Document:

EXHIBIT 10.25

    

       

      CELLEGY
        PHARMACEUTICALS, INC.

      2005
        EQUITY INCENTIVE PLAN

      STOCK
        OPTION AGREEMENT 

       

       

      This
        Stock Option Agreement (this "Agreement")
        is made
        and entered into as of the date of grant set forth below (the "Date
        of Grant")
        by and
        between Cellegy Pharmaceuticals, Inc., a Delaware corporation (the
"Company"),
        and
        the participant named below ("Participant").
        Capitalized terms not defined herein shall have the meaning ascribed to them
        in
        the Company's 2005 Equity Incentive Plan, as amended (the "2005
        Plan").
        

       

      
        Participant:

        Social
          Security Number:

        Participant's
          Address: 

         

        Total
          Option Shares:

        Exercise
          Price Per Share:

        Date
          of Grant:

        Vesting
          Start Date:

        Expiration
          Date:

        Type
          of Stock Option 

         

      

      
        	
                (Check
                  one):

              	
                 

              	
                o
                  Incentive Stock Option

                o
                  Nonqualified Stock Option

              	
                 

              	
                 

              

      

      

      1. 
        Grant of Option.  The
        Company hereby grants to Participant an option (this "Option")
        to
        purchase up to the total number of shares of Common Stock of the Company
        set
        forth above (collectively, the "Shares")
        at the
        Exercise Price Per Share set forth above (the "Exercise
        Price"),
        subject to all of the terms and conditions of this Agreement and the 2005
        Plan.
        If designated as an Incentive Stock Option above, this Option is intended
        to
        qualify as an "incentive stock option" ("ISO")
        within
        the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
        (the "Code").
        Capitalized terms not defined in this Agreement will have the meanings given
        to
        them in the 2005 Plan.

      

      2. 
        Vesting; Exercise Period.
        

      

      2.1
        Vesting
        of Right to Exercise Option.  This
        Option shall become exercisable as it vests as to portions of the Shares
        as
        follows: (a) this Option shall not be exercisable with respect to any of
        the Shares until _________________ (the "Vesting
        Start Date");
        (b) On the Vesting Start Date this Option shall become exercisable as to
        twenty-five percent (25%) of the Shares; and (c) thereafter, on the first
        anniversary of the Vesting Start Date and on each successive anniversary
        of the
        Vesting Start Date, this Option shall become exercisable as to an additional
        twenty-five percent (25%) of the Shares; provided that this Option shall
        in no
        event ever become exercisable with respect to more than 100% of the Shares.
        Vesting will occur so long as Participant continuously provides services
        to the
        Company or any Subsidiary, Parent or Affiliate of the Company and is not
        terminated. 

      

      2.2  Expiration.  This
        Option shall expire on the Expiration Date set forth above and must be
        exercised, if at all, on or before the earlier of the Expiration Date or
        the
        date on which this Option is earlier terminated in accordance with the
        provisions of Section 3.   

       

      3. 
        Termination.
        

      

      3.1  Termination
        for Cause.  If
        Participant is Terminated for cause, then this Option, to the extent (and
        only
        to the extent) that it would have been exercisable by Participant on the
        date of
        Termination, may be exercised by Participant no later than three (3) months
        after the date of Termination, but in any event no later than the Expiration
        Date.  

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

      3.2  Termination
        Because of Death or Disability.  If
        Participant is Terminated because of death or Disability or Participant,
        then
        this Option, to the extent that it is exercisable by Participant on the date
        of
        Termination, may be exercised by Participant (or Participant's legal
        representative) no later than twelve (12) months after the date of
        Termination, but in any event no later than the Expiration Date. 

      

      3.3  No
        Obligation to Employ.  Nothing
        in the Plan or this Agreement shall confer on Participant any right to continue
        in the employ of, or other relationship with, the Company or any Parent,
        Subsidiary or Affiliate of the Company, or limit in any way the right of
        the
        Company or any Parent, Subsidiary or Affiliate of the Company to terminate
        Participant's employment or other relationship at any time, with or without
        cause. 

      

      4. 
        Manner of Exercise.
        

      

      4.1  Stock
        Option Exercise Agreement.  To
        exercise this Option, Participant (or in the case of exercise after
        Participant's death, Participant's executor, administrator, heir or legatee,
        as
        the case may be) must deliver to the Company an executed stock option exercise
        agreement in such form as may be approved by the Company from time to time
        (the
"Exercise
        Agreement"),
        which
        shall set forth, inter
        alia, Participant's
        election to exercise this Option, the number of Shares being purchased, any
        restrictions imposed on the Shares and any representations, warranties and
        agreements regarding Participant's investment intent and access to information
        as may be required by the Company to comply with applicable securities laws.
        If
        someone other than Participant exercises this Option, then such person must
        submit documentation reasonably acceptable to the Company that such person
        has
        the right to exercise this Option. 

      

      4.2  Limitations
        on Exercise.  This
        Option may not be exercised unless such exercise is in compliance with all
        applicable federal and state securities laws, as they are in effect on the
        date
        of exercise. This Option may not be exercised as to fewer than 100 Shares
        unless
        it is exercised as to all Shares as to which this Option is then exercisable.
        

       

      4.3  Payment.  The
        Exercise Agreement shall be accompanied by full payment of the Exercise Price
        for the Shares being purchased in cash (by check), or, if the Company in
        its
        discretion agrees in writing and where permitted by law:

      

      (a)
        by
        cancellation of indebtedness of the Company to the Participant;

      

      (b)
        by
        waiver of compensation due or accrued to Participant for services
        rendered;

      

      (c)
        provided that a public market for the Company's stock exists: (1) through
        a
        "same day sale" commitment from Participant and a broker-dealer that is a
        member
        of the National Association of Securities Dealers (an "NASD
        Dealer")
        whereby
        Participant irrevocably elects to exercise this Option and to sell a portion
        of
        the Shares so purchased to pay for the exercise price and whereby the NASD
        Dealer irrevocably commits upon receipt of such Shares to forward the exercise
        price directly to the Company; or
        (2)
        through a "margin" commitment from Participant and a NASD Dealer whereby
        Participant irrevocably elects to exercise this Option and to pledge the
        Shares
        so purchased to the NASD Dealer in a margin account as security for a loan
        from
        the NASD Dealer in the amount of the exercise price, and whereby the NASD
        Dealer
        irrevocably commits upon receipt of such Shares to forward the exercise price
        directly to the Company; or

      

      (d)
        by
        any combination of the foregoing.

       

      4.4  Tax
        Withholding.  Prior
        to the issuance of the Shares upon exercise of this Option, Participant must
        pay
        or provide for any applicable federal or state withholding obligations of
        the
        Company. If the Committee permits, Participant may provide for payment of
        withholding taxes upon exercise of this Option by requesting that the Company
        retain Shares with a Fair Market Value
        equal to the minimum amount of taxes required to be withheld. In such case,
        the
        Company shall issue the net number of Shares to the Participant by deducting
        the
        Shares retained from the Shares issuable upon exercise. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      4.5  Issuance
        of Shares.  Provided
        that the Exercise Agreement and payment are in form and substance satisfactory
        to counsel for the Company, the Company shall issue the Shares registered
        in the
        name of Participant, Participant's authorized assignee, or Participant's
        legal
        representative, and shall deliver certificates representing the Shares with
        the
        appropriate legends affixed thereto. 

       

      5. Notice
        of Disqualifying Disposition of ISO Shares.  If
        this Option is an ISO, and if Participant sells or otherwise disposes of
        any of
        the Shares acquired pursuant to the ISO on or before the later of (a) the
        date two (2) years after the Date of Grant, and (b) the date one
        (1) year after transfer of such Shares to Participant upon exercise of this
        Option, then Participant shall immediately notify the Company in writing
        of such
        disposition. Participant agrees that Participant may be subject to income
        tax
        withholding by the Company on the compensation income recognized by Participant
        from the early disposition by payment in cash or out of the current wages
        or
        other compensation payable to Participant. 

       

      6 Compliance
        with Laws and Regulations.  The
        exercise of this Option and the issuance and transfer of Shares shall be
        subject
        to compliance by the Company and Participant with all applicable requirements
        of
        federal and state securities laws and with all applicable requirements of
        any
        stock exchange on which the Company's Common Stock may be listed at the time
        of
        such issuance or transfer. Participant understands that the Company is under
        no
        obligation to register or qualify the Shares with the Securities and Exchange
        Commission, any state securities commission or any stock exchange to effect
        such
        compliance. 

       

      7. Non-transferability
        of Option.  This
        Option may not be transferred in any manner other than by will or by the
        laws of
        descent and distribution and may be exercised during the lifetime of Participant
        only by Participant. The terms of this Option shall be binding upon the
        executors, administrators, successors and assigns of Participant. 

       

      8. 
        Tax Consequences.  Set
        forth below is a brief summary as of the Date of Grant of some of the federal
        tax consequences of exercise of this Option and disposition of the Shares.
        THIS
        SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
        TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE
        OPTION
        OR DISPOSING OF THE SHARES. 

      

      8.1  Exercise
        of ISO.  If
        this Option qualifies as an ISO, there will be no regular federal income
        tax
        liability upon the exercise of this Option, although the excess, if any,
        of the
        fair market value of the Shares on the date of exercise over the Exercise
        Price
        will be treated as a tax preference item for federal income tax purposes
        and may
        subject the Participant to the alternative minimum tax in the year of exercise.
        

      

      8.2  Exercise
        of Nonqualified Stock Option.  If
        this Option does not qualify as an ISO, there may be a regular federal income
        tax liability upon the exercise of this Option. Participant will be treated
        as
        having received compensation income (taxable at ordinary income tax rates)
        equal
        to the excess, if any, of the fair market value of the Shares on the date
        of
        exercise over the Exercise Price. The Company will be required to withhold
        from
        Participant's compensation or collect from Participant and pay to the applicable
        taxing authorities an amount equal to a percentage of this compensation income
        at the time of exercise. 

      

      8.3  Disposition
        of Shares.  If
        the Shares are held for more than twelve (12) months after the date of the
        transfer of the Shares pursuant to the exercise of this Option (and, in the
        case
        of an ISO, are disposed of more than two (2) years after the Date of
        Grant), then any gain realized on disposition of the Shares will be treated
        as
        long term capital gain for federal income
        tax purposes. If Shares purchased under an ISO are disposed of within one
        (1) year of exercise or within two (2) years after the Date of Grant,
        then any gain realized on such disposition will be treated as compensation
        income (taxable at ordinary income rates) to the extent of the excess, if
        any,
        of the fair market value of the Shares on the date of exercise over the Exercise
        Price. The Company will be required to withhold from Participant's compensation
        or collect from Participant and pay to the applicable taxing authorities
        an
        amount equal to a percentage of this compensation income at the time of
        exercise. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      9. Privileges
        of Stock Ownership.  Participant
        shall not have any of the rights of a stockholder with respect to any Shares
        until Participant exercises this Option and pays the Exercise Price.

       

      10. 
        Interpretation.  Any
        dispute regarding the interpretation of this Agreement shall be submitted
        by
        Participant or the Company to the Committee for review. The resolution of
        such a
        dispute by the Committee shall be final and binding on the Company and
        Participant. 

       

      11. Entire
        Agreement.  The
        2005 Plan is incorporated herein by reference. This Agreement and the 2005
        Plan
        and the Exercise Agreement constitute the entire agreement and understanding
        of
        the parties hereto with respect to the subject matter hereof and supersede
        all
        prior understandings and agreements with respect to such subject matter.
        

       

      12. 
        Notices.  Any
        notice required to be given or delivered to the Company under the terms of
        this
        Agreement shall be in writing and addressed to the Corporate Secretary of
        the
        Company at its principal corporate offices. Any notice required to be given
        or
        delivered to Participant shall be in writing and addressed to Participant
        at the
        address indicated above or to such other address as such party may designate
        in
        writing from time to time to the Company. All notices shall be deemed to
        have
        been given or delivered upon: personal delivery; three (3) days after
        deposit in the United States mail by certified or registered mail (return
        receipt requested); one (1) business day after deposit with any return
        receipt express courier (prepaid); or one (1) business day after
        transmission by telecopier with confirmation of successful transmission.
        

       

      13.  Successors
        and Assigns.  T
        he Company may assign any of its rights under this Agreement. This Agreement
        shall be binding upon and inure to the benefit of the successors and assigns
        of
        the Company. Subject to the restrictions on transfer set forth herein, this
        Agreement shall be binding upon Participant and Participant's heirs, executors,
        administrators, legal representatives, successors and assigns. 

       

      14. 
        Governing Law.  This
        Agreement shall be governed by and construed in accordance with the internal
        laws of the State of Delaware, without regard to that body of law pertaining
        to
        choice of law or conflict of law. 

      

      15. 
        Acceptance.  Participant
        hereby acknowledges receipt of a copy of the 2005 Plan and this Agreement.
        Participant has read and understands the terms and provisions thereof, and
        accepts this Option subject to all the terms and conditions of the 2005 Plan
        and
        this Agreement. Participant acknowledges that there may be adverse tax
        consequences upon exercise of this Option or disposition of the Shares and
        that
        the Company has advised Participant to consult a tax advisor prior to such
        exercise or disposition. 

       

      [Remainder
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          4

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Agreement to be executed by its duly authorized
        representative and Participant has executed this Agreement as of the Date
        of
        Grant. 

       

       

      
        	 	 CELLEGY
                PHARMACEUTICALS, INC. 	 	 PARTICIPANT
	 

                By:

              	 	 	 	 
	 	
                

                 

              	 	 	
                

                (Signature)

              
	 	
                 

                 

                

                (Please
                  print title)

              	 	 	
                 

                 

                

                (Please
                  print name)

              
	 	
                 

                 

                

                (Please
                  print title) 

              	 	 	 

      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
 

      
        CELLEGY
          PHARMACEUTICALS, INC.

        2005
          EQUITY INCENTIVE PLAN

        DIRECTOR
          STOCK OPTION AGREEMENT 

         

         

        This
          Director Stock Option Agreement (this "Agreement")
          is made
          and entered into as of the date of grant set forth below (the "Date
          of Grant")
          by and
          between Cellegy Pharmaceuticals, Inc., a Delaware corporation (the
"Company"),
          and
          the participant named below ("Participant").
          Capitalized terms not defined herein shall have the meaning ascribed to
          them in
          the Company's 2005 Equity Incentive Plan, as amended (the "2005
          Plan").
          

         

        Participant:

        Social
          Security Number:

        Participant's
          Address: 

         

        Total
          Option Shares:

        Exercise
          Price Per Share:

        Date
          of Grant:

        Vesting
          Start Date:

        Expiration
          Date:

        Type
          of Stock Option 

         

        
          	
                  (Check
                    one):

                	
                   

                	
                  o
                    Incentive Stock Option

                  x
                    Nonqualified Stock Option

                	
                   

                	
                   

                

        

        

        1. 
          Grant of Option.  The
          Company hereby grants to Participant an option (this "Option")
          to
          purchase up to the total number of shares of Common Stock of the Company
          set
          forth above (collectively, the "Shares")
          at the
          Exercise Price Per Share set forth above (the "Exercise
          Price"),
          subject to all of the terms and conditions of this Agreement and the 2005
          Plan,
          including without limitation Section 5.11 of the 2005 Plan. This Option
          is
          granted pursuant to Section 5.11 of the 2005 Plan and is not intended to
          qualify
          as an "incentive stock option" ("ISO")
          within
          the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
          (the "Code").
          Capitalized terms not defined in this Agreement will have the meanings
          given to
          them in the 2005 Plan.

        

        2. 
          Vesting; Exercise Period.
          

        

        2.1
          Vesting
          of Right to Exercise Option.  
          Subject to the terms and conditions of the 2005 Plan and this Grant, this
          Option
          shall vest and become exercisable as to one-third (1/3)
          of the
          Shares on the first anniversary of the Date of Grant. Thereafter, this
          Option
          shall vest as one-third (1/3)
          of the
          total Shares upon each of the next two (2) successive anniversaries of the
          Date of Grant, so long as the Optionee continuously remains a member of
          the
          Board of Directors of the Company (a "Board
          Member").

