Exhibit 10.1
 
 
AGREEMENT OF SALE
 

NexMed (USA), Inc., Seller
 
 
and

 
Pharmar & Pharmar LLC, Buyer
 

Property:
89 Twin Rivers Drive and 113 Milford Road
 
East Windsor, Mercer County, New Jersey

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TABLE OF CONTENTS

Page
 
1.
Agreement to Sell and Purchase; Facility Lease
1
     
2.
Purchase Price; Deposit.
1
     
3.
Quality of Title.
3
     
4.
Seller's Representations, Warranties and Covenants
4
     
5.
Buyer's Representations, Warranties and Covenants
5
     
6.
Buyer’s Due Diligence; Condition of the Property
6
     
7.
Closing
9
     
8.
Closing Documents
10
     
9.
Intentionally Omitted
11
     
10.
Possession
11
     
11.
Closing Costs
11
     
12.
Apportionments
11
     
13.
Maintenance; Casualty
12
     
14.
Condemnation
13
     
15.
Buyer's Default
13
     
16.
Seller's Default
13
     
17.
Termination
14
     
18.
Seller's Liability
14
     
19.
Assignability
14

 
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TABLE OF CONTENTS
(continuted)

Page
 
20.
Brokers
14
     
21.
Confidentiality
15
     
22.
Notices
15
     
23.
Recording
16
     
24.
Whole Agreement; Amendments; Survival
16
     
25.
Captions; Pronouns
16
     
26.
Counterparts
17
     
27.
Holidays
17
     
28.
Governing Law
17
     
29.
Submission not an Offer or Option
17
     
30.
Right to Bifurcate House Closing
17
     
31.
No Additional Offers for Purchase of Property
17

Exhibits
 
Exhibit “A-1”
-
The Building
Exhibit “A-2”
-
The House
Exhibit “B”
-
Personal Property
Exhibit “C”
-
Facility Lease
Exhibit “D”
-
Management and Service Agreements
Exhibit “E”
-
Deed
Exhibit “F”
-
Bill of Sale
Exhibit “G”
-
Non-Foreign Affidavit
Exhibit “H”
-
Affidavit of Title
     

 

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TABLE OF DEFINED TERMS

Agreement
1
Bill of Sale
11
Building
1
Buyer
1
Buyer Party
9
Buyer’s Closing Documents
12
Buyer’s Statement
3
Change
10
Closing
10
Closing Date
10
Deed
11
Deposit
1
Due Diligence Period
3
Escrow Agent
1
Estimate
13
Facility Lease
1
House
1
Improvements
1
Land
1
Permitted Encumbrances
3
Personal Property
1
Property
1
Purchase Price
1
Seller
1
SELLER PARTY
8
Seller’s Closing Documents
11
Seller’s Repair Election
13
SNDA
11

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Discussion Draft

 
AGREEMENT OF SALE
 

This Agreement of Sale (“Agreement”) is entered into as of the 13th day of
August, 2007 (the “Effective Date”) by and between NexMed (USA), Inc., a
Delaware corporation (“Seller”), and Pharmar & Pharmar, LLC, a New Jersey-
limited liability company (“Buyer”).
 
In consideration of the mutual agreements herein set forth, the parties hereto,
intending to be legally bound, agree as follows.
 
1. Agreement to Sell and Purchase; Facility Lease.
 
(a) For the Purchase Price (as defined in Section 2 below) and subject to the
terms and conditions hereof, Seller agrees to sell to Buyer, and Buyer agrees to
purchase from Seller fee simple absolute title to all and singular the following
(which are herein sometimes collectively referred to as the “Property”):
 
(i) that certain tract of land, situated at 89 Twin Rivers Drive, East Windsor,
Mercer County, New Jersey and comprising approximately five (5) acres, which
tract is more particularly described in Exhibit A-1 hereto (the “Building”);
 
(ii) that certain tract of land, situated at Block 20.06, Lot 5, 113 Milford
Road, East Windsor, Mercer County, New Jersey, which tract is more particularly
described in Exhibit A-2 hereto (the “House,” and together with the Building,
the “Land”);
 
(iii) the buildings, structures, improvements and fixtures erected or located on
the Land (collectively, the “Improvements”);
 
(iv) the tenements, hereditaments, appurtenances, rights of way, strips, gores,
easements, rights and privileges in any way pertaining or beneficial to the Land
or Improvements; and
 
(v) the tangible personal property listed on Exhibit B hereto (the “Personal
Property”).
 
(b) At Closing (as defined in Section 7 below), Seller and Buyer shall enter
into a lease in the form attached hereto as Exhibit C (the “Facility Lease”)
pursuant to which Buyer, as landlord, shall lease the Building, to Seller, as
tenant.
 
2. Purchase Price; Deposit.
 
(a) The purchase price for the Property is Five Million Eight Hundred Thousand
Dollars ($5,800,000.00) (the “Purchase Price”) and is payable by Buyer as
follows:
 
(i) Two Hundred Ninety Thousand Dollars ($290,000.00) (the “Deposit”) shall be
paid to Fidelity National Title Insurance Company (“Escrow Agent”) by wire
transfer of immediately available federal funds to Escrow Agent within two (2)
days after the Effective Date; and
 

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(ii) the balance of the Purchase Price, subject to the adjustments and
prorations described in this Agreement, shall be paid at Closing (as defined in
Section 7 of this Agreement) by wire transfer of immediately available federal
funds, transferred to the order or account of Seller or such other person as
Seller may designate in writing.
 
(b) The Deposit shall be held by the Escrow Agent in a non-interest bearing
account with a federally-insured bank or other federally-insured lending
institution. Escrow Agent shall hold the Deposit in accordance with the terms
and conditions of this Agreement, subject to the following:
 
(i) Escrow Agent undertakes to perform only such duties as are expressly set
forth in this Agreement and no implied duties or obligations shall be read into
this Agreement against Escrow Agent.
 
(ii) Escrow Agent may act in reliance upon any writing or instrument or
signature which it, in good faith, believes, and any statement or assertion
contained in such writing or instrument, and may assume that any person
purporting to give any writing, notice, advice or instrument in connection with
the provisions of this Agreement has been duly authorized to do so. Escrow Agent
shall not be liable in any manner for the sufficiency or correctness as to form,
manner and execution, or validity of any instrument deposited in escrow, nor as
to the identity, authority, or right of any person executing the same, and
Escrow Agent's duties under this Agreement shall be limited to those provided in
this Agreement.
 
(iii) Unless Escrow Agent discharges any of its duties under this Agreement in a
negligent manner or is guilty of willful misconduct with regard to its duties
under this Agreement, Seller and Buyer shall indemnify Escrow Agent and hold it
harmless from any and all claims, liabilities, losses, actions, suits or
proceedings at law or in equity, or other expenses, fees, or charges of any
character or nature, which it may incur or with which it may be threatened by
reason of its acting as Escrow Agent under this Agreement; and in such
connection Seller and Buyer shall indemnify Escrow Agent against any and all
expenses including reasonable attorneys' fees and the cost of defending any
action, suit or proceeding or resisting any claim in such capacity.
 
(iv) If the parties (including Escrow Agent) shall be in disagreement about the
interpretation of this Agreement, or about their respective rights and
obligations, or the propriety of any action contemplated by Escrow Agent, or the
application of the Deposit, Escrow Agent shall hold the Deposit until the
receipt of written instructions from both Buyer and Seller or a final order of a
court of competent jurisdiction. In addition, in any such event, Escrow Agent
may, but shall not be required to, file an action in interpleader to resolve the
disagreement. Escrow Agent shall be indemnified for all costs and reasonable
attorneys' fees in its capacity as Escrow Agent in connection with any such
interpleader action and shall be fully protected in suspending all or part of
its activities under this Agreement until a final judgment in the interpleader
action is received.
 
(v) Escrow Agent shall otherwise not be liable for any mistakes of fact or
errors of judgment, or for any acts or omissions of any kind, unless caused by
its negligence or willful misconduct.
 

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(c) Buyer and Seller hereby appoint Escrow Agent as, and Escrow Agent agrees to
act as “the person responsible for closing” the transaction which is the subject
of this Agreement, pursuant to Internal Revenue Code of 1986 Section 6045(e).
Escrow Agent shall prepare and file the informational return (IRS Form 1099-B)
required by and otherwise comply with the terms of IRS § 6045(e). Escrow Agent
further agrees to indemnify and hold Buyer, Seller and the respective attorneys
harmless from and against all claims, costs, liabilities, penalties or expenses
resulting from Escrow Agent’s failure to file the appropriate reports and
otherwise comply with the terms of the Internal Revenue Code pursuant to this
paragraph.
 
3. Quality of Title.
 
(a) Title to the Land shall be good and marketable and insurable by a reputable
title insurance company licensed to do business in New Jersey, subject to the
following (collectively, “Permitted Encumbrances”):
 
(i) All matters of record, including without limitation any deed restrictions
relating to the management of Hazardous Substances (as defined below);
 
(ii) Provisions of existing building and zoning laws;
 
(iii) The leasehold estate created by, and all the terms, covenants and
conditions set forth in, the Facility Lease;
 
(iv) Such real estate taxes for the then current year as are not due and payable
on the date of the Closing;
 
(v) Any liens for municipal betterments assessed after the day of the Closing;
 
(vi) Any matter that would be disclosed by a survey and physical inspection of
the Property;
 
(vii) All utility and road easements and rights of way; and
 
(viii) standard printed exceptions, exclusions and disclaimers which are part of
the ALTA’s form owner’s policy.
 
(b) No later than fifteen (15) days following the Effective Date, Escrow Agent
shall, at Buyer’s sole cost and expense, prepare and deliver to Buyer and Seller
a title commitment pertaining to the Property leading to the issuance of an ALTA
extended coverage owner’s policy of title insurance, together with copies of all
Schedule B items and all other recorded items referred to in such commitment.
 
(c) Within the sixty (60) day period commencing on the Effective Date (the “Due
Diligence Period”), Buyer shall notify Seller in writing with a statement
specifying any defects in title (“Buyer’s Statement”). Seller shall notify Buyer
no later than ten (10) days after receipt of Buyer’s Statement whether Seller
will remedy such defects. If Seller does not agree to remove such defects prior
to Closing, Buyer shall have the right prior to the expiration of the Due
Diligence Period, either to (a) waive the defect and proceed to Closing without
abatement or reduction of the Purchase Price, or (b) terminate this Agreement
and obtain a refund of the Deposit, and upon such refund this Agreement and all
rights and obligations of the respective parties hereunder shall be null and
void. If Seller fails to respond to Buyer’s notice within such ten (10) day
period, then Seller shall be deemed to have agreed to cure such objection or
defect. If Buyer fails to deliver such notice before the expiration of the Due
Diligence Period, or if Seller agrees or is deemed to have agreed to cure any
objection or defect raised by Buyer, then Buyer shall be deemed to have accepted
title in its then condition (subject to any cure obligation of Seller) and to
have irrevocably waived the foregoing condition precedent. From the Effective
Date, Seller shall not permit any further encumbrances to appear of record on
the Property without Buyer’s written approval.
 
 

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4. Seller's Representations, Warranties and Covenants.
 
(a) In order to induce Buyer to enter into this Agreement and to complete
Closing, Seller represents and warrants to Buyer as follows:
 
(i) Seller is the owner of the Property.
 
(ii) There are no unpaid bills or claims for labor or services performed or
materials furnished or delivered during the last four (4) months for
alterations, repairs, work, or new construction on the Property, except for
those disclosed to Buyer at Closing in writing by Seller.
 
(iii) Seller is duly organized, validly subsisting and in good standing under
the laws of Delaware, with all legal power and authority to undertake, observe
and perform all of Seller's agreements and obligations hereunder and under
Seller’s Closing Documents (as defined in Section 8 below), and the execution
and delivery hereof and the performance by Seller of their obligations hereunder
will not violate or constitute an event of default under the terms or provisions
of any agreement, document or other instrument to which Seller is a party or by
which they or the Property are bound.
 
(iv) This Agreement constitutes, and when executed and delivered Seller’s
Closing Documents will constitute, the valid and binding obligations of Seller,
enforceable in accordance with their terms.
 
(v) To Seller’s actual knowledge, without investigation or inquiry, there are no
proceedings at law or in equity before any court, grand jury, administrative
agency or other investigative body, or governmental department, commission,
board, agency, bureau or instrumentality of any kind pending or, threatened,
against or affecting Seller or the Property that (i) involve the validity or
enforceability of this Agreement or any other instrument or document to be
delivered by Seller pursuant hereto, (ii) enjoin or prevent or threaten to
enjoin or prevent the performance of Seller’s obligations hereunder, (iii)
relate specifically to the Property or use and occupancy thereof or (iv) the
title thereto, including but not limited to any unrecorded agreements or
encumbrances.
 

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(vi) There are no existing or pending contracts of sale, options to purchase or
rights of first refusal or first offer with respect to the Property, or any part
thereof, recorded or unrecorded.
 
(vii) Other than the Permitted Encumbrances, there are no leases or other
occupancy agreements pursuant to which Seller has granted another party the
right to use or occupy all or any portion of the Property after the Closing
Date.
 
(viii) Seller is not in the hands of a receiver nor is an application for the
appointment of a receiver pending; Seller has not made an assignment for the
benefit of creditors, nor has Seller filed, or had filed against it, any
petition in bankruptcy.
 
(ix) Seller has not received any written notice that the Property has been
registered or certified as “historic” by any local, State or Federal
governmental entity or historic commission.
 
(x) Seller has not received any written notice from any federal, state, county
or municipal authority which alleges that the Property is in violation with any
statute, rule, regulation or ordinance applicable to the Property.
 
(xi) Seller has not received any written notice from any federal, state, county
or municipal authority of any pending or threatened condemnation or similar
action in the nature of eminent domain with respect to all or any portion of the
Property.
 
(xii) There are no management, service, or other agreements with respect to or
affecting the Property, recorded or unrecorded, which will survive the Closing,
except as set forth on Exhibit D hereto.
 
(xiii) No portion of the Property is assessed as farmland under the Farmland
Assessment Act, N.J.S.A. 54:4-23.1 et seq.
 
(xiv) Seller represents that Seller is not a “foreign person” as such term is
defined under Section 7701 (a) of the Internal Revenue Code of 1986, as amended.
 
