Exhibit 10.1
 
Execution Version

ASSET PURCHASE AGREEMENT
 
dated as of
 
February 3, 2009
 
between
 
WARNER CHILCOTT COMPANY INC.,
 
and
 
NEXMED INC.

 
 

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TABLE OF CONTENTS
 

     
Page
       
ARTICLE 1
DEFINITIONS
 
1
       
Section 1.01.
Definitions
 
1
       
Section 1.02.
Other Definitional and Interpretative Provisions
 
5
       
ARTICLE 2
PURCHASE AND SALE 
 
5
       
Section 2.01.
Purchase and Sale
 
5
       
Section 2.02.
Excluded Assets
 
6
       
Section 2.03.
Assumed Liabilities
 
6
       
Section 2.04.
Rights Retained by Seller
 
6
       
Section 2.05.
Purchase Price
 
6
       
Section 2.06.
Allocation of Consideration
 
7
       
Section 2.07.
Closing
 
7
       
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
 
8
       
Section 3.01.
Corporate Existence and Power
 
8
       
Section 3.02.
Corporate Authorization
 
8
       
Section 3.03.
Governmental Authorization
 
8
       
Section 3.04.
Noncontravention
 
8
       
Section 3.05.
Consents
 
8
       
Section 3.06.
Litigation
 
8
       
Section 3.07.
Compliance with Laws and Court Orders
 
9
       
Section 3.08.
Sufficiency of and Title to the Purchased Assets
 
9
       
Section 3.09.
Intellectual Property
 
9
       
Section 3.10.
Transferred Manufacturing Equipment
 
11
       
Section 3.11.
Finders’ Fees
 
11
       
Section 3.12.
Buyer’s Acknowledgement
 
11
       
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
 
11
       
Section 4.01.
Corporate Existence and Power
 
11
       
Section 4.02.
Corporate Authorization
 
11
       
Section 4.03.
Governmental Authorization
 
11
       
Section 4.04.
Noncontravention
 
11
       
Section 4.05. 
Financing
 
12

 
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TABLE OF CONTENTS
(continued)
 

     
Page
       
Section 4.06.
Litigation
 
12
       
Section 4.07.
Finders’ Fees
 
12
       
ARTICLE 5
COVENANTS OF BUYER AND SELLER
 
12
       
Section 5.01.
Reasonable Best Efforts; Further Assurances
 
12
       
Section 5.02.
Publicity
 
12
       
Section 5.03.
Buyer Option for Product Manufacture by Seller
 
13
       
Section 5.04.
Transfer Of Manufacturing Know-How
 
13
       
Section 5.05.
Termination Of Existing License Agreement
 
13
       
ARTICLE 6
INDEMNIFICATION; LIMITATION OF LIABILITY
 
14
       
Section 6.01.
Survival of Representations and Warranties
 
14
       
Section 6.02.
Buyer Indemnity
 
14
       
Section 6.03.
Seller Indemnity
 
14
       
Section 6.04.
Indemnification Procedures
 
14
       
Section 6.05.
Calculation of Losses
 
15
       
Section 6.06.
Limitation of Liability
 
15
       
Section 6.07.
Exclusive Remedy
 
15
       
ARTICLE 7
MISCELLANEOUS
 
15
       
Section 7.01.
Jurisdiction
 
15
       
Section 7.02.
Notification
 
16
       
Section 7.03.
Language
 
17
       
Section 7.04.
Governing Law
 
17
       
Section 7.05.
Entire Agreement
 
17
       
Section 7.06.
Amendments
 
17
       
Section 7.07.
Waiver
 
17
       
Section 7.08.
Headings
 
17
       
Section 7.09.
Successors and Assigns
 
17
       
Section 7.10. 
Construction
 
17
       
Section 7.11.
Severability
 
18
       
Section 7.12.
Counterparts; Effectiveness; Third Party Beneficiaries
 
18
       
Section 7.13.
Expenses
 
18

 
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TABLE OF CONTENTS
(continued)

     
Page
       
Section 7.14. 
WAIVER OF JURY TRIAL
 
18
       
Section 7.15.
Specific Performance
 
18
       
Section 7.16
Fulfillment of Obligations
 
18

EXHIBITS
Exhibit A
Form of License Agreement
Exhibit B
Form of Bill of Sale
Exhibit C
Form of Patent Assignment Agreement
Exhibit D
Form of Trademark Assignment Agreement
Exhibit E
Form of Trademark Co-Existence Agreement

 
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ASSET PURCHASE AGREEMENT
 
This Asset Purchase Agreement (this “Agreement”) dated as of February 3, 2009 is
made by and between Warner Chilcott Company, Inc., a Puerto Rico corporation
(“Buyer”), and NexMed Inc., a Nevada corporation (“Seller”).
 
WITNESSETH:
 
WHEREAS, Seller controls certain proprietary patent, know-how and technology
rights related to a pharmaceutical formulation containing alprostadil for the
topical treatment of erectile dysfunction;
 
WHEREAS, Seller and Buyer are party to that certain License Agreement dated
November 1, 2007 (the “Existing License Agreement”), whereby Buyer obtained a
license from Seller to develop and commercialize the Product (as hereinafter
defined);
 
WHEREAS, Buyer desires to purchase the Purchased Assets (as hereinafter defined)
from Seller, and Seller desires to sell the Purchased Assets to Buyer, upon the
terms and subject to the conditions hereinafter set forth; and
 
WHEREAS, in connection with such purchase and sale, Buyer and Seller desire to
enter into the License Agreement (the “License Agreement”) attached hereto as
Exhibit A, and to terminate the Existing License Agreement.
 
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:
 
ARTICLE 1
Definitions
 
Section 1.01.   Definitions.  The following initially capitalized terms, as used
herein, have the following meanings:
 
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such other
Person.  For purposes of this definition, “control” means ownership, directly or
indirectly through one or more Affiliates, of 50% or more of the shares of stock
entitled to vote for the election of directors, in the case of a corporation, or
50% or more of the equity interests in the case of any other type of legal
entity, status as a general partner in any partnership, or any other arrangement
whereby a Person controls or has the right to control the board of directors or
equivalent governing body of a corporation or other entity, or otherwise has the
ability to direct the affairs or operations of such Person.
 
“Ancillary Agreements” means, collectively, the License Agreement, the Bill of
Sale, the Patent Assignment Agreement, the Trademark Assignment Agreement and
the Co-Existence Agreement.

