Document:

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                                                                   Exhibit 10.34

                        CONFIDENTIAL TREATMENT REQUESTED.
    CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN
         SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                LICENSE AGREEMENT

                                     between

                            PERMATEC TECHNOLOGIE, AG

                                       and

                         BIOSANTE PHARMACEUTICALS, INC.

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                                      INDEX

                                                                            Page
                                                                            ----
Background .................................................................  1
1.    Definitions ..........................................................  1
   1.1      Affiliate ......................................................  1
   1.2      Approval .......................................................  1
   1.3      Develop or Development .........................................  1
   1.4      Development Plan ...............................................  1
   1.5      FDA ............................................................  1
   1.6      Know-How .......................................................  1
   1.7      Market or Marketing ............................................  2
   1.8      Net Sales ......................................................  2
   1.9      Patents ........................................................  2
   1.10     Products .......................................................  2
   1.11     Regu1atory Authority ...........................................  2
   1.12     Specifications .................................................  2
   1.13     Supply Agreement ...............................................  2
   1.14     Territory ......................................................  2
   1.15     U.S. Good Manufacturing Practices or GMP .......................  3
2.    License Grant ........................................................  3
   2.1      License ........................................................  3
   2.2      Sub-Licenses ...................................................  3
   2.3      Assistance .....................................................  3
   2.4      No further or Trademark License ................................  4
   2.5      E2-**** Combi Gel ..............................................  4
3.    Consideration ........................................................  4
   3.1      Initial payment ................................................  4
   3.2      Royalty payments ...............................................  4
   3.3      Milestone payments .............................................  4
      3.3.1       Manufacture of first Product .............................  5
      3.3.2       Manufacture of second Product ............................  5
      3.3.3       Start of clinical trial of E2-**** Combi Gel .............  5
      3.3.4       Filings for Approvals ....................................  5
                  3.3.4.1      First tier ..................................  5
                  3.3.4.2      Second tier .................................  5
                  3.3.4.3      Third tier ..................................  5
                  3.3.4.4      E2-**** Combi Gel ...........................  5

                                       i

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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      3.3.5       Approvals ................................................  5
                  3.3.5.1     Gel Testosterone .............................  5
                  3.3.5.2     Gel E2 .......................................  5
                  3.3.5.3     Patch E2 .....................................  5
                  3.3.5.4     E2-**** Combi Gel ............................  5
      3.3.6       BIOSANTE failure to order ................................  6
      3.3.7       BIOSANTE failure to file .................................  6
   3.4      Sub-licensee payments ..........................................  6
   3.5      Mode of Payments, related reports ..............................  6
      3.5.1       Initial and Milestone Payments ...........................  6
      3.5.2       Royalty payments .........................................  6
                  3.5.2.1     Withholding ..................................  7
                  3.5.2.2     Calculation of royalties .....................  7
                  3.5.2.3     Reports ......................................  7
                  3.5.2.4     Books and records ............................  7
4.    PERMATEC production of Products ......................................  7
   4.1      Production of Clinical Batches .................................  7
      4.1.1       Orders ...................................................  8
      4.1.2       Production costs .........................................  8
      4.1.3       Further provisions .......................................  8
      4.1.4       Repayment of production milestones .......................  8
   4.2      Production of Commercial Supply ................................  8
5.    Development Obligations of BIOSANTE and PERMATEC .....................  8
   5.1      Non-Territory development ......................................  8
   5.2      Data sharing ...................................................  9
   5.3      BIOSANTE's development and marketing obligations/
            United States ..................................................  9
   5.4      BIOSANTE's development and marketing obligations/Non-US ........  9
   5.5      Protocol review ................................................ 10
   5.6      Development Plan ............................................... 10
      5.6.1       Agreed Development Plan .................................. 10
      5.6.2       Material deviations ...................................... 10
   5.7      Development Reporting .......................................... 10
6.    Representations, warranties and covenants; indemnification ........... 10
   6.1      PERMATEC's ..................................................... 10
      6.1.1       Right to license ......................................... 10
      6.1.2       No inability to receive approval ......................... 11
      6.1.3       Clear rights ............................................. 11
      6.1.4       Right to execute and perform ............................. 11

                                       ii

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

      6.1.5       Compliance with law ...................................... 11
      6.1.6       No further representation ................................ 11
   6.2      BIOSANTE's ..................................................... 12
      6.2.1       Right to execute and perform ............................. 12
      6.2.2       Compliance with law ...................................... 12
      6.2.3       Best efforts ............................................. 12
      6.2.4       Compliance with Approvals ................................ 12
      6.2.5       No further representation ................................ 12
   6.3      Indemnification by BIOSANTE .................................... 13
   6.4      Indemnification by PERMATEC .................................... 13
7.    Confidentiality ...................................................... 13
   7.1      Obligation of confidentiality .................................. 13
   7.2      Exceptions ..................................................... 13
   7.3      When consent needed ............................................ 14
8.    Proprietary Right and Patents ........................................ 14
   8.1      Title .......................................................... 14
   8.2      Infringement by third parties .................................. 14
      8.2.1       Notice ................................................... 14
      8.2.2       Independent decisions to act ............................. 14
      8.2.3       Reduction in Royalty ..................................... 15
      8.2.4       Cooperation .............................................. 15
9.    Term and Termination ................................................. 15
   9.1      Term ........................................................... 15
   9.2      Termination .................................................... 15
   9.3      No prejudice to rights ......................................... 17
   9.4      Termination of license, return of information .................. 17
   9.5      Partial termination ............................................ 18
   9.6      Remedies not limited ........................................... 18
10.   Options to extend Territory or Products .............................. 18
  10.1      Option to extend Territory ..................................... 18
  10.2      Right of first offer ........................................... 18
  10.3      Option regarding the **** Combi Gel ............................ 19
      10.3.1      License Agreement ........................................ 19
      10.3.2      Terms .................................................... 19
      10.3.3      Payments ................................................. 19
                  10.3.3.1     Execution of License Agreement .............. 20
                  10.3.3.2     Manufacturing of clinical batches ........... 20
                  10.3.3.3     Filing of the Product ....................... 20

                                      iii

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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                  10.3.3.4     Approval .................................... 20
  10.4      Termination of option rights ................................... 20
11.   Miscellaneous ........................................................ 20
  11.1      Governing Law .................................................. 20
  11.2      Dispute Resolution ............................................. 20
  11.3      Notice ......................................................... 21
  11.4      Entirety ....................................................... 22
  11.5      Modification ................................................... 22
  11.6      Severability ................................................... 22
  11.7      Waiver ......................................................... 23
  11.8      Relationship of Parties ........................................ 23
  11.9      Assignment ..................................................... 23
  11.10     Force Majeure .................................................. 23
  11.11     Interest ....................................................... 23
  11.12     Interpretation ................................................. 23
Signature Page ............................................................. 24
Exhibit A .................................................................. 25
Exhibit B .................................................................. 28
Exhibit C .................................................................. 29

                                       iv

<PAGE>

                                LICENSE AGREEMENT

This agreement is entered into, effective this 13th day of June, 2000, by and
between PERMATEC TECHNOLOGIE, AG, a corporation of Switzerland ("PERMATEC"), and
BIOSANTE PHARMACEUTICALS, INC., a Wyoming corporation ("BIOSANTE").

                                   Background

WHEREAS, PERMATEC has begun formulation and development of several new
pharmaceutical products based on proprietary know-how, and desires to grant
BIOSANTE an exclusive license in defined geographical areas under the terms and
conditions set forth hereinafter to continue the development of and to market
these products;

WHEREAS, BIOSANTE desires to take from PERMATEC such a license to continue the
development and to market these products;

THE PARTIES ARE HEREBY AGREED AS FOLLOWS:

1.   Definitions
     -----------

1.1 "Affiliate" shall mean, with respect to either party hereto, any
corporation, partnership or other entity controlled by, controlling or under
common control with, such party, with "control" meaning direct or indirect
beneficial ownership of more than 50% of the voting power of, or more than 50%
of ownership interest in, such corporation, partnership or other entity.

1.2 "Approval" shall mean the first effective date on which sales of a new drug
may begin, in accordance with a new drug approval received from FDA, and any
equivalent approval from the respective Regulatory Authority in any other
country of the Territory.

1.3 "Develop" or "Development" shall mean and include to undertake any and all
activities to investigate, research, conduct clinical trials, perform market
research, prepare and submit applications for Approval, negotiate with
government entities (including the FDA and Regulatory Authorities), or conduct
any other activities ordinarily undertaken, or necessary or required or
advisable to be undertaken, by the sponsor of a pharmaceutical product in the
process of being prepared for marketing or being marketed and to be granted
Approvals, on the same basis as if it were the owner of the Products.

1.4 "Development Plan" shall mean the Development Plan for each Product pursuant
to Section 5.6 below.

1.5 "FDA" shall mean the US Food and Drug Administration.

1.6 "Know-How" shall mean all information and data, which are not generally
known including, but not limited to, patent claims and related information not
yet disclosed to the public, formulae, procedures, protocols, techniques and
results of experimentation and testing,

                                       1

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which (a) relate to any of the Products, and (b) are necessary or useful to the
Development or Marketing of any of the Products in the Territory, all to the
extent as of the effective date of this Agreement owned or otherwise controlled
by and at the free disposition of PERMATEC.

1.7 "Market" or "Marketing" shall mean any and all activities ordinarily
associated with efforts to interest a given market in a product and to induce
and further sales, including, but not limited to, sales, sales support,
continuing medical education, advertising, promotion, publicity and media
relations.

1.8 "Net Sales" shall mean the aggregate arms-length gross price invoiced by
BIOSANTE and, if applicable, invoiced by the sublicensees of BIOSANTE, for the
sale for commercial use of Products to non-affiliated third parties during the
relevant period, less deductions for (i) normal and customary trade and cash
discounts, credits and allowances (for rejection or return of Products), rebates
or refunds incurred or granted; and (ii) sales, use or excise taxes and duties,
and freight and insurance, to the extent included in the gross price charged.