        

        2.2  Expiration.  This
          Option shall expire on the Expiration Date set forth above and must be
          exercised, if at all, on or before the earlier of the Expiration Date or
          the
          date on which this Option is earlier terminated in accordance with the
          provisions of Section 3.   

         

        3. 
          Termination.
          

        

        3.1  Termination.  The
          Option shall cease to vest if the Participant ceases to be a Board Member
          (the
“Termination
          Date”).
          If
          Participant is Terminated for cause, then this Option, to the extent (and
          only
          to the extent) that it would have been exercisable by Participant on the
          date of
          Termination, may be exercised by Participant (or the Participant’s legal
          representative) no later than twelve (12) months after the Termination
          Date, but
          in no event later than the Expiration Date.

        

        3.2
          Acceleration
          of Options.
          In the
          event of a corporate transaction of the kind described in Section 18 of
          the 2005
          Plan, the vesting of the Option will accelerate and the Option will become
          exercisable in full prior to the consummation of such event at such times
          and on
          such conditions as the Committee determines.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        

        3.3  No
          Right to Remain a Director.  Nothing
          in the 2005 Plan or this Agreement shall confer on Participant any right
          to
          remain a Board Member or limit in any way the right of the Company to terminate
          Participant's relationship with the Company at any time. 

        

        4. 
          Manner of Exercise.
          

        

        4.1  Stock
          Option Exercise Agreement.  To
          exercise this Option, Participant (or in the case of exercise after
          Participant's death, Participant's executor, administrator, heir or legatee,
          as
          the case may be) must deliver to the Company an executed stock option exercise
          agreement in such form as may be approved by the Company from time to time
          (the
"Exercise
          Agreement"),
          which
          shall set forth, inter
          alia, Participant's
          election to exercise this Option, the number of Shares being purchased,
          any
          restrictions imposed on the Shares and any representations, warranties
          and
          agreements regarding Participant's investment intent and access to information
          as may be required by the Company to comply with applicable securities
          laws. If
          someone other than Participant exercises this Option, then such person
          must
          submit documentation reasonably acceptable to the Company that such person
          has
          the right to exercise this Option. 

        

        4.2  Limitations
          on Exercise.  This
          Option may not be exercised unless such exercise is in compliance with
          all
          applicable federal and state securities laws, as they are in effect on
          the date
          of exercise. This Option may not be exercised as to fewer than 100 Shares
          unless
          it is exercised as to all Shares as to which this Option is then exercisable.
          

         

        4.3  Payment.  The
          Exercise Agreement shall be accompanied by full payment of the Exercise
          Price
          for the Shares being purchased in cash (by check), or, if the Company in
          its
          discretion agrees in writing and where permitted by law:

        

        (a)
          by
          cancellation of indebtedness of the Company to the Participant;

        

        (b)
          by
          waiver of compensation due or accrued to Participant for services
          rendered;

        

        (c)
          provided that a public market for the Company's stock exists: (1) through
          a
          "same day sale" commitment from Participant and a broker-dealer that is
          a member
          of the National Association of Securities Dealers (an "NASD
          Dealer")
          whereby
          Participant irrevocably elects to exercise this Option and to sell a portion
          of
          the Shares so purchased to pay for the exercise price and whereby the NASD
          Dealer irrevocably commits upon receipt of such Shares to forward the exercise
          price directly to the Company; or
          (2)
          through a "margin" commitment from Participant and a NASD Dealer whereby
          Participant irrevocably elects to exercise this Option and to pledge the
          Shares
          so purchased to the NASD Dealer in a margin account as security for a loan
          from
          the NASD Dealer in the amount of the exercise price, and whereby the NASD
          Dealer
          irrevocably commits upon receipt of such Shares to forward the exercise
          price
          directly to the Company; or

        

        (d)
          by
          any combination of the foregoing.

         

        4.4  Tax
          Withholding.  Prior
          to the issuance of the Shares upon exercise of this Option, Participant
          must pay
          or provide for any applicable federal or state withholding obligations
          of the
          Company. If the Committee permits, Participant may provide for payment
          of
          withholding taxes upon exercise of this Option by requesting that the Company
          retain Shares with a Fair Market Value
          equal to the minimum amount of taxes required to be withheld. In such case,
          the
          Company shall issue the net number of Shares to the Participant by deducting
          the
          Shares retained from the Shares issuable upon exercise. 

        

        4.5  Issuance
          of Shares.  Provided
          that the Exercise Agreement and payment are in form and substance satisfactory
          to counsel for the Company, the Company shall issue the Shares registered
          in the
          name of Participant, Participant's authorized assignee, or Participant's
          legal
          representative, and shall deliver certificates representing the Shares
          with the
          appropriate legends affixed thereto. 

         

        5. Compliance
          with Laws and Regulations.  The
          exercise of this Option and the issuance and transfer of Shares shall be
          subject
          to compliance by the Company and Participant with all applicable requirements
          of
          federal and state securities laws and with all applicable requirements
          of any
          stock exchange on which the Company's Common Stock may be listed at the
          time of
          such issuance or transfer. Participant understands that the Company is
          under no
          obligation to register or qualify the Shares with the Securities and Exchange
          Commission, any state securities commission or any stock exchange to effect
          such
          compliance. 

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        

        6. Non-transferability
          of Option.  This
          Option may not be transferred in any manner other than by will or by the
          laws of
          descent and distribution and may be exercised during the lifetime of Participant
          only by Participant. The terms of this Option shall be binding upon the
          executors, administrators, successors and assigns of Participant. 

         

        7. 
          Tax Consequences.  Set
          forth below is a brief summary as of the Date of Grant of some of the federal
          tax consequences of exercise of this Option and disposition of the Shares.
          THIS
          SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
          SUBJECT
          TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE
          OPTION
          OR DISPOSING OF THE SHARES. 

        

        7.1.
            Exercise
          of Nonqualified Stock Option.  Tthere
          may be a regular federal income tax liability upon the exercise of this
          Option.
          Participant will be treated as having received compensation income (taxable
          at
          ordinary income tax rates) equal to the excess, if any, of the fair market
          value
          of the Shares on the date of exercise over the Exercise Price. The Company
          may
          be required to withhold from Participant's compensation or collect from
          Participant and pay to the applicable taxing authorities an amount equal
          to a
          percentage of this compensation income at the time of exercise. 

         

        8. Privileges
          of Stock Ownership.  Participant
          shall not have any of the rights of a stockholder with respect to any Shares
          until Participant exercises this Option and pays the Exercise Price.

         

        9. 
          Interpretation.  Any
          dispute regarding the interpretation of this Agreement shall be submitted
          by
          Participant or the Company to the Committee for review. The resolution
          of such a
          dispute by the Committee shall be final and binding on the Company and
          Participant. 

         

        10. Entire
          Agreement.  The
          2005 Plan is incorporated herein by reference. This Agreement and the 2005
          Plan
          and the Exercise Agreement constitute the entire agreement and understanding
          of
          the parties hereto with respect to the subject matter hereof and supersede
          all
          prior understandings and agreements with respect to such subject matter.
          

         

        11. 
          Notices.  Any
          notice required to be given or delivered to the Company under the terms
          of this
          Agreement shall be in writing and addressed to the Corporate Secretary
          of the
          Company at its principal corporate offices. Any notice required to be given
          or
          delivered to Participant shall be in writing and addressed to Participant
          at the
          address indicated above or to such other address as such party may designate
          in
          writing from time to time to the Company. All notices shall be deemed to
          have
          been given or delivered upon: personal delivery; three (3) days after
          deposit in the United States mail by certified or registered mail (return
          receipt requested); one (1) business day after deposit with any return
          receipt express courier (prepaid); or one (1) business day after
          transmission by telecopier with confirmation of successful transmission.
          

         

        12.  Successors
          and Assigns.  T
          he Company may assign any of its rights under this Agreement. This Agreement
          shall be binding upon and inure to the benefit of the successors and assigns
          of
          the Company. Subject to the restrictions on transfer set forth herein,
          this
          Agreement shall be binding upon Participant and Participant's heirs, executors,
          administrators, legal representatives, successors and assigns. 

         

        13. 
          Governing Law.  This
          Agreement shall be governed by and construed in accordance with the internal
          laws of the State of Delaware, without regard to that body of law pertaining
          to
          choice of law or conflict of law. 

        

        14. 
          Acceptance.  Participant
          hereby acknowledges receipt of a copy of the 2005 Plan and this Agreement.
          Participant has read and understands the terms and provisions thereof,
          and
          accepts this Option subject to all the terms and conditions of the 2005
          Plan and
          this Agreement. Participant acknowledges that there may be adverse tax
          consequences upon exercise of this Option or disposition of the Shares
          and that
          the Company has advised Participant to consult a tax advisor prior to such
          exercise or disposition. 

         

        [Remainder
          of page intentionally left blank]

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        

         

        IN
          WITNESS WHEREOF,
          the
          Company has caused this Agreement to be executed by its duly authorized
          representative and Participant has executed this Agreement as of the Date
          of
          Grant. 

         

         

        
          	 	 CELLEGY
                  PHARMACEUTICALS, INC. 	 	 PARTICIPANT
	 

                  By:

                	 	 	 	 
	 	
                  

                   

                	 	 	
                  

                  (Signature)

                
	 	
                   

                   

                  

                  (Please
                    print title)

                	 	 	
                   

                   

                  

                  (Please
                    print name)

                
	 	
                   

                   

                  
                    

                  

                   (Please
                    print
                    title)Unassociated Document

     

    FIRST
      AMENDED AND RESTATED EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT FOR
      RECTOGESIC®

     

    Between

     

    STRAKAN
      INTERNATIONAL LIMITED

     

    And

     

    Cellegy
      Pharmaceuticals, Inc.

     

     

    Confidential

    

     

    
      	 	
              [*]

            	
              designates
                portions of this document that have been omitted pursuant to a request
                for
                confidential treatment filed separately with the
                Commission

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    FIRST
      AMENDED AND RESTATED 

    EXCLUSIVE
      LICENSE AND
      DISTRIBUTION AGREEMENT

    

    THIS
      FIRST AMENDED AND RESTATED EXCLUSIVE LICENSE AND
      DISTRIBUTION LICENSE AGREEMENT
      (this "Agreement")
      is
      made and entered into as of November
      9, 2005 (the “Agreement
      Date”),
      by
      and between Cellegy Pharmaceuticals, Inc., a Delaware
      corporation having its principal place of business at 1800 Byberry Road,
      Building 13, Huntingdon Valley, PA, 19006-3525 USA ("Cellegy"),
      and
      Strakan International Limited,
      a
      company organized and existing under the laws of Bermuda with a branch office
      at
      Buckholm Mill, Galashiels, TD1 2HB, UK ("Licensee”").
      

    

    BACKGROUND

    

    A.    Cellegy
      owns or possesses certain intellectual property rights with respect to the
      Licensed Product (as hereinafter defined) and certain rights pertaining to
      Cellegy’s Marks (as hereinafter defined).

    

    B.    The
      Parties previously entered into an Exclusive License and Distribution Agreement
      (“Prior
      Agreement”)
      dated
      as of July 9, 2004 (the “Prior
      Agreement Date”),
      pursuant to which Licensee obtained an exclusive license to certain rights
      to
      the Licensed Product under such intellectual property rights, and to Cellegy’s
      Marks within the Territory (as hereinafter defined).

    

    C.    The
      Parties desire to amend the Prior Agreement in various respects, as reflected
      in
      this Agreement.

    

    AGREEMENT

    

    Commencing
      with the Agreement Date, this Agreement shall amend, restate and supersede
      in
      its entirety the Prior Agreement. In consideration of the foregoing and of
      the
      mutual covenants hereinafter set forth and other good and valuable
      consideration, the receipt of which is hereby acknowledged, the Parties (as
      hereinafter defined) mutually agree as follows:

    

    ARTICLE
      1

    DEFINITIONS

    

    As
      used
      in this Agreement, the following terms, whether used in the singular or the
      plural, shall have the following meanings:

    

      “Affiliates”
shall
      mean, with respect to any party, any person, which, directly or indirectly,
      is
      controlled by, controls or is under common control with such party. For purposes
      of this definition, the term control (including with correlative meanings,
      the
      terms controlled by and under common control with) means having the power,
      whether held directly or indirectly and by whatever means (and whether or not
      enforceable at law or in equity) to:

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	 	(i)	exercise or control the right to vote
              attached to 50% or more of the issued shares in the party;
	 	 	 
	 	(ii) 	
              dispose
                of or exercise a right of disposal in respect of 50% or more of the
                issued
                voting shares in the party;

            
	 	 	 
	 	(iii)	
              appoint
                one half or more of the number of directors to the board of the party;
                or

            
	 	 	 
	 	(iv)	determine substantially the conduct
              of the
              party’s business activities.

    

     

    “Agreement”
means
      this First Amended and Restated Exclusive License and Distribution
      Agreement.

    

    “Approvals”
are
      registration approvals, registrations or authorizations provided by the Relevant
      Regulatory Authority in the Territory for the importation, storage, Development,
      promotion, marketing, distribution or sale of the Licensed Product, but
      excluding any pricing approvals that may be required by any Relevant Regulatory
      Authority of a country within the Territory.

    

    “Cellegy
      Information”
means
      the technical and clinical information concerning the Licensed Product that
      is
      developed by Cellegy and that is included in the new drug application filed
      with
      the Relevant Regulatory Authority in the
      United Kingdom,
      and
      Cellegy’s European common technical document format, and which may include,
      without limitation, data in support of indications, bioequivalency data and
      information, clinical data, pharmaco-toxicological data, analytical methods,
      stability and pharmaceutical data concerning the Licensed Product, and any
      other
      of Cellegy’s related supporting documentation or other information or
      materials
      of
      Cellegy
      in
      Cellegy’s possession from time to time that Cellegy may in its discretion from
      time to time develop before the date that all required Approvals are obtained
      and that may be necessary for, or useful in connection with obtaining and
      maintaining Approvals for the Licensed Product in the Territory. 

    

    “Cellegy
      Marks”
means
      the trademarks, service marks and/or trade names owned by Cellegy or that
      Cellegy has the right to use in connection with the Licensed Product as set
      forth on Exhibit
      C hereto
      and as further described in Section 13.1, that are used by Licensee, its
      Affiliates or Sublicensees in connection with the importation, storage,
      Development, promotion, marketing, distribution and sale of the Licensed
      Product.

    

    “Cellegy
      Patents”
means
      the patents identified on Exhibit
      B
      hereto.

    

    “Cellegy
      Supply Agreement” means
      the
      supply agreement between Cellegy and Manufacturer governing the supply of the
      Licensed Product to Cellegy or Cellegy’s nominees or licensees outside the
      Territory and incorporating the terms and conditions of a relevant Technical
      Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Commercially
      Reasonable and Diligent Efforts”
shall
      mean with respect to Development and commercialization of the Licensed Product,
      a Party’s reasonable efforts no less than those efforts used by the Party in its
      other development, commercialization or marketing projects with other
      technologies and products having comparable commercial potential. 

    

    “Competing
      Licensed Products”
has
      the
      meaning set forth in Section 2.4.

    

    “Development”
      (including variations such as “Develop” and the like) shall mean all appropriate
      measures, steps and the like that are necessary to prepare and compile dossiers
      appropriate for obtaining Approvals for the Licensed Product in the Territory
      and conducting clinical trials in the Territory (if required). As it relates
      to
      Cellegy, “Development” shall mean that Cellegy shall provide Licensee a copy of
      the dossier concerning the Licensed Product filed by Cellegy with the Relevant
      Regulatory Authority in the
      United Kingdom,
      and
      such other materials relating thereto or to obtaining other Approvals for the
      Licensed Product in the Territory as Cellegy may in its discretion from time
      to
      time develop before the date that all required Approvals are
      obtained.

    

    “Dollars”
or
      “$”
      means
      United States dollars.

    

    “Prior
      Agreement Date”
      means
      the date set forth at the beginning of the Prior Agreement.

    

    “Euros”
or
      “€”
      shall
      mean currency denominated in Euros.

