Exhibit 10.1

FORBEARANCE AGREEMENT

        This FORBEARANCE AGREEMENT (this “Agreement”) is entered into as of
March 22, 2005 (the “Closing Date”), between and among Bradley Pharmaceuticals,
Inc., as Borrower (the “Borrower”), certain subsidiaries of the Borrower, as
Guarantors (the “Guarantors”) and Wachovia Bank, National Association, as
Administrative Agent (in such capacity, the “Agent”) for and on behalf of the
various financial institutions from time to time party to the Credit Agreement
referenced below (the “Lenders”). Capitalized terms used herein but not
otherwise defined shall have the meanings given to such terms in the Credit
Agreement (as defined below).

RECITALS

        A. The Borrower, the Guarantors, the Agent and the Lenders are parties
to that certain Credit Agreement dated as of September 28, 2004 (as amended and
otherwise modified from time to time, the “Credit Agreement”), pursuant to which
the Lenders have made and may hereafter make loans and advances and other
extensions of credit to the Borrower.

        B. Events of Default exist under the Credit Agreement arising from (i)
the Borrower’s failure to furnish the financial statements required under
Section 5.1(a) of the Credit Agreement as and when required, (ii) the Borrower’s
failure to file the Form 10-K with the SEC within the time period prescribed by
the SEC in violation of Section 5.11 of the Credit Agreement and (iii) the
cross-default to the Convertible Bonds under Sections 7.1(d) and (e) of the
Credit Agreement triggered by the default under the Convertible Bonds resulting
from the Borrower’s failure to file the Form 10-K with the SEC within the time
period prescribed by the SEC and to delivery a copy of such Form 10-K to the
trustee with respect to the Convertible Bonds (the “Acknowledged Events of
Default”).

        C. The Borrower has requested that the Lenders forbear from exercising
certain rights and remedies arising from the Acknowledged Events of Default
through and until April 22, 2005.

        D. The Required Lenders have agreed to do so pursuant to the terms and
conditions set forth herein and have directed the Agent to execute this
Agreement on their behalf.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

        1. Estoppel, Acknowledgement and Reaffirmation. As of March 18, 2005,
the total outstanding principal amount of the Term Loan was $71,250,000, which
amount constitutes a valid and subsisting obligation of the Borrower to the
Lenders that is not subject to any credits, offsets, defenses, claims,
counterclaims or adjustments of any kind. The Borrower and the Guarantors hereby
acknowledge their respective obligations under the Credit Documents, reaffirm
that each of the liens and security interests created and granted in or pursuant
to the Credit Documents are valid and subsisting and agree that this Agreement
shall in no manner impair or otherwise adversely affect such obligations or such
liens and security interests.

        2. Forbearance. Subject to the terms and conditions set forth herein,
the Agent and the Lenders shall, until the occurrence of a Forbearance
Termination Event (as defined below), forbear from exercising any rights or
remedies (including without limitation the right to institute the default rate
of interest pursuant to Section 2.10 of the Credit Agreement) to the extent such
rights arise exclusively as a result of the Acknowledged Events of Default;
provided, however, that the Agent and the Lenders shall be

   

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free to exercise any or all of their rights and remedies arising on account of
the Acknowledged Events of Default at any time upon or after the occurrence of a
Forbearance Termination Event (defined below).

        3. Forbearance Termination Events. Nothing set forth herein or
contemplated hereby is intended to constitute an agreement by the Agent or the
Lenders to forbear from exercising any of the rights available to them under the
Credit Agreement, the other Credit Documents, or applicable law (all of which
rights and remedies are hereby expressly reserved by the Agent and the Lenders)
upon or after the occurrence of a Forbearance Termination Event (as defined
below). As used herein, a “Forbearance Termination Event” shall mean the
earliest to occur of: (a) any Default or Event of Default under any of the
Credit Documents other than the Acknowledged Events of Default; (b) any breach
of this Agreement by the Borrower or any of the Guarantors; (c) the Company’s
receipt of a notice of a default under the Convertible Bonds and the expiration
of any applicable grace periods before such default is cured; and (d) April 22,
2005. The period from the Closing Date to (but excluding) the date that a
Forbearance Termination Event occurs shall be referred to as the “Forbearance
Period.”

        4. Limitation on Advances. During the Forbearance Period, the Borrower
shall not request, and the Lenders shall have no obligation to make, any
additional Extensions of Credit under the Credit Agreement, whether in the form
of Revolving Loans, Swingline Loans, Letters of Credit or otherwise. In
addition, the Borrower shall continue to be permitted to convert Alternate Base
Rate Loans into LIBOR Rate Loans, or extend or continue existing LIBOR Rate
Loans, so long as any such LIBOR Rate Loans have Interest Periods of no longer
than two months.

        5. Cooperation with Consultants. The Agent reserves the right to engage,
through counsel or otherwise, a consultant (the ”Consultant”) to analyze and
examine the Borrower’s operating and financial condition. If the Agent engages a
Consultant, the Borrower shall (i) provide the Consultant reasonable access to
all business records and appropriate personnel to facilitate the Consultant’s
review and analysis, and (ii) reimburse the Agent for the fees and expenses of
the Consultant upon demand.

        6. Reporting. In addition to any financial statements, reports or other
information required under the Credit Agreement during the Forbearance Period,
the Borrower shall deliver, or cause to be delivered any information the
Administrative Agent may reasonably request.

        7. Expenses. Upon demand therefor, the Borrower shall pay all reasonable
out-of-pocket expenses incurred by the Agent (including without limitation the
reasonable fees and out-of-pocket expenses of counsel) in connection with the
Credit Agreement and this Agreement.

