LICENSE AGREEMENT

This License Agreement (this “ Agreement ”) is made effective as of February 3, 2009 (the “ Effective Date ”) by and between NexMed Inc., a Nevada corporation (“ NexMed ”), and Warner Chilcott Company, Inc., a Puerto Rico corporation (“ Warner ”).  NexMed and Warner are each hereinafter referred to individually as a “ Party ” and together as the “ Parties .” Capitalized terms that are used and not defined in this Agreement shall have their respective meanings set forth in the Purchase Agreement (as defined below).

WHEREAS, the Parties have entered into an Asset Purchase Agreement dated as of February 3, 2009 (the “ Purchase Agreement ”) pursuant to which Warner will purchase the Purchased Assets (as defined in the Purchase Agreement) from NexMed;

WHEREAS, NexMed is retaining certain Licensed Patents (as defined below) and Licensed Know-How (as defined below) that is necessary to or useful for exploiting the Purchased Assets; and

WHEREAS, the Purchase Agreement contemplates that the Parties shall enter into this Agreement simultaneously with the Closing.

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

Section 1.01   Definitions .  The following initially capitalized terms, as used herein, have the following meanings:

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

“ ANDA Product ” means a product that is the subject of an Abbreviated New Drug Application, as defined under 21 U.S.C. § 355(j), filed by a Third Party with the FDA, for which the Licensed Product is the reference listed drug.

“ API ” means alprostadil.

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

“ Competing Product ” means any Third Party pharmaceutical product for use in the Field, including any ANDA Product.

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

“ Control ” or “ Controlled ” means, with respect to any Technology or Patents, the ownership thereof or the possession by a Party of rights under such Technology or Patents sufficient to permit it to grant licenses or sublicenses to such Technology or Patents as provided for herein, in each case without violating the terms of any legally binding agreements between a Party and any Third Party in existence as of the Effective Date.

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

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

“ Field ” means the topical treatment of male erectile dysfunction.

“ Licensed Know-How ” means all Technology that is Controlled by NexMed that is necessary or useful for Warner to Develop, make, use or sell the Licensed Product in the Territory other than the Transferred Technology.

“ Licensed Patents ” means the Patents that are Controlled by NexMed that are necessary or useful for Warner to Develop, make, use or sell the Licensed Product in the Territory other than the Transferred Technology, including the Patents set forth on Schedule A .

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

“ Licensed Trademark ” means the trademark set forth on Schedule B .

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

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

“ Sublicensee ” means any Third Party or Affiliate of Warner to whom Warner grants a Sublicense of the rights granted to Warner under this Agreement, as provided under Section 2.02.

“ Technology ” means, whether or not patentable, any and all proprietary ideas, inventions, discoveries, trade secrets, processes, formulae, data, know-how, improvements, inventions, chemical materials, assays, techniques, marketing plans, strategies, customer lists, biologic materials, results, designs, specifications, methods, formulations, ideas, technical information (including structural and functional information), process information, pre-clinical information, clinical information, any and all proprietary biological, chemical, pharmacological, toxicological, pre-clinical, clinical, assay, control and manufacturing data and materials or other information.

“ Territory ” means the United States of America, including its possessions and territories.

“ Third Party ” means any Person other than Warner, NexMed and their respective Affiliates.

Section 1.02   Additional Definitions .  Each of the following terms is defined in the Section set forth opposite such term:

Section 2.01   License To Warner .  Subject to the terms and conditions of this Agreement, NexMed, on behalf of itself and its Affiliates, hereby grants to Warner:

(a)            a perpetual, exclusive (even as to NexMed and its Affiliates but subject to Section 5.03 of the Purchase Agreement), fully transferable, fully sublicensable, royalty-free, fully paid-up license under the Licensed Patents and Licensed Know-How to Develop, have Developed, make, have made, use, have used, sell, distribute for sale, have distributed for sale, offer for sale, have sold, import or have imported Licensed Products in the Field in the Territory; and

(b)            a perpetual, exclusive (even as to NexMed and its Affiliates but subject to Section 5.03 of the Purchase Agreement), fully transferable, fully sublicensable, royalty-free, fully paid-up license under the Licensed Trademark solely in connection with the Development, manufacture and commercialization the Licensed Product in the Field in the Territory.

Section 2.02    Right to Sublicense .  Warner shall have the right to grant sublicenses under the exclusive licenses granted pursuant to Section 2.01.  In connection with the grant of any permitted sublicense hereunder, Warner shall ensure that each of its Affiliates and Sublicensees accepts and complies with all of the terms and conditions of this Agreement as if such Affiliates or Sublicensees were a party to this Agreement and Warner shall guarantee and remain obligated for the performance (or failure of performance) of any Affiliate or Sublicensee hereunder.