    

    “Field”
shall
      mean the use of the Licensed Product for the treatment of the pain associated
      with chronic anal fissure, for the treatment of one (1) or more of the symptoms
      associated with or related to hemorrhoids, and for any other additional
      therapeutic and medicinal uses of the Licensed Product within the
      Territory.

    

      “GMP”
      means
      good manufacturing practices in conformity with the regulations and regulatory
      interpretations of the Relevant Regulatory Authorities in each country in the
      Territory, including without limitation EU cGMP such regulations covering good
      manufacturing practices set forth in the relevant legislation or guidelines
      and
      applicable to the Territory, as such regulations may be amended and interpreted
      by the Relevant Regulatory Authorities from time to time.

    

    “Initial
      Indication”
      means
      the treatment of the pain associated with chronic anal fissure. 

     

    
      “Intellectual
        Property Rights”
        means
        all rights and interests, vested or arising out of any industrial or
        intellectual property, whether protected at common law or under statute,
        which
        includes (without limitation) the Patent
        Rights, Cellegy
        Marks
        and Know-How and any rights and interests in inventions (both patentable
        and
        unpatentable), patents, copyrights, moral rights, designs (whether registered
        or
        unregistered), trade marks (whether registered or unregistered), trade secrets,
        goodwill, samples, materials, data, results and Confidential
        Information.

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Know-How”
means
      all data, information, methods, procedures, processes and materials, which
      is or
      comes to be possessed, acquired, licensed or owned by Cellegy as of the Prior
      Agreement Date and from time to time thereafter, to the extent that such data,
      information, methods, procedures, processes and materials specifically relate
      to
      the manufacture, development, testing or use of the Licensed Product, including
      but not limited to, biological, chemical, biochemical, toxicological,
      pharmacological, metabolic, formulation, clinical, analytical and stability
      information and data (other than such Know-How which is the subject of a patent
      or of a provisional or filed patent application), and for which Cellegy has
      the
      right to license, disclose or provide to Licensee.

    

    “Launch
      Date”
means
      following Approval the date upon which the Licensed Product is first
      commercially offered for sale in a country in the Territory, determined on
      a
      country by country basis. 

     

    
      “Licensed
        Product”
        means
        the pharmaceutical
        product known as Rectogesic®
        ointment, 
        a
nitroglycerin
        ointment in any formulations or presentations for the treatment of pain
        associated with chronic anal fissure and, if Approvals are obtained, for
        the
        treatment of one or more additional
        indications.

    

     

    “Licensee
      Supply Agreement”
      means
      the
      supply agreement between Licensee and Manufacturer governing the supply of
      the
      Licensed Product to Licensee by Manufacturer for the Territory and incorporating
      the terms and conditions of a relevant Technical Agreement.

    

    “Loss”
means
      any and all loss, liability, damage, fee, cost, (including without limitation
      actual reasonable court costs and reasonable attorneys’ fees regardless of
      outcome) expense, suit, claim, demand, judgment and prosecution.

    

    “Major
      European Countries”
      shall
      mean France, Germany, Italy, Spain and the United Kingdom.

    

    “Manufacturer”
      means
      the existing Third Party manufacturer of the Licensed Product or any other
      manufacturer that may in the future enter into a Cellegy Supply Agreement or
      a
      Licensee Supply Agreement. 

    

    “Marketing
      Authorization” means
      any
      approval (including any applicable pricing and governmental reimbursement
      approvals) in Licensee’s name required to Develop, market and sell the
      Licensed Product in a particular country in the Territory.

    “M.R.P”
      means
      the mutual recognition procedure as defined in Article 28 of European Directive
      2001/83/EC. 

    

    “Net
      Sales”
means
      the gross proceeds from sales of the Licensed Product that is due, or otherwise
      received by, Licensee, or its Affiliates or its Sublicensees from Third Party
      customers for such Licensed Product, less:  

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
       

      
        	 	(i)	reasonable credited allowances actually
                granted to such Third Party customers
                for spoiled, damaged, rejected, recalled, outdated or returned Licensed
                Product,
	 	 	 
	 	(ii) 	
                the
                  amounts of reasonable trade and cash discounts actually allowed,
                  to the
                  extent such trade and cash discounts are specifically allowed on
                  account
                  of the purchase of such Licensed Product,

              
	 	 	 
	 	(iii)	
                sales
                  taxes, excise taxes, use taxes and import/export duties and any
                  other
                  government charges (other than taxes on income) actually due or
                  incurred
                  or paid by Licensee, or its Affiliates or Sublicensees, in connection
                  with
                  the sales of the Licensed Product to any Third Party, and
                  

              
	 	 	 
	 	(iv)	reasonable allowances, adjustments,
                reimbursements, discounts, chargebacks and rebates actually granted
                to
                Third Parties, including, but not limited to, rebates given to health
                care
                organizations or other Third Parties, and any bona fide payment made
                in
                respect of any sales of Licensed Product to any governmental or
                quasi-governmental body or agency, whether during the actual Sales
                Period
                or
                not.

      

    

     

    “Party”
      means
      Cellegy or Licensee, and Parties shall mean both Cellegy and
      Licensee.

    

      “Patent
        Rights”
means
        (i) the patents and patent applications listed in Exhibit
        B
        hereto
        and any patents and patent applications existing as of the Prior Agreement
        Date;
        (ii) any patent or patent application hereafter which is acquired by Cellegy
        or
        under which Cellegy becomes licensed and with the right to sublicense to
        Licensee, during the term of this Agreement, in each case of (i) and (ii)
        above
        relating to the Licensed Product, its manufacture, use or sale, including
        methods of use and screening or processes that use the Licensed Product;
        (iii)
        any divisionals,
        continuations and continuations-in-part defined in (i) or (ii); (iv) any
        extension, renewal or reissue or patent identified in any reissue or
        re-examination of any patent or patent application identified in (i) through
        (iv), in each case, to the extent that such items relate to the Licensed
        Product. Such items set forth in sub-items (i) through (iv) will be identified
        and added by the Parties to Exhibit
        B
        from
        time to time during the term of this Agreement.

    “Relevant
      Regulatory Authority”,
      in
      relation to a country or region in the Territory, means the governmental
      authority, regulating the use, importation, storage, Development, promotion,
      marketing, distribution or sale of therapeutic substances and the grant of
      Approvals in such country or region.

    

    “Retained
      Information”
      means
      any and all books and records prepared and maintained by Cellegy now or in
      the
      future in connection with the Licensed Product, including, without limitation,
      in relation to any and all additional formulations, therapeutic and medicinal
      uses and further including, without limitation, all regulatory files (including
      correspondence with regulatory authorities), assays, test methods, batch
      records, analytical methods including validation protocol and the drug master
      file and stability studies in relation thereto in each case to the extent that
      Cellegy is permitted by law and under its agreements to provide such information
      to Licensee.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Sublicensee”
means
      any person to whom Licensee sublicenses the rights, or any portion thereof,
      granted by Cellegy to Licensee pursuant to Section 2.1 hereof.

     

    “Technical
      Agreements”
      mean the
      agreements between Cellegy and Manufacturer for Product supplied outside the
      Territory, and between Strakan and Manufacturer for Licensed Product supplied
      within the Territory, defining the roles and responsibilities for the parties
      in
      relation to, inter alia, (i) manufacture and supply of the Licensed Product
      pursuant to GMP; and (ii) regarding regulatory, safety and pharmacovigilence
      issues, the terms and conditions of which are incorporated into any supply
      agreement for the Licensed Product. 

    

    “Territory”
means
      the countries listed on Exhibit
      A hereto.
      

    

    “Third
      Party”
means
      any party other than Cellegy or Licensee, or Licensee’s Affiliates or
      Sublicensees.

    

    ARTICLE
      2

    GRANT
      OF LICENSE

    

    2.1    Grant.
      Cellegy
      grants to Licensee an exclusive
      fully
      paid up license, with a right to sublicense as set forth herein, under all
      of
      Cellegy’s Intellectual Property Rights to manufacture or have manufactured
      anywhere in the world, import, store, Develop, have Developed (through
      agreements with contract research organizations or similar Third Parties,
      performing work on behalf of and for the benefit of Licensee), promote, market,
      distribute, offer for sale, and sell the Licensed Product in
      the
      Field within
      the Territory, and to use Cellegy’s Intellectual Property Rights and the
      Retained Information in connection with the manufacturing, importation, storage,
      Development, promotion, marketing, distribution
      and sale of Licensed Product
      in the
      Field within the Territory
      and
      obtaining any Approvals hereunder. Licensee’s rights to the Licensed Product and
      the Intellectual Property Rights are limited to those expressly granted, and
      all
      others are reserved to Cellegy.

    

    2.2    Right
      to sub-license.
      Licensee may freely sub-license any of its rights or obligations under this
      Agreement, directly or indirectly, in whole or in part.
      Any such
      sublicense shall not relieve Licensee of any of its obligations hereunder,
      and
      Licensee shall remain responsible and liable for compliance by any such Third
      Party, Affiliate or Sublicensee with this Agreement, all relevant laws,
      regulations and requirements relating to the manufacturing, importation,
      distribution, marketing, promotion and sale of the Licensed Product in the
      Territory, and any acts or omissions by any such Third Party, Affiliate or
      Sublicensee that would constitute a breach of this Agreement if such sublicense
      had not been entered into and the actions or omissions were those of Licensee
      rather than the Third Party, Affiliate or Sublicensee. Any sublicense agreement
      shall contain terms and conditions that are not inconsistent with those of
      this
      Agreement.

    

    2.3    Acceptance
      of Appointment; Sales Outside Territory.

    

    (a)    Licensee
      hereby accepts appointment as Cellegy's exclusive licensee
      of Licensed Product in the Territory, as provided in Section 2.1
      above.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b)    Licensee
      shall not, and Licensee shall use all Commercially Reasonable and Diligent
      Efforts to ensure that its officers, directors, employees, Affiliates, agents
      or
      representatives (collectively, "Agents")
      shall
      not, without the prior written consent of Cellegy, directly or indirectly
      promote, sell, distribute or otherwise make available (for remuneration or
      gratuitously) Licensed Product outside the Territory or sell, distribute or
      otherwise make available (for remuneration or gratuitously) Licensed Product
      to
      persons outside the Territory for the purpose of resale or distribution (whether
      for remuneration or gratuitously) outside the Territory. Without limiting the
      foregoing, Licensee agrees to use all Commercially Reasonable and Diligent
      Efforts to ensure compliance with the preceding sentence, including without
      limitation placing appropriate notices on the labels of Licensed Products;
      provided, however, that Licensee shall not be obligated to include any notices
      in a particular country in the Territory that would conflict with any relevant
      requirements of the Relevant Regulatory Authority for such country, and
      Licensee’s failure or refusal to include any such notices in such circumstances
      shall not constitute a breach of any provision of this Agreement. 

    

    2.4    Competing
      Products.
      Until
      June 30, 2007, or, if earlier, the maximum period of time permitted by
      applicable European Union regulations, Licensee shall not, and shall use all
      Commercially Reasonable and Diligent Efforts to ensure that its officers,
      directors, employees, Affiliates, Sublicensees, agents or representatives
      (collectively, "Agents")
      shall
      not, directly or indirectly, promote, sell or distribute products within the
      Major European Countries that are directly competitive in the treatment of
      anal
      fissures (the
      “Competing
      Licensed Products”).
      If
      applicable law or applicable European Union regulations provide that the
      foregoing covenant is unenforceable or require that the duration of the
      foregoing covenant be shorter than the term of this Agreement, then such
      provision shall be deemed automatically conformed in order to comply with
      applicable law or regulations.

    

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES

    

    3.1    Representations
      and Warranties of Cellegy. Cellegy
      hereby represents and warrants to Licensee that:

    

    (a)    Cellegy
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of the State of Delaware,
      with
      the corporate power and authority to enter into this Agreement and to perform
      its obligations hereunder. The execution and delivery of this Agreement and
      the
      consummation of the transactions contemplated hereby have been duly authorized
      by all requisite corporate action on the part of Cellegy. This Agreement has
      been duly executed and delivered by Cellegy and constitutes the valid, binding
      and enforceable obligation of Cellegy, subject to applicable bankruptcy,
      reorganization, insolvency, moratorium and other laws affecting creditors’
rights generally from time to time in effect and to general principles of
      equity.

    

    (b)    Except
      as
      disclosed by Cellegy to Licensee in a writing prior to the Agreement Date
      specifically referencing this Section 3.1(b), Cellegy is not subject to, or
      bound by, any provision of: (i) its certificate of incorporation or by-laws,
      (ii) any mortgage, deed of trust, lease, note, shareholders’ agreement, bond,
      indenture, license, permit, trust, custodianship, or other instrument, agreement
      or restriction, or (iii) any judgment, order, writ, injunction or decree of
      any
      court, governmental body, administrative agency or arbitrator, that would
      prevent, or be violated by, or under which there would be a default as a result
      of, nor is the consent of any person required for, the execution, delivery
      and
      performance by Cellegy of this Agreement and the obligations contained herein,
      including without limitation, the grant to Licensee of the license described
      in
      Section 2.1 hereof.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c)    Subject
      to the final sentence of this Section 3.1(c): (i) Cellegy
      is the exclusive owner of all right, title and interest in the Patent
      Rights
      in the
      applicable countries in the Territory;
      (ii) the
      patent applications included in the Patent Rights have been duly filed and
      contain no material errors;
      and
(iii)
      Cellegy
      shall maintain all Patent Rights for the full duration of this Agreement
or
      such
      earlier time, if any, as Licensee forecloses on the Patent Rights pursuant
      to
      Article 9. Attached hereto as Exhibit
      B is
      a
      complete and accurate list of all patents and patent applications included
      in
      the Patent Rights.
      Notwithstanding the foregoing, as Cellegy has disclosed in its filings with
      the
      Securities and Exchange Commission, the Board of Opposition of the European
      Patent Office rendered a verbal decision revoking Cellegy’s European patent
      relating to the Licensed Product; and although Cellegy has appealed this
      decision, Cellegy makes no representation or warranty regarding the outcome
      of
      the opposition and appeal process, the Cellegy Patent Rights may be held to
      be
      invalid or revoked, and any representation or warranty of Cellegy made herein
      regarding Cellegy Patent Rights is qualified in its entirety by the foregoing
      matters.

    

    (d)    Cellegy
      is the exclusive owner of all right, title and interest in the Cellegy Marks
      in
      the
      Territory. Cellegy shall maintain at its sole expense where applicable all
      Cellegy Marks for the full duration of this Agreement or such earlier time,
      if
      any, as Licensee forecloses on the Cellegy Marks pursuant to Article 9. Attached
      hereto as Exhibit
      C
      is a
      complete and accurate list of all trade marks and trade mark applications
      included in the Cellegy Marks.

    

    (e)    To
      the
      best of Cellegy’s knowledge, neither the development, use or sale of the
      Licensed Product or the practice of any of the inventions included in the Patent
      Rights or the use of the Cellegy Marks or the use of the Know-How by Licensee
      as
      contemplated by this Agreement infringes upon any Third Party’s know-how,
      patent, trade mark or other intellectual property rights in the
      Territory.

    

    (f)    To
      the
      best of Cellegy’s knowledge, there is no Third Party using or infringing any or
      all of the Patent Rights or the Cellegy Marks in derogation of the rights
      granted to Licensee in this Agreement.

    

    (g)    Cellegy
      represents and warrants that, to the best of its knowledge, it has furnished
      or
      will furnish (in accordance with the terms of this Agreement) to Licensee all
      of
      the Know-How which Cellegy owns or possesses.

    

    (h)    CELLEGY
      MAKES NO REPRESENTATION OR WARRANTY OTHER THAN THOSE EXPRESSLY PROVIDED
      HEREUNDER, AND CELLEGY HEREBY DISCLAIMS ALL SUCH OTHER WARRANTIES, EXPRESS
      OR
      IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY, OR
      THE
      FITNESS FOR A PARTICULAR PURPOSE, OF THE LICENSED PRODUCT OR THE KNOW-HOW.
      EXCEPT AS MAY BE EXPRESSLY PROVIDED ELSEWHERE HEREIN, CELLEGY MAKES NO
      REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCT IS OR WILL BE SHOWN TO
      BE
      SAFE OR EFFECTIVE FOR ANY INDICATION. THE FOREGOING SHALL NOT REDUCE THE SCOPE
      OF ANY REPRESENTATION OR WARRANTY OF CELLEGY EXPRESSLY MADE TO LICENSEE
      HEREIN.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (i)    Cellegy
      will use all Commercially Reasonable and Diligent Efforts to ensure that Cellegy
      will provide
      reasonable notice to Licensee of any significant changes to
      the
      Cellegy Information supplied to Licensee or the materials or processes described
      in that information in relation to any Licensed Product.