 
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“Applicable Law” means, with respect to any Person, any federal, state or local
law (statutory, common or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling
or other similar requirement enacted, adopted, promulgated or applied by a
Governmental Authority that is binding upon or applicable to such Person, as
amended unless expressly specified otherwise.
 
“Assumed Liabilities” means (a) with respect to the Product, all claims and
complaints (including all damages, losses, expenses, adverse reactions, recalls,
product and packaging complaints and other liabilities) for the Product in the
Territory that are filed, claimed, or otherwise arise out of the development,
use, manufacture, purchase and/or sale by Buyer, its Affiliates, sublicensees
and/or distributors, and the consumption or use, of the Product in the Territory
after the Closing, and (b) all obligations and liabilities that are filed,
claimed or otherwise arise or are incurred on or after the Closing to the extent
such claims arise from or relate to Buyer’s, its Affiliates’ or licensees’
ownership or exploitation of the Purchased Assets, including obligations in
connection with the Transferred NDAs; provided, however, any matter that would
be subject to indemnification by Seller pursuant to Section 6.03 (disregarding
any limitations on indemnification set forth in ARTICLE 6) shall not be
considered an Assumed Liability.
 
“Business Day” means a day, other than Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by Applicable
Law to close.
 
“Excluded Assets” means all assets, property, rights and interests of Seller and
its Affiliates other than the Purchased Assets, including all Patents (other
than the Transferred Patents), trademarks (other than the Transferred
Trademarks), Intellectual Property Rights (other than the Transferred
Intellectual Property) and proprietary rights, new drug applications and their
equivalents (other than the Transferred NDAs), plants, property, equipment,
contracts and all other assets of Seller and its Affiliates.
 
“FDA” means the United States Food and Drug Administration and any successor
agency or authority thereto.
 
“Governmental Authority” means any transnational, domestic or foreign federal,
state or local, governmental authority, department, court, agency or official,
including any political subdivision thereof.
 
“Indemnitee” means a Buyer Indemnitee or a Seller Indemnitee, as applicable.
 
“Intellectual Property Rights” means (i) Patents, (ii) trademarks, service
marks, trade dress, logos, domain names, rights of publicity, trade names and
corporate names (whether or not registered) in the United States and all other
nations throughout the world, including all registrations and applications for
registration of the foregoing and all goodwill associated therewith, (iii)
copyrights (whether or not registered) and registrations and applications for
registration thereof in the United States and all other nations throughout the
world, including all derivative works, moral rights, renewals, extensions,
reversions or restorations associated with such copyrights, now or hereafter
provided by Applicable Law, regardless of the medium of fixation or means of
expression, (iv) computer software, (v) trade secrets and, whether or not
confidential, business information and know-how (including manufacturing and
production processes and techniques and research and development information),
(vi) databases and data collections, (vii) any other similar type of proprietary
intellectual property right and (viii) all rights to sue or recover and retain
damages and costs and attorneys’ fees for past, present and future infringement
or misappropriation of any of the foregoing.

 
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“Knowledge” means with respect to a Person that is not an individual, the
knowledge of such Person’s officers after reasonable inquiry.
 
“Licensed Intellectual Property” means the Licensed Patents and the Licensed
Know-How.
 
“Licensed Know-How” shall have the meaning ascribed to such term in the License
Agreement, and licensed by Seller to Buyer pursuant to the License Agreement.
 
“Licensed Patents” shall have the meaning ascribed to such term in the License
Agreement, and licensed by Seller to Buyer pursuant to the License Agreement.
 
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any kind in
respect of such property or asset.  For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any property or asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
 
“NDA” means a new drug application (as defined in Title 21 of the United States
Code of Federal Regulations, as amended from time to time), or supplement
thereto, filed with the FDA, seeking regulatory approval to market and sell a
pharmaceutical product.
 
“Patents” means patents or patent applications (including any patents issuing
therefrom), as well as any substitutions, continuations, continuations-in-part,
divisionals and all reissues, renewals, reexaminations, extensions,
supplementary protection certificates, confirmations, revalidations,
registrations or patents of addition in connection with any of the foregoing.
 
“Permitted Liens” means (i) Liens disclosed on Schedule 1.01(a) of the Seller
Disclosure Schedule, (ii) Liens which do not detract from the value of any
Purchased Asset, or interfere with any present or intended use of any Purchased
Asset, (iii) Liens for any and all taxes not yet due and payable or that may
hereafter be paid without material penalty or for those taxes being contested in
good faith by appropriate proceedings for which adequate reserves have been
established and (iv) restrictions on transfer imposed by Applicable Laws.
 
“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.
 
“Product” means a pharmaceutical composition for use in the topical treatment of
male erectile dysfunction that contains alprostadil.

 
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“Product Intellectual Property” means the Transferred Intellectual Property and
the Licensed Intellectual Property.
 
“Technology” means, whether or not patentable, any and all proprietary ideas,
inventions, discoveries, trade secrets, processes, formulae, data, know-how,
improvements, inventions, chemical materials, assays, techniques, marketing
plans, strategies, customer lists, biologic materials, results, designs,
specifications, methods, formulations, ideas, technical information (including
structural and functional information), process information, pre-clinical
information, clinical information, any and all proprietary biological, chemical,
pharmacological, toxicological, pre-clinical, clinical, assay, control and
manufacturing data and materials or other information.
 
“Territory” means the United States of America, including its possessions and
territories.
 
“Transferred Intellectual Property” means (i) the Transferred Patents, (ii) the
Transferred Trademarks and (ii) the Transferred Technology.
 
“Transferred Technology” means the Technology owned by Seller or its Affiliates
in the Territory that is exclusively or primarily related to the Product.
 
“Transferred NDAs” means the NDAs owned by Seller relating to the Product and
set forth on Schedule 1.01(b) hereto.
 
“Transferred Patents” means the Patents set forth on Schedule 3.09(a)(i) hereto.
 
“Transferred Trademarks” means the VITAROS trademark, together with all goodwill
associated therewith, including the registrations and applications for such
trademark set forth on Schedule 3.09(a)(i) hereto.  Notwithstanding the
foregoing, “Transferred Trademarks” shall not include any of Seller’s or its
Affiliates’ rights in the VITAROS trademark outside of the Territory.
 
