Document:

Research and Development Agreement

 Exhibit 10.8 
  
 

 
  

 ** 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. 
  
 RESEARCH AND DEVELOPMENT AGREEMENT 
  
 THIS
RESEARCH AND DEVELOPMENT AGREEMENT (this “Agreement”) is made as of the 20th day of June, 2003, by and between FORMULATION TECHNOLOGIES L.L.C., d/b/a PharmaForm, with an office located at 1006 Yeager Lane, Bldg. D,
Suite 101, Austin TX 78753 (“PharmaForm”), and AUXILIUM PHARMACEUTICALS, INC. with an office located at 160 W. Germantown Pike, Norristown, PA 19401 (“AUXILIUM”). 
  
 RECITALS 
  
 WHEREAS, AUXILIUM is engaged in the research, development and sale of pharmaceutical products; and

  
 WHEREAS, PharmaForm is in the business of and has
appropriate facilities for providing certain services to the pharmaceutical industry and others; and 
  
 WHEREAS, AUXILIUM and PharmaForm wish to enter into this Agreement for PharmaForm to provide certain services (the “Services”) to
AUXILIUM; 
  
 AGREEMENT 
  
 NOW, THEREFORE, for good and valuable consideration, AND INTENDING
TO BE LEGALLY BOUND, PharmaForm and AUXILIUM hereby agree as follows: 
  
 1. Duties and Responsibilities of PharmaForm 
  

	 	1.1.	This Agreement sets forth the general terms and conditions with respect to the Services. The description and payment schedule for the Services are expressly set forth in the
Exhibit(s) attached to this Agreement, which are incorporated by reference herein. 

  

	 	1.2.	PharmaForm agrees to provide the Services in accordance with: (a) all applicable state and federal laws and regulations, including, without limitation, the federal Food, Drug and
Cosmetics Act and standards of Good Clinical Practices, Good Laboratory Practices and Good Manufacturing Practices, as applicable; and (b) the standards and practices that are 

  
 CONFIDENTIAL 
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 generally accepted in the industry and exercised by other persons engaged in performing similar
services. 
  

	 	1.3.	The research and development work described in this Agreement shall be conducted at PharmaForm’s Food and Drug Administration (“FDA”) registered facility and
PharmaForm will have the appropriate permits from the DEA and local drug enforcement authorities to work with scheduled substances at all times during the term of this Agreement. 

  
 2. Conflicts of Interest 
  

	 	2.1.	PharmaForm represents and warrants that PharmaForm is authorized to enter into this Agreement and that the terms of this Agreement are not inconsistent with or a violation of any
contractual or other legal obligation to which PharmaForm is subject. 

  

	 	2.2.	The parties agree and acknowledge that PharmaForm is in the business of providing contract research and development services to the pharmaceutical industry. Accordingly, PharmaForm
shall be free to undertake the provision of services to any third-party and/or conduct research and development on its own behalf so long as it does not develop products that compete directly with products developed for AUXILIUM or otherwise breach
the confidentiality and intellectual property provisions of this Agreement; provided that PharmaForm shall not be precluded from performing manufacturing or analytical services on a contract basis. 

  
 3. Confidentiality 
  

	 	3.1.	“Confidential Information” shall mean any and all information, including but not limited to, clinical, analytical and/or scientific data, reports, processes,
procedures, methods, formulations, inventions, and/or trade secrets relating to products developed pursuant to this Agreement and any other non-public information disclosed by a party (the “Disclosing Party”) to the other party (the
“Receiving Party”) pursuant to this Agreement of any kind, nature or description concerning any matters affecting or relating to the business of the Receiving Party. Confidential Information also includes, but is not limited to,
trade secrets, ideas, inventions, research and development work, work-in-process, products, methods, procedures, technology, computer software, databases and programming, test data and data files, know-how, designs, specifications, programs,
standard operating procedures, policies, guidelines, processes, formulations and unpublished data, personnel, staffing, cost, profit, marketing, sales, engineering and manufacturing data and information, patient, customer, supplier and investigator
lists and data, and proposals and contracts (including specifically this Agreement), salary structure/compensation information, pricing strategies, budgets and other related data, financial information and projections, services, techniques and any
other 

  
 CONFIDENTIAL 
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 information which, if divulged to a third-party, could have an adverse impact on the Disclosing
Party, or on any third-party to which such Disclosing Party owes a confidentiality obligation. However, Confidential Information shall not include information that (i) is or becomes generally publicly available through no fault of a party to this
Agreement; (ii) the Receiving Party can prove was known to the Receiving Party prior to the disclosure of the information by the Disclosing Party; or (iii) is required to be disclosed by court order or applicable law, provided that the Receiving
Party shall use its best efforts to limit such disclosure and to obtain confidential treatment or a protective order for such Confidential Information. 
  

	 	3.2.	Each party agrees that it shall not at any time, whether during or after the termination of this Agreement (a) use any Confidential Information of a Disclosing Party for any purpose
other than performing obligations pursuant to this Agreement and the Exhibit(s); or (b) disclose or otherwise make available, directly or indirectly, any item of Confidential Information to anyone other than those of the Receiving Party’s
employees, independent contractors or agents who reasonably need to know the same in the performance of the obligations under this Agreement and the Exhibit(s). Each party shall advise its employees, independent contractors and agents who have
access to any Confidential Information of the confidential nature thereof, and agrees that such persons will be bound by terms of confidentiality with respect thereto that are at least as restrictive as the terms of this Section 3.

  

	 	3.3.	Upon the completion or earlier termination of this Agreement, or at any time upon request, a Receiving Party shall promptly return to the Disclosing Party all written Confidential
Information. 

  
 4. Independent Contractor 

 

	 	4.1.	The parties acknowledge that PharmaForm is an independent contractor and agrees that: 

  

	 	(a)	PharmaForm has an independently established business and is engaged by AUXILIUM to undertake the Services for a limited period of time; 

  

	 	(b)	Nothing in this Agreement shall be construed to create a partnership, joint venture, employment or similar relationship between PharmaForm and AUXILIUM; 

  
 5. Intellectual Property 
  

	 	5.1.	If at any time or times during the term of this Agreement, PharmaForm shall (either alone or with others), make, conceive, create, discover, invent or reduce to practice any
invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula or data (collectively, “Developments”), whether 

  
 CONFIDENTIAL 
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 or not patentable or registrable under any patent, copyright, trademark or similar statutes or
subject to analogous protection (collectively, “Legal Protection”) that (a) relate to PharmaForm’s work with or business of AUXILIUM (including, without limitation, any of the products or services being or to be developed,
manufactured or sold by AUXILIUM), (b) result from the performance of the Services, (c) result from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by AUXILIUM, or (d) result from or are
based on Confidential Information of AUXILIUM, such Developments, and any rights that PharmaForm may have or acquire therein in any country throughout the world, and their resulting benefits (collectively, “Rights”) are and shall
immediately become the sole and absolute property of AUXILIUM, as “work made for hire” or otherwise; provided, however, nothing here shall (i) give AUXILIUM any Rights in the intellectual property of PharmaForm existing prior
to this Agreement or otherwise unrelated to this Agreement; or (ii) affect the rights set forth in the license agreement entered into by and between AUXILIUM and PharmaForm dated the same date hereof. 
  

