exv10w5






Exhibit 10.5




LICENSE AGREEMENT




     THIS LICENSE AGREEMENT is made as of the 31st day of May, 2000 by and between BENTLEY
PHARMACEUTICALS, INC., a Delaware corporation, with offices at 65 Lafayette Road, 3rd Floor, North
Hampton, New Hampshire 03862-2403 (hereinafter, “BENTLEY” or “Licensor”), and AUXILIUM A2, INC., a
Delaware corporation having a principal place of business at 160 W. Germantown Pike, Suite D-5,
East Norriton, Pennsylvania 19401 (hereinafter, “AUXILIUM” or “Licensee”). BENTLEY and AUXILIUM may
be referred to as a “Party” or, collectively, as “Parties.”



RECITALS




     WHEREAS AUXILIUM is engaged in the research, development, manufacture, marketingand sale of
pharmaceutical products;



     WHEREAS BENTLEY is engaged in the development of pharmaceutical formulations and drug delivery
systems and has developed certain formulations which contain a therapeutic drug and drug delivery
systems included under BENTLEY Patents and BENTLEY Technology;



     WHEREAS under a Research Services Agreement of even date herewith (the “Research Agreement”)
BENTLEY will prepare and test topical pharmaceutical formulations, excluding patch applications,
which contain the therapeutic drug testosterone and CPE-215 (hereinafter, the “Compound”) under
BENTLEY Patents and BENTLEY Technology;



     WHEREAS AUXILIUM wishes to obtain a license under BENTLEY Patents and BENTLEY Technology to
undertake development of products containing the Compound which meet criteria set forth in the
Research Agreement for commercialization in the Territory; and



     WHEREAS BENTLEY is willing to grant such a license under certain terms and conditions.



     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and
INTENDING TO BE LEGALLY BOUND HEREBY, the Parties agree as follows:



ARTICLE I




DEFINITIONS




     1.1 The following terms, as used herein, shall have the following meanings:



     “Act” shall mean the United States Federal Food Drug and Cosmetic Act and applicable
regulations.



     “Affiliate” means, when used with reference to a Party, any person directly or indirectly
Controlling, Controlled by or under common Control with a Party.



 









 





     “Bankruptcy Event” means the person in question becomes insolvent, or voluntary or involuntary
proceedings by or against such person are instituted in bankruptcy or under any insolvency law, or
a receiver or custodian is appointed for such person, or proceedings are instituted by or against
such person for corporate reorganization or the dissolution of such person, which proceedings, if
involuntary, shall not have been dismissed within one hundred eighty days after the date or filing,
or such person makes an assignment for the benefit of creditors, or substantially all of the assets
of such person are seized or attached and not released within one hundred eighty days thereafter.



     “BENTLEY Know-How” shall mean any and all present and future information and any materials,
including, without limitation, formulations, processes, techniques, formulas, biological, chemical,
assay control and manufacturing data, methods, software, equipment designs, know-how, and trade
secrets, patentable or otherwise, tangible or intangible, that are owned or controlled by Licensor
that relate to the preparation, purification, characterization, stabilization, processing, and
formulation and/or use of a testosterone topical formulation containing CPE-215.



     “BENTLEY Patents” shall mean United States Patent No. 5,023,252 and any and all continuations,
continuations-in-part, additions, divisions, renewals, extensions, re-examinations and reissues
thereof and any and all foreign counterparts of the foregoing as set forth in Schedule A hereto and
any other Bentley U.S. or foreign patent application which is filed hereafter and which includes a
claim that covers a testosterone topical formulation which contains CPE-215 and/or the preparation
and/or use thereof and any U.S. or foreign patent issuing therefrom and any renewal, extension,
re-examination or reissue thereof.



     “BENTLEY Technology” means BENTLEY Know-How and Improvements.



     “Calendar Quarter” means each three-month period, or any portion thereof, beginning on January
1, April 1, July 1 and October 1.



     “Combination Products” means any and all pharmaceutical compositions which contain: (A)
testosterone as an active ingredient in combination with any other steroids, hormones,
somatotropics, emollients, or therapeutic soy products; and (B) the Compound; and which fall within
the scope of any composition, method, or article claim of the BENTLEY Patents and which is intended
to be applied topically to the user of the composition.



     “Compound” is defined above in the Recitals.



     “Confidential Information” means (i) BENTLEY Technology, (ii) any other information or
material in tangible form that is confidential or proprietary to the furnishing Party at the time
it is delivered to the receiving Party, (iii) proprietary information of the furnishing party, (iv)
information that is furnished orally if the furnishing party identifies such information as
confidential or proprietary when it is disclosed, and (v) patent applications not yet in the public
domain.



     “Control”, “Controlling,” and “Controlled by” mean the direct or indirect ownership of over
50% of the outstanding voting securities of an entity, or the right to receive over 50% of the
profits or earnings of a person, or the right to control the policy decisions of a person.



 









 





     “Effective Date” means the date of receipt by BENTLEY of written notice from AUXILIUM pursuant
to Section 9.1 of the Research Agreement that it wishes to proceed with development of Product.
Such notice shall be provided on or before 30 September, 2000.



     “Improvement” shall mean any formulations and/or any enhancement or other desirable change to
the technical/pharmacological characteristics of formulations of Product, whether patentable or
not, which is useful for commercializing Product developed by BENTLEY during the term of this
Agreement which may take the form of, without limitation, new or improved methods of
administration, manufacture, improved shelf life or packaging.



     “IND” shall mean an Investigational New Drug Exemption application filed under the Act, or
comparable filing in any major market in the Territory the approval of which permits clinical
investigation of Product in humans.



     “NDA” means a New Drug Application submitted under the Act to permit commercial sale of
Product in the United States or a comparable marketing license in another major market in the
Territory.



     “Net Sales Price” means the gross amount charged by Licensee for the sale of a Product, net of
returns and credits for rejected goods, and after deducting (i) trade and quantity discounts
actually allowed, (ii) sales, use or value added taxes, the legal obligation of which is on
Licensee, and (iii) freight allowances, insurance and customs duties, to the extent any of the
foregoing are identified on the invoice for the product. If a product is sold for consideration
other than solely cash, the fair market value of such other consideration shall be included in the
Net Sales Price. If a Product is sold in a package or kit containing another product which is not a
Product, the Net Sales price for purposes of calculating the royalty under Section 3.2 hereof shall
be calculated by multiplying the Net Sales Price of the combination product by the fraction of
A/A+B, where “A” is the Net Sales Price of Product when sold separately “B” is the Net Sales Price
of the other product or products when sold separately. If either the Product or the other product
is not sold separately, the Net Sales Price of the Product shall be negotiated in good faith by the
Parties.



     “Person” or “Persons” means any corporation, partnership, joint venture or natural person.



     “Products” means any and all pharmaceutical compositions which contain (A) testosterone as the
single active drug ingredient; and (B) the Compound; and which fall within the scope of any
composition, method or article claim of the BENTLEY Patents and which is intended to be applied
topically to the user of the composition.