Additional Definitions.  Each of the following terms is defined in the Section
set forth opposite such term:
 
Term
 
Section
     
Agreement
 
Preamble
Bill of Sale
 
Section 2.07
Buyer
 
Preamble
Buyer Indemnitees
 
Section 6.03
Closing
 
Section 2.07
Co-Existence Agreement
 
Section 2.07
Existing License Agreement
 
Recitals
FDA Act
 
Section 3.07(b)
Indemnifying Party
 
Section 6.04
Initial Payment
 
Section 2.05

 
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License Agreement
 
Recitals
Manufacturing Agreement
 
Section 5.03
Manufacturing Purchase Price
 
Section 2.05
Manufacturing Improvements
 
Section 5.03
Mixed Books and Records
 
Section 2.01(d)
Patent Assignment Agreement
 
Section 2.07
Proposed Allocation Schedule
 
Section 2.06
Purchased Assets
 
Section 2.01
Purchase Price
 
Section 2.05
Seller
 
Preamble
Seller Indemnitees
 
Section 6.01
Third Party Claim
 
Section 6.04
Trademark Assignment Agreement
 
Section 2.01
Transferred Books and Records
 
Section 2.01(d)
Transferred Manufacturing Equipment
 
Section 2.01(c)
USPTO
 
Section 3.09(e)

 
Section 1.02.   Other Definitional and Interpretative Provisions.  The words
“hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.  References to Articles, Sections, Exhibits and Schedules are to
Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise
specified.  All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise
defined therein, shall have the meaning as defined in this Agreement.  Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular.  Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”, whether or not they are in fact followed by
those words or words of like import.  References to any Person include the
successors and permitted assigns of that Person.  References from or through any
date mean, unless otherwise specified, from and including or through and
including, respectively.
 
ARTICLE 2
Purchase and Sale
 
Section 2.01.   Purchase and Sale.  Except as otherwise provided below, upon the
terms and subject to the conditions of this Agreement, Buyer agrees to purchase
from Seller and Seller agrees to sell, and cause its Affiliates to, convey,
transfer, assign and deliver, or cause to be sold, conveyed, transferred,
assigned and delivered, to Buyer at the Closing, free and clear of all Liens,
other than Permitted Liens, all of Seller’s and its Affiliates right, title and
interest in, to and under the following assets (the “Purchased Assets”):
 
(a)           the Transferred NDAs;

 
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(b)           the Transferred Intellectual Property;
 
(c)           the manufacturing equipment set forth on Schedule (c) (the
“Transferred Manufacturing Equipment”); and
 
(d)           all books, records, data (including clinical and pre-clinical
data), studies, reports, correspondence, information, documentation, files and
papers, whether in hard copy or computer format, exclusively or primarily
relating to the Product in the Territory, the Transferred NDAs or the
Transferred Intellectual Property, (collectively the “Transferred Books and
Records”); provided, however, to the extent the Transferred Books and Records
also contain information relating to any of Seller’s other products, or contain
information that is not related to the Product (the “Mixed Books and Records”),
Seller shall provide to Buyer copies of the Mixed Books and Records and may
redact any such information contained in the Mixed Books and Records to the
extent such information is not related to the Product and Seller shall retain
ownership of such Mixed Books and Records.
 
Section 2.02.   Excluded Assets.  Buyer shall not acquire any assets or rights
of any kind or nature, real or personal, tangible or intangible, other than the
Purchased Assets, subject in each case to the conditions and rights set forth
herein, and Seller and its Affiliates shall retain all other assets, including
the Excluded Assets.
 
Section 2.03.   Assumed Liabilities.  Buyer shall assume, satisfy, perform, pay
and discharge the Assumed Liabilities in accordance with their respective terms
and subject to the respective conditions thereof, when and as due.
 
Section 2.04.   Rights Retained by Seller.  The assignment of the Purchased
Assets contained in Section 2.01 shall be subject to the non-exclusive right of
Seller (on behalf of itself and its Affiliates and licensees and assignees of
Seller and its Affiliates) to use and reference (i) the Purchased Assets (other
than the Transferred Manufacturing Equipment), and to use and reference any
data, know-how or Intellectual Property Rights contained in the Purchased
Assets, in each case, to the extent related to the research, development,
manufacture, marketing, distribution, import, export or sale of products
(including the Product) outside of the Territory and (ii) any clinical or
pre-clinical data contained in the Transferred NDAs to the extent related to the
research, development, manufacture, marketing, distribution, import, export or
sale of products (other than the Product) inside the Territory.
 
Section 2.05.   Purchase Price.  The purchase price for the Purchased Assets
other than the Transferred Manufacturing Equipment and the grant of the license
by Seller to Buyer pursuant to the License Agreement (the “Purchase Price”) is
$5,000,000 in cash.  The Purchase Price shall be paid as follows: $2,500,000
(the “Initial Payment”) shall be paid at Closing as provided in Section 2.07 and
$2,500,000 shall be paid within three (3) business days after Buyer receives
notice of NDA approval from the FDA for the marketing, use and sale of the
Product in the Territory.  The Purchase Price for the Transferred Manufacturing
Equipment (the “Manufacturing Purchase Price”) is $350,000 in cash and shall be
paid as set forth on Schedule 2.01(c).  Seller shall pay the Purchase Price and
the Manufacturing Purchase Price by wire transfer of immediately available
United States dollars into an account designated by Seller. All payments made or
to be made by Buyer to Seller in respect to the Purchase Price and Manufacturing
Purchase Price shall be non-refundable and independent of any obligations that
Seller or its Affiliates may have to Buyer under the Ancillary Agreements, and
Buyer shall have no right of set-off with respect thereto.

 
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Section 2.06.   Allocation of Consideration.  During the thirty (30) day period
following the Closing, Seller and Buyer shall cooperate, in good faith, to reach
agreement as to an allocation of the Purchase Price between and among the
Purchased Assets  and the Licensed Intellectual Property in accordance with the
following procedure:  (i) Seller shall prepare and provide to Buyer a schedule
indicating a proposed allocation of the Purchase Price between and among the
Assets (the “Proposed Allocation Schedule”) and (ii) within 20 days after the
receipt of the Proposed Allocation Schedule, Buyer shall propose to Seller any
changes to the Proposed Allocation Schedule or shall be deemed to have indicated
its concurrence therewith.  Buyer and Seller shall endeavor in good faith to
resolve any differences with respect to the Proposed Allocation Schedule within
20 days after Seller’s receipt of notice of objection from Buyer.  If Seller
objects to the Proposed Allocation Schedule within the period provided in this
Section 2.06 and Buyer and Seller are unable to resolve any differences that, in
the aggregate, are material in relation to the Purchase Price, then any
remaining disputed matters shall be finally and conclusively determined by an
independent accounting firm of recognized national standing selected by Buyer
and Seller, which firm shall not be the regular auditing firm of Buyer or
Seller.
 
