Document:

Amended and Restated Coal Lease

 CONFIDENTIAL TREATMENT 
 INTERNATIONAL COAL GROUP, INC. HAS REQUESTED THAT THE 
 MARKED PORTIONS OF THIS DOCUMENT BE ACCORDED

 CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE 
 SECURITIES EXCHANGE ACT OF 1934 
 Exhibit 10.4 
 Execution Copy 
 DULCET ACQUISITION LLC 
 DULCIMER LAND PROPERTY 
 AMENDED AND
RESTATED COAL LEASE TO 
 POWDUL ACQUISITION LLC 
 May 27, 2008 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
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 TABLE OF
CONTENTS 
  

					
	 	  	 	  	Page
	1.	  	Leased Coal; Leased Premises	  	1
	2.	  	Term	  	3
	3.	  	Rights; Failure of Title	  	4
	4.	  	Disclaimer of Warranty	  	5
	5.	  	Wheelage and Processing Rights	  	5
	6.	  	Tonnage Royalty	  	6
	7.	  	Minimum Rental; Payment	  	7
	8.	  	Compliance with Laws	  	9
	9.	  	Mining Operations	  	9
	10.	  	Surveys, Maps and Permits	  	12
	11.	  	Engineering Audit	  	14
	12.	  	Weights	  	14
	13.	  	Exploration Data	  	15
	14.	  	Records	  	15
	15.	  	Permits and Reclamation	  	16
	16.	  	Taxes	  	17
	17.	  	Indemnity	  	18
	18.	  	Workers’ Compensation; Black Lung	  	19
	19.	  	Insurance	  	20
	20.	  	Liens and Encumbrances	  	22
	21.	  	Environmental Damage	  	22
	22.	  	Boundary Coal	  	23
	23.	  	Condemnation	  	23
	24.	  	Substances Mixed With Coal	  	23
	25.	  	Timber	  	24
	26.	  	Roads	  	24
	27.	  	Essential Reliance	  	24
	28.	  	Assignment Prohibited	  	25
	29.	  	Collection of Rents – Rights Reserved	  	25
	30.	  	Default; Forfeiture; Remedies Cumulative	  	25
	31.	  	Removal of Property Upon Expiration or Termination	  	27
	32.	  	Release Upon Expiration or Termination	  	27
	33.	  	Waiver	  	27
	34.	  	Successors Bound	  	27
	35.	  	Notices	  	27
	36.	  	Dispute Settlement and Arbitration	  	28
	37.	  	Relationship Between the Parties	  	29
	38.	  	Power of Attorney	  	29
	39.	  	Headings	  	30
	40.	  	Applicable Law	  	30
	41.	  	Severability	  	30
	42.	  	Representations and Warranties of Lessee	  	30

  

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	43.	  	Representations and Warranties of Lessor	  	30
	44.	  	Entire Agreement	  	31
	45.	  	No Recordation	  	31
	46.	  	No Disclosure	  	31
	47.	  	No Rights in Third Parties	  	32

					
			
	Exhibits	  		  	
			
	Exhibit A	  	Leased Premises	  	
	Exhibit B	  	Production Schedule	  	
	Exhibit C	  	Memorandum of Lease	  	
	Exhibit D	  	Third Party Coal Properties	  	

  

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 AMENDED AND RESTATED COAL LEASE 
 THIS AMENDED AND RESTATED COAL LEASE (this “Lease”), is made and effective as of the 27
th day of May, 2008, by and between DULCET ACQUISITON LLC, a Delaware limited liability company with an address at Seven Sheridan Square, Suite 400,
Kingsport, Tennessee 37660 (“Lessor”), and POWDUL ACQUISITION LLC, a Delaware limited liability company with an address at 300 Corporate Centre Drive, Scott Depot, West Virginia 25560 (“Lessee”). 
 W I T N E S S E T H: 
 WHEREAS, Lessor and Lessee are parties to that certain Sublease Agreement, dated as of October 22, 1980 (as amended, the “Original Coal
Lease”); and 
 WHEREAS, Lessor and Lessee desire to amend and restate the Original Coal Lease as provided in this Lease; 
 NOW, THEREFORE, that for and in consideration of the premises and of the sum of Ten Dollars, cash in hand paid by Lessee to Lessor, the receipt and
sufficiency of which are hereby acknowledged, and of the rents and royalties herein provided to be paid, and of the mutual covenants and promises hereinafter set forth, the parties hereto do hereby agree as follows: 
 1. Leased Coal; Leased Premises. 
 a.
Lease. Subject to the exceptions, reservations and conditions set forth in this Lease, Lessor does hereby LEASE, LET, ASSIGN and/or GRANT unto Lessee, upon the terms and conditions hereinafter set forth, all of the coal (the “Leased
Coal”) in and underlying those certain tracts or parcels of land commonly referred to as the Dulcimer Land Property, situate, lying and being in Harlan County, Kentucky and Lee County, Virginia (collectively, the “Leased Premises”), a
general description of such lands shown on a map attached hereto as Exhibit A, together with the right to use the surface, together with all the rights, easements and privileges that Lessor has the right to grant as may be necessary or convenient to
the exploration, mining, transportation and sale of the Leased Coal. Lessee shall have the right to mine the Leased Coal by any current or future surface or deep mining method (including, without limitation, mountaintop removal, contour surface,
room and pillar, longwall or other method now or hereafter in existence). Highwall and auger mining may be conducted on the Leased Premises upon written consent by Lessor with respect to specific mining plan proposals submitted by Lessee.

 EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE, LESSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, QUALITY,
QUANTITY, RECOVERABILITY, TITLE OR OTHERWISE AS TO THE LEASED PREMISES, THE LEASED COAL OR INTERESTS THEREIN, COAL RESERVES OR MINING OR OTHER RIGHTS OWNED BY LESSOR, OR AS TO THE 

  

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CONDITION OF THE LEASED PREMISES OR THE LEASED COAL, AND LESSEE SHALL RELY UPON ITS OWN EXAMINATION THEREOF THROUGH ENGINEERS AND OTHER REPRESENTATIVES
SELECTED AND EMPLOYED SOLELY BY LESSEE. 
 b. Exceptions and Reservations. There is excepted and reserved from the operation of
this Lease the entire ownership and control of the Leased Premises for all purposes other than those for which this Lease is made, including the following: 
 i. The right to mine and take away coal not leased to Lessee under this Lease from the Leased Premises by any current or future surface or deep mining method and to select and grant to others the right to do so;

 ii. The right to cut, prepare, use or remove all the timber on the Leased Premises; 
 iii. The right to search for oil, gas, coal, coal bed methane not released in the ordinary course of mining (“CBM”) and other minerals and
products other than the Leased Coal and removing the same when found, the right to bore for and produce the oil and gas, including CBM, found in the Leased Premises (provided, however, that nothing herein shall prevent or restrict Lessee from
venting CBM as may be necessary in its mining operations, without compensation or other liability therefor to Lessor), the right to store and transport, through pipelines or otherwise, such gas and oil, and gas and oil from any other lands, the
right to prospect, mine, produce, store and transport any minerals other than the Leased Coal found in, on or underlying the Leased Premises and the right to store and transport any minerals from other lands; provided, however, that with respect to
any pipelines placed on the Leased Premises pursuant to rights granted to third parties after the date hereof, if Lessee determines that such pipelines will interfere with Lessee’s mining operations, Lessor shall, promptly upon receipt of
written notice from Lessee, require such third parties to relocate such pipeline(s) to avoid such interference, with the first such relocation to be at no cost to Lessee, and any subsequent relocation of the same pipeline to be at Lessee’s
cost. 
 iv. The right to drain water, to transmit electrical energy, steam and heat, to transport coal or coke or other products and
minerals and goods of all other kinds from the Leased Premises or any other land over, across or through the Leased Premises and to select and grant to others such rights; 
 v. The right to use the stone, earth, water and other minerals and products in, on or underlying the Leased Premises, to make excavations and sinking or
boring slopes, shafts, drifts, tunnels and walls, to erect buildings, structures, machinery and other improvements, to construct and maintain ditches, transmission lines, telegraph and telephone lines, railroads or other roads, tramways, tubing,
pipelines or other means of drainage, transmission, communications or transportation over, upon or beneath the surface of the Leased Premises and to select and grant to others rights of way therefor; 
  

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 vi. The right to grant and convey, from time to time, any rights of way over, across or through the Leased Premises; 
 vii. Rights of ingress and egress as may be necessary or convenient in the proper development of the Leased Premises or other lands or in the proper
exercise of the rights hereby excepted and reserved; and 
 viii. All outstanding rights of any person or entity under existing leases,
subleases, deeds or other instruments evidenced by recorded instruments or visible on the ground; 
 provided, however, that the exercise and any use
by Lessor of the rights retained and reserved unto Lessor in subsections b(i) through (viii) herein above shall not unreasonably interfere with the mining plans and operations of Lessee upon the Leased Premises; provided, further,
that any such rights granted to third parties by Lessor after the date hereof shall expressly provide that such rights shall be subject to the rights of Lessee under this Lease. 
 2. Term. The term of this Lease shall be as follows: 
 a. The “Primary Term” shall commence on the date hereof and shall continue until the earlier of (i) 10 years from the date hereof, (ii) such time as Lessee shall have mined and removed all of the
mineable and merchantable (as defined below) Leased Coal or (iii) the termination of this Lease in accordance with Section 30. Lessee shall have the option to extend the Primary Term for two additional terms of five years each,
provided, that Lessee is not then in breach hereof beyond any applicable notice and grace periods hereunder and is either (x) actively engaged in mining operations on the Leased Premises or (y) prevented from mining at the time of
such extension due to an event of Force Majeure (as defined in Section 9(b)). The option to extend the Primary Term of this Lease for the additional periods described above may be exercised by written notice from Lessee to Lessor no more than
120 days nor less than 90 days prior to the expiration of the then-current term. 
 b. The “Remainder Term” shall commence at the
end of the Primary Term, or any extension thereof, as applicable, and shall continue until Lessee shall have fully complied with all of its reclamation, environmental and other obligations hereunder and under all applicable Permits (as defined in
Section 15(a)). During the Remainder Term, Lessee shall continue to comply with the terms of this Lease, although Lessee shall have no rights to mine, transport or process coal on the Leased Premises. 
 c. For purposes of this Lease, “mineable and merchantable” Leased Coal shall mean Leased Coal which when reached in the prosecution of a
prudent and economic plan of operation and development of the Leased Premises ordinarily could be mined by Lessee and, with prudent and economic preparation, marketed at reasonable profit to Lessee by the use of machinery and methods for mining and
cleaning coal which at the time are modern and efficient, and by the use of skillful and efficient management and planning. 
  

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 3. Rights; Failure of Title. 
 a.
During the Primary Term, or any extension thereof, Lessee shall have all of the mining rights and privileges, including surface rights, reasonably necessary or convenient to mine and take away the Leased Coal by the mining methods as granted herein,
and no additional rights or privileges. Lessee covenants and agrees to ascertain those mining rights and privileges to include, without limitation, the accurate boundary line of the Leased Premises before conducting any mining operations under this
Lease. 
 b. It is distinctly understood and agreed that Lessor grants only such mining rights and privileges as it possesses or has acquired
in connection with the Leased Coal contained in the Leased Premises; and that in mining, removing and carrying away the Leased Coal Lessee shall be limited to the exercise of the aforesaid rights and privileges. 
 c. Lessee and Lessor recognize there may be multiple lessees operating on Lessor’s property, as well as timber and other activities pursuant to
Lessor’s retained rights. Recognizing there will be increased demand for use of surface areas and roads on the Leased Premises, Lessor and Lessee agree to reasonably cooperate with each other to coordinate and plan the development and use of
the coal, surface and roads so the interference to the operations of each is minimized. Lessee acknowledges and agrees that its leasehold interest and estate created hereby is subject to the interest or estate of other lessees of Lessor’s
property and shall be subject to and benefit from the cooperation provisions herein. Lessee further acknowledges and consents to operations by other lessees of Lessor in the Leased Premises in coal seams not leased hereunder. Lessee shall cooperate
with these other coal lessees of Lessor to the extent necessary so as not to unreasonably interfere with their ability to: (i) obtain or modify a mining Permit; (ii) mine and remove coal from seams not leased hereunder; or (iii) use
the surface of the Leased Premises for mining such seams of coal. 
 d. Lessee is hereby advised that there may be utility power lines, gas
lines, water lines or other obstructions in and on the Leased Premises. To the extent Lessor has the right to give consent to Lessee for rights-of-way or easements necessary to provide for relocation of such lines to facilitate mining activities of
Lessee on the Leased Premises, Lessor shall give such consent in its reasonable discretion. Lessor assumes no responsibility for any loss or delay resulting from having to relocate such lines. 
 e. In the event any part of the Leased Premises is lost after final adjudication or settlement to the holder of any outstanding superior title, and, if
Lessee has mined and removed a part or all of the Leased Coal therefrom and paid Lessor therefore on the royalty basis, Lessor agrees to repay to Lessee the amount of Tonnage Royalty so paid, without interest, but Lessor shall not be otherwise
liable to Lessee on account of the mining and removing of such Leased Coal by Lessee. 
  

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 4. Disclaimer of Warranty. Lessee has examined the Leased Premises and the Leased Coal existing on the Leased Premises, accepts the same in their
present condition and assumes all risks incident thereto, to the mining and removal of Leased Coal therefrom and therewith and to any and all activities of its contractors, agents, employees, invitees or licensees. Lessee shall in no way be
considered an agent, contractor or employee of Lessor. Lessee agrees that Lessor makes no covenant to Lessee for quiet enjoyment of the Leased Premises and that Lessor has made no representations or warranties with respect to the Leased Premises,
including, without limitation, the condition thereof, the quantity, quality, depth or thickness of the Leased Coal therein or the condition of Lessor’s title thereto; provided, however, that Lessor does warrant and covenant that it
(i) has not and will not enter into any lease, conveyance or other agreement that would materially interfere with Lessee’s rights or operations hereunder and (ii) will not cause or permit the creation of any lien, claim or encumbrance
on the Leased Premises that would materially interfere with Lessee’s operations hereunder. 
 5. Wheelage and Processing Rights.

 a. Lessee shall have the right to transport Adverse Coal over, under or through the Leased Premises subject to the terms and conditions of
this Section 5. 
 i. If, in any particular month, Lessee has mined from the Leased Premises and sold an amount of tons of Leased Coal
less than the tons of Leased Coal set forth on Exhibit B attached hereto (the “Production Schedule”) for such month, then Lessee shall pay to Lessor a wheelage fee (the “Wheelage Fee”) equal to
[        *        ] of the Gross Sales Price for each ton of Adverse Coal transported over, under or through the Leased Premises up to the number of tons of such
shortfall. 
 ii. Payment of Wheelage Fees, if any, shall be made monthly on or
before the 20th day of each calendar month with respect to Adverse Coal transported over, under or through the Leased Premises during the preceding
month. Each payment of Wheelage Fees shall be accompanied by a statement showing the Adverse Coal transported over, under or through the Leased Premises during the period for which the payment is tendered, the Gross Sales Price per ton, the number
of tons sold at such Gross Sales Price and the Wheelage Fee thereon. 
 iii. In any month where Lessee pays the Wheelage Fee, such Wheelage
Fee shall be credited to Lessee’s account for subsequent months. If, in any subsequent month, Lessee shall mine from the Leased Premises and sell an amount of tons of Leased Coal greater than the tons of Leased Coal set forth on the Production
Schedule for such month, then Lessee shall have the right to produce and ship, without paying any Tonnage Royalty, such quantities of Leased Coal as would produce, at the royalty rates prevailing at that time, a Tonnage Royalty equal to that credit.
This right of recoupment may be exercised within 36 consecutive months from the time that the credit accrues. However, this right of recoupment shall terminate upon the expiration or termination of this Lease. 
  

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 iv. If, in any particular month, Lessee has mined from the Leased Premises and sold an amount of tons of Leased Coal equal to or greater than the tons of
Leased Coal set forth on the Production Schedule for such month, then Lessee shall have the right to transport Adverse Coal over, under or through the Leased Premises during such month free of any Wheelage Fee. 
 v. After the third anniversary of the date of this Lease, Lessee shall have the right to transport Adverse Coal over, under or through the Leased
Premises free of any Wheelage Fee. 
 b. Lessee shall have no right under this Lease to process coal from Adverse Lands on the Leased
Premises. 
 c. For purposes of this Lease, (i) “Adverse Coal” shall mean coal mined from Adverse Lands;
(ii) “Adverse Lands” shall mean property not included in this Lease that is not owned by Lessor or any of its Affiliates (provided, however, that if Lessor or any of its Affiliates acquires the property currently leased by
Lessee from Manalapan Mining Company, then such property shall be Adverse Lands); and (ii) “Process,” “Processed” or “Processing” shall mean any coal beneficiation process which results in the separation and
disposal of rock, shale or other waste material from the coal, and shall not be applied to crushing and/or blending operations. 
 6.
Tonnage Royalty. 
 a. For each ton of Leased Coal mined hereunder from the Leased Premises and sold, Lessee shall pay to Lessor a
tonnage royalty (the “Tonnage Royalty”) equal to the greater of a fixed rate (the “Fixed Rate”) or the percentage of the Gross Sales Price (as defined in Section 6(b)) for such ton (the “Percentage Rate”), each as
specified below (the “Lease Royalty Rate”). 
  

					
	 Mining Method
	  	 Fixed Rate
	  	 Percentage Rate

	 Deep
	  	[ * ] per ton	  	[ * ] of Gross Sales Price
	 Surface, Highwall or Auger
	  	[ * ] per ton	  	[ * ] of Gross Sales Price

 b. Defined Terms. For the purpose of this Lease, the following terms shall have the
following meanings: 
 i. The term “ton” shall mean a short ton of 2,000 pounds, composed of coal after final preparation, or, if
not to be prepared, after mining. 
 ii. The term “Gross Sales Price” shall mean the actual aggregate price or consideration
received, f.o.b. the railcar, for Leased Coal by Lessee or its Affiliates, directly or indirectly, from an independent third party buyer in an arms’ length transaction, without the deduction of any costs whatsoever. The Gross Sales Price shall
include all amounts paid by such independent third party buyer for such 

  

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Leased Coal, whether stated as part of the price per ton or not, and whether paid in cash or not. If any Leased Coal mined hereunder shall be consumed
without first being loaded through the loading point or if any Leased Coal is sold at the loading point to a buyer other than an independent third party buyer, the Gross Sales Price of such Leased Coal for the purpose of computing the Percentage
Rate shall be the price then being paid by independent third party buyers for similar coal at similar loading sites. 
 iii. The term
“independent third party” shall mean a buyer in which neither Lessee nor any of its Affiliates has a controlling ownership interest or any other means of controlling price. 
 iv. The term “Affiliate” shall mean an entity which is controlled by, in control of or under common control with another entity. 

7. Minimum Rental; Payment. 
 a. During the Primary Term, or any extension thereof, Lessee shall pay to Lessor, as a minimum
rental, without regard to the quantity of Leased Coal mined, a monthly minimum rental of [ * ] per month, which sum shall be payable without demand therefor, on or before the 20th day of the calendar month following that for which the minimum rental payment is applicable, beginning with the payment on or before August 20, 2008 for the calendar month of July 2008. Notwithstanding the
foregoing, after Lessee shall have mined [ * ] tons of Leased Coal, then the monthly minimum rental shall be reduced to [ * ] per month for the remainder of the then-current term and any extension thereof. The amount of minimum rental that is
unable to be recouped by Lessee due to the expiration of the right of recoupment as provided in Section 7(c) shall be credited as having been mined for the purposes of calculating such [ * ] tons threshold. Such credit shall be
the number of tons determined by dividing the amount of such expired recoupable amounts by [ * ] per ton. All coal mined from the properties identified on Exhibit D attached hereto (the “Third Party Coal Properties”) shall also reduce on a
ton-for-ton basis the [ * ] tons required to have been mined by Lessee hereunder in order to reduce the monthly minimum rental payable hereunder. By way of example, if [ * ] tons of coal is mined from the Third Party Coal Properties, then
Lessee’s monthly minimum rental will reduce in accordance herewith after Lessee shall have mined [ * ] tons of Leased Coal. Lessor shall provide Lessee at least quarterly with a certified statement of the number of tons mined under from
each of the Third Party Coal Properties until the monthly minimum rental has been reduced to [ * ] per month and the Production Minimum obligations under Section 7(g) have terminated. 
 b. For each month during the Remainder Term and until termination of this Lease, Lessee shall pay to Lessor as rent the sum of [ * ] per month, payable
monthly in advance on or before the first day of each month. 
 c. Each month’s Tonnage Royalty shall be credited against such
month’s minimum rental so that no minimum rental payment shall be due for any month 

  

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where Tonnage Royalties equal or exceed the minimum rental. In any month where the Tonnage Royalty falls short of the minimum rental, the difference between
the minimum rental paid and the Tonnage Royalty for that month shall be credited to Lessee’s account for subsequent months. Lessee shall then have the right to produce and ship, without paying any Tonnage Royalty, such quantities of Leased Coal
as would produce, at the royalty rates prevailing at that time, a Tonnage Royalty equal to that credit. In no event will Lessee pay less during any month than the monthly minimum rental. This right of recoupment may be exercised within 24
consecutive months from the time that the credit accrues. However, this right of recoupment shall terminate upon the expiration or termination of this Lease. 
 d. Payment of Tonnage Royalty, if any, shall be due after applying the foregoing provisions and
shall be made monthly on or before the 20th day of each calendar month with respect to Leased Coal mined and sold from the Leased Premises during
the preceding month. Each payment of Tonnage Royalty shall be accompanied by a statement showing the Leased Coal mined and sold during the period for which the payment is tendered, the unsold inventory at the beginning and end of the month, the
Gross Sales Price per ton, the number of tons sold at such Gross Sales Price and the royalty due thereon. Any coal sales agent of Lessee is hereby authorized, and Lessee shall instruct such agent, to furnish to Lessor upon Lessor’s request to
such sales agent (with a copy of such request to Lessee) any information desired by Lessor with regard to the quantities and the Gross Sales Price of the Leased Coal with respect to which Lessor is to receive a payment hereunder. 
 e. All payments to be made hereunder by Lessee to Lessor shall be wire transferred in immediately available funds to such account as Lessor may from time
to time designate in writing to Lessee, or in such manner as Lessor may from time to time designate in writing. Any late payment shall bear interest at the rate of [ * ] compounded annually on all amounts not paid when due. Interest charges, if
incurred, are intended to compensate Lessor for actual pecuniary loss due to late payment by Lessee. Charging of interest shall not excuse late payment by Lessee or limit Lessor’s remedies for failure of Lessee to make payments in a timely
fashion. 
 f. If Lessee shall make any payment of a lesser amount than that due hereunder, Lessor may accept the same as a payment on
account, without any requirement of notice to Lessee of the nature of such acceptance; and Lessor shall not be bound by any notation on any check involving such payment or any statement in any accompanying letter. The existence of a dispute as to
any amount due Lessor shall not relieve Lessee from paying when due the amount not in dispute, and the receipt of such amount shall not be treated as a waiver by Lessor of any of its claims with respect to any amounts in dispute. 
 g. Subject to Force Majeure and the provision contained in the last sentence of this Section 7(g), Lessee shall produce and ship not less than [ * ]
tons of Leased Coal from the Leased Premises during 2008, not less than [ * ] tons of Leased Coal from the 