	 	5.2.	PharmaForm hereby assigns to AUXILIUM, without further compensation at any time, all of PharmaForm’s Rights with respect to the Developments. To ensure AUXILIUM’s
ownership of the Developments, PharmaForm shall promptly: 

  

	 	(a)	Disclose each Development to AUXILIUM (or any persons designated by it), and without disclosing the same to others, communicate to AUXILIUM all available information relating to the
Developments (with all necessary plans and models); and 

  

	 	(b)	Whether during or after the termination of this Agreement, at the reasonable request and cost of AUXILIUM, sign, execute, make and do all such deeds, documents, acts and things as
AUXILIUM and its duly authorized agents may reasonably require to (i) apply for, obtain, register, vest, renew and restore, in the name of AUXILIUM alone (unless AUXILIUM otherwise directs), any Rights with respect to the Developments under Legal
Protection in any country throughout the world; and (ii) enforce and defend any judicial, opposition or other proceedings, petitions or applications in respect of such Legal Protection relating to a Development, or the revocation thereof.

  

	6.	PharmaForm Warranties 

  

	 	6.1	PharmaForm represents and warrants that PharmaForm has never been and is not currently: 

  

	 	(a)	An individual who has been debarred or convicted of a crime for which a person can be debarred by the U.S. Food and Drug Administration (the “FDA”) under 21 U.S.C.
§335a (a) or (b), or by any other regulatory agency (a “Debarred Individual”), from providing services in any capacity to a person or entity that has an approved or pending 

  
 CONFIDENTIAL 
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 drug product application, or an employer, employee or partner of a Debarred Individual; or

  

	 	(b)	A corporation, partnership, or association that has been debarred by the FDA under 21 U.S.C. §335a (a) or (b), or by any other regulatory agency (a “Debarred
Entity”), from submitting or assisting in the submission of an abbreviated new drug application, or an employee, partner, shareholder, member, subsidiary or affiliate of a Debarred Entity. 

  

	 	6.2	PharmaForm further represents and warrants that PharmaForm has not been convicted of or pled guilty or no contest to a crime or been sanctioned by a federal or state law
enforcement, regulatory, or licensing agency. 

  

	 	6.3	PharmaForm further represents and warrants that PharmaForm has no knowledge of any circumstances which may affect the accuracy of the representations set forth in Sections 6.1 or
6.2, and that PharmaForm will immediately notify AUXILIUM in the event of any such debarment, conviction, threat or indictment occurring during the term of this Agreement. 

  

	 	6.4	PharmaForm warrants that PharmaForm will comply with all applicable requirements of the Health Insurance Portability and Accountability Act, 45 CFR§160 et seq.
(“HIPAA”) relating to the use and or disclosure of Protected Health Information as defined in 45 CFR§ 160.501. 

  

	 	6.5	PharmaForm DISCLAIMS ALL WARRANTIES EXCEPT THOSE SET FORTH IN THIS PARAGRAPH, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMIMTATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. 

  
 7. Restrictions on
Announcements 
  
 PharmaForm shall not make any announcement, oral
presentation or publication relating to the Services without AUXILIUM’s prior written consent, except as required by law or by court or administrative order, provided however, that prior written notice is provided to AUXILIUM and
that AUXILIUM has the opportunity to appeal such requirement. PharmaForm shall not employ or use the name of AUXILIUM in any publication or promotional material or in any form for public distribution, without the prior written consent of AUXILIUM.

  
 8. FDA Inspection 
  
 In the event that PharmaForm receives a Notice of Inspection (a “Notice”)
from the Food and Drug Administration (“FDA”) which relates to the Services, PharmaForm shall: (a) notify AUXILIUM 
  
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 promptly of such Notice; (b) keep AUXILIUM informed of the progress of the inspection; and (c) provide to AUXILIUM a
copy of any documents produced to the FDA pursuant to such Notice. AUXILIUM acknowledges that it is PharmaForm’s obligation to respond to a Notice directed to PharmaForm that PharmaForm must respond to the Notice without advice from, or
consultation with, AUXILIUM concerning the contents thereof. 
  
 9. Access
to Facilities 
  
 AUXILIUM’s authorized representatives may visit
PharmaForm’s site and facilities at reasonable times and with reasonable frequency during normal business hours and upon reasonable advance written notice. 
  

10. Termination 
  

	 	10.1	Either party may terminate this Agreement and/or any Exhibit at any time and for any reason upon a minimum of thirty (30) days’ prior notice to the other party. In the event of
any such early termination of some or all of the Services, each party shall assemble and turn over in an orderly fashion to authorized representatives of the other party all documents, write-ups, notes, computer programs and other material related
thereto, and AUXILIUM shall pay the charges stated herein for Services satisfactorily performed for the period since the date of commencement of the Services through the date of notice of termination. 

  

	 	10.2	Either party shall have the right at any time to cancel this Agreement and/or the Exhibit(s) immediately for non-performance or material breach of this Agreement or such Exhibit(s)
by the other party; provided, however, that no such termination of this Agreement shall relieve a breaching party of any liability or obligation it might otherwise have. 

  
 11. Equitable Relief 
  
 Both parties agree that any breach of Sections 2, 3 or 5 of this
Agreement will cause irreparable damage to the other party and that in the event of such breach, each party shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent
the violation of PharmaForm’s obligations hereunder. 
  

	12.	Indemnification 

  

	 	12.1	AUXILIUM agrees to indemnify, defend and hold harmless PharmaForm from and against any and all claims, demands, investigations, suits or actions, (each a “Claim”)
for any and all liability, losses, damages, costs or expenses (including reasonable 

  
 CONFIDENTIAL 
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 attorneys’ fees and costs of court) arising out of or related to the Services performed pursuant
to this Agreement, including without limitation any and all claims of patent infringement that may be brought against PharmaForm related to exploitation or use of the Developments; provided, however, that AUXILIUM’s indemnity obligations shall
not apply to any Claim arising directly from the gross negligence, bad faith or willful misconduct of PharmaForm; a material breach of any applicable federal, state or local law by PharmaForm; or a material breach of this Agreement by PharmaForm.

  
 12.2 PharmaForm agrees to indemnify, defend and hold harmless
AUXILIUM and each of its affiliates, officers, directors, employees and representatives from any against and all Claims for liability, losses, damages, costs or expenses (including reasonable attorneys’ fees and costs of court) arising out of
or related to the gross negligence, bad faith or willful misconduct on the part of PharmaForm; or a breach of any applicable federal, state or local law by PharmaForm; or a material breach of this Agreement by PharmaForm. 
  
 12.3 Each party’s agreement to indemnify and hold the other harmless is
conditioned on the indemnified party: providing written notice to the indemnifying party of any claim, demand or action arising out of the Indemnified activities as soon as practicable but at least within thirty (30) days after the indemnified party
receives written notice of such claim, demand or action; permitting the indemnifying party to assume full responsibility to investigate, prepare for and defend against any such claim or demand; assisting the indemnifying party at the indemnifying
party’s reasonable expense, in the investigation of, preparation for and defense of any such claim or demand; and not compromising or settling such claim or demand without the indemnifying party’s written consent. 
  
 13. Limitations 
  

	 	13.1	BOTH PARTIES EXPRESSLY AGREE THAT EXCEPT WITH RESPECT TO CLAIMS ARISING OUT OF FRAUD, INTENTIONAL MISCONDUCT AND/OR FAILURE TO COMPLY WITH OBLIGATIONS OF CONFIDENTIALITY PURSUANT TO
PARAGRAPH 3 OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE OR RESPONSIBLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS AND DAMAGES RESULTING FROM LOSS OR
USE OR LOSS OF CORRPUTED DATA OR SOFTWARE, EVEN IF SUCH PARTY HAS BEEN ADVISED, KNEW OF OR SHOULD HAVE KNOWN OF THE POSSIBILITY THEREOF. EXCEPT WITH RESPECT TO CLAIMS ARISING OUT OF FRAUD, INTENTIONAL MISCONDUCT AND/OR FAILURE TO COMPLY WITH
OBLIGATIONS OF 

  
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 CONFIDENTIALITY PURSUANT TO PARAGRAPH 3 OF THIS AGREEMENT, PHARMAFORM SHALL NOT BE LIABLE TO AUXILIUM
FOR ANY AMOUNT GREATER THAN THE AGGREGATE OF ALL PAYMENTS RECEIVED BY PHARMAFORM FROM AUXILIUM UNDER THIS AGREEMENT. 
  