Section 2.07.   Closing.  The closing (the “Closing”) of the purchase and sale
of the Purchased Assets and the assumption of the Assumed Liabilities hereunder
shall take place at the offices of Warner Chilcott (US), Inc., 100 Enterprise
Drive, Rockaway, New Jersey, immediately after the execution of this Agreement
or at such other time or place as Buyer and Seller may agree. At the Closing:
 
(a)           Buyer shall deliver to Seller the Initial Payment and any portion
of the Manufacturing Purchase Price to be paid on the Closing in accordance with
Schedule 2.01(c).
 
(b)           Seller shall deliver to Buyer (i) the tangible embodiments of the
Transferred Technology, (ii) the Licensed Know-How and (iii) the Transferred
Books and Records.
 
(c)           Seller and Buyer shall enter into the License Agreement;
 
(d)           Seller and Buyer shall enter into a Bill of Sale and Assignment
substantially in the form attached hereto as Exhibit B (the “Bill of Sale”);
 
(e)           Seller and Buyer shall enter into a Patent Assignment Agreement
substantially in the form attached hereto as Exhibit C (the “Patent Assignment
Agreement”);
 
(f)            Seller and Buyer shall enter into a Trademark Assignment
Agreement substantially in the form attached hereto as Exhibit D (the “Trademark
Assignment Agreement”); and
 
(g)           Seller and Buyer shall enter into a Trademark Co-Existence
Agreement substantially in the form attached hereto as Exhibit E (the
“Co-Existence Agreement).

 
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ARTICLE 3
Representations and Warranties of Seller
 
Seller represents and warrants to Buyer that, except as set forth in the Seller
Disclosure Schedule:
 
Section 3.01.   Corporate Existence and Power.  Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted.  Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, be material.
 
Section 3.02.   Corporate Authorization.  The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby are within
Seller’s corporate powers and have been duly authorized by all necessary
corporate action on the part of Seller.  This Agreement and each of the
Ancillary Agreements constitutes a valid and binding agreement of Seller.
 
Section 3.03.   Governmental Authorization.  The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby require no
action by or in respect of, or filing with, any Governmental Authority.
 
Section 3.04.   Noncontravention.  The execution, delivery and performance by
Seller of this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby do not and will not (i) violate
the certificate of incorporation or bylaws of Seller, (ii) violate any
Applicable Law, (iii) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of Seller
or to a loss of any benefit relating to the Purchased Assets or Licensed
Intellectual Property to which Seller is entitled under any provision of any
agreement or other instrument binding upon Seller or by which any of the
Purchased Assets or Licensed Intellectual Property is or may be bound or (iv)
result in the creation or imposition of any Lien (other than Permitted Liens) on
any Purchased Asset or Licensed Intellectual Property.
 
Section 3.05.   Consents.  Schedule 3.05 sets forth each agreement, contract or
other instrument binding upon Seller or any permit requiring consent or other
action by any Person as a result of the execution, delivery and performance of
this Agreement or any of the Ancillary Agreements.
 
Section 3.06.   Litigation.  There is no action, suit, investigation or
proceeding (or any basis therefor) pending against, or to the Knowledge of
Seller, threatened against or affecting, any Purchased Asset or Licensed
Intellectual Property, or otherwise relating to a Product utilizing the
Purchased Assets, before any court or arbitrator or any Governmental Authority
which, individually or in the aggregate, if determined or resolved adversely in
accordance with the plaintiff’s demands, could reasonably be expected to have a
material adverse effect or which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement or an of the Ancillary Agreements.

 
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Section 3.07.   Compliance with Laws and Court Orders.
 
(a)           Seller is not in violation of, has not violated, and to the
Knowledge of Seller is not under investigation with respect to and has not been
threatened to be charged with or given notice of any violation of, any
Applicable Law relating to the Purchased Assets or Licensed Intellectual
Property.
 
(b)           Seller’s Product is being, and at all times has been, developed,
tested, manufactured and stored, as applicable, in compliance with the Federal
Food, Drug and Cosmetic Act (the “FDA Act”) and all other Applicable Laws in the
Territory, including those requirements relating to good manufacturing practice,
good laboratory practice, good clinical practice and promotional practices.  To
the Knowledge of Seller, the clinical trials (including any post-marketing
studies) conducted by Seller were, and if still pending, are, being conducted in
all material respects in accordance with all clinical protocols, informed
consents and applicable requirements of the FDA.
 
(c)           Seller is not subject to any investigation that is pending or, to
the Knowledge of Seller that has been threatened, by the FDA or any other
Governmental Authority in the Territory in connection with Seller’s Product, and
Seller is not aware of any basis for such an investigation.
 
(d)           Seller has not used in any capacity the services of any individual
or entity debarred under 21 U.S.C. § 335a(a) or any similar laws, rules or
regulations, and Seller has not engaged in any conduct that has resulted, or
would reasonably be expected to result, in debarment under 21 U.S.C. § 335a(a)
or any similar laws, rules or regulations.
 
(e)           Seller has at all times complied with all Applicable Laws in the
Territory relating to security and privacy standards regarding protected health
information.
 
Section 3.08.   Sufficiency of and Title to the Purchased Assets.
 
(a)           The Purchased Assets, together with the Licensed Intellectual
Property, comprise all of the property and assets that are used or held for use
in the Territory in connection with the Product which Seller or any of its
Affiliates own, control or otherwise have a right to use.
 
(b)           Upon consummation of the transactions contemplated hereby, Buyer
will have acquired good and marketable title in and to each of the Purchased
Assets, free and clear of all Liens, except for Permitted Liens.
 
Section 3.09.   Intellectual Property.
 
(a)           Schedule 3.09(a) (i) contains a true and complete list of all
Patents and trademarks included in the Transferred Intellectual
Property.  Schedule 3.09(a)(ii) contains a true and complete list of all
agreements (excluding licenses for commercial off the shelf computer software
that are generally available on nondiscriminatory pricing terms which have an
aggregate acquisition cost of $5,000 or less) to which Seller is a party or
otherwise bound and pursuant to which Seller (A) grants the right to use, or a
covenant not to be sued under, any Transferred Intellectual Property or (B)
obtains the right to use, or a covenant not to be sued under, any Product
Intellectual Property.

 
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(b)           Seller or one of its Affiliates is the sole and exclusive owner of
the Transferred Intellectual Property and the Licensed Intellectual Property and
holds all right, title and interest in and to the Transferred Intellectual
Property and the Licensed Intellectual Property free and clear of all Liens,
other than Permitted Liens.  There exist no restrictions on the disclosure, use,
license or transfer of the Transferred Intellectual Property.  Seller or one of
its Affiliates has the right to grant the licenses contemplated in the License
Agreement with respect to the Licensed Intellectual Property.  The consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements
will not alter, encumber, impair or extinguish any Product Intellectual
Property.
 
