Document:

EMPLOYMENT
AGREEMENT

       

      This
EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of February 2, 2009 (the
“Effective Date”), by and between AMCOL International Corporation, a Delaware
corporation (the “Company”), and Donald W. Pearson (“Executive”).

       

      The Board
of Directors of the Company (the “Board”), has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined herein).  The
Board believes it is imperative to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created by a pending
or threatened Change of Control and to encourage the Executive’s full attention
and dedication to the Company in the event of any threatened or pending Change
of Control, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control that ensure that the compensation and
benefits expectations of the Executive will be satisfied and that provide the
Executive with compensation and benefits arrangements that are competitive with
those of other corporations. In addition, the Board believes it is necessary to
provide a severance package that assures that the Company is able to attract and
retain the highest quality executive talent and to ensure that the
post-employment non-compete and non-solicitation restrictions are
enforceable.  Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Agreement.

       

      NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

       

      Article
I — DEFINITIONS

       

      The terms
set forth below have the following meanings:

       

      1.1           “Accrued
Annual Bonus” means the amount of any Annual Bonus earned but not yet paid with
respect to any fiscal year ended prior to the Date of Termination.

       

      1.2           “Accrued
Base Salary” means the amount of Executive’s Base Salary which is accrued but
not yet paid as of the Date of Termination.

       

      1.3           “Affiliate”
means any Person that directly or indirectly controls, is controlled by, or is
under common control with, the applicable Person.  For the purposes of
this definition, the term “control” when used with respect to any Person means
the power to direct or cause the direction of management or policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

       

      1.4           “Anniversary
Date” means any annual anniversary of the Effective Date.

       

      1.5           “Annual
Bonus” - see Section 4.2.

       

      1.6           “Beneficial
Owner” means such term as defined in Rule 13d-3 (or any successor rule) under
the Exchange Act.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1.7         “Cause”
means any of the following:

       

      (a)           Executive’s
commission of a felony or misdemeanor that involves fraud, dishonesty or moral
turpitude,

       

      (b)           Executive’s
willful or intentional material breach of this Agreement, or any material breach
of this Agreement that is not corrected within thirty (30) days of notice from
the Company,

       

      (c)           willful
or intentional material misconduct by Executive in the performance of his duties
under this Agreement,

       

      (d)           Executive
performs his duties in a manner that is grossly negligent, or

       

      (e)           Executive
fails to cooperate in any governmental investigations or
proceedings.

       

      For
purposes of clauses (b), (c), (d) and (e) of the preceding sentence, Cause shall
not include bad judgment or negligence which results from the Executive’s good
faith efforts to perform his duties.

       

      1.8         “Change
of Control” means the occurrence of any one or more of the
following:

       

      (a)           any
person (as such term is used in Rule 13d-5 under the Exchange Act) or group (as
such term is defined in Section 3(a)(9) and 13(d)(3) of the Exchange Act), other
than a Subsidiary, any employee benefit plan (or any related trust) of the
Company or any of its Subsidiaries or any Excluded Person, becomes the
Beneficial Owner of 50.1% or more of the outstanding common stock of the Company
or of Voting Securities representing 50.1% or more of the combined voting power
of the then outstanding voting securities of the Company (such a person or
group, a “Majority Owner”), except that (i) no Change of Control shall be deemed
to have occurred solely by reason of such beneficial ownership by a corporation
with respect to which both more than 49.9% of the common stock of such
corporation and Voting Securities representing more than 49.9% of the aggregate
voting power of such corporation are then owned, directly or indirectly, by the
persons who were the direct or indirect owners of the common stock and Voting
Securities of the Company immediately before such acquisition in substantially
the same proportions as their ownership, immediately before such acquisition, of
the common stock and Voting Securities of the Company, as the case may be and
(ii) such corporation shall not be deemed a Majority Owner; or

       

      (b)           the
Incumbent Directors (determined using the Effective Date as the baseline date)
cease for any reason to constitute at least one-half of the directors of the
Company then serving; or

       

      
        
          
          

        

        
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      (c)           the
consummation by the Company of a merger, reorganization, consolidation, or
similar transaction, or sale or other disposition of 50.1% of the consolidated
assets of the Company (any of the foregoing transactions, a “Reorganization
Transaction”) which is not an Exempt Reorganization Transaction.

