*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED.
ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 SECOND AMENDMENT TO  TRANSITION AGREEMENT DATED JANUARY 28, 2005
 Second Amendment Effective Date MEDICIS
PHARMACEUTICAL CORPORATION MEDICIS aaiPharma Inc. AAIPharma
 RECITALS:
 Agreement
    A.
    
    Agreement of Quality/Technical Responsibility of Exhibit III. The Agreement of
Quality/Technical Responsibility of Exhibit III is hereby deleted in its entirety and replaced
with the revised Agreement of Quality/Technical Responsibility attached hereto.B.
    
    Binding Effect. Except as modified in this Second Amendment, the Agreement, as
previously amended, shall remain unchanged and in full force and effect. The parties
represent and warrant that, as of the Effective Date, no other agreements, written or oral,
exist between the parties with respect to the subject matter covered herein except for the
Agreement and this Second Amendment. The parties acknowledge and agree that in the event of
any conflict between the terms amended pursuant to this Second Amendment and the other terms
of the Agreement, the terms of this Second Amendment shall govern.C.
    
    Counterparts. This Second Amendment may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall be deemed one and
the same instrument.D.
    
    Authority. Each party represents and warrants to the other party that this Second
Amendment is being executed by the authorized representatives of each party.
  MEDICIS PHARMACEUTICAL CORPORATION

AAIPHARMA INC.By:
    
    
    
    By:
    
    

Name:

    
    
    Name:Title:

    
    
    Title:
 1




---



##### 



AGREEMENT OF QUALITY / TECHNICAL RESPONSIBILITY
    KEY CONTACTS:
   KEY CONTACTS:
 Area ofResponsibility
    
    AAI
    
    MedicisQuality Assurance
    
    ***
    
    ***Regulatory Affairs
    
    ***
    
    ***Technical Services
    
    ***
    
    ***Medical Affairs
    
    ***
    
    ***Non-medical
Product Complaints
    
    ***
    
    ***
 
 *
    
    Key Quality Assurance contactNOTE: All documents for review and approval are to be sent to quality@medicis.com DEFINITIONS
   1.
    
    The term of this QT Agreement will begin on the Effective Date (see 3. below)
and will expire on the date of expiration or earlier termination of the Manufacturing
Terms.2.
    
    The parties will review this QT Agreement at least annually to verify that
the technical responsibilities allocated in this QT Agreement are current and valid.
 2




---



##### 



3.
    
    The Effective Date of this QT Agreement will be the signature date of the
last party to sign this QT Agreement. The QT Agreement shall be fully implemented
within *** of the Effective Date.
 CHANGE CONTROL PROCESS
 Either party may propose updates, amendments, modifications, or supplements
(collectively, the Amendments) to this QT Agreement. No Amendment will be valid
or effective unless made in writing and signed by duly authorized officers of both
parties.
 3




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI1
    
    COMPLIANCE REQUIREMENTS1.1
    
    Perform and maintain all audit documentation regarding supplier(s) of
Active Ingredient for the Products.
    
    ***
    
    ***
    
    ***1.2
    
    Perform and maintain all qualification documentation regarding suppliers
of Components for the Products.
    
    ***
    
    ***
    
    ***1.3
    
    Manufacture, test and package Product in strict adherence to the
approved drug application, cGMPs, and Specifications.
    
    ***
    
    ***
    
    ***1.4
    
    *** shall not subcontract any of the work to a third party without prior
written agreement of ***, which prior agreement shall not be
unreasonably withheld or delayed. *** shall be responsible for auditing
subcontractors to ensure cGMP compliance.
    
    ***
    
    ***
    
    ***1.5
    
    Provide *** with copies of all information supporting annual Product
reports for Products supplied to Medicis.
    
    ***
    
    ***
    
    ***1.6
    
    Provide *** with copies/correspondence regarding the approved drug
applications for the Products.
    
    ***
    
    ***
    
    ***1.7
    
    Notify *** and have written authorization from *** prior to implementing
any proposed changes to the facilities, manufacturing process,
materials, Specifications, and/or testing that impact the approved
registration, or that require revalidation. Identify for ***, in
writing prior to delivery, the first manufactured Batch incorporating
any approved changes.
    
