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                                                                   EXHIBIT 10.13

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                             MANUFACTURING AGREEMENT

     This MANUFACTURING AGREEMENT (this "AGREEMENT") dated as of the first day
of January, 2008 (the "EFFECTIVE DATE"), is made by and between BOEHRINGER
INGELHEIM ROXANE, INC. ("BIRI"), a Delaware corporation (as successor in
interest to ROXANE LABORATORIES, INC.), and XANODYNE PHARMACEUTICALS, INC.
("XANODYNE"), a Delaware corporation (as successor in interest to AAIPHARMA,
INC. and ELAN PHARMA INTERNATIONAL LIMITED).

     WHEREAS, subject to the terms and conditions set forth in this Agreement,
XANODYNE wishes to have BIRI manufacture and supply for XANODYNE certain
palliative care pharmaceutical products; and

     WHEREAS, subject to the terms and conditions set forth in this Agreement,
BIRI wishes to manufacture and supply such palliative care pharmaceutical
products for XANODYNE.

     NOW THEREFORE, in consideration of the premises and the undertakings of the
parties hereinafter set forth, the parties agree as follows.

SECTION 1. DEFINITIONS

     1.1 "AFFILIATE" shall mean, with respect to any PERSON, any PERSON that,
directly or indirectly, controls, is controlled by or is under common control
with such PERSON. A PERSON shall be regarded as in control of another PERSON if
it owns or controls, directly or indirectly, (a) in the case of corporate
entities at least fifty percent (50%) (or the maximum ownership interest
permitted by law) of the equity securities in the subject entity entitled to
vote in the election of directors, and (b) in the case of any entity that is not
a corporation, at least fifty percent (50%) (or the maximum ownership interest
permitted by law) of the equity securities or other ownership interests with the
power to direct the management and policies of such subject entity or entitled
to elect the corresponding management authority, provided, however, that the
term "AFFILIATE" shall not include subsidiaries or other entities in which a
PARTY or its AFFILIATES owns a majority of the ordinary voting power necessary
to elect a majority of the board of directors or other governing board, but is
restricted from electing such majority by contract or otherwise, until such time
as such restrictions are no longer in effect.

     1.2 "BATCH" shall mean the quantity of each PRODUCT as either a tablet,
capsule or liquid set forth on Attachment A hereof.

     1.3 "CLAIMANT" shall have the meaning set forth in Section 12.3 hereof.

     1.4 "COA" shall have the meaning set forth in Section 4.1 hereof.

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     1.5 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
9.2 hereof

     1.6 "COST" shall mean BIRI's fully burdened costs (including all costs for
[**]) for each PRODUCT, and, solely in the case of [**] costs, allocated for
each PRODUCT consistent with BIRI' s past practices.

     1.7 "DEA" shall mean the United States Drug Enforcement Administration.

     1.8 "DELIVERY DATE" means the date for the delivery of a PRODUCTS shipment,
as stated in the applicable purchase order plus or minus three calendar days for
such shipment.

     1.9 "ENVIRONMENTAL CLAIM" shall mean any claim, investigation or notice
(written or oral) by any PERSON alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or fatalities, or penalties) arising out of, based on or
resulting from (a) the presence, release or threatened release into the
environment of, or human exposure to, any MATERIAL OF ENVIRONMENTAL CONCERN at
any location, whether or not owned or operated by BIRI or its AFFILIATES or (b)
activities or conditions forming the basis of any violation, or alleged
violation of, or liability or alleged liability under, any ENVIRONMENT AL LAW.

     1.10 "ENVIRONMENTAL LAWS" shall mean all applicable federal, state and
local laws, statutes, rules, regulations, ordinances (including any amendments
thereto), including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., and
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean
Air Act, 42 U.S.C. Section 1857 et seq., and the Toxic Substances Control Act,
15 U.S.C. Section 2601 et seq., orders, decrees, plans, codes, judgments,
injunctions, notice or demand letters, prohibitions, obligations, schedules,
timetables, standards, conditions or requirements issued, entered, approved or
promulgated thereunder, relating to pollution or protection of human health or
the environment, including laws relating to emissions, discharges, releases or
threatened releases of MATERIALS OF ENVIRONMENTAL CONCERN in, into, onto or upon
the environment (including, without limitation, ambient air, surface water,
ground water, or land) or otherwise relating to the manufacture, processing,
distribution, use, treatment, collection, accumulation, storage, disposal,
transport, or handling of MATERIALS OF ENVIRONMENTAL CONCERN.

     1.11 "EPA" shall mean the United States Environmental Protection Agency.

     1.12 "EXISTING INVENTORY" shall have the meaning set forth in Section 6.1.

     1.13 "FDA" shall mean the United States Food and Drug Administration.

     1.14 "GOOD MANUFACTURING PRACTICES" (cGMPs) shall mean current good

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manufacturing practices required by the FDA for the manufacture of each of the
PRODUCTS as set forth under 21 CFR 210 and 211 and cGMPs as otherwise
articulated by the FDA in formal written guidance.

     1.15 "GOVERNMENTAL AGENCY" shall mean any United States federal or state
government authority, agency, commission or other instrumentality that has
jurisdiction over the manufacture, marketing, use, sale or distribution of any
of the PRODUCTS and includes, but is not limited to, the FDA, EPA and DEA.

     1.16 "GRANDFATHERED PRODUCTS" shall mean those PRODUCTS [**] that are
manufactured by BIRI for XANODYNE and are identified in Attachment A

     1.17 "INDEMNI'TOR" shall have the meaning set forth in Section 12.3 hereof.

     1.18 "LABELING" shall mean the "label," as defined in Section 20l(m) of the
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 321(m), and the package
inserts accompanying each of the PRODUCTS, and any other written, printed, or
graphic materials accompanying the PRODUCTS, including, but not limited to,
patient instructions or patient medication guides.

     1.19 "MANUFACTURING SERVICES" shall mean, with respect to each PRODUCT, the
manufacture, processing and testing (including, without limitation, testing in
accordance with Section 4.1 hereof) of such PRODUCT and the packaging, filling
and LABELING of such PRODUCT in finished dosage form for commercial sale in the
United States in accordance with this Agreement.

     1.20 "MANUFACTURING TECHNOLOGIES" shall mean (a) all ACQUIRED ASSETS and
(b) other technologies, proprietary rights and know-how owned by XANODYNE or its
AFFILIATES or to which XANODYNE or its AFFILIATES otherwise have rights which
are necessary for the performance of the MANUFACTURING SERVICES, including, but
not limited to, all manufacturing and packaging processes, trade secrets,
technical information, manufacturing formulae, manufacturing directions,
manufacturing specifications, manufacturing validation, component
specifications, test methods, stability data, validation data of analytical
methods and know-how necessary for the performance of the MANUFACTURING SERVICES
in accordance with the SPECIFICATIONS and other requirements of this AGREEMENT.

     1.21 "MARKETING AUTHORIZATION" shall mean the approval to market each of
the PRODUCTS from the FDA, whether as a result of a New Drug Application
(including all supplements and amendments thereto), the Drug Efficacy Study
Implementation ("DESI") program or as a pre-1938 drug having been generally
recognized as being safe.

     1.22 "MASTER CONTROL DOCUMENT" shall mean the batch specific documentation
used by BIRI in the production of product for XANODYNE.

     1.23 "MATERIAL ADVERSE EFFECT" shall mean any event, change, circumstance
or effect that is or reasonably could be expected to be (a) materially adverse
to the business, assets, operations, results of operations or financial
condition of a PARTY, or any of the PRODUCTS, other than any event, change,
circumstance or effect relating (i) to the economy in general, or (ii) in

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general to the pharmaceutical industry or palliative care medication business,
provided that neither the PARTY nor any PRODUCT is not materially
disproportionately affected as compared to other PERSONS engaged in such
industry or business by such event, change, circumstance or effect; or (b)
materially adverse to the ability of a PARTY to perform any of its material
obligations under this AGREEMENT.

     1.24 "MATERIALS OF ENVIRONMENTAL CONCERN" shall mean all chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum, petroleum
products and hazardous substances (as defined in Section 101(14) of CERCLA, 42
U.S.C. Section 9601(14)), or solid or hazardous wastes as now defined under any
ENVIRONMENTAL LAWS.

     1.25 "PARTIES" shall mean BIRI and XANODYNE.

     1.26 "PARTY" shall mean each of BIRI and XANODYNE.

     1.27 "PERSON" shall mean a natural person, a corporation, a partnership, a
limited liability company, an association, a trust, a joint venture or any other
entity or organization, including a GOVERNMENTAL AGENCY.

     1.28 "PLANT" means the premises of BIRI situated at 1809 Wilson Road
Columbus, Ohio 43216 or such other FDA approved facility of Manufacturer
approved by Xanodyne for the purpose of MANUFACTURING SERVICES hereunder.

     1.29 "PRODUCT FORMULATION" shall mean each dosage form of a PRODUCT (but
not each packaging presentation of a PRODUCT). For example, Oramorph SR TAB 100
mg (1 x 25 blisters) and Oramorph SR TAB 100 mg (100 count bottles) would be the
same PRODUCT FORMULATION while Oramorph SR TAB 100 mg (1 x 25 blisters) and
Oramorph SR TAB 60 mg (1 x 25 blisters) would be different PRODUCT FORMULATIONS.

     1.30 "PRODUCTS" shall mean the palliative care pharmaceutical PRODUCTS
identified in Attachment A

     1.31 "RAW MATERIALS" means, in relation to the PRODUCTS, the Active
Ingredient(s), excipients and packaging materials used in the MANUFACTURING
SERVICES thereof.

     1.32 "SPECIFICATIONS" shall mean the specifications for the composition of
each of the PRODUCTS and the performance of the MANUFACTURING SERVICES with
respect to each of the PRODUCTS and the related raw materials, components,
methods and stability protocols and procedures as set forth in (a) the MARKETING
AUTHORIZATIONS, and (b) the MASTER CONTROL DOCUMENTS utilized by BIRI as of the
EFFECTIVE DATE, as may be amended pursuant to Section 3.2 hereof from time to
time.

     1.33 "TECHNICAL AGREEMENT" shall have the meaning set forth in Section 3.7.

     1.34 "TRADEMARK AGREEMENT" shall mean that certain Trademark Agreement by
and between the PARTIES (or their AFFILIATES) dated as of the date hereof.

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     1.35 "TRANSACTION DOCUMENTS" shall mean the INTERIM DISTRIBUTION SERVICES
AGREEMENT, the INTERIM REGULATORY SERVICES AGREEMENT, the TRADEMARK AGREEMENT
and the ASSET PURCHASE AGREEMENT.

     1.36 "UNIT PRICE" means the Price of a Unit identified in Attachment B and
established pursuant to Section 6.

SECTION 2. GRANT OF LICENSE

     XANODYNE hereby grants to BIRI a non-exclusive license during the term of
this AGREEMENT to use and otherwise practice the MANUFACTURING TECHNOLOGIES
solely for the purposes of fulfilling its obligations under this AGREEMENT. The
license granted in this Section 2 shall terminate automatically and without
further action by XANODYNE or BIRI upon the expiration or earlier termination of
this AGREEMENT in accordance with Section 10 hereof.

SECTION 3. MANUFACTURE

     3.1 Manufacture of Products.

          (a) In accordance with the terms of this Agreement, BIRI shall perform
the MANUFACTURING SERVICES with respect to each PRODUCT, XANODYNE shall order
and purchase each of the PRODUCTS in finished dosage form from BIRI, and BIRI
shall sell and deliver such purchased PRODUCTS to XANODYNE. Subject to the terms
and conditions contained herein, BIRI shall perform the MANUFACTURING SERVICES
in accordance with: (i) the SPECIFICATIONS for each of the PRODUCTS; (ii) all
regulations now in place or hereafter established by the FDA (including, but not
limited to, GOOD MANUFACTURING PRACTICES, and 21 C.F.R. Part 11), DEA or any
other GOVERNMENTAL AGENCY that are applicable to the performance of
MANUFACTURING SERVICES with respect to the applicable PRODUCT; and (iii) all
material requirements of other federal, state or local laws and regulations
applicable to the performance of MANUFACTURING SERVICES with respect to the
applicable PRODUCT.

          (b) BIRI shall be responsible for (i) obtaining all materials,
ingredients and components required to manufacture each of the PRODUCTS in
accordance with the SPECIFICATIONS; and (ii) supplying all other equipment,
materials and personnel necessary for the performance of the MANUFACTURING
SERVICES and delivery of the PRODUCTS in finished package form to XANODYNE. BIRI
shall maintain in its inventory such quantity of materials, ingredients and
components necessary for BIRI to perform its obligations hereunder in reliance
on Xanodyne's most recently submitted forecast pursuant to Section 5.5.

          (c) BIRI shall perform the MANUFACTURING SERVICES at its PLANT in
Columbus, Ohio.

          (d) BIRI shall ensure that, at the time of delivery of the PRODUCTS to
a common carrier for shipment to XANODYNE: (a) the PRODUCTS shall conform to the
SPECIFICATIONS; (b) the PRODUCTS shall, subject to XANODYNE's timely provision
of compliant and accurate LABELING and artwork, not be adulterated or misbranded
under applicable laws; and (c) the

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PRODUCTS shall have a remaining shelf life of not less than [**] months on
products with a [**] month expiry and [**] months on products with a [**] month
expiry unless mutually agreed upon by both parties in advance of shipment.

     3.2 Changes to Specifications. Either of the PARTIES hereunder shall have
the right to request changes to the SPECIFICATIONS; provided, however, that no
such change shall be implemented unless: (a) the other PARTY gives its prior
written consent to any such changes, which consent shall not be unreasonably
withheld, conditioned or delayed, (b) the PARTIES agree in writing concerning
the implementation date of any such change, and (c) in the event any such change
increases or decreases or is reasonably likely to increase or decrease BIRI'S
COSTS in connection with the performance of the MANUFACTURING SERVICES, the
PARTIES agree in writing upon an equitable adjustment in the payment therefore.
In addition, in the event any change in the SPECIFICATIONS is requested or
required by any GOVERNMENTAL AGENCY, including the FDA, the PARTIES shall meet
and discuss the implications of such change, the costs associated therewith, the
capacity required to implement such change, and the timeframe in which such
change could be implemented. If XANODYNE desires to have BIRI implement such
change and so notifies BIRI in writing, BIRI shall promptly either implement
such change or, in the event BIRI believes the implementation of such change
would be commercially impractical, notify XANODYNE of its decision not to
implement such change. BIRI shall not unreasonably refuse to implement any
change and shall implement all changes that are not commercially impractical
subject to [**]. Prior to implementing any change in the SPECIFICATIONS, the
PARTIES shall agree in writing upon an equitable adjustment in the payments to
BIRI to reflect any increased or decreased COSTS incurred by BIRI as a result of
the implementation of such change. Commencing on the date any change in the
SPECIFICATIONS is implemented, the payments to BIRI shall be adjusted as agreed
in writing, and inventories of PRODUCTS, ingredients, packaging and LABELING
components, and other in process work maintained by BIRI in accordance with
Section 3.1(b) hereof which cannot be used by BIRI as the result of such change
in the SPECIFICATIONS shall be identified by BIRI and purchased by XANODYNE from
BIRI at BIRI'S COST therefore (including any costs associated with shipping
and/or disposing of such materials in accordance with XANODYNE's instructions).
If any change to the SPECIFICATIONS requires FDA or other GOVERNMENTAL AGENCY
approval, such change shall not be implemented until such change has been so
approved. Notwithstanding the foregoing, the COST shall not be increased as a
result of any change, alteration or modification in the event such change,
alteration or modification is related generally to the PLANT or other products
manufactured by BIRI in the PLANT, with the exception of any mandated regulatory
changes required by a Governmental Agency.

     3.3 Monitoring of Manufacturing Activities. XANODYNE shall be permitted,
but not obligated, to reasonably monitor all aspects of BIRI'S activities at
BIRI's facilities under this AGREEMENT, provided, however that XANODYNE may only
inspect BIRI's facilities used in the performance of this AGREEMENT, and all
such inspections shall occur at reasonable time intervals, upon reasonable prior
notice and during regular business hours and without unreasonable disruption to
BIRI'S business. BIRI shall make all records regarding its performance under
this AGREEMENT reasonably available for inspection by XANODYNE.

     3.4 Notifications Concerning Manufacturing Matters.

          (a) BIRI shall (i) promptly, notify XANODYNE of any problems or
unusual

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production situations which have, or are reasonably likely to have, a MATERIAL
ADVERSE EFFECT on BIRI'S ability to perform the MANUFACTURING SERVICES in
accordance with this Agreement or deliver the PRODUCTS to XANODYNE in a timely
manner; and (ii) shall notify XANODYNE of such other matters relating to the
MANUFACTURING SERVICES as required in the TECHNICAL AGREEMENT in accordance with
the terms of the TECHNICAL AGREEMENT.

          (b) In the event BIRI is unable to manufacture or have manufactured
and deliver PRODUCTS in sufficient quantities to satisfy XANODYNE's forecasted
requirements, due to any cause, BIRI shall promptly inform XANODYNE of the
expected duration of its inability to manufacture or have manufactured
sufficient quantities of PRODUCTS and shall keep XANODYNE informed on a timely
basis of developments during any such period of time.

          (c) BIRI shall notify and, if applicable, provide copies of any
notices or communications to, XANODYNE of any FDA or other GOVERNMENTAL AGENCY
inspection, investigation or other inquiry, or other material governmental
notice or communication, relating to the manufacture of any PRODUCT or to any
facility at which any PRODUCT is manufactured, supplied, processed, tested,
packaged, labeled or shipped, including, but not limited to, any FDA Form 483 or
Warning Letter, promptly within no more than [**] business days after BIRI
becomes aware of such inspection, investigation, inquiry, notice or
communication and shall promptly thereafter provide to XANODYNE a written
summary of all findings and corrective actions(s) taken or planned by BIRI,
including any written responses from BIRI to the FDA or other GOVERNMENTAL
AGENCY.

     3.5 Compliance with Applicable Laws. BIRI shall comply with all GOOD
MANUFACTURING PRACTICES and other FDA laws and regulations, DEA laws and
regulations and all material requirements of other applicable laws in carrying
out its duties and obligations under this AGREEMENT, including, without
limitation, maintaining in full force and effect all necessary registrations,
licenses, permits and other authorizations (other than the MARKETING
AUTHORIZATIONS), obtaining any necessary procurement quotas, and filing any
necessary ARCOS reports and other DEA forms, including, without limitation, DEA
Form 222. Notwithstanding the foregoing or any other provision of this Agreement
requiring compliance with laws and/or regulations, the PARTIES acknowledge that
BIRI is currently manufacturing and selling certain PRODUCTS pursuant to
MARKETING AUTHORIZATIONS other than New Drug Applications, and agree that BIRI's
continued manufacture and sale of PRODUCTS in substantially the same manner
pursuant to such MARKETING AUTHORIZATIONS shall not be deemed to be a breach of
this AGREEMENT as a consequence of the absence of an approved New Drug
Application for any such PRODUCT.

     3.6 Subcontractors. BIRI may, with XANODYNE's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, subcontract
all or any part of the performance of the MANUFACTURING SERVICES with respect to
all or any of the PRODUCTS, provided that BIRI shall at all times remain
primarily responsible for the performance of its obligations hereunder and that
BIRI shall cause any such subcontractor to agree in writing to be bound by
confidentiality terms substantially similar to those set forth in Section 9
hereof. The PARTIES acknowledge that cost is one of the factors that XANODYNE
may reasonably consider when determining whether to consent to the use of a
particular subcontractor.

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     3.7 Technical Agreement. The technical agreement between the PARTIES is
attached hereto as Attachment C and incorporated herein by reference. In the
event of any conflict or inconsistency between the terms of this AGREEMENT and
the terms of such TECHNICAL AGREEMENT, the terms of this AGREEMENT shall govern
the relationship between the PARTIES.