       

      Notwithstanding
the occurrence of any of the foregoing events, a Change of Control shall not
occur with respect to Executive if, in advance of such event, the Executive
agrees in writing that such event shall not constitute a Change of
Control.

       

      1.9         “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.

       

      1.10       “Compensation
Committee” means the Compensation Committee of the Board of Directors of the
Company.

       

      1.11       “Conflicting
Organization” means any person or entity which is engaged in or about to become
engaged in, research, development, production, manufacturing, importation,
marketing, licensing, selling, or servicing of a Conflicting
Product.

       

      1.12       “Conflicting
Product” means any product, process, system or service of any person or
organization other than the Company or an Affiliate, in existence or under
development, which is the same as or similar to or competes with a product,
process, system or service upon which Executive works or has worked during the
three year period ending on his Date of Termination, or about which Executive
acquired or acquires Confidential Information.

       

      1.13      “Date
of Termination” means the date of the receipt of the Notice of Termination by
Executive (if such Notice is given by the Company) or by the Company (if such
Notice is given by Executive), or any later date, not more than 15 days after
the giving of such Notice, specified in such notice; provided, however,
that:

       

      (a)           if
Executive’s employment is terminated by reason of death, the Date of Termination
shall be the date of Executive’s death; and

       

      (b)           if
Executive’s employment is terminated by reason of Disability, the Date of
Termination shall be the 30th day after Executive’s receipt of the physician’s
certification of Disability, unless, before such date, Executive shall have
resumed the full-time performance of Executive’s duties; and

       

      (c)           if
Executive terminates his employment without Good Reason, the Date of Termination
shall be determined by the Company, provided that it will not be later than the
90th day after the giving of such Notice; and

       

      (d)           if
no Notice of Termination is given, the Date of Termination shall be the last
date on which Executive is employed by the Company.

       

      
        
          
          

        

        
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      1.14       “Disability”
means (i) the Executive has a physical or mental condition which renders
Executive unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, or (ii) by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, the Executive is
receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering the Executive that is sponsored by
the Company.

       

      1.15      “Employment
Period” - see Section 3.1.

       

      1.16       “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

       

      1.17       “Excluded
Person” means any of the Paul Bechtner Trust, Everett P. Weaver, any Named
Executive, any Affiliates or Family Member of any of the foregoing and any group
(as such term is defined in Section 3(a)(9) and 13(d)(3) of the Exchange Act) of
which any of the foregoing is a member.

       

      1.18       “Executive
Termination” means a Termination of Employment by Executive for any reason
including Good Reason or no reason during the 30-day period commencing twelve
months after a Change of Control.

       

      1.19       “Exempt
Reorganization Transaction” means a Reorganization Transaction which results (i)
in the Persons who were the direct or indirect owners of the outstanding common
stock and Voting Securities of the Company immediately before such
Reorganization Transaction becoming, immediately after the consummation of such
Reorganization Transaction, the direct or indirect owners of both more than
49.9% of the then-outstanding common stock of the Surviving Corporation and
Voting Securities representing more than 49.9% of the aggregate voting power of
the Surviving Corporation, in substantially the same respective proportions as
such Persons’ ownership of the common stock and Voting Securities of the Company
immediately before such Reorganization Transaction; (ii) in the Excluded Person
owning 50% or more of the common stock of the Surviving Corporation or Voting
Securities representing 50% or more of the combined voting power of the
Surviving Corporation; or (iii) from a transaction of any kind (including,
without limitation, a merger, reorganization, consolidation or similar
transaction or a plan or agreement for sale or other disposition of assets of
the Company or a plan of liquidation of the Company) pursuant to the Bankruptcy
Code of Title 11 of the United States Code, as amended from time to time, or any
similar or successor statute, domestic or foreign.

       

      1.20       “Family
Member” means, with respect to the applicable Person, a spouse, ancestor, lineal
descendant, or spouse of a lineal descendant, including without limitation
descendants by adoption.

       

      1.21       “Good
Reason” means the occurrence of any one of the following events unless Executive
specifically agrees in writing that such event shall not be Good
Reason:

       

      (a)           any
material breach of the Agreement by the Company, including without limitation,
Section 2.1, provided, however, that no breach of this Agreement shall
constitute Good Reason unless Executive gives the Company written notice of such
breach and the Company fails to cure such breach within 30 days;

       

      
        
          
          

        

        
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      (b)           the
failure of either the Company to assign this Agreement to a successor of the
Company or failure of a successor of the Company to expressly assume and agree
to be bound by the Agreement; or

       

      (c)           the
assignment to the Executive of any duties inconsistent in any respect with the
Executive’s position, authority, duties or responsibilities as contemplated by
this Agreement, or any action by the Company that results in a material
reduction in the nature or scope of Executive’s position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by the Company
promptly after receipt of notice thereof given by the Executive.