	 	13.2	PharmaForm agrees to use its best efforts to accomplish the agreed goals with AUXILIUM, but nothing herein shall bind PharmaForm to any guarantees of success at any development
stage and absent a showing of gross negligence or willful misconduct, PharmaForm shall have no liability under this Agreement or otherwise for any failure to achieve the goals set forth in the Project Plan. 

  
 14. Entire Agreement 
  
 This Agreement, together with all corresponding Exhibits, constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes any and all prior and contemporaneous communications, representations, agreements or understandings, whether oral or written. No amendment or modification of this
Agreement or any Exhibit shall be binding unless in a writing signed by both parties. 
  
 15. Construction of Agreement 
  
 The failure of either
party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement. If any provision of this
Agreement or the application thereof shall be invalid or unenforceable, the remainder of this Agreement shall be unaffected thereby and each remaining term or provision of this Agreement shall be valid and be enforced to the fullest extent permitted
by law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to provisions of conflicts of law. 
  

16. Assignment 
  
 Neither PharmaForm nor AUXILIUM may assign this Agreement or any rights hereunder or delegate the performance of any duties hereunder without the prior written approval
of the other party, which approval shall not be unreasonably delayed or withheld; provided, however, that without such consent, AUXILIUM may assign this Agreement to an affiliate or in connection with the transfer or sale of all or
substantially all of its assets, stock or business, or its merger, consolidation or combination with or into another entity. Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective
heirs, administrators, successors and permitted assigns of the parties. 
  
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 17. Survival 
  

Any terms of this Agreement which by their nature extend beyond its performance, expiration or termination (including, without limitation, Sections 3, 5,
11 and this Section 17) shall survive any termination or expiration of this Agreement, however caused. 
  

	18.	Notices 

  
 Any notices given under this Agreement shall be in writing and shall be given by personal delivery, or sent by (a) facsimile transmission (with message confirmed during normal business hours); (b) first class mail,
postage prepaid; or (c) Federal Express (or equivalent overnight delivery service), delivery charges prepaid. All notices shall be given to a party at its respective address set forth in this agreement, or at such other address as such party may
specify by notice in accordance with this Section 18. A notice shall be deemed given when actually received. 
  
 19. Dispute Resolution. Except as otherwise specifically provided herein, any disputes or disagreements arising under the Agreement will be referred to the chief executive officer of each party for a
period not to exceed sixty (60) days. During such sixty (60) days, both parties may in good faith explore resolution of the dispute using alternative dispute resolution techniques before pursuing other remedies. If such dispute is not resolved by
the end of such sixty-day period, the parties shall be free to pursue any legal or equitable remedy available to them. 
  
 CONFIDENTIAL 
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 20. Signatories 
  
 This Agreement may be executed in counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of
which, when joined, shall together constitute one and the same agreement. Any photocopy or facsimile of this Agreement, or of any counterpart, shall be deemed the equivalent of an original. 
  
 ACCEPTED AND APPROVED BY AND BETWEEN: 
  

									
	Formulation Technologies L.L.C., d/b/a PharmaForm	 	 	 	AUXILIUM PHARMACEUTICALS, INC.
					
	 By:
	 	 /s/    Robert O. Williams, III
	 	 	 	 By:
	 	 /s/    Geraldine A. Henwood        

	 	 	
	 	 	 	 	 	

	 Print Name:
	 	Robert O. Williams, III	 	 	 	 Name:
	 	Geraldine A. Henwood
	 	 	
	 	 	 	 	 	

	 Title:
	 	 Vice Pres.

	 	 	 	 Title:
	 	 CEO

  
 CONFIDENTIAL 
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 EXHIBIT 1 TO RESEARCH AND DEVELOPMENT AGREEMENT BETWEEN 
 FORMULATION TECHNOLOGIES L.L.C., D/B/A PharmaForm AND AUXILIUM 
 PHARMACEUTICALS, INC., DATED APRIL 1, 2003 
  

	1.	SERVICES TO BE PERFORMED 

  
 Satisfactory completion of the following services shall be provided by PharmaForm and may not be replaced without the prior written consent of AUXILIUM:

  

	 	(a)	The services included on the attached Project Plan (the “Services”) shall be performed by PharmaForm in consultation with AUXILIUM, based on the timelines included
in the Project Plan, for the following projects: 

  

	 	•	Androgens (Project 1); 

  

	 	•	Oxybutynin (Project 2). 

  

	2.	PAYMENT FOR PERFORMANCE OF SERVICES 

  
 In consideration of the Services, AUXILIUM shall pay PharmaForm [**] per month, per project which monthly fee shall include the cost of all
materials and supplies, exclusive of the respective active pharmaceutical ingredients (“APIs”). 
  
 Auxilium shall make a start-up payment of [**], covering the first three months of Services, on May 31, 2003. Thereafter, PharmaForm will
submit invoices for Services performed on a monthly basis. 
  

	3.	TERMS AND CONDITIONS 

  
 All other terms and conditions of the Research and Development Agreement dated May         , 2003 are
incorporated by reference as if fully set forth herein. 
  
 EXHIBIT ACCEPTED
AND APPROVED BY AND BETWEEN: 
  

							
	FORMULATION TECHNOLOGIES L.C.C. d/b/a PharmaForm	 	AUXILIUM PHARMACEUTICALS, INC.
				
	 By:
	  	 /s/    Robert O. Williams, III
	 	 By:
	  	 /s/    Geraldine A. Henwood        

	 	 	 	 	 	 	

  
 CONFIDENTIAL 
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REQUEST. 
  

 

 
  

							
				
	 Print Name:
	  	 Robert O. Williams, III
	 	 Name:
	  	 Geraldine A. Henwood

	 	  	
	 	 	  	

	 Title:    Vice Pres.
	 	 Title:
	  	 CEO

			
	 Date:    6-20-03
	 	 Date:
	  	 6-23-03

  
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 -2-Loan and Security Agreement

 Exhibit 10.9 
  

  
 AUXILIUM PHARMACEUTICALS, INC. 
  
 LOAN AND SECURITY
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. 
  
 This LOAN AND SECURITY AGREEMENT is entered into as of March 11, 2004, by and between COMERICA BANK (“Bank”) and AUXILIUM PHARMACEUTICALS, INC. (“Borrower”). 
  
 RECITALS 
  
 Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. This Agreement sets forth the terms on which
Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank. 
  
 AGREEMENT 
  
 The parties
agree as follows: 
  
 1. DEFINITIONS AND CONSTRUCTION.

  
 1.1 Definitions. As used in this
Agreement, the following terms shall have the following definitions: 
  
 “Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles, and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing. 
  
 “Advance” or “Advances” means a cash advance or cash advances under the Revolving Facility. 
  
 “Affiliate” means, with respect to any Person, any Person that
owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners. 
  
 “Bank Expenses” means all: reasonable out-of-pocket costs or
expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable
attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought. 
  
 “Borrower’s Books” means all of Borrower’s books and
records including: ledgers; records concerning Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information. 

