Document:

exv10w5

Exhibit 10.5

LICENSE AGREEMENT

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

RECITALS

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

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

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

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

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

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

ARTICLE I

DEFINITIONS

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

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

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

 

 

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

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

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

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

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

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

     “Compound” is defined above in the Recitals.

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

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

 

 

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

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

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

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

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

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

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

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

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

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

 

 

ARTICLE II

GRANT OF LICENSE 

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

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

ARTICLE III

PAYMENTS IN CONSIDERATION FOR LICENSE 

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

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

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

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

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

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

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

 

 

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

	 	 	 	 	 
	All Annual Net Sales over $1 Million
	 	 	3	%

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

	 	 	 	 	 
	All Annual Net Sales over $1 Million
	 	 	2	%

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

     3.4 Currency, Place of Payment, Interest.

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

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

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

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

 

 

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

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

ARTICLE IV

CERTAIN OBLIGATIONS OF LICENSEE

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

     4.2 Licensee Efforts.

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

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

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

ARTICLE V

WARRANTIES AND REPRESENTATIONS 

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

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

 

 

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

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

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

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

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

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

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

     5.2 BENTLEY Warranties.

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

 

 

ARTICLE VI

INSURANCE

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

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

ARTICLE VII

INDEMNIFICATION 

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

 

 

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

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

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

ARTICLE VIII

INTELLECTUAL PROPERTY 

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

ARTICLE IX

PATENTS, TRADEMARKS AND INFRINGEMENT 

     9.1 Prosecution of Patents.

 

 

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

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

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

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

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

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

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

 

 

ARTICLE X

CONFIDENTIALITY

     10.1 Confidentiality

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

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

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

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

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

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

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

 

 

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

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

ARTICLE XI

TERM AND TERMINATION

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

     11.2 Termination by the Licensor or Licensee.

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

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

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

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

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

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

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

 

 

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

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

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

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

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

ARTICLE XII

FORCE MAJEURE 

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

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

ARTICLE XIII

ADDITIONAL PROVISIONS 

     13.1 Arbitration.

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

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

 

 

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

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

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

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

If to the Licensor, to:

BENTLEY PHARMACEUTICALS, Inc.

65 Lafayette Road, 3rd Floor

North Hampton, NH 03862-2403

Attention: President

If to the Licensee, to:

AUXILIUM A(2), Inc.

160 W. Germantown Pike

Suite D-5, Norriton Office Center

Norristown, PA 19401

Attention: President

Copy to General Counsel

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

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

 

 

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

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

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

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

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

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

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

 

 

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

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

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

	 	Title:
	 	Chief Executive Officer
	 	 	 	 	 	Title:
	 	Chief Executive Officer	 	 

 

 

SCHEDULE A/APPENDIX A

BENTLEY PATENTS

	 	 	 	 	 	 	 	 	 
	COUNTRY	 	 	PATENT NO.	 	GRANT DATE	 	EXPIRATION DATE
	Belgium

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

SCHEDULE B

Claims Made Against Bentley Pharmaceuticals, Inc.

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

 

 

AMENDMENT NO. 1 TO LICENSE AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

 

 

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

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

	 	Title:
	 	Chairman and CEO
	 	 	 	 	 	Title:
	 	EVP

 

 

AMENDMENT NO. 2 TO LICENSE AGREEMENT

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

RECITALS

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

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

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

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

1.

DEFINITIONS

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

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

ARTICLE XIV

GRANT OF LICENSE 

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

ARTICLE XV

PAYMENTS IN CONSIDERATION FOR LICENSE 

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

 

 

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

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

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

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

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

	 	Name:
	 	Jordan Horvath
	 	 	 	 	 	Name:
	 	Geraldine A. Henwood	 	 
	 

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

 

 

AMENDMENT NO. 3 TO LICENSE AGREEMENT

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

RECITALS

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

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

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

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

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

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

ARTICLE XVI

DEFINITIONS

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

 

 

ARTICLE XVII

PAYMENTS IN CONSIDERATION FOR LICENSE

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

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

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

	 	 	 	 	 
	 

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

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

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

ARTICLE XVIII

INTELLECTUAL PROPERTY

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

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

 

 

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

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

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

	 	 
	 	 	 	 	 	 	 	 
	 	 	James R. Murphy	 	 	 	Geraldine A. Henwood
	 

	 	Chief Executive Officer
	 	 	 	 	 	Chief Executive Officer	 	 

 

 

AMENDMENT NO. 4 TO LICENSE AGREEMENT

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

RECITALS

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

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

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

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

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

ARTICLE XIX

DEFINITIONS

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

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

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

 

 

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

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

ARTICLE XX

PAYMENTS IN CONSIDERATION FOR LICENSE

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

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

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

ARTICLE XXI

CERTAIN OBLIGATIONS OF LICENSEE

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

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

 

 

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

ARTICLE XXII

PATENTS, TRADEMARKS AND INFRINGEMENT

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

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

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

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

ARTICLE XXIII

TERM AND TERMINATION

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

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

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

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

 

 

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

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

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

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

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

ARTICLE XXIV

ADDITIONAL PROVISION

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

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

          If to the Licensor, to:

BENTLEY PHARMACEUTICALS, INC.

Bentley Park

2 Holland Way

Exeter, New Hampshire 03833

Attention: President

 

 

          If to the Licensee, to:

AUXILIUM PHARMACEUTICALS, INC.

160 W. Germantown Pike

Norristown, PA 19401

Attention: President

Copy to General Counsel

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

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

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

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

	 	 
	 	 	 	 	 	 
	 

	 	James R. Murphy
	 	 	 	 	 	Geraldine A. Henwood
	 

	 	Chief Executive Officer
	 	 	 	 	 	Chief Executive Officerexv10w10

Exhibit 10.10

EXECUTION COPY

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of June 30, 2008 by and
between CPEX Pharmaceuticals, Inc., a Delaware corporation (the “Employer” or “CPEX”), and Fred
Feldman (the “Employee”).