(c)           To the Knowledge of Seller, the manufacture, sale, offer for sale
or importation of the Product utilizing the Purchased Assets, and the processes
used in the manufacture, sale, offering for sale or importation of such Product,
do not infringe, misappropriate or otherwise violate any Intellectual Property
Right of any Person.  None of the Transferred Intellectual Property has been
adjudged invalid or unenforceable in whole or part, and, to the Knowledge of
Seller, all such Transferred Intellectual Property is valid and enforceable.
 
(d)           To the Knowledge of Seller, no Person has infringed,
misappropriated or otherwise violated any Transferred Intellectual
Property.  Seller or one of its Affiliates has taken reasonable steps in
accordance with normal industry practice to maintain the confidentiality of all
Transferred Intellectual Property the value of which is contingent upon
maintaining the confidentiality thereof and no such Transferred Intellectual
Property has been disclosed other than to Buyer and to employees,
representatives and agents of the Seller and its Affiliates all of whom are
bound by written confidentiality agreements.
 
(e)           Each of the Transferred Patents has been prosecuted in material
compliance with all applicable rules, policies, and procedures of the United
States Patent and Trademark Office (the “USPTO”).  Except as set forth on
Schedule 3.09(e), there are no actions that must be taken within 90 days of the
Closing, including the payment of any registration or maintenance fees or the
filing of any responses to office actions by the USPTO or other authorities in
the Territory, with respect to the Transferred Intellectual Property, where
failure to take such timely actions would impair or extinguish any such
Transferred Intellectual Property.  All maintenance and renewal fees necessary
to preserve the material rights of Seller in connection with the Transferred
Intellectual Property have been paid.
 
(f)           To the extent that any Transferred Intellectual Property has been
developed or created by a third party (including any current or former
contractor or employee) for Seller or its Affiliates, Seller or such Affiliate
has been assigned and owns exclusive ownership of such Transferred Intellectual
Property and documentation evidencing the true and complete chain of title with
respect to any registrations and applications for registration included in the
Transferred Intellectual Property has been properly recorded with the USPTO.

 
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(g)           To the Knowledge of Seller, Seller has not provided to Buyer any
written information concerning any Purchased Asset or Licensed Intellectual
Property which is materially inaccurate or misleading and has not failed to
provide to Buyer any written information in its possession or under its control
which is materially inconsistent with the written information provided to Buyer
by Seller as of the date hereof.
 
Section 3.10.   Finders’ Fees.  There is no investment banker, broker, finder or
other intermediary who has been retained by or is authorized to act on behalf of
Seller who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement.
 
Section 3.11.  Buyer’s Acknowledgement.  BUYER ACKNOWLEDGES THAT, EXCEPT FOR THE
EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, SELLER HAS
MADE NO REPRESENTATION OR WARRANTY WHATSOEVER AND BUYER HAS NOT RELIED ON ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EXCEPT THOSE EXPRESSLY SET FORTH
IN THIS AGREEMENT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
BUYER IS ACQUIRING THE PURCHASED ASSETS ON AN “AS IS, WHERE IS” BASIS WITHOUT
ANY EXPRESS OR IMPLIED WARRANTIES AS TO THE FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY OR CONDITION OF THE PURCHASED ASSETS OR AS TO ANY OTHER MATTER.
 
ARTICLE 4
Representations and Warranties of Buyer
 
Buyer represents and warrants to Seller that:
 
Section 4.01.   Corporate Existence and Power.  Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of Puerto
Rico and has all corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
 
Section 4.02.   Corporate Authorization.  The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby are within the corporate powers of Buyer have been duly
authorized by all necessary corporate action on the part of Buyer.  This
Agreement constitutes a valid and binding agreement of Buyer.
 
Section 4.03.   Governmental Authorization.  The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby require no material action by or in respect of, or material
filing with, any Governmental Authority.
 
Section 4.04.   Noncontravention.  The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) violate the certificate of incorporation or
bylaws of Buyer or (ii) violate any material Applicable Law.

 
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Section 4.05.   Financing.  Buyer has, or will have prior to the Closing,
sufficient cash, available lines of credit or other sources of immediately
available funds to enable it to make payment of the Purchase Price and any other
amounts to be paid by it hereunder.
 
Section 4.06.   Litigation.  There is no action, suit, investigation or
proceeding pending against, or to the Knowledge of Buyer threatened against or
affecting, Buyer before any arbitrator or Governmental Authority which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.
 
Section 4.07.   Finders’ Fees.  There is no investment banker, broker, finder or
other intermediary who has been retained by or is authorized to act on behalf of
Buyer who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement.
 
ARTICLE 5
Covenants of Buyer and Seller
 
Buyer and Seller agree that:
 
Section 5.01.   Reasonable Best Efforts; Further Assurances.  Subject to the
terms and conditions of this Agreement, Buyer and Seller will use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under Applicable Laws to
consummate the transactions contemplated by this Agreement, including (i)
preparing and filing as promptly as practicable with any Governmental Authority
or other third party all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information, applications
and other documents and (ii) obtaining and maintaining all approvals, consents,
registrations, permits, authorizations and other confirmations required to be
obtained from any Governmental Authority or other third party that are
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement.
 
Section 5.02.   Publicity.  Neither party may publicly disclose the existence or
terms or any other matter of fact regarding this Agreement without the prior
written consent of the other party; provided, however, that either party may
make such a disclosure (i) to the extent required by Applicable Law or by the
requirements of any nationally recognized securities exchange, quotation system
or over-the-counter market on which such party has its securities listed or
traded, or (ii) to any actual or prospective sublicensees, investors, lenders,
other financing sources, acquirors, or companies being acquired by such party
who are obligated to keep such information confidential.  The party desiring to
make any such public announcement or disclosure shall inform the other party of
the proposed announcement or disclosure in reasonably sufficient time prior to
public release and shall provide the other party with a written copy
thereof.  Each party shall cooperate fully with the other with respect to all
disclosures regarding this Agreement to the Securities Exchange Commission and
any other Governmental Authority, including requests for confidential treatment
of proprietary information of either party included in such disclosure.

