Document:

Investor Rights Agreement

 EXHIBIT 4.2 
  

AUXILIUM PHARMACEUTICALS, INC. 
  
 THIRD AMENDED AND RESTATED 
 INVESTOR
RIGHTS AGREEMENT 
  
 THIS THIRD AMENDED AND RESTATED INVESTOR
RIGHTS AGREEMENT (this “Agreement”) is entered into as of October 31, 2003, by and among Auxilium Pharmaceuticals, Inc., a Delaware corporation (the “Company”), the holders of the Company’s Series A Preferred Stock, par
value $0.01 per share (the “Series A Preferred Stock”), set forth on Exhibit A (the “Series A Investors”), the holders of the Company’s Series B Preferred Stock, par value $0.01 per share (the “Series B Preferred
Stock”), set forth on Exhibit B (the “Series B Investors”), the holders of the Company’s Series C Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), set forth on Exhibit C (the
“Series C Investors”) and the holders of the Company’s Series D Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”), set forth on Exhibit D (the “Series D Investors”). 
  
 RECITALS 
  
 WHEREAS, the Company, the Series A Investors, the Series B Investors and the Series C Investors entered into an Amended and
Restated Investor Rights Agreement, dated as of June 21, 2003 (the “Prior Investor Rights Agreement”), in connection with the Company’s sale of up to 10,283,336 shares of its Series C Preferred Stock to the Series C Investors and
warrants to purchase 3,085,001 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”); 
  
 WHEREAS, the Company and the Series D Investors have entered into the Series D Preferred Stock Purchase Agreement, dated of even date herewith (the
“Purchase Agreement”), providing for, among other things, the sale and issuance of an aggregate of 28,752,365 shares of the Series D Preferred Stock and warrants to purchase up to 8,634,339 shares of the Series D Preferred Stock in
accordance with the terms and conditions set forth in the Purchase Agreement; 
  
 WHEREAS, Section 5.6 of the Prior Investor Rights Agreement provides that such agreement may be amended by the written agreement of the Company, the holders of at least a majority of the shares of the Series A
Preferred Stock, the holders of at least a majority of the shares of the Series B Preferred Stock, and the holders of at least a majority of the shares of the Series C Preferred Stock; 
  
 WHEREAS, the Series A Investors that are signatories hereto own at least a majority of the Series A Preferred Stock
necessary to amend the Investors’ Rights Agreement; 
  
 WHEREAS, the Series B Investors that are signatories hereto own at least a majority of the Series B Preferred Stock necessary to amend the Investors’ Rights Agreement; 
  
 WHEREAS, the Series C Investors that are signatories hereto own at least a majority of the Series C Preferred Stock
necessary to amend the Investors’ Rights Agreement; 

 WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to induce the Series D
Investors to invest funds in the Company pursuant to the Purchase Agreement, the Series A Investors, the Series B Investors, the Series C Investors and the Company hereby desire to amend and restate the Prior Investor Rights Agreement, such that
this Agreement shall govern the rights of the Series A Investors, the Series B Investors, the Series C Investors and the Series D Investors (the Series A Investors, the Series B Investors, the Series C Investors and the Series D Investors
hereinafter collectively referred to as the “Investors”) to cause the Company to register its shares of Common Stock issuable to the Investors upon conversion of the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock and the Series D Preferred Stock and to address certain other matters as set forth herein; and 
  
 WHEREAS, the execution and delivery of this Agreement by the Company and the Investors is a condition to the closing of the issuance, sale and purchase of
the Series D Preferred Stock pursuant to the Purchase Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this Agreement and the investment of the Series D Investors in the Series D Preferred Stock, the parties, intending
to be legally bound hereby, mutually agree as follows: 
  
 SECTION 1. GENERAL

  
 1.1 Definitions. As used in this Agreement the
following terms shall have the following respective meanings: 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. 
  
 “Holder” means any person owning of record Registrable Securities that have not been sold to the
public or any assignee of record of such Registrable Securities in accordance with Section 2.9. 
  
 “Initial Public Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock
registered under the Securities Act. 
  
 “Litigation” means the litigation resulting from the complaints filed against the Company, Auxilium Holdings, Inc., and Geraldine Henwood in the Superior Court of Delaware in April 2002 (C.A. No. 02C-03-208).

  
 “Qualified Public Offering” means an
underwritten, firm commitment public offering registered under the Securities Act covering the offer and sale by the Company of its Common Stock in which (i) the aggregate proceeds to the Company equal or exceed $40,000,000 (calculated after
deducting underwriters’ discounts and commissions and other offering expenses), and (ii) at a price per share to the public that is at least two times the then applicable conversion price of the Series D Preferred Stock. 
  

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 “Register,” “registered,” and “registration”
refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document. 
  
 “Registrable Securities” means (a) Common Stock of
the Company issued or issuable upon conversion of the Shares; (b) any Common Stock of the Company issued or issuable upon exercise and conversion, if applicable, of the warrants issued to the Investors under the Series A Preferred Stock Purchase
Agreement, dated July 18, 2000, by and among the Company and the Series A Investors, the Series B Preferred Stock Purchase Agreement, dated October 12, 2001, by and among the Company and the Series B Investors, the Series C Preferred Stock Purchase
Agreement, dated June 21, 2003, by and among the Company and the Series C Investors and the Purchase Agreement (collectively, the “Warrants”); and (c) any Common Stock of the Company issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above described securities. Notwithstanding the foregoing, Registrable Securities shall not
include any securities sold by a person to the public pursuant to a registration statement or Rule 144 or sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned. 
  
 “Registrable Securities then outstanding” shall be
the number of shares determined by calculating the total number of shares of the Company’s Common Stock that are Registrable Securities and are then issued, outstanding or issuable pursuant to then exercisable or convertible securities.

  
 “Registration Expenses” shall mean all
expenses incurred by the Company in complying with Sections 2.2, 2.3 and 2.4, including all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special
counsel for the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the
Company). 
  
 “SEC” or
“Commission” means the Securities and Exchange Commission. 
  
 “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 “Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale. 
  
 “Shares” shall mean the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock issued to the Investors and their permitted assigns, and the shares of Series D Preferred Stock issued or issuable upon the exercise and conversion, if
applicable, of the warrants to purchase Series D Preferred Stock issued to the Investors under the Purchase Agreement. 
  

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 SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER 
  
 2.1 Restrictions on Transfer. 
  
 (a) In addition to the restriction of transfer contained in the Third Amended and Restated Stockholders Agreement, dated as
of the date hereof, no Holder shall make any disposition of all or any portion of the Shares or Registrable Securities unless and until: 
  
 (i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; 
  
 (ii) Such
disposition is made pursuant to and in compliance with Rule 144; or 
  
 (iii) (A) The proposed transferee has agreed in writing to be bound by the terms of this Agreement by executing a counterpart signature page in the form attached as Annex A (the “Counterpart Signature Page”) (which shall
not be deemed to be an amendment hereto), (B) such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (C)
if reasonably requested by the Company, such Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Securities Act.

  
 Notwithstanding the provisions of paragraphs (i), (ii) and
(iii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by a Holder which is: (A) a Holder’s transfer of any or all shares held either during such Holder’s lifetime or on death by will or
intestacy to such Holder’s immediate family or to any custodian or trustee for the account of such Holder or such Holder’s immediate family (“immediate family” as used herein shall mean spouse, lineal descendant, father, mother,
brother, or sister of the Holder making such transfer); (B) a Holder’s transfer of any or all of such Holder’s shares to the Company or to any other stockholder of the Company; (C) a Holder’s transfer of any or all of such
Holder’s shares to a person who, at the time of such transfer, is an officer or director of the Company; (D) a corporate Holder’s transfer of any or all of its shares pursuant to and in accordance with the terms of any merger,
consolidation, reclassification of shares or capital reorganization of the corporate Holder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate Holder; (E) a corporate Holder’s transfer of any or all of its
shares to any or all of its stockholders; (F) a transfer by a Holder which is a limited or general partnership to any or all of its partners or former partners in connection with a liquidation or withdrawal event; (G) a transfer by a Holder to a
limited partnership (or other similar entity) in which at least 90% of the general and limited partnership interests are held by, or in trust for, the Holder’s immediate family; (H) a transfer by a limited liability company to its members or
former members in accordance with their interest in the limited liability company; (I) a transfer by a Holder to an affiliate; and (J) a transfer by a Holder to a retirement plan (regardless of form) created by a Holder for the primary benefit of,
or in trust for, the Holder and/or such Holder’s immediate family or a transfer from such retirement plan to the designated beneficiary or beneficiaries thereof; provided that in each of the cases provided above the transferee has agreed
in writing to 
  

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 be bound by the terms of this Agreement by executing a Counterpart Signature Page (which shall not be deemed to be an
amendment hereto), and such transfer is in compliance with all applicable federal and state securities laws. 
  
 (b) Each certificate representing Shares or Registrable Securities shall (unless otherwise permitted by the provisions of the Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws): 
  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED. 
  
 (c) The Company shall be
obligated to reissue promptly unlegended certificates at the request of any holder thereof if the holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be unlegended may lawfully be so disposed of without registration, qualification or legend. 
  
 (d) Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop transfer instructions with respect to such securities
shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal. 
  
 2.2 Demand Registration. 
  
 (a) Subject to the conditions of this Section 2.2, if the Company receives a request from the Holders of at least 50% of the Registrable Securities then
outstanding (the “Initiating Holders”) that the Company file a Registration Statement under the Securities Act then the Company shall, within 15 days of the receipt thereof, give notice of such request to all Holders. The Holders shall
have the right, by giving written notice to the Company within 15 days after the Company provides its notice, to elect to have included in such registration such of their Registrable Shares as such Holders may request in such notice of election, and
the Company shall use its best efforts to effect, as soon as practicable, the registration of all Registrable Securities that the Holders request to be registered in such notice of election (and shall promptly notify in writing the Holders
registering Registrable Securities registered under any such Registration Statement once any such Registration Statement has been declared effective). 
  

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 (b) If the Initiating Holders intend to distribute the Registrable Securities by means of an
underwriting, they shall so advise the Company as a part of their demand pursuant to this Section 2.2 or Section 2.4 and the Company shall include such information in the notice referred to in Section 2.2(a) or Section 2.4(a), as applicable. In such
event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon participation in such underwriting. The underwriter or underwriters for such offering shall be selected by a majority in interest of
the Holders participating in such offering, subject to the approval of the Board of Directors of the Company (the “Board”), which approval shall not be unreasonably withheld. Notwithstanding any other provision of this Section 2.2 or
Section 2.4, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities) then the Company shall so advise all participating Holders, and the
number of shares that may be included in the underwriting and registration shall be allocated pro rata to the participating Holders based on the number of Registrable Securities held; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities of the Company proposed to be included in such underwriting and registration by holders of the Company’s securities are
first entirely excluded from the underwriting and registration. If all of the Registrable Securities so requested for registration by the Holders requesting registration are excluded from an offering under Section 2.2(a) by the underwriter or
underwriters for such offering (a “Reload Event”), then such Holders shall have the right to one additional Demand Registration under Section 2.2(a) upon the occurrence of each Reload Event. 
  
 (c) The Company shall not be required to effect any such registration
pursuant to this Section 2.2: 
  
 (i) prior to the earlier of
(A) the second anniversary of the date of this Agreement or (B) six months following the effective date of the registration statement pertaining to an Initial Public Offering; 
  
 (ii) the aggregate offering price of the proposed underwriting and registration is less than $5.0 million; 
  
 (iii) after the Company has effected two registrations pursuant to this
Section 2.2, and such registrations have been declared or ordered effective, and the securities offered pursuant to such registrations have been sold; 
  
 (iv) during the period starting with the date of filing of, and ending on the date six months following the effective date of a registration statement
pertaining to the Initial Public Offering or to any other underwritten public offering made pursuant to this Section 2.2 or Section 2.4 or in which the Holders were given the opportunity to participate pursuant to Section 2.3 and no more than 25% of
the Registrable Securities so requested to be registered by the Holders were excluded from any such registration; provided that the Company makes reasonable and diligent good faith efforts to cause such registration statement to become
effective; 
  

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 (v) if within 15 days of receipt of a written request from the Initiating Holders pursuant to Section
2.2(a), the Company gives notice to the Holders of the Company’s intention to make its Initial Public Offering within 120 days; 
  
 (vi) if the Company shall furnish to the Initiating Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of
the Board, it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders; provided that such right to delay a request shall be exercised by the Company not more than once in any 12-month period; or 
  
 (vii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered
on Form S-3 pursuant to a request made pursuant to Section 2.4 below. 
  
 (d) If any Holder of Registrable Securities disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the Initiating Holders delivered at least 15 days
prior to the effective date of the Registration Statement; provided, however, that if the number of Registrable Securities withdrawn in accordance herewith would result in the registration of less than 20% of the Registrable Securities
then outstanding (or a lesser percent if the anticipated aggregate offering price would exceed $5,000,000), then the Company shall not be required to effect a registration pursuant to this Section 2.2, and the Company shall not be required to pay
the Registration Expenses incurred to date. The securities so withdrawn shall also be withdrawn from the Registration Statement. 
  
 2.3 Piggyback Registrations. Following the Company’s Initial Public Offering, the Company shall notify all Holders at least 30 days prior to
the filing of any registration statement under the Securities Act for a public offering of securities of the Company (including registration statements relating to secondary offerings of securities of the Company, but excluding registration
statements relating to employee benefit plans or corporate reorganizations or other transactions under Rule 145 of the Securities Act) and will afford each such Holder an opportunity to include in such registration statement all or part of the
Registrable Securities held by such Holder. Each Holder desiring to include Registrable Securities in any such registration statement shall notify the Company within 15 days after the notice from the Company. Such notice shall state the intended
method of disposition of the Registrable Securities by such Holder. If a Holder decides not to include all of its Registrable Securities in any registration statement filed by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company, all upon the terms and conditions set forth herein. 
  
 (a) Underwriting. If the registration statement under which the Company gives notice under this Section 2.3 is for an
underwritten offering, the Company shall so advise the Holders. In such event, the right of any Holder to be included in a registration pursuant to this Section 2.3 shall be conditioned upon the Holder’s participation in the underwriting.
Notwithstanding any other provision of the Agreement, if the underwriter determines in good 
  

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 faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that
may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders pro rata based on the total number of Registrable Securities held by the Holders; and third, to any stockholder of the Company (other than a
Holder) on a pro rata basis. Notwithstanding the foregoing, no such reduction shall reduce the amount of securities of the selling Holders included in the registration below 25% of the total amount of securities included in such registration, unless
such offering is the Initial Public Offering. 
  
 (b) Right to
Terminate Registration. The Company shall give written notice of its determination to terminate or withdraw any registration initiated by it under this Section 2.3 promptly after the occurrence thereof. The Registration Expenses of such
withdrawn registration shall be borne by the Company in accordance with Section 2.5. 
  