 
 “Borrowing Base” means an amount equal to eighty percent (80%)
of Eligible Accounts, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrower plus, to the extent of any shortfall between the Eligible Accounts and the Revolving Line, an amount of cash pledged to
Bank in an account in which the minimum balance will not be permitted to be less than the amount of such shortfall. 
  
 “Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are authorized or required
to close. 
  
 “Change in Control” shall mean a
transaction in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all 
  
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 2 

 classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such
“person” or “group” to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction. 
  
 “Closing Date” means the date of this Agreement. 
  
 “Code” means the California Uniform Commercial Code. 
  

“Collateral” means the property described on Exhibit A attached hereto. 
  
 “Contingent Obligation” means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation (excluding nonmonetary performance obligations) of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect
to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap
agreement, interest rate collar agreement, or other agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent
Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation
in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in
any event exceed the maximum amount of the obligations under the guarantee or other support arrangement. 
  
 “Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held. 
  
 “Credit Extension” means each Advance, Letter of Credit, or any
other extension of credit by Bank for the benefit of Borrower hereunder. 
  
 “Current Liabilities” means, as of any applicable date, all amounts that should, in accordance with GAAP, be included as current liabilities on the consolidated balance sheet of Borrower and its
Subsidiaries, as at such date, plus, to the extent not already included therein, all outstanding Credit Extensions made under this Agreement, including all Indebtedness that is payable upon demand or within one year from the date of determination
thereof unless such Indebtedness is renewable or extendible at the option of Borrower or any Subsidiary to a date more than one year from the date of determination. 
  
 “Daily Balance” means the amount of the Obligations owed at the end of a given day. 
  
 “Eligible Accounts” means those Accounts that arise in the
ordinary course of Borrower’s business that comply with all of Borrower’s representations and warranties to Bank set forth in Section 5.4; provided, that standards of eligibility may be fixed and revised from time to time by Bank in
Bank’s reasonable judgment and upon notification thereof to Borrower in accordance with the provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following: 
  
 (a) Accounts that the account debtor has failed to pay within ninety (90)
days of invoice date; 
  
 (b) Accounts with respect to an
account debtor, twenty-five percent (25%) of whose Accounts the account debtor has failed to pay within ninety (90) days of invoice date; 
  
 ** 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 

 (c) Accounts with respect to which the account debtor is an officer, employee, or agent of Borrower;

  
 (d) Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, bill and hold, or other terms by reason of which the payment by the account debtor may be conditional; 
  
 (e) Accounts with respect to which the account debtor is an Affiliate of Borrower; 
  
 (f) Accounts with respect to which the account debtor does not have its
principal place of business in the United States, except for Eligible Foreign Accounts; 
  
 (g) Accounts with respect to which the account debtor is the United States or any department, agency, or instrumentality of the United States, except for Accounts of the United States if the payee has assigned its
payment rights to Bank and the assignment has been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C. 3727); 
  
 (h) Accounts with respect to which Borrower is liable to the account debtor for goods sold or services rendered by the account debtor to Borrower or for
deposits or other property of the account debtor held by Borrower, but only to the extent of any amounts owing to the account debtor against amounts owed to Borrower; 
  
 (i) Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose total obligations to Borrower
exceed twenty five percent (25%), except that the concentration limit shall be forty percent (40%) for Accounts owing by Cardinal Health, Amerisource, McKesson and such other account debtors as Bank may approve in writing from time to time;

  
 (j) Accounts with respect to which the account debtor
disputes liability or makes any claim with respect thereto as to which Bank believes, in its sole discretion, that there may be a basis for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject to any
Insolvency Proceeding, or becomes insolvent, or goes out of business; and 
  
 (k) Accounts the collection of which Bank reasonably determines to be doubtful. 
  
 “Eligible Foreign Accounts” means Accounts with respect to which the account debtor does not have its principal place of business in the United
States and that (i) are supported by one or more letters of credit in an amount and of a tenor, and issued by a financial institution, acceptable to Bank, or (ii) that Bank approves on a case-by-case basis. 
  
 “Equipment” means all present and future machinery, equipment,
tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder. 
  
 “Event of Default” has the meaning assigned in Article 8.

  
 “GAAP” means generally accepted accounting
principles as in effect from time to time. 
  
 “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations. 
  

** 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 

 “Insolvency Proceeding” means any proceeding commenced by or against any person or entity
under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its
creditors, or proceedings seeking reorganization, arrangement, or other relief. 
  
 “Intellectual Property” means all of Borrower’s right, title, and interest in and to the Copyrights, Trademarks and Patents. 
  
 “Inventory” means all present and future inventory in which Borrower has any interest, including merchandise, raw
materials, parts, supplies, packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in
the custody or possession, actual or constructive, of Borrower, including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s Books relating to any of the foregoing. 
  
 “Investment” means any beneficial ownership of (including stock, partnership interest or other securities) any
Person, or any loan, advance or capital contribution to any Person. 
  
 “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. 
  
 “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 
  
 “Loan Documents” means, collectively, this Agreement, any note or
notes executed by Borrower, and any other agreement entered into in connection with this Agreement, all as amended or extended from time to time. 
  
 “Material Adverse Effect” means a material adverse effect on (i) the business operations or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan Documents or (iii) the value or priority of Bank’s security interests in the Collateral. 

 
 “Negotiable Collateral” means all of Borrower’s present
and future letters of credit of which it is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper, and Borrower’s Books relating to any of the foregoing. 
  
 “Obligations” means all debt, principal, interest, Bank Expenses
and other amounts owed to Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an
Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise. 
  
 “Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same. 
  
 “Periodic Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank. 
  
 “Permitted
Indebtedness” means: 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN
OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 5 

 (a) Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document;

  
 (b) Indebtedness existing on the Closing Date and disclosed
in the Schedule; 
  
 (c) Indebtedness secured by a lien
described in clause (c) of the defined term “Permitted Liens,” provided (i) such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness and (ii) such Indebtedness does not
exceed $250,000 in the aggregate at any given time; and 
  
 (d)
Subordinated Debt. 
  
 “Permitted Investment” means:

  
 (a) Investments existing on the Closing Date disclosed in
the Schedule; and 
  
 (b) (i) marketable direct obligations
issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment
therein issued by Bank and (iv) Bank’s money market accounts. 
  
 “Permitted Liens” means the following: 
  
 (a) Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan Documents; 
  
 (b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate
proceedings, provided the same have no priority over any of Bank’s security interests; 
  
 (c) Liens (i) upon or in any equipment which was not financed by Bank acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the
purpose of financing the acquisition of such equipment, or (ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such
equipment; 
  
 (d) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien
and the principal amount of the indebtedness being extended, renewed or refinanced does not increase. 
  
 “Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency. 
  
 “Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate,” whether or not
such announced rate is the lowest rate available from Bank. 
  
 “Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower. 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A CONFIDENTIAL TREATMENT REQUEST. 
  

 6 

 “Revolving Facility” means the facility under which Borrower may request Bank to issue
Advances, as specified in Section 2.1(a) hereof. 
  
 ** 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. 
  

 7 

 “Revolving Line” means a credit extension of up to Five Million Dollars ($5,000,000).

  
 “Revolving Maturity Date” means the day before the
first anniversary of the Closing Date. 
  
 “Schedule”
means the schedule of exceptions attached hereto and approved by Bank, if any. 
  
 “Subordinated Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Bank on terms acceptable to Bank (and identified as being such by Borrower and Bank). 

 
 “Subsidiary” means any corporation, company or partnership in
which (i) any general partnership interest or (ii) more than 50% of the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of
which any determination is being made, is owned by Borrower, either directly or through an Affiliate. 
  