    

    3.2    Representations
      and Warranties of Licensee.
      Licensee hereby represents and warrants to Cellegy as follows:

    

    (a)    Licensee
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of Bermuda, having a branch office in the UK with the corporate power
      and authority to enter into this Agreement and to perform its obligations
      hereunder. The execution and delivery of this Agreement and the consummation
      of
      the transactions contemplated hereby have been duly authorized by all requisite
      corporate action on the part of Licensee. This Agreement has been duly executed
      and delivered by Licensee and constitutes the valid, binding and enforceable
      obligation of Licensee, subject to applicable bankruptcy, reorganization,
      insolvency, moratorium and other laws affecting creditors’ rights generally from
      time to time in effect and to general principles of equity.

    

    (b)    Licensee’s
      Affiliates shall not conduct themselves in such a way that Licensee will be
      in
      breach of any term or condition of this Agreement.

    

    (c)    To
      the
      best of Licensee’s knowledge, Licensee currently is in compliance in all
      material respects with all applicable laws and has received, or will receive
      where relevant, all applicable pharmaceutical product certifications and
      registrations from appropriate governmental entities that are necessary to
      perform its obligations under this Agreement. Licensee agrees that during the
      term of this Agreement it will comply in all material respects with all
      applicable laws and regulations regarding the export, sale and distribution
      of
      the Licensed Product in the Territory.

    

    ARTICLE
      4

    APPROVAL
      AND MARKETING PLANS

    

      4.1    Approval
        Plan; Marketing Plan. The
        overall timetable to obtain Approvals for the Licensed Product in the Major
        European Countries has been set forth in a written plan by Licensee which
        Cellegy has approved (the “Approval
        Plan”).
        In
        addition, Licensee has
        prepared and Cellegy has approved a
        marketing plan
        in
        connection with the promotion, marketing and distribution of the Licensed
        Product in the Major European Countries (the “Marketing
        Plan”).
        

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      5

    REGULATORY
      MATTERS; APPROVALS

    

    5.1    Regulatory
      Matters; Approvals.

    

    (a)    Licensee
      shall use Commercially Reasonable and Diligent Efforts, subject to this
      Agreement, to
      obtain
      at its sole expense all Approvals that are necessary for the sale of the
      Licensed Product within the Territory for the Initial Indication only, including
      without limitation any additional clinical trials, studies or data in addition
      to the Cellegy Information that may be required in order to obtain or maintain
      Approvals for the Licensed Product in each country in the Territory for the
      Initial Indication, and comply with any and all applicable statutory,
      administrative or regulatory requirements of the Territory or any governmental
      or political subdivisions thereof (collectively, "Laws")
      in
      relation to the manufacture, importation, storage, Development, promotion,
      marketing, distribution or sale of the Licensed Product in the Territory under
      this Agreement, including, without limitation, Licensed Product documentation
      such as Licensed Product tracking, samples, Licensed Product complaints, adverse
      event reporting requirements, post-marketing surveillance activities, and
      documentation of recalls, which documentation shall be maintained by the
      Licensee for the period required by the Relevant Regulatory Authorities in
      the
      Territory notwithstanding termination or expiration of this Agreement, any
      Licensed Product registrations with any government agency or health authority,
      or any registration, approvals, or filing of this Agreement. Licensee
      shall inform Cellegy on at least a semi-annual basis (and more frequently if
      Cellegy so reasonably requests) about the progress of such registration work,
      and will promptly provide Cellegy with a copy of all presentations and documents
      submitted by Licensee to any Relevant Regulatory Authority with respect to
      the
      Licensed Product. Cellegy shall, upon Licensee’s written request, provide
      reasonable assistance to Licensee, at Licensee’s sole cost, regarding obtaining
      such Approvals in the Territory, including allowing Licensee reasonable access
      to relevant experts in relation to the Cellegy Information for the purpose
      of
      obtaining Approvals. 

    

    (b)    With
      respect to indications other than the Initial Indication, Licensee shall be
      responsible for the conduct of such clinical trials or studies as Licensee
      may
      in its discretion undertake. 

     

    

      (c)    Utilizing
        the United Kingdom Marketing Authorization for the Licensed
        Product
        Licensee
will
        make
        filings that are required to seek and obtain Approvals for the Licensed Product
        in each other Major European Country through the M.R.P provided that the
        dossier
        used in the United Kingdom is acceptable for use in an MRP application. If
        the
        Relevant Regulatory Authority in a country other than the
        United Kingdom
        determines that such dossier is not complete or acceptable for the initiation
        of
        an M.R.P. application in such country, then the parties shall meet and attempt
        to agree on an appropriate course of action. If Licensee desires to not seek
        Approvals in one or more Major European Countries because Licensee concludes
        in
        good faith that for regulatory or marketing reasons it would not be in the
        parties’ best interests to pursue Approvals in such countries, it shall notify
        Cellegy and if Cellegy disagrees, the parties shall meet in good faith to
        attempt to agree whether Approvals will be sought in such country or countries.
        If alteration by Cellegy of the Cellegy Information after the date of this
        Agreement requires additional time to submit or revise regulatory filings
        relating to Approvals, then the time periods set forth above for making filings
        and obtaining Approvals shall be extended by the additional period of time
        required to submit or revise such filings. Licensee
        shall have no liability nor shall it be deemed to be in breach of this Agreement
        in the event that Approvals are not obtained in any or all other Major European
        Countries or in any other country in the Territory.

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (d)    With
      the
      exception of the assignment
      of the Approval
      that Cellegy has obtained in the
      United Kingdom and
      such
      other materials as Cellegy in its discretion may provide to Licensee pursuant
      to
      this Agreement, Licensee shall pay all costs in connection with the filing,
      prosecution, meetings, communications, and review by Relevant Regulatory
      Authorities of Approval applications and Approvals relating to the Licensed
      Product in the Territory and complying with applicable laws and
      regulations.

    

    5.2    Cooperation
      Regarding Material Events.
      Each
      Party will immediately notify the other Party of any material events relating
      to
      the Development of the Licensed Product in the Territory, including, without
      limitation, any material comments or concerns raised by any Relevant Regulatory
      Authority.
      To the
      extent either Party receives written or material oral communication from any
      Relevant Regulatory Authority relating to the Licensed Product in the Territory,
      the party receiving such communication shall notify the other parties and
      provide a copy of any written communication as soon as reasonably practicable.
      

    

    5.3    Copies
      of Documents.
      Each
      Party agrees to provide to the other Party a copy of (i) any documents or
      reports relating to the Licensed Product that are filed with any Relevant
      Regulatory Authority in the Territory under this Agreement, including any
      Approval applications; and (ii) all data, database information and safety
      reports from clinical trials conducted by or on behalf of Licensee. In
      particular, Licensee acknowledges that Cellegy has provided to Licensee a copy
      of the dossier concerning the Licensed Product filed in the
      United Kingdom.
      All
      such documents and reports shall be centralized and held at Licensee or by
      a
      Third Party selected by Licensee and agreed to by Cellegy, provided however,
      that Cellegy shall be entitled to obtain and keep copies of any such documents
      and records but only for the uses specifically set forth in this
      Agreement.

    

    5.4    Meetings
      With Regulatory Authorities. Licensee
      shall be responsible for conducting all meetings and discussions and routine
      telephone communications with any Relevant
      Regulatory Authority, related to clinical studies, Approval applications and
      Approvals for the Licensed Product in the Territory. Licensee will keep Cellegy
      apprised of all material communications with such Relevant Regulatory
      Authorities. 

    

    5.5    Clinical
      Trials.
      Licensee shall at its own cost be responsible for the conduct of all studies
      and
      clinical trials that may be necessary or appropriate to obtain all required
      Approvals (with
      the
      exception of the Approval for the United Kingdom that has been
      obtained)
      and any
      post-Approval Clinical Trials and for the grant of all necessary approvals
      and
      maintaining in effect all appropriate policies of insurance for clinical trials
      for the use of the Licensed Product in the Territory. Licensee agrees to provide
      such data and materials regarding any such studies or trials as Cellegy may
      reasonably request, and Cellegy may use such materials for its own business
      purposes in connection with obtaining or maintaining Approvals for the Licensed
      Product in other jurisdictions outside the Territory. Licensee may enter into
      one or more manufacturing and supply agreement(s) (or similar arrangements)
      with
      Third Party contract manufacturer(s) for such clinical supplies. 

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    5.6    Cellegy
      Obligations.
      Promptly following entering into this Agreement Cellegy shall, to the extent
      it
      has not already done so pursuant to the Prior Agreement:

    

    (a)    provide
      Licensee with a complete copy of the Cellegy Information
      as well
      as copies of clinical data, analysis and reports of Cellegy or its other
      licensees of the Licensed Product in other countries (to the extent in Cellegy’s
      possession and that Cellegy is permitted to provide such information under
      the
      terms of its agreements with such licensees, with Cellegy agreeing to use
      commercially reasonable efforts after the date of this Agreement to include
      provisions in agreements with other licensees of the Licensed Product to permit
      the sharing of such data, analysis and reports from licensees);

    

    (b)    provide
      Licensee with any information in its possession that is reasonably likely to
      jeopardize or otherwise have a material adverse impact on the application,
      or
      any grant, maintenance, variation or renewal of the Approvals;

    

    (c)     use
      commercially reasonable efforts to assist Licensee to enter into Licensee Supply
      Agreement and Technical Agreement with the Manufacturer; and 

    

    (d)    notify
      Licensee and promptly provide all relevant assistance and supporting
      documentation to Licensee and Manufacturer, where relevant, should Cellegy
      make
      any alteration to the Licensed Product, or the manufacture, or packing of the
      Licensed Product that requires notification to a Relevant Regulatory
      Authority.

    

    5.7    Approvals.

    

    (a)    All
      Approvals by any Relevant Regulatory Authority which are necessary to sell
      the
      Licensed Product within the Territory shall be issued to, owned by
      and held
      in the name of Licensee. 

    

    (b)    Licensee
      shall promptly provide to Cellegy, upon Cellegy's request, such evidence that
      Cellegy shall reasonably require, confirming that all Approvals necessary to
      import, store, Develop, promote, market, distribute and sell the Licensed
      Product in the Territory have been obtained. 

    

    (c)    Cellegy
      hereby acknowledges that, except as may otherwise be required by law, Licensee
      has no obligation to verify the Cellegy Information. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6

    POST-
      APPROVAL RESPONSIBILITIES

    

    6.1    Responsibility.
      Each
      Party acknowledges that Licensee or the Affiliate or Sublicensee named by
      Licensee as the holder of the Approvals bears the ultimate responsibility
vis-à-vis
      the
      Relevant Regulatory Authorities for complying with the regulatory requirements
      applicable to the manufacture, importation, storage, Development, promotion,
      marketing, distribution and sale of the Licensed Product in the Territory.
      

    

    6.2    Collaboration.
      The
      Parties shall collaborate with each other and each Party agrees to provide
      the
      other Party with any reasonable assistance it may require to ensure compliance
      with the Approvals. 

    

    6.3    Insurance.
      To the
      extent commercially available, both Parties shall maintain in full force and
      effect for the term of this Agreement and for five (5) years thereafter product
      liability insurance and property damage insurance on its operations naming
      the
      other Party as an additional insured, with terms reasonably satisfactory to
      the
      other Party. The amount and extent of coverage of the insurance required
      hereunder, if any, shall be not less than a single limit liability of not less
      than U.S. $5 million in one claim and in the aggregate, and each Party shall
      furnish to the other Party copies of policies of insurance or certificates
      evidencing the existence and amounts of such insurance within thirty (30) days
      of the other Party’s request for such copies. Each Party shall provide the other
      Party with written notice of any cancellation of any insurance hereunder at
      least thirty (30) days prior to such cancellation. 

    

    ARTICLE
      7

    INFORMATION;
      DATA; PHARMACOVIGILENCE

    

    7.1    Clinical
      Data.
      (a) All
      clinical
      data and
      reports related to clinical trials for the Licensed Product in the Territory
      shall be owned by the Party funding such clinical trial(s). Other than to a
      Sublicensee in connection with the transactions contemplated by this Agreement,
      Licensee shall not sell, disclose to or share with any Third Party, or grant
      any
      Third Party right to use, any clinical data arising owned by Licensee as a
      result of the preceding sentence. Each Party shall have access to, and copies
      of, all such data and reports related to clinical trials for the Licensed
      Product in the Territory, and each Party may use such data without any
      additional payments to the other Party. Each Party shall treat such data and
      reports as Confidential Information of the other Party, and neither Party shall
      disclose or use such data or reports for any purpose other than performing
      its
      obligations under this Agreement or as otherwise expressly authorized in writing
      by the other party except to the extent that data or reports are required by
      the
      voluntary or compulsory prior registration of a clinical trial, and except
      for
      such disclosures as a Party reasonably believes is required by securities or
      regulatory laws or regulations. If a Party itself obtains data from a clinical
      trial hereunder, it shall promptly transfer all of the clean, final data for
      such trial to Licensee or to Cellegy, as the case may be. The parties shall
      coordinate the transfers of any such data. 

     

    7.2    Safety
      Data Base.
      The
      Parties will, as soon as practical, organize a serious adverse event data base
      (the “SAE
      Data Base”).
      Cellegy and Licensee shall jointly own the SAE Data Base and all data contained
      therein, and the data from the SAE Data Base shall be made
      available to both Parties. Licensee shall be responsible for, and bear the
      costs
      of, data for the SAE Data Base related to the Territory. Cellegy shall be
      responsible for, and bear the costs of, data for the SAE Data Base related
      to
      territories outside the Territory. The provisions governing the management
      of
      such SAE Data Base shall be agreed separately by the
      Parties.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    [*]
      designates portions of this document that have been omitted pursuant to a
      request for confidential treatment filed separately with the
      Commission

     

    7.3    Adverse
      Events.
      The
      Parties recognize that as the holder of the Approvals, Licensee will be required
      to submit information and file reports to various governmental agencies on
      compounds under clinical investigation, compounds proposed for marketing, or
      marketed drugs. The process and responsibilities for such reports will be
      governed by the Adverse Event Reporting Addendum separately agreed to by the
      Parties. 

    

    7.4    Product
      Complaints.
      Each
      Party will maintain a record of all non-medical and medical Licensed
      Product-related complaints and will notify the other Party of any complaint
      in a
      sufficient time to allow the other Party to comply with any regulatory
      requirements it may have with respect to such complaint.
      The
      details and responsibilities governing the management of such Licensed
      Product-related complaints shall be agreed separately by the
      Parties.

    

    7.5    Further
      Development.
      For the
      avoidance of doubt, Licensee shall be free and clear to conduct further
      development (including conducting clinical trials), formulation work for any
      and
      all additional therapeutic and medicinal uses of the Licensed Product within
      the
      Territory and to sub-license its rights obtained hereunder within the Territory
      without the need for consent or any further payment or compensation due to
      Cellegy whatsoever. Licensee shall provide information relating to such
      development, work and uses as provided above.

    

    7.6    Access
      and Use of Retained Information, Future Information and
      Personnel.
      At any
      time on or after the Agreement Date at no cost to Licensee: (i) Cellegy shall
      cooperate with Licensee in making Retained Information available; (ii) Cellegy
      shall use reasonable efforts to make available to Licensee for a minimum period
      of [*]
      certain
      Cellegy personnel identified separately in writing, to assist, inter alia,
      Licensee in relation to the MRP; and (iii) Cellegy shall furnish copies of
      such
      Retained Information for review by Licensee, to the extent practicable, at
      the
      reasonable request of Licensee. At any time on or after the Agreement Date
      at no
      cost to Cellegy, Licensee shall cooperate with Cellegy in making any information
      developed by or on behalf of Licensee or its licensees relating to any further
      development (including conducting clinical trials and any related technical
      or
      clinical data, analysis and reports), formulation work and clinical trials
      for
      any and all additional therapeutic and medicinal uses of the Licensed Product
      within the Territory.