RECITALS

     A. In connection with the proposed transfer to the Employer of a portion of the business of
Bentley Pharmaceuticals, Inc. (“Bentley”), a Delaware corporation, known as “Drug Delivery”, the
shares of CPEX common stock will be distributed to the stockholders of Bentley in a spin-off
transaction (generally, the “Spin-off”) and the Employee’s employment will be transferred to the
Employer.

     B. Upon the distribution of shares of CPEX common stock in the Spin-off (“completion of the
Spin-off”), the Employer desires to employ the Employee, and the Employee desires to be employed by
the Employer, all upon the terms and provisions and subject to the conditions set forth in this
Agreement.

WITNESSETH

     NOW THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to be legally bound as follows:

1. Employment. Subject to completion of the Spin-off, the Employer hereby agrees to employ the
Employee, and the Employee hereby accepts such employment, as Chief Science Officer and Senior Vice
President of Research and Development of the Employer, upon the terms and subject to the conditions
set forth in this Agreement. The Employee shall perform such functions as are consistent with
these positions under the supervision of the Chief Executive Officer of the Employer. The Employee
shall, without any compensation in addition to that which is specifically provided in this
Agreement, serve in such further offices or positions with Employer or any subsidiary or affiliate
of Employer (collectively, the “Employer Group”) as shall from time to time be reasonably requested
by the Chief Executive Officer of Employer.

2. Term. Subject to the termination provisions hereinafter contained, the term of this Agreement
shall be for an initial term commencing immediately after the date of completion of the Spin-off
(the “Distribution Date”) and terminating on December 31, 2009. This Agreement shall thereafter be
automatically renewed for successive one (1) year terms, unless the Employee’s employment with the
Employer has been terminated, as hereinafter provided, or unless either party shall have given the
other party notice at least one year before the then applicable date of expiration that this
Agreement will terminate as of its then applicable date of expiration. The initial term of this
Agreement, and any extension thereof pursuant to this paragraph, are referred to as the “Term”.

 

 

3. Compensation, Reimbursement, Etc. Subject to completion of the Spin-off, and commencing on the
Distribution Date, the Employer shall provide the Employee the following compensation and benefits:

	 	a.	 	Base Salary. The Employer shall pay to the Employee as compensation for all
services rendered by the Employee a base salary of $23,320.92 per month (the “Monthly
Base Salary”), payable in accordance with the Employer’s regular payroll practices,
plus annual bonuses on a calendar year basis as determined by the Compensation
Committee of the Employer’s Board of Directors (the “Compensation Committee”), subject
to Sections 3(d) and 3(e). If an increase in Monthly Base Salary is determined for a
calendar year after January 1 and before May 31 of that year, the increase shall be
retroactive to the beginning of that year. Annual review of the Employee’s Monthly
Base Salary will be on a calendar year basis, and the results of such review will be
provided to the Employee no later than May of the following year.
	 
	 	b.	 	Expense Reimbursement. The Employer shall reimburse the Employee on a
semi-monthly basis for all reasonable expenses incurred by the Employee in the
performance of his duties under this Agreement; provided however, that the Employee
shall have previously furnished to the Employer an itemized account, satisfactory to
the Employer, in substantiation of such expenditures.
	 
	 	c.	 	Benefits. The Employee shall be entitled to health and other benefits on the
same terms and conditions as the Employer has made available to other senior executives
of Employer, including without limitation participation in the Employer’s health plans.
If the Employee elects not to participate in the Employer’s health plans, Employee
shall be entitled to reimbursement for the premiums paid for an alternate plan in
amounts not to exceed the premiums that would have been paid on behalf of the Employee
for Employer’s health plan. The Employer agrees to maintain life insurance and
disability coverage on the Employee in an amount equivalent to 24 times Monthly Base
Salary, which insurance will be payable to the Employee’s estate or beneficiaries (as
the Employee may designate) upon the Employee’s death or to the Employee in the event
of disability as provided in Section 7(b) hereof.
	 
	 	d.	 	Bonuses. The Employee shall be eligible for a bonus each year of the Term of
up to 40% of his annual Base Salary, payable in cash, common stock and/or other equity
awards, and the amount of any such bonus to be paid for any year shall be determined by
the Compensation Committee in its sole discretion. Such annual bonus will be awarded
for each year as soon as practicable after March 15, but in no event later than June
30, of the following year.
	 
	 	e.	 	Annual Review. The Employee shall be reviewed on an annual (calendar year)
basis.

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	 	f.	 	Equity Awards. So long as the Employee continues to be employed as an
executive officer of the Employer, the Employee will be eligible for periodic equity
awards (“Equity Awards”) under the Employer’s 2008 Equity Incentive Plan or another
plan as determined by the Compensation Committee (collectively, the “Plan”). All
Equity Awards shall be subject to substantially the same terms and conditions (and, if
more than one type of award is granted, in the same proportions) as the annual equity
awards made generally to the other executive officers of the Employer, as determined in
good faith by the Compensation Committee, which awards shall be made on the same date
as when annual equity awards are made generally to the other executive officers of the
Employer.
	 
	 	 	 	In addition, after completion of the Spin-off, the Employee will receive an option
to purchase shares of CPEX common stock under a new equity plan of CPEX, which
option shall be at an exercise price and for a number of shares to be determined by
the Compensation Committee.

4. Duties. Subject to the condition that Bentley completes the Spin-off (which is in the
discretion of the Bentley Board of Directors), the Employee will become the Chief Science Officer
and Senior Vice President of Research and Development of the Employer upon completion of the
Spin-off.

5. Extent of Services. During the Term, the Employee shall devote his full time, energy and
attention to the benefit and business of the Employer and its affiliates and shall not be employed
by another entity, either directly or as a consultant to or in any other capacity, except as
approved in advance by the Employer’s Board of Directors; provided, however, that no such approval
shall be required to serve as a director, officer or trustee of any trade association or of any
civic or charitable organization so long as such service does not significantly interfere with the
Employee’s performance of his duties at the Employer.

6. Vacation. The Employee may take a maximum of four weeks of paid vacation each calendar year, at
times to be determined in a manner most convenient to the business of the Employer, as approved by
the Chief Executive Officer. A maximum of one week of unused vacation may be carried over from one
calendar year to the next.