SECTION 4. TESTING; RECEIPT OF PRODUCTS; ACCEPTANCE

     4.1 Testing: Certificate of Analysis. BIRI shall test, or have tested, each
BATCH of the finished PRODUCTS using the analytical testing methodologies which
are set forth in the SPECIFICATIONS. BIRI shall furnish XANODYNE with a
Certificate of Analysis ("COA") for each BATCH of the PRODUCTS on or before the
date on which such PRODUCTS are delivered to XANODYNE. BIRI shall retain records
pertaining to all such testing as required by law.

     4.2 Rejection/Acceptance Procedures: Non-Conforming Products.

          (a) XANODYNE shall be entitled to reject any portion or all of any
shipment of PRODUCTS (or any component thereof) that, at the time of transfer
from BIRI to a common carrier, (i) fails to comply with any of the
SPECIFICATIONS with respect to a particular PRODUCT, (ii) is not suitable for
sale due to (A) the failure to manufacture such PRODUCT in accordance with GOOD
MANUFACTURING PRACTICES or (B) the failure to comply with other FDA laws and
regulations, DEA laws and regulations or material requirements of other
applicable laws (all such PRODUCTS, "NONCONFORMING PRODUCTS", and any of such
events, a "NONCONFORMITY"); provided that XANODYNE notifies BIRI within [**]
days after receipt of the shipment that XANODYNE is rejecting such shipment. If
no such notice is provided by XANODYNE, then XANODYNE shall be deemed to have
accepted the shipment regardless of whether XANODYNE has actually performed any
testing on such PRODUCTS. Notwithstanding the foregoing, in the event XANODYNE
determines after acceptance of a PRODUCT that such PRODUCT is a NONCONFORMING
PRODUCT due to a NONCONFORMITY that was not, and should not reasonably have
been, discovered upon reasonable diligent examination and testing by XANODYNE
upon receipt or otherwise known by XANODYNE, XANODYNE may subsequently revoke
its acceptance of such NONCONFORMING PRODUCTS upon confirmation of such
NONCONFORMITY, provided that it has given to BIRI written notice of its
discovery of the NONCONFORMITY within [**] days after XANODYNE discovers or
should reasonably have discovered such NONCONFORMITY and promptly proceeded to
diligently investigate such NONCONFORMITY and notify BIRI of the results
thereof. Any notification by' XANODYNE to BIRI of NONCONFORMING PRODUCTS shall
indicate the SPECIFICATIONS or other applicable laws or regulations claimed to
be unmet and any pertinent analysis performed by XANODYNE in making this
conclusion.

          (b) BIRI shall notify XANODYNE as promptly as reasonably possible, but
in any event within [**] days after receipt of XANODYNE's notice of rejection or
revocation of acceptance, whether it accepts or disputes XANODYNE's assertions
that certain PRODUCTS are NONCONFORMING PRODUCTS.

          (c) Whether or not BIRI accepts XANODYNE'S assertion that certain
PRODUCTS

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are NONCONFORMING PRODUCTS, BIRI shall with reasonable promptness replace all
such NONCONFORMING PRODUCTS with PRODUCTS that comply with the SPECIFICATIONS
and were manufactured in accordance with all GOOD MANUFACTURING PRACTICES, other
FDA laws and regulations, DEA laws and regulations and material requirements of
other applicable laws (such PRODUCTS, "REPLACEMENT PRODUCTS"), and XANODYNE
shall pay the total amount originally invoiced in connection with the original
shipment of PRODUCTS within [**] days after receipt of such invoice. Such
payment shall be in addition to any amounts payable to BIRI pursuant to Section
4.2(g).

          (d) If BIRI accepts XANODYNE'S assertion that certain PRODUCTS are
NONCONFORMING PRODUCTS, the REPLACEMENT PRODUCTS for such NONCONFORMING PRODUCTS
shall be provided at no cost to XANODYNE. In such circumstances, BIRI shall bear
freight, tax, and insurance costs incurred by XANODYNE in transporting such
replacement PRODUCTS to XANODYNE or its designee at the location to which the
original PRODUCTS were shipped.

          (e) If BIRI disputes XANODYNE'S assertion that certain PRODUCTS are
NONCONFORMING PRODUCTS, then at either PARTY'S request an independent testing
laboratory or other appropriately credentialed expert of recognized repute,
mutually agreeable to the PARTIES and subject to confidentiality provisions set
forth in Section 9 below, shall analyze a sample of the allegedly NONCONFORMING
PRODUCTS as necessary to determine whether the rejected PRODUCTS are
NONCONFORMING PRODUCTS. The laboratory or expert shall use such procedures and
tests as such laboratory or expert may consider necessary or appropriate to
reach a conclusion. Both PARTIES agree to cooperate with the independent
laboratory's or expert's reasonable requests for assistance in connection with
its analysis hereunder. Both PARTIES shall be bound by the laboratory's or
expert's results of analysis, which, absent manifest error, shall be deemed
final as to any dispute over NONCONFORMITY. The costs incurred by the laboratory
or expert shall be borne by the losing PARTY, or if the laboratory or expert
cannot place the fault noticed and complained about, then the PARTIES shall
share equally the expenses in connection with such laboratory or expert.

          (f) If the independent laboratory or expert determines, or if BIRI
acknowledges the same in writing, that such PRODUCTS were NONCONFORMING
PRODUCTS, then XANODYNE shall have no obligation to reimburse BIRI for the
REPLACEMENT PRODUCTS, except that XANODYNE shall reimburse BIRI to the extent
that the NONCONFORMITY was caused by XANODYNE rather than by BIRI's performance
of the MANUFACTURING SERVICES.

          (g) If the independent laboratory or expert determines, or if XANODYNE
acknowledges the same in writing, that such PRODUCTS were not NONCONFORMING
PRODUCTS, then BIRI shall provide an invoice to XANODYNE as of the earlier of
such determination or acknowledgement, which invoices shall set forth: (i) the
purchase price for the REPLACEMENT PRODUCTS as of the date such REPLACEMENT
PRODUCTS were shipped to XANODYNE; together with (ii) all freight, tax, and
insurance costs incurred in transporting such REPLACEMENT PRODUCTS to XANODYNE
or its designee. Such purchase price for the REPLACEMENT PRODUCTS shall be in
addition to the purchase price for the original shipment of the allegedly
NONCONFORMING PRODUCTS. XANODYNE shall pay such invoice within [**]days after
receipt thereof.

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          (h) NONCONFORMING PRODUCTS shall, upon mutual agreement by BIRI and
XANODYNE and at BIRI's sole expense, either (i) be returned to BIRI within a
reasonable period of time and relabeled or reworked as permitted in the
MARKETING AUTHORIZATIONS and SPECIFICATIONS, if permitted by the FDA or (ii)
destroyed. Any return and/or destruction of NONCONFORMING PRODUCTS shall be in
accordance with applicable DEA regulations and other federal, state or local
laws and regulations related to the return and/or destruction of controlled
substances.

SECTION 5. QUANTITY; ORDER PROCEDURE

     5.1 Purchase and Sale. Subject to the terms and conditions set forth
herein, BIRI shall manufacture and sell to XANODYNE, and XANODYNE shall purchase
from BIRI, such orders for the PRODUCTS as shall be placed from time to time by
XANODYNE on its own behalf and/or on behalf of its distributors during the term
of this AGREEMENT.

     5.2 Purchase Orders. XANODYNE shall order PRODUCTS on its standard purchase
order forms (each, a "PURCHASE ORDER") submitted electronically via email to the
BIRI production site in Columbus, OH and also to the BI Service Center in
Ridgefield, CT. no less than [**] months prior to any DELIVERY DATE. In the
event XANODYNE fails to deliver to BIRI a forecast within [**] days of the first
business day of a calendar month then the firm order shall be deemed to be the
forecasted amount for such period in the immediately preceding forecast supplied
by XANODYNE to BIRI. (e.g. Month [**] from the previous months [**]-month
rolling forecast shall become binding due to the aforementioned [**] month
lead-time). Subject to the other terms and conditions of this AGREEMENT, BIRI
shall supply, begin manufacture and sell the PRODUCTS to XANODYNE in the
quantities specified in XANODYNE's PURCHASE ORDER on the DELIVERY DATES
therefore, provided, however that under no circumstances may such PURCHASE
ORDERS for any PRODUCT, individually or collectively, exceed the DEA quotas for
BIRI's manufacture of such PRODUCT. BIRI shall properly request quota based on
the most recent forecast received from XANODYNE in accordance with timelines and
procedures outlined by the Drug Enforcement Administration (DEA). The only
function of the PURCHASE ORDER is to set forth the quantities of PRODUCTS
desired by package size, the quantity of PRODUCTS ordered, the DELIVERY DATE and
the destination of the PRODUCTS. All other terms and conditions set forth in
such PURCHASE ORDERS shall be of no force or effect. XANODYNE agrees to purchase
the PRODUCTS and request delivery thereof in production BATCH quantities or
multiples thereof as defined by BIRI in attachment A.

     5.3 Acknowledgments; Confirmations. In addition, within [**] calendar days
following receipt of a PURCHASE ORDER, BIRI shall notify XANODYNE in the event
that: (a) that the PURCHASE ORDER is rejected for noncompliance with the
requirements of this AGREEMENT; or (b) that the PURCHASE ORDER exceeds the
FORECAST, in which case, BIRI shall notify XANODYNE whether it is willing to
supply the PRODUCTS in excess of the FORECAST requested (provided that BIRI
agrees to use commercially reasonable efforts to supply PRODUCTS in excess of
the FORECAST). XANODYNE shall negotiate in good faith any changes in delivery
dates proposed by BIRI. Any changes in the PURCHASE ORDER must be agreed to in
writing by XANODYNE to be binding. Any determination of whether quantities in
excess of the FORECAST shall be manufactured by BIRI must be specifically agreed
to in writing by BIRI to be binding. Once

                                       10

<PAGE>

PURCHASE ORDERS have been confirmed by both parties the details of those
PURCHASE ORDERS are to be listed and updated monthly by the BI Service Center in
the "XANODYNE Purchase Orders by Month Report".

     5.4 Purchase Requirements. Attached hereto as Attachment D, which is based
on an initial [**] calendar month rolling forecast of purchases of each of the
PRODUCTS, including desired delivery dates (the "INITIAL FORECAST"). XANODYNE
agrees to purchase, at a minimum, the total dollar amount as specified in
Attachment D, for the year 2008 (Total of $[**] according to sales prices
indicated on Attachment B) and 2009 (Total of $[**] according to sales prices
indicated on Attachment B) respectively during the term of this AGREEMENT. In
the event XANODYNE fails to purchase the minimum dollar amount set forth in the
attached forecast in any [**] month period, within [**] days thereafter,
XANODYNE shall pay to BIRI a sum equal to the difference between the total price
that XANODYNE would have been required to pay hereunder and the total price
actually paid by XANODYNE during such period. XANODYNE'S obligation to purchase
the foregoing minimum dollar amount shall be suspended during any period in
which XANODYNE's inability to purchase such minimum dollar amount is
attributable to the fault of BIRI or due to an event of force majeure, which in
each case continues for at least [**] days.

     5.5 Forecasts. XANODYNE shall submit to BIRI a new [**] calendar month
rolling forecast of purchases of each of the PRODUCTS, on or before the first
business day of each calendar month thereafter during the term of this
AGREEMENT. XANODYNE will exercise reasonable efforts to level load its
production requirements in recognition of BIRI's finite capacity and the lead
times necessary for production. BIRI will exercise commercially reasonable
efforts to ship any quantities which are in excess of the forecasted quantities,
within [**] months of receipt of a PURCHASE ORDER. XANODYNE shall not submit
orders for PRODUCTS which shall require production by BIRI after the expiration
date of this Agreement. In the event XANODYNE fails to deliver to BIRI a
forecast within [**] days of the first business day of a calendar month then the
firm order shall be deemed to be the forecasted amount for such period in the
immediately preceding forecast supplied by XANODYNE to BIRI. (e.g. the
forecasted amounts from Month [**] of the previous months [**]-month rolling
forecast shall become binding due to the aforementioned three month lead-time
requirement).

SECTION 6. PAYMENT TERMS: SHIPPING

     6.1 Purchase of On-Hand Inventory of PRODUCTS. Subject to the terms of this
AGREEMENT, BIRI agrees to sell, and XANODYNE agrees to purchase, the amount of
BIRI's inventory of the PRODUCTS, that meet the shelf life requirements as
detailed in Section 3.1(d), above, existing as of the EFFECTIVE DATE (the
"EXISTING INVENTORY") at the prices set forth in Attachment B. All quantities of
PRODUCTS provided as part of such EXISTING INVENTORY shall be credited toward
fulfillment of the PURCHASE ORDERS issued hereunder for such PRODUCTS and the
minimum purchase requirements as detailed in Section 5.4 without further action
or payment by either PARTY.

     6.2 UNIT PRICE of Products. BIRI agrees to sell, and XANODYNE agrees to
purchase, pursuant to the PURCHASE ORDERS the PRODUCTS manufactured by BIRI
pursuant to this Agreement at the UNIT PRICE set forth in Attachment B as such
prices may be adjusted from time to time in accordance with this Agreement.

                                       11

<PAGE>

     6.3 Shipping. BIRI shall ship each order of PRODUCTS, F.O.B. the BIRI
manufacturing facility in Columbus, Ohio, or its warehouse in Nevada to XANODYNE
or its designee at the location specified, as instructed by XANODYNE in the
applicable PURCHASE ORDER. Freight and insurance shall be charged to and paid by
XANODYNE, and BIRI shall use reasonable efforts to assist XANODYNE in arranging
any desired insurance. Title shall pass to XANODYNE, and the risk of loss, delay
or damage in transit shall be with XANODYNE, from and after delivery to the
designated carrier. BIRI shall package each PRODUCT for shipment in accordance
with its customary practices therefore, unless otherwise specified by XANODYNE,
in which event, any extra costs reasonably incurred by BIRI on account of any
changes requested by XANODYNE shall be reimbursed by XANODYNE.

     6.4 Invoices; Payments. All PRODUCTS shall be invoiced by BIRI to XANODYNE
upon shipment thereof, unless XANODYNE requests in writing that BIRI hold such
shipment beyond the delivery date, in which case BIRI shall be entitled to
invoice XANODYNE as of the delivery date provided that BIRI is ready to ship
such PRODUCTS as of such date. Payments for amounts invoiced by BIRI shall be
due and payable to BIRI on or before the [**] day after the date of such
invoice. All payments by XANODYNE to BIRI shall be by wire transfer of
immediately available funds to the bank account(s) designated by BIRI.

     6.5 Quantitative Variations. Each PARTY shall notify the other PARTY in
writing of any quantitative deficiencies or over delivery in any shipment of any
PRODUCT, which deficiencies or over delivery the notifying PARTY believes to
have existed prior to transfer from BIRI to a common carrier, within [**] days
after receipt of such shipment by XANODYNE. The PARTIES shall investigate such
deficiency or over delivery and, if the PARTIES agree that such deficiency or
over delivery existed prior to transfer from BIRI to the common carrier, BIRI
shall issue an amended invoice for such shipment to XANODYNE crediting XANODYNE
for any deficiency or invoicing XANODYNE for any over delivery, as the case may
be. In the event that a PARTY disputes the other PARTY's determination of any
quantitative deficiency or over delivery or the fault therefore, the PARTIES
shall attempt to resolve such dispute in good faith. If the PARTIES'
investigation indicates that any quantitative deficiency is the result of theft
or significant loss of product, XANODYNE shall provide written notification of
the theft or loss to the local DEA field office by filing a DEA Form 106, as
appropriate.

     6.6 Variations in BATCH size. The PARTIES acknowledge that the quantities
of PRODUCT in any given BATCH may vary from the amounts set forth on Attachment
A. In the event the quantity of PRODUCTS in any BATCH delivered to XANODYNE
varies by more than ten percent ([**]%) from the quantities set forth on
Attachment A, the PARTIES shall mutually agree on how the variance shall be
addressed.

     6.7 Pricing Adjustments. Subject to any price adjustments resulting from a
change in SPECIFICATIONS pursuant to Section 3.2 which may be reflected as of
the implementation of such change, the prices set forth in Attachment B shall
remain in effect for twelve (12) months from and after the EFFECTIVE DATE and
thereafter, BIRI shall adjust the prices no more than [**] each twelve (12)
month period in accordance with the following: (a) the prices shall be adjusted
to reflect any increase or decrease in BIRI'S COSTS for materials and (b) BIRI
may increase the portion of the price attributable to overhead and labor,
provided, however, that the increase in the portion

                                       12

<PAGE>

attributable to overhead and labor in any period shall not exceed the percentage
increase (if any) in the Pharmaceutical Producer Price Index during the
preceding twelve (12) month period. The "Pharmaceutical Producer Price Index"
shall mean the Producer Price Index (PPI All Industries) for "Pharmaceutical
preparations, prescriptions" for the then current year (or the most recent
period for which it is available) published by the United States Bureau of Labor
Statistics and currently available at http://stats.bls.govlblshome.htm.
Notwithstanding the foregoing, in the event there is a price increase of [**]
percent ([**]%) or more in the cost to BIRI for the active ingredient of any of
the PRODUCTS, BIRI may immediately increase the prices for such PRODUCTS, upon
written notice thereof to XANODYNE and the exhaustion of BIRI's inventories of
such active ingredient, and BIRI shall supply reasonable supporting
documentation to XANODYNE detailing such price increase. BIRI shall use
commercially reasonable efforts to mitigate the effects of any such price
increases in the costs for an active ingredient.

     6.8 Pricing Audits. Subject to the confidentiality provisions of Section 9,
during the term of this Agreement and for a period of [**] after its termination
or cancellation, XANODYNE shall have the right to have an independent certified
public accounting firm to which BIRI has no reasonable objection, examine the
relevant books and records of BIRI for the previous [**] at the place where such
records are customarily kept, for the purpose of verifying the accuracy of
BIRI's calculation of COSTS. The full cost of such audit shall be paid by
XANODYNE, unless such audit discloses an overpayment of more than [**] percent
([**]%) or [**] dollars ($[**]), whichever is larger from BIRI'S calculation of
COST, in which case BIRI shall bear the full cost of the audit. In the event
that BIRI disputes the results of XANODYNE'S audit, the PARTIES shall attempt to
resolve such dispute in good faith. Any amounts that are determined or agreed to
be due and owing by one PARTY to the other shall be promptly paid.

     6.9 Taxes. If XANODYNE is required to deduct or withhold for or on account
of any tax required by applicable laws or regulations, XANODYNE shall (a) pay to
the relevant authorities the full amount required to be deducted or withheld,
(b) forward to BIRI an official receipt (or certified copy) or other
documentation reasonably acceptable to BIRI evidencing payment to such
authorities. Promptly after the EFFECTIVE DATE, XANODYNE shall furnish to BIRI a
valid blanket state resale exemption certificate.

SECTION 7. LABELS AND LABELING

     7.1 Labeling. XANODYNE shall specify the trade name, trade dress, trademark
and the name of the distributor, if any, which will appear on the LABELING.
XANODYNE will also specify the exact wording which is to appear on the LABELING
as provided in Section 7.2 below. No LABELING shall be used by BIRI which has
not first been approved by XANODYNE in writing; provided, however, that once
particular LABELING has been approved by XANODYNE, BIRI may continue to use such
LABELING, unless otherwise notified in writing by XANODYNE, without obtaining
any additional prior approval. XANODYNE shall ensure that all LABELING for the
PRODUCTS is accurate, non-infringing and in compliance with all laws and
regulations applicable to the LABELING of the PRODUCTS and shall make any
modifications to such LABELING as may be required by applicable laws and
regulations from time to time.

     7.2 Artwork for LABELING. XANODYNE, at [**], shall provide to BIRI
camera-ready artwork for the LABELING. Any changes or revisions to such artwork
shall be at [**].

