Exhibit
      10.31


    


    LICENSE
      AGREEMENT

    


    This
      License Agreement (this “Agreement”)
      is
      made effective as of November 1, 2007 (the “Effective
      Date”)
      by and
      between NexMed Inc., a Nevada corporation (“NexMed”),
      and
      Warner Chilcott Company, Inc., a Puerto Rico corporation (“Warner”).
      NexMed and Warner are each hereinafter referred to individually as a
“Party”
and
      together as the “Parties.”

    


    WHEREAS,
      NexMed Controls (as that term is hereafter defined) certain proprietary patent,
      know-how and technology rights related to a pharmaceutical formulation
      containing alprostadil for the treatment of erectile dysfunction;
      and

    


    WHEREAS,
      Warner desires to obtain a license from NexMed to develop and commercialize
      the
      Licensed Products (as hereafter defined); and 

    


    WHEREAS,
      NexMed desires to grant such license to Warner on the terms and subject to
      the
      conditions of this Agreement.

    


    NOW,
      THEREFORE, in consideration of the mutual covenants contained herein, and for
      other good and valuable consideration, the receipt and adequacy of which are
      hereby acknowledged, the Parties hereby agree as follows:

     

    1. DEFINITIONS

    


    Whenever
      used in this Agreement with an initial capital letter, the terms defined in
      this
      Section 1 shall have the meanings specified.

     

    1.1. “Affiliate”
shall
      mean any corporation, firm, limited liability company, partnership or other
      entity that controls or is controlled by or is under common control with a
      Party
      to this Agreement. For purposes of this Section 1.1, “control” means
      ownership, directly or indirectly through one or more Affiliates, of fifty
      percent (50%) or more of the shares of stock entitled to vote for the election
      of directors, in the case of a corporation, or fifty percent (50%) or more
      of
      the equity interests in the case of any other type of legal entity, status
      as a
      general partner in any partnership, or any other arrangement whereby a person
      or
      entity controls or has the right to control the board of directors or equivalent
      governing body of a corporation or other entity, or otherwise has the ability
      to
      direct the affairs or operations of such person.

     

    1.2. “API”
shall
      mean alprostadil.

    


    1.3. “Approval”
shall
      mean, with respect to any Licensed Product, approval from the FDA (as hereafter
      defined) for the marketing, use and sale of the Licensed Product in the
      Territory.

    


    1.4. “Commercially
      Reasonable Efforts”
means,
      with respect to a Party, efforts and resources comparable to those undertaken
      by
      pharmaceutical companies of similar size and scope as such Party, as applicable,
      to pursue intellectual property protection for, Develop, manufacture, market,
      sell and distribute a pharmaceutical product owned by it or to which it has
      rights, which is of similar overall market potential at a similar stage in
      its
      product lifecycle, taking into account, inter alia, the competitiveness of
      the
      marketplace, the proprietary position of the product, the profitability of
      the
      product and other relevant factors. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.5. “Confidential
      Information”
shall
      mean with
      respect
      to a
      Party all trade secrets, processes, formulae, data, know-how, improvements,
      inventions, chemical materials, assays, techniques, marketing plans, strategies,
      customer lists, or other information that has been created, discovered, or
      developed by such Party, or has otherwise become known to such Party, or to
      which rights have been assigned or licensed to such Party, as well as any other
      information and materials that are deemed confidential or proprietary to or
      by
      such Party (including, without limitation, all information and materials of
      such
      Party’s customers and any other Third Party and their consultants), in each case
      that are disclosed by such Party to the receiving Party, whether orally,
      visually, in writing or by way of any other media, that if disclosed in tangible
      form is marked “confidential,” or if disclosure is not in tangible form, the
      disclosing Party has notified the receiving Party at the time of disclosure
      that
      such disclosure is confidential and summarized such disclosure in writing,
      marking the summary “confidential” and submitting it to the receiving Party (or,
      if applicable, to such of the receiving Party’s Affiliates or sublicensees to
      whom disclosure has been made) within thirty (30) days of the disclosure.
      Confidential Information shall not include any such information, data or
      materials to the extent that the receiving Party can demonstrate that such
      information, (a) as of the date of disclosure is known to the receiving Party
      or
      its Affiliates other than by virtue of a prior confidential disclosure to the
      receiving Party or its Affiliates; (b) as of the date of disclosure is, or
      subsequently becomes, publicly known, through no fault or omission of the
      receiving Party or its Affiliates; (c) is obtained from a Third Party having
      a
      lawful right to make such disclosure free from any obligation of confidentiality
      to the disclosing Party; or (d) is independently developed by or for the
      receiving Party or its Affiliates without reference to or reliance upon any
      Confidential Information of the disclosing Party.

    


    1.6. “Contract
      Year”
shall
      mean each successive period of four consecutive calendar quarters, with the
      first such Contract Year beginning on the first day of the first full calendar
      quarter that begins after the Effective Date.

    


    1.7. “Control”
or
      “Controlled”
      shall
      mean with respect to any Technology or Patent Rights (as such terms are defined
      hereunder), the ownership of the intellectual property rights in and to such
      Technology or Patent Rights, or the possession by a Party of rights under such
      Technology or Patent Rights sufficient to permit it to grant licenses or
      sublicenses to such Technology or Patent Rights as provided for herein, in
      each
      case without violating the terms of any legally binding agreements between
      such
      Party and any Third Party.

    


    1.8. “Development”
or
      “Develop”
means,
      with respect to a Licensed Product, all clinical and other development
      activities undertaken to obtain Approval of such Licensed Product in accordance
      with this Agreement. When used as a verb, “Developing” means to engage in
      Development and “Developed” shall have a corresponding meaning.

     

    1.9. “Divided
      Patent Rights”
      shall
      mean the Patent Rights set forth on Exhibit B hereto and any Licensed Patent
      Rights other than the Undivided Patent Rights.

    


    1.10. “FDA”
shall
      mean the United States Food and Drug Administration and any successor agency
      or
      authority thereto. 

     

    
      
        
        

      

      
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    1.11. “Field”
shall
      mean the topical treatment of erectile dysfunction.

     

    1.12. “First
      Commercial Sale”
shall
      mean the date of the first arm’s length transaction, transfer or disposition for
      value to a Third Party of a Licensed Product by or on behalf of Warner or any
      Affiliate or Sublicensee of Warner. 

    


    1.13. “Generic
      Product”
shall
      mean any Third Party product that contains the API, is identical to the Licensed
      Product in strength, dosage form and route of administration, is bioequivalent
      to the Licensed Product and is approved by the FDA as an AB-rated equivalent
      (as
      defined in the 27nd edition of Approved Drug Products with Therapeutic
      Equivalence Evaluations issued by the United States Department of Health and
      Human Services) to the Licensed Product.

    


    1.14. “Licensed
      Know-How”
shall
      mean any Technology (as hereafter defined) that is Controlled by NexMed as
      of
      the Effective Date or at any time thereafter that is necessary or useful for
      Warner to Develop, have Developed, make, have made, use, have used, sell,
      distribute for sale, have distributed for sale, offer for sale, have sold,
      import or have imported the Licensed Products and any NexMed Improvements.
      

     

    1.15. “Licensed
      Patent Rights”
shall
      mean any Patents Rights under the Control of NexMed as of the Effective Date,
      or
      at any time thereafter, that cover Licensed Product or any NexMed
      Improvements.

     

    1.16. “Licensed
      Product”
shall
      mean any form or dosage of a pharmaceutical product for use in the Field that
      contains the API as an active ingredient.

     

    1.17. “NDA”
shall
      mean a new drug application (as defined in Title 21 of the United States Code
      of
      Federal Regulations, as amended from time to time), or supplement thereto,
      filed
      with the FDA, seeking regulatory approval to market and sell any Licensed
      Product in the Territory in the Field.

    


    1.18. “Net
      Sales”
shall
      mean the gross invoiced sales price for all Licensed Products sold by Warner,
      its Affiliates or Sublicensees to Third Parties throughout the Territory during
      a reporting period, less the following amounts actually incurred or paid by
      Warner or its Affiliates or Sublicensees during such reporting period with
      respect to sales of Licensed Products:
      (a)
      allowances for normal and customary trade, quantity and cash discounts, rebates,
      chargebacks; (b) fees, reimbursements or similar payments or adjustments granted
      or paid to wholesalers or other distributors, buying groups, healthcare
      insurance carriers or other similar persons; (c) transportation, shipping,
      customs duties, insurance and postage charges included in the billing amount,
      if
      paid by Warner, any Warner Affiliate or any Sublicensee; (d) credits or
      allowances actually granted for damaged goods, recalls, returns or rejections
      (including, but not limited to, wholesaler, distributor and retailer returns)
      of
      Licensed Products or for retroactive price reductions; (e) any payment,
      allowance or credit to any governmental entity, including Federal or state
      Medicaid, Medicare or similar program; (f) actual write-offs for bad debts
      and
      (g) sales, use, excise, value-added and other taxes (other than income taxes)
      or
      governmental charges included in the billing amount, in each case, determined
      in
      accordance with United States generally accepted accounting principles
      (“GAAP”).

     

    
      
        
        

      

      
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    If
      any
      Licensed Products are sold to Third Parties in transactions that are not at
      arm’s length between the buyer and seller, or for consideration other than cash,
      then the gross amount to be included in the calculation of Net Sales for such
      sales shall be the amount that would have been invoiced had the transaction
      been
      conducted at arm’s length, which amount shall be determined, whenever possible,
      by reference to the average selling price of the relevant Licensed Product
      in
      arm's-length transactions at the time of sale. If Warner or its Affiliates
      or
      Sublicensees sell Licensed Products to a Third Party who also purchases other
      products or services from Warner or its Affiliates or Sublicensees, Warner
      shall
      not, and shall require its Affiliates and Sublicensees not to, (i) bundle or
      include any Licensed Product as part of any incentive programs, chargebacks,
      disease management programs or similar programs based on multiple product
      offerings or (ii) discount or price any Licensed Product, in the case of either
      of the foregoing clauses (i) or (ii), such that the applicable rebate, discount,
      other form of reimbursement for, or the price of, such Licensed Product in
      such
      arrangement is inconsistent with the rebate, discount, or other form of
      reimbursement for, or price of, such Licensed Product when sold separately
      to
      such Third Party from any such other products or services sold to such Third
      Party.

    


    1.19. “NexMed
      Improvement”
shall
      mean any change in the formulation, ingredients, preparation, presentation,
      means of delivery, dosage, package of, manufacture, or any new or expanded
      uses
      of the Licensed Product in the Field developed during the term of this Agreement
      by or on behalf of NexMed.

     

    1.20. “OTC
      Product”
shall
      mean a Licensed Product for sale over-the-counter.