 (c) If any Holder disapproves of the terms of any such underwriting, such person may elect to withdraw therefrom by written notice to the Company and the underwriter delivered at least fifteen days prior to the
effective date of the Registration Statement. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such Registration. 
  
 2.4 Form S-3 Registration. 
  

(a) If the Company shall receive from any Holder or Holders a request that the Company effect a registration on Form S-3 (or any successor to Form S-3)
or any similar short form registration statement, and any related qualification or compliance, with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will: 
  
 (i) promptly give notice of the proposed registration, and any related
qualification or compliance, to all other Holders of Registrable Securities; and 
  
 (ii) as soon as practicable, effect such registration and all such qualifications and compliances as would permit or facilitate the sale and distribution of the Registrable Securities specified in such request,
together with the Registrable Securities of any other Holder or Holders joining in such request by notice to the Company given within 15 days after receipt of such notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4: 
  
 (1) if Form S-3 (or any successor or similar form) is not available for such offering by the Holders, or 
  
 (2) if the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $1,000,000, or 
  
 (3) if the Company shall furnish to the Holders a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company
shall have the right to 
  

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 defer the filing of the Form S-3 registration statement for a period of not more than 120 days after receipt of the
request of the Holder or Holders under this Section 2.4; provided, that such right to delay a request shall be exercised by the Company not more than once in any 12-month period, or 
  
 (4) if the Company has, within the 12-month period preceding the date of
such request, already effected a registration on Form S-3 for the Holders pursuant to this Section 2.4, or 
  
 (5) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance. 
  
 (b) Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of
the Holders. Registrations effected pursuant to this Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 2.2 or 2.3, respectively. If the Initiating Holders intend to distribute Registrable
Shares pursuant to an underwriting, they shall so advise the Company in the demand pursuant to Section 2.2(a). 
  
 (c) After the Company’s Initial Public Offering, the Company will use its commercially reasonable efforts to qualify for the registration of its
shares of Common Stock on Form S-3. 
  
 2.5 Expenses of
Registration. Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall
be borne by the Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the Company or the stockholders selling the securities on a pro-rata basis, as the case may be. The Company shall not, however,
be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2, the request of which has been subsequently withdrawn by the Initiating Holders unless the withdrawal is based upon material adverse information concerning
the Company (including a material drop in the market price of the Company’s common stock) of which the Initiating Holders were not aware at the time of such request. If the Holders are required to pay the Registration Expenses, such expenses
shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested. Notwithstanding the foregoing, the Holders shall be solely
responsible for the fees and expenses of any counsel retained by such Holders on a pro-rata basis in connection with such withdrawn registration (other than a withdrawal which is based upon material adverse information concerning the Company,
including a material drop in the market price of the Company’s common stock, of which the Initiating Holders were not aware at the time of such request) and any transfer taxes or Selling Expenses incurred by the Holders in connection therewith.

  

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 2.6 Obligations of the Company. Whenever required to register any Registrable Securities, the
Company shall, as expeditiously as reasonably possible: 
  
 (a)
Prepare and file with the SEC a registration statement with respect to such Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415 promulgated under the Securities Act for a registration pursuant to Section 2.4,
and use all reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to six
months for a registration pursuant to Section 2.2 and for up to twenty-four months for a registration pursuant to Section 2.4 or, if earlier, until the Holder or Holders have completed the distribution related thereto; provided,
however, that (x) before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall provide counsel selected by the Holders holding a majority of the Registrable Securities being registered in
such registration (“Holders’ Counsel”) with an adequate and appropriate opportunity to review and comment on such Registration Statement and each prospectus included therein (and each amendment or supplement thereto) to be filed with
the SEC, subject to such documents being under the Company’s control, and (y) the Company shall notify the Holders’ Counsel and each seller of Registrable Securities of any stop order issued or threatened by the SEC and take all action
required to prevent the entry of such stop order or to remove it if entered or of the receipt of any SEC comment letter (a copy of which shall be provided to Holders’ Counsel). 
  
 (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in paragraph (a)
above. 
  
 (c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

  
 (d) Use its reasonable best efforts to register and qualify
the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. 
  
 (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form,
with the managing underwriter(s) of such offering. 
  
 (f) Notify
in writing each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing. 
  

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 (g) Use its reasonable best efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters. 
  
 (h) Keep Holders’ Counsel advised in writing as to the initiation and progress of any registration under Sections 2.2, 2.3 and 2.4 hereunder.

  
 (i) Take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby. 
  
 2.7 Furnishing Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of disposition of such securities and such other information as shall be required to effect the registration of their Registrable Securities as the Company may reasonably
request in writing. 
  
 2.8 Indemnification. In the event
any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4: 
  
 (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder and the partners, officers, directors, stockholders and
Affiliates (as defined below) of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against
any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will pay as incurred to each such Holder, partner, officer, director, stockholder, underwriter, Affiliate or controlling
person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action (subject to recoupment if this indemnification is determined to be inapplicable);
provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement 
  

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 is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in
connection with such registration by such Holder, partner, officer, director, stockholder, underwriter, Affiliate or controlling person of such Holder. The term “Affiliate” for purposes of this Section 2.8 shall mean, with respect to any
person, any other person that, directly or indirectly, controls, is controlled by, or is under common control with, such person. 
  
 (b) To the extent permitted by law, each Holder, will severally and not jointly, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors, officers, stockholders, Affiliates or any person who controls such Holder, against any
losses, claims, damages or liabilities to which the Company or any such person may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly
executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder, severally and not jointly, will pay as incurred any legal or other expenses reasonably incurred by the Company or any such
person in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this
Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided
further, that in no event shall any indemnity under this Section 2.8 exceed the net proceeds from the offering received by such Holder. 
  
 (c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, but the omission so to
deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8. 
  

 12 

 (d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction
to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable
law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified
party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed
the net proceeds from the offering received by such Holder. The parties hereto hereby acknowledge that it would not be just and equitable if contribution pursuant to this Section 2.8(d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. 
  
 (e) The
obligations of the Company, Holders under this Section 2.8 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or litigation. 
  
 2.9 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable
Securities which (a) is a subsidiary, parent, general partner, limited partner, retired partner, member, retired member or affiliate of a Holder, (b) is a Holder’s immediate family member or trust for the benefit of an individual Holder or
immediate family members or (c) any third-party purchaser; provided, however, (i) the transferor shall, within 10 days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being assigned, (ii) such transferee or assignee receives in such transfer or assignment at least 800,000 shares, provided, however, if the transferee or assignee is
a subsidiary, parent, general partner, limited partner, retired partner, member, retired member or affiliate of a Holder, or is a Holder’s immediate family member or trust for the benefit of an individual Holder or immediate family members no
such minimum amount of shares shall be required for the assignment of the registration rights; (iii) such transferee shall agree to be subject to all restrictions set forth in this Agreement by executing a Counterpart Signature Page (which shall not
be deemed to be an amendment hereto), and (iv) such assignment or transfer shall be in compliance with all federal and state securities laws. 
  

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 2.10 Amendment of Registration Rights. Any provision of this Section 2 may be amended and the
observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of at least a majority of the Registrable Securities held by the
Series A Investors then outstanding, at least a majority of the Registrable Securities held by the Series B Investors then outstanding, at least a majority of the Registrable Securities held by the Series C Investors then outstanding and at least a
majority of the Registrable Securities held by the Series D Investors then outstanding, each voting as a separate class. Any amendment or waiver effected in accordance with this Section 2.10 shall be binding upon each Holder and the Company. By
acceptance of any benefits under this Section 2, Holders of Registrable Securities hereby agree to be bound by the provisions hereunder. 
  
 2.11 Limitation on Subsequent Registration Rights. After the date of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the Registrable Securities then outstanding held by the Series A Investors, a majority of the Registrable Securities then outstanding held by the Series B Investors, a majority of the Registrable Securities then
outstanding held by the Series C Investors and a majority of the Registrable Securities then outstanding held by the Series D Investors, enter into any agreement with any holder or prospective holder of any securities of the Company that would grant
such holder registration rights pari passu or senior to those granted to the Holders hereunder. 
  
 2.12 “Market Stand-Off” Agreement; Agreement to Furnish Information. No Holder shall sell or otherwise transfer (other than transfers by
a Holder to an affiliate of such Holder) or dispose of any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) for a period specified by the representative of the underwriters of
Common Stock (or other securities) of the Company not to exceed 180 days following the effective date of a registration statement of the Company filed under the Securities Act; provided that: 
  
 (i) such agreement shall apply only to the Company’s Initial Public
Offering; 
  
 (ii) all officers, directors and 5% stockholders of
the Company enter into similar agreements; and 
  
 (iii) each
Holder shall execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the
Company or the representative of the underwriters of Common Stock (or other securities) of the Company, each Holder shall provide, within 10 days of such request, such information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 2.12 shall not apply to a registration relating
solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be 
  

 14 

 promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said 180-day period. 
  
 2.13 Rule 144 Reporting. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company shall use its best efforts to: 
  
 (a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general
public; 
  
 (b) File with the SEC, in a timely manner, all reports
and other documents required of the Company under the Exchange Act; and 
  
 (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of
the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company; and such other reports and documents so filed by the Company, and such other information
as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration. 
  
 SECTION 3. COVENANTS OF THE COMPANY 
  
 3.1 Basic Financial Information and Reporting. 
  
 (a) The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant
to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied, and will set aside on its books all such proper accruals and reserves as shall be required under generally
accepted accounting principles consistently applied. 
  
 (b) As
soon as practicable after the end of each fiscal year of the Company, and in any event within 90 days thereafter, the Company will furnish each Investor with audited financial statements of the Company prepared by a major accounting firm selected by
the Board and in accordance with generally accepted accounting principles consistently applied. 
  
 (c) As soon as practicable, and in any event not later at the Company’s December Board meeting, the Company will furnish each Investor with an annual
budget for the next fiscal year approved by the Board (and as soon as available, any subsequent revisions thereto) including projected income statements, cash flows and balance sheets on a quarterly basis for the ensuing fiscal year. 
  
 (d) As soon as practicable after the end of each calendar month, and in any
event within 30 days thereafter, consolidated balance sheets of the Company as of the end of 
  

 15 

 each calendar month, and consolidated statements of income and cash flows of the Company for such month and for the
current fiscal year to date, prepared in accordance with generally accepted accounting principles consistently applied, excluding footnotes and year-end adjustments, and a narrative discussion and analysis, of the results of operations and financial
condition of the Company and setting forth in each case in comparative form the figures for such month and the figures from the most recent budget approved by the Board, and an analysis of the Company’s compliance with applicable loan
covenants, if any, all in reasonable detail. Such financial statements shall include a narrative discussion and analysis of the financial condition of the Company prepared by the Chief Financial Officer of the Company summarizing the foregoing.

  
 (e) In the event that the Company fails to provide the
financial statements and/or monthly reports required by Sections 3.1(b) and 3.1(d), the Investors may, at the Company’s expense, request an audit by an accounting firm of their own choice such that such financial statements and/or monthly
reports are produced to the Investors’ satisfaction. 
  
 (f)
Within 10 days after discovery of any default in the performance of the covenants and agreements contained in this Section 3.1, the Company shall furnish each Investor a statement outlining such default or event, and management’s proposed
response to such default or event. 
  
 3.2 Inspection
Rights. Each Investor shall have the right to visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and
to review such information as is reasonably requested all during normal business hours following reasonable notice and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this
Section 3.2 with respect to any Investor that is a competitor of the Company. 
  
 3.3 Confidentiality of Records. Each Investor shall use, and shall use its reasonable best efforts to cause its authorized representatives to use, the same degree of care as such Investor uses to protect its
own confidential information to keep confidential any information furnished to it which the Company identifies in writing as being confidential or proprietary (so long as such information is not in the public domain), except that such Investor may
disclose such proprietary or confidential information to any partner, subsidiary, affiliate or parent of such Investor for the purpose of evaluating its investment in the Company as long as such partner, subsidiary, affiliate or parent is advised of
the confidentiality provisions of this Section 3.3. Notwithstanding the foregoing, information shall not be deemed confidential if (a) at the time of disclosure it is generally available to and known by the public (other than as a result of a
disclosure directly by the recipient or any of its representatives), (b) was available to the recipient on a non-confidential basis from a source that is not and was not prohibited from disclosing such information to the recipient by a contractual,
legal or fiduciary obligation or (c) is known to the recipient prior to or independently of its relationship with the Company. 
  
 3.4 Reservation of Common Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of
the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and the exercise of the Warrants, all shares of Common Stock issuable from time to time upon such conversion and exercise.

  

 16 

 3.5 Stock Vesting. Unless otherwise approved by the Board, all stock options and other stock
equivalents issued after the date of this Agreement to employees, directors, consultants and other service providers shall be subject to vesting over four years. With respect to any shares of stock purchased by any such person pursuant to the
exercise of any stock options, the Company shall have the following rights (to the extent permissible under applicable securities laws and other laws): (a) until the Company’s Initial Public Offering, the Company or its assignee shall have a
right of first refusal to purchase such shares of stock should the holder thereof desire to sell any such shares; and (b) the Company’s repurchase option shall provide that upon such person’s termination of employment or service with the
Company, with or without cause, the Company or its assignee (to the extent permissible under applicable securities laws and other laws) shall have the option until the Initial Public Offering, to purchase at fair market value (as determined in good
faith by the Board) any vested shares of stock held by such person. 
  
 3.6 Employee Non-Disclosure, Assignment of Developments and Non-Solicitation Agreement. The Company shall require all employees and consultants to execute and deliver an Employee Non-Disclosure, Assignment of Developments and
Non-Solicitation Agreement substantially in the form attached as Exhibit 3.15 to the Purchase Agreement. 
  