  

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Leased Premises during each of 2009 and 2010, not less than [ * ] tons of Leased Coal from the Leased Premises during each calendar year thereafter
during the Primary Term and not less than [ * ] tons of Leased Coal from the Leased Premises during each calendar year during any extended term, such minimum amounts being hereinafter referred to as the “Production Minimum;”
provided, however, that any Adverse Coal for which Lessee pays a Wheelage Fee pursuant to Section 5(a), and any coal mined from the Third Party Coal Properties shall be credited towards the Production Minimum. If Lessee fails during a
calendar year to meet the Production Minimum for such year, then Lessee shall pay an amount equal to the Production Minimum for such year multiplied by the Fixed Rate provided in Section 6(a) less the greater of the Tonnage Royalty or minimum
rental paid during such year, such amount due and payable to Lessor on or before the 25th day of January immediately following the calendar year in
which such failure occurred; provided, however, that such payment in lieu of the complete satisfaction of the Production Minimum shall not be available to Lessee in more than two years during the Primary Term and one year in each extended
term. Notwithstanding anything herein to the contrary, the requirement to produce and ship any Production Minimum shall cease on the date that Lessee shall have produced and shipped, or received credit as set forth above for, an aggregate of [ *
] tons of Leased Coal. Any amounts paid by Lessee pursuant to this Section 7(g) shall be recoupable in the same manner and within the same time frame as minimum rental payments as provided in Section 7(c). The requirement to meet, or
make payment under this Section 7(g) in lieu of, the Production Minimum shall be excused in any year that the quarterly reported price of 12,500 Btu, 1.6# SO2 Norfolk Southern prompt market coal shall be [ * ] per ton or less as reported by ICAP United index. This Section 7(g) shall not affect the applicability of Section 7(a). 
 8. Compliance with Laws. Lessee shall observe and promptly comply in all material respects with all federal, state and local laws, statutes,
ordinances, rules, regulations, orders and other similar requirements of any appropriate governmental authority, now or hereafter enacted or promulgated, as they may exist from time to time, which are in any way applicable to Lessee or the Leased
Premises or activities thereon (“Laws and Regulations”), including, but not limited to, all Laws and Regulations pertaining to the environment and to the working of mines and the health and safety of all persons employed therein or in
connection therewith. Notices of violation, cessation orders or other enforcement orders issued by any governmental authority that are timely abated or appealed in good faith shall not be deemed a breach of this Section 8. 
 9. Mining Operations. 
 a. Lessor
shall not direct or control the operations of Lessee and hereby waives and disclaims any right to exercise any supervision, operation or control with respect to the operations of Lessee. Notwithstanding anything in this Lease to the contrary, this
Lease does not empower Lessor to make any decisions regarding Lessee’s mining operations and Lessor hereby expressly waives and disclaims any right to exercise any supervision, operation or control with respect to the terms and 

  

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conditions under which the Leased Coal hereby leased is extracted or prepared, such as, but not limited to, the manner of extraction or preparation or the
amount of Leased Coal to be produced, all within the meaning of the Acts (as defined in Section 18(b)(i)). The parties hereto do acknowledge, however, that Lessor has reserved certain rights and has imposed certain requirements under the terms
of this Lease, including, but not limited to, those rights and requirements provided in Sections 9, 10 and 11, solely for the purpose of preventing waste and protecting the reserved rights of Lessor. 
 b. Lessee shall diligently develop and continue mining operations on the Leased Premises in an energetic, approved, skillful and workmanlike manner,
utilizing a mine plan reviewed by Lessor, so as to recover the greatest practicable amount of mineable and merchantable Leased Coal from the Leased Premises employing modern machinery and equipment and good mining and reclamation practices and in
accordance with the plans submitted by Lessee to Lessor pursuant to Section 10(b), having due regard for the value of the Leased Premises as a coal-producing property so as to avoid unnecessary damage to and waste of any seams of coal, whether
granted as a part of the Leased Premises or not so granted, and to continue mining operations to extract the same with due diligence during the term of this Lease, subject to Force Majeure. For the purpose of this Lease, the term “Force
Majeure” shall mean any act or occurrence that is beyond Lessee’s reasonable control and that is not caused by the negligence or willful misconduct of Lessee or its agents or employees and that prevents in any material respect the mining,
processing, transportation or delivery of Leased Coal from the Leased Premises, including, but not limited to, fire, natural flood, damage to or destruction of Lessee’s mines, improvements or machinery, riot, strike, labor disruption, act of
God or serious accident, terrorist attack, geological abnormalities, non-approval of government or regulatory environmental Permits required for mining operations provided Lessee has done all things reasonably necessary to secure such Permits, or
other similar causes beyond the reasonable control of Lessee. Lessee shall, however, upon the happening of any event of Force Majeure, use all commercially reasonable efforts to remove or abate the cause of the inability to mine, process, transport
and deliver Leased Coal. 
 c. Lessor shall at all times have the right, in compliance with all applicable safety requirements, to enter the
Leased Premises and workings and mines of Lessee in order to determine that all the terms and conditions of this Lease are fully complied with and for these purposes to use freely the means of access to the Leased Premises and workings thereon
without hindrance, but in such manner as not unreasonably to interfere with Lessee’s operations. 
 d. If Lessor finds and reports to
Lessee in writing that, in the progress of the work, any areas of merchantable and mineable Leased Coal have been passed by with the result that Leased Coal has not been removed, which in accordance with good mining practices should have been
removed, Lessee agrees either to (i) return to such areas and remove the Leased Coal therefrom or (ii) pay for the Leased Coal under the lost coal provision as provided in Section 9(e). 
 e. Lessee shall pay full Tonnage Royalty at the rate herein stipulated 

  

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upon all mineable and merchantable Leased Coal, whether in place or mined, which is burned, lost, destroyed, abandoned or injured by fire or explosion
(“Lost Coal”), when such loss is caused by negligence of Lessee or its agents or employees or the failure of Lessee to properly mine or provide for the mining of such Leased Coal by the methods of mining described in Section 9(b).
Lost Coal shall be paid for according to the following formula: (Lease Royalty Rate) X (Average Gross Sales Price) X (Recoverable Tons). The Lease Royalty Rate is provided in Section 6(a). The Average Gross Sales Price as used in this
subsection is the average of the Gross Sales Prices for all Leased Coal sold during the month preceding the month of the occurrence of Lost Coal during which Leased Coal was actually sold pursuant to this Lease. Recoverable Tons is the percentage of
tons in place that could reasonably be expected to be recovered, taking into consideration mining conditions, geology and other relevant factors. If Lessor and Lessee cannot agree on the quantity of Recoverable Tons, the quantity shall be determined
pursuant to Section 36. The Lost Coal for partially mined areas shall be calculated using the pre-mining tons in place and deducting therefrom actual tons mined. Payment for Lost Coal shall be made by Lessee to Lessor within one month following
such loss. 
 f. Lessee shall use commercially reasonable efforts to prevent trespass on the mines operated hereunder and shall, at its own
expense and in its own name (and in the name of Lessor when specifically authorized by Lessor), initiate and conduct all proceedings necessary to that end. Lessor, or any person acting on its behalf, shall have the right to enter the Leased Premises
at all reasonable times to inspect for or prevent any trespass; provided, however, that Lessor shall not be obligated to make such inspections nor will Lessor be responsible in any manner for any such trespass. 
 g. Lessee shall use reasonable care and precaution to (i) prevent the occurrence of fires in timber or forest growth on the surface overlying the
Leased Premises, (ii) prevent mine fires in the coal seams on the Leased Premises and (iii) pursue the prompt extinguishment of any such fires caused by its activities. Lessee shall also cooperate with Lessor and its other lessees in
extinguishing such fires on the Leased Premises and on adjoining lands that may be liable to spread to or over the Leased Premises. Lessee shall be responsible for all injuries and damages caused by Lessee or its contractors or agents or by fire,
including, but not limited to, damages to timber and forest growth and injuries to persons or property on the Leased Premises or adjoining lands, if such fire is caused by the negligence of Lessee or its employees, subcontractors, agents or assigns.

 h. Lessee shall have the right to employ reputable contract operators on the Leased Premises to mine and deliver Leased Coal to Lessee for
preparation and marketing; provided, however, that Lessee shall (i) remain liable for the performance of all of the terms of this Lease and (ii) include in its mining agreement with its contractor language relating to this Lease in
substantially the following form: 
 Receipt of Lease. Contractor acknowledges receipt of pertinent provisions of the Amended and
Restated Coal Lease (the “Lease”) 

  

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effective May 27, 2008 under which Owner is Lessee of the Lease Premises; has read and examined those provisions of the Lease; and hereby agrees that
all work to be performed by Contractor under this agreement shall be in conformance with this agreement and with the terms, conditions and obligations of those provisions of the Lease. The rights and privileges of Contractor hereunder are and shall
be construed as limited to such rights and privileges only as Owner possesses and has the lawful right to contract. Contractor agrees to assume, in performing under this agreement, the obligations and conditions under the Lease relating to mine
operations in the same manner as if the Contractor were Lessee under the Lease, except for payments owing from Owner to its Lessor as required by the Lease. Notwithstanding additional requirements contained herein, all statements, notices, maps or
other similar documents required to be furnished by Owner to its Lessor under the Lease shall be furnished by Contractor to Owner in connection with Contractor’s operations under this agreement and all such documents shall in turn be furnished
by Owner to its Lessor. Contractor shall indemnify and save harmless Owner against all liability arising out of the nonperformance by Contractor of any of the terms, conditions, covenants and requirements of the Lease. 
 i. Lessee shall conduct its mining operations so as not to violate any rights of lateral and subjacent support or other rights belonging to the owners of
other estates on or adjacent to the Leased Premises, unless Lessor shall provide its written consent to conduct retreat mining or other full extraction mining, which consent shall not be unreasonably withheld. 
 10. Surveys, Maps and Permits. 
 a.
Lessee shall at its expense employ a competent, registered professional mining engineer, whose duty it shall be to plan and project in advance the coal mining operations to be conducted on the Leased Premises in an efficient and practicable manner,
according to accepted and approved engineering practices for the development of coal mines by the methods of mining provided for in this Lease. 
 b. The registered mining engineer shall lay out plans for development of the mining and cause maps, on such scale as Lessor may deem acceptable, to be made, which maps shall show thereon, fully and accurately, mining plans and proposals for
mining covering at least one year of projected mining, all improvements and surface structures to be made in conjunction with the mining of the Leased Coal, reclamation methods after removal of the Leased Coal, elevation of the coal seam, total coal
thickness, total seam thickness and contour above sea level, utilizing the Kentucky State Plane Coordinate System or Virginia State Plane Coordinate System, as applicable, and Lessee shall, 30 days before the commencement of any mining operation,
furnish to Lessor a copy of such maps and electronic files in a format acceptable to Lessor. Such maps showing planned mining shall be submitted no less than two times per year, on March 1 and September 1 of each year, and at such times as
material changes have been made to such plans as submitted. 
  

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 c. Lessee agrees to give Lessor reasonable notice of its or any contractor’s intention to submit a permit application under Kentucky or Virginia
state law or other applicable Laws and Regulations any area in, on or under the Leased Premises. Lessor will not withhold unreasonably its consent to any request for a change in post-mining land use for all or any portion of the Leased Premises (it
being understood that it shall not be unreasonable for Lessor to withhold its consent to a change in post-mining land use that adverse affects Lessor’s ability to use the Leased Premises for timber operations), and Lessor will execute any
waivers or other documents reasonably requested by Lessee in connection with its permitting activities. 
 d. Once every month, Lessee shall
furnish to Lessor maps and/or electronic files in a format acceptable to Lessor which accurately show workings and the extension of Lessee’s mining operations on, and the volume of Leased Coal removed from, the Leased Premises during the
preceding month, and any other reasonable information requested by Lessor. Such maps and/or electronic files shall show measurements of coal and impurities in the coal at intervals not exceeding 200 feet in every direction and at intermediate places
whenever coal thickness significantly changes. The maps shall be on a scale of five hundred (500) feet to one (1) inch (three sets) for deep mining and surface mining operations and one hundred (100) feet to one (1) inch (one
set) or such other scale as requested in writing by Lessor and shall be based on tied surveys of all workings utilizing the Kentucky State Plane Coordinate System or Virginia State Plane Coordinate System, as applicable and shall be delivered to
Lessor at its designated office. Lessee agrees to provide any additional maps, electronic files or other documentation that may be required by the Prime Lease in a timely manner so as to allow Lessor to review such documents and timely submit such
documents to the Prime Lessor. 
 e. Lessor itself, or through its agents, shall at all times have access to the plans, Permit applications
(amendments and completions), maps, electronic files and exploration and quality data pertaining to Lessee’s mining operations in a form acceptable to Lessor and may take therefrom copies of such portions thereof as Lessor or its agents may
desire. If Lessee fails to furnish maps or other records as herein provided for and continues not to furnish such maps or documents for a period of 20 days after written demand by Lessor, Lessor may employ a competent engineer to make a survey of
the mining developments of Lessee as herein provided and the expense thereof shall be paid by Lessee within 10 days after written demand. 
 f. Lessee shall furnish Lessor on or before the 1st day of March of each year and at such other times as may be fixed by law or required for tax assessments, a statement of and maps showing the acreage of the Leased Coal that was
mined, abandoned and/or lost by tax tract during the preceding year and the estimated remaining Leased Coal. Lessee shall cooperate fully with Lessor in any effort by Lessor during a reappraisal or otherwise to reduce or minimize any taxes, fees,
levies or other assessments on all or any part of the Leased Premises. 
  

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 g. The purpose of providing the plans, maps, documents and electronic files described herein is solely for the purpose of informing Lessor concerning
Lessee’s efforts to recover mineable and merchantable Leased Coal and advising Lessor of the areas wherein Lessee will be conducting operations. Lessor shall have no power to approve or disapprove plans or maps. 
 h. It shall be the sole responsibility of Lessee to ascertain by title search, survey and/or other means the accurate boundary lines of the Leased
Premises as may be required by the circumstances before conducting any mining operations in the vicinity of third party boundaries. Lessee shall submit to Lessor when available copies of all original survey notes relating to the Leased Premises, and
shall deliver to Lessor legible, clear, single sheet mylar copies, and any digital equivalent, of all related information, including, but not limited to, hardbacks and tracings. 
 i. At the expiration or termination of this Lease for any reason, Lessee covenants and agrees to furnish Lessor with a complete and final map, certified
by a registered engineer, of a scale of not more than 200 to 400 feet to the inch, which map shall show all Leased Coal mined by Lessee from the Leased Premises during the term of this Lease. The submission of such map to Lessor by Lessee is
expressly made a condition precedent to Lessee’s right to be discharged from its obligations hereunder (including the obligation to pay rents and royalties) upon termination of this Lease, any provision herein contained to the contrary
notwithstanding. 
 11. Engineering Audit. Lessor or its agents or engineers, with their assistants, shall have the right, in
compliance with all applicable safety requirements, to enter at all times the Leased Premises and mining operations of Lessee in order to audit, review, examine books and records, select samples of Leased Coal and survey or measure the same or any
part thereof for the purpose of ascertaining the condition of the mines and the methods of mining practiced, as well as the amount of Leased Coal removed, or for any other lawful purpose, and Lessor shall have the right to place and keep an auditor
or other representative upon any tipples, docks or loading facilities at the mines of Lessee for the purpose of checking the weights, measures, accounts and mining methods of Lessee and for these purposes to use freely the means of access to such
mines and works without let, hindrance or molestation. Notwithstanding the foregoing, it is expressly understood and agreed that Lessor or its agents, engineers or other representatives shall be present on the Leased Premises, if at all, only to
protect the interest of Lessor under this Lease and shall not be responsible to supervise or control the activities or omissions of Lessee or its agents, employees or others. 
 12. Weights. 
 a. All payments for
Leased Coal mined from the Leased Premises shall be paid for by Lessee on the basis of batch weigh loadout weights. Such Leased Coal shipped by truck or conveyor or by other than rail or water transportation, or used by Lessee for its own purposes,
shall be weighed by Lessee on accurate scales which shall be inspected and approved as accurate by a qualified agency, and payments for 

  

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such Leased Coal shall be made based on such weights. If actual weights are not immediately available, estimated weights will be utilized and adjusted when
actual weights become available. 
 b. To the extent reasonably possible, Lessee shall provide suitable, accurate, tested scales and shall
weigh separately before commingling all Leased Coal mined from the Leased Premises; and Lessee shall provide a plan or method, which is satisfactory to Lessor, whereby accurate weights, quality and Gross Sales Prices of each can be determined. Such
method or plan shall be submitted to and approved in writing by Lessor before any such Leased Coal is commingled. At the time of each payment hereunder, Lessee shall furnish to Lessor a report in form approved by Lessor showing the information
required above. Where scales are not available to determine weights prior to commingling of Leased Coal, Lessee shall propose a plan or method of determining such raw Leased Coal weights and shall submit such plan to Lessor, which Lessor’s
approval therefor shall not be unreasonably denied. 
 c. In addition to the
foregoing, if Leased Coal from the Leased Premises are to be commingled with coal from other lands, Lessee shall no less frequently than semi-annually calculate by cubic measurement the Leased Coal mined during the preceding six-month period in
accordance with a plan or method, which is satisfactory to Lessor, whereby accurate weights of Leased Coal mined from the Leased Premises and accurate weights of coal mined from other lands can be determined. Lessee shall on or before the
15th day of January and July, and at other times as reasonably requested by Lessor, during the Primary Term (or any extension thereof) furnish to
Lessor a report in form approved by Lessor, showing separately (i) the total quantity of Leased Coal mined from the Leased Premises and (ii) the total quantity of any coal mined from other premises and commingled with Leased Coal mined
from the Leased Premises determined in accordance with the provisions of this subsection. The report shall also show in what manner the Leased Coal or other coal was shipped, the certified weights of the Leased Coal and other coal and a record of
the representative samples for float and sink tests or other appropriate tests as approved by Lessor with analysis of such Leased Coal or other coal made or caused to be made by Lessee bi-weekly before such Leased Coal and other coal are commingled.

 13. Exploration Data. Lessee promptly shall furnish Lessor with true and complete copies of any and all data (including records of
corehole data, e-logging records, core analysis or channel samples taken as part of an exploration program) which Lessee may obtain, by drilling or other means, with respect to the existence, location, quantity, quality, depth and thickness of coal
in the Leased Premises and with respect to the existence, location, quantity, quality, depth and thickness of any oil, gas, CBM, casinghead gas, clay or other mineral strata in the Leased Premises. 
 14. Records. Lessee will keep and cause to be kept during the term of this Lease and for not less than five years after the expiration or
termination of this Lease accurate records showing separately the quantities of Leased Coal with respect to which Lessor is to receive a payment hereunder and the Gross Sales Price of all such 
  

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Leased Coal. Lessor and its agents, engineers, attorneys or other persons in its behalf shall have access at any and all reasonable times to all records
containing facts necessary for a just accounting of amounts due Lessor hereunder and to the offices where such records are kept, for the purpose of inspecting, auditing and making copies thereof. For like purposes, Lessee, to the extent Lessee has
the right and only to such extent, does hereby authorize Lessor to request and/or require of any railroad company, barge company, trucking company or any other entity providing a mode of transportation of such Leased Coal an inspection of its books
and records, showing the detailed weight and quantity of all such Leased Coal and pertinent information relating thereto; and such carriers and their agents are hereby authorized and requested to show Lessor and its agents all such records when
requested and to furnish all such information upon request. 
 15. Permits and Reclamation. 
 a. In all mining and other activities undertaken by Lessee in, on and under the Leased Premises, Lessee will in all material respects comply with all
applicable Laws and Regulations, including obtaining all necessary permits or other authorizations (collectively, the “Permits”). Lessee shall submit to Lessor copies of all Department for Natural Resources (“DNR”) or Department
of Mines, Mining and Energy (“DMME”) reclamation Permit applications filed, and all DNR or DMME reclamation Permits obtained, by Lessee or persons under contract with Lessee relating to the Leased Premises, together with all maps and other
attachments filed therewith. Copies of all Permits issued by any governmental authority shall be furnished to Lessor immediately after they are received by Lessee. All Permits shall be obtained by and at the expense of Lessee. Lessee shall post, or
cause to be posted, such bonds as may be required in connection with the issuance of the Permits. Lessee shall conduct all mining activities in accordance with the Permits. Lessor shall have the right to inspect and copy at reasonable times and
intervals, all inspection reports and compliance, noncompliance and other orders issued by any governmental authority. 
 b. Lessee shall
pay, or cause to be paid, all reclamation fees and shall otherwise be entirely responsible for the complete performance of reclamation obligations hereunder relating to Lessee’s operations on the Leased Premises. Lessee shall perform all
reclamation work in accordance with applicable Laws and Regulations and the Permits. Lessee shall pay, or cause to be paid, all fines which may be levied or assessed in connection with the mining operations of Lessee by the Commonwealth of Kentucky,
the Commonwealth of Virginia or any other governmental authority. Notwithstanding the foregoing, Lessee may contest or appeal the levy or assessment of any fine to the full extent permitted by applicable Laws and Regulations, provided that
Lessor has received assurances satisfactory to it that failure to pay the fine pending the outcome of the contest or appeal shall not adversely affect Lessor. 
 c. i. At such time as Lessee shall have mined and removed all of the mineable and merchantable Leased Coal or upon termination of Lessee’s right to mine, process and ship Leased Coal as provided herein or upon
the expiration or termination of this Lease, at Lessor’s election made within 180 days thereof, Lessee 

  