    


    1.21. “Patent
      Rights”
shall
      mean
      all
      rights arising under patents
      or patent applications (including any patents issuing therefrom), as well as
      any
      substitutions, continuations, continuations-in-part, divisionals and all
      reissues, renewals, reexaminations, extensions, supplementary protection
      certificates, confirmations, revalidations, registrations or patents of addition
      in connection with any of the foregoing.

    


    1.22. “Pre-Notification
      Room Temperature Formulation Development Activities”
shall
      mean all Development activities conducted by NexMed during the period from
      the
      Effective Date until the Room Temperature Formulation Notification Date with
      respect to the Room Temperature Formulation.

    


    1.23. “Refrigerated
      Formulation”
shall
      mean a formulation of the Licensed Product that is manufactured, distributed,
      stored and sold under refrigeration. 

    


    1.24. “Refrigerated
      Formulation NDA”
shall
      mean an NDA with respect to the Refrigerated Formulation. 

    


    1.25. “Room
      Temperature Formulation”
shall
      mean a formulation of the Licensed Product that is manufactured, distributed,
      stored and sold at room temperature.

    


    1.26. “Room
      Temperature Formulation NDA”
shall
      mean an NDA with respect to the Room Temperature Formulation.

     

    
      
        
        

      

      
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    1.27. “Sublicense”
shall
      mean each sublicense agreement entered into by Warner pursuant to Section 2.2
      with respect to a Licensed Product. 

     

    1.28. “Sublicensee”
shall
      mean any Third Party or Affiliate of Warner to whom Warner grants a Sublicense
      of the rights granted to Warner under this Agreement, as provided under Section
      2.2.

     

    1.29. “Technology”
shall
      mean and include, whether or not patentable, any and all proprietary ideas,
      inventions, discoveries, Confidential Information, biologic materials, data,
      results, formulae, designs, specifications, methods, processes, formulations,
      techniques, ideas, know-how, technical information (including, without
      limitation, structural and functional information), process information,
      pre-clinical information, clinical information, and any and all proprietary
      biological, chemical, pharmacological, toxicological, pre-clinical, clinical,
      assay, control and manufacturing data and materials.

     

    1.30. “Term”
shall
      have the meaning set forth in Section 9 hereof.

     

    1.31. “Territory”
shall
      mean the United States of America, including its possessions and
      territories.

     

    1.32. “Third
      Party”
shall
      mean any person or entity other than Warner, NexMed and their respective
      Affiliates.

     

    1.33. “Undivided
      Patent Rights”
shall
      mean the Patent Rights set forth on Exhibit C hereto and any Licensed Patent
      Rights that relate solely to the Licensed Products.

    


    1.34. “Valid
      Claim”
shall
      mean a claim that has been allowed or is contained in an issued patent or
      pending patent application, which claim has not lapsed, been canceled, or become
      abandoned and which claim has not been declared invalid or unenforceable by
      an
      unappealable decision of a court of competent jurisdiction.

    


    1.35. “Warner
      Improvement”
shall
      mean any change in the formulation, ingredients, preparation, presentation,
      means of delivery, dosage, package of, manufacture, or any new or expanded
      uses
      of the Licensed Product in the Field developed during the term of this Agreement
      by or on behalf of Warner.

     

    2. GRANT
      OF RIGHTS

     

    2.1. License
      to Warner.
      Subject
      to the terms and conditions of this Agreement, NexMed grants to Warner an
      exclusive (even as to NexMed and its Affiliates but subject to Section 2.5)
      license under the Licensed Know-How and Licensed Patent Rights to Develop,
      have
      Developed, make, have made, use, have used, sell, distribute for sale, have
      distributed for sale, offer for sale, have sold, import or have imported
      Licensed Products in the Field in the Territory.

    


    2.2. License
      to NexMed.
      Warner
      hereby grants to NexMed a fully paid-up, exclusive license under any Warner
      Improvements and Joint Inventions to develop, manufacture, use, sell, offer
      for
      sale and import products including Licensed Products (i) outside the Territory
      and (ii) inside the Territory outside the Field, including the right to grant
      sublicenses.

     

    
      
        
        

      

      
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    2.3. Right
      to Sublicense.
      Warner
      shall have the right to grant sublicenses under the exclusive license granted
      pursuant to Section 2.1 to an Affiliate of Warner. In the event Warner intends
      to grant to a Third Party a sublicense of the rights granted hereunder, it
      shall
      provide written notice to NexMed of its intention to appoint or designate a
      sublicensee, including a reasonably detailed description of the scope and nature
      of such sublicense. In connection with the grant of any permitted sublicense
      hereunder, Warner shall ensure that each of its Affiliates and Sublicensees
      accepts and complies with all of the terms and conditions of this Agreement
      as
      if such Affiliates or Sublicensees were a party to this Agreement and Warner
      shall guarantee and remain obligated for the performance (or failure of
      performance) of any Affiliate or Sublicensee hereunder, including by way of
      example only and not limitation, for the payment to NexMed of its milestone
      and
      royalty obligations as described in Section 5 hereof. 

    


    2.4. Non-Compete.
      During
      the Term, except as contemplated by this Agreement, neither Party nor their
      respective Affiliates, directly or indirectly or with or through a Third Party,
      shall develop, make, use, promote, distribute or sell a pharmaceutical product
      in the Field in the Territory. 

    


    2.5. Retained
      Rights and License to NexMed.
      Except
      as expressly provided hereunder, NexMed reserves all other rights in and to
      the
      Licensed Know-How and Licensed Patent Rights. Warner hereby grants NexMed a
      non-exclusive, worldwide, royalty-free license under the Licensed know-How
      and
      Licensed Patent Rights solely to the extent necessary to allow NexMed to fulfill
      its obligations to Develop, manufacture and supply Licensed Products under
      this
      Agreement. 

    


    2.6. Right
      of Reference.
      Each
      Party and its Affiliates will, upon reasonable request, provide the other Party
      with a right of reference to any filings with the FDA related to the Licensed
      Product including, but not limited to, drug master files. 

    


    2.7. OTC
      Product.
      If at
      any time during the Term the JSC determines in good faith that it is reasonably
      likely that an OTC Product could be (i) manufactured under a commercially viable
      manufacturing process and (ii) sold in compliance with applicable law then
      Warner shall notify NexMed within ninety (90) days of such determination if
      it
      intends to Develop and commercialize such OTC Product (such notice, the
“OTC
      Commercialization Notice”).
      Following delivery of the OTC Commercialization Notice, Warner shall use
      Commercially Reasonable Efforts to Develop and commercialize the OTC Product
      as
      promptly as practicable. Notwithstanding the foregoing, if Warner fails to
      provide the OTC Commercialization Notice within the period described in this
      Section 2.7, the rights granted to Warner to Develop and commercialize the
      OTC
      Product in the Field and in the Territory under this Agreement shall revert
      to
      NexMed and NexMed shall thereafter have the unencumbered right to grant one
      or
      more Third Parties the right to develop and commercialize the OTC Product.
      

     

    
      
        
        

      

      
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    3. DEVELOPMENT,
      REGULTORY APPROVAL AND COMMERCIALIZATION
      OF LICENSED PRODUCTS.

     

    3.1. Regulatory
      Approval for Refrigerated Formulation NDA.
      NexMed
      will use Commercially Reasonable Efforts to obtain Approval of the Refrigerated
      Formulation NDA as promptly as practicable following the Effective Date. In
      the
      event the Parties determine that additional Development is required following
      submission of the Refrigerated Formulation NDA to the FDA in order to obtain
      Approval of such submission, such Development shall be conducted by NexMed
      at
      the direction of the JSC (as hereafter defined) in accordance with Section
      3.2
      and Warner shall reimburse NexMed for all costs and expenses (other than any
      FDA
      filing fees with respect to the Refrigerated Formulation NDA) relating to such
      Development, including any amounts paid to a contract research organization
      engaged by NexMed to perform such Development. Warner shall determine the nature
      and extent of any improvements, upgrades, personnel changes or other
      modifications that are necessary to enable the NexMed manufacturing facility
      to
      receive all required approvals relating to the FDA pre-approval inspection
      (the
“PAI”)
      conducted in connection with obtaining Approval of the Refrigerated Formulation
      NDA (collectively, the “PAI
      Upgrades”).
      Warner shall use Commercially Reasonable Efforts to timely conduct such PAI
      Upgrades in advance of the PAI and NexMed shall provide reasonable assistance
      and cooperation to facilitate the PAI Upgrades. Warner shall bear the cost
      of
      the PAI Upgrades. 

    


    3.2. Development.

    


    3.2.1.  JSC.
      All
      Development (other than that Pre-Notification Room Temperature Formulation
      Development Activities) with respect to the Licensed Products shall be conducted
      at the direction of a joint steering committee (the “JSC”)
      that
      shall be established by the Parties as promptly as practicable after the
      Effective Date. The JSC shall (i) oversee all Development in connection with
      obtaining Approval of the Refrigerated Formulation NDA and (ii) in the event
      Warner determines to proceed with the Development of the Room Temperature
      Formulation in accordance with Section 3.2.3, prepare a Development plan with
      respect to the Room Temperature Formulation and oversee the Development thereof
      and the preparation and filing of the Room Temperature Formulation NDA. The
      JSC
      shall consist of six (6) members, three (3) nominated by each Party. Each Party
      may designate a substitute for a member nominated by it, who is unable to be
      present at a meeting. Meetings of the JSC shall be held on a quarterly basis,
      or
      at such other interval as may be agreed between the Parties. The JSC will be
      chaired by one of the Warner designated representatives (the “Chair”).
      Meetings shall be held alternately at the offices of Warner or NexMed. The
      JSC
      may be convened, polled or consulted from time to time by means of
      telecommunication or correspondence. The meetings of the JSC shall be documented
      in written minutes to be approved by both Parties. Each Party shall bear its
      own
      costs for participation in the JSC. At each JSC meeting the NexMed
      representatives shall provide an update with respect to all material aspects
      of
      any ongoing Development and regulatory filings. If there is a material change
      with respect to such updates after any such meeting, NexMed will promptly notify
      Warner thereof.

    


    3.2.2. JSC
      Decisions.
      The JSC
      members shall use reasonable efforts to reach agreement on any and all matters.
      In the event that, despite such reasonable efforts, agreement on a particular
      matter cannot be reached by the JSC, then the Chair of the JSC shall have the
      right to make the final decision on such matter, but shall only exercise such
      right in good faith after full consideration of the positions of both Parties;
      provided, however, that NexMed shall not be required to provide resources or
      expertise beyond its reasonable capabilities, notwithstanding the fact that
      Warner is required to reimburse NexMed for such Development costs and expenses.
      

     

    
      
        
        

      

      
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    3.2.3. Room
      Temperature Formulation.
      

    


    3.2.3.1. 
      NexMed
      shall provide Warner with reasonably detailed summaries of all Pre-Notification
      Room Temperature Formulation Development Activities at such times as Warner
      shall reasonably request.