 3.7 Board Observation. 
  
 (a) Prior to a Qualified Public Offering, the following Holders shall have the right to have a representative attend all meetings of the Board of
Directors (whether in person, by telephone or otherwise) in a non-voting observer capacity and shall be entitled to receive, concurrently with the members of the Board, and in the same manner, notice of such meeting and a copy of all materials,
consents and resolutions provided to such members of the Board: 
  
 (i) The Sprout Group, beginning on the date on which Sprout Capital IX, L.P. and its affiliates are not represented on the Board and ending on the date that Sprout Capital IX, L.P. and its affiliates owns less than 20% of the Series D
Preferred Stock purchased by Sprout Capital IX, L.P. and its affiliates on the date hereof or Common Stock issuable upon conversion of such series of Preferred Stock; 
  
 (ii) Perseus-Soros Biopharmaceutical Fund, L.P. (“PSBF”), beginning on the date on which PSBF is not represented
on the Board and ending on the date that PSBF owns less than 20% of the Series B Preferred Stock purchased by it on October 12, 2001 and the Series C Preferred Stock purchased by it on June 21, 2002 or Common Stock issuable upon conversion of such
series of Preferred Stock; 
  
 (iii) Orbimed Advisors, LLC,
beginning on the date on which Caduceus Private Investments II, LP (“Caduceus”) and its affiliates are not represented on the Board and ending on the date that Caduceus and its affiliates own less than 20% of the Series D Preferred Stock
purchased by it on the date hereof or Common Stock issuable upon conversion of such series of Preferred Stock; 
  

 17 

 (iv) BB Biotech (“BB”), or an affiliate thereof, until such time as BB and its affiliates own
less than 20% of the Series D Preferred Stock purchased by BB on the date hereof or Common Stock issuable upon conversion of such series of Preferred Stock; 
  
 (v) SCP Private Equity Partners II, L.P. (“SCP”), beginning on the date on which SCP is not represented on the Board and ending on the date
that SCP and its affiliates own less than 1.0 million shares of the capital stock of the Company; 
  
 (vi) Lehman Brothers Healthcare Venture Capital L.P. (“Lehman”), or an affiliate thereof, until such time as Lehman and its affiliates own less
than 20% of the Series C Preferred Stock purchased by Lehman and its affiliates on June 21, 2002 or the Common Stock issuable upon conversion thereof; and 
  
 (vii) Schroder Ventures Life Sciences Fund II LPI (“Schroders”), or an affiliate thereof, until such time as Schroders and its affiliates own
less than 20% of the Series C Preferred Stock purchased by Schroders and its affiliates on June 21, 2002 or the Common Stock issuable upon conversion thereof. 
  

(b) The Company shall hold meetings of the Board not less than quarterly. 
  
 (c) After the date hereof the Company shall create a search committee to initiate a search for a President/Chief Operating
Officer, which search committee shall include at least one director designated by the holders of a majority of the shares of Series D Preferred Stock. 
  
 3.8 Directors’ Expenses. The Company shall reimburse each member of the Board for all reasonable expenses incurred by the director to attend
board meetings and any other expenses incurred in connection with the Company’s business approved by the Chief Executive Officer or President of the Company. 
  
 3.9 Directors’ Liability and Indemnification. The Company’s Fourth Restated Certificate of Incorporation
and By-laws shall provide (a) for elimination of the liability of directors to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the maximum extent permitted by law. 
  
 3.10 Indemnification. The Company will indemnify members of the Board
to the broadest extent permitted by applicable law and will indemnify each Investor for any claims brought against the Investors by any third-party (including any other stockholder of the Company) as a result of this financing. 
  
 3.11 Real Property Holding Corporation. The Company covenants that it
will operate in a manner such that it will not become a “United States real property holding corporation” (“USRPHC”) as that term is defined in Section 897(c)(2) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (“FIRPTA”). The Company shall make determinations as to its status as a USRPHC, and will file statements concerning those determinations with the Internal Revenue Service, in the manner and at the times required
under Reg. § 1.897-2(h), or any supplementary or successor provision thereto. Within 30 days of a request from an Investor or any of its partners, the Company will inform the requesting party, in 
  

 18 

 the manner set forth in Reg. § 1.897-2(h)(1) (but in any event, one business day prior to the close of any sale of
an interest in the Company by such Investor) or any supplementary or successor provision thereto, whether that party’s interest in the Company constitutes a United States real property interest (within the meaning of Internal Revenue Code
Section 897(c)(1) and the regulations thereunder) and whether the Company has provided to the Internal Revenue Service all required notices as to its USRPHC status. 
  
 3.12 Settlement of Litigation. If the Company is adjudged liable in connection with the Litigation in an amount that
is less than $2.0 million, the Company promptly shall give The Sprout Group written notice of such judgement promptly after the Company receives notice that such judgement was entered. The Company shall not appeal any such judgment without the
written approval of The Sprout Group; provided, that The Sprout Group delivers written notice of its objection to any such appeal at least five calendar days prior to the last date on which the Company may enter a notice of appeal with
respect to such judgment. If the Company negotiates the terms of a settlement agreement with the plaintiffs in the Litigation for an amount less than $2.0 million, then the Company shall promptly deliver written notice thereof to The Sprout Group,
which notice shall include the specific terms thereof. The Sprout Group shall have five business days from the date of its receipt of such notice to require the Company to consummate such settlement agreement. If The Sprout Group fails to notify the
Company in writing of its approval within such five-business day period, then The Sprout Group shall be deemed to have waived its rights under this Section 3.12 as to requiring the Company to consummate any such settlement agreement. Additionally,
the Company shall promptly notify The Sprout Group in writing of any settlement proposal relating to the Litigation. 
  
 3.13 Termination of Covenants. Except for the covenants contained in Section 3.3, 3.4 and 3.10, all covenants of the Company contained in Section 3
of this Agreement shall expire and terminate as to each Holder upon the earlier of (i) the effective date of the registration statement pertaining to the Initial Public Offering or (ii) upon an acquisition of the Company by another corporation or
entity by consolidation, merger or other reorganization in which the holders of the Company’s outstanding voting stock immediately prior to such transaction, together with their affiliates, own immediately after such transaction securities
representing less than 50% of the voting power of the corporation or other entity surviving such transaction. 
  
 SECTION 4. RIGHT OF FIRST REFUSAL 
  
 4.1 Subsequent Offerings. The Holders shall have Pro Rata, a right of first refusal to purchase all Equity Securities, as defined below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section 4.6 The term “Equity Securities” shall mean (i) any Common Stock or Preferred Stock of the Company, (ii) any security convertible, with or without
consideration, into any of the Common Stock or the Company’s Preferred Stock, par value $0.01 per share (the “Preferred Stock”) (including any option to purchase such a convertible security), (iii) any security carrying any warrant or
right to subscribe to or purchase any Common Stock or Preferred Stock or (iv) any such warrant or right. The term “Pro Rata” means the number quotient determined by dividing the (x) the sum of the number of shares of Common Stock held by
each Holder immediately prior to the issuance of the Equity Securities, assuming full exercise and/or conversion of all shares of Preferred Stock, all other Company securities exercisable 
  

 19 

 and/or convertible into the Company’s Common Stock held by all Holders, by the total number of common shares held by
all Holders, assuming full exercise and/or conversion of all Preferred Stock, and all other Company securities exercisable and/or convertible into the Company’s Common Stock held by all Holders. 
  
 4.2 Exercise of Rights. If the Company proposes to issue any Equity
Securities, it shall give the Holders notice of its intention, describing the Equity Securities, the price and the terms and conditions upon which the Company proposes to issue the same. Each Holder shall have 20 days from the date of delivery of
any such notice to agree to purchase the Equity Securities for the price and upon the terms and conditions specified in the notice by giving notice to the Company and stating therein the quantity of Equity Securities it agrees to purchase. Such 20
day limited period is subject to the Company then being in compliance with its covenants in Sections 3.1 and 3.2. If some but not all of the Holders elect to purchase their Pro Rata share of the offered Equity Securities, those electing Holders
shall have 10 additional days to agree to purchase any or all of the offered Equity Securities that were available for purchase by the non-electing Holders, allocated Pro Rata among the electing Holders who choose to purchase such additional offered
Equity Securities, based on the number of common shares held by each electing Holder assuming conversion of all shares of Preferred Stock held by such Holder. 
  

4.3 Issuance of Equity Securities to Other Persons. If the Holders fail to exercise in full the rights of first refusal, the Company shall have
90 days thereafter to sell all such Equity Securities to any other person(s), at the same price and upon general terms and conditions materially no more favorable to the purchasers thereof than were offered to the Holders pursuant to Section 4.2,
and shall have no obligation to sell any such equity securities to the Holders. 
  
 4.4 Termination and Waiver of Right of First Refusal. The right of first refusal established by this Section 4 shall not apply to, and shall terminate upon the effective date of the registration statement
pertaining to the Company’s first Qualified Public Offering. The provisions of this Section 4 may be amended or waived only by the agreement of the Company and the holders of at least a majority of the Series A Preferred Stock, a majority of
the Series B Preferred Stock, a majority of the Series C Preferred Stock of the Company and 66 2/3% of the Series
D Preferred Stock of the Company each voting as a separate class. 
  
 4.5 Transfer of Rights of First Refusal. Each Holder may assign its right of first refusal under this Section 4 in whole or in part to one or more of the following: any subsidiary, parent, general partner,
limited partner, retired partner, member, retired member, general partner of a general partner, affiliate or family trust of such Holder, who shall agree to be bound by this Agreement in connection with and following such assignment by executing a
Counterpart Signature Page (which shall not be deemed to be an amendment hereto). 
  
 4.6 Excluded Securities. The rights of first refusal established by this Section 4 shall have no application to any of the following Equity Securities: 
  
 (a) shares of Common Stock (and/or options, warrants or other Common Stock
purchase rights issued pursuant to such options, warrants or other rights) issued or to be issued to employees, officers or directors of, or consultants or advisors to the Company or any subsidiary, pursuant to compensation plans, agreements, or
other arrangements that are approved by the Board, including the Company’s 2000 Equity Compensation Plan, as amended from time to time. 
  

 20 

 (b) stock issued pursuant to convertible securities outstanding as of the date of this Agreement or
issued pursuant to the Purchase Agreement; 
  
 (c) any Equity
Securities issued pursuant to the acquisition of another business entity by the Company by merger, purchase of substantially all of the assets or shares or other reorganization whereby the Company will own not less than a majority of the voting
power of the surviving or successor corporation; 
  
 (d) shares of
Common Stock issued in connection with any stock split, stock dividend or recapitalization by the Company; 
  
 (e) shares of Common Stock issued upon conversion of the Shares or upon exercise of the Warrants issued pursuant to the Purchase Agreement; 
  
 (f) any Equity Securities not to exceed 1.0% of the outstanding capital stock
of the Company on a fully diluted and as-converted basis on the date of issuance issued pursuant to any equipment leasing arrangement, or debt financing from a bank or similar financial institution; 
  
 (g) any Equity Securities issued in connection with strategic transactions
involving the Company and other entities, including (i) joint ventures, manufacturing, marketing or distribution arrangements or (ii) technology transfer or development arrangements; provided that such strategic transactions and the issuance
of shares therein has been approved by the Board; or 
  
 (h) any
Series D Preferred Stock sold pursuant to the Purchase Agreement. 
  
 SECTION
5. MISCELLANEOUS 
  
 5.1 Governing Law. This Agreement
shall be governed by and construed under the laws of the State of Delaware, regardless of the conflicts of laws principles thereof. 
  
 5.2 Survival. Except as expressly provided herein, the representations, warranties, covenants, and agreements made herein shall survive any
investigation made by any Holder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection
with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 
  
 5.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to
time; provided, however, that prior to the receipt by the Company of adequate written notice of the 
  

 21 

 transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and
treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price. 
  
 5.4 Entire Agreement. This Agreement and the Exhibits and Schedules,
the Purchase Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects and no party shall be liable or bound to any other in any manner by
any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 
  
 5.5 Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby. 
  
 5.6 Amendment and Waiver. 
  
 (a) Except as otherwise expressly provided, this Agreement may be amended or modified only upon the consent of (i) the Company, and (ii) the holders of at least a majority of the Series A Preferred Stock, a majority of the Series B
Preferred Stock, a majority of the Series C Preferred Stock and 66 2/3% of the Series D Preferred Stock, each
voting as a separate class. 
  
 (b) Except as otherwise
expressly provided, the obligations of the Company and the rights of the Holders under this Agreement may be waived only with the consent of the holders of at least a majority of the Series A Preferred Stock, a majority of the Series B Preferred
Stock, a majority of the Series C Preferred Stock and 66 2/3% of the Series D Preferred Stock, each voting as a
separate class. 
  
 5.7 Delays or Omissions. It is
agreed that no delay or omission to exercise any right, power, or remedy accruing to any Holder, upon any breach, default or noncompliance of the Company under this Agreement shall impair any such right, power, or remedy, nor shall it be construed
to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or
character on any Holder’s part of any breach, default or noncompliance under the Agreement or any waiver on such Holder’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not alternative. 
  
 5.8 Notices and Consents. All notices and consents required or permitted hereunder must be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the party to be notified at the address as set forth on the signature pages or Exhibit A or at such other address as such party may designate by 10 days advance written notice to the other parties hereto. 
  

 22 

 5.9 Forum Selection. Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement shall be brought against any of the parties in the Chancery Court of the State of Delaware, if permitted, or in such other appropriate court of the State of Delaware, County of New Castle or, if it has or can
acquire jurisdiction, in the United States District Court for the District of Delaware and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. 
  
 5.10 Counterparts. This Agreement may be executed in any number of counterparts (delivery of which may occur via facsimile), each of which shall be
an original, but all of which together shall constitute one instrument. The parties hereto confirm that any facsimile copy of another party’s executed counterpart of this Agreement (or the signature page thereof) shall be deemed to be an
executed original thereof. 
  
 5.11 Adjustments. All
references to numbers of shares, per share price or other share amounts in this Agreement, the Purchase Agreement or in any of the agreement delivered in connection herewith or therewith shall be appropriately adjusted to reflect any stock dividend,
split, combination or other recapitalization of shares by the Company occurring after the date of this Agreement. 
  
 5.12 Interpretation. Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the singular, the
singular the plural, the part the whole, (b) references to any gender include all genders, (c) “including” has the inclusive meaning frequently identified with the phrase “but not limited to” and (d) references to
“hereunder” or “herein” relate to this Agreement. The section and other headings contained in this Agreement are for reference purposes only and shall not control or affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection, Annex, Schedule and Exhibit and similar references are to this Agreement unless otherwise specified. Each accounting term used herein that is not specifically defined herein shall have the meaning given
to it under GAAP. Any reference to a party’s being satisfied with any particular item or to a party’s determination of a particular item presumes that such standard will not be achieved unless such party shall be satisfied or shall have
made such determination in its sole or complete discretion. 
  
 5.13 Aggregation. All shares of Series A Preferred Stock held by Series A Investors that are affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement to such Series A
Investors. All shares of Series B Preferred Stock held by Series B Investors that are affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement to such Series B Investors. All shares
of Series C Preferred Stock held by Series C Investors that are affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement to such Series C Investors. All shares of Series D Preferred
Stock held by Series D Investors that are affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement to such Series D Investors. 
  

 23 

 5.14 Negotiated Agreement. The parties hereto hereby acknowledge that the terms and language of
this Agreement were the result of negotiations among the parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any particular party. Any controversy over construction of this
Agreement shall be decided without regard to events of authorship or negotiation. 
  
 5.15 Prior Investor Rights Agreement. The Prior Investor Rights Agreement is hereby amended and restated in full to read as set forth herein. 
  
 [Signature Pages to Follow] 
  

 24 

 IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS
AGREEMENT as of the date set forth in the first paragraph hereof. 
  