                                       13

<PAGE>

SECTION 8. REGULATORY MATTERS

     8.1 Adverse Experience Reports and Product Complaints. BIRI shall promptly
submit to XANODYNE all adverse drug experience information and customer
complaints brought to the attention of BIRI in respect of any of the PRODUCTS,
as well as any material events and matters concerning or affecting the safety or
efficacy of any of the PRODUCTS. In addition, BIRI shall, at its own cost and
expense, and consistent with its past practices, use commercially reasonab1e
efforts to assist XANODYNE in connection with the investigation of and response
to any adverse drug experience or complaint to the extent such experience or
complaint relates to the MANUFACTURING SERVICES. XANODYNE shall be solely
responsible for all required reporting of adverse experiences for the PRODUCTS.
XANODYNE shall notify BIRI promptly of any serious and unexpected adverse events
that XANODYNE reasonably believes may be related to the MANUFACTURING SERVICES.

     8.2 Recalls. The decision to initiate a recall, market withdrawal or other
corrective action (collectively, a "Recall") shall be made by Xanodyne in its
sole discretion. Xanodyne shall bear the cost of all Recalls of Product, and
BIRI shall reimburse XANODYNE on a monthly basis for all of its reasonable
direct out of pocket costs and expenses, including notification, shipping and
handling charges and amounts refunded or credited to customers incurred in
respect of any RECALLS relating to the PRODUCTS deemed to be necessary by
XANODYNE in XANODYNE's commercially reasonable judgment, to the extent that such
RECALL results from or arises out of (i) any breach of any representation,
warranty or covenant contained in this AGREEMENT by BIRI or (ii) any other
wrongful or negligent act or omission by BIRI in connection with the performance
of its obligations hereunder. XANODYNE shall reasonably consult with BIRI and
take into consideration BIRI's reasonable recommendations regarding such
RECALLS; except XANODYNE shall not be required to consult with BIRI in advance
to the extent exigent circumstances preclude prior consultation. In addition,
XANODYNE shall use commercially reasonable efforts to mitigate the costs and
expenses associated with any such RECALL.

     8.3 DEA Quotas.

     (a) BIRI shall file timely requests for renewal of DEA manufacturing,
procurement and production quotas for the PRODUCTS based on the quantities
ordered and forecasted by XANODYNE in accordance with this AGREEMENT.

     (b) In addition, BIRI shall, upon the reasonable request of XANODYNE, use
reasonable efforts to assist XANODYNE in obtaining from the DEA manufacturing,
procurement and/or production quotas for the manufacture of the PRODUCTS by or
on behalf of XANODYNE during the [**] month period following the termination of
this AGREEMENT.

     8.4 FDA Filing for GRANDFATHERED PRODUCTS. XANODYNE must [**]. On a product
by product basis XANDOYNE will [**], or at Xanodyne's option [**]. If FDA
requires [**], then [**]. [**].

     8.5 Product / Production Changes and Optimizations. BIRI shall, upon
reasonable request, provide XANODYNE with cost estimates for any new product,
process, product optimization or

                                       14

<PAGE>

changes, including but not limited to shelf-life extension, production equipment
modification, current product changes or new product launches or development
that are desired by XANODYNE or required by BIRI, FDA or any other government or
regulatory agency. BIRI will not undertake any requested production changes or
product optimizations without either a Purchase Order or a signed Statement of
Work from XANODYNE.

SECTION 9. CONFIDENTIALITY

     9.1 Confidentiality. Each PARTY acknowledges that it may receive
CONFIDENTIAL INFORMATION of the other PARTY in the performance of this
AGREEMENT. Each PARTY shall use commercially reasonable efforts to safeguard and
to hold such CONFIDENTIAL INFORMATION received by it from the other PARTY in
confidence, and shall limit disclosure of the furnishing PARTY's CONFIDENTIAL
INFORMATION to those employees and consultants of the receiving PARTY and its
AFFILIATES who are bound by a written obligation of confidentiality to the
receiving PARTY that is consistent the terms of this section 9. Each PARTY shall
not, directly or indirectly, disclose, publish or use for the benefit of any
third party or itself, except in carrying out its duties hereunder, any
CONFIDENTIAL INFORMATION of the other PARTY, without first having obtained the
furnishing PARTY's written consent to such disclosure or use.

     9.2 Definition of "Confidential Information". For the purposes of this
Section 9, "CONFIDENTIAL INFORMATION" means the terms of this Agreement and any
information, technical data or know-how relating to the disclosing party's
ideas, products, technology, customers, markets, developments, inventions,
clinical data, efficacy and safety data, adverse event information, formulas,
methods and processes, specifications, pricing information (including discounts,
rebates and other price adjustments) and other terms and conditions of sales,
customer information, business plans, and all other intellectual property
disclosed to the receiving PARTY by the disclosing PARTY, whether patentable or
not, whether communicated orally, or in writing, in graphic or electromagnetic
form or otherwise. This restriction shall not apply to any information within
the following categories:

          (a) information that is independently developed by employees, agents,
or independent contractors of the receiving PARTY or its AFFILIATES without
reference to or reliance upon the information furnished by the disclosing PARTY,
as evidenced by written records or other competent proof;

          (b) information disclosed to the receiving PARTY or its AFFILIATES by
a third party that has a right to make such disclosure; or

          (c) any other information that becomes part of the public domain
through no fault or negligence of the receiving PARTY.

     9.3 Permitted Disclosures. The receiving PARTY shall also be entitled to
disclose the other PARTY's CONFIDENTIAL INFORMATION that is required to be
disclosed in compliance with applicable laws or regulations or by order of any
governmental body or a court of competent jurisdiction provided, that the PARTY
required to disclose such information shall use commercially reasonable efforts
to obtain confidential treatment of such information by the agency or court or
other

                                       15

<PAGE>

disclosee, and shall provide the other PARTY with a copy of the proposed
disclosure in sufficient time to allow reasonable opportunity to comment
thereon.

     9.4 Survival. The obligations of each PARTY under this Section 9 shall
remain in full force and effect for ten (10) years following termination or
expiration of this Agreement.

SECTION 10. TERM/TERMINATION

     10.1 Term. This AGREEMENT shall commence on the EFFECTIVE DATE and continue
for a period not to exceed two (2) years from the EFFECTIVE DATE.

     10.2 Termination.

          (a) This AGREEMENT may be terminated by XANODYNE with respect to any
PRODUCTS at any time without cause upon the giving of BIRI at least nine (9)
months prior written notice.

          (b) Either PARTY may terminate this AGREEMENT for material breach or
default if such material breach or default is not cured within sixty (60) days
after the giving of written notice by the other PARTY specifying such breach or
default, or, in the case of any default of any payment obligation, such default
is not cured within fifteen (15) days after the receipt of written notice by the
other PARTY specifying such payment default. Waiver by either PARTY of a single
default or a succession of defaults shall not deprive such PARTY of any right to
terminate this AGREEMENT arising by reason of subsequent default.

          (c) If either XANODYNE or BIRI shall commence as debtor to any
proceedings under any bankruptcy, insolvency, reorganization, readjustment of
debt, dissolution or liquidation law or statute of the federal government or any
state government or any subdivision of either now or hereafter in effect; or if
any such proceedings shall be commenced against either PARTY, or any trustee or
receiver in respect of either PARTY shall be appointed in any such proceedings,
and any such PARTY shall by any act or failure to act indicate approval of, or
consent to or acquiescence in such proceedings or in the appointment of any such
trustee or receiver, or if any such proceedings brought against either PARTY
shall be approved by any court or shall remain undismissed for sixty (60) days;
or if any warrant of attachment shall be issued against all, or substantially
all, of the assets of either PARTY and shall not be released within sixty (60)
days after its levy, then, in any such case, such other PARTY not involved in
such proceedings, other than a creditor, shall have the option to terminate this
AGREEMENT by written notice and upon the giving of such notice this Agreement
shall immediately terminate.

     10.3 Procedures Upon Termination.

          (a) Purchase of RAW MATERIALS On-Hand. In the event this AGREEMENT is
terminated pursuant to Section 10.2, BIRI shall invoice to XANODYNE, and
XANODYNE shall pay, an amount equal to the cost of all RAW MATERIALS, in BIRI's
possession or in transit to BIRI as

                                       16

<PAGE>

of such date of expiration or termination, provided that BIRI demonstrates that
such RAW MATERIALS (i) were purchased in reasonable quantities in reliance on
XANODYNE's most recently submitted forecast pursuant to Section 5.4 and (ii) are
in compliance with all relevant Specifications and otherwise fit for commercial
use; provided, however, that BIRI agrees to offset the amount due from XANODYNE
pursuant to this Section 10.3 by the Acquisition Cost of any Raw Materials which
BIRI may use for production of other products during the six months immediately
following the date of such termination. BIRI shall return, transfer or dispose
of Active Ingredient(s) as reasonably requested by XANODYNE. All reasonable
expenses related to return transfer or disposal of RAW MATERIALS shall be paid
by XANODYNE.

          (b) Purchase of PRODUCT. Upon the expiration or termination of this
AGREEMENT by either PARTY, for any reason other than BIRI's breach, XANODYNE
shall purchase from BIRI all remaining PRODUCTS manufactured in accordance with
Article 3 and 5 of this Agreement, at the prices then in effect.

          (c) Accrued Obligations: Survival. Termination of this AGREEMENT for
any reason shall not relieve the PARTIES of any obligation accruing prior
thereto and shall be without prejudice to the rights and remedies of either
PARTY with respect to any antecedent breach of the provisions of this AGREEMENT.
Without limiting the generality of the foregoing, no termination of this
Agreement shall serve to terminate the obligations of the PARTIES hereto under
Sections 1, 8.1, 8.2, 8.3(b), 9, 10.3, 11, 12 and 14, and such Sections shall
survive the termination or expiration of this AGREEMENT.

          (d) Return of Confidential Information and Materials. On the
termination or expiration of this AGREEMENT, for any reason, XANODYNE and BIRI
each shall return to the other all CONFIDENTIAL INFORMATION which it or its
AFFILIATES or any of its or their respective designees, officers, directors or
employees possess or control that belongs to the other, except that each may
retain a copy solely for record-keeping purposes.

     10.4 Transfer of MANUFACTURING TECHNOLOGIES and Transition of MANUFACTURING
SERVICES. During the term of this Agreement (upon XANODYNE's request) and
following the expiration or termination of this AGREEMENT, BIRI shall provide
reasonable assistance to XANODYNE, as mutually agreed upon, at XANODYNE'S
expense, in transferring to XANODYNE the MANUFACTURING TECHNOLOGIES and other
records and materials relating to the MANUFACTURING SERVICES in BIRI's
possession and transitioning the MANUFACTURING SERVICES to XANODYNE.

SECTION 11. REPRESENTATIONS AND WARRANTIES

     11.1 Representations of BIRI. BIRI represents and warrants to XANODYNE as
follows:

          (a) BIRI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. BIRI has the requisite
corporate power and authority to own, operate and lease the properties that it
purports to own, operate or lease and to carry on its business as it is now
being conducted and is duly licensed or qualified as a foreign corporation in
each domestic or foreign jurisdiction in which the nature of the business
conducted by it or the character or the location of the properties owned or
leased by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not, individually or in the

                                       17

<PAGE>

aggregate, reasonably be expected to have a MATERIAL ADVERSE EFFECT.

          (b) The execution, delivery and performance by BIRI of this AGREEMENT
and the consummation of the transactions contemplated hereby are within BIRI's
corporate powers and have been duly authorized by all necessary corporate action
on the part of BIRI. This AGREEMENT is a legal, valid and binding obligation of
BIRI, enforceable against BIRI in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws from time to time in effect which affect the
enforcement creditors' rights generally and by legal and equitable limitations
on the availability of specific performance and other equitable remedies against
BIRI.

          (c) The execution, delivery and performance by BIRI of this AGREEMENT
do not and will not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of BIRI, (ii) contravene or conflict with or constitute
a violation of any applicable federal or state law, rule or other regulation,
(iii) contravene or conflict with or constitute a violation of any writ,
judgment, decree, injunction or similar order of any GOVERNMENTAL AGENCY binding
upon BIRI, or (iv) contravene or conflict with or constitute a breach or default
under any contract or agreement binding upon BIRI. The execution, delivery and
performance by BIRI of this AGREEMENT and the consummation by BIRI of the
transactions contemplated hereby and thereby will not require any notice to,
declarations or filing with, or the consent, waiver, approval, or authorization
of, any GOVERNMENTAL AGENCY or other PERSON.

          (d) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY OF THE
TRANSACTION DOCUMENTS, (i) BIRI MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND
WHATEVER OR AS BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND (ii) BIRI
SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT, OR PROFITABILITY.

     11.2 Representations of XANODYNE. XANODYNE represents and warrants to BIRI
as follows:

          (a) XANODYNE is a private company duly organized. XANODYNE has the
requisite corporate power and authority to own, operate and lease the properties
that it purports to own, operate or lease and to carryon its business as it is
now being conducted and is duly licensed or qualified as a foreign corporation
in each domestic or foreign jurisdiction in which the nature of the business
conducted by it or the character or the location of the properties owned or
leased by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not, individually or in the
aggregate, reasonably be expected to have a MATERIAL ADVERSE EFFECT.

          (b) The execution, delivery and performance by XANODYNE of this
AGREEMENT and the consummation of the transactions contemplated hereby are
within XANODYNE's corporate powers and have been duly authorized by all
necessary corporate action on the part of XANODYNE. This AGREEMENT is a legal,
valid and binding obligation of XANODYNE, enforceable against XANODYNE in
accordance with its terms, except as such

                                       18

<PAGE>

enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws from time to time in effect which affect the
enforcement creditors' rights generally and by legal and equitable limitations
on the availability of specific performance and other equitable remedies against
XANODYNE.

          (c) The execution, delivery and performance by XANODYNE of this
AGREEMENT do not and will not (i) contravene or conflict with the applicable
organization documents of XANODYNE, (ii) contravene or conflict with or
constitute a violation of any applicable federal or state law, rule or other
regulation, (iii) contravene or conflict with or constitute a violation of any
writ, judgment, decree, injunction or similar order of any GOVERNMENTAL AGENCY
binding upon XANODYNE, or (iv) contravene or conflict with or constitute a
breach or default under any contract or agreement binding upon XANODYNE. The
execution, delivery and performance by XANODYNE of this AGREEMENT and the
consummation by XANODYNE of the transactions contemplated hereby and thereby
will not require any notice to, declarations or filing with, or the consent,
waiver, approval, or authorization of, any GOVERNMENTAL AGENCY or other PERSON.

          (d) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY OF THE
TRANSACTION DOCUMENTS, XANODYNE MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND
WHATEVER OR AS BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND XANODYNE
SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANT ABILITY OR WARRANTY OF FITNESS FOR
A PARTICULAR PURPOSE.

     11.3 Debarment. BIRI and XANODYNE represent and warrant to each other that
it is not debarred and has not and will not knowingly use in any capacity the
services of any person debarred under subsections 306 (a) or (b) of the Generic
Drug Enforcement Act of 1992. If at any time this representation and warranty is
no longer accurate, BIRI or XANODYNE, as the case may be, shall immediately
notify the other of such fact.

SECTION 12. INDEMNITY: INSURANCE: LIMITATIONS ON LIABILITY

     12.1 Indemnification by XANODYNE. XANODYNE shall defend, indemnify and hold
harmless BIRI and each of its AFFILIATES and their respective directors,
officers, employees and agents from and against any and all claims, demands,
suits or proceedings for damages, costs (including reasonable attorney's fees),
expenses and loss (collectively, "LOSS") incurred by BIRI to the extent arising
out of or resulting from (a) any breach of any representation, warranty or
covenant contained in this AGREEMENT by XANODYNE; or (b) any other wrongful or
negligent act or omission by XANODYNE in connection with the performance of its
obligations hereunder.

     12.2 Indemnification by BIRI. BIRI shall defend, indemnify and hold
harmless XANODYNE and each of its AFFILIATES and their respective directors,
officers, employees and agents from and against any and all LOSS incurred by
XANODYNE to the extent arising out of or resulting from (a) any breach of any
representation, warranty or covenant contained in this AGREEMENT by BIRI (or its
permitted subcontractors), or (b) any other wrongful or negligent act or
omission by BIRI (or its permitted subcontractors) in connection with the
performance of its obligations hereunder; PROVIDED, HOWEVER, THAT THE MAXIMUM
LIABILITY OF BIRI

                                       19

<PAGE>

PURSUANT TO THIS AGREEMENT SHALL NOT EXCEED TWENTY MILLION U.S. DOLLARS
($20,000,000).

     12.3 Indemnification Procedures.

          (a) In the event of any claim under Sections 12.1 or 12.2 hereof, the
PARTY claiming the right to indemnity (the "CLAIMANT") shall promptly notify the
indemnifying PARTY (the "INDEMNITOR") in writing of such claim. The notice shall
describe such claim in reasonable detail.

          (b) INDEMNITOR shall have twenty (20) days after receipt of such
notice to decide whether it will undertake, conduct and control, through counsel
of its own choosing and at its own expense, the settlement or defense of the
tendered claim; provided, however, that CLAIMANT shall have the right to consent
to such counsel, which consent shall not be unreasonably conditioned, withheld
or delayed. Notwithstanding anything in this AGREEMENT, CLAIMANT shall have the
right to employ its own counsel at its own expense if CLAIMANT deems such action
necessary or advisable to fully protect its interests.

          (c) INDEMNITOR shall not settle or compromise any action, or consent
to the entry of any judgment in any tendered claim, without the written consent
of CLAIMANT, which shall not be unreasonably conditioned, withheld or delayed.
INDEMNITOR's obligation to defend and indemnify CLAIMANT shall survive any
settlement, compromise or judgment that does not include as an unconditional
term thereof the delivery by the underlying claimant or plaintiff to CLAIMANT of
a duly executed written release of CLAIMANT from all liability in respect to
such action, which release shall be reasonably satisfactory in form and
substance to CLAIMANT's counsel.

          (d) In the event INDEMNITOR does not notify CLAIMANT in writing within
twenty (20) days after receipt of notice of the tendered claim it elects to
undertake its defense, CLAIMANT shall have the right to contest, settle or
compromise such claim, but shall not thereby waive any right to indemnity from
INDEMNITOR for such claim.

          (e) CLAIMANT and INDEMNITOR shall cooperate fully in the defense of
any claim for which indemnity is sought pursuant to this AGREEMENT, including
providing each other with reasonable access to their employees during regular
business hours (including as witnesses) and other reasonably necessary
information. CLAIMANT shall be reimbursed for any out-of-pocket expenses
resulting from such cooperation.

     12.4 Insurance.

          (a) Both PARTIES shall procure and maintain at their own expense and
for their own benefit, product liability coverage with respect to the Products
of no less the $[**] per occurrence and in the aggregate. The scope of the U.S.
Products Liability coverage is to be similar to standard ISO Forms (e.g. ISO
Forms CG 0001 01 96 or CG 00 02 01 96). If the insurance to be provided is in
the form of ISO Form CG 00 02 01 96, the policy shall contain an extended
reporting period of at least two (2) years; any retroactive date under said
policy shall be no later than the EFFECTIVE DATE of the AGREEMENT. In either
case, the insurance required herein shall be maintained for a period of not less
than five (5) years after the expiration of this AGREEMENT. Furthermore, both

                                       20

<PAGE>

PARTIES agree to give due notice to the other during the period stated of any
such material change that may affect the continuation of such coverage.

          (b) Upon request, no more often than on an annual basis, both PARTIES
shall furnish the other with a certificate(s) from the insurance carrier(s)
(having a minimum AM Best rating of A-) showing the coverage's set forth above.
The insurance will contain an ordinary deductible and may be cancelled or
altered only after thirty (30) days written notice is given to the other PARTY.