 
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Section 5.03.   Buyer Option for Product Manufacture by Seller.  Within (3)
three years after the Closing, in the event Buyer notifies Seller that it
desires Seller to manufacture the Product on behalf of Buyer and Seller has the
capacity to manufacture the Product, Buyer and Seller shall promptly negotiate
in good faith to enter into a manufacturing and supply agreement (the
“Manufacturing Agreement”) on customary terms pursuant to which Seller shall
supply the Product to Buyer; provided that it is understood that in the event
the parties agree to enter into the Manufacturing Agreement, Buyer shall retain
responsibility for the manufacture and supply of Product until such time as
Seller is able to qualify and validate a facility for the manufacture of Product
for the Territory.  The Manufacturing Agreement shall provide that Seller shall
be exclusively responsible for the manufacture of and supply to Buyer, and
Seller shall exclusively purchase from Buyer, all requirements of the
Product.  Buyer shall be responsible for the cost of any initial plant and
equipment improvements with respect to Seller’s manufacturing facility that are
necessary to enable Seller to meet its supply obligations under the
Manufacturing Agreement (the “Manufacturing Improvements”), it being understood
that the Manufacturing Improvements shall not include personnel and Buyer shall
have no obligation with respect to costs associated with personnel.  Buyer shall
be responsible for determining the Manufacturing Improvements that are necessary
and a process for conducting such improvements.  In the event Seller transfers
its manufacturing equipment or capability to an Affiliate or a third party,
Seller shall (i) notify Buyer of such transfer and (ii) require such Affiliate
or third party, if notified by Buyer, to negotiate in good faith with Buyer to
enter into a manufacturing and supply agreement on customary terms pursuant to
which such Affiliate or third party shall supply the Product to Buyer.
 
Section 5.04.   Transfer Of Manufacturing Know-How.  Upon the reasonable request
of Buyer, provided that Seller is reasonably able and possesses the necessary
resources and personnel, Seller shall provide to Buyer the assistance of
Seller’s employees and access to Seller’s other internal resources to provide
Buyer with a reasonable level of technical assistance and consultation with
respect to the transfer from Seller to Buyer, or any third party manufacturer
designated by Buyer, of the manufacture of such formulation.  Buyer shall pay
Seller $600 per day per full time equivalent for the provision of such
assistance plus reasonable travel and lodging expenses (collectively, “NexMed
Employee Costs”).  Promptly following the date hereof, Seller shall provide
Buyer with (i) reasonable access to and use of its manufacturing facility and
equipment and (ii) the services of its employees or consultants with the
relevant expertise for the purposes of instructing Buyer in, and assisting Buyer
with, the manufacture of one (1) batch (such batch consisting of approximately
40,000 units) of the Product (the “Initial Batch Manufacture”).  Buyer shall
complete the Initial Batch Manufacture within 15 days of the date on which
Seller provides Buyer with access to its facility and sufficient quantities of
raw materials accomplish the Initial Batch Manufacture (such date, the “Initial
Batch Manufacture Completion Date”).  Buyer shall be responsible for all costs
(including the NexMed  Employee Costs, the cost of raw materials and any other
costs incurred by Seller) associated with the Initial Batch Manufacture.
 
Section 5.05.   Termination Of Existing License Agreement.  Except as otherwise
set forth in this Section 5.05, Buyer and Seller hereby agree that effective
upon Closing, the Existing License Agreement shall be terminated in its entirety
and shall be of no further force and effect, and neither Buyer nor Seller shall
have any continuing liability or obligation thereunder. Notwithstanding any
provision herein to the contrary, the rights and obligations of the Parties set
forth in Article 6 (Confidentiality) of the Existing License Agreement shall
survive termination of the Existing License Agreement.

 
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ARTICLE 6
Indemnification; Limitation Of Liability
 
Section 6.01.   Survival of Representations and Warranties.  The representations
and warranties that are covered by the indemnification agreements in Sections
6.02(a) and 6.03(a) shall (a) survive the Closing and (b) shall expire on the
date eighteen (18) months following the Closing, except that (i) the
representations and warranties set forth in Sections 3.09(c), 3.09(d) and
3.09(g) shall survive until the third anniversary of the Closing, and (ii) the
representations and warranties set forth in Sections 3.01, 3.02, 3.08, 3.09(a),
3.09(b), 3.09(f), 4.01 and 4.02 shall survive indefinitely or until the latest
date permitted by Applicable Law.
 
Section 6.02.   Buyer Indemnity.  Buyer shall indemnify, defend and hold
harmless Seller, its Affiliates and their respective directors, officers,
employees, stockholders and agents and their respective successors, heirs and
assigns (the “Seller Indemnitees”) from and against any liability, damage, loss
or expense (including reasonable attorneys’ fees and expenses of litigation)
incurred by or imposed upon such Seller Indemnitees, or any of them, in
connection with any claims, suits, actions, demands or judgments, including
product liability matters, to the extent based upon, arising out of, or result
from any of the following: (a) a breach by Buyer of any of its representations
or warranties in this Agreement or any Ancillary Agreement, (b) any failure by
Buyer to perform any of its covenants or agreements hereunder or under any
Ancillary Agreement, or (c) any liability or obligation that is an Assumed
Liability.
 
Section 6.03.   Seller Indemnity.  Seller shall indemnify, defend and hold
harmless Buyer, its Affiliates and their respective directors, officers,
employees, and agents, and their respective successors, heirs and assigns (the
“Buyer Indemnitees”), from and against any liability, damage, loss or expense
(including reasonable attorneys’ fees and expenses of litigation) incurred by or
imposed upon such Buyer Indemnitees, or any of them, in connection with any
claims, suits, actions, demands or judgments based upon, arising out of, or
result from any of the following: (a) a breach by Seller of any of its
representations or warranties in this Agreement or any Ancillary Agreement, or
(b) any failure by Seller to perform any of its covenants or agreements
hereunder or under any Ancillary Agreement.
 
Section 6.04.   Indemnification Procedures.  In the event that any Indemnitee is
seeking indemnification under this ARTICLE 6 from a party hereto (the
“Indemnifying Party”) for any claim made by a Third Party (a “Third Party
Claim”), the other party hereto shall notify the Indemnifying Party of such
Third Party Claim with respect to such Indemnitee as soon as reasonably
practicable after the Indemnitee receives notice of the Third Party Claim, and
the party (on behalf of itself and such Indemnitee) shall permit the
Indemnifying Party to assume direction and control of the defense of the Third
Party Claim (including the right to settle the claim solely for monetary
consideration) and shall cooperate as requested (at the expense of the
Indemnifying Party) in the defense of the Third Party Claim.  The
indemnification obligations under this ARTICLE 6 shall not apply to any harm
suffered as a direct result of any delay in notice to the Indemnifying Party
hereunder or to amounts paid in settlement of any Third Party Claim if such
settlement is effected without the consent of the Indemnifying Party, which
consent shall not be withheld or delayed unreasonably.  The Indemnitee, its
employees and agents, shall reasonably cooperate with the Indemnifying Party and
its legal representatives in the investigation of any Third Party Claim covered
by ARTICLE 6.