    


    3.2.3.2. 
      In the
      event Warner determines, in its sole discretion, to proceed with the Development
      and commercialization of the Room Temperature Formulation, Warner shall notify
      NexMed in writing (such notice, the “Room
      Temperature Formulation Development Notice”)
      on or
      prior to the date that is 30 days following Approval of the Refrigerated
      Formulation NDA (such date, the “Room
      Temperature Formulation Notification Date”).
      Thereafter, the Parties shall promptly enter into good faith discussions in
      order to determine mutually acceptable product labeling with respect to the
      Room
      Temperature Formulation NDA. Following receipt of the Room Temperature
      Formulation Development Notice, NexMed shall provide Warner with reasonably
      detailed documentation of all expenses incurred by NexMed relating to
      Pre-Notification Room Temperature Formulation Development Activities and Warner
      shall promptly reimburse NexMed for all costs and expenses relating to such
      Development, including any amounts paid to a contract research organization
      engaged by NexMed to perform such Development. Following receipt of the Room
      Temperature Formulation Development Notice (i) all Development thereafter
      conducted with respect to the Room Temperature Formulation shall be conducted
      by
      NexMed at the direction of the JSC in accordance with Section 3.2 and Warner
      shall reimburse NexMed for (A) all costs and expenses relating to such
      Development, including any amounts paid to a contract research organization
      engaged by NexMed to perform such Development and (B) any filing fees paid
      to
      the FDA with respect to the Room Temperature Formulation NDA and (ii) at the
      direction of the JSC in accordance with Section 3.2, NexMed will use
      commercially reasonable efforts to prepare, submit and obtain Approval of a
      Room
      Temperature Formulation NDA that reflects the labeling agreed by the Parties,
      as
      promptly as practicable. For the avoidance of doubt, it is understood that
      Warner shall only be responsible to reimburse NexMed for Pre-Notification Room
      Temperature Formulation Development Activities if Warner delivers the Room
      Temperature Formulation Development Notice and in no instance shall Warner
      be
      responsible to reimburse NexMed for Development conducted prior to the Effective
      Date. The Party manufacturing the Room Temperature Formulation shall be
      responsible for payment to the FDA of any annual fees on establishments under
      the Prescription Drug User Fee Act (“PDUFA”)
      with
      respect to such Party’s manufacturing facility for so long as such Party
      manufactures the Room Temperature Formulation.

    


    3.3. FDA
      Meetings and Submissions.
      NexMed
      shall own all regulatory filings and Approvals for all Licensed Products in
      the
      Territory and NexMed shall be responsible for and shall control the regulatory
      strategy and interactions with regulatory authorities for all Licensed Products
      in the Territory and shall be the designated point of contact with such
      regulatory authorities, it being understood that NexMed shall consult with
      Warner with respect to such strategy and interactions and will consider in
      good
      faith any Warner recommendations relating thereto. Warner shall be entitled
      to
      participate in all meetings and discussions with the FDA relating to the
      Licensed Products. Prior to submitting any correspondence or other information
      relating to the Licensed Products to the FDA (an “FDA
      Submission”),
      NexMed shall (i) provide Warner with a copy of the FDA Submission and (ii)
      in
      the case of a material FDA Submission, provide Warner with a reasonable
      opportunity to review such FDA Submission and NexMed shall consider and discuss
      in good faith any comments or proposed changes to such submission by Warner.
      NexMed shall be responsible for pursuing, compiling and submitting all
      regulatory documents, and for interacting with the FDA. Nexmed shall be
      responsible for all product renewal fees payable to the FDA with respect to
      any
      Licensed Product under PDUFA.

     

    
      
        
        

      

      
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    3.4. Commercialization.

    


    3.4.1. Responsibility.
      From
      and after the Effective Date, Warner, subject to the terms and conditions of
      this Agreement, shall be fully responsible for and shall have full control
      and
      authority over the commercialization of Licensed Products in the Field in the
      Territory, including without limitation, (a) subject to Section 4.2.2, all
      activities relating to manufacture and supply of all Licensed Products, and
      (b)
      all marketing, promotion, sales and distribution activities relating to any
      Licensed Product.

    


    3.4.2. Diligence.
      Warner
      will exercise Commercially Reasonable Efforts to commercialize Licensed Products
      in the Field in the Territory. For the avoidance of doubt, Warner shall be
      deemed to have satisfied its obligations under this Section 3.4.2 so long as
      it
      is exercising Commercially Reasonable Efforts to commercialize the Refrigerated
      Formulation, the Room Temperature Formulation or the OTC Product.

    


    3.4.3. Warner
      Responsibilities.
      In
      addition to and without limiting, defining or otherwise qualifying the standards
      of conduct set forth elsewhere in this Agreement, Warner shall:

    


    3.4.3.1. launch
      the Licensed Product within six (6) months following receipt of Approval of
      the
      Licensed Product in the Territory;

    


    3.4.3.2. perform
      pre-commercialization analysis, planning, market preparation, and related
      marketing activities for the Territory;

    


    3.4.3.3. conduct
      phase IV clinical trials and marketing studies as Warner deems necessary or
      useful for commercialization of Licensed Product;

    


    3.4.3.4. conduct
      the commercialization of Licensed Product in compliance in all material respects
      with all requirements of applicable laws; and

    


    3.4.3.5. consult
      with and keep NexMed and the JSC informed, through regular, periodic written
      reports, in accordance with Section 3.4.5.

    


    3.4.4. Commercialization
      Expenses.
      Warner
      shall be responsible and pay for one hundred percent (100%) of all costs and
      expenses incurred in connection with the distribution, marketing, sale or other
      commercialization of the Licensed Product in the Territory.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    3.4.5. Updates
      and Reports.
      In
      addition to royalty information reports to be provided by Warner pursuant to
      Section 5.5 hereof, no later than sixty (60) days prior to the expected date
      of
      Approval of each Licensed Product,Warner shall provide NexMed a preliminary
      written commercialization plan and budget for such Licensed Product for review
      and comment by NexMed (each, a “Commercialization
      Plan”).
      Warner shall consider all of NexMed’s comments in good faith. Each
      Commercialization Plan shall be developed by Warner in good faith in accordance
      with usual pharmaceutical industry practices and, at a minimum, shall contain:
      (a) a quarterly Net Sales forecast (dollars and units) and associated pricing
      and market share assumptions for at least the four (4) consecutive calendar
      quarters after the forecasted First Commercial Sale of such Licensed Product;
      (b) the out-of-pocket expense budgets for promotional activities including
      but
      not limited to advertising and public relations and any other relevant
      promotional activities; and (c) a description of the sales force efforts,
      including the number, type and allocation of pharmaceutical sales
      representatives beginning with pre-launch activities through and including
      the
      4th quarter of the Net Sales forecast. Warner shall amend and update each
      Commercialization Plan annually after the first such plan is prepared for each
      Licensed Product and shall promptly provide a copy of such updated
      Commercialization Plan to NexMed. Warner shall provide NexMed with oral updates
      as reasonably requested by NexMed with respect to any Commercialization Plan.
      All such Commercialization Plans and updates shall be considered Confidential
      Information of Warner, subject to the terms of Section 6 hereof.

    


    3.4.6. Pharmacovigilance.
      Warner
      shall be responsible for all processing of information related to any adverse
      events, including, without limitation, any information regarding such adverse
      events that is received from a Third Party with respect to Licensed Product
      in
      the Territory. As soon as reasonably practicable following the date of this
      Agreement, the pharmacovigilance departments of each of NexMed and Warner shall
      meet and determine the approach to be taken for the collection, review,
      assessment, tracking and filing of information related to adverse events
      associated with Licensed Product, consistent with the provisions of this Section
      3.4.6. Such approach shall be documented in a separate and appropriate written
      pharmacovigilance agreement between each of NexMed and Warner. Each Party agrees
      to share relevant information it receives (either directly or indirectly) with
      the other Party in a timely manner so as to allow each Party to comply with
      its
      responsibility to report pharmacovigilance information.

     

    4. LICENSED
      PRODUCT MANUFACTURE AND SUPPLY

    


    4.1. Licensed
      Product Manufacture by Warner.
      Subject
      to Section 4.2, Warner shall have the sole obligation and responsibility for
      the
      manufacture of the Licensed Products for commercial sale during the Term.


    


    4.2. Option
      for Licensed Product Manufacture by NexMed.
      In the
      event Warner notifies NexMed that it desires NexMed to manufacture the
      Refrigerated Formulation, the Parties shall promptly negotiate in good faith
      and
      execute the necessary manufacturing and supply agreement (the “Manufacturing
      Agreement”);
      provided that it is understood that in the event the parties agree to enter
      into
      the Manufacturing Agreement, Warner shall retain responsibility for the
      manufacture and supply of Licensed Product until such time as NexMed is able
      to
      qualify and validate a facility for the manufacture of Licensed Product for
      the
      Territory. The Manufacturing Agreement shall provide that NexMed shall be
      exclusively responsible for the manufacture of and supply to Warner, and Warner
      shall exclusively purchase from NexMed, all requirements of the Refrigerated
      Formulation for a period of three years commencing on the date of Approval
      of
      the Refrigerated Formulation NDA (the “Manufacturing
      Term”),
      it
      being understood that the Manufacturing Agreement shall also provide that NexMed
      shall manufacture quantities of the Refrigerated Formulation necessary to
      adequately supply the trade in anticipation of the commercial launch of the
      Refrigerated Formulation. Warner shall be responsible for the cost of any
      initial plant and equipment improvements with respect to NexMed’s manufacturing
      facility that are necessary to enable NexMed to meet its supply obligations
      under the Manufacturing Agreement (the “Manufacturing
      Improvements”),
      it
      being understood that the Manufacturing Improvements shall not include personnel
      and Warner shall have no obligation with respect to costs associated with
      personnel. Warner shall be responsible for determining the Manufacturing
      Improvements that are necessary and a process for conducting such improvements.
      Warner will oversee the implementation of the Manufacturing Improvements and
      NexMed shall reasonably cooperate to allow such improvements to be completed
      in
      a timely manner. The price for the Refrigerated Formulation supplied to Warner
      under the Manufacturing Agreement shall be NexMed’s fully-loaded cost of supply
      with respect to such Refrigerated Formulation. The Party manufacturing the
      Refrigerated Formulation shall be responsible for payment to the FDA of any
      annual fees on establishments under PDUFA with respect to such Party’s
      manufacturing facility for so long as such Party manufactures the Refrigerated
      Formulation. 

     

    
      
        
        

      

      
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    4.3. Transfer
      of Manufacturing Know-How

    


    4.3.1. Upon
      the
      reasonable request of Warner, for a period of time from the Effective Date
      until
      twelve (12) months after Approval, NexMed shall provide to Warner the assistance
      of NexMed’s employees and access to NexMed’s other internal resources to provide
      Warner with a reasonable level of technical assistance and consultation with
      respect to the transfer from NexMed to Warner, or any Third Party manufacturer
      designated by Warner of the manufacture of the Refrigerated Formulation. After
      such initial twelve (12) month period, Warner shall pay NexMed $600 per day
      per
      full time equivalent for the provision of such assistance.