       

      In the
event of an occurrence or omission constituting Good Reason as described in
subsections (a), (b) and (c) above, Executive shall provide notice to the Board
of any such reduction, change or breach upon which Executive intends to rely as
the basis for Good Reason within 30 days of the occurrence of such reduction,
change or breach.  The Company shall have 30 days following the
receipt of such notice to remedy the condition constituting such reduction,
change or breach and, if so remedied, any termination of Executive’s employment
hereunder on the basis of the circumstances described in such notice shall be
considered a voluntary termination of employment.  If the Company does
not remedy the condition that has been the subject of a notice as described in
this Section within 30 days of the Company’s receipt of such notice, Executive
must terminate his employment within 90 days following the occurrence of such
condition in order for such termination to be considered due to Good Reason for
purposes of this Agreement.

       

      1.22      
“Imminent Control Change Date” means any date on which occurs (i) a presentation
to the Company’s stockholders generally or any of the Company’s directors or
executive officers of a proposal or offer for a Change of Control, (ii) the
public announcement (whether by advertisement, press release, press interview,
public statement, SEC filing or otherwise) of a proposal or offer for a Change
of Control, and (iii) such proposal or offer remains effective and
unrevoked.

       

      1.23       “Incumbent
Directors” means, as of the date of this Agreement, individuals then serving as
members of the Board; provided that any subsequently-appointed or elected member
of the Board whose election, or nomination for election by stockholders of the
Company or the Surviving Corporation, as applicable, was approved by a vote or
written consent of at least one-half of the directors then comprising the
Incumbent Directors shall also thereafter be considered an Incumbent Director,
unless the initial assumption of office of such subsequently-elected or
appointed director was in connection with (i) an actual or threatened election
contest, including a consent solicitation, relating to the election or removal
of one or more members of the Board, (ii) a “tender offer” (as such term is used
in Section 14(d) of the Exchange Act), (iii) a proposed Reorganization
Transaction, or (iv) a request, nomination or suggestion of any Beneficial Owner
of Voting Securities representing 35% or more of the aggregate voting power of
the Voting Securities of the Company or the Surviving Corporation, as
applicable.

       

      
        
          
          

        

        
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      1.24       “Named
Executive” means any individual listed on Exhibit A except to the extent the
individual had a termination of employment not less than 120 days prior to the
applicable event potentially constituting a Change of Control and any other
employee or officer of the Company designated by the Board and who is a party to
an agreement substantially in the same form as this Agreement (with variation in
the amount of compensation and benefits payable under the agreement) and entered
into by the employee or officer not less than 120 days prior to the applicable
event potentially constituting a Change of Control.

       

      1.25       “Notice
of Termination” means a written notice given in accordance with Section 9.11
which sets forth (a) the specific termination provision in this Agreement relied
upon by the party giving such notice, (b) in reasonable detail the specific
facts and circumstances claimed to provide a basis for such Termination of
Employment, and (c) if the Date of Termination is other than the date of receipt
of such Notice of Termination, the Date of Termination.

       

      1.26       “Person”
means any individual, sole proprietorship, partnership, joint venture, limited
liability company, trust, unincorporated organization, corporation, institution,
public benefit corporation, entity or government instrumentality, division,
agency, body or department.

       

      1.27       “Prorata
Annual Bonus” means the portion of the Annual Bonus payable to Executive as
calculated on a pro rata basis, based on performance to date and on the number
of days which have elapsed in such fiscal year through the Date of
Termination.

       

      1.28       “Subsidiary”
means, with respect to any Person, (a) any corporation of which more than 50% of
the Voting Securities are at the time, directly or indirectly, owned by such
Person, and (b) any partnership or limited liability company in which such
Person has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than 50%.

       

      1.29       “Surviving
Corporation” means the corporation resulting from a Reorganization Transaction
or, if securities representing more than 50% of the aggregate Voting Power of
such resulting corporation are directly or indirectly owned by another
corporation, such other corporation.

       

      1.30       “Target
Annual Bonus” - see Section 4.2.