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shall either (A) fully reclaim and restore the Leased Premises in accordance with all applicable Laws and Regulations and the Permits or (B) leave
the Leased Premises in such condition that mining or other activities by another person or entity may begin immediately after the expiration or termination of this Lease, each as hereinafter more fully described. Lessor in its sole discretion may
elect option (A) for parts or portions of the Leased Premises and option (B) for other parts or portions of the Leased Premises. 
 ii. If Lessor elects to have any part of the Leased Premises reclaimed and restored, Lessee at its sole cost and expense shall reclaim and restore such Leased Premises as required by all applicable Laws and Regulations and the Permits and
shall initiate and diligently pursue all things reasonably necessary to terminate all Permits held by Lessee regarding such Leased Premises, subject to any long-term water treatment obligations that may require certain Permits to remain in effect
until the satisfaction of such obligations. 
 iii. If Lessor elects to have Lessee leave any part of the Leased Premises in such condition
that mining or other activities by another person or entity may begin immediately, Lessee, at its sole cost and expense, promptly upon receipt of notice of such election, shall initiate and diligently pursue all things reasonably necessary,
effective as soon as possible after such election is made, to accommodate Lessor’s election. Lessee shall do all things reasonably requested by Lessor, if such request is made, to permit immediate mining or other activities by another person or
entity, including, but not limited to, the transfer or assignment to Lessor or its designee of applicable Permits, subject to the replacement of all bonds required to be posted in connection with such Permits, except to the extent that Lessee is not
in compliance with such Permits. The parties agree that any noncompliance by Lessee under any applicable Laws and Regulations or Permit shall be determined by a final inspection by the state compliance inspector(s) as close as possible, but prior,
to the time of transfer. Once the activity, if any, which is not in compliance has been corrected by Lessee, such transferee shall be responsible for all future obligations with respect to such activity. During the Remainder Term, if Lessor so
requests, Lessee agrees to transfer any Permit that it then holds on all or any portion of the Leased Premises to any designee thereof or to permit such designee thereof to over-permit any Permit area that may be necessary for any type of
development or other activity as Lessor may request. In such case, Lessee, upon completion of such Permit transfer or over-permitting, shall no longer be responsible for such portion of the Leased Premises hereunder. 
 16. Taxes. 
 a. During the Primary
Term (and any extension thereof), Lessee shall promptly and properly, in accordance with all Laws and Regulations and all pertinent rulings and case law, pay at the times they become due and payable all taxes, fees, levies, assessments (including,
but not limited to, black lung benefits and assessments), ad valorem, excise, license, privilege or severance taxes, and any other charges whether imposed by the United States, any State, any political subdivision thereof or any municipal
corporation (collectively, “Taxes”) upon or with respect to: (1) the Leased Coal and that portion of the surface of the Leased Premises used by 

  

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Lessee in its mining operations; (2) Lessee’s interest in this Lease; (3) the leasehold estate hereby created; (4) all Leased Coal mined
and produced from the Leased Premises by Lessee and the products thereof; (5) the exercise of any right or privilege in connection with Lessee’s operations hereunder; and (6) any buildings, structures, improvements, equipment and
property of any kind used by Lessee in, on or under the Leased Premises, whether owned by Lessee or Lessor. For the avoidance of doubt, Lessee shall not be liable for Taxes attributable to the surface of the Leased Premises (except that portion of
the surface used by Lessee in its mining operations) or to the timber, oil and gas or other estates not leased to Lessee hereunder. Lessee shall be required to pay the Taxes only with respect to the periods during the Primary Term (or any extension
thereof) for which the Tax is assessed. If this Lease begins or ends during a period for which a Tax is assessed, then such Tax shall be pro-rated between Lessee and Lessor. 
 b. If Lessor makes any payment, either voluntarily or as required by applicable Laws and Regulations, on account of any or all Taxes required to be paid
by Lessee pursuant to subsection (a) above, then the amount thereof shall be repaid by Lessee to Lessor within 10 days after the date Lessor submits a written statement to Lessee. 
 c. Notwithstanding the foregoing, it is not intended that Lessee shall pay, or be required to pay, any so-called income, profits, excise, occupational or
privilege Taxes levied or assessed upon the income of Lessor. Lessee shall provide to Lessor any filings prepared for submission to the Kentucky State Tax Department or Virginia State Tax Department with respect to the Leased Coal and the Leased
Premises and Lessee’s mining activity thereon. 
 17. Indemnity. 
 a. Lessee does hereby agree to indemnify, defend and hold harmless Lessor and its parents, subsidiaries and other affiliates and their respective members,
partners, officers, directors, employees, agents, successors and assigns (collectively, the “Indemnified Parties”) from and against any and all claims, losses, liabilities, damages, demands, obligations, fines or civil penalties,
regardless of when made or arising, by and on behalf of any person, entity or governmental agency arising from or related to Lessee’s operations on, in or under, or with respect to, the Leased Premises, specifically including, without
limitation, any and all claims (x) for personal injury (including death) and property damage, (y) for salaries and wages and employee or former employee medical, retirement and all other “benefits” (as defined in
Section 18(b)(ii)) and (z) arising from or related to Lessee’s noncompliance with any Laws and Regulation or any Permit, together with all costs, fees and expenses (including, but not limited to, court costs and reasonable
attorneys’ fees) connected with any of the above (collectively, “Damages”). 
 b. In the event that any action or proceeding
is brought against any of the Indemnified Parties by reason of any such claim for Damages described above, Lessee will at its sole cost and expense, using counsel reasonably acceptable to 

  

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Lessor, resist and defend such action or proceeding and satisfy any order or judgment against any of the Indemnified Parties resulting therefrom.
Notwithstanding the foregoing, (i) if Lessee fails to timely and diligently resist or defend such action or proceeding, Lessor shall have the right, using its own counsel at Lessee’s expense, to resist and defend such action or proceeding
and (ii) in any event, Lessor shall have the right, using its own counsel at its expense, to defend such action or proceeding upon written notice to Lessee. 
 c. Lessee’s indemnity obligations under this Lease shall survive the expiration or termination of this Lease. 
 18. Workers’ Compensation; Black Lung. 
 a. Without limiting the generality of Lessee’s obligation to conduct its
operations hereunder in conformity with all Laws and Regulations, Lessee agrees that it will become and remain a subscriber to the Workers’ Compensation Fund of the Commonwealth of Kentucky and the Workers’ Compensation Fund of the
Commonwealth of Virginia or otherwise provide workers’ compensation coverage for its employees in accordance with all applicable Laws and Regulations. 
 b. i. Without limiting the generality of Lessee’s obligation to conduct its operations hereunder in conformity with all Laws and Regulations, Lessee agrees that it shall comply with all of the terms and
provisions of the Federal Coal Mine Health and Safety Act of 1969, as amended by the Black Lung Benefits Act of 1972, the Federal Mine Safety and Health Act of 1977, the Black Lung Benefits Act of 1977 and the Black Lung Benefits Reform Act of 1977,
as now or hereafter amended and all rules and regulations adopted pursuant thereto (collectively, the “Acts”). 
 ii. Lessee
acknowledges that, as among Lessor and Lessee and for the purposes of this Lease, Lessee is, and shall be deemed to be, the operator of any coal mine for the mining of the Leased Coal from the Leased Premises and of all related activities engaged in
by Lessee or persons under contract with Lessee pursuant to the terms of this Lease with respect to any claim for black lung benefits or any other “social benefit” (“benefits”) filed by or on account of its employees or former
employees pursuant to the Acts, the Coal Industry Retiree Health Benefits Act of 1992 (the “Coal Act”) or any similar or successor statute or amendment to the Acts or the Coal Act. Lessee shall secure and shall require any other person or
entity who operates, controls or supervises a coal mine in, on or under the Leased Premises or performs services of construction, transportation or other activities related to coal mining under the terms of this Lease, or who otherwise may be liable
for the payment of benefits, to secure the payment of such benefits to or on account of their employees or their former employees in accordance with all applicable Laws and Regulations and shall provide Lessor, at least annually and more often upon
request, with appropriate certification that each of them has provided security in compliance with all applicable Laws and Regulations for the payment of such benefits. Lessee shall notify Lessor immediately in writing of any changes or alterations
in the status of any such security. 
  

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 iii. Without limiting the generality of Lessee’s obligation to comply with all other provisions of this Lease, Lessee agrees that it will secure and
guarantee the payment of all benefits, if any, required to be paid under the Acts or the Coal Act or any similar act or successor statute or amendment to the Acts or the Coal Act by reason of said mining, construction, transportation or related
activities pursuant to this Lease, and Lessee does hereby agree that it will indemnify and hold harmless Lessor from and against any Damages which Lessor may suffer, directly or indirectly, as a result of or with respect to any claim for benefits
filed by or on account of any of Lessee’s employees or former employees or employees or former employees of others for whom Lessee may be required to secure the payment of benefits under subsection (ii) above. 
 c. Lessee acknowledges that Lessor has reserved certain rights and imposed certain requirements under the terms of this Lease solely for the purpose of
assuring that the coal in, on and under the Leased Premises is recovered in accordance with the terms and conditions of this Lease so as to prevent waste and protect the reserved rights of Lessor; provided, however, that such reserved rights
shall in no event cause Lessor to be or be considered an operator as defined in the Acts or the Coal Act with respect to Lessee’s employees or the employees of others. 
 19. Insurance. Without limiting Lessee’s undertaking to protect, indemnify, hold harmless and defend the Indemnified Parties as provided in
this Lease, and without limiting the generality of Lessee’s obligation to conduct its operations hereunder in conformity with all Laws and Regulations, Lessee agrees at its own cost to procure and maintain at all times during the term of this
Lease from insurance companies (or statutory funds) reasonably acceptable to Lessor the insurance coverages as hereinafter set forth: 
 a.
Workers’ Compensation and Employers Liability. 
 i. Workers’ Compensation coverage for occupational injury and disease in
accordance with requirements imposed by applicable Laws and Regulations. 
 ii. Employers Liability coverage with limits of not less than
$3,000,000 per occurrence. 
 b. Liability Insurance as is afforded under a policy of Commercial General Liability, with endorsements
or under other policies as may be appropriate, with limits of not less than $5,000,000 (except for the Pollution Liability Coverage required in subsection (iii) below, which shall be in the amount of $1,000,000) combined single limits in any
one occurrence, for liability arising from injury to or death of one or more persons, and for liability arising out of damage to or destruction of property, including loss of use thereof and downtime, and including the following: 
 i. Blanket Contractual Liability 
  

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 ii. Bodily Injury Liability 
 iii.
Pollution Liability Coverage 
 iv. Owners and Contractors Protective Liability 
 v. Broad Form Property Damage Liability 
 vi. Explosion and Collapse Hazards 
 c. Auto Liability Insurance covering owned, non-owned and hired motor vehicles which
may be used in any connection with the operations contemplated hereunder with limits of not less than $5,000,000 combined single limits in any one occurrence, for all liability arising out of injury to or death of one or more persons, and for all
liability arising out of damage to or destruction of property, including loss of use thereof and downtime. 
 d. All policies and
endorsements providing the insurance required under subsections (a), (b) and (c) above shall: 
 i. be occurrence coverage
except for the Pollution Liability coverage under subsection (b)(iii) above; 
 ii. be endorsed to include liability assumed by Lessee
under this Lease; 
 iii. name Lessor as an additional insured; 
 iv. be primary to any and all other insurance of Lessor and the Indemnified Parties with respect to any and all claims and demands which may be made
against them for bodily injury or death to the Lessee’s employees, contractors, agents, servants, invitees and guests, and for property damage, including damage to Lessor’s or Lessee’s property, caused by or alleged to have been
caused by any act omission or default, negligent or otherwise of Lessee by reason of the mining or other activities under this Lease; 
 v.
provide that it applies separately to each insured against which claim is made or suit is brought, but in no event for more than the limit of liability of the applicable policy; and 
 vi. be endorsed to provide that, except in cases where damage or injury is the result of the sole negligence of Lessor or the Indemnified Parties, all
rights of subrogation against Lessor and the Indemnified Parties and their insurers are expressly waived. 
 The limits of liability required above may be
provided by a combination of primary and excess policies as long as all requirements and coverages are provided thereunder. The foregoing minimum requirements shall not limit Lessee’s liability to Lessor in any manner. 
  

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 e. Prior to commencement of any operations under this Lease, Lessee shall provide to Lessor acceptable evidence in the form of an original certificate or
certificates of insurance from the respective insurance companies confirming that all coverages and policies required herein are in full force and effect in the form required, that Lessor and the Indemnified Parties have been included as additional
insureds where required and that Lessor will be notified in writing not less than 30 days prior to the cancellation or non-renewal of any such insurance. Upon request of Lessor, Lessee shall provide duplicate originals of such policies to Lessor.
Lessee shall require its contractors, subcontractors and other agents performing any work in, on or under the Leased Premises to obtain and maintain insurance for the risks and in accordance with all the terms in this Section 19 but at
reasonable limits designated by Lessee. 
 20. Liens and Encumbrances. 
 a. Except for certain liens and encumbrances that Lessor consents to in writing, Lessee shall not permit any lien or encumbrance to accrue on the Leased
Premises or any part thereof, except a lien for ad valorem property taxes not due or payable. In the event that any non-permitted encumbrance or lien on the Leased Premises or appurtenances accrues, Lessee shall cause the same to be promptly
discharged and removed. If Lessee fails to promptly discharge or remove any such lien or encumbrance, Lessor shall have the right, but not the obligation, to take such actions as may be necessary to remove or satisfy the same. Without limiting the
generality of Lessee’s indemnification of the Indemnified Parties against breach-related Damages, Lessee shall be obligated to reimburse Lessor for any costs, expenses, disbursements or attorneys’ fees necessarily incurred in protecting
the Leased Premises from such liens and encumbrances and shall pay the same at the next succeeding payment of the Tonnage Royalty or the Minimum Rental. Lessee shall have the right to contest in the courts or otherwise the validity of any such lien
or encumbrance. 
 b. Lessee covenants and agrees that this Lease and all or any part of the Leased Premises are not intended to be an
“equitable servitude” or any other property interest for the benefit of a third party. Lessee further covenants and agrees that it shall not create an equitable servitude upon the Leased Premises by virtue of any collective bargaining
agreement, agreement of understanding, contract, subcontract, license, sublease, assignment, employment practice, successorship clause or any other contract with a third party which has no interest in the Leased Premises. Lessor shall have the
right, at its option, to terminate this Lease and forfeit the leasehold estate without any further action by Lessor unless Lessee shall have removed any such equitable servitude within 30 days after written notice from Lessor. 
 21. Environmental Damage. Without limiting the generality of Lessee’s indemnification of the Indemnified Parties against environmental and
environmental-related Damages, Lessee agrees that it will conduct its mining operations on the Leased Premises in such manner as to not cause the Indemnified Parties to incur any liability due to pollution or discoloration of streams fed by waters
from the Leased 
  

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Premises resulting from such operations or interference with the present bed of such streams or their natural flow resulting from such operations. Lessee
further agrees that it will conduct all of its operations under this Lease in a careful and prudent manner and in such a way as to not cause the Indemnified Parties to incur any liability arising therefrom, and Lessee shall be solely responsible for
the treatment of any water discharges arising out of, connected with or related to its mining or other activities under this Lease in, on or under the Leased Premises or adjacent lands to the full extent required by present or future Law and
Regulations, which responsibility of Lessee as well as the aforesaid indemnification shall survive the expiration or termination of this Lease. The obligations of Lessee under this Section 21 are in addition to, not in lieu of, other sections
of this Lease regarding indemnification, insurance and Lessee’s other obligations. 
 22. Boundary Coal. If Lessee shall acquire
other coal properties which adjoin and have a common boundary with the Leased Premises, in order to avoid unnecessary loss of Leased Coal, Lessor waives any present or future requirement of law relating to the leaving of coal at or near boundaries
and consents to the mining and removal of all of the Leased Coal within any distance of any boundary between the Leased Premises and other coal lands and coal leaseholds now or hereafter owned by Lessee; provided, however, that Lessee must
also obtain a similar waiver from the owners of such other coal lands. 
 23. Condemnation. 
 a. In the event that any governmental agency formally begins, or indicates a desire to bring, condemnation proceedings related to the Leased Coal or the
Leased Premises, Lessor and Lessee shall jointly resist and/or negotiate with the condemnation authority. 
 b. In the event that any part of
the Leased Coal or Leased Premises is taken by eminent domain or condemnation, Lessor shall not in any manner be liable to Lessee for untimely termination of this Lease or the consequential inability of Lessee or its successors to conduct mining
operations at all or on the scale anticipated by Lessee before such eminent domain or condemnation proceedings were exercised, nor for any loss or liability for any reduction in anticipated profit by Lessee resulting as a consequence of the
attempted and/or actual condemnation. The Minimum Rental shall be reduced on a pro-rata basis for any material amount of Leased Coal taken by eminent domain or condemnation; provided, however, that no adjustment shall be made unless and until
the amount of Leased Coal so taken exceeds ten percent (10%) of the remaining recoverable reserves. 
 c. If all or any part of the
Leased Premises is taken or condemned, each of Lessor and Lessee shall pursue its own claim for compensation; provided, however, that Lessor and Lessee shall cooperate in their efforts to maximize each party’s compensation award.

 24. Substances Mixed With Coal. Lessee covenants and agrees that it will 
  

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not mine from the Leased Premises any substances mixed with the coal, except to the extent that such substances necessarily must be removed in Lessee’s
ordinary mining process, and that such substances shall not be removed and sold unless and until there is mutual agreement regarding division of proceeds received therefrom. 
 25. Timber. In conducting operations on the surface of the Leased Premises, Lessee shall use reasonable care to do as little damage to the timber
and surface as is practicable consistent with its obligation to mine all mineable and merchantable coal. Lessee agrees to delineate on the ground or on trees by paint marks or ribbons, the limitations of ground surface to be disturbed by surface
operations and to give notice to Lessor at least 90 days in advance of any such operations which will require the removal of any timber or would result in damage thereto so as to permit Lessor or its agents, contractors or assigns to cut and remove
the timber in question. If Lessor does not remove the timber that is the subject of such notice, Lessee may arrange to have such timber removed and may offset the cost of cutting such timber by the receipt of revenues for the sale of such timber
only up to the actual cost incurred by lessee in having such timber removed. All revenues over and above the actual cost of timber removal incurred by Lessee shall be the property of Lessor and shall be promptly remitted thereto within 30 days of
the receipt thereof by Lessee. 
 26. Roads. Lessee is granted the non-exclusive right to use existing roads on the Leased Premises.
Lessor reserves for itself and its other existing and future lessees, sublessees, contractors and other designees the non-exclusive right to use existing roads and roads hereafter constructed by Lessee and, to the extent Lessee’s consent is
required therefor, Lessee shall provide such consent. Where, in the conduct of its activities pursuant to this Lease, it is necessary for Lessee to alter or destroy existing roads, Lessee shall provide substantially equivalent alternate access
needed by the users of such roads. Lessee shall, at its own expense, keep and maintain all of the roads used by it on the Leased Premises in usable condition and repair and in at least as good condition as the same now are. To the extent such
existing roads or roads hereafter constructed are used by Lessee, Lessor or other grantees of Lessor, with respect to such other grants made after the date of this Lease, all such users of such roads shall share, on an equitable basis based upon the
total tonnage hauled over such roads by such user, or some other mutually acceptable method, in the cost of maintaining such roads as are commonly used, and the users thereof shall keep such records as are necessary to ascertain the proper
apportionment of the costs therefor. The users of such roads shall establish between themselves the necessary agreements to accomplish the mutual sharing of such costs, liabilities and indemnifications with respect thereto, and no other user shall
have the right to use such roads in the absence of such an agreement. 
 27. Essential Reliance. It is understood that it is the
essence of this Lease that Lessor enters into this Lease expressly relying upon the demonstrated skill, experience, character, substance, credit and ability of Lessee and its present management. Lessor and Lessee hereto expressly recognize and
acknowledge that the obligations of Lessee hereunder are “personal services” of Lessee, a Lessee whom 
  

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Lessor considers to be uniquely competent and qualified to perform those services. Recognizing such unique competence, qualification, skill, credit,
character and substance of Lessee, Lessor enters into this Lease because of the special trust and confidence that Lessor has in the ability of Lessee to perform its obligations hereunder. For these reasons, Lessor demands, and Lessee specifically
agrees to, performance of all Lessee’s obligations under this Lease from Lessee alone and from no other person or entity. Lessor and Lessee expressly recognize and acknowledge that performance by some person or entity other than Lessee would,
by the very nature of the services to be rendered by Lessee under this Lease, constitute something essentially different from the performance contemplated by Lessor and Lessor’s reliance upon Lessee under this Lease. Therefore, Lessor and
Lessee hereto expressly agree that the obligations of Lessee contemplated under this Lease shall be performed only by Lessee, subject to Sections 9(h) and 28. 
 28. Assignment Prohibited. Lessee agrees that it will not assign, let, sublease, encumber, pledge, mortgage or otherwise transfer its rights under this Lease, either voluntarily or by operation of law, without
the prior written consent of Lessor; provided, however, that Lessee shall have the right to sublease or assign this Lease to an Affiliate without the consent of Lessor; provided, further, that, notwithstanding any such sublease or
assignment, Lessee shall remain fully liable for performance of all of the terms and conditions of this Lease. Lessee shall provide Lessor with written notice of any assignment to an Affiliate within 10 days after such assignment. Any violation of
the terms and provisions of this Section 28 by Lessee shall, at the option of Lessor, automatically forfeit and terminate this Lease. Any transaction or series of related transactions following which Lessee is no longer controlled by either
ICG, LLC, a Delaware limited liability company, or International Coal Group, Inc., a Delaware corporation, shall constitute an assignment within the meaning of this Section 28. For purposes of this Section 28, “control” shall
mean the power to direct or cause the direction of, either directly or indirectly, the management or policies of Lessee, whether through the ownership of voting securities, by contract or otherwise. 
 29. Collection of Rents – Rights Reserved. All rents and royalties required to be paid to Lessor hereunder shall be deemed and considered as
rent reserved for the Leased Premises, and Lessor shall have for the collection thereof all of the rights and remedies which landlords may now or hereafter have for the collection of rent reserved upon contract under the laws of the Commonwealth of
Kentucky and the Commonwealth of Virginia. 
 30. Default; Forfeiture; Remedies Cumulative. 
 a. In any of the following events, that is to say: 
 i. Lessee shall fail to pay any rent or royalty for 10 days after written notice of any non-payment of any such payment due under this Lease; or 
 ii. Lessee shall fail on more than two occasions within any consecutive 12-month period to timely pay any installment of rent, royalty or other payment due under this Lease within five days after when first due and
payable; or 
  

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 iii. Lessee shall fail for a period of 30 days after written demand therefor to pay or repay any sums due for taxes as provided in this Lease; or

 iv. Lessee shall abandon the Leased Premises; or 
 v. Lessee shall fail to keep and perform any of the terms, conditions, covenants and agreements of this Lease to be kept and performed, and, if any such failure as provided in this subpart (v) is not cured or
reasonable efforts to cure such failure are not commenced, and diligently prosecuted thereafter, within 30 days after Lessor shall have given written notice of such default to Lessee; or 
 vi. Lessee shall be adjudicated a bankrupt or discharged by any court as an insolvent debtor, or if any receiver or assignee or other person or persons
be appointed by any court to take charge of the Leased Premises or the property of Lessee, or the mines and equipment upon the same; 
 then, in any such
event, all rights of Lessee under this Lease to mine, process and ship Leased Coal as provided in this Lease shall, at the option of Lessor (except for an event specified in (vi) immediately above, which event shall cause a forfeiture and
termination ipso facto), become forfeited and cease and determine, and Lessor shall have the right to re-enter the Leased Premises and to exclude Lessee therefrom and to hold the Leased Premises free of any claims of Lessee, anything herein
contained to the contrary notwithstanding; provided, however, that Lessee shall thereafter fully comply with, perform and complete all of its reclamation, environmental and other obligations under this Lease, and Lessee shall have reasonable
access to the Leased Premises for such purpose. 
 b. Upon any declaration of forfeiture, all estate, rights and privileges of Lessee to
mine, process and ship Leased Coal as provided in this Lease shall cease and determine, and Lessor may thereupon or at any time thereafter, without further notice, demand or action by it or any of its agents, re-enter and take possession of the
Leased Premises, or any part thereof in the name of the whole, and Lessor in making such re-entry and taking possession of the Leased Premises shall have the right to do so without legal action, or without notice or process, as may be required by
the laws of the Commonwealth of Kentucky or the Commonwealth of Virginia. In the event that Lessor exercises the right herein provided to declare such forfeiture, Lessor shall not be liable to Lessee for any injury or damage by reason thereof, and
Lessee hereby expressly waives and releases any and every claim for any such injury or damage. 
 c. All provisions contained in this Lease
for the collection of rents, royalties or other payments, or concerning the remedy of Lessor in case of breach by Lessee of any condition, covenant or agreement contained in this Lease, shall be deemed to be cumulative and not exclusive and shall
not deprive Lessor of any of its other legal or equitable remedies which may now or hereafter be provided under the laws of the Commonwealth of Kentucky or the Commonwealth of Virginia. 
  