7. Termination Following Death or Incapacity.

	 	a.	 	Death. All rights of the Employee under this Agreement shall terminate upon
death (other than rights accrued prior thereto). All Equity Awards shall be
exercisable for a period of twelve (12) months from death, in accordance with the Plan.
The Employer shall pay to the estate of the Employee any unpaid salary and other
benefits due, as well as reimbursable expenses accrued and owing to the Employee at the
time of his death and any term-life insurance benefit provided in accordance with
Section 3(c) above.
	 
	 	b.	 	Disability.

3

 

	 	i.	 	During any period of disability, illness or incapacity during
the Term which renders the Employee at least temporarily unable to perform the
services required under this Agreement, the Employee shall receive his salary
payable under Section 3 of this Agreement, less any benefits received by him
under any insurance carried by or provided by the Employer; provided however,
all rights of the Employee under this Agreement (other than rights already
accrued) shall terminate as provided below upon the Employee’s permanent
disability (as defined below).
	 
	 	ii.	 	The term “permanent disability” as used in this Agreement shall
mean the inability of the Employee, as determined by the Board of Directors of
the Employer, by reason of physical or mental disability to perform the duties
required of him under this Agreement after a period of: (a) 120 consecutive
days of such disability; or (b) disability for at least six months during any
twelve month period. Upon such determination, the Board of Directors may
terminate the Employee’s employment under this Agreement upon ten (10) days
prior written notice. In the event of permanent disability all Equity Awards
shall vest, and be exercisable for a period of time, in accordance with their
respective terms and the terms of the Plan.
	 
	 	iii.	 	If any determination of the Board of Directors with respect to
permanent disability is disputed by the Employee, the parties hereto agree to
abide by the decision of a panel of three physicians. The Employee and
Employer shall each appoint one member, and the third member of the panel shall
be appointed by the other two physicians. If the physicians appointed by the
parties have not agreed upon the third physician within fifteen (15) days,
either party may petition the New Hampshire Medical Society to appoint a third
physician. The Employee agrees to make himself available for and to submit to
reasonable examinations by such physicians as may be directed by the Employer.
Failure to submit to any such exam shall constitute a material breach of this
Agreement. In the event such a panel is convened, the party whose position is
not sustained will bear all the associated costs.

	8.	 	Other Terminations.

	 	a.	 	Without Cause.

	 	i.	 	Either the Employee or the Employer may terminate the
Employee’s employment hereunder at any time upon written notice.
	 
	 	ii.	 	If the Employee gives written notice pursuant to paragraph (i)
above, the Employer shall have the right to either (a) relieve the Employee, in
whole or in part, of his duties under this Agreement or (b) to accelerate the
date

4

 

	 	 	 	of termination of employment to coincide with the date on which the written
notice is received.
	 
	 	iii.	 	Notwithstanding any provisions hereof to the contrary, the
Employer may terminate Employee’s employment hereunder without cause at any
time. If the Employer terminates the Employee’s Employment pursuant to the
provisions of this Section 8(a), it shall pay to the Employee as a severance
benefit, in cash, an amount equal to (a) twelve months of the Employee’s
Monthly Base Salary plus (b) the higher of the bonus target for the current
year or the bonus paid for the prior year, which amount shall be due and
payable in a lump sum within not more than ten (10) days after such termination
or such later date on which the revocation period for the release contemplated
by Section 18 expires provided, however, that this obligation shall terminate
if the release has not been delivered and the revocation period has not expired
within sixty 60 days after such termination. Additionally, the vesting of
Equity Awards shall be accelerated on a pro rata basis determined by the number
of completed months of service during the then current annual vesting period,
the vested portions of such Equity Awards shall be exercisable for the period
of time indicated in the terms of the Equity Award, and all other vesting of
Equity Awards shall cease unless otherwise determined by the Compensation
Committee.

	 	b.	 	For Cause.

	 	i.	 	The Employer may terminate the Employee’s employment hereunder
without notice (a) upon the Employee’s breach of any material provision of this
Agreement, or (b) for other “good cause” (as defined below).
	 
	 	ii.	 	The term “good cause” as used in this Agreement shall mean:
(a) any breach by Employee of any of Employee’s fiduciary duties to Employer or
material obligations under this Agreement (other than as a result of incapacity
due to physical or mental illness), in each case if such breach is not cured
within ten (10) days after written notice thereof to Employee by Employer, (b)
conviction of a felony or a crime involving moral turpitude or other commission
of any act or omission of Employee involving, fraud, embezzlement, theft,
substance abuse or sexual misconduct with respect to the Employer or any of its
subsidiaries or any of their employees, vendors, suppliers or customers, (c)
Employee’s substantial neglect of duties provided that such act of neglect is
not cured within ten (10) days after written notice thereof to Employee by
Employer, (d) the Employee’s willful, knowing or deliberate misappropriation of
funds or assets of Employer or one of its subsidiaries for personal use, or (e)
the Employee’s willful, knowing or deliberate misconduct in the performance of
Employee’s duties.

5

 

	 	iii.	 	If the Employee’s employment is terminated pursuant to Section
8(b), the Employer shall pay to the Employee any unpaid salary and other
benefits and reimbursable expenses accrued and owing to the Employee in
accordance with law, but in any event within not more than ten (10) days after
such termination. Such payment shall be in full and complete discharge of any
and all liabilities or obligations of the Employer to the employee hereunder.
The Employee shall be entitled to no further benefits under this Agreement
other than extension of health benefits as required by law, at the Employee’s
expense. All Equity Awards shall cease vesting in accordance with the terms
thereof and the Plan.

	 	c.	 	Whenever the Employee’s employment is terminated under this Agreement, the
Employee shall immediately resign, in a signed writing in such form as the Employer may
reasonably request, from all offices and any other positions he shall hold with the
Employer or any parent corporation and any subsidiaries or divisions of the Employer or
any such parent corporation. If Employee fails to deliver any such resignation
immediately, Employee may be removed from any such office or position without further
cause.