    

    ARTICLE
      8

    MILESTONE
      PAYMENTS

    

    8.1    Milestone
      Payments.
      After
      the Agreement Date, Licensee shall pay Cellegy milestone payments in the
      particular amounts specified below
      (with
      all payments to be made in U.S. Dollars): 
      Licensee
      shall pay to Cellegy three (3) milestone payments, each milestone
      being

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    [*]
      designates portions of this document that have been omitted pursuant to a
      request for confidential treatment filed separately with the
      Commission

    

    the
      amount of [*]
      for each
      Approval obtained in the first of [*]
      up to a
      maximum total amount payable of [*].
      Such
      payments shall be due no later than [*]
      after
      achievement of the milestone.

    

      8.2    Sales
        Milestones.
        In
        addition, Licensee shall pay Cellegy the following amounts, within [*] after
        the
        end of the month in which the relevant milestone is achieved:

      

      (a)    [*]

      

      (b)    [*]

      

      (c)    Licensee
        shall provide to Cellegy sufficient information from time to time regarding
        Licensed Product sales to enable Cellegy to determine whether one or more
        of the
        above milestones have been satisfied. 

      

      (d)    Licensee’s
        obligations to pay sales milestones under this Section shall terminate and
        be of
        no further force or effect on June 30, 2007 and Licensee shall not be deemed
        to
        be in breach of this Article 8.2 if it fails to achieve such Net Sales referred
        to above prior to June 30, 2007.

    8.3    Fee
      Conditions. Each
      and
      every payment made under this Article shall be independent,
      non-refundable, and shall not be considered an advance or credit on any
      royalties or other obligation received or owed

     

    ARTICLE
      9

    SECURITY
      INTEREST IN CELLEGY PATENTS AND CELLEGY MARKS

    

    
      
        9.1    Definitions.
          For
          purposes of this Article, the following terms shall have the following
          meanings:

      

    

     

    “Obligations”
means
      the performance in all material respects of Cellegy’s obligations to Licensee
      under this Agreement.

     

    “Collateral”
means
      the Cellegy Patents and the Cellegy Marks.

     

    “UCC”
means
      the Uniform Commercial Code as in effect from time to time in the State of
      California or any other state (including without limitation Delaware) the laws
      of which are required to be applied in connection with the perfection of
      security interests.

     

     9.2    Security
      Interest.
      In
      consideration of and as security for the full and complete performance of the
      Obligations, Cellegy hereby grants to Licensee a security interest in the
      Collateral, subject to the rights of any Third Party separately identified
      in
      writing by Cellegy to Licensee before the date of this Agreement expressly
      referencing this Section.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    9.3    Default.
      

    

    (a)    If
      Licensee
      terminates this Agreement pursuant to Section 16.2 (an “Event
      of Default”),
      then
      Licensee shall have the rights and remedies of a secured party under the UCC.
      In
      addition to exercising any other rights or remedies that Licensee may have
      at
      law or in equity, Licensee may, at its option, and without demand first made,
      exercise any one or all of the following rights and remedies: (i) collect the
      Collateral and its proceeds; (ii) take possession of the Collateral wherever
      it
      may be found, using all reasonable means to do so, or require Cellegy to
      assemble the Collateral and make it available to Licensee at a place designated
      by Licensee which is reasonably convenient to Cellegy; (iii) proceed with the
      foreclosure of the security interest in the Collateral granted herein and the
      sale or endorsement and collection of the proceeds of the Collateral in any
      manner permitted by law or provided for herein; and (iv) sell, lease or
      otherwise dispose of the Collateral at public or private sale, with or without
      having the Collateral at the place of sale, subject to the notice requirement
      below.

     

    (b)    No
      Election of Remedies.
      The
      election by Licensee of any right or remedy will not prevent Licensee from
      exercising any other right or remedy against Cellegy.

     

    (c)    Sales
      of Collateral.
      Any
      item of Collateral may be sold for cash or other value at public or private
      sale
      or other disposition and the proceeds thereof collected by or for Licensee.
      Cellegy agrees to promptly execute and deliver, or promptly cause to be executed
      and delivered, such instruments, documents, assignments, waivers, certificates
      and affidavits and supply or cause to be supplied such further information
      and
      take such further action as Licensee may require in connection with any such
      sale or disposition. Licensee will have the right upon any such public sale
      or
      sales, and, to the extent permitted by law, upon any such private sale or sales,
      to purchase the whole or any part of the Collateral so sold, free of any right
      or equity of redemption in Cellegy, which right or equity is hereby waived
      or
      released. If any notice of a proposed sale, lease, license or other disposition
      of Collateral shall be required by law, such notice shall be deemed reasonable
      and proper if given at least ten (10) days before such sale, lease, license
      or
      other disposition. Licensee agrees to give Cellegy thirty (30) days prior
      written notice of any sale, lease, license or other disposition of Collateral
      (or any part thereof) by Licensee. 

     

    (d)    Application
      of Proceeds.
      The
      proceeds of all sales and collections in respect of the Collateral, the
      application of which is not otherwise specifically herein provided for, will
      be
      applied as follows: (i) first, to the payment of the costs and expenses of
      such
      sale or sales and collections and the attorneys' fees and out-of-pocket expenses
      incurred by Licensee relating to costs of collection; (ii) second, to
      satisfaction of the Obligations; and (iii) third, any surplus then remaining
      will be paid to Cellegy.

     

    (e)    Cooperation.
      Upon
      the occurrence of an Event of Default and foreclosure on the Collateral by
      Licensee, Cellegy will cooperate with Licensee and execute such instruments
      of
      assignment and transfer as Licensee may reasonably request in order to vest
      Licensee with ownership of the Collateral.

     

    
      
        
        

      

      
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    [*]
      designates portions of this document that have been omitted pursuant to a
      request for confidential treatment filed separately with the
      Commission

    

    ARTICLE
      10

    MARKETING

     

    10.1    General
      Promotional Duties.  Licensee
      shall: (i) not make false or misleading representations to customers or other
      persons with regard to the Licensed Product, and (ii) subject to sub-clause
      (i),
      shall not make any representations with respect to the specifications, features
      or capabilities of the Licensed Product which are not consistent with the
      relevant Approvals. 

     

    10.2    Marketing
      Effort; Minimum Expenditures for Commercialization.
      At all
      times prior to June 30, 2007, Licensee agrees to exert its Commercially
      Reasonable and Diligent Efforts to introduce, promote and, sell the Licensed
      Product within the Major European Countries following receipt of Marketing
      Authorization in such Major European Countries and minimum satisfactory (in
      Licensee’s sole opinion) reimbursement price.

    

    10.3    Minimum
      Sales.
      At all
      times prior to June 30, 2007, Licensee shall use Commercially Reasonable and
      Diligent Efforts to achieve agreed annual minimum unit sales of Licensed Product
      in each Major European Country and commencing in each such country upon the
      [*]
      from
      launch and representing [*]
      of the
      sales forecasts of the Licensed Product in each Major European Country as set
      forth in the Marketing Plan (“Minimum
      Sales”).
      

    

    ARTICLE
      11

    MANUFACTURING;
      SUPPLY OF LICENSED PRODUCT

     

    
      
        11.1    Production
          and Supply of Product.

      

    

    

    (a)    During
      the term of this Agreement or thereafter, Cellegy reserves the right, without
      obligation or liability to Licensee, to manufacture, have manufactured, produce,
      assemble, warehouse or source the Licensed Product
      for sale outside of the Territory at any worldwide location, including Canada
      or
      the United States of America and locations within or outside the Territory.
      

       

      (b)    Cellegy
        agrees to use all Commercially Reasonable and Diligent Efforts
        to
        (i)
        maintain
        its existing Cellegy Supply Agreement with the existing Manufacturer until
        at
        least March
        31,
        2006, (ii)
        cooperate with Licensee with the goal that, prior to the establishment of
        the
        Licensee Supply Agreement, Licensee may purchase Licensed Product directly
        from
        the Manufacturer,
        and
        (iii) until Licensee enters into a Licensee Supply Agreement, cooperate with
        Licensee to involve Licensee in discussions between Cellegy and Manufacturer
        concerning product pricing or other material terms of the Cellegy Supply
        Agreement. 

    

     

    11.2    Forecasts.
      Until
      such time as Licensee enters into a Licensee Supply Agreement,
      Licensee
      shall be responsible for combining (if practicable in Licensee’s sole opinion)
      its forecast for Licensed Product in the Territory and Cellegy’s forecast for
      Licensed Product outside the Territory and for delivering all combined forecasts
      for the Parties to the Manufacturer providing that both Cellegy and Licensee
      are
      utilizing the same Manufacturer. Should the Parties decide to utilize separate
      manufacturers, each Party will be responsible for providing their Manufacturer
      with its own forecasts. Additional details concerning relating to orders from
      the Manufacturer shall be mutually agreed upon and set forth on Exhibit
      E.

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    11.3    Additional
      Manufacturing Location.
      Either
      Cellegy or Licensee may initiate activities relating to the establishment of
      a
      Manufacturer within the Territory.

    

    11.4    Payment.
      In
      consideration of the amendments to the Prior Agreement and the execution of
      this
      Agreement concerning the purchase by Licensee of Licensed Products, at the
      Agreement Date Licensee shall deliver to Cellegy the amount of [*]
      by
      electronic funds transfer to the bank account designated by Cellegy in writing.
      Cellegy agrees that after the Agreement Date, Licensee shall have no further
      obligation to pay Cellegy any amounts with respect to the purchase of Licensed
      Products from the Manufacturer or other manufacturers, including with respect
      to
      purchase order no. 05-1180 dated October 31, 2005. 

    

    11.5    Warranty
      Limitation, Disclaimer.
      Except as expressly set forth in this Agreement, the sole warranty, if any,
      given by Cellegy regarding any Licensed Product shall be that written limited
      warranty, if any, which shall accompany such Licensed Product or which shall
      otherwise be designated in writing by Cellegy as applicable to such Licensed
      Product, as the same may be revised by Cellegy from time to time. After the
      initial commercial launch of the Licensed Product, subsequent changes to the
      written limited warranty must be approved by Licensee, which approval shall
      not
      be unreasonably withheld. THE WRITTEN LIMITED WARRANTY, IF ANY, APPLICABLE
      TO
      ANY PARTICULAR PRODUCT SHALL STATE THE FULL EXTENT OF CELLEGY’S LIABILITY
      WHETHER DIRECT OR INDIRECT, SPECIAL OR CONSEQUENTIAL, RESULTING FROM ANY BREACH
      OF SUCH WARRANTY. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT WITH RESPECT
      TO WARRANTIES MADE TO LICENSEE, CELLEGY FURTHER DISCLAIMS ALL EXPRESS, STATUTORY
      AND IMPLIED WARRANTIES APPLICABLE TO THE LICENSED PRODUCT.

    

    11.6     Recalls.

     

    

      (a)    Licensee
        may
        recall
        any quantity of Licensed Product at any time, and Licensee will administer
        any
        such recall in the Territory.

    

    (b)    If
      the
      Relevant Regulatory Authority requires or otherwise initiates a recall of the
      Licensed Product for any reason whatsoever, Licensee will immediately administer
      the recall.

    

    
      
        
        

      

      
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    ARTICLE
      12

    PATENT
      RIGHTS

    

    12.1    No
      Ownership By Licensee.
      Except
      as provided in Article 9, Licensee shall not be deemed by anything contained
      in
      this Agreement or done pursuant to it to acquire any right, title or interest
      in
      or to the Cellegy Patent Rights or any patent owned by or licensed to Cellegy
      now or hereafter covering or applicable to any Licensed Product, nor in or
      to
      any invention or improvement, owned by Cellegy, now or hereafter embodied in
      the
      Licensed Product, whether or not such invention or improvement is patentable
      under the laws of any country. 

    

    12.2    New
      Cellegy Inventions/Improvements to the Licensed Product.
      If
      Cellegy develops and commercially offers:

    

    (a)    any
      improvements in terms of dosage, route of administration or formulation of
      the
      Licensed Product for the same indication; or

     

    (b)    any
      improvement in terms of dosage, route of administration or formulation of any
      product derived from the Licensed Product for the same indication;
      then

    

    such
      improvements shall be included within the definition of Licensed Product herein
      at no additional costs to Licensee. 

    

    12.3    Improvements
      by Licensee.
      If,
      during the term of this Agreement other than where Cellegy is in material breach
      or if Article 9 applies in which case this article 12.3 shall not apply ,
      Licensee or any Sublicensee invents or designs any improved Licensed Product
      or
      any associated method, apparatus, equipment or process related to or having
      application to the Licensed Product, or makes an improvement thereon, whether
      or
      not patented or patentable in any jurisdiction, Licensee shall make or cause
      a
      prompt and full disclosure to Cellegy of such invention, design or improvement
      (“Licensee
      Improvement”),
      and
      hereby irrevocably transfers, conveys and assigns to Cellegy all of its right,
      title and interest therein. Licensee shall execute such documents, render such
      assistance, and take such other action as Cellegy may reasonably request, at
      Cellegy’s expense, to apply for, register, perfect, confirm, and protect
      Cellegy’s rights therein. Cellegy shall have the exclusive right to apply for or
      register any patents or other proprietary protections with respect thereto.
      Such
      Licensee Improvements shall be licensed back from Cellegy to Licensee as, and
      shall be deemed part of, the Licensed Product, at no additional cost to
      Licensee. 

    

    ARTICLE
      13

    CELLEGY
      MARKS 

    

    13.1    Use
      of
      Cellegy Marks by Licensee.
      Licensee, its Affiliates and Sublicensees will have the exclusive right to
      use
      Cellegy’s Mark RectogesicTM
      in the Territory in connection with the importation, storage, Development,
      promotion, marketing, distribution and sale of Licensed Product. In such event,
      Licensee and its Affiliates (and Sublicensees) shall use Cellegy’s Marks only in
      the form and manner prescribed by Cellegy. In no event shall Licensee use any
      of
      Cellegy’s Marks or any similar mark or term as part of its business name. Should
RectogesicTM
      not be
      registered or registerable by Cellegy in all countries of the Territory, then
      Cellegy may notify Licensee that another
      Cellegy
      trademark
      will be
      used; and if no such marks are registered or registerable by Cellegy in all
      countries of the Territory, then Licensee may propose an alternative trade
      mark/s for Cellegy’s approval, such approval not to be unreasonably withheld or
      delayed.
      Cellegy
      shall apply for and maintain such alternative trade mark at Cellegy’s sole
      expense and such alternate trade mark shall become a Cellegy Mark under the
      terms of this Agreement.  For
      the
      avoidance of doubt the Licensee shall be free to choose, use and own a different
      trademark to the Cellegy Marks in relation to the Licensed Product.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    13.2    Acknowledgment
      of Ownership.
      Except
      as provided in Article 9 Licensee acknowledges that 

    

    (a)    Cellegy
      owns Cellegy’s Marks and all goodwill associated with or symbolized by Cellegy’s
      Marks;

    

    (b)    Licensee
      has no ownership right in or to any of Cellegy’s Marks; and 

    

    (c)    Licensee
      shall acquire no ownership interest in or to any of Cellegy’s Marks by virtue of
      this Agreement. Licensee shall do nothing inconsistent with Cellegy's ownership
      of Cellegy’s Marks and related goodwill, shall not directly or indirectly
      contest the validity of or Cellegy’s rights in the Cellegy Marks, and agrees
      that all use of Cellegy’s Marks by Licensee shall inure to the benefit of
      Cellegy. Nothing in this Agreement shall be deemed to constitute or result
      in an
      assignment of any of Cellegy’s Marks to Licensee or the creation of any
      equitable or other interests therein. Licensee shall not use any of Cellegy’s
      Marks in any manner as a part of its business, corporate or trade
      name.