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 d. No delay or omission of Lessor to exercise any right, remedy or lien accruing upon any default or forfeiture under this Lease, or otherwise available
to it, shall impair, prejudice or waive any such right, remedy or lien, but every such right, remedy and lien may be exercised by Lessor on account of any subsequent breach in the same manner and to the same extent as if such delay or omission had
not occurred. 
 31. Removal of Property Upon Expiration or Termination. Unless specified otherwise in the Prime Lease with respect to
property on the Leased Premises subject to the Prime Lease, upon the expiration or termination of this Lease, at Lessor’s option, either (a) Lessee shall have 90 days within which to remove all of its property, whether affixed or not, from
the Leased Premises, and any such property not so removed by Lessee within such applicable period shall, at the election of Lessor, become the absolute property of Lessor or, to the extent required by the Prime Lease, of the Prime Lessor or
(b) Lessor shall purchase any or all such property from Lessee at a purchase price equal to the fair market value thereof as determined by an independent appraiser retained by Lessor and reasonably acceptable to Lessee. Lessee may leave in the
Leased Premises such of its property as may be required to complete or comply with valid governmental reclamation or environmental or other requirements for such period of time as may be reasonably necessary for such completion or compliance.

 32. Release Upon Expiration or Termination. Upon the expiration or termination of this Lease, Lessee shall execute and deliver to
Lessor, in such form as will permit recordation of the same, a written release and relinquishment of all of the right, title and interest acquired under this Lease in and to the Leased Premises, including such property as Lessee is hereby required
to leave on the Leased Premises. 
 33. Waiver. No failure or delay on the part of either Lessor or Lessee in exercising any of their
respective rights under this Lease upon any failure by the other party to perform or observe any condition, covenant or provision contained in this Lease shall operate as a waiver thereof, nor shall any single or partial exercise of any such rights
preclude any other or further exercise thereof or the exercise of any other right under this Lease. 
 34. Successors Bound. All
covenants and agreements contained in this Lease shall inure to the benefit of and shall be binding upon and fully performed by the respective parties hereto and their respective successors and permitted assigns. 
 35. Notices. All requests, statements, notices and demands shall be deemed given and served (x) three business days after mailing, if sent by
registered or certified mail, postage and registration or certification fee prepaid, return receipt requested, or (y) one business day after sending, if sent by overnight delivery, addressed as follows: 
 For Lessor, 
 Dulcet Acquisition LLC

 Seven Sheridan Square, Suite 400 
 Kingsport, TN 37660 
 Attention: Stephen F. Looney 
  

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 with a copy to: 
 Penn Virginia Resource
Partners, L.P. 
 Three Radnor Corporate Center, Suite 300 
 100 Matsonford Road 
 Radnor, PA 19087-4564 
 Attention: Nancy M. Snyder 
 For Lessee,

 Powdul Acquisition LLC 
 300
Corporate Centre Drive 
 Scott Depot, WV 25560 
 Attention: President 
 With a copy to: 
 ICG, LLC 
 300 Corporate Centre Drive

 Scott Depot, WV 25560 
 Attention: General Counsel 
 or to such other person or address as either party may prescribe from time to time by written notice to the other
party. Notwithstanding the foregoing, any notice to or demand upon Lessee may be served or given in the manner required by the laws of the Commonwealth of Kentucky and Commonwealth of Virginia for service of process. 
 36. Dispute Settlement and Arbitration. If at any time during the continuance of this Lease, or any extension thereof, any dispute shall arise
between Lessor and Lessee under this Lease or under any of the terms and provisions hereof which cannot be agreed upon by the parties hereto, then such dispute shall be referred to a board of arbitrators (the “Board”). The Board shall be
comprised of one representative of Lessor and one representative of Lessee, to be selected by Lessor and Lessee, respectively, and a third arbitrator who shall be chosen by the two arbitrators herein provided for. Each arbitrator shall have at least
10 years experience in the coal mining and/or coal land management business. In the event that the two arbitrators are unable to agree within 15 days upon a third arbitrator, then the American Arbitration Association shall designate a disinterested
person to act as such arbitrator; and, in the event that the Receiving Party (as defined below) should, for a period of 15 days after receipt of an Arbitration Notice (as defined below), fail to select and make known in writing to the Notifying
Party (as defined below) the arbitrator selected by the Receiving Party, the Board shall be comprised of the one sole arbitrator chosen by the Notifying Party. Either party (the “Notifying Party”) may at any time serve upon the other (the
“Receiving Party”) a notice (an “Arbitration Notice”) setting forth the point or points upon which the decision of the Board is desired and the identity of the arbitrator chosen by the Notifying Party. Within 15 days after the
date of such Arbitration Notice, the Receiving Party shall deliver a counter-notice to the Notifying Party which shall identify the arbitrator chosen by the Receiving Party and which may specify any additional points or differences arbitrable
hereunder upon which the Receiving Party may desire a 
  

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decision. The Board shall give 10 days written notice of the time and place of hearing to the respective parties and shall determine questions submitted to
it for arbitration and make its decision and award in writing. The decision and award of a majority of the arbitrators (or the sole arbitrator, as the case may be) shall be final, conclusive and obligatory upon the parties to this Lease and their
successors and assigns, and without appeal, and each party hereto agrees to abide by and comply with every such decision and award. Judgment on the award of the Board may be entered and enforced by a court of competent jurisdiction. The costs of
each party in connection with any such arbitration shall in the first instance be paid by such party, but if such party substantially prevails therein, it shall be reimbursed therefor by the other party, and the question of costs shall in each case
be determined by the Board when it renders its decision on the question or questions submitted to it. Notwithstanding the requirement to arbitrate any dispute, any party may apply to a court for interim measures, such as injunctions, attachments and
conservation orders, which measures may be immediately enforced by court order. Any decision with respect to such interim measures shall promptly be referred to the Board for review and final decision. 
 37. Relationship Between the Parties. Nothing herein contained or hereby implied, including, without limitation, rights reserved by Lessor to use
the Leased Premises for purposes other than those which are granted to Lessee, to receive and examine development plans and maps, to review Lessee’s records and otherwise audit and inspect Lessor’s operations and their impact on the Leased
Coal and/or the Leased Premises, shall be construed as creating or constituting by implication or otherwise an obligation of or right in Lessor to control or otherwise correct Lessee’s acts and omissions or a lessening of Lessee’s duties
to indemnify Lessor and provide insurance herein required or any relationship or partnership, mining partnership, joint venture, agency or of employer and employee between Lessor, on the one hand, and Lessee, on the other hand, it being understood
that the relationship between them is solely that of Lessor and Lessee. 
 38. Power of Attorney. Lessee acknowledges that pursuant to
certain provisions hereof, it is required to provide, upon request of Lessor, certain consents, waivers, transfers, assignments and other documentation. Accordingly, in the event Lessee fails to deliver any such consent within 15 days after written
demand therefor, which demand shall describe the provisions hereof requiring such and the circumstances which provide the basis for such demand, Lessee may elect to submit such matter to arbitration as herein provided. In further consideration of
this Lease, Lessee does hereby irrevocably designate any officer of Lessor as its attorney-in-fact with the power and authority to execute and deliver on behalf of Lessee such consents, waivers, transfers, assignments and other documentation which
are the subject of the written demand given by Lessor to Lessee in the event that Lessee fails to submit such matter for arbitration, or Lessee, after submitting such matter to arbitration and receiving a decision in favor of Lessor, fails to comply
with a decision of the Board directing it to provide such consents, waivers, transfers, assignments or other documentation within 15 days after such decision. Presentation of an executed copy of this Lease and a copy of the written demand or, if
arbitrated, a written decision of the Board shall constitute sufficient evidence of the nature and extent of this designation by Lessee. 
  

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 39. Headings. Section headings used herein are for convenience of reference only and shall not affect the meaning or construction of any provision
hereof. 
 40. Applicable Law. This Lease shall be construed, enforced and performed in accordance with the laws of the Commonwealth
of Virginia. 
 41. Severability. If any provision of this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall in no way be affected or impaired, and such remaining provisions shall remain in full force and effect. 
 42.
Representations and Warranties of Lessee. Lessee represents and warrants as follows: 
 a. Lessee is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of Delaware and has the limited liability company power to perform its obligations under this Lease and the other documents delivered pursuant hereto or referred to herein
and to carry on its business as now conducted and as contemplated by this Lease and the documents referred to herein. 
 b. Neither the
execution nor delivery by Lessee of this Lease, nor consummation of the transactions contemplated by this Lease, will (i) conflict with, violate or result in the breach of or constitute a default under Lessee’s certificate of formation or
limited liability company agreement, or any applicable Laws or Regulations or (ii) conflict with, result in the material breach of any term or provision of, result in the termination of, result in the acceleration of, or permit the acceleration
of the performance required by the terms of, or give rise to any right of termination or cancellation under, any loan agreement, indenture, mortgage, deed of trust or other contract to which Lessee is a party or by which it may be bound. 

c. The execution and delivery of this Lease by Lessee and of the other documents referred to herein, and the performance by it of the transactions
contemplated herein and therein, have been duly authorized by all necessary limited liability company action required, and no further authorization with respect to Lessee is required. 
 d. The representations and warranties set forth in this Section 42 shall remain in full force and effect and shall survive for two years following
the expiration or termination of this Lease. 
 43. Representations and Warranties of Lessor. Lessor represents and warrants as
follows: 
 a. Lessor is a limited liability company, duly organized, validly 

  

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existing and in good standing under the laws of the State of Delaware and has the limited liability company power to perform its obligations under this Lease
and the other documents delivered pursuant hereto or referred to herein and to carry on its business as now conducted and as contemplated by this Lease and the documents referred to herein. 
 b. Neither the execution nor delivery by Lessor of this Lease, nor consummation of the transactions contemplated by this Lease, will (i) conflict
with, violate or result in the breach of or constitute a default under Lessor’s certificate of formation or limited liability company agreement, or any applicable Laws or Regulations or (ii) conflict with, result in the material breach of
any term or provision of, result in the termination of, result in the acceleration of, or permit the acceleration of the performance required by the terms of, or give rise to any right of termination or cancellation under, any loan agreement,
indenture, mortgage, deed of trust or other contract to which Lessor is a party or by which it may be bound. 
 c. The execution and delivery
of this Lease by Lessor and of the other documents referred to herein, and the performance by it of the transactions contemplated herein and therein, have been duly authorized by all necessary limited liability company action required, and no
further authorization with respect to Lessor is required. 
 d. The representations and warranties set forth in this Section 43 shall
remain in full force and effect and shall survive for two years following the expiration or termination of this Lease. 
 44. Entire
Agreement. This Lease (together with the documents referred to herein) constitutes all of the agreements, conditions, understandings, representations and warranties made between the parties hereto and supersedes all prior or contemporaneous
agreements, whether written or oral, with respect to the subject matter hereof, including the Original Coal Lease. This Lease may not be modified orally or in any manner other than by an agreement in writing signed by both parties hereto.

 45. No Recordation. This Lease shall not be recorded absent mutual agreement between the parties hereto, but the parties agree that
each shall execute, and either may file of record, a memorandum of lease in the form attached hereto as Exhibit C. 
 46. No
Disclosure. Without the prior written consent of the other party, and except to the extent required by applicable Laws and Regulations (including requirements of the United States Securities and Exchange Commission) or for the conduct of the
legal, accounting and taxation affairs of their respective businesses, neither Lessor nor Lessee will disclose to any person the terms and conditions of this Lease. Disclosure of the terms of this Lease may be made as required to secure financing
required by Lessee to acquire the necessary equipment and credit necessary to perform its obligations hereunder, but Lessee shall receive the assurance of such lender that such information shall be held in confidence. 
  

 31 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 47. No Rights in Third Parties. The provisions of this Lease are not intended and do not confer upon any persons or entities other than the parties
hereto and their successors and permitted assigns any rights or remedies under or by reason of this Lease. 
 [Signature Page Follows] 

  

 32 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 WITNESS the following signatures: 
  

			
	DULCET ACQUISITION LLC,
	a Delaware limited liability company
		
	By:	 	Penn Virginia Operating Co., LLC,
		 	its sole member
		
	By:	 	 /s/ Stephen F. Looney

	Name:	 	Stephen F. Looney
	Title:	 	Vice President
	
	 POWDUL ACQUISITION LLC,
 a Delaware limited
liability company

		
	By:	 	ICG, LLC,
		 	its sole member
		
	By:	 	 /s/ Charles G. Snavely

	Name:	 	Charles G. Snavely
	Title:	 	 Sr. Vice President – Planning and
 Northern
Region Operations

 [Signature Page to Amended and Restated Coal Lease] 
  

 33 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 STATE OF TENNESSEE, 
 COUNTY OF SULLIVAN, to-wit: 
 The foregoing instrument was acknowledged before me this 27th day of May, 2008, by Stephen F. Looney, the Vice President of Penn Virginia Operating Co., LLC, a Delaware limited liability company and the sole member of Dulcet Acquisition LLC, a
Delaware limited liability company, on behalf of the company. 
 My commission expires December 8, 2008. 
  

	
	 Kathy E. Arnold

	            Notary Public

 [SEAL] 
 STATE
OF WEST VIRGINIA, 
 COUNTY OF PUTNAM, to-wit: 
 The foregoing instrument was acknowledged before me this 27th day of May, 2008, by Charles G. Snavely, the Sr. Vice President – Planning and Northern Region Operations of ICG, LLC, a Delaware limited liability company and the sole member
of Powdul Acquisition LLC, a Delaware limited liability company, on behalf of the company. 
 My commission expires 12/15/2014. 

 

	
	 /s/ Johneen F. Pomeroy

	            Notary Public

 [SEAL] 
 [Signature Page to Amended and Restated Coal Lease] 
  

 34 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 EXHIBIT A 
 LEASED PREMISES 
 

 
  

 35 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 EXHIBIT B 
 PRODUCTION SCHEDULE 
  

			
	 Month
	  	Production Minimum
	 June 2008
	  	[    *    ]
	 July 2008
	  	[    *    ]
	 August 2008
	  	[    *    ]
	 September 2008
	  	[    *    ]
	 October 2008
	  	[    *    ]
	 November 2008
	  	[    *    ]
	 December 2008
	  	[    *    ]
	 January 2009
	  	[    *    ]
	 February 2009
	  	[    *    ]
	 March 2009
	  	[    *    ]
	 April 2009
	  	[    *    ]
	 May 2009
	  	[    *    ]
	 June 2009
	  	[    *    ]
	 July 2009
	  	[    *    ]
	 August 2009
	  	[    *    ]
	 September 2009
	  	[    *    ]
	 October 2009
	  	[    *    ]
	 November 2009
	  	[    *    ]
	 December 2009
	  	[    *    ]
	 January 2010
	  	[    *    ]
	 February 2010
	  	[    *    ]
	 March 2010
	  	[    *    ]
	 April 2010
	  	[    *    ]
	 May 2010
	  	[    *    ]
	 June 2010
	  	[    *    ]
	 July 2010
	  	[    *    ]
	 August 2010
	  	[    *    ]
	 September 2010
	  	[    *    ]
	 October 2010
	  	[    *    ]
	 November 2010
	  	[    *    ]
	 December 2010
	  	[    *    ]
	 January 2011
	  	[    *    ]
	 February 2011
	  	[    *    ]
	 March 2011
	  	[    *    ]
	 April 2011
	  	[    *    ]
	 May 2011
	  	[    *    ]

  

 B-1 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 EXHIBIT C 
 MEMORANDUM OF LEASE 
 THIS MEMORANDUM OF LEASE, made and entered into by and between DULCET ACQUISITION LLC, a Delaware limited liability company (“Lessor”), and
POWDUL ACQUISITION LLC, a Delaware limited liability company (“Lessee”). 
 R E C I T A L 
 The parties entered into an Amended and Restated Coal Lease (the “Lease”) dated as of the
27th day of May, 2008, involving land in Harlan County, Kentucky and Lee County, Virginia (the “Leased Premises”), as more particularly
described on Exhibit A attached hereto and by reference made a part thereof. 
 The parties hereto desire to make this Memorandum of Lease.

 WITNESSETH THE FOLLOWING: 
 1.
The parties to the Lease are as set forth in the caption hereof as “Lessor” and “Lessee.” Each having the following address: 
 Lessor 
 Dulcet Acquisition LLC 
 Seven Sheridan Square 
 Suite 400 
 Kingsport, TN 37660 
 Lessee 
 Powdul Acquisition LLC 
 300 Corporate
Centre Drive 
 Scott Depot, WV 25560 
 2. The Lease is dated as of May 27, 2008, and was executed by Lessee on May 27, 2008 and by Lessor on May 27, 2008. 
 3. A description of the Leased Premises in the form contained in the Lease is attached hereto as Exhibit A. 
 4. The Term of the
Lease commences on May 27, 2008 and continues until all the mineable and merchantable coal is removed or for ten (10) years, subject to two (2) extensions of five (5) years each, and thereafter for a Remainder Term until Lessee
concludes the work on the Leased Premises. 
  

 37 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 WITNESS the following signatures: 
  

			
	DULCET ACQUISITION LLC,
	a Delaware limited liability company
		
	By:	 	Penn Virginia Operating Co., LLC,
		 	its sole member
		
	By:	 	  

	Name:	 	Stephen F. Looney
	Title:	 	Vice President
	
	 POWDUL ACQUISITION LLC,
 a Delaware limited
liability company

		
	By:	 	ICG, LLC,
		 	its sole member
		
	By:	 	  

	Name:	 	Charles G. Snavely
	Title:	 	 Sr. Vice President – Planning and
 Northern
Region Operations

  

 38 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 STATE OF TENNESSEE, 
 COUNTY OF SULLIVAN, to-wit: 
 The foregoing instrument was acknowledged before me this 27th day of May, 2008, by Stephen F. Looney, the Vice President of Penn Virginia Operating Co., LLC, a Delaware limited liability company and the sole member of Dulcet Acquisition LLC, a
Delaware limited liability company, on behalf of the company. 
 My commission expires
                                         
       . 
  

	
	  

	         Notary Public

 [SEAL] 
 STATE
OF WEST VIRGINIA, 
 COUNTY OF PUTNAM, to-wit: 
 The foregoing instrument was acknowledged before me this 27th day of May, 2008, by Charles G. Snavely, the Sr. Vice President – Planning and Northern Region Operations of ICG, LLC, a Delaware limited liability company and the sole member
of Powdul Acquisition LLC, a Delaware limited liability company, on behalf of the company. 
 My commission expires
                                         
       .  
  

	
	  

	         Notary Public

 [SEAL] 
 This
Document prepared by: 
 James F. Modzelewski 
 Vice President
and Assistant General Counsel 
 Penn Virginia Resource Partners 
 Three Radnor Corporate Center, Suite 300 
 100 Matsonford Road 
 Radnor, PA 19087 
  

 39 

 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND 
 FILED SEPARATELY WITH THE SECURITIES AND 
 EXCHANGE COMMISSION. BOXES AND ASTERISKS

 DENOTE SUCH OMISSION. 
  
 EXHIBIT D 
 THIRD PARTY COAL PROPERTIES

 

 
  

 40Supply Agreement

 Exhibit 10.1 
 SUPPLY AGREEMENT 
 This Agreement is made and entered into as of the last day signed below (the
“Effective Date”) by and between Hollister-Stier Laboratories LLC, having a principal place of business at 3525 North Regal Street, Spokane, Washington, 99207-5788 (“Hollister-Stier”) and Auxilium Pharmaceuticals, Inc.,
having a principal place of business at 40 Valley Stream Parkway, Malvern, Pennsylvania 19355 (“Auxilium”). Both Hollister-Stier and Auxilium are referred to herein individually as “Party” and collectively as the
“Parties.” 
 WITNESSETH THAT: 
 WHEREAS, Auxilium has a commercial interest in the manufacture of the Product (as hereafter defined) and requests the services of Hollister-Stier in the manufacturing of the Product pursuant with the terms and
conditions contained herein, and Hollister-Stier desires to manufacture the Product on behalf of Auxilium pursuant to the terms and conditions contained herein; 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the Parties agree as follows: 
 ARTICLE 1 
 DEFINITIONS 
  

	1.	Certain terms are defined in the text of this Agreement. In addition, as used in this Agreement, the following definitions shall apply: 

  

	 	1.1.	“Act” shall mean the U.S. Food, Drug and Cosmetics Act of 1934 (21 U.S. C. § 301 et seq.) and the regulations promulgated thereunder, as the same may be amended
from time to time, as well as all similar applicable laws, orders and regulations of members of the European Union. 

