Document:

Distribution Agreement Dated December 29, 2003

 Exhibit 10.4 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A CONFIDENTIAL TREATMENT REQUEST. 
  
 Distribution
Agreement 
  
 THIS DISTRIBUTION
AGREEMENT is entered into by and between Auxilium Pharmaceuticals, Inc. (“Auxilium”), a company incorporated under the laws of Delaware with offices at 160 W. Germantown Pike, Norristown, PA 19401, USA, and Bayer Inc.
(“Distributor”), a company incorporated under the laws of Canada with offices at 77 Belfield Road, Toronto, ON, Canada, M9W 1G6. 
  
 Whereas, Auxilium is engaged in the business of developing and marketing of pharmaceutical products; and 
  
 Whereas, Auxilium enjoys the full right and interest in and to the
Product (as hereinafter defined) and has the sole and exclusive right to market and sell the Product in certain territories, including the Territory (as hereinafter defined); and 
  
 Whereas, Auxilium is seeking a distributor of the Product in the Territory; and 
  
 Whereas, Distributor has the marketing and sales force in the
Territory to enable it to effectively market the Product in the Territory. 
  
 THE PARTIES DO HEREBY AGREE AS FOLLOWS: 
  

	1.	Definitions 

  

	 	1.1	“Affiliate” of a party means any business entity controlling, controlled by or under common control with that party. “Control” means direct or indirect
beneficial ownership of at least fifty percent (50%) of the voting or income interest in such entity. 

  

	 	1.2	“Binding Order” has the meaning set forth in Section 7.1. 

  

	 	1.3	“Confidential Information” has the meaning set forth in Section 12. 

  

	 	1.4	“Cost of Goods” means the cost of the Product to Auxilium, as described in Section 8.2 and Schedule 4. 

  

	 	1.5	“Dollars” or “$” means United States currency unless otherwise specifically provided for herein. 

  

	 	1.6	“Effective Date” has the meaning set out in Section 2.2. 

  

	 	1.7	“Indemnified Party” has the meaning set forth in Section 14.3 

  

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REQUEST. 

	 	1.8	“Indemnifying Party” has the meaning set forth in Section 14.3 

  

	 	1.9	“Launch” means full scale introduction of the Product for sale in the Territory consistent with Distributor’s Marketing Plan, including distribution to the
trade in sufficient quantities to meet demand for the Product, commencement of detailing activities and commencement of commercial promotion to physicians, pharmacies and patients. 

  

	 	1.10	“Marketing Authorizations” means all of the regulatory authorizations required to sell the Product in the Territory. 

  

	 	1.11	“Net Sales” shall mean, the gross amount invoiced for the Product in such period by Distributor to Third Parties, less deductions for the following: (a) returned
goods; (b) trade and quantity discounts; (c) rebates; (d) payments in respect of any governmental subsidized program; (e) reimbursement or similar payments given to wholesalers or other distributors, buying groups, healthcare insurance carriers or
other institutions; (f) sales or other taxes actually paid by Distributor, not including taxes assessed on the income resulting from such sales; and (g) freight allowances, insurance and customs duties to the extent any of the foregoing are
identified on the invoice for the Product. If a Product is sold for consideration other than cash, the fair market value of such other consideration shall be included in Net Sales. 

  

	 	1.12	“Parties” means the parties hereto collectively; and “Party” means any one of them. 

  

	 	1.13	“Patents” means the patents and patent applications identified in Schedule 1 

  

	 	1.14	“Person” means an individual, corporation, company, co-operative, partnership, organization or any similar entity. 

  

	 	1.15	“Product” means Testim® 1% testosterone gel. 

  

	 	1.16	“Quarterly Forecast” has the meaning set forth in Section 7.1. 

  

	 	1.17	“Regulatory Authority” means any government agency having the responsibility for having product registrations and other government permits with respect to the
marketing of the Product in the Territory. 

  

	 	1.18	“Sales Year” means the period from the date on which the Marketing Authorization is received until December 31st of that year for the first Sales Year and each successive twelve (12) calendar months beginning on January 1st of each consecutive year thereafter during the
Term. 

  

	 	1.19	“Sample” means one box of seven single dose tubes of Product not for commercial sale. 

  

	 	1.20	“Schedule(s)” refers to the Schedules attached to this Agreement and incorporated herein by this reference. 

  
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	 	1.21	“Signing Date” means the date when both Parties have signed this Agreement. 

  

	 	1.22	“Specifications” means the specifications for the Product as set forth in Schedule 2 attached hereto. 

  

	 	1.23	“Term” has the meaning set forth in Section 11.1. 

  

	 	1.24	“Territory” means Canada. 

  

	 	1.25	“Trademarks” means TestimTM, Testim®, Testim or Testim 1%. 

  

	 	1.26	“Transfer Price” means the price at which Auxilium shall transfer a Unit of Product to Distributor. 

  

	 	1.27	“Unit” means one box of thirty (30) single dose tubes of the Product. 

  

	2.	Appointment of Distributor 

  

	 	2.1	Appointment. Auxilium hereby appoints Distributor as its exclusive distributor of the Product in the Territory, with the right to sell, market and distribute the Product in
the Territory under the “Testim” trade name. Auxilium agrees that it shall use commercially reasonable efforts to supply the Product to the Distributor during the Term as provided for in this Agreement. 

  

	 	2.2	Agreement Conditional. The Parties agree that this Agreement shall be conditional on Distributor attending at DPT’s manufacturing facilities where the Product is
manufactured, to satisfy itself that the manufacturer and the manufacturing facilities are adequate. This inspection shall occur on a date to be agreed to by the Parties, but not later then January 30, 2004. Within five (5) Business Days of such
inspection, Bayer shall be required to inform Auxilium in writing of its findings. In the event that Bayer gives Auxilium notice that the manufacturing site is suitable, the date that such notice is received by Auxilium shall be the Effective Date.
In the event that Bayer, acting reasonably, finds the manufacturing site to be unacceptable, the Parties shall meet to determine how to proceed. In the event that; 

  

	 	(i)	both Parties agree in writing that Bayer’s issues with the manufacture of the Product cannot be resolved, or 

  

	 	(ii)	the issues with the manufacture of Product have not been resolved by February 27, 2004, 

  
 This Agreement shall not become effective and will automatically terminate, without liability to either Party as a result of such
termination. 
  

	3.	Rights And Obligations Of Distributor 

  
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	 	3.1	Distribution. Distributor shall, through the use of sales people, technical service, promotional, warehousing, and distribution activities, employ commercially reasonable
efforts to promote, market, sell and distribute the Product in the Territory. Distributor shall purchase from Auxilium and maintain an inventory of such quantities of the Product as is necessary to assure continuous availability of the Product for
all customers in the Territory. 

  

	 	3.2	No Export. Distributor shall not seek customers, establish any branch, or maintain any distribution depot outside the Territory with respect to the Product. The Distributor
shall not have the right to knowingly sell the Product outside the Territory and Distributor agrees that it will take the steps to prevent sales of the Product outside of the Territory that it takes with its own pharmaceutical products. Both parties
recognize that the objective of this Agreement is not to threaten the viability of Auxilium’s core business in the United States through reimportation of the Product from the Territory into the United States. In the event Auxilium becomes aware
of sales of the Product outside the Territory that have or are reasonably likely to have an adverse economic impact on Auxilium, the parties agree to engage in good faith discussions to determine what steps may be taken to prevent or minimize the
effect of such sales, including without limitation, imposition of a cap on the amount of Product delivered to Distributor by Auxilium at the level corresponding to $[**] Canadian dollars (“CDN”) as annualized Net Sales.

  

	 	3.3	Exclusivity. Except as otherwise provided herein, this distributorship shall be exclusive to Distributor within the Territory. The phrase “exclusive to Distributor
within the Territory” shall mean that so long as Distributor fully performs its obligations under this Agreement, Auxilium shall not distribute the product in the Territory and shall not appoint any other distributor to distribute the Product
within the Territory or allow any other party to sell the Product in the Territory. In the event that either Party becomes aware that a non-authorized third-party is selling or distributing the Product in the Territory, the Parties agree to work
together to attempt to discourage any such sale or distribution. 

  

	 	3.4	Non-Compete. During the term of this Agreement, the Parties and their respective Affiliates shall not market, sell or distribute products, or any product line, competitive
with the Product in the Territory. For the purposes of this paragraph, products that are “competitive with the Product” shall include all products whose sole purpose is delivery of testosterone to the human body. 

 

	 	3.5	Distributor’s Price. The Distributor shall be free to set the selling price of the Product in the Territory. 

  

	4.	Regulatory And Other Governmental Compliance 

  

	 	4.1	Compliance. The Parties shall comply with all legal and governmental requirements in the Territory regarding Product sold by Distributor under this Agreement.

  

	 	4.2	Marketing Authorizations. 

  

	 	4.3	Responsibility. Auxilium shall, at its own expense, prepare documentation in support of, 

  
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 obtain and maintain from the appropriate Regulatory Authority the Marketing Authorization for the Product
in the Territory. Such documentation shall be prepared and submitted by Auxilium to the Regulatory Authority within forty-five (45) days of the Effective Date of this Agreement. In the event it becomes necessary to change or update regulatory
documentation after a Marketing Authorization has been obtained, Distributor shall cooperate with Auxilium so that Auxilium can file such new applications or amendments, all at Auxilium’s expense. Auxilium shall be required to maintain, at its
expense, the Marketing Authorizations during the Term. Distributor shall, at its own expense prepare documentation in support of, obtain and maintain any and all formulary, reimbursement applications and authorizations necessary in the Territory.
Auxilium will provide reasonable assistance to Distributor, including providing the Distributor with access to necessary data or documents, at Distributor’s expense. 
  

	 	4.4	Ownership. The Marketing Approvals shall be held in the name of Auxilium or one of its Affiliates. Distributor acknowledges that Auxilium or one of its Affiliates is the
owner of such Marketing Authorizations and Distributor shall provide Auxilium with copies of any documents relating to the Product and the Marketing Authorizations that it may receive, including, without limitation, all material correspondence
between Distributor and any Regulatory Authority, as soon as is reasonably possible following Distributor’s receipt of such documents. Distributor agrees to promptly inform Auxilium of any material verbal communication with any Regulatory
Authority concerning the Product during the Term. 

  

	 	4.5	Labeling. Auxilium will prepare labeling and package insert information, at its own expense, as required by laws and regulations in the Territory and by the terms of this
Agreement. Distributor shall not obscure, remove, change, amend or otherwise interfere with any instructions approved or required by any Regulatory Authority as to the use or warnings for the Product, including statements concerning the Product on
the packaging, labeling leaflet or insert accompanying the Product sold hereunder, provided only that the packaging of such Product conforms to the requirements of this Agreement. 

  

	 	4.6	Cooperation. Distributor shall cooperate with Auxilium in supplying Auxilium with any data or documents that may be requested by Auxilium with respect to any government
regulation, registrations, or approvals, including but not limited to, fully supporting Auxilium in the process of obtaining and maintaining any patent extensions or Marketing Authorizations for the Product, all at Auxilium’s expense.

  

	5.	Marketing 

  

	 	5.1	General. Upon receipt of Marketing Authorization for the Product in the Territory, Distributor will use commercially reasonable efforts to diligently and promptly market,
launch and sell the Product in the Territory. Distributor shall not sell, offer for sale or advertise for sale the Product in the Territory until the Marketing Authorization is obtained. Distributor shall cease selling, offering for sale and
advertising for sale any Product in the Territory immediately upon the revocation or cancellation of Marketing Authorization for the Product. 

  
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	 	5.2	Promotional and Training Material. As reasonably requested by Distributor, Auxilium shall provide Distributor, at no cost to Distributor, with samples of its United States
promotional and sales training materials for the Product. Distributor shall be responsible, at its cost, to adapt or prepare such materials for use in the Territory. Auxilium hereby delegates to Distributor any responsibility for compliance with all
legal and regulatory requirements in the Territory with respect to promotional and/or training materials related to the Product, subject to Auxilium’s right to review such materials in advance. Distributor shall provide Auxilium with copies of
its final promotional and sales training materials related to the Product. 

  

	 	5.3	Customers. Distributor shall market the Product and handle promptly all inquiries, quotations, correspondence and orders. Distributor agrees to share customer information
with Auxilium where permissible. 

  

	 	5.4	Updates and Other Information. Once distribution of Product begins, Distributor shall provide to Auxilium a quarterly report that describes the competitive marketplace in the
Territory, including marketing and sales updates on Product in the Territory (including reports of quarterly sales), average selling price and market potential for the Product, sales trends, forecasts, and competition, and any changes in marketing
techniques, regulatory climate, and such other similar subjects as Auxilium may reasonably require. Beginning with September 30, 2004, and by September 30 of each calendar year thereafter (beginning with September 30, 2004), Distributor will supply
Auxilium with a detailed marketing plan for the coming year that includes sales forecasts, sample forecasts. The Parties agree to work together where possible to develop the marketing plans for the Territory. Distributor will cooperate with Auxilium
personnel and designees and give them reasonable access to marketing records and data during their visits to the Territory. Nothing in this section 5.4 shall limit Distributor’s sole ability to set the selling price of the Product in the
Territory. 

  

	 	5.5	Packaging. Auxilium agrees that it shall package and label the Products in accordance with the Specifications and the terms of this Agreement. Bayer shall be required to
prepare its packaging design and copy for the Products and submit it to Auxilium. Auxilium shall, within two (2) weeks of receiving packaging design and copy from Bayer, prepare and submit packaging vendor proofs from the packaging design and copy
supplied by Bayer for Bayer’s approval. Bayer shall be required to accept or reject the packaging vendor proofs submitted by Auxilium within two (2) weeks of its receipt by Bayer. In the event that Bayer rejects a packaging vendor proof
submitted by Auxilium, Bayer shall be required to re-submit the packaging vendor proof to Auxilium, together with instructions on how the packaging vendor proof is to be revised. The packaging vendor proof shall be revised by Auxilium within (2)
weeks and re-submitted to Bayer. 

  

	 	5.6	Packaging Errors. Auxilium shall not be liable for any error in label or packaging design or text, unless such error is the result of Auxilium’s error made after Bayer
has approved the packaging vendor proof. Bayer shall be responsible for all costs resulting 

  
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 from any change in label or packaging design or text required by Bayer other than costs incurred to
correct any error attributable to Auxilium. 
  