       

      1.31       “Target
Annual Goals” - see Section 4.2.

       

      1.32       “Taxes”
means the incremental federal, state, local and foreign income, employment,
excise and other taxes payable by Executive with respect to any applicable item
of income.

       

      1.33      
“Termination For Good Reason” means a Termination of Employment by Executive for
a Good Reason.

       

      
        
          
          

        

        
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      1.34       “Termination
of Employment” means a termination by the Company or Executive of Executive’s
employment.

       

      1.35       “Termination
Without Cause” means a Termination of Employment by the Company for any reason
other than Cause or Executive’s death or Disability.

       

      1.36       “Voting
Securities” of a corporation means securities of such corporation that are
entitled to vote generally in the election of directors of such corporation, but
not including any other class of securities of such corporation that may have
voting power by reason of the occurrence of a contingency.

       

      Article
II —
DUTIES

       

      2.1           Duties.  During
the Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date and, (B) following any Change of
Control, the Executive’s services shall be performed at the office where the
Executive was employed immediately preceding the effective date of the Change of
Control, or at any other location less than 50 miles from such
office.  Executive shall devote all of his business time, attention
and effort during normal business hours, excluding any periods of disability,
vacation, or sick leave to which Executive is entitled, to the affairs of the
Company and shall use his best efforts to promote the interests of the
Company.

       

      2.2           Other
Activities.  Executive may serve on civic or charitable boards
or committees, deliver lectures, fulfill speaking engagements or teach at
educational institutions, and manage personal investments; provided that such
activities do not significantly interfere with the performance of Executive’s
duties under this Agreement.  Executive may serve on corporate boards
or committees with the prior written consent of the Board.

       

      Article III —
EMPLOYMENT PERIOD

       

      Subject
to the termination provisions provided herein, the term of Executive’s
employment under this Agreement (the “Employment Period”) shall begin on the
Effective Date and end on the second annual Anniversary Date or, such later date
to which the Employment Period is extended pursuant to the following
sentence.  On the date which is twenty-one months after the Effective
Date and thereafter, the Employment Period (assuming that an Expiration Notice
to the effect that the Agreement shall expire on the second annual Anniversary
Date has not been delivered by the Executive or Company to the other prior to
such date) shall be automatically extended each day by one day to create a new
three-month term until, at any time after the date which is twenty-one months
after the Effective Date the Company delivers written notice (an “Expiration
Notice”) to Executive or Executive delivers an Expiration Notice to the Company,
in either case, to the effect that the Agreement shall expire on a date
specified in the Expiration Notice (the “Expiration Date”) that is not less than
three months after the date the Expiration Notice is delivered to the Company or
the Executive, respectively.  The employment of Executive by the
Company shall not be terminated other than in accordance with Article
VI.

       

      
        
          
          

        

        
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      Article IV —
COMPENSATION

       

      4.1         Salary.  Subject
to Section 4.3 hereof, during the Employment Period, the Company shall pay or
cause to be paid to Executive in accordance with its normal payroll practices
(but not less frequently than monthly) an annual salary at a rate of $235,000
per year (“Base Salary”).  During the Employment Period, the Base
Salary shall be reviewed at least annually and may be increased from time to
time as shall be determined by the Compensation Committee.  After any
such increase, the term “Base Salary” shall thereafter refer to the increased
amount.  Any increase in Base Salary shall not limit or reduce any
other obligation of the Company to Executive under this
Agreement.  Base Salary shall not be reduced at any time without the
express written consent of Executive.

       

      4.2         Annual
Bonus.

       

      (a)           Subject
to Section 4.3 hereof, the Company shall pay or cause to be paid to Executive an
annual cash bonus (“Annual Bonus”) in accordance with the terms of the AMCOL
International Corporation 2006 Annual Cash Incentive Plan and the terms hereof
for each fiscal year which begins or ends during the Employment
Period.  Executive shall be eligible for an Annual Bonus based upon
target performance goals (the “Target Annual Goals”), as determined by the
Compensation Committee for a payment of at least 60% of Executive’s Base Salary
(“Target Annual Bonus”) upon the Executive’s achievement of the Target Annual
Goals.  The Target Annual Goals shall be set as described above no
later than February 28 of each fiscal year.