  

	 	1.2.	“Active Pharmaceutical Ingredient” or “API” shall mean the active pharmaceutical ingredient of the Product, specifically clostridial collagenase.

  

	 	1.3.	“Affiliate” shall mean any individual, firm, corporation or other legal entity that directly or indirectly controls, is controlled by, or is under common control with, a
Party. As used in the preceding sentence, “control” means possession, whether direct or indirect, of the power to direct or cause the direction of the management and policies of such entity, whether pursuant to the ownership of voting
securities, by contract or otherwise. 

  

	 	1.4.	“Auxilium’s Technology Package” shall mean the technical information supplied by Auxilium to Hollister-Stier to enable Hollister-Stier to carry out its obligations
hereunder. Items which may be included in Auxilium’s Technology Package include, but are not limited to, the Specifications, raw material and manufacturing component specifications, intermediate Product specifications, analytical and
microbiological method validation reports, analytical method transfer protocols, filter validation reports, and storage specifications. 

  

	 	1.5.	“Batch” or “Lot” shall mean each separate and distinct quantity of Product processed under continuous conditions and designated by Hollister-Stier with a batch
or lot number. 

  

	 	1.6.	“cGMP Regulations” means the applicable current Good Manufacturing Practices as promulgated by the FDA from time to time under the Act, as presently codified in
21 CFR Parts 210 and 211, as well as members of the European Union. 

	 	1.7.	“Certificate of Analysis” or “COA” shall mean a document executed by Hollister-Stier to certify that a Batch or Lot of Product meets the Specifications as agreed
to by Hollister-Stier and Auxilium. 

  

	 	1.8.	“Confidential Information” shall mean any nonpublic information of Hollister-Stier or Auxilium including without limitation, trade secrets, business methods, operating
procedures, manufacturing methods and processes, prices, and customer information, whether of a written, oral, or visual nature. 

  

	 	1.9.	“Delivery Date” shall mean the date of delivery set forth in Auxilium’s purchase order and shall be the date by which each Batch of Product shall be delivered to
Auxilium, accompanied by a Certificate of Analysis signed by a duly authorized representative of Hollister-Stier. 

  

	 	1.10.	“FDA” shall mean the United States Food and Drug Administration. 

  

	 	1.11.	“Fill Date” shall mean the date the Product is scheduled to be filled at Hollister-Stier. 

  

	 	1.12.	“Intellectual Property” shall mean patents, copyrights, trademarks, trade names, service marks, licenses and other intellectual property rights of a Party.

  

	 	1.13.	“Manufacturing Date” shall mean the same thing as Fill Date—the date the Product is scheduled to be filled at Hollister-Stier. 

  

	 	1.14.	“Master Batch Record” shall mean a written description of the procedure to be followed by Hollister-Stier in processing of a Batch or Lot of Product, which description
shall include, but not be limited to, a complete list of all active and inactive ingredients, components, weights and measures used in processing the Product within the meaning of 21 CFR part 211.186, or its successor as in effect from
time to time. 

  

	 	1.15.	“Product” shall mean Auxilium’s pharmaceutical product XiaflexTM (clostridial collagenase for injection) in a 3ml vial, currently in development, formerly
referred to as AA4500, and a sterile diluent. 

  

	 	1.16.	“Quality Technical Agreement” or “QTA” shall mean an agreement in the form attached as Exhibit A, to be executed by the Parties simultaneously with
the execution of this Agreement. The terms and conditions of the QTA are incorporated in this Agreement as if set forth herein at length. 

  

	 	1.17.	“Regulatory Authority” shall mean any federal, state, local, or international regulatory agency, department, bureau, or other governmental agency.

  

	 	1.18.	“Third Party” shall mean any party other than Auxilium or Hollister-Stier and their respective Affiliates. 

  

	 	1.19.	“Specifications” shall mean the specifications for the Product established by Auxilium and agreed to by Hollister-Stier and attached hereto as Exhibit B.

 ARTICLE 2 
 REPRESENTATIONS AND WARRANTIES 
  

	2.	The Parties agree to the following representations and warranties: 

  

	 	2.1	Each Party represents and warrants to the other as follows: 

  

	 	2.1.1.	It has full power and authority to enter into this Agreement and perform its obligations hereunder. 

  

	 	2.1.2.	Subject to Section 3.2 of this Agreement, it has such permits, licenses, and authorizations of Regulatory Authorities, including, with respect to Auxilium, Regulatory
Authorities with jurisdiction over the Product, as are necessary to own its respective properties, conduct its business and perform its obligations hereunder. 

	 	2.1.3.	It is not currently debarred, suspended, or otherwise excluded by the FDA or any other Regulatory Authority from conducting business and shall not knowingly use in connection with
this Agreement the services of any person debarred by the FDA. 

  

	 	2.2.	Hollister-Stier represents and warrants to Auxilium as follows: 

  

	 	2.2.1	Hollister-Stier shall process the Product in compliance in all material respects with the Specifications, Quality Technical Agreement, the Master Batch Record, the Act and the cGMP
Regulations. 

  

	 	2.2.2	The Product when delivered shall comply in all respects with the Specifications and release testing; provided, however, that Hollister-Stier shall have no liability to Auxilium or
any Third Party for any breach of the foregoing representation and warranty to the extent that any such breach is caused in whole or in part by Auxilium or by any materials provided by Auxilium. 

  

	 	2.2.3	The manufacturing facilities for the Product shall conform in all respects to the standards of those Regulatory Authorities with jurisdiction over such facilities, including, but
not limited to, those set forth in the cGMP Regulations. 

  

	 	2.3	Auxilium represents and warrants to Hollister-Stier as follows: 

  

	 	2.3.1	Neither Auxilium’s Technology Package, nor the use thereof by Hollister-Stier, shall infringe, violate nor misappropriate the rights of any Third Party.

  

	 	2.3.2	Auxilium has all necessary rights to enable Hollister-Stier to process the Product for Auxilium in accordance with the terms and conditions of this Agreement.

  

	 	2.3.3	All laboratory, scientific, technical and/or other data submitted by or on behalf of Auxilium (including Auxilium’s Technology Package) relating to the Product shall be
complete and correct and shall not contain any falsification, misrepresentation or omission. 

  

	 	2.3.4	All materials supplied by or on behalf of Auxilium for use in processing the Product shall conform to the Specifications. 

 2.4        THE WARRANTIES SET FORTH IN THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO THOSE SET FORTH IN SECTION 3.3
AND 4.2, ARE THE SOLE AND EXCLUSIVE WARRANTIES MADE BY EITHER PARTY UNDER THIS AGREEMENT, AND NEITHER PARTY MAKES ANY OTHER WARRANTIES EXPRESS OR IMPLIED OR ARISING BY LAW, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE OR ARISING FROM THE COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE. 
 2.5        EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED UNDER ARTICLE 6 OF THIS AGREEMENT, AUXILIUM’S SOLE AND EXCLUSIVE REMEDY, AND HOLLISTER-STIER’S SOLE AND EXCLUSIVE
LIABILITY AND OBLIGATION FOR ANY BREACH OF A REPRESENTATION AND WARRANTY SET FORTH IN SECTION 2.2 SHALL BE FOR HOLLISTER-STIER TO PERFORM ITS OBLIGATIONS UNDER SECTIONS 4.1 AND 4.2 OR UNDER SECTION 4.4, AS THE CASE MAY BE. 
 2.6        EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED UNDER ARTICLE 6 OF THIS AGREEMENT,
SECTION 3.3 AND SECTION 4.2 AND/OR IN THE EVENT OF A BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 9 OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, TORT, STRICT LIABILITY,
NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR THE COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THE PRODUCT OR ANY SERVICES PROVIDED IN CONNECTION WITH THE PRODUCT, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

 2.7        EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM
INDEMNIFIED UNDER ARTICLE 6 OF THIS AGREEMENT, SECTION 3.3, SECTION 4.2 AND/OR IN THE EVENT OF A BREACH OF ITS CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 9 OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES SHALL HOLLISTER-STIER’S TOTAL LIABILITY
TO AUXILIUM IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE PRODUCT OR ANY SERVICES PROVIDED IN CONNECTION WITH THE PRODUCT, EXCEED THE TOTAL AMOUNT PAID BY AUXILIUM TO HOLLISTER-STIER UNDER THIS
AGREEMENT. 
 ARTICLE 3 
 SUPPLY AND PROCESSING OF PRODUCT; FORECASTS, 
 PURCHASE ORDERS AND PAYMENT 
  

	3.	The Parties agree to the following supply and processing provisions: 

  

	 	3.1.	Subject to the terms and conditions of this Agreement, and upon completion of the process development program, Hollister-Stier shall use commercially reasonable efforts to produce
and supply to Auxilium, and Auxilium shall purchase from Hollister-Stier Product in accordance with Section 3.10 below. 

  

	 	3.2.	Except as set forth in the following sentence, Auxilium shall be solely responsible for obtaining and maintaining all permits, licenses, and authorizations necessary for
Hollister-Stier to ship Product. Hollister-Stier shall be solely responsible for securing and maintaining approval of Hollister-Stier’s facility as a registered FDA facility, and Hollister-Stier shall be solely responsible for securing and
maintaining any and all permits and approvals required by the state of Washington, as well as members of the European Union. 

  

	 	3.3.	API: 

  

	 	3.3.1.	Auxilium will supply, at its expense, sufficient quantities of API to Hollister-Stier’s facility prior to the Delivery Date set forth in any purchase order to enable
Hollister-Stier to meet its obligations hereunder. All such API shall conform to the Specifications agreed to by Hollister-Stier and Auxilium. Title to API shall remain at all times with Auxilium. Except as expressly provided otherwise in Sections
3.3.2 through 3.3.5, risk of loss of the API shall remain at all times with Auxilium. 

  

	 	3.3.2.	Prior to Processing. If API is lost or damaged prior to processing as a result of Hollister-Stier’s negligent acts or omissions, [**]. For example, if Auxilium has provided
Hollister-Stier with sufficient API to process [**] Batches, and such API is lost or damaged prior to processing as a result of Hollister-Stier’s negligent acts or omissions, [**]. 

  

	 	3.3.3.	In Processing. If API is lost or damaged in processing as a result of Hollister-Stier’s negligent acts or omissions, Hollister-Stier will process a replacement Batch (or
Batches if applicable) at no additional cost to Auxilium for that number of Batches for which API was lost or damaged as its sole liability and Auxilium’s sole remedy (except that Auxilium shall provide replacement API at Auxilium’s
expense). 

  

	 	3.3.4.	Gross Negligence. In the event any loss or damage of API is caused by the gross negligence or willful misconduct of Hollister-Stier, as Hollister-Stier’s sole liability and
Auxilium’s sole remedy with respect to such gross negligence or willful misconduct Hollister-Stier, at Auxilium’s option, shall (i) [**], or (ii) [**]. 

  
  

	**	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.

	 	3.3.5.	Notwithstanding Sections 3.3.2 through 3.3.4, Hollister-Stier shall have no obligations under such sections if and to the extent Hollister-Stier assigns to Auxilium any insurance
proceeds it receives that are intended to compensate for lost or damaged API. 

  

	 	3.4.	In accordance with the QTA, Auxilium shall be responsible for release of Product for sale or distribution. 

  

	 	3.5.	In accordance with the QTA, Auxilium, with Hollister-Stier’s involvement, shall be responsible for any stability testing program for the Product required by the Act and the
cGMP Regulations. 

  

	 	3.6.	In accordance with the QTA, Hollister-Stier shall be responsible for maintaining any retention samples of the Product (including vials, stoppers, etc.) required by the Act and the
cGMP Regulations. 

  

	 	3.7.	In accordance with the QTA, Auxilium shall have the right, upon reasonable advance notice to Hollister-Stier, to conduct an annual audit to observe and inspect
Hollister-Stier’s facilities and procedures for processing Product. Such annual inspections will be made by no more than four (4) Auxilium representatives, who, if they are not Auxilium employees subject to the existing confidentiality
obligations, shall execute confidentiality agreements as requested by Hollister-Stier. Each annual inspection shall last no more than two (2) business days. During such inspection, Auxilium’s representatives shall (a) be accompanied
by a representative of Hollister-Stier, (b) follow such security and facility access procedures as are reasonably requested by Hollister-Stier, and (c) use good faith efforts to avoid disrupting Hollister-Stier’s operations.

  

	 	3.8.	Regulatory Support: Auxilium plans to file with the FDA a Biologics License Application (“BLA”) for the Product in early 2009 or as soon as possible thereafter, and
applications for marketing approvals in other countries as well. Hollister-Stier agrees to provide assistance and cooperation to Auxilium for its regulatory filings related to the Product. Specifically, Hollister-Stier shall use commercially
reasonable efforts to assist Auxilium in completing, submitting and supplementing applications for marketing approval by promptly providing required information related to the manufacturing process and the facilities used at Hollister-Stier for the
manufacture of Product and responding to inquiries from regulatory authorities regarding the manufacture of the Product at Hollister-Stier. Any additional regulatory effort on the part of Hollister-Stier beyond commercially reasonable efforts shall
be priced accordingly at the time of Auxilium’s request. 

  

	 	3.9.	Unless specifically requested otherwise by Auxilium in writing, Hollister-Stier will be responsible for purchase or manufacture of reasonable quantities of components and raw
materials (other than API, which will be supplied by Auxilium in accordance with Section 3.3), based on the estimates set forth in the Forecast (as defined below). If the quantity of Product set forth in any purchase order deviates from the
estimate set forth in the immediately preceding Forecast, and Hollister-Stier’s reliance thereon causes obsolescence of any such components or raw materials, Auxilium shall reimburse Hollister-Stier for its out-of-pocket costs incurred in
association therewith (including, but not limited to, any out-of-pocket costs related to returning such component or raw materials to the vendor or otherwise disposing thereof). 

  

	 	3.10.	Forecasts, Purchase Orders, Price, Terms of Payment: 

  

	 	3.10.1.	Forecasts: At least 90 days in advance of Auxilium’s first purchase order for Product, Auxilium shall supply Hollister-Stier with a written, rolling eighteen (18) month
forecast of Auxilium’s estimated requirements for Product from Hollister-Stier during such 18 month period (the “Initial Forecast”). Every 90 days thereafter, Auxilium will update and extend the forecast to cover the 18 months
beginning with the date of such updated forecast (the “Forecast”). Each Forecast shall include an estimated number of Batches and requested delivery dates for the 18 months covered by such Forecast. Auxilium shall be responsible for
aggregate amounts of components and raw materials purchased by Hollister-Stier for the first 12 months in each Forecast pursuant to Section 8.5.1 below. Amounts set forth for months 13 through 18 in each Forecast are estimates, to be used for
planning purposes only, and components and raw materials purchased by Hollister-Stier for months 13 through 18 in each Forecast shall not be binding on Auxilium. 

	 	3.10.2.	Purchase Orders: Auxilium will provide Hollister-Stier with a firm purchase order at least ninety (90) days prior to the Fill Date specified in such purchase order. All
purchase orders will be sent by facsimile or electronic mail to the address specified by Hollister-Stier. 

  

							
		 	3.10.2.1.	  	Each purchase order and any acknowledgment thereof shall be governed by the terms of this Agreement. In the event a Party uses forms or documents to place or accept purchase orders
that contain terms and conditions that are in addition to or contrary to those in this Agreement, the Parties agree and acknowledge that such forms or documents will be used for convenience only, and that no terms or conditions set forth therein,
except with respect to quantity, shall be of any force or effect. Hollister-Stier shall be deemed to have accepted a purchase order unless it objects within ten business days after receiving a purchase order. If Hollister-Stier’s objection is
based on its belief that it cannot accommodate the amount or Delivery Date requested in the purchase order (an Inability to Supply), then Sections 3.10.3 and 8.4 shall apply. Once a purchase order is accepted or deemed accepted by Hollister-Stier,
Hollister-Stier will be required to use commercially reasonable efforts to produce the quantity of Product set forth in the purchase order for delivery on the Delivery Date(s) set forth in such purchase order. Within twenty business days after
receiving each purchase order, Hollister-Stier shall provide Auxilium with a Fill Date in writing.
			
		 	3.10.2.2.	  	Auxilium reserves the right to cancel or postpone any purchase order after acceptance by Hollister-Stier under the following terms:
				
		 		  	3.10.2.2.1.1.	  	Should Auxilium cancel or postpone any purchase order within fourteen (14) calendar days prior to the scheduled Fill Date, Auxilium shall pay Hollister-Stier a fee equivalent to [**] price
for the postponed or cancelled purchase order.
				
		 		  	3.10.2.2.1.2.	  	Should Auxilium cancel a firm batch 15 – 90 calendar days before the scheduled Fill Date, Hollister-Stier will impose a cancellation fee equivalent to [**].
				
		 		  	3.10.2.2.1.3.	  	Should Auxilium cancel a firm batch greater than 90 calendar days before the scheduled Fill Date, Hollister-Stier will impose no cancellation fee.
				
		 		  	3.10.2.2.1.4.	  	Should Auxilium request postponement of a purchase order 15 to 90 calendar days before the scheduled Manufacturing Date, [**].

  

	 	3.10.3.	Inability to Supply. If Hollister-Stier is unable to supply the full amount of Product in a Forecast or an accepted purchase order in the time agreed (hereinafter an “Inability
to Supply”), Hollister-Stier shall notify Auxilium within 5 business days and Hollister-Stier shall endeavor to remedy the Inability to Supply as quickly as possible. 

  

					
		 	3.10.3.1.	  	While an Inability to Supply persists, Auxilium may purchase Product from other sources, and Auxilium shall be relieved of its firm 12 month supply requirement obligation (Section 3.10.1
above).
			
		 	3.10.3.2.	  	In the event the Inability to Supply continues for more than ninety (90) days after the Delivery Date in the purchase order, Auxilium may purchase Product from other sources, Auxilium
shall be relieved of its firm 12 month supply requirement obligation (Section 3.10.1 above), and Auxilium may, at its option, terminate this Agreement in accordance with Section 8.4.

  
  

	**	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.

	 	3.10.4.	Price and Shipping: Auxilium shall pay Hollister-Stier, in U.S. dollars, the price specified in Exhibit C annexed hereto. The price excludes all taxes, duties, shipping,
insurance and other expenses. Beginning on October 1, 2009, and on October 1 of each succeeding year during the term of this Agreement, the then current price shall be increased by the annual percentage increase, if any, for the most
recent twelve (12) month period for which figures are available in the “Producer Price Index—Pharmaceutical Preparations” (code PCU2834) (the “PPI”) published by the U.S. Bureau of Labor Statistics (the
“BLS”) or, if the same is no longer published, the successor index published by the BLS that is most similar thereto. If the PPI is discontinued and not replaced with a corresponding or similar index, then the Parties shall,
in good faith, agree upon a replacement PPI. Price increases shall be effective for all new purchase orders placed after the applicable anniversary. Product shall be delivered FOB Hollister-Stier’s facility, Spokane, Washington, either freight
collect or freight prepaid, and Hollister-Stier will ship Product to the destination, and via the carrier, that Auxilium specifies in the purchase order. Risk of loss shall pass to Auxilium when the Product is tendered to the carrier for shipment.
Shipment and insurance of Product shall be arranged by Auxilium and the price and liability of such shipment shall be borne by Auxilium. 

  

	 	3.10.5.	Auxilium agrees to provide Hollister-Stier with not less than [**] ([**]%) of the total forecasted volume for Product, as long as Hollister-Stier has not entered into a situation
where it is unable to supply Product to Auxilium per sections 3.10.3 and 8.4. 

  

	 	3.10.6.	Terms of Payment: Invoices shall be payable to Hollister-Stier within thirty (30) calendar days after Auxilium’s acceptance or deemed acceptance of Product as set forth in
Article 4. All amounts not paid when due shall bear interest from the due date at the rate of one and one-half percent (1.5%) per month. 

  

							
		 	3.10.6.1.	  	 Invoices shall be sent to the following address:
  
 Auxilium Pharmaceuticals, Inc,
 Attention: Accounts Payable
 Address: 40 Valley Stream Parkway
 Address: Malvern, PA
19366

			
		 	3.10.6.2.	  	All payments due hereunder to Hollister-Stier shall be sent by wire transfer of funds via the Federal Reserve Wire Transfer System to:
			
		 		  	 ACH ABA# 323070380
 WIRE ABA#
026009593
 Beneficiary: Hollister-Stier Laboratories LLC
 Account
# 004850802409
 Swift Code BOFAUS3N
  
 Or by mail to:
 Hollister-Stier Laboratories LLC
 14110 Collections Center Drive
 Chicago, IL 60693-4110

  
  

	**	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.

 ARTICLE 4 
 INSPECTION AND REJECTION OF PRODUCT; QUALITY CONTROL 
  

	4.	Subject to the terms of the QTA, the Parties agree to the following provisions for acceptance or rejection of Product and certain matters relating to quality control:

  

	 	4.1.	Each Batch of Product delivered to Auxilium hereunder shall be accompanied by a Certificate of Analysis signed by a duly authorized representative of Hollister-Stier. Auxilium shall
have 30 days from the date of receipt of Product and Certificate of Analysis to inspect and reject acceptance by written notice to Hollister-Stier; provided, however, that any such notice shall set forth Auxilium’s reasons for rejection in
reasonable detail and provided, further, that Auxilium may reject Product only if: (i) Auxilium claims a material breach of Hollister-Stier’s representations and warranties in Section 2.2 of this Agreement with respect to such
Product; or (ii) Hollister-Stier has failed to deliver a Certificate of Analysis for such Product or (iii) if Auxilium determines that the Product does not meet the Specifications, despite an accompanying Certificate of Analysis. If
Hollister-Stier does not receive Auxilium’s written notice of rejection within such 30 day period, Auxilium shall be deemed to have accepted Product. 