 6. Adverse Events, Recalls
and other Regulatory Matters 
  

	 	6.1	Contact Persons. Each party shall inform the other party of a contact person for Regulatory Affairs and a contact person for Pharmacovigilance, along with such person’s
phone number and other pertinent information. Each party shall promptly inform the other party if the contact person changes. 

  

	 	6.2	Adverse Events/Pharmacovigilance. Distributor shall inform Auxilium in writing of all adverse events associated with the use of the Product in the Territory and comply with
all other reporting requirements with respect to pharmacovigilence for the Product as set forth in Schedule 3. As of the date Distributor receives its first shipment of Product, and continuously thereafter for the term of this Agreement, Distributor
shall have on staff or under contract a sufficient number of individuals qualified to handle pharmacovigilence activities, including adverse events, product complaints and medical information requests, for the Product in the Territory.

  

	 	6.3	Product Complaints. Product complaints shall be handled in accordance with procedures set forth in Schedule 3. 

  

	 	6.4	Medical Information. Distributor shall respond to requests for medical information in accordance with procedures set forth in Schedule 3. 

  

	 	6.5	Product Recall. 

  
 6.5.1 Regulatory Recall. If any governmental or regulatory authority having jurisdiction in the Territory requires either party to this Agreement
to recall any of the Product, such party shall immediately give written notice to the other of such action and all particulars thereof and review with the other the proposed manner in which the recall is to be carried out. Both parties agree to
advise and cooperate with the other to assist with the recall process. Auxilium must approve in writing, within a time period reasonable in the specific circumstance, any notice of, or letters relating to, any recall. 
  
 6.5.2 Voluntary Recall. Auxilium shall have the right, acting
reasonably, to initiate a Voluntary Recall. In case of a voluntary recall initiated by Auxilium, Auxilium shall immediately give written notice to the Distributor of such action and all particulars thereof and review with the Distributor the
proposed manner in which the recall is to be carried out. In the event that Distributor believes that a voluntary recall should be initiated, Auxilium shall be consulted prior to the decision of (i) whether a voluntary recall or other removal of
Product shall be made; and (ii) the manner of communicating and executing any voluntary Product recall or withdrawal. In the event Distributor reasonably believes a voluntary Product recall or withdrawal in the Territory should be made for reasons
of patient safety, Distributor shall promptly notify Auxilium of its belief 
  
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 in writing and provide Auxilium with all supporting information or documentation. Auxilium’s
approval must be obtained in writing, within a time period reasonable in the specific circumstance, for any recall and any notice of, or letters relating to, any recall. In the event that distributor and Auxilium cannot agree that a voluntary recall
should be made for safety reasons, Distributor shall have the right to terminate the Agreement, remove the Product bearing its trademarks from the market within a reasonable time and to notify its customers that the Product will no longer be
distributed by Distributor. 
  
 6.5.3 Responsibilities.
Distributor shall have an established system to ascertain all recipients (including names and addresses) of Product by lot number and quantity, to the extent that such is reasonable and customary in the industry in the Territory. All costs and
expenses of recall or removal, including, without limitation, expenses and other costs or obligations to third parties will be covered by Auxilium except that Distributor shall be responsible for all costs and expenses of any recall or removal if
such recall or removal is caused by (i) Distributor’s negligence, willful malfeasance or breach of this Agreement; (ii) Distributor’s storage, handling or distribution of the Product; or (iii) any claim of failure by Distributor to comply
with legal and/or governmental regulatory requirements relating to the Product. 
  

	7.	Forecasts and Ordering 

  

	 	7.1	Orders. Distributor shall provide Auxilium with quarterly forecasts of estimated needs for Product and Samples for twelve (12) month periods, updated on a rolling quarterly
basis. (“Quarterly Forecast”). Distributor’s first Quarterly Forecast shall be submitted no later than the date on which the Marketing Authorization is granted and subsequent Quarterly Forecasts shall be submitted at least ninety (90)
days prior to the commencement of the forecasted period. It is understood and agreed that with respect to each Quarterly Forecast issued by Distributor to Auxilium pursuant to the terms hereof, the forecast for the first quarter thereof shall
constitute a binding order for Product and Samples, subject to Section 7.3 (“Binding Order”). Auxilium shall deliver a Binding Order to Distributor no later than ninety (90) days after receipt of such Binding Order by Auxilium. However,
Auxilium shall deliver the first Binding Order no later than sixty (60) days after the Marketing Authorization has been granted. Each Binding Order shall consist of a minimum order of [**] batch of Product (approximately [**] Units)

  

	 	7.2	Rejection of Binding Orders. Notwithstanding section 7.1, in the event that Distributor places a Binding Order in a Quarterly Forecast that is equal to or greater than 20%
larger than the Binding Order in the preceding Quarterly Forecast, Auxilium will have five (5) Business Days after receipt of each Quarterly Forecast to reject in writing such a Binding Order. If the Binding Order is not rejected in writing within
the five (5) Business Days, then the order becomes binding on both Parties. In the event that a Binding Order is rejected by Auxilium within the five (5) Business Days, the parties will immediately begin good faith negotiations to determine an
acceptable quantity for the Binding Order. 

  
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 Once a Binding Order is agreed to, the Quarterly Forecast will be adjusted to reflect the quantity of
Product in the new Binding Order. In the event that an agreement cannot be reached as to how much Product Auxilium will supply to the Distributor within ten (10) Business Days, the Binding Order shall be reduced to the quantity delivered pursuant to
the Binding Order in the preceding Quarterly Forecast and delivery will be made to Distributor within ninety (90) days of the receipt of the disputed Quarterly Forecast. 
  

	 	7.3	Samples. Distributor shall be entitled to purchase Samples from Auxilium at Auxilium’s fully absorbed cost (“Sample Cost”). Auxilium’s Sample Cost shall
include the cost of shipping the samples from Auxilium to the Distributor’s Warehouse. Forecasting and ordering for Samples shall be done in accordance with Sections 7.1-7.2 above. Distributor shall include a plan for forecasting, ordering and
distribution of Samples in its marketing plans in accordance with Section 5.4, above. 

  

	 	7.4	Delivery Terms. Auxilium shall deliver the ordered Product and Samples DDU Distributor’s Warehouse located at 77 Belfield Road, Toronto, Canada (“Distributor’s
Warehouse”). Distributor shall be responsible for any customs, tariffs, import taxes, fees or other charges (including costs of quarantine) in connection with importing the Product into the Territory. Title and risk of loss shall pass upon
arrival at Distributor’s Warehouse. All Product received by Distributor shall be received at least 18 months prior to the expiry date marked on the Product. Any Product received by Distributor with less than 18 months to expiry shall be
returned to Auxilium at its expense and Auxilium will credit Distributor for a full refund of the Transfer Price paid for such Product and for any costs associated with the return of such Product. 

  

	 	7.5.	Minimum Purchases. Distributor agrees to purchase in any Sales Year from Auxilium a minimum quantity of Product, not including Product purchased as Samples (the “Minimum
Purchase”). The Minimum Purchase for the first Sales Year shall be at least [**]% of Distributor’s forecasted needs as set forth in the first Quarterly Forecast submitted in accordance with Section 7.1, above. In the event
the first Sales Year will be shorter than eight (8) months, the [**]% minimum purchase obligation described above will be applied for the first two Sales Years according to the same principles. Thereafter, the Minimum Purchase for each
year of the term shall be determined by the Parties negotiating in good faith within sixty (60) days after the first full year of sales data becomes available, and within sixty (60) days of the end of each calendar year thereafter. In the event that
the Parties cannot agreed to a Minimum Purchase for a year as provided for herein, the Minimum Purchase for the year in question shall be the Minimum Purchase set for the previous year. 

  

	 	7.6	Inability to Supply Minimum Purchase Quantity. Auxilium shall be required to supply at least the Minimum Purchase quantities to the Distributor during the Term. In the event
that Auxilium is unable to supply Product up to the Minimum Purchase quantity, the Distributor shall have the option to terminate the Agreement pursuant to Section 11.2. 

  

	 	7.7	Inability to Supply. In the event that Auxilium is unable, for any reason, to supply the 

  
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 full amount of Product in an accepted Binding Order, Auxilium shall notify the Distributor of such
shortage as soon as possible and the Parties shall negotiate in good faith to determine when and to what extent Product can be supplied to Distributor. In the event that Auxilium persistently fails to deliver Binding Orders the Distributor shall
have the option to terminate the Agreement pursuant to Section 11.2. 
  

	 	7.8	QC Testing. Schedule 2 sets forth the Specifications, which may be amended from time to time by Auxilium in writing, subject to Auxilium obtaining all necessary regulatory
approvals. QC testing of the Product will be performed in accordance with procedures set forth in Schedule 3. 

  

	 	7.9	Product Returns. Distributor shall be responsible for all costs associated with the return of any Product to Distributor, with the exceptions that Auxilium shall be
responsible for the cost of all Product returned to Distributor due to non-conformance of the Product with the Specifications at any time prior to the expiry date marked on the Product, where such failure to conform to Specifications is not the
result of improper handling or storage of the Product after delivery to Distributor’s Warehouse. In the event Product described in this Section. 7.9 is returned to Auxilium by Distributor, Auxilium shall issue a full refund or an equivalent
credit for the Transfer Price paid for all such Product, and any expenses incurred in its return, within sixty (60) days of receipt of such Product. 

  
 8. Payments 
  
 In consideration of the rights granted hereunder, Distributor shall make the following payments to Auxilium: 
  

	 	8.1	Milestone Payments. Distributor shall make the following non-refundable fixed payments (“Milestone Payments”) to Auxilium by wire transfer:

  

	 	(a)	$[**](US) payable within sixty (60) days of the Signing Date of this agreement by both parties; and 

  

	 	(b)	$[**](US) payable within thirty (30) days of Auxilium’s filing with the Regulatory Authority a submission for Marketing Authorization; and

  

	 	(c)	$[**](US) payable within thirty (30) days of the first commercial sale of the Product in the Territory; and, 

  

	 	(d)	$[**](CDN) payable within thirty (30) days of the date on which Distributor’s cumulative Net Sales for the Product reach $3 million CDN; and, 

 

	 	(e)	$[**](CDN) payable within thirty (30) days of the date on which Distributor’s cumulative Net Sales for the Product reach $5 million CDN; and, 

 
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	 	(f)	$[**](CDN) payable within thirty (30) days of the date on which Distributor achieves annual calendar year Net Sales for the Product of greater than $15
million CDN; and, 

  

	 	(g)	$[**](CDN) payable within thirty (30) days of the date on which Distributor achieves annual calendar year Net Sales for the Product of greater than $19
million CDN. 

  

	 	8.2	Transfer Price. Auxilium will provide Bayer, on an annual basis, the Transfer Price, supported by cost of goods components and assumptions, by October 31 of each calendar
year, to be effective as of January 1 of the next upcoming calendar year. The Cost of Goods assumptions to be provided to Distributor shall include annual projections for volumes, component price increases and direct overhead changes. The Transfer
Price as of the Effective Date shall be set at $[**] and the Cost of Goods components are set out in Schedule 4. In the event that the Cost of Goods for the Product changes significantly (+/- 10%), the Parties will
begin good faith discussions to determine whether or not and to what extent, if at all, the Sample Cost and the Transfer Price should be amended to reflect such change in Auxilium’s costs. Auxilium shall not be permitted to increase

  
 Transfer Price to the extent that any increase
in Cost of Goods is due to changes in allocation methodology. In the event that there is a dispute as to the Transfer Price, such dispute shall be dealt with according to Section 18 herein. During the resolution of a dispute as to Transfer Price,
the Transfer Price payable by Distributor shall be the Transfer Price that had been charged by Auxilium immediately prior to such dispute. 
  

	 	8.3	Flow-Through Payment. Distributor shall pay Auxilium a Flow-Through Payment equal to [**]% of Net Sales of Product in the Territory. After the Product
has been sold in the United States for thirty-six (36) months from the date of launch in the United States (January 27, 2003), the Flow-Through Payment payable by the Distributor will be reduced to [**]% of Net Sales.

  

	 	8.4	Payment Terms on Transfer Price and Samples. Except as otherwise specifically provided for herein, Distributor shall pay Auxilium within forty-five (45) days of receipt of
Product and Samples. Payments not made within the forty-five (45) day period, or otherwise as specifically provided for herein, shall bear interest after the due date at the lesser of (i) the maximum rate allowed by law and (ii) the prime rate (as
it may be set from time to time) set forth in the Wall Street Journal, plus two (2) percentage points. Unless otherwise requested by Auxilium, all payments shall be made by wire transfer and be in US dollars. 

  

	 	8.5	Payment Terms on Flow-Through Payments. Flow-Through Payments shall be paid within sixty (60) days of the last day of the Calendar Quarter in which Distributor sells Product.
Such payment shall be accompanied by a report of sales of the Product for the quarter in the format requested by Auxilium. Payments not made within the sixty (60) day time period, or otherwise as specifically provided for herein, shall bear interest
after the due date at the lesser of (i) the maximum rate allowed by law and (ii) the prime rate 

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

 11 

 (as it may be set from time to time) set forth in the Wall Street Journal, plus two (2) percentage
points. Unless otherwise requested by Auxilium, all payments shall be made by wire transfer and be in US dollars. 
  

	 	8.6	Failure to Pay. If Distributor fails to pay for Product or to make Milestone or Flow- Through Payments when due, Auxilium may suspend deliveries of the Product and notify
Distributor in writing that deliveries have been suspended pending receipt by Auxilium of payment in full. If such failure to pay extends beyond ninety (90) days after notification by Auxilium, Auxilium may terminate this Agreement and/or
Distributor’s right to be an exclusive Distributor without further notice and without prejudice to whatever rights or remedies Auxilium may have at law or in equity. 