     12.5 LIMITATION ON LIABILITY. NEITHER PARTY WILL BE LIABLE TO THE OTHER
PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES,
INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES") (EVEN IF THAT PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARLSING FROM BREACH OF THIS
AGREEMENT, OR ARISING FROM ANY OTHER PROVISION OF THIS AGREEMENT; PROVIDED,
THAT, EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY
DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
INDEMNIFICATION PURSUANT TO SECTION 12.1 OR 12.2

SECTION 13. ENVIRONMENTAL MATTERS

     13.1 BIRI is and will remain in compliance with all ENVIRONMENTAL LAWS
applicable to the performance of the MANUFACTURING SERVICES, except where any
failure to do so would not be reasonably likely to have a MATERIAL ADVERSE
EFFECT.

     13.2 BIRI will promptly notify XANODYNE of any pending or overtly
threatened ENVIRONMENTAL CLAIM, which ENVIRONMENTAL CLAIM could have a MATERIAL
ADVERSE EFFECT.

SECTION 14. GENERAL TERMS

     14.1 Governing Law. This AGREEMENT shall be governed and construed in
accordance with the laws of the State of Ohio excluding any choice of law rules
which may direct the application of the law of another state.

     14.2 Public Announcements. Neither BIRI nor XANODYNE (nor any of their
respective AFFILIATES) shall issue any press release or make any public
announcement with respect to this AGREEMENT and the transactions contemplated
hereby without obtaining the prior written consent of the other PARTY, except as
may be required by applicable law upon the advice of counsel and only if the
disclosing PARTY provides the non-disclosing PARTY with a reasonable opportunity
to first review the release or other public announcement.

     14.3 Force Majeure. No liability shall result from any delay in
performance, or failure to perform, in whole or in part, if and to the extent
caused by occurrences beyond the reasonable control of the PARTY affected (a
"FORCE MAJEURE EVENT"), including, but not 1imited to, acts of God,

                                       21

<PAGE>

fire, flood, accident, riot, war, terrorism, sabotage, strike, labor trouble or
shortage or embargo. The PARTY suffering such occurrence shall promptly notify
the other P ARTY as soon as practicable of such inability and the period for
which such inability is expected to continue, and any time for performance
hereunder shall be extended by the actual time of delay caused by the
occurrence; provided, that the PARTY suffering such occurrence uses reasonable
efforts to mitigate. If any such circumstances affect only a part of BIRI's
capacity to perform, BIRI shall have the right to allocate production and
deliveries on a pro-rata basis among all of its third party customers (excluding
any internal or affiliated divisions, departments and companies) based on their
previous purchases made during the shorter of (a) the twelve (12) month period
immediately preceding such FORCE MAJEURE EVENT and (b) the period commencing on
the EFFECTIVE DATE and ending on the date of such FORCE MAJEURE EVENT.
Quantities affected by this Section may, at the option of either PARTY, be
eliminated from the AGREEMENT without liability, but the AGREEMENT shall remain
otherwise unaffected.

     14.4 Waiver. No delay on the part of BIRI or XANODYNE in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of either BIRI or XANODYNE of any right, power or
privilege hereunder operate as a waiver of any other right, power or privilege
hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Any provision of this
AGREEMENT may be waived if, and only if, such waiver is in writing and signed by
the PARTY against whom the waiver is to be effective.

     14.5 Captions. All section titles or captions contained in this AGREEMENT
and in any Attachment annexed hereto are for convenience only, shall not be
deemed a part of this AGREEMENT and shall not affect the meaning or
interpretation of this AGREEMENT.

     14.6 Independent Contractors. The PARTIES are and will remain at all times
independent contractors, and no agency, partnership, joint venture or employment
relationship exists between them.

     14.7 Limitations on Assignment. This AGREEMENT may not be assigned by
either of the PARTIES without the prior written consent of the other, which
consent shall not be unreasonably withheld, except that XANODYNE may assign its
rights and obligations hereunder (or any part thereof), without BIRI's consent,
to any AFFILIATE of XANODYNE, provided that any of the obligations assigned to
such AFFILIATE that are covered by the XANODYNE Parent Guaranty.

     14.8 Severability. If any provision of this AGREEMENT is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any PARTY hereto under this AGREEMENT will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this AGREEMENT will be construed and enforced as if such illegal,
invalid or unenforceable provision had never compromised a part hereof, (c) the
remaining provisions of this AGREEMENT will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom, and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
AGREEMENT a legal, valid and enforceable provision as similar to terms to such
illegal, invalid or unenforceable provision as may be possible and reasonably
acceptable to the PARTIES herein.

                                       22

<PAGE>

     14.9 Construction. As used in this AGREEMENT, the masculine shall include
the feminine and neuter, the singular shall include the plural and the plural
shall include the singular, as the context may require. This AGREEMENT shall be
deemed to have been drafted by both BIRI and XANODYNE and shall not be construed
against either PARTY as the draftsperson hereof.

     14.10 Counterparts. This AGREEMENT may be executed in any number of
counterparts, each of which shall be deemed an original but all or which
together shall constitute a single instrument.

     14.11 Notices. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand, prepaid telex, cable, telegram or facsimile and
confirmed in writing, or mailed first class, postage prepaid, by registered or
certified mail, return receipt requested (mailed notices and notices sent by
telex, cable or telegram shall be deemed to have been given on the date
received) as follows:

          IF TO BIRI, AS FOLLOWS:

               BI Roxane, Inc.
               1801 Wilson Road
               PO Box 16532
               Columbus, OH 43216-6532
               Attn: President
               Fax: (614) 274-7045

          with a copy to:

               BI Roxane, Inc.
               1801 Wilson Road
               PO Box 16532
               Columbus, OH 43216-6532
               Attn: General Counsel
               Fax: (614) 274-7045

          IF TO XANODYNE, AS FOLLOWS:

               Xanodyne Pharmaceutical, Inc.
               One Riverfront Place
               Newport, KY 41071-4563
               Attn: President
               Fax: (859) 342-2090

          with a copy to:

               Xanodyne Pharmaceutical, Inc.
               One Riverfront Place
               Newport, KY 41071-4563
               Attn: General Counsel
               Fax: (859) 371-7692

                                       23

<PAGE>

or in any case to such other address or addresses as hereafter shall be
furnished as provided in this section 14.11 by any PARTY hereto to the other
PARTY.

     14.12 Further Assurances. Each PARTY hereto agrees, upon the reasonable
request of the other PARTY hereto, and at the expense of the requesting PARTY,
to make, execute and deliver any or all documents or instruments of any kind or
character, and to perform all such other actions, that may be necessary or
proper and reasonable to effectuate, confirm, perform or carry out the terms and
provisions of this AGREEMENT.

     14.13 Entire Agreement. This AGREEMENT and the TRANSACTION DOCUMENTS
constitute the entire agreement between the PARTIES with respect to the subject
matter hereof and supersedes all prior agreements, understanding and
negotiations, both written and oral, between the PARTIES with respect to the
subject matter of this AGREEMENT and the TRANSACTION DOCUMENTS.

          IN WITNESS WHEREOF, the PARTIES have executed this AGREEMENT on the
day and year first above written.

XANODYNE PHARMACEUTICALS, INC.          BOEHRINGER INGELHEIM ROXANE, INC.

By:                                     By:
    ---------------------------------       ------------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Its:                                    Its:
     --------------------------------        -----------------------------------

                                       24
<PAGE>

                                  ATTACHMENT A

<TABLE>
<CAPTION>
                                                                                                      APPROXIMATE
Xanodyne Item #   Product                                                        TABLET BATCH SIZE   TABLET YIELD
---------------   -------                                                        -----------------   ------------
<S>               <C>                                                            <C>                 <C>
  106647954010    Oramorph SR Tablets 15mg - Bottle of 100                              [**]             [**]
  106647954025    Oramorph SR Tablets, 15mg - 4X25RN/ Box of 100                        [**]             [**]

  106647954110    Oramorph SR Tablets, 30mg - Bottle of 100                             [**]             [**]
  106647954125    Oramorph SR Tablets, 30mg - 4X25RN/ Box of 100                        [**]             [**]

  106647954210    Oramorph SR Tablets, 60mg - Bottle of 100                             [**]             [**]
  106647954225    Oramorph SR Tablets, 60mg - 1X25RN/ Box of 100                        [**]             [**]

  106647954310    Oramorph SR Tablets, 100mg - Bottle of 100                            [**]             [**]
  106647954325    Oramorph SR Tablets, 100mg - 1X25RN/ Box of 100                       [**]             [**]

  106647958010    Roxicodone Tablets 5mg - Bottle of 100***                             [**]             [**]
  106647958025    Roxicodone Tablets 5mg - 4X25RN/ Box of 100***                        [**]             [**]

  106647958110    Roxicodone Tablets 15mg - Bottle of 100                               [**]             [**]
  106647958210    Roxicodone Tablets 30mg - Bottle of 100                               [**]             [**]
</TABLE>

<TABLE>
<CAPTION>
                                                                                                        APPROX.
Xanodyne Item #   Product                                                        BOTTLE BATCH SIZE   BOTTLE YIELD
---------------   --------                                                       -----------------   ------------
<S>               <C>                                                            <C>                 <C>
  106647958350    Roxicodone Oral Solution, 5mg/ 5mL - 500mL Bottle ***                 [**]             [**]
  106647958305    Roxicodone Oral Solution, 5mg/ 5mL - 40X 5mL Cup ***                  [**]             [**]

  106647958403    Roxicodone Intensol Oral Solution, 20mg/mL - 30mL Bottle ***          [**]             [**]
</TABLE>

***  Denotes Grandfathered Products as defined in the AGREEMENT

                                       25

<PAGE>

                                  ATTACHMENT B

<TABLE>
<CAPTION>
Bulk Item #   Xanodyne Item #   Product                                                    UNIT COST
-----------   ---------------   --------                                                   ---------
<S>           <C>               <C>                                                        <C>
  2479000       106647954010    Oramorph SR Tablets, 15mg - Bottle of 100                     [**]
  2479000       106647954025    Oramorph SR Tablets, 15mg - 4X25RN/ Box of 100                [**]

  2479100       106647954110    Oramorph SR Tablets, 30mg - Bottle of 100                     [**]
  2479100       106647954125    Oramorph SR Tablets, 30mg - 4X25RN/ Box of 100                [**]

  2479200       106647954210    Oramorph SR Tablets, 60mg - Bottle of 100                     [**]
  2479200       106647954225    Oramorph SR Tablets, 60mg - 1X25RN/ Box of 100                [**]

  2479300       106647954310    Oramorph SR Tablets, 100mg - Bottle of 100                    [**]
  2479300       106647954325    Oramorph SR Tablets, 100mg - 1X25RN/ Box of 100               [**]

  2368200       106647958350    Roxicodone Oral Solution, 5mg/ 5mL - 500mL Bottle             [**]
  2368200       106647958305    Roxicodone Oral Solution, 5mg/ 5mL - 40X 5mL Cup              [**]

  2368300       106647958403    Roxicodone Intensol Oral Solution, 20mg/mL - 30mL Bottle      [**]

  2465700       106647958010    Roxicodone Tablets 5mg - Bottle of 100                        [**]
  2465700       106647958025    Roxicodone Tablets 5mg - 4X 25RN/ Box of 100                  [**]

  5465800       106647958110    Roxicodone Tablets 15mg - Bottle of 100                       [**]
  2466500       106647958210    Roxicodone Tablets 30mg - Bottle of 100                       [**]
</TABLE>

                                       26

<PAGE>

                                  ATTACHMENT C

                              TECHNICAL AGREEEMENT

                                       27

<PAGE>

                                QUALITY AGREEMENT

                                     BETWEEN

                          XANODYNE PHARMACEUTICALS INC.

                                       AND

                        BOEHRINGER INGELHEIM ROXANE INC.

                                       1

<PAGE>

                                QUALITY AGREEMENT

                                REVISION HISTORY:

<TABLE>
<CAPTION>
                      Effective
REVISION #               Date                 Summary of Changes
----------            ---------               ------------------
<S>                   <C>                     <C>
    1                 12.31.2007               INITIAL DOCUMENT.
</TABLE>

                                       2
<PAGE>

                                QUALITY AGREEMENT

CONTENTS

<TABLE>
<S>   <C>
1.    PARTIES
2.    QUALITY AGREEMENT
3.    ADMINISTRATIVE INFORMATION
4.    PRODUCTS
5.    DURATION OF AGREEMENT
6.    CONFIDENTIALITY
7.    MANUFACTURE
      7.1   Premises
      7.2   Product Specification and Master Production Records
      7.3   GMP Guidelines
      7.4   Master Production Record Approval
      7.5   Production
      7.6   Methodology
      7.7   Standard Operating Procedure
      7.8   Dates of Manufacture and Expiration
      7.9   Manufacturing and Equipment Data
8.    QUALITY ASSURANCE
      8.1   Laboratory Control of Materials
      8.2   In-Process and Finished Product Testing
      8.3   Release Procedures
      8.4   Documentation
      8.5   Sampling
      8.6   Stability
      8.7   Deviations and Investigations
      8.8   Rejection of Product
      8.9   Regulatory Inspection
      8.10  Regulatory Actions at Xanodyne
      8.11  Right to Audit
      8.12  Product Complaints, Recall
9.    CHANGE MANAGEMENT
10.   PRODUCT PROCESS VALIDATION
      10.1  Process
      10.2  Cleaning Validation
      10.3  Equipment, Computer, Facility, and Utilities Qualification
      10.4  Laboratory Qualifications
11.   ANNUAL PRODUCT REVIEW, DRUG LISTING, AND ANNUAL REPORTS
      11.1  Annual Product Review
      11.2  Drug Listing
      11.3  Annual Reports
12.   STORAGE

      APPROVAL OF QUALITY AGREEMENT

      ATTACHMENT I
      ATTACHMENT II
      ATTACHMENT III
</TABLE>

                                       3
<PAGE>

1     PARTIES

      This Quality Agreement is effective as of January 1, 2008 by and between
      Xanodyne Pharmaceuticals, Inc., a Delaware Corporation having corporate
      offices at One Riverfront Place, Newport, Kentucky 41071-4563 (hereinafter
      referred to as "Xanodyne") and Boehringer Ingelheim Roxane, Inc. 1809
      Wilson Road, Columbus, Ohio 43228 (herein after referred to as "BIRI").

2     QUALITY AGREEMENT

      2.1   This Agreement supplements and is hereby incorporated by reference
            into, that certain Manufacturing Agreement between the Parties dated
            January 1, 2008 the "Manufacturing Agreement" for each of the
            Products to which this Agreement relates.

      2.2   This agreement defines certain roles and responsibilities of BIRI
            for services or materials supplied to Xanodyne or Affiliates, for
            commercial distribution or clinical trial use to ensure compliance
            with applicable cGMPs. This Agreement is supplemental to and
            constitutes a part of the Manufacturing Agreement. The provisions of
            this Agreement are intended to be supplemental to and not in
            derogation from the terms of the Manufacturing Agreement and
            provisions contained herein shall be treated as supplemental to the
            Manufacturing Agreement and in particular but without limitation in
            relation to the application, compliance, verification and
            implementation of cGMP. To the extent any terms set forth in this
            Agreement conflict with the terms of the Manufacturing Agreement,
            the terms of the Manufacturing Agreement shall control. Defined
            terms used in this Agreement shall have the meaning set forth in
            Appendix I or as otherwise defined herein.

3     ADMINISTRATIVE INFORMATION

      Contact names will be provided from both sites for key functional areas.
      Contact names are provided in Attachment II and may be updated as needed
      upon written notice of a Party.

4     PRODUCTS

      A Product list is provided in Attachment I.

5     DURATION OF AGREEMENT

      This Agreement shall commence on execution by both Parties and subject to
      the following provisions of this clause shall expire or terminate on the
      expiry or termination of that Manufacturing Agreement. Any section of this
      Agreement which has a predefined retention, survival or maintenance
      period, for example raw data storage, product complaints and sample
      retention, shall survive the termination of this Agreement for the period
      defined in the appropriate section. This Agreement cannot be modified
      except with the written approval of both Parties. Specifications and
      Master Batch Records may be modified with written authorization from
      designated Quality representatives of both companies.

6     CONFIDENTIALITY

      Confidential Information shall be governed by the terms of the applicable
      Manufacturing Agreement.

                                       4
<PAGE>

7     MANUFACTURE

      7.1   Premises

            BIRI will manufacture the Products at the facility and will not use
            or transfer at a later date any of the Manufacturing operations for
            the Product(s) to Third Parties or other sites without the prior
            written agreement of Xanodyne Corporate Quality Assurance.

      7.2   Product Specification and Master Production Records

            7.2.1  BIRI will Manufacture the Product(s) in accordance with the
                   most recent approved version of the Specifications and Master
                   Batch Record (formula, in-process and release specifications,
                   methods, shelf life, and regulatory requirements) as supplied
                   or approved by Xanodyne.

            7.2.2  BIRI will select approved suppliers using quality and
                   purchasing evaluations. Xanodyne Corporate Quality Assurance
                   must approve suppliers. Any change from approved suppliers
                   must follow the change management guidelines set by this
                   quality agreement.

                   7.2.2.1  Raw Material Specification

                            BIRI will test Raw Materials to the full
                            Specification unless a supplier Certificate of
                            Analysis ("COA") is available from an approved
                            supplier, in which case, reduced testing may be
                            employed. However, full testing should be performed
                            on [**] per year minimum.

                   7.2.2.2  Label Component Specifications

                            BIRI will use only labels and labeling approved in
                            compliance with standards and Specifications.

                   7.2.2.3  Packaging Component Specifications

                            BIRI will obtain from approved suppliers as defined
                            in the appropriate Regulatory documentation and
                            test-packaging components to the full Specification
                            unless a supplier COA is available from an approved
                            supplier, in which case reduced testing may be
                            employed. Packaging Specifications must be provided
                            or approved by Xanodyne Corporate Quality Assurance.

      7.3   GMP Guidelines

            Any applicable product license or pharmacopoeia requirements
            applicable to the Manufacture of Product(s) shall be complied with
            in addition to cGMP and Specifications.

      7.4   Master Production Record Approval

                                       5

<PAGE>

            BIRI may transcribe the information (i.e. formulation, filling work
            order, packaging work order) into its own format and must obtain
            written approval from Xanodyne Corporate Quality Assurance for
            changes to a master document version before Manufacturing.

      7.5   Production

            The Products will be manufactured in accordance with the
            manufacturing and packaging procedures set forth in the
            Specifications and Master Batch Records and additional internal BIRI
            site procedures.

      7.6   Methodology

            BIRI will test using the approved methodology listed in the current
            Specification.

      7.7   Standard Operating Procedures

            BIRI is responsible for maintaining any Standard Operating
            Procedures (SOPs) required to make the Product in accordance with
            cGMPs and as described in the NDA or compendial documentation as
            well as any other regulatory requirements.

      7.8   Dates of Manufacture and Expiration

            7.8.1  Date of Manufacture

                   BIRI will determine the date of manufacture based upon the
                   current applicable BIRI SOP.

            7.8.2  Expiration Date

                   BIRI will calculate expiration dates for Batches to be
                   manufactured based upon expiration dating standards
                   determined by approved Stability data.

      7.9   Manufacturing and Equipment Data

            BIRI is responsible for safe keeping and retention of records of
            machine usage (previous product produced in non-dedicated
            machinery), cleaning, any maintenance/calibration performed, Raw
            Material batch numbers and certification, in-process results and
            parameters, test results and shall perform all functions in
            accordance with legal and regulatory requirements and all Applicable
            Laws.

8     QUALITY ASSURANCE AND CONTROL

      8.1   Laboratory Control of Materials

            8.1.1  Any Specifications, standards, sampling plans, test
                   procedures, and other laboratory control mechanisms,
                   including changes to documents listed, should be drafted by
                   BIRI and reviewed and approved by Xanodyne Corporate Quality
                   Assurance. This applies to changes which are deemed critical
                   by BIRI and Xanodyne. Compendial changes do not apply.