     “Sale” or any variation thereof means the sale, assignment, lease or other disposition of a
Product by Licensee to a non-Affiliate. A Product shall be deemed to have been sold for purposes of
calculating royalties under Article III hereof upon the first to occur of the following: (i) the
transfer of title in the Product from Licensee to a non-Affiliate; or (ii) shipment of the Product
from the manufacturing facilities of Licensee to a non-Affiliate.



     “Territory” shall mean all countries and territories of the world except Spain.



     “Use Patents” shall mean any patent granted in the Territory for the use of the Product in a
specific therapeutic indication.



 









 





ARTICLE II




GRANT OF LICENSE 




     2.1 Grant of License. Subject to the terms and conditions contained in this
Agreement, the Licensor hereby grants to Licensee a sole and exclusive, worldwide (except Spain),
royalty-bearing license under BENTLEY Patents and BENTLEY Technology with the right to sublicense
to make, have made, use and sell Products in the Territory pursuant to the terms and conditions of
this License Agreement. In addition, Licensee shall have the exclusive right to enter into another
License Agreement with BENTLEY to acquire rights in BENTLEY Patents and BENTLEY Technology for the
development of Combination Products, such right to expire upon the termination of this Agreement.
Licensor and Licensee agree to negotiate the terms of such License Agreement in good faith.



     2.2 Disclosure of BENTLEY Know-How. Promptly following the Effective Date BENTLEY
shall make available to Licensee any and all BENTLEY Know How not disclosed under the Research
Agreement to enable Licensee to develop Products.



ARTICLE III




PAYMENTS IN CONSIDERATION FOR LICENSE 




     3.1 Milestone Payments. In partial consideration for the license rights granted
hereunder, Licensee shall make the following non-refundable payments to Licensor within ten (10)
days after the achievement of the following milestones in the development of the first Product:


Milestone One — On the date of execution of this Agreement: Twenty Five thousand dollars ($25,000)



Milestone Two — On the Effective Date: Twenty Five thousand dollars ($25,000)



Milestone Three — Three (3) months after first approval for commercialization in any major market
(United States, Germany, France or Japan): Five hundred thousand dollars ($500,000)




     3.2 Royalties. In further consideration for the license rights granted under this
Agreement Licensee shall also pay to Licensor the following royalty amounts on annual Net Sales of
Products in those countries in the Territory in which



          (a) there is an enforceable BENTLEY Patent at the time of sale:



	 	 	 	 	 
	The First $1-15 Million of Annual Net Sales
	 	 	14	%
	The Next $15+-50 Million of Annual Net Sales
	 	 	16	%
	The Next $50+-100 Million of Annual Net Sales
	 	 	18	%
	Net Sales over the First $100 Million of Annual Sales
	 	 	20	%






 









 






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



	 	 	 	 	 
	All Annual Net Sales over $1 Million
	 	 	3	%






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



	 	 	 	 	 
	All Annual Net Sales over $1 Million
	 	 	2	%






     3.3 Royalty Payments. Royalties under this Agreement shall be paid within ninety (90)
days in the case of no sublicense, and one hundred twenty (120) days, in the case of royalties
received from a sublicensee, following the last day of the Calendar Quarter in which the royalties
and other amounts accrue. The last such payment shall be made within ninety (90) days after
termination of this Agreement. Payments shall be deemed paid as of the day on which they are
received by Licensor in the manner designated by Section 3.4. Licensor and Licensee agree to
negotiate in good faith any future implication on royalties caused by withholding taxes.



     3.4 Currency, Place of Payment, Interest.



          (a) All dollar amounts referred to in this Agreement shall be expressed in United States
dollars. All payments to the Licensor under this Agreement shall be made in United States dollars,
as directed by the Licensor, by wire transfer to the Licensor or in such other manner as the
Licensor may designate from time to time.



          (b) If Licensee receives revenues from sales of Products in a currency other than United
States dollars, royalties shall be converted into United States dollars at a quarterly conversion
rate for each foreign currency calculated as the average of the conversion rate for such currency
published in the Exchange Rates table in the eastern edition of the Wall Street Journal for the
first business day of each month of the quarter.



          (c) Amounts that are not paid when due shall accrue interest from the due date until paid, at
an annual rate equal to the Prime Rate plus 1% as published in the eastern edition of the Wall
Street Journal as of the due date. The Licensor may treat unpaid payments as a breach of this
Agreement in a manner consistent with Article XI notwithstanding the payment of interest.



     3.5 Records. Licensee will maintain complete and accurate books and records which
enable the royalties payable hereunder to be verified. The records for each Calendar Quarter shall
be maintained for three years. Upon reasonable prior notice to Licensee, the Licensor and its
accountants shall have access to the books and records of Licensee necessary to enable Licensor to
verify the royalties paid hereunder. Such access shall be available during normal business hours
from time to time during the term of this Agreement, and, during the period from expiration or
termination of this Agreement until three years after such date, not more often than once each
calendar year. If it is ultimately determined that Licensee has underpaid royalties by 10% or more,
Licensee will pay the costs and expenses of the Licensor’s accountant in connection with its review
or audit of the sales records of the Product, together with any interest as provided in Section 3.4
(c) above.



 









 





     3.6 Co-Marketing. In the event Licensee enters into a co-marketing or sub-license
arrangement with a third party, the royalty payments due to Licensor will be calculated using Net
Sales of Product of Licensee and Net Sales of Product of Licensee’s co-marketing partner combined.



     3.7 Sales in Spain. Licensor shall pay to Licensee a royalty of 14% on all annual Net
Sales in Spain over $60 million.



ARTICLE IV




CERTAIN OBLIGATIONS OF LICENSEE




     4.1 Government Approvals. Licensee will be responsible for obtaining, at its cost and
expense, all governmental approvals required for marketing and sale of Products in the Territory.



     4.2 Licensee Efforts.



          (a) Licensee shall use its reasonable best efforts to develop for commercial sale and to
market Products in the Territory, and to continue to market Products as long as commercially
viable, all in a manner consistent with sound and reasonable business practices. For purposes of
this Agreement reasonable best efforts in the case of Product development in any major market shall
mean at least that diligence required on the part of an NDA applicant in undertaking the
development of a drug product to qualify for the maximum patent term extension under the Act.



          (b) Licensee shall notify Licensor within ten (10) days after the first commercial sale of a
Product and of any formal written notice from the FDA or other equivalent regulatory authority
(“Regulator”) in which CPE-215 is the Regulator’s primary focus, apart from the use of CPE-215 in
the Licensee’s Product.



     4.3 Manufacture of Product. Prior to commercialization of the Product, the Parties
may, if appropriate for both parties, negotiate in good faith a manufacturing and supply agreement
to provide for Licensor to fulfill the manufacturing requirements of Licensee for Product for sale
in the European market. The cost of such manufacturing shall not be greater than one hundred and
ten percent (110%) of the cost of any competitor cGMP contract manufacturing facility that proposes
to manufacturer the Product for Licensee.