	9.	 	Termination of Employment Upon Change in Control.

	 	a.	 	For purposes hereof, a “Change in Control” shall be deemed to have occurred if:

	 	i.	 	there has occurred a “change in control” as such term is used
in Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as in effect as of the date hereof (hereinafter referred
to as the “1934 Act”);
	 
	 	ii.	 	if there has occurred a change in “control” as the term
“control” is defined in Rule 12b-2 promulgated under the 1934 Act;
	 
	 	iii.	 	when any person (as such term is defined in Section 3(a)(9) and
13(d)(3) of the 1934 Act, a “Person”), during the Term, becomes a beneficial
owner, directly or indirectly, of securities of the Employer representing 20%
or more of the Employer’s then outstanding securities having the right to vote
on the election of directors if such person did not have 20% or more of the
Employer’s then outstanding securities at the commencement of the Term; or if a
Person having more than 20% of the Employer’s then outstanding securities
increases his or its holdings by more than 15% of the Employer’s then
outstanding securities during the Term;
	 
	 	iv.	 	if the stockholders of the Employer approve a plan of complete
liquidation or dissolution of the Employer, or a merger or consolidation (a) in
which the voting securities of the Employer outstanding immediately prior
thereto do not represent (either by remaining outstanding or by being

6

 

	 	 	 	converted into voting securities of the surviving entity) at least 50.1% of
the combined voting securities of the Employer or such surviving entity
outstanding immediately after such merger or consolidation or (b) in which
no Person acquires 30% or more of the combined voting power of the
Employer’s then outstanding securities; or
	 
	 	v.	 	if during any period of twenty-four (24) consecutive months
(not including any period prior to the date of this Agreement), individuals who
at the beginning of such period constitute the Board and any new director
(other than a director designated by a person who has entered into an agreement
with the Employer to effect a transaction described in paragraphs i, ii or iii
of this section 9(a)) whose election by the Board or nomination for election by
the stockholders of the Employer was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved by the stockholders, cease for any reason to constitute
a majority thereof; provided, however, in no event shall any mere action (other
than sales or purchases of the Employer’s outstanding securities) by Michael
McGovern and the Employer be deemed to be a Change in Control;

provided, however, that the Spin-off alone shall not be deemed to be a Change in
Control transaction with respect to the Employer or Bentley.

	 	b.	 	The Employee may terminate his employment at any time within 12 months after a Change in
Control if during such 12-month period any of the following events has occurred:

	 	i.	 	A material diminution of the Employee’s authority, duties, or
responsibilities,
	 
	 	ii.	 	a material breach of Employer’s obligations pursuant to this
Agreement; 
	 
	 	iii.	 	the Employer requires Employee to move Employee’s primary place
of employment to a location more than 30 miles from Employer’s primary place of
business before the Change in Control (other than temporary relocation or
business travel in the ordinary course); or
	 
	 	iv.	 	a material diminution in the Employee’s Monthly Base Salary
without the prior written consent of the Employee;

provided that in the case of clause i. through iv. such event or condition continues
uncured for 30 days after Employee gives Employer notice of such event or condition
within 90 days of its initial existence. For the avoidance of doubt, the parties
hereby confirm that the change in the nature of the business for which Employee is
responsible as a result of becoming Chief Science Officer and Senior Vice President
of Research and Development of the Employer shall not be

7

 

deemed to be a material diminution of the Employee’s authority, duties, or
responsibilities, whether or not he continues for any period of time after the
Spin-off to provide services to Bentley under a transition services agreement
between Bentley and CPEX and whether or not such agreement is terminated or expires
by its terms.

An election by the Employee to terminate his employment following a Change in
Control for any of the reasons set forth above shall not be deemed a voluntary
termination of employment by the Employee for the purpose of interpreting the
provisions of this Agreement or any of the Employer’s employee benefit plans and
arrangements. The Employee’s continued employment with the Employer for any period
of time during the Term of this Agreement after a Change in Control shall not be
considered a waiver of any right he may have to terminate his employment to the
extent permitted under this Section 9(b).

If the Employer terminates the Employee without cause pursuant to Section 8(a)
hereof within twelve (12) months after a Change in Control has occurred, such
termination shall be deemed an election by the Employee to terminate his employment
pursuant to this Section 9(b) and Employee shall have the right to the compensation
set forth in Section 9(c) instead of the compensation set forth in Section 8(a). In
addition, in the event of such termination, the Employee shall continue to have the
obligations provided for in Sections 11 and 12 hereof.

	 	c.	 	If the Employee’s employment with the Employer is terminated under Section 9(b)
hereof,

	 	i.	 	the Employee shall be paid in a lump sum, in cash, within
thirty (30) days after termination of employment or such later date on which
the revocation period for the release contemplated by Section 18 expires,
severance pay in an amount equal to two (2) times (A) the average of his
aggregate annual compensation paid by his current Employer during the two prior
calendar years (including base salary and bonuses, if any) or (B) if he has not
been so employed for two full prior calendar years, twelve (12) times his
Monthly Base Salary immediately before the Change in Control plus the greater
of (X) his most recent bonus, if any, paid by his current Employer before the
Change in Control and (Y) his target bonus most recently determined by his
current Employer before the Change in Control; provided, however, that the
obligation under this clause (i) shall terminate if such release has not been
delivered within sixty (60) days after such termination;.
	 
	 	ii.	 	all stock options and other Equity Awards under the Plan held
by the Employee immediately prior to the effective date of the Change in
Control shall immediately vest and become fully exercisable for the period of
time indicated in the terms of the option or other Equity Award;

8

 

	 	iii.	 	health benefits as provided in Section 3(c) shall continue for
up to two years from the date of termination, including reimbursement of COBRA
payments to the extent no longer covered under the Employer’s plans; provided,
however, that any such reimbursements under this clause (iv) shall be made
within 10 business days of payment by the Employee and such benefits will be
subject to mitigation to the extent of comparable benefits at a new job; and
	 
	 	iv.	 	life insurance benefits may be continued for up to two years
from the date of termination at the option of the Employee and at the
Employer’s expense;