  

	 	8.7	Audit. 

  
 8.7.1 Auxilium’s Right to Audit. Distributor shall keep adequate records in sufficient detail to enable the fees due from Distributor
hereunder to be determined. Upon reasonable advance notice and during regular business hours, Auxilium shall be permitted to audit Distributor’s books and records with respect to the Product and Samples to ensure that the information provided
to Auxilium by Distributor concerning Net Sales only is accurate. Any audits performed under this section shall be limited to ensuring that there has been accurate reporting by the Distributor of Net Sales of the Product in the Territory during a
specified time period. Any audits conducted hereunder will be paid for by Auxilium; provided, however, that if an audit reveals that Distributor has underpaid fees to Auxilium by more than ten percent (10%), Distributor will be responsible for the
cost of such audit. 
  
 8.7.2 Distributor’s Right to
Audit. Auxilium shall keep adequate records in sufficient detail to enable the Transfer Price to be audited. Auxilium shall make such records available upon reasonable advance notice and during regular business hours, but not more frequently
than once per year to enable an independent certified public accountant of Distributor’s selection, except one to whom Auxilium may have reasonable objection, to audit Auxilium’s books and records with respect to the Product and Samples to
ensure that the information provided to Auxilium by Distributor concerning cost of goods as provided in accordance with Section 8.2 only is accurate. Any audits performed under this section shall be limited to ensuring that there has been accurate
reporting by Auxilium of cost of goods of the Product during a specified time period. Any audits conducted hereunder will be paid for by Distributor. 
  

	 	8.8	Failure to Perform. In the event Distributor fails to meet the Minimum Purchase requirements for the Product in any Sales Year as set forth in Section 7.5, and provided that
any such failure by the Distributor is not related in any way to the failure by Auxilium to deliver Product, Auxilium shall have the right to terminate this Agreement as provided for in Section 11.2.2. 

  

	 	8.9	Taxes. Value-added, sales, use or other taxes measured by sales or receipts are not included in the price shown and Distributor is responsible to pay all applicable taxes

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

 12 

 directly to taxing authorities and shall fully indemnify Auxilium for its failure to do
so. 
  

	 	8.10	Withholding Tax. Pursuant to the Income Tax Act, Canada (the “Act”) and the Canada – United States Tax Convention (1980) (the “Treaty”), the
Distributor is required to withhold tax on all Flow-Through Payment payments, as defined or understood in Act or Treaty, made to residents of a foreign country. Distributor shall therefore withhold the appropriate amount from all such payments due
to Auxilium, remit this amount to the appropriate tax authority as required by law and provide Auxilium, on an annual basis, with proof of such remittance. 

  

	9.	Trademarks 

  

	 	9.1	Trademark. The Product will be marketed under Auxilium’s Trademark for such Product, to the extent permitted by law, and provided there is no mutually agreed upon
conflict with language or custom. Auxilium shall be responsible for securing and for maintaining a registration for the Trademark in Canada. 

  

	 	9.2	Packaging and Promotional Materials. Distributor shall make no modifications, additions to or alterations to Product or Sample labels, package inserts, or other materials
without the prior written approval of Auxilium. With respect to all packaging, labeling and inserts for use in the Territory, the Trademark, the Bayer HealthCare name and the Bayer Cross trademark shall be prominently featured. The Parties agree to
meet, in a timely manner after the execution of this Agreement, to determine the design of the Product and Sample packaging. 

  

	 	9.3	Distributor Acquires No Rights. Distributor recognizes Auxilium’s right, title and interest in and to the Trademarks and Distributor shall not at any time do or suffer
to be done any act or thing that would in any way impair Auxilium’s property rights therein. Distributor shall not acquire, nor shall Distributor claim, any right, title, or interest in the Trademarks by reason of Distributor’s performance
of this Agreement or otherwise; the intention of the parties is that all use of the Trademarks shall at all times inure to the benefit of Auxilium. Distributor shall execute and deliver to Auxilium any and all documents that Auxilium may request to
confirm in Auxilium all right title and interest in the Trademarks. Any registrations by Distributor of the Trademarks shall be subject to the prior written consent of Auxilium and shall be made on behalf of and in the name of Auxilium unless
otherwise agreed in writing between the parties. 

  

	 	9.4	Quality Assurance. Auxilium reserves the right to inspect Distributor’s facilities and methods of handling the Product for quality assurance purposes. In the event that
Auxilium has an issue with Distributor’s facilities or handling methods, the Parties acting reasonably will work together to address Auxilium’s concerns in a mutually agreeable manner. 

  

	 	9.5	Cooperation. Distributor shall cooperate with Auxilium in transferring any appropriate rights in connection with the Trademarks to Auxilium or its designee.

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

 13 

	10.	Independent Contractor 

  
 Distributor shall act solely as an independent contractor and nothing in this Agreement shall be construed to give Distributor the power or authority to
act or contract for Auxilium. Distributor shall not use the Auxilium name or logo in a manner that might suggest Distributor is Auxilium’s agent. Distributor shall not use the Auxilium name or logo on its stationary, business cards, or
advertising without the prior written consent of Auxilium. All uses of the Auxilium name or logo by Distributor must include a reference to the Distributor relationship and include Distributor’s name. In addition, Distributor shall not use the
Auxilium name or logo in any shareholder reports, press releases or other communications with the media or analysts, without the prior written consent of Auxilium. 
  

	11.	Term and Termination 

  

	 	11.1	Term. This Agreement shall have a term of the life of patent protection (issued patents and pending patents) to the Product in the Territory, unless sooner terminated in
accordance with this Agreement (the “Term”). The patents registered and pending in the Territory on the Product are set out in Schedule 1. 

  

	 	11.2	Termination. By Either Party. Either Party may terminate this Agreement, effective immediately upon receipt of written notice to the other Party, under the following
circumstances: 

  

	 	(a)	By either Party if the other Party is in material breach or default with respect to any term or provision hereof and fails to cure the same within thirty (30) days of receipt of
written notice of said breach or default; or 

  

	 	(b)	By either party if the other party is adjudged bankrupt, files or has filed against it any petition under any bankruptcy, insolvency or similar law, has a receiver appointed for its
business or property, or makes a general assignment for the benefit of its creditors; or 

  

	 	(c)	By either Party where the right to terminate the Agreement is specifically provided for herein. 

  

	 	11.2.2	By Auxilium. Auxilium may terminate this Agreement, effective immediately upon receipt of written notice by Distributor, under the following circumstances:

  

	 	(a)	In the event that Distributor does not Launch the Product in the Territory within thirty (30) days of the later of the receipt of the Marketing Authorization or receipt of Product
from Auxilium; or 

  

	 	(b)	Subject to Section 8.8, in the event that Distributor fails to meet the Minimum Purchase requirements set forth; or 

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

 14 

	 	(c)	In the event that Distributor acquires rights to or promotes, sells or markets a product that is competitive to the Product as provided for in Section 3.4. 

 

	 	11.2.3	By Distributor. Distributor may terminate this Agreement, effective immediately upon receipt of written notice by Auxilium, under the following circumstances:

  

	 	(a)	In the event that Distributor is unable to Launch the Product in the Territory due to Auxilium’s failure to supply Product within sixty (60) days of the receipt of the
Marketing Authorization; or 

  

	 	(b)	In the event that Marketing Authorization has not been obtained thirty (30) months after execution of the Agreement; or 

  

	 	(c)	In the event that the Marketing Authorization is withdrawn in the Territory for any reason; or 

  

	 	(d)	In the event that the Product patents are not enforceable in the Territory, with the result of no patent protection for the Product in the Territory. 

  

	11.3	Resulting Obligations. Upon termination or expiration of this Agreement: 

  

	 	11.3.1	Product. 

  

	 	(a)	In the event of termination by Auxilium, all rights to the Product shall revert to Auxilium free of charge and Distributor shall have no further rights with respect to the Product.
Distributor shall, at Auxilium’s election, return, store or destroy (at Auxilium’s expense) any Product remaining in Distributor’s possession at the time of termination or expiration. 

  

	 	(b)	In the event of termination by Distributor Distributor shall be entitled to; (i) return all unsold Product and unused Samples to Auxilium at Auxilium’s expense and to receive a
full refund of the Transfer Price paid to Auxilium for the Product and Samples returned by the Distributor, or (ii) continue to sell Product according to the terms of this Agreement until all inventory is sold or for six (6) months, whichever shall
occur first. 

  

	 	11.3.2	Trademarks. Except as provided for in 11.3.1(b)(ii), Distributor shall terminate any use of the Trademarks and shall, at Auxilium’s election, either destroy or return to
Auxilium at Distributor’s cost all literature, labels, or other materials, incorporating or bearing same. Distributor shall cooperate with Auxilium and execute any and all documents requested by Auxilium for the purpose of canceling any
registered user or other rights with respect to the Trademarks that Distributor may have acquired in operating hereunder, or, at Auxilium’s election, in transferring such rights to Auxilium or its designee; 

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

 15 

	 	11.3.3	Data. Except as provided for in 11.3.1(b) (ii), Distributor shall cease using all information and technical and other data provided by Auxilium relating to the Product, and
shall, at Auxilium’s option, return to Auxilium or destroy all such data having physical form and all copies thereof, and shall continue to abide by its obligation of confidentiality set forth in Article 12 below; 

  

	 	11.3.4	Approvals. Except as provided for in 11.3.1(b) (ii), Distributor shall promptly assign or otherwise cause to be transferred to Auxilium, or Auxilium’s designee, all
government registrations or approvals having to do with the Product that are in Distributor’s name and shall make no further use of the same. 

  

	 	11.3.5	Survival of Rights. All of the remedies provided for in this Section 11.3 are in addition to the other rights and remedies available to the Parties on termination and this
Section 11.3 is not intended to limit any of those rights or remedies. 

  

	12.	Confidentiality 

  

	 	12.1	All information, whether in oral, written, graphic or electronic form, disclosed by either Party (“Disclosing Party”) to the other and/or any of its subsidiaries,
subdivisions, parent companies, affiliates agents or consultants (“Receiving Party”), and all notes, documents and materials prepared by or for either Party which reflect, interpret, evaluate, include or are derived therefrom, shall
be deemed to be “Confidential Information.” In particular, Confidential Information shall include, without limitation, any trade secret, proprietary information, invention, research and development work, work-in-process, technology,
technique, know-how, design, specification, program, unpublished data, procedure (including operating procedures), computer software, data base or programming, idea, sample, strategy, budget, projection, development, process, formulation, method,
guideline, policy, proposal, contract, test data or data file, or any engineering, manufacturing, marketing, servicing, financing, pricing, cost, profit, personnel or salary structure/ compensation information relating to the past, present or future
operations, products, services, technology, sales, suppliers, clients, customers, employees, investigators, investors or business of Disclosing Party. In addition, “Confidential Information” includes any trade secrets, data
(technical or non-technical) or confidential information relating to the past, present or future operations, organization, business, projects or finances of any third-party to which Disclosing Party owes a duty of confidentiality including, without
limitation, the mere fact that Disclosing Party is or may be working with or for any client. 

  

	 	12.2	Receiving Party shall not use or disclose such Confidential Information to others (except its employees who reasonably require same for the purposes hereof and who are bound to it
by a like obligation as to confidentiality) without the express written permission of Disclosing Party, except for Confidential Information that (i) can be demonstrated by written records to be known to Receiving Party from a source other than
Disclosing Party at the time of receipt; or (ii) was subsequently otherwise legally acquired by Receiving Party from a third-party having an independent right to disclose the information; or (iii) is now or later becomes publicly known without
breach of this Agreement by Receiving 

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

 16 

 Party or any party that received such Confidential Information from Receiving Party. 
  

	 	12.3	Press Release. No public announcement or other disclosure by the parties concerning the existence of or terms of this Agreement shall be made, either directly or indirectly,
by either party to this Agreement, without first obtaining the written approval of the other party and agreement upon the nature and text of such announcement or disclosure, such consent not to be unreasonably withheld. The party desiring to make
any such public announcement or other disclosure shall inform the other party of the proposed announcement or disclosure in reasonably sufficient time prior to public release, and shall provide the other party with a written copy thereof. Each party
agrees that it shall cooperate fully with the other with respect to all disclosures regarding this Agreement to any governmental or regulatory agencies, including requests for confidential treatment of proprietary information of either party
included in any such disclosure. 

  

	13.	Warranties 

  

	 	13.1	Representations and Warranties of Auxilium. Auxilium makes the following covenants, representations and warranties to Distributor and does so in full understanding and
acknowledgement that Distributor is relying on the said representations and warranties in concluding the present Agreement: 

  

	 	13.1.1	Status. Auxilium is a corporation organized and existing under the Laws of the State of Delaware, United States of America. No action has been taken by the directors,
officers or shareholders of Auxilium to dissolve Auxilium. Auxilium has the corporate power and authority to enter into the present Agreement and to perform all its obligations hereunder. 

  

	 	13.1.2	All Necessary Proceedings. Auxilium has taken all necessary corporate actions and proceedings to enable it to enter into the present Agreement. 

  

	 	13.1.3	No Other Agreements for the Product. Auxilium has not made any written or oral agreement or undertaking with any other Person regarding the rights to sell the Product in
Territory. 

  

	 	13.1.4	No Violation. Auxilium warrants that the execution, delivery and performance of this Agreement by it (1) does not and will not violate or conflict with any provision of law
or any provision of its articles of incorporation or by-laws; and (2) does not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, or
require any consent under, or result in the creation of any lien, charge or encumbrance upon any of its property or assets pursuant to any material instrument or agreement to which it is a party or by which it or its properties may

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

 17 

 be bound or affected. 
  

	 	13.1.5	Compliance. Auxilium warrants that the Product shall meet Specifications and shall comply with Auxilium’s official labeling for the Product to the expiry date marked on
the Product; provided, however, that such warranty shall not apply in the event the Product’s failure to meet Specifications and/ or non compliance with labeling is the result of improper handling and/or storage of the Product after delivery to
Distributor. Auxilium further warrants that the Product manufactured by or for Auxilium shall comply with the GMP requirements of the Regulatory Authority. Auxilium represents and warrants that it will take all commercially reasonable actions
necessary to obtain and to maintain the Marketing Authorization in the Territory during the Term. 

  

	 	13.1.6	Non-infringement. Auxilium represents and warrants that to the best of its knowledge, as of the Effective Date, (i) that there are no outstanding claims or allegations that
the Product and/or Auxilium’s Trademark infringe upon any rights of a third Person and (ii) that the Product and Auxilium’s Trademark do not infringe upon any rights of a third Person. Auxilium represents and warrants that subject to legal
and contractual limitations imposed upon Auxilium as the licensee of the patents it will take all commercially reasonable actions necessary to maintain patent protection for the Product in the Territory during the Term. 