(b) The representations and warranties contained in this Section 4 are true,
accurate and complete and not misleading in any material respect as of the
Effective Date and shall be deemed to be repeated at and as of the Closing Date,
and shall be true, accurate and complete and not misleading in any material
respect as of such date, except for acts or omissions expressly permitted by
other provisions of this Agreement. The representations and warranties contained
in this Section 4 shall survive the Closing for a period of one (1) year and any
claim for a breach of the representations and warranties must be brought within
such one (1) year period. Buyer will not have any right to bring any action
against Seller as a result of any untruth or inaccuracy of such representations
and warranties, or any such breach, unless and until the aggregate amount of all
liability and losses arising out of any such untruth or inaccuracy, or any such
breach, exceeds One Hundred Thousand Dollars ($100,000.00), in which event Buyer
may seek to recover from Seller for all such liability and losses (not just the
portion of such losses that exceed One Hundred Thousand Dollars ($100,000.00));
provided, however, in no event will Seller’s liability for all such
misrepresentations and breaches herein exceed Five Hundred Thousand Dollars
($500,000.00) in the aggregate.
 
 

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5. Buyer's Representations, Warranties and Covenants.
 
(a) In order to induce Seller to enter into this Agreement and to complete
Closing, Buyer represents and warrants to Seller as follows:
 
(i) Buyer is duly organized, validly subsisting and in good standing under the
laws of New Jersey, with all legal power and authority to undertake, observe and
perform all of Buyer’s agreements and obligations hereunder and under Buyer’s
Closing Documents (as defined in Section 8 below).
 
(ii) This Agreement constitutes, and when executed and delivered Buyer’s Closing
Documents will constitute, the valid and binding obligations of Buyer,
enforceable in accordance with their terms.
 
(iii) Buyer (i) is represented by competent counsel, (ii) understands the
assumptions of risk and liability set forth in this Agreement, and (iii) has the
financial wherewithal to fulfill its financial obligations under this Agreement.
 
(b) The representations and warranties contained in this Section 5 are true,
accurate and complete and not misleading in any material respect as of the
Effective Date and shall be deemed to be repeated at and as of the Closing Date,
and shall be true, accurate and complete and not misleading in any material
respect as of such date, except for acts or omissions expressly permitted by
other provisions of this Agreement. The representations and warranties contained
in this Section 5 shall survive the Closing for a period of one (1) year and any
claim for a breach of the representations and warranties must be brought within
such one (1) year period. Seller will not have any right to bring any action
against Buyer as a result of any untruth or inaccuracy of such representations
and warranties, or any such breach, unless and until the aggregate amount of all
liability and losses arising out of any such untruth or inaccuracy, or any such
breach, exceeds Ten Thousand Dollars ($10,000.00), in which event Seller may
seek to recover from Buyer for all such liability and losses (not just the
portion of such losses that exceed Ten Thousand Dollars ($10,000.00)); provided,
however, in no event will Buyer’s liability for all such misrepresentations and
breaches herein exceed Two Million Dollars ($2,000,000.00) in the aggregate.
 
6. Buyer’s Due Diligence; Condition of the Property.
 
(a) During the term of this Agreement, Buyer may perform, at Buyer's sole
expense, a survey of the Property and environmental and engineering
investigations of the Property and the Improvements as Buyer deems necessary;
provided, however, that such investigations may not include subsurface
investigations or other invasive physical testing without the express written
consent of Seller. As part of Buyer’s investigations, Buyer may obtain from the
New Jersey Department of Environmental Protection the following items: (i) a
Letter of Interpretation (if required) regarding the delineation and/or
existence of wetlands (if any) on the Property; and (ii) all approvals (if
required) regarding stormwater management on the Property. To facilitate Buyer's
investigations, Buyer shall have the right, during the term of this Agreement,
to examine and copy at Buyer's expense the assessments, reports and/or
correspondence regarding the environmental condition of the Property as well as
any other assessments, reports and/or correspondence available at Seller’s
office located on the Property. Buyer shall be permitted to enter upon the
Property during the term of this Agreement for the purpose of conducting its
investigations on the following terms and conditions: (i) prior to any entry
onto the Property, Buyer shall provide to Seller an insurance certificate
confirming that Buyer has in effect a policy of commercial general liability
insurance, with a reputable insurance company, naming Seller as an additional
insured party with limits of not less than $1,000,000.00 for each occurrence and
$2,000,000.00 in the annual aggregate for bodily injury (including death) and
$1,000,000.00 in annual aggregate for property damage; (ii) Buyer shall promptly
repair any and all damages to the Property arising in connection with Buyer’s
entry onto the Property and shall restore the Property to the same condition as
before such entry; and (iii) Buyer shall indemnify and hold Seller harmless from
and against any and all claims arising from or by reason of Buyer's entry upon
the Property. Buyer shall schedule any such examinations of the documents at
Seller’s office located at the Property and any inspection of the Property with
Seller, who shall have the right to have a representative present at all times
during examinations and inspections performed by Buyer. Buyer shall have the
right to communicate with any and all of Seller’s consultants, employees,
management companies, tenants and government officials in connection with
Seller’s investigation of the Property. In the event the results of any of
Buyer's investigations are not satisfactory to Buyer in Buyer’s sole discretion,
Buyer shall have the right, in its absolute discretion, for any reason, to
terminate this Agreement before the expiration of the Due Diligence Period, in
which case the Deposit shall be promptly refunded to Buyer. If Buyer does not
terminate this Agreement as aforesaid, this contingency shall be deemed
satisfied, and Buyer shall be deemed to have irrevocably waived the foregoing
condition precedent. Buyer hereby confirms that, if Buyer does not terminate
this Agreement on or before the expiration of the Due Diligence Period, Buyer
will be satisfied with the condition of the Property, and Buyer will be
accepting the Property in its "AS-IS" condition as of the expiration of the Due
Diligence Period.
 

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(b) Prior to Closing, Seller shall comply with ISRA (as defined below) and
obtain and provide to Buyer either:
 
(i) a letter from the New Jersey Department of Environmental Protection
(“NJDEP”) stating that the New Jersey Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et. seq. and the regulations promulgated thereunder (collectively
“ISRA”) are not applicable to the transaction contemplated by this Agreement (a
“Letter of Non-Applicability”); or
 
(ii) an approved Negative Declaration (as defined by ISRA), De Minimis Quantity
Exemption (as defined by ISRA), Expedited Review (as defined by ISRA), Regulated
Underground Storage Tank Waiver (as defined by ISRA), Remediation in Progress
Waiver (as defined by ISRA) or No Further Action Letter (as defined by ISRA)
(the Negative Declaration, De Minimis Quantity Exemption, Expedited Review,
Regulated Underground Storage Tank Waiver, Remeditation in Progress Waiver or No
Further Action Letter, as the case may be, are hereinafter referred to
collectively as the “ISRA Clearance”) for each property subject to the
transaction contemplated by this Agreement and ISRA.
 
(c) If Seller is unable to obtain a Letter of Non-Applicability or ISRA
Clearance prior to Closing for each property subject to the transaction
contemplated by this Agreement and ISRA, then Seller shall apply for and, prior
to Closing, enter into a Remediation Agreement (as defined by ISRA) with NJDEP
for each property subject to the transaction contemplated by this Agreement and
ISRA for which a Letter of Non-Applicability or ISRA Clearance cannot be
obtained. In any such Remediation Agreement, Seller shall pay for and be
identified as the sole party responsible for:
 

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(i) compliance with the Remediation Agreement after Closing;
 
(ii) obtaining ISRA Clearance after the Closing; and
 
(iii) providing all necessary financial assurance required by NJDEP under any
such Remediation Agreement.
 
(d) Buyer acknowledges that: (i) Seller has already made, prior to the Effective
Date, a substantial amount of information relating to the Property available for
Buyer’s examination; (ii) Seller will be making the Property and additional
information available to Buyer during the Due Diligence Period; (iii) Buyer will
inspect the Property and such information to the extent deemed necessary by
Buyer; and (iv) Buyer will be relying solely on the results of its own
examinations and inspections with respect to the physical and environmental
condition of the Property and all other aspects of the Property. Except as
expressly provided in this Agreement, Seller has not made and does not make any
representation of any nature as to the physical condition or operation of the
Property, as to the accuracy, thoroughness or completeness of, or the
conclusions drawn in, any information provided by Seller to Buyer, or as to any
other matter or thing affecting or related to the Property, and Buyer hereby
expressly acknowledges that no such other representations have been made by
Seller or relied on by Buyer. Seller shall not be liable or bound in any manner
by any expressed or implied warranties, guaranties, promises, statements,
representation, or information pertaining to the Property, made or furnished by
any agent, employee, servant or other person representing or purporting to
represent Seller, unless such warranties, guaranties, promises, statements,
representations or information are expressly and specifically set forth in this
Agreement. All representations, warranties, understandings and agreements
heretofore had between the parties hereto are merged in this Agreement, which
alone fully and completely expresses their agreement.
 
(e) TO THE FULLEST EXTENT PERMITTED BY LAW, BUYER HEREBY UNCONDITIONALLY AND
IRREVOCABLY RELEASES AND FOREVER DISCHARGES SELLER, SELLER’S OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS, AND EACH OF THEIR RESPECTIVE AFFILIATES,
OFFICERS, DIRECTORS, MEMBERS, PARTNERS, EMPLOYEES AND AGENTS (EACH A “SELLER
PARTY” AND COLLECTIVELY THE “SELLER PARTIES”) FROM ANY AND ALL LIABILITY OR
RESPONSIBILITY FOR CLAIMS, LOSSES AND DEMANDS, INCLUDING THOSE ARISING FROM
PERSONAL INJURY OR DEATH, AND ALL CONSEQUENCES THEREOF (INCLUDING ANY
INTERRUPTION OR INTERFERENCE WITH ANY BUSINESS OR ACTIVITIES BEING CONDUCTED ON
THE PROPERTY AND ANY LOSS OF OPPORTUNITY), WHETHER NOW KNOWN OR NOT, WHICH MAY
ARISE FROM (1) ANY LATENT OR PATENT DEFECTS, ANY HIDDEN OR CONCEALED CONDITIONS,
(2) THE CONDITION, STRUCTURAL INTEGRITY, OPERABILITY, MAINTENANCE OR REPAIR OF
ANY BUILDINGS, EQUIPMENT, FURNITURE, FURNISHINGS OR IMPROVEMENTS, OR (3) THE
COMPLIANCE OF THE PROPERTY WITH, OR VIOLATION OF, ANY LAW (EXCLUDING
ENVIRONMENTAL LAW), STATUTE, ORDINANCE, RULE OR REGULATION OF ANY GOVERNMENTAL
ENTITY, INCLUDING, WITHOUT LIMITATION, APPLICABLE ZONING ORDINANCES, BUILDING
AND HEALTH CODES.
 

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(f) In addition to the foregoing release, if the Closing occurs, Buyer shall
indemnify, defend and hold harmless each Seller Party from and against any and
all liabilities, claims, demands, suits, administrative proceedings, causes of
action, costs, damages, personal injuries and property damages, losses and
expenses, both known and unknown, present and future, at law or in equity
arising out of, by virtue of or related in any way to: (i) any environmental
conditions, including, without limitation, the presence, Release or threatened
Release or placement on, in or from the Property, or any portion thereof, of
Hazardous Substances occurring after the Closing, except to the extent Seller,
as tenant, is obligated to indemnify Buyer, as landlord, pursuant to Section
13(e)(ii) of the Facility Lease, (ii) the violation of any Environmental Laws
occurring after the Closing, except to the extent Seller, as tenant, is
obligated to indemnify Buyer, as landlord, pursuant to Section 13(e)(ii) of the
Facility Lease.
 
(g) If the Closing occurs, Seller shall indemnify, defend and hold harmless
Buyer, Buyer’s officers, directors, employees and agents, and each of their
respective affiliates, officers, directors, members, partners, employees and
agents (each a “Buyer’s Party” and collectively the “Buyer’s Parties”) from and
against any and all liabilities, claims, demands, suits, administrative
proceedings, causes of action, costs, damages, personal injuries and property
damages, losses and expenses, both known and unknown, present and future, at law
or in equity arising out of, by virtue of or related in any way to: (i) any
environmental conditions, including, without limitation, the presence, Release
or threatened Release or placement on, in or from the Property, or any portion
thereof, of Hazardous Substances occurring during Seller’s Building
Environmental Period, Seller’s House Environmental Period and after the Closing
to the extent Seller, as tenant, is obligated to indemnify Buyer, as landlord,
pursuant to Section 13(e)(ii) of the Facility Lease, (ii) the violation of any
Environmental Laws occurring during Seller’s Building Environmental Period,
Seller’s House Environmental Period and after the Closing to the extent Seller,
as tenant, is obligated to indemnify Buyer, as landlord, pursuant to Section
13(e)(ii) of the Facility Lease.
 
For purposes of this Agreement, the following terms shall have the following
meanings:
 
(1) “Environmental Law” means any federal, state, or local statute, law, order,
regulation, ordinance, constitution, agreement, permit, or decision relating to
pollution or protection of human health, safety or the environment, including
natural resources, as well as any principles of common law under which a person
may be held liable for the Release of any Hazardous Substance into the
environment.
 
(2) “Hazardous Substances” means any gaseous, liquid or solid chemical,
material, substance, contaminant or waste that may or could pose a hazard to the
environment or human health or safety, including (a) any “hazardous substances”
as defined by the federal Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. §9601 et seq., the New Jersey Spill Compensation and
Control Act, N.J.S.A. 58:10-23.11a et seq., and the Industrial Site Recovery
Act, N.J.S.A. 13:1K-6 et seq. (b) any “extremely hazardous substance,”
“hazardous chemical,” or “toxic chemical” as those terms are defined by the
federal Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et
seq., (c) any “hazardous waste,” as defined under the federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act, 42
U.S.C. § 6901 et seq., and the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et
seq. (d) any “pollutant,” as defined under the federal Water Pollution Control
Act, 33 U.S.C. § 1251 et seq., (e) any chemical, material, substance,
contaminant or waste, whether gaseous, liquid or solid, that is regulated under
any Environmental Law, and (f) any asbestos, polychlorinated biphenyls
(“PCB’s”), petroleum, petroleum products and urea formaldehyde and mold.
 

9

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(3) “Release” means any release, spill, emission, leaching, leaking, migration,
dumping, emptying, pumping, injection, deposit, disposal, discharge or dispersal
of any Hazardous Substance into the indoor or outdoor environment, or into, on,
or from any property.
 
(4) “Seller’s Environmental Building Liability Period” means the period from
October 17, 2000 through the Closing Date.
 
(5) “Seller’s Environmental House Liability Period” means the period from
February 13, 2002 through the Closing Date.
 