The lump sum severance payment described in clause (i) of this Section 9(c) is
hereinafter referred to as the “Termination Compensation.” The amount of the
Termination Compensation shall be determined, at the expense of the Employer, by its
regular outside certified public accountants. Upon payment of the Termination
Compensation and any other accrued compensation, this Agreement shall terminate
(except for the Employee’s obligations pursuant to Sections 10, 11, 12, 13 and 14
hereof and the continuing obligations to provide the benefits set forth in clauses
(ii) — (iv) of this Section 9(c) in accordance with the terms thereof) and be of no
further force or effect.

	 	d.	 	After a Change in Control has occurred, the Employer shall honor the Employee’s
exercise of the Employee’s outstanding stock options and any other Equity Awards in
accordance with the terms thereof and this Employment Agreement. After a Change in
Control has occurred and the Employee’s employment is terminated as a result thereof,
the Employee (or his designated beneficiary or personal representative(s) shall also
receive, except to the extent already paid pursuant to Section 9(c)(i) hereof or
otherwise, the sums the Employee would otherwise have received (whether under this
Agreement, by law or otherwise) by reason of termination of employment as if a Change
in Control had not occurred.
	 
	 	e.	 	The Employee shall not be required to mitigate the payment of the Termination
Compensation or other benefits or payments by seeking other employment. To the extent
that the Employee shall, after the Term of this Agreement, receive compensation from
any other employment, the payment of Termination Compensation or other benefits or
payments shall not be adjusted (except as set forth in Section 9(c)(iii)).
	 
	 	f.	 	Notwithstanding any provision in this Agreement to the contrary, if the payment
of any compensation or benefit hereunder (including, without limitation, any severance
benefit) would be subject to additional taxes and interest under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) because the timing of such
payment is not delayed as provided in Section 409A(a)(2)(B) of the Code, then any such
payment or benefit that the Employee would otherwise be entitled to during the first
six months following the 

9

 

	 	 	 	date of the Employee’s termination of employment shall be accumulated and paid or provided, as applicable,
on the date that is six months and one day after the date of the Employee’s
termination of employment (or if such date does not fall on a business day of the
Employer, the next following business day of the Employer), or such earlier date
upon which such amount can be paid or provided under Section 409A of the Code
without being subject to such additional taxes and interest. The preceding sentence
shall apply only to the extent required to avoid the Employee’s incurrence of any
additional tax or interest under Section 409A of the Code or the regulations or
Treasury guidance promulgated thereunder.

10. Disclosure, Proprietary Rights. The Employee agrees that during the Term of his employment by
the Employer, he will disclose only to the Employer all ideas, methods, plans, formulas, processes,
trade secrets, developments, or improvements known by him which relate directly or indirectly to
the business of the Employer, including any lines of business, acquired by the Employee during his
employment by the Employer; provided, that nothing in this Section 10 shall be construed as
requiring any such communication where the idea, plan, method or development is lawfully protected
from disclosure, including but not limited to trade secrets of third parties. For purposes of the
Agreement, the term “the business of the Employer” shall include, without limitation, the
following: the design, development, obtaining regulatory approval, production, manufacturing,
marketing, and licensing of prescription and non-prescription drugs, medical devices, and methods
for the diagnosis, evaluation, treatment or correction of any disease, injury, illness or other
medical or health condition and such other lines of business as the Employer shall engage in during
the Term hereof. The parties further agree that any inventions, formulas, trade secrets, ideas, or
secret processes which shall arise from any disclosure made by the Employee pursuant to this
paragraph, whether or not patentable, shall be and remain the sole property of the Employer.

11. Confidentiality. As a condition to Employee’s employment by the Employer, Employee shall
execute and deliver to the Employer the Employer’s Confidentiality Agreement in the form attached
hereto as Exhibit A (the “Employee Agreement”), which sets forth, among other things,
Employee’s obligations with respect to the Employer’s confidential and proprietary information.

12. Non-Competition. If the Employee is terminated for good cause the Employee covenants that he
will not engage, directly or indirectly, alone or in conjunction with others, as an agent,
employee, investor, director, shareholder or partner in any business which provides products,
information and/or services to the public which are competitive with those provided by the Employer
Group; provided, however, that the ownership by the Employee of 5% or less of the issued and
outstanding shares of any class of securities which is traded on a national securities exchange or,
in the over the counter market shall not constitute a breach of the provisions of this section.
The Employee will not on his own behalf or on behalf of any other business enterprise, directly or
indirectly, solicit or induce any creditor, customer, client, supplier, officer, employee or agent
of the Employer Group to sever his/her or its relationship with or leave the employ of the Employer
Group. The covenants in this Section 12 shall continue in full force and effect throughout the
Term hereof and for a one year period subsequent to the termination hereof.

10

 

13. Conflict of Interest and Other Policies. The Employee shall devote his full time, energy and
attention to the benefit and business of the employer and its affiliates and shall not be employed
by another entity, except as permitted in Section 5. It is understood by and between the parties
hereto that the foregoing restrictive covenants set forth in Sections 10, 11, 12, 13 and 14 are
essential elements of this Agreement, and that but for the agreement of the Employee to comply with
such covenants, the Employer would not have entered into this Agreement. Notwithstanding anything
to the contrary in this Agreement, the terms and provisions of Sections 11, 12, 13 and 14 of this
Agreement, together with any definitions used in such terms and provisions, shall survive the
termination or expiration of this Agreement. The existence of any claim or cause of action of the
Employee against the Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of such covenants. The Employee shall be
subject to the Employer’s policies applicable to its executives generally.

14. Specific Performance. The Employee agrees that damages at law will be insufficient remedy to
the Employer if the employee violates the terms of Sections 10, 11, 12 or 13 of this Agreement and
that the Employer shall be entitled, upon application to a court of competent jurisdiction, to
obtain injunctive relief to enforce the provisions of such Sections, which injunctive or other
equitable relief shall be in addition to any other rights or remedies available to the Employer,
and the Employee agrees that he will not raise and hereby waives any objection or defense that
there is an adequate remedy at law.