1.9 "Patents" shall mean all patents and patent applications filed or having
presently or in the future legal force in any country in the Territory owned by
PERMATEC which claim any of the Products, or the process to manufacture any of
the Products, including but not limited to the patents and patent applications
listed in Exhibit A hereto, together with all patents that in the future issue
therefrom in any country of the Territory, including utility, model and design
patents and certificates of invention, and all divisionals, continuations,
continuations-in-part, reissues, renewals, extensions, substitutions,
confirmations or additions to any such patents and patent applications.

1.10 "Products" shall mean the four pharmaceutical products developed by
PERMATEC, either dermal gel or patch, for application on the skin, intended for
pharmaceutical use with humans for any indication now known or known in the
future, and with defined active compounds, all as listed in Exhibit B.

1.11 "Regu1atory Authority" shall mean any governmental authority in any country
of the Territory competent to approve pharmaceutical products for manufacturing,
marketing, distribution and sale in any country of the Territory and/or to
approve the price for pharmaceutical products to be sold in any country of the
Territory.

1.12 "Specifications" shall mean the specifications, recipes and manufacturing
instructions for Products as known at the effective date of this Agreement and
from time to time during the term of this Agreement changed, altered, amended or
repealed by mutual consent of the parties.

1.13 "Supply Agreement" shall mean the written agreement between BIOSANTE
PHARMACEUTICALS, INC. and PERMATEC TECHNOLOGIE, AG, executed by the parties at
or about the same time as this License Agreement.

1.14 "Territory" shall mean the United States of America and those of its
territories and possessions over which the FDA has regulatory authority (the
"USA"); Canada; Australia; New Zealand; South Africa; Israel; Mexico; The
People's Republic of China (including Hong Kong)

                                       2

<PAGE>

("China"); Malaysia; and Indonesia. The countries are classified according to
Exhibit C in three tiers.

1.15 "Good Manufacturing Practices" or "GMP" shall mean the then-current
requirements of FDA relating to the manufacture of pharmaceutical products and
related activities in the United States, as set forth in applicable FDA
regulations and Guidance Documents, and any and all equivalent rules and
regulations applicable to such activities in any other country of the Territory.

2.   License Grant
     -------------

2.1 License: PERMATEC hereby grants to BIOSANTE an exclusive license, with the
right to grant sublicenses as provided in this Agreement, to Develop the
Products in the Territory (except for the E2-**** Combi Gel or any other product
substituted under section 2.5 of this Agreement, the Territory for which is
restricted to USA and Canada) as "applicant" and "owner" of Products, as those
terms are defined in applicable regulations, for purposes of obtaining
Approvals, and upon receipt of the Approvals, to Market and sell the Products,
in the Territory, and to use the Patents and Know-How exclusively for that
purpose, all in accordance with the provisions contained in this Agreement. It
is the parties' intention that any product characterized by its marketing
approval, as opposed to Products, developed by BIOSANTE and based on PERMATEC's
technology will be and remain the property of BIOSANTE but BIOSANTE will not be
allowed to use or market the products in case the License Agreement between
PERMATEC and BIOSANTE is terminated.

2.2 Sub-Licenses: In the event that BIOSANTE grants a sublicense under its
license to any Affiliate or third party for any part of the Territory, then
BIOSANTE shall be responsible for any and all acts, deeds and undertakings of
its sub-licensee(s) and shall continue to be bound by all terms and provisions
under this Agreement throughout its term. BIOSANTE shall assume any and all
obligations and undertakings in lieu and place of its sub-licensee(s) and shall
be held responsible for these obligations, including but not limited to the
confidentiality obligations set forth hereinafter. Furthermore, BIOSANTE
undertakes that any and all sub-license agreements shall provide for inspection
and audit provisions identical to the provisions set forth below in order to
enable PERMATEC to control and audit and receive any and all payments due as
provided in this Agreement. BIOSANTE shall provide PERMATEC promptly with copies
of all agreements with such sub-licensee(s) (with only the commercial terms
redacted).

2.3 Assistance: PERMATEC agrees during the term of this Agreement to provide
technical and scientific assistance to BIOSANTE (i) without any additional
charge to the extent mutually agreed upon in the Development Plan, and (ii)
against reimbursement applying a rate of USD 150 per man-hour spend by PERMATEC
personnel in addition to the mutually agreed upon assistance pursuant to
sub-section (i) hereinabove, provided in each case that BIOSANTE undertakes and
agrees to reimburse any and all reasonable out-of-pocket expenses incurred by
PERMATEC in connection with any such assistance. Such assistance shall be
provided by PERMATEC within a reasonable time in response to requests in
connection with BIOSANTE's efforts to obtain Approvals for the Products,
including, without limitation, providing the

                                       3

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

chemistry, manufacturing and control components of any application needed to
obtain Approvals.

2.4 No further or Trademark License: It is understood and acknowledged by
BIOSANTE that the license granted hereunder shall under no circumstances
encompass any further license grant, including without limitation any further
license with respect to the Know-How or the Patents or any products other than
Products, or with respect to any trademark or trade-name of PERMATEC, including
without limitation its internationally registered trademark "Permatec".

2.5 E2-**** Combi Gel: BIOSANTE has ninety (90) days to exchange the E2-****
Combi Gel with another progestative from the following list: *****, ****, or
****. BIOSANTE shall use its best efforts to decide on a change in a shorter
period of time. Without written notice from BIOSANTE requesting a change,
PERMATEC will assume that E2-**** Combi Gel remains the originally selected
progestative. In the meantime, the Development Plan will be established based on
E2-**** Combi Gel. If PERMATEC has a potential interested party for one of the
mentioned Combi gels, excluding E2-**** Combi Gel, with proposed commercial
terms, PERMATEC shall inform BIOSANTE in writing and BIOSANTE has fifteen (15)
business days to decide on a change.

3.   Consideration
     -------------

3.1 Initial payment: Upon the mutual execution of this Agreement, BIOSANTE shall
pay to PERMATEC the sum of One Million Dollars (USD 1,000,000) of which Two
Hundred and Fifty Thousand Dollars (USD 250,000) is creditable against future
royalty payments and/or sublicense up front payments as described in Section 3.4
of this Agreement, pursuant to section 3.5.2 below.

3.2 Royalty payments: Commencing with the first commercial sale of any of the
Products, and thereafter during the entire term of this Agreement, BIOSANTE
shall pay a royalty of six percent (6%) of the aggregate Net Sales invoiced for
sales of the Products, calculated on a country-by-country basis as described in
Section 3.5.2.2. PERMATEC and BIOSANTE agree that BIOSANTE will make royalty
payments for each respective Product during a period (the "Royalty Term")
computed on a country-by-country basis starting with the first commercial sale
of such Product in such country and ending upon the later of (i) the expiration
of the last to expire Patents applicable to such Product in such country, and
(ii) the tenth (10th) anniversary of the first commercial sale of such Product
in such country. However, if PERMATEC obtains a patent during the term of this
Agreement that achieves exclusivity in the market for any Product, then the
Royalty obligation regarding that Product shall continue for the life of that
patent. Upon the expiration of the Royalty Term in any given country for any
Product, BIOSANTE shall have a fully paid-up exclusive license regarding the
applicable Product in such country.

3.3 Milestone payments: In addition, BIOSANTE shall pay to PERMATEC the
milestone payments described below in the amounts and at the occurrence of the
events described below:

                                       4

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

     3.3.1 Manufacture of first Product: Upon the start of manufacturing by
           PERMATEC in response to an order by BIOSANTE to PERMATEC pursuant to
           Section 4.1 below to manufacture the first batch of GMP compliant
           finished Product for use in a clinical trial of the first Product to
           be subjected to such clinical trial, or pursuant to Section 3.3.6
           below, BIOSANTE shall pay to PERMATEC the sum of One Hundred Twenty
           Five Thousand Dollars (USD 125,000).

     3.3.2 Manufacture of second Product: Upon the start of manufacturing by
           PERMATEC in response to an order by BIOSANTE to PERMATEC pursuant to
           Section 4.1 below to manufacture the first batch of GMP compliant
           finished Product for use in a clinical trial of the second Product to
           be subjected to such clinical trial, or pursuant to Section 3.3.6
           below, BIOSANTE shall pay to PERMATEC the sum of One Hundred Twenty
           Five Thousand Dollars (USD 125,000).

     3.3.3 Start of clinical trial of E2-* Combi Gel: Upon the start of the
           first clinical trial of E2-* Combi Gel in the USA, BIOSANTE shall
           pay to PERMATEC the sum of Five Hundred Thousand Dollars (USD
           500,000).

     3.3.4 Filings for Approvals: Upon the first acceptance for filing by FDA of
           New Drug Applications (NDA) or Abbreviated New Drug Applications
           (ANDA) or the equivalent filing with any other Regulatory Authority
           in any other country of the Territory for, respectively, each of the
           Products, or pursuant to Section 3.3.7 below, BIOSANTE shall pay to
           PERMATEC up to ****** Dollars (USD ****) per Product or ******
           Dollars (USD ****) for E2-******** Combi Gel respectively, as
           follows:

           3.3.4.1 ********. BIOSANTE shall pay up to USD ****** ********
                  (depending upon whether payments have previously been made
                  pursuant to paragraphs 3.3.4.2 and/or 3.3.4.3).

           3.3.4.2 ********, BIOSANTE shall pay USD ****** *********.

           3.3.4.3 ********. BIOSANTE shall pay USD ****** *********.

           3.3.4.4 E2-******** Combi Gel: BIOSANTE shall pay to PERMATEC USD
                   ****** ********.

     3.3.5 Approvals: Upon receipt of the first Approval to market from FDA or
           from any other Regulatory Authority in any other country of the
           Territory for, respectively, each of the Products, as follows:

           3.3.5.1 Gel Testosterone up to USD ******

           3.3.5.2 Gel E2 up to USD ******

           3.3.5.3 Patch E2 up to USD ******

           3.3.5.4 E2-**** Combi Gel up to USD ******

           The following payments shall be made:

           ************:     Up to USD ****** for Gel Testosterone, USD ******
                             for Gel E2 and USD **** for Patch E2, USD ******
                             for E2-**** Combi Gel, depending upon whether
                             payments have previously been made for *********
                             as set forth below.