    ***
    
    ***
    
    ***1.8
    
    Provide notification to the other party of any organizational and/or
personnel changes to Quality Assurance, Technical Services, or
Regulatory Affairs Contacts.
    
    ***
    
    ***
    
    ***1.9
    
    *** will make every reasonable effort to provide copies of any Form
483s, Warning Letters, Field Alerts or similar correspondence from
Governmental Authorities within one (1) business day of receipt and
subsequent response(s) relating to the Products or processes used to
produce, test, or package the Products promptly thereafter. ***
approval is required for responses related to the Products.
    
    ***
    
    ***
    
    ***1.10
    
    Notify *** within one (1) business day of any circumstances likely to
result in a recall, Product withdrawal or field correction, including
any confirmed Product failure.
    
    ***
    
    ***
    
    ***1.11
    
    Perform and maintain as current all appropriate validation, including
but not limited to: process, analytical method, cleaning, computer, and
packaging.
    
    ***
    
    ***
    
    ***1.12
    
    Dispose of all production residue, manufacturing rejects, tailings,
other chemicals, containers and packaging materials associated with
Products manufactured for Medicis in compliance with all applicable laws
and regulations.
    
    ***
    
    ***
    
    ***1.13
    
    *** will notify *** within two (2) business days, then proceed to
promptly investigate and resolve to the reasonable satisfaction of ***
all Out-of-
    
    ***
    
    ***
    
    ***
 3




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAISpecification results. *** to review and approve any
retesting scenarios in OOS investigations.1.14
    
    Notify *** of any requests for information, notices of violations or
other communication from a Governmental Agency related to the Medicis
Products or processes promptly within no more than two (2) business days
after *** receipt thereof.
    
    ***
    
    ***
    
    ***1.15
    
    Notify *** of any incident affecting compliance to environmental,
occupational health and safety laws related to handling Medicis Products
or processes within three (3) business days.
    
    ***
    
    ***
    
    ***2
    
    PRODUCTION AND TESTING OF BULK PRODUCT2.1
    
    *** to Maintain the Master Formula (or Product structure). *** to
review and approve.
    
    ***
    
    ***
    
    ***2.2
    
    *** will maintain approved Specifications.
    
    ***
    
    ***
    
    ***2.3
    
    Provide consistent Batch identification system for bulk manufacture.
Immediately notify *** of any proposed changes to identification system
prior to implementation of any such changes.
    
    ***
    
    ***
    
    ***2.4
    
    Qualify Active Ingredient suppliers.
    
    ***
    
    ***
    
    ***2.5
    
    Maintain Active Ingredient Specification, and ensure compliance of the
Specification with regulatory and compendial requirements.
    
    ***
    
    ***
    
    ***2.6
    
    Procure Active Ingredient (include Certificate of Analysis, COA, for the
Active Ingredient). The Active Ingredient shall have not *** left to
expiration upon receipt at AAI. Any exceptions to the above must be
approved in writing by AAI.
    
    ***
    
    ***
    
    ***2.7
    
    Store Active Ingredient.
    
    ***
    
    ***
    
    ***2.8
    
    Sample Active Ingredient.
    
    ***
    
    ***
    
    ***2.9
    
    Validate and/or transfer test method for Active Ingredient to ***. ***
to approve the analytical method.
    
    ***
    
    ***
    
    ***2.10
    
    Analyze Active Ingredient (include documentation, COA).
    
    ***
    
    ***
    
    ***2.11
    
    Release Active Ingredient.
    
    ***
    
    ***
    
    ***2.12
    
    Retain reference samples of Active Ingredient for a *** Product
expiration date, of the last lot using each batch of API.
    
    ***
    
    ***
    
    ***2.13
    
    Qualify inactive substance suppliers in accordance with ***.
Qualification does not include on-site audits.
    
    ***
    
    ***
    
    ***2.14
    
    Procure inactive substances (include COA).
    