        8. Conditions Precedent. As conditions precedent to the effectiveness of
this Agreement, (a) the Agent shall have received (i) counterparts to this
Agreement, duly executed by the Borrower and the Guarantors and (ii) written
direction from the Required Lenders for the Agent to execute this Agreement on
their behalf and (b) the Borrower shall have paid all fees and expenses of the
Agent’s counsel incurred through the Closing Date; and

        9. Representations and Warranties. The Borrower and the Guarantors each
hereby represents and warrants to the Agent and Lenders that:

          (a) other than the Acknowledged Events of Default, no Default or Event
of Default exists under any of the Credit Documents on and as of the date
hereof;

          (b) after giving effect to this Agreement, the representations and
warranties of the Borrower and the Guarantors contained in Article III of the
Credit Agreement are true, accurate and complete in all material respects on and
as of the date hereof to the same extent as though

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  made on and as of such date except to the extent such representations and
warranties specifically relate to an earlier date; and

          (c) (i) the execution, delivery and performance by the Borrower and
the Guarantors of this Agreement are within the Borrower and the Guarantors’
respective corporate powers and have been duly authorized by all necessary
corporate action on the part of the Borrower and the Guarantors, (ii) this
Agreement constitutes the legal, valid and binding obligation of the Borrower
and the Guarantors enforceable against the Borrower and the Guarantors in
accordance with its terms and (iii) neither this Agreement, nor the execution,
delivery or performance by the Borrower or any of the Guarantors hereof (A)
violates any law or regulation, or any order or decree of any court or
Governmental Authority, (B) conflicts with or results in the breach or
termination of, constitutes a default under or accelerates any performance
required by, any material indenture, mortgage, deed of trust, lease, agreement
or other instrument to which the Borrower or any Guarantor is a party or by
which the Borrower or any Guarantor, or any of its respective property is bound,
or (C) results in the creation or imposition of any lien upon any of the
Collateral.

        10. Release. In consideration of the willingness of the Agent and the
Lenders to enter into this Agreement, the Borrower and each of the Guarantors
hereby releases the Agent and the Lenders, and the officers, employees,
representatives, counsel, subsidiaries, affiliates, trustees and directors of
each, from any and all actions, causes of action, claims, demands, damages and
liabilities of whatever kind or nature, in law or in equity, now known or
unknown, suspected or unsuspected to the extent that any of the foregoing arises
from any action or failure to act on or prior to the date hereof.

        11. Reference to and Effect on Credit Agreement. Except as specifically
modified herein, the Credit Documents shall remain in full force and effect. The
execution, delivery and effectiveness of this Agreement shall not operate as a
waiver of any right, power or remedy of the Lenders or the Agent under any of
the Credit Documents, or constitute a waiver or amendment of any provision of
any of the Credit Documents, except as expressly set forth herein.

        12. Further Assurances. Each of the Agent, the Lenders, the Guarantors
and the Borrower agrees to execute and deliver, or to cause to be executed and
delivered, all such instruments as may reasonably be requested to effectuate the
intent and purposes, and to carry out the terms, of this Agreement.

        13. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW
PROVISIONS THEREOF); PROVIDED THAT THE BORROWER, THE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        14. Miscellaneous.

          (a) This Agreement shall be binding on and shall inure to the benefit
of the Borrower, the Guarantors, the Agent, the Lenders and their respective
successors and permitted assigns. The terms and provisions of this Agreement are
for the purpose of defining the relative rights and obligations of the Borrower,
the Guarantors, the Agent and the Lenders with respect to the transactions
contemplated hereby and there shall be no third party beneficiaries of any of
the terms and provisions of this Agreement.

          (b) Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

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          (c) Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

          (d) Except as otherwise provided in this Agreement, if any provision
contained in this Agreement is in conflict with, or inconsistent with, any
provision in the Credit Documents, the provision contained in this Agreement
shall govern and control.

          (e) This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement. Delivery of an executed counterpart of this Agreement by telecopy
shall be effective as an original and shall constitute a representation that an
original shall be delivered to the Agent.

          (f) The parties hereto agree that this Agreement shall constitute a
Credit Document for purposes of the Credit Agreement and the other Credit
Documents and that Sections 9.5, 9.14, 9.15 and 9.18 of the Credit Agreement are
incorporated by reference into this Agreement, mutatis mutandis.

        15. Entirety. This Agreement and the other Credit Documents embody the
entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof. This Agreement
and the other Credit Documents represent the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.

[Remainder of Page Left Blank Intentionally.]

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        IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.

BORROWER:      

BRADLEY PHARMACEUTICALS, INC.

            By: /s/ R. Brent Lenczycki

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    Name: R. Brent Lenczycki     Title: Chief Financial Officer      
GUARANTORS:   DOAK DERMATOLOGICS, INC.             By: /s/ R. Brent Lenczycki

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    Name: R. Brent Lenczycki     Title: Chief Financial Officer          
BIOGLAN PHARMACEUTICALS CORP.             By: /s/ R. Brent Lenczycki

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    Name: R. Brent Lenczycki     Title: Chief Financial Officer

BRADLEY PHARMACEUTICALS, INC.
FORBEARANCE AGREEMENT

   

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AGENT:      

WACHOVIA BANK, NATIONAL ASSOCIATION
as Administrative Agent, for, on behalf of and at the
direction of the Required Lenders

            By: /s/ Christian Bradeen

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    Name: Christian Bradeen

BRADLEY PHARMACEUTICALS, INC.
FORBEARANCE AGREEMENT

   

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