  

	 	13.1.7	Intellectual Property Protection. Auxilium has not and will not knowingly or intentionally take any action, and will use its best efforts to assure that its Affiliates will
not knowingly or intentionally take any action, during the term of the Agreement that could adversely affect the Intellectual Property covering the Product, including without limitation, the distinctiveness or value of the Trademarks. Auxilium
represents and warrants that it will take all commercially reasonable actions necessary to register the Trademarks in the Territory, to maintain the registration and to defend the Trademarks during the Term. 

  

	 	13.1.8	Right to Grant Licenses. To Auxilium’s knowledge, Auxilium is the sole and exclusive owner or licensee of all Intellectual Property needed to market, distribute and sell
the Product in the Territory in accordance with this Agreement. Auxilium has the full right, power and authority to grant the rights granted to Distributor hereunder, free and clear of any mortgage, lien or encumbrance. 

  

	 	13.1.9	Disclosure. Distributor has the right to use under this Agreement all Intellectual Property owned or controlled by Auxilium relating to the Product necessary for Distributor
to perform its obligations under this Agreement. 

  

	 	13.2	Representations and Warranties of Distributor. Distributor makes the following covenants, representations and warranties to Auxilium and does so in full understanding and
acknowledgement that Auxilium is relying on the said representations and warranties in concluding the present Agreement: 

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

 18 

	 	13.2.1	Status. Distributor is a corporation organized and existing under the Laws of the Canada. No action has been taken by the directors, officers or shareholders of Distributor
to dissolve Distributor. Distributor has the corporate power and authority to enter into the present Agreement and to perform all its obligations hereunder. 

  

	 	13.2.2	All Necessary Proceedings. Distributor has taken all necessary corporate actions and proceedings to enable it to enter into the present Agreement. 

 

	 	13.2.3	No Violation. Distributor warrants that the execution, delivery and performance of this Agreement by it (1) does not and will not violate or conflict with any provision of
Law or any provision of its articles of incorporation or by-laws; and (2) does not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, or
require any consent under, or result in the creation of any lien, charge or encumbrance upon any of its property or assets pursuant to any material instrument or agreement to which it is a party or by which it or its properties may be bound or
affected. 

  

	 	13.2.4	Compliance. Distributor warrants that it shall comply with all applicable laws in relation to the storage, handling, distribution and sale of the Product. Distributor
warrants that, at all times, Product will be stored at Climate Zone II storage conditions [**]. Distributor shall not, and it shall cause its Affiliates not to, do anything that would adversely affect the reputation and goodwill of Auxilium or of
its Affiliates or adversely affect the reputation of the Product or the Trademark. 

  

	 	13.2.5	Technical Know-How. Distributor represents that it has the necessary experience, know-how and personnel to enable it to comply with all applicable Laws governing the sale of
the Product in the Territory. 

  

	 	13.3	THE WARRANTIES SET OUT ABOVE ARE THE ONLY WARRANTIES GIVEN BY EITHER PARTY AND ARE MADE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. THERE IS NO OTHER CONDITION OR
WARRANTY THAT PRODUCT SHALL BE MERCHANTABLE, OF SATISFACTORY QUALITY, FIT FOR ANY PARTICULAR PURPOSE, IN ACCORDANCE WITH ANY SAMPLE, AS DESCRIBED IN ANY LITERATURE, OR THAT ITS SALE OR USE DOES NOT INFRINGE THE RIGHTS OF OTHERS.

  

	14.	Indemnification 

  

	 	14.1	Distributor. Distributor shall indemnify and hold Auxilium harmless from and against any and all loss, including without limitation court costs and reasonable attorneys’
fees and expenses regardless of outcome, arising out of any and all governmental or private actions (whether by insurers under rights of Distributor subrogation or otherwise) that are 

  
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

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 related in any way to (i) Distributor’s negligence or willful malfeasance; (ii) Distributor’s
storage, handling, use, promotion, or sale of the Product; or (iii) to any claim of failure by Distributor to comply with legal and/or governmental regulatory requirements relating to the Product, except if, and to the extent that, any such loss is
related in any way to the negligence or willful malfeasance of Auxilium. 
  

	 	14.2	Auxilium. Auxilium shall indemnify and hold Distributor harmless from and against any and all loss, including, without limitation, court costs and reasonable attorneys’
fees and expenses regardless of outcome, arising out of any and all governmental or private actions based upon (i) a failure of the Product to meet the Specifications up to the expiry date marked on the Product, except where such failure is caused
by improper storage and or handling of the Product after delivery to Distributor’s Warehouse or (ii) the quality of the Product or the proper and intended use of the Product, or (iii) alleged Product patent or Trademark infringement, except if,
and to the extent that, any such loss is related in any way to the negligence or willful malfeasance of the Distributor. 

  

	 	14.3	Notice of Claim to Indemnification. In the event of any claim being made against a party hereto (the “Indemnified Party”) for which the other party (the
“Indemnifying Party”) has agreed to indemnify the Indemnified Party pursuant to this Article 14, the Indemnifying Party shall be promptly notified thereof and the Indemnifying Party may, in its discretion and at any time, assume and
control all negotiations for the settlement of the same and any litigation (including, but not limited to, the defense of any claim) that may arise therefrom regardless of whether it is the Indemnified Party or the Indemnifying Party. The
Indemnified Party shall provide such assistance with respect to any settlement or litigation efforts by the Indemnifying Party as the Indemnifying Party may reasonably request. Subject to the other provisions of this Article 14, the Indemnifying
Party may, at its sole expense, participate in the defense of any claim hereunder with counsel of its own choice. 

  

	 	14.4	Limitations. DISTRIBUTOR AND AUXILIUM EACH AGREE THAT IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES
(WHETHER IN CONTRACT OR IN TORT). 

  

	15.	Insurance 

  

	 	15.1	Distributor Insurance. Upon obtaining Marketing Authorization for the Product in the Territory and during the entire remaining term of this Agreement and for a period of
three (3) years thereafter, Distributor, at its sole expense shall maintain a policy of self-insurance or a policy in full force and effect with an insurance company or companies having A. M. Best Rating of an “A-: Class VII” or better,
commercial general liability insurance, including personal injury, blanket contractual liability and broad form property damage, with a five million dollar ($5,000,000) combined single limit per occurrence 

  
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 20 

 and Product Liability insurance, in the amount of five million dollars ($5,000,000) per each occurrence
and in the general aggregate. Within thirty (30) days of obtaining Marketing Authorization for the Product in the Territory, Distributor shall provide to Auxilium a certificate of insurance indicating that such obligations have been satisfied.

  

	 	15.2	Auxilium Insurance. Upon obtaining Marketing Authorization for the Product in the Territory and during the entire remaining term of this Agreement and for a period of three
(3) years thereafter, Auxilium, at its sole expense shall maintain in full force and effect with an insurance company or companies having A. M. Best Rating of an “A-: Class VII” or better commercial general liability insurance, including
personal injury, blanket contractual liability and broad form property damage, with a five million dollar ($5,000,000) combined single limit per occurrence and Product Liability insurance, in the amount of five million dollars ($5,000,000) per each
occurrence and in the general aggregate. Auxilium shall designate Distributor and its Affiliates as “additional insureds” under all insurance policies referenced in this Section. Within thirty (30) days of obtaining Marketing Authorization
for the Product in the Territory, Auxilium shall provide to Distributor a certificate of insurance indicating that such obligations have been satisfied. 

  

	16.	Force Majeure 

  
 Neither party shall be liable for any delay or default in such party’s performance hereunder if such default or delay is caused by events beyond such party’s control including, but not limited to, acts of
God, war or insurrection, civil unrest, disease or calamity affecting the strain used in the production of Product, earthquake, fire, flood or storm, labor disturbances or epidemic. An event of Force Majeure shall have no effect on
Distributor’s obligation to pay for Product already delivered as required by this Agreement. 
  
 In the event that either Party is forced to rely on this section due to an event of Force Majeure, the Parties agree that, after the event of Force Majeure has ended, they will meet to discuss any issues with the
Agreement resulting from the Force Majeure and that the Parties will negotiate in good faith to resolve any such issues. Should an event Force Majeure continue for more than six (6) months, the Party not relying on this Section shall have the right
to terminate this Agreement by giving thirty (30) days written notice to the other Party of its intent to terminate. 
  

	17.	Successors in Interest 

  

	 	17.1	Neither Party may assign this Agreement or any rights hereunder or delegate the performance of any duties hereunder without the prior written approval of the other party, which
approval shall not be unreasonably delayed or withheld; provided, however, that without such consent either party may assign this Agreement to an Affiliate or in connection with the transfer or sale of all or substantially all of its
assets, stock or 

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

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 business, or its merger, consolidation or combination with or into another entity or acquisition of
another entity. Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns. 
  

	 	17.2	Notwithstanding Section. 17.1, in the event that this Agreement is transferred or sold with all or substantially all of a Party’s assets, stock or business, or that Party is
merged, consolidated or combined with or into another entity or acquires another entity as provided for in Section. 17.1, and (a) that entity holds the rights to a competing product, as that term is defined in Section. 3.4; or, (b) the other Party
acting reasonably cannot continue in this contractual relationship with this new entity,, then either Party has three (3) months to give notice to the other Party of its intent to terminate the Agreement, such termination to be effective sixty (60)
days after receipt of notice of termination. 

  

	18.	Dispute Resolution 

  
 Except with respect to disputes or claims for injunctive relief arising out of Sections 9 and 12 of this Agreement or relating to either Party’s proprietary rights,
any dispute, controversy or claim arising out of or relating to this Agreement, or the breach or termination thereof, shall be settled as follows: 
  

	 	18.1	Reference to Executives. In the event of a significant controversy, claim, or dispute arising out of or relating to this Agreement or any significant breach thereof
(hereinafter collectively referred to as a “Dispute”), the Parties agree that the Dispute shall be described in writing by one or both of the Parties and copies of the description shall be sent to Phil Blake, President and CEO,
Bayer Inc., and to Geraldine Henwood, President and CEO, Auxilium Pharmaceuticals, Inc. The executives will then have fifteen (15) days from receipt of such Dispute description to attempt in good faith to resolve the Dispute. In the event the
Dispute is not resolved within this fifteen (15) day time period, then either Party can proceed to mediation of the Dispute, as described in section 18.2. 

  

	 	18.2	Mediation. The Parties shall then attempt in good faith to resolve any significant controversy, claim, or dispute arising out of or relating to this Agreement or any
significant breach thereof through mediation with a mutually agreed mediator. If the mediation of such Dispute does not commence within thirty (30) days (or such other period of time mutually agreed upon by the Parties) of the receipt of a written
request for such mediation by the other Party, or if the Dispute is not resolved within thirty (30) days (or such other period of time mutually agreed upon by the Parties) of commencing such mediation, or if the Party against which a claim has been
asserted refuses to attend such mediation, or the Parties are unable to agree upon a mediator, then either Party may proceed to litigation, as provided for in section 18.3. 

  

	 	18.3	Litigation. Only in the event that a Dispute is not resolved through mediation, as provided above, may the Parties resort to litigation. In the case where Bayer is the Party

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

 22 

 initiating litigation, the litigation shall be filed and shall take place in Norristown, Pennsylvania,
USA or in the United States District Court for the Eastern District of Pennsylvania, Philadelphia, Pennsylvania, USA. In the case where Auxilium is the Party initiating litigation, the litigation shall be filed and shall take place in Toronto,
Ontario, Canada. The law of the state of Delaware shall apply to any litigation initiated under this Agreement (regardless of its or any other jurisdiction’s choice of law principles). 
  

	19.	Notice 

  
 Any notice required or permitted to be given hereunder shall be deemed sufficient if sent by facsimile letter or overnight courier, or delivered by hand to Auxilium or Distributor at the respective addresses set forth
below or at such other address as either party hereto may designate. If sent by facsimile letter, notice shall be deemed given when the transmission is completed if the sender has a confirmed transmission report. If a confirmed transmission report
does not exist, then the notice will be deemed given when the notice is actually received by the person to whom it is sent. If delivered by overnight courier, notice shall be deemed given when it has been signed for. If delivered by hand, notice
shall be deemed given when received. 
  
 All notices to Auxilium shall be
addressed as follows: 
  
 Auxilium Pharmaceuticals, Inc. 
 160 W. Germantown Pike 
 Norristown, PA 19401

  
 Attention: President (fax: 610-279-8205) 
 cc: General Counsel (fax: 610-279-8205) 
  
 All notices to Distributor shall be addressed as follows: 
  
 Bayer Inc. 
 77 Belfield Road 
 Toronto, ON M5M 1Z8 
  
 Attention: President (fax: 416-248-6768) 
 cc:
General Counsel (fax: 416-240-5426) 
  

	20.	Survival 

  
 The provisions of Sections 9.5 and 11.3, and Sections 6, 12, 13, 14, 15, 18, 19 and this Section 20 shall survive expiration or termination of this Agreement. 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 23 

	21.	Additional Terms 

  

	 	21.1	Entire Agreement. This Agreement, together with the Schedules attached hereto, constitutes the entire understanding between the parties with respect to the Product, and
supersedes and replaces all previous negotiations, understandings, representations, writings, and contract provisions and rights relating to the subject matter hereof. The parties agree that all supply and distribution of the Product hereunder shall
be subject to and governed by the terms and provisions set forth herein, and none of the terms and conditions contained on any purchase or order form, invoice, or other writing, shall change the provisions of this Agreement unless it is signed and
delivered by both parties and it clearly indicates that the parties intend to vary the terms hereof. 

  

	 	21.2	Amendments; No Waiver. No provision of this Agreement may be amended, revoked or waived except by writing signed and delivered by an authorized officer of each party. Any
waiver on the part of either party of any breach or any right or interest hereunder shall not imply the waiver of any subsequent breach or waiver of any other right or interest. 

  

	 	21.3	Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, each
of which shall remain in full force and effect. 

  

	 	21.4	Headings. The descriptive headings are inserted for convenience of reference only and are not intended to be part of or to affect the meaning of or interpretation of this
Agreement. 

  

	 	21.5	Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same
instrument. 