 “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks. 
  
 1.2 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations made
hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include the notes and schedules thereto. 
  
 2. LOAN AND TERMS OF PAYMENT. 
  
 2.1 Credit Extensions. 
  
 (a) Revolving Advances. 
  
 (i) Subject to and upon the terms and conditions of this Agreement, Borrower may request Advances in an aggregate outstanding amount not to exceed the
Revolving Line, minus the aggregate face amount of all outstanding Letters of Credit. At any time Borrower’s unrestricted cash on deposit with Bank is less than $10,000,000, Borrower may request Advances in an aggregate outstanding amount not
to exceed the lesser of (i) the Revolving Line or (ii) the Borrowing Base, minus the aggregate face amount of all outstanding Letters of Credit. Subject to the terms and conditions of this Agreement, amounts borrowed pursuant to this Section 2.1(a)
may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(a) shall be immediately due and payable. Borrower may prepay any Advances without penalty or premium. 
  
 (ii) Whenever Borrower desires an Advance, Borrower will notify Bank by
facsimile transmission or telephone no later than 3:00 p.m. Eastern time, on the Business Day that the Advance is to be made. Each such notification shall be promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit B
hereto. Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to
meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold
Bank harmless for any damages or loss suffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under this Section 2.1(a) to Borrower’s deposit account. 
  
 (b) Letters of Credit. 
  
 (i) Subject to the terms and conditions of this Agreement, at any time
prior to the Revolving Maturity Date, Bank agrees to issue or cause to be issued letters of credit for the account of 
  
 ** 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 

 Borrower (each, a “Letter of Credit” and collectively, the “Letters of Credit”) in an aggregate
outstanding face amount not to exceed the Revolving Line (or, if Borrower’s unrestricted cash on deposit with Bank is less than $10,000,000 the lesser of the Revolving Line or the Borrowing Base) minus, in each case, the aggregate amount of the
outstanding Advances at any time, provided that the aggregate face amount of all outstanding Letters of Credit shall not exceed $25,000. All Letters of Credit shall be, in form and substance, acceptable to Bank in its sole discretion and shall be
subject to the terms and conditions of Bank’s form of standard application and letter of credit agreement (the “Application”), which Borrower hereby agrees to execute, including Bank’s standard fee equal to 2.0% per annum of the
face amount of each Letter of Credit. On any drawn but unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an Advance under Section 2.1(a). On or before the Revolving Maturity Date, Borrower shall secure in cash all obligations
under any outstanding Letters of Credit on terms acceptable to Bank. 
  
 (ii) The obligation of Borrower to reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, the Application,
and such Letters of Credit, under all circumstances whatsoever. Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable attorneys’ fees, arising out
of or in connection with any Letters of Credit, except for expenses caused by Bank’s gross negligence or willful misconduct. 
  
 2.2 Overadvances. If at any time that Borrower’s unrestricted cash on deposit with Bank is less than $10,000,000 and the aggregate amount of
the outstanding Advances plus the aggregate face amount of all outstanding Letters of Credit exceeds the lesser of the Revolving Line or the Borrowing Base, Borrower shall immediately cash secure such excess amount in a money market account with
Bank on terms satisfactory to Bank. 
  
 2.3 Interest Rates,
Payments, and Calculations. 
  
 (a) Interest Rates.
Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to one half percent (0.5%) above the Prime Rate. 
  
 (b) Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due,
Borrower shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law. All Obligations shall bear interest, from and after the
occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default. 
  
 (c) Payments. Borrower promises to pay to the order of Bank, in
lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower hereunder. Borrower shall also pay interest on the unpaid principal amount of such Credit Extensions at rates in
accordance with the terms hereof. Interest hereunder shall be due and payable on the first calendar day of each month during the term hereof. Bank shall, at its option and upon written notice to Borrower, charge such interest, all Bank Expenses, and
all Periodic Payments against any of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder. Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear of any taxes, withholdings, duties, impositions or other charges, to the
end that Bank will receive the entire amount of any Obligations payable hereunder, regardless of source of payment. 
  
 (d) Computation. In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased
or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the
actual number of days elapsed. 
  
 2.4 Crediting Payments.
Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies. After the occurrence of an Event of Default, the receipt by Bank
of any wire transfer of funds, check, or other item 
  
 ** 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. 
  

 9 

 of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or
payment received by Bank after 12:00 noon Pacific time shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment to Bank under the Loan Documents would otherwise be
due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such
extension. 
  
 2.5 Fees. Borrower shall pay to Bank the
following: 
  
 (a) Facility Fee. A fee equal to $10,000
of which Bank acknowledges receipt of $5,000 prior to the Closing Date, and the remaining $5,000 shall be due on the Closing Date, all of which fee shall be nonrefundable; and 
  
 (b) Bank Expenses. On the Closing Date, all Bank Expenses incurred through the Closing Date, including reasonable
attorneys’ fees and expenses (in an amount not to exceed $12,000) and, after the Closing Date, all Bank Expenses, including reasonable attorneys’ fees and expenses, as and when they are incurred by Bank. 
  
 2.6 Additional Costs. In case of the change in or change in
interpretation of any law, regulation, treaty or official directive or the interpretation or application thereof by any court or any governmental authority charged with the administration thereof or the compliance with any guideline or request of
any central bank or other governmental authority (whether or not having the force of law): 
  
 (a) subjects Bank to any tax with respect to payments of principal or interest or any other amounts payable hereunder by Borrower or otherwise with respect to the transactions contemplated hereby (except for taxes on
the overall net income of Bank imposed by the United States of America or any political subdivision thereof); 
  
 (b) imposes, modifies or deems applicable any deposit insurance, reserve, special deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, Bank; or 
  
 (c) imposes
upon Bank any other condition with respect to its performance under this Agreement, 
  
 and the result of any of the foregoing is to increase the cost to Bank, reduce the income receivable by Bank or impose any expense upon Bank with respect to the Obligations, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense as and when such cost, reduction or expense is incurred or determined, upon presentation by Bank of a statement of the amount and setting forth Bank’s calculation
thereof, all in reasonable detail, which statement shall be deemed true and correct absent manifest error. 
  
 2.7 Term. This Agreement shall become effective on the Closing Date and, subject to Section 12.7, shall continue in full force and effect for so
long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement
immediately and without notice upon the occurrence and during the continuance of an Event of Default. Notwithstanding termination, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding. 

 
 2.8 Lockbox. Within 90 days after the Closing Date, Borrower shall
open and shall thereafter maintain at all times an account at Bank (the “Lock Box Account”) into which all funds received by Borrower from any source shall immediately be deposited. Borrower shall direct all customers, to mail or deliver
all checks or other forms of payment for amounts owing to Borrower to a post office box designated by Bank, over which Bank shall have exclusive and unrestricted access. 
  
 ** 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. 
  

 10 

 3. CONDITIONS OF CREDIT EXTENSIONS. 
  
 3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is
subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the following: 
  
 (a) this Agreement; 
  
 (b) a certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement;

  
 (c) UCC National Form Financing Statement; 
  
 (d) agreement to provide insurance in substantially the form attached to
this Agreement; 
  
 (e) payment of the fees and Bank Expenses
then due specified in Section 2.5 hereof; 
  
 (f) current
financial statements of Borrower; 
  
 (g) a letter from Silicon
Valley Bank stating that each of Borrower and Auxilium Holdings, Inc. has repaid all amounts that it owes to Silicon Valley Bank, along with a copy of the termination of the financing statements naming Silicon Valley Bank as secured party;

  
 (h) copies of the terminations of the financing statements
naming Perseus-Soros Biopharmaceutical Fund, LP and SCP Private Equity Partners II, L.P. as secured party; and 
  
 (i) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 
  
 3.2 Conditions Precedent to all Credit Extensions. The obligation of
Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions: 
  
 (a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and 
  
 (b) the representations and warranties contained in Section 5 shall be true and correct in all material respects on and as
of the date of such Payment/Advance Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit
Extension (provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date). The making of each Credit Extension shall be deemed to be a
representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2. 
  