			
	AUXILIUM PHARMACEUTICALS, INC.
		
	 By:
	 	 /S/    JANE H. HOLLINGSWORTH

	 Name:
	 	 Jane H. Hollingsworth

	 Title:
	 	 Executive Vice President

	
	 160 W. Germantown Pike, Suite D-5
 Norristown, PA 19401

  

			
	 AS A SERIES D INVESTOR:

	
	SPROUT ENTREPRENEURS FUND, L.P.
		
	 By:
	 	 DLJ Capital Corporation

		
	 Its:
	 	 General Partner

	
	 /S/    PHILIPPE O.
CHAMBON

	 By:
	 	 Philippe O. Chambon

	 Its:
	 	 Managing Director

			
		
	 Address:
	 	 11 Madison Avenue

	 	 	 26th Floor

	 	 	 New York, NY 10010

	 	 	 Attention:

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	SPROUT CAPITAL IX, L.P.
		
	 By:
	 	 DLJ Capital Corporation

		
	 Its:
	 	 Managing General Partner

	
	 /S/    PHILIPPE O.
CHAMBON

		
	 By:
	 	 Philippe O. Chambon

	 Its:
	 	 Managing Director

			
		
	 Address:
	 	 11 Madison Avenue

	 	 	 26th Floor

	 	 	 New York, NY 10010

	 	 	 Attention:

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	DLJ CAPITAL CORPORATION
	
	 /s/    PHILIPPE O. CHAMBON

	 By:
	 	 Philippe O. Chambon

	 Its:
	 	 Managing Director

			
		
	 Address:
	 	 11 Madison Avenue

	 	 	 26th Floor

	 	 	 New York, NY 10010

	 	 	 Attention:

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	CADUCEUS PRIVATE INVESTMENTS II, L.P.
	
	 /S/    ERIC A. BITTELMAN

	 By:
	 	 
	 Title:
	 	 Partner

			
		
	 Address:
	 	 
		
	 	 	 Attention:

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	CADUCEUS PRIVATE INVESTMENTS II (QP), L.P.
	
	 /S/    ERIC A. BITTELMAN

	 By:
	 	 
	 Title:
	 	 Partner

			
		
	 Address:
	 	 
		
	 	 	 Attention:

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	UBS JUNIPER CROSSOVER FUND, L.L.C.
	
	 /S/    ERIC A. BITTELMAN

	 By:
	 	 
	 Title:
	 	 Partner

			
		
	 Address:
	 	 
		
	 	 	 Attention:

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	BIOTECH GROWTH N.V.
	
	 
	 By:
	 	 /s/    H.J. VAN NEUTEGEN

	 Name:

	 Title:

			
		
	 Address:
	 	         Asset Management BAB N.V.

	 	 	         A. Mendes Chumaceiro Boulevard 11

	 	 	         Curacoa, Netherlands Antilles

	 	 	         Attention: Jon Bootsma

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

 AS A SERIES A, SERIES B, SERIES C INVESTOR AND SERIES D INVESTOR: 
  

			
	SCP PRIVATE EQUITY PARTNERS II, L.P.
		
	 By:
	 	 SCP Private Equity II General Partner, L.P.,

		
	 	 	 its General Partner

		
	 By:
	 	 SCP Private Equity II, LLC

		
	 By:
	 	 /S/    WAYNE B. WEISMAN

	 Name:

	 Title:

			
		
	 Address:
	 	 435 Devon Park Drive, Building 300

	 	 	 Wayne, PA 19087

	 	 	 Attention: Winston J. Churchill

	 	 	 Fax: 610.975.9546

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

 AS A SERIES A, SERIES C AND SERIES D INVESTOR: 
  

			
	CIP CAPITAL, L.P.
		
	 By:
	 	 CIP Capital Management, Inc.

		
	 By:
	 	 /s/    JOSEPH L. JACKSON

			
	 Name:
	 	 Joseph L. Jackson

	 Title:
	 	 President

			
		
	 Address:
	 	 435 Devon Park Drive, Building 300

	 	 	 Wayne, PA 19087

	 	 	 Attention: Joseph L. Jackson

	 	 	 Fax: 610.975.9546

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	 AS A SERIES B, SERIES C AND SERIES D INVESTOR:

	
	PERSEUS-SOROS BIOPHARMACEUTICAL FUND, LP
		
	 By:
	 	 Perseus-Soros Partners, LLC,

	 	 	 Its General Partner

		
	 By:
	 	 SFM Participation, L.P.,

	 	 	 Its Managing Member

		
	 By:
	 	 SFM AH, Inc.,

	 	 	 Its General Partner

		
	 By:
	 	 Soros Private Funds Management LLC

	 	 	 Its Managing Member

	
	 /S/    JOHN F. BROWN

	 By:
	 	 
	 Title:
	 	 Attorney-in-Fact

  

			
	 Address:
	 	         Perseus-Soros Biopharmaceutical Fund,
L.P.
         888 Seventh Avenue, 29th Floor
         New York, NY 10106
         Attention: Christopher D. Earl

		
	 	 	         with a copy to:

		
	 	 	         Perseus-Soros Biopharmaceutical Fund, L.P.
         C/O Soros Fund Management LLC
         888 Seventh Avenue, 31st Floor
         New York, NY 10106
         Attention: Richard D. Holahan, Jr., Esq.

		
	 	 	         and

		
	 	 	         Paul, Weiss, Rifkind, Wharton & Garrison

        1285 Avenue of the Americas
         New York, New York 10019-6064
         Attention: Bruce A. Gutenplan, Esq.

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

					
	LEHMAN BROTHERS P.A. LLC
		
	 By:
	 	 /S/    STEVEN BERKENFELD

	 Name: Steven Berkenfeld

	 Its:      Senior Vice President

		
	 Address:
	 	         Lehman Brothers

	 	 	 	 	         399 Park Avenue

	 	 	 	 	         New York, NY 10022

	 	 	 	 	         Attention: Fred Steinberg

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

					
	LEHMAN BROTHERS PARTNERSHIP ACCOUNT 2000/2001, L.P.
		
	 By:
	 	 LB I Group Inc., its General Partner

		
	 By:
	 	 /S/    STEVEN BERKENFELD

	 Name: Steven Berkenfeld

	 Its:      Senior Vice President

					
		
	 Address:
	 	 Lehman Brothers

	 	 	 	 	 399 Park Avenue

	 	 	 	 	 New York, NY 10022

	 	 	 	 	 Attention: Fred Steinberg

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

					
	LEHMAN BROTHERS OFFSHORE PARTNERSHIP ACCOUNT 2000/2001, L.P.
		
	 By:
	 	 Lehman Brothers Offshore Partners Ltd.,

	 	 	     its General Partner

		
	 By:
	 	/S/    STEVEN BERKENFELD
	 	 	

	 Name: Steven Berkenfeld

	 Its:      Senior Vice President

		
	 Address:
	 	 Lehman Brothers

	 	 	 	 	 399 Park Avenue

	 	 	 	 	 New York, NY 10022

	 	 	 	 	 Attention: Fred Steinberg

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

					
	SCHRODER VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP1
		
	 By:
	 	 Schroder Venture Managers Inc., as General Partner

		
	 By:
	 	 /S/    NICOLA WALKER

	 Name:

	 Title:

			
		
	 Address:
	 	     22 Church Street

	 	 	     Hamilton HM 11

	 	 	     BERMUDA

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

 SCHRODER VENTURES INTERNATIONAL LIFE
SCIENCES FUND II LP2 
  

					
	 By:
	 	 Schroder Venture Managers Inc., as General Partner

		
	 By:
	 	 /S/    NICOLA WALKER

	 Name:

	 Title:

					
		
	 Address:
	 	 22 Church Street

	 	 	 	 	 Hamilton HM 11

	 	 	 	 	 BERMUDA

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

 SCHRODER VENTURES INTERNATIONAL LIFE
SCIENCES FUND II LP3 
  

					
	 By:
	 	 Schroder Venture Managers Inc., as General Partner

		
	 By:
	 	 /S/    NICOLA WALKER

	 Name:

	 Title:

					
		
	 Address:
	 	 22 Church Street

	 	 	 	 	 Hamilton HM 11

	 	 	 	 	 BERMUDA

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

 SCHRODER VENTURES INTERNATIONAL LIFE
SCIENCES FUND II STRATEGIC PARTNERS LP 
  

					
	 By:
	 	 Schroder Venture Managers Inc., as General Partner

		
	 By:
	 	 /S/    NICOLA WALKER

	 Name:

	 Title:

					
		
	 Address:
	 	 22 Church Street

	 	 	 	 	 Hamilton HM 11

	 	 	 	 	 BERMUDA

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

					
	SITCO NOMINEES LTD. VC01903
		
	 By:
	 	 Schroder Venture Managers Inc., as General Partner

		
	 By:
	 	 /S/    NICOLA WALKER

	 Name:
	 	 
	 Title:
	 	 

					
		
	 Address:
	 	 22 Church Street

	 	 	 	 	 Hamilton HM 11

	 	 	 	 	 BERMUDA

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	SV (NOMINEES) LIMITED AS NOMINEE OF SCHRODER VENTURES
INVESTMENTS LIMITED

			
		
	 By:
	  	 Schroder Venture Managers Inc., as General Partner

		
	 By:
	  	 /S/    THERESE MAGUIRE

	 Name:

	 Title:

			
		
	 Address:
	  	        Attention: Therese Maguire
	 	  	        Barfield House
	 	  	        St. Julian’s Avenue
	 	  	        St. Peter Port, Guernsey
	 	  	        CHANNEL ISLANDS

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	LEHMAN BROTHERS HEALTHCARE VENTURE CAPITAL L.P.
		
	 By:
	  	 Lehman Brothers HealthCare Venture Capital Associates L.P.,
 its General Partner

		
	 By:
	  	 LB I Group Inc., its General Partner

		
	 By:
	  	 /S/    STEVEN BERKENFELD

			
	 Name:
	  	 Steven Berkenfeld

	 Its:
	  	 Senior Vice President

			
		
	 Address:
	  	 Lehman Brothers

	 	  	 399 Park Avenue

	 	  	 New York, NY 10022

	 	  	 Attention: Fred Steinberg

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	 AS A SERIES C AND SERIES D INVESTOR:

	
	INTERNATIONAL BIOTECHNOLOGY TRUST plc
		
	 By:
	  	 /S/    NICK COLEMAN

			
	 Name:

	 Title:

			
		
	 Address:
	  	 F.A.O. Nick Coleman

	 	  	 Schroder Ventures Life Sciences

	 	  	 First Floor

	 	  	 71 Kingsway

	 	  	 London

	 	  	 WC2B 6ST

	 	  	 UNITED KINGDOM

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	 AS A SERIES B AND SERIES C INVESTOR:

	
	C.E. UNTERBERG, TOWBIN PRIVATE EQUITY PARTNERS II-Q, L.P.

			
		
	 By:
	  	 UTCM, LLC, its General Partner

		
	 By:
	  	 /S/    THOMAS I. UNTERBERG

			
	 Name:
	  	 Thomas I. Unterberg

	 Title:
	  	 A Managing Member

			
		
	 Address:
	  	         350 Madison Avenue

	 	  	         New York, NY 10017

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	C.E. UNTERBERG, TOWBIN PRIVATE EQUITY PARTNERS, L.P.
		
	 By:
	 	 UTCM, LLC, its General Partner

		
	 By:
	 	 /S/    THOMAS I. UNTERBERG
  

	 Name:
	 	 Thomas I. Unterberg

	 Title:
	 	 A Managing Member

		
	 Address:        
	 	         350 Madison Avenue

	 	 	         New York, NY 10017

  
 Signature Page to

 Third Amended and Restated 
 Investor Rights Agreement 

			
	 AS A SERIES C INVESTOR:

	
	MERRILL LYNCH VENTURES L.P. 2001
		
	 By:
	 	 Merrill Lynch Ventures LLC, as General Partner

		
	 By:
	 	 /S/    EDWARD J. H

	 Name: Edward J. Higgins

	 Title:   Vice President and Co-Chief Investment Officer

			
		
	 Address:
	 	 95 Greene Street, 7th Floor

	 	 	 Jersey City, NJ 07302

	 	 	 Attention: Robert F. Tully

	 	 	 PH: 201.671.0400

	 	 	 FAX: 201.671.4527

  
  
 Signature Page to 
 Third Amended and Restated 
 Investor Rights Agreement 

 EXHIBIT A 
  

SERIES A INVESTORS 
  

	
	NAME
	
	SCP Private Equity Partners II, L.P.
	
	C.I.P. Capital L.P.

 EXHIBIT B 
  

SERIES B INVESTORS 
  
 NAME 
  
 Perseus-Soros BioPharmaceutical Fund L.P. 
  
 SCP Private Equity Partners II, L.P. 
  
 LB I Group Inc.

  
 Lehman Brothers P.A. LLC 
  
 Lehman Brothers Partnership Account 2000/2001, L.P. 
  
 Lehman Brothers Offshore Partnership Account 2000/2001, L.P. 
  
 C.E. Unterberg, Towbin Private Equity Partners II-Q, L.P. 
  
 C.E. Unterberg, Towbin Private Equity Partners II, L.P. 
  
 Schroder Ventures International Life Sciences Fund II LP1 
  
 Schroder Ventures International Life Sciences Fund II LP2 
  
 Schroder Ventures International Life Sciences Fund II LP3 
  
 Schroder Ventures International Life Sciences Fund II Strategic Partners LP

  
 SITCO Nominees Ltd. VC01903 
  
 SV (Nominees) Limited as Nominee of Schroder Ventures Investments Limited 

 EXHIBIT C 
  

SERIES C INVESTORS 
  
 NAME 
  
 Perseus-Soros BioPharmaceutical Fund L.P. 
  
 SCP Private Equity Partners II, L.P. 
  
 C.I.P. Capital
L.P. 
  
 Lehman Brothers Healthcare Venture Capital L.P. 
  
 Lehman Brothers P.A. LLC 
  
 Lehman Brothers Partnership Account 2000/2001, L.P. 
  
 Lehman Brothers Offshore Partnership Account 2000/2001, L.P. 
  
 C.E. Unterberg, Towbin Private Equity Partners II-Q, L.P. 
  
 C.E. Unterberg, Towbin Private Equity Partners II, L.P. 
  
 Schroder Ventures International Life Sciences Fund II LP1 
  
 Schroder Ventures International Life Sciences Fund II LP2 
  
 Schroder Ventures International Life Sciences Fund II LP3 
  
 Schroder Ventures International Life Sciences Fund II Strategic Partners LP 
  
 SITCO Nominees Ltd. VC01903 
  
 SV (Nominees) Limited as Nominee of Schroder Ventures Investments Limited 

 
 International Biotechnology Trust plc 
  
 Merrill Lynch Ventures L.P. 2001 
  

 EXHIBIT D 
  

SERIES D INVESTORS 
  
 NAME 
  
 Sprout Entrepreneurs Fund, L.P. 
  