15. Compliance with Other Agreements. The Employee represents and warrants that the execution of
this Agreement by him and his performance of his obligation hereunder will not conflict with,
result in the breach of any provision of, terminate, or constitute a default under any agreement to
which the Employee is or may be bound.

16. Waiver of Breach. The waiver by the Employer of a breach of any of the provisions of this
Agreement by the Employee shall not be construed as a waiver of any subsequent breach by the
Employee.

17. D&O Insurance; Indemnification. The Employer hereby agrees to maintain in full force and
effect for the duration of this Agreement, Director’s and Officer’s Liability Insurance of at least
$5,000,000 and to indemnify and hold harmless the Employee to the full extent permitted by law, for
acts performed by him in carrying out his duties and responsibilities in accordance with this
Agreement.

18. Release. In the event of the termination of the Employee’s employment with the Employer, the
Employee shall execute a release that is substantially in the form attached hereto as Exhibit
B (the “Release”) or that is the standard form of release that the Employer is using for these
purposes at the time of such termination. If the Employee declines or refuses to execute the
Release at such time, the Employer shall have no obligation to make any future payments to the
Employee which would otherwise be owed to the Employee under the terms of this Agreement, and the
Employer may delay any such future payment until after expiration of the period during which the
Employee may revoke the Release in accordance with its terms.

11

 

19. Binding Effect, Assignment. The rights and obligations of the Employer under this Agreement
shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer.
This Agreement is a personal employment contract and the rights, obligations and interests of the
Employee hereunder may not be sold or assigned or hypothecated. Whenever in this Agreement
reference is made to any party, such reference shall be deemed to include the successors, assigns,
heirs, and legal representatives of such party, and without limiting the generality of the
foregoing, all representations, warranties, covenants and other agreements made by or on behalf of
the Employee in this Agreement shall inure to the benefit of the successors and assigns of the
Employer; provided, however, that nothing herein shall be deemed to authorize or permit the
Employee to assign any of his rights or obligations under this Agreement to any other person
(whether or not a family member or other affiliate of the Employee, other than as specifically
provided in this Agreement), and the Employee covenants and agrees that he shall not make any such
assignments.

20. Modification, Amendment, Etc. Each and every modification and amendment of this Agreement
shall be in writing and signed by all of the parties hereto, and each and every waiver of, or
consent to any departure from, any representation, warranty, covenant or other term or provision of
this Agreement shall be in writing and signed by each affected party hereto.

21. Notice. Any notice required or permitted to be given under this Agreement shall be sufficient
if in writing and if sent by certified or registered mail, first class, return receipt requested,
to the Employer, at its executive offices as set forth in its filings with the Securities and
Exchange Commission and, to the Employee, at his address as set forth on the current employment
records of the Employer.

22. Severability. It is agreed by the Employer and Employee that if any portion of the provisions
set forth in this Agreement are held to be unreasonable, arbitrary or against public policy, then
that portion of such covenants shall be considered divisible both as to time and geographical area.
The Employer and Employee agree that if any court of competent jurisdiction determines the
specific time period or the specified geographical area applicable to this Agreement to be
unreasonable, arbitrary or against public policy, then a lesser time period or geographical area
which is determined to be reasonable, non-arbitrary and not against public policy may be enforced
against the Employee. The Employer and Employee agree that the foregoing covenants are appropriate
and reasonable when considered in light of the nature and extent of the business conducted by the
Employer.

23. Entire Agreement. This Agreement contains the entire agreement between the Employer and the
Employee and supersedes all prior agreements and understandings, oral or written, with respect to
the subject matter hereof. The Employee acknowledges that upon completion of the Spin-off the
Employment Agreement dated as of October 31, 2005 between Bentley and the Employee will be
terminated other than Employee’s confidentiality obligations to Bentley referenced in Section 11
thereof and Bentley’s obligations with respect to the Employee’s outstanding equity awards from
Bentley.

24. Headings. The headings contained in this agreement are for reference purposes only and shall
not affect the meaning or interpretation of the Agreement.

12

 

25. Governing Law; Forum. This Agreement shall be construed and enforced in accordance with the
laws of the State of New Hampshire. Any action brought pursuant to this Agreement or in relation
to its breach may be heard by any court of competent jurisdiction having jurisdiction thereof. The
parties hereby expressly consent to the personal jurisdiction of the state and federal courts
located in New Hampshire for any lawsuit filed arising from or relating to this Agreement and
expressly waive any and all objections to venue, including, without limitation, the inconvenience
of such forum.

26. Counterparts. This Agreement may be executed in two counterpart copies of the entire document
or of signature pages to the document, each of which may be executed by one or more of the parties
hereto, but all of which when taken together, shall constitute a single agreement binding upon all
of the parties hereto.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day
and year first written above.

	 	 	 	 	 	 	 	 	 	 	 
	Employer:	 	 	 	Employee:	 	 
	CPEX PHARMACEUTICALS, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John A. Sedor
	 	 	 	By:
	 	/s/ Fred Feldman
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	John A. Sedor
	 	 	 	 	 	Fred Feldman, individually	 	 
	 

	 	Chief Executive Officer	 	 	 	 	 	 	 	 

13

 

Exhibit A

Employee Name (printed):

CPEX PHARMACEUTICALS, INC.

EMPLOYEE CONFIDENTIALITY AGREEMENT

     Effective as of April ___, 2008, the undersigned having an address at
_____________________________________________ enters into this Agreement with CPEX Pharmaceuticals, Inc., (“CPEX”),
a Delaware corporation with principal offices and facilities in Exeter, New Hampshire.

     Since CPEX is engaged in a highly competitive and rapidly evolving business of developing and
marketing pharmaceuticals, and owns or controls technological and marketing information in various
fields, which information is of commercial value throughout the world; and,

     Since CPEX has expended and intends to continue to expend significant time, effort and
financial resources to develop the business practices, technology and products which are necessary
to the continued success of CPEX’s business, and the information relative to this development is
considered by CPEX and acknowledged by the undersigned, to be confidential and trade secret
information which is proprietary to CPEX; and,

     Since I will be employed by CPEX, I will have access to CPEX’s confidential and trade secret
information, the unauthorized disclosure of which to a competitor of CPEX could cause serious and
irreparable financial and business damage to CPEX.