       

      (b)           Subject
to Section 4.3 hereof, the Company shall pay or cause to be paid the entire
Annual Bonus that is payable with respect to a fiscal year in cash after the
Compensation Committee has certified (i) whether and the degree to which Target
Annual Goals have been achieved, and (ii) the amount of the Annual Bonus, which
shall occur as soon as practicable following the close of such fiscal
year.  Any such Annual Bonus shall in any event be paid no later than
February 28 of each fiscal year.

       

      4.3         Deferral.  In
the event that all or any portion of a payment to be made to Executive pursuant
to Section 4.1 or 4.2 hereof or any equity compensation award shall be
ineligible for treatment as “qualified performance - based compensation” under
Section 162(m) of the Code, the Company, in its sole discretion, shall have the
right to defer payment to Executive of all or any portion of any such payment
until such time as such amounts are deductible by the Company under Section
162(m) of the Code; provided that such deferral shall be limited to the portion
of the payment that is not deductible by the Company pursuant to the
Code.

       

      
        
          
          

        

        
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      Article V — OTHER
BENEFITS

       

      5.1           Stock Option, Restricted
Stock and Other Equity Incentive Plans.  In addition to Base
Salary and an Annual Bonus, Executive shall be eligible to participate during
the Employment Period in all stock option, restricted stock and other equity
incentive plans, practices, policies and programs of the Company, in accordance
with their terms as in effect from time to time. If a Change of Control occurs
during the Employment Period, all outstanding stock options, restricted stock
and other equity compensation granted to Executive (whether before, on or after
the Effective Date) shall become fully vested and exercisable, except as
otherwise provided with respect to an award intended to qualify as
performance-based compensation under Section 162(m) of the Code.

       

      5.2           Incentive, Savings and
Retirement Plans.  In addition to Base Salary, Annual Bonus,
and equity awards, Executive shall be entitled to participate during the
Employment Period in all incentives, savings and retirement plans, practices,
policies and programs that are from time to time applicable to other comparable
senior executives of the Company, including any supplemental executive
retirement plan, in accordance with their terms as in effect from time to
time.

       

      5.3           Welfare
Benefits.  During the Employment Period, Executive and his
family shall be eligible to participate in, and shall receive all benefits
under, welfare benefit plans, practices, policies and programs provided by the
Company (including medical, prescription, dental, disability, employee life,
group life, dependent life, accidental death and travel accident insurance plans
and programs) applicable to other comparable senior executives of the Company,
in accordance with their terms as in effect from time to time.

       

      5.4           Fringe
Benefits.  During the Employment Period, Executive shall be
entitled to fringe benefits applicable to other comparable senior executive of
the Company, in accordance with their terms as in effect from time to
time.

       

      5.5           Vacation.  During
the Employment Period, Executive shall be entitled to paid vacation time in
accordance with the plans, practices, policies, and programs applicable to other
comparable senior executives of the Company, in accordance with their terms as
in effect from time to time, but in no event shall such vacation time be less
than four weeks per calendar year.

       

      5.6           Expenses.  During
the Employment Period, Executive shall be entitled to receive prompt
reimbursement for all reasonable employment-related expenses incurred by
Executive upon the receipt by the Company of an accounting in accordance with
practices, policies, and procedures applicable to comparable senior executives
of the Company, in accordance with their terms as in effect from time to
time.

       

      Article VI —
TERMINATION BENEFITS

       

      6.1           Termination for Cause or
Other than for Good Reason, etc.  If the Company terminates
Executive’s employment for Cause (whether before or after a Change of Control)
or Executive terminates his employment other than for Good Reason, death or
Disability, or Executive Termination, the Company shall pay to Executive
immediately after the Date of Termination an amount equal to the sum of
Executive’s Accrued Base Salary and Accrued Annual Bonus and Executive shall not
be entitled to receive any severance payment.

       

      
        
          
          

        

        
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      6.2         Termination for Death or
Disability Prior to Change of Control or More than Thirteen Months after a
Change of Control.  If Executive’s employment terminates due to
his death or Disability prior to a Change of Control or more than thirteen
months after a Change of Control, the Company shall pay to Executive or his
beneficiaries, as the case may be, (i) immediately after the Date of Termination
an amount which is equal to the sum of Executive’s Accrued Base Salary and
Accrued Annual Bonus, and (ii) at the time described in Section 4.2(b), an
amount which is equal to the Executive’s Prorata Annual Bonus.