    

    13.3    Marking.
      Licensee shall mark all advertising, promotional or other materials created
      by
      it and bearing any of Cellegy’s Marks (the “Licensee
      Material”)
      with
      such notices as Cellegy may reasonably require, including, but not limited
      to,
      notices that Cellegy’s Marks are trademarks of Cellegy and are being used with
      the permission of Cellegy.

    

    13.4    Registration.
      Cellegy
      shall have the sole right to take such action as it deems appropriate to obtain
      trademark registration in the Territory for any of Cellegy’s Marks. If it shall
      be necessary for Licensee to be the applicant to effect any such registrations,
      Licensee shall cooperate with Cellegy to effect any such registrations, and
      hereby does assign all of its right, title and interest in and to each such
      application, and any resulting registration, to Cellegy, and shall execute
      all
      papers and documents necessary to effectuate or confirm any such assignment.
      Licensee shall perform all reasonable and necessary acts and execute all
      necessary documents to affect the registration of Cellegy’s Marks as Cellegy may
      request, all at Cellegy's sole expense. Licensee shall not obtain or attempt
      to
      obtain in the Territory, or elsewhere, any right, title or interest,
      registration, or otherwise, in or to Cellegy’s Marks, or any of them. In the
      event that any such right, title or interest should be obtained by Licensee
      in
      contravention hereof, Licensee shall hold the same on behalf of Cellegy and
      shall transfer the same to Cellegy upon request and without expense to
      Cellegy.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    13.5    Trademarks.
      Licensee further agrees not to use any Cellegy marks in connection with any
      products other than the Licensed Product. Licensee also will include the
      appropriate trademark notices when referring to any Licensed Product in
      advertising and promotional materials. Licensee covenants and warrants that
      Licensee's use of Cellegy’s Marks or other trademarks, trade names, logos and
      designations of Cellegy on any Licensed Product, Licensed Product packaging
      or
      labels, or related materials that Licensee or its Agents prepare or use will
      be
      in accordance with Cellegy’s reasonable intellectual property policies in effect
      from time to time, including but not limited to trademark usage and cooperative
      advertising policies. Licensee agrees not to attach any additional trademarks,
      trade names, logos or designations to any Licensed Product except in compliance
      with such policies or otherwise with Cellegy’s prior written consent, which
      shall not be unreasonably delayed or withheld. Licensee will include on each
      Licensed Product that it distributes, and on all containers and storage media
      therefor, all trademark, copyright and other notices of proprietary rights
      included by Cellegy on such Licensed Product. Licensee agrees not to alter,
      erase, deface or overprint any such notice on anything provided by Cellegy.
      Licensee also will include the appropriate trademark notices when referring
      to
      any Licensed Product in advertising and promotional materials. Licensee shall
      submit to Cellegy for its prior written approval (which shall not be
      unreasonably delayed or withheld) and before any use is made thereof,
      representative samples of the initial Licensed Product, packages, containers,
      and advertising or promotional materials bearing any of Cellegy’s Marks which
      Licensee or its Sublicensees prepare, but need not seek prior approval for
      subsequent uses of such materials that are in compliance with Cellegy’s
      policies. Licensee shall also submit to Cellegy for its prior written approval
      (which shall not be unreasonably delayed or withheld) any such materials that
      may not be consistent with Cellegy’s intellectual property policies in effect
      from time to time, and Cellegy shall use all reasonable efforts to respond
      promptly to give its approval or indicate the respects in which changes are
      required in light of Cellegy’s policies. Cellegy and Licensee shall cooperate
      with each other and use reasonable efforts to protect the Cellegy Marks from
      infringement by Third Parties.

    

    ARTICLE
      14

    INFRINGEMENT;
      INDEMNIFICATION AND OTHER CLAIMS

    

    14.1    Infringement
      of Intellectual Property Rights.
      In the
      event Cellegy or Licensee have reason to believe that a Third Party may be
      infringing or diluting, as the case may be, Intellectual Property Rights or
      misappropriating the Licensed Product, such Party shall promptly notify the
      other Party. Cellegy may, in its discretion, elect to enforce the Intellectual
      Property Rights through legal action or otherwise, and Licensee agrees to
      reasonably cooperate with Cellegy in such enforcement subject to reimbursement
      of its reasonable out-of-pocket expenses together with any reasonable attorneys
      fees incurred in connection therewith. In the event Cellegy elects not to
      enforce the Patent Rights relating to the Licensed Product within sixty (60)
      days after notice of the possible infringement or dilution, and Licensee can
      demonstrate that the potential infringement or dilution is reasonably likely
      to
      result in material lost sales of the Licensed Product within the applicable
      country, then Licensee may institute a lawsuit or other such actions at its
      expense to prevent continuation of such potential infringement or dilution,
      and
      then
      Licensee
      will retain all award, damages or compensation obtained by Licensee in such
      suit. Cellegy will provide reasonable cooperation with respect to any lawsuit
      which Licensee may bring pursuant to this Article, subject to reimbursement
      of
      its reasonable out-of-pocket expenses and reasonable attorneys fees in
      connection therewith. Licensee shall not enter into any settlement or compromise
      of any such claim without the prior written consent of Cellegy, which shall
      not
      be unreasonably delayed or withheld.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

     14.2    Alleged
      Infringement of Third Party Intellectual Property Rights.

     

    (a)    If
      a
      claim or lawsuit is brought against Licensee alleging infringment of any patent
      or infringement or dilution of any trademark owned by a Third Party arising
      from
      Licensee’s importation, storage, Development, promotion, marketing, distribution
      and sale of
      the
      Licensed Product or use of proprietory rights, Licensee shall provide to Cellegy
      all information in Licensee’s possession regarding such claim or lawsuit. Within
      a reasonable time after receiving notice of such claim or lawsuit, but in any
      event within sixty (60) days after receiving such notice, Cellegy shall advise
      Licensee of Cellegy’s decision as what action it plans to take to dispose of
      such claim or defend such lawsuit.

     

      (b)    If
      Cellegy elects not to dispose of such claim or defend such lawsuit, Licensee
      may
      defend the claim or lawsuit. Licensee shall not enter into any settlement or
      compromise of any such claim or lawsuit without the prior written consent of
      Cellegy, which shall not be unreasonably delayed or withheld. For the purpose
      of
      Licensee’s conduct of the claim or defense, Cellegy shall furnish to Licensee
      such reasonable assistance as Licensee may need and from time to time reasonably
      request. 

    

    14.3    Notice
      from Licensee.
      Licensee shall promptly notify Cellegy of any potential or actual litigation
      or
      governmental activity in the Territory relating to the Licensed Product or
      the
      business operations of Licensee or Cellegy. Licensee shall provide such notice
      within ten (10) days from the time that Licensee learns of such litigation
      or
      activity.

    

    14.4    Indemnification.
      

    

    (a)    Cellegy
      assumes all risk of loss and indemnifies and holds harmless Licensee, its
      Affiliates, Sublicensees and their respective directors, officers and employees
      from and against any and all Loss arising from or incidental to or relating
      to
      any claim, demand, lawsuit, action or proceeding (a “Claim”)
      arising from or relating to:

     

    (i)    any
      claim
      or lawsuit which relates to or arises out of the alleged infringement by
      Licensee of any patent or trademark owned by a Third Party to the extent that
      the alleged infringement relates to actions covered by the Exclusive License
      granted to Licensee under Section 2.1 of this Agreement;

    

    (ii)    the
      importation, storage, Development, promotion, marketing, distribution or sale
      of
      the Licensed Product based on action or inaction of Cellegy;

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (iii)    a
      Product
      Liability Claim based on action or inaction of Cellegy; or

    

    
      
        (iv)    any
          negligence or willful default of Cellegy relating to the Licensed Product
          or
          this Agreement; or any
          material
          breach
          by Cellegy of any representation or warranty given in this Agreement;
          or

      

    

    

    (v)    any
      claim
      by a Third Party against Cellegy or Licensee that entering into this Agreement
      is a material breach of, or is prohibited by, any agreement between Cellegy
      and
      such Third Party.

    

       (b)    Any
      indemnification by, Cellegy pursuant to a claim made under this Section shall
      be
      subject to the following limitations:

    

    (i)    no
      indemnification shall be payable unless the aggregate of all Losses for which
      Cellegy would be liable exceeds on a cumulative basis an amount equal to
      $50,000, and then in such circumstances Licensee shall be entitled to demand
      an
      indemnity for the total aggregate of all Losses;

     

    (ii)    no
      indemnification shall be payable for any individual items (or series of related
      individual items) where the Loss relating thereto is less than $10,000, in
      which
      case such items shall not be aggregated;

     

    (iii)    no
      indemnification shall be payable in excess of an aggregate amount equal to
      the
      sum of $2,000,000 and any additional payments made under Section 8.2; and

     

    (iv)    no
      indemnification shall be payable to the extent the liability or obligation
      is
      directly caused by any action taken or omitted to be taken by Licensee or any
      of
      its Affiliates or Sublicensees.

     

    (c)    Licensee
      assumes all risk of loss and indemnifies and holds harmless Cellegy from all
      Loss arising from or incidental to or relating to any claim, action or
      proceeding arising from or relating to:

    

    (i)    the
      importation, storage, Development, promotion, marketing, distribution, or sale,
      of the Licensed Product based on action or inaction of Licensee, Affiliates,
      Sublicensees or their respective directors, officers and employees (Licensee
      and
      such other Persons sometimes referred to as “Licensee
      Indemnified Persons”);
      

    

    (ii)    any
      Product Liability claim based on action or inaction of any Licensee Indemnified
      Person;

    

    (iii)     any
      breach by any Licensee Indemnified Person of any representation or warranty
      given in this Agreement; any negligence or willful default of any Licensee
      Indemnified Person relating to the Licensed Product or this Agreement;
      or

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (iv)    any
      material
      breach
      by Licensee of any representation or warranty given in this
      Agreement.

     

    (d)     In
      order
      for a party (the "Indemnified
      Party")
      to be
      entitled to any indemnification provided for under this Agreement in respect
      of,
      arising out of or involving a claim made by any Person against the Indemnified
      Party (a "Third
      Party Claim"),
      such
      Indemnified Party must notify the indemnifying party (the "Indemnifying
      Party")
      in
      writing (and in reasonable detail) of the Third Party Claim within 15 days
      after
      receipt by such Indemnified Party of notice of the Third Party Claim; provided,
      however, that failure to give such notification shall not affect the
      indemnification provided hereunder except to the extent the Indemnifying Party
      shall have been actually prejudiced as a result of such failure (except that
      the
      Indemnifying Party shall not be liable for any expenses incurred during the
      period in which the Indemnified Party failed to give such notice). Thereafter,
      the Indemnified Party shall deliver to the Indemnifying Party, within ten days
      after the Indemnified Party's receipt thereof, copies of all notices and
      documents (including court papers) received by the Indemnified Party relating
      to
      the Third Party Claim.

    

    (e)    Subject
      to the provisions of Section 14.1 and 14.2, if a Third Party Claim is made
      against an Indemnified Party, the Indemnifying Party shall be entitled to
      participate in the defense thereof and, if it so chooses, to assume the defense
      thereof with counsel selected by the Indemnifying Party. Should the Indemnifying
      Party so elect to assume the defense of a Third Party Claim, the Indemnifying
      Party shall not be liable to the Indemnified Party for any legal expenses
      subsequently incurred by the Indemnified Party in connection with the defense
      thereof. If the Indemnifying Party assumes such defense, the Indemnified Party
      shall have the right to participate in the defense thereof and to employ
      counsel, at its own expense, separate from the counsel employed by the
      Indemnifying Party, it being understood that the Indemnifying Party shall
      control such defense. The Indemnifying Party shall be liable for the fees and
      expenses of counsel employed by the Indemnified Party for any period during
      which the Indemnifying Party has not assumed the defense thereof (other than
      during any period in which the Indemnified Party shall have failed to give
      notice of the Third Party Claim as provided above). If the Indemnifying Party
      chooses to defend or prosecute a Third Party Claim, all the indemnified parties
      shall cooperate in the defense or prosecution thereof. Such cooperation shall
      include the retention and (upon the Indemnifying Party's request) the provision
      to the Indemnifying Party of records and information that are reasonably
      relevant to such Third Party Claim, and making employees available on a mutually
      convenient basis to provide additional information and explanation of any
      material provided hereunder. Whether or not the Indemnifying Party assumes
      the
      defense of a Third Party Claim, the Indemnified Party shall not admit any
      liability with respect to, or settle, compromise or discharge, such Third Party
      Claim without the Indemnifying Party's prior written consent (which consent
      shall not be unreasonably withheld). If the Indemnifying Party assumes the
      defense of a Third Party Claim, the Indemnified Party shall agree to any
      settlement, compromise or discharge of a Third Party Claim that the Indemnifying
      Party may recommend and that by its terms obligates the Indemnifying Party
      to
      pay the full amount of the liability in connection with such Third Party Claim,
      which releases the Indemnified Party completely in connection with such Third
      Party Claim and that would not otherwise materially adversely affect the
      Indemnified Party. 

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (f)    Other
      Claims.
      In the
      event any Indemnified Party should have a claim against any Indemnifying Party
      that does not involve a Third Party Claim being asserted against or sought
      to be
      collected from such Indemnified Party, the Indemnified Party shall deliver
      notice of such claim with reasonable promptness to the Indemnifying Party.
      The
      failure by any Indemnified Party so to notify the Indemnifying Party shall
      not
      relieve the Indemnifying Party from any liability that it may have to such
      Indemnified Party hereunder, except to the extent that the Indemnifying Party
      demonstrates that it has been materially prejudiced by such failure. If the
      Indemnifying Party disputes its liability with respect to such claim, the
      Indemnifying Party and the Indemnified Party shall proceed in good faith to
      negotiate a resolution of such dispute and, if not resolved through
      negotiations, such dispute shall be resolved as provided in Section 18.14.
      

    

    ARTICLE
      15

    CONFIDENTIALITY

    

    15.1    Treatment
      of Confidential Information.
      Except
      as otherwise provided in this Article 15, during the term of this Agreement
      and
      for a period of five (5) years thereafter, Licensee and its Affiliates will
      retain in confidence and use only for purposes of this Agreement any
      information, data, and materials supplied by Cellegy or on behalf of Cellegy
      to
      Licensee and its Affiliates under this Agreement, and Cellegy will retain in
      confidence and use only for purposes of this Agreement any information, data,
      and materials supplied by Licensee or on behalf of Licensee to Cellegy under
      this Agreement. For purposes of this Agreement, all such information and data
      which a party is obligated to retain in confidence shall be called “Confidential
      Information.”
For
      the avoidance of doubt, Cellegy Information shall constitute Confidential
      Information of Cellegy.

    

    15.2    Right
      to Disclose.
      To the
      extent it is reasonably necessary or appropriate to fulfill its obligations
      or
      exercise its rights under this Agreement or any rights which survive termination
      or expiration hereof, Licensee may disclose Confidential Information to its
      Affiliates, Sublicensees, consultants, outside contractors, clinical
      investigators or other Third Parties on condition that such entities or persons
      agree in writing (a) to keep the Confidential Information confidential for
      the
      same time periods and to the same extent as Licensee is required to keep the
      Confidential Information confidential and (b) to use the Confidential
      Information only for such purposes as Licensee is entitled to use the
      Confidential Information. Each Party or its Affiliates or sublicensees may
      disclose such Confidential Information to government or other regulatory
      authorities to the extent that such disclosure (i) is reasonably necessary
      to
      obtain Approvals; or (ii) is otherwise legally required.

    

    15.3    Release
      From Restrictions.
      The
      foregoing obligations in respect of disclosure and use of Confidential
      Information shall not apply to any part of such Confidential Information that
      the non-disclosing party, or its Affiliates (all collectively referred to as
      the
“Receiving
      Party”)
      can
      demonstrate by contemporaneously prepared written evidence:

    

    (a)    is
      or
      becomes part of the public domain other than by acts of the Receiving Party
      in
      contravention of this Agreement;

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (b)    is
      disclosed to the Receiving Party or its Affiliates or Sublicensees by a Third
      Party, provided such Confidential Information was not obtained by such Third
      Party directly or indirectly from the other party under this
      Agreement;

    

    (c)    prior
      to
      disclosure under this Agreement, was already in the possession of the Receiving
      Party or its Affiliates or Sublicensees, provided such Confidential Information
      was not obtained, directly or indirectly, from the other party under this
      Agreement; or

    

    (d)    results
      from research and development by persons who have not had access to the
      disclosures made to Receiving Party under this Agreement, including any
      information obtained through the testing, manufacturing regulatory approval,
      or
      distribution of the Licensed Product, or other activities undertaken in
      connection with this Agreement by the Receiving Party.