ARTICLE V




WARRANTIES AND REPRESENTATIONS 




     5.1 Mutual Representations. Each of the Parties hereto represents, warrants and
covenants:




          (i) It is a corporation or entity duly organized and validly existing under the
laws of the state or other jurisdiction of its incorporation or formation.



 









 






          (ii) The execution, delivery and performance of this Agreement by such Party
has been duly authorized by all requisite corporate action.




          (iii) It has the power and authority to execute and deliver this Agreement and
perform its obligations hereunder.




          (iv) The execution, delivery and performance by such Party of this Agreement
does not and will not conflict with or result in breach of the terms and provisions
of any other agreement or constitute a default under (a) a loan agreement, guaranty,
financing agreement, affecting a product or other agreement or instrument binding or
affecting it or its property; (b) the provisions of its charter or operative
documents or bylaws; or (c) any order, writ, injunction or decree of any court or
governmental authority entered against it or by which any of its property is bound.




          (v) The execution, delivery and performance of this Agreement by such Party
does not require the consent, approval or authorization of, or notice, declaration,
filing or registration with, any governmental or regulatory authority in the
Territory and the execution, delivery and performance of this Agreement does not
violate any law, rule or regulation applicable to such Party.




          (vi) This Agreement has been duly authorized, executed and delivered and
constitutes such Party’s legal, valid, and binding obligation enforceable against it
in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors’ rights and to the availability of particular remedies under general
equity principles.




          (vii) It shall comply with all applicable laws and regulations relating to its
activities under this Agreement.




          (viii) Each warrants that it is not debarred and has not and will not use in
any capacity the services of any person debarred under subsections 306 (a) and (b),
of the Generic Drug Enforcement Act of 1992. If at any time during the term of this
Agreement this warranty is no longer accurate, the affected party shall immediately
notify the other.



     5.2 BENTLEY Warranties.




          (i) BENTLEY Patents. BENTLEY represents and warrants that: (a) BENTLEY is the
owner of all right, title and interest in and to the BENTLEY Technology and BENTLEY
Patents; and (b) BENTLEY has not received any written notice that the Technology or
Patents infringes the proprietary rights of any third party nor is the Licensor in
any other way aware of any infringement of third party proprietary rights; (d)
except for those claims explained in detail in Schedule B hereto, there are no
claims, judgments or settlements against or owed by BENTLEY, or pending or
threatened claims, or litigation, relating to BENTLEY Patents.



 









 





ARTICLE VI




INSURANCE




     6.1 Insurance Requirements for Licensee. Prior to commencing work with Product in
human clinical trials under this Agreement and during the entire term of this Agreement and for a
period of three (3) years thereafter, AUXILIUM, at its sole expense, shall maintain in full force
and effect with an insurance company or companies having an A. M. Best Rating of “A-: Class VII” or
better and supply a Certificate of Insurance to BENTLEY evidencing Product Liability insurance
(including coverage for human clinical trials and contractual liability) coverage in the amount of
three million dollars ($3,000,000) per each occurrence and in the general aggregate, respectively,
during the clinical trial phase and prior to commercialization of the Products and three million
dollars ($3,000,000) per each occurrence and in the general aggregate, respectively. Endorsement
shall be furnished reflecting the inclusion of BENTLEY, its officers, directors and employees as
additional insured. The policy providing the above insurance shall be endorsed to contain the
following undertaking: “It is agreed that this insurance will not be cancelled, materially changed
or non-renewed without at least thirty (30) days notice to BENTLEY, by certified mail-Return
Receipt Requested.” Any type of insurance or increase in liability limits not described in the
foregoing which AUXILIUM requires for its own protection shall be its own responsibility and at its
sole expense. The minimum insurance amounts specified herein shall not be deemed a limitation on
AUXILIUM’S indemnification liability under this Agreement.



     6.2 Insurance Requirements for Licensor. Prior to commencing work with Product in
human clinical trials under this Agreement and during the entire term of this Agreement and for a
period of three (3) years thereafter, BENTLEY, at its sole expense shall maintain in full force and
effect with an insurance company or companies having A. M. Best Rating of an “A-: Class VII” or
better and supply a Certificate of Insurance to AUXILIUM evidencing Product Liability insurance
(including coverage for human clinical trials and contractual liability) coverage in the amount of
three million dollars ($3,000,000) per each occurrence and in the general aggregate, respectively.
The policy providing the above insurance shall be endorsed to contain the following undertaking:
“It is agreed that this insurance will not be cancelled, materially changed or non-renewed without
at least thirty (30) days notice to AUXILIUM, by certified mail-“Return Receipt Requested”. Any
type of insurance or increase in liability limits not described in the foregoing which BENTLEY
requires for its own protection shall be its own responsibility and at its sole expense.



ARTICLE VII




INDEMNIFICATION 




     7.1 Indemnification by BENTLEY. BENTLEY will indemnify and hold AUXILIUM, its
directors, officers, employees and agents harmless against any and all liability, damage, loss,
cost or expense (including reasonable attorney’s fees) resulting from any third party claims made
or suits brought against AUXILIUM which arise from an act or failure to act by BENTLEY or BENTLEY’s
breach of its representations, warranties or agreements contained herein.



 









 





     7.2 Indemnification by AUXILIUM. AUXILIUM will indemnify and hold BENTLEY, its
directors, officers, employees and agents harmless against any and all liability, damage, loss,
cost or expense(including reasonable attorney’s fees) resulting from any third party claims made or
suits brought against BENTLEY which arise from the breach of any of AUXILIUM’s representations,
warranties or agreements contained herein, or which arise out of the development, manufacture,
promotion, distribution, use, testing or sale, distribution or other disposition of Product,
including, without limitation, any claims, express, implied or statutory, made as to the efficacy,
safety or use to be made of Product, and claims made by reason of any Product labeling or any
packaging containing Product. This indemnification obligation shall not apply where the basis for
the claim is the negligence or willful malfeasance of BENTLEY.



     7.3 Limitations on Indemnification Obligations. BENTLEY AND AUXILIUM EACH AGREE THAT
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM A DEFAULT OR BREACH OF THIS AGREEMENT.



     7.4 Procedures. The indemnified Party shall notify the indemnifying Party of any
claim or action giving rise to a liability within fifteen (l5) days after receipt of knowledge of
the claim. If notice is not given within fifteen (15) days, the indemnifying Party shall maintain
its obligation to indemnify unless such failure to timely notify has a material, adverse effect on
the outcome of the claim. The indemnifying Party shall control the defense or settlement of the
claim. However, the indemnifying Party shall not settle or compromise any such claim or action in a
manner that imposes any restrictions or obligations on the indemnified Party without the
indemnified Party’s written consent. The indemnified Party shall cooperate reasonably, assist and
give all necessary authority and reasonably required information.