 Sprout Capital IX, L.P. 
  
 DLJ Capital Corporation

  
 UBS Juniper Crossover Fund, L.L.C. 
  
 Caduceus Private Investments II, LP 
  
 Caduceus Private Investments II (QP), LP 
  
 Biotech Growth N.V. 
  
 Perseus-Soros BioPharmaceutical Fund L.P. 
  
 SCP Private Equity Partners II, L.P. 
  
 C.I.P. Capital L.P. 
  
 Lehman Brothers Healthcare Venture Capital L.P. 
  
 Lehman Brothers P.A. LLC 
  
 Lehman Brothers Partnership
Account 2000/2001, L.P. 
  
 Lehman Brothers Offshore Partnership Account
2000/2001, L.P. 
  
 Schroder Ventures International Life Sciences Fund II
LP1 
  
 Schroder Ventures International Life Sciences Fund II LP2

  
 Schroder Ventures International Life Sciences Fund II LP3 

 
 Schroder Ventures International Life Sciences Fund II Strategic Partners LP

  
 SITCO Nominees Ltd. VC01903 
  
 SV (Nominees) Limited as Nominee of Schroder Ventures Investments Limited 

 
 International Biotechnology Trust plc 

 ANNEX A 
  
 COUNTERPART SIGNATURE PAGE 
 TO

 AUXILIUM PHARMACEUTICALS, INC. 
 THIRD AMENDED AND RESTATED 
 INVESTOR RIGHTS AGREEMENT 
  
 The undersigned, as a purchaser of shares of Series C Preferred Stock, par value $0.01 per
share, of Auxilium Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby adopts and agrees to be bound by all of the terms and provisions of, and shall be entitled to all of the benefits and privileges of an Investor as
defined in, the Second Amended and Restated Prior Investor Rights Agreement by and among the Company, and the investors listed on Exhibit A, Exhibit B and Exhibit C thereto (the “Prior Investor Rights Agreement”), and
further authorizes the Company to attach this signature page to the Prior Investor Rights Agreement in order to make the undersigned a party to the Prior Investor Rights Agreement. 
  

	
	
	  

	 [Investor Name]

  
 Dated:             , 200License Agreement

 Exhibit 10.1 
 CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT 
  
 LICENSE AGREEMENT 
  
 THIS LICENSE AGREEMENT is made as of the 31st day of May, 2000 by and between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation, with offices at 65 Lafayette Road, 3rd Floor, North Hampton, New Hampshire 03862-2403 (hereinafter,
“BENTLEY” or “Licensor”), and AUXILIUM A2, INC., a Delaware corporation having a principal place of business at 160 W. Germantown Pike, Suite D-5, East Norriton, Pennsylvania 19401 (hereinafter, “AUXILIUM” or”
Licensee”). BENTLEY and AUXILIUM may be referred to as a “Party” or, collectively, as “Parties.” 
  
 RECITALS 
  
 WHEREAS AUXILIUM is engaged in the research, development, manufacture, marketing and sale of pharmaceutical products; 
  
 WHEREAS BENTLEY is engaged in the development of pharmaceutical formulations and drug delivery systems and has developed certain formulations which contain a therapeutic
drug and drug delivery systems included under BENTLEY Patents and BENTLEY Technology; 
  
 WHEREAS under a Research Services Agreement of even date herewith (the “Research Agreement”) BENTLEY will prepare and test topical pharmaceutical formulations, excluding patch applications, which contain the therapeutic drug
testosterone and CPE-215 (hereinafter, the “Compound”) under BENTLEY Patents and BENTLEY Technology; 
  
 WHEREAS AUXILIUM wishes to obtain a license under BENTLEY Patents and BENTLEY Technology to undertake development of products containing the Compound which meet criteria set forth in the Research Agreement for
commercialization in the Territory; and 
  
 WHEREAS BENTLEY is willing to grant
such a license under certain terms and conditions. 
  
 NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein, and INTENDING TO BE LEGALLY BOUND HEREBY, the Parties agree as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 The following terms, as used herein, shall have the following meanings:

  
 “Act” shall mean the United States Federal Food Drug
and Cosmetic Act and applicable regulations. 
  
 “Affiliate” means, when used with reference to a Party, any person directly or indirectly Controlling, Controlled by or under common Control with a Party. 
  

 “Bankruptcy Event” means the person in question becomes insolvent, or voluntary or involuntary
proceedings by or against such person are instituted in bankruptcy or under any insolvency law, or a receiver or custodian is appointed for such person, or proceedings are instituted by or against such person for corporate reorganization or the
dissolution of such person, which proceedings, if involuntary, shall not have been dismissed within one hundred eighty days after the date or filing, or such person makes an assignment for the benefit of creditors, or substantially all of the assets
of such person are seized or attached and not released within one hundred eighty days thereafter. 
  
 “BENTLEY Know-How” shall mean any and all present and future information and any materials, including, without limitation, formulations,
processes, techniques, formulas, biological, chemical, assay control and manufacturing data, methods, software, equipment designs, know-how, and trade secrets, patentable or otherwise, tangible or intangible, that are owned or controlled by Licensor
that relate to the preparation, purification, characterization, stabilization, processing, and formulation and/or use of a testosterone topical formulation containing CPE-215. 
  
 “BENTLEY Patents” shall mean United States Patent No. 5,023,252 and any and all continuations,
continuations-in-part, additions, divisions, renewals, extensions, re-examinations and reissues thereof and any and all foreign counterparts of the foregoing as set forth in Schedule A hereto and any other Bentley U.S. or foreign patent application
which is filed hereafter and which includes a claim that covers a testosterone topical formulation which contains CPE-215 and/or the preparation and/or use thereof and any U.S. or foreign patent issuing therefrom and any renewal, extension,
re-examination or reissue thereof. 
  
 “BENTLEY
Technology” means BENTLEY Know-How and Improvements. 
  
 “Calendar Quarter” means each three-month period, or any portion thereof, beginning on January 1, April 1, July 1 and October 1. 
  
 “Combination Products” means any and all pharmaceutical compositions which contain: (A) testosterone as an active ingredient in combination with
any other steroids, hormones, somatotropics, emollients, or therapeutic soy products; and (B) the Compound; and which fall within the scope of any composition, method, or article claim of the BENTLEY Patents and which is intended to be applied
topically to the user of the composition. 
  
 “Compound”
is defined above in the Recitals. 
  
 “Confidential
Information” means (i) BENTLEY Technology, (ii) any other information or material in tangible form that is confidential or proprietary to the furnishing Party at the time it is delivered to the receiving Party, (iii) proprietary information of
the furnishing party, (iv) information that is furnished orally if the furnishing party identifies such information as confidential or proprietary when it is disclosed, and (v) patent applications not yet in the public domain. 
  

 2 

 “Control”, “Controlling,” and “Controlled by” mean the direct or indirect
ownership of over 50% of the outstanding voting securities of an entity, or the right to receive over 50% of the profits or earnings of a person, or the right to control the policy decisions of a person. 
  
 “Effective Date” means the date of receipt by BENTLEY of written
notice from AUXILIUM pursuant to Section 9.1 of the Research Agreement that it wishes to proceed with development of Product. Such notice shall be provided on or before 30 September, 2000. 
  
 “Improvement” shall mean any formulations and/or any enhancement or
other desirable change to the technical/pharmacological characteristics of formulations of Product, whether patentable or not, which is useful for commercializing Product developed by BENTLEY during the term of this Agreement which may take the form
of, without limitation, new or improved methods of administration, manufacture, improved shelf life or packaging. 
  
 “IND” shall mean an Investigational New Drug Exemption application filed under the Act, or comparable filing in any major market in the
Territory the approval of which permits clinical investigation of Product in humans. 
  
 “NDA” means a New Drug Application submitted under the Act to permit commercial sale of Product in the United States or a comparable marketing license in another major market in the Territory. 
  
 “Net Sales Price” means the gross amount charged by Licensee for
the sale of a Product, net of returns and credits for rejected goods, and after deducting (i) trade and quantity discounts actually allowed, (ii) sales, use or value added taxes, the legal obligation of which is on Licensee, and (iii) freight
allowances, insurance and customs duties, to the extent any of the foregoing are identified on the invoice for the product. If a product is sold for consideration other than solely cash, the fair market value of such other consideration shall be
included in the Net Sales Price. If a Product is sold in a package or kit containing another product which is not a Product, the Net Sales price for purposes of calculating the royalty under Section 3.2 hereof shall be calculated by multiplying the
Net Sales Price of the combination product by the fraction of A/A+B, where “A” is the Net Sales Price of Product when sold separately “B” is the Net Sales Price of the other product or products when sold separately. If either the
Product or the other product is not sold separately, the Net Sales Price of the Product shall be negotiated in good faith by the Parties. 
  
 “Person” or “Persons” means any corporation, partnership, joint venture or natural person. 
  
 “Products” means any and all pharmaceutical compositions which
contain (A) testosterone as the single active drug ingredient; and (B) the Compound; and which fall within the scope of any composition, method or article claim of the BENTLEY Patents and which is intended to be applied topically to the user of the
composition. 
  
 “Sale” or any variation thereof means
the sale, assignment, lease or other disposition of a Product by Licensee to a non-Affiliate. A Product shall be deemed to have been sold for purposes of calculating royalties under Article III hereof upon the first to occur of the following: (i)
the transfer of title in the Product from Licensee to a non-Affiliate; or (ii) shipment of the Product from the manufacturing facilities of Licensee to a non-Affiliate. 
  

 3 

 “Territory” shall mean all countries and territories of the world except Spain. 
  
 “Use Patents” shall mean any patent granted in the Territory for
the use of the Product in a specific therapeutic indication. 
  
 ARTICLE II 
 GRANT OF LICENSE 
  
 2.1 Grant of License. Subject to the terms and conditions contained in this Agreement, the Licensor hereby grants to Licensee a sole and exclusive,
worldwide (except Spain), royalty-bearing license under BENTLEY Patents and BENTLEY Technology with the right to sublicense to make, have made, use and sell Products in the Territory pursuant to the terms and conditions of this License Agreement. In
addition, Licensee shall have the exclusive right to enter into another License Agreement with BENTLEY to acquire rights in BENTLEY Patents and BENTLEY Technology for the development of Combination Products, such right to expire upon the termination
of this Agreement. Licensor and Licensee agree to negotiate the terms of such License Agreement in good faith. 
  
 2.2 Disclosure of BENTLEY Know-How. Promptly following the Effective Date BENTLEY shall make available to Licensee any and all BENTLEY Know How not
disclosed under the Research Agreement to enable Licensee to develop Products. 
  
 ARTICLE III 
 PAYMENTS IN CONSIDERATION FOR LICENSE 
  
 3.1 Milestone Payments. In partial consideration for the license rights
granted hereunder, Licensee shall make the following non-refundable payments to Licensor within ten (10) days after the achievement of the following milestones in the development of the first Product:* 
  
 3.2 Royalties. In further consideration for the license rights granted under
this Agreement Licensee shall also pay to Licensor the following royalty amounts on annual Net Sales of Products in those countries in the Territory in which 
  
 (a) there is an enforceable BENTLEY Patent at the time of sale: 
  

	*	Confidential information has been omitted and filed confidentially with the Securities and Exchange Commission. 

  

 4 

			
	$* Million of Annual Net Sales	  	*%
	$* Million of Annual Net Sales	  	*%
	Net Sales over the $* Million of Annual Net Sales	  	*%

  
 (b)
there is no enforceable BENTLEY Patent in the country when there is an enforceable BENTLEY Patent in another country at the time of sale: 
  

			
	All Annual Net Sales over $*	  	*%

  
 (c)
there is no enforceable BENTLEY Patent in any country at the time of sale: 
  

			
	All Annual Net Sales over $*	  	*%

  
 3.3 Royalty Payments.
Royalties under this Agreement shall be paid within ninety (90) days in the case of no sublicense, and one hundred twenty (120) days, in the case of royalties received from a sublicensee, following the last day of the Calendar Quarter in which the
royalties and other amounts accrue. The last such payment shall be made within ninety (90) days after termination of this Agreement. Payments shall be deemed paid as of the day on which they are received by Licensor in the manner designated by
Section 3.4. Licensor and Licensee agree to negotiate in good faith any future implication on royalties caused by withholding taxes. 
  
 3.4 Currency, Place of Payment, Interest. 
  
 (a) All dollar amounts referred to in this Agreement shall be expressed in United States dollars. All payments to the Licensor under this
Agreement shall be made in United States dollars, as directed by the Licensor, by wire transfer to the Licensor or in such other manner as the Licensor may designate from time to time. 
  
 (b) If Licensee receives revenues from sales of Products in a currency other than United States dollars,
royalties shall be converted into United States dollars at a quarterly conversion rate for each foreign currency calculated as the average of the conversion rate for such currency published in the Exchange Rates table in the eastern edition of the
Wall Street Journal for the first business day of each month of the quarter. 
  
 (c) Amounts that are not paid when due shall accrue interest from the due date until paid, at an annual rate equal to the Prime Rate plus 1% as published in the eastern edition of the Wall Street Journal as of the due
date. The Licensor may treat unpaid payments as a breach of this Agreement in a manner consistent with Article XI notwithstanding the payment of interest. 
  
 3.5 Records. Licensee will maintain complete and accurate books and records which enable the royalties payable hereunder to be verified. The records for
each Calendar Quarter shall be maintained for three years. Upon reasonable prior notice to Licensee, the Licensor and its accountants shall have access to the books and records of Licensee necessary to enable Licensor to verify the royalties paid
hereunder. Such access shall be available during normal business hours from 
  

	*	Confidential information has been omitted and filed confidentially with the Securities and Exchange Commission. 

  

 5 

 time to time during the term of this Agreement, and, during the period from expiration or termination of this Agreement
until three years after such date, not more often than once each calendar year. If it is ultimately determined that Licensee has underpaid royalties by 10% or more, Licensee will pay the costs and expenses of the Licensor’s accountant in
connection with its review or audit of the sales records of the Product, together with any interest as provided in Section 3.4 (c) above. 
  
 3.6 Co-Marketing. In the event Licensee enters into a co-marketing or sub-license arrangement with a third-party, the royalty payments due to Licensor
will be calculated using Net Sales of Product of Licensee and Net Sales of Product of Licensee’s co-marketing partner combined. 
  
 3.7 Sales in Spain. Licensor shall pay to Licensee a royalty of *% on all annual Net Sales in Spain over $* million. 
  
 ARTICLE IV 
 CERTAIN OBLIGATIONS OF LICENSEE 
  
 4.1 Government Approvals. Licensee will be responsible for obtaining, at its cost and expense, all governmental approvals required for marketing and sale of Products in the Territory. 
  