 4. CREATION OF SECURITY INTEREST. 
  
 4.1 Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the Schedule and subject
to Permitted Liens, such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in Collateral acquired after the date hereof.

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

 11 

 4.2 Delivery of Additional Documentation Required. Borrower shall from time to time execute and
deliver to Bank, at the request of Bank, all Negotiable Collateral, all financing statements and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests
in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents. Borrower from time to time may deposit with Bank specific time deposit accounts to secure specific Obligations. Borrower authorizes
Bank to hold such balances in pledge and to decline to honor any drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Obligations are outstanding. 
  
 4.3 Right to Inspect. Bank (through any of its officers, employees,
or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books
and to make copies thereof and to check, test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral. 
  
 4.4 Cash Collateral. At all times after which Borrower’s
unrestricted cash on deposit with Bank is less than $10,000,000, Borrower shall maintain a money market account with Bank with a balance equal to or greater than the amount of shortfall, if any, between the Eligible Accounts and the Revolving
Line (the “Required Balance”) at all times. Such money market account and all amounts held therein, together with all proceeds thereof, interest paid thereon, and substitutions therefor, and all accounts, securities, instruments,
securities entitlements and financial assets arising out of any of the foregoing, including without limitation money market account [**] at Bank, are the “Cash Collateral”. Borrower grants and pledges to Bank a continuing
security interest in all presently existing and hereafter acquired or arising Cash Collateral, in order to secure prompt repayment of any and all Obligations. Bank shall retain control over the Cash Collateral up to the Required Balance to secure
the Obligations until such Obligations have been satisfied in full. Borrower hereby authorizes Bank to place restrictions on Borrower’s ability to withdraw amounts from accounts holding the Cash Collateral in order to ensure that such Required
Balance is maintained. Borrower authorizes Bank to execute and/or file such documents, and take such actions, as Bank determines reasonable to perfect its security interest in the Cash Collateral. Such security interest constitutes a valid, first
priority security interest in the Cash Collateral, and will constitute a valid, first priority security interest in Cash Collateral acquired after the date hereof. At all times after which Borrower’s unrestricted cash on deposit with Bank is
less than 10,000,000, it shall be a condition precedent to each Credit Extension requested that the Cash Collateral be in an amount of at least the Required Balance. Notwithstanding termination of this Agreement, Bank’s Lien on
the Cash Collateral shall remain in effect for so long as any Obligations are outstanding. 
  
 5. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as follows: 
  
 5.1 Due Organization and Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of its state of incorporation
and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure to do so could not reasonably be expected to cause a Material Adverse
Effect. 
  
 5.2 Due Authorization; No Conflict. The
execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Certificate of Incorporation
or Bylaws, nor will they constitute an event of default under any material agreement to which Borrower is a party or by which Borrower is bound. Borrower is not in default under any material agreement to which it is a party or by which it is bound,
except to the extent such default could not reasonably be expected to cause a Material Adverse Effect. 
  
 5.3 No Prior Encumbrances. Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted Liens. 

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

 12 

 5.4 Bona Fide Eligible Accounts. The Eligible Accounts are bona fide existing obligations. The
property and services giving rise to such Eligible Accounts has been delivered or rendered to the account debtor or to the account debtor’s agent for immediate and unconditional acceptance by the account debtor. Borrower has not received notice
of actual or imminent Insolvency Proceeding of any account debtor that is included in any Borrowing Base Certificate as an Eligible Account. 
  
 5.5 Merchantable Inventory. All Inventory is in all material respects of good and marketable quality, free from all material defects, except for
Inventory for which adequate reserves have been made. 
  
 5.6
Intellectual Property. Borrower is the sole owner of the Intellectual Property, except for non-exclusive licenses granted by Borrower to its customers in the ordinary course of business. Each of the Patents is valid and enforceable, and no
part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Intellectual Property violates the rights of any third-party. Except as set forth in the Schedule,
Borrower’s rights as a licensee of intellectual property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of
any product or service. 
  
 5.7 Name; Location of Chief
Executive Office. Except as disclosed in the Schedule, Borrower has not done business under any name other than that specified on the signature page hereof. The chief executive office of Borrower is located at the address indicated in Section 10
hereof. All Borrower’s Inventory and Equipment is located only at the location set forth in Section 10 hereof. 
  
 5.8 Litigation. Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before
any court or administrative agency in which an adverse decision could have a Material Adverse Effect, or a material adverse effect on Borrower’s interest or Bank’s security interest in the Collateral. 
  
 5.9 No Material Adverse Change in Financial Statements. All
consolidated and consolidating financial statements related to Borrower and any Subsidiary that Bank has received from Borrower fairly present in all material respects Borrower’s financial condition as of the date thereof and Borrower’s
consolidated and consolidating results of operations for the period then ended. There has not been a material adverse change in the consolidated or the consolidating financial condition of Borrower since the date of the most recent of such financial
statements submitted to Bank. 
  
 5.10 Solvency, Payment of
Debts. Borrower is solvent and able to pay its debts (including trade debts) as they mature. 
  
 5.11 Regulatory Compliance. Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit
plans subject to ERISA, and no event has occurred resulting from Borrower’s failure to comply with ERISA that could result in Borrower’s incurring any material liability. Borrower is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of the important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower has complied with all the provisions of the Federal Fair Labor Standards Act. Borrower has not violated
any statutes, laws, ordinances or rules applicable to it, violation of which could have a Material Adverse Effect. 
  
 5.12 Environmental Condition. Except as disclosed in the Schedule, none of Borrower’s or any Subsidiary’s properties or assets has ever
been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous owners or operators, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance other
than in accordance with applicable law; to the best of Borrower’s knowledge, none of Borrower’s properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous waste
or hazardous substance disposal site, or a candidate for closure pursuant to any environmental protection statute; no lien arising under any environmental protection statute has attached to any revenues or to any real or personal property owned by
Borrower or any Subsidiary; and neither Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, state or other 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 13 

 governmental agency concerning any action or omission by Borrower or any Subsidiary resulting in the releasing, or
otherwise disposing of hazardous waste or hazardous substances into the environment. 
  
 5.13 Taxes. Borrower and each Subsidiary have filed or caused to be filed all material tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all material taxes
reflected therein. 
  
 5.14 Subsidiaries. Borrower does
not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments. 
  
 5.15 Government Consents. Borrower and each Subsidiary have obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s business as currently conducted, the failure to obtain which could have a Material Adverse Effect. 
  
 5.16 Accounts. Except as set forth in the Schedule, none of
Borrower’s nor any Subsidiary’s cash, securities or other investments is maintained or invested with a Person other than Bank. 
  
 5.17 Full Disclosure. No representation, warranty or other statement made by Borrower in any certificate or written statement furnished to Bank
contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. 
  
 6. AFFIRMATIVE COVENANTS. 
  
 Borrower covenants and agrees that, until payment in full of all outstanding Obligations, and for so long as Bank may have any commitment to make a Credit
Extension hereunder, Borrower shall do all of the following: 
  
 6.1 Good Standing. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required
under applicable law except where a failure to qualify could not reasonably be expected to have a Material Adverse Effect. Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect. 
  