           ************:     USD ****** *********** and USD ****** ********.

                                       5

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

           ************:     USD ****** ******** and USD ****** ***********.

                             If a patent exists that prevents BIOSANTE from
                             introducing any Product into commercial sale,
                             notwithstanding Approval, the Approval payments
                             described in this subsection will be delayed until
                             such time as the patent in issue ceases to prevent
                             such sale.

     3.3.6 ********: In the event that BIOSANTE fails to ******** pursuant to
           Section 3.3.1 or 3.3.2 above at the time as provided in the
           Development Plan for the respective Product, and such failure to
           ******* continues for more than thirty (30) days after BIOSANTE
           receives from PERMATEC the respective notice to do so, then the
           respective milestone payment under Section 3.3.1 and 3.3.2 above,
           respectively, shall nonetheless become due and payable upon the
           expiration of the thirty (30) day period provided for in PERMATEC's
           notice.

     3.3.7 ********: In the event that BIOSANTE fails to ******** and such
           failure ******* continues for more than thirty (30) days after
           BIOSANTE receives from PERMATEC the respective notice to do so, then
           the respective milestone payment under Section 3.3.4 above shall
           nonetheless become due and payable upon the expiration of such thirty
           (30) day period provided for in PERMATEC's notice.

3.4 Sub-licensee payments: Should BIOSANTE in its sole discretion, but always in
accordance with Section 2.2 above, sub-license any of the Products, in any
portion of the Territory, BIOSANTE shall pay to PERMATEC twenty-five percent
(25%) of any up-front or sublicense or milestone payments received from such
sub-licensees, in addition to royalties, except for up-front or milestone or
sublicense payments related to a sublicense in China, Hong Kong, Malaysia or
Indonesia for which BIOSANTE will pay PERMATEC thirty-five percent (35%) of such
payments from sub-licensees.

3.5  Mode of Payments, related reports

     3.5.1 Initial and Milestone Payments: The initial payment and all milestone
           payments due PERMATEC under this Agreement shall be paid in U.S.
           Dollars (USD), within thirty (30) days of the triggering event of the
           initial payment and each milestone, respectively, by confirmed wire
           transfer to a bank account of PERMATEC reasonably notified to
           BIOSANTE.

     3.5.2 Royalty payments: All royalty payments due to PERMATEC under this
           Agreement shall accrue and be paid to PERMATEC quarterly, in U.S.
           Dollars (USD), within sixty (60) days of the end of each calendar
           quarter (each quarter being a period of three consecutive calendar
           months commencing January, April, July and October), by confirmed
           wire transfer to a bank account of PERMATEC reasonably notified to
           BIOSANTE from time to time.

                                       6

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

           3.5.2.1 Withholding: Any and all withholding taxes or similar charges
                   assessable to BIOSANTE on royalties payable hereunder for
                   sales outside of the United States will be deducted from such
                   amount due, will be paid by the payer to the proper taxing
                   authority, and proof of payment of said tax, as well as any
                   other documents or confirmations reasonably required by
                   PERMATEC to recover any such withholding taxes or parts
                   thereof from the proper tax authorities, will be secured and
                   sent to PERMATEC as evidence of such payment.

           3.5.2.2 Calculation of royalties: Any conversions into U.S. Dollars
                   (USD) from the currency in which the corresponding Net Sales
                   for any royalties were made, are to be made by applying an
                   exchange rate equal to the applicable buying rate reported
                   by The Wall Street Journal for the currency of the country
                   in question for the last business day of the calendar
                   quarter in question.

           3.5.2.3 Reports: Each such royalty payment shall be accompanied by a
                   statement showing on a country-by-country and
                   Product-by-Product basis the amount of Net Sales of each
                   Product achieved during such quarter and the amounts of
                   royalty due on such Net Sales of Products. With respect to
                   any calendar quarter for which no payment is due for any
                   given Product in any given country, BIOSANTE shall
                   nonetheless include such Product and/or country in each such
                   quarterly statements. Each such statement shall be certified
                   by the CFO or other authorized officer of BIOSANTE to be
                   complete, true and accurate.

           3.5.2.4 Books and records: BIOSANTE shall keep full, true and
                   accurate books of account containing all particulars and
                   reasonable supporting documentation which may be necessary
                   for the purpose of determining the Net Sales of Products,
                   royalties due thereon and the statements provided by
                   BIOSANTE pursuant to Section 3.5.2.3 above. Such records
                   shall be kept at BIOSANTE's principal place of business, and
                   shall be open at all reasonable times and upon reasonable
                   advance notice to the inspection of PERMATEC or an
                   independent certified public accounting firm retained by
                   PERMATEC, and reasonably acceptable to BIOSANTE, for the
                   purpose of verifying any payment made under this Agreement.
                   PERMATEC shall bear the full cost of any such audit, unless
                   the audit discloses that the amount due during any period
                   audited exceeds the amount paid by (i) ten percent (10%) or
                   more during the first two (2) years following first
                   commercial sale of a Product in any country; or (ii) five
                   percent (5%) or more thereafter, in which case BIOSANTE
                   shall bear the full cost of such audit. Any additional
                   royalty found in such audit to be due PERMATEC shall be paid
                   by BIOSANTE within thirty (30) days after such finding.

4.   PERMATEC production of Products
     -------------------------------

4.1 Production of Clinical Batches: PERMATEC will formulate and produce and
supply the Products in sufficient quantities for all purposes of Development as
reasonably needed for BIOSANTE to perform its Development obligations under this
Agreement, as follows:

                                       7

<PAGE>

     4.1.1 Orders: PERMATEC will supply Products for clinical studies in
           response to written orders from BIOSANTE to be issued in accordance
           with the Development Plan for each Product. Any order for such
           clinical batch shall provide for lead times of at least
           one-hundred-eighty (180) days, and will allow for quantities of +1-
           10% of the quantity of Product ordered. BIOSANTE agrees to purchase
           from PERMATEC all supplies of Products so ordered for all Development
           purposes hereunder.

     4.1.2 Production costs: PERMATEC shall bear the costs, up to an aggregate
           of One Hundred Fifty Thousand Dollars (USD 150,000) per Product (for
           a potential aggregate maximum of Six Hundred Thousand Dollars (USD
           600,000) for all four products), associated with the formulation and
           production of such clinical batches of the Products including,
           without limitation, the preparation of the chemistry, manufacturing
           and control components of any application needed to obtain
           Approval(s), with any additional cost of the formulation and
           production of such clinical batches of Products in excess of USD
           150,000 per Product to be borne exclusively by BIOSANTE.

     4.1.3 Further provisions: Any and all further provisions governing the
           production and supply of clinical batches of Products shall be
           mutually agreed upon by the parties at the appropriate time and,
           absent such mutual agreement, the respective provisions of the Supply
           Agreement shall apply mutatis mutandis to such production and supply
           of clinical batches.

     4.1.4 Repayment of production milestones: in the event that PERMATEC,
           within the one-hundred-eighty (180) days minimum lead time for the
           order of any Product for clinical studies from BIOSANTE under Section
           4.1.1 above, may not reasonably demonstrate its ability to produce or
           have produced the ordered clinical batch of the respective Product in
           time and in compliance with applicable GMP, then BIOSANTE may request
           PERMATEC to repay the respective production milestone payment paid by
           BIOSANTE for the production of the clinical batches of such Product
           under Section 3.3.1 and 3.3.2, respectively, upon receipt of which
           request PERMATEC shall be fully released from its obligation under
           Sections 4.1.1 through 4.1.3, but with respect to the affected
           Product only. In that case, PERMATEC shall repay to BIOSANTE **** of
           USD **** per product up to a total of ****** (USD ****).

4.2 Production of Commercial Supply: The terms and conditions governing the
ordering, manufacturing and supply of any Product for commercial use shall be
mutually agreed upon by the parties in a separate Supply Agreement.

5.   Development obligations of BIOSANTE and PERMATEC
     ------------------------------------------------

5.1 Non-Territory development: PERMATEC shall retain all rights to the Products,
the Know-How and the Patents in geographical areas not included within the
Territory, and

                                       8

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

PERMATEC shall have all rights, but no obligation whatsoever, to develop, market
and sell or license out to a third party any Product with respect to any and all
countries outside the Territory.

5.2 Data sharing: BIOSANTE and PERMATEC agree to provide one another immediate,
full and free access to the clinical data and results generated by or on behalf
of each with respect to the Products, and each agrees that the other may utilize
all such data and results, directly or through permitted (sub-) licenses in
pursuit of Product Approval in their respective geographical areas (the
Territory for BIOSANTE, all other areas for PERMATEC), provided that (i)
BIOSANTE undertakes to include such obligation in any and all of its sub-license
agreements in accordance with Section 2.2 above, and (ii) PERMATEC will use its
best efforts to obtain access to such data from other licensees or sublicensees,
but PERMATEC shall have no obligation to share or provide any such information
and data regarding Products with BIOSANTE under this Section 5.2, if such
information and data is not freely available to PERMATEC.

5.3 BIOSANTE's Development and Marketing obligations/United States: BIOSANTE
agrees and undertakes to diligently use all its commercially reasonable efforts
to (1) Develop the Products in the Territory, and to (2) obtain Approval from
the FDA to market the Products as applicant and owner, consistent with the
Development efforts undertaken by other companies similarly situated within the
industry for similar drug products used for similar indications, all in
accordance with the respective Development Plan for each Product. As Approvals
for each respective Product are obtained, BIOSANTE shall proceed diligently to
(1) use all its commercially reasonable efforts to sell the Product[s] in the
applicable jurisdictions of the Territory, (2) Market, advertise and promote the
sale of and otherwise employ marketing and sales techniques reasonably designed
to develop a demand for the Product[s] in order to achieve the projected sales.
Toward these ends, BIOSANTE shall take appropriate steps including but not
limited to:

     (a)  preparation and filing of an Investigational New Drug Application with
          FDA concerning each Product as applicant; and

     (b)  establishing and maintaining a program reasonably designed and funded
          to obtain information adequate to enable BIOSANTE to file a New Drug
          Application or Abbreviated New Drug Application, as applicable, for
          each Product; and

     (c)  investing and making available any and all necessary financial,
          Marketing, sales and human resources required to achieve in time the
          projected sales of each Product as provided for in the Development
          Plan.