  

	 	4.2.	In the event Auxilium provides Hollister-Stier with a timely notice of rejection as set forth in Section 4.1, Auxilium shall return the rejected Product to Hollister-Stier at
Hollister-Stier’s expense. Hollister-Stier shall have 30 days following receipt of rejected Product in which to test such Product. If Hollister-Stier does not dispute a rejection, Hollister-Stier shall [**] and [**] shall constitute
Auxilium’s exclusive remedy and Hollister-Stier’s sole liability with respect to such rejection (unless Sections 3.3.2 through 3.3.5 apply, in which case, Auxilium shall have the remedy set forth therein). If Hollister-Stier disputes a
rejection, Hollister-Stier shall provide Auxilium with written notice of such dispute within 10 business days after receiving the returned Product, and the Parties shall use commercially reasonable efforts to resolve the dispute amicably and
promptly. If the Parties are unable to reach a resolution within 30 days after Auxilium’s notice of rejection, the returned Product shall be submitted to any independent laboratory or consultant mutually acceptable to the Parties, whose
decision as to the conformity of such Product with the Specifications shall be final and binding for the purpose of determining (1) which party shall pay the laboratory or consultant, and (2) whether or not Hollister-Stier shall replace
the rejected Product. (The decision of the laboratory or consultant shall not supersede Auxilium’s authority to release the Product.) The Party against whom the dispute is decided shall pay any charges for such laboratory or consultant. If the
laboratory or consultant determines that the returned Product did not conform to the Specifications, Hollister-Stier shall replace the rejected Product at no charge to Auxilium (except that Auxilium shall provide replacement API at Auxilium’s
expense), and such replacement shall constitute Auxilium’s exclusive remedy and Hollister-Stier’s sole liability with respect to such rejected Product (unless Sections 3.3.2 through 3.3.5 apply, in which case, Auxilium shall have the
remedy set forth therein). 

  

	 	4.3.	In addition to any safety requirements set forth in the QTA or the Master Batch Record, Hollister-Stier shall develop, adopt and enforce safety procedures for processing Product in
compliance in all material respects with the Act and the cGMP Regulations. Hollister-Stier shall be responsible for treating and/or disposing, in compliance with the Act and the cGMP Regulations in all material respects, all waste generated as a
result of such processing, and for maintaining required records related thereto. 

  

	 	4.4.	In the event (a) any Regulatory Authority issues a request, directive or order that any of the Product be recalled, withdrawn, or corrected, (b) a court of competent
jurisdiction orders such an action, or (c) either Party reasonably determines that any Product should be recalled, withdrawn or corrected, the Parties shall take all appropriate corrective actions as they reasonably mutually determine, and
shall cooperate in any governmental investigations relating to the Product. As between Hollister-Stier and Auxilium, Auxilium shall be solely responsible for initiating, conducting, and managing any recall, withdrawal or correction effort. Auxilium
shall be solely responsible for all related expenses, except that Hollister-Stier shall be liable for such expenses to the extent that the recall, withdrawal or correction resulted from a breach by Hollister-Stier of any of its representation and
warranties set forth in Section 2.2 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. 

	 	4.5.	Auxilium shall provide to Hollister-Stier copies of all material regulatory submissions that relate to Hollister-Stier’s services under this Agreement, which copies shall be
provided reasonably in advance of submission. Hollister-Stier shall consult with Auxilium in responding to questions from the Regulatory Authorities regarding processing of the Product. Each Party shall notify the other promptly after receipt of any
notice of any Regulatory Authority inspection, investigation or other inquiry involving the Product. The Parties shall cooperate with each other during any such inspection, investigation or other inquiry including, but not limited to, allowing, upon
reasonable request, a representative of the other to participate during such inspection, investigation or other inquiry, and providing copies of all relevant documents. 

  

	 	4.6.	The Parties agree to the following provisions regarding adverse events and complaints: 

  

	 	4.6.1.	Auxilium shall be responsible to (a) report adverse events involving the Product to the FDA and other Regulatory Authorities, and (b) respond to quality complaints and
medical and technical inquiries, respecting the Product. Note that depending on the nature of the complaint, Hollister-Stier may need to assist in the complaint investigation. 

  

	 	4.6.2.	In the event Hollister-Stier (a) receives information regarding any adverse event relating to the Product, (b) receives any complaints relating to the Product,
(c) receives any medical or technical inquiry relating to the Product, or (d) discovers or is notified of any material defect in the Product, it shall (i) promptly notify Auxilium and (ii) conduct an investigation in accordance
with its normal procedures for complaints, inquiries or discoveries of that nature and promptly report the results of such investigation to Auxilium. The Parties shall reasonably cooperate with and assist each other, at Auxilium’s cost, in
connection with any such matter. 

 ARTICLE 5 
 INTELLECTUAL PROPERTY RIGHTS 
  

	5.	The Parties agree to the following provisions regarding Intellectual Property: 

  

	 	5.1.	License Grant: Auxilium hereby grants Hollister-Stier a nonexclusive, worldwide, royalty-free license during the term of this Agreement to use Auxilium’s Technology Package and
Auxilium’s Intellectual Property rights solely in the performance of Hollister-Stier’s obligations under this Agreement. 

  

	 	5.2.	Limitation of Use: Except as expressly stated in this Agreement, no Intellectual Property rights of any kind or nature are conveyed by this Agreement and except as set forth in
Section 5.1, neither Party shall have any right, title or interest in or to the other Party’s Intellectual Property rights for any purpose whatsoever without such other Party’s prior written consent. Upon termination of this Agreement
for whatever reason, neither party shall use or exploit in any manner whatsoever any Intellectual Property rights of the other Party. 

  

	 	5.3.	During the initial term and any renewal terms and for five (5) years thereafter, neither Hollister-Stier nor any of its Affiliates shall directly or indirectly develop or
manufacture any competing product which for the purposes of this Agreement shall mean any product containing collagenase for injection which would compete with the indications of the Product. 

 ARTICLE 6 
 INDEMNIFICATION FOR
THIRD PARTY CLAIMS 
  

	6.	The Parties agree to the following clauses regarding indemnification for Third Party claims: 

  

	 	6.1.	 Indemnification by Auxilium: Auxilium shall indemnify, defend and hold Hollister-Stier, its Affiliates and their respective directors, officers, employees, agents,
successors and assigns harmless from and against any damages, losses, judgments, claims, suits, actions, liabilities, costs and expenses (including, 

	 	 
but not limited to, reasonable attorneys’ fees) (collectively, “Liabilities”) resulting from any Third Party claims or suits arising out of
(1) the ownership, use, handling, distribution, marketing or sale of the Product, (2) Auxilium’s breach of any of its warranties or representations, or failure to perform any of its obligations, hereunder, or (3) Auxilium’s
negligent acts or omissions or willful misconduct. 

  

	 	6.2.	Indemnification by Hollister-Stier: Hollister-Stier shall indemnify, defend and hold Auxilium, its Affiliates and their respective directors, officers, employees, agents, successors
and assigns harmless from and against any Liabilities resulting from any Third Party claims arising out of (1) Hollister-Stier’s services in manufacturing, processing or assembling the Product,(2) Hollister-Stier’s breach of any
of its warranties or representations, or failure to perform any of its obligations, hereunder or (3) Hollister-Stier’s negligent acts or omissions or willful misconduct. 

  

	 	6.3.	Indemnification Procedures: 

  

	 	6.3.1.	Any Party hereto seeking indemnification hereunder (in this context the “Indemnified Party”) shall notify the other Party (in this context the “Indemnifying
Party”) in writing reasonably promptly after the assertion against the Indemnified Party any claim by a Third Party (a “Third Party Claim”) in respect of which the Indemnified Party intends to base a claim for indemnification
hereunder. 

  

	 	6.3.2.	(1) The Indemnifying Party shall have the right, upon written notice given to the Indemnified Party within thirty (30) calendar days after receipt of the notice from the
Indemnified Party of any Third Party Claim, to assume the defense and handling of such Third Party Claim, at the Indemnifying Party’s sole expense, in which case the provisions of Section 6.3.2(2) below shall govern.

 (2) The Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party in connection with conducting
the defense and handling of such Third Party Claim, and the Indemnifying Party shall defend or handle the same in consultation with the Indemnified Party, and shall keep the Indemnified Party apprised of the status of the Third Party Claim. The
Indemnifying Party shall not, without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld, agree to a settlement of any Third Party Claim that could directly or indirectly lead to liability or create
any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder. The Indemnified Party shall cooperate with the Indemnifying Party and shall be entitled to
participate in the defense or handling of such Third Party Claim with its own counsel at its own expense. 
  

	 	6.3.3.	(1) If the Indemnifying Party does not give written notice to the Indemnified Party, within thirty (30) calendar days after receipt of the notice from the Indemnified
Party of any Third Party Claim, of the Indemnifying Party’s election to assume the defense or handling of such Third Party Claim, the provisions of Section 6.3.3(2) below shall govern. 

 (2) The Indemnified Party may, at the Indemnifying Party’s expense, select counsel in connection with conducting the defense or handling of such
Third Party Claim and defend or handle such Third Party Claim in such manner as it may deem appropriate, provided, however, that the Indemnified Party shall keep the Indemnifying Party timely appraised of the status of such Third Party Claim and
shall not settle such Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. If the Indemnified Party defends or handles such Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party and shall be entitled to participate in the defense or handling of such Third Party Claim with its own counsel and at its own expense. 
  

	 	6.3.4.	The indemnification remedies in this Article 6 shall constitute the sole and exclusive remedies of the Parties with respect to any Third Party Claims arising under or relating
to this Agreement. 

	 	6.4.	Limitation of Liability: Notwithstanding any other provisions of this Agreement, Hollister-Stier’s aggregate indemnification liability to Auxilium and its Affiliates for Third
Party Claims pursuant to this Article 6 shall not exceed [**] United States Dollars (US $[**]). 

 ARTICLE 7 

 INSURANCE 
 Each of
Auxilium and Hollister-Stier shall obtain and maintain, either itself or through one or more of its Affiliates, with reputable carriers, product liability insurance with limits of not less than Ten Million United States Dollars (US $10,000,000)
per claim/annual aggregate by no later than the scheduled delivery date for the first Batch of Product delivered under this Agreement. Upon request, each Party shall furnish the other Party with a certificate that such insurance is in force. In the
event of any proposed cancellation, non-renewal, or material adverse change in such coverage, the other Party hereto shall be given at least thirty (30) calendar day’s advance written notice thereof. 
 ARTICLE 8 
 TERM AND TERMINATION

  

	8.	The Parties agree to the following clauses regarding the term and termination of this Agreement: 

  

	 	8.1.	Term: This Agreement shall remain in full force and effect for an initial term of three (3) years following the Effective Date, unless terminated earlier in accordance with
8.2, 8.3 or 8.4. After the initial three (3) year term, this Agreement shall automatically renew for subsequent two (2) year terms, unless or until either party notifies the other at least 180 days before the expiration of the current term
that it does not wish to renew. 

  

	 	8.2.	Termination for Default: This Agreement may be terminated by either Party in the event of material breach or default by the other Party of the terms and conditions hereof; provided,
however, the other Party shall first give to the defaulting Party written notice of the proposed termination or cancellation of this Agreement, specifying the grounds therefor. Upon receipt of such notice, with respect to such defaults as are
capable of being cured, the defaulting Party shall have thirty (30) calendar days to respond by curing such default. If the breaching Party does not respond or fails to work diligently and to cure such breach within such thirty (30) day
period, then the other Party may terminate this Agreement. 

  

	 	8.3.	Bankruptcy or Insolvency: 

  

	 	8.3.1.	Either Party may terminate this Agreement upon the occurrence of any of the following with respect to the other Party: 

  

					
		 	8.3.1.1.	  	The filing of an involuntary petition under the U.S. Bankruptcy Code, or any other similar law, which is not dismissed within sixty (60) days after the filing date;
			
		 	8.3.1.2.	  	The filing of a voluntary petition by such other Party for relief under the U.S. Bankruptcy Code or other similar law; or
			
		 	8.3.1.3.	  	 The  failure of such other Party to pay its debts when they become due.

  

	 	8.4	Inability to Supply. Auxilium may, at its option, terminate this Agreement effective immediately upon written notice to Hollister-Stier, if an Inability to Supply continues for more
than ninety (90) days after the Delivery Date in a purchase order. 

  
  

	**	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. 

	 	8.5	Rights and Duties Upon Termination: 

  

	 	8.5.1	Termination of this Agreement for whatever reason, shall not affect the surviving obligations of either Party, including payment of obligations which have accrued prior to such
termination. Upon termination of this Agreement, other than due to an uncured breach of this Agreement by Hollister-Stier, Auxilium shall purchase from Hollister-Stier, at the out-of-pocket cost to Hollister-Stier, any components and raw materials
purchased for the Product which Hollister-Stier has purchased based upon the first 12 months in the current Forecast. Hollister-Stier shall ship such components and raw materials to Auxilium at Auxilium’s expense and in accordance with
Auxilium’s instructions promptly after receiving such payment. Articles 1 and 2, Sections 3.9.3, 5.3 and 8.5, and Articles 6, 9, 10, 11 and 12, and all other provisions that may reasonably be construed as surviving the termination of this
Agreement shall survive the termination. 

 ARTICLE 9 
 CONFIDENTIALITY 
  

	9.	In carrying out their respective obligations under this Agreement, it is recognized by Hollister-Stier and Auxilium that each may disclose to the other Confidential Information of
the disclosing Party, and they hereby agree as follows with respect to any such disclosure: 

  

	 	9.1.	Form of Disclosure: Confidential Information may be disclosed in oral, written or electronic form. 

  

	 	9.2.	Obligations: The receiving Party shall hold Confidential Information in confidence and use it only for the purpose of performing its obligations under this Agreement. Except as
provided below, the receiving Party shall not disclose, disseminate or distribute any such Confidential Information to any Third Party unless prior written authorization has been obtained from the disclosing Party. These obligations shall not apply
to: 

  

	 	9.2.1.	Information which, at the time of disclosure, is generally known to the public; 

  

	 	9.2.2.	Information which, after disclosure, becomes generally known to the public by publication or otherwise, except by breach of this Agreement by the receiving Party;

  

	 	9.2.3.	Information which the receiving Party can demonstrate by its written records was in the receiving Party’s possession at the time of the disclosure, and which was not acquired
directly or indirectly, from the disclosing Party under an obligation of confidentiality; 

  

	 	9.2.4.	Information which is lawfully disclosed to the receiving Party on a non-confidential basis by a Third Party who is not obligated to the disclosing Party or any other Third Party to
retain such information in confidence; 

  

	 	9.2.5.	Information which results from independent research and development by the receiving Party, as shown by competent evidence; or 

  

	 	9.2.6.	Information which is required to be disclosed by legal process; provided that the Party so disclosing such Confidential Information timely informs the other Party and uses
commercially reasonable efforts to limit the disclosure, maintain its confidentiality to the extent possible, and permit the other Party to attempt by appropriate legal means to limit such disclosure. The parties acknowledge that the financial terms
of this Agreement and the product specifications are confidential information and they will seek confidential treatment of such information in the event this Agreement must be filed with the SEC or any other securities regulatory authority.

	 	9.3.	Each Party covenants and agrees that it has and shall use commercially reasonable efforts to prevent the unauthorized use, disclosure, copying, dissemination or distribution of
Confidential Information. Without limiting the foregoing, the receiving Party shall make Confidential Information of the other Party available only to those of its employees, agents and other representatives who have a need to know the same for the
purpose carrying out this Agreement, who have been informed that the Confidential Information belongs to the disclosing Party and is subject to this Agreement, and who have agreed or are otherwise obligated to comply with the confidentiality
provisions of this Agreement. 

 ARTICLE 10 
 FORCE MAJEURE/DISPUTE RESOLUTION 
  

	10.	The Parties agree to the following: 

  

	 	10.1.	Effect of Force Majeure: Neither Party shall be held liable or responsible for any loss or damages resulting from any failure or delay in its performance due hereunder (other than
payment of money) caused by force majeure. As used herein, force majeure shall be deemed to include any condition beyond the reasonable control of the affected Party including, without limitation, strikes or other labor disputes, war, riot,
earthquake, tornado, hurricane, flood or other natural disasters, fire, civil disorder, explosion, sabotage, inability to obtain adequate fuel, power, labor, containers, transportation, compliance with governmental requests, laws, rules,
regulations, orders or actions; inability despite good faith efforts to renew operating permits or licenses from local, state or federal governmental authorities; breakage or failure of machinery or apparatus; national defense requirements; or
supplier strike, lockout or injunction. 

  

	 	10.2.	Notice of Force Majeure: In the event either Party is delayed or rendered unable to perform due to force majeure, the affected Party shall give notice of the same and its expected
duration to the other Party promptly after the occurrence of the cause relied upon, and upon the giving of such notice the obligations of the Party giving the notice will be suspended during the continuance of the force majeure; provided, however,
such Party shall take commercially reasonable steps to remedy or mitigate the force majeure with all reasonable dispatch. The requirement that force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or
labor controversies by acceding to the demands of the opposing party. 

  

	 	10.3.	Nothing in the preceding Force Majeure provisions shall restrict or limit Auxilium’s rights and remedies under Section 3.10.3 et seq. (Inability to Supply).

  

	 	10.4.	Dispute Resolution: The Parties hereto agree to perform the terms of this Agreement in good faith, and to attempt to resolve any controversy, dispute or claim arising hereunder in
good faith. Either Party may initiate such informal dispute resolution by sending written notice of the dispute to the other Party, and within ten (10) business days after such notice appropriate representatives of the Parties shall meet for
attempted resolutions by good faith negotiations. If they are unable to resolve the dispute within thirty (30) days of initiating such negotiations, the Parties agree first to submit the dispute to non-binding mediation before resorting to
litigation or other mutually agreed dispute resolution mechanism. The dispute resolution procedures set forth herein shall not limit a party from seeking or a court from granting a temporary restraining order or a preliminary injunction in order to
preserve the status quo of the Parties pending mediation, arbitration or litigation. Further, in the event of a dispute under Section 4.2, the Parties shall comply with the dispute resolution provisions set forth in Article 4. In the event
that the parties are unable to resolve the dispute through mediation or arbitration and they proceed through litigation, the substantially prevailing Party shall be entitled, in addition to any other rights and remedies it may have, to reimbursement
for its expenses incurred thereby, including court cost and reasonable attorneys’ fees, from the substantially non-prevailing Party. 

 ARTICLE 11 
 NOTICES 
 Except as otherwise specifically set forth in Section 3.9.2 with respect to purchase
orders, all notices and other communications provided herein shall be in writing and shall be deemed to be delivered when deposited in the United States mail, postage prepaid and certified, or hand-delivered, or sent by facsimile, or express service
courier, charges prepaid, to the address of the other Party designated below: 
  

			
	Auxilium	  	Hollister-Stier
		
	Auxilium Pharmaceuticals, Inc.	  	Hollister-Stier Laboratories LLC
	40 Valley Stream Parkway	  	3525 North Regal Street
	Malvern, PA 19355	  	Spokane, WA 99207
	Attention: VP, Manufacturing	  	Attention: Anthony D. Bonanzino, Ph.D.
	CC: General Counsel	  	FAX: (509) 482-3543

 The addresses and persons provided above may be changed by either Party by providing the other
Party with written notice of such change. 
 ARTICLE 12 
 MISCELLANEOUS 
  

	12.	The Parties agree to the following miscellaneous clauses: 

  

	 	12.1.	Entire Agreement: This Agreement, along with the Quotation/Supply Proposal No. 677-3-23 dated March 31, 2008 (attached hereto as Exhibit D) and the attached exhibits
contain the entire understanding between the Parties with respect to the subject matter hereof, and may be modified only by a written instrument duly executed by each Party’s authorized representative. To the extent there is any term or
condition in the Quotation/Supply Proposal No. 677-3-23 dated March 31, 2008 that is not consistent with the terms and conditions herein, this Agreement shall control. 

  

	 	12.2.	Independent Contractors: The Parties are independent contractors and nothing contained in this Agreement shall be construed to place them in the relationship of partners, principal
and agent, employer/employee or joint venturers. Neither Party shall have power or right to bind or obligate the other, nor hold itself out as having such authority. 

  

	 	12.3.	Publicity: Except as explicitly set forth below in Section 12.4, any press release, publicity or other form of public written disclosure related to this Agreement prepared by
one Party shall be submitted to the other party prior to release for written approval, which approval shall not be unreasonably withheld or delayed by such other Party. 

  

	 	12.4.	Use of Party’s Name: Except as expressly provided or contemplated hereunder and except as otherwise required by applicable law, no right is granted pursuant to this Agreement
to either Party to use in any manner the trademarks or name of the other Party, or any other trade name, service mark, or trademark owned by or licensed to the other Party in connection with the performance of the Agreement. To the extent required
by applicable law, the Parties shall be permitted to use the other Party’s name and disclose the existence and terms of this Agreement in connection with required public regulatory filings, public securities filings and private placement
memoranda and documentation, using reasonable commercial efforts to protect the confidentiality of the terms of this Agreement. 

  

	 	12.5.	 Severability: If any provision of this Agreement or any Exhibit is held to be invalid or unenforceable to any extent, then (a) such provision shall be
interpreted, construed or reformed to the extent reasonably 

	 	 
required to render it valid, enforceable and consistent with the Parties’ original intent underlying such provision and (b) such invalidity or
unenforceability shall not affect any other provision of this Agreement or any other agreement between the Parties. 

  

	 	12.6.	Assignment: This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party; provided, however, either Party may,
without such consent, assign this Agreement 

  

	 	(a)	in connection with the transfer or sale of all or substantially all of the assets of such Party or the line of business of which this Agreement forms a part, or

  

	 	(b)	in the event of a merger or consolidation of a Party, or 

  

	 	(c)	to an Affiliate 

 Any purported assignment in violation of
the preceding shall be void. Any permitted assignee shall assume all obligations of its assignor under this Agreement. No assignment shall relieve either Party of responsibility for the performance of any obligation which accrued prior to the
effective date of such assignment. 
  

	 	12.7.	Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state of Washington, irrespective of any conflicts of law rule which may direct
or refer such determination of applicable law to any other state, and if this Agreement were performed wholly within the state of Washington. 

  

	 	12.8.	Headings: Paragraph headings and captions used herein are for convenience of reference only and shall not be used in the construction or interpretation of this Agreement.

  

	 	12.9.	Waiver: Neither Party’s waiver of any breach or failure to enforce any of the terms and conditions of this Agreement at any time, shall in any way affect, limit or waive such
Party’s right thereafter to enforce and compel strict compliance with every term and condition of this Agreement. Any such waiver shall be made in writing. 