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

 24 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized
representatives. 
  

									
	 Auxilium Pharmaceuticals, Inc.
	 	 	 	 Bayer Inc.

					
	By:	 	     /s/    Geraldine
Henwood        
	 	 	 	By:	 	    /s/    Phil Blake        
	 	 	    Geraldine A. Henwood, CEO	 	 	 	 	 	    Phil Blake, President
					
	 Date:
	 	     29th December, 2003

	 	 	 	 Date:
	 	     December 29, 2003

					
	 	 	 	 	 	 	 By:
	 	     /s/     T. Tithecott

					
	 	 	 	 	 	 	 Date:
	 	 December 29. 2003

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

 25 

 Schedule 1 Patents 
  
 Canadian Patent 
 Patent Number—1,312,281 
 Grant Date—January 5, 1993 
 Expiration Date—January 5, 2010 
  
 PCT Patent Application 
  
 International Application Number—PCT/US03/12235 
 International Filing Date—April 21, 2003 
 Priority Date—April 19, 2002 
  

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

 SCHEDULE 2: 
 Testim ® 1% Gel (testosterone) 
 Proposed Finished Product Release Specifications for NDS* 
  

			
	 ATTRIBUTES

	  	 Release Specification

	 Description
	  	A clear to translucent gel with an alcoholic/musk odor with [**]
	 pH
	  	[**]
	 Viscosity, at [**]
	  	[**]
	 Ethanol [**]
	  	[**]
	 Microbial Limit Test
	  	[**]
	 Fill weight of individual tubes**
	  	[**] gel per tube
	 Testosterone I.D. [**]
	  	[**]
	 Testosterone [**] Assay
	  	[**]
	 Content Uniformity [**]
	  	Meets requirements of [**]
	 Pentadecalactone [**]
	  	[**]

  

	**	Determined from in-process testing 

  
 Note: Microbial Limit Test and Content Uniformity Specifications also meet USP requirements. 
  
 *Note: These specifications are directly from the [**] 
  
  

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

 Schedule 3: 
 Auxilium/Bayer Technical Agreement 
  
 R =
Responsible, A = Approve, C = Copy 
  

							
	 Quality Assurance/Control

	  	 Auxilium

	    	 Bayer

	    	 Third Party
 (Auxilium)

	 Procedures for Management of Lot Release
	  	R*	    	R*	    	 
	 ID testing, each lot exported to Canada
	  	 	    	R	    	 
	 Annual confirmatory testing to release specification on samples after receipt in Canada and provide Bayer with results
	  	R	    	C	    	 
	 Annual stability update and provide to Bayer
	  	R	    	C	    	 
	 GMP inspection documentation (current) held by third party
	  	 	    	 	    	 
	 Includes the following:
 1.   Raw Material Specifications
 2.   Packaging Material Specification
 3.   Finished Product Specification
 4.   Master Formula including manufacturing procedures
 5.   Sampling procedure
 6.   Critical SOP’s (this is not well defines)
	  	R	    	 	    	C
	 7.   On-going Stability Protocol and Summary updated annually
 8.   Process (Manufacturing and Packaging) Validation Summary and Protocol
 9.   Cleaning Validation Protocol and Summary
 10. 1 completed Manufacturing Batch Record per year
	  	 	    	 	    	 
	Certificate of Analysis and Certificate of Manufacture for each lot	  	R	    	C	    	 
	Copy for all labeling	  	R	    	A, C of final	    	 
	Proof of GMP Compliance (as requested)	  	R	    	C	    	 
			
	 Pharmacovigilance

	    	 Auxilium

	    	 Bayer

	 Procedures for Adverse Event (AE) Management
	    	  R*	    	R
	 Master database of adverse events
	    	R	    	 
	 Signal detection and labeling changes
	    	R	    	C
	 AE’s Reported within Canada

	 Primary responsibilities for AE receipt follow-up review
	    	C	    	R
	 Provide Auxilium information on Expedited AE within 1-3 days
	    	 	    	 
	 Submission of Expedited AE to Canadian Reg. Authorities
	    	R	    	C
	 Provide Auxilium with information on non-expedited AE’s on a weekly basis
	    	 	    	R
	* Both parties will ensure that the content of the procedures are mutually agreed upon.
			
	 	    	 Auxilium

	    	 Bayer

	 AE’s Reported outside Canada
	    	 	    	 
	 Provide a copy of serious, unexpected AE reports outside of Canada simultaneously to Bayer upon submission to Health
Canada
	    	R	    	 
	 PSUR
	    	 	    	 
	 Preparation of Canadian PSUR
	    	R	    	 
	 Review of Canadian PSUR
	    	 	    	R
	 Submission of PSUR
	    	R	    	 
			
	 Product Complaints

	    	 	    	 
	 Procedures for managing product complaints
	    	R	    	R
	 Receipt follow-up on product compliant
	    	 	    	R
	 Forward Product Compliant to Auxilium Pharmaceuticals, Inc.
	    	 	    	R
	 Evaluation of Product Compliant
	    	R	    	 
	 Conclusions provided to Bayer for technical product complaints and or when a response back to the reporter (customer) is
required
	    	R	    	C
	 Annually summarize Canadian product complaints and provide to Bayer
	    	R	    	C
	 Response to Customer
	    	 	    	R
	
	 Medical Information

	 Provide Bayer with all Auxilium published literature
	    	R	    	 
	 Assist with training Bayer Medical Information Group
	    	R	    	 
	 Management of professional and consumer inquiries from within Canada
	    	 	    	 R

  

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

 Schedule 4: Cost of Goods Components 
  

					
	Material Requirement & Standard Costs	  	 
	Auxilium Testim Testosterone Gel—NDC# 66887-001-05	  	 
			
	 Description

	  	         2003        
         Costs        

	  	 
	 PACKAGING COMPONENTS
	  	                        $            [**]	  	 
	 CHEMICALS
	  	                        $            [**]	  	 
			
	 Total Inventory
	  	                        $            [**]	  	 
	 	  	 	  	 
	 Contract Manufacturing Fee
	  	                        $            [**]	  	 
	 	  	 	  	 
	 Contract Lab Testing
	  	                        $            [**]	  	 
	 Purchasing Agent Fees
	  	                        $            [**]	  	 
	 International Freight Charges
	  	                        $            [**]	  	 
	 Overhead
	  	                        $            [**]	  	 
	 Product Liability Insurance
	  	                        $            [**]	  	 
	 	  	 	  	 
	 Total Cost Per Tube
	  	                        $            [**]	  	 
	 	  	 	  	 
	 Total Cost Per 30—Pack
	  	                        $            [**]	  	 

  

	**	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.Manufacturing Agreement Dated April 23, 2002

 Exhibit 10.5 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A CONFIDENTIAL TREATMENT REQUEST. 
  
 MANUFACTURING
AGREEMENT 
  
 DPT LABORATORIES,
LTD. 
  
 and 
  
 AUXILIUM PHARMACEUTICALS, INC. 
  
 Table of Contents 
  

							
	I—DEFINITIONS	  	3
				
	 	  	  1.1	  	ACT	  	3
	 	  	  1.2	  	PRODUCT(S)	  	3
	 	  	  1.3	  	FDA	  	3
	 	  	  1.4	  	FORECASTED NEEDS	  	4
	 	  	  1.5	  	LABEL, LABELED, OR LABELING	  	4
	 	  	  1.6	  	MARKET YEAR	  	4
	 	  	  1.7	  	PACKAGING	  	4
	 	  	  1.9	  	MATERIAL SAFETY DATA SHEETS	  	4
	 	  	  1.10	  	MANUFACTURING FEE	  	5
		
	II—PRODUCT MANUFACTURE AND SUPPLY	  	5
				
	 	  	  2.1	  	MANUFACTURE AND PURCHASE	  	5
	 	  	  2.2	  	SUPPLY OF MATERIALS	  	6
	 	  	  2.3	  	MATERIALS TESTING	  	6
	 	  	  2.4	  	MATERIAL SAFETY DATA SHEETS	  	6
	 	  	  2.5	  	COMMENCEMENT OF MANUFACTURING	  	7
	 	  	  2.6	  	PRODUCTION	  	7
	 	  	  2.7	  	REJECTED PRODUCTS	  	8
	 	  	  2.8	  	PRODUCT PRICE	  	10
	 	  	  2.9	  	BACK-UP SUPPLIER	  	11
		
	III—SHIPMENT AND RISK OF LOSS	  	12
				
	 	  	  3.1	  	SHIPMENT	  	12
	 	  	  3.2	  	DELIVERY TERMS	  	12
	 	  	  3.3	  	CLAIMS	  	12
		
	IV—TERM AND TERMINATION	  	12
				
	 	  	  4.1	  	TERM	  	12
	 	  	  4.2	  	TERMINATION	  	13
	 	  	  4.3	  	PAYMENT ON TERMINATION	  	13

  

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

							
	 	  	  4.4	  	SURVIVAL	  	14
		
	V—CERTIFICATES OF ANALYSIS AND MANUFACTURING COMPLIANCE	  	14
				
	 	  	  5.1	  	CERTIFICATES OF ANALYSIS	  	14
	 	  	  5.2	  	STABILITY TESTING	  	14
	 	  	  5.3	  	VALIDATION WORK OR ADDITIONAL TESTING	  	15
	 	  	  5.4	  	FDA INSPECTION	  	15
	 	  	  5.5	  	NDA’S, ANDA’S, & 510(K)’S	  	15
		
	VI—WARRANTIES	  	15
				
	 	  	  6.1	  	CONFORMITY WITH SPECIFICATIONS	  	15
	 	  	  6.2	  	COMPLIANCE WITH THE ACT	  	16
	 	  	  6.3	  	CONFORMITY WITH FDA REGULATIONS AND CGMP’S	  	16
	 	  	  6.4	  	COMPLIANCE OF PACKAGING AND LABELING WITH LAWS AND
REGULATIONS	  	17
	 	  	  6.5	  	ACCESS TO DPT’S FACILITIES	  	17
	 	  	  6.6	  	DISCLAIMER	  	17
		
	VII—PRODUCT RECALLS	  	18
		
	VIII—FORCE MAJEURE: FAILURE TO SUPPLY	  	18
				
	 	  	  8.1	  	FORCE MAJEURE EVENTS	  	18
		
	IX—IMPROVEMENTS	  	19
	 	  	  9.1	  	CHANGES BY COMPANY	  	19
	 	  	  9.2	  	CHANGES BY DPT	  	19
	 	  	  9.3	  	CHANGES BY REGULATORY AUTHORITIES	  	19
	 	  	  9.4	  	OBSOLETE INVENTORY	  	20
	 	  	  9.5	  	DISPOSAL COSTS	  	20
		
	X—CONFIDENTIAL INFORMATION: INTELLECTUAL PROPERTY RIGHTS	  	20
				
	 	  	10.1	  	CONFIDENTIAL INFORMATION	  	20
	 	  	10.2	  	CONFLICT OF INTEREST/NON-COMPETITION	  	19
	 	  	10.3	  	TRADEMARKS AND TRADE NAMES	  	21
		
	XI—INDEMNIFICATION	  	21
				
	 	  	11.1	  	INDEMNIFICATION BY DPT	  	21
	 	  	11.2	  	INDEMNIFICATION BY COMPANY	  	21
	 	  	11.3	  	PATENT AND OTHER INTELLECTUAL PROPERTY RIGHTS	  	22
	 	  	12.4	  	CONDITIONS OF INDEMNIFICATION	  	22
	 	  	11.5	  	EVIDENCE OF LIABILITY INSURANCE	  	22
		
	XII—GENERAL PROVISIONS	  	23
				
	 	  	12.1	  	NOTICES	  	23
	 	  	12.2	  	ENTIRE AGREEMENT; AMENDMENT	  	23
	 	  	12.3	  	WAIVER	  	24
	 	  	12.4	  	OBLIGATIONS TO THIRD PARTIES	  	24
	 	  	12.5	  	ASSIGNMENT	  	24
	 	  	12.6	  	GOVERNING LAW AND ARBITRATION	  	24
	 	  	12.7	  	SEVERABILITY	  	25
	 	  	12.8	  	HEADINGS, INTERPRETATION	  	25
	 	  	12.9	  	COUNTERPARTS	  	25
	 	  	12.10	  	INDEPENDENT CONTRACTOR	  	26

  

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

 2 

 This Manufacturing Agreement (the “Agreement”) is made as of this 23rd day of April 2002
by and between Auxilium Pharmaceuticals, Inc. (“COMPANY”)., a corporation organized under the laws of the State of Delaware with its principal place of business 160 W. Germantown Pike, Suite D-5, Norristown, PA19401 (hereinafter referred
to as “COMPANY”) and DPT Laboratories, Ltd., a Texas Limited Partnership with a place of business at 307 East Josephine Street, San Antonio, Texas 78215 (hereinafter collectively referred to as “DPT”). 
  
 WITNESSETH: 
  
 WHEREAS, COMPANY is engaged in the distribution and sale of certain
pharmaceutical products; and 
  
 WHEREAS, DPT is engaged in
the manufacture, distribution and sale of such products and has the capability of manufacturing like products for third parties; and 
  
 WHEREAS, COMPANY desires DPT to manufacture the Products more specifically described in Schedule A and DPT desires to do so. 
  
 NOW, THEREFORE, in consideration of the mutual covenants hereinafter
expressed, the parties agree as follows: 
  
 1—DEFINITIONS 
  
 1.1 Act 
  
 “Act” means the Federal Food, Drug and Cosmetic Act, as amended,
and regulations promulgated thereunder. 
  
 1.2 Product(s) 
  
 “Product(s)” means product(s) (as listed in Schedule A)
manufactured, packaged, labeled and/or finished by DPT to meet the Specifications (as hereinafter defined). 
  
 1.3 FDA 
  
 “FDA” means the United States Food and Drug Administration, or any successor entity thereto. 
  

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

 3 

 1.4 Forecasted Needs 
  
 “Forecasted Needs” means COMPANY’s estimate of Products to be ordered from DPT for each of the twelve (12) months following the month in
which such estimate is provided. 
  
 1.5 Label, Labeled, or Labeling

  
 “Label”, “Labeled”, or
“Labeling” means all labels and other written, printed, or graphic matter upon: (i) Product or any container or wrapper utilized with Product or (ii) any written material accompanying Product. 
  