5.4 BIOSANTE's Development and Marketing obligations/Non-US: In all other
countries of the Territory, BIOSANTE agrees to use all its commercially
reasonable efforts to Develop and Market, or have Developed and Marketed by
sub-licensees in accordance with Section 2.2 above, the Products and to obtain
the necessary Approvals, consistent with the Development and Marketing efforts
undertaken by other companies similarly situated within the industry for similar
drug products used for similar indications in any country of the Territory, all
in accordance with the respective Development Plan for each Product, in order to
achieve in time the projected sales of each Product as provided for in the
Development Plan.

                                       9

<PAGE>

5.5 Protocol review: The parties agree that before either begins a clinical
trial of a Product, whether conducted by or on behalf of such party, it will
give the other party the opportunity to review the protocol for such trial,
along with the opportunity to provide comments. The reviewing party shall have
fourteen (14) days to complete such review. Notwithstanding any such
consultation, the party conducting such clinical trial shall maintain full and
sole responsibility regarding any such study protocol.

5.6 Development Plan

     5.6.1 Agreed Development Plan: As soon as possible, but in any event within
           ninety (90) days of entering into this Agreement, BIOSANTE shall
           prepare and provide to PERMATEC, for each Product, a Development Plan
           containing sales projections, its best good faith projection of a
           Development timetable (including projected timetables for clinical
           studies and the FDA new drug application process), and projected date
           of launch. BIOSANTE and PERMATEC will consult and agree on this
           Development Plan by written acknowledgement by each party on a copy
           of the plan, provided to the other party.

     5.6.2 Material deviations: Material deviations from the Development Plans,
           including without limitation deviations from the timetable contained
           therein, shall require the prior written consent by PERMATEC, which
           consent shall not be unreasonably withheld, except that in no event
           shall PERMATEC's approval be withheld if BIOSANTE may demonstrate
           that such deviation is required, due to, or caused by, any material
           technical, scientific or clinical reason encountered by BIOSANTE
           during the Development of such Product.

5.7 Development Reporting: BIOSANTE undertakes to provide PERMATEC regularly,
but at least twice yearly (within sixty (60) days of the start of the calendar
year and July 1, respectively), with an update reasonably detailing the steps
and actions performed and results achieved or gained by BIOSANTE in pursuing the
Development pursuant to the Development Plan, including without limitation
information on the status of any filing for Approvals for each Product.

6.   Representations, warranties and covenants; indemnification
     ----------------------------------------------------------

6.1 PERMATEC's: PERMATEC, as an inducement to BIOSANTE to enter into this
Agreement, represents, warrants and covenants to BIOSANTE as follows:

     6.1.1 Right to license: PERMATEC has full right, power and authority to
           grant an exclusive license to BIOSANTE in the Territory pursuant to
           the terms of this Agreement to practice the technology covered by any
           and all patents listed in Exhibit A, and Know-How, and to Develop,
           Market and sell the Products, free and clear of any mortgage, lien,
           encumbrance or other third-party interest of any kind. As of the
           effective date of this Agreement, PERMATEC is not aware of any fact
           or circumstances that the Products are, in or with respect to the
           Territory,

                                       10

<PAGE>

           subject to any restrictions, covenants, licenses other than this
           Agreement, or judicial and administrative orders of any kind, which
           detract in any material respect from the value of the Products, or
           which could interfere with the use thereof by BIOSANTE in the
           Territory as contemplated by this Agreement.

     6.1.2 No inability to receive Approval: As of the effective date of this
           Agreement, PERMATEC is aware of no facts that would reasonably lead
           it to conclude that any of the Products will be unable to receive the
           contemplated Approval from the FDA or Approval from any other
           Regulatory Authority upon satisfactory completion of clinical trials,
           and PERMATEC has no knowledge of any facts which would reasonably
           lead it to conclude that satisfactory completion of clinical trials
           is not likely.

     6.1.3 Clear rights: As of the effective date of this Agreement, PERMATEC
           has not received any notice and has no knowledge that (i) the rights
           to Develop, Market and sell the Products have been challenged in any
           judicial or administrative proceeding, or (ii) any person, entity or
           product has infringed or will infringe any patent rights encompassed
           by the Patents and applicable to the Products, or (iii) any patent
           rights or other intellectual property rights, including but not
           limited rights of trade mark, trade dress and copyright, have been
           infringed by PERMATEC or will be infringed by BIOSANTE by virtue of
           performing the activities contemplated by this Agreement.

     6.1.4 Right to execute and perform: PERMATEC has full right, power and
           authority to execute and deliver this Agreement, and to perform its
           obligations under it, and has taken all necessary action to authorize
           such execution, delivery and performance. This Agreement constitutes
           the legal, valid and binding obligation of PERMATEC, enforceable
           against it in accordance with its terms.

     6.1.5 Compliance with law: PERMATEC will comply with all applicable laws in
           connection with performance of its obligations under this Agreement.
           The execution, delivery and performance of this Agreement by PERMATEC
           does not violate any provision of applicable law or of any
           regulation, order, decree of any court, arbitration or governmental
           authority, or any other agreement to which PERMATEC is a party.
           No consents, approvals or authorizations, registrations or filings
           are required in connection with the execution, delivery, performance,
           validity or enforceability of this Agreement, except as have been
           obtained or set forth in this Agreement.

     6.1.6 No further representation: Except for the specific representations
           and warranties given by PERMATEC in this Section 6.1, PERMATEC does
           not give any further or other warranty and makes no other or further
           representation, whether express or implied. IN PARTICULAR, BUT
           WITHOUT LIMITATION OF THE GENERALITY OF THE PRECEDING SENTENCE,
           PERMATEC DOES NOT GIVE ANY WARRANTY AND MAKES NO REPRESENTATION WITH
           RESPECT TO THE PRODUCTS AND/OR THE KNOW-HOW, INCLUDING

                                       11

<PAGE>

           WITHOUT LIMITATION, ANY WARRANTY OF COMPLETENESS, ACCURACY,
           MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE THEREOF, IN
           PARTICULAR WITH RESPECT TO THE INTENDED PURPOSE OF SUCCESSFUL
           APPLICATION FOR APPROVAL(S) IN ANY COUNTRY OF THE TERRITORY.

6.2 BIOSANTE's: As an inducement to PERMATEC to enter into this Agreement,
BIOSANTE represents and warrants to PERMATEC as follows:

     6.2.1 Right to execute and perform: BIOSANTE has full right, power and
           authority to execute and deliver this Agreement, and to perform its
           obligations under it, and has taken all necessary action to authorize
           such execution, delivery and performance. This Agreement constitutes
           the legal, valid and binding obligation of BIOSANTE, enforceable
           against it in accordance with its terms.

     6.2.2 Compliance with law: BIOSANTE will comply with all applicable laws in
           connection with performance of its obligations under this Agreement.
           The execution, delivery and performance of this Agreement by BIOSANTE
           does not and will not violate any provision of applicable law or of
           any regulation, order, decree of any court, arbitration or
           governmental authority, or any other agreement to which BIOSANTE is a
           party. No consents, approvals or authorizations, registrations or
           filings are required in connection with the execution, delivery,
           performance, validity or enforceability of this Agreement, except as
           have been obtained or set forth in this Agreement.

     6.2.3 Best efforts: BIOSANTE represents and warrants that it will use its
           best efforts to perform and pursue all steps and actions required
           for, and apply for and pursue the Approvals for Product in accordance
           with the Development Plans and within the time-limits set forth
           therein, and, upon such granting of any such Approvals, to Market the
           Products throughout the Territory during the term of and in
           accordance with this Agreement.

     6.2.4 Compliance with Approvals: BIOSANTE represents and warrants that in
           addition to complying with and respecting any and all applicable
           laws, rules, regulations and orders, it shall also comply with all
           terms and conditions of the Approvals (if any), when Developing,
           Marketing and selling Products in any country of the Territory.

     6.2.5 No further representation: Except for the specific representations
           and warranties given by BIOSANTE in this Section 6.2, BIOSANTE does
           not give any further or other warranty and makes no other or further
           representation, whether express or implied. IN PARTICULAR, BUT
           WITHOUT LIMITATION OF THE GENERALITY OF THE PRECEDING SENTENCE,
           BIOSANTE DOES NOT GIVE ANY WARRANTY AND MAKES NO REPRESENTATION WITH
           RESPECT TO THE PRODUCTS AND/OR THE KNOW-HOW, INCLUDING WITHOUT
           LIMITATION, ANY WARRANTY OF COMPLETENESS,

                                       12

<PAGE>

           ACCURACY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
           THEREOF, IN PARTICULAR WITH RESPECT TO THE INTENDED PURPOSE OF
           SUCCESSFUL APPLICATION FOR APPROVAL(S) IN ANY COUNTRY OF THE
           TERRITORY.

6.3 Indemnification by BIOSANTE: Without affecting any other remedies available
under this Agreement, BIOSANTE shall defend, indemnify and hold PERMATEC and its
directors, officers and employees, harmless from and against any and all claims,
suits or demands for liability, damages, costs and expenses (including
reasonable fees, costs and expenses of attorneys and other professionals and
court costs, but excluding consequential damages for lost profits) arising from
or relating to the negligence or willful misconduct of BIOSANTE or its
Affiliates or its sub-licensees in connection with the subject matter of this
Agreement.