  

	 	12.10.	Construction: This Agreement has been jointly prepared on the basis of the mutual understanding of the Parties and shall not be construed against either Party by reason of such
Party’s being the drafter hereof or thereof. 

  

	 	12.11.	Exhibits: Any and all exhibits referred to herein form an integral part of this Agreement and are incorporated into this Agreement by this reference. 

  

	 	12.12.	Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute a single instrument.

 IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the Effective Date. 

					
	FOR: HOLLISTER-STIER LABORATORIES LLC	 		 	FOR: AUXILIUM PHARMACEUTICALS, INC.
			
	 /s/ Rick Lapointe
	 		 	 /s/ Armando Anido

	Signature	 		 	Signature
			
	 Rick Lapointe
	 		 	 Armando Anido

	Printed Name	 		 	Printed Name
			
	 President Contract Business Unit
	 		 	 Chief Executive Officer and President

	Title	 		 	Title
			
	 6/24/08
	 		 	 6/26/08

	Date Signed	 		 	Date Signed

 EXHIBIT A 
 QUALITY SYSTEMS AGREEMENT 

 QUALITY TECHNICAL AGREEMENT 
 Between 
 AUXILIUM PHARMACEUTICALS, Inc. 
 And 
 HOLLISTER-STIER LABORATORIES
LLC 
  

  

			
		
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 This Quality Technical Agreement between Auxilium Pharmaceuticals, Inc., hereinafter “Auxilium” (located at the following address: Auxilium Pharmaceuticals, Inc, 40 Valley Stream Parkway, Malvern, PA 19355.), and
Hollister-Stier Laboratories LLC, hereinafter “Hollister-Stier” (located at the following address: 3525 North Regal Street, Spokane, Washington, USA 99207-5788), defines the quality responsibilities as they are related to the
product(s) and service(s) listed below, (hereinafter known as the “Product”). 
  

					
		 	 Product
	  	Service provided by Hollister-Stier
			
		 	 AA4500
	  	Fill/Finish/Testing/Stability/Validation
			
		 	 Sterile Diluent
	  	Manufacturing/Fill/Finish/Testing/Stability/Validation

 It is the intention of the parties that this agreement is read in conjunction with the applicable Development and
Supply Agreement. 
 Any changes to the Quality Technical Agreements may be made solely by an amendment in writing signed by both parties. In the event that
the Development and Supply Agreement is terminated for any reason, the Quality Systems Agreement shall be amended to define the Quality responsibilities that remain in effect. 
 Approvals: 
 This Quality Technical Agreement is approved by: 
  

					
	 /s/ Benjamin J. DelTito, Jr.    21 Feb 2008
	 		 	 /s/ Charles H. Moore    28 Feb 2008

	Benjamin Del Tito Jr., PhD.        Date	 		 	Charles H. Moore                    Date
			
	Sr. Vice President, Quality and Regulatory Affairs	 		 	Director, QU and Development
	Auxilium Pharmaceuticals, Inc.	 		 	Hollister-Stier Laboratories LLC
	 40 Valley Stream Parkway
 Malvern, PA 19355
USA
	 		 	 3525 North Regal Street
 Spokane, Washington
99207-5788 USA

  

  

			
		
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 TABLE OF CONTENTS 
  

					
	 1.
	  	Definitions	  	5
			
	 2.
	  	General Information	  	6
			
	 2.1
	  	Regulatory Compliance Requirements	  	6
			
	 2.2
	  	Notification of Regulatory Agencies and Regulatory Submissions	  	6
			
	 2.3
	  	Responsibilities	  	6
			
	 3.
	  	Quality Assurance	  	7
			
	 3.1
	  	Auxilium Oversight in Facility	  	7
			
	 3.2
	  	Annual Product Review	  	7
			
	 3.3
	  	Quality Audits and Regulatory Inspections	  	7
			
	 3.4
	  	Internal Audits	  	8
			
	 3.5
	  	Process Qualification/Validation	  	8
			
	 3.6
	  	Training and Qualification	  	8
			
	 3.7
	  	Supplier Qualification	  	9
			
	 3.8
	  	Deviations/Investigations/Out-of-Trend (OOT) Material	  	9
			
	 3.9
	  	Nonconforming or Rejected Material	  	10
			
	 3.10
	  	Buildings and Facilities / Utilities	  	10
			
	 3.11
	  	Equipment	  	11
			
	 3.12
	  	Environmental Controls	  	11

  

  

			
		
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	 3.13
	  	Control of Components, Intermediates, Labeling and Packaging Materials	  	11
			
	 3.14
	  	Production and Process Controls	  	12
			
	 3.15
	  	Laboratory Methods and Controls	  	12
			
	 3.16
	  	Reference Standards	  	13
			
	 3.17
	  	Product Testing and Release	  	13
			
	 3.18
	  	Product Storage and Shipping	  	14
			
	 3.19
	  	Returned Goods	  	14
			
	 3.20
	  	Stability Activities	  	14
			
	 3.21
	  	Retention Samples	  	14
			
	 3.22
	  	Documentation	  	15
			
	 3.23
	  	Change Control	  	15
			
	 3.24
	  	Quality Records	  	16
			
	 3.25
	  	Record Retention	  	16
			
	 3.26
	  	Product Complaints and Adverse Drug Events	  	16
			
	 3.27
	  	Recall of Marketed Product and Withdrawal of Clinical Material	  	16
		
	APPENDIX A – QUALITY SYSTEMS CONTACT LIST	  	17
		
	APPENDIX B - RESPONSIBILITIES: PRODUCT – AA4500 & STERILE DILUENT	  	18

  

  

			
		
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	1.	Definitions 

 Manufacturing – All operations of
receipt of materials, production, packaging, repackaging labeling, relabeling, quality control, release, storage and shipping of drug products. 
 Out-of-Specification (OOS) – A test result that does not meet pre-determined specifications or standards and must be investigated in accordance with internal procedures (e.g. Non-Conforming Materials Report (NCMR)) that comply
with applicable Regulatory Agency regulations. 
 Qualification – Action of proving and documenting that equipment, materials, systems and
suppliers satisfy predetermined conditions or requirements and are fit for their purpose. 
 Regulatory Agencies – Regulatory Agencies having
jurisdiction over the manufacture or sale of the Products. 
 Change Control – A system to ensure changes are reviewed, recorded, evaluated for
impact, justified, and approved by the appropriate parties, prior to implementation. 
 Component – Means any ingredient intended for use in the
manufacture of a drug product including those that may not appear in the final Product. 
 Significant Changes – Any changes that may affect the
safety, efficacy, identity, strength, purity or quality of the Products or may affect any regulatory submissions for the Products, agreed to by both parties. 
 Deviations – Any excursions or nonconformities from processes, specifications, quality systems that may affect the safety, efficacy, identity, strength, purity, or quality of Products or any regulatory submissions for the
Products. 
 Atypical Events – Any incident or event identified during manufacturing and/or testing of a drug product, which is considered a
non-conformance (e.g. Quality Assurance Message (QAM) or Environmental Investigation) to procedures, operations, batch instructions or validated parameters. 
 Out-of-Trend (OOT) – a result that is not an out-of-specification, but is showing an unusual trend toward the lower or higher end of a specification range. 
 Third Party Subcontractor – a company, individual or other entity contracted by Hollister-Stier to provide services in the manufacture, testing, packaging, labeling and/or storage of components or the
Products that directly impacts the Products. 
  

  

			
		
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	2.	General Information 

 This Quality Systems Agreement applies
to Clinical, Development and Commercial Product Manufacturing. 
 Main contact points at Auxilium and Hollister-Stier are listed in the attached Quality
Systems Contact List. See Appendix A. Appendix A is subject to change without the need to re-sign this agreement and assign a new version number. 
  

	2.1	Regulatory Compliance Requirements 

 Auxilium and
Hollister-Stier shall be in compliance with the following regulations and guidelines. The parties agree to work together in good faith to resolve any differences in interpretation of the regulations. 
  

	a)	21 CFR 210 Current Good Manufacturing Practice in Manufacturing, Processing, Packing, or Holding of Drugs; General and 21 CFR 211 Current Good Manufacturing Practice for Finished
Pharmaceuticals. 

  

	b)	Current Guide to Good Manufacturing Practice for Medicinal Products. The Rules Governing Medicinal Products in the European Community. 

  

	c)	Health Products and Food Branch Inspectorate Guidelines, current Good Manufacturing Practices, Health Canada. 

  

	d)	MHRA Orange Guide – Rules and Guidelines for Pharmaceutical Manufacturers & Distributors 

 Auxilium and Hollister-Stier shall ensure that the manufacture, labeling, packaging, testing, storage and shipping of the Products are in compliance with the above regulations and guidelines or equivalent standards
defined in regulatory submissions for Worldwide Marketing Authorizations. 
  

	2.2	Notification of Regulatory Agencies and Regulatory Submissions 

 Auxilium shall be responsible for all communication with Regulatory Agencies including notification of process/ product changes and the submission of Annual Reports. 
  

	2.3	Responsibilities 

 Responsibilities concerning specific
product activities for both Auxilium and Hollister-Stier are outlined in Appendix B, Responsibility Matrix. 
  

  

			
		
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	3.	Quality Assurance 

  

	3.1	Auxilium Oversight in Facility 

 Auxilium will be allowed up
to 2 individuals present in Hollister-Stier’s facilities to observe manufacturing of Product(s). The individuals must observe Hollister-Stier work rules and may require training. Auxilium personnel are in the plant to observe the manufacture of
products and provide both technical and quality oversight, as needed. 
  

	3.2	Annual Product Review 

 Hollister-Stier shall provide
Auxilium with the required information to perform Annual Product Reviews including information from Third Party Subcontractors. Such information shall contain, but not be limited to, the following: batch production summary, environmental monitoring
results, OOS and deviation reports, critical process parameter trending data and change controls summary, document revisions and any FDA audit responses that are specific to the Product. 
  

	3.3	Quality Audits and Regulatory Inspections 

 Auxilium may
perform scheduled Quality audits of Hollister-Stier up to 2 times per calendar year to assess ongoing cGMP compliance. Adequate prior notification (minimum 2 weeks) shall be provided by Auxilium to Hollister-Stier. Such audits to be limited to no
more than three individuals and no more than three days. 
 Auxilium shall have the right to perform reasonable “for cause” audits in addition to
any scheduled annual audit(s). The specific goals of the audit, the proposed date of such audit, and the names of the individuals who will conduct the audit shall be provided by Auxilium to Hollister-Stier. 
 Hollister-Stier shall notify Auxilium in advance of any pending Regulatory Authority inspections to be performed at the facility. Auxilium representatives may be present
when any Regulatory Agency inspects Hollister-Stier and such inspection directly relates to the Products. Auxilium representation shall be limited to two individuals. Direct participation in the audit shall be limited to Product or Process specific
questions. Auxilium reserves the right to organize and participate in a mock Pre-Approval Inspection (PAI) utilizing Auxilium personnel or Auxilium approved consultants. For a PAI associated with Auxilium’s Biologics License Application (BLA),
Auxilium representation shall be limited to four individuals. During the PAI, at least two individuals (one Manufacturing and one Quality) shall be present in the inspection room(s) during the inspection if/when questions related to Product and
process (i.e. non-fill/lyophilization related) are requested by the inspecting Regulatory Authorities. 
 Hollister-Stier shall provide Auxilium with copies
of any inspection reports from any Regulatory Agencies that may impact the Products within 30 business days of receipt. Proprietary and confidential information for other customer products shall be redacted at Hollister-Stier’s discretion.

  

  

			
		
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 Hollister-Stier shall obtain Auxilium’s written approval when preparing responses to Regulatory Agencies, when
the responses are directly related to the Products. 
 Hollister-Stier will promptly notify Auxilium of any regulatory action resulting in: 
  

	 	a)	Mandatory removal of Product, or 

  

	 	b)	The closing of the facility for the Product 

  

	3.4	Internal Audits 

 Hollister-Stier shall have a documented
program and procedure for conducting internal quality audits (self-inspections). These audits shall be performed according to Hollister-Stier SOP. Internal audits are available for review during annual audits. 
  

	3.5	Process Qualification/Validation 

 Hollister-Stier shall
perform process validation according to protocols and a validation master plan jointly approved by Auxilium and Hollister-Stier. 
 Hollister-Stier shall
perform cleaning validation and provide appropriate documentation to Auxilium. 
 Hollister-Stier shall be responsible for performing container-closure
microbial integrity validation on the container-closure system specified by Auxilium. 
 Hollister-Stier shall maintain original copies of all relevant
documentation verifying such validation and provide “exact copy” duplicate copies to Auxilium. 
 Auxilium shall be responsible for filter
compatibility testing of production filters. A copy of the report shall be provided to Hollister-Stier. 
 Hollister-Stier shall validate and/or qualify
computer systems and associate software used in processing Product. 
 Hollister-Stier will addresses the integrity, archival, retrieval and destruction of
electronic data related to process of product to the extent required for compliance with all applicable regulations. Hollister-Stier will also provide documentation of such validation and/or qualification during annual audits. 
  

	3.6	Training and Qualification 

 Hollister-Stier shall ensure
that all personnel performing the functions to support the systems outlined in this agreement are trained according to Hollister-Stier SOP. Training program documents are available for review during annual audits. 
  

  

			
		
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 Hollister-Stier will provide personnel qualified and trained to perform and supervise operations related to the
Product. Hollister-Stier will also provide written job descriptions for positions responsible for processing the Product. 
  

	3.7	Supplier Qualification 

 Hollister-Stier shall be responsible
for the qualification of the suppliers of components, containers, labeling and packaging materials provided by Hollister-Stier. 
 Auxilium shall be
responsible for the qualification of the suppliers of any material(s) supplied to Hollister-Stier by Auxilium. 
 Upon request, Hollister-Stier or Auxilium,
as the case may be, shall provide the requesting party with documented evidence describing the qualifications of applicable suppliers and contractors used to provide components, containers, testing services, labeling and packaging materials used for
Auxilium products. Hollister-Stier shall provide this information to Auxilium for regulatory filings (e.g., BLA filing). 
 Hollister-Stier shall provide a
list of approved suppliers associated with Auxilium’s product(s) and process. Hollister-Stier shall ensure that any component vendors and third party subcontract manufacturers/packagers or testing laboratories used by Hollister-Stier are
qualified and in compliance with current GMPs or equivalent standards defined in regulatory submissions for Worldwide Marketing Authorizations. 
 Auxilium
has the right to request the use of a vendor or subcontractor that is not currently qualified by Hollister-Stier. Upon such requests, Auxilium will be responsible for qualifying and approving the new entity. Likewise, Auxilium and Hollister-Stier
may work together to qualify the new entity in order to add them to Hollister-Stier’s approved vendor/subcontractor list. 
 Upon Auxilium’s
request, Hollister-Stier shall provide Auxilium with documented evidence describing the qualifications of third party subcontractors used by Hollister-Stier for performing outsourced testing. 
  

	3.8	Deviations/Investigations/Out-of-Trend (OOT) Material 

 Hollister-Stier shall notify Auxilium in writing (by fax or e-mail), within one business day of the detection of all deviations, OOTs and atypical events (e.g., QAMs), and of any OOS results during the Manufacture and control testing of the
Products, intermediates and qualifications. 
 Auxilium shall notify Hollister-Stier in writing of the detection of any deviation which is discovered
following delivery of any Products and/or samples to Auxilium, or to a Auxilium designee, which may affect or impact the safety, identity, strength, purity or quality of the Products or any regulatory submissions related to the Products within 3
business days following the discovery. 
 Hollister-Stier shall have a controlled system to document, investigate and assess the impact of all deviations and
atypical events, including OOSs and OOTs, relating to the Products. 
  

  

			
		
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 Hollister-Stier shall obtain Auxilium’s written approval prior to implementing any Manufacturing changes, as a
result of a deviation/atypical event that impact Auxilium products or processes. 
 For OOS investigations, Hollister-Stier shall provide Auxilium with a
copy of the initial laboratory assessment of the OOS. Hollister-Stier shall obtain Auxilium’s written approval prior to retesting or, resampling, as part of a full-scale failure investigation. 
 Auxilium shall review any deviations/atypical events, and the results of Hollister-Stier’s investigations that occur during the Manufacture and testing of the
Products. Auxilium shall provide its approval or disapproval of the investigation results to Hollister-Stier in writing (within 10 business days) before the disposition of the batch has been determined and approved. 
 Hollister-Stier shall undertake reasonable corrective actions to correct deviations/atypical events and investigations and provide Auxilium with documented evidence that
the corrective actions have been completed. Hollister-Stier shall monitor such corrective actions for effectiveness and Auxilium may verify corrective actions during the scheduled Quality audits and/or during onsite production oversight. 

 

	3.9	Nonconforming or Rejected Material 

 Hollister-Stier shall
notify Auxilium upon discovery of every nonconformity that may affect the safety, integrity, strength, purity and quality of the Product or intermediate. Hollister-Stier shall investigate these nonconformities and shall provide Auxilium with
documentation of the nonconformity and investigation findings. 
 Auxilium shall determine the product impact and the disposition of nonconforming material
through its Material Review Board (MRB) process and provide direction to Hollister-Stier. 
 Hollister-Stier shall not perform any reprocessing or rework of
the Products without prior written approval by Auxilium. 
  

	3.10	Buildings and Facilities / Utilities 

 Hollister-Stier shall
perform qualification/validation, monitoring, calibration and maintenance (preventative and corrective) for all plant utility systems, including, but not limited to, Water for Injection, HVAC, steam and compressed air, such work to be conducted
within an established timeframe appropriate to the significance of the system and documented. Documentation of such work shall be available for review during scheduled Quality audits and upon request. Re-qualifications shall be established by
Hollister-Stier according to Hollister-Stier’s Standard Operating Procedure (SOP). Documentation of such work shall be available for review during scheduled Quality audits and upon request. 
 Hollister-Stier will notify Auxilium within five (5) business days of any calibration failures which have an adverse impact on Product already supplied to Auxilium.

  

  

			
		
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 Hollister-Stier shall maintain a pest control program for the manufacturing, storage and handling areas used for
Product. 
  

	3.11	Equipment 

 Hollister-Stier shall perform
qualification/validation, monitoring, calibration and maintenance (preventative and corrective) for all Manufacturing and QC equipment, such work to be conducted within an established timeframe appropriate to the significance of the equipment and
documented. Documentation of such work shall be available for review during scheduled Quality audits and upon request. Re-qualifications shall be established by Hollister-Stier according to Hollister-Stier’s Standard Operating Procedure (SOP).
Documentation of such work shall be available for review during scheduled Quality audits and upon request. 
 Hollister-Stier shall also perform cleaning
validation for Manufacturing equipment used for the Products. For non-dedicated equipment, this shall include a product impact assessment of other products that utilize the same equipment. Documentation of such work shall be available for review
during scheduled Quality audits and upon request. 
  

	3.12	Environmental Controls 

 Hollister-Stier shall be responsible
for routine environmental monitoring (EM) activities as well as related records. Lot specific EM data (static, dynamic, and personnel) shall be provided to Auxilium in the batch record. 
  

	3.13	Control of Components, Intermediates, Labeling and Packaging Materials 

 Hollister-Stier shall purchase components, labeling and packaging materials, perform testing, and release of such components and materials according to the components and material specifications mutually agreed to by
Auxilium and Hollister-Stier. Hollister-Stier shall store components, labeling and packaging materials under the appropriate environmental conditions as stated in the specifications. Hollister-Stier shall use only those specifications for
components, containers and packaging material for the Manufacture of the Products that are acceptable to Auxilium. 
 Any changes to these materials shall go
through Hollister-Stier’s change control system and shall be subject to Auxilium approval. 
 Hollister-Stier and Auxilium shall comply with the
requirements in the current CPMP/CVMP Note for Guidance on Minimizing the Risk of Transmitting Animal Spongiform Encephalopathy Agents Via Human and Veterinary Medicinal Products (EMEA/410/01) when manufacturing Sterile Diluent or AA4500 Drug
Product for Auxilium. 
  

  

			
		
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	3.14	Production and Process Controls  

 Hollister-Stier shall
generate the master batch production record, labeling and packaging procedures for the Manufacture of the Product based on the information supplied by Auxilium. The master batch production record(s) and subsequent revisions shall be subject to the
approval of Hollister-Stier and Auxilium, and will contain a summary of any change(s) with appropriate justification(s) for change(s). Each batch shall be Manufactured in accordance with a batch production record, which is a uniquely identified copy
of the master batch production record. 
  

	3.15	Laboratory Methods and Controls 

 Hollister-Stier shall
generate Standard Operating Procedures (SOPs) for Sterility testing and submit them to Auxilium for approval prior to use. The qualification of the Sterility test shall conform to current USP and EP. A summary report of the qualification shall be
prepared and provided to Auxilium. This summary report shall contain copies of the raw data that support the conclusions of the qualification tests. 
 The
copies of raw data of results of final product Sterility test shall be subject to Auxilium approval. 
 The Sterility Test media used for Product testing
shall conform to the growth promotion methods in current USP and EP. Records of media preparation, testing, and release shall be available for review during scheduled Quality audits. 
 Hollister-Stier shall provide to Auxilium summary reports of any Sterility test failure investigations conducted on products filled in the same area as AA4500. 
 SOPs that support the environmental monitoring, water for injection, clean steam, and clean compressed air monitoring and their associated method qualifications shall be
available for review during audits. Trend analysis reports shall be available for review during scheduled Quality audits. 
 Hollister-Stier shall generate
Product specific analytical methods based on Auxilium’s analytical methods and submit them to Auxilium for approval prior to use. When validation is required, Auxilium shall provide documentation of validation, from which Hollister-Stier will
produce a method transfer protocol and the final report. 
 For methods that Hollister-Stier has developed, Hollister-Stier shall produce an assay
qualification/validation (in-process/release testing) protocol and the final report, when validation is required. 
 Full analytical validation, in
accordance with ICH guidelines, is required for in-process and product release analytical methods. 
 Hollister-Stier and Auxilium shall approve all Product
specific analytical method validation/transfer protocols and reports that are developed by Hollister-Stier. 
  

  

			
		
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 The laboratory conducting the protocol shall retain the original of such reports and raw data. A copy of each such
report shall be supplied to the other party. 
  

	3.16	Reference Standards 

 Auxilium shall provide Hollister-Stier
with an adequate supply (and upon request) of Product reference standards and qualification documents stating the expiry or retest date of such reference standards. Hollister-Stier is responsible for requesting the supply of reference standards as
required with reasonable notice. Hollister-Stier is responsible for storing and maintaining the reference standards according to instructions supplied by Auxilium and shall ensure the appropriate use of the reference standards. 
 The responsible parties outlined in Appendix B shall qualify reference standards. 
  