 
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Section 6.05.   Calculation of Losses.  Any indemnity payment hereunder shall be
treated as an adjustment to the Purchase Price to the extent permitted by
Applicable Law.
 
Section 6.06.   Limitation of Liability.
 
(a)           No amount of indemnity shall be payable as a result of any claim
arising under Section 6.02(a) and Section 6.03(a) unless and until the
Indemnitee has suffered, incurred, sustained or become subject to liability,
damage, loss or expense referred to in that clause in excess of $50,000.00 in
the aggregate, in which case the Indemnitee may bring a claim for all such
losses (and such claim shall not be limited to such losses in excess of
$50,000).  The maximum aggregate liability of an Indemnifying Party under
Section 6.02(a) and Section 6.03(a) shall not exceed an aggregate amount equal
to fifty (50%) of the amount of the Purchase Price paid by Buyer to Seller at
the time the claim leading to such liability arose.
 
(b)           EXCEPT FOR EACH PARTY’S OBLIGATION OF INDEMNITY UNDER THIS ARTICLE
6, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PURSUANT TO THIS AGREEMENT FOR ANY
LOST PROFITS OR FOR ANY INDIRECT, EXEMPLARY, SPECIAL, CONSEQUENTIAL OR
INCIDENTAL DAMAGES OF ANY KIND, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
 
(c)           THE LIMITATIONS OF LIABILITY CONTAINED IN THIS AGREEMENT ARE A
FUNDAMENTAL PART OF THE BASIS OF EACH PARTY’S BARGAIN HEREUNDER, AND NEITHER
PARTY WOULD ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATION OF LIABILITY.
 
Section 6.07.   Exclusive Remedy.  Subject to Section 7.15, the indemnification
provided to any Person pursuant to this ARTICLE 6 shall be such Person’s sole
remedy for any claims for money damages arising hereunder, or otherwise in
connection with or arising out of the transactions described herein, including
any breach by any Party hereto of any representation, warranty or covenant
contained in this Agreement, or in any certificate or document (to the extent
such certificate or document relates to matters covered by the representation,
warranties or covenants contained herein) required to be delivered in connection
herewith.
 
ARTICLE 7
Miscellaneous
 
Section 7.01.   Jurisdiction.  The parties agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the District of
New Jersey or any New Jersey State court, so long as one of such courts shall
have subject matter jurisdiction over such suit, action or proceeding, and that
any cause of action arising out of this Agreement shall be deemed to have arisen
from a transaction of business in the State of New Jersey, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of any
such court.

 
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Section 7.02.   Notification.  All notices, requests and other communications
hereunder shall be in writing, shall be addressed to the receiving party’s
address set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by
facsimile transmission (to be followed with written confirmation by the
delivering party), (iii) sent by private courier service providing evidence of
receipt, or (iv) sent by registered or certified mail, return receipt requested,
postage prepaid.  The addresses and other contact information for the parties
are as follows:
 
if to Buyer, to:
 
Warner Chilcott Company, Inc.
PO Box 1005
Fajardo, Puerto Rico 00738
Attention:  Director, Business Management
Facsimile No.: (787) 863-5355

with a copy to:

Warner Chilcott (US), LLC
100 Enterprise Drive
Rockaway, NJ 07866
Attention: General Counsel
Facsimile No.: (973) 442-3310

if to Seller, to:
 
NexMed, Inc.
89 Twin Rivers Drive
East Windsor, NJ 08520
Attention: Chief Financial Officer
Facsimile No.: (609) 426-9116

with a copy to:
 
Morgan, Lewis & Bockius LLP
502 Carnegie Center
Princeton, New Jersey 08540
Attention: David G. Glazer
Facsimile No.: (609) 919-6701

 
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All notices, requests and other communications hereunder shall be deemed to have
been given either (i) if by hand, at the time of the delivery thereof to the
receiving party at the address of such party set forth above, (ii) if made by
facsimile transmission, at the time that receipt thereof has been acknowledged
by the recipient, (iii) if sent by private courier, on the day such notice is
delivered to the recipient, or (iv) if sent by registered or certified mail, on
the fifth (5th) business day following the day such mailing is made.
 
Section 7.03.   Language.  This Agreement has been prepared in the English
language and the English language shall control its interpretation.
 
Section 7.04.   Governing Law.  This Agreement will be construed, interpreted
and applied in accordance with the laws of the State of New Jersey, excluding
its body of law controlling conflicts of law.
 
Section 7.05.   Entire Agreement.  This Agreement, together with the Ancillary
Agreements, is the entire Agreement between the parties with respect to the
subject matter hereof and supersedes all prior representations, understandings
and agreements between the parties with respect to the subject matter hereof.
 
Section 7.06.   Amendments.  No modification to this Agreement shall be
effective unless in writing with specific reference to this Agreement and signed
by the parties.
 
Section 7.07.   Waiver.  The terms or conditions of this Agreement may be waived
only by a written instrument executed by the party waiving compliance.  The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect its rights at a later time to enforce
the same.  No waiver by either party of any condition or term shall be deemed as
a continuing waiver of such condition or term or of another condition or term.
 
Section 7.08.   Headings.  Section and subsection headings are inserted for
convenience of reference only and do not form part of this Agreement.
 
Section 7.09.   Successors and Assigns.  The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto; except that Buyer may transfer
or assign its rights and obligations under this Agreement, in whole or from time
to time in part, to (i) one or more of its Affiliates at any time and (ii) after
the Closing, to any Person; provided that no such transfer or assignment will
relieve Buyer of its obligations hereunder or enlarge, alter or change any
obligation of any other party hereto or due to Buyer.
 
Section 7.10.   Construction.  The parties hereto acknowledge and agree that:
(i) each party and its counsel reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this
Agreement.  Neither party shall challenge the validity or enforceability of the
terms, conditions, obligations and covenants hereunder.

 
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Section 7.11.   Severability.  If any provision(s) of this Agreement are or
become invalid, are ruled illegal by any court of competent jurisdiction or are
deemed unenforceable under Applicable Law from time to time in effect, it is the
intention of the parties that the remainder of this Agreement shall not be
affected thereby provided that a party’s rights under this Agreement are not
materially affected.  The parties hereto covenant and agree to renegotiate any
such term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this
Agreement or the application thereof that is invalid, illegal or unenforceable,
it being the intent of the parties that the basic purposes of this Agreement are
to be effectuated.
 