6.4 Indemnification by PERMATEC: Without affecting any other remedies available
under this Agreement, PERMATEC shall defend, indemnify and hold BIOSANTE and its
directors, officers and employees, harmless from and against any and all claims,
suits or demands for liability, damages, costs and expenses (including
reasonable fees, costs and expenses of attorneys and other professionals and
court costs, but excluding consequential damages for lost profits) arising from
or relating to the negligence or willful misconduct of PERMATEC in connection
with the subject matter of this Agreement.

7.   Confidentiality
     ---------------

7.1 Obligation of confidentiality: Except to the extent expressly authorized by
this Agreement, or otherwise agreed in writing, the parties agree that, at all
times during the term of this Agreement and for five (5) years thereafter, the
receiving party shall keep completely confidential, shall not publish or
otherwise disclose and shall not use directly or indirectly for any purpose, any
information furnished, disclosed, delivered or otherwise made available to it by
the other party pursuant to this Agreement (including without limitation
Know-How), except to the extent that it can be established by the receiving
party by competent proof that such information:

     (a)  was already known to the receiving party, other than under an
          obligation of confidentiality, at the time of disclosure by the other
          party;

     (b)  was generally available to the public or otherwise part of the public
          domain at the time of its disclosure to the receiving party;

     (c)  became generally available to the public or otherwise part of the
          public domain after its disclosure, other than through any act or
          omission of the receiving party in breach of this Agreement; or

     (d)  was disclosed to the receiving party, other than under an obligation
          of confidentiality, by a third party who had no obligation to the
          disclosing party not to disclose such information to others.

7.2 Exceptions: Each party may disclose the other's information to the extent
such disclosure is reasonably necessary in filing or prosecuting patent
applications, pursuing or

                                       13

<PAGE>

defending litigation, or complying with applicable governmental regulations,
provided that if a party intends to make any such disclosure, it shall give
reasonable advance written notice to the other party of such intended
disclosure, and shall take reasonable steps to restrict or limit such disclosure
or require confidential treatment thereof.

7.3 When consent needed: Except as otherwise provided in Section 7.2 above,
neither party shall disclose any terms or conditions of this Agreement to any
third party without the prior consent of the other party. Notwithstanding the
foregoing, prior to the execution of this Agreement, the parties shall agree
upon the substance of information that can be used to describe the terms of this
transaction, and the parties may disclose only such information without the
other party's consent.

8.   Proprietary Right and Patents
     -----------------------------

8.1 Title: PERMATEC shall retain title to and full ownership in the Products,
the Patents and the Know-How including, but not limited to, any and all
developments and inventions related thereto, if any (hereinafter collectively
referred to as "PERMATEC IPR"). BIOSANTE does not by virtue of this Agreement,
directly or indirectly through its officers, directors, employees, agent,
Affiliates, customers or other controlled or associated third parties, acquire
any proprietary interest in or other right to PERMATEC IPR, other than provided
in this Agreement.

8.2 Infringement by third parties: PERMATEC and BIOSANTE recognize that they
each have an interest in the protection of the PERMATEC IPR. Either or both may
wish to take steps to protect or defend their respective interests in specific
circumstances. In addition:

     8.2.1 Notice: If either PERMATEC or BIOSANTE becomes aware of (i) any
           product or activity of any kind that involves or may involve an
           infringement or violation of PERMATEC IPR with respect to Products
           and/or the Territory, or (ii) any third-party action, claim or
           dispute (including, but not limited to, actions for declaratory
           judgement alleging invalidity or non-infringement) based upon or
           arising out of PERMATEC with respect to Products and/or the
           Territory, then each agrees to promptly so notify the other in
           writing.

     8.2.2 Independent decisions to act: Each party shall, in its sole
           discretion, have the right but no obligation to determine the most
           commercially appropriate course of action, if any, for it to follow
           to enforce, or otherwise abate the infringement of, or defend third-
           party actions regarding, PERMATEC IPR with respect to Products and
           the Territory, including whether to request status as an additional
           party to any such action. Each party deciding to take any such course
           of action shall do so at its own risk, benefit, cost and expense.
           Notwithstanding anything contained herein, BIOSANTE shall not accept
           any settlement or award in any such action which has or may have a
           negative impact on the proprietary or other legitimate rights of
           PERMATEC in any of the PERMATEC IPR, without the

                                       14

<PAGE>

           prior written consent of PERMATEC, which consent shall not be
           withheld unreasonably.

     8.2.3 Reduction in Royalty: In the instance in which an A/B rated generic
           equivalent or substitute of a Product on sale in any part of the
           Territory is reasonably notified by either party under Section 8.2.1
           above to infringe a Patent available for such Product in such country
           of the Territory, and PERMATEC takes no action against the third
           party, but BIOSANTE does, and BIOSANTE may give evidence that the
           marketing of such competitive product has led to a reduction in sales
           of the affected Product in such country of the Territory of more then
           fifteen percent (15%), then the Royalty payable by BIOSANTE to
           PERMATEC for that Product after such reasonable notice pursuant to
           Section 8.2.1 in that country of the Territory will be **** percent
           (**%) for as long as (1) such competing product is on sale, and (2)
           BIOSANTE's Royalty obligation exists under this Agreement.

     8.2.4 Cooperation: In addition to the above, each party, regardless of
           whether it joins in a legal action, agrees to cooperate with the
           other to provide reasonable assistance in the prosecution or defense
           of any actions regarding PERMATEC's IPR. Each party shall keep the
           other regularly informed on developments in any such action in which
           it participates or obtains information, if the other party is not
           involved.

9.   Term and Termination
     --------------------

9.1 Term: This Agreement shall be effective on the date first written above and
shall expire, unless earlier terminated by either party pursuant to this Section
9, on a country-by-country and Product-by-Product basis upon the expiration of
the respective Royalty Term, subject to BIOSANTE's continuing fully-paid up
exclusive license pursuant to Section 3.2 above.

9.2 Termination: At any time, this Agreement may be terminated by giving written
notice to that effect, as follows:

     (a)  by either party, if the other party is in material default or in
          material breach of any term or provision hereof, including without
          limitation to the terms and deadlines incorporated into the parties'
          agreed Development Plan, which termination shall apply only to the
          Product(s) and Country(ies) involved, or material breach of any
          representation or warranty in this Agreement or material breach of the
          confidentiality obligations hereof, and such material default or
          material breach continues and is not remedied within thirty (30) days
          upon the other party's written request to remedy such default or
          breach; or

     (b)  by either party, if the other party goes into liquidation, voluntarily
          or otherwise, other than for the sole purpose of reorganisation, or
          goes into bankruptcy or makes an assignment for the benefit of
          creditors, or in the event of a receiver being appointed of a
          substantial part of the other party's property; or

                                       15

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

     (c)  by either party in its sole discretion, with respect only to the
          involved Product or Products, or country or countries of the
          Territory, respectively, and without prejudice to any other rights
          conferred on it by this Agreement and in addition to any other
          remedies available to it by law or in equity, if such party terminates
          the Supply Agreement for material breach or insolvency or other
          material reason caused or set by the other party as provided for in
          such Supply Agreement, with the effect of such being the termination
          of this Agreement upon the effective date of the termination of the
          Supply Agreement; or

     (d)  by PERMATEC, with respect only to the involved Product or Products, or
          country or countries of the Territory, respectively, if BIOSANTE, (A)
          within six (6) months after the delivery of clinical supplies has not
          initiated with respect to each Product and for each country of the
          Territory reasonable steps, including sub-licensing in case BIOSANTE
          shall not wish to Develop and Market itself the Product in certain
          countries of the Territory, to Develop and thereafter Market such
          Product pursuant to the provisions of this Agreement, it being
          understood the development work done in the USA may be applicable in
          all countries of the Territory or (B) within three (3) months after
          receipt of commercial quantities after receipt of any Approval for a
          Product in any given country of the Territory has not launched such
          Product in such country of the Territory, or (C) within eighteen (18)
          months after receipt of the first Approval for any given Product by
          any Regulatory Authority, does not either (i) file a request for
          Approval for such Product in all countries of the Territory only if
          the first approval is useful for approval purposes, or (ii) sublicense
          such Product in such other country(ies) of the Territory, or (D)
          ceases the Marketing and sale of any Product in any country of the
          Territory after the Approval from the respective Regulatory Authority
          has been received, in each case with respect to the affected Product
          and the affected country(ies) only, and in each case only if BIOSANTE
          does not cure such situation within three (3) months after PERMATEC's
          written request to do so, subject always to Section 11.10 below; or

     (e)  by BIOSANTE prior to the granting of an Approval for any given Product
          in any given country of the Territory, in case of material technical,
          scientific or regulatory problems or, if the results and data achieved
          and generated during the Development of any given Product in
          reasonable determination show that Approval for such Product will be
          unlikely to be granted, with respect to the affected Product only and
          in a specific country of the Territory, and provided that prior to
          such termination, the parties have discussed in all details the
          problems encountered and not agreed on a mutually acceptable change of
          the Development Plan pursuant to Section 5.6.2 above; or

     (f)  by BIOSANTE, if any Regulatory Authority has finally denied the
          Approval (or any material part thereof) for any given Product in any
          country of the Territory, with respect to the affected Product and
          such country or countries only; or

                                       16

<PAGE>

     (g)  by BIOSANTE if in its reasonable discretion it determines that it
          would not be economically viable to develop and market a Product in
          any country of the Territory, with respect to a specific product and
          country only. In this case, BIOSANTE shall inform PERMATEC immediately
          of this decision and shall provide in writing and within 30 days a
          detailed explanation including market research data and projections
          and calculation for such a decision. Following this decision and on a
          country-by-country basis, PERMATEC has the right to use free of charge
          all the development data, registration file for marketing or licensing
          purposes in that specific country and for that specific Product. In
          that case the repayment of the costs to generate data by PERMATEC to
          BIOSANTE as defined in paragraph 9.4 does not apply. The approvals
          obtained by BIOSANTE in these countries will be transferred free of
          charge to PERMATEC upon request.