    

    15.4    Confidentiality
      of Agreement.
      Except
      as otherwise required by law or the terms of this Agreement or mutually agreed
      upon by the Parties, each Party shall treat as confidential the terms,
      conditions and existence of this Agreement, except that each Party may disclose
      such terms and conditions and the existence of this Agreement to its Affiliates,
      sublicensees, and shareholders to the extent required by the any corporate
      laws,
      and provided, that each Party shall seek confidential treatment of the key
      business terms contained in this Agreement, including but not limited to all
      payments owed hereunder. Notwithstanding
      the foregoing, the
      Parties
      may make such public announcements as they determine including any required
      by
      law or applicable stock exchange requirements.

    

    15.5    Return
      of Confidential Information.
      Upon
      termination of this Agreement with respect to the entire Territory, the Parties
      and Affiliates and sublicensees shall return all Confidential Information of
      the
      other Party, in their possession along with a certification that they no longer
      possess any such Confidential Information.

    

    15.6    Previous
      Confidentiality Agreements.
      Confidential information disclosed by either Party to the other Party or its
      Affiliates prior to the Prior Agreement Date under any written agreement
      executed by Cellegy and Licensee shall be treated as Confidential Information
      under Section 15.1 notwithstanding expiration of such prior Confidentiality
      Agreement. 

    

    ARTICLE
      16

    TERM;
      TERMINATION

    

    16.1    Term.
      Unless
      terminated sooner pursuant to this Article 16, this Agreement shall become
      effective as of the Agreement Date and shall continue in full force and effect
      without term;
      provided, however, that the license to the Cellegy Patent Rights shall expire
      with respect to a particular country upon the later of (i) the date of
      expiration of the last to expire of the Cellegy Patent Rights in the particular
      country, or (ii) if earlier, the latest date permitted by applicable law,
      determined on a country-by-country basis. 

    

    16.2     Termination
      Rights.
      

     

    
      
        
        

      

      
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    [*]
      designates portions of this document that have been omitted pursuant to a
      request for confidential treatment filed separately with the
      Commission

    

    16.2.1 
Licensee
      may terminate this Agreement in whole or in part upon the occurrence of any
      of
      the following:

    

    (a)    Cellegy
      becomes the subject of voluntary bankruptcy or insolvency case; or

    

    (b)    Cellegy
      becomes the subject of an involuntary bankruptcy or insolvency case that is
      not
      dismissed within ninety (90) days; or

    

    (c)    Upon
      or
      after the material breach of any provision of this Agreement by Cellegy, if
      such
      material breach is not cured (if such default is capable of cure) within thirty
      (30) days after written notice thereof.

    

    16.2.2  Cellegy
      may terminate this Agreement:

    

    (a)    If
      Licensee becomes the subject of a voluntary bankruptcy or insolvency case up
      until June 30, 2007; or

    

    (b)    If
      Licensee becomes the subject of an involuntary bankruptcy or insolvency case
      that is not dismissed within ninety (90) days up until June 30, 2007
      ;or

    

    (c)    If
      Licensee is in breach of its payment obligations under Sections 8.1 or 11.4
      and
      in no other circumstance and only if payment is not then made within thirty
      (30)
      days of receiving notice of such breach.

    

    16.3    Licensee’s
      Right to Terminate.
      Licensee
      may terminate this Agreement; (i) immediately on written notice on health or
      safety grounds in relation to the Licensed Product; (ii) immediately on written
      notice if Approvals
      is not obtained, through no fault of Licensee, in all Major European Countries
      [*]
      of MRP
      being initiated; (iii)
      on
[*]
      written
      notice to Cellegy should it no longer be economically viable to market the
      Licensed Product, based on Licensee’s reasonable opinion and determined on a
      country by country basis; or (iv)
      [*]
      if a
      claim by any Third Party that the Intellectual Property Rights infringe such
      Third Party’s patent, trade mark, protected know-how or other intellectual
      property right is made against Licensee and which either (A) prevents use of
      the
      Licensed Product in any country of the Territory for a period of [*],
      or (B)
      is not being challenged by either Party pursuant to Article 14 in relation
      to
      such country. 

    

    16.4    Cellegy’s
      Rights Upon Termination under Section 16.2.2 .
      Termination of this Agreement shall not extinguish debts and other obligations
      created or arising between the Parties by virtue of contracts or arrangements
      entered into hereunder before the effective date of termination of this
      Agreement (the "Termination
      Date").
      Without limiting the generality of the foregoing, in the circumstance where
      Cellegy terminates in the circumstances set out in Section 16.2.2 upon and
      following the Termination Date:

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (a)    Licensee
      shall be permitted to store, promote, sell and distribute such Licensed Product
      as well as any Licensed Product in Licensee's inventory within the Territory,
      subject to the provisions of paragraph (h) below and provided that Licensee
      shall not sell or otherwise dispose any of the Licensed Product in bulk, in
      any
      non-customary manner or otherwise circumvent its regular customers.

    

    (b)    Licensee
      shall cooperate with Cellegy to allow for the orderly transfer of Approvals
      within the Territory to Cellegy or its designee upon request and without expense
      to Cellegy. Licensee shall provide Cellegy with (i) full and immediate access
      to
      and copies of all marketing and sales information and other materials pertaining
      to the Licensed Product, including, without limitation, customer lists, past
      sales history and Licensed Product pricing information, and (ii) any inventions
      or other materials or rights required to be assigned to Cellegy pursuant to
      this
      Agreement. Notwithstanding any other term or provision of this Agreement,
      effective upon the Termination Date, Licensee shall execute any documents that
      are necessary to transfer to Cellegy, or Cellegy’s designee, all Approvals or
      intellectual property which are then in the name of and/or held by Licensee
      and
      which relate to the marketing or sale of the Licensed Product (the “Relevant
      Documents”).
      In
      the event that full Approvals for any Licensed Product in the Territory are
      not
      completed before any transfer of operations pursuant to this Article, Licensee
      shall also transfer to Cellegy or Cellegy’s designee, free of any charge, the
      Cellegy Information and all the data submitted to the Relevant Regulatory
      Authorities therefor. At Cellegy’s request, Licensee shall authorize Cellegy’s
      nominee, without any delay, to perform all the required activities in order
      to
      obtain the transfer of such permits and registration rights. If Licensee fails
      to execute the Relevant Documents, it hereby appoints Cellegy as its agent
      and
      authorizes Cellegy to act on its behalf, in order to execute all Relevant
      Documents. Licensee, its Affiliates and Sublicensees shall terminate any use
      of
      the Cellegy Marks and shall, at Cellegy’s option, either destroy or return to
      Cellegy at Licensee’s cost all literature, labels, or other materials,
      incorporation or bearing same. 

     

    (c)    Each
      party shall cease to use any of the other party’s Confidential Information
      relating to or in connection with its continued business operations and shall
      promptly return or assign to the other party any and all physical, written
      and
      descriptive matter (including all reproductions and copies thereof) containing
      that party’s Confidential Information, provided that each party
      may:

    

    (i)    provide
      one copy of the other party’s Confidential Information to its legal advisers to
      be held by them solely for the purpose of determining the scope of that party’s
      obligations under this clause;

    

    (ii)   retain
      one copy of such of the other party’s Confidential Information that is required
      by the Relevant Regulatory Authorities in the Territory, to be retained by
      that
      party; and

    

    (iii)   retain
      any documents confidential to it (including board papers, strategic plans and
      operational reviews) in which the other party’s Confidential Information is
      incorporated, provided that such confidential information shall continue to
      be
      treated as Confidential Information hereunder.

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (d)    Upon
      expiration or termination for any reason, the obligations of confidentiality
      and
      use of Confidential Information under Article 15 shall survive for the period
      provided therein;

    

    (e)    Upon
      expiration or termination for any reason, Articles 14 and 16 of this Agreement
      shall survive for the maximum duration permitted by law; and

    

    (f)    Articles
      5, 8 and 9 shall survive until all outstanding payment obligations and reporting
      obligations of Licensee and its Affiliates and Sublicensees have been fulfilled,
      and Sections 9.3 and 9.4 shall survive for two years following the year in
      which
      such or expiration became effective.

    

    16.5    Licensee’s
      Rights upon Termination.
      Where
      Licensee terminates this Agreement in accordance with the terms hereof Licensee
      shall have an irrevocable fully paid up exclusive license under the Intellectual
      Property Rights and Retained Information and, where Licensee terminates this
      Agreement pursuant to the provisions of Section 16.2.1(c) above, Licensee shall
      have no obligation to Cellegy to make any further milestone under Section 8.1
      or
      sales milestones under Section 8.2 or other payments or compensation of any
      kind
      that may have fallen due after the Termination Date.

    

    ARTICLE
      17

    REGISTRATION
      OF LICENSE; LIMITATION OF LIABILITY

    

    17.1    Registration.
      Licensee may, at its expense, register the exclusive license granted under
      this
      Agreement in any country of the Territory where the government of such country
      would require one for use, sale or distribution of the Licensed Product in
      such
      country and Cellegy shall reasonably cooperate in such registration at
      Licensee’s expense. Upon request by Licensee, Cellegy agrees promptly to execute
      any “short form” licenses developed in a form reasonably acceptable to both
      Licensee and Cellegy and reasonably submitted to it by Licensee from time to
      time in order to effect the foregoing registration in such country at no cost
      to
      Licensee.

    

    17.2    Limitation
      of Liability.
      NEITHER
      PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL
      DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING
      NEGLIGENCE) OR OTHERWISE, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF
      THE
      POSSIBILITY OF SUCH DAMAGE. NOTWITHSTANDING ANYTHING TO THE CONTRARY, NEITHER
      PARTY SHALL BE LIABLE TO THE OTHER PARTY WITH RESPECT TO ANY SUBJECT MATTER
      OF
      THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
      OR EQUITABLE THEORY FOR ANY AMOUNTS IN EXCESS OF THE AMOUNTS RECEIVED BY CELLEGY
      FROM LICENSEE HEREUNDER. THIS LIMITATION WILL APPLY NOTWITHSTANDING ANY FAILURE
      OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN.

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      18

    GENERAL
      PROVISIONS

    

    18.1    Force
      Majeure.
      Neither
      Party shall be held liable or responsible to the other Party nor be deemed
      to
      have defaulted under or breached this Agreement for failure or delay in
      fulfilling or performing any term of this Agreement, other than an obligation
      to
      make payments hereunder, when such failure or delay is caused by or results
      from
      fire, floods, embargoes, government regulations, prohibitions or interventions,
      war, acts of war (whether war be declared or not), insurrections, riots, civil
      commotions, strikes, lockouts, acts of God or any other cause beyond the
      reasonable control of the affected party to anticipate, prevent, avoid or
      mitigate (a “Force
      Majeure Event”);
      provided, however, that any failure or delay in fulfilling a term of this
      Agreement shall not be considered a result of a Force Majeure Event if it arises
      from a failure of Licensee or Cellegy to comply with applicable laws and
      regulations. In the event of force majeure lasting more than sixty days (60)
      days, the Parties agree to meet and discuss how this Agreement can be justly
      and
      fairly implemented under the circumstances prevailing in such Country or
      Countries and if the Parties are unable to agree upon how the Agreement can
      be
      implemented then either Party may terminate the Agreement in relation to such
      country or countries upon sixty (60) days written notice.

    

    18.2    Further
      Assurances.
      Each
      Party to agrees to perform such acts, execute such further instruments,
      documents or certificates, and provide such cooperation in proceedings and
      actions as may be reasonably requested by the other Party in order to carry
      out
      the intent and purpose of this Agreement, including without limitation the
      registration or recordation of the rights granted hereunder. 

    

    18.3    Severability.
      Both
      Parties hereby expressly acknowledge and agree that it is the intention of
      neither party to violate any public policy, statutory or common law, rules,
      regulations, treaty or decision of any government agency or executive body
      thereof of any country or community or association of countries and specifically
      agree that if any word, sentence, paragraph, clause or combination thereof
      in
      this Agreement is found by a court or executive body with judicial powers having
      jurisdiction over this Agreement or any of the parties hereto in a final
      unappealed order, to be in violation of any such provisions in any country
      or
      community or association of countries, then in such event such words, sentences,
      paragraphs, clauses or combination shall be inoperative in such country or
      community or association of countries and the remainder of this Agreement shall
      remain binding upon the parties hereto.

    

    18.4    Notices.
      Any
      notice required or permitted to be given hereunder shall be in writing and
      shall
      be deemed to have been properly given if delivered in person, or by an
      internationally recognized overnight courier, or by facsimile (and promptly
      confirmed by overnight courier), to the addresses given below or such other
      addresses as may be designated in writing by the parties from time to time
      during the term of this Agreement. Any notice sent by overnight courier as
      aforesaid shall be deemed to have been given two (2) working days after
      sending.

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    
      	
              In
                the case of Cellegy:

              Cellegy
                Pharmaceuticals, Inc.

              1000
                Marina Boulevard, Ste. 300

              Brisbane,
                California 94080

              Attention:
                John Chandler

              Telephone
                No.: (650)
                616-2200

              Facsimile
                No.: (650)616-2222,
                and

               

               

               

              Cellegy
                Pharmaceuticals, Inc.

              1800
                Byberry Road, Building 13

              Huntingdon
                Valley, PA 19006-3525

              Attention:
                Chief Financial Officer

              Telephone
                No.: (215) 914-0900

              Facsimile
                No.: (215) 914-0914

            	
              With
                a required copy to:

              Weintraub
                Genshlea Chediak 

              400
                Capitol Mall, 11th
                floor

              Sacramento,
                CA 95814 

              Attention:
                Kevin Kelso, Esq.

              Telephone
                No.: (916)
                558-6110

              Facsimile
                No.: (916)
                446-1611

            
	
               

              In
                the case of Licensee:

              Strakan
                International Limited

              Buckholm
                Mill

              Galashiels

              TD
                1 2HB, UK

              Attention:
                Mr. Andrew McLean,

              Corporate
                Director

              Telephone
                No.: 44-1896-668060

              Facsimile
                No.: 44-1896-668061

            	
               

               

               

               

               

               

            

    

    

    18.5    Assignment.
      This
      Agreement may not be assigned or otherwise transferred by either Party without
      the written consent of the other Party such consent not to be unreasonably
      withheld or delayed; provided,
      however,
      that
      either Party may, without such consent, assign this Agreement (i) in connection
      with the transfer or sale of all or substantially all of its business related
      to
      this Agreement; or (ii) in the event of the merger or consolidation of such
      Party with another corporation; or (iii) to an Affiliate. Any permitted assignee
      shall assume all obligations of its assignor under this Agreement.

    

    18.6    Amendment.
      The
      parties hereto may amend, modify or alter any of the provisions of this
      Agreement, but only by a written instrument duly executed by both parties
      hereto.

    

    18.7    Entire
      Agreement.
      This
      Agreement contains the entire understanding of the parties with respect to
      the
      subject matter hereof and supersedes and replaces all previous negotiations,
      understandings and representations whether written or oral including, but not
      limited to, the Heads of Agreement dated November
      12,
      2004
      between the Parties
      and the
      Prior Agreement.
      This
      Agreement shall not be modified, altered or amended except by a written document
      signed on behalf of and delivered by both Parties. 

    

    18.8    Waiver.
      The
      failure of a party to enforce, at any time or for any period, any of the
      provisions hereof shall not be construed as a waiver of such provisions or
      of
      the rights of such party thereafter to enforce each such provision.

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    18.9    No
      Implied Licenses.
      Except
      as expressly and specifically provided under this Agreement, the parties agree
      that neither party is granted any implied rights to or under any of the other
      party’s current or future patents, trade secrets, copyrights, moral rights,
      trade or service marks, trade dress, or any other intellectual property
      rights.