(h) Buyer acknowledges and agrees that the provisions of this Section 6 are a
material factor in Seller's acceptance of the Purchase Price and that Seller
would be unwilling to sell the Property unless Seller and the other Seller
Parties are expressly released and indemnified in accordance with subsections
6(d) and 6(e) above.
 
(i) The provisions of this Section 6 shall survive the Closing or earlier
termination of this Agreement.
 
7. CLOSING.
 
(a) The closing of the conveyance of the Property pursuant to this Agreement
(“Closing”) shall be held at 10:00 A.M. prevailing local time thirty (30) days
after the expiration of the Due Diligence Period (the “Closing Date”). Closing
shall be effected through an escrow with the Escrow Agent or, if a closing by
escrow is not possible, then at the offices of Hill Wallack LLP, 202 Carnegie
Center, Princeton, New Jersey.
 
(b) All of Buyer's representations and warranties contained in this Agreement
shall be true and correct at the Closing as though made at and as of the
Closing. All of Seller's representations and warranties contained in this
Agreement shall be true and correct at the Closing as though made at and as of
the Closing. With respect to representations and warranties of Seller: (a)
Seller shall promptly notify Buyer of any material changes therein (a “Change”)
promptly upon Seller becoming aware of any such Change; and (b) Seller shall not
have any liability to Buyer, whether prior to, at or following Closing, for any
Change except to the extent such Change: (1) is caused by Seller; and (2)
materially and adversely affects any of the Property and Buyer's intended use
thereof. In the event of a Change caused by Seller which materially and
adversely affects any of the Property and Buyer's intended use thereof, Buyer
may elect to terminate this Agreement if the Change is not cured or otherwise
satisfied to Buyer's reasonable satisfaction by the Closing. With respect to
representations and warranties of Buyer: (a) Buyer shall promptly notify Seller
of any material Change therein promptly upon Buyer becoming aware of any such
Change; and (b) Buyer shall not have any liability to Seller, whether prior to,
at or following the Closing, for any Change, except to the extent such Change
(i) is caused by Buyer, and (ii) materially and adversely affects Buyer's
ability to perform its obligations under this Agreement.
 
 

10

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8. Closing Documents.
 
(a) The obligations of Buyer hereunder are subject to the fulfillment of the
conditions specified below by Seller prior to or on the Closing Date (any one of
which may be waived in whole or in part by Buyer at or prior to Closing). At
Closing, Seller shall execute and notarize, where appropriate, and deliver to
Buyer:
 
(i) A fully executed and acknowledged bargain and sale deed with covenants
against grantor’s acts (“Deed”) in the form set forth as Exhibit E.
 
(ii) A fully executed and acknowledged bill of sale (“Bill of Sale”) in the form
set forth as Exhibit F.
 
(iii) A Non-Foreign Affidavit as required by the Foreign Investors in Real
Property Tax Act, as amended in the form set forth on Exhibit G.
 
(iv) All documents required by the Buyer’s title insurance company which are
reasonably necessary in order for said title company to issue an ALTA form
owner's title insurance policy to Buyer.
 
(v) A fully executed Facility Lease in the form set forth on Exhibit C.
 
(vi) A subordination, non-disturbance and attornment agreement on a form
prescribed by Buyer’s lender with substance reasonably acceptable to Seller,
Buyer and Buyer’s lender (“SNDA”), signed and notarized by Seller.
 
(vii) A fully executed and acknowledged Affidavit of Title in the form set forth
on Exhibit H.
 
(viii) A fully executed Seller’s Residency Certification/Exemption.
 
(ix) All documents required by the East Windsor Township Housing Division which
are reasonably necessary for the transfer of the House, including, without
limitation, a certificate of occupancy and smoke detector certification (if
applicable).
 
(x) Keys to all locks on the Property.
 
All of the foregoing documents and materials are sometimes herein collectively
referred to as the (“Seller’s Closing Documents”).
 

11

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(b) The obligations of Seller hereunder are subject to the fulfillment of the
conditions specified below by Buyer prior to or on the Closing Date (any one of
which may be waived in whole or in part by Seller at or prior to Closing). At
Closing, Buyer shall deliver to Seller:
 
(i) The balance of the Purchase Price as described in Subsection 2(a) above.
 
(ii) A fully executed Facility Lease in the form set forth on Exhibit C.
 
(iii) A SNDA, signed and notarized by Buyer and Buyer’s lender.
 
(iv) All documents required by the East Windsor Township Housing Division which
are reasonably necessary for the transfer of the House.
 
All of the foregoing documents and materials are sometimes herein collectively
referred to as the (“Buyer’s Closing Documents”).
 
9. Intentionally Omitted.
 
10. Possession. At Closing, Seller shall deliver to Buyer actual possession of
the Property subject, however, to the rights of Seller under the Facility Lease.
 
11. Closing Costs.
 
(a) At Closing, all real estate transfer taxes, documentary stamp taxes,
recording taxes or similar charges, if any, shall be paid in accordance with
standard New Jersey conveyancing practice. All other recording costs and closing
costs of any nature or description shall be borne or apportioned in accordance
with custom and practice in New Jersey. Each party shall bear its own counsel
fees.
 
(b) At the Closing, Buyer shall pay to Escrow Agent the cost of all title search
and exam fees, the premium for all policies of title insurance, any additional
premiums for any extended or other coverages obtained by Buyer and for any title
endorsements required by Buyer or Buyer’s lenders.
 
(c) At the Closing, Seller shall not be obligated to reimburse Buyer for any
costs and expenses that Buyer incurs in order to perform any diligence hereunder
or to procure any purchase money financing for the acquisition of the Property.
 
12. Apportionments.
 
(a) At Closing, all real estate taxes applicable to the Property for the tax
year in which Closing occurs shall be apportioned between Seller and Buyer as of
the Closing Date. Such apportionment shall be based on the respective tax years
for which such taxes are assessed, and on the most recent assessment of the Land
and the Improvements and the then applicable tax rates. If Closing occurs prior
to the date on which the applicable real estate tax rates are fixed for the tax
year in which Closing occurs, such taxes shall be apportioned as aforesaid on
the basis of the tax rates for the preceding tax year, and if there is any
increase or decrease in the tax rates for the tax year in which Closing occurs,
the parties shall adjust such apportionment after the Closing promptly following
the final promulgation of such tax rates by the relevant taxing authorities.
 

12

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(b) All utilities, water and sewer charges, based upon the applicable billing
period for each such charge, shall be prorated by Buyer and Seller at Closing
 
(c) The provisions of this Section 12 shall survive the Closing.
 
13. Maintenance; Casualty.
 
(a) Between the Effective Date and the Closing Date, subject to the other
provisions of this Section 13, Seller shall maintain the Property in
substantially the same condition as it now is, reasonable wear and tear
excepted.
 
(b) If the Improvements are damaged prior to Closing, Seller shall give Buyer
prompt notice thereof. Thereafter, Seller shall retain a reputable, independent
architect or contractor reasonably approved by Buyer to estimate the cost to
repair or replace such damage (the “Estimate”) and shall deliver to Buyer the
Estimate within twenty (20) days after the damage occurred. If the architect or
contractor estimates that the cost to repair or replace such damage is more than
One Million Dollars ($1,000,000.00), then Buyer shall have the right to
terminate this Agreement by written notice to Seller within ten (10) days of the
delivery of the Estimate to Buyer. Notwithstanding the foregoing, if Seller
notifies Buyer at the time Seller furnishes the Estimate that Seller is willing
to perform all required repairs and replacements to restore the Improvements to
substantially the same condition as they were prior to the damage (“Seller’s
Repair Election”), then Buyer shall have no termination right (regardless of
amount of the Estimate) and the Closing Date shall be postponed for up to three
(3) months, as Seller shall elect by notice to Buyer, so that Seller can
complete the necessary repairs and replacements. In the event that Seller
exercises the Seller’s Repair Election, Seller will cause the repairs and
replacements to be made by a reputable contractor, in compliance with applicable
laws and regulations, such that the Improvements are repaired and restored no
later than three (3) months after the closing date as originally scheduled
herein. The Property shall not be deemed to be complete unless the Property is
in substantially the same condition as of the Effective Date. Seller will assign
to Buyer at Closing all warranties from all contractors and material and
equipment suppliers and manufacturers relating to the repair, restoration and
replacement work.
 
(c) If this Agreement cannot be terminated pursuant to Subsection 13(b), or if
Buyer elects not to terminate the Agreement notwithstanding any such damage (and
a failure to terminate within the aforementioned ten (10) day period shall be
deemed to be an election not to terminate), then (i) Seller shall file
appropriate proofs of loss and shall properly adjust all applicable insurance
policies, (ii) provided insurance proceeds are made available therefor, Seller
shall repair such damage to the extent necessary to restore the Improvements to
a safe condition before Closing or to prevent further damage to or deterioration
of the Improvements, except that if Seller has exercised Seller’s Repair
Election, then Seller will repair or restore the Improvements in accordance with
Section 13(b) irrespective of the amount or availability of insurance proceeds,
(iii) except to the extent used to repair and restore the Improvements, all
proceeds of such insurance actually received by Seller shall be applied as a
credit against the Purchase Price, (iv) at Closing Seller shall assign to Buyer,
in form reasonably satisfactory to Buyer, all unpaid claims and rights relating
to such damage and shall credit the applicable deductible amount against the
Purchase Price, and (v) at and following Closing, Seller shall give Buyer, at
Buyer's expense, such further assurances of such claims and rights and such
assignment as Buyer may from time to time reasonably request.
 

13

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(d) The provisions of this Section 13 shall survive the Closing.
 
14. Condemnation. If the entire Property or a material part thereof (as defined
below) is taken by eminent domain, or a proceeding is initiated to effect such a
taking by eminent domain, prior to Closing, Seller shall promptly notify Buyer,
and Buyer may terminate this Agreement by written notice to Seller within ten
(10) days of receiving Seller’s notice. If (i) less than a material part of the
Property is taken, or a proceeding is initiated to effect such a taking, prior
to Closing, or (ii) Buyer elects not to terminate this Agreement even though the
entire Property or a material part thereof is taken by eminent domain, or a
proceeding is initiated to effect such a taking by eminent domain, prior to
Closing (and a failure to terminate within the aforementioned ten (10) day
period shall be deemed to be an election not to terminate), then in either case
(A) Seller shall file appropriate claims with the condemning authority,
(B) provided condemnation proceeds are made available therefor, Seller shall
repair any damage to the extent necessary to restore the Property to a safe
condition (where only a partial condemnation occurs), (C) except to the extent
used to repair and restore the Property, all proceeds of such condemnation
actually received by Seller shall be applied as a credit against the Purchase
Price, (D) at Closing Seller shall assign to Buyer, in form reasonably
satisfactory to Buyer, all unpaid claims and rights relating to such
condemnation, and (E) at and following Closing, Seller shall give Buyer, at
Buyer's expense, such further assurances of such claims and rights and such
assignment as Buyer may from time to time reasonably request. The provisions of
this Section 14 shall survive the Closing. For the purposes of this Section 14,
a taking of a “material part” of the Property shall mean any taking that
involves more than ten percent (10%) of the acreage of Building.
 
15. Buyer's Default. In the event Buyer shall default in the observance or
performance of any of its obligations hereunder, then Seller, at its option,
shall have the right, as its sole and exclusive remedy, to terminate this
Agreement and retain the Deposit as liquidated damages it being expressly
understood that the retention of such Deposit by Seller as aforesaid constitutes
a fair and reasonable amount for the damage sustained by Seller by reason of
Buyer’s default of this Agreement.
 
16. Seller's Default. If Seller fails to complete Closing or to convey to Buyer
title to the Property as required by this Agreement, then Buyer shall have the
right, as Buyer's sole right and remedy, either to (a) take such title to the
Property as Seller can give with an adjustment of the Purchase Price that is
mutually agreed upon by Seller and Buyer, (b) terminate this Agreement and
receive the Deposit, or (c) enforce this Agreement by specific performance.
Notwithstanding the foregoing, Buyer’s right to sue Seller for specific
performance shall terminate and be of no further force and effect if not
exercised on or prior to the date that is 60 days after the scheduled Closing
Date. Accordingly, if Buyer does not file a lawsuit against Seller for specific
performance of this Agreement on or before such date, Buyer’s right to do so
shall lapse.
 
 

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17. Termination. Whenever this Agreement specifies a right of Buyer or Seller to
terminate this Agreement, such right shall be exercisable only by the exercising
party giving written notice thereof to the other party in accordance with
Section 22 below, whereupon all rights and obligations of the parties hereunder
shall terminate, except to the extent otherwise expressed in this Agreement, and
all original counterparts of this Agreement shall be returned to Seller
promptly.
 
18. Seller's Liability. Except for any provision of this Agreement that
expressly survives Closing or the termination of this Agreement, upon the
earlier to occur of Closing or the termination of this Agreement by Buyer or
Seller pursuant to a termination right specified herein, Seller automatically
shall be deemed relieved and released from all obligations and liability to
Buyer under this Agreement.
 
19. Assignability .
 
(a) Seller shall not assign this Agreement or any rights hereunder.
 
(b) Prior to Closing, Buyer may at its option freely assign this Agreement to
any three (3) entities controlled by, controlling or under common control with
the named Buyer (an “affiliated entity”), without the consent of Seller;
however, Buyer shall provide Seller with written notice and reasonable evidence
documenting the relationship between Buyer and the single assignee at least five
(5) days prior to the Closing Date and if not delivered this right and any
assignment shall be null and void. Otherwise, Buyer may not assign this
Agreement or any rights or remedies of Buyer hereunder without Seller’s prior
written consent, in Seller’s sole discretion. Any such assignment by Buyer shall
not relieve Buyer from any of its obligations hereunder. Subject to the
foregoing, all of the terms, covenants and conditions of this Agreement shall
inure to the benefit of and bind the respective successors and assigns of Buyer.
 
20. Brokers. Buyer covenants, represents and warrants to Seller that Buyer has
had no dealing or negotiations with any broker or agent or finder in connection
with respect to this Agreement other than Mercer Oak Realty, LLC. Buyer shall
pay Mercer Oak Realty, LLC a commission pursuant to a separate agreement. Seller
covenants, represents and warrants to Buyer that Seller has had no dealing or
negotiations with any broker or agent or finder in connection with respect to
this Agreement other than CB Richard Ellis and Byron Real Estate Co., Inc.
Seller shall pay CB Richard Ellis and Byron Real Estate Co., Inc. commissions
pursuant to separate agreements. Buyer and Seller each covenant and agree to
pay, hold harmless and indemnify the other from and against any and all costs,
expenses, including reasonable attorneys’ fees, and liability for any
compensation, commissions or charges claimed by any other broker or agent with
whom the indemnifying party has had any dealings or negotiations with respect to
this Agreement.
 