9.3 No prejudice to rights: The termination of this Agreement shall be without
prejudice to any rights and obligations of either party accrued prior to the
effective date of such termination, unless explicitly otherwise agreed. BIOSANTE
shall forthwith make all payments due and outstanding to PERMATEC at the date of
termination. Except as explicitly otherwise stated in this Agreement or
otherwise agreed in writing, PERMATEC shall not be obliged to refund upon
termination of this Agreement to BIOSANTE any payments, including without
limitation the milestone payments or royalties made by BIOSANTE to PERMATEC
prior to such termination pursuant to the provisions of this Agreement.

9.4 Termination of license, return of information: In the event of termination
of this Agreement for whatsoever reason, then the license granted hereunder
shall immediately be terminated and BIOSANTE shall immediately refrain from
using directly or indirectly in any way the Patents, Know-How and confidential
information of PERMATEC. Furthermore, BIOSANTE shall return to PERMATEC all
materials, documentation, information, data and other things furnished by
PERMATEC in connection with this Agreement, including without limitation any and
all information on PERMATEC IPR, together with all copies thereof in BIOSANTE's
possession or under its control, which were achieved, produced or received
hereunder, all free of any charge. Furthermore, BIOSANTE shall deliver to
PERMATEC any and all studies, data, results and protocols achieved, produced or
gained by BIOSANTE in performing the Development and not previously delivered to
PERMATEC pursuant to Section 5.2 above. PERMATEC shall have the right, but no
obligation, to use, at its sole discretion, any and all such material for its
own purposes. In case PERMATEC shall use such information in applying and
receiving marketing approval and launching the Product, then at launch, PERMATEC
shall reimburse the costs to generate such information to BIOSANTE excluding
development costs that were paid by BIOSANTE to PERMATEC under this Agreement.
In case PERMATEC shall use such information to enter a license agreement with a
third party, then PERMATEC shall reimburse the costs to generate such
information to BIOSANTE excluding development costs that were paid by BIOSANTE
to PERMATEC under this agreement. The reimbursement to BIOSANTE will occur at
the execution of the license agreement and shall not exceed the net payments
(upfront, milestones and royalty payments excluding development costs) received
by PERMATEC from a third party under a license agreement. BIOSANTE's costs to
generate such information which is to be reimbursed by PERMATEC is to be agreed

                                       17

<PAGE>

between BIOSANTE and PERMATEC at the time of termination or when the information
is to be transferred to PERMATEC

9.5 Partial termination: In the event that any termination hereunder is limited
to one or more, but not all, countries of the Territory and/or to one Product
only, but not all Products, as provided for in Sections 9.2(d), (e) and (f)
above, then the effects of such termination shall only apply to such country or
countries and/or the affected Product, but shall not affect in any way the
validity of this Agreement with respect to any other country of the Territory
with respect to the affected Product and/or any other Product.

9.6 Remedies not limited: The termination of this Agreement by either party
shall not limit remedies which may be otherwise available under this Agreement
or in law or equity to either party.

10.  Options to extend Territory or Products
     ---------------------------------------

10.1 Option to extend Territory: During a period of 180 days after the effective
date of this Agreement (the "Exercise Period"), BIOSANTE shall have a free
option, exercisable in its sole discretion, to add any or all of the nations of
****, ****, ****, and **** (the "Option Countries") to the Territory that is the
subject of this Agreement, with respect to the Products provided and to the
extent that the Products are available for license for the considered countries.
The option may be exercised by BIOSANTE during the Exercise Period by giving
written notice of exercise to PERMATEC as provided in this Agreement. The
parties recognizing that they may or may not desire to abide by identical terms
to those in this Agreement with respect to the extended portions of the
Territory, upon receipt by PERMATEC of BIOSANTE's written notice of exercise.
the parties agree to negotiate in good faith and determine the specific terms to
apply to BIOSANTE's Development and Marketing in the extended portions of the
Territory. Notwithstanding anything contained in this Section 10.1, PERMATEC,
during the Exercise Period, if it has negotiated with a third party commercial
terms of a license (including, without limitation license fees, milestone
payments, royalties and allocation of development costs) in any Option Country,
may request BIOSANTE in writing to elect whether or not to exercise its option
under this Section 10.1 with respect to the same country or countries that are
the subject of the terms negotiated with the third party, in which case BIOSANTE
shall have thirty (30) days from such notice from PERMATEC to exercise that
option. In the event that BIOSANTE does not exercise its option under this
Section 10.1 within the thirty (30) day period after receipt of PERMATEC's
notice hereunder, then the option under this Section 10.1 shall lapse and fall
away, irrespective of any part of the Exercise Period remaining.

10.2 Right of first offer: During a period starting on the ninety-first (91st)
day after the effective date of this Agreement and ending on the first (1st)
anniversary of the effective date of this Agreement (the "Offering Period"),
BIOSANTE shall have an exclusive right of first offer to Develop and Market in
the United States, Canada, Japan, and any other country of the Territory not
already licensed to third parties or subject to a third party's right of first
refusal, and to enter into a respective license therefor, any nonproprietary
sexual hormone product or related hormonal product, including **** and its
derivatives, that PERMATEC may have formulated,

                                       18

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

invented, developed, licensed or otherwise obtained rights with respect to, and
which PERMATEC intends to, but has not prior to such Offering Period committed
to, license out for the Territory or parts thereof. Exercise of the right of
first offer shall commence with PERMATEC notifying BIOSANTE at any time during
the Offering Period of its intention to license out such product. which notice
shall in reasonable detail describe the product and Territory or parts thereof
in question and the commercial terms of such license (including without
limitation license fees, milestone payments, royalties and allocation of
development cost). BIOSANTE shall have forty five (45) days to accept the offer
on identical terms as contained in such notice, during which forty five (45)
days PERMATEC and BIOSANTE agree to negotiate in good faith all terms of such
contemplated license and development agreement on the basis of PERMATEC's
notice, unless otherwise agreed by the Parties. Notice and exercise under this
Section 10.2 shall be made by written notice. In the event that BIOSANTE shall
not accept the commercial terms notified by PERMATEC, then PERMATEC shall be
free to grant such license to any third party, irrespective of any part of the
Offering Period remaining. In the event that PERMATEC has the ability to license
the products described to a third party within the first ninety (90) days of
this Agreement, PERMATEC shall immediately so notify BIOSANTE, and BIOSANTE
shall have fifteen (15) business days within which to exercise its right of
first offer as described elsewhere in this paragraph.

10.3 Option regarding the **** Combi Gel

     10.3.1 License Agreement: PERMATEC will not license **** Combi Gel to
            any company other than the one company identified by PERMATEC to
            BIOSANTE during negotiation of this Agreement in the first ninety
            (90) days of the effectiveness of this Agreement. If no license
            agreement is reached in that ninety (90) day period with the company
            described, then during a period starting on the ninety-first (91st)
            day after the effective date of this Agreement and ending on the
            first (1st) anniversary of the effective date of this Agreement (the
            "Offering Period") PERMATEC will offer and BIOSANTE hereby agrees to
            accept an exclusive license on the ****** Combi Gel pursuant to the
            terms and conditions set forth below.

     10.3.2 Terms: PERMATEC will license to BIOSANTE **** Combi Gel in the
            countries of the United States of America and Canada and any other
            part of the Territory not already licensed to third parties except
            Japan on the following basic terms: for a license fee of ******
            Dollars (USD ******), which license fee is not refundable,
            nonrecoverable and payable as set forth below, and a **** percent
            (**%) royalty on Net Sales of **** Combi Gel, calculated in the same
            manner as royalties for the Products under this Agreement, and
            BIOSANTE to bear all costs of development (including without
            limitation clinical study cost), and otherwise on substantially
            identical terms as set forth in this Agreement. The costs associated
            with the production of clinical batches of **** Combi Gel will be
            borne equally by PERMATEC and BIOSANTE up to ****** Dollars (USD
            ******), with any amounts in excess thereof to be borne by BIOSANTE.

                                       19

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

     10.3.3 Payments:

            10.3.3.1 Execution of License Agreement: Upon execution of a
                     separate license agreement concerning **** Combi Gel,
                     BIOSANTE shall pay to PERMATEC a milestone payment of
                     ****** Dollars (USD ******).

            10.3.3.2 ********: Upon ******, BIOSANTE shall pay to PERMATEC a
                     milestone payment of ****** Dollars (USD ******).

            10.3.3.3 ********: Upon ******, BIOSANTE shall pay to PERMATEC a
                     milestone payment of up to ****** Dollars (USD ******), as
                     follows: ********* ********** ********.

            10.3.3.4 ********: Upon ******, BIOSANTE shall pay to PERMATEC a
                     milestone payment of up to ****** Dollars (USD *****),
                     as follows: ****** ****** ******.

10.4 Termination of option rights: In the event that this Agreement is
terminated by PERMATEC pursuant to Section 9.2 above prior to the expiration of
any of the rights contained in this Section 10, then all such rights shall
terminate and fall away as per the effective date of such termination without
any liability on the side of PERMATEC.

11.  Miscellaneous
     -------------

11.1 Governing Law: This Agreement is governed by and construed in all respects
in accordance with the laws of the State of Illinois, USA and the United States
of America (without regard to conflicts of laws principles), excluding the
United Nations Convention on Contracts for the International Sale of Goods.

11.2 Dispute Resolution:

     (a)  Conciliation. The parties wish first to seek an amicable settlement of
          all disputes, controversies or claims arising out of or relating to
          this Agreement by conciliation in accordance with the UNCITRAL
          Conciliation Rules now in force. The conciliation shall take place in
          Chicago, Illinois (USA) before a conciliator. If assistance is needed
          in connection with the appointment of a conciliator or other
          administrative matters, JAMS Endispute, Inc., 222 S. Riverside Plaza,
          Chicago, Illinois, USA (telephone 312-739-0200), shall be the
          institution to render such assistance. The language to be used in the
          conciliation proceedings shall be English.