    


    4.3.2. Upon
      the
      reasonable request of Warner, for a period of time from the Effective Date
      until
      twelve (12) months after Approval, NexMed shall provide to Warner the assistance
      of NexMed’s employees and access to NexMed’s other internal resources to provide
      Warner with a reasonable level of technical assistance and consultation with
      respect to the transfer to Warner of any expertise or know-how that NexMed
      has
      developed relating to the manufacture of Room Temperature
      Formulation.
      After
      such initial twelve (12) month period, Warner shall pay NexMed $600 per day
      per
      full time equivalent for the provision of such assistance.

     

    5. PAYMENTS
      AND ROYALTIES.

     

    5.1. Upfront
      License Fee.
      In
      consideration of the grant of the licenses described in Section 2 hereof, Warner
      hereby shall pay NexMed on the Effective Date a nonrefundable, non-creditable
      license fee in the amount of Five Hundred Thousand Dollars ($500,000.00
      US).

     

    
      
        
        

      

      
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    “****
      indicates where a confidential portion has been omitted and filed separately
      with the Commission.”

     

    5.2. Milestone
      Payments.
      Additionally,
      Warner shall pay to NexMed the following amounts:

    


    5.2.1. ****
      Two
      Million Five Hundred Thousand Dollars ($2,500,000 US). ****

    


    5.2.2. ****
      Two
      Million Dollars (US $2,000,000 US). ****

    


    5.2.3. ****
      Two
      Million Dollars ($2,000,000 US) ****

    


    5.2.4. ****
      Six
      Million Dollars ($6,000,000 US). ****

    


    “****
      indicates where a confidential portion has been omitted and filed separately
      with the Commission.”

    


    5.3. Royalty
      Rates; Payment. 

    


    5.3.1. Royalty
      Payment. 
      In
      further consideration of the grant of the licenses by NexMed hereunder, and
      subject to the other terms of this Agreement, commencing on the date of the
      First Commercial Sale of a Licensed Product and continuing until the last to
      expire Valid Claim included in the Licensed Patent Rights covering such Licensed
      Product:

    


    5.3.1.1. with
      respect to Net Sales of Licensed Product during the period from the date of
      the
      First Commercial Sale of the Licensed Product until the end of the first full
      calendar year thereafter (“Year
      1”),
      Warner shall pay to NexMed a royalty payment equal to (i) ****% of the first
      $150 million of Net Sales, (ii) ****% of Net Sales in excess of $150 million
      and
      up to $300 million and (iii) ****% of Net Sales in excess of $300;

    


    5.3.1.2. with
      respect to Net Sales of Licensed Product during the 12 month period following
      Year 1 (“Year
      2”),
      Warner shall pay to NexMed a royalty payment equal to (i) ****% of the first
      $150 million of Net Sales, (ii) ****% of Net Sales in excess of $150 million
      and
      up to $300 million and (iii) ****% of Net Sales in excess of $300 million;
      and

    


    5.3.1.3. with
      respect to Net Sales of Licensed Product during the 12 month period following
      Year 2 (“Year
      3”)
      and
      thereafter until the expiration of the Term, Warner shall pay to NexMed a
      royalty payment equal to (i) ****% of the first $150 million of Net Sales,
      (ii)
      ****% of Net Sales in excess of $150 million and up to $300 million and (iii)
      ****% of Net Sales in excess of $300 million. 

    


    5.3.2. Generic
      Competition.
      The
      royalties payable by Warner, its Affiliates and Sublicensees under Section
      5.3.1
      shall be reduced by fifty percent (50%) for any period during which one or
      more
      Generic Products that have received Approval in the Field are sold by one or
      more Third Parties in the Territory during the Term provided there is a
      reduction in the market share of the Licensed Product in the Territory of at
      least twenty percent (20%), as measured by unit sales (as determined by IMS
      International, or if such data is not available, a reliable source of data
      as
      reasonably agreed by the Parties) from the calendar quarter immediately prior
      to
      such first Generic Product sale. Notwithstanding anything in this Section to
      the
      contrary, no adjustment for Generic Product competition will be due in the
      event
      Warner, its Affiliates and Sublicensees fail to use Commercially Reasonable
      Efforts to promote and market Licensed Product.

     

    
      
        
        

      

      
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    5.4. Payment.
      All
      payments to be made by Warner hereunder shall be made in United States Dollars
      by wire transfer of immediately available funds to such United States bank
      account as shall be designated by NexMed. Late payments shall bear interest
      at
      the rate of 1% of the outstanding balance per month as prorated, or the maximum
      amount permitted by law, whichever is less.

    


    5.5. Sales
      Reports and Royalty Payments.
      After
      the First Commercial Sale of a Licensed Product and during the Term, Warner
      shall furnish to NexMed a written report, within thirty (30) days after the
      end
      of each calendar quarter (or portion thereof, if this Agreement terminates
      during a calendar quarter), showing the amount of royalty payments due for
      the
      immediately preceding calendar quarter (or portion thereof). Royalty payments
      for each calendar quarter shall be due at the same time as such written reports.
      Each written report shall contain the following information:

    


    5.5.1. the
      gross
      sales and quantity of each Licensed Product sold by Warner, its Affiliates,
      and
      Sublicensees in the preceding calendar quarter; 

    


    5.5.2. the
      calculation of Net Sales from such gross sales; and 

    


    5.5.3. the
      royalties payable in United States Dollars which shall have accrued hereunder
      in
      respect of such Net Sales.

    


    If
      no
      royalty payment is due for any royalty period hereunder, Warner shall so
      report.

    


    5.6. Tax
      Withholding; Restrictions on Payment.
      All
      payments hereunder shall be made free and clear of any taxes, duties, levies,
      fees or charges, except for withholding taxes (to the extent mandated by
      applicable law). Warner shall make any applicable withholding payments due
      on
      behalf of NexMed and shall provide NexMed upon request with such written
      documentation regarding any such payment as is available to Warner.

    


    5.7. Sales
      Record Audit.
      Warner
      shall keep, and shall cause each of its Affiliates, and Sublicensees, if any,
      to
      keep, full and accurate books of accounting in accordance with GAAP as may
      be
      reasonably necessary for the purpose of calculating the royalties payable to
      NexMed. Such books of accounting (including, without limitation, those of
      Warner’s Affiliates, and Sublicensees, if any) shall be kept at their principal
      place of business and, with all necessary supporting data, shall during all
      reasonable times for the three (3) years next following the end of the calendar
      year to which each shall pertain, be open for inspection at reasonable times
      upon written notice by NexMed, no more than once per year, by a nationally
      recognized independent certified accountant selected by NexMed (reasonably
      acceptable to Warner), for the purpose of verifying royalty statements for
      compliance with this Agreement. Such accountant must have agreed in writing
      to
      maintain all information learned in confidence, except as necessary to disclose
      to NexMed such compliance or noncompliance by Warner. The results of each
      inspection, if any, shall be binding on both Parties. NexMed shall pay for
      such
      inspections, except that in the event there is any upward adjustment in
      aggregate royalties payable for the period of such inspection of more than
      five
      percent (5%) of the amount actually paid to NexMed, Warner shall pay for the
      reasonable out-of-pocket costs of such audit. Any underpayments shall be paid
      by
      Warner within thirty (30) days of notification of the results of such inspection
      plus interest as calculated in accordance with Section 5.4. Any overpayments
      shall be fully creditable against amounts payable in subsequent payment periods
      or, if no such amounts become payable within ninety (90) days after notification
      of such results, shall be refunded.

     

    
      
        
        

      

      
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    5.8. Minimum
      Royalties.
      If at
      any time after the completion of Year 3 Warner fails to generate at least $25
      million of Net Sales in each of two consecutive Contract Years (the
“Net
      Sales Minimums”),
      upon
      the written request of NexMed, the Parties shall enter into a co-promotion
      agreement on commercially reasonable terms with respect to the Licensed Products
      pursuant to which NexMed will have the right to co-promote the Licensed
      Products. Notwithstanding the foregoing, if Warner, in its sole discretion,
      makes a payment to NexMed within thirty (30) days of receipt of such request
      equal to difference between (i) the amount of the royalty that NexMed would
      have
      received under Section 5.3.1.3 if Warner had generated $25 million of Net Sales
      in each of such two consecutive Contract Years and (ii) the amount of the
      royalty actually paid to NexMed with respect to such periods, then NexMed shall
      have no co-promotion rights hereunder as a result of Warner’s failure to meet
      such Net Sales Minimums.

    
    

     

    6. TREATMENT
      OF CONFIDENTIAL INFORMATION

     

    6.1. Confidentiality
      Obligations.
      Each of
      NexMed and Warner agree that during the Term and for ten (10) years thereafter,
      it will keep confidential, and will cause its employees,
      consultants, Affiliates, agents, subcontractors,
      and
      Sublicensees
      to keep
      confidential, all Confidential Information of the other Party. Neither NexMed
      nor Warner nor any of their employees,
      consultants, Affiliates, agents, subcontractors,
      or
      Sublicensees
      shall
      use Confidential Information of the other Party for any purpose whatsoever
      other
      than exercising any rights granted to it or reserved by it hereunder. Without
      limiting the foregoing, each Party may disclose information to the extent such
      disclosure is reasonably necessary to (a) file and prosecute patent applications
      and/or maintain patents which are filed or prosecuted in accordance with the
      provisions of this Agreement, or (b) file, prosecute or defend litigation in
      accordance with the provisions of this Agreement or (c) comply with applicable
      laws, regulations or court orders; provided,
      however,
      that if
      a Party is required to make any such disclosure of the other Party’s
      Confidential Information in connection with any of the foregoing, it will give
      reasonable advance notice to the other Party of such disclosure requirement
      and
      will use reasonable efforts to assist such other Party in efforts to secure
      confidential treatment of such information required to be
      disclosed.

