Exhibit
10.1

     

    Termination
Agreement

     

    This
Termination Agreement is made and entered into as of the 7th
day of July, 2009 (“Termination Effective Date”)
by and between NexMed, Inc., a corporation organized and existing under the laws
of Nevada, NexMed International Limited, a corporation organized and existing
under the laws of British Virgin Islands (NexMed, Inc. and NexMed International
Limited collectively referred to as “NexMed”) and Novartis
International Pharmaceutical Ltd., a
limited company organized and existing under the laws of Bermuda (“Novartis”).

     

    WITNESSETH:

     

    WHEREAS,
NexMed and Novartis concluded the License Agreement dated 13th
September, 2005 for NexMed Patent Rights and NexMed Know-How relating to the
NexMed Formulation for Anti-Fungal Ingredients (“License Agreement”) and an
amendment dated 13th
February, 2007 (“Amendment”), (“License Agreement” and “Amendment” collectively
referred to herewith as “Agreement”) and

     

    WHEREAS,
the parties have agreed that it is in the mutual best interest of the parties to
terminate the Agreement.

     

    NOW,
therefore, in consideration of the above premises and mutual covenants herein
contained, the parties hereto agree as follows:

     

    Capitalized
terms used herein not otherwise defined herein shall have the meaning given such
terms in the Agreement.

     

    Article
1

     

    The
Agreement shall be terminated in accordance with Clause 11.3 of the Agreement as
of the date first set forth above provided however, that Clause 12.5 to be
amended and that specifically  Clauses 9.1, 9.4, 10, 12.1, 12.2 (other
than 12.2(f)), 13.1,13.2,13.5, 14, 15.2, 16.4, 16.5, 16.7, 16.8, 16.9, 16.10 and
16.15 shall survive the termination of the Agreement. Any other provision of
this Agreement which is expressly or by implication intended to come into or
continue in force on or after termination shall survive termination of this
Agreement. The provisions of Clause 10 (Confidentiality) shall survive the
termination of this Agreement for a period of ten (10) years.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Article
2

     

    
      	
              2.1

            	
              In accordance with the provisions and timelines
      set forth in Clause 12.2 of the Agreement, Novartis shall take all actions
      and provide all assistance and support as required pursuant to Clause 12.2
      of the Agreement. Notwithstanding the
      timelines set forth in Clause 12.2 of the Agreement, Novartis will endeavour to provide to NexMed reports associated with the
      phase III clinical trials conducted by or on behalf of Novartis with
      respect to the formulation for the treatment of onychomycosis as described
      in Exhibit A of the Agreement (“NexMed Formulation”) and corresponding
      Product within thirty (30) days upon written request by
      NexMed.  Upon written request by NexMed, Novartis personnel will
      provide specific support to NexMed in
      accordance with Clause 12.2 of the
  Agreement.

            


    

     

    
      	
              2.2

            	
              In consideration of the transfer of Novartis
      Know-How related to NexMed Formulation and corresponding Product and the
      support to be provided and actions to
      be undertaken by Novartis pursuant to
      Article 2.1 above:

            


    

     

    
      	
               
      

            	
              (a)

            	
              NexMed
      shall pay Novartis fifteen percent (15%) of any upfront and/or milestone payments
      NexMed actually receives from a third
      party licensee for the license of NexMed Technology relating to NexMed
      Formulation or Products containing the NexMed Formulation.  In
      addition, NexMed shall pay Novartis a royalty as
  follows:

            


    

     

    
      
        
          	
                  Annual net sales of each
      Product

                	 	
                  Royalty Rate

                	 
	
                  Less
      than or equal to $500 million

                	 	 	2.8	%
	
                  More
      than $500 million and less than or equal to $750 million

                	 	 	3.5	%
	
                  More
      than $750 million and less than or equal to $1.5 billion

                	 	 	4.5	%
	
                  More
      than $1.5 billion

                	 	 	6.5	%


        

      

    

     

    Such
royalty payment shall be based on net sales of each Product invoiced by or on
behalf of NexMed and any NexMed Affiliate, licensee or sublicensee for the
Product where net sales and payment terms shall have an equivalent meaning to
the definition of Net Sales and payment terms in the Agreement in relation to
Novartis.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (b)

            	
              In
      the event that NexMed is acquired, or its substantial part of the assets
      are acquired by a third party (the “Acquirer”), Novartis shall receive 15%
      on any upfront and milestone payment or equivalent payment received by NexMed or its successor from the Acquirer relating to NexMed
      Technology and NexMed Formulation. If no upfront payment
      is  made by Acquirer but certain milestone payments will be paid
      to NexMed on achieving future development milestones, then
      Novartis  shall  receive 15% of any such milestone
      payments upon actual receipt by NexMed,
      and, in addition, the royalty
      rate as defined in Clause 2.2(a)
      above for net sales less than or
      equal to $ 500 million will be 3% (instead of 2.8%). Other royalty rates
      as defined in Clause 2.2(a) above
      will not change.

            


    

     

    
      	
               
      

            	
              (c)

            	
              If
      no upfront or milestone payment is  made by Acquirer during
      development of Products containing NexMed Formulation, the royalty rate
      for net sales on behalf of NexMed and any NexMed Affiliate, licensee or
      sublicensee for Product as defined in Clause 2.2(a) for less than or equal to $ 750 million will be 4%
      (instead of 2.8 or 3.5% respectively). Other royalty rates as defined in
      Clause 2.2(a) above will not
      change.

            


    

     

    
      	
               
      

            	
              For
      purposes of clarity, Novartis acknowleges and agrees that, for purposes of
      the definition of “Product”, the only Product developed under the
      Agreement involved and/or contained terbinafine.  Accordingly,
      to the extent that NexMed makes, uses or sells any products containing
      anti-fungal ingredients other than terbinafine, such products shall not be
      considered “Products” for purposes of this Article
  2.

            


    

     

    Article
3

     

    NexMed
acknowledges that the trademark Lamisil® is solely owned by Novartis and that
NexMed has no rights to such trademark whatsoever.

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be
executed by their duly authorized representatives on the Termination Effective
Date and each one of the two originals to be kept by respective
parties.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                NOVARTIS
      INTERNATIONAL
      

                                PHARMACEUTICAL
      LTD.

                              	 
      	
                                NEXMED
      INTERNATIONAL LIMITED

                              
	 
      	 
      	 
      	 
      	 
      
	
                                By:

                              	
                                /s/
      H. S. Zivi

                              	 
      	
                                By:

                              	
                                /s/
      Vivian Liu

                              
	
                                Name:

                              	
                                H.
      S. Zivi

                              	 
      	
                                Name:

                              	
                                Vivian
      Liu

                              
	
                                Title:

                              	
                                Authorized
      Signatory

                              	 
      	
                                Title:

                              	
                                Managing
      Director

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                NEXMED,
      INC.

                              
	 
      	 
      	 
      	 
      	 
      
	
                                By:

                              	
                                /s/ Michael Jones

                              	 
      	
                                By:

                              	
                                /s/
      Mark Westgate

                              
	
                                Name:

                              	
                                Michael
      Jones

                              	 
      	
                                Name:

                              	
                                Mark
      Westgate

                              
	
                                Title:

                              	
                                Director

                              	 
      	
                                Title: 

                              	
                                Vice
      President and Chief Financial
Officer