     (b)  Arbitration. Subject to possible court proceedings under Section
          11.2(d) of this Agreement, if any conciliation proceedings under
          Section 11.2(a) of this Agreement are terminated in accordance with
          Article 15 of the UNCITRAL Conciliation Rules or rejected in
          accordance with Article 2 of those Rules,

                                       20

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

          without resolution of the disputes, controversies or claims, then all
          said disputes, controversies or claims shall be determined by
          arbitration in accordance with the UNCITRAL Arbitration Rules now in
          force, as supplemented by the IBA Rules on the Taking of Evidence in
          International Commercial Arbitration, as adopted June 1, 1999, insofar
          as said IBA Rules are not inconsistent with the express provisions of
          this Agreement. The language to be used in the arbitral proceedings
          shall be English. There shall be three (3) arbitrators, the place of
          arbitration shall be Chicago, Illinois (USA) and the appointing
          authority shall be JAMS Endispute, Inc. In rendering the award, the
          arbitrator shall follow and apply the substantive laws of the State of
          Illinois (without regard to conflict or choice of laws principles).
          The arbitrator shall have the authority to award compensatory damages
          only, subject to the limitations described in this Agreement. Each
          party shall pay the fees of its own attorneys, expenses of witnesses
          and all other expenses and costs in connection with the presentation
          of such party's case (collectively, "Attorneys' Fees"). The remaining
          costs of the arbitration, including without limitation, fees of the
          arbitrator, costs of records or transcripts and administrative fees
          (collectively, "Arbitration Costs") shall be borne equally by the
          parties. Notwithstanding the foregoing, the arbitrator in the award
          may apportion said Attorneys' Fees and Arbitration Costs, pursuant to
          articles 38 through 40 of the UNCITRAL Arbitration Rules. The award
          rendered by the arbitrator shall be final, and judgment may be entered
          in accordance with the applicable law by any court having jurisdiction
          thereof.

     (c)  Confidentiality. The existence and resolution of any conciliation
          and/or arbitration shall be kept confidential, and the parties, the
          conciliator and the arbitrator shall not disclose to any person any
          information about such arbitration.

     (d)  Court Proceedings. Notwithstanding the arbitration provisions in
          Section 11.2(c) of this Agreement, PERMATEC shall have the right to
          sue in any court of competent jurisdiction to collect from BIOSANTE
          funds due and owing PERMATEC hereunder. Section 11.2(c) of this
          Agreement shall not be construed to prevent either party from seeking
          injunctive relief against the other party from any judicial or
          administrative authority of competent jurisdiction to enjoin that
          party from breaching this Agreement pending the resolution of a
          dispute by arbitration, pursuant to said Section 11.2(c). Any action
          to confirm an arbitration award or any other legal action related to
          this Agreement between the parties may be instituted in any court of
          competent jurisdiction. PERMATEC and BIOSANTE each waive their right
          to a trial by jury in any such court proceedings.

11.3 Notice: All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by facsimile transmission,
mailed by registered or certified mail (return receipt requested, postage
prepaid) or sent by overnight courier service to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

                                       21

<PAGE>

                  If to PERMATEC

                  Permatec Technologie, AG
                  c/o Permatec Pharma AG
                  Hardstrasse 18
                  CH-4132 Muttenz, Switzerland
                  Attn.:   President
                  Fax No: +41 61 465 92 91

with copy to:     Rinderknecht Klein & Stadelhofer
                  Beethovenstrasse 7
                  CH-8022 Zurich, Switzerland
                  Fax No: ++41 1 287 24 00

                  If to BIOSANTE:

                  Stephen M. Simes
                  President and CEO
                  BioSante Pharmaceuticals, Inc.
                  175 Olde Half Day Road
                  Lincolnshire, Illinois 60069
                  Tel:     (847) 793-2434
                  Fax:     (847) 793-2435

with copy to:     Eric F. Greenberg
                  Ungaretti & Harris
                  3500 Three First National Plaza
                  Chicago, Illinois 60602-4283
                  Tel:     (312) 977-4647
                  Fax:     (312) 977-4405

11.4 Entirety: The terms and conditions of this Agreement, together with the
Exhibits referred to herein, constitute the entire agreement and understanding
of the parties, and supersede all previous communications whether oral or
written between the parties, including any previous agreement or understanding
varying or extending the same.

11.5 Modification: This Agreement may be released, discharged, abandoned,
changed or modified only by an instrument in writing of equal formality, signed
by the duly authorized officer or representative of each of the parties.

11.6 Severability: Each party hereby acknowledges that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties agree that it is their intent that
the remainder of the Agreement shall continue in effect, and shall substitute,
by mutual consent, valid provisions for such invalid provisions which valid
provisions in their

                                       22

<PAGE>

economic effect are sufficiently similar to the invalid provisions that it can
be reasonably assumed that the parties would have entered into this Agreement
with such valid provisions.

11.7 Waiver: The failure of either party at any time or from time to time to
exercise any of its rights or to enforce any of the terms, conditions or
provisions under this Agreement shall not be deemed to be a waiver of any such
rights nor shall it prevent such party from subsequently asserting or exercising
any such rights.

11.8 Relationship of Parties: Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency or joint venture relationship between
the parties.

11.9 Assignment: Neither this Agreement nor any interest hereunder shall be
assignable by either party without the prior written consent of the other party
(provided that this shall not restrict or prevent BIOSANTE from sublicensing its
rights or responsibilities hereunder). Notwithstanding the foregoing, PERMATEC
may subcontract any and all of its obligations hereunder to any third party, and
the parties may assign this Agreement or any of its respective rights or
obligations hereunder to any Affiliate or successor by merger or sale of
substantially all of their business; provided in each case, however, that such
party shall remain jointly and severally liable for the performance of all of
its duties and obligations hereunder.

11.10 Force Majeure: Neither party hereto shall be held liable or responsible to
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including but not limited to fire, floods,
embargos, war, acts of war (whether war be declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labour disturbances, acts of
God, omissions or delays in acting by any governmental authority (including the
FDA and Regulatory Authorities) or the other party hereto.

11.11 Interest: In the event any amount due and payable under this Agreement is
not paid by the due date, then the party owing such amount shall pay to the
other party, without being requested by such other party, interest on the total
outstanding amount at the rate equal to the U.S. Prime Rate, as reported by the
Wall Street Journal on the date that such payment falls due, increased by three
percent (3%), in United States Dollars and adjusted on the first day of every
subsequent calendar quarter.

11.12 Interpretation: The Parties will execute or have executed a Supply
Agreement at or about the same time as this License Agreement, which has as its
initial subject matter the same Products that are the subject of this License
Agreement. It is the Parties' intent and understanding that there are no
conflicts or contradictions between the two Agreements, as the License Agreement
is intended to control the licensing (including supply of products for
development), Development and Marketing of the Products, and the Supply
Agreement is intended to control the supply of commercial quantities of
Products. In the event and to the extent any direct conflict or contradiction
between the two Agreements is identified, it is the Parties' intent that the
terms of the License Agreement shall govern.

                                       23

<PAGE>

     IN WITNESSETH WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers with effect as of the date first
above written.

PERMATEC TECHNOLOGIE, AG

/s/  Jacques Gonella
----------------------------------
By:   Dr. Jacques Gonella
Its:  Executive Chairman

/s/ Philippe Dro
----------------------------------
By:   Dr. Philippe Dro
Its:  President and COO

BIOSANTE PHARMACEUTICALS, INC.

/s/ Stephen M. Simes
----------------------------------
By:   Stephen M. Simes
Its:  President and CEO

                                       24

<PAGE>

                                    EXHIBIT A

                                     PATENTS
                                     -------

A Novel Composition for transdermal administration of an Estrogen, a Progestin
or a mixture thereof (Combi Gel)

Ref.:             PRE.001

<TABLE>
<CAPTION>
Country              Application           Number              Patent             Number             Expirat.
                        Date                                    Date                                   Date
<S>                  <C>                 <C>                  <C>                <C>                <C>
Argentina             06.06.1997         P970102497                                                 06.06.2017
Australia             05.06.1997         24729/97                                                   05.06.2017
Canada                05.06.1997         2,207,144                                                  05.06.2017
Europe                04.06.1997         97108989.1                                                 04.06.2016
Italy                 06.06.1996         M196A001152          07.04.1998         1283102            06.06.2016
Japan                 05.06.1997         9-185695                                                   05.06.2017
Korea, Rep.           04.06.1997         97-236704                                                  04.06.2017
New Zealand           05.06.1997         328021               19.03.1998         328021             05.06.2017
South Africa          05.06.1997         974981               25.03.1998         97/4981            05.06.2017
Taiwan                06.06.1997         86107807
U.S.A.                05.06.1997         08/869.982           06.04.1999         5,891,462          05.06.2017
</TABLE>

                                       25

<PAGE>

Administration System for Estradiol
(Estradiol Patch)

Ref.:             GPH.001

<TABLE>
<CAPTION>
Country              Application           Number              Patent             Number            Expirat.
                        Date                                    Date                                  Date
<S>                   <C>                <C>                  <C>                <C>                <C>
Australia             07.05.1993         38459/93             05.11.1996         670273             07.05.2013
Austria               07.05.1993         93810336.3           05.08.1998         0569338            07.05.2013
Belgium               07.05.1993         93810336.3           05.08.1998         0569338            07.05.2013
Denmark               07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
Europe                07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
Europe/It.            07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
France                07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
Germany               07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
Greece                07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
Ireland               07.05.1993         93810336.3           05.08.1999         0569338            07.05.2013
Japan                 28.04.1993         102325/1993          30.07.1999         2960832            28.04.2013
Korea, Rep.           07.05.1993         93-7877                                                    07.05.2013
Luxembourg            07.05.1993         93810336.3           05.08.1998         0569338            07.05.2013
Netherlands           07.05.1993         93810336.3           05.08.1998         0569338            07.05.2013
New Zealand           05.05.1993         247549               11.04.1996         247549             05.05.2013
Portugal              07.05.1993         93810336.3           05.08.1998         569338             07.05.2013
South Africa          06.05.1993         93/3180              31.08.1994         93/3180            06.05.2013
Spain                 07.05.1993         93810336.3           05.08.1998         0569338            07.05.2013
Sweden                07.05.1993         93810336.3           05.08.1998         0569338            07.05.2013
Switzerland           07.05.1993         9381 0336.3          05.08.1998         0569338            07.05.2013
Taiwan                08.05.1993         82103602             27.11.1995         NI072551           07.05.2013
U.K.                  07.05.1993         93810336.3           05.08.1998         569338             07.05.2013
Canada                07.05.1993         2,095,789                                                  07.05.2013
U.S.A.                03.05.1993         08/058,517
</TABLE>