                                        6
<PAGE>

            8.1.2  BIRI is responsible for investigating any laboratory out of
                   specification (OOS) results as per BIRI procedures. Each OOS
                   investigation must be reviewed and approved by BIRI Quality
                   and must evaluate if the failure has jeopardized the safety,
                   efficacy or quality of the Product. Xanodyne Corporate
                   Quality Assurance must be notified within [**] working days
                   of a confirmed OOS value and BIRI must forward the completed
                   package to Xanodyne Corporate Quality Assurance upon
                   conclusion of the investigation. The investigation process
                   should be completed in a timely manner with a target of [**]
                   days.

            8.1.3  Any reference standards that are supplied by Xanodyne or
                   Xanodyne's Affiliates must be accompanied by a COA listing
                   the expiration date and any correction factors that need to
                   be applied.

      8.2   In-Process and Finished Product Testing

            8.2.1  Raw Materials and packaging components

                   8.2.1.1  BIRI will ensure that all materials used are in
                            compliance with the compendial and/or approved
                            Methods and Specifications.

                   8.2.1.2  BIRI will perform all in-process and finished
                            Product testing using the Specifications, finished
                            Product attribute Acceptable Quality Level ("AQL"),
                            and Methods of analysis approved by Xanodyne's
                            Corporate Quality Assurance and other applicable
                            licenses.

8.3   Release Procedures

      8.3.1 Product

            BIRI is responsible for ensuring that the Product has been made
            according to cGMPs, as well as the Specifications and procedures
            documented in the Master Batch Record.

      8.3.2 Certificate of Compliance/Analysis

            BIRI Quality will provide a Certificate of Compliance and
            Certificate of Analysis confirming that the Product has been
            manufactured, packaged and tested in accordance with cGMP and
            Applicable Laws and meets the requirements of the Master Batch
            Record and Specifications including a statement that any deviations
            identified during the manufacturing process have been satisfactorily
            closed. Examples of these documents are included in Appendix III.

                                       7

<PAGE>

      8.3.3 Xanodyne Receipts

            Release of Products to the market or for use in clinical studies
            will be undertaken by Xanodyne Corporate Quality Assurance based on
            Xanodyne's internal procedures and the documentation provided by
            BIRI.

      8.4   Documentation

            8.4.1  Requests for Full Documentation

                   BIRI will supply Xanodyne or its Affiliates with any
                   completed Manufacturing, packaging, testing, or stability
                   data within [**] working days of request.

            8.4.2  BIRI will retain, at minimum, batch production records,
                   quality control testing records, all records of shipments of
                   the Product from BIRI, and other documentation relating to
                   the Product for the time periods required by Applicable Laws
                   with respect to the Product plus [**]. BIRI shall make such
                   records and data available for review by Xanodyne at BIRI
                   Plant upon at least [**] days' prior written notice from
                   Xanodyne.

      8.5   Retain Sampling

            8.5.1  Retain Samples - Raw Materials

                   BIRI will retain samples of active ingredient for at least
                   [**] [**] beyond the expiry period of the Products in which
                   used. The amount of sample retained will be [**] the quantity
                   required to carry out all of the tests required to determine
                   if the material meets its Specifications.

            8.5.2  Retain Samples - Products

                   BIRI will retain samples of the Products for at least [**]
                   [**] beyond the expiry period. The amount of sample retained
                   will be [**] the quantity required to carry out all of the
                   tests required to determine if the material meets its
                   Specifications.

      8.6   Stability

            8.6.1  Routine/Commercial Stability Program

                   8.6.1.1  BIRI is responsible for routine stability testing.

                   8.6.1.2  BIRI will be responsible for performing non routine
                            stability testing required to support the Products.
                            Xanodyne will establish the protocols and BIRI will
                            develop, execute and write reports for the protocol
                            when requested by Xanodyne.

                                       8
<PAGE>

            8.6.2  Stability Failures

                   Any confirmed Out of Specification result which arises as a
                   result of or during any of the stability programs will be
                   communicated in writing within [**]to Xanodyne Corporate
                   Quality Assurance.

      8.7   Deviations and Investigations

            8.7.1  Deviations

                   Any deviation from the process during Manufacture must be
                   investigated and documented in the batch records, justified
                   and approved by BIRI's Quality Assurance and be included in
                   the documentation package.

            8.7.2  Failure Investigations and Out Of Specification (OOS) Results

                   BIRI is responsible for investigating any test result or
                   in-process test that fails to meet Specification per internal
                   procedures. Each investigation will be reviewed and approved
                   by BIRI Quality Assurance. The investigation must evaluate if
                   the failure has impacted the safety, efficacy or quality of
                   the Product. Xanodyne must be notified in writing within [**]
                   working days of a confirmed OOS value and BIRI must forward
                   the completed package to Xanodyne Corporate Quality Assurance
                   upon conclusion of the investigation.

            8.7.3  BIRI will notify Xanodyne Corporate Quality Assurance
                   forthwith if any problems are discovered that may impact
                   Product Batch(s) previously shipped to Xanodyne identifying
                   the Batches in question.

            8.7.4  Some deviations/failures may require that additional testing,
                   stability, or validation be conducted. This work will be
                   performed as agreed by both Parties.

      8.8   Rejection of Product

            BIRI will notify Xanodyne Corporate Quality Assurance in writing of
            any Batch rejected by BIRI. This communication shall be accompanied
            by a completed investigation with regard to the failure.

      8.9   Regulatory Inspections

            Xanodyne's Vice President or Director of Corporate Quality Assurance
            will be promptly notified of any inspections by a Regulatory
            Authority related to Xanodyne Products. BIRI will discuss with
            Xanodyne prior to making any commitment concerning Xanodyne Products
            to a Regulatory Authority.

                                       9
<PAGE>

      8.10  Regulatory Actions at Xanodyne

            Xanodyne or its Affiliates will notify BIRI of any regulatory
            actions on the Products that may impact BIRI. Additionally, Xanodyne
            will immediately forward any regulatory correspondence concerning
            the Manufacture of the Products to BIRI.

            8.10.1 Correspondence: Each Party shall promptly notify the other
                   Party of, and shall provide the other Party with copies of,
                   any correspondence and other documentation received or
                   prepared by the notifying Party in connection with any of the
                   following events:

                   8.10.1.1 Receipt of a 483 Observation Letter or "Warning
                            Letter" from the FDA in connection with the
                            Manufacture, packaging, testing, storage or security
                            of the Product.

                   8.10.1.2 Any field alert, recall, market withdrawal or
                            correction of any Batch of the Product.

      8.11  Right to Audit

            Xanodyne or Xanodyne Affiliate representatives will be escorted at
            all times by BIRI personnel. Upon reasonable prior notice of [**]
            weeks, BIRI shall permit Xanodyne to audit any facilities used by
            BIRI in the performance of its obligations under this Quality
            Agreement. Within [**] of the audit, Xanodyne will provide BIRI with
            copy of the findings of the inspection. BIRI must respond to the
            findings within [**] [**] of the date of receipt. If additional time
            is required to complete the response, BIRI must notify Xanodyne in
            writing.

      8.12  Product Complaints, Recall, Adverse Events

            8.12.1 Product Complaints

                   Xanodyne Corporate Quality Assurance shall maintain complaint
                   files with respect to the Product (s) in accordance with
                   cGMP's. Xanodyne Corporate Quality Assurance is responsible
                   for receiving and initially investigating any complaints and
                   will notify BIRI of any complaint that may impact the Product
                   quality. BIRI will investigate any Product complaints and
                   provide a report to Xanodyne within [**] days. Xanodyne shall
                   have responsibility for reporting all complaints relating to
                   the Product to the FDA and any other Regulatory Authority,
                   including, but not limited to, complaints relating to the
                   Manufacture of the Product as well as adverse events.

            8.12.2 Product Recall

                   Xanodyne Corporate Quality Assurance is responsible for
                   instituting a Product Recall. Xanodyne will notify BIRI of
                   any Recall of product listed in appendix 1. BIRI and Xanodyne
                   will discuss the Recall prior to initiation. BIRI will work
                   with Xanodyne and Xanodyne's Affiliates to investigate cause
                   of the Recall. BIRI will provide a rapid initial response,
                   periodic updates of the progress of the investigation and a
                   report upon completion. BIRI will promptly notify Xanodyne's
                   Corporate Quality Assurance of any procedures and practices
                   that have been implicated in a recall investigation which
                   impact the manufacture of Xanodyne's products.

                                       10
<PAGE>

9     CHANGE MANAGEMENT

      Product specific Master Batch Records, Methods and Specifications will be
      approved by both Xanodyne's Corporate Quality Assurance Department and
      BIRI Quality Department prior to implementation. This applies to changes
      which are deemed critical by BIRI and Xanodyne. Compendial changes do not
      apply. All required regulatory approvals will be obtained prior to
      implementation. Variations to established production procedures may be
      initiated by either Party, but must be agreed to in writing by the
      authorized members of the Quality Assurance Departments of both Parties
      before implementation. The release status of the Product produced under a
      variation will be decided as part of the variation approval process.
      Quality Assurance Departments of BIRI or Xanodyne will have the right to
      assign a final disposition of "rejected" to the batch should they conclude
      that such action is appropriate.

10    PRODUCT AND PROCESS VALIDATION

      10.1  Process

            BIRI is responsible for ensuring that any validation of a
            manufacturing process is executed. BIRI will not use any validation
            protocol or issue a report unless Xanodyne technical personnel and
            Xanodyne Quality Assurance have first approved them. Xanodyne will
            approve or reject all protocols and validation reports within [**]
            working days of receipt.

      10.2  Cleaning Validation

            BIRI is responsible for ensuring that adequate cleaning is carried
            out between batches of different products to prevent contamination.
            BIRI is responsible for having approved cleaning procedures for
            Product(s)

      10.3  Equipment, Computer, Facility, and Utilities Qualification

            BIRI is responsible for the safe and efficient working of all
            equipment, computer, utility, and facility qualification activities
            associated with the Products, including maintenance.

      10.4  Laboratory Qualifications

            10.4.1 BIRI is responsible for ensuring that all laboratories are
                   compliant with cGMPs with regard to systems and equipment
                   qualifications.

            10.4.2 BIRI is responsible for maintaining appropriate cGMP (GLP)
                   documentation procedures in the laboratories (i.e. notebooks,
                   logbooks, sample receipt, sample tracking, SOPs, etc).

            10.4.3 BIRI will only use appropriately qualified and/or validated
                   methodology associated with the testing of the Products

                                       11
<PAGE>

11   ANNUAL PRODUCT REVIEW, DRUG LISTING, AND ANNUAL REPORTS

     11.1 Annual Product Review

          BIRI will perform an annual product review on the Products and will
          issue a report to Xanodyne no later than [**] months after the
          conclusion of an annual manufacturing cycle. This review will be
          conducted in accordance with accepted industry practice, 21CFR211.180
          (e) and any other Applicable Laws.

     11.2 Drug Listing

          BIRI is responsible for drug listing as the Manufacturer of the
          Product(s) while Xanodyne is responsible for drug listing as the
          distributor of the Product(s). Xanodyne will provide BIRI copies of
          all Product labeling including package insert, NDA number, name and
          address of NDA holder, and NDC code which includes labeler code,
          product code, and packaging code.

     11.3 Annual Reports, IND Updates or Other Regulatory Filings

          Xanodyne is responsible for preparing any Annual Report, IND update or
          other regulatory filing as required by Applicable Laws, including 21
          CFR 314.7 (g)(3), 314.81 (b)(2), and/or 601.12 (d), (f)(3).

12   STORAGE

     BIRI will ensure that during storage of the Product(s) that there is no
     possibility of deterioration, interference, theft, Product contamination or
     admixture with any other materials. Xanodyne Corporate Quality Assurance
     will provide details of any labeling requirements and container sealing and
     integrity requirements.

                                       12
<PAGE>

                       APPROVAL OF THIS QUALITY AGREEMENT

<TABLE>
<CAPTION>
           TITLE                          NAME                    SIGNATURE           DATE
-----------------------------    -----------------------    --------------------    ---------
<S>                              <C>                        <C>                     <C>
BIRI -                           PAMELA GEELAN              /s/ PAMELA GEELAN       1/16/2008
Director, Quality Service

BIRI                             MICHAEL MCCOY              /s/ MICHAEL MCCOY       1/16/2008
Manager Quality Assurance
</TABLE>

<TABLE>
<CAPTION>
           TITLE                          NAME                    SIGNATURE           DATE
-----------------------------    -----------------------    --------------------    ---------
<S>                              <C>                        <C>                     <C>
Xanodyne Pharmaceuticals Inc.    G. KEITH ARVIN             /s/ G. KEITH ARVIN      1/23/2008

Director  Quality Assurance

                                 STEPHEN A. STAMP           /s/ STEPHEN A. STAMP    01-22-08

                                 CHIEF FINANCIAL OFFICER
</TABLE>

                                       13
<PAGE>

                                   DEFINITIONS

          1.   ANNUAL REPORT means a regulatory update to a New Drug Application
               (NDA) or Abbreviated New Drug Application (ANDA) submitted to the
               FDA (or other such agency). Typically minor changes to such
               applications are submitted pursuant to 21 CFR 314.70(d).

          2.   "API" shall mean the active pharmaceutical ingredient (API), in
               bulk form ready to be used for Manufacture into the Product.

          3.   "APR" shall mean an Annual Product Review (APR for evaluation of
               the quality standards for each Finished Product according to
               21CFR211.180(e)

          4.   BOEHRINGER INGELHEIM ROXANE INC. will be abbreviated to BIRI.

          5.   "DEVIATION" A deviation is defined as any anomalous event that
               may occur during the processing of a Batch that is a departure
               from Specifications, approved procedures or validated processes.

          6.   "FINISHED PRODUCT" shall mean Product and Samples in a final
               labeled and packaged form suitable for distribution to the
               market.

          7.   " "CGMP" shall mean the current Good Manufacturing Practices in
               accordance with:

               -    (i) the regulatory requirements promulgated by the FDA under
                    the United States' Federal Food, Drug and Cosmetic Act, as
                    amended, Code of Federal Regulations Title 21 Section 210
                    et.seq; and/or

               -    (ii) Other comparable regulatory standards, in each case
                    including those procedures expressed or implied in the
                    regulatory documents with respect to the Product provided to
                    regulatory authorities and as applicable to the Manufacture
                    of Product, as such regulations are in effect at the time of
                    Manufacturing Product.

          8.   "MANUFACTURE" of the Product shall mean the receipt of materials,
               production, packaging, labelling, quality control, quality
               assurance, release and storage of the Product.

          9.   "MANUFACTURING AGREEMENT" shall mean the Manufacturing Agreement
               between BIRI and Xanodyne for the Product DATED AS OF JANUARY 1,
               2008.

          10.  "MASTER BATCH RECORDS" mean the approved formulation,
               manufacturing/packaging instructions, and controls whereby a
               Batch of Product is manufactured. Master Batch Records must be
               written per cGMPs for all clinical, registration, stability, and
               commercial manufacturing processes and may

                                       14
<PAGE>

               be issued repeatedly of the manufacture of the same Batch of
               Product.

          11.  "METHODS" means approved analytical testing procedures for Raw
               Materials, intermediates and final Product.

          12.  "NDA" means New Drug Application or non-US equivalent thereof
               applicable to or referencing of the Active Ingredient to be
               supplied hereunder relating to the Xanodyne formulation of the
               finished dose Product and any supplements to such NDA as may be
               filed during the term hereof.

          13.  "NDC" means National Drug Code.

          14.  "OOS", shall mean out-of-specification; i.e. a result of
               analytical methods which is not within the specifications

          15.  "PRODUCT" see attachment I.

          16.  PRODUCT COMPLAINT" shall mean any written, verbal, or electronic
               expression of dissatisfaction regarding Product including, but
               not limited to, actual or suspected product tampering,
               contamination, mislabeling, or wrong ingredients.

          17.  "SAMPLE" shall mean retention sample

          18.  "SPECIFICATIONS" shall mean the specifications for manufacturing,
               testing, stability, labeling and packaging the Product.

                                       15
<PAGE>

                                   ATTACHMENT I

                                LIST OF PRODUCTS

                                    Products

Roxicodone Oral Solution 5mg per 5mL

Roxicodone Intensol 20mg per mL

Roxanol Oral Solution

Roxicodone Tablets 5mg

Roxicodone Tablets 15mg

Roxicodone Tablets 30mg

Oramorph SR Tablets 15mg

Oramorph SR Tablets 30mg

Oramorph SR Tablets 60mg

Oramorph SR Tablets 100mg

                                       16
<PAGE>

                                  ATTACHMENT II

                          PERSONNEL KEY CONTACT LISTING

<TABLE>
<CAPTION>
        FUNCTION             INDIVIDUAL   PHONE   FAX / E-MAIL   ADDRESS
--------------------------   ----------   -----   ------------   -------
<S>                          <C>          <C>     <C>            <C>
                        BOEHRINGER INGELHEIM ROXANE INC.

QUALITY RESPONSIBILITIES

QA, PRODUCT RELEASE             [**]       [**]       [**]         [**]

QA, SUPPLIER QUALITY            [**]       [**]       [**]         [**]

QA, ADVISING AND                [**]       [**]       [**]         [**]
INVESTIGATIONS

QA, CONTRACT PRODUCTS AND       [**]       [**]       [**]         [**]
COMPLAINTS

COMPLAINT SAMPLES AND           [**]       [**]       [**]         [**]
INVESTIGATION

REGULATORY COMPLIANCE RESPONSIBILITIES

REGULATORY COMPLIANCE           [**]       [**]       [**]         [**]

PRODUCTION TECHNOLOGY RESPONSIBILITIES

PRODUCTION TECHNOLOGY           [**]       [**]       [**]         [**]
</TABLE>

                                       17
<PAGE>

                                  ATTACHMENT II

                          PERSONNEL KEY CONTACT LISTING
                                   (CONTINUED)

<TABLE>
<CAPTION>
          FUNCTION           INDIVIDUAL   PHONE      E-MAIL      ADDRESS
--------------------------   ----------   -----   ------------   -------
<S>                          <C>          <C>     <C>            <C>
                          XANODYNE PHARMACEUTICALS INC

QUALITY RESPONSIBILITIES

QA, PRODUCT RELEASE             [**]       [**]       [**]       One Riverfront Place
                                                                 Newport, KY 41071

QA, ADVISING AND                [**]       [**]       [**]       One Riverfront Place
INVESTIGATIONS                                                   Newport, KY 41071

QA, SUPPLIER QUALITY            [**]       [**]       [**]       One Riverfront Place
                                                                 Newport, KY 41071

COMPLAINT SAMPLES AND           [**]       [**]       [**]       One Riverfront Place
INVESTIGATION                                                    Newport, KY 41071
</TABLE>

                                       18
<PAGE>

                                 ATTACNMENT III

The release documentation for all Batches will include a Certificate of Analysis
(COA) and a Certificate of Conformance (COC).

See attached for examples of these documents.

                                       19
<PAGE>

                            CERTIFICATE OF COMPLIANCE

<TABLE>
<S>                        <C>                                      <C>
Product Name:
                           ______________________________________   Quality Assurance
Roxane Pkg Lot No.:                                                 TELEPHONE 614-276-4000
                           ______________________________________   TELEFAX 614-308-0236
Roxane Pkg Material No.:
                           ______________________________________
Package Yield:
                           ______________________________________
Package Expiration Date:
                           ______________________________________
First Mfg Process Step:
                           ______________________________________

The Manufacturing and/or Packaging Documentation for the above
mentioned product have been reviewed for completeness, accuracy
and compliance to cGMP's. All documentation has been found to be
in compliance with the requirements of the manufacturing and/or
packaging specifications.

This lot has been tested to the requirements of the Quality         BIRI
Standard and the Certificate of Analysis is attached.               P.O. BOX 16532
                                                                    COLUMBUS, OHIO 43216-6532
</TABLE>

Copy of the coded primary labeling is attached.

Unusual occurrences, deviations, variances, investigations, when
applicable, are attached.

All lot documentation is available upon request.