 1.6 Market Year 
  
 “Market Year” means a period of twelve (12) consecutive months commencing on the first day of the month following
the initial sale of Product by COMPANY and beginning on January 1st of each consecutive year thereafter. 
  
 1.7 Packaging 
  
 “Packaging” means all primary containers, cartons, shipping cases, inserts or any other like material used in packaging, or accompanying, Product. 
  
 1.8 Specifications 
  
 “Specifications” means the (i) raw material specifications (including approved suppliers, art proofs, chemical, micro, and packaging
specifications); (ii) sampling requirements (i.e., lab, chemical, and micro); (iii) compounding module, including compounding process and major equipment; (iv) intermediate specifications; (v) packaging module (including packaging procedures, torque
and fill weights); (vi) finished Product specifications release criteria including DPT’s Acceptable Quality Limits (“AQL’s), as approved in writing by COMPANY; (vii) stability specifications; and (viii) test methods. Specifications
shall be established and/or amended from time to time upon the written agreement of both DPT and COMPANY via a Product Change Request (“PCR”) in accordance with Section IX below. 
  
 1.9 Material Safety Data Sheet 
  
 “Material Safety Data Sheet” (“MSDS”) means written or
printed material concerning a hazardous chemical which is prepared in accordance with 
  

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

 4 

 the regulations promulgated by the Occupational Safety & Health Administration, or any successor entity thereto.

  
 1.10 Manufacturing Fee 
  
 “Manufacturing Fee” means the fee paid by COMPANY to DPT for
services required to manufacture and package Products. The Manufacturing Fee is quoted in single final Product unit increments (i.e. by the bottle or tube.) The Manufacturing Fee shall include services for incoming inspection of raw material,
compounding of bulk, packaging Product, testing Product for release, making Product ready for shipment, and minimum product documentation (five (5) copies of Certificate of Analysis.) The Manufacturing Fee does not include, without limitation, any
Research & Development support, Package Engineering studies, Validation support, Warehousing or Distribution of Product, FDA audit support, extensive reporting requirements, or additional laboratory testing beyond that required in the
Specifications. These services are in addition to the Manufacturing Fee and shall be billed by the hour at DPT’s then-prevailing R&D hourly rate. In addition, the Manufacturing Fee does not include any material costs or costs associated
with establishing or manufacturing new material such as art charges, die costs, plate costs, and packaging equipment change parts. These items are billed separately in accordance with paragraph 2.8 below. 
  
 II—PRODUCT MANUFACTURE AND SUPPLY 
  
 2.1 Manufacture and Purchase. 
  
 (a) Except to the extent specified in Section 2.9 of this Agreement, subject
to the terms and conditions of this Agreement, DPT agrees that it will manufacture for and provide to COMPANY, and COMPANY agrees that it will purchase from DPT, one hundred percent (100%) of the annual requirements of the Products identified in
Schedule A attached hereto. COMPANY shall pay DPT for Products as defined in paragraph 2.8 below. DPT shall manufacture Products in accordance with the Specifications or pursuant to exceptions approved in writing by COMPANY, and in sufficient
quantity to meet the COMPANY’s Forecasted Needs for the length of this Agreement. 
  
 (b) All orders for the Products shall be made pursuant to the COMPANY’s Forecasted Needs delivered to DPT in accordance with Section 2.6 hereof. 
  
 (c) DPT shall manufacture and package the Products supplied to Company in accordance with the specifications. No change in
the specifications, methods, processes and/or procedures may be made unless (i) Company agrees in writing 
  

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

 5 

 thereto or (ii) such change is required by (1) any regulatory agency which has jurisdiction over Company;
provided, that, DPT shall notify Company prior to making any such required change and obtain Company’s written approval of any revised Specifications before implementation. 
  
 2.2 Supply of Materials. 
  
 (a) DPT shall supply, at the expense of COMPANY pursuant to subsection (c)
below, all raw material components necessary for the manufacture of Products. DPT shall be responsible for the performance of all necessary quality control testing of the raw material components in accordance with DPT’s Standard Operating
Procedures (“SOPs”). DPT shall maintain and enforce a vendor qualification program in accordance with its SOPs, but shall not be responsible for qualifying COMPANY dictated suppliers that are not already participating in such program
unless specifically engaged by COMPANY to do so and at COMPANY’S expense. 
  
 (b) COMPANY shall provide DPT with Specifications (including art proofs) for Packaging and Labeling, and DPT shall purchase, at the expense of COMPANY, Packaging and Labeling in accordance with the Specifications.

  
 (c) All DPT supplied materials will be billed to COMPANY on
the respective invoice for Product, into which the material was converted, and in addition to the Manufacturing Fee, all in accordance with the provisions of paragraph 2.8 below. 
  
 2.3 Materials Testing. 
  
 All raw materials and packaging supplies shall, when received by DPT, be submitted to analysis and evaluation in accordance with the Specifications and
DPT’s SOP’s to determine whether or not said materials meet the Specifications. The cost of all such analyses and evaluations shall be borne by DPT, except as otherwise provided in paragraph 2.2 of this Agreement. DPT agrees to maintain
and, if necessary, make available records of all such analyses and evaluations. 
  
 2.4 Material Safety Data Sheets. 
  
 Prior to
DPT’s receipt and testing, and as a condition precedent of any testing or formulation work by DPT pursuant to this Agreement, DPT shall formulate generic MSDS sheets at COMPANY’S expense per agreed protocol 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 6 

 for finished products, and obtain MSDS sheets for all components necessary for the manufacture of Products from the
respective suppliers of such components. Any components or Products requiring disposal shall be presumed hazardous unless otherwise provided in the MSDS information provided. 
  
 2.5 Commencement of Manufacturing for New Products. 
  
 No later than three (3) months prior to the initial Market Year of a new Product, COMPANY agrees to notify DPT of its
delivery requirements for the succeeding three (3) months and shall provide its Forecasted Needs for the first Market Year in order to ensure timely delivery of Product for initial sale and marketing. 
  
 2.6 Production. 
  
 (a) COMPANY agrees to purchase from DPT all Products manufactured for COMPANY by DPT in accordance with COMPANY’s
Forecasted Needs to the extent such Products meet the Specifications or exceptions approved in writing by COMPANY. 
  
 (b) Products shall be manufactured in increments of full batch quantities. DPT will supply COMPANY with the estimated batch yield of each Product. From
time to time, DPT may update these estimates based upon actual manufacturing experience. 
  
 (c) At the initiation of the first Market Year and thereafter, COMPANY shall provide DPT with specific data as to its Forecasted Needs for the following twelve (12) months on a monthly basis in substantially the form
attached hereto as Schedule XX (“Monthly Forecast”). This Monthly Forecast will be updated on a rolling, monthly basis thereafter. DPT shall, no later than fifteen (15) business days after receipt of each such forecast, notify Company in
writing of any prospective problems it might have in meeting Company’s forecasted order quantities or estimated delivery dates. 
  
 It is understood and agreed that with respect to any forecasts issued to DPT by COMPANY pursuant to the terms hereof, the forecast for the first three (3)
months thereof shall constitute a firm order for Products, and no purchase orders shall be required. COMPANY shall specify the requested delivery dates for the first three months of the Forecasted Needs therein and DPT shall meet those dates,
subject to the availability of materials. DPT may, at its sole discretion, produce Product up to thirty (30) days prior to the requested delivery date in order to accommodate fluctuations in production demands. However, there will never be more than
a thirty (30) day period from production 
  

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 7 

 compound to completion of packaging, without the prior consent of COMPANY. During the current month before the next
Monthly Forecast is due, if the second three (3) months of the period addressed in the Forecasted Needs is expected to change by more than five percent (5%), COMPANY will provide DPT with an appropriate update. 
  
 Notwithstanding the binding nature of the initial three months of the
Forecasted Needs, COMPANY shall be entitled to postpone delivery dates or cancel Forecasted Needs provided that: (i) COMPANY reimburses DPT for any raw material components ordered to support such production as well as any related storage charges;
and (ii) in the event such notice of postponement or cancellation is received within two weeks of the original delivery date and DPT is unable to replace the scheduled production, COMPANY agrees to reimburse DPT for the lost manufacturing fee
revenue pertaining to the postponed or scheduled production. 
  
 The second three (3) months of the period addressed in the Forecasted Needs shall be utilized by DPT for purposes of raw material acquisition on behalf of COMPANY and DPT production planning. Although DPT shall employ all commercially
reasonable efforts to minimize the raw material inventory purchased on behalf of COMPANY, certain raw materials may have long lead times, require a minimum order quantity, and/or present a substantial economic order quantity. Therefore, DPT may
order the chemical and packaging components necessary to support up to six (6) months of COMPANY’s Forecasted Needs, or the applicable minimum order quantity, whichever is greater. Notwithstanding the foregoing, with respect to certain raw
materials that may not be readily available in the market, Company reserves the right to require DPT to maintain in stock, specified amounts of those tested materials, provided that COMPANY pays for such safety stock in advance as well as storage
charges. 
  
 (d) COMPANY shall specify delivery dates in its
Forecasted Needs with at least ninety (90) days prior notice if the requirements are at or below one hundred twenty-five percent (125%) of the most recently supplied Forecasted Needs for such period, and at least one hundred twenty (120) days prior
to the requested delivery date if the requirements exceed the most recently supplied Forecasted Needs for such period by more than one hundred twenty-five percent (125%). 
  
 (e) DPT shall fill and ship all orders of Products in accordance with COMPANY’s written instructions in compliance with
this Agreement. DPT shall distribute the Product to COMPANY’S customers in accordance with the terms of Schedule A attached hereto. 
  
 2.7 Rejected Products. 
  

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 (a) Except for any minor departures from Specifications or nonconformities not impairing the safety or
efficacy of Products to which COMPANY may reasonably waive objection, COMPANY may reject any Product which fails to meet the Specifications. COMPANY shall, within twenty (20) days after its receipt of any shipment of Product and related Certificate
of Analysis of Product batch (as described in paragraph 5.1 hereof), notify DPT in writing of any claim relating to rejected Product batch and, failing such notification, shall be deemed to have accepted such Product batch. Such notice to DPT shall
specify why the Product batch failed to perform to Specifications. DPT shall have an opportunity to inspect or test said Product batch. All Products shall be submitted to inspection and evaluation in accordance with DPT’s SOP’s to
determine whether or not said Products meet the Specifications. As to any such Product batch (including phases of or complete batches of bulk product) which is determined to fail the Specifications and may be rejected by COMPANY or DPT
(“Rejected Product”), DPT, at its sole cost and expense (including shipping) shall replace such Rejected Product promptly after all raw materials are available to DPT for the manufacture. If requested, DPT shall make arrangements with
COMPANY for the return or disposal of Rejected Product at DPT’s sole cost and expense. 
  
 (b) In the event of a conflict between the test results of DPT and the test results of COMPANY with respect to any shipment of Product batch, a sample of such Product batch shall be submitted by DPT to an independent
laboratory acceptable to both parties for testing against the Specifications under procedures employed in the Specifications. The fees and expenses of such laboratory testing shall be borne entirely by the party against whom such laboratory’s
finding are made. If results from the independent laboratory are inconclusive, final resolution will be settled in accordance with paragraph 13.6 (b) below. 
  
 (c) Following validation, for all commercial production batches of a Product produced by DPT (“Commercial Batches”) in the event a Rejected
Product is due to COMPANY supplied information, formulations or materials, COMPANY shall bear one hundred percent (100%) of all costs directly related to and invoiced for Rejected Product including cost of destruction of the Rejected Product. In the
event a Rejected Product is due to DPT’s willful malfeasance, breach of its warranties provided for herein or any other material breach of this Agreement and such conduct renders the Product unmarketable, or in the event more than two (2)
Commercial Batches are rejected in any calendar year, DPT shall bear one hundred percent (100%) of the manufacturing fees, costs of materials supplied by DPT and costs of destruction. In the event the Product does not meet final specifications, but
such failure is not due to either COMPANY supplied information or DPT’s, willful malfeasance, breach of its 
  
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REQUEST. 
  

 9 

 warranties or any other material breach of this Agreement the COMPANY shall bear all material costs with DPT bearing all
Manufacturing Fees related to Rejected Product, and with destruction to be conducted by the COMPANY with costs shared equally by the parties. Destruction of rejected Product shall be in accordance with all applicable laws and regulations and the
party conducting the destruction shall indemnify the other party hereto for any liability, costs or expenses, including attorney’s fees and court costs, relating to a failure to dispose of such Product in accordance with such laws and
regulations. The party conducting the destruction shall also provide to the other party hereto all manifests and other applicable evidence of proper destruction as may be requested by applicable law. The parties agree that any dispute concerning the
operation or effect of this paragraph 2.7 will be resolved in accordance with paragraph 13.6 (b) below. 
  
 2.8 Product Price. 
  
 (a)
The Manufacturing Fees to be paid by COMPANY to DPT are listed in Schedule A. The parties hereto agree that the Manufacturing Fees set out in Schedule A shall be re negotiated, in good faith, at the beginning of each calendar year. If the parties
are unable to agree on a re-negotiated price at least thirty (30) days prior to the start of a new twelve (12) month period, then this Agreement, effective the first day of January of the new twelve (12) month period, shall continue in force with
prices being adjusted to reflect the change in the Consumer Price Index during the preceding twelve (12) month period until price negotiation can be completed. Prices for new Products or new Product sizes, not initially included in Schedule A, shall
be negotiated and DPT and COMPANY shall arrive at a mutual agreement with respect to prices at the time said new Products or new Product sizes are added to Schedule A. If a negotiated price cannot be agreed upon, final pricing will be settled in
accordance with paragraph 13.6 (b) below. 
  