                                       26

<PAGE>

Administration System for Estradiol (followed)

Ref.:    GPH.001/A und /CON 1

<TABLE>
<CAPTION>
Country               Application          Number              Patent             Number            Expirat.
                         Date                                   Date                                  Date
<S>                   <C>                 <C>                 <C>                 <C>               <C>
GPH.001/A
Switzerland           08.05.1992          1487/92                                                   08.05.2012

GPH.001/CON 1
U.S.A.                19.12.1994          08/358,897          09.09.1997         5,665,377          09.09.2014
</TABLE>

                                       27

<PAGE>

                                    EXHIBIT B

                                    PRODUCTS
                                    --------

Gel E2 (where estradiol is the sole active ingredient, and where the gel is
applied to the skin)

Gel Testosterone (where testosterone is the sole active ingredient and where the
gel is applied to the skin)

Patch E2 (where estradiol is the sole active ingredient and where the patch is
applied to the skin)

E2-**** Combi Gel (where estradiol and *********** are the two active
ingredients and where the gel is applied to the skin)

Option regarding **** Combi gel

**** Combi Gel (where ***** and ***** are the two active ingredients and where
the gel is applied to the skin)

                                       28

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

                                    EXHIBIT C

                             COUNTRY CLASSIFICATION
                             ----------------------

First Tier:                USA

Second Tier                Canada; China

Third Tier:                All other countries of the Territory

                                       29<PAGE>
                                                                   Exhibit 10.35

                        CONFIDENTIAL TREATMENT REQUESTED.
    CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN
         SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                 Amendment No. 1

                                     to the

                                License Agreement
                    dated 13th of June 2000 (the "Agreement")

                                 by and between

               Antares Pharma IPL AG, Zug, Switzerland as Licensor
                   (formerly known as Permatec Technologie AG)

                                       and

      BioSante Pharmaceuticals, Inc., Lincolnshire, IL, U.S.A. as Licensee

--------------------------------------------------------------------------------

                                    Recitals:

WHEREAS, Permatec Technologie AG has changed its corporate name into Antares
Pharma IPL AG ("ANTARES"); and

WHEREAS, "ANTARES" has secured a third party being interested in a license
package which package would - inter alia - include the rights to certain
Products (all capitalized terms used herein but not defined shall have such
meaning as ascribed to such terms in the Agreement) in specified countries of
the Territory as licensed to BioSante Pharmaceuticals, Inc. ("BIOSANTE") under
the Agreement; and

WHEREAS, BIOSANTE is prepared to return such rights to certain Products in
specified countries included in the license under the Agreement for the
consideration described and under the terms and conditions set forth herein
below.

NOW THEREFORE, the Parties hereby agree pursuant to this Amendment No. 1 to the
License Agreement dated 13th of June 2000 (the "Agreement") ("Amendment No. 1")
to amend the Agreement as follows:

1.   Change of Corporate Name
     ------------------------

     Following the change of corporate name from Permatec Technologie AG into
     Antares Pharma IPL AG effective as of 15th February 2001, the Agreement is
     hereby amended as follows for clarification and to make the Agreement
     consistent with this Amendment No. 1:

     (a)  all references in the Agreement to Permatec Technologie AG shall be
          substituted by Antares Pharma IPL AG; and

                                       1

<PAGE>

     (b)  all references in the Agreement to PERMATEC shall be substituted by
          ANTARES.

2.   Return of Rights
     ----------------

2.1  BIOSANTE hereby returns its rights granted under the Agreement as part of
     the license (including without limitation rights to Develop, apply and
     receive Approval as applicant, Market, use and sell) to ANTARES with
     respect to:

     (a)  all rights to the Product Patch E2 (where estradiol is the sole active
          ingredient and where the patch is applied to the skin) for all
          counties of the Territory; and

     (b)  the rights to the Product Gel E2 (where estradiol is the sole active
          ingredient and where the gel is applied to the skin), for the
          countries Australia and Malaysia; and

     (c)  the rights to the Product Gel Testosterone (where testosterone is the
          sole active ingredient and where the gel is applied to the skin), for
          the counties Australia and Malaysia.

     All such rights returned to ANTARES as described in this Section 2.1 shall
     be collectively referred to hereinafter as the "Returned Rights".

2.2  In order to give effect to the waiver and return of the Returned Rights,
     the parties agree to amend the Agreement as follows:

     (a)  the Product Patch E2 (where estradiol is the sole active ingredient
          and where the patch is applied to the skin) is deleted from the list
          of Products attached to the Agreement as Exhibit B, and all references
          to Patch E2 in the Agreement are deleted and eliminated without
          substitution; and

     (b)  the definition of the term "Territory" in Section 1.14 of the
          Agreement is deleted in its entirety and substituted by the following
          definition:

          1.14 "Territory" shall mean the United States of America and those of
          its territories and possessions over which the FDA has regulatory
          authority (the "USA"); Canada; Australia; New Zealand; South Africa;
          Israel; Mexico; The People's Republic of China (including Hong Kong)
          ("China"); Malaysia; and Indonesia, except for the Products Gel E2 and
          Gel Testosterone, for which Products the term "Territory" shall mean
          the United States of America and those of its territories and
          possessions over which the FDA has regulatory authority (the "USA");
          Canada; New Zealand, South Africa; Israel; Mexico, The Peoples
          Republic of China (including Hong Kong) ("China"); and Indonesia. The
          countries are classified according to Exhibit C in three tiers.

                                       2

<PAGE>

3.   Data Sharing
     ------------

3.1  In order to secure the mutual exchange and sharing of data relating to the
     Products in the Territory (as amended hereby) by BIOSANTE and its
     Sublicensees, and outside the Territory (as amended hereby) by ANTARES
     and/or its third party licensees, the parties hereby agree that Section 5.2
     of the Agreement shall in particular also include the use of any data and
     results generated in the Territory by BIOSANTE or any of is a sublicensees
     (if any) for use by ANTARES or any licensee with respect to the Returned
     Rights outside the Territory, and any data and results generated by ANTARES
     or any licensee with respect to the Returned Rights for use by BIOSANTE or
     its sub-licensees in the Territory.

3.2  ANTARES undertakes to include a respective obligation giving effect to such
     data sharing also with respect to the Returned Rights in any eventual
     license agreement with a third party on the Returned Rights (or any part
     thereof).

4.   Changes in Payment Obligations
     ------------------------------

4.1  As consideration for the Returned Rights by BIOSANTE, the parties agree to
     eliminate certain payment obligation of BIOSANTE under the Agreement as
     specified herein below:

     (a)  the payment obligation of BIOSANTE under Section 3.3.1 of the
          Agreement in the amount of USD 125,000 upon start of manufacturing of
          the first batch of GMP-compliant finished Product for use in a
          clinical trial of the first Product to be subjected to such clinical
          trial (which is either the Product GEL E2 or GEL Testosterone) shall
          be eliminated from the Agreement; and

     (b)  the payment obligation of BIOSANTE under Section 3.3.2 of the
          Agreement in the amount of USD 125,000 upon start of manufacturing of
          the first batch of GMP-compliant finished Product for use in a
          clinical trial of the second Product to be subjected to such clinical
          trial (which is either the Product GEL E2 or GEL Testosterone) shall
          be eliminated from the Agreement; and

     (c)  the milestone payment obligation of BIOSANTE under Section 10.3.3.1 of
          the Agreement in the amount of USD ***** Combi-Gel shall be eliminated
          from the Agreement.

4.2  As further consideration for the Returned Rights by BIOSANTE, ANTARES
     agrees that its obligation under Section 4.1.3 of the Agreement is not
     diminished by this Amendment No. 1, such that ANTARES remains obligated to
     expend funds for the formulation and production of the Products remaining
     under the Agreement, up to a potential maximum of Six Hundred Thousand
     Dollars ($600,000), and such that the funds it was to have expended on the
     Product Patch E2, up to One Hundred Fifty Thousand Dollars ($150,000), will
     be allocated as additional formulation and production expenditures for
     Product Gel E2 and Product Gel Testosterone.

4.3  The parties hereby confirm that the consideration described above is
     sufficient and adequate for the Returned Rights.

                                       3

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

5.   No Further Changes
     ------------------

5.1  The parties hereby agree and acknowledge that the Agreement shall, except
     for and in due incorporation of the changes agreed upon in this Amendment
     No. 1, remain in full force and effect and, subject to Section 5.2 below,
     not be otherwise changed, altered or amended.

5.2  The parties further agree that in the event that any further amendment,
     change or alteration of the language or wording of any Section of the
     Agreement would be required to give full effect to any of the changes
     agreed upon in this Amendment, then such further amendment, change or
     alteration of the language or wording shall be made upon reasonable request
     of either party.

5.3  This Amendment is agreed to be subject to the provisions of the Agreement
     of 11.1 (Governing Law) and 11.2 (Dispute Resolution) by reference.

IN WITNESSETH WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers with effect as of the 20th day of
May, 2001.

Antares Pharma IPL AG

/s/  Dario Carrara
----------------------------------
By:  Dario Carrara
Its: Executive Director

BIOSANTE PHARMACEUTICALS, INC.

/s/  Stephen M. Simes
----------------------------------
By:  Stephen M. Simes
Its: President and CEO

                                       4

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