21. Confidentiality.
 
(a) Buyer agrees to keep confidential and not to use, other than in connection
with its determination whether to proceed with the purchase of the Property in
accordance with Section 6 hereof, any of the documents, material or information
regarding the Property supplied to Buyer by Seller or by any third party at
Sellers' request except to Buyer's consultants or attorneys on a “need to know”
basis, unless Buyer is compelled to disclose such documents, material or
information by law or by subpoena and excluding any information previously known
to the Buyer, any information obtained by Buyer from a third party who had the
right to disclose such information to Buyer, and any information as it becomes
generally known to others without breach by Buyer of its obligations hereunder.
Buyer agrees to indemnify and hold harmless Seller from and against any and all
losses, damages, claims and liabilities of any kind (including without
limitation reasonable attorneys' fees) arising out of Buyer's breach of this
Section 21. In the event that the Closing does not occur in accordance with the
terms of this Agreement, Buyer shall return to Seller all of the documents,
material or information regarding the Property supplied to Buyer by Seller or at
the request of Seller. The provisions of this Section 21 shall survive the
termination of this Agreement but shall no longer be applicable following
Closing in accordance with the terms of this Agreement.
 

15

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(b) Except as may be required by applicable laws or stock exchange rules (and
then only with written notice to Seller and an opportunity to review), Buyer (or
any affiliate thereof) will not make a public announcement of the transactions
contemplated by this Agreement without the prior written consent of Seller, such
consent not to be unreasonably withheld or delayed.
 
22. Notices. All notices (including without limitation approvals, consents and
exercises of rights or options) required by or relating to this Agreement shall
be in writing and shall be personally delivered, delivered by reputable
overnight courier or mailed United States registered or certified mail, return
receipt requested, postage prepaid, via facsimile transmission with confirmation
of receipt to the other respective party at its address below set forth, or at
such other address as such other party shall designate by notice, and shall be
effective when delivered to such address. Such notices shall be effective when
dispatched, except that the time period within which any party may respond to a
notice pursuant to this Agreement shall not commence until the earlier of such
party’s actual receipt of such notice, the third business day after dispatch in
the case of notices by certified mail, or the first business day after dispatch
for timely next day delivery by overnight delivery.
 
Seller:
NexMed (USA), Inc.
89 Twin Rivers Drive
East Windsor, NJ 08520
Attention: Mark Westgate
Fax: (609) 426-0340
   
With a required copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103-2921
Attention: Joseph D. Horter
Fax: (215) 963-5001

 
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Buyer:
Pharmar & Pharmar LLC
1052 Route 202/206 North
Bridgewater, NJ 08807
Attention: Vinod Patel
Fax: (609) 526-0433
   
With a required copy to:
Hill Wallack LLP
202 Carnegie Center
Princeton, NJ 08543-5226
Attention: Joseph A. Vales, Esquire
Fax: (609) 452-1888
   
Escrow Agent:
Fidelity National Title Insurance Company
3705 Quakerbridge Road
Suite 205
Mercerville, NJ 08619
Attention: Debbie Kane
Fax: (609)-584-2405

 
23. Recording. Neither this Agreement nor any notice or memorandum hereof shall
be recorded or otherwise filed or made a matter of public record and any attempt
to record or file same by Buyer shall be deemed a default by Buyer hereunder.
 
24. Whole Agreement; Amendments; Survival. This Agreement sets forth all of the
agreements, representations, warranties and conditions of the parties hereto
with respect to the subject matter hereof, and supersedes all prior or
contemporaneous agreements, representations, warranties and conditions. Any
exhibits and riders referred to above constitute parts of this Agreement. No
alteration, amendment, modification or waiver of any of the terms or provisions
hereof, and no future representation or warranty by either party with respect to
this transaction, shall be valid unless the same be in writing and signed by the
party against whom enforcement of same is sought. Except for the provisions of
this Agreement which expressly contemplate survival of the Closing or earlier
termination of this Agreement, (a) none of the terms of this Agreement shall
survive Closing or early termination of this Agreement, and (b) if the Closing
occurs, the delivery and acceptance of Seller’s Closing Documents and Buyer’s
Closing Documents shall effect a merger and be deemed to establish the full
performance of the parties hereunder. 
 
25. Captions; Pronouns. The captions of the sections of this Agreement are for
convenience only and have no meaning with respect to this Agreement or the
rights or obligations of the parties hereto. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein:
“person”, as used herein, includes an individual, corporation, partnership,
trust, unincorporated association, government, governmental authority, or other
entity; “Property” includes each portion of the Property and each estate and
interest therein; “hereof”, “herein” and “hereunder” and other words of similar
import refer to this Agreement as a whole; “Agreement” includes these presents
as supplemented or amended from time to time by written instrument(s) entered
into by Seller and Buyer; “Buyer” includes Buyer's successors and assigns;
“Seller” includes Seller's successors and assigns; “parties” means Buyer and
Seller; and “governmental authority” means any federal, state or municipal
governmental body, or any political subdivision thereof, or any court, agency,
authority or officer of any of the foregoing. Whenever the context may require,
any pronoun used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of pronouns or nouns shall include the
plural and vice versa.
 
 

17

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26. Counterparts. This Agreement may be executed by the parties hereto in any
number of separate counterparts, all of which, when delivered, shall together
constitute one and the same Agreement.
 
27. Holidays. Wherever this Agreement provides for a date, day or period of time
on or prior to which action or events are to occur or not occur, and if such
date, day or last day of such period of time falls on a Saturday, Sunday or
legal holiday, then same shall be deemed to fall on the immediately following
business day.
 
28. Governing Law. This Agreement and all issues arising hereunder shall be
governed by the laws of the State of New Jersey.
 
29. Submission not an Offer or Option. The submission of this Agreement or a
summary of some or all of its provisions for examination or negotiation by Buyer
or Seller does not constitute an offer by Seller or Buyer to enter into an
agreement to sell or purchase the Property, and neither party shall be bound to
the other with respect to any such purchase and sale until a definitive
agreement satisfactory to the Buyer and Seller in their sole discretion is
executed and delivered by both Seller and Buyer.
 
30. Right to Bifurcate House Closing. Buyer shall have the right to bifurcate
the House Closing from the Closing for the balance of the Property and to
designate another entity to take title to the House at a purchase price equal to
$1.00 consideration.
 
31. No Additional Offers for Purchase of Property. Seller shall not accept any
offers for the purchase of the Property unless and until this Agreement is
terminated in accordance with the terms of this Agreement.
 

[SIGNATURES ON NEXT PAGE]

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

 
Seller:
     
NexMed (USA), Inc.
     
By: /s/ Mark Westgate              
 
Name: Mark Westgate
 
Title: Vice President & CFO
     
Buyer:
     
Pharmar & Pharmar LLC
     
By: /s/ Vinod Patel                     
 
Name: Vinod Patel
 
Title: President and CEO
     
Escrow Agent:
(Signing solely for the purpose of confirming its agreement to Subsections 2(b),
2(c) and 3(b) of this Agreement)
     
Fidelity National Title Insurance Company
     
By: /s/ Robert S. Dember           
 
Name: Robert S. Dember
 
Title: Senior Commercial Underwriter

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Exhibit “A-1”
 
The Building
 

Description of Tax Map Lot 6 Block 20.06 situated in East Windsor Township,
Mercer County, New Jersey.

Beginning at a point situated along the southerly right of way line of Twin
Rivers Drive (66 feet wide), said point being located 25.00 feet from the
intersection of the westerly prolongation of the same and the northerly
prolongation of the easterly right of way line of Milford Road (66 feet wide);
thence running

1. South 85° 22’ 26” East along the southerly right of way line of Twin Rivers
Drive, 208.27 feet to a point; thence

2. Easterly along the same, along a curve to the right having a radius of 967.00
feet and a arc length of 242.60 feet to a point; thence

3. South 06° 55’ 34” West along the common line of Lots 6 and 190 Block 20.06,
371.02 feet to a point; thence

4. North 80° 46’ 41” West along the common line of Lots 4 and 6 Block 20.06;
293.02 feet to a point; thence

5. North 04° 37’ 34” East along the common line of Lots 5 and 6 Block 20.06,
150.00 feet to a point; thence

6. North 80° 46’ 41” West along the same, 166.90 feet to a point; thence

7. North 04° 37’ 34” East along the easterly line of Milford Road, 189.14 feet
to a point; thence

8. Easterly along the same, along a curve to the right having a radius of 25.00
feet and an arc length of 39.27 feet to the point and place of beginning.

Containing 151,009 s.f. more or less

A-1-1

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Exhibit “A-2”
 
The House
 
All that certain lot, parcel or tract of land, situate and lying in the Township
of East Windsor, County of Mercer and State of New Jersey being more
particularly described as follows:

Beginning at a point in the centerline of Milford Road, said point being distant
246.20 feet southwestwardly from the intersection of the said centerline of
Milford Road with the centerline of Twin Rivers Drive and running; thence

(1) Along Lot 6, South 73 degrees 15 minutes East, a distance of 200.00 feet to
a point; thence

(2) Along same, South 12 degrees 00 minutes West, a distance of 150.00 feet to a
point in line with Lot 4; thence

(3) Along the northeasterly line of a portion of Lot 4, North 73 degrees 15
minutes West, a distance of 200.00 feet to the point in the centerline of
Milford Road; thence

(4) Along the centerline of Milford Road, North 12 degrees 00 minutes East, a
distance of 150.00 feet to the point and place of Beginning.

The above description was drawn in accordance with a survey prepared by Crest
Engineering Associates, Inc., Daniel P. Hundley, P.L.S., dated February 8, 2002.

FOR INFORMATIONAL PURPOSES ONLY: BEING ALSO KNOWN as Lot 5 in Block 20.06 on the
Official Tax Map of the Township of East Windsor, Mercer County, NJ.

A-2-1

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Exhibit “B”
 
Personal Property
 
NexMed, Inc.
             
List of Equipment Sold with Building
                                 
Asset
 
Asset description
   
Acquis.val.
                         
20003
 
KOHLER GENERATOR 600 KVA
 
75,000.00
     
20004
 
TWO BYRN MODEL Furnace Boilers
83,863.20
     
20005
 
USP WATER SYSTEM PER QUOTE AD101-06-10
250,143.83
     
20006
 
HVAC CHILLERS
   
159,883.00
     
20007
 
HVAC CONTROLS
   
313,995.00
     
20008
 
REFRIGERATION SYSTEM Cold Box in Warehouse
84,000.00
     
20009
 
Custom Advantage Air Condensor Chiller System
6,687.50
     
20013
 
LAB CABINETS & CASEWORK
 
181,583.54
     
20014
 
Walk in Refrigerator Cold Box
 
8,700.00
     
20025
 
FIRE DOOR FOR CARTONING ROOM
8,547.60
     
20026
 
2 Ton AC Unit for Computer Room (Fujitsu)
6,060.00
                         
30003
 
Steer rite hydraulic pallet truck
 
666.43
     
30006
 
COLD ROOM 8X8
   
9,708.00
     
30010
 
Easy to Climb steel rolling plateform ladder
658.24
     
30024
 
6 FOOT STEEL TABLES WITH BACKSPLASH
580.27
     
30026
 
6 FOOT STEEL TABLES WITH BACKSPLASH
580.27
     
30394
 
Model 522LS Autoclave
 
77,785.90
                         
70083
 
41 aeron chairs by herman Miller
 
29,270.00
Note 1
   
70084
 
Office furniture
   
57,325.80
Note 2
   
70085
 
EW Furniture
   
13,740.00
Note 3
                               
TOTAL
 
1,368,778.58
                                                                               
 
Note 1:
   
Note 2:
   
Note 3:
   
Includes:
   
Includes:
   
Includes:
   
9 office chairs
 
Conference table
 
10 - 5 drawer files
   
15 task chairs
 
Reception desk
 
8 side chairs
   
20 conference chairs
 
30 chairs with no arms
15 cubes
   
$10k of installation
 
10 stools
   
15 desks for cube
           
10 chairs with vinyl
 
15 files ( one per cube)
               
7 files for the offices (one per office)
 

 

B-1

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Exhibit “C”
 
Facility Lease
 

LEASE AGREEMENT
 
Pharmar & Pharmar LLC
“Landlord”
 
and
 
NexMed (USA), Inc.
“Tenant”
 

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TABLE OF CONTENTS
 
1.
Premises and Term
1
     
2.
Rent
1
     
3.
Taxes and Other Charges
2
     
4.
Utilities and Other Service Charges
3
     
5.
Maintenance and Repair
3
     
6.
Use
4
     
7.
Compliance with Law
4
     
8.
Sublease and Assignment.
4
     
9.
Fire or Other Casualty
5
     
10.
Insurance
7
     
11.
Alterations and Additions
8
     
12.
Condemnation
9
     
13.
Environmental Provisions
10
     
14.
Indemnification
13
     
15.
Default by Tenant
14
     
16.
Landlord’s Remedies
14
     
17.
Default by Landlord
15
     
18.
Quiet Possession
17

 
-i-

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TABLE OF CONTENTS
(continuted)

Page
 
19.
Subordination and Non-Disturbance
17
     
20.
Inspection
18
     
21.
Surrender
18
     
22.
Signs
18
     
23.
Notices
18
     
24.
Brokers
19
     
25.
Waiver
19
     
26.
Tenant Holding Over
19
     
27.
Estoppel Certificates
19
     
28.
Delivery for Examination
19
     
29.
Tenant’s Equipment Financing
20
     
30.
Furniture
20
     
31.
Miscellaneous
20

-ii-

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LEASE AGREEMENT
 
THIS LEASE AGREEMENT made this         day of                     , 2007 (the
“Commencement Date”), by and between Pharmar & Pharmar LLC (“Landlord”) and
NexMed (USA), Inc. (“Tenant”).
 
Background
 
Landlord is the owner of certain premises located at and known as 89 Twin Rivers
Drive, East Windsor, Mercer County, New Jersey (the “Premises”). The Premises
consists of (i) the land described in Exhibit “A” (the “Land”), (ii) the
buildings and improvements constructed thereon (the “Improvements”), (iii) all
easements, rights of way, licenses, privileges and appurtenances, if any,
belonging to or inuring to the benefit of the Land or the Improvements. (For the
avoidance of doubt, the Improvements do not include Tenant’s Property (as
hereinafter defined).) Landlord desires to let and demise to Tenant and Tenant
desires to take and hire from Landlord the Premises, subject to the terms and
conditions hereinafter set forth.
 