 (b) Price of
materials to be paid by COMPANY to DPT (“Quoted Price of Material”) shall be listed in an amendment to Schedule A within 90 days of commencement of regular production of the applicable Product. Quoted Price of Material is calculated as
DPT’s “Standard Cost” (Standard Cost is defined as average actual cost to DPT of material plus incoming freight plus yield loss adjustment) plus mark-up of [**]% for administration and carrying costs. Quoted Price of Material
does not include, without limitation, new or non-recurring costs associated with establishing, testing or manufacturing changes in components or new material such as reference standards, reagents, art charges, die costs, mold or tooling costs, plate
costs, and packaging equipment change parts required as a result of changes to existing specifications by Company or pursuant to regulatory requirements. These items will be invoiced to COMPANY at DPT’s cost on a net thirty (30) 
  
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 10 

 basis. COMPANY agrees to reimburse DPT for any such authorized expenditures made on COMPANY’s behalf. DPT’s
Quoted Price of Material will be adjusted once annually at the beginning of each calendar year and Schedule A shall be amended accordingly. In the event, however, the cost of a raw material increases or decreases greater than ten percent (10%), DPT
may notify COMPANY and, with COMPANY’s approval, adjust its invoice price for said material to COMPANY to compensate for the increase or decrease. In the event of an increase in the cost of raw materials, COMPANY may, (to the extent available)
require DPT to obtain competitive bids from vendors of affected raw materials prior to approving any adjustment to DPT’s invoice price. 
  
 (c) Payment for all deliveries of Product and services shall be made in U.S. dollars, net thirty (30) days, after date of DPT’s invoice
therefore. Invoices shall be generated upon QA Release of Product from DPT. Total invoice shall be equal to the quantity of Product released times the Total Price per unit, effective on the date of Product release, as listed in Schedule A. A late
fee of one and one-half percent (1.5%) of total invoice can be added each month for late payments. DPT, at its sole discretion, has the right to discontinue COMPANY’s credit on future orders and to put a hold on any production or shipment of
Product if COMPANY’s account is past due by more than ninety (90) days. Such hold on production or shipment shall not be considered a breach of this Agreement by DPT. In the event credit is discontinued, a one hundred percent (100%) material
deposit paid by COMPANY to DPT will be required prior to DPT ordering raw materials. In addition, a fifty percent (50%) Manufacturing Fee deposit will be required prior to DPT manufacturing any Product and the balance of the invoice must be paid in
full prior to shipment. 
  

	2.9	Back-Up Supplier 

  
 In the event that DPT is unable to meet COMPANY’s supply requirements, COMPANY shall have the immediate right to have a third-party supplier act as
Back-Up Supplier (“Back-Up Supplier”). In such an event, DPT shall use commercially reasonable efforts to enable Back-Up Supplier to manufacture and package the Products, provided that Back-Up Supplier agrees to enter into an acceptable
agreement of confidentiality with DPT and DPT is reimbursed its reasonable costs and expenses associated with such assistance. Subject to the foregoing, DPT shall provide to Back-Up Supplier the Specifications and any other information reasonably
necessary for the manufacturing and packaging of the Products (“Technical Information”). Any disclosure or use of Technical Information will be subject to the confidentiality restrictions set forth in this Agreement. 
  
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

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 III—SHIPMENT AND RISK OF LOSS 
  
 3.1 Shipment. 
  
 Shipment of Product shall be in accordance with COMPANY’s written instructions, provided that shipment is made in
accordance with all relevant statutory requirements. 
  
 3.2 Delivery Terms.

  
 The purchase price of Products in Schedule A hereof shall
be F.O.B., DPT’s plant of manufacture, San Antonio, Texas. COMPANY will bear all risk of loss, delay, or damage in transit, as well as cost of freight and insurance. 
  
 3.3 Claims. 
  
 The weights, tares and tests affixed by DPT’s invoice shall govern unless established to be incorrect. Claims relating to quantity, weight and loss
or damage to any Product sold under this Agreement shall be waived by COMPANY unless made within thirty (30) days of receipt of Product by COMPANY. 
  
 IV—TERM AND TERMINATION 
  
 4.1 Term. 
  
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 12 

 This Agreement shall commence on the first day of the month following the mutual signing of this document
and will continue until the expiration of the Third (3rd) Market Year for the Product identified in Schedule A, unless sooner terminated pursuant to paragraph 4.2 below. This Agreement may be extended by mutual written agreement between both parties
and Schedule A shall be amended accordingly to reflect extended terms. In the absence of a written agreement to extend this Agreement, receipt and acceptance by DPT of COMPANY’s purchase order for Products beyond the term of this Agreement
shall constitute extension of this Agreement as it applies to the accepted purchase order with all other terms and conditions of this Agreement in full effect except that the term shall only be through completion of the accepted purchase order.
COMPANY shall have the option to renew this agreement for an additional three year and one-half year term by giving at least eighteen months prior written notice. 
  
 4.2 Termination. 
  
 This Agreement may be terminated at any time upon the occurrence of either of the following events: 
  
 (a) The failure of either party to comply with its obligations herein, which failure is not remedied within ninety (90) days
after written notice by the other party of its intention to terminate. 
  
 (b) The failure of DPT to meet substantially all of Company’s requirements for three (3) consecutive months. 
  
 (c) Notice by either party to the other upon its insolvency or bankruptcy. 
  
 4.3 Payment on Termination. 
  
 In the event of the termination or cancellation of this Agreement for any reason other than DPT’s breach hereof, and without prejudice to any other
rights and remedies available to DPT hereunder, COMPANY agrees to reimburse DPT at Standard Cost for any raw materials, directly ordered for the manufacture of Products based on COMPANY’s Forecasted Needs and for which DPT has no other use, as
well as for work-in-process commenced by, and finished goods of, DPT in connection with the performance of this Agreement. With respect to any raw materials and components ordered for manufacture of Products for which DPT can reasonably find
alternate use, DPT shall only charge COMPANY its 
  
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THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 13 

 inventory carrying costs for storage of such raw materials and components until use (not to exceed twelve (12) months).
Within sixty (60) days of termination and at COMPANY’s written request, DPT shall furnish COMPANY with a statement of all materials in inventory, and shall ship such materials and the applicable invoice therefore to COMPANY at COMPANY’s
cost and per COMPANY’s written instructions. COMPANY shall pay for materials upon receipt of such invoice. 
  
 4.4 Survival. 
  
 Termination of this Agreement under paragraph 4.2 or due to expiration or cancellation shall not relieve either party of obligations or liability for
breaches of this Agreement incurred prior to or in connection with termination, expiration or cancellation. Sections VI, VII, IX, X, XI and XII hereof shall survive the termination or cancellation of this Agreement for any reason. 
  
 V—CERTIFICATES OF ANALYSIS AND MANUFACTURING COMPLIANCE

  
 5.1 Certificates of Analysis. 
  
 DPT shall test each lot of Product purchased pursuant to this Agreement
before delivery to COMPANY. Each Certificate of Analysis shall set forth the items tested, specifications and test results for each lot delivered. DPT shall send a minimum of five (5) Certificates of Analysis to COMPANY at the time of the release of
Product. DPT warrants the accuracy of each Certificate of Analysis to a reasonable degree of scientific certainty. Extraordinary reporting or documentation, outside this Agreement, may be subject to an additional charge by DPT. 
  
 Notwithstanding the foregoing, COMPANY reserves the right to have additional
release testing of some or all Product batches performed by a third-party, at COMPANY’s sole cost and expense, provided that any additional release testing conducted at the COMPANY’S request is conducted within thirty days after QA release
of the Product from DPT and does not affect the COMPANY’S obligations pursuant to Section 2.8(c) above, unless it is ultimately determined that the Product does not meet its Specifications pursuant to Section 2.7(b) above. 
  
 5.2 Stability Testing. 
  
 DPT shall perform its standard stability test program as defined in DPT’s SOP’s or as separately agreed to in
accordance with a PCR for each of the Products contained herein. For the first Market Year, COMPANY shall receive a 
  
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REQUEST. 
  

 14 

 Quarterly Report for the Product and a copy of DPT’s Annual Report for the Product. DPT will be reimbursed by
COMPANY for all expenses incurred in rendering the Quarterly Report. Thereafter, COMPANY shall receive a copy of DPT’s Annual Report for the Product as long as DPT is continuing to produce such Product for COMPANY and for as long as
COMPANY’s account is current. If COMPANY elects to perform its own stability testing on Product, COMPANY agrees to provide DPT with a copy of the results from such testing on an annual basis. 
  
 5.3 Validation Work or Additional Testing. 
  
 It is understood by the parties hereto that the responsibility for any
validation work in connection with the Product shall be the sole responsibility of DPT in accordance with the written Project Protocol establishing methodology and pricing for such services. It is understood between the parties hereto that if DPT is
required by a regulatory authority to perform any additional validation studies or additional testing of the Product in order to legitimately continue to engage in the manufacture of the Product for COMPANY and DPT and COMPANY cannot reach an
agreement on a written Project Protocol, then DPT shall be under no obligation to continue the manufacture of the Product affected by said regulation. 
  
 5.4 FDA Inspection. 
  
 DPT shall advise COMPANY within one (1) business day if an authorized agent of the FDA or other governmental agency visits DPT’s manufacturing
facility and requests or requires information or changes which directly pertain to the Products. FDA audit time specific to Products will be billed to COMPANY from DPT at the then-prevailing QA hourly rate. 
  
 5.5 NDAs, ANDAs, & 510(k)s. 
  
 COMPANY agrees to provide DPT with copies of any sections of NDAs, ANDAs,
510(k)s or other regulatory filings applicable to the Products manufactured and/or tested by DPT, and copies of any changes in or updates of same as they, from time to time, hereafter occur. 
  
 VI—WARRANTIES 
  
 6.1 Conformity with Specifications. 
  
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THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 15 

 DPT warrants that: 
  
 (a) all Products sold and delivered pursuant to this Agreement will have been manufactured in accordance with the Specifications for the finished goods,
including all requirements for release testing, at the time of release or pursuant to written exceptions approved by COMPANY at the time of manufacture and shipment. 
  
 (b) its process or technical data utilized by DPT in manufacturing or packaging the Products does not knowingly violate or
infringe any patent, copyright or trademark laws. 
  
 6.2 Compliance with the
Act. 
  
 COMPANY shall bear sole responsibility for the
validity of all test methods and appropriateness of all Specifications originated or supplied by COMPANY. In addition, COMPANY shall bear sole responsibility for all regulatory approvals, filings, and registrations and adequacy of all validation,
stability, and preservative efficacy studies. Each party warrants that it has obtained any and all necessary approvals from all applicable regulatory agencies necessary to manufacture and distribute all Products under this Agreement. 
  
 6.3 Conformity with FDA regulations and cGMP’s. 
  
 Subject to the provisions set forth in paragraph 6.2 and 6.4 hereof, DPT
warrants that all Products manufactured, held for sale, sold and shipped pursuant to this Agreement shall have been manufactured and shipped by DPT in substantial compliance with all applicable state and federal laws including, without limitation,
FDA regulations and current, written Good Manufacturing Practices. 
  
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INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 16 

 6.4 Compliance of Packaging and Labeling with Laws and Regulations. 
  
 COMPANY warrants that all Labeling copy and artwork approved, designated or
supplied by COMPANY shall be in compliance with all applicable laws and governmental regulations. Compliance with all federal, state, and local laws and regulations concerning Packaging and Labeling shall be the sole responsibility of COMPANY,
provided that DPT purchases such Packaging and Labeling as provided in paragraph 2.2 (c) hereof. 
  
 COMPANY hereby represents and warrants to DPT that all COMPANY designated formulas, components and artwork related to the Product do not violate or infringe any patent, copyright or trademark laws. 
  
 6.5 Access to DPT’s Facilities. 
  
 COMPANY shall have access to DPT’s facilities upon advance notice to
inspect DPT’s facilities and records to the extent Company deems reasonably necessary to enable Company to verify compliance by DPT with its obligations under this Agreement in relation to the Products and to verify compliance with any
statutory or regulatory requirements which are applicable to the manufacture and/or packaging of the Products. Such access shall in no way give COMPANY the right to any of DPT’s confidential or proprietary information. Notwithstanding the
foregoing, audits conducted by or on behalf of COMPANY shall be limited to one (1) time per calendar year and three (3) employees of COMPANY who are subject to the same requirements of confidentiality as COMPANY, unless additional audits are
reasonably necessary due to specifications, testing or GMP compliance issues which require additional actions. 
  
 6.6 Disclaimer.  
  
 DPT
AND COMPANY MAKE NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCT, LABELING OR PACKAGING. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE ARE HEREBY DISCLAIMED. DPT AND COMPANY AGREE THAT IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTALOR CONSEQUENTIAL DAMAGES RESULTING FROM BREACH OF THIS AGREEMENT. 
  
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 WITH RESPECT TO ANY CLAIMS, DEMANDS, SUITS OR DAMAGES IN CONNECTION WITH REJECTED PRODUCT (SECTION 2.7(c)) AND/OR
RECALLED PRODUCT(SECTION VII), ARISING FROM OR RELATING TO DPT’S WILLFUL MALFEASANCE, BREACH OF ITS WARRANTIES PROVIDED FOR HEREIN OR ANY OTHER MATERIAL BREACH OF THIS AGREEMENT, DPT’S LIABILITY TO COMPANY FOR ANY CONSEQUENTIAL DAMAGES,
SHALL BE LIMITED TO ITS EXISTING INSURANCE COVERAGE, AND ANY ADDITIONAL INSURANCE COVERAGE WHICH COMPANY IS WILLING TO PURCHASE ON BEHALF OF DPT. 
  
 VII—PRODUCT RECALLS 
  
 In the event (i) any government authority issues a request, directive or order that Product be recalled, or (ii) a court of competent jurisdiction orders
such a recall, or (iii) COMPANY reasonably determines that the Product should be recalled for any reason, the parties shall take all appropriate corrective actions reasonably requested by the other party hereto or by any government agency. In the
event that such recall results from DPT’s willful malfeasance, breach of its warranties provided for herein or any other material breach of this Agreement, DPT shall be responsible for any and all costs and expenses of the recall, including,
without limitation, expenses relating to notification, shipment, rebates and destruction or return of the recalled Product, as well as any reasonable out-of-pocket costs incurred by COMPANY in connection with any corrective action taken in
connection with the recall, in any case not to exceed the greater of (a) available insurance proceeds pursuant to Section 6.6, and (b) fifty thousand dollars ($50,000.00) per recall incident. In the event the recall results from the COMPANY’s
willful malfeasance, breach of its warranties or any other material breach of this Agreement, COMPANY shall be responsible for the expenses of the recall. 
  