         Signature
                           ___________________________________________
                           Erin Mutchler-Rose
                           Documentation Specialist, Quality Assurance

         Date

                               20
<PAGE>

ATTACHMENT D   XANODYNE INITIAL 24 MONTH FORECASTS - 2008 & 2009 MINIMUM DOLLAR
               COMMITMENTS

For the Year 2008, Xanodyne agrees to purchase, at a minimum, the dollar amount
of Products totaling $[**]

For the Year 2009, Xanodyne agrees to purchase, at a minimum, the dollar amount
of Products totaling $[**].

                                       28EX-10.20

 

Exhibit 10.20

EMPLOYMENT AGREEMENT

     THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made as of
December 19, 2007, by and between
Xanodyne Pharmaceuticals, Inc., a Delaware corporation with a principal place of business at One
Riverfront Place, Newport, Kentucky (the “Company”), and Greg Flexter, an individual (the
“Employee”).

     The Company and the Employee have entered into an Employment Agreement dated as of June 12,
2007 (the “Existing Employment Agreement”). The Company desires to continue to employ the Employee
as President and Chief Executive Officer, and the Employee desires to continue to be employed by
the Company as President and Chief Executive Officer on the terms and conditions set forth herein.
The Company and the Employee desire to amend and restate the Existing Employment Agreement in its
entirety.

     In consideration of the mutual covenants and promises contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties to this Agreement, the parties agree as follows:

     1) EMPLOYMENT AND SUPERSESSION OF ALL PRIOR AGREEMENTS. The Company hereby employs the
Employee and the Employee accepts employment upon the terms and conditions of this Agreement. This
Agreement, together with all attachments, annexes and exhibits hereto, shall supersede and replace
any and all agreements, written or oral, express or implied, between the Employee and the Company
or any related or predecessor organization, relating to the subject matter hereof, including
without limitation the Existing Employment Agreement. This Agreement, together with all
attachments, annexes and exhibits hereto, constitutes the complete understanding between the
parties relating to the subject matter hereof and thereof.

     2) DUTIES. The Employee will continue to be employed as President and Chief Executive
Officer, reporting to the Board of Directors of the Company (the “Board”). During the Employee’s
employment, the Employee agrees to serve and perform such duties consistent with being a President
and Chief Executive Officer at such times and in such manner as the Company or the Board may
reasonably from time to time direct. At the Company’s discretion, the Employee may be given
additional duties or different duties, and this Agreement shall apply as well to any such duties
assumed by Employee. During the term of this Agreement, the Employee agrees to faithfully perform
the duties assigned to him or her to the best of his or her ability and to devote full and
undivided time to the transaction of the Company’s business. The Employee agrees to abide by the
rules, regulations, instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company. As provided in the Existing
Employment Agreement, the Employee has been elected by the stockholders of the Company in an action
by written consent dated June 19, 2007 as a member of the Company’s Board of Directors, effective
as of July 9, 2007.

 

 

     3) COMPENSATION.

          a) Base Salary. The Company shall pay the Employee, in periodic installments in
accordance with the Company’s customary payroll practices, an annual base salary of $500,000, as
may be adjusted from time to time by the Board or the Compensation Committee of the Board (the
“Committee”), based upon a review of Company and Employee performance, which review shall occur at
least annually; provided, however that effective as of January 1, 2008 the Employee’s annual base
salary shall be increased to at least $550,000.

          b) Annual Bonus. The Employee will be eligible for an annual bonus based on
achievement of objectives set by the Board or the Committee on an annual basis. The Employee’s
target bonus will be 60% of the Employee’s base salary. Depending on results, the Employee’s
actual bonus, if any, may be higher or
lower. The Board or the Committee has the right to modify the bonus program at any time. The
bonus award amount will be determined by the Board or Committee in its sole discretion.
Notwithstanding the foregoing, for the 2007 calendar year, the Company will pay the Employee a
minimum bonus payment of 50% of the base salary paid to Employee in 2007 (such that the 2007 bonus
payment will be pro-rated based on salary actually paid in 2007), which bonus shall be paid to the
Employee on or before March 15, 2008.

          c) Benefits. The Employee shall be entitled to receive those benefits generally
provided to other full-time employees of the Company at substantially the same employment level.
Such benefits are subject to change from time to time in the Company’s sole discretion.

          d) Vacation. The Employee shall be entitled to 25 days of paid vacation per year
(prorated from July 8, 2007 for calendar year 2007), to be taken at such times as may be approved
by the Board, the Committee or an officer designated by the Board or the Committee.

          e) Expense Reimbursement. The Company shall reimburse the Employee for all reasonable
travel, entertainment and other expenses incurred or paid by the Employee in connection with, or
related to, the performance of his or her duties, responsibilities or services under this
Agreement, in accordance with policies and procedures, and subject to limitations, adopted by the
Company from time to time.

          f) Stock Options.

               i) As provided in the Existing Employment Agreement, the Board has granted the Employee, in a
resolution adopted on July 9, 2007, an option to acquire 1,750,000 shares of the Company’s Common
Stock pursuant to and in accordance with the Company’s Amended and Restated 2001 Stock Incentive
Plan at an exercise price of $0.98 per share.

               ii)
On the first day of trading of the
Company’s Common Stock on the NASDAQ Global

- 2 -

 

Market, the Company shall grant to the Employee an option to purchase 500,000 shares of the
Company’s Common Stock (the “IPO Options”), subject to the execution and delivery by the Employee
of an appropriate stock option agreement in substantially the form approved and adopted by the
Board. The IPO Options shall (i) vest and become exercisable with respect to 25% of the shares on
the first anniversary of the grant date and with respect to an additional 2.0833% of the shares at
the end of each successive one-month period following the first anniversary of the grant date until
the fourth anniversary of the grant date; (ii) be granted pursuant to and in accordance with the
Company’s 2007 Stock Incentive Plan or the Company’s Amended and Restated 2001 Stock Incentive Plan
and be subject to the terms and conditions of the applicable plan; (iii) have an exercise price per
share equal to the closing sales price of the Company’s Common Stock on the first day of trading of
the Company’s Common Stock on the NASDAQ Global Market. The number of shares of the Company’s
Common Stock subject to the IPO Option shall be subject to appropriate adjustment for stock splits,
combinations, recapitalizations and other similar events affecting the Company’s Common Stock.
The IPO Options are the same options the granting of which was
approved in a resolution adopted by the Board on November 2,
2007. The IPO Options together with the options to be granted to
other employees of the Company pursuant to such resolution are
generally referred to by the Company as the “IPO Bonus
Plan.”

               iii) Future grants of options to the Employee will be at the discretion of the
Board.

          g) Relocation. The Company agrees to reimburse Employee for all reasonable and
necessary relocation expenses incurred in relocating to the Cincinnati area in accordance with the
Company’s Relocation Policy in the form attached hereto as Annex B. Employee must
coordinate his relocation through the Company’s Human Resources Department, and any eligible
expenses incurred must be reported to the Company by July 9, 2008 in order to be reimbursed.

          h) Withholding. All salary, bonus and other compensation payable to the Employee
shall be subject to applicable withholding taxes.

     4) EMPLOYMENT PERIOD.

          a) Employment Period. The period commencing on the date first written above and
ending on the date on which this Agreement is terminated is referred to herein as the “Employment
Period.” During the Employment Period, the Employee will be an at-will employee of the Company.
The Employment Period shall be freely terminable for any reason by either party at any time;
provided, however, that (i) if the Company terminates the Employee’s employment with the Company,
the Company shall provide written notice of such termination to the Employee (subject, in the event
of a termination for Cause, to any additional notice and cure provisions described in the
definition of Cause set forth in Section 5(d)) and (ii) if the Employee terminates his or her
employment with the Company for any reason other than for Good Reason (as defined in Section 5(d)
and subject to the notice and cure provisions described therein), the Employee shall provide
written notice of such termination to the Company at least three months prior to the effective date
of such termination (the “Employee Notice Period”). The Company may reduce the Employee Notice
Period in its sole and absolute discretion. During the Employee Notice Period, it is understood
that the Employee shall continue to perform relevant duties for the Company and will assist the
Company with transferring

- 3 -

 

the Employee’s responsibilities in an appropriate manner and take such actions as deemed
necessary by the Company to assure a smooth transition.

          b) Cooperation. After notice of termination, the Employee shall cooperate with the
Company, as reasonably requested by the Company, to effect a transition of the Employee’s
responsibilities and to ensure that the Company is aware of all matters being handled by the
Employee. The Company agrees to pay for reasonable travel and lodging expenses incurred by the
Employee relating to this cooperation clause.

          c) Termination Date. For all purposes in this Agreement, “Termination Date” means the
effective date of the Employee’s termination of employment with the Company.

     5) TERMINATION PAYMENTS.

          a) Termination for Any Reason. Upon termination of the Employee’s employment for any
reason, the Employee will be entitled to: (i) all unpaid salary and vacation days accrued through
the Termination Date and (ii) any unreimbursed business expenses. The Employee may also be
eligible for other post-employment payments and benefits as provided in this Agreement or pursuant
to other agreements or plans with the Company.

          b) Termination Not Related to a Change in Control.

               i) Except in a termination related to a Change in Control (as defined in Section 5(d)), which
is covered in Section 5(c), if:

     (1) the Employee’s employment is involuntarily terminated by the Company other
than for (x) Cause (as defined in Section 5(d) and subject to the notice and cure
provisions described therein), (y) death or (z) Disability (as defined in Section
5(d)), or

     (2) the Employee voluntarily terminates his or her employment for Good Reason
(as defined in Section 5(d) and subject to the notice and cure provisions described
therein),

then, subject to the Employee delivering an executed release in the form attached hereto as
Exhibit A or, at the Company’s election, such other form that the Company is then using for
employees similarly situated to the Employee, the Company will provide the Employee the following:

     (A) a lump sum equivalent of 12 months of the Employee’s base salary and
target bonus as in effect on the Termination Date; and

     (B) for 12 months following the Termination Date, the Employee also shall be
entitled to continuation, at the Company’s expense, of group medical, dental,
long-term disability, accidental death and disability, and life insurance benefits
from the Company to the extent

- 4 -

 

permitted under such plans or as otherwise approved by the Board, as in effect
immediately prior to the Termination Date; provided, however, that in the event
continuation of such benefits is not permitted under such plans, the Company shall
pay to Employee the cash equivalent of such benefits not permitted to be covered
under such plans; and

     (C) the accrued target bonus earned during the calendar year of severance on a
pro rata basis.

               ii) The continuation of benefits at the Company’s expense pursuant to Section 5(b)(i)(B) shall
be concurrent with any obligation of the Company to provide continuation of coverage under Section
4980B of the Internal Revenue Code of 1986 or Sections 601 et. seq. of the Employee Retirement
Income Security Act of 1974 (collectively, “COBRA”), and shall not replace or extend the Employee’s
right to continued coverage under COBRA.

          c) Termination Related to a Change in Control.

               i) In the event that one of the following occurs:

     (1) the Employee’s employment is involuntarily terminated by the Company other
than for (x) Cause (as defined in Section 5(d) and subject to the notice and cure
provisions described therein), (y) death or (z) Disability (as defined in Section
5(d)), either within 90 days prior to, on the date of or within one year after a
Change in Control; or

     (2) the Employee terminates his or her employment for Good Reason (as defined
in Section 5(d) and subject to the notice and cure provisions described therein)
within one year after such Change in Control,

then, subject to the Employee delivering an executed release in the form attached hereto as
Exhibit A or, at the Company’s election, such other form that the Company is then using for
employees similarly situated to the Employee, the Company will provide the Employee the following:

     (A) a lump sum equivalent of 24 months of the Employee’s base salary and
target bonus as in effect on the Termination Date; and

     (B) full vesting of all stock options or other equity incentive awards that
are outstanding and not vested as of the Termination Date; and

     (C) for 24 months following the Termination Date, the Employee also shall be
entitled to continuation, at the Company’s expense, of group medical, dental,
long-term disability, accidental death and disability, and life insurance benefits
from the Company to the extent permitted under such plans or as otherwise approved
by the Board, as in effect immediately prior to the Termination Date; provided,
however, that

- 5 -

 

in the event continuation of such benefits is not permitted under such plans,
the Company shall pay to Employee the cash equivalent of such benefits not
permitted to be covered under such plans; and

     (C) the accrued target bonus earned during the calendar year of severance on a
pro rata basis.

               ii) The continuation of benefits at the Company’s expense pursuant to Section 5(c)(i)(C) shall
be concurrent with any obligation of the Company to provide continuation of coverage under COBRA,
and shall not replace or extend the Employee’s right to continued coverage under COBRA.

          d) Definitions. For purposes of this Section 5, the following words and phrases shall
have the meanings indicated:

               i) “Change in Control” means an event or occurrence set forth in any one or more of
subsections (1) through (4) below (including without limitation an event or occurrence that
constitutes a Change in Control under one of such subsections but is specifically exempted from
another such subsection):

     (1) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of
the Company if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x)
the then-outstanding As-Converted Common Stock (as defined below) of the Company
(such outstanding shares, the “Outstanding As-Converted Company Common Stock”) or
(y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company
Voting Securities”); provided, however, that for purposes of this subsection (1),
the following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible into
or exchangeable for common stock or voting securities of the Company, unless the
Person exercising, converting or exchanging such security acquired such security
directly from the Company or an underwriter or agent of the Company), (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation controlled
by the Company, or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i) and (ii) of subsection (3) of this
Section 5(d)(i); or

     (2) such time as the Continuing Directors (as defined below) do not constitute
a majority of the Board (or, if applicable, the Board of

- 6 -

 

Directors of a successor corporation to the Company), where the term
“Continuing Director” means at any date a member of the Board (i) who was a member
of the Board on the date of the execution of this Agreement or (ii) who was
nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election
or whose election to the Board was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii) any
individual whose initial assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents, by or on behalf of
a person other than the Board; or

     (3) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in one
or a series of related transactions (a “Business Combination”), unless, immediately
following such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding As-Converted Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding As-Converted Common Stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the Company’s
assets either directly or through one or more subsidiaries) (such resulting or
acquiring corporation is referred to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding As-Converted Company Common Stock and
Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding
any employee benefit plan (or related trust) maintained or sponsored by the Company
or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or
more of the then outstanding As-Converted Common Stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of
such corporation entitled to vote generally in the election of directors (except to
the extent that such ownership existed prior to the Business Combination); or

     (4) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

- 7 -

 

               ii) “As-Converted Common Stock” means the outstanding shares of common stock of an entity
together with all shares of common stock then issuable upon the conversion or exchange of any
outstanding securities convertible into or exchangeable for common stock of such entity, but
excluding any common stock issuable upon the exercise of any outstanding securities (such as
options and warrants) exercisable for common stock of such entity.

               iii) “Cause” shall mean: (a) the Employee’s willful misconduct with respect to the business
and affairs of the Company or any subsidiary thereof, (b) the Employee’s gross neglect of duties or
failure to act which can reasonably be expected to affect materially and adversely the business or
affairs of the Company or any subsidiary thereof, (c) the Employee’s material breach of any of the
agreements contained herein, any other written agreement between the Company and the Employee, or
any written policy of the Company governing the Employee’s conduct or employment whether now
existing or hereafter created, or the Employee’s breach of the Non-Compete Agreement (as defined in
Section 6), (d) the commission by the Employee of an act involving moral turpitude relating to the
Company, dishonesty in performance of employment duties or fraud, (e) the Employee’s conviction of
any felony, or of any misdemeanor involving fraud, theft, embezzlement, forgery or moral turpitude,
(f) possession or use of or impairment on account of illegal drugs, (g) abandonment of employment
duties or (h) conduct on the part of Employee relating to the Company’s business or his or her
employment duties (which is not authorized, directed or approved by the Company) which results in
governmental sanctions being imposed on the Company or the Employee. Before “Cause” under clause
(b) or (c) has been deemed to have occurred, the Company, the Board or the Committee must give the
Employee written notice detailing why the Company, the Board or the Committee, as the case may be,
has determined that Cause has occurred. The Employee shall then have 30 days after his or her
receipt of written notice to cure the item cited in the written notice so that “Cause” will have
not formally occurred with respect to the event in question.

               iv) “Disability” shall mean the Employee’s failure or inability to perform his or her duties
under this Agreement due to a mental or physical infirmity for a period of more than 120 days
during any 12 consecutive month period.

               v) “Good Reason” shall mean, and is limited to (A) a material diminution in the Employee’s
base salary, duties or responsibility without the prior written consent of the Employee or (B) the
transfer, without the prior written consent of the Employee, of the Employee’s permanent primary
place of employment to a location that is (x) more than 25 miles from the location of Employee’s
permanent primary place of employment and (y) more than 25 miles from the location of the
Employee’s residence. Before “Good Reason” has been deemed to have occurred, the Employee must
give the Company written notice detailing why the Employee believes a Good Reason event has
occurred and such notice must be provided to the Company within 30 days of the Employee’s actual
knowledge of the initial occurrence of such alleged Good Reason event. The Company shall then have
30 days after its receipt of written notice to cure the item cited in the written notice so that
“Good Reason” will have not formally occurred with respect to the event in question. A termination
of employment due to

- 8 -

 

Good Reason shall occur no later than 75 days after the Employee’s actual knowledge of the
condition giving rise to Good Reason.

     6) PROPRIETARY INFORMATION AND NON-COMPETE AGREEMENT. The Employee has executed the
Proprietary Information and Invention and Non-Compete Agreement, a copy of which is attached hereto
and the text of which is incorporated herein as Annex A (the “Non-Compete Agreement”) and covenants
that the Employee will comply with the terms of the Non-Compete Agreement.

     7) INTERNAL REVENUE CODE SECTION 409A. The following rules shall apply with respect to
distribution of the payments and benefits, if any, to be provided to the Employee under Section 5:

          a) It is intended that each installment of the payments and benefits provided under Section 5
shall be treated as a separate “payment” for purposes of Section 409A of the U.S. Internal Revenue
Code of 1986, as amended (the “Code”), and the guidance issued thereunder (“Section 409A”).
Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of
any such payments or benefits except to the extent specifically permitted or required by Section
409A;

          b) If, as of the date of the “separation from service” of the Employee from the Company, the
Employee is not a “specified employee” (each, for purposes of this Agreement, within the meaning of
Section 409A), then each installment of the payments and benefits shall be made on the dates and
terms set forth in Section 5; and

          c) If, as of the date of the separation from service of the Employee from the Company, the
Employee is a specified employee, then:

               i) Each installment of the payments and benefits due under Section 5 that, in accordance with
the dates and terms set forth herein, will in all circumstances, regardless of when the separation
from service occurs, be paid within the Short-Term Deferral Period (as defined below) shall be
treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4)
to the maximum extent permissible under Section 409A. For purposes of this Agreement, the
“Short-Term Deferral Period” means the period ending on the later of (A) the 15th day of the third
month following the end of the Employee’s tax year in which the Employee’s separation from service
occurs and (B) the 15th day of the third month following the end of the Company’s tax year in which
the Employee’s separation from service occurs; and

               ii) Each installment of the payments and benefits due under Section 5 that is not paid within
the Short-Term Deferral Period and that would, absent this subsection, be paid within the six-month
period following the separation from service of the Employee shall not be paid until the date that
is six months and one day after such separation from service (or, if earlier, the death of the
Employee), with any such installments that are required to be delayed being accumulated during the
six-month period and paid in a lump sum on the date that is six months and one day following the
Employee’s separation from service and any subsequent installments, if any, being paid

- 9 -

 

in accordance with the dates and terms set forth herein; provided, however, that the preceding
provisions of this sentence shall not apply to any installment of payments and benefits if and to
the maximum extent that that such installment is deemed to be paid under a separation pay plan that
does not provide for a deferral of compensation by reason of the application of Treasury Regulation
1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service) or
Treasury Regulation 1.409A-1(b)(9)(iv) (relating to reimbursements and certain other separation
payments). Such payments due under Section 5 shall bear interest at an annual rate equal to the
prime rate as set forth in the Eastern edition of the Wall Street Journal on the Termination Date,
from the Termination Date to the date of payment. Any installments that qualify for the exception
under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of
the second taxable year of the Employee following the taxable year of the Employee in which the
separation from service occurs.