Agreement
 
NOW THEREFORE, intending to be legally bound, Landlord and Tenant hereby agree
as follows:
 
32. Premises and Term.
 
(a) Landlord hereby lets and demises to Tenant and Tenant hereby takes and hires
from Landlord the Premises for a term (the “Lease Term”) beginning on the
Commencement Date and expiring without further notice or act on the last day of
the month in which the second (2nd) anniversary of the Commencement Date occurs,
unless sooner terminated or extended as provided herein.
 
(b) So long a Tenant Default (as hereinafter defined) has not occurred beyond
any applicable notice or cure periods under this Lease, Tenant shall have the
option to renew this Lease for one (1) consecutive renewal term (the “Renewal
Term”) of one (1) year, commencing on the first day following the expiration of
the Lease Term and the same terms and conditions as set forth in this Lease
shall apply to such Renewal Term, except that the Annual Fixed Rent set forth in
Exhibit “B” due from Tenant during such Renewal Term shall be increased to
$780,000.00 per year. Tenant shall exercise its option to renew the Lease Term
by giving written notice to Landlord not less than three (3) months prior to the
expiration of the Lease Term.
 
(c) At any time after the sixth (6th) month of the Lease Term, Tenant shall have
the right to terminate this Lease upon ninety (90) days written notice to
Landlord. Tenant shall vacate the Premises by the end of the ninety (90) day
period and shall continue to pay Rent, as hereinafter defined, until the last
day of the ninety (90) day period. This right of termination is exclusive to the
Tenant and may not be assigned or transferred to any future tenant, assignee or
transferee.
 
 

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33. Rent.
 
(a) Beginning on the Commencement Date, Tenant shall pay to Landlord in lawful
money of the United States minimum annual rental in the amounts set forth in
Exhibit “B” (“Annual Fixed Rent”) in equal monthly installments of one-twelfth
of the amount thereof, payable in advance on the first day of each and every
calendar month during the Lease Term. The first such monthly installment shall
be due and payable on the Commencement Date. If the Commencement Date occurs on
a day other than the first day of a calendar month or if the Lease Term ends on
a day other than the last day of a calendar month, the Rent due for the partial
calendar months occurring at the commencement and expiration of the Lease Term
shall be prorated on a per diem basis.
 
(b) Except as otherwise set forth in this Lease, all costs, expenses and
obligations with respect to the Premises shall be paid by Tenant, so that,
except as otherwise set forth in this Lease, the Annual Fixed Rent payable by
Tenant to Landlord hereunder shall be “net” to Landlord.
 
(c) All sums other than Annual Fixed Rent payable by Tenant under this Lease are
referred to hereinafter as “Additional Rent” and Landlord shall have the same
rights and remedies for non-payment thereof as Landlord has for non-payment of
Annual Fixed Rent. Annual Fixed Rent and Additional Rent are sometimes referred
to hereinafter collectively as “Rent”.
 
(d) Except as otherwise set forth in this Lease, all monetary obligations shall
be paid without notice or demand and without set-off, counterclaim, recoupment,
abatement, suspension, deferment, diminution, deduction, reduction or defense.
 
(e) In order to compensate Landlord for the additional expense Landlord may
incur in the event Tenant is delinquent in the payment of Rent, Tenant agrees to
pay a late charge of Fifty Dollars ($50.00) per day and interest to Landlord at
the Overdue Interest Rate (as hereinafter defined) on account of any payment of
Rent that is not paid within five (5) days after the same is due, from the date
that any such payment is due to the actual date of payment. As used herein, the
term "Overdue Interest Rate" shall mean two percent (2%) per annum over the
interest rate quoted from time to time by Wachovia Bank, N.A. (or such other
national bank with offices in New Jersey as may be selected by Landlord), as its
"prime" rate of interest. Notwithstanding the foregoing, the interest and late
fee referred to in this Section 2(e) shall not be payable with respect to the
first occurrence during any twelve (12) month period during the Lease Term that
Tenant fails to make a payment of Rent when due, until five (5) days after
Landlord delivers written notice of such delinquency to Tenant. If Tenant’s
payment of Rent is still delinquent on the sixth (6th) day after Landlord
delivers such written notice, then Landlord shall be entitled to the forgoing
late charge and interest as of the first day that Tenant’s payment of Rent was
delinquent. Landlord shall only be required to deliver Tenant notice of such
delinquency once during any twelve (12) month period during the Lease Term.
 

2

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(f) If Landlord receives two (2) or more checks from Tenant which are returned
by Tenant’s bank for insufficient funds, Landlord may require that all checks
thereafter be bank certified or cashier’s checks (without limiting Landlord’s
other remedies). All bank service charges resulting from any returned checks
shall be borne by Tenant.
 
34. Taxes and Other Charges.
 
(a) Tenant shall pay before any fine, penalty, interest or cost may be added
thereto, or become due or be imposed by operation of law for the non-payment
thereof, all taxes, including municipal and school taxes, assessments, rates and
charges, county taxes, excises, levies, and all other license and permit fees
and other governmental charges, including but not limited any establishment
fees, manufacturing fees, or impact fees imposed by the federal, state or
municipal government or any such governmental agency, and any taxes, charges or
fees in lieu of any of the foregoing, which during the Lease Term may be
assessed, levied, confirmed, imposed upon, or become due and payable with
respect to the Premises or any part thereof or any appurtenance thereto (all of
which are hereinafter collectively called “Taxes”). Landlord shall promptly
submit to Tenant copies of all such Tax bills directed to Landlord. Tenant shall
pay such Taxes directly to the government or other public authority charged with
the collection thereof. Tenant shall deliver to Landlord copies of receipts or
canceled checks showing the payment of such Taxes.
 
(b) All Taxes which shall be charged, laid, levied, assessed or imposed for each
fiscal period in which the Lease Term terminates shall be apportioned pro rata
between Landlord and Tenant in accordance with the portion of the relevant
fiscal period during which the Lease Term shall be in effect. In the event that
any payment of Taxes is due during the Lease Term with respect to a fiscal
period that extends beyond the Lease Term, Landlord shall pay Tenant Landlord’s
proportionate share thereof (based upon the portion of the fiscal period that
extends beyond the Lease Term) at least ten (10) days prior to the date that
payment is due with the maximum discount. Provided that Tenant receives
Landlord’s payment as aforesaid, Tenant shall remit to the taxing authority, the
full amount due for the relevant fiscal period. If Tenant does not receive
Landlord’s payment as aforesaid, Tenant shall remit to the taxing authority,
Tenant’s proportionate share of Taxes for the relevant fiscal period. In the
event that any payment of Taxes is due after the expiration of the Lease Term
with respect to a fiscal period that includes part of the Lease Term, Tenant
shall pay to Landlord Tenant’s proportionate share thereof (based upon the
portion of the fiscal period that was included in the Lease Term) with the last
monthly payment of Rent due to Landlord.
 
(c) If any special assessment with respect to the Premises may be paid in
installments, Tenant shall be obligated to pay only those installments which
become due and payable during the Lease Term.
 
(d) Nothing herein contained shall require or be construed to require Tenant to
pay any transfer, recording, inheritance, estate, succession, franchise, excise,
business privilege, income, gross receipts or profit tax, or capital levy that
is or may be imposed upon Landlord.
 

3

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(e) Tenant shall have the right to request that Landlord contest any increase in
any Taxes levied against the Premises and Landlord shall have the right to
decide whether to contest such increase in its sole and absolute discretion.
 
35. Utilities and Other Service Charges. During the Lease Term, Tenant will pay
for all water, gas, oil, electricity, heat, telephone, sewage, trash removal,
janitorial and landscaping services and snow removal and all other utilities and
services used by Tenant in the Premises, except as otherwise expressly set forth
in this Lease. Landlord is not obligated to provide or pay for any utilities or
services supplied to the Premises.
 
36. Maintenance and Repair.
 
(a) Except as set forth in subsection 5(b) below, Tenant, at its sole cost and
expense throughout the Lease Term, shall keep and maintain the Premises,
including, but not limited to all plumbing, electrical, sewage, life-safety,
heating, ventilating, and air-conditioning systems, and all pipes, wires, lines
and conduits contained therein or which are part thereof, in the same order and
condition as they are on the Commencement Date and shall make all repairs,
replacements and renewals necessary to keep them in such order and condition,
reasonable wear and tear and damage by fire or other casualty (including the
elements) excepted. In addition, Tenant, at its sole cost and expense, shall
seal or stripe the parking areas as commercially reasonable and necessary to
maintain such areas in good condition.
 
(b) Landlord, at its own cost and expense, shall keep and maintain the roof, the
roof drain, outside walls, foundation and structural components of the
Improvements (including the footings, exterior walls, foundations and structural
steel columns and girders) in good order and condition and will make all
necessary repairs, replacements and renewals necessary to keep them in such
order and condition, reasonable wear and tear and damage by fire or other
casualty (including the elements) excepted. In addition, Landlord, at its sole
cost and expense, shall pave the parking areas as commercially reasonable and
necessary to maintain such areas in good condition.
 
37. Use. Tenant shall have the right to use the Premises for its intended
purpose as a pharmaceutical manufacturing facility, including office, laboratory
and pharmaceutical manufacturing facility. Tenant shall not use or occupy or
permit any of the Premises to be used or occupied, nor do or permit anything to
be done in or on any of the Premises, in a manner which would or might
constitute a public or private nuisance or waste, or which would prevent
Landlord from (i) obtaining or maintaining any permits, licenses, or approvals
for the Property as a pharmaceutical manufacturing facility or (ii) insuring the
Property or increasing the cost of insuring the Property.
 
38. Compliance with Law. Except as set forth in the following paragraph, Tenant
agrees that during the Lease Term, it will, at its own cost and expense,
promptly comply with: (a) all present and future federal, state, county, city
and municipal or other statutes, charters, laws, rules, orders, regulations and
ordinances affecting the Premises, the occupancy, use or repair thereof; (b) all
rules, orders, and regulations of all public officers including the police,
health and fire departments and with the National Board of Fire Underwriters or
other similar organizations for the prevention of fire or the corrections of
hazardous conditions; and (c) the requirements of all insurance companies having
policies or public liability, fire and other insurance at any time in force and
effect with respect to the Premises and its permanent improvements. Tenant’s
obligations to comply with this Section 7 shall include, without limitation
obtaining all permits, licenses, certificates and approvals to conduct its
business in the Premises, or any necessary waivers or variances, without thereby
subjecting Landlord or the Premises to any costs, requirements, liabilities or
restrictions.
 

4

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

Notwithstanding the foregoing, Tenant shall in no event have any obligation to
do any of the following, all of which shall be done by Landlord at its sole cost
and expense: (a) make any repair or replacement which would otherwise be
Landlord’s responsibility under subsection 5(b) of this Lease; (b) correct,
remedy, repair or replace any condition which was in existence prior to the
Commencement Date; or (c) correct or remedy any environmental problem which was
not caused or created by Tenant on or after the Commencement Date.
 
39. Sublease and Assignment.
 
(a) Tenant shall not be permitted to sublease all or any portion of the Premises
or assign this Lease without the prior written approval of Landlord, which may
be withheld or denied in Landlord’s sole discretion.
 
(b) Notwithstanding foregoing provisions of this Section, Tenant will have the
right to assign the Lease or sublet all or any part of the Premises to an
affiliate of Tenant which is in existence on the Commencement Date without
obtaining Landlord’s prior approval, but Tenant shall provide notice of Tenant’s
intent to assign or sublet at least fifteen (15) days prior to the effective
date of the same and shall provide current audited financial statements for any
affiliate. Furthermore, any affiliate of Tenant shall be permitted to use all or
any part of the Premises, and such use shall not be considered an assignment of
the Lease or a sublet of the Premises. The term “affiliate of Tenant” shall mean
any person(s), partnership(s), corporation(s), or other form of business or
legal association or entity that has a net worth in excess of Five Million
Dollars ($5,000,000.00) and (i) owning or controlling Tenant, under common
ownership or control with Tenant, or controlled by Tenant or (ii) acquiring all
or substantially all of Tenant’s assets or ownership interests.
 
(c) No subleasing of the Premises or assignment of this Lease, nor the granting
of any consent by Landlord with respect thereto, shall release or relieve Tenant
from liability for the payment of Rent or performance of any other obligations
of Tenant under this Lease, except in the case of an assignment of this Lease to
an assignee that has a net worth on the date of the assignment in excess of Five
Million Dollars ($5,000,000.00) (in which case Tenant shall be released from any
further liability or obligation thereafter arising under this Lease).
 
 

5

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40. Fire or Other Casualty.
 
(a) The term “Major Casualty” as used in this Section means any fire or other
casualty (including the elements) which causes damage to or destruction of the
Premises of such an extent that, in the opinion of an independent licensed
engineer or architect retained by Tenant, it would require one hundred twenty
(120) days or more to restore the Premises to the condition which existed prior
to the Major Casualty, from the date that such restoration is commenced. The
term “Minor Casualty” as used in this Section means any fire or other casualty
(including the elements) which causes damage to or destruction of the Premises
of such an extent that it would require less than one hundred twenty (120) days
to restore the Premises to the condition which existed prior to the Minor
Casualty, from the date that such restoration is commenced. The term “Casualty”
as used in this Section means either a Minor Casualty or a Major Casualty.
 
(b) Immediately following the occurrence of a Casualty, Tenant shall notify
Landlord of the Casualty. Within thirty (30) days of the Casualty, Tenant shall
send written notice to Landlord estimating the date (“Restoration Completion
Date”) that the Premises will be fully restored to the condition which existed
prior to the Casualty, including a copy of the opinion of an independent
engineer or architect setting forth the estimate of the number of days required
to restore the Premises to the condition which existed prior to the Casualty,
from the date that such restoration is commenced. Landlord shall have the right,
but not the obligation, to have its own engineer or architect evaluate the
damage and estimate the number of days required to restore the Premises to the
condition which existed prior to the Casualty, from the date that such
restoration is commenced.
 
(c) In the event of a Minor Casualty, Tenant shall proceed with reasonable
diligence to restore the Premises as nearly as possible to its condition prior
to the occurrence of the Minor Casualty. In the event that the insurance
proceeds are insufficient to complete repair, restoration or rebuilding of the
Premises, Tenant shall be solely responsible for such deficiency and shall be
directly responsible for payment of any costs in excess of the insurance
proceeds, including without limitation any deductible under the insurance
policy.
 
