Exclusive License Agreement (2003)Full Document 

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                   EXCLUSIVE LICENSE AGREEMENT FOR TOSTREX

                                     BETWEEN

                                    PDI, INC.

                                       AND

                          CELLEGY PHARMACEUTICALS, INC.

================================================================================

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




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

ARTICLE 1 DEFINITIONS ....................................................     1

         "Affiliates" ....................................................     1
         "Agreement" .....................................................     1
         "Approvals" .....................................................     2
         "Auditor" .......................................................     2
         "Cellegy Information " ..........................................     2
         "Dollars" or "$" ................................................     2
         "Defective Product" .............................................     2
         "Exclusive License" .............................................     2
         "Effective Date" ................................................     2
         "FDA" ...........................................................     2
         "FD&C Act" ......................................................     2
         "Good Manufacturing Practice" ...................................     2
         "Improved Product" ..............................................     2
         "Intellectual Property Rights" ..................................     2
         "Joint Management Committee" ....................................     2
         "Launch Date" ...................................................     3
         "Loss" ..........................................................     3
         "Licensed Product" ..............................................     3
         "KnowHow" .......................................................     3
         "Net Sales" .....................................................     3
         "Patent Rights" .................................................     3
         "Proprietary Rights" ............................................     3
         "Relevant Regulatory Authority" .................................     4
         "Territory" .....................................................     4
         "Third Party" ...................................................     4
         "Trademark" .....................................................     4
         "Sublicensee" ...................................................     4

ARTICLE 2 REPRESENTATIONS AND WARRANTIES .................................     4

    2.1  "Representations and Warranties of Cellegy" .....................     4
    2.2  "Representations and Warranties of Licensee" ....................     6

ARTICLE 3 GRANT OF LICENSE ...............................................     6

    3.1  "Grant" .........................................................     6
    3.2  "Addition to the Territory" .....................................     6
    3.3  "Restrictions on Territory " ....................................     6
    3.4  "Right to sublicense in the Territory" ..........................     6
    3.5  [*] .............................................................     7
    3.6  "Marketing Effort" ..............................................     7
    3.7  "Maintenance of Exclusivity " ...................................     7
    3.8  "Covenant not to Compete" .......................................     8
    3.9  "Notice of Other Testosterone Product Deals" ....................     8


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

                           Table of Contents (Cont'd)

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ARTICLE 4 LICENSE FEE AND MILESTONE PAYMENTS .............................     8

    4.1  "License Fee" ...................................................     8
    4.2  "Milestone Payments " ...........................................     8
    4.3  "Fee Conditions " ...............................................     8

ARTICLE 5 ROYALTIES AND PAYMENTS FOR ORDERED GOODS .......................     8

    5.1  "Royalties in General" ..........................................     8
    5.2  "Royalty Defined" ...............................................     9
    5.3  "Burdened Costs " ...............................................     9
    5.4  "Minimum Royalty" ...............................................     9

ARTICLE 6 ROYALTY REPORTS AND ACCOUNTING .................................    10

    6.1  "Royalty Reports; Records" ......................................    10
    6.2  "Payment Due Dates" .............................................    10
    6.3  "Right to Audit Licensee" .......................................    11
    6.4  "Right to Audit Cellegy" ........................................    11
    6.5  "Overpayment or Underpayment of Burdened Cost" ..................    11
    6.6  "Disagreement with Auditor Findings" ............................    11

ARTICLE 7 SUPPLY OF LICENSED PRODUCT BY CELLEGY ..........................    12

    7.1  "Purchasing Commitment" .........................................    12
    7.2  "Forecasts and Ordering Procedure" ..............................    12
    7.3  "Orders" ........................................................    13
    7.4  "Production and Supply of Licensed Product " ....................    13
    7.5  "Defective Product" .............................................    13
    7.6  "Product Packaging " ............................................    14
    7.7  "Title and Risk of Loss " .......................................    14
    7.8  "United States Export Controls " ................................    14
    7.9  "Supply Warranty and Disclaimer " ...............................    14
    7.10 "Remedy for Failure to Supply Licensed Product" .................    15

ARTICLE 8 PATENT RIGHTS ..................................................    16

    8.1  "No Ownership by Licensee " .....................................    16
    8.2  "New Cellegy Inventions/Improvements " ..........................    17
    8.3  "Improvements by Licensee " .....................................    17
    8.4  [*] .............................................................    17

ARTICLE 9 INFRINGEMENT AND OTHER CLAIMS ..................................    18

    9.1  "Infringement by Third Person" ..................................    18
    9.2  "Alleged Infringement of Third Party Patents" ...................    18
    9.3  "By Cellegy" ....................................................    19


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

                           Table of Contents (Cont'd)