     8) INTERNAL REVENUE CODE SECTION 280G. In the event that it is determined that any payment
or distribution of any type to the Employee or for the Employee’s benefit made by the Company, by
any of its affiliates, by any Person who acquires ownership or effective control or ownership of a
substantial portion of the Company’s assets (within the meaning of Section 280G of the Code and the
regulations thereunder) or by any affiliate of such Person, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest or penalties, are collectively
referred to as the “Excise Tax”), then such payments or distributions or benefits shall be payable
either: (a) in full or (b) in a lesser amount reflecting a reduction in payments to the extent
necessary to result in no portion of such payments or distributions or benefits being subject to
the Excise Tax. Method (b) shall be used unless method (a) provides a higher after-tax benefit to
the Employee. If method (b) is used, then the Employee shall have the right to determine which
payments or benefits will be reduced and in what magnitude. The Employee and the Company shall
furnish such documentation and documents as may be necessary for the Company’s independent external
accountants to perform the requisite computations and analysis contemplated by this Section 8.

     9) REMEDIES UPON BREACH. The Employee acknowledges that the restrictions contained in this
Agreement are necessary for the protection of the business and goodwill of the Company and are
reasonable for such purpose. The Employee agrees that any breach of this Agreement by the Employee
will cause irreparable damage to the Company and that in the event of such breach, the Company
shall be entitled, in addition to monetary damages and to any other remedies available to the
Company under this Agreement and at law, to equitable relief, including without limitation
injunctive relief, and to payment by the Employee of all costs incurred by the Company in enforcing
the provisions of this Agreement.

     10) ATTORNEYS’ FEES. If either party to this Agreement breaches any of the terms hereof, that
party shall pay to the non-defaulting party all of the non-defaulting party’s costs and expenses,
including without limitation attorneys’ fees, incurred by that

- 10 -

 

party in enforcing the terms of this Agreement.

     11) WAIVER OF TRIAL BY JURY. THE PARTIES TO THIS AGREEMENT DESIRE TO AVOID THE ADDITIONAL
TIME AND EXPENSE RELATED TO JURY TRIAL OF ANY DISPUTES ARISING HEREUNDER. THEREFORE, IT IS
MUTUALLY AGREED BY AND BETWEEN THE PARTIES TO THIS AGREEMENT THAT THEY SHALL AND HEREBY DO WAIVE
TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, OR THIRD-PARTY CLAIM, INCLUDING WITHOUT LIMITATION ANY
AND ALL CLAIMS OR INJURY OR DAMAGES, BROUGHT BY EITHER PARTY AGAINST THE OTHER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS AGREEMENT. THE PARTIES ACKNOWLEDGE AND AGREE THAT THIS WAIVER IS
KNOWINGLY, FREELY, AND VOLUNTARILY GIVEN, IS DESIRED BY BOTH PARTIES, AND IS IN THE BEST INTERESTS
OF BOTH PARTIES.

     12) ASSIGNMENT. The Employee acknowledges that services are unique and personal.
Accordingly, the Employee may not assign rights or obligations under this Agreement.

     13) SUCCESSORS. This Agreement shall be binding upon, and inure to the benefit of, any
successor to all or substantially all of the Company’s business and/or assets, and the Company will
require any such successor to expressly assume and agree in writing to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. For all purposes under this Agreement, the term “Company” shall include
any successor to the Company’s business and/or assets which becomes bound by this Agreement by
contract, operation of law or otherwise. This Agreement will inure to the benefit of and be
enforceable by the Employee and the Employee’s personal or legal representatives, executors,
estate, trustee, administrators, successors, heirs, distributees, devisees and legatees, as
applicable. If the Employee dies and any amounts become payable under this Agreement, the Company
will pay those amounts to the Employee’s estate or named beneficiary, as applicable, except as
otherwise may be required by applicable law.

     14) WAIVER AND AMENDMENT. No waiver of any term or condition of this Agreement shall be
effective unless in writing and signed by the party so waiving. No amendment to this Agreement
shall be valid unless in writing and signed by the Company and Employee.

     15) SEVERABILITY. If any provision of this Agreement or any attachment, annex or exhibit
hereto, is invalid under any applicable statute or rule of law, it is to that extent to be deemed
omitted. The remainder of the Agreement, and such attachments, annexes and exhibits, shall be
valid and enforceable to the maximum extent possible.

     16) GOVERNING LAW AND JURISDICTION. The parties agree that this Agreement, and all
attachments, annexes and exhibits hereto, shall be construed and enforced in accordance with the
laws of the Commonwealth of Kentucky, and that the courts of the Commonwealth of Kentucky have
exclusive jurisdiction over actions to

- 11 -

 

enforce any term of this Agreement or any attachment, annex or exhibit hereto or any action
alleging a breach of this Agreement.

     17) HEADINGS. Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.

     18) NOTICE. Any notice or communications that are required or that may be given pursuant to
this Agreement shall be in writing and shall be deemed to be duly given if (a) delivered personally
or (b) sent by first class mail, postage prepaid, return receipt requested or prepaid via a
reputable nationwide overnight courier, in each case in this clause (b), at the addresses specified
in the preamble to this Agreement or such other place as may be specified in writing by a party
from time to time. Any notice or communications shall be deemed to be effective (i) if personally
delivered, when delivered in hand to the party to which it is directed, (ii) if sent by first class
mail, postage prepaid, on the third business day following the day of the dispatch thereof or (iii)
if sent via a reputable overnight courier service, one business day following the day it is sent.

     19) COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which taken together shall constitute one and the same
instrument.

[Remainder of page intentionally left blank]

- 12 -

 

     IN WITNESS WHEREOF, Employee and the Company have executed this Agreement as of the date first
above written.

COMPANY:

	 	 	 	 	 
	 	XANODYNE PHARMACEUTICALS, INC.

 	 
	 	By:	  /s/  Rolf Classon	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

EMPLOYEE:

/s/
Greg Flexter 
Name:

- 13 -

 

ANNEX “A”

to the Employment Agreement

XANODYNE PHARMACEUTICALS, INC.

EMPLOYEE PROPRIETARY INFORMATION

AND INVENTION AND NON-COMPETE AGREEMENT

     I have entered into an employment agreement dated as of ___(the “Employment Agreement”)
with Xanodyne Pharmaceuticals, Inc., a Delaware company (together with its subsidiaries, the
“Company”). Capitalized terms used herein and not otherwise defined shall have the meanings set
forth in the Employment Agreement. In consideration of my continued employment by the Company
pursuant to the Employment Agreement and the compensation paid or to be paid to me by the Company,
I hereby covenant and agree that:

     1. My interest in (a) any and all inventions, improvements, and ideas (whether or not
patentable) which I have made or conceived, or may make or conceive, either solely or jointly with
others, at any time during the course of and in connection with my employment with the Company,
whether or not during normal working hours or on the premises of the Company, and (b) any
suggestions, proposals, writing and the like, of any sort whatsoever, including without limitation
any interest in any copyright and copyrightable material which relate or are applicable directly or
indirectly to any phase of the Company’s business, and which I develop during the course of and in
connection with my employment, whether or not during normal working hours or on the premises of the
Company, shall be the exclusive property of the Company, its successors, assignees, or nominees.
(The items defined in (a) and (b) above will hereinafter be referred to collectively as
“Proprietary Subject Matter.”)

     2. I shall make full and prompt disclosure in writing to an official of the Company, or to
anyone designated for that purpose by the Company, of all Proprietary Subject Matter made or
conceived during the course of and in connection with my employment.

     3. I hereby assign to the Company all of my right, title and interest in and to the
Proprietary Subject Matter and any and all related patent rights, copyrights and applications and
registrations therefor. At the request and expense of the Company, but without further
compensation to me, I shall do such acts, and execute, acknowledge and deliver all such papers,
including without limitation patent and copyright applications or assignments, as may be necessary
or desirable in the sole discretion of the Company to obtain, maintain, protect or vest in the
Company the entire right, title and interest in and to Proprietary Subject Matter and any patent
applications, patents, copyright or other proprietary rights of any kind relating thereto, in all
countries of the world; including without limitation rendering such assistance as the Company may
request in any contemplated or pending litigation, patent office proceeding, or other proceeding.
I hereby appoint the Company my attorney-in-fact to execute and deliver any such documents on my
behalf in the event I should fail or refuse to do so within a reasonable

Annex A-1

 

period following the Company’s request. I understand that, to the extent this Non-Compete
Agreement shall be construed in accordance with the laws of any state which limits assignability to
the Company of certain employee inventions, this Non-Compete Agreement shall be interpreted not to
apply to any such invention which a court rules or the Company agrees is subject to such state
limitation.

     4. I shall not disclose or cause others to disclose to the Company, or induce the Company to
use, any information or material, which is the property of any former or concurrent employer, or
any other person or entity with whom I have an agreement or to whom I owe a duty to keep such
information in confidence. Those persons or entities with whom I have such agreements or to whom I
owe such a duty are identified on Exhibit I attached hereto. I hereby represent to the
Company that, except as identified on Exhibit I attached hereto, I am not bound by any
agreement or any other previous or existing business relationship which conflicts with or prevents
the full performance of my duties and obligations to the Company (including without limitation my
duties and obligations under this Non-Compete Agreement or any other agreement with the Company)
during my employment.

     5. Since the work for which I am employed and upon which I shall be engaged will include
Company knowledge and information of a private, confidential, or secret or proprietary nature, I
shall not, except as required in the conduct of the Company’s business or as authorized in writing
by the Company, publish, disclose, or make use of, or authorize anyone else to publish, disclose or
make use of any such knowledge or information, of a confidential, secret or proprietary nature or
other information which in any way relates to the business, business relationships and financial
affairs of the Company or the design, construction, manufacture or sale of the Company’s products
or services.

     6. I will keep and maintain adequate and current written records of my work and inventions at
all times and stages, in the form of notes, sketches, drawings, memoranda, and reports, which
records shall be and remain the property of and be available to the Company at all time. All
documents, written information and other items including without limitation notes, sketches,
manuals, blueprints, notebooks, products, tools, fixtures, records and information relating to the
business of the Company and all copies thereof, made or obtained by me while employed by the
Company shall be the exclusive property of the Company and shall be delivered by me to the Company
on termination of my employment (whether such termination is caused by act of the Company or by my
own resignation or other act) or at any time as reasonably requested by the Company.

     7. During the term of my Employment Agreement and for a period of 12 months following the
Termination Date (as defined in the Employment Agreement), except that in the event of a
termination of my employment with the Company as described in Section 5(c)(i) of the Employment
Agreement, the period shall be 24 months following the Termination Date, and whether as owner,
partner, officer, director, employee, consultant, investor, lender or otherwise, except as the
holder of not more than 1% of the outstanding stock of a publicly-held company, I agree not to:
(i) engage in any

Annex A-2

 

business or enterprise that is competitive with the Company’s business, including without
limitation to any business or enterprise that develops, manufactures, markets, licenses, sells or
provides any product or service that competes with any product or service developed, manufactured,
marketed, licensed, sold or provided, or planned to be developed, manufactured, marketed, licensed,
sold or provided, by the Company or any of its subsidiaries while I am or was employed by the
Company; (ii) solicit or accept orders with or for any of the products or business activities that
are competitive with the Company’s products or business activities; (iii) solicit or entice away
any employee from the Company, or hire any such employee; (iv) solicit or request investments or
funds from any other person or entities that are affiliated with the Company or for any entity
which competes with the Company; and/or (v) solicit, divert or take away or attempt to divert or
take away, the business or patronage of any of the clients, customers or accounts, or prospective
clients, customers or accounts of the Company with respect to products or business activities that
are competitive with the Company’s products or business activities. I acknowledge that even at
such times as I may be entitled to compete with the Company after the periods of restriction in
this Non-Compete Agreement or my Employment Agreement, the provisions of this Non-Compete Agreement
relating to the confidential nature and ownership of Proprietary Subject Matter in favor of the
Company will survive and continue to be binding upon me.

     8. Upon termination of my employment with the Company, I shall, if requested by the Company,
reaffirm in writing all of the obligations set forth in paragraph 1 through 7 of this Non-Compete
Agreement. All such obligations expressly survive the termination of my employment with the
Company.

     9. Excepted from this Non-Compete Agreement are only such inventions, improvements, ideas,
suggestions, proposals, writings and the like relating to any phase of the Company’s business made
or conceived by me prior to my employment with the Company which are (a) embodied in a United
States Letters Patent, Copyright Registration or an application for United States Letters Patent or
Copyright Registration filed prior to the commencement of my employment; (b) in the physical
possession of a former employer who owns them; or (c) disclosed in detail in Exhibit I
attached hereto.

     10. I agree that should I violate any obligation imposed on me in this Non-Compete Agreement,
I shall continue to be bound by the obligation until a period equal to the term of such obligation
has expired without violation of such obligation.

     11. In the event that any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Non-Compete Agreement, and all
other provisions shall remain in full force and effect. If any of the provisions of this
Non-Compete Agreement is held to be excessively broad, it shall be reformed and construed by
limiting and reducing it so as to be enforceable to the maximum extent permitted by law.

     12. This Non-Compete Agreement is attached to and forms a part of my Employment Agreement with
the Company and is subject to following provisions

Annex A-3

 

therein: Section 9 (Remedies Upon Breach), Section 10 (Attorney’s Fees), Section 11 (WAIVER OF
TRIAL BY JURY), Section 12 (Assignment), Section 13 (Successors), Section 14 (Waiver and
Amendment), Section 16 (Governing Law and Jurisdiction) and Section 18 (Notice).

     IN
WITNESS WHEREOF, I have hereunto set my hand this 19 day of
December, 2007.

 /s/
Gregory D. Flexter

 
Print
Name: GREGORY D. FLEXTER

Annex A-4

 

ANNEX “B”

to the Employment Agreement

XANODYNE PHARMACEUTICALS, INC.

RELOCATION POLICY

	I.	 	Purpose
	 
	 	 	To define the Company’s policy governing relocation expenses for all employees and, to
provide a summary of relocation services provided to employees.
	 
	II.	 	Scope
	 
	 	 	This Policy is applicable to all employees who relocate for employment with Xanodyne
Pharmaceuticals, Inc. We are dedicated to providing you with personalized service and
professional assistance with the necessary tools to facilitate a smooth transition to your new
location.

	 	a.	 	Policy
	 
	 	 	 	The Company will pay or reimburse certain reasonable relocation expenses to a full-time
employee who is offered the company’s relocation package. To be eligible for
reimbursement of relocation-related expenses, IRS regulations require that the employee’s
commuting distance be at least fifty (50) miles from the former residence or the
Company’s work site. This measurement is based on the most direct, commonly traveled
route. Example: If the old commuting distance to work is three (3) miles, then the new
commuting distance to work would have to exceed fifty-three (53) miles in order to be
eligible for relocation benefits.
	 
	 	 	 	The IRS also requires that reimbursement of all relocation-related expenses must be made
within the first twelve (12) months after the effective date of the relocation. The
initiation of the expense must occur before the end of the 12-month period, even if the
activity connected with that expense is not completed until after the 12 (twelve) months
has ended. Example: If the employee’s household goods are loaded on the truck prior to
the end of the 12 (twelve) months, but not delivered to the new location until sometime
later, the expense would be covered.
	 
	 	 	 	If an employee voluntarily leaves the company within eighteen (18) months from the date
of transfer, the employee will be required to reimburse the Company a prorated portion of
the relocation expenses and gross-up expenses paid by the Company based on the following
scale:

	 	•	 	Prior to six (6) months — 100% reimbursable.
	 
	 	•	 	Between seven (7) months and eighteen (18) months the reimbursement will be
reduced by one-twelfth (1/12) for each month that the employee was with the
Company.

Annex B-1

 

	III.	 	Reimbursable Relocation Expenses covered under this policy are as follows:

	 	a.	 	House-Hunting Assistance
	 
	 	 	 	You and your spouse (if applicable) are entitled to two trips, for up to a total of four
(4) days, to search for a residence in your new work area. You will be reimbursed for
all reasonable expenses incurred during your trip, (e.g., lodging, meals, travel,
telephone, rental car and gasoline, parking and tolls). All travel arrangements should
be made through the Company’s travel agency by the employee.
	 
	 	 	 	Please be sure to contact your Human Resources Department prior to scheduling your
house-hunting trip to assure maximum use of your time and a successful outcome.
	 
	 	b.	 	Closing Costs
	 
	 	 	 	The company will reimburse for the following qualifying closing costs for the sale and/or
purchase of a house:

	 	•	 	Appraisal Fee
	 
	 	•	 	Attorney’s Fees (if required by local custom-not to exceed five-hundred
($500.00) dollars.)
	 
	 	•	 	Courier Service
	 
	 	•	 	Credit Report
	 
	 	•	 	Document Preparation
	 
	 	•	 	Escrow Fee
	 
	 	•	 	Homeowner’s Document Transfer Fee
	 
	 	•	 	Inspections (if required by lender)
	 
	 	•	 	Loan Application Fee
	 
	 	•	 	Loan/Lender Fees and Points of up to 2% of mortgage amount
	 
	 	•	 	Notary Fees
	 
	 	•	 	Real Estate Commissions for Seller
	 
	 	•	 	Recording Fees
	 
	 	•	 	Settlement/Closing Fee
	 
	 	•	 	Survey (if required by lender)
	 
	 	•	 	Tax Stamps
	 
	 	•	 	Title Search/Abstract

	 	c.	 	Lease Breaking Fees
	 
	 	 	 	If you are living in a rental unit and will be required to pay a penalty for early lease
cancellation, the company will reimburse you up to but not exceeding two (2) months of
lease breaking expenses. Documentation showing the penalty is required in order to
obtain reimbursement.
	 
	 	d.	 	Transportation And Storage Of Household Goods
	 
	 	 	 	The company has contracted with an approved carrier to manage your move. Your Human
Resources Department will initiate this service.

Annex B-2

 

	 	 	 	The company will cover the following costs related to moving your household goods:

	 	•	 	Packing and unpacking your household goods.
	 
	 	•	 	Transportation of your goods from your existing home to your new home.
	 
	 	•	 	Disconnecting and connecting of major appliances (limited to normal
appliance services).
	 
	 	•	 	Shipment of two (2) cars.
	 
	 	•	 	Sixty (60) days of temporary storage of household goods.

	 	 	 	The moving company will submit all bills directly to the company for processing and
payment. Please note, there are some items that will not be moved under the company’s
relocation package, as listed below:

	 	•	 	Hazardous Material: Flammable liquids, aerosol cans, paints, fuel
kerosene, matches, ammunition, etc.
	 
	 	•	 	Perishable Items and Liquor: Perishable food, liquor, beer, wine, plants,
flowers, shrubs, and other similar items.

	 	•	 	On occasion, household plants may be moved on the van;
however, this at your own risk.

	 	•	 	Pets: Any types of pets or livestock are your moving responsibility. If
possible, your pet should travel with your family.
	 
	 	•	 	Bulky or Heavy Items: Boats, utility trailer, hobby equipment,
snowmobiles, firewood, bricks, patio blocks, storage sheds, and similar types
of items.

	 	 	 	You, your spouse or other adult member must be present during the packing, unloading and
unpacking of household goods and must carefully review the inventory list prior to signing.
	 
	 	e.	 	Loss Or Damage Claims
	 
	 	 	 	If your household goods are damaged during transportation and/or storage, you are insured
for the full replacement value of your household goods up to fifty-thousand ($50,000.00)
dollars. You must pre-designate your valuable possessions (e.g., antiques, original art
work) along with the corresponding appraised value for each item prior to your actual
move date. We recommend that you discuss these items with the approved carrier to ensure
that they will be insured during the move.
	 
	 	 	 	You may be required to pay for insurance for extraordinary items that are above and
beyond a reasonable cost. Coverage of stored goods is limited to sixty (60) days and
must be in the care, custody, and control of the original moving company responsible for
your household goods.
	 