 VIII—FORCE MAJEURE: FAILURE TO SUPPLY 
  
 8.1 Force Majeure Events. 
  
 If any party’s performance of this Agreement or any Exhibit is prevented, restricted or delayed (either totally or in part) by reason of any cause
beyond the reasonable control of the parties, such as acts of God, explosion, disease, weather, war, insurrection, civil strike, riot or power failure, the party so affected shall, upon giving notice thereof to the other parties, be excused from
such performance to the extent of such prevention, restriction or delay; provided, that the affected party shall use its commercially reasonable efforts to avoid or 
  
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 remove such causes of non-performance and shall continue performance with the utmost dispatch whenever such causes are
removed. 
  
 Notwithstanding the foregoing, in the event DPT is
unable to perform its obligations under this Agreement as a result of a force majeure, COMPANY shall have the right to temporarily use a Back-Up Supplier to manufacture the Product until such time that DPT can resolve any conditions resulting from
the force majeure event. 
  
 IX—IMPROVEMENTS

  
 9.1 Changes by COMPANY. 
  
 If COMPANY at any time requests a change to Product; (i) such change shall
be incorporated within the Master Batch Record and/or Specifications via a written PCR reviewed and agreed upon by both DPT and COMPANY; (ii) the parties shall mutually agree on a price adjustment of Product, if necessary, and Schedule A shall be
amended accordingly; and (iii) COMPANY shall pay DPT for the costs associated with such change including, but not limited to, any additional development work required, charged at DPT’s then-prevailing R&D rates. 
  
 9.2 Changes by DPT. 
  
 DPT agrees that any changes developed by DPT, which may be incorporated into the Product shall require the written approval
of COMPANY via a PCR prior to such incorporation. If such changes require a revision to the Specifications, such revised Specifications must be approved in writing by COMPANY before they are implemented. It is also agreed that any regulatory filings
incident to any such change shall be the sole responsibility of COMPANY. 
  
 DPT further agrees to notify COMPANY within three (3) business days of any confirmed out of specifications findings, changes to batch records or processes, release testing changes, investigations, or supply chain
interruptions for product of greater than one week. 
  
 9.3 Changes by
Regulatory Authorities. 
  
 DPT agrees that any changes
required by regulatory authority, shall be incorporated into the Product as evidenced by the written approval of COMPANY via a PCR prior to such incorporation. At the time of such incorporation, such changes shall become part of the Specifications
and such revised Specifications 
  
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 must be approved in writing by COMPANY before they are implemented. If, as a result of such change, DPT is required by a
regulatory authority to perform validation studies for purposes of validating new manufacturing process or cleaning procedures or new raw material and finished Product assay procedures with respect to Product in order to continue to engage in the
manufacture of said Product for COMPANY, such studies shall be conducted in accordance with paragraph 5.3 herein. Due to said changes the parties shall mutually agree upon an adjustment to the price of Product, if necessary, and Schedule A shall be
amended accordingly. 
  
 9.4 Obsolete Inventory. 
  
 Any COMPANY-specific inventory including, but not limited to, raw materials,
work-in-process, and finished goods rendered obsolete as a result of formula, artwork or packaging changes requested by COMPANY or by changes required by regulatory authority shall be reimbursed to DPT by COMPANY at DPT’s Standard Cost. At such
time and unless otherwise agreed by DPT, DPT will ship the obsolete inventory to COMPANY for destruction by COMPANY. COMPANY shall bear one hundred percent (100%) of all destruction costs related to said obsolete inventory. The destruction shall be
in accordance with all applicable laws and regulations. COMPANY shall also provide DPT with all manifests and other applicable evidence of proper destruction as may be requested by DPT or required by applicable law. If DPT does not receive
disposition instructions from COMPANY within ninety (90) days from date of obsolescence, obsolete inventory remaining at DPT’s facilities may be subject to storage fees. 
  
 9.5 Disposal Costs. 
  
 DPT reserves the right to invoice COMPANY for all costs associated with disposal of controlled substances, unless the disposal relates to nonconforming
batches due to the failure of DPT to follow established written procedures. 
  
 X—CONFIDENTIAL INFORMATION: INTELLECTUAL PROPERTY RIGHTS 
  
 10.1 Confidential Information. 
  
 The provisions of the Confidentiality and Nondisclosure Agreement between the parties dated July 12, 2000 are incorporated herein by reference. 
  
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REQUEST. 
  

 20 

 10.2 Conflict of Interest/Non-Competition 
  
 It is understood and agreed that DPT manufactures products for itself and third-parties, some of which may be substantially
equivalent to and in competition with Products of COMPANY. Nonetheless, DPT represents and warrants that it is authorized to enter into this Agreement, that the terms of this Agreement are not inconsistent with or a violation of any contractual or
other legal obligation to which it is subject and that it will not enter into any contractual or legal obligations that are inconsistent with or in violation of this Agreement. 
  
 10.3 Trademarks and Trade Names. 
  
 (a) Each party hereby acknowledges that it does not have, and shall not acquire, any interest in any of the other party’s trademarks or trade names
unless otherwise expressly agreed. 
  
 (b) Each party agrees not
to use any trade names or trademarks of the other party, except as specifically authorized by the other party in writing both as to the names or marks which may be used and as to the manner and prominence of use. 
  
 XI—INDEMNIFICATION 
  
 11.1 Indemnification by DPT. 
  
 DPT will indemnify, defend, and hold COMPANY harmless against any and all
liability, damage, loss, cost, or expense (including reasonable attorney’s fees) resulting from any third party claims made or suits brought against COMPANY which arise from DPT’s willful malfeasance, breach of its warranties provided for
herein or any other material breach of this Agreement. 
  
 11.2 Indemnification
by COMPANY. 
  
 COMPANY will indemnify, defend and hold DPT
harmless against any and all liability, damage, loss, cost or expense (including reasonable attorney’s fees) resulting from any third-party claims made or suits brought against DPT which arise from COMPANY’s willful malfeasance, breach of
its warranties provided for herein or which arise out of the promotion, distribution, use, testing or sales of Products, including, without limitation, any claims, express, implied or 
  
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A CONFIDENTIAL TREATMENT REQUEST. 
  

 21 

 statutory, made as to the efficacy, safety, or use to be made of Products, and claims made by reason of any Product
Labeling or any Packaging containing Product (provided such packaging and Labeling was purchased by DPT as provided in paragraph 2.2 (c) hereof), unless such liability, damage, loss or expense arises from DPT’s willful malfeasance, breach of
its warranties under Section VI hereof, or any other material breach of this Agreement. 
  
 11.3 Patent and Other Intellectual Property Rights. 
  
 (a) COMPANY will indemnify, defend and hold DPT harmless from any damage, judgment, loss, cost or other reasonable expense (including reasonable attorney’s fees) arising from claims that Products or the use of the Product names and any
other trademarks, trade names, or trade dress used by COMPANY in connection with Products infringes patent or other proprietary rights of a third-party. 
  
 (b) DPT shall indemnify and hold COMPANY harmless from all costs, damages and expense (including reasonable attorney’s fees) arising out of any suit
or action brought against COMPANY based upon a claim that any process or technical data furnished or utilized by DPT infringes any patent or other proprietary rights. 
  
 11.4 Conditions of Indemnification. 
  
 If either party expects to seek indemnification from the other under paragraphs 11.1, 11.2, or 11.3 hereof, it shall promptly give notice to the other
party of any such claim or suit threatened, made or filed against it which forms the basis for such claim of indemnification and shall cooperate fully with the other party in the defense of all such claims or suits. No settlement or compromise shall
be binding on a party hereto without its prior written consent. 
  
 11.5
Evidence of Liability Insurance. 
  
 It is further agreed
that each party hereto shall furnish to the other evidence of products and contractual liability insurance coverage affording not less than two million dollars ($2,000,000) each occurrence combined single limit, bodily injury/property damage and
five million dollars ($5,000,000) aggregate liability limits. Each insurer shall name the other as an additional insured. Such evidence of insurance coverage can be in the form of the original policy or Certificate of Insurance which shall provide
that the insurer has assumed the liability as provided for herein. In addition, such insurers shall warrant that such 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST. 
  

 22 

 insurance will not be changed or canceled without at least thirty (30) days prior written notice to the respective
indemnities. 
  
 XII—GENERAL PROVISIONS

  
 12.1 Notices. 
  
 Any notices permitted or required by this Agreement shall be sent by telex
or fax or by certified or registered mail and shall be effective the earlier of the date received or three (3) days after deposit in the U.S. mail, if sent and addressed as follows or to such other address as may be designated by either party in
writing: 
  

							
	 If to DPT:
	 	DPT Laboratories, Ltd:	 	 	 	 
	 	 	Attention: President	 	 	 	 
	 	 	P.O. Box 1659	 	 	 	 
	 	 	San Antonio, Texas 78296	 	 	 	 
	 	 	 	 	 	 	 
	 With a copy to:
	 	General Counsel	 	 	 	 
	 	 	318 McCullough	 	 	 	 
	 	 	San Antonio, Texas 78215	 	 	 	 
	 	 	Fax (210) 227-6132	 	 	 	 
	 	 	 	 	 	 	 
	 If to COMPANY:
	 	COMPANY	 	 	 	 
	 	 	Attention: General Counsel	 	 	 	 
	 	 	160 W. Germantown Pike	 	 	 	 
	 	 	Suite D-5	 	 	 	 
	 	 	Norristown, PA 19401	 	 	 	 
	 	 	Fax:    610-239-8853	 	 	 	 

  

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

 23 

 12.2 Entire Agreement; Amendment. 
  
 The parties hereto acknowledge that this document sets forth the entire agreement and understanding of the parties and
supersedes all prior written or oral agreements or understandings with respect to the subject matter hereof, and shall supersede any conflicting portions of DPT’s quotation, acknowledgment and invoice forms and COMPANY’s Purchase Order and
other written forms. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by the party against whom enforcement is sought. No course of dealing or usage of trade
shall be used to modify the terms and conditions herein. 
  
 12.3 Waiver.

  
 No waiver by either party of any default shall be
effective unless in writing, nor shall any such waiver operate as a waiver of any other default or of the same default on a future occasion. 
  
 12.4 Obligations to Third Parties. 
  
 Each party warrants and represents that proceeding herein is not inconsistent with any contractual obligations, express or implied, undertaken with any
third-party. 
  
 12.5 Assignment. 
  
 This Agreement shall be binding upon and inure to the benefit of the
successors or permitted assigns of each of the parties and may not be assigned or transferred by either party without the prior written consent of the other, which consent will not be unreasonably withheld. Any assignments, including but not limited
to, sale, transfer, or license of brand or Products, shall not release the original party hereto from their duties and obligations under this Agreement. For the purposes of this Agreement, the terms “subsidiaries” and
“affiliates” shall mean any corporation controlling, controlled by, or under common control with, either of the parties hereto. 
  
 12.6 Governing Law and Arbitration. 
  

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

 24 

 (a) The validity, interpretation and effect of this Agreement shall be governed by and construed under
the laws of the State of Texas 
  
 (b) Except with respect to
disputes concerning Confidential Information and Intellectual Property Rights as set forth in Section X of this Agreement, the parties agree to attempt to settle any disputes that arise in connection with this Agreement through good faith
non-binding mediation efforts. Each party shall bear their own attorneys fees and expenses in connection with any mediation. The parties agree that any dispute that arises in connection with this Agreement which is not settled through good faith
mediation efforts shall be settled by arbitration which shall be in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Such arbitration shall be held in (i) COMPANY’s home county, if the demand for
arbitration is initiated by DPT or (ii) Bexar County, Texas, if the demand for arbitration is initiated by COMPANY. There shall be three (3) arbitrators, one (1) to be chosen by COMPANY, one (1) to be chosen by DPT and a third to be selected by the
two arbitrators so chosen. The decision of the arbitrators shall be final and binding upon all parties and their respective successors and assigns. The costs of arbitration, excluding attorney’s fees, shall be borne by the losing party.
Notwithstanding the foregoing, the parties agree that any breach of Section X of this Agreement will cause irreparable damage and that in the event of such breach, each of the parties hereto shall have, in addition to any and all remedies at
law, the right to an injunction, specific performance or other equitable relief to prevent the violation of the other party’s obligations hereunder. 
  
 12.7 Severability. 
  
 In the event that any term or provision of this Agreement shall violate any applicable statute, ordinance, or rule of law in any jurisdiction in which it
is used, or otherwise be unenforceable, such provision shall be ineffective to the extent of such violation without invalidating any other provision hereof. 
  
 12.8 Headings, Interpretation. 
  
 The headings used in this Agreement are for convenience only and are not a part of this Agreement. 
  
 12.9 Counterparts. 
  
 This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same original. 
  

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

 25 

 12.10 Independent Contractor. 
  
 In performing its services hereunder, DPT shall act as an independent contractor. 
  
 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be executed by their duly authorized officers as of the date first above written. 
  

											
	 	 	AUXILIUM PHARMACEUTICALS, INC.	 	 	 	 	 	DPT LABORATORIES, LTD.
						
	 	 	 	 	 	 	 	 	By:	 	 DFB HOLDING, INC.
 Sole General
Partner

					
	 By:
	 	 /s/    Geraldine Henwood        

	 	 	 	 By:
	 	 /s/    John
Feik        

	 	 	Geraldine A. Henwood	 	 	 	 	 	 
	 Its:
	 	 President & CEO

	 	 	 	 Its:
	 	 President

  
 Revised: January1999 
  

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

 26 

	
	   Schedule “A” to Manufacturing Agreement Between DPT
Laboratories, Ltd. and Auxilium Pharmaceuticals, Inc., Dated
  
 April 23, 2002

  
 Product Pricing 
     16-Dec-02 
  
  

					
	 	 	 Units(MM)
 6 mos.

	  	 Price
 ($unit)

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

  
 The initial price per unit will be
$[**]/unit based on Auxilium’s guarantee of [**] units for the first six month period. At the end of each six month period, the difference between the price per unit paid will be calculated using the spreadsheet above as either a
payment to Auxilium ( if actual production invoiced is over unit projection and falls in a lower price category ) or to DPT Labs ( if actual production invoiced is under unit projection and falls in a higher price category ). Each succeeding six
month period will be initially priced according to projected client purchase orders. 
  

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

 27

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