    

    18.10    Injunctions.
      The
      parties agree that any breach or threatened breach by one party of the
      confidentiality provisions contained in this Agreement may cause substantial
      harm to the other party that cannot be remedied by monetary damages, and
      therefore each party agrees that either party shall have the right to apply
      for
      equitable remedies, without bond, including injunctions and repossession of
      Confidential Information, to abate actual or threatened breaches of this
      Agreement.

    

    18.11    Independent
      Contractors.
      The
      parties agree that the relationship of Cellegy and Licensee established by
      this
      Agreement is that of independent licensee and licensor. Furthermore, the parties
      agree that this Agreement does not, is not intended to, and shall not be
      construed to, establish a partnership or joint venture, and nor shall this
      Agreement create or establish an employment, agency or any other relationship.
      Except as may be specifically provided herein, neither party shall have any
      right, power or authority, nor shall they represent themselves as having any
      authority to assume, create or incur any expense, liability or obligation,
      express or implied, on behalf of the other party, or otherwise act as an agent
      for the other party for any purpose.

    

    18.12    No
      Third Party Beneficiaries.
      All
      rights, benefits and remedies under this Agreement are solely intended for
      the
      benefit of Cellegy and Licensee or permitted assignees, and no Third Party
      shall
      have any rights whatsoever to (i) enforce any obligation contained in this
      Agreement (ii) seek a benefit or remedy for any breach of this Agreement, or
      (iii) take any other action relating to this Agreement under any legal theory,
      including but not limited to, actions in contract, tort (including but not
      limited to negligence, gross negligence and strict liability), or as a defense,
      setoff or counterclaim to any action or claim brought or made by the
      parties.

    

    18.13    Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California, exclusive of its choice-of-law rules.

    

    18.14    Resolution
      of Disputes.
      All
      disputes arising out of or related to the terms and conditions of this
      Agreement, or the breach thereof, will be settled as follows.

    

    (a)    If
      a
      dispute arises under this Agreement, a representative of each party must,
      following whatever investigation each considers appropriate, promptly discuss
      the dispute. 

     

    (b)    If
      the
      dispute is not resolved as a result of the discussions in paragraph (a), either
      party may give
      written notice to the other party requesting the commencement of negotiations
      in
      good faith. The notice shall:

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (i)    set
      out
      the issues in dispute and any other relevant circumstances; and 

    

    (ii)    designate
      a senior representative with the appropriate authority to negotiate the
      dispute.

     

    (c)    Within
      ten (10) business days of receipt of the notice referred to in paragraph (b)
      the
      recipient shall notify the other party of a senior representative with similar
      authority to negotiate the dispute and specify a reasonable time and place
      to
      meet within the following fourteen business days.

     

    (d)    The
      representatives must meet in accordance with the notice referred to in paragraph
      (b) and, using all reasonable endeavors, commence negotiations in good faith
      to
      resolve the dispute.

     

    (e)    If
      the
      dispute is not resolved within thirty (30) days of notification under paragraph
      (b), then the dispute shall be settled by binding arbitration in Philadelphia,
      Pennsylvania, in accordance with the then existing rules of International
      Chamber of Commerce. In any arbitration pursuant to this Section the award
      shall
      be rendered by a single arbiter if the Parties agree to one or a majority of
      three (3) arbiters, one (1) of whom shall be appointed by each Party and the
      third of whom shall be appointed by mutual agreement of the two Party-appointed
      arbitrators. Either Party may initiate such an arbitration by giving written
      notice to the other Party of such arbitration, specifying, in reasonable detail,
      the dispute to be resolved thereby. The determination of the arbitrators with
      respect to any dispute will be conclusive and binding on the Parties, and the
      arbitrators will have right to award attorneys’ fees and costs, including but
      not limited to the costs of the arbitration, to the prevailing Party. Judgment
      upon the award rendered in any arbitration may be entered in any court of
      competent jurisdiction in any country. The Parties agree to the exclusive
      jurisdiction and venue of any state or federal court located in Philadelphia,
      Pennsylvania for purposes of any action arising out of or relating to this
      Agreement that is not subject to mandatory arbitration, and agree that service
      of process in any such action may be made in the manner provided for in this
      Agreement for the delivery of notices. 

    

    (f)    Neither
      Party shall be prevented from applying to a court at any stage for urgent
      injunctive or other relief.

    

    18.15    Headings.
      The
      Article and section headings contained in this Agreement are for reference
      purposes only and shall not affect in any way the meaning or interpretation
      of
      this Agreement.

    

    18.16    Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original but all of which together shall constitute one and the same
      document.

    

    18.17    Late
      Payment.
      If
      Licensee fails to pay to Cellegy any amount when due, Licensee agrees to pay
      interest on the overdue balance at the rate of the LIBOR rate (as quoted in
      the

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    [*]
      designates portions of this document that have been omitted pursuant to a
      request for confidential treatment filed separately with the
      Commission

    

    London
      edition of the Financial Times and in effect from time to time) plus
[*]
      or, if
      such rate exceeds the maximum rate permitted by law, the maximum rate permitted
      by law. Payments received from Licensee when any overdue balance exists shall
      be
      applied first against accrued interest. Licensee shall pay all collection
      charges and expenses, and including, but not limited to, attorneys’ fees, which
      are incurred by Cellegy in connection with Cellegy’s collection of any amounts
      under or relating to this Agreement, or otherwise in connection with the
      enforcement of this Agreement.

    

    18.18    ProStrakan
      Group plc Guarantee.
      ProStrakan Group plc, of which Licensee is a wholly-owned subsidiary, hereby
      guarantees the performance of Licensee under this Agreement to the extent,
      and
      pursuant to the terms of, the Guarantee attached hereto as Exhibit
      D.

    

    IN
      WITNESS HEREOF, the parties have executed this Agreement as of the Agreement
      Date.

     

     

    
      	STRAKAN INTERNATIONAL
              LIMITED	 	CELLEGY PHARMACEUTICALS,
              INC.
	 	 	 	 	 
	By:  	 	 	By:    	 
	 	 	 	 	 
	 	 	 	 	 
	Its:	 	 	Its:	 
	 	 	 	 	 
	
              PROSTRAKAN
                GROUP plc, only as to

              Section
                18.18 and the Guarantee

            	 	 
	 	 	 	 	 
	By	 	 	 	 
	 	 	 	 	 
	Its:	 	 	 	 

    

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    COUNTRIES
      IN THE TERRITORY

     

    TERRITORIES

    
      	
              1.
                Europe

            	
              1.
                Europe (continued)

            
	
              Andorra

            	
              Slovak
                Republic

            
	
              Albania

            	
              Slovenia

            
	
              Austria

            	
              Spain

            
	
              Belgium

            	
              Sweden

            
	
              Bosnia-Herzegovina

            	
              Switzerland

            
	
              Bulgaria

            	
              United
                Kingdom

            
	
              Croatia

            	
              Republic
                of Yugoslavia

            
	
              Cyprus

            	 
	
              Czech
                Republic

            	 
	
              Denmark

            	 
	
              Estonia

            	 
	
              Finland

            	 
	
              France

            	 
	
              Germany

            	 
	
              Gibraltar

            	 
	
              Greece

            	 
	
              Hungary

            	 
	
              Ireland

            	 
	
              Italy

            	 
	
              Latvia

            	 
	
              Liechtenstein
                

            	 
	
              Lithuania

            	 
	
              Luxembourg

            	 
	
              Republic
                of Macedonia

            	 
	
              Malta

            	 
	
              Monaco

            	 
	
              Netherlands

            	 
	
              Norway
                

            	 
	
              Poland
                

            	 
	
              Portugal

            	 
	
              Romania

            	 

    

     

    
      
        
        

      

      
        A

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B
PATENTS
      

    

    “Cellegy
      Patents”

    

    

    
      	
              Cellegy
                Ref No

            	
              Description
                or Title

            	
              Country

            	
              Application
                No.

            	
              Filing
                Date

            	
              Patent
                or Publication No.

            	
              Issue/Pub
                Date

            	
              Status

            	
              Summary

            
	
              C045-4510-

            	
              AT

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Austria

            	
              95916264.5

            	
              04/10/95

            	
              AT
                0719145 

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              BE

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Belgium

            	
              95916264.5

            	
              04/10/95

            	
              BE
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              CH

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Switzerland

            	
              95916264.5

            	
              04/10/95

            	
              CH
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              DE

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Germany

            	
              95916264.5

            	
              04/10/95

            	
              DE 0719145

            	
              9/6/00

            	
              On Appeal

            	
              German
                translation filed 11/9/00. National Phase of European application
                95916264.5

            
	
              C045-4510-

            	
              DK

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Denmark

            	
              95916264.5

            	
              04/10/95

            	
              DK
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              Danish
                translation filed 11/00. National Phase of European application
                95916264.5

            
	
              C045-4510-

            	
              EP

            	
              Nitric
                oxide donor composition and method for treatment of anal
                disorders

            	
              Europe

            	
              95916264.5

            	
              04/10/95

            	
              0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              On
                Appeal

            
	
              C045-4510-

            	
              ES

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Spain

            	
              95916264.5

            	
              04/10/95

            	
              ES
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application
                95916264.5

            

    

     

    
      
        
        

      

      
        A

        
          

        

      

      
        
        

      

    

     

    
      	
              C045-4510-

            	
              FR

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              France

            	
              95916264.5

            	
              04/10/95

            	
              FR
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              GB

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              United
                Kingdom

            	
              95916264.5

            	
              04/10/95

            	
              GB
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5. 

            
	
              C045-4510-

            	
              GR

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Greece

            	
              95916264.5

            	
              04/10/95

            	
              GR
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              IE

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Ireland

            	
              95916264.5

            	
              04/10/95

            	
              IE
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              IT

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Italy

            	
              95916264.5

            	
              04/10/95

            	
              51262BE/2000

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              LU

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Luxembourg

            	
              95916264.5

            	
              04/10/95

            	
              LU
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              MC

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Monaco

            	
              95916264.5

            	
              04/10/95

            	
              MC
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              NL

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Netherlands

            	
              95916264.5

            	
              04/10/95

            	
              NL
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application 95916264.5

            
	
              C045-4510-

            	
              PT

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Portugal

            	
              95916264.5

            	
              04/10/95

            	
              PT
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              Portuguese
                translation filed 10/27/00. National Phase of European application
                95916264.5

            
	
              C045-4510-

            	
              SE

            	
              Nitric
                oxide donor composition for treatment of anal disorders

            	
              Sweden

            	
              95916264.5

            	
              04/10/95

            	
              SE
                0719145

            	
              9/6/00

            	
              On
                Appeal

            	
              National
                Phase of European application
                95916264.5

            

    

     

    
      
        
        

      

      
        B

        
          

        

      

      
        
        

      

    

    

    
      	
              Microdose
                Cases

            	 	 	 	 	 	 	 	 	 
	
              V003-310-

            	
              PC

            	
              Microdose
                Therapy

            	
              PCT

            	
              PCT/CA98/00603

            	
              06/22/98

            	
              WO
                98/58633

            	
              12/30/98

            	
              National
                Phase

            	
              PCT
                claiming priority from first and second provisionals.

            	 
	
              V003-310-

            	
              EP

            	
              Microdose
                Therapy

            	
              Europe

            	
              98
                930577.6

            	
              06/22/98

            	 	 	
              Pending

            	
              National
                Phase of PCT/CA98/00603.

            	
              Allowable
                Claim 1 on file: The use of NO or a NO-donor selected from glyceryl
                trinitrate (GTN) and sodium nitroprusside in the manufacture of a
                medicament for the treatment of female sexual dysfunction associated
                with
                a vascular condition, wherein the medicament does not appreicably
                alter
                normal systemic vascular tone, said medicament providing a dose of
                NO or
                NO-donor that is 1/2 to about 1/20 of that required to induce vasodilation
                in an anatomical site lacking said vascular condition.

            
	
              V003-311-

            	
              EP

            	
              Microdose
                Therapy

            	
              Europe

            	
              04
                029432.4

            	
              12/13/04

            	
              Pub.
                No. 1535611

            	
              Pub.
                6/1/05

            	
              Pending

            	
              DIV
                of the 310 EP case.

            	 
	
              Remodeling
                Cases

            	 	 	 	 	 	 	 	 	 	 
	
              V004-410-

            	
              PC

            	
              Methods
                for Remodelling Neuronal and Cardiovascular Pathways

            	
              PCT

            	
              PCT/CA99/00787

            	
              08/25/99

            	
              WO
                00/12110

            	
              3/9/00

            	
              National
                Phase

            	
              PCT
                claiming priority to provisional application.

            	 
	
              V004-410-

            	
              EP

            	
              Methods
                for Remodelling Neuronal and Cardiovascular Pathways

            	
              Europe

            	
              99
                939874.6

            	
              08/25/99

            	 	 	
              Pending

            	
              National
                Phase of PCT/CA99/00787.

            	
              Pending
                Claim 1: The use of one or more phosphodiesterase inhibitors which
                lower
                blood pressure for the manufacture of a medicament for chronic
                administration in the management of sexual dysfunction by remodeling
                an
                ilio-hypogastric-pudendal arterial bed and genetalia, the medicament
                being
                adapted for administration at a dose that is from about one twentieth
                to
                about one hald the dose required to evoke vasodilation in a human
                patient
                exhibiting normal circulation.

            
	
              Urogenital
                Disorders Cases

            	 	 	 	 	 	 	 	 	 	 
	
              C081-8120-

            	
              PC

            	
              Use
                of Nitric Oxide donors and other agents for the treatment of urogenital
                disorders

            	
              PCT

            	
              PCT/US02/07026

            	
              03/06/02

            	
              WO
                02/069906

            	
              9/12/02

            	
              National
                Phase

            	
              PCT
                claiming priority to provisional application.

            	 
	
              C081-8120-

            	
              EP

            	
              Use
                of Nitric Oxide donors and other agents for the treatment of urogenital
                disorders

            	
              Europe
                

            	
              2723359.2

            	
              03/06/02

            	 	 	
              Pending

            	
              National
                Phase of PCT/US02/07026. 

            	
              Allowed
                Claim 1 from equivalent US case: A method for relieving the vulvar
                pain of
                vulvodynia in a patient, the method comprising topically administering
                to
                the affected vulvar area of the patient a NO donor in a therapeutically
                effective amount, wherein the vulvar pain which is not caused by
                dyspareunia is relieved. 

            

    

    

    
      
        
        

      

      
        C

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C
CELLEGY
      MARKS

     

    
      	
              Name

            	
              Status

            	
              Country

            	
              Registration
                Date

            	
              Renewal

            
	
              Rectogesic

            	
              Registered

            	
              European
                Union

            	
              10/25/02

            	
              9/13/10

            
	
              Rectogesic

            	
              Registered

            	
              Switzerland

            	
              3/8/01

            	
              9/8/10

            
	
              Rectogesic

            	
              no
                filing

            	
              Andorra

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Albania

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Bosnia-Herzegovina

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Bulgaria

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Croatia

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Gibraltar

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Republic
                of Yugoslavia

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Republic
                of Macedonia

            	 	 
	
              Rectogesic

            	
              no
                filing

            	
              Monaco

            	 	 

    

    

    
      
        
        

      

      
        C

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D
PROSTRAKAN
      GROUP plc GUARANTEE

    

    ProStrakan
      Group plc (“Group”)
      hereby
      unconditionally guarantees and undertakes to Cellegy that Licensee will duly
      and
      punctually observe and perform all the undertakings, covenants and obligations
      of Licensee under this Agreement (including the payment of any damages becoming
      due to Cellegy as a result of any breach by Licensee of such undertakings,
      covenants and obligations) and under any agreements between the Parties (or
      any
      of them) which are expressly supplemental to this Agreement or which this
      Agreement requires to be executed (the “Obligations”)
      to the
      intent that if Licensee shall fail for whatever reason so to observe and perform
      any Obligations, Group shall be liable to perform the same in all respects
      as if
      Group was the party principally bound thereby in place of Licensee on demand
      from Cellegy. 

    

    
      
        
        

      

      
        D

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      E

    

    FLOW
      DIAGRAM SHOWING 

    

    ORDERING
      AND COMMUNICATION PATHWAYS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]