ARTICLE VIII




INTELLECTUAL PROPERTY 




     8.1 Intellectual Property Rights. The inventorship of inventions developed under this
Agreement and relating to Products (“Inventions”) shall be determined in accordance with U.S. Law.
Inventions made solely by employees of BENTLEY or owned by BENTLEY (“BENTLEY Inventions”) shall be
the exclusive property of BENTLEY. Inventions made solely by employees of AUXILIUM (“AUXILIUM
Inventions”) shall be the exclusive property of AUXILIUM, except that AUXILIUM Inventions that
relate to the use of Products shall be the joint property of AUXILIUM and BENTLEY, each with an
undivided one-half interest. Inventions other than BENTLEY Inventions and AUXILIUM Inventions shall
belong jointly to BENTLEY and AUXILIUM, each with an undivided one-half interest.



ARTICLE IX




PATENTS, TRADEMARKS AND INFRINGEMENT 




     9.1 Prosecution of Patents.



 









 





          (a) The Licensor shall be solely responsible for preparing, prosecuting and maintaining the
BENTLEY Patents.



          (b) Each Party shall cooperate with the other Party to execute all required papers and
instruments and to make all required oaths and declarations as may be necessary in the preparation
and prosecution of all such patents and other applications and protections referred to in this
Section 9.1.



     9.2 Ownership. The Licensor shall retain all right, title and interest in and to the
BENTLEY Patents and any patents, copyrights and other protections related thereto, regardless of
which party prepares, prosecutes or maintains the patents, copyrights or other protections related
to the BENTLEY Technology, subject to the express license granted to Licensee under this Agreement.



          (a) In the event of Licensor wishing to abandon any BENTLEY Patents, Licensor will offer to
assign to Licensee, free of charge, any such Patent prior to effectuating the abandonment. Licensee
will bear the costs connected to any assignment hereunder. In the event that any of the BENTLEY
Patents is assigned to AUXILIUM and AUXILIUM decides thereafter to abandon the assigned Patent,
AUXILIUM agrees that, at the request of BENTLEY, it will offer to assign the assigned Patent to a
third party licensee that is licensed by BENTLY under the assigned Patent as such third party
licensee is identified by BENTLEY to AUXILIUM.



     9.3 Trademarks. Licensee shall have the right, in its sole discretion and at its own
expense, to select and register such trademarks as it wishes to employ in connection with the sale
of the Products throughout the Territory and Licensee shall have legal and equitable ownership of
the entire right, title and interest in and to the trademarks and registrations Licensee elects to
use. Licensee will acknowledge BENTLEY’S CPE-215 by adding “CPE-215TM, BENTLEY” to its listing of
ingredients wherever such listing is appropriate or used by Licensee. It is hereby expressly agreed
that this Section 9.3 shall survive the expiration or termination of this Agreement.



     9.4 Infringement of Patents. If either Party has knowledge of any infringement of
BENTLEY Patents or BENTLEY Technology, the Party having such knowledge shall promptly inform the
other of such infringement. The Parties shall thereafter discuss what action should be taken,
including whether any legal proceeding should be instituted. If the Parties mutually agree on the
course of action to be taken in respect of any such infringement, they shall jointly select counsel
and equally share any expenses. Any settlement or recovery shall be shared equally by the Parties.
If either party determines to take action, but the other Party does not desire to do so, the first
Party may take action at its own expense and through counsel of its own choice, and any settlement
or recovery shall in such case belong solely to the Party taking action.



     9.5 If one party institutes and carries on a legal proceeding to enforce a BENTLEY Patent
against an alleged infringing party, the other Party shall fully cooperate with and supply all
assistance reasonably requested by the Party instituting and carrying or such proceeding.



 









 





ARTICLE X




CONFIDENTIALITY




     10.1 Confidentiality



          (a) Licensee and Licensor shall maintain in confidence and shall not disclose to any third
party the Confidential Information received pursuant to this Agreement, without the prior written
consent of the other Party except that the Confidential Information may be disclosed only to those
third parties (x) who have a need to know the information in connection with the exercise of rights
and obligations under this Agreement and who agree in writing to keep the information confidential
to the same extent as is required of each Party under this Section 10.1, or (y) to whom the Party
is legally obligated to disclose the Information. The foregoing obligation shall not apply to:




          (i) information that is known to the other Party or independently developed by
the other Party prior to the time of disclosure, in each case, to the extent
evidenced by written records promptly disclosed to the other Party upon receipt of
the Confidential Information; or




          (ii) information that becomes patented, published or otherwise part of the
public domain as a result of acts by a Party or a third person obtaining such
information lawfully as a matter of right; or




          (iii) information that becomes patented, published or otherwise part of the
public domain as a result of acts by the Licensor or a third person obtaining such
information lawfully as a matter of right; or




          (iv) information that is required by any law, rule, regulation, order,
decision, decree, or subpoena or other judicial, administrative or legal process to
be disclosed, provided, however that each Party, as applicable, gives the other
prompt written notice of such request/order to permit the other party to seek a
protective order or other similar order with respect to such Confidential
Information and thereafter discloses only the minimum Confidential Information
required to be disclosed in order to comply.



          (b) Each Party will take all reasonable steps to protect the Confidential Information of the
other Party with the same degree of care it uses to protect its own confidential proprietary
information. Without limiting the foregoing, each party shall ensure that all of its employees
having access to the Confidential Information of the other Party are obligated in writing to keep
such information confidential to the same extent as is required of each Party under this Section
10.1.



     10.2 Injunctive Relief. Because damages at law may be an inadequate remedy for breach
of any of the covenants, promises and agreements contained in Section 10.1 hereof, both the
Licensor and Licensee shall be entitled to injunctive relief in any state or federal court located
within the District of Delaware, including specific performance or an order enjoining the breaching
Party from any threatened or actual breach of such covenants, promises or agreements.



 









 




Each of the Licensee and the Licensor hereby waives any objection it may have to the personal
jurisdiction or venue of any such court with respect to any such action. The rights set forth in
this Section 10.2 shall be in addition to any other rights which the Licensor and Licensee may have
at law or in equity.




     10.3 This Article X shall survive the expiration or termination of this Agreement.



ARTICLE XI




TERM AND TERMINATION




     11.1 Term. This Agreement and the licenses granted herein shall commence on the
Effective Date and shall continue in effect in perpetuity subject to earlier termination under
Section 11.2 hereof.



     11.2 Termination by the Licensor or Licensee.



          (a) Upon the occurrence of any of the events set forth below (“Events of Default”), the
Licensor shall have the right to terminate this Agreement by giving written notice of termination,
such termination effective with the giving of such notice:




          (i) In the event of nonpayment of any material amount payable to the Licensor
after completion of an audit provided for under Section 3.5 hereof, which nonpayment
is continuing thirty (30) calendar days after the Licensor gives Licensee written
notice of such non-payment.