    


    6.2. Limited
      Disclosure and Use. NexMed
      and Warner each agree that any disclosure of the other Party’s Confidential
      Information to any of its employees,
      consultants, Affiliates, agents, subcontractors,
      or
      sublicensees
      shall be
      made only if and to the extent necessary to carry out its rights and
      responsibilities under this Agreement, shall be limited to the maximum extent
      possible consistent with such rights and responsibilities, and shall only be
      made to the extent any such persons are bound by confidentiality obligations
      to
      maintain the confidentiality thereof and not to use such Confidential
      Information except as expressly permitted by this Agreement. NexMed and Warner
      each further agree not to disclose or transfer the other Party’s Confidential
      Information to any Third Parties under any circumstance without the prior
      written approval from the other Party, except as otherwise required by law,
      and
      except as otherwise expressly permitted by this Agreement. Each Party shall
      take
      such action, and shall cause its employees,
      consultants, Affiliates, agents, subcontractors,
      and
      sublicensees
      to take
      such action, to preserve the confidentiality of each other Party’s Confidential
      Information as it would customarily take to preserve the confidentiality of
      its
      own Confidential Information. In connection with the termination of this
      Agreement, upon the request of the other Party, each Party will return all
      the
      Confidential Information disclosed or transferred to it by the other Party
      pursuant to this Agreement, including all copies and extracts of documents
      and
      all manifestations of Confidential Information in any form, within sixty (60)
      days of such request; provided however, that a Party may retain (a) any
      Confidential Information of the other Party relating to any license which
      expressly survives such termination and (b) one (1) copy of all other
      Confidential Information in inactive archives solely for the purpose of
      maintaining a record of information and materials deemed to be Confidential
      Information hereunder.

     

    
      
        
        

      

      
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    6.3. Publicity.
      Neither
      Party may publicly disclose the existence or terms or any other matter of fact
      regarding this Agreement without the prior written consent of the other Party;
      provided,
      however,
      that
      either Party may make such a disclosure (a) to the extent required by law or
      by
      the requirements of any nationally recognized securities exchange, quotation
      system or over-the-counter market on which such Party has its securities listed
      or traded, or (b) to any actual or prospective sublicensees, investors, lenders,
      other financing sources, acquirors, or companies being acquired by such Party
      who are obligated to keep such information confidential. The Party desiring
      to
      make any such public announcement or disclosure shall inform the other Party
      of
      the proposed announcement or disclosure in reasonably sufficient time prior
      to
      public release and shall provide the other Party with a written copy thereof.
      Each Party agrees that it shall cooperate fully with the other with respect
      to
      all disclosures regarding this Agreement to the Securities Exchange Commission
      and any other governmental or regulatory agencies, including, without
      limitation, requests for confidential treatment of proprietary information
      of
      either Party included in such disclosure.

     

    7. PROVISIONS
      CONCERNING THE FILING, PROSECUTION AND  MAINTENANCE
      OF LICENSED PATENT RIGHTS

     

    7.1. Ownership
      of Inventions.

    


    7.1.1. Sole
      Inventions.
      Subject
      to Section 7.1.3, each Party shall exclusively own all inventions conceived
      by
      such Party, its employees, agents and consultants during the Term without the
      use in any material respect of any Technology owned by the other Party
      (“Sole
      Inventions”).
      Sole
      Inventions conceived solely by NexMed, its employees, agents and consultants
      are
      referred to herein as “NexMed
      Sole Inventions”.
      Sole
      Inventions conceived solely by Warner, its employees, agents and consultants
      are
      referred to herein as “Warner
      Sole Inventions.”
      

    


    7.1.2. Joint
      Inventions.
      Subject
      to Section 7.1.3, the Parties shall jointly own all inventions (a)
      conceived or first reduced to practice jointly by or on behalf of both Warner
      (or any of its Affiliates) and NexMed (or any of its Affiliates) or (b)
      conceived or first reduced to practice by or on behalf of one Party or any
      of
      its Affiliates as a result of its use in any material respect of the Technology
      of the other Party,
      on the
      basis of each Party having an undivided interest in the whole (collectively
      “Joint
      Inventions”).

     

    
      
        
        

      

      
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    7.1.3. Permeation
      Inventions.
      Notwithstanding Section 7.1.1 or Section 7.2.2, in the event a Joint Invention
      is a discovery, invention, improvement or new use of permeation enhancing
      excipient technology (a “Permeation
      Invention”),
      such
      Permeation Invention shall be the sole and exclusive property of NexMed, and
      Warner agrees to assign, and hereby does assign, its entire right, title and
      interest in and to such Permeation Invention to NexMed. Thereafter, all assigned
      Permeation Inventions shall be part of the “Licensed Know-How” under this
      Agreement. 

    


    7.1.4. Inventorship.
      For
      purposes of determining whether an invention is a NexMed Sole Invention, a
      Warner Sole Invention or a Joint Invention, questions of inventorship shall
      be
      resolved in accordance with United States patent laws.

    


    7.2. Cooperation.
      Warner
      agrees to cooperate with all reasonable requests of NexMed in the filing and
      prosecution of the Licensed Patent Rights.

     


    7.3. Patent
      Filing, Prosecution and Maintenance.
      Subject
      to the other terms of this Section 7, NexMed, at its cost, shall use
      Commercially Reasonable Efforts to diligently prepare, file, prosecute, and
      maintain, the Licensed Patent Rights in the Territory. NexMed shall timely
      provide to Warner, prior to filing, any patent applications or filings with
      respect to the Licensed Patent Rights in the Territory and shall consider in
      good faith any comments by Warner thereon. NexMed will keep Warner informed
      of
      the status of filing, prosecution and maintenance of all Licensed Patent Rights
      in the Territory and shall provide Warner with copies of all material documents
      relating thereto. NexMed also shall promptly notify Warner in the event it
      determines to abandon or permit the expiration of any Patent Rights included
      in
      the Licensed Patent Rights in the Territory (other than any expiration of the
      natural life of such Patent Right(s)), which notice shall, to the extent
      practical, be delivered no less than thirty (30) days prior to such action
      or
      inaction, in order to permit Warner, in Warner’s reasonable judgment and at
      Warner’s cost and expense, to prosecute or maintain such Licensed Patent
      Right(s), provided,
      however,
      that
      any such action does not violate the terms of any judgment, settlement,
      compromise or other resolution binding upon NexMed.

     

    7.4. Notice
      of Infringement.
      If,
      during the Term, either Party learns of any actual, alleged or threatened
      infringement by a Third Party of any Licensed Patent Rights in the Territory,
      such Party shall notify the other Party within fifteen (15) days of becoming
      aware of such infringement and shall provide such other Party with available
      evidence of such infringement.

     

    
      
        
        

      

      
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    7.5. Infringement
      of Licensed Patent Rights.
      NexMed
      shall have the first right (but not the obligation), at its own expense and
      with
      legal counsel of its own choice, to bring suit (or take other appropriate legal
      action) against any actual, alleged or threatened infringement of the Divided
      Patent Rights in the Territory. Warner shall have the first right (but not
      the
      obligation), at its own expense and with legal counsel of its own choice, to
      bring suit (or take other appropriate legal action) against any actual, alleged
      or threatened infringement of the Undivided Patent Rights in the Territory.
      Each
      Party shall have the right, at its own expense, to be represented in any such
      action brought by the other by counsel of such Party’s own choice; provided,
      however,
      that
      under no circumstances shall the foregoing affect the right of the other Party
      to control the suit as described in this Section 7.5. Notwithstanding the
      foregoing, neither Party shall settle, compromise or otherwise resolve any
      such
      suit that (i) in the case of a settlement by NexMed, materially restricts or
      waives rights under the Licensed Patent Rights granted to Warner hereunder
      and
      (ii) in the case of a settlement by Warner, materially restricts or waives
      any
      rights under the Licensed Patents, in each case without the prior written
      consent of the other Party, which consent shall not be unreasonably withheld,
      conditioned or delayed. If the Party having the first right to bring suit does
      not file any action or proceeding against any such infringement within thirty
      days after the earliest of notice under Section 7.4, or a written request from
      the other to take action with respect to such infringement, then other Party
      shall have the right (but not the obligation), at its own expense, to bring
      suit
      (or take other appropriate legal action) against such actual, alleged or
      threatened infringement, with legal counsel of its own choice, but shall not
      be
      permitted to settle, compromise or otherwise resolve any such suit without
      the
      prior written consent of the other Party, which consent shall not be
      unreasonably withheld, conditioned or delayed. Any damages, monetary awards
      or
      other amounts recovered by a Party, whether by judgment or settlement, pursuant
      to any suit, proceeding or other legal action taken under this Section 7.5,
      shall be applied as follows:

    


    7.5.1. first,
      to
      reimburse the Parties for their respective out-of- pocket costs and expenses
      (including reasonable attorneys’ fees and costs) incurred in prosecuting such
      enforcement action; and

    


    7.5.2. second,
      any remaining balance that (i) represents compensation for lost sales, royalty
      or profits, or any other damages as result of impairment of Warner’s rights
      hereunder resulting from the infringement (collectively, “Infringement
      Damages”),
      shall
      be retained by or paid to Warner; provided, such Infringement Damages shall
      be
      deemed Net Sales and subject to royalty payments as set forth in Section 5.3.1
      and (ii) represents punitive and exemplary damages shall be shared equally
      by
      Warner and NexMed.

     

    If
      a
      Party brings any such action or proceeding hereunder, the other Party agrees
      to
      be joined as Party plaintiff if necessary to prosecute such action or
      proceeding, and to give the Party bringing such action or proceeding reasonable
      assistance and authority to file and prosecute the suit; provided,
      however,
      that
      neither Party shall be required to transfer any right, title or interest in
      or
      to any property to the other Party or any Third Party to confer standing on
      a
      Party hereunder.

     

    7.6. Defense
      of Claims.
      In the
      event that any action, suit or proceeding is brought against NexMed or Warner
      or
      any Affiliate or Sublicensee of either Party alleging the infringement of the
      Technology or intellectual property rights of a Third Party by reason of the
      development, manufacture, use, sale, importation or offer for sale of a Licensed
      Product in the Territory (a “Third
      Party Action”)
      then
      Warner shall have the first right to defend itself and NexMed in such Third
      Party Action. In such case, NexMed shall have the right to be represented by
      independent counsel at NexMed’s own expense. If either Warner refuses to accept
      control of the defense of a Claim by a Third Party for which it has the first
      right to control defense hereunder within thirty (30) days after receiving
      or
      giving notice thereof, then the other NexMed shall have the right to defend
      against such Third Party Action. The Parties and their respective Affiliates
      shall cooperate with each other in the defense of any Third Party Action. The
      Parties will give each other prompt written notice of the commencement of any
      Third Party Action and will furnish each other a copy of each communication
      relating to the alleged infringement. Warner shall not compromise, settle or
      otherwise dispose of any Third Party Action without NexMed’s advice and prior
      consent if such compromise, settlement or other disposition would impair the
      use
      of such Technology or Patent Rights, provided that such consent shall not be
      unreasonably withheld. The Parties shall each be responsible for fifty percent
      (50%) of the amount of any settlement, judgment or legal expenses arising out
      of
      such Third Party Action. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    8. REPRESENTATIONS
      AND WARRANTIES

     

    8.1. NexMed
      Representations.
      NexMed
      represents and warrants to Warner that: 

    


    8.1.1. the
      execution and delivery of this Agreement and the performance of the transactions
      contemplated hereby have been duly authorized by all appropriate NexMed
      corporate action; 

    