Section 2.03    Retained Rights .  Except as expressly provided hereunder, NexMed and its Affiliates reserve all other rights in and to the Licensed Know-How, Licensed Patents and Licensed Trademark, including retaining all rights to the Licensed Trademark outside the Territory.  Notwithstanding anything else contained herein to the contrary, NexMed and its Affiliates at all times reserve such rights under the Licensed Know-How and Licensed Patents as is necessary to allow NexMed and its Affiliates to Develop, manufacture and supply Licensed Products outside the Territory.

Section 2.04    Right of Reference.   Each Party and its Affiliates will, upon reasonable request, provide the other Party and its Affiliates, its licensees and sublicensees with access to and a right to reference and use any filings with the FDA related to the Licensed Product including drug master files.

Section 2.05    OTC Product .  If at any time during the Term, Warner determines in good faith that it is reasonably likely that an OTC Product could be (i) manufactured under a commercially viable manufacturing process and (ii) sold in compliance with Applicable Law, then Warner shall notify NexMed within ninety (90) days of such determination whether it intends to Develop and commercialize such OTC Product (such notice, the “ OTC Commercialization Notice ”).  Following delivery of an OTC Commercialization Notice reflecting Warner’s intent to Develop and commercialize an OTC Product, the parties shall promptly determine in good faith the fair market value of such OTC Product and Warner shall promptly pay to NexMed an amount equal to such fair market value; provided that if the Parties cannot agree on such fair market value, an independent valuation expert reasonably acceptable to both Parties shall be retained to determine such value.  Notwithstanding the foregoing, if Warner fails to provide the OTC Commercialization Notice within the period described in this Section 2.05 or such notice reflects a determination not to Develop and Commercialize the OTC Product, the rights granted to Warner to Develop and commercialize the OTC Product in the Field and in the Territory under this Agreement shall revert to NexMed and NexMed shall thereafter have the unencumbered right to grant one or more Third Parties the right to Develop and commercialize the OTC Product (it being understood that nothing in this Section 2.05 shall in any way limit the rights granted to Warner pursuant to Section 2.01 with respect to any prescription pharmaceutical product included in the Licensed Products).

Section 2.06    Licensed Trademark .  The Licensed Trademark shall be used by Warner only pursuant to the terms of this Agreement to identify and in connection with the marketing and sale of Licensed Product in the Field in the Territory, and shall not be used by Warner to identify or in connection with the marketing of any other products.  Warner shall comply with NexMed’s trademark guidelines and specifications as provided to Warner on the Effective Date as may be reasonably amended from time to time by NexMed upon reasonable prior written notice to Warner (it being understood Warner shall be free to utilize any existing inventories containing the Licensed Trademark prior to the amendment of such guidelines or specifications) in connection with its use of the Licensed Trademark in all promotional materials, advertisements, packaging, labeling and trade dress.  Warner agrees to use the Licensed Trademark with the necessary trademark designations, and shall use the Licensed Trademark in a manner that does not derogate from NexMed’s and its Affiliates’ rights in the Licensed Trademark.  Warner agrees that it will take no action that will interfere or diminish NexMed’s or its Affiliates’ rights in the Licensed Trademark.  Warner agrees that all use of the Licensed Trademark will inure to the benefit of NexMed and its Affiliates.  The Licensed Trademark shall be owned by NexMed or its Affiliates and, upon the request of NexMed, Warner agrees to assign any rights (other than the rights granted hereunder) it may have in the Licensed Trademark to NexMed.  Warner shall have no rights under this Agreement in or to the Licensed Trademark or the goodwill pertaining thereto except as specifically provided herein.

Section 3.01    Confidentiality Obligations .  Each of NexMed and Warner agree that during the Term and for ten (10) years thereafter, it will keep confidential, and will cause its employees, consultants, Affiliates, agents, subcontractors, and Sublicensees to keep confidential, all Confidential Information of the other Party.  Neither NexMed nor Warner nor any of their employees, consultants, Affiliates, agents, subcontractors, or Sublicensees shall use Confidential Information of the other Party for any purpose whatsoever other than exercising any rights granted to it or reserved by it hereunder.  Without limiting the foregoing, each Party may disclose information to the extent such disclosure is reasonably necessary to (a) file and prosecute patent applications and/or maintain patents which are filed or prosecuted in accordance with the provisions of this Agreement, or (b) file,