    ***
    
    ***
    
    ***2.15
    
    Store inactive substances.
    
    ***
    
    ***
    
    ***
 4




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI2.16
    
    Sample inactive substances.
    
    ***
    
    ***
    
    ***2.17
    
    Validate and/or transfer test methods for the inactive substances to ***.
    
    ***
    
    ***
    
    ***2.18
    
    Analyze inactive substances (include documentation, COA).
    
    ***
    
    ***
    
    ***2.19
    
    Release inactive substances.
    
    ***
    
    ***
    
    ***2.20
    
    Perform Process Validation. *** to review and approve.
    
    ***
    
    ***
    
    ***2.21
    
    Perform Cleaning Validation. *** to review and approve.
    
    ***
    
    ***
    
    ***2.22
    
    Provide Bill of Materials (BOM) for bulk manufacture. *** to review and
approve.
    
    ***
    
    ***
    
    ***2.23
    
    Provide Manufacturing Transfer Document for transfer within ***.
    
    ***
    
    ***
    
    ***2.23A
    
    Review and approve the Manufacturing Transfer Document
    
    ***
    
    ***
    
    ***2.24
    
    Prepare Manufacturing Instructions (Production Operating Instructions).
*** to review and approve.
    
    ***
    
    ***
    
    ***2.25
    
    *** will maintain Specification for bulk Product and ensure compliance
of the Specification with regulatory and compendial requirements. ***
will maintain approved Specifications.
    
    ***
    
    ***
    
    ***2.26
    
    Produce bulk Product (include Batch documentation).
    
    ***
    
    ***
    
    ***2.27
    
    Document, investigate and resolve deviations from approved manufacturing
instructions or Specifications. *** to review and approve all
deviations. *** to be notified within two (2) business days of
discovery of a deviation.
    
    ***
    
    ***
    
    ***2.28
    
    Not to reprocess or salvage any partially processed or fully processed
materials without the written consent of *** unless such activities are
expressly allowed in applicable approved regulatory documents.
    
    ***
    
    ***
    
    ***2.29
    
    Develop bulk Product sampling plan.
    
    ***
    
    ***
    
    ***2.29A
    
    Review and approve the Product sampling plan.
    
    ***
    
    ***
    
    ***2.31
    
    Validate and/or transfer test method for bulk Product to ***. *** to
approve analytical method.
    
    ***
    
    ***
    
    ***2.32
    
    Analyze bulk Product.
    
    ***
    
    ***
    
    ***2.33
    
    Approve bulk Product for packaging.
    
    ***
    
    ***
    
    ***2.34
    
    Produce Certificate of Analysis for bulk Product.
    
    ***
    
    ***
    
    ***2.35
    
    Retain reference samples of bulk Product for the period of time
specified in AAIs Standard Operating Procedures.
    
    ***
    
    ***
    
    ***
 5




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI2.36
    
    Perform manufacturing facility, equipment and instrument qualification,
preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***2.37
    
    Perform laboratory facility, equipment and instrument qualification,
preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***2.38
    
    Perform stability storage and testing of bulk Product as requested by
*** in accordance with the Manufacturing Terms or other service
estimate.
    
    ***
    
    ***
    
    ***3.
    
    INSPECTION, PACKAGING OF FINISHED PRODUCT3.1
    
    Maintain finished Product Specification, and ensure compliance of the
Specifications with regulatory and compendial requirements.
    
    ***
    
    ***
    
    ***3.2
    
    Provide Batch identification system for finished Product.
    
    ***
    
    ***
    
    ***3.3
    
    Provide artwork and labeling text (blister, carton, leaflet, label,
etc.) to ***.
    
    ***
    
    ***
    
    ***3.4
    
    Perform labeling review and approval.
    
    ***
    
    ***
    
    ***3.5
    
    Medicis will provide Specifications for packaging materials, and ensure
compliance of the Specifications with regulatory and compendial
requirements. *** will maintain approved Specifications.
    
    ***
    
    ***
    
    ***3.6
    
    Validate and/or transfer test method(s) for Product packaging materials
to ***. *** to approve analytical methods.
    