    8.1.2. this
      Agreement is a legal and valid obligation binding upon NexMed and enforceable
      in
      accordance with its terms, and the execution, delivery and performance of this
      Agreement by NexMed does not conflict with any agreement, instrument or
      understanding to which NexMed is a Party or by which it is bound;

    


    8.1.3. To
      the
      knowledge of NexMed, NexMed has not provided to Warner any written information
      concerning the Licensed Know-How which is materially inaccurate or misleading
      and has not failed to provide to Warner any written information in its
      possession or under its Control which is materially inconsistent with the
      written information provided to Warner by NexMed as of the Effective
      Date;

    


    8.1.4. NexMed
      is
      the owner of the Licensed Patent Rights and Licensed Know-How and has the
      requisite rights to grant to Warner the licenses granted herein to Warner,
      and,
      to the knowledge of NexMed, no right or license of any Third Party is required
      to permit NexMed to perform its obligations under this Agreement in accordance
      with the terms of this Agreement; 

    


    8.1.5. to
      the
      knowledge of NexMed no Third Party patent, patent application or other
      intellectual property rights would be infringed by practicing any process or
      method or by making, using or selling any composition which is claimed or
      disclosed in the Licensed Patent Rights, or which constitutes Licensed Know-How;
      

    


    8.1.6. there
      is
      no litigation pending or, to the knowledge of NexMed, threatened, against NexMed
      with respect to the Licensed Patent Rights existing as of the Effective Date;
      and

    


    8.1.7. NexMed
      is
      not aware of any infringement or misappropriation by a Third Party of the
      Licensed Patent Rights or Licensed Know-How.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    8.2. Warner
      Representations.
      Warner
      represents and warrants to NexMed that: 

    


    8.2.1. the
      execution and delivery of this Agreement and the performance of the transactions
      contemplated hereby have been duly authorized by all appropriate Warner
      corporate action; and

    


    8.2.2. this
      Agreement is a legal and valid obligation binding upon Warner and enforceable
      in
      accordance with its terms, and the execution, delivery and performance of this
      Agreement by Warner does not conflict with any agreement, instrument or
      understanding to which Warner is a Party of or by which it is
      bound.

     

    8.3. No
      Warranties.
      Except
      as expressly set forth in this Agreement, NEITHER PARTY MAKES ANY REPRESENTATION
      OR EXTENDS ANY WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WRITTEN
      OR
      ORAL, AND EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL SUCH WARRANTIES
      ARE HEREBY DISCLAIMED, INCLUDING, WITHOUT LIMITATION, WARRANTIES ARISING BY
      COURSE OF DEALING, PERFORMANCE, CUSTOM OR USAGE IN THE TRADE, AND IMPLIED
      WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

    


    8.4. Indemnification.

    


    8.4.1. Warner
      Indemnity.
      Warner
      shall indemnify, defend and hold harmless NexMed, its Affiliates and their
      respective directors, officers, employees, stockholders and agents and their
      respective successors, heirs and assigns (the “NexMed
      Indemnitees”)
      from
      and against any liability, damage, loss or expense (including reasonable
      attorneys’ fees and expenses of litigation) incurred by or imposed upon such
      NexMed Indemnitees, or any of them, in connection with any Third Party claims,
      suits, actions, demands or judgments, including, without limitation, product
      liability matters, to the extent arising (i) as a consequence of a breach by
      Warner of its representations, warranties, covenants or agreements, hereunder
      or
      (ii) out of the manufacture, sale or use by any person of any Licensed Product
      manufactured or sold by Warner or any Affiliate or Sublicensee under this
      Agreement, in each case, except to the extent of NexMed’s responsibility
      therefore under Section 8.4.2, or arising from the negligence or willful
      misconduct of NexMed.

    


    8.4.2. NexMed
      Indemnity.
      NexMed
      shall indemnify, defend and hold harmless Warner, its Affiliates and their
      respective directors, officers, employees, and agents, and their respective
      successors, heirs and assigns (the “Warner
      Indemnitees”),
      from
      and against any liability, damage, loss or expense (including reasonable
      attorneys’ fees and expenses of litigation) incurred by or imposed upon such
      Warner Indemnitees, or any of them, in connection with any Third Party claims,
      suits, actions, demands or judgments, arising as a result of (i) a breach by
      NexMed of its representations, warranties, covenants or agreements hereunder,
      in
      each case, except to the extent of Warner’s responsibility therefore under
      Section 8.4.1, or arising from the negligence or willful misconduct of
      Warner or (ii) the manufacture by NexMed of any Licensed Product.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    8.4.3. Indemnification
      Procedures.
      In the
      event that any Indemnitee is seeking indemnification under Section 8.4
      above from a Party (the “Indemnifying
      Party”),
      the
      other Party shall notify the Indemnifying Party of such claim with respect
      to
      such Indemnitee as soon as reasonably practicable after the Indemnitee receives
      notice of the claim, and the Party (on behalf of itself and such Indemnitee)
      shall permit the Indemnifying Party to assume direction and control of the
      defense of the claim (including the right to settle the claim solely for
      monetary consideration) and shall cooperate as requested (at the expense of
      the
      Indemnifying Party) in the defense of the claim. The indemnification obligations
      under Section 8 shall not apply to any harm suffered as a direct result of
      any
      delay in notice to the Indemnifying Party hereunder or to amounts paid in
      settlement of any claim, demand, action or other proceeding if such settlement
      is effected without the consent of the Indemnifying Party, which consent shall
      not be withheld or delayed unreasonably. The Indemnitee, its employees and
      agents, shall reasonably cooperate with the Indemnifying Party and its legal
      representatives in the investigation of any claim, demand, action or other
      proceeding covered by Section 8.4.

     

    8.5. LIMITATION
      OF LIABILITY.

    


    8.5.1. EXCEPT
      FOR EACH PARTY’S OBLIGATION OF INDEMNITY UNDER SECTION 8.4, NEITHER PARTY SHALL
      BE LIABLE TO THE OTHER FOR ANY LOST PROFITS OR FOR ANY INDIRECT, EXEMPLARY,
      SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND, EVEN IF IT HAS BEEN
      ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR A BREACH OF EITHER
      PARTY’S OBLIGATIONS WITH RESPECT TO SECTION 6 (“TREATMENT OF CONFIDENTIAL
      INFORMATION”).

    


    8.5.2. THE
      LIMITATIONS OF LIABILITY CONTAINED IN THIS AGREEMENT ARE A FUNDAMENTAL PART
      OF
      THE BASIS OF EACH PARTY’S BARGAIN HEREUNDER, AND NEITHER PARTY WOULD ENTER INTO
      THIS AGREEMENT ABSENT SUCH LIMITATION OF LIABILITY.

    


    8.6. Insurance.
      Each
      Party will obtain and maintain, during the term of this Agreement, at its own
      cost and expense, with reputable and financially sound insurance carriers,
      comprehensive commercial general liability insurance, product liability
      insurance, to cover such Party’s indemnification obligations hereunder, or
      self-insurance, in amounts consistent with such Party’s normal business
      practices. Each Party will name the other Party as an additional insured on
      each
      such insurance policy. Each such policy or self-insurance shall be in types
      and
      amount that are reasonable and customary in the pharmaceutical industry for
      companies engaged in similar business and operations and amounts that meet
      all
      contractual requirements of each Party’s vendors, distributors or other
      contractors. Maintenance of such insurance coverage will not relieve a Party
      of
      any responsibility under this Agreement for Losses in excess of such insurance
      limits or otherwise. Each Party will provide the other Party, upon reasonable
      request, with a certificate from the insurer(s) evidencing such insurance
      coverage.

     

    9. TERM
      AND TERMINATION

     

    9.1. Term;
      Expiration.
      Unless
      earlier terminated as provided herein, the term of this Agreement (“Term”)
      shall
      commence on the Effective Date and continue until expiration of the last to
      expire of the Licensed Patent Rights. Upon the expiration of the last payment
      obligation to NexMed hereunder (other than a termination for cause), Warner
      shall have a fully paid-up, irrevocable and sublicensable (subject to the terms
      of Section 2.2) license in the Territory and the Field under the Licensed
      Know-How to make, have made, use, have used, sell, distribute for sale, have
      distributed for sale, offer for sale, have sold, import or have imported
      Licensed Products in the Territory.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    9.2. Termination
      by NexMed.

    


    9.2.1. Insolvency.
      NexMed
      shall have the right to terminate this Agreement with respect to any or all
      licenses granted to Warner pursuant to Section 2 of this Agreement, at NexMed’
sole discretion, upon delivery of written notice to Warner upon the filing
      by
      Warner in any court or agency pursuant to any statute or regulation of the
      United States or any other jurisdiction of a petition in bankruptcy or
      insolvency or for reorganization or similar arrangement for the benefit of
      creditors or for the appointment of a receiver or trustee of Warner or its
      assets, or if Warner is served with an involuntary petition against it in any
      insolvency proceeding, upon the ninety-first (91st) day after such service
      if
      such involuntary petition has not previously been stayed or dismissed, or upon
      the making by Warner of an assignment of substantially all of its assets for
      the
      benefit of its creditors.

    


    9.2.2. Material
      Breach.
      NexMed
      shall have the right to terminate this Agreement with respect to any or all
      licenses granted to Warner pursuant to Section 2 of this Agreement by giving
      thirty (30) days written notice to Warner in the event of any breach
      by
      Warner of any material terms and conditions of this Agreement, provided that
      such breach has not been cured within sixty (60) days after written notice
      thereof is given by NexMed to Warner specifying the nature of the alleged
      breach.

    


    9.2.3. Termination
      for Convenience.
      NexMed
      may terminate this Agreement upon delivery of written notice to Warner if Warner
      (i) has not delivered the Room Temperature Formulation Development Notice and
      (ii)(A) the 45 day period set forth in Section 5.2.1 has expired and Warner
      has
      not made a payment to NexMed thereunder or (B) the 30 day period set forth
      in
      Section 5.2.2 has expired and Warner has not made a payment to NexMed
      thereunder.

    


    9.2.4. Patent
      Challenge.
      NexMed
      will be permitted to terminate this Agreement by written notice effective upon
      receipt if Warner or its Affiliates directly, or indirectly through assistance
      granted to a Third Party, commence any interference or opposition proceeding,
      challenge the validity or enforceability of (other than in defense of an action
      for infringement of a Patent Controlled by Warner), or oppose any extension
      of
      or the grant of a supplementary protection certificate with respect to, any
      Licensed Patent Right (each such action, a “Patent
      Challenge”).
      Warner will include provisions in all agreements granting sublicenses of
      Warner’s rights hereunder providing that if the Sublicensee or its Affiliates
      undertake a Patent Challenge with respect to any NexMed Patent under which
      the
      sublicensee is sublicensed, Warner will be permitted to terminate such
      sublicense agreement. If a sublicensee of Warner (or an Affiliate of such
      sublicensee) undertakes a Patent Challenge of any such Licensed Patent Right
      under which such Sublicensee is sublicensed, then Warner upon receipt of notice
      from NexMed of such Patent Challenge will terminate the applicable sublicense
      agreement. If Warner fails to so terminate such sublicense agreement, NexMed
      may
      terminate Warner’s right to sublicense and any sublicenses previously granted to
      such sublicensee shall automatically terminate. In connection with such
      sublicense termination, Warner shall cooperate with NexMed’s reasonable requests
      to cause such a terminated sublicensee to discontinue activities with respect
      to
      the Licensed Product.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    9.3. Termination
      by Warner.
      