     THEREFORE, in consideration of my employment with CPEX, I hereby agree with CPEX as follows:

     1. Property of CPEX. All ideas, discoveries and inventions, whether patentable or not, which I
make or conceive during my employment by CPEX which relate to the business of CPEX, or to work or
investigations done for CPEX, shall be the sole and exclusive property of CPEX and I will promptly
and fully disclose such to CPEX.

     2. Records. In order that CPEX may protect such property, I will make adequate written records
of such ideas, discoveries and inventions, which records shall be CPEX’s property; and both during
and after termination of my employment by CPEX, I will sign all papers and render any other proper
assistance necessary for CPEX to obtain, maintain and enforce patents thereon throughout the world.

     3. Nondisclosure. During my employment with CPEX and thereafter, I will not, and I will not
cause, suffer or permit any family member or other of my affiliates to, directly or indirectly,
under any circumstances, (i) use, disclose to others or publish any “confidential information”, as
defined below unless CPEX specifically instructs or authorizes me in writing to do so; (ii) act or
fail to act so as to reveal any confidential

 

 

information or otherwise impair the confidentiality of any confidential information; (iii) use
any know-how, customer list or other confidential information other than at the direction and for
the benefit of CPEX; or (iv) offer or agree to, or cause or assist in the inception or continuation
of, any such disclosure, impairment or use.

“Confidential information” of CPEX shall, for purposes of this Agreement, include but not be
limited to such ideas, discoveries and inventions, and any other information and data, of CPEX, or
used by CPEX in its business, as are (i) not readily available to the public without any
publication directly or indirectly in violation of this Agreement or any similar obligation of
confidentiality and (ii) and:

	 	(a)	 	are of a technical nature such as, but not limited to,
methods, know-how, formula, drawings, operations, procedures, reports,
systems inventions, processes, discoveries, computer programs, software,
software documentation, technologies and similar items;
	 
	 	(b)	 	are of a business nature such as, but not limited to,
information about sales or lists of customers, prices, costs, purchasing,
profits, markets, product capabilities assets, business, creditors,
employees, financial condition or affairs and suppliers; or
	 
	 	(c)	 	pertain to future developments such as, but not limited
to, research and development, new or improved products, business ventures,
and marketing and merchandising plans and ideas.

     4. Removal of Materials. I will not remove or cause to be removed from CPEX’s premises, for
purposes other than the work or investigations I do for CPEX, any material whatsoever belonging to
CPEX, including material created, discovered or developed by me and belonging to CPEX, unless CPEX
in writing specifically instructs or authorizes me to do so.

     5. Disclosure of Other Information. I understand that CPEX will not require nor expect me to
disclose to CPEX, or to use at or for CPEX, any secret or confidential information that I obtained
from any of my former employers which is not then publicly available, and I agree not to use at or
for CPEX any such secret or confidential information; provided, however, that the foregoing
obligation shall not apply to confidential information related to the drug delivery business of
Bentley Pharmaceuticals, Inc. (“Bentley”) and is subsequently transferred to CPEX upon the spin-off
of CPEX to the stockholders of Bentley.

     6. Warranty. I warrant that I have not previously assumed any obligations inconsistent with
those of this Agreement.

     7. Duties Upon Termination. Upon termination of my employment with CPEX, I agree to turn over
to CPEX all copies of data, information and knowledge, including without limitation all drawings,
photographs, graphs, tables, charts, documents,

 

 

correspondence, specifications, notebooks, reports, sketches, formula, computer programs,
software, software documentation, sales data, business manuals, price lists, customer lists,
samples, and all other materials and copies therefore including product and other embodiments
relating in any way to the business of CPEX, made fully or in part, or obtained by me during the
course of my employment, whether confidential information or not, which are in my possession or
control.

     8. Exclusions. Notwithstanding anything contained herein, my obligations hereunder shall not
apply to any information which I can demonstrate by documentary evidence:

	 	(a)	 	was rightfully known to me prior to disclosure to me by CPEX
or its predecessor in interest to such information.
	 
	 	(b)	 	is or becomes generally available to the public other than
as a result of disclosure by me, members of my family or other of my
affiliates,
	 
	 	(c)	 	becomes available to me on a nonconfidential basis from a
source other than CPEX, which has a right to disclose such information.

     9. Disclosure by Law. In the event that I become legally compelled to disclose any
confidential information, I will provide CPEX with prompt notice so that CPEX may seek a protective
order or other appropriate remedy or waive compliance with the provisions of the Agreement. In the
event that such protective order or other remedy is not obtained, or that CPEX waives compliance
with the provisions of this Agreement, I shall furnish only that portion of such confidential
information that is legally required to be disclosed.

     10. No License or Right to Use. Except as is expressly set forth in this Agreement, I shall
have no right to examine, hold, use, access or disclose the confidential information in any manner.
Nothing herein shall be deemed to create a license of such confidential information to me.

     11. Remedies. I agree that any breach or threatened breach of any of the provisions of this
paragraph cannot be remedied solely by the recovery of damages and CPEX shall be entitled to any
other remedies available at law or in equity for any such breach or threatened breach, including
injunctive relief, specific performance or such other relief as CPEX may request to enjoin or
otherwise restrain any act prohibited hereby, as well as the recovery of all costs and expenses,
including attorney’s fees, incurred. I will not raise and hereby waive any objection or defense
that there is an adequate remedy at law.

     12. Severability. If any condition herein or the application of such condition shall be
invalid and unenforceable, the remainder of this Agreement shall not be affected and

 

 

each remaining condition hereof shall be valid and enforced to the fullest extent permitted by
law.

     13. Parties. This Agreement shall be binding on and for the benefit of CPEX, its successors
and assigns. This Agreement may not be assigned by me and any purported assignment shall be void.
No term or provision of this Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against which the enforcement of the change,
waiver, discharge or termination is sought.