          (ii) In the event that Licensee fails to initiate clinical trials within two
(2) years of availability of final formulation in quantities adequate for clinical
testing and associated documentation for clinical trials, unless such failure is
outside of the control of Licensee. See Auxilium Development Plan attached as
Schedule C hereto.




          (iii) In the event that Licensee does not submit an application for marketing
approval in a major market within a five (5) year period after the Effective Date
unless such failure to submit is outside of the control of Licensee.




          (iv) In the event that Licensee does not launch Product in a major market
within six (6) months after marketing approval.




          (v) In the event that Licensee becomes subject to a Bankruptcy Event provided,
however, that so long as Licensor continues to receive royalty payments from
Licensee under this Agreement, such Bankruptcy Event shall not be a basis for
termination of this Agreement by Licensor.



          (b) Upon the occurrence of any of the events set forth below (“Events of Default”), Licensee
shall have the right to terminate this Agreement by giving written notice of termination, such
termination effective with the giving of such notice:



 









 






          (i) breach by Licensor of any covenant or any representation or warranty
contained in this Agreement that is continuing thirty (30) calendar days after
Licensee gives written notice of such breach;




          (ii) Licensor fails to comply with the terms of the license granted hereunder
and such noncompliance is continuing thirty (30) calendar days after Licensee gives
notice of such noncompliance;




          (iii) Licensor becomes subject to a Bankruptcy Event; or




          (iv) the dissolution or cessation of operations by Licensor.



          (c) No exercise by the Licensor or Licensee of any right of termination shall constitute a
waiver of any right of the Licensor or Licensee for recovery of any monies then due to it hereunder
or any other right or remedy the Licensor or Licensee may have at law or under this Agreement.



ARTICLE XII




FORCE MAJEURE 




     12.1 Either Party shall be relieved of its obligations under this Agreement to the extent that
fulfillment of such obligations shall be prevented by strikes, embargoes, riots, fires, floods,
war, hurricanes, windstorms, acts or defaults of common carriers, governmental laws, acts or
regulations, shortages of materials or any other occurrence, whether or not similar to the
foregoing, beyond the reasonable control of the Party affected thereby.



     12.2 If either Party is prevented from fulfilling its obligations under this Agreement by
reason of a circumstance covered by this Article 12, the Party unable to fulfil its obligations
shall, upon the occurrence of any such circumstances, promptly notify the other Party upon the
cessation of such circumstance and of the likely duration thereof, and shall promptly notify the
other party upon the cessation of such circumstance.



ARTICLE XIII




ADDITIONAL PROVISIONS 




     13.1 Arbitration.



          (a) All disputes arising between the Licensor and Licensee under this Agreement shall be
settled by arbitration conducted in accordance with the Rules of the American Arbitration
Association. The Parties shall cooperate with each other in causing the arbitration to be held in
as efficient and expeditious a manner as practicable.



          (b) Licensee and Licensor each irrevocably and unconditionally consents to the jurisdiction of
any such proceeding and waives any objection that it may have to personal jurisdiction or the
laying of venue of any such proceeding.



 









 





     13.2 Assignment. No rights hereunder may be assigned by the Licensee, directly or by
merger or other operation of law, except assignment to an Affiliate, without the express written
consent of the other Party, such consent not to be unreasonably withheld; provided, however,
without such consent, either Party may assign this Agreement in connection with the sale of all or
substantially all of its assets or business or its merger or consolidation with another company.
Any prohibited assignment of this Agreement or the rights hereunder shall be null and void. No
assignment shall relieve Licensee or Licensor of responsibility for the performance of any accrued
obligations which they have prior to such assignment. This Agreement shall inure to the benefit of
permitted assigns.



     13.3 No Waiver. A waiver by either Party of a breach or violation of any provision of
this Agreement will not constitute or be construed as a waiver of any subsequent breach or
violation of that provision or as a waiver of any breach or violation of any other provision of
this Agreement.



     13.4 Independent Contractor. Nothing herein shall be deemed to establish a
relationship of principal and agent between the Licensor and Licensee, nor any of their agents or
employees for any purpose whatsoever. This Agreement shall not be construed as constituting the
Licensor and Licensee as partners, or as creating any other form of legal association or
arrangement which could impose liability upon one Party for the act of the other Party.



     13.5 Notices. Any notice under this Agreement shall be sufficiently given if sent in
writing by overnight courier, prepaid, first class, certified or registered mail, return receipt
requested, addressed as follows:


If to the Licensor, to:



BENTLEY PHARMACEUTICALS, Inc.

65 Lafayette Road, 3rd Floor

North Hampton, NH 03862-2403

Attention: President



If to the Licensee, to:



AUXILIUM A(2), Inc.

160 W. Germantown Pike

Suite D-5, Norriton Office Center

Norristown, PA 19401

Attention: President

Copy to General Counsel



or to such other addresses as may be designated from time to time by notice given in accordance
with the terms of this Section.




     13.6 Severability. Any of the provisions of this Agreement which are determined to be
invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity
or unenforceability in such jurisdiction, without rendering invalid or unenforceable the remaining



 









 







provisions hereof or affecting the validity or unenforceability of any of the terms of this
Agreement in any other jurisdiction.



     13.7 Headings and Titles. Any headings and titles used in this Agreement are for
convenience or reference only and shall not affect its construction or interpretation.



     13.8 No Third Party Benefits. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the Parties hereto or their permitted assigns, any
benefits, rights or remedies.



     13.9 Governing Law. This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of Delaware, without giving effect to conflict of
law provisions.



     13.10 Counterparts. This Agreement shall become binding when any one or more
counterparts hereof, individually or taken together, shall bear the signatures of each of the
parties hereto. This Agreement may be executed in any number of counterparts, each of which shall
be deemed an original as against the party whose signature appears thereon, but all of which taken
together shall constitute but one and the same instrument.



     13.11 Entire Agreement. This Agreement is the entire agreement between the parties
regarding the subject matter herein, and supercedes all prior existing understandings between the
Parties relating to the subject matter hereof. This Agreement may not be modified except in writing
signed by both Parties.



     13.12 Press Releases. The Parties will not disclose, via any press release or public
announcement, the existence of this Agreement or the Research Agreement until the Effective Date.