       

      6.3         Termination Without Cause or
for Good Reason Prior to Change of Control or More than Thirteen Months After a
Change of Control.  In the event of a Termination Without Cause
or a Termination for Good Reason prior to a Change of Control or more than
thirteen (13) months after a Change of Control, Executive shall receive the
following:

       

      (a)           immediately
after the Date of Termination, a lump sum amount in immediately available funds
equal to the sum of Executive’s Accrued Base Salary and Accrued Annual
Bonus;

       

      (b)           at
the time described in Section 4.2(b), an amount which is equal to the
Executive’s Prorata Annual Bonus;

       

      (c)           Base
Salary payable on the same basis as in effect immediately prior to the Date of
Termination for eighteen (18) months following the Executive’s Date of
Termination, provided that if the Date of Termination occurs between September
15th and December 31st, the Executive will be paid on the same basis as in
effect immediately prior to the Date of Termination for the period through March
14th of the following year, at which time all payments will be suspended until
the day after the six-month anniversary of the Date of Termination (the
“Suspension Period”), at which time all payments suspended during the Suspension
Period will be paid in a lump sum and the normal payment schedule will
resume.  Each of these payments shall be a separate payment for
purposes of Section 409A of the Code;

       

      (d)           other
than in the event of death, the Executive and his dependents will continue to be
eligible for coverage, at the Company’s cost and expense, under the Company’s
group health, dental and prescription group plans for a period commencing on the
Executive's Date of Termination and ending on the earlier of (i) 18 months after
the Executive's Date of Termination and (ii) the date on which the Executive
accepts a position with another employer.  The Executive acknowledges
that under the Code, these amounts will be treated as imputed income to him for
income tax purposes; and

       

      (e)           if
the Executive’s group health, dental and prescription coverage continues for 18
months under subsection (d) above, then following the expiration of the 18-month
period, the Executive and his dependents will continue to be eligible for
coverage, at the Executive’s cost and expense, under the Company’s group health,
dental and prescription group plans until the earliest of (i) the Executive's
eligibility for Medicare benefits, (ii) the date on which the Executive accepts
a position with another employer; or (iii) the date the Executive ceases paying
for such coverage.

       

      
        
          
          

        

        
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      Notwithstanding
any provisions of this Section 6.3 to the contrary, if Executive breaches any or
all of the provisions of Sections 7.1 and 7.2, the payment of the Prorata Annual
Bonus pursuant to Section 6.3(b), any payments due under Sections 6.3(c) and the
continuation or eligibility for benefits under Section 6.3(d) or (e) shall cease
immediately upon such breach.  In addition to the foregoing, and to
protect and compensate the Company in the event of such breach by the Executive,
the Company shall be entitled to any and all remedies at law and equitable
relief as described in Section 7.3.

       

      6.4         Termination After Change of
Control.  In the event of a Termination Without Cause or a
Termination for Good Reason within thirteen (13) months after a Change In
Control, or Termination of Employment due to death or Disability within thirteen
(13) months following a Change of Control, or an Executive Termination after a
Change In Control, the Executive shall receive the following:

       

      (a)           immediately
after the Date of Termination, a lump sum amount in immediately available funds
equal to the sum of Executive’s Accrued Base Salary, Accrued Annual Bonus and
Prorata Annual Bonus; 

       

      (b)           six-months
and one day following his Date of Termination, a lump sum amount in immediately
available funds equal to two (2) times the sum of (i) the Executive’s Base
Salary and (ii) the greater of the following amounts:  (x) 60% of
Executives Base Salary for the fiscal year during which the Date of Termination
occurs and (y) the average of the Annual Bonuses paid or payable to Executive
for the three most recent fiscal years ended on or before such date;
and

       

      (c)           other
than in the event of death, the Executive and his dependents will continue to be
eligible for coverage, at the Company’s cost and expense, under the Company’s
group health, dental and prescription group plans for a period commencing on the
Executive's Date of Termination and ending on the earlier of (i) 24 months after
the Executive's Date of Termination and (ii) the date on which the Executive
accepts a position with another employer.  The Executive acknowledges
that under the Code, these amounts will be treated as imputed income to him for
income tax purposes.