 4.2 Licensee Efforts. 
  
 (a) Licensee shall use its reasonable best efforts to
develop for commercial sale and to market Products in the Territory, and to continue to market Products as long as commercially viable, all in a manner consistent with sound and reasonable business practices. For purposes of this Agreement
reasonable best efforts in the case of Product development in any major market shall mean at least that diligence required on the part of an NDA applicant in undertaking the development of a drug product to qualify for the maximum patent term
extension under the Act. 
  
 (b) Licensee shall
notify Licensor within ten (10) days after the first commercial sale of a Product and of any formal written notice from the FDA or other equivalent regulatory authority (“Regulator”) in which CPE-215 is the Regulator’s primary focus,
apart from the use of CPE-215 in the Licensee’s Product. 
  
 4.3 Manufacture of Product. Prior to commercialization of the Product, the Parties may, if appropriate for both parties, negotiate in good faith a manufacturing and supply agreement to provide for Licensor to fulfill the manufacturing
requirements of Licensee for Product for sale in the European market. The cost of such manufacturing shall not be greater than * percent (*%) of the cost of any competitor cGMP contract manufacturing facility that proposes to manufacturer the
Product for Licensee. 
  

	*	Confidential information has been omitted and filed confidentially with the Securities and Exchange Commission. 

  

 6 

 ARTICLE V 
 WARRANTIES AND REPRESENTATIONS 
  
 5.1 Mutual Representations. Each of the Parties hereto represents, warrants and covenants: 
  
 (i) It is a corporation or entity duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation or formation. 
  
 (ii) The execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action.

  
 (iii) It has the power and authority to execute and deliver this Agreement and
perform its obligations hereunder. 
  
 (iv) The execution, delivery and
performance by such Party of this Agreement does not and will not conflict with or result in breach of the terms and provisions of any other agreement or constitute a default under (a) a loan agreement, guaranty, financing agreement, affecting a
product or other agreement or instrument binding or affecting it or its property; (b) the provisions of its charter or operative documents or bylaws; or (c) any order, writ, injunction or decree of any court or governmental authority entered against
it or by which any of its property is bound. 
  
 (v) The execution, delivery and
performance of this Agreement by such Party does not require the consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority in the Territory and the execution, delivery and
performance of this Agreement does not violate any law, rule or regulation applicable to such Party. 
  
 (vi) This Agreement has been duly authorized, executed and delivered and constitutes such Party’s legal, valid, and binding obligation enforceable against it in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to the availability of particular remedies under general equity principles. 
  
 (vii) It shall comply with all applicable laws and regulations relating to its activities
under this Agreement. 
  
 (viii) Each warrants that it is not debarred and has not
and will not use in any capacity the services of any person debarred under subsections 306 (a) and (b), of the Generic Drug Enforcement Act of 1992. If at any time during the term of this Agreement this warranty is no longer accurate, the affected
party shall immediately notify the other. 
  
 5.2 BENTLEY
Warranties 
  
 (i) BENTLEY Patents. BENTLEY represents and warrants that: (a)
BENTLEY is the owner of all right, title and interest in and to the BENTLEY Technology and BENTLEY Patents; and (b) BENTLEY has not received any written notice that the Technology or Patents infringes the proprietary rights of any third-party nor is
the Licensor in any other way aware of any infringement of third-party proprietary rights; (d) except for those claims explained in detail in Schedule B hereto, 
  

 7 

 there are no claims, judgments or settlements against or owed by BENTLEY, or pending or threatened claims, or litigation,
relating to BENTLEY Patents. 
  
 ARTICLE VI 
 INSURANCE 
  
 6.1 Insurance Requirements for Licensee. Prior to commencing work with Product in human clinical trials under this Agreement and during the entire term of
this Agreement and for a period of three (3) years thereafter, AUXILIUM, at its sole expense, shall maintain in full force and effect with an insurance company or companies having an A. M. Best Rating of “A-: Class VII” or better and
supply a Certificate of Insurance to BENTLEY evidencing Product Liability insurance (including coverage for human clinical trials and contractual liability) coverage in the amount of three million dollars ($3,000,000) per each occurrence and in the
general aggregate, respectively, during the clinical trial phase and prior to commercialization of the Products and three million dollars ($3,000,000) per each occurrence and in the general aggregate, respectively. Endorsement shall be furnished
reflecting the inclusion of BENTLEY, its officers, directors and employees as additional insured. The policy providing the above insurance shall be endorsed to contain the following undertaking: “It is agreed that this insurance will not be
cancelled, materially changed or non-renewed without at least thirty (30) days notice to BENTLEY, by certified mail-Return Receipt Requested.” Any type of insurance or increase in liability limits not described in the foregoing which AUXILIUM
requires for its own protection shall be its own responsibility and at its sole expense. The minimum insurance amounts specified herein shall not be deemed a limitation on AUXILIUM’S indemnification liability under this Agreement. 

 
 6.2 Insurance Requirements for Licensor. Prior to commencing work with
Product in human clinical trials under this Agreement and during the entire term of this Agreement and for a period of three (3) years thereafter, BENTLEY, at its sole expense shall maintain in full force and effect with an insurance company or
companies having A. M. Best Rating of an “A-: Class VII” or better and supply a Certificate of Insurance to AUXILIUM evidencing Product Liability insurance (including coverage for human clinical trials and contractual liability) coverage
in the amount of three million dollars ($3,000,000) per each occurrence and in the general aggregate, respectively. The policy providing the above insurance shall be endorsed to contain the following undertaking: “It is agreed that this
insurance will not be cancelled, materially changed or non-renewed without at least thirty (30) days notice to AUXILIUM, by certified mail-”Return Receipt Requested”. Any type of insurance or increase in liability limits not described in
the foregoing which BENTLEY requires for its own protection shall be its own responsibility and at its sole expense. 
  
 ARTICLE VII 
 INDEMNIFICATION 
  
 7.1 Indemnification by BENTLEY. BENTLEY will indemnify and hold AUXILIUM, its
directors, officers, employees and agents harmless against any and all liability, damage, loss, cost or expense (including reasonable attorney’s fees) resulting from any third-party claims made or suits brought against AUXILIUM which arise from
an act or failure to act by BENTLEY or BENTLEY’s breach of its representations, warranties or agreements contained herein. 
  
 7.2 Indemnification by AUXILIUM. AUXILIUM will indemnify and hold BENTLEY, its directors, officers, employees and agents harmless against any and all
liability, damage, loss, cost or expense 
  

 8 

 (including reasonable attorney’s fees) resulting from any third-party claims made or suits brought against BENTLEY
which arise from the breach of any of AUXILIUM’s representations, warranties or agreements contained herein, or which arise out of the development, manufacture, promotion, distribution, use, testing or sale, distribution or other disposition of
Product, including, without limitation, any claims, express, implied or statutory, made as to the efficacy, safety or use to be made of Product, and claims made by reason of any Product labeling or any packaging containing Product. This
indemnification obligation shall not apply where the basis for the claim is the negligence or willful malfeasance of BENTLEY. 
  
 7.3 Limitations on Indemnification Obligations. BENTLEY AND AUXILIUM EACH AGREE THAT IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM A DEFAULT OR BREACH OF THIS AGREEMENT. 
  
 7.4 Procedures. The indemnified Party shall notify the indemnifying Party of any claim or action giving rise to a liability within fifteen (l5) days after
receipt of knowledge of the claim. If notice is not given within fifteen (15) days, the indemnifying Party shall maintain its obligation to indemnify unless such failure to timely notify has a material, adverse effect on the outcome of the claim.
The indemnifying Party shall control the defense or settlement of the claim. However, the indemnifying Party shall not settle or compromise any such claim or action in a manner that imposes any restrictions or obligations on the indemnified Party
without the indemnified Party’s written consent. The indemnified Party shall cooperate reasonably, assist and give all necessary authority and reasonably required information. 
  
 ARTICLE VIII 
 INTELLECTUAL PROPERTY 
  
 8.1 Intellectual Property
Rights. The inventorship of inventions developed under this Agreement and relating to Products (“Inventions”) shall be determined in accordance with U.S. Law. Inventions made solely by employees of BENTLEY or owned by BENTLEY
(“BENTLEY Inventions”) shall be the exclusive property of BENTLEY. Inventions made solely by employees of AUXILIUM (“AUXILIUM Inventions”) shall be the exclusive property of AUXILIUM, except that AUXILIUM Inventions that relate
to the use of Products shall be the joint property of AUXILIUM and BENTLEY, each with an undivided one-half interest. Inventions other than BENTLEY Inventions and AUXILIUM Inventions shall belong jointly to BENTLEY and AUXILIUM, each with an
undivided one-half interest. 
  

 9 

 ARTICLE IX 
 PATENTS, TRADEMARKS AND INFRINGEMENT 
  
 9.1 Prosecution of Patents. 
  
 (a) The
Licensor shall be solely responsible for preparing, prosecuting and maintaining the BENTLEY Patents. 
  
 (b) Each Party shall cooperate with the other Party to execute all required papers and instruments and to make all required oaths and
declarations as may be necessary in the preparation and prosecution of all such patents and other applications and protections referred to in this Section 9.1. 
  

9.2 Ownership. The Licensor shall retain all right, title and interest in and to the BENTLEY Patents and any patents, copyrights and other protections
related thereto, regardless of which party prepares, prosecutes or maintains the patents, copyrights or other protections related to the BENTLEY Technology, subject to the express license granted to Licensee under this Agreement. 
  
 (a) In the event of Licensor wishing to abandon any BENTLEY
Patents, Licensor will offer to assign to Licensee, free of charge, any such Patent prior to effectuating the abandonment. Licensee will bear the costs connected to any assignment hereunder. In the event that any of the BENTLEY Patents is assigned
to AUXILIUM and AUXILIUM decides thereafter to abandon the assigned Patent, AUXILIUM agrees that, at the request of BENTLEY, it will offer to assign the assigned Patent to a third-party licensee that is licensed by BENTLY under the assigned Patent
as such third-party licensee is identified by BENTLEY to AUXILIUM. 
  
 9.3 Trademarks. Licensee shall have the right, in its sole discretion and at its own expense, to select and register such trademarks as it wishes to employ in connection with the sale of the Products throughout the Territory and Licensee
shall have legal and equitable ownership of the entire right, title and interest in and to the trademarks and registrations Licensee elects to use. Licensee will acknowledge BENTLEY’S CPE-215 by adding “CPE-215(TM), BENTLEY” to its
listing of ingredients wherever such listing is appropriate or used by Licensee. It is hereby expressly agreed that this Section 9.3 shall survive the expiration or termination of this Agreement. 
  
 9.4 Infringement of Patents. If either Party has knowledge of any
infringement of BENTLEY Patents or BENTLEY Technology, the Party having such knowledge shall promptly inform the other of such infringement. The Parties shall thereafter discuss what action should be taken, including whether any legal proceeding
should be instituted. If the Parties mutually agree on the course of action to be taken in respect of any such infringement, they shall jointly select counsel and equally share any expenses. Any settlement or recovery shall be shared equally by the
Parties. If either party determines to take action, but the other Party does not desire to do so, the first Party may take action at its own expense and through counsel of its own choice, and any settlement or recovery shall in such case belong
solely to the Party taking action. 
  
 9.5 If one party institutes
and carries on a legal proceeding to enforce a BENTLEY Patent against an alleged infringing party, the other Party shall fully cooperate with and supply all assistance reasonably requested by the Party instituting and carrying or such proceeding.

  

 10 

 ARTICLE X 
 CONFIDENTIALITY 
  
 10.1
Confidentiality 
  
 (a) Licensee and Licensor
shall maintain in confidence and shall not disclose to any third-party the Confidential Information received pursuant to this Agreement, without the prior written consent of the other Party except that the Confidential Information may be disclosed
only to those third parties (x) who have a need to know the information in connection with the exercise of rights and obligations under this Agreement and who agree in writing to keep the information confidential to the same extent as is required of
each Party under this Section 10.1, or (y) to whom the Party is legally obligated to disclose the Information. The foregoing obligation shall not apply to: 
  
 (i) information that is known to the other Party or independently developed by the other Party prior to the time of disclosure, in each case, to the extent evidenced by
written records promptly disclosed to the other Party upon receipt of the Confidential Information; or 
  
 (ii) information that becomes patented, published or otherwise part of the public domain as a result of acts by a Party or a third person obtaining such information lawfully as a matter of right; or 
  
 (iii) information that becomes patented, published or otherwise part of the public domain as
a result of acts by the Licensor or a third person obtaining such information lawfully as a matter of right; or 
  
 (iv) information that is required by any law, rule, regulation, order, decision, decree, or subpoena or other judicial, administrative or legal process to be disclosed,
provided, however that each Party, as applicable, gives the other prompt written notice of such request/order to permit the other party to seek a protective order or other similar order with respect to such Confidential Information and thereafter
discloses only the minimum Confidential Information required to be disclosed in order to comply. 
  
 (b) Each Party will take all reasonable steps to protect the Confidential Information of the other Party with the same degree of care it
uses to protect its own confidential proprietary information. Without limiting the foregoing, each party shall ensure that all of its employees having access to the Confidential Information of the other Party are obligated in writing to keep such
information confidential to the same extent as is required of each Party under this Section 10.1. 
  
 10.2 Injunctive Relief. Because damages at law may be an inadequate remedy for breach of any of the covenants, promises and agreements contained in
Section 10.1 hereof, both the Licensor and Licensee shall be entitled to injunctive relief in any state or federal court located within the District of Delaware, including specific performance or an order enjoining the breaching Party from any
threatened or actual breach of such covenants, promises or agreements. Each of the Licensee and the Licensor hereby waives any objection it may have to the personal jurisdiction or venue of any 
  

 11 

 such court with respect to any such action. The rights set forth in this Section 10.2 shall be in addition to any other
rights which the Licensor and Licensee may have at law or in equity. 
  
 10.3 This Article X shall survive the expiration or termination of this Agreement. 
  
 ARTICLE XI 
 TERM AND TERMINATION 
  
 11.1 Term. This Agreement and the licenses granted herein shall commence on the Effective Date and shall continue in effect
in perpetuity subject to earlier termination under Section 11.2 hereof. 
  
 11.2 Termination by the Licensor or Licensee. 
  
 (a) Upon the occurrence of any of the events set forth below (“Events of Default”), the Licensor shall have the right to terminate this Agreement by giving written notice of termination, such termination effective with the giving
of such notice: 
  
 (i) In the event of nonpayment of any material
amount payable to the Licensor after completion of an audit provided for under Section 3.5 hereof, which nonpayment is continuing thirty (30) calendar days after the Licensor gives Licensee written notice of such non-payment. 
  