    ***
    
    ***
    
    ***3.7
    
    Qualify packaging component and labeling suppliers in accordance with
AAI policies. Qualification does not include on-site audits.
    
    ***
    
    ***
    
    ***3.8
    
    Procure packaging materials.
    
    ***
    
    ***
    
    ***3.9
    
    Analyze packaging materials.
    
    ***
    
    ***
    
    ***3.10
    
    Release packaging materials.
    
    ***
    
    ***
    
    ***3.11
    
    Retain samples of labeling materials for a *** Product expiry date.
[NOTE: Other packaging materials need not be retained separately since
they are part of the finished Product retains].
    
    ***
    
    ***
    
    ***3.12
    
    Perform Packaging Validation. *** to review and approve.
    
    ***
    
    ***
    
    ***3.13
    
    *** will provide Bill of Materials (BOM) for packaging. *** to review
and approve.
    
    ***
    
    ***
    
    ***3.14
    
    *** will prepare Packaging Instructions (Production Operating
Instructions for packaging). *** to review and approve.
    
    ***
    
    ***
    
    ***3.15
    
    Perform packaging operations (include documentation).
    
    ***
    
    ***
    
    ***3.16
    
    Perform in-process controls during packaging (include documentation).
    
    ***
    
    ***
    
    ***3.17
    
    Develop finished Product sampling plan consistent with the Manufacturing
    
    ***
    
    ***
    
    ***
 6




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAITerms for retain and stability samples.
Provide finished Product release sampling plan for ***
review and approval.3.18
    
    Sample finished Product including retain samples, stability
samples, release samples, and customer samples.
    
    ***
    
    ***
    
    ***3.19
    
    Retain reference samples of finished Product for a *** past
Product expiry date.
    
    ***
    
    ***
    
    ***3.20
    
    Reconcile packaging materials.
    
    ***
    
    ***
    
    ***3.21
    
    Perform manufacturing facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***3.22
    
    Perform laboratory facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***3.23
    
    Document, investigate and resolve any deviations from
approved packaging instructions or Specifications. *** to
review and approve all deviations. Notify Medicis within
two (2) business days of discovery of deviations.
    
    ***
    
    ***
    
    ***4.
    
    TESTING AND RELEASE OF FINISHED PRODUCT4.1
    
    Validate and/or transfer test method(s) for finished Product
to ***. *** to review and approve.
    
    ***
    
    ***
    
    ***4.2
    
    Perform laboratory equipment and instrument qualification,
preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***4.3
    
    Analyze finished Product.
    
    ***
    
    ***
    
    ***4.4
    
    *** to approve shipment of finished Product to Medicis.***
to release Product for distribution.
    
    ***
    
    ***
    
    ***4.5
    
    Review Batch Record including all pertinent documentation
and data. Provide copy to *** for review.
    
    ***
    
    ***
    
    ***4.6
    
    Produce Certificate of Analysis for finished Product testing.
    
    ***
    
    ***
    
    ***4.7
    
    Perform stability storage and testing as requested by *** in
accordance with the Manufacturing Terms or other service
estimate. Notify Medicis immediately within one (1)
business day, if the Product fails to meet Specifications
during stability testing.
    
    ***
    
    ***
    
    ***4.8
    
    Stability Testing ProtocolDefine protocol requirements.
    
    ***
    
    ***
    
    ***For each packaging configuration, place the*** production
Batches of Product on stability and *** annually.
    
    ***
    
    ***
    
    ***Pull stability samples as per the approved stability
protocol. Provide reviewed/approved test results to ***
within *** of completion of testing.
    
    ***
    
    ***
    
    ***
 7




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAIPerform stability facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***4.9
    
    Establish approved expiration date.
    
    ***
    
    ***
    
    ***4.10
    
    Adverse Events and Product Complaints
    
    ***
    
    ***
    
    ****** shall document Product complaints and adverse event
claims. *** shall notify the others key contact as
specified in the Manufacturing Terms following receipt of
any Adverse Event or Product Complaint.
    