 6.2 Government Compliance. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause
each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could have a Material Adverse Effect. 
  
 6.3 Financial Statements, Reports, Certificates. Borrower shall deliver the following to Bank in each case at both
the Inglewood and the Boston addresses referenced in Section 10: (a) as soon as available, but in any event within thirty (30) days after the end of each calendar month, a company prepared consolidated balance sheet, income, and cash flow statement
covering Borrower’s consolidated operations during such period, prepared in accordance with GAAP, consistently applied, together with aged listings of accounts receivable and accounts payable, in each case in a form acceptable to Bank and
certified by a Responsible Officer; (b) as soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s fiscal year, audited consolidated financial statements of Borrower prepared in accordance with GAAP,
consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (c) copies of all statements, reports and notices sent or made available
generally by Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (d) promptly upon receipt of notice thereof, a report of
any legal actions pending or threatened against Borrower or any Subsidiary that could reasonably be expected to result in damages or 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST. 
  

 14 

 costs to Borrower or any Subsidiary of Two Hundred and Fifty Thousand Dollars ($250,000) or more; (e) such budgets, sales
projections, operating plans or other financial information as Bank may reasonably request from time to time; and (f) not later than January 31 of each year, an annual financial forecast for the year, broken down by month, in form and substance
reasonably acceptable to Bank. 
  
 At any time Borrower’s
unrestricted cash on deposit with Bank is less than $10,000,000, Borrower shall, within thirty (30) days after the last day of each month, deliver to Bank at both the Inglewood and Boston addresses, a Borrowing Base Certificate signed by a
Responsible Officer in substantially the form of Exhibit C hereto. 
  
 Borrower shall deliver to Bank with the monthly financial statements, at both the Inglewood and the Boston addresses referenced in Section 10, a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D
hereto. 
  
 Within thirty (30) days after Borrower’s
unrestricted cash is less than $15,000,000, and from time to time thereafter (not to exceed semiannually as long as an Event of Default has not occurred), Bank shall have a right to audit Borrower’s Accounts at Borrower’s expense
provided, however, that Borrower shall not be required to pay more than $4,000 for each such audit. 
  
 6.4 Inventory; Returns. Borrower shall keep all Inventory in good and marketable condition, free from all material defects except for Inventory for
which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist at the time of the
execution and delivery of this Agreement. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims, where the return, recovery, dispute or claim involves more than Two Hundred and Fifty Thousand Dollars
($250,000). 
  
 6.5 Taxes. Borrower shall make, and shall
cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate certificates
attesting to the payment or deposit thereof; and Borrower will make, and will cause each Subsidiary to make, timely payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Bank with proof satisfactory to Bank indicating that Borrower or a Subsidiary has made such payments or
deposits; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower.

  
 6.6 Insurance. 
  
 (a) Borrower, at its expense, shall keep the Collateral insured against
loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where Borrower’s business is conducted on
the date hereof. Borrower shall also maintain insurance relating to Borrower’s business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrower’s. 
  
 (b) All such policies of insurance shall be in such form, with such
companies, and in such amounts as are reasonably satisfactory to Bank. All such policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee thereof,
and all liability insurance policies shall show the Bank as an additional insured and shall specify that the insurer must give at least twenty (20) days notice to Bank before canceling its policy for any reason. Upon Bank’s request, Borrower
shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums therefor. All proceeds payable under any such policy shall, at the option of Bank, be payable to Bank to be applied on account of the
Obligations. 
  
 6.7 Accounts. Borrower and Auxilium
Holdings, Inc. shall collectively maintain at least $10,000,000 in one or more investment accounts with Bank and/or an Affiliate of Bank. At any time that such balance is less than $10,000,000 Borrower and Auxilium Holdings, Inc. shall
maintain, and shall cause each of its Subsidiaries to maintain, all of its depository, operating, and investment accounts with Bank and/or an Affiliate of Bank, and shall maintain all of its cash and cash equivalents in such accounts. 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 15 

 6.8 Quick Ratio. At any time that Borrower and Auxilium Holdings, Inc.’s collective
unrestricted cash on deposit with Bank is less than $10,000,000 Borrower shall maintain at all times a ratio of (i) unrestricted cash on deposit with Bank plus Eligible Accounts to (ii) Current Liabilities minus the current portion of
deferred revenue minus Obligations specifically secured by cash on deposit with Bank, of at least [**]. 
  
 6.9 Cash Balance Cure. If the balance of unrestricted cash on deposit with Bank falls below $10,000,000, but Borrower transfers sufficient funds
within five Business Days into accounts with Bank to cause the balance to exceed $10,000,000, then the second sentence of Section 6.7 and all of Section 6.8 shall not apply; provided Borrower may exercise this right to cure only one time in any
calendar month and three times in any period of twelve consecutive months. Borrower authorizes Bank to decline to honor any checks, drafts or other items of payment or directions to wire or otherwise transfer funds from Bank if, after giving effect
to the payment of any such item, Borrower would not be in compliance with this Section 6.9. 
  
 6.10 Further Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes
of this Agreement. 
  
 7. NEGATIVE COVENANTS. 

 
 Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until payment in full of the outstanding Obligations or for so long as Bank may have any commitment to make any Credit Extensions, Borrower will not do any of the following: 
  
 7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose
of (collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than: (i) Transfers of Inventory in the ordinary course of business; (ii) Transfers of non-exclusive
licenses or exclusive licenses for territories or countries which are not being commercially exploited by Borrower and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business; or (iii)
Transfers of worn-out or obsolete Equipment which was not financed by Bank. 
  
 7.2 Change in Business; Change in Control or Executive Office. Engage in any business, or permit any of its Subsidiaries to engage in any business, other than the businesses currently engaged in by Borrower and
any business substantially similar or related thereto (or incidental thereto); or cease to conduct business in the manner conducted by Borrower as of the Closing Date; or suffer or permit a Change in Control; or without thirty (30) days prior
written notification to Bank, relocate its chief executive office or state of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which its fiscal year ends. 
  
 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with or into any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, except with respect to
transactions (i) among Borrower and its wholly owned Subsidiaries provided that Borrower is the surviving entity of each such transaction, and (ii) among Borrower’s wholly owned Subsidiaries. 
  
 7.4 Indebtedness. Create, incur, assume or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness. 
  
 7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens. Agree with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of its property, or
permit any Subsidiary to do so. 
  
 7.6 Distributions. Pay
any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of its Subsidiaries to do so, except that Borrower may repurchase the stock of former employees
pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase. 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A CONFIDENTIAL TREATMENT REQUEST. 
  

 16 

 7.7 Investments. Except as permitted pursuant to Section 6.7, directly or indirectly acquire or
own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments; or maintain or invest any of its property with a Person other than Bank or permit any of its Subsidiaries to do so unless
such Person has entered into an account control agreement with Bank in form and substance satisfactory to Bank; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or
otherwise distributing property to Borrower. 
  
 7.8
Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary course of Borrower’s business, upon fair and
reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person. 
  
 7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in
compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent. 
  
 7.10 Inventory and Equipment. Except as disclosed in the Schedule, store the Inventory or the Equipment with a
bailee, warehouseman, or other third-party unless the third-party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third-party that it is holding or will hold the Inventory or Equipment for
Bank’s benefit or (b) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Store or maintain any Equipment or Inventory at a location other than the location set forth in Section 10 of this
Agreement. 
  
 7.11 Compliance. Become an “investment
company” or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for
the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose. Fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to
occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien on the
Collateral, or permit any of its Subsidiaries to do any of the foregoing. 
  