 









 





     IN WITNESS WHEREOF, the parties hereto have duly executed this License Agreement as of the
date first above written.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BENTLEY PHARMACEUTICALS, INC.	 	 	 	AUXILIUM A2, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ JAMES R. MURPHY	 	 	 	By:	 	/s/ GERALDINE A. HENWOOD	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	James R. Murphy
	 	 	 	 	 	Name:
	 	Geraldine A. Henwood	 	 
	 

	 	Title:
	 	Chief Executive Officer
	 	 	 	 	 	Title:
	 	Chief Executive Officer	 	 







 












 





SCHEDULE A/APPENDIX A




BENTLEY PATENTS




	 	 	 	 	 	 	 	 	 
	COUNTRY	 	 	PATENT NO.	 	GRANT DATE	 	EXPIRATION DATE
	Belgium

	 	 	248,885	 	 	Aug. 5, 1992
	 	Nov. 28, 2006
	Canada

	 	 	1,312,281	 	 	Jan. 5, 1993
	 	Jan. 05, 2010
	Denmark

	 	 	167,343	 	 	Oct. 18, 1993
	 	Nov. 28, 2006
	France

	 	 	248,885	 	 	Aug. 5, 1992
	 	Nov. 28, 2006
	Germany

	 		P3,690,626.3	 	 	May 15, 1997
	 	Nov. 28, 2006
	Great Britain

	 	 	2,192,134	 	 	Apr. 25, 1990
	 	Nov. 28, 2006
	Italy

	 	 	248,885	 	 	Aug. 5, 1992
	 	Nov. 28, 2006
	Japan

	 	 	2,583,777	 	 	Nov. 21, 1996
	 	Nov. 28, 2006
	Korea

	 	 	84,759	 	 	Nov. 29, 1994
	 	Nov. 28, 2006
	Luxembourg

	 	 	WO 873,473
	 	 	Nov. 11, 1987
	 	Nov. 28, 2006
	Switzerland

	 	 	666,813	 	 	Aug. 31, 1988
	 	Nov. 28, 2006
	United States

	 	 	5,023,252	 	 	June 11, 1991
	 	Jun. 11, 2008





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





 









 








SCHEDULE B




Claims Made Against Bentley Pharmaceuticals, Inc.



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




 









 








AMENDMENT NO. 1 TO LICENSE AGREEMENT




     THIS AMENDMENT NO. 1 TO LICENSE AGREEMENT (the “Amendment”) is made as of the ___ day of
October 2000 by and between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation with offices at
65 Lafayette Road, Third Floor, North Hampton, New Hampshire 03862-2403 (hereinafter “Bentley” or
“Licensor”) and AUXILIUM A2 , INC., a Delaware corporation with offices at 160 W. Germantown Pike,
Suite D-5, Norriton Office Center, Norristown, Pennsylvania 19401 (hereafter, “Auxilium” or
“Licensee”). Bentley and Auxilium may be referred to as a “Party” or, collectively, as “Parties.”



     WHEREAS, the parties have entered into that certain License Agreement dated May 31, 2000
relating to the grant by Bentley to Auxilium of a license of certain technology (the “License
Agreement”);



     WHEREAS, as reflected in the third recital of the License Agreement, the parties intended not
to include patch applications as part of the license;



     WHEREAS, the parties wish to clarify the definitions in the License Agreement to indicate that
patch applications are not included in the scope of the license;



     NOW THEREFORE, the parties hereby amend the License Agreement as follows:




	 	1.	 	The definition of “Combination Products” in Section 1.1 of the License
Agreement is hereby modified in its entirety to read as follows:






          “Combination Products” means any and all pharmaceutical compositions, other
than patch applications, which contain (A) testosterone as an active ingredient in
combination with any other steroids, hormones, somatotropics, emollients, or
therapeutic soy products; and (B) the Compound; and which fall within the scope of
any composition, method, or article claim of the BENTLEY Patents and which is
intended to be applied topically to the user of the composition.




	 	2.	 	The definition of “Products” in Section 1.1 of the License Agreement is hereby
modified in its entity to read as follows:






          “Products” means any and all pharmaceutical compositions, other than patch
applications, which contain (A) testosterone as the single active ingredient; and
(B) the Compound; and which fall within the scope of any composition, method, or
article claim of the BENTLEY Patents and which is intended to be applied topically
to the user of the composition.




	 	3.	 	As modified by this Amendment, the License Agreement remains in full force and
effect.





     IN WITNESS WHEREOF, the parties have executed this Amendment by their duly authorized
representatives as of the date set forth above.



 









 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	BENTLEY PHARMACEUTICALS, INC.	 	 	 	AUXILIUM A2, Inc.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ JAMES R. MURPHY	 	 	 	By:	 	/s/ JANE A. HOLLINGSWORTH
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	James R. Murphy
	 	 	 	 	 	Name:
	 	Jane A. Hollingsworth
	 

	 	Title:
	 	Chairman and CEO
	 	 	 	 	 	Title:
	 	EVP







 









 








AMENDMENT NO. 2 TO LICENSE AGREEMENT




     THIS AMENDMENT NO. 2 TO LICENSE AGREEMENT is made as of the 31st day of May, 2001 by and
between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation, with offices at 65 Lafayette Road,
3rd Floor, North Hampton, New Hampshire 03862-2403 (hereinafter, “BENTLEY” or “Licensor”), and
AUXILIUM A2, INC., a Delaware corporation having a principal place of business at 160 W. Germantown
Pike, Suite D-5, East Norriton, Pennsylvania 19401 (hereinafter, “AUXILIUM” or “Licensee”). BENTLEY
and AUXILIUM may be referred to as a “Party” or, collectively, as “Parties.”



RECITALS



WHEREAS the parties have entered into that certain License Agreement, dated May 31, 2000, relating
to the grant by BENTLEY to AUXILIUM of a license of certain technology (the “License Agreement”);



WHEREAS the parties clarified the License Agreement by entering into Amendment No. 1 to the License
Agreement, dated October 31, 2000 (“Amendment No. 1”); and



WHEREAS the Parties wish to further amend the License Agreement to change certain sections of the
License Agreement;



NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and
INTENDING TO BE LEGALLY BOUND HEREBY, the Parties further amend the License Agreement as follows:




1.




DEFINITIONS




     13.13 Except as amended below, the terms defined in the License Agreement, as amended in
Amendment No. 1, shall remain unchanged.



     13.14 “Territory” shall mean all countries and territories of the world, including Spain.



ARTICLE XIV




GRANT OF LICENSE 




     14.1 The grant of license in Section 2.1 of the License Agreement shall include Spain.



ARTICLE XV




PAYMENTS IN CONSIDERATION FOR LICENSE 




     15.1 Except as amended below, all payments set forth in Article III of the License Agreement
shall remain unchanged.



 









 





     15.2 Section 3.2 (a) of the License Agreement shall be amended to read as follows:




	 	(a)	 	there is an enforceable BENTLEY Patent at the time of sale:





	 	 	 	 	 
	The First $1-15 Million of Annual Net Sales
	 	 	20	%
	The Next $15+-50 Million of Annual Net Sales
	 	 	18	%
	The Next $50+-100 Million of Annual Net Sales
	 	 	16	%
	Net Sales over $100 Million of Annual Net Sales
	 	 	14	%






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



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BENTLEY PHARMACEUTICALS, INC.	 	 	 	AUXILIUM A2, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ JORDAN HORVATH	 	 	 	By:	 	/s/ GERALDINE A. HENWOOD	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Jordan Horvath
	 	 	 	 	 	Name:
	 	Geraldine A. Henwood	 	 
	 

	 	Title:
	 	Vice President & General Counsel
	 	 	 	 	 	Title:
	 	Chief Executive Officer	 	 






 









 






AMENDMENT NO. 3 TO LICENSE AGREEMENT




     THIS AMENDMENT NO. 3 TO LICENSE AGREEMENT is made as of the 6th day of September, 2002 by and
between BENTLEY PHARMACEUTICALS, INC., a Delaware corporation, with offices at 65 Lafayette Road,
3rd Floor, North Hampton, New Hampshire 03862-2403 (hereinafter, “BENTLEY” or “Licensor”), and
AUXILIUM PHARMACEUTICALS, INC. (formerly Auxilium A(2), Inc.), a Delaware corporation having a
principal place of business at 160 W. Germantown Pike, Suite D-5, East Norriton, Pennsylvania 19401
(hereinafter, “AUXILIUM” or “Licensee”). BENTLEY and AUXILIUM may be referred to as a “Party” or,
collectively, as “Parties.”