    


    9.3.1. Insolvency.
      Warner
      shall have the right to terminate this Agreement at Warner’s sole discretion,
      upon delivery of written notice to NexMed upon the filing by NexMed in any
      court
      or agency pursuant to any statute or regulation of the United States or any
      other jurisdiction of a petition in bankruptcy or insolvency or for
      reorganization or similar arrangement for the benefit of creditors or for the
      appointment of a receiver or trustee of NexMed or its assets, or if NexMed
      is
      served with an involuntary petition against it in any insolvency proceeding,
      upon the ninety-first (91st) day after such service if such involuntary petition
      has not previously been stayed or dismissed, or upon the making by NexMed of
      an
      assignment of substantially all of its assets for the benefit of its
      creditors.

    


    9.3.2. Material
      Breach.
      In
      addition, Warner may terminate this Agreement by giving thirty (30) days written
      notice to NexMed in the event of any breach by NexMed of any material terms
      and
      conditions of this Agreement, provided that such breach has not been cured
      within sixty days (60) days after written notice thereof is given by Warner
      to
      NexMed specifying the nature of the alleged breach. 

    


    9.3.3. Termination
      for Convenience.
      Warner
      may terminate this Agreement upon delivery of written notice to NexMed
      following:

    


    9.3.3.1. 
      receipt
      of (i) Ninety Day Conference Comments sufficient to commence the 45 day period
      under Section 5.2.1 hereof or (ii) all material FDA comments provided to NexMed
      in connection with the process of obtaining Approval of the Refrigerated
      Formulation NDA if such Ninety Day Comments are not received; provided Warner
      delivers such notice within forty five (45) days of receipt of such
      comments;

    


    9.3.3.2. 
      receipt
      of Approval of the Refrigerated Formulation NDA, if such NDA, as approved,
      (i)
      contains labeling that is not materially consistent with the labeling set forth
      in Exhibit A or (ii) in Warner’s reasonable determination, will not allow it to
      launch a commercially viable Licensed Product; provided Warner delivers such
      notice within thirty (30) days of receipt of such Approval; or

    


    9.3.3.3. 
      receipt
      of Approval of the Room Temperature Formulation Supplement, if such NDA, as
      approved, contains labeling that is not materially consistent with the labeling
      agreed by the Parties in accordance with Section 3.2.3.2; provided Warner
      delivers such notice within thirty (30) days of receipt of such
      Approval.

    


    For
      the
      avoidance of doubt, if Warner exercises its termination right under this Section
      9.3.3 it shall have no obligation to make any milestone payment with respect
      to
      the milestone event resulting in such termination.

    


    9.4. Effect
      of Termination.
      Upon
      termination of this Agreement or any right or license pursuant to Sections
      9.2
      or 9.3, the rights and obligations of the Parties hereunder, and all licenses
      granted to Warner hereunder shall immediately cease.

     

    
      
        
        

      

      
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    9.4.1. Payments.
      Subject
      to Section 9.3.3, all amounts due or payable to NexMed prior to the effective
      date of termination shall remain due and payable, but (except as otherwise
      expressly provided herein) no additional amounts shall be payable.

    


    9.4.2. Inventory.
      Should
      Warner have any inventory of any Licensed Product approved and allocated for
      commercial sale prior to termination other than upon the occurrence of a
      material breach by NexMed pursuant to Section 9.3.2, Warner shall have twelve
      (12) months thereafter in which to dispose of such inventory (subject to the
      payment to NexMed of any royalties due hereunder thereon). In the event that,
      at
      the end of such twelve-month period, Warner has unsold inventory of Licensed
      Product remaining, Warner shall offer to sell such Licensed Products to NexMed
      at Warner's fully loaded manufacturing cost (but NexMed shall be under no
      obligation to purchase same unless it agrees to do so in writing at such time).
      If NexMed terminates this Agreement pursuant to Section 9.2.1 or 9.2.2, Warner
      and its Affiliates and Sublicensees shall immediately cease all sales of
      Licensed Product.

    


    9.4.3. Assignments.
      Warner
      will promptly (and in each case within sixty (60) days of receipt of NexMed’s
      request) and at no cost to NexMed:

    


    9.4.3.1. following
      any termination of this Agreement other than a termination under Section 9.3.1
      or 9.3.2:

    


    9.4.3.1.1. upon
      NexMed’s request, assign to NexMed all of Warner’s right, title and interest in
      and to any agreements between Warner and Third Parties that are freely
      assignable by Warner and that relate to the commercialization of Licensed
      Product;

    


    9.4.3.1.2. Warner,
      if in Warner’s name or possession, agrees to transfer and assign, and hereby
      does transfer and assign, to NexMed all of Warner’s right, title and interest in
      and to any and all regulatory filings, regulatory dossiers and Approvals
      (including the NDA and any foreign equivalents thereto) for Licensed Product;
      

    


    9.4.3.1.3. assign
      to
      NexMed all of Warner’s right, title and interest in and to any trademarks
      utilized by Warner in connection with the commercialization of Licensed Product
      (other than any Warner housemarks or logos) (including any goodwill associated
      therewith), any registrations and design patents for any of the foregoing and
      any Internet domain name registrations for such trademarks and slogans, all
      to
      the extent solely related to Licensed Product;

    


    9.4.3.1.4. to
      the
      extent that any agreement or other asset described in this Section 9.4.3 is
      not
      assignable by Warner or does not relate solely to Licensed Product, then such
      agreement or other asset will not be assigned, and upon the request of NexMed,
      Warner will take such steps as may be necessary to allow NexMed to obtain and
      to
      enjoy the benefits of such agreement or other asset in the form of a license
      or
      other right to the extent Warner has the right and ability to do so;
      and

    


    9.4.3.1.5. provide
      copies of any other books, records, documents and instruments to the extent
      related to Licensed Product.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    9.4.3.2. 
      following any termination of this Agreement under Section 9.3.1 or 9.3.2, Warner
      (i) if in Warner’s name or possession, agrees to transfer and assign, and hereby
      does transfer and assign, to NexMed all of Warner’s right, title and interest in
      and to any and all regulatory filings, regulatory dossiers and Approvals
      (including the NDA and any foreign equivalents thereto) for Licensed Product
      and
      (ii) will promptly assign to NexMed all of Warner’s right, title and interest in
      and to any trademarks utilized by Warner in connection with the
      commercialization of Licensed Product (other than any Warner housemarks or
      logos) (including any goodwill associated therewith), any registrations and
      design patents for any of the foregoing and any Internet domain name
      registrations for such trademarks and slogans, all to the extent solely related
      to Licensed Product.

    


    9.4.4. Manufacturing.
      To the
      extent Warner is then manufacturing Licensed Product, Warner will, upon NexMed’s
      request, supply NexMed with quantities of Licensed Product for the shorter
      of
      (i) the period until NexMed or its designee is able to resume manufacturing
      Licensed Product or (ii) twelve (12) months from the effective date of such
      termination; provided, however, that NexMed will reimburse Warner for Warner’s
      cost of goods, it being understood that in the case of a termination under
      Section 9.3.1 or 9.3.2 Warner shall have no obligation to supply NexMed with
      Licensed Product.

    


    9.4.5. Sublicensees.
      Except
      for a termination for cause by NexMed arising as a result of a breach by a
      Sublicensee of the terms, conditions and limitations set forth herein, upon
      any
      termination of this Agreement where Warner has designated a non-Affiliate as
      a
      Sublicensee as permitted hereunder, such Sublicensee shall be permitted to
      exercise the rights granted under such Sublicense on the same terms and
      conditions under which such rights and licenses were granted to such
      Sublicensee, provided that such Sublicensee (i) is in material compliance with
      the Sublicense terms; (ii) agrees in writing to be bound by the terms,
      conditions and limitations relating to the Licensed Patent Rights, Licensed
      Know-How, Licensed Compounds and Confidential Information as set forth
      hereunder; and (iii) agrees, to further evidence the continuation of the
      licenses granted under this Agreement and the Sublicense, execute a document
      having the same text and meaning as the Sublicense in favor of NexMed but does
      not include obligations upon NexMed that exceed the obligations of NexMed under
      this Agreement. 

     

    9.5. Remedies.
      Except
      as otherwise expressly set forth in this Agreement, the termination provisions
      of this Section 9 are in addition to any other relief and remedies available
      to
      either Party at law.

     

    9.6. Surviving
      Provisions.
      Notwithstanding any provision herein to the contrary, the rights and obligations
      of the Parties set forth in Sections 5.5, 5.6, 5.7, 8.4, 8.5, 9.4, 11.3 and
      Articles 1 and 6, as well as any rights or obligations otherwise accrued
      hereunder (including any accrued payment obligations), shall survive the
      expiration or termination of the Term for any reason. Without limiting the
      generality of the foregoing and subject to Section 9.3.3, Warner shall have
      no
      obligation to make any milestone or royalty payment to NexMed that has not
      accrued prior to the effective date of any termination of this Agreement, but
      shall remain liable for all such payment obligations accruing prior to the
      effective date of such
      termination.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    10. Jurisdiction.
      The
      Parties agree that any suit, action or proceeding seeking to enforce any
      provision of, or based on any matter arising out of or in connection with,
      this
      Agreement or the transactions contemplated hereby shall be brought in the United
      States District Court for the District of New Jersey or any New Jersey State
      court, so long as one of such courts shall have subject matter jurisdiction
      over
      such suit, action or proceeding, and that any cause of action arising out of
      this Agreement shall be deemed to have arisen from a transaction of business
      in
      the State of New Jersey, and each of the parties hereby irrevocably consents
      to
      the jurisdiction of such courts (and of the appropriate appellate courts
      therefrom) in any such suit, action or proceeding and irrevocably waives, to
      the
      fullest extent permitted by law, any objection that it may now or hereafter
      have
      to the laying of the venue of any such suit, action or proceeding in any such
      court or that any such suit, action or proceeding brought in any such court
      has
      been brought in an inconvenient forum. Process in any such suit, action or
      proceeding may be served on any party anywhere in the world, whether within
      or
      without the jurisdiction of any such court. 