	3.17	Product Testing and Release 

 Hollister-Stier shall initiate
sterility testing and ship batch samples for release testing (not performed by Hollister-Stier) to Auxilium or specified outside testing laboratory within 3 business days from the end of lyophilization. Shipping preparations will occur according to
procedures provided to Hollister-Stier by Auxilium. 
 Hollister-Stier shall review and approve all batch production, labeling and control records.
Hollister-Stier shall complete all batch documentation and forward all documentation to Auxilium for review within 28 business days from the end of lyophilization. Closure of any outstanding investigations, deviations, OOSs, etc. beyond 28 business
days, will be closed within a timeframe agreed upon by both Hollister-Stier and Auxilium. If it is not possible for Hollister-Stier to provide a response within 28 business days, Hollister-Stier shall notify Auxilium in writing of the revised
timeline for responding with appropriate justification for revised timeline. 
 Hollister-Stier shall provide Auxilium with a copy of the reviewed and
approved production, labeling and control records, including deviation/atypical event/OOS reports, QC raw data (e.g. sterility) associated with the batch. A copy of the Certificate of Manufacturing shall also be provided. 
 Auxilium shall submit any questions regarding the batch production and control records to Hollister-Stier in writing within 15 business days of the receipt of the final
batch record. If it is not possible for Auxilium to submit questions within 15 business days, Auxilium shall notify Hollister-Stier in writing of the revised timeline for responding with appropriate justification for revised timeline.
Hollister-Stier shall provide written responses within 3-5 business days. If it is not possible for Hollister-Stier to provide a response within 3-5 business days, Hollister-Stier shall notify Auxilium in writing of the revised timeline for
responding with appropriate justification for revised timeline. 
  

  

			
		
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 Hollister-Stier shall provide Auxilium with samples required for special testing upon Auxilium’s written
request. Such samples shall be shipped to Auxilium under appropriate conditions as specified in the written sample request. 
 Auxilium shall be responsible
for disposition of the final lot. 
  

	3.18	Product Storage and Shipping 

 Hollister-Stier shall store
and ship the Product and all components under appropriate environmental conditions as stated in the specifications. 
 Hollister-Stier shall not ship the
Product or transfer it to another facility without prior written approval of Auxilium. Product and sample shipping shall be performed following client-specific Hollister-Stier SOP (approved by Auxilium). Shipment under Quarantine prior to Product
release may only be undertaken on written approval of Auxilium. 
  

	3.19	Returned Goods  

 This section was intentionally deleted.

  

	3.20	Stability Activities 

 Hollister-Stier shall provide Auxilium
or its designee with samples of the Product, when required, for stability testing upon request in writing. Samples must arrive at Auxilium or its designee within 5 business days after Hollister-Stier’s receipt of Auxilium’s written request
for release and stability samples or completion of the Manufacture of the Products, whichever is later. Sample shipping shall be performed following client-specific Hollister-Stier SOP (approved by Auxilium). 
 For stability testing performed at Hollister-Stier, pull dates shall be provided to Auxilium, and testing shall be initiated within five (5) business days of actual
pull dates. 
 Auxilium shall inform Hollister-Stier of the sample quantities required for stability testing prior to production as well as an appropriate
Shipping Notification for shipment of such samples. Such Shipping Notifications may be part of the initial Purchase Order. 
  

	3.21	Retention Samples 

 The responsible parties as outlined in
Appendix B shall perform maintenance of the retention sample of the products. Shipment of retention samples to Auxilium or its designee will occur according to procedures provided to Hollister-Stier by Auxilium. 
  

  

			
		
	 Auxilium Document Number: QTA-001
 Version:
1.0
 Effective Date:
	 	 Page 14 of 18

 CONFIDENTIAL 

 QUALITY TECHNICAL AGREEMENT 
  
  
  

	3.22	Documentation 

 Upon revision, Auxilium and Hollister-Stier
shall provide each other with copies of all applicable Product specific quality documents and SOP’s pertaining to Product Manufacturing. 
 Hollister-Stier shall supply essential documents in support of the Chemistry, Manufacturing and Control (“CMC”) section of Auxilium’s supplemental regulatory filing in the U.S. or the equivalent in other jurisdictions.

 Auxilium shall provide Hollister-Stier with a copy of the relevant CMC section (i.e., Product Manufactured), prior to submission, of the relevant
regulatory submissions for Hollister-Stier review and comment. (e.g. IND or NDA). Hollister-Stier shall provide any comments to Auxilium within 5 business days. 
  

	3.23	Change Control  

 Hollister-Stier will maintain a change
control system for equipment, processes, document, etc. That is compliant with current cGMP requirements. Hollister-Stier Quality and Regulatory personnel will be required to review change requests to determine if clients should be notified or if
client approval is needed before the change is executed. 
 When it is determined that a proposed change has potential impact on Auxilium regulatory files or
product Auxilium will review and approve the change prior to Hollister-Stier making the change. Changes that Auxilium will approve include, but are not limited to, 
  

	 	a.	Documents previously approved by Auxilium such as Batch Production Records (BPR’s), test methods, specifications, labels. 

  

	 	b.	Processes validated specifically for Auxilium such as lyophilization cycles. 

  

	 	c.	Third Party Contractors approved by Auxilium such as testing laboratories. 

  

	 	d.	Critical components or suppliers of critical components such as vials, stoppers and excipients. 

  

	 	e.	Changes made to the fill line, lyophilizer and capper that directly impact the production of the Product. 

 Auxilium shall notify Hollister-Stier in writing of any significant changes to the Product, its specification and testing requirements where the changes affect the
activities at Hollister-Stier, prior to the implementation of the change. Written notification shall be provided to Hollister-Stier. 
  

  

			
		
	 Auxilium Document Number: QTA-001
 Version:
1.0
 Effective Date:
	 	 Page 15 of 18

 CONFIDENTIAL 

 QUALITY TECHNICAL AGREEMENT 
  
  
  

	3.24	Quality Records 

 Hollister-Stier shall maintain original
records related to the Manufacture, labeling, packaging, storage and testing of the Products in a limited access area and shall treat such records in accordance with the confidentiality requirements in the Development and Supply Agreement. Access to
these records shall be restricted to personnel authorized by Hollister-Stier. Hollister-Stier shall ensure that these records are available to Auxilium upon request within a mutually agreed timeframe. 
 Upon receiving a written request from Auxilium, Hollister-Stier shall transfer to Auxilium copies of all Auxilium -Product related records including but not limited to
records relating to critical processes and inspection. If such records have been provided previously, i.e. BPR’s, then an appropriate administrative charge shall apply. 
 Except as required by law, Hollister-Stier shall not release documents for the Products to a third party without the written approval of Auxilium’s QA and Regulatory Departments. 
  

	3.25	Record Retention 

 Hollister-Stier shall ensure that all
quality documents and records including those related to critical processes specific to or affecting Auxilium Products are retained until Auxilium provides Hollister-Stier with written authorization for their disposition. 
  

	3.26	Product Complaints and Adverse Drug Events 

 Auxilium shall
notify Hollister-Stier of all complaints related to the Products that occur after release and transportation if the complaint is deemed to be directly related to the Manufacture of the Products including, but not limited to, Product testing, batch
record review, procedure assessment or examination of retention samples. Hollister-Stier shall provide the necessary information to assist any investigations required by Auxilium as a result of a Product complaint or adverse event. 
  

	3.27	Recall of Marketed Product and Withdrawal of Clinical Material 

 Auxilium shall be responsible for all recall and clinical withdrawal activities related to the Products and for reporting to Regulatory Authorities according to Auxilium’s written procedures. Hollister-Stier shall provide the necessary
information to assist any investigations required by Auxilium as a result of a potential recall or withdrawal. 
  

  

			
		
	 Auxilium Document Number: QTA-001
 Version:
1.0
 Effective Date:
	 	 Page 16 of 18

 CONFIDENTIAL 

 QUALITY SYSTEMS AGREEMENT 
  
  
 APPENDIX A – QUALITY SYSTEMS CONTACT LIST 
  

					
	 AREA
	  	 AUXILIUM CONTACT
	  	 HOLLISTER-STIER CONTACT

	 Quality Systems Agreements,
 Revisions,
Updates
	  	 Name: [**]
 Telephone: [**]
 Fax: [**]
	  	 [**]
 Telephone: [**]
 Fax: [**]

			
	 General
 Quality Assurance
	  	 Name: [**]
 Telephone: [**]
 Fax: [**]
	  	 [**]
 Telephone: [**]
 Fax: [**]

			
	Audit Scheduling/Issues	  	 Name: [**]
 Telephone: [**]
 Fax: [**]
	  	 [**]
 Telephone: [**]
 Fax: [**]

			
	Regulatory	  	 Name: [**]
 Telephone: [**]
 Fax: [**]
	  	 [**]
 Telephone: [**]
 Fax: [**]

			
	Product Complaint	  	 Name: [**]
 Telephone: [**]
 Fax: [**]
	  	 [**]
 Telephone: [**]
 Fax: [**]

			
	Project Management	  	 Name: [**]
 Telephone: [**]
 Fax: [**]
	  	 [**]
 Telephone: [**]
 Fax: [**]

  
  

	**	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.

  

  

			
		
	 Auxilium Document Number: QTA-001
 Version:
1.0
 Effective Date:
	 	 Page 17 of 18

 CONFIDENTIAL 

 QUALITY SYSTEMS AGREEMENT 
  
  
  

 APPENDIX B - RESPONSIBILITIES: PRODUCT – AA4500
DRUG PRODUCT (AA4500) AND STERILE DILUENT 
  

					
	 RESPONSIBILITY
	  	 AUXILIUM
	  	 HOLLISTER-STIER

	Approve suppliers of components, vials, stoppers, closures, labeling and packaging materials	  	X	  	
			
	Receipt, sampling, testing and release of components, vials, stoppers, closures, labeling and packaging materials	  		  	X
			
	Reference standard qualification	  	X	  	
			
	Manufacture AA4500 Drug Substance (N/A for Sterile Diluent)	  	X	  	
			
	Filling and Lyophilization of AA4500 Drug Product (N/A for Sterile Diluent)	  		  	X
			
	Packaging/Labeling of AA4500 Drug Product/Sterile Diluent	  	X	  	X
			
	Sampling of release and stability samples	  		  	X
			
	Sterility testing of AA4500 Drug Product/Sterile Diluent	  		  	X
			
	Release testing of AA450 Drug Product/Sterile Diluent	  	X	  	X
			
	Disposition of AA4500 Drug Product/Sterile Diluent	  	X	  	
			
	Stability testing of AA4500 Drug Product/Sterile Diluent	  	X	  	
			
	Storage of retention samples of AA4500 Drug Product/Sterile Diluent	  	X	  	
			
	Storage of retention samples of components	  		  	X
			
	Approve third party subcontractors for the testing of AA4500 Drug Product/Sterile Diluent	  	X	  	

  

  

			
		
	 Auxilium Document Number: QTA-001
 Version:
1.0
 Effective Date:
	 	 Page 18 of 18

 CONFIDENTIAL 

 EXHIBIT B 
 SPECIFICATIONS 

 ********** FOR REFERENCE ONLY ********** 
 

 
 FINISHED PRODUCT RELEASE SPECIFICATION – CLINICAL 
  

							
	Material Name:	  	AA4500 Drug Product	 	Specification #:	  	HFPD.001.00
	Manufacturer:	  	Hollister-Stier Labs for Auxilium Pharmaceuticals, Inc.
	Description/Grade:	  	Lyophilized Collagenase in [**]
	Storage Conditions:	  	[**]

  

					
	Property/Test	  	Test Reference	  	Specification

 [**] 
  

			
	 Specification Number: HFPD.001.00
  
 Effective Date: 28 Jan 2008
	 	 CONFIDENTIAL
  
 Page 1 of 1

  
  

	**	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. 

 *********** FOR REFERENCE ONLY ********** 
 

 
 FINISHED PRODUCT RELEASE SPECIFICATION – CLINICAL 
  

							
	Material Name:	  	AA4500 Sterile Diluent	 	Specification #:	  	HFPD.002.00
	Manufacturer:	  	Hollister-Stier Labs for Auxilium Pharmaceuticals, Inc.
	Description/Grade:	  	[**]
	Storage Conditions:	  	[**]

  

					
	Property/Test	  	Test Reference	  	Specification

 [**] 
  

			
	 Specification Number: HFPD.002.00
  
 Effective Date: 11 Feb 2008
	 	 CONFIDENTIAL
  
 Page 1 of 1

  
  

	**	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. 

 EXHIBIT C 
 PRICE 

 

 
 June 25, 2008 
 Mr. Greg Sabatino 
 Biotechnology Manager 
 Auxilium Pharmaceuticals, Inc. 
 40 Valley Stream Parkway 
 Malvern, PA 19355 
 Quotation No.: 677-1-21 Revision No. 2: Proposed 2008 Commercial Pricing for AA4500 Active 
 Dear Mr. Sabatino: 
 Hollister-Stier Laboratories LLC (Hollister-Stier)
is pleased to provide the following 2008 commercial pricing for AA4500 Active. 
 AA4500 ACTIVE CGMP
PRODUCTION BATCH ([**]-LITER)* 
 cGMP batch including: compounding, in-process testing, filtration, filling,
freeze-drying, oversealing, final container testing, visual inspection, bulk packaging (no label, bulk/tray pack off only) 
  

	 	 •
	 	 1st [**] Lots (Lots
1 thru [**] per calendar year) 

  

	 	•	 	 $[**]/Unit (minimum batch price $[**]) 

  

	 	•	 	 Lots [**] and higher (Beginning with Lot [**] per calendar year) 

  

	 	•	 	 $[**]/Unit (minimum batch price $[**]) 

  

	 	•	 	 Pricing is applicable to the [**]-liter batch scale, which yields approximately [**] units 

  

	 	•	 	 Pricing does not include final product labeling and packaging requirements 

  

	*	Prices subject to annual increase based upon increases published in the Producer Price Index (PPI) 

  

	•	 	 Pricing is exclusive of final product packaging requirements which have not yet been finalized. Cost of packaging (labor and materials) will be provided to Auxilium
once known. 

  

	•	 	 All charges are subject to 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.

 Mr. Sabatino 
 June 25,
2008 
 Page 2 
  

 Pricing for increased batch sizes (for example the proposed [**]-liter scale) will be negotiated in the future and is
not covered by this document. 
 This quotation and the services herein are subject to the Quality Systems Agreement between Hollister-Stier and Auxilium
dated December 20, 2006 and the terms and conditions contained in the Revised Quotation for Manufacture of AA4500 (Active) Registration Lots and Validation Support (Quotation 667-1-4- Revision No. 2) between Hollister-Stier and Auxilium
dated October 26, 2006, both of which are incorporated herein by reference. 
  

	
	Sincerely,
	
	 /s/ Peggy Sowers

	Peggy Sowers
	Senior Manager, Business Development
	
	PWS:lec

  
  

	**	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.

 

 
 September 19, 2007 
 Mr. Greg Sabatino 
 Biotechnology Manager 
 Auxilium Pharmaceuticals, Inc. 
 40 Valley Stream Parkway 
 Malvern, PA 19355 
 Quotation No.: 677-2-22 Revision No. 0: Proposed 2008 Commercial Pricing for AA4500 Diluent 
 Dear Mr. Sabatino: 
 Hollister-Stier Laboratories LLC (Hollister-Stier)
is pleased to provide the following 2008 commercial pricing for AA4500 Diluent. 
 AA4500 DILUENT CGMP
PRODUCTION BATCH* 
 cGMP batch including: compounding, in-process testing, filtration, filling, terminal sterilization,
oversealing, final container testing, visual inspection, bulk packaging (no label, bulk/tray pack off only) 
  

	 	•	 	 $[**]/Unit (minimum batch price—$[**]/batch) 

  

	 	•	 	 Maximum batch size [**] units 

  

	 	•	 	 Pricing does not include final product labeling and packaging requirements 

  

	*	Prices subject to annual increase based upon increases published in the Producer Price Index (PPI) 

  

	•	 	 Pricing is exclusive of final product packaging requirements which have not yet been finalized. Cost of packaging (labor and materials) will be provided to Auxilium
once known. 

  

	•	 	 Pricing is exclusive of routine stability studies. Cost for service will be determined once commercial product testing matrix is determined/finalized.

 All charges are subject to applicable taxes. This quotation and the services herein are subject to the Quality Systems Agreement between
Hollister-Stier and Auxilium dated December 20, 2006 and the terms and conditions contained in the Revised Quotation for Manufacture of AA4500 (Active) Registration Lots and Validation Support (Quotation 667-1-4- Revision No. 2) between
Hollister-Stier and Auxilium dated October 26, 2006, both of which are incorporated herein by reference. 
  

	
	Sincerely,
	
	 /s/ Peggy Sowers

	Peggy Sowers
	Senior Manager, Business Development
	
	PWS:lkb

  
  
 ** 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. 

 EXHIBIT D 
 QUOTATION/SUPPLY PROPOSAL DATED MARCH 31, 2008 

 

 
 March 27, 2008 
 Mr. Greg Sabatino 
 Biotechnology Manager 
 Auxilium Pharmaceuticals, Inc. 
 40 Valley Stream Parkway 
 Malvern, PA 19355 
 Quotation No.: 677-3-23 Revision No.3: Reservation for AA4500 Active and Diluent in 2009 Manufacturing Schedule

 Valid Until April 17, 2008 
 Dear
Mr. Sabatino: 
 Hollister-Stier Laboratories LLC (Hollister-Stier) is pleased to provide the following revised quotation for reservation of
manufacturing slots in the 2009 schedule. This proposal is applicable to both the AA4500 Active and Diluent products. 
 Project Assumptions

  

	1.	Auxilium has provided Hollister-Stier with a forecast for April 2009 through March 2010. Using this forecast, Hollister-Stier will reserve manufacturing slots in SVP’s Line 1
schedule corresponding to the month listed in the forecast (May through September 2009 only). 

  

	 	1.1.	A copy of the forecast is included as Attachment 1 of this proposal. 

  

	2.	Reservation fees are based upon a minimum batch price of $[**]/lot (active and diluent). 

  

	 	2.1.	Reservation fees will be 25% of the minimum batch price ($[**] per batch). 

  

	 	2.1.1.	For each batch that is produced, Hollister-Stier will credit Auxilium $[**] off the actual price for filling services. 

  

	 	2.2.	Reservation fees do not include final product labeling and packaging activities. 

  

	 	2.3.	The reservation fee is due upon execution of the proposal and issuance of a Purchase Order. 

  

	3.	Three months (90 days) prior to the scheduled manufacturing month (date), Hollister-Stier will consider all orders placed as firm orders. 

  

	4.	To accommodate the magnitude of manufacturing slots to be reserved for Auxilium products, and compensate Hollister-Stier for possible adverse business impact should a significant
delay in FDA approval occur, a portion of each reservation fee will be nonrefundable (up to $300,000) as described in Attachment 2. 

  
  

	**	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.

 Mr. Sabatino 
 March
27, 2008 
 Page 2 
  

	5.	Cancellation fees: 

  

	 	5.1.	If Auxilium cancels a batch more than ninety (90) days before the scheduled manufacturing month, Hollister-Stier will issue Auxilium a credit ($[**]) from each cancelled
lot’s reservation fee (refer Attachment 2). 

  

	 	5.2.	If Auxilium requests rescheduling (postponement) of a firm batch 15 to 90 calendar days before the scheduled manufacturing date/month, Hollister-Stier will impose no
rescheduling/cancellation fee. 

  

	 	5.3.	If Auxilium cancels a firm batch 15 to 90 calendar days before the scheduled manufacturing date, Auxilium will forfeit the $[**] reservation fee for the batch(es) which are
cancelled. 

  

	 	5.4.	If Auxilium requests rescheduling or cancellation of a firm batch within 14 calendar days of the scheduled manufacturing date, Hollister-Stier will impose a
rescheduling/cancellation fee equivalent to 25% of the minimum batch charge for that lot (in addition to 25% reservation fee already paid). 

 ONE-TIME PROJECT COSTS: 
  

					
	 Description
	  	AMOUNT
USD ($)	 
	 •        Reservation Fees (Active)
	  			
	 ¡      [**] manufacturing slots May 2009 through September 2009
	  	$	[	**]
	 ¡      [**] manufacturing slots October 2009 through March 2010
	  			
		
	 •        Reservation Fees (Diluent)
	  			
	 ¡      [**] manufacturing slots May 2009 through September 2009
	  	$	[	**]
	 ¡      [**] manufacturing slots October 2009 through March 2010
	  			
	 Total Reservation Fee
	  	$	[	**]

  

	•	Payment terms are net 30 days from date of invoice 

 This Quotation and
the services herein are subject to the Quality Technical Agreement (QTA) between Hollister-Stier and Auxilium dated February 28, 2008. 
 This
Quotation/Proposal is subject to and contingent upon the parties executing a final Commercial Supply Agreement (“Supply Agreement”). Language within this document will be incorporated into the Supply Agreement. Once the Supply Agreement is
signed by both Auxilium and Hollister-Stier, the Supply Agreement will supersede this Quotation/Proposal. In the event the parties do not execute a Supply Agreement, all reservation fees paid will be refunded. 
  
  

	**	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.

 Mr. Sabatino 
 March
27, 2008 
 Page 3 
  

 Please indicate acceptance of the quotation and payment terms by signing in the designated location below and
providing a Purchase Order to reserve manufacturing slots as indicated in this document. Please feel free to contact me if you have any questions. 
  

					
	Sincerely,	 		 	ACCEPTED AND AGREED UPON:
		 		 	Auxilium Pharmaceuticals, Inc.
			
	 /s/ Peggy Sowers
	 		 	 Armando Anido

	Peggy Sowers	 		 	Name
	Senior Manager, Business Development	 		 	
		 		 	
		 		 	 /s/ Armando Anido

		 		 	Signature
			
	PWS:lec	 		 	 3/31/08

		 		 	Date
	Attachment (2)	 		 	
		 		 	 H1494

		 		 	P.O. Number

  

 ATTACHMENT 1 – 2009/2010 MANUFACTURING SCHEDULE
FOR 
 AA4500 ACTIVE AND DILUENT 
 [**] 
  
  

	**	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.

 ATTACHMENT 2 – 
 SCHEDULE FOR RESERVATION FEES (NON-REFUNDABLE) 
 [**] 
  
  

	**	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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