RECITALS




     WHEREAS the parties have entered into that certain License Agreement, dated May 31, 2000,
relating to the grant by BENTLEY to AUXILIUM of a license of certain technology (the “License
Agreement”);



     WHEREAS the parties clarified certain aspects of the License Agreement by entering into
Amendments Nos. 1 and 2 to the License Agreement, dated October 31, 2000 and May 31, 2001,
respectively (“Previous Amendments”); and



     WHEREAS, BENTLEY would like to provide incentives to AUXILIUM to enter into
sub-licenses for the Products in territories outside the United States; and



     WHEREAS, BENTLEY would like to provide further incentives to AUXILIUM to extend the commercial
life of the Products licensed under the License Agreement; and



     WHEREAS the Parties wish to further amend the License Agreement to change
certain sections of the License Agreement;



     NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and
INTENDING TO BE LEGALLY BOUND HEREBY, the Parties further amend the License Agreement as follows:



ARTICLE XVI




DEFINITIONS




     16.1 Except as amended below, the terms defined in the License Agreement, as amended by the
Previous Amendments, shall remain unchanged. Unless otherwise defined in this Amendment, all
capitalized terms in this Amendment shall have the meanings ascribed to them in the License
Agreement, as amended by the Previous Amendments.



 









 





ARTICLE XVII




PAYMENTS IN CONSIDERATION FOR LICENSE




     17.1 Except as amended below, all payments set forth in Article III of the
License Agreement shall remain unchanged.



     17.2 (a) of the License Agreement shall be amended to read as follows:




	 	(a)	 	there is an enforceable BENTLEY Patent at the time of sale:





	 	 	 	 	 
	 

	 	All Annual Net Sales in the United
States and Canada
	 	13% beginning at Product launch and
continuing for thirty-six full
calendar months thereafter; and 12%
thereafter
	 
	 	 	 	 
	 

	 	All Annual Net Sales outside the
United States and Canada
	 	7% plus one-half of all “Product
Royalties” (as defined below) paid
to Auxilium which exceed 10%






     “Product Royalties” shall mean all payments received by Auxilium which are based on sales of
Products, but shall not include milestone payments related to achievements which are not sales
based.



ARTICLE XVIII




INTELLECTUAL PROPERTY




     18.1 Article VIII of the License Agreement is amended in its entirety to read as
follows:




8.1 Intellectual Property Rights. The inventorship of inventions developed under
this Agreement and relating to Products (“Inventions”) shall be determined in
accordance with U.S. Law. Inventions made solely by employees of BENTLEY or owned by
BENTLEY (“BENTLEY Inventions”) shall be the exclusive property of BENTLEY.
Inventions made solely by employees of AUXILIUM (“AUXILIUM Inventions”) shall be the
exclusive property of AUXILIUM, except that AUXILIUM Inventions that relate to the
use of Products shall be owned by BENTLEY and shall be included in the license
granted under this License Agreement and included in the definition of BENTLEY
Patents. Inventions made by employees of BENTLEY and employees of AUXILIUM shall
also be owned by BENTLEY and shall be included in the license granted under this
License Agreement and included in the definition of BENTLEY Patents.



 









 





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



	 	 	 	 	 	 	 	 	 	 	 
	BENTLEY PHARMACEUTICALS, INC.	 	AUXILIUM PHARMACEUTICALS, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 	 	 
	 	 	James R. Murphy	 	 	 	Geraldine A. Henwood
	 

	 	Chief Executive Officer
	 	 	 	 	 	Chief Executive Officer	 	 






 









 






AMENDMENT NO. 4 TO LICENSE AGREEMENT



THIS AMENDMENT NO. 4 TO LICENSE AGREEMENT is made as of the 25th day of March, 2004 by and between
BENTLEY PHARMACEUTICALS, INC., a Delaware corporation, with offices at Bentley Park, 2 Holland Way,
Exeter, New Hampshire 03833 (hereinafter, “BENTLEY” or “Licensor”), and AUXILIUM PHARMACEUTICALS,
INC. (formerly Auxilium A2, Inc.), a Delaware corporation having a principal place of business at
160 W. Germantown Pike, Norristown, Pennsylvania 19401 (hereinafter, “AUXILIUM” or “Licensee”).
BENTLEY and AUXILIUM may be referred to as a “Party” or, collectively, as “Parties.”




RECITALS



WHEREAS the parties have entered into that certain License Agreement, dated May 31, 2000, relating
to the grant by BENTLEY to AUXILIUM of a license of certain technology (the “License Agreement”);



WHEREAS the parties clarified certain aspects of the License Agreement by entering into Amendment
Nos. 1, 2 and 3 to the License Agreement, dated October 31, 2000, May 31, 2001 and September 6,
2002, respectively (“Previous Amendments”); and



WHEREAS, BENTLEY would like to provide incentives to AUXILIUM to enter into sub-licenses for the
Products in territories outside the United States; and



WHEREAS the Parties wish to further amend the License Agreement to clarify certain sections of the
License Agreement;



NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and
INTENDING TO BE LEGALLY BOUND HEREBY, the Parties further amend the License Agreement as follows:




ARTICLE XIX




DEFINITIONS




          19.1 Except as amended below, the terms defined in the License Agreement, as amended by the
Previous Amendments, shall remain unchanged. Unless otherwise defined in this Amendment, all
capitalized terms in this Amendment shall have the meanings ascribed to them in the License
Agreement, as amended by the Previous Amendments.