 (ii) In the event that Licensee fails to initiate clinical trials within two
(2) years of availability of final formulation in quantities adequate for clinical testing and associated documentation for clinical trials, unless such failure is outside of the control of Licensee. See Auxilium Development Plan attached as
Schedule C hereto. 
  
 (iii) In the event that Licensee does not
submit an application for marketing approval in a major market within a five (5) year period after the Effective Date unless such failure to submit is outside of the control of Licensee. 
  
 (iv) In the event that Licensee does not launch Product in a major market within six (6) months after marketing approval.

  
 (v) In the event that Licensee becomes subject to a Bankruptcy
Event provided, however, that so long as Licensor continues to receive royalty payments from Licensee under this Agreement, such Bankruptcy Event shall not be a basis for termination of this Agreement by Licensor. 
  
 (b) Upon the occurrence of any of the events set forth below
(“Events of Default”), Licensee shall have the right to terminate this Agreement by giving written notice of termination, such termination effective with the giving of such notice: 
  
 (i) breach by Licensor of any covenant or any representation or warranty
contained in this Agreement that is continuing thirty (30) calendar days after Licensee gives written notice of such breach; 
  

 12 

 (ii) Licensor fails to comply with the terms of the license granted hereunder and such noncompliance is
continuing thirty (30) calendar days after Licensee gives notice of such noncompliance; 
  
 (iii) Licensor becomes subject to a Bankruptcy Event; or 
  
 (iv) the dissolution or cessation of operations by Licensor. 
  
 (d) No exercise by the Licensor or Licensee of any right of termination shall constitute a waiver of any right of the Licensor or Licensee
for recovery of any monies then due to it hereunder or any other right or remedy the Licensor or Licensee may have at law or under this Agreement. 
  
 ARTICLE XII 
 FORCE MAJEURE 
  
 12.1 Either Party shall be relieved of its obligations under this Agreement
to the extent that fulfillment of such obligations shall be prevented by strikes, embargoes, riots, fires, floods, war, hurricanes, windstorms, acts or defaults of common carriers, governmental laws, acts or regulations, shortages of materials or
any other occurrence, whether or not similar to the foregoing, beyond the reasonable control of the Party affected thereby. 
  
 12.2 If either Party is prevented from fulfilling its obligations under this Agreement by reason of a circumstance covered by this Article 12, the Party
unable to fulfil its obligations shall, upon the occurrence of any such circumstances, promptly notify the other Party upon the cessation of such circumstance and of the likely duration thereof, and shall promptly notify the other party upon the
cessation of such circumstance. 
  
 ARTICLE XIII 
 ADDITIONAL PROVISIONS 
  
 13.1 Arbitration. 
  
 (a) All disputes arising between the Licensor and Licensee under this Agreement shall be settled by arbitration conducted in accordance
with the Rules of the American Arbitration Association. The Parties shall cooperate with each other in causing the arbitration to be held in as efficient and expeditious a manner as practicable. 
  
 (b) Licensee and Licensor each irrevocably and
unconditionally consents to the jurisdiction of any such proceeding and waives any objection that it may have to personal jurisdiction or the laying of venue of any such proceeding. 
  
 13.2 Assignment. No rights hereunder may be assigned by the Licensee, directly or by merger or other operation of law,
except assignment to an Affiliate, without the express written consent of the 
  

 13 

 other Party, such consent not to be unreasonably withheld; provided, however, without such consent, either Party may
assign this Agreement in connection with the sale of all or substantially all of its assets or business or its merger or consolidation with another company. Any prohibited assignment of this Agreement or the rights hereunder shall be null and void.
No assignment shall relieve Licensee or Licensor of responsibility for the performance of any accrued obligations which they have prior to such assignment. This Agreement shall inure to the benefit of permitted assigns. 
  
 13.3 No Waiver. A waiver by either Party of a breach or violation of any
provision of this Agreement will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision of this Agreement. 
  
 13.4 Independent Contractor. Nothing herein shall be deemed to establish a
relationship of principal and agent between the Licensor and Licensee, nor any of their agents or employees for any purpose whatsoever. This Agreement shall not be construed as constituting the Licensor and Licensee as partners, or as creating any
other form of legal association or arrangement which could impose liability upon one Party for the act of the other Party. 
  
 13.5 Notices. Any notice under this Agreement shall be sufficiently given if sent in writing by overnight courier, prepaid, first class, certified or
registered mail, return receipt requested, addressed as follows: 
  
 If to the Licensor, to: 
  
 BENTLEY PHARMACEUTICALS, Inc. 
 65 Lafayette Road, 3rd Floor 
 North Hampton, NH 03862-2403 
 Attention: President 
  
 If to the Licensee, to: 
  
 AUXILIUM
A(2), Inc. 
 160 W. Germantown Pike 
 Suite D-5, Norriton Office Center 
 Norristown, PA 19401 
 Attention: President 
 Copy to General Counsel 
  
 or to such other addresses as may be designated from time to time by notice given in accordance with the terms of this Section. 
  
 13.6 Severability. Any of the provisions of this Agreement which are
determined to be invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability in such jurisdiction, without rendering invalid or unenforceable the remaining provisions hereof or affecting the
validity or unenforceability of any of the terms of this Agreement in any other jurisdiction. 
  

 14 

 13.7 Headings and Titles. Any headings and titles used in this Agreement are for convenience or reference
only and shall not affect its construction or interpretation. 
  
 13.8 No Third Party Benefits. Nothing in this Agreement, express or implied, is intended to confer on any person other than the Parties hereto or their permitted assigns, any benefits, rights or remedies. 
  
 13.9 Governing Law. This Agreement shall be construed, governed, interpreted
and applied in accordance with the laws of the State of Delaware, without giving effect to conflict of law provisions. 
  
 13.10 Counterparts. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the party whose signature appears thereon, but all of which taken together shall constitute
but one and the same instrument. 
  
 13.11 Entire Agreement. This
Agreement is the entire agreement between the parties regarding the subject matter herein, and supercedes all prior existing understandings between the Parties relating to the subject matter hereof. This Agreement may not be modified except in
writing signed by both Parties. 
  
 13.12 Press Releases. The
Parties will not disclose, via any press release or public announcement, the existence of this Agreement or the Research Agreement until the Effective Date. 
  
 IN WITNESS WHEREOF, the parties hereto have duly executed this License Agreement as of the date first above written. 
  

									
	 BENTLEY PHARMACEUTICALS, INC.
	 	 	 	 AUXILIUM A2, Inc.

					
	By:	 	/s/    JAMES R. MURPHY        	 	 	 	By:	 	/s/    GERALDINE A. HENWOOD         
	 	 	
	 	 	 	 	 	

	 	 	 James R. Murphy
 Chief Executive Officer
	 	 	 	 	 	 Geraldine A. Henwood
 Chief Executive
Officer

  

 15 

 SCHEDULE A/APPENDIX A 
 BENTLEY PATENTS 
  

							
	 COUNTRY

	 	 PATENT NO.

	 	 GRANT DATE

	 	 EXPIRATION DATE

	 Belgium
	 	248,885	 	Aug. 5, 1992	 	Nov. 28, 2006
	 Canada
	 	1,312,281	 	Jan. 5, 1993	 	Jan. 05, 2010
	 Denmark
	 	167,343	 	Oct. 18, 1993	 	Nov. 28, 2006
	 France
	 	248,885	 	Aug. 5, 1992	 	Nov. 28, 2006
	 Germany
	 	P3,690,626.3	 	May 15, 1997	 	Nov. 28, 2006
	 Great Britain
	 	2,192,134	 	Apr. 25, 1990	 	Nov. 28, 2006
	 Italy
	 	248,885	 	Aug. 5, 1992	 	Nov. 28, 2006
	 Japan
	 	2,583,777	 	Nov. 21, 1996	 	Nov. 28, 2006
	 Korea
	 	84,759	 	Nov. 29, 1994	 	Nov. 28, 2006
	 Luxembourg
	 	WO 873,473	 	Nov. 11, 1987	 	Nov. 28, 2006
	 Switzerland
	 	666,813	 	Aug. 31, 1988	 	Nov. 28, 2006
	 United States
	 	5,023,252	 	June 11, 1991	 	Jun. 11, 2008

  
 Other patents are filed as provisional
applications or are in the preparation or developmental stages and will be amended, if applicable, to this Agreement. 

 SCHEDULE B 
  
 Claims Made Against Bentley Pharmaceuticals, Inc. 
  
 In November 1999, Creative Technologies, Inc. (“Creative”) commenced a lawsuit against the Bentley Pharmaceuticals, Inc. and others in the Superior Court of New
Jersey, Essex County, asserting that the Bentley breached a brokerage or finder’s fee contract with Creative regarding its 1999 acquisition of permeation enhancement technology. Creative also asserts claims for breach of the implied covenant of
good faith and fair dealing and for tortious interference with contract. Bentley has made a motion to dismiss the complaint and each count therein for failure to state a cause of action and for lack of personal jurisdiction over Bentley. 

 AMENDMENT NO. 1 TO LICENSE AGREEMENT 
  
 THIS AMENDMENT NO. 1 TO LICENSE AGREEMENT (the “Amendment”) is made as of the 31st day of October 2000 by
and between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation with offices at 65 Lafayette Road, Third Floor, North Hampton, New Hampshire 03862-2403 (hereinafter “Bentley” or “Licensor”) and AUXILIUM A2 , INC., a Delaware
corporation with offices at 160 W. Germantown Pike, Suite D-5, Norriton Office Center, Norristown, Pennsylvania 19401 (hereafter, “Auxilium” or “Licensee”). Bentley and Auxilium may be referred to as a “Party” or,
collectively, as “Parties.” 
  
 WHEREAS, the parties
have entered into that certain License Agreement dated May 31, 2000 relating to the grant by Bentley to Auxilium of a license of certain technology (the “License Agreement”); 
  
 WHEREAS, as reflected in the third recital of the License Agreement, the parties intended not to include patch applications
as part of the license; 
  
 WHEREAS, the parties wish to clarify
the definitions in the License Agreement to indicate that patch applications are not included in the scope of the license; 
  
 NOW THEREFORE, the parties hereby amend the License Agreement as follows: 
  
 1. The definition of “Combination Products” in Section 1.1 of the License Agreement is hereby modified in its
entirety to read as follows: 
  
 “Combination Products” means any and all pharmaceutical compositions, other than patch applications, which contain (A) testosterone as an active ingredient in combination with any other steroids, hormones, somatotropics,
emollients, or therapeutic soy products; and (B) the Compound; and which fall within the scope of any composition, method, or article claim of the BENTLEY Patents and which is intended to be applied topically to the user of the composition.

  
 2. The definition of “Products” in Section 1.1 of
the License Agreement is hereby modified in its entity to read as follows: 
  
 “Products” means any and all pharmaceutical compositions, other than patch applications, which contain (A) testosterone as the single active ingredient; and (B) the Compound; and which fall within the scope
of any composition, method, or article claim of the BENTLEY Patents and which is intended to be applied topically to the user of the composition. 

 3. As modified by this Amendment, the License Agreement remains in full force and effect. 
  
 IN WITNESS WHEREOF, the parties have executed this Amendment by their duly
authorized representatives as of the date set forth above. 
  

									
	 BENTLEY PHARMACEUTICALS, INC.
	 	 	 	 AUXILIUM A2 , INC.

					
	By:	 	 /s/    JAMES R. MURPHY
	 	 	 	 By:
	 	 /s/    JANE A. HOLLINGSWORTH

	 	 	
	 	 	 	 	 	

	 	 	 Name: James R. Murphy
 Title:   Chairman and CEO
	 	 	 	 	 	 Name: Jane A. Hollingsworth
 Title:   EVP

 CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT. 
  
 AMENDMENT NO. 2 TO LICENSE AGREEMENT 
  
 THIS AMENDMENT NO. 2 TO LICENSE AGREEMENT is made as of the 31st day of May,
2001 by and between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation, with offices at 65 Lafayette Road, 3rd Floor, North Hampton, New Hampshire 03862-2403 (hereinafter, “BENTLEY” or “Licensor”), and AUXILIUM A2, INC., a
Delaware corporation having a principal place of business at 160 W. Germantown Pike, Suite D-5, East Norriton, Pennsylvania 19401 (hereinafter, “AUXILIUM” or “Licensee”). BENTLEY and AUXILIUM may be referred to as a
“Party” or, collectively, as “Parties.” 
  
 RECITALS 
  
 WHEREAS the parties have entered into that certain License
Agreement, dated May 31, 2000, relating to the grant by BENTLEY to AUXILIUM of a license of certain technology (the “License Agreement”); 
  
 WHEREAS the parties clarified the License Agreement by entering into Amendment No. 1 to the License Agreement, dated October 31, 2000 (“Amendment No. 1”); and

  
 WHEREAS the Parties wish to further amend the License Agreement to change
certain sections of the License Agreement; 
  
 NOW, THEREFORE, in consideration of
the promises and mutual covenants contained herein, and INTENDING TO BE LEGALLY BOUND HEREBY, the Parties further amend the License Agreement as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 Except as amended below, the terms defined in the License Agreement, as
amended in Amendment No. 1, shall remain unchanged. 
  
 1.2
“Territory” shall mean all countries and territories of the world, including Spain. 
  
 ARTICLE II 
 GRANT OF LICENSE 
  
 2.1 The grant of license in Section 2.1 of the License Agreement shall include Spain. 
  
 ARTICLE III 
 PAYMENTS IN CONSIDERATION FOR LICENSE 
  
 3.1 Except as amended below, all payments set forth in Article III of the License Agreement shall remain unchanged. 

 3.2 Section 3.2 (a) of the License Agreement shall be amended to read as follows: 
  
 (a) there is an enforceable BENTLEY Patent at the time of
sale: 
  

			
	 $* Million of Annual Net Sales
	  	*%
	 $* Million of Annual Net Sales
	  	*%
	 $* Million of Annual Net Sales
	  	*%
	 Net Sales over
	  	 
	 Net Sales over
	  	*%

  
 IN WITNESS WHEREOF,
the parties hereto have duly executed this Amendment No. 2 to License Agreement as of the date first above written. 
  

									
	 BENTLEY PHARMACEUTICALS, INC.
	 	 	 	 AUXILIUM A2 , INC.

					
	By:	 	 /s/    JORDAN HORVATH
	 	 	 	 By:
	 	 /s/    GERALDINE A. HENWOOD

	 	 	
	 	 	 	 	 	

	 	 	 Name: Jordan Horvath
 Title:   Vice President & General Counsel
	 	 	 	 	 	 Name: Geraldine A. Henwood
 Title:   Chief Executive Officer

  

	*	Confidential information has been omitted and filed confidentially with the Securities and Exchange Commission. 

  
  

 2 

 CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT. 
  