     14. Law. Any claim or action arising out of this Agreement shall be decided in Rockingham
County, New Hampshire. This Agreement shall be construed under the laws of the State of New
Hampshire, without regard to the conflict of law provisions thereof.

	 	 	 
	Witness:

	 	Employee:
	 
	 	 
	 
	 	 
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	Witness Name Printed

	 	Employee Name Printed
	 
	 	 
	 
	 	 
	 

	 	 
	Date

	 	Date

	 	 	 	 	 	 	 
	Agreed and accepted:

CPEX PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

Exhibit B

GENERAL RELEASE OF CLAIMS

     In consideration of the payments on termination set forth in my Employment Agreement dated as
of ____________, with CPEX Pharmaceuticals, Inc. (the “Company”), and other good and valuable
consideration provided to me, I, hereby forever release, waive and discharge the Company, its
predecessors, successors and assigns, and all of its present and former subsidiaries, employees,
representatives, fiduciaries, attorneys and agents (the “Released Parties”) from any and all claims
of any nature whatsoever, known or unknown which I now have, or at any time may have had, against
the Released Parties up to and including the date of this Agreement (“Claims”).

     Without limiting the generality of the foregoing, and by way of example only, I specifically
release, discharge and covenant not to sue or file administrative charges against the Released
Parties from and with respect to any and all statutory and common law claims and causes of action
in tort or contract (express and implied); Claims related to my employment, my activities on behalf
of the Company and the Released Parties, the termination of my employment, Claims of wrongful
discharge, Claims for the payment of any salary, wages, bonuses, draws, distributions, commissions,
severance, and benefits, Claims relating to the Company’s intellectual property, confidential and
proprietary information and trade secrets, Claims of misrepresentation, Claims of detrimental
reliance, Claims based upon breach of contract, defamation, intentional infliction of emotional
distress, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or
any other common law, statutory or other Claims whatsoever arising out of or relating to my
employment or affiliation with and/or separation from employment with the Company and/or any of the
other Released Parties, Claims under common law or any federal or state statute, including, without
limitation, Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e, et seq.); the Americans
with Disabilities Act of 1990 (42 U.S.C. §12112, et seq.); the Age Discrimination in Employment Act
(“ADEA”) (29 U.S.C. §729, et seq.); the Employee Retirement Income Security Act, (“ERISA”)(29
U.S.C. §1001, et seq.); the Fair Labor Standards Act (“FLSA”) (29 U.S.C. §201, et seq.); , the
Family and Medical Leave Act of 1993, the New Hampshire Law Against Discrimination, and all other
federal, state, and local laws of any kind and nature.

     Excepted from this promise not to sue are claims under the ADEA to the extent such an
exception is required by law. Further excepted are any claims that cannot be waived by law,
including the right to file a charge of discrimination with an administrative agency; however, I do
waive any right to any monetary recovery in connection with any such charge or lawsuit.

     I expressly agree and understand that this release of Claims is a GENERAL RELEASE, and that
any reference to specific Claims arising out of or in connection with my employment with the
Company is not intended to limit the Release of Claims. I expressly agree and understand the
GENERAL RELEASE means that I am releasing, remising and discharging the Released Parties from and
with respect to all Claims,

 

 

whether known or unknown, asserted or unasserted, and whether or not the Claims arise out of
or in connection with my employment with the Company, and/or my termination, or otherwise.

     Rights of Rescission and Revocation. This Release is intended to comply with the Older Workers
Benefit Protection Act of 1990 with regard to your waiver of rights under the ADEA. You acknowledge
by signing this Release that you have read and understood this document and that the Company
advised you to consult with an attorney of your own choosing regarding the terms and meaning of
this Release prior to executing this Release, and that you did so to the extent you deemed
appropriate. You further represent that you have had at least twenty-one (21) days to consider the
terms of this Release, and that if you sign this Release before twenty-one (21) days, you
acknowledge that you had sufficient time to consider this Release, and you waive any right you
might have to additional time within which to consider this Release. You understand that you have
seven (7) days following the date you sign this Release in which to revoke it, and that the Release
shall not become effective, and the Additional Consideration shall commence, only after the seven
(7) day revocation period ends, and only if you have not exercised your revocation rights. Any
revocation must be received in writing within the 7-day revocation period by the Company’s
attorney, Timothy P. Van Dyck, Esq., Edwards Angell Palmer & Dodge LLP, 111 Huntington Avenue,
Boston, MA 02199. The Effective Date of this Release is the date upon which your rights of
revocation lapse unexercised. This Release and waiver does not waive or release any rights or
claims that you may have arising after the date you execute this Release.

   PLEASE READ THIS RELEASE CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU
AGREE THAT YOU RECEIVED VALUABLE CONSIDERATION IN EXCHANGE FOR ENTERING INTO THIS RELEASE AND THAT
THE COMPANY ADVISED YOU TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT. YOU PROMISE THAT NO
REPRESENTATIONS OR INDUCEMENTS HAVE BEEN MADE TO YOU EXCEPT AS SET FORTH HEREIN, AND IN THE MAY 16,
2006 LETTER AGREEMENT WITH THE COMPANY AND THAT YOU HAVE SIGNED THE SAME KNOWINGLY AND VOLUNTARILY.
YOU HAVE BEEN PROVIDED AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE AND TO
WAIVE AND RELEASE ALL CLAIMS AND RIGHTS, INCLUDING BUT NOT LIMITED TO, THOSE ARISING UNDER THE
ADEA. YOU SHALL HAVE SEVEN (7) DAYS WITHIN WHICH TO REVOKE THIS AGREEMENT, AND THIS AGREEMENT SHALL
NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THAT REVOCATION PERIOD EXPIRES. ANY SUCH REVOCATION MUST
BE IN WRITING AND RECEIVED BY THE COMPANY, IN ACCORDANCE WITH THE NOTICE PROVISIONS SET FORTH
ABOVE, PRIOR TO THE END OF THE REVOCATION PERIOD.

	 	 	 	 	 	 	 
	Dated:

	 	 	 	Name:

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