	 	 	 	If damage does occur during storage or the move, you will be required to file an
insurance claim through the moving coordinator as soon as you notice the damage.

Annex B-3

 

	 	f.	 	Travel To New Location:
	 
	 	 	 	It is expected that you will drive your car(s) to your new residence. Employees are
expected to drive the most direct route available in order to ensure a timely relocation.
	 
	 	 	 	The following reimbursable expenses will be paid during your travel:

	 	•	 	Meals (per diem of fifty ($50.00) dollars per day), lodging, parking,
mileage (at the current reimbursable rate) for each day of travel. This
includes travel from the old location and the arrival day at the new location.
	 
	 	•	 	If your household pets cannot travel with you by car, you must arrange for
their shipment. You will be reimbursed shipping charges (including pet
carriers), insurance cost and required health certificates for up to two
household pets.

	 	g.	 	Temporary Living
	 
	 	 	 	Temporary housing expenses, not to exceed two-thousand ($2,000) dollars per month, will
be reimbursed for up to ninety (90) days, so as not to incur duplicate housing expenses.
Your Human Resources Department will assist you in finding temporary housing.
	 
	 	h.	 	Return Visits
	 
	 	 	 	If it is necessary for you to move to your new work location before your family, you are
entitled to reimbursement for airline tickets or personal automobile mileage for two (2)
trips home. Your spouse may visit you in the new location in lieu of your trips home,
provided there is no additional cost to the Company. If your spouse visits you, only
your spouse’s transportation cost will be covered.
	 
	 	 	 	All return visits will be covered as business travel expenses. All airline reservations
should be coordinated through the company’s travel agent and only coach airfare will be
reimbursed. Transportation expenses to and from the airport will also be reimbursed; car
rentals are not a reimbursable expense.
	 
	 	i.	 	Important Tax Information
	 
	 	 	 	The Internal Revenue Service (IRS) considers reimbursements of allowances for moving
expenses as compensation to the transferred employee. These reimbursements and/or
allowances are subject to Federal and State Income Tax, as well as Social Security taxes.
Accordingly, such relocation expenses will be reported on your annual W-2.
	 
	 	 	 	In order to offset some of the tax impact created by this additional income, you will be
provided with an income tax allowance or gross-up for the estimated additional you will
be required to pay. The income tax allowance includes an amount to offset the tax
liability by the gross-up itself (e.g., gross-up on the

Annex B-4

 

	 	 	 	gross-up). To be consistent in calculating the gross-up amount for eligible employees
and for administrative efficiency, Xanodyne will use a standard, all inclusive tax rate
of 40% in calculating the gross-up amount. This rate is applicable for all relocating
employees. The following example illustrates how the gross-up amount will be calculated:

	 	 	 	Example: Taxable expenses reimbursed to the employee: $12, 372

Total gross-up provided: [taxable expenses / (1-tax rate] or [12,372 / .60 = $20,620]
	 
	 	 	 	In the above example, the employee would have total taxable income of $20,620 included on
his / her W-2 related to the relocation. This amount would include the taxable
relocation expense reimbursement of $12,372, plus the gross up tax component of $8,248
($20,620 — $12,372). The pay stub for this employee will reflect the inclusion of
$20,620 in income, with tax withholdings of $8,248. The employee will not receive a
check for any amount, since the taxable reimbursement amount will have already been paid
on the employee’s behalf.
	 
	 	 	 	You are encouraged to keep careful records of all transactions and expenditures during
your move and to seek the assistance of a professional tax consultant to ensure that you
have considered all the tax implications of your move.

Annex B-5

 

Relocation Repayment Agreement

The undersigned agrees to the repayment terms outlined in the Xanodyne Pharmaceuticals, Inc.
Relocation Policy. My signature also confirms that I have read, accept, and understand the
attached policy guidelines.

In consideration of payments made to me, or on my behalf to third-party vendors (i.e., shipment of
household goods, temporary housing, etc.), I agree that if I voluntarily terminate my employment
within the first eighteen months of my employment or transfer date, I will be liable to Xanodyne
for the repayment of all or a prorated amount, including gross up (tax treatment). I hereby agree
to repay the relocation costs to Xanodyne Pharmaceuticals, Inc. within the first (30) days as of my
effective termination date of employment as per the schedule outlined in this policy. If full
repayment or repayment arrangements have not been made within thirty (30) days of notification,
Xanodyne reserves the right to involve the services of a collection agency to recover the money.

I further understand that I am personally indebted to the Company for any amounts required to be
repaid to the Company under the terms of this Agreement and that these amounts can be deducted from
any compensation or payments due me from the Company upon termination, including salary, bonuses,
PTO, and/or other forms of compensation, to the extent permitted by applicable law.

Finally, I understand that this Agreement can only be modified in writing, signed by me and a Human
Resources representative acting on behalf of the Company.

Allow my signature to serve as my understanding and agreement with the terms of this agreement.

	 	 	 	 	 
	Signed:

	 	 
	 	                    Date: ___/___/___
	 

	 	 	 	 

	 	 	 	 	 
	Printed Name:

	 	 
	 	 
	 

	 	 	 	 

Annex B-6

 

EXHIBIT I

to the Non-Compete Agreement

This Exhibit I is attached to the Xanodyne Pharmaceuticals, Inc. (the “Company”) Employee
Proprietary Information and Invention and Non-Compete Agreement (the “Non-Compete Agreement”) of
the employee signatory thereto (the “Employee”).

1. In accordance with paragraph 4 of the Non-Compete Agreement, the following are all former or
concurrent employers and all other persons and entities with whom the Employee has an agreement or
to whom the Employee owes a duty to keep information in confidence:

None.

2. In accordance with paragraph 4 of the Non-Compete Agreement, the following are all agreements
to which the Employee is bound and all other previous and existing business relationships which
conflict with or prevent the full performance of the Employee’s duties and obligations to the
Company (including without limitation the Employee’s duties and obligations under the Non-Compete
Agreement or any other agreement with the Company) during the Employee’s employment with the
Company:

None.

3. The following are all inventions, improvements, ideas, suggestions, proposals, writings and the
like relating to any phase of the Company’s business made or conceived by the Employee prior to the
Employee’s employment with the Company that shall be excepted from the Non-Compete Agreement
pursuant to paragraph 9 therein:

None.

 

 

EXHIBIT A

to the Employment Agreement

FORM OF RELEASE

[Company Letterhead]

[Date]

[Employee Name]

[Employee Address]

[Employee Address]

Dear [Employee Name]:

          In connection with the termination of your employment with Xanodyne Pharmaceuticals, Inc. (the
“Company”) on [Termination Date], you are eligible to receive the Severance Benefits (as defined
below), if you sign and return this letter agreement to [the General Counsel of the Company] in the
enclosed self-addressed stamped envelope postmarked by [Return Date — 21 days from date of receipt
of this letter agreement] and it becomes binding between you and the Company. “Severance Benefits”
means the severance benefits set forth in Section 5[(a)/(b)/(c)] of the Employment Agreement dated
as of [Date], between you and the Company (your “Employment Agreement”) and, if and only if you are
a “Participant” as defined in the Company’s Enhanced Severance Plan, any enhanced severance
benefits available to you pursuant to such Enhanced Severance Plan.

     By signing and returning this letter agreement and not revoking your acceptance, you will be
agreeing to the terms and conditions set forth in the numbered paragraphs below, including the
release of claims set forth in paragraph 2. Therefore, you are advised to consult with an attorney
before signing this letter agreement and you may take up to twenty-one (21) days to do so. If you
sign this letter agreement, you may change your mind and revoke your agreement during the seven (7)
day period after you have signed it by notifying [the General Counsel of the Company] in writing.
If you do not so revoke, this letter agreement will become a binding agreement between you and the
Company upon the expiration of the seven (7) day period.

          If you choose not to sign and return this letter agreement by [Return Date-Same as Above], or
if you timely revoke your acceptance in writing, you shall not receive any Severance Benefits from
the Company. You will, however, receive payment on your Termination Date, as defined below, for
your final wages and any unused vacation time accrued through the Termination Date. Also,
regardless of signing this letter agreement, you may elect to continue receiving group medical
insurance pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et seq. If you so
elect, you shall pay all premium costs on a monthly basis for as long as, and to the extent that,
you remain eligible for COBRA continuation. You should consult the COBRA materials to be provided
by the Company for details regarding these benefits.

Exhibit A-1

 

          The following numbered paragraphs set forth the terms and conditions that will apply if you
timely sign and return this letter agreement and do not revoke it in writing within the seven (7)
day period.

	 	1.	 	Termination Date — Your effective date of termination from the Company is
[Date] (the “Termination Date”).

	 	2.	 	Release — In consideration of the payment of the Severance Benefits, which
you acknowledge you would not otherwise be entitled to receive, you hereby fully, forever,
irrevocably and unconditionally release, remise and discharge the Company, its officers,
directors, stockholders, corporate affiliates, subsidiaries, parent companies, agents and
employees (each in their individual and corporate capacities) (hereinafter, the “Released
Parties”) from any and all claims, charges, complaints, demands, actions, causes of
action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature
that you ever had or now have against the Released Parties, including, but not limited to,
any and all claims arising out of or relating to your employment with and/or separation
from the Company, including, but not limited to, all claims under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans With Disabilities Act
of 1990, 42 U.S.C. § 12101 et seq., the Age Discrimination in Employment
Act, 29 U.S.C. § 621 et seq., the Family and Medical Leave Act, 29 U.S.C.
§ 2601 et seq., the Worker Adjustment and Retraining Notification Act
(“WARN”), 29 U.S.C. § 2101 et seq., Section 806 of the Corporate and
Criminal Fraud Accountability Act of 2002, 18 U.S.C. 1514(A), the Rehabilitation Act of
1973, 29 U.S.C. § 701 et seq., the Fair Credit Reporting Act, 15 U.S.C. §
1681 et seq., the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001 et seq., Executive Order 11246, and Executive Order 11141, all as
amended; all claims arising out of the Kentucky Civil Rights Act, Ky. Rev. Stat. Ann. §
344.010 et seq., the 1976 Kentucky Equal Opportunities Act, Ky. Rev. Stat. Ann. §
207.130 et seq., Ky. Rev. Stat. Ann. § 337.420 et seq. (Kentucky equal pay
law), Ky. Rev. Stat. Ann. § 337.015 (Kentucky adoption leave law), and Ky. Rev. Stat. Ann.
§§ 207.170, 337.990, 338.121 (Kentucky whistleblower protection law), all as amended; all
common law claims including, but not limited to, actions in defamation, intentional
infliction of emotional distress, misrepresentation, fraud, wrongful discharge, and breach
of contract (including, without limitation, all claims with respect to severance benefits
or otherwise arising out of the Employment Agreement and any amendments thereto); all
claims to any non-vested ownership interest in the Company, contractual or otherwise, and
any claim or damage arising out of your employment with and/or separation from the Company
(including a claim for retaliation) under any common law theory or any federal, state or
local statute or ordinance not expressly referenced above; provided, however, that nothing
in this letter agreement:

Exhibit A-2

 

	 	a.	 	prevents you from filing a charge with, cooperating with, or
participating in any proceeding before the Equal Employment Opportunity Commission
or a state fair employment practices agency (except that you acknowledge that you
may not be able to recover any monetary benefits in connection with any such claim,
charge or proceeding);

	 	b.	 	releases the Company from its obligations to you following
termination of your employment with respect to any stock options, restricted
stock, restricted stock units, or other equity awards granted to you and vested as
of the Termination Date pursuant to any applicable Company equity incentive plans;
or

	 	c.	 	releases the Company from its obligations to you following
termination of your employment to pay, if and only if you are a “Participant” in
the Company’s Company Sale Bonus Plan and not a “Terminated Participant” as
provided therein, the bonus amount payable to you, if any, in accordance with the
terms and conditions of such Company Sale Bonus Plan.

	 	3.	 	Non-Disclosure, Non-Competition and Non-Solicitation — You acknowledge and
reaffirm your obligations to keep confidential and not disclose all non-public information
concerning the Company and its clients that you acquired during the course of your
employment with the Company, as stated more fully in the Employee Proprietary and
Non-Compete Agreement dated as of [Date] (the “Non-Compete Agreement”) you executed for
the benefit of the Company, which remains in full force and effect. You further
acknowledge and reaffirm your non-competition and non-solicitation obligations and other
obligations under paragraphs 1 through 7 of the Non-Compete Agreement, which also remain
in full force and effect.

	 	4.	 	Return of Company Property — You confirm that you have returned to the
Company all keys, files, records (and copies thereof), equipment (including, but not
limited to, computer hardware, software and printers, wireless handheld devices, cellular
phones, pagers, etc.), Company identification, and any other Company-owned property in
your possession or control and have left intact all electronic Company documents,
including but not limited to those which you developed or helped to develop during your
employment. You further confirm that you have cancelled all accounts for your benefit, if
any, in the Company’s name, including but not limited to, credit cards, telephone charge
cards, cellular phone and/or pager accounts and computer accounts.

	 	5.	 	Business Expenses and Final Compensation — You acknowledge that you have
been reimbursed by the Company for all relocation costs and business expenses incurred in
conjunction with the performance of your employment and that no other reimbursements are
owed to you. You further acknowledge that you have received payment in full for all
services rendered in conjunction with your employment by the Company, including payment
for all wages, bonuses and 

Exhibit A-3

 

	 	 	 	accrued, unused vacation time, and that no other compensation
is owed to you except as provided herein.

	 	6.	 	Non-Disparagement — To the extent permitted by law, you understand and agree that as
a condition for payment to you of the Severance Benefits, you shall not make any false,
disparaging or derogatory statements to any person or entity, including any media outlet,
regarding the Company or any of its directors, officers, employees, agents or
representatives or about the Company’s business affairs and financial condition.

	 	7.	 	Continued Assistance — You agree that after the Termination Date you will
provide all reasonable cooperation to the Company, including but not limited to, assisting
the Company transition your job duties, assisting the Company in defending against and/or
prosecuting any litigation or threatened litigation, and performing any other tasks as
reasonably requested by the Company.

	 	8.	 	Amendment and Waiver — This letter agreement shall be binding upon the
parties and may not be modified in any manner, except by an instrument in writing of
concurrent or subsequent date signed by duly authorized representatives of the parties
hereto. This letter agreement is binding upon and shall inure to the benefit of the
parties and their respective agents, assigns, heirs, executors, successors and
administrators. No delay or omission by the Company in exercising any right under this
letter agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that instance
and shall not be construed as a bar to or waiver of any right on any other occasion.

	 	9.	 	Validity — Should any provision of this letter agreement be declared or be
determined by any court of competent jurisdiction to be illegal or invalid, the validity
of the remaining parts, terms or provisions shall not be affected thereby and said illegal
or invalid part, term or provision shall be deemed not to be a part of this letter
agreement.

	 	10.	 	Confidentiality — To the extent permitted by law, you understand and agree that as a
condition for payment to you of the Severance Benefits herein described, the terms and
contents of this letter agreement, and the contents of the negotiations and discussions
resulting in this letter agreement, shall be maintained as confidential by you and your
agents and representatives and shall not be disclosed except to the extent required by
federal or state law or as otherwise agreed to in writing by the Company.

	 	11.	 	Nature of Agreement — You understand and agree that this letter agreement
does not constitute an admission of liability or wrongdoing on the part of the Company.

	 	12.	 	Acknowledgments — You acknowledge that you have been given at least
twenty-one (21) days to consider this letter agreement, and that the Company advised you
to consult with an attorney of your own choosing prior to signing this letter 

Exhibit A-4

 

	 	 	 	agreement.
You understand that you may revoke this letter agreement for a period of seven (7) days
after you sign this letter agreement by notifying [the General Counsel of the Company] in
writing, and the letter agreement shall not
be effective or enforceable until the expiration of this seven (7) day revocation period.
You understand and agree that by entering into this letter agreement, you are waiving any
and all rights or claims you might have under the Age Discrimination in Employment Act, as
amended by the Older Workers Benefits Protection Act, and that you have received
consideration beyond that to which you were previously entitled.

	 	13.	 	Voluntary Assent — You affirm that no other promises or agreements of any
kind have been made to or with you by any person or entity whatsoever to cause you to sign
this letter agreement, and that you fully understand the meaning and intent of this letter
agreement. You state and represent that you have had an opportunity to fully discuss and
review the terms of this letter agreement with an attorney. You further state and
represent that you have carefully read this letter agreement, understand the contents
herein, freely and voluntarily assent to all of the terms and conditions hereof and sign
your name of your own free act.

	 	14.	 	Applicable Law — This letter agreement shall be interpreted and construed by
the laws of the Commonwealth of Kentucky, without regard to conflict of laws provisions.
You hereby irrevocably submit to and acknowledge and recognize the jurisdiction of the
courts of the Commonwealth of Kentucky, or if appropriate, a federal court located in the
Commonwealth of Kentucky (which courts, for purposes of this letter agreement, are the
only courts of competent jurisdiction), over any suit, action or other proceeding arising
out of, under or in connection with this letter agreement or the subject matter hereof.

	 	15.	 	WAIVER OF JURY TRIAL — YOU AND THE COMPANY DESIRE TO AVOID THE ADDITIONAL
TIME AND EXPENSE RELATED TO JURY TRIAL OF ANY DISPUTES ARISING HEREUNDER. THEREFORE, IT
IS MUTUALLY AGREED BY AND BETWEEN YOU AND THE COMPANY THAT YOU AND THE COMPANY SHALL AND
HEREBY DO WAIVE TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, OR THIRD-PARTY CLAIM, INCLUDING
WITHOUT LIMITATION ANY AND ALL CLAIMS OR INJURY OR DAMAGES, BROUGHT BY EITHER PARTY
AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LETTER AGREEMENT. YOU
AND THE COMPANY ACKNOWLEDGE AND AGREE THAT THIS WAIVER IS KNOWINGLY, FREELY, AND
VOLUNTARILY GIVEN, IS DESIRED BY BOTH PARTIES, AND IS IN THE BEST INTERESTS OF BOTH
PARTIES.

	 	16.	 	Entire Agreement — This letter agreement contains and constitutes the entire
understanding and agreement between the parties hereto with respect to the Severance
Benefits and the settlement of claims against the Company and cancels all previous oral
and written negotiations, agreements or commitments in 

Exhibit A-5

 

	 	 	 	connection therewith, including
without limitation your Employment Agreement and any amendments thereto. Nothing in this
paragraph or otherwise in this letter
agreement, however, shall modify, cancel or supersede your obligations as set forth in
paragraph 3.

	 	17.	 	Tax Acknowledgement — In connection with the Severance Benefits provided to
you pursuant to this letter agreement, the Company shall withhold and remit to the tax
authorities the amounts required under applicable law, and you shall be responsible for
all applicable taxes with respect to such payments and consideration under applicable law.
You acknowledge that you are not relying upon the advice or representation of the Company
with respect to the tax treatment of any of the Severance Benefits.

	 	18.	 	Section 409A — The Severance Benefits under this letter agreement are
intended to comply with, or be exempt from, the provisions of Section 409A of the Internal
Revenue Code of 1986 and this letter agreement shall be administered and construed
accordingly.

Exhibit A-6

 

     If you have any questions about the matters covered in this letter agreement, please call
[Name] at [Phone Number].

	 	 	 	 	 
	 	 	          Very truly yours,
	 
	 	 	 	 
	 	 	Xanodyne Pharmaceuticals, Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

     I hereby agree to the terms and conditions set forth above. I have been given at least
twenty-one (21) days to consider this letter agreement and I have chosen to execute this on the
date below. I intend that this letter agreement will become a binding agreement between me and the
Company if I do not revoke my acceptance in seven (7) days.

	 	 	 
	 

	 	 
	[Employee Name]

	 	Date

To be returned in the enclosed self-addressed stamped envelope by [Return Date — 21 days from date
of receipt of this letter agreement].

Exhibit A-7

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