(d) In the event of a Major Casualty, then either Landlord or Tenant may elect
to cancel and terminate this Lease as of the date of the occurrence of the Major
Casualty by giving written notice to the non-canceling party of its election to
do so within thirty (30) days after the date of occurrence of such damage. If
the Lease is terminated by either party, then Tenant shall (i) assign to
Landlord all of Tenant’s right, title and interest in and to all insurance
proceeds paid or payable to Tenant on account of the Improvements (but Tenant
shall retain all right, title and interest in and to all insurance proceeds paid
or payable to Tenant on account of Tenant’s Property), (ii) pay to Landlord the
deductible carried by Tenant to the extent such deductible exceeds One Hundred
Thousand Dollars ($100,000.00) (except that Tenant shall pay the full deductible
if the Major Casualty is the result of the sole negligence of Tenant, its
agents, servants, employees, contractors, invitees or licensees), (iii) be
released from all further obligation to repair, restore or rebuild the Premises
under this Lease. Upon the termination of this Lease under this Section, both
Landlord and Tenant shall be released from further obligations to the other
party coincident with the surrender of possession of the Premises, except for
any Rent, charges, costs, or items which have theretofore accrued and are then
unpaid.
 

6

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(e) In the event that there occurs any Casualty and this Lease is not terminated
by either Tenant or Landlord pursuant to subsection 9(d), then Tenant shall act
diligently and in good faith to restore and repair the Premises to its condition
prior to the occurrence of the Casualty. In the event that Tenant is responsible
for restoring the Premises and the insurance proceeds are insufficient to
complete repair, restoration or rebuilding of the Premises, Tenant shall be
solely responsible for such deficiency and shall be directly responsible for
payment of any costs in excess of the insurance proceeds, including without
limitation any deductible under the insurance policy. Tenant’s obligation to pay
Rent for any portion of the Premises shall be equitably abated from the date of
the Casualty until the date that the Premises has been substantially restored;
provided, however, that such abatement shall apply only to the portion of the
Premises rendered unusable for the operation of Tenant’s business.
 
(f) In the event of any reconstruction, restoration, or re-fixturing of the
Premises by Tenant under this section, Tenant shall promptly obtain receipt of
said insurance proceeds and commence reconstruction, restoration or re-fixturing
of the Premises and shall diligently prosecute such work to completion. Tenant
shall, before commencing any such reconstruction, restoration or re-fixturing,
at its expense obtain, all permits, approvals and certificates required by any
governmental or quasi-governmental bodies and (upon completion) certificates of
final approval thereof and shall deliver promptly duplicates of all such
permits, approvals and certificates to Landlord and Tenant agrees to carry and
will cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as
Landlord may reasonably require. Upon completion of the reconstruction,
restoration or re-fixturing, Tenant shall obtain and deliver to Landlord final
unconditional lien waivers with respect to all work performed in, on or to the
Premises from all contractors employed by Tenant and/or its contractors in
connection with the reconstruction, restoration or re-fixturing. If any
mechanic's lien is filed against the Premises for work claimed to have been done
for, or materials furnished to Tenant, whether or not done pursuant to this
Section 9, the same shall be discharged by Tenant within thirty (30) days after
Tenant receives notice of such mechanic’s lien, at Tenant's expense, by filing a
bond, or as is otherwise required by law.
 
41. Insurance.
 
(a) During the Lease Term, Tenant, at its expense, shall purchase and maintain
in effect:
 
(i) a standard fire and casualty insurance with extended coverage (i.e., “all
risk coverage”) in an amount equal to the full replacement value of the
Improvements with a reasonable deductible of no more than Ten Thousand Dollars
($10,000.00) and rent loss insurance;
 
(ii) comprehensive general liability insurance in the amount of at least
$2,000,000.00, combined single limit, and a general aggregate limit of
$5,000,000.00, naming Landlord as an additional insured.
 

7

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(iii) insurance coverage for all risks of physical loss or damage insuring the
full replacement value of Tenant’s Property and other personal property of
Tenant.
 
(iv) statutory worker’s compensation insurance, and employer’s liability
insurance with a Five Hundred Thousand Dollar ($500,000.00) minimum limit
covering all of Tenant’s employees. Such liability insurance shall include,
without limitation, products and completed operations liability insurance, fire
and legal liability insurance, and such other coverage as Landlord may
reasonably require from time to time.
 
(b) All insurance required by subsection 10(a) above shall be carried with
companies licensed to do business in the State of New Jersey having an A.M.
Best’s rating of at least A-/VII. All insurance policies required to be carried
by Tenant under this Lease (except for worker’s compensation insurance) shall
(i) name Landlord, and any other parties designated by Landlord as additional
insureds, (ii) as to liability coverages, be written on an “occurrence” basis,
(iii) provide that Landlord shall receive thirty (30) days notice from the
insurer before any cancellation or change in coverage, and (iv) contain a
provision that no act or omission of Tenant shall affect or limit the obligation
of the insurer to pay the amount of any loss sustained. Each such policy shall
contain a provision that such policy and the coverage evidenced thereby shall be
primary and non-contributing with respect to any policies carried by Landlord.
 
(c) Tenant may, at its option, include the insurance coverage required by
subsection 10(a) above in general or blanket policies of insurance. If general
or blanket policies of insurance are maintained, the policy shall include a
provision to the effect that the aggregate limit of $5,000,000.00 shall apply
separately to the Premises.
 
(d) Tenant hereby releases Landlord from any and all liability or responsibility
to Tenant or anyone claiming through or under Tenant by way of subrogation or
otherwise for any loss or damage to property covered by any insurance then in
force (and, if none is in force, then to the extent such damage would have been
covered had the insurance required by subsection 10(a)(i) been procured and
maintained), even if such loss or damage shall have been caused by the fault or
negligence of Landlord or anyone for whom Landlord may be responsible; provided,
however, that this release shall be applicable and in force and effect only with
respect to any loss or damage occurring during such time as the policy or
policies of insurance covering said loss shall contain a clause or endorsement
to the effect that this release shall not adversely affect or impair such
insurance or prejudice the right of Tenant to recover thereunder. Tenant agrees,
at its sole cost, to obtain such a clause or endorsement if it is available.
 
(e) Any loss under the fire and casualty insurance policy shall be adjusted with
the insurance companies by and at the cost of Tenant, but, if Tenant has
exercised the right to terminate this Lease in accordance with subsection 9(d)
above, settlement shall be subject to the approval of Landlord (not to be
unreasonably withheld, conditioned or delayed) and the proceeds from the
settlement shall be assigned to Landlord in accordance with subsection 9(d)
above.
 

8

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(f) Except for Landlord’s acts, omissions or negligence, Landlord shall not be
liable for any damage or damages of any nature whatsoever to persons or property
caused by explosion, fire, theft or breakage, vandalism, falling plaster, by
sprinkler, drainage or plumbing systems, or air conditioning equipment, by the
interruption of any public utility or service, by steam, gas, electricity,
water, rain or other substances leaking, issuing or flowing into any part of the
Premises, by natural occurrence, acts of the public enemy, riot, strike,
insurrection, war, court order, requisition or order of governmental body or
authority, or by anything done or omitted to be done by any person in the
Premises, it being agreed that Tenant shall be responsible for obtaining
appropriate insurance to protect its interests.
 
42. Alterations and Additions.
 
(a) Tenant will be entitled to make alterations that do not exceed $10,000
(other than Major Alterations (as hereinafter defined)) and any alterations
necessary to maintain the Premises in accordance with Good Manufacturing
Practices (“GMP”) as defined by the U.S. Food and Drug Administration (“FDA”)
including, but not limited to, specific alterations required by the FDA in
connection with its periodic inspection of the Premises without obtaining
Landlord’s approval, but Tenant shall provide notice of Tenant’s intent to
perform any alterations at least fifteen (15) days prior to the date on which
the work is scheduled to commence. Tenant shall not make any Major Alteration to
the Improvements without first securing Landlord’s written approval, which
approval shall not be unreasonably withheld, conditioned or delayed. The term
“Major Alteration” means any alteration or addition which could adversely affect
demising walls, the sewer, plumbing, roof, any structural component, or any
electrical or mechanical system of the Improvements. Any alterations and
additions shall be executed by Tenant in a good and workmanlike manner. Tenant
shall, before making any alterations, at its expense obtain, all permits,
approvals and certificates required by any governmental or quasi-governmental
bodies and (upon completion) certificates of final approval thereof and shall
deliver promptly duplicates of all such permits, approvals and certificates to
Landlord and Tenant agrees to carry and will cause Tenant's contractors and
sub-contractors to carry workman's compensation, general liability, personal and
property damage insurance. Upon completion of any Major Alteration, Tenant shall
obtain and deliver to Landlord final unconditional lien waivers with respect to
all work performed in, upon or to the Premises from all contractors employed by
Tenant and/or its contractors in connection with the Major Alteration. Except as
hereinafter provided, all alterations made by Tenant shall become the property
of Landlord and shall be surrendered to Landlord upon the expiration or earlier
termination of this Lease. When granting consent for any Major Alternation,
Landlord shall indicate whether it will require the removal of the Major
Alteration at the expiration or earlier termination of the Lease. Tenant shall
remove Major Alterations that Landlord requested be removed at the expiration or
earlier termination of the Lease. Tenant shall repair at its sole cost and
expense all damage caused to the Premises by removal of any Major Alterations.
 
(b) No mechanic’s liens or other lien shall be allowed against the Premises as a
result of Tenant’s alterations to the Premises. Tenant shall promptly pay all
persons furnishing labor, materials, or services with respect to any work
performed by Tenant on the Premises. Any mechanic’s liens filed against the
Premises for work done or materials supplied to Tenant in the making of
alterations, decorations, installations, additions, or improvements shall be
promptly paid or bonded and discharged within forty five (45) days following
notice to Tenant of the intention by the labor material supplier to assert or
file such lien. Tenant agrees to indemnify and to save and hold Landlord
harmless against all judgments, costs, expenses and reasonable attorneys fees
Landlord may incur by reason of Tenant’s failure to discharge such liens.
 
 

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43. Condemnation
 
(a) The term “Total Taking” as used herein means any taking of all or a portion
of the Premises by condemnation or other governmental proceeding as a result of
which it is unreasonable or impossible for Tenant to properly conduct its
business in the Premises. The term “Partial Taking” means any taking of a
portion of the Premises, other than a Total Taking. The term “Taking” means
either a Total Taking or a Partial Taking.
 
(b) In the event of a Taking, the entire proceeds of any condemnation award or
compensation shall belong to Landlord, except as hereinafter provided. In such
event, Tenant shall and hereby does assign all right, title and interest in any
condemnation award or compensation to Landlord, except as hereinafter provided,
and Tenant shall and hereby does waive in favor of Landlord any interest
therein, except as hereinafter provided. If the Taking is a Total Taking or if
the Taking is a Partial Taking which adversely affects Tenant’s ability to use
the Premises, then Tenant shall be entitled to claim from the condemning
authorities such compensation as may be separately awarded or recoverable by
Tenant in its own right on account of any and all damages to Tenant’s business
by reason of the condemnation and for or on account of any cost or a loss to
which Tenant might be put in relocating its business or in removing Tenant’s
personalty, provided however, that such claim by Tenant and award thereto does
not diminish, reduce or affect the Landlord’s condemnation award.
 
(c) In the event of a Partial Taking, Landlord shall, using due diligence,
repair and restore the balance of the Premises remaining after the condemnation
as nearly as possible to the condition as existed prior to the Partial Taking,
provided however, Landlord shall not be required to expend more on such
restoration work than the condemnation award received and retained by Landlord
for the Premises. Following a Partial Taking, Rent shall be equitably adjusted
in the event that Tenant’s use of the Premises is adversely affected by such
Partial Taking.
 
44. Environmental Provisions
 
(a) Definitions. For purposes of this Section 13, the following terms shall have
the following meanings:
 
(i) “Environmental Law” means any federal, state, or local statute, law, order,
regulation, ordinance, constitution, agreement, permit, or decision relating to
pollution or protection of human health, safety or the environment, including
natural resources, as well as any principles of common law under which a person
may be held liable for the Release of any Hazardous Substance into the
environment.
 
(ii) “Hazardous Substances” means any gaseous, liquid or solid chemical,
material, substance, contaminant or waste that may or could pose a hazard to the
environment or human health or safety, including (a) any “hazardous substances”
as defined by the federal Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. §9601 et seq., the New Jersey Spill Compensation and
Control Act, N.J.S.A. 58:10-23.11a et seq., and the Industrial Site Recovery
Act, N.J.S.A. 13:1K-6 et seq. (b) any “extremely hazardous substance,”
“hazardous chemical,” or “toxic chemical” as those terms are defined by the
federal Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et
seq., (c) any “hazardous waste,” as defined under the federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act, 42
U.S.C. § 6901 et seq., and the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et
seq. (d) any “pollutant,” as defined under the federal Water Pollution Control
Act, 33 U.S.C. § 1251 et seq., (e) any chemical, material, substance,
contaminant or waste, whether gaseous, liquid or solid, that is regulated under
any Environmental Law, and (f) any asbestos, polychlorinated biphenyls
(“PCB’s”), petroleum, petroleum products and urea formaldehyde and mold.
 
 

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(iii) “Release” means any release, spill, emission, leaching, leaking,
migration, dumping, emptying, pumping, injection, deposit, disposal, discharge
or dispersal of any Hazardous Substance into the indoor or outdoor environment,
or into, on, or from any property.
 
(iv) “Remedial Action” means any action required by Environmental Law to address
a Release of Hazardous Substances, including, but not limited to,
investigations, abatement, corrective actions, response actions, removal
actions, or remediation.
 
(v) “Tenant’s Environmental Building Liability Period” means the period from
October 17, 2000 through the expiration or termination of the Lease Term.
 
(b) Prohibition. Tenant shall not generate, use, store, treat or dispose of
Hazardous Substances on, under or in the Premises or any part thereof without
prior written authorization by Landlord. Such prohibition shall not apply to
Hazardous Substances that are generated, used, or stored in the ordinary course
of Tenant conducting its business or any other permitted use of the Premises,
including the repairs or maintenance of the Premises, provided such Hazardous
Substances are generated, used, stored, treated or disposed of in compliance
with Environmental Law.
 
(c) Tenant Activities.
 