 8. EVENTS OF DEFAULT. 
  
 Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement: 
  
 8.1 Payment Default. If Borrower fails to pay, when due, any of the Obligations and such failure continues for three (3) calendar days or more
after the due date, provided that within such 3-Day cure period, the failure to pay shall not be deemed an Event of Default, but no Credit Extensions will be made. 
  
 8.2 Covenant Default. 
  
 (a) If Borrower fails to perform any obligation under Article 6 or violates any of the covenants contained in Article 7 of this Agreement; or 

 
 (b) If Borrower fails or neglects to perform or observe any other
material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or
covenant that can be cured, has failed to cure such default within ten days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten
day period or cannot after diligent attempts by Borrower be cured within such ten day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case
exceed 30 days) to attempt to cure such default, and within such reasonable time period 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. 
  

 17 

 the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made.

  
 8.3 Material Adverse Effect. If there occurs any
circumstance or circumstances that could have a Material Adverse Effect; 
  
 8.4 Attachment. If any material portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person
acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if Borrower is enjoined, restrained, or in any way prevented by court order from
continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record
with respect to any material portion of Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten
(10) days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period); 
  
 8.5 Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not dismissed or stayed within forty
five (45) days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding); 
  
 8.6 Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party or by which it is bound
resulting in a right by a third-party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Seventy Five Thousand Dollars ($75,000) or which could have a Material Adverse Effect; 

 
 8.7 Subordinated Debt. If Borrower makes any payment on account of
Subordinated Debt, except to the extent such payment is allowed under any subordination agreement entered into with Bank; 
  
 8.8 Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred and
Fifty Thousand Dollars ($250,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of thirty (30) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment);

  
 8.9 Audits. If any audit obtained by Bank under
Section 6.3 is not, in form and substance, reasonably satisfactory to Bank; or 
  
 8.10 Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any
Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan Document. 
  
 8.11 Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any reason to be in full force and
effect, or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under any Guaranty Document or any guarantor
revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any certificate delivered to Bank in connection
with any Guaranty Document, or if any of the circumstances described in Sections 8.3 through 8.8 occur with respect to any guarantor or any guarantor dies or becomes subject to any criminal prosecution, or any circumstances arise causing Bank, in
good faith, to become insecure as to the satisfaction of any of any guarantor’s obligations under the Guaranty Documents. 
  
 ** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST. 
  

 18 

 8.12 If Auxilium Holdings Inc. (i) undertakes any business activities other than the holding of cash and
intellectual property and the licensing of such intellectual property, (ii) creates, incurs, assumes or remains liable with respect to any Indebtedness other than Indebtedness in favor of service professionals arising in connection with professional
services rendered to Auxilium Holdings Inc and running expenses which shall not, in the aggregate, exceed $20,000. 
  
 9. BANK’S RIGHTS AND REMEDIES. 
  
 9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its
election and without demand, do any one or more of the following, all of which are authorized by Borrower: 
  
 (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided
that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become immediately due and payable without any action by Bank); 
  

(b) Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and
Bank; 
  
 (c) Settle or adjust disputes and claims directly with
account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable; 
  
 (d) Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to
assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With
respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at
law, in equity, or otherwise; 
  
 (e) Set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Bank; 
  
 (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with
Bank’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit; 
  
 (g) Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at
such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate; 
  
 (h) Bank may credit bid and purchase at any public sale; and 
  
 (i) Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by Borrower. 
  
 ** 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. 
  

 19 

 9.2 Power of Attorney. Effective only upon the occurrence and during the continuance of an Event
of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Bank’s
security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of lading relating to any
Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to
Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; (g) to file, in its sole discretion, one or
more financing or continuation statements and amendments thereto, relative to any of the Collateral. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated. 
  
 9.3 Accounts Collection. At any time during the term of this Agreement, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of such Account. Upon the occurrence and during the continuance of an Event of Default, Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all
payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit. 
  
 9.4 Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons
or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under a loan facility in Section
2.1 as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.6 of this Agreement, and take any action with respect to such policies as Bank
deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any
payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement. 
  
 9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices, Bank shall not
in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default
of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower. 
  
 9.6 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other
agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank
of any Event of Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf
of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given. 
  
 9.7 Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of
any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any way be liable. 
  
 10. NOTICES. 
  
 Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be

  
 ** 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. 
  

 20 

 personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt
requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below: 
  

			
	If to Borrower:	  	Auxilium Pharmaceuticals, Inc.
	 	  	160 West Germantown
	 	  	Pike Norristown, PA 19401
	 	  	Attn: Neil Lansing, Chief Financial Officer
	 	  	FAX: (610) 279-8205
		
	If to Bank:	  	Comerica Bank
	 	  	9920 S. La Cienega Blvd., Suite 1401
	 	  	Inglewood, CA 90301
	 	  	Attn: Manager
	 	  	FAX: (310) 338-6110
		
	with a copy to:	  	Comerica Bank
	 	  	100 Federal Street, 28th Floor
	 	  	Boston, MA 02110
	 	  	Attn: Parag Shah
	 	  	FAX: (617) 757-6351

  
 The parties hereto may
change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. 
  
 11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 
  
 This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
  
 12. GENERAL PROVISIONS. 
  
 12.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties;
provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without
the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder. 
  
 12.2 Indemnification. Borrower shall defend, indemnify and hold harmless
Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank
Expenses in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation
reasonable attorneys’ fees and expenses), except for fees paid before the Closing Date pursuant to Section 2.5 of this Agreement and for losses caused by Bank’s gross negligence or willful misconduct. 
  
 ** 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. 
  

 21 

 12.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in
this Agreement. 
  
 12.4 Severability of Provisions. Each
provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 
  
 12.5 Amendments in Writing, Integration. Neither this Agreement nor the Loan Documents can be amended or terminated
orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan
Documents. 
  
 12.6 Counterparts. This Agreement may be
executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same
Agreement. 
  
 12.7 Survival. All covenants,
representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions to Borrower. The obligations of Borrower to indemnify
Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run. 
  
 12.8 Confidentiality. In handling any confidential information Bank
and all employees and agents of Bank, including but not limited to accountants, shall maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may
be made (i) to the subsidiaries or affiliates of Bank in connection with their present or prospective business relations with Borrower, (ii) to prospective transferees or purchasers of any interest in the Loans, provided that they have entered into
a comparable confidentiality agreement in favor of Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may be required in connection with the
examination, audit or similar investigation of Bank and (v) as Bank may reasonably determine in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the
public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third-party, provided Bank does not have actual
knowledge that such third-party is prohibited from disclosing such information. 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 
  

			
	AUXILIUM PHARMACEUTICALS, INC.
		
	 By:
	 	 /s/    Cornelius Lansing        

	 Title:
	 	CFO

  

			
	COMERICA BANK
		
	By:	 	 /s/    Parag Shah        

	 Title:
	 	  

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

 22 

			
		
	DEBTOR	  	Auxilium Pharmaceuticals, Inc.
		
	SECURED PARTY:	  	Comerica Bank

  
 EXHIBIT A

  
 COLLATERAL DESCRIPTION ATTACHMENT 
 TO LOAN AND SECURITY AGREEMENT 
  
 All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or
acquired, and wherever located, including, but not limited to: 
  
 (a) all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions
thereto), general intangibles (including payment intangibles but excluding patents, trademarks and copyrights), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be
furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any
of the foregoing, and the computers and equipment containing said books and records; 
  
 (b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment.
All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9 of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999,
c.991 (S.B. 45), Section 35, operative July 1, 2001. 
  

 23

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