Section 7.12.   Counterparts; Effectiveness; Third Party Beneficiaries.  This
Agreement may be executed simultaneously in one or more counterparts (including
by facsimile), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement shall
become effective when each party hereto shall have received a counterpart hereof
signed by all of the other parties hereto.  Until and unless each party has
received a counterpart hereof signed by the other party hereto, this Agreement
shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other
communication).  No provision of this Agreement is intended to confer any
rights, benefits, remedies, obligations or liabilities hereunder upon any Person
other than the parties hereto and their respective successors and assigns.
 
Section 7.13.   Expenses.  Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.  All excise, sales, use, value added,
registration stamp, recording, documentary, conveyancing, franchise, property,
transfer, gains and similar taxes, levies, charges and fees incurred in
connection with the transactions contemplated by this Agreement shall be borne
by Buyer.
 
Section 7.14.   WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
 
Section 7.15.   Specific Performance.  The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof in the courts
referred to in Section 7.01, in addition to any other remedy to which they are
entitled at law or in equity.
 
Section 7.16.   Fulfillment of Obligations.  Any obligation of any party to any
other party under this Agreement, which obligation is performed, satisfied or
fulfilled by an Affiliate of such party, shall be deemed to have been performed,
satisfied or fulfilled by such Party.

 
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[Signature Page Follows]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 
WARNER CHILCOTT COMPANY, INC.
 
By:
/s/ Max Torres
 
Name: Max Torres
 
Title: Senior Director
 
NEXMED INC.
 
By:
/s/ Vivian Liu
 
Name:  Vivian Liu
 
Title:  President & CEO

 
SIGNATURE PAGE TO THE ASSET PURCHASE AGREEMENT

 
 

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Disclosure ScheduleS to the Asset Purchase Agreement
 
dated as of
 
February 3, 2009
 
between

WARNER CHILCOTT COMPANY INC.,
 
AND
 
NEXMED INC.

 
 

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Schedule 1.01(B)
TRANSFERRED NDA’s

1.           VITAROS® (alprostadil) Cream NDA No. 22-197

 
 

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Schedule 2.01(c)
TRANSFERRED MANUFACTURING EQUIPMENT

   
Selling
   
NexMed Asset
   
NexMed Asset
 
Description
 
Price
   
Number
   
Inventory Tag
 
AccuDose Dispenser tooling and molds
  $ 40,000    
30357 & 30158,59,60
   
Off site & 290,291,292
 
Ross PVM-4 mixer with Chiller
  $ 37,000    
N/A & 30086
   
N/A & 1073
 
Cozzoli, 5 nozzle filler
  $ 26,000    
30028 & 30221
      621  
Schmucker F/F/S 3 lane Poucher
  $ 94,000       30012       226  
FD/120 Filling Machine
  $ 114,000       30252       1130  
In process cold box (180,000 units)
  $ 4,000    
30278 & 20014
   
1077 & N/A
 
Finished Product Cold Box
  $ 35,000       20008     N/A                            
Total
  $ 350,000                  

At Closing, Buyer shall pay fifty percent (50%) of the Manufacturing Purchase
Price to Seller.  Within thirty (30) days of the Initial Batch Manufacture
Completion Date, Buyer shall remove the Transferred Manufacturing Equipment from
Seller’s premises and within two (2) business days of completion of such removal
Buyer shall pay Seller the remaining fifty percent (50%) of the Manufacturing
Purchase Price.  All payments hereunder shall be made by wire transfer of
immediately available United States dollars into an account designated by
Seller.  All costs associated with the removal of the Transferred Manufacturing
Equipment shall be paid by Buyer.

 
 

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Schedule 3.05
CONSENTS

 
1.
License Agreement, dated as of September 13, 2005, as amended February 13, 2007
by and between Novartis International Pharmaceutical Ltd., NexMed, Inc., and
NexMed International Limited.  Under the License Agreement, NexMed requires the
consent of Novartis to grant a right of reference and use to the NexMed Studies
(as defined in the License Agreement) to third parties.  Consent from Novartis
was obtained via a side letter dated January 30, 2009.

 
2.
Security Agreement and Assignment of Rents of Leases, dated as of June 30, 2008,
by and between The Tailwind Fund Ltd., Salomon Strategic Holdings, Inc., NexMed,
Inc. and NexMed (U.S.A.) Inc.  Consent from The Tailwind Fund Ltd. and Salomon
Strategic Holdings, Inc. was obtained via waiver dated January 27, 2009.

 
 

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Schedule 3.08
SUFFICIENCY AND TITLE TO THE PURCHASED ASSETS

 
1.
Software and laboratory equipment that is readily available from third party
suppliers that is used to support Seller’s general ongoing operations and which
is not used or designed to be used exclusively in connection with the Purchased
Assets.

 
 

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Schedule 3.09(a) (1)
TRANSFERRED PATENTS

U.S. PATENTS TO BE ASSIGNED
   
Patent No.
 
AppIn. No.
 
Filed
 
Granted
 
Nominal Expiration Date 
(Without Term Extension, If Any 
Applicable
 
Title
NMD-118
 
6,323,241
 
09/480,738
 
10-Jan-2000
 
27-Nov-2001
 
10-Jan-2020
 
Prostaglandin Compositions And Methods Of Treatment For Male Erectile
Dysfunction
NMD-123
 
6,693,135
 
09/947,617
 
6-Sep-2001
 
17-Feb-2004
 
10-Jan-2020
 
Prostaglandin Compositions And Methods Of Treatment For Male Erectile
Dysfunction (Continuation-In-Part of 09/480,738)
NMD-121
 
7,105,571
 
10/236,485
 
6-Sep-2002
 
12-Sep-2006
 
10-Jan-2020
 
Prostaglandin Compositions And Methods Of Treatment For Male Erectile
Dysfunction (Continuation-In-Part of 09/480,738)

 
 

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Schedule 3.09(a)(1)
TRANSFERRED TRADEMARK

 
1.
U.S. Registration No. 3,454,263 VITAROS for pharmaceutical preparations for the
treatment of sexual dysfunction.  Registration Date 6/24/08

 
 

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Schedule 3.10
FINDER’S FEES

 
1.
Global Harvest Pharma, 200 Chesterfield Parkway, Suite 100, Great Valley
Corporate Center, Malvern, PA  19355 (such fee to be paid by Seller).

 
 

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