 AMENDMENT NO. 3 TO LICENSE AGREEMENT 
  
 THIS AMENDMENT NO. 3 TO LICENSE AGREEMENT is made as of the 6th day of
September, 2002 by and between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation, with offices at 65 Lafayette Road, 3rd Floor, North Hampton, New Hampshire 03862-2403 (hereinafter, “BENTLEY” or “Licensor”), and AUXILIUM
PHARMACEUTICALS, INC. (formerly Auxilium A(2), Inc.), a Delaware corporation having a principal place of business at 160 W. Germantown Pike, Suite D-5, East Norriton, Pennsylvania 19401 (hereinafter, “AUXILIUM” or “Licensee”).
BENTLEY and AUXILIUM may be referred to as a “Party” or, collectively, as “Parties.” 
  
 RECITALS 
  
 WHEREAS the parties have entered into that certain License Agreement, dated May 31, 2000, relating to the grant by BENTLEY to AUXILIUM of a license of certain technology (the “License Agreement”); 
  
 WHEREAS the parties clarified certain aspects of the License Agreement by
entering into Amendments Nos. 1 and 2 to the License Agreement, dated October 31, 2000 and May 31, 2001, respectively (“Previous Amendments”); and 
  
 WHEREAS, BENTLEY would like to provide incentives to AUXILIUM to enter into sub-licenses for the Products in territories outside the United States; and

  
 WHEREAS, BENTLEY would like to provide further incentives to
AUXILIUM to extend the commercial life of the Products licensed under the License Agreement; and 
  
 WHEREAS the Parties wish to further amend the License Agreement to change certain sections of the License Agreement; 
  
 NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and INTENDING TO BE LEGALLY BOUND HEREBY, the Parties further amend the License Agreement as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 Except as amended below, the terms defined in the License Agreement, as
amended by the Previous Amendments, shall remain unchanged. Unless otherwise defined in this Amendment, all capitalized terms in this Amendment shall have the meanings ascribed to them in the License Agreement, as amended by the Previous Amendments.

 ARTICLE III 
 PAYMENTS IN CONSIDERATION FOR LICENSE 
  
 3.1 Except as amended below, all payments set forth in Article III of the License Agreement shall remain unchanged. 
  
 3.2 (a) of the License Agreement shall be amended to read as follows: 
  
 (a) there is an enforceable BENTLEY Patent at the time of sale: 
  

			
	All Annual Net Sales in the United States and Canada	  	*
		
	All Annual Net Sales outside the United States and Canada	  	*

  
 “Product
Royalties” shall mean all payments received by Auxilium which are based on sales of Products, but shall not include milestone payments related to achievements which are not sales based. 
  
 ARTICLE IV 
 INTELLECTUAL PROPERTY 
  
 4.1 Article VIII of the License Agreement is amended in its entirety to read as follows: 
  
 8.1 Intellectual Property Rights. The inventorship of inventions developed under this Agreement and relating to Products
(“Inventions”) shall be determined in accordance with U.S. Law. Inventions made solely by employees of BENTLEY or owned by BENTLEY (“BENTLEY Inventions”) shall be the exclusive property of BENTLEY. Inventions made solely by
employees of AUXILIUM (“AUXILIUM Inventions”) shall be the exclusive property of AUXILIUM, except that AUXILIUM Inventions that relate to the use of Products shall be owned by BENTLEY and shall be included in the license granted under this
License Agreement and included in the definition of BENTLEY Patents. Inventions made by employees of BENTLEY and employees of AUXILIUM shall also be owned by BENTLEY and shall be included in the license granted under this License Agreement and
included in the definition of BENTLEY Patents. 
  

	*	Confidential information has been omitted and filed confidentially with the Securities and Exchange Commission. 

  
  

 2 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. 3 to License Agreement as of
the date first above written. 
  

									
	 BENTLEY PHARMACEUTICALS, INC.
	 	 	 	 AUXILIUM PHARMACEUTICALS, INC.

					
	 By:
	 	 /s/    JAMES R. MURPHY
	 	 	 	 By:
	 	 /s/    GERALDINE A. HENWOOD

	 	 	
	 	 	 	 	 	

	 	 	 James R. Murphy
 Chief Executive Officer
	 	 	 	 	 	 Geraldine A. Henwood
 Chief Executive Officer

  
  

 3 

 AMENDMENT NO. 4 TO LICENSE AGREEMENT 
  
 THIS AMENDMENT NO. 4 TO LICENSE AGREEMENT is made as of the 25th day of March, 2004 by and between BENTLEY PHARMACEUTICALS,
INC., a Delaware corporation, with offices at Bentley Park, 2 Holland Way, Exeter, New Hampshire 03833 (hereinafter, “BENTLEY” or “Licensor”), and AUXILIUM PHARMACEUTICALS, INC. (formerly Auxilium A2, Inc.), a Delaware
corporation having a principal place of business at 160 W. Germantown Pike, Norristown, Pennsylvania 19401 (hereinafter, “AUXILIUM” or “Licensee”). BENTLEY and AUXILIUM may be referred to as a “Party” or, collectively,
as “Parties.” 
  
 RECITALS 
  
 WHEREAS the parties have entered into that certain License Agreement, dated May 31, 2000,
relating to the grant by BENTLEY to AUXILIUM of a license of certain technology (the “License Agreement”); 
  
 WHEREAS the parties clarified certain aspects of the License Agreement by entering into Amendment Nos. 1, 2 and 3 to the License Agreement, dated October 31, 2000, May
31, 2001 and September 6, 2002, respectively (“Previous Amendments”); and 
  
 WHEREAS, BENTLEY would like to provide incentives to AUXILIUM to enter into sub-licenses for the Products in territories outside the United States; and 
  

WHEREAS the Parties wish to further amend the License Agreement to clarify certain sections of the License Agreement; 
  
 NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and
INTENDING TO BE LEGALLY BOUND HEREBY, the Parties further amend the License Agreement as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 Except as amended below, the terms defined in the License Agreement, as amended by the Previous Amendments, shall remain
unchanged. Unless otherwise defined in this Amendment, all capitalized terms in this Amendment shall have the meanings ascribed to them in the License Agreement, as amended by the Previous Amendments. 
  
 “Net Sales Price” means, with respect to the
Product, the gross amount invoiced by Licensee for such Product, less deductions for: 
  
 (i) returned goods; (ii) trade and quantity discounts; (iii) rebates, including those in respect of any governmental subsidized program,
rebate payments given to wholesalers, buying groups, healthcare insurance carriers or other institutions; (iv) sales or other taxes actually paid by Licensee or its sublicensee or distributor, not including 

  

 17 

 
taxes assessed on the income resulting from such sales; and (v) freight allowances, insurance and customs duties, to the extent any of the foregoing are
identified on the invoice for the Product. If Product is sold for consideration other than cash, the fair market value of such other consideration shall be included in Net Sales. If a Product is sold in a package or kit containing another product
which is not a Product, the Net Sales price for purposes of calculating the royalty under Section 3.2 hereof shall be calculated by multiplying the Net Sales Price of the combination product by the fraction of A/A+B, where “A” is the Net
Sales Price of Product when sold separately “B” is the Net Sales Price of the other product or products when sold separately. If either the Product or the other product is not sold separately, the Net Sales Price of the Product shall be
negotiated in good faith by the Parties. 
  
 “Commercial Sale” means the sale of Product (as indicated by shipment of Product) to an unaffiliated third-party of the Licensee, or of its sublicensee or distribution partner, such as a wholesaler, managed care organization,
hospital or pharmacy and shall exclude (i) any transfer of Product by Licensee to its sublicensee, distribution partner or Affiliate and (ii) any distribution of Product for use in research, development, pre-clinical and clinical trials. 

 
 ARTICLE II 
 PAYMENTS IN CONSIDERATION FOR LICENSE 
  
 2.1 Except as amended below, all payments set forth in Article III of the License Agreement shall remain unchanged. 
  
 2.2 Section 3.2 of the License Agreement is hereby amended to include the following additional paragraph (d): 
  
 “(d) Notwithstanding any contrary provisions in this Section 3.2, the royalty payments
due under Sections 3.2 (a), (b) or (c) above shall be paid on a country-by-country basis only until the later of (i) the termination of Bentley Patent rights in such country or (ii) ten years from the date of first Commercial Sale of Product in such
country. 
  

 18 

 ARTICLE III 
 CERTAIN OBLIGATIONS OF LICENSEE 
  
 3.1 A new Section 4.4 shall be added to the License Agreement as follows: 
  
 4.4 Drug Master File. Licensee shall make certain data generated during the research and development of Testim accessible to
Licensor through the preparation and filing of one or more Drug Master Files (“DMF”). Such DMF shall (a) be filed by or on behalf of the Licensee with the United States Food and Drug Administration (“FDA”) on or before June 30,
2004 and (b) shall contain the data listed on the index attached as Exhibit A to this Amendment 4 to the License Agreement (the “Data Index”). Licensee will designate Licensor, or its licensee if requested in writing by Licensor, as having
a right of reference with the FDA to the DMF (the “Right of Reference”). Licensor shall treat the Data Index as confidential information of Licensee and may disclose the Data Index only to those persons or third parties who have agreed in
writing to maintain its confidentiality and to use the Data Index solely for purposes of evaluation of a potential business opportunity with Licensor. 
  
 ARTICLE IV 
 PATENTS, TRADEMARKS AND
INFRINGEMENT 
  
 4.1 Section 9.2(a) of the License Agreement shall
be deleted in its entirety and replaced with the following: 
  
 (a) In the event of Licensor wishing to abandon any BENTLEY Patents, Licensor will offer to assign to Licensee or a sublicense of Licensee, at Licensee’s option, free of charge, any such Patent prior to
effectuating the abandonment. Licensee will bear the costs connected to any assignment hereunder. 
  
 4.2 A new Section 9.6 shall be added to the License Agreement as follows: 
  
 9.6 Bentley Trademark. In cooperation with Licensee, Licensor shall register in the United States
Patent and Trademark Office and such other countries of the world where the trademark is registrable, a trademark to be used to describe the unique qualities of the technology contained in the Bentley Patents (the “New Trademark”).
Licensee shall have a perpetual, royalty free, worldwide, sole and exclusive license with the right to sublicense, to use the New Trademark in connection with the Product or any other product, patents, technology or similar rights licensed from
Licensor now or in the future which contain the ingredient pentadecalactone. Nothing in this Section 9.6 shall prevent Licensee from using or registering any trademark of its own in connection with the Product or any characteristic of or ingredient
in the Product. 
  
 ARTICLE V 
 TERM AND TERMINATION 
  
 5.1 Except as amended below, all provisions of Article XI Term and Termination of the License Agreement shall remain unchanged. 
  

 19 

 5.2 Section 11.1 of the License Agreement shall be deleted in its entirety and replaced with the
following: 
  
 11.1 Term. This Agreement
and the licenses granted herein shall commence on the Effective Date and shall continue until all royalty obligations of Licensee under Section 3.2 of this Agreement are ended, subject to earlier termination under Section 11.2 hereof. Once all such
royalty obligations of Licensee have ended Licensee shall have a fully paid up license under this Agreement. 
  
 5.3 Section 11.2 (a) of the License Agreement shall be deleted in its entirety and replaced with the following: 
  
 (a) Upon the occurrence of any of the events set forth below
(“Events of Default”), the Licensor shall have the right to terminate this Agreement by giving written notice of termination, such termination effective with the giving of such notice: 
  
 (i) In the event of nonpayment of any material amount
payable to the Licensor after completion of an audit provided for under Section 3.5 hereof, which nonpayment is continuing thirty (30) calendar days after the Licensor gives Licensee written notice of such non-payment. 
  
 (ii) In the event that Licensee fails to initiate clinical
trials within two (2) years of availability of final formulation in quantities adequate for clinical testing and associated documentation for clinical trials, unless such failure is outside of the control of Licensee. See Auxilium Development Plan
attached as Schedule C hereto. 
  
 (iii) In the
event that Licensee does not submit an application for marketing approval in a major market within a five (5) year period after the Effective Date unless such failure to submit is outside of the control of Licensee. 
  
 (iv) In the event that Licensee becomes subject to a
Bankruptcy Event provided, however, that so long as Licensor continues to receive royalty payments from Licensee under this Agreement, such Bankruptcy Event shall not be a basis for termination of this Agreement by Licensor. 
  
 ARTICLE VI 
 ADDITIONAL PROVISION 
  
 6.1 Section 13.5 of the License Agreement shall be deleted in its entirety and replaced with the following: 
  
 13.5 Notices. Any notice under this Agreement shall be sufficiently given if sent in writing by overnight courier, prepaid, first
class, certified or registered mail, return receipt requested, addressed as follows: 
  

 20 

 If to the Licensor, to: 
  
 BENTLEY PHARMACEUTICALS, INC. 
 Bentley Park 
 2 Holland Way 
 Exeter, New Hampshire 03833 
 Attention: President 
  
 If to the Licensee, to: 
  
 AUXILIUM
PHARMACEUTICALS, INC. 
 160 W. Germantown Pike 
 Norristown, PA
19401 
 Attention: President 
 Copy to General Counsel

  
 or to such other addresses as may be designated from time to time by notice
given in accordance with the terms of this Section. 
  
 IN WITNESS
WHEREOF, the parties hereto have duly executed this Amendment No. 4 to License Agreement as of the date first above written. 
  

									
	 BENTLEY PHARMACEUTICALS, INC.
	 	 	 	 AUXILIUM PHARMACEUTICALS, INC.

					
	By:	 	  /s/    James R. Murphy
	 	 	 	By:	 	  /s/    Geraldine A Henwood

	 	 	
	 	 	 	 	 	

	 	 	 James R. Murphy
 Chief Executive Officer
	 	 	 	 	 	 Geraldine A. Henwood
 Chief Executive
Officer

  

 21 

 Format and Proposed Contents of the 
 Drug Master File for CPD 
  
 Non-clinical 

	2.6.6	      Toxicology Written Summary 

	2.6.6.1    Summary	

	2.6.6.2    Repeat	Dose Toxicity 

	2.6.6.3    Genotoxicity	

	2.6.6.4    Reproductive	and Developmental Toxicity 

  
 Chemistry 
 3.2.S       Novel Excipient CPD (also known as oxacylcohexadecan-2-one;
CPE-215) 
  
 3.2.S.1    General Information 
 3.2.S.1.1         Nomenclature 
 3.2.S.1.2         Structure 
  
 3.2.S.3    Characterization 
 3.2.S.3.1         Elucidation of Structure and other
Characteristics 
 3.2.S.3.2         Impurities 
  
 3.2.S.4    Control of Novel Excipient 
 3.2.S.4.1         Specification 
 3.2.S.4.2
        Analytical Procedures 
 3.2.S.4.3         Validation of Analytical
Procedures 
  
 3.2.S.5    Reference Standards or Materials

  
 3.2.S.6    Container Closure System 
  
 3.2.S.7    Stability

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