(i) Tenant shall, at its own cost, comply with all Environmental Laws in
connection with Tenant’s operations or activities at the Premises.
 
(ii) Remedial Action. If the presence, Release, threat of Release, placement on
or in the Premises or any portion thereof, or the generation, transportation,
storage, treatment, or disposal at, on, in, under or from the Premises, or any
portion thereof of any Hazardous Substance, to the extent occurring in
connection with Tenant’s operations or activities at the Premises during the
Lease Term or Tenant’s Building Environmental Liability Period: (a) gives rise
to liability (including, but not limited to, a Remedial Action) under
Environmental Laws, (b) causes an adverse public health effect, or (c) pollutes,
or threatens to pollute the environment, Tenant shall promptly take, at Tenant’s
sole cost and expense, any and all Remedial Action reasonably necessary to
respond to such Hazardous Substances, and mitigate exposure to liability arising
from the Hazardous Substance, if and to the extent required by Environmental
Law. When conducting any such remedial measures, Tenant shall comply with all
Environmental Laws.
 
 

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(iii) Tenant shall have the right, but not the obligation, to perform an
environmental assessment of the Premises, at any time, including on or about the
expiration of the Lease Term. The written results or report of any such
environmental assessment shall be provided by Tenant to Landlord.
 
(d) Landlord Activities.
 
(i) Landlord shall promptly provide Tenant copies of all written, non-routine
communications, permits or agreements with any governmental authority or agency
(federal, state or local) or any private entity relating in any way to the
presence, Release, threat of Release, placement on, in or from the Premises, or
any portion thereof, or the generation, transportation, storage, treatment or
disposal in, on, or from the Premises of any Hazardous Substances prior to or
during the Lease Term.
 
(ii) Remedial Action. If the presence, Release, threat of Release, placement on,
in or from the Premises, or any portion thereof, or the generation,
transportation, storage, treatment or disposal at, on, in, under or from the
Premises, or any portion thereof, of any Hazardous Substance, to the extent
caused by Landlord or any third party not connected or related to Tenant, occurs
during the Lease Term or Tenant’s Building Environmental Liability Period: (a)
gives rise to liability (including, but not limited, to a Remedial Action) under
Environmental Laws, (b) causes an adverse public health effect, or (c) pollutes,
or threatens to pollute the environment, Landlord shall promptly take, at
Landlord’s sole cost and expense, any and all Remedial Action reasonably
necessary to respond to such Hazardous Substances, and mitigate exposure to
liability arising from the Hazardous Substances, if any, to the extent required
by Environmental Laws.
 
(e) Environmental Indemnification.
 
(i) Notwithstanding anything to the contrary contained in this Lease, Landlord
hereby indemnifies and holds Tenant, and its affiliates, partners, directors,
officers, agents and employees harmless from and against any and all claims,
including, without limitation, costs incurred in connection with ISRA (as
defined below) compliance, arising from or in connection with (A) any
environmental conditions, including, without limitation, the presence, Release
or threatened Release or placement on, in or from the Premises, or any portion
thereof, of Hazardous Substances occurring during the Lease Term if caused by
Landlord or a third party not connected or related to Tenant, (B) the violation
of any Environmental Laws occurring during the Lease Term if caused by Landlord
or a third party not connected or related to Tenant, or (C) any breach or
default by Landlord in the full payment and/or performance of its obligations
under this Section.
 
 

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(ii) Notwithstanding anything to the contrary contained in this Lease, Tenant
hereby indemnifies, defends and holds Landlord, and its respective partners,
directors, officers, agents and employees harmless from and against any and all
claims, including, without limitation, costs incurred in connection with ISRA
(as defined below) compliance, arising from or in connection with (A) any
environmental conditions, including, without limitation, the presence, Release,
or threatened Release or placement on, in or from the Premises, or any portion
thereof, of Hazardous Substances as a result of Tenant’s operations or
activities on the Premises during the Lease Term and Tenant’s Building
Environmental Liability Period, (B) the violation of any Environmental Laws to
the extent arising from Tenant’s operations or activities on the Premises during
Tenant’s Building Environmental Liability Period, or (C) any breach or default
by Tenant in the full payment and/or performance of its obligations under this
Section.
 
(f) Landlord’s and Tenant’s obligations under this Section 13 shall survive the
expiration or any termination of the Lease.
 
(g) ISRA Compliance. Upon the closure of Tenant’s operations at the Premises,
Tenant shall comply with ISRA (as defined below). Within sixty (60) days after
the expiration or earlier termination of this Lease, Tenant shall obtain and
provide to Landlord either:
 
(i) a letter from the New Jersey Department of Environmental Protection
(“NJDEP”) stating that the New Jersey Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et. seq. and the regulations promulgated thereunder (collectively
“ISRA”) are not applicable to the expiration or earlier termination of this
Lease (a “Letter of Non-Applicability”); or
 
(ii) an approved Negative Declaration (as defined by ISRA) or No Further Action
Letter (as defined by ISRA) (the Negative Declaration or No Further Action
Letter, as the case may be, are hereinafter referred to collectively as the
“ISRA Clearance”) relating to the Premises.
 
(h) If Tenant is unable to obtain a Letter of Non-Applicability or ISRA
Clearance within sixty (60) days after the expiration or earlier termination of
this Lease, then Tenant shall apply for and enter into a Remediation Agreement
(as defined by ISRA) with NJDEP or an amendment to an existing Remediation
Agreement with NJDEP for the Premises. In any such Remediation Agreement, Tenant
shall pay for and be identified as the sole party responsible for:
 
(i) compliance with the Remediation Agreement; and
 
(ii) obtaining ISRA Clearance, provided, however, that such obligations of
Tenant under such Remediation Agreement shall in no way affect the indemnity
obligations of Tenant and Landlord pursuant to this Lease.
 
(i) Landlord’s and Tenant’s obligations under this Article shall survive the
expiration or any termination of the Lease.
 
45. Indemnification.
 

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(a) In addition to its indemnification obligations under Section 13, Tenant
covenants and agrees to exonerate, indemnify, defend, protect and save Landlord
harmless from and against any and all claims, demands, losses, suits, damages,
costs, charges and expenses, including reasonable architect’s, engineer’s and
attorney’s fees, which may be imposed upon, incurred by, or asserted against
Landlord and arising, directly or indirectly, out of in connection with (i)
injury to persons or damage to property caused by the negligence or otherwise
act or omission of Tenant, its agents, employees, contractors, invitees,
licensees or guests, (ii) any breach by Tenant of any covenant, agreement,
representation or warranty made by Tenant pursuant to this Lease, (iii) Tenant’s
operations or activities on the Premises, and (iv) use and occupancy of the
Premises by Tenant, its agents, employees, contractors, invitees, licenses or
guests.
 
(b) In addition to its indemnification obligations under Section 13, Landlord
covenants and agrees to exonerate, indemnify, defend, protect and save Tenant
harmless from and against any and all claims, demands, losses, suits, damages,
costs, charges and expenses, including reasonable architect’s, engineer’s and
attorney’s fees, which may be imposed upon, incurred by, or asserted against
Tenant and arising, directly or indirectly, out of in connection with (i) injury
to persons or damage to property caused by the negligence or otherwise act or
omission of Landlord, its agents, employees, contractors, invitees, licensees or
guests, (ii) any breach by Landlord of any covenant, agreement, representation
or warranty made by Landlord pursuant to this Lease, (iii) Landlord’s operations
or activities on the Premises, and (iv) use of the Premises by Landlord, its
agents, employees, contractors, invitees, licenses or guests.
 
(c) All indemnity obligations of Landlord and Tenant arising under this Lease,
including without limitation Section 13 above and this Section 14, and all
claims, demands, damages and losses assertable by Landlord and Tenant against
the other in any suit or cause of action arising out of or relating to this
Lease, the Premises, or the use and occupancy thereof, are limited as follows:
 
(i) by the releases and waivers expressed in subsection 10(d);
 
(ii) all of the claims for indemnification and other recoveries shall be limited
to direct, proximately caused damages, and shall exclude all special,
consequential, indirect, exemplary or incidental damages, including business
loss or interruption, of any kind whether arising in contract, tort, product
liability or otherwise, suffered by the party asserting the claim or seeking the
recovery; and
 
(iii) in the event that Landlord and Tenant are determined to be contributorily
responsible for the indemnified injury or loss, each indemnitor’s obligation
shall be limited to the indemnitor’s equitable share of the losses, costs or
expenses to be indemnified against based on the relative culpability of each
indemnifying person whose negligence or willful acts or omissions contributed to
the injury or loss.
 
46. Default by Tenant. The occurrence of any one of the following shall
constitute an event of default by Tenant (“Tenant Default”):
 

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(a) failure by Tenant to pay any installment of Annual Fixed Rent or any other
sum required to be paid by Tenant pursuant to this Lease within five (5) days
after Tenant receives written notice from Landlord that the same is due,
provided that Landlord shall only be required to deliver Tenant notice of such
failure once during any twelve (12) month period during the Lease Term;
 
(b) failure by Tenant to perform or comply with any other covenant or condition
of this Lease to be performed or complied with by Tenant within thirty (30) days
after written notice thereof from Landlord and such additional time, if any, as
is reasonably necessary to cure such failure, provided Tenant commences to cure
such failure within such thirty (30) day period and thereafter prosecutes such
cure to completion with reasonable diligence; or
 
(c) the filing of a petition against Tenant for adjudication of it as a bankrupt
or insolvent, or for its reorganization or the appointment of a receiver or
trustee for the benefit of its creditors, if such petition is not dismissed
within sixty (60) days of filing; or the filing of such a petition by Tenant; or
an assignment by Tenant for the benefit of creditors; or the taking of
possession of the property of Tenant by any governmental officer or agency
pursuant to statutory authority for the dissolution or liquidation of Tenant.
 
47. Landlord’s Remedies.
 
(a) In addition to all other remedies available to Landlord at law or equity, if
any Tenant Default under this Lease shall have occurred and be continuing,
Landlord shall have all of the following rights and remedies:
 
(i) terminate this Lease and all the estate of Tenant in the Premises by giving
Tenant fifteen (15) days’ written notice of termination, and, upon the date
specified in such notice, the Lease Term and the estate hereby granted shall
expire and terminate with the same force and effect as if the date set forth in
such notice were the date herein before fixed for the expiration of the Lease
Term;
 
(ii) with or without terminating this Lease, reenter and repossess the Premises,
or any part thereof, and relet, or attempt to relet, any or all parts of the
Premises;
 
(iii) terminate Tenant’s right to possession of the Premises and to recover (i)
all Rent which shall have accrued and remain unpaid through the date of
termination; plus (ii) the amount by which the unpaid Rent for the balance of
the Lease Term, discounted to present value at six percent (6%), shall exceed
the then fair rental value of the Premises for the balance of the Lease Term,
similarly discounted, plus (iii) any other amount necessary to compensate
Landlord for all the damages caused by Tenant’s failure to perform its
obligations under this Lease (including, without limitation, reasonable
attorneys’ and accountants’ fees, costs of alterations of the Premises, interest
costs and brokers’ fees incurred upon any reletting of the Premises);
 
(iv) pay or perform for the account of Tenant any obligation or work to be paid
or done by Tenant pursuant to the provisions of this Lease which Tenant has
failed to pay or perform, and Landlord may reenter and repossess such part of
the Premises as may be necessary to perform such work. Tenant shall pay to
Landlord on demand as Additional Rent the amount reasonably paid or expended by
Landlord to do the work or otherwise cure the default by Tenant.
 

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(b) In the event of any termination of this Lease or repossession of the
Premises or any part thereof under this Section by reason of an occurrence of a
Tenant Default, Tenant shall pay to Landlord the Annual Fixed Rent and all other
sums required to be paid by Tenant to and including the date of such termination
or repossession; and, thereafter, Tenant shall, until the end of what would have
been the expira-tion of the Lease Term in the absence of such termination or
repossession, and whether or not the Premises or any part thereof shall have
been relet, be liable to Landlord for, and shall pay to Landlord as agreed,
current damages, the Annual Fixed Rent and all other sums which would be payable
under this Lease by Tenant in the absence of such termination or repossession,
less the net proceeds, if any, of any reletting effected for the account of
Tenant pursuant to subsection 15(a)(ii), after deducting from such proceeds all
of Landlord’s reasonable expenses in connection with such reletting (including,
without limitation, all reasonable related repossession costs, brokerage
commissions, legal expenses, attorney’s fees, employees’ expenses, alteration
costs and expenses of preparation of such reletting). Tenant shall pay such
current damages on the days on which the Annual Fixed Rent would have been
payable under this Lease in the absence of such termination or repossession, and
Landlord shall be entitled to recover the same from Tenant on each such day.
Following such termination of this Lease or repossession of the Premises,
Landlord shall use commercially reasonable efforts to re-let the Premises (i.e.,
listing the Premises with a commercial real estate broker) on commercially
reasonable terms and to otherwise mitigate its damages.
 
(c) Landlord shall look only to Tenant for the satisfaction of Landlord’s
remedies under this Lease and no assets of Tenant’s affiliates, partners,
officers, directors, shareholders or principals, disclosed or undisclosed, shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of Landlord’s remedies under this Lease.
 
48. Default by Landlord.
 
(a) The following shall be an event of default by Landlord (a “Landlord
Default”):
 
(i) failure by Landlord to pay any sum required to be paid by Landlord pursuant
to this Lease within five (5) days after Landlord receives notice from Tenant
that the same is due and payable; or
 
(ii) failure by Landlord to perform or comply with any covenant or condition of
this Lease to be performed or complied with by Landlord within thirty (30) days
after written notice thereof from Tenant and such additional time, if any, as is
reasonably necessary to cure such failure, provided Landlord commences to cure
such failure within such thirty (30) day period and thereafter prosecutes such
cure to completion with reasonable diligence.
 

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(b) Upon the occurrence of a Landlord Default, Tenant may, at its election,
perform the obligation which Landlord has failed to perform for the account of
Landlord. Notwithstanding the foregoing, in case of an emergency where there is
an immediate threat to the Premises or Tenant’s property therein as a result of
Landlord’s failure to perform any obligation under this Lease, Tenant shall have
the right to perform any obligation that Landlord has failed to perform, without
giving the notice and opportunity for cure required for such failure to
constitute a Landlord Default. Tenant shall, however, give such notice as may be
reasonable under the circumstances (which notice may, for this purpose, consist
of telephonic notice).
 