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    9.4  "By Licensee" ...................................................    19
    9.5  "Conditions to Indemnification" .................................    19
    9.6  "Control of Proceedings" ........................................    20
    9.7  "Indemnification Claim" .........................................    20
    9.8  "Assumption of Defense by Cellegy" ..............................    20

ARTICLE 10 CONFIDENTIALITY ...............................................    20

   10.1  "Treatment of Confidential Information" .........................    20
   10.2  "Right to Disclose" .............................................    20
   10.3  "Release From Restrictions" .....................................    21
   10.4  "Confidentiality of Agreement" ..................................    21
   10.5  "Return of Confidential Information" ............................    21

ARTICLE 11 TRADEMARKS ....................................................    22

   11.1  "Cellegy's Marks" ...............................................    22
   11.2  "Use of Cellegy's Marks by Licensee " ...........................    22
   11.3  "Acknowledgment of Ownership" ...................................    22
   11.4  "Marking " ......................................................    22
   11.5  "Registration " .................................................    22
   11.6  "Infringement Information " .....................................    22
   11.7  "Termination of Use " ...........................................    22
   11.8  "Trademarks" ....................................................    22

ARTICLE 12 TERM; TERMINATION .............................................    23

   12.1  "Term" ..........................................................    23
   12.2  "Bilateral Termination Rights" ..................................    23
   12.3  "Bankruptcy Rights" .............................................    23
   12.4  "Rights Upon Termination or Expiration" .........................    24

ARTICLE 13 REGULATORY MATTERS ............................................    24

   13.1  "Licensee's Obligations " .......................................    24
   13.2  "Cellegy's Obligations " ........................................    25
   13.3  "Adverse Drug Events and Recalls " ..............................    25
   13.4  "Approvals " ....................................................    26
   13.5  "Cellegy Information Warranties " ...............................    26
   13.6  "Insurance " ....................................................    27

ARTICLE 14 REGISTRATION OF LICENSE; LIMITATION OF LIABILITY ..............    27

   14.1  "Registration of License " ......................................    27
   14.2  "Limitation of Liability " ......................................    27

ARTICLE 15 [*] ...........................................................    27


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                           Table of Contents (Cont'd)

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ARTICLE 16 GENERAL PROVISIONS ............................................    28

   16.1  "Force Majeure" .................................................    28
   16.2  "Further Assurances" ............................................    28
   16.3  "Severability" ..................................................    28
   16.4  "Notices" .......................................................    28
   16.5  "Assignment" ....................................................    29
   16.6  "Amendment" .....................................................    29
   16.7  "Entire Agreement" ..............................................    29
   16.8  "Waiver" ........................................................    29
   16.9  "No Implied Licenses" ...........................................    29
   16.10 "Injunctions" ...................................................    29
   16.11 "Independent Contractors" .......................................    29
   16.12 "No Third Party Beneficiaries" ..................................    30
   16.13 "Governing Law" .................................................    30
   16.14 "Headings" ......................................................    30
   16.15 "Counterparts" ..................................................    30
   16.16 "Publicity" .....................................................    30
   16.17 "Resolution of Disputes" ........................................    30

SIGNATURES

EXHIBIT A  -  REPORTING OF ADVERSE DRUG EVENTS

EXHIBIT B  -  MINIMUM SALES REQUIREMENTS

EXHIBIT C  -  PATENT RIGHTS

EXHIBIT D  -  OTHER TESTOSTERONE PRODUCTS

EXHIBIT E  -  BURDENED COSTS

EXHIBIT F  -  TRADEMARKS


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                           EXCLUSIVE LICENSE AGREEMENT

      THIS EXCLUSIVE LICENSE AGREEMENT (this "Agreement") is made and entered
into as of December 31st, 2002 (the "Effective Date"), by and between Cellegy
Pharmaceuticals, Inc., a California corporation ("Cellegy"), and PDI, Inc., a
Delaware corporation ("Licensee").

                              W I T N E S S E T H:
                               - - - - - - - - - -

      WHEREAS, Cellegy owns or possesses certain intellectual property rights
current and pending with respect to the Licensed Product (as hereinafter
defined) and certain rights pertaining to the Trademark (as hereinafter
defined);

      WHEREAS, Licensee desires to obtain an exclusive license to certain rights
current and pending to the Licensed Product under such intellectual property
rights, and to the Trademark within the Territory (as hereinafter defined);

      WHEREAS, Cellegy is willing to grant an exclusive license to Licensee
under such current and pending intellectual property rights, and is willing to
grant an exclusive license to the Trademark to Licensee, each within the
Territory, all as more particularly described in, and subject to the terms and
conditions of, this Agreement.

      NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties mutually agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

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

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

            (i) exercise or control the right to vote attached to 50% or more of
the issued shares in the party;

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

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

            (iv) determine substantially the conduct of the party's business

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