          “Net Sales Price” means, with respect to the Product, the gross amount invoiced by Licensee
for such Product, less deductions for:





(i) returned goods; (ii) trade and quantity discounts; (iii) rebates, including
those in respect of any governmental subsidized program, rebate payments given to
wholesalers, buying groups, healthcare insurance carriers or other institutions;
(iv) sales or other taxes actually paid by Licensee or its sublicensee or
distributor, not including taxes assessed on the income resulting from such sales;
and (v) freight allowances, insurance and customs duties, to the extent any of the




 









 






foregoing are identified on the invoice for the Product. If Product is sold for consideration
other than cash, the fair market value of such other consideration shall be included
in Net Sales. If a Product is sold in a package or kit containing another product
which is not a Product, the Net Sales price for purposes of calculating the royalty
under Section 3.2 hereof shall be calculated by multiplying the Net Sales Price of
the combination product by the fraction of A/A+B, where “A” is the Net Sales Price
of Product when sold separately “B” is the Net Sales Price of the other product or
products when sold separately. If either the Product or the other product is not
sold separately, the Net Sales Price of the Product shall be negotiated in good
faith by the Parties.



          “Commercial Sale” means the sale of Product (as indicated by shipment of Product) to an
unaffiliated third-party of the Licensee, or of its sublicensee or distribution partner, such as a
wholesaler, managed care organization, hospital or pharmacy and shall exclude (i) any transfer of
Product by Licensee to its sublicensee, distribution partner or Affiliate and (ii) any distribution
of Product for use in research, development, pre-clinical and clinical trials.




ARTICLE XX




PAYMENTS IN CONSIDERATION FOR LICENSE




          20.1 Except as amended below, all payments set forth in Article III of the License Agreement
shall remain unchanged.




          20.2 Section 3.2 of the License Agreement is hereby amended to include the following
additional paragraph (d):





“(d) Notwithstanding any contrary provisions in this Section 3.2, the royalty
payments due under Sections 3.2 (a), (b) or (c) above shall be paid on a
country-by-country basis only until the later of (i) the termination of Bentley
Patent rights in such country or (ii) ten years from the date of first Commercial
Sale of Product in such country.



ARTICLE XXI




CERTAIN OBLIGATIONS OF LICENSEE




          21.1 A new Section 4.4 shall be added to the License Agreement as follows:




          21.2 Drug Master File. Licensee shall make certain data generated during the research
and development of Testim accessible to Licensor through the preparation and filing of one or more
Drug Master Files (“DMF”). Such DMF shall (a) be filed by or on behalf of the Licensee with the
United States Food and Drug Administration (“FDA”) on or before June 30, 2004 and (b) shall contain
the data listed on the index attached as Exhibit A to this Amendment 4 to the License Agreement
(the “Data Index”). Licensee will designate Licensor, or its licensee if requested in writing by
Licensor, as having a right of reference with the FDA to the DMF (the “Right of Reference”).
Licensor shall treat the Data Index as confidential information of Licensee and may disclose the
Data Index only to those persons or third parties who have agreed



 









 






in writing to maintain its confidentiality and to use the Data Index solely for purposes of
evaluation of a potential business opportunity with Licensor.




ARTICLE XXII




PATENTS, TRADEMARKS AND INFRINGEMENT




          22.1 Section 9.2(a) of the License Agreement shall be deleted in its entirety and replaced
with the following:




               (a) In the event of Licensor wishing to abandon any BENTLEY Patents, Licensor will offer to
assign to Licensee or a sublicense of Licensee, at Licensee’s option, free of charge, any such
Patent prior to effectuating the abandonment. Licensee will bear the costs connected to any
assignment hereunder.



          22.2 A new Section 9.6 shall be added to the License Agreement as follows:




          22.3 Bentley Trademark. In cooperation with Licensee, Licensor shall register in the
United States Patent and Trademark Office and such other countries of the world where the trademark
is registrable, a trademark to be used to describe the unique qualities of the technology contained
in the Bentley Patents (the “New Trademark”). Licensee shall have a perpetual, royalty free,
worldwide, sole and exclusive license with the right to sublicense, to use the New Trademark in
connection with the Product or any other product, patents, technology or similar rights licensed
from Licensor now or in the future which contain the ingredient pentadecalactone. Nothing in this
Section 9.6 shall prevent Licensee from using or registering any trademark of its own in connection
with the Product or any characteristic of or ingredient in the Product.




ARTICLE XXIII




TERM AND TERMINATION




          23.1 Except as amended below, all provisions of Article XI Term and Termination of the License
Agreement shall remain unchanged.




          23.2 Section 11.1 of the License Agreement shall be deleted in its entirety and replaced with
the following:




          23.3 Term. This Agreement and the licenses granted herein shall commence on the
Effective Date and shall continue until all royalty obligations of Licensee under Section 3.2 of
this Agreement are ended, subject to earlier termination under Section 11.2 hereof. Once all such
royalty obligations of Licensee have ended Licensee shall have a fully paid up license under this
Agreement.




          23.4 Section 11.2 (a) of the License Agreement shall be deleted in its entirety and replaced
with the following:




 









 








               (a) Upon the occurrence of any of the events set forth below (“Events of Default”), the
Licensor shall have the right to terminate this Agreement by giving written notice of termination,
such termination effective with the giving of such notice:




                    (i) In the event of nonpayment of any material amount payable to the Licensor
after completion of an audit provided for under Section 3.5 hereof, which nonpayment
is continuing thirty (30) calendar days after the Licensor gives Licensee written
notice of such non-payment.




                    (ii) In the event that Licensee fails to initiate clinical trials within two
(2) years of availability of final formulation in quantities adequate for clinical
testing and associated documentation for clinical trials, unless such failure is
outside of the control of Licensee. See Auxilium Development Plan attached as
Schedule C hereto.




                    (iii) In the event that Licensee does not submit an application for marketing
approval in a major market within a five (5) year period after the Effective Date
unless such failure to submit is outside of the control of Licensee.




                    (iv) In the event that Licensee becomes subject to a Bankruptcy Event provided,
however, that so long as Licensor continues to receive royalty payments from
Licensee under this Agreement, such Bankruptcy Event shall not be a basis for
termination of this Agreement by Licensor.



ARTICLE XXIV




ADDITIONAL PROVISION




          24.1 Section 13.5 of the License Agreement shall be deleted in its entirety and replaced with
the following:




          24.2 Notices. Any notice under this Agreement shall be sufficiently given if sent in
writing by overnight courier, prepaid, first class, certified or registered mail, return receipt
requested, addressed as follows:




          If to the Licensor, to:



BENTLEY PHARMACEUTICALS, INC.

Bentley Park

2 Holland Way

Exeter, New Hampshire 03833

Attention: President




 









 








          If to the Licensee, to:



AUXILIUM PHARMACEUTICALS, INC.

160 W. Germantown Pike

Norristown, PA 19401

Attention: President

Copy to General Counsel



or to such other addresses as may be designated from time to time by notice given in accordance
with the terms of this Section.



IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. 4 to License Agreement
as of the date first above written.




	 	 	 	 	 	 	 	 	 
	BENTLEY PHARMACEUTICALS, INC.	 	 	 	AUXILIUM PHARMACEUTICALS, INC.
	 
	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 
	 

	 	James R. Murphy
	 	 	 	 	 	Geraldine A. Henwood
	 

	 	Chief Executive Officer
	 	 	 	 	 	Chief Executive Officer