(c) Landlord shall pay Tenant upon written demand all reasonable costs incurred
by Tenant in performing Landlord’s obligations under the preceding paragraph. If
Landlord fails to pay Tenant such amounts within five (5) days after demand
therefor, Landlord agrees to also pay a late charge of Fifty Dollars ($50.00)
per day and interest to Tenant at the Overdue Interest Rate beginning on the
first day that such payment was demanded until the date that Tenant receives
payment.
 
(d) The rights and remedies granted to Tenant pursuant to this Section are in
addition to all other rights and remedies which Tenant may have by law or equity
on account of a failure by Landlord to perform its obligations under this Lease.
 
(e) None of Landlord’s covenants, undertakings or agreements under this Lease is
made or intended as personal covenants, undertakings or agreements by Landlord,
or by any of Landlord’s shareholders, directors, officers, trustees or
constituent partners. All liability for damage or breach or nonperformance by
Landlord shall be collectible only out of Landlord’s interest from time to time
in the Premises, and no personal liability is assumed by nor at any time may be
asserted against Landlord or any of Landlord’s shareholders, directors,
officers, trustees or constituent partners.
 
(f) Upon the sale or other conveyance or transfer of Landlord’s interest in the
Premises, the transferor shall be relieved of all covenants and obligations of
Landlord arising under this Lease from and after the closing of such sale,
conveyance or transfer, provided the transferee assumes the obligations of
Landlord under this Lease from and after the date of transfer.
 
49. Quiet Possession. Landlord covenants and agrees that, so long as Tenant
keeps and performs each and every covenant and condition contained herein to be
kept and performed by Tenant, Tenant shall quietly possess and enjoy the
Premises without hindrance or molestation by Landlord or any party claiming
under or by Landlord.
 
50. Subordination and Non-Disturbance.
 
(a) Landlord hereby represents to Tenant that there are no mortgages, judgments
or liens encumbering the Premises except those set forth in Exhibit “C”.
Simultaneously with the execution of this Lease, Landlord has delivered to
Tenant Non-Disturbance Agreements (as hereinafter defined), on a form prescribed
by Landlord’s lender and with substance reasonably acceptable to Tenant,
executed by the holders of all such mortgages, judgments and liens.
 

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(b) This Lease and the estate, interest and rights hereby created are
subordinate to any mortgage or mortgages hereafter placed upon the Premises or
any estate or interest therein, and to all renewals, modifications,
consolidations, replacements and extensions of the same, and any substitutes
therefor. Tenant agrees that in the event any person, firm corporation or other
entity (including any mortgagee) acquires the right to possession of the
Premises, Tenant shall, if requested by such person, firm, corporation or other
entity, attorn to and become the tenant of such person, firm, corporation or
other entity upon the same terms and conditions as are set forth herein for the
balance of the Lease Term. Notwithstanding the foregoing, any mortgagee may, at
any time, subordinate its mortgage to this Lease, without Tenant’s consent, by
notice in writing to Tenant, and thereupon this Lease shall be deemed prior to
such mortgage without regard to their respective dates of execution and
delivery, and in that event, such mortgagee shall have the same rights with
respect to this Lease as if this Lease had been executed prior to the execution
and delivery of the mortgage.
 
(c) The foregoing provisions of this subsection are subject, however, to the
express condition that the holder of any mortgage to which this Lease is
subordinate shall deliver to Tenant an agreement in form and substance
reasonably acceptable to Tenant (a “Nondisturbance Agreement”) which shall
provide that if (and for as long as) no Tenant Default under this Lease has
occurred and is continuing, then (i) Tenant shall not be made a party to the
foreclosure of any mortgage, or any action or proceeding by any mortgagee to
recover possession of the Building, (ii) Tenant’s possession shall not be
disturbed, and (iii) this Lease shall not be canceled or terminated and shall
continue in full force and effect upon such foreclosure or recovery of
possession upon all the terms, covenants, conditions and agreements set forth in
this Lease.
 
(d) Although the subordination and attornment provisions of this subsection are
automatic subject to the foregoing condition, if requested by the mortgagee,
such Nondisturbance Agreement shall also include the subordination and
attornment provisions set forth above and shall be executed by Tenant.
 
51. Inspection. Subject to Tenant's reasonable security requirements, Landlord
shall have the right upon reasonable notice and at reasonable times during
business hours to inspect all parts of the Premises and during the last four (4)
months of the Lease Term to show the interior and exterior of the Premises to
prospective tenants. Landlord shall not in any way interfere with or disrupt the
operation of Tenant’s business in the exercise by Landlord of its rights under
this Section and shall, at all times, observe Tenant's reasonable security
requirements.
 
52. Surrender. At the expiration or earlier termination of the Lease Term,
Tenant shall surrender and deliver possession of the Premises in the same
condition it is as of the Commencement Date, subject only to reasonable wear and
tear, damage by fire or other casualty (including the elements) that Tenant is
not obligated to restore pursuant to Section 9 above, and alterations and
additions made by Tenant during the Lease Term that Landlord elects not to have
removed pursuant to Section 11 above. In addition, Tenant shall decontaminate,
repair, or clean-up the laboratories at the Premises to remove any contamination
from the laboratories resulting from Tenant's operations.
 
 

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53. Signs. Tenant shall have the right to place signs upon the exterior of the
Premises identifying Tenant, provided such signs comply with the local
ordinances and regulations and are of a reasonable size. Upon the expiration of
the Lease Term, Tenant shall remove all signage and shall restore and repair any
damage caused by the installation or removal of such signs.
 
54. Notices. All notices to be given to either party hereunder shall be in
writing and shall be sent to the following addresses:
 
Tenant:
NexMed (USA), Inc.
89 Twin Rivers Drive
East Windsor, NJ 08520
Attention: Mark Westgate
Fax: (609) 426-0340
   
With a required copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103-2921
Attention: Joseph D. Horter
Fax: (215) 963-5001
   
Landlord:
Pharmar & Pharmar LLC
1052 Route 202/206 North
Bridgewater, NJ 08807
Attention: Vinod Patel
Fax:
   
With a required copy to:
Hill Wallack LLP
202 Carnegie Center
Princeton, NJ 08543-5226
Attention: Joseph A. Vales, Esquire
Fax: (609) 452-1888

 
Notices shall be sufficient if personally delivered, delivered by reputable
overnight courier or mailed United States registered or certified mail, return
receipt requested, postage prepaid, via facsimile transmission with confirmation
of receipt to the other respective party at its address set forth above. Notices
shall be effective on the date of delivery (if a business day) or the next
business day after delivery (if delivery does not occur on a business day). The
party to whom notice is to be given may change the address for the giving of
notices set forth above by delivering notice of such change to the other party.
 
55. Brokers. Landlord covenants, represents and warrants to Tenant that Landlord
has had no dealing or negotiations with any broker or agent or finder in
connection with respect to this Lease. Tenant covenants, represents and warrants
to Landlord that Tenant has had no dealing or negotiations with any broker or
agent or finder in connection with respect to this Lease. Landlord and Tenant
each covenant and agree to pay, hold harmless and indemnify the other from and
against any and all costs, expenses, including reasonable attorneys’ fees, and
liability for any compensation, commissions or charges claimed by any other
broker or agent with whom the indemnifying party has had any dealings or
negotiations with respect to this Lease.
 
 

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56. Waiver. Any particular waiver by Landlord or Tenant of any covenant or
condition of this Lease shall extend to that particular case only in the manner
specified and shall not be construed as applying to or in any manner waiving any
further or other rights hereunder. The receipt of Rent by Landlord, with
knowledge of any breach of this Lease by Tenant or of any default on the part of
Tenant in any of the conditions or covenants of this Lease, shall not be deemed
to be a waiver of any provision of this Lease.
 
57. Tenant Holding Over. Any hold over by Tenant beyond the expiration of the
Lease Term shall give rise to a tenancy from month-to-month, cancellable on
thirty (30) days’ written notice by either party, notwithstanding the provisions
of any law or rule to the contrary. During any such hold over period, Tenant
shall pay one hundred fifty percent (150%) of the Annual Fixed Rent last
prevailing hereunder as agreed liquidated damages for holding over and
Additional Rent and any other charges or costs incurred during the hold-over
period for which Tenant is responsible for under the Lease
 
58. Estoppel Certificates. Each of the parties hereby agrees to deliver to the
other, from time to time, within twenty (20) days after request therefor, an
estoppel certificate certifying that this Lease is in full force and effect and
that the requesting party is not in default under the terms hereof (or if the
foregoing is not the case, giving an explanation thereof).
 
59. Delivery for Examination. The submission of this instrument for review and
examination does not constitute an offer by the party submitting the same to
lease the Premises. This instrument shall not become effective as a lease, nor
shall Landlord or Tenant have any obligation hereunder, unless and until this
instrument has been executed by and delivered to the parties.
 
60. Tenant’s Equipment Financing. Tenant may from time to time own or hold in
the Premises furniture, trade fixtures and equipment related to Tenant’s
business (collectively, “Tenant’s Property”). Tenant shall have the right to
pledge all or any part of Tenant’s Property, and Landlord shall subordinate any
rights it may have (including any “landlord’s lien”) with respect to the same.
The terms and conditions of any such subordination shall be mutually agreed upon
by Landlord and Tenant’s lender. Landlord shall not unreasonably withhold,
condition or delay its approval of the terms and conditions of any such
subordination agreement.
 
61. Landlord’s Personal Property. Tenant shall have the right to use Landlord’s
furniture, fixtures, personal property and equipment located at the Premises and
specified on Exhibit “D” (“Landlord’s Personal Property”). Tenant, at its sole
cost and expense throughout the Lease Term, shall keep and maintain Landlord’s
Personal Property in the same order and condition as they are on the
Commencement Date, reasonable wear and tear excepted.
 
 

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62. Miscellaneous.
 
(a) The headings preceding each section of this Lease are for convenience of
reference only and shall not affect the construction or meaning of the
provisions hereof.
 
(b) If any part of this Lease is found to be invalid or unenforceable, it shall
not affect any remaining portion of this Lease, which shall continue to be in
full force and effect and be severable from any invalid provision.
 
(c) This Lease, including any exhibits hereto, constitutes the entire agreement
between the parties and shall not be modified except by written agreement
between the parties.
 
(d) This Lease is legally binding upon the parties hereto and their successors
and assigns.
 
(e) Neither this Lease nor any memorandum of lease or short form lease shall be
recorded in any public land records.
 
(f) Time is of the essence of each and every provision of this Lease.
 

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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed the
day and year first above written.
 

   
LANDLORD:
 
Pharmar & Pharmar LLC
 
 
By:                                                                          
 
Name:                                                                      
 
Title:                                                                        
   
 
TENANT:
 
NexMed (USA), Inc.
 
By:                                                                          
 
Name:                                                                      
 
Title:                                                                        

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Exhibit “A”

Legal Description

Description of Tax Map Lot 6 Block 20.06 situated in East Windsor Township,
Mercer County, New Jersey.

Beginning at a point situated along the southerly right of way line of Twin
Rivers Drive (66 feet wide), said point being located 25.00 feet from the
intersection of the westerly prolongation of the same and the northerly
prolongation of the easterly right of way line of Milford Road (66 feet wide);
thence running

1. South 85° 22’ 26” East along the southerly right of way line of Twin Rivers
Drive, 208.27 feet to a point; thence

2. Easterly along the same, along a curve to the right having a radius of 967.00
feet and a arc length of 242.60 feet to a point; thence

3. South 06° 55’ 34” West along the common line of Lots 6 and 190 Block 20.06,
371.02 feet to a point; thence

4. North 80° 46’ 41” West along the common line of Lots 4 and 6 Block 20.06;
293.02 feet to a point; thence

5. North 04° 37’ 34” East along the common line of Lots 5 and 6 Block 20.06,
150.00 feet to a point; thence

6. North 80° 46’ 41” West along the same, 166.90 feet to a point; thence

7. North 04° 37’ 34” East along the easterly line of Milford Road, 189.14 feet
to a point; thence

8. Easterly along the same, along a curve to the right having a radius of 25.00
feet and an arc length of 39.27 feet to the point and place of beginning.

Containing 151,009 s.f. more or less

A-1

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Exhibit “B”

Annual Fixed Rent

$720,000.00 per year.

B-1

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Exhibit “D”
 
Landlord’s Personal Property
 
NexMed, Inc.
             
List of Equipment Sold with Building
                                 
Asset
 
Asset description
   
Acquis.val.
                         
20003
 
KOHLER GENERATOR 600 KVA
 
75,000.00
     
20004
 
TWO BYRN MODEL Furnace Boilers
83,863.20
     
20005
 
USP WATER SYSTEM PER QUOTE AD101-06-10
250,143.83
     
20006
 
HVAC CHILLERS
   
159,883.00
     
20007
 
HVAC CONTROLS
   
313,995.00
     
20008
 
REFRIGERATION SYSTEM Cold Box in Warehouse
84,000.00
     
20009
 
Custom Advantage Air Condensor Chiller System
6,687.50
     
20013
 
LAB CABINETS & CASEWORK
 
181,583.54
     
20014
 
Walk in Refrigerator Cold Box
 
8,700.00
     
20025
 
FIRE DOOR FOR CARTONING ROOM
8,547.60
     
20026
 
2 Ton AC Unit for Computer Room (Fujitsu)
6,060.00
                         
30003
 
Steer rite hydraulic pallet truck
 
666.43
     
30006
 
COLD ROOM 8X8
   
9,708.00
     
30010
 
Easy to Climb steel rolling plateform ladder
658.24
     
30024
 
6 FOOT STEEL TABLES WITH BACKSPLASH
580.27
     
30026
 
6 FOOT STEEL TABLES WITH BACKSPLASH
580.27
     
30394
 
Model 522LS Autoclave
 
77,785.90
                         
70083
 
41 aeron chairs by herman Miller
 
29,270.00
Note 1
   
70084
 
Office furniture
   
57,325.80
Note 2
   
70085
 
EW Furniture
   
13,740.00
Note 3
                               
TOTAL
 
1,368,778.58
                                                                               
 
Note 1:
   
Note 2:
   
Note 3:
   
Includes:
   
Includes:
   
Includes:
   
9 office chairs
 
Conference table
 
10 - 5 drawer files
   
15 task chairs
 
Reception desk
 
8 side chairs
   
20 conference chairs
 
30 chairs with no arms
15 cubes
   
$10k of installation
 
10 stools
   
15 desks for cube
           
10 chairs with vinyl
 
15 files ( one per cube)
               
7 files for the offices (one per office)
 

D-1

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