     

    11. MISCELLANEOUS

     

    11.1. Notification.
      All
      notices, requests and other communications hereunder shall be in writing, shall
      be addressed to the receiving Party’s address set forth below or to such other
      address as a Party may designate by notice hereunder, and shall be either (i)
      delivered by hand, (ii) made by facsimile transmission (to be followed with
      written confirmation by the delivering Party), (iii) sent by private courier
      service providing evidence of receipt, or (iv) sent by registered or certified
      mail, return receipt requested, postage prepaid. The addresses and other contact
      information for the Parties are as follows:

    


    


    
      	
              If
                to NexMed:

            	
              NexMed,
                Inc.

              89
                Twin Rivers Drive

              East
                Windsor, NJ 08520

              Attn:
                Chief Financial Officer

              Fax:
                (609) 426-9116

            
	 	 
	
              With
                a copy to:

            	
              Morgan,
                Lewis & Bockius LLP

              502
                Carnegie Center

              Princeton,
                New Jersey 08540

              Attn:
                Steven M. Cohen

              Fax:
                (609) 919-6701

            
	 	 
	
              If
                to Warner:

            	
              Warner
                Chilcott Company, Inc. 

              PO
                Box 1005 

              Fajardo,
                Puerto Rico 00738   

              Attn:
                Director, Business Management  

              Fax:
                (787) 863 5355

            
	 	 
	
              With
                a copy to:

            	
              Warner
                Chilcott (US), Inc.

              100
                Enterprise Drive

              Rockaway,
                New Jersey 07866

              Attn:
                General Counsel

              Fax:
                (973) 442-3310

               

            


    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    All
      notices, requests and other communications hereunder shall be deemed to have
      been given either (i) if by hand, at the time of the delivery thereof to the
      receiving Party at the address of such Party set forth above, (ii) if made
      by
      facsimile transmission, at the time that receipt thereof has been acknowledged
      by the recipient, (iii) if sent by private courier, on the day such notice
      is
      delivered to the recipient, or (iv) if sent by registered or certified mail,
      on
      the fifth (5th)
      business day following the day such mailing is made.

     

    11.2. Language.
      This
      Agreement has been prepared in the English language and the English language
      shall control its interpretation.

     

    11.3. Governing
      Law.
      This
      Agreement will be construed, interpreted and applied in accordance with the
      laws
      of the State of New Jersey, excluding its body of law controlling conflicts
      of
      law.

     

    11.4. Entire
      Agreement.
      This
      Agreement is the entire Agreement between the Parties with respect to the
      subject matter hereof and supersedes all prior representations, understandings
      and agreements between the Parties with respect to the subject matter hereof.
      No
      modification shall be effective unless in writing with specific reference to
      this Agreement and signed by the Parties.

     

    11.5. Waiver.
      The
      terms or conditions of this Agreement may be waived only by a written instrument
      executed by the Party waiving compliance. The failure of either Party at any
      time or times to require performance of any provision hereof shall in no manner
      affect its rights at a later time to enforce the same. No waiver by either
      Party
      of any condition or term shall be deemed as a continuing waiver of such
      condition or term or of another condition or term.

     

    11.6. Headings.
      Section
      and subsection headings are inserted for convenience of reference only and
      do
      not form part of this Agreement.

     

    11.7. Assignment.
      This
      Agreement shall not be assignable by either Party to any third party without
      the
      written consent of the other Party hereto; except either party may assign this
      Agreement, without such consent, to (i) an Affiliate or (ii) an entity that
      acquires all or substantially all of the capital stock, business or assets
      of
      the Party to which this Agreement pertains, (whether by merger, reorganization,
      acquisition, sale or otherwise) and agrees in writing to be bound by the terms
      and conditions of this Agreement. Any permitted assignee shall assume all
      obligations of its assignor under this Agreement. Any purported assignment
      in
      violation of this Section 11.7 shall be void. The terms and conditions of this
      Agreement shall be binding upon and inure to the benefit of the permitted
      successors and assigns of the Parties. 

     

    11.8. Force
      Majeure.
      Except
      for obligations of payment arising hereunder, neither Party shall be liable
      for
      failure of or delay in performing obligations set forth in this Agreement,
      and
      neither shall be deemed in breach of its obligations, if such failure or delay
      is due to natural disasters or any causes beyond the reasonable control of
      such
      Party. In event of such force majeure, the Party affected thereby shall use
      commercially reasonable efforts to cure or overcome the same and resume
      performance of its obligations hereunder.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    11.9. Construction.
      The
      Parties hereto acknowledge and agree that: (i) each Party and its counsel
      reviewed and negotiated the terms and provisions of this Agreement and have
      contributed to its revision; (ii) the rule of construction to the effect that
      any ambiguities are resolved against the drafting Party shall not be employed
      in
      the interpretation of this Agreement; and (iii) the terms and provisions of
      this
      Agreement shall be construed fairly as to all Parties hereto and not in favor
      of
      or against any Party, regardless of which Party was generally responsible for
      the preparation of this Agreement.
      Neither
      Party shall challenge the validity or enforceability of the terms, conditions,
      obligations and covenants hereunder.

     

    11.10. Severability.
      If any
      provision(s) of this Agreement are or become invalid, are ruled illegal by
      any
      court of competent jurisdiction or are deemed unenforceable under then current
      applicable law from time to time in effect during the Term hereof, it is the
      intention of the Parties that the remainder of this Agreement shall not be
      affected thereby provided that a Party’s rights under this Agreement are not
      materially affected. The Parties hereto covenant and agree to renegotiate any
      such term, covenant or application thereof in good faith in order to provide
      a
      reasonably acceptable alternative to the term, covenant or condition of this
      Agreement or the application thereof that is invalid, illegal or unenforceable,
      it being the intent of the Parties that the basic purposes of this Agreement
      are
      to be effectuated.

     

    11.11. Status.
      Nothing
      in this Agreement is intended or shall be deemed to constitute a partner,
      agency, employer-employee, or joint venture relationship between the
      Parties.

    


    11.12. Section
      365(n).
      All
      licenses granted under this Agreement are deemed to be, for purposes of Section
      365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual property”
as defined in Section 101 of such Code.

     

    11.13. Further
      Assurances.
      Each
      Party agrees to execute, acknowledge and deliver such further instructions,
      and
      to do all such other acts, as may be necessary or appropriate in order to carry
      out the purposes and intent of this Agreement.

     

    11.14. Counterparts.
      This
      Agreement may be executed simultaneously in one or more counterparts (including
      by facsimile), each of which shall be deemed an original, but all of which
      together shall constitute one and the same instrument.

    


    [Signature
      Page Follows]

    


    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
      duly authorized representative.

    
      

        
          	
                  NEXMED
                    INC.

                	 	
                  WARNER
                    CHILCOTT COMPANY, INC.

                	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                  By:

                	
                  /s/
                    Vivian H. Liu

                	 	
                  By:

                	
                  /s/
                    Max Torres

                	 
	 	 	 	 	 	 
	
                  Name:

                	
                  Vivian
                    H. Liu

                	 	
                  Name:

                	
                  Max
                    Torres

                	 
	 	 	 	 	 	 
	
                  Title:

                	
                  Chief
                    Executive Officer

                	 	
                  Title:

                	
                  Senior
                    Director

                	 


        

      

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    


    Exhibit
      A - Refrigerated Formulation Labeling

    


    


    In
      connection with the Approval of the labeling with respect to the Refrigerated
      Formulation NDA, the FDA shall not require any material adverse revisions to
      the
      labeling set forth in the Refrigerated Formulation NDA submitted to the FDA
      prior to the Effective Date. The initial dose of the Refrigerated Formulation
      set forth in the Dosage and Administration section of such labeling as approved
      by the FDA shall be 300 mcg and such labeling shall not require or suggest
      that
      a physician titrate from a 200 mcg dose.

    


    In
      connection with the Approval of the Refrigerated Formulation NDA, the FDA shall
      not require the implementation of a Risk Evaluation and Mitigation Strategy
      (REMS) or distribution restrictions

     

    
      
        
        

      

      
        EX-A-1

        
          

        

      

      
        
        

      

    


    Exhibit
      B - Divided Patents

    


    
      	
              DIVIDED
                - Compositions, Penetration Enhancers and
                Applicators

            
	 	
              Patent
                No.

            	
              Appln.
                No.

            	
              Filed

            	
              Granted

            	
              Title

            
	 	
              4,980,378

            	
              07/201,029

            	
              June
                1, 1988

            	
              December
                25, 1990

            	
              Biodegradable
                Absorption Enhancers

            
	 	
              5,082,866

            	
              07/566,758

            	
              August
                14, 1990

            	
              January
                21, 1992

            	
              Biodegradable
                Absorption Enhancers

            
	
              NMD-102

            	
              6,046,244

            	
              08/964,509

            	
              November
                5, 1997

            	
              April
                4, 2000

            	
              Topical
                Compositions For Prostaglandin E1
                Delivery

            
	
              NMD-107

            	
              6,118,020

            	
              09/314,571

            	
              May
                19, 1999

            	
              September
                12, 2000

            	
              Crystalline
                Salts Of Dodecyl 2-(N, N-Dimethylamino)-Propionate

            
	
              NMD-110

            	
              6,224,573

            	
              09/232,360

            	
              January
                15, 1999

            	
              May
                1, 2001

            	
              Medicament
                Dispenser

            
	
              NMD-113

            	
              6,414,028

            	
              09/542,668

            	
              April
                4, 2000

            	
              July
                2, 2002

            	
              Topical
                Compositions Containing Prostaglandin E1

            
	
              NMD-121

            	
              7,105,571

            	
              10/236,485

            	
              September
                6, 2002

            	
              September
                12, 2006

            	
              Prostaglandin
                Compositions And Methods Of Treatment For Male Erectile Dysfunction
                [Claims to compositions]

            
	
              NMD-125

            	
              6,841,574

            	
              10/336,481

            	
              January
                3, 2003

            	
              January
                11, 2005

            	
              Topical
                Stabilized Prostaglandin E Compound Dosage Forms
                

            


    

    



    
      
        
        

      

      
        EX-B-1

        
          

        

      

      
        
        

      

    


    Exhibit
      C - Undivided Patents

    


    
      	
              UNDIVIDED
                - Methods of Treating Erectile Dysfunction and Suitable Applicator
                plus
                Medicament

            
	 	
              Patent
                No.

            	
              Serial
                No. 

            	
              Filed

            	
              Granted

            	
              Title

            
	
              NMD-118

            	
              6,323,241

            	
              09/480,738

            	
              January
                10, 2000

            	
              November
                27, 2001

            	
              Prostaglandin
                Compositions And Methods Of Treatment For Male Erectile Dysfunction
                [Claims to Methods of Treatment]

            
	
              NMD-123

            	
              6,693,135

            	
              09/947,617

            	
              September
                6, 2001

            	
              February
                17, 2004

            	
              Prostaglandin
                Compositions And Methods Of Treatment For Male Erectile Dysfunction
                [Claims to Applicator and Medicament]


            


    

    


    
      
        
        

      

      
        EX-C-1