Exhibit
10.1

         

      

      Execution
Version

      


      ASSET
PURCHASE AGREEMENT

       

      dated as
of

       

      February
3, 2009

       

      between

       

      WARNER
CHILCOTT COMPANY INC.,

       

      and

       

      NEXMED
INC.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      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

                  


          

        

      


      
        
           


        

        
          -i-

          
            

          

        

        
           


        

      


      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

                  


          

        

      


      
        
           


        

        
          -ii-

          
            

          

        

        
           


        

      


      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

                  


          

        

      


      
        
           


        

        
          -iii-

          
            

          

        

        
           


        

      


      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.


      
        
           


        

        
          1

          
            

          

        

        
           


        

      

       

      “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.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      

       

      “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.


      
        
           


        

        
          3

          
            

          

        

        
           


        

      

       

      “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

                    


            

          

        

      


      
        
           


        

        
          4

          
            

          

        

        
           


        

      

      


      
        
          	
                  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;


      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      (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.


      
        
           


        

        
          6

          
            

          

        

        
           


        

      

       

      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).


      
        
           


        

        
          7

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          8

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          9

          
            

          

        

        
           


        

      

       

      (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.


      
        
           


        

        
          10

          
            

          

        

        
           


        

      

       

      (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.


      
        
           


        

        
          11

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          12

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          13

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          14

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          15

          
            

          

        

        
           


        

      

       

      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


      
        
           


        

        
          16

          
            

          

        

        
           


        

      

    

    
      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.


      
        
           


        

        
          17

          
            

          

        

        
           


        

      

       

      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.


      
        
           


        

        
          18

          
            

          

        

        
           


        

      

       

      [Signature
Page Follows]


      
        
           


        

        
          19

          
            

          

        

        
           


        

      


      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


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Disclosure
ScheduleS to the Asset Purchase Agreement

       

      dated as
of

       

      February
3, 2009

       

      between

      


      WARNER
CHILCOTT COMPANY INC.,

       

      AND

       

      NEXMED
INC.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
1.01(B)

      TRANSFERRED
NDA’s

      


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


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      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.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      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.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      
    

      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.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      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)

                                      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      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

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      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).