    ***
    
    ***
    
    ****** shall promptly investigate any such complaints. ***
shall provide *** with a summary of its investigation as
soon as practicable, but in no event later than ***.
Complaints designated by *** as high priority complaints
shall be investigated by *** within ***.
    
    ***
    
    ***
    
    ****** shall respond to regulatory agencies and reporters and
shall be responsible for all activities relating to medical
surveillance.
    
    ***
    
    ***
    
    ***Complete follow-up corrective action.
    
    ***
    
    ***
    
    ***4.11
    
    Visually examine retain reference samples of finished
Product annually. Investigate if required. Report all
results to ***.
    
    ***
    
    ***
    
    ***4.12
    
    Perform Annual Product Review. Provide copies of all
information supporting annual Product reporting to ***.
    
    ***
    
    ***
    
    ***4.13
    
    Prepare annual Product report and file with applicable
regulatory agencies.
    
    ***
    
    ***
    
    ***4.14
    
    Product RecallDecide to initiate recall.
    
    ***
    
    ***
    
    ***Notify appropriate regulatory agencies.
    
    ***
    
    ***
    
    ***Manage recall.
    
    ***
    
    ***
    
    ***Reconcile returned Product.
    
    ***
    
    ***
    
    ***4.15
    
    Responsibility to AuthoritiesLiaison with Regulatory Authorities for approval,
maintenance and updating of drug application.
    
    ***
    
    ***
    
    ***Liaison with Regulatory Authorities for any site visits
related to the Products produced for Medicis. *** to notify
*** promptly within no more than one (1) business day after
being contacted regarding such site visits.
    
    ***
    
    ***
    
    ***
 8




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAIMaintain safety/hazard and handling data on Products and Active
Ingredient.
    
    ***
    
    ***
    
    ***Maintain safety/hazard and handling data on Components.
    
    ***
    
    ***
    
    ***4.16
    
    Special test requirements (specify):
    
    ***
    
    ***
    
    ***4.17
    
    Maintain all Batch Records for a *** Product expiry date and supply
copies (true or electronic) of all such records to *** on request.
    
    ***
    
    ***
    
    ***5
    
    STORAGE AND TRANSPORTATION OF BULK PRODUCT, FINISHED PRODUCT AND
WASTE DISPOSAL5.1
    
    Store bulk Product up to packaging.
    
    ***
    
    ***
    
    ***5.2
    
    Store finished Product after release by Medicis.
    
    ***
    
    ***
    
    ***5.3
    
    Store all materials under appropriate conditions of temperature,
humidity, light and cleanliness and in a manner to avoid
deterioration, theft, interference and Product contamination.
    
    ***
    
    ***
    
    ***6
    
    DOCUMENTATION6.1
    
    Provide *** with complete copies of Process Validation reports for
the *** of each Product.
    
    ***
    
    ***
    
    ***6.2
    
    Provide *** with complete copies of Packaging Validation reports for
each Product.
    
    ***
    
    ***
    
    ***6.3
    
    Provide the following documentation to *** for each Batch:Executed Batch record, including copies of labeling documenting
expiration date and lot number
    
    ***
    
    ***
    
    ***Test results for Active Ingredient and Components (upon request)
    
    ***
    
    ***
    
    ***Manufacturing release summary: Certificate of Compliance (COC)
statement indicating Product conformance with cGMP, signed by the
responsible Quality individual performing Product approval
    
    ***
    
    ***
    
    ***If Product release testing is performed by ***, testing release
summary, Certificate of Analysis (COA), including:
    
    ***
    
    ***
    
    ***- Tests performed- Test methods used- Test Specifications- Test results including retest results if required- Date of release- Signature of responsible Quality individual performing testing
release
 9




---



##### 



Medicis Pharmaceutical Corporation
    
    AAIPharma Inc.Quality Assurance Approval:Name: Terri Magee
    
    Name:(Print/Type)
    
    (Print/Type)Title: Director of QC
    
    Title:Signature:
    
    Signature:Date:
    
    Date:AAIPharma Inc.Executive Approval:Name:(Print/Type)Title:
 10