       

      (d)           if
the Executive’s group health, dental and prescription coverage continues for 36
months under subsection (c) above, then following the expiration of the 24-month
period, the Executive and his dependents will continue to be eligible for
coverage, at the Executive’s cost and expense, under the Company’s group health,
dental and prescription group plans until the earliest of (i) the Executive's
eligibility for Medicare benefits, (ii) the date on which the Executive accepts
a position with another employer; or (iii) the date the Executive ceases paying
for such coverage.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
any provisions of this Section 6.4 to the contrary, if Executive breaches any or
all of the provisions of Sections 7.1 and 7.2, the continuation of payments and
benefits pursuant to this Section 6.4 shall cease upon such breach and, to
prevent the Executive’s unjust enrichment, the Executive shall immediately pay
the Company an amount equal to (i) the amount that the Executive received from
the Company pursuant to this Section 6.4, multiplied by (ii) a fraction of which
the numerator is the number of days remaining from the date of the breach
through the first anniversary of the Executive’s Termination of Employment and
the denominator of which is 365.  In addition to the foregoing, and to
protect and compensate the Company in the event of such breach by the Executive,
the Company shall be entitled to any and all remedies at law and equitable
relief as described in Section 7.3.

       

      6.5           Imminent Control
Change.  If an Imminent Control Change Date occurs on or within
30 days after the date on which the Company delivers a Notice of Termination to
Executive terminating Executive’s employment not for Cause and if a Change of
Control occurs within twelve months after delivery of the Notice, the
Executive’s Termination of Employment pursuant to the Notice shall be deemed a
Termination of Employment Without Cause on or after a Change of Control and the
Executive’s rights and obligations shall be determined under Section 6.4 rather
than Section 6.3.  Any payments or benefits to be received by the
Executive pursuant to Section 6.4 shall be reduced by any payments or benefits
made or provided pursuant to Section 6.3.  If an Imminent Control
Change Date occurs on or within 30 days after the date on which the Executive
has a Termination of Employment due to death or Disability and if a Change of
Control occurs within twelve months after death or Disability, the Executive’s
Termination of Employment due to death or Disability shall be deemed a
Termination of Employment due to death or Disability on or after a Change of
Control and the Executive’s beneficiaries’ rights and obligations shall be under
Section 6.4 rather than Section 6.2.  Any payments or benefits to be
received by the Executive’s Beneficiaries pursuant to Section 6.4 shall be
reduced by any payments or benefits made or provided pursuant to Section
6.2.

       

      6.6           Other
Rights.  Except as specifically provided herein, this Agreement
shall not prevent or limit Executive’s continuing or future participation in any
benefit, bonus, incentive or other plan, program or policy provided by the
Company and for which Executive may qualify, nor shall this Agreement limit or
otherwise affect such rights Executive may have under any other agreements with
the Company.  Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, program or policy and any other
payment or benefit required by law at or after the Date of Termination shall be
payable in accordance with such plan, program or policy or applicable law except
as expressly modified by this Agreement.

       

      6.7           Termination
Rights.  Executive recognizes and agrees that the Company has
the right to terminate his employment for any reason or no reason and that upon
such termination the Executive’s sole right is to receive compensation and
benefits in accordance with the terms of this Agreement.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      Article VII —
COVENANTS

       

      7.1         Non-Disclosure and
Non-Solicitation.  Executive acknowledges that the successful
marketing and development of the Company’s products requires substantial time
and expense.  Such efforts utilize and generate valuable confidential
and proprietary information, of which Executive will obtain knowledge during the
course of his employment with the Company.  As used herein,
“Confidential Information” means any information of the Company that the Company
considers to be proprietary and treats as confidential or information of any
third party that the Company is under an obligation to keep confidential,
including but not limited to the following: (i) trade secrets, confidential
knowledge, data or other proprietary information relating to products,
processes, know-how, designs, formulas, developmental or experimental work, (ii)
employment status, salaries and other personnel information, decisions to offer
employment, pre-employment testing and screening results, citizenship status,
disability status, performance issues, executive evaluations, medical problems
of executives and executives’ families, garnishments and levies against wages,
contents of employment agreements, statements regarding the financial condition
of the Company or any subsidiary or affiliated entity, payments made to or
expenses incurred by the Company or any of its executives, shareholders or
directors, discounts given by the Company, vendors and other parties, minutes of
Board meetings of the Company or any subsidiary or affiliated entities, contents
of contracts, legal matters by or against the Company or any subsidiary or
affiliated entities, business strategies, plans, proposals, names of customers
and potential customers; and (iii) other information or materials of the Company
marked or noticed by the Company as being confidential, whether constituting a
trade secret or not, and whether proprietary or not, which are of value to the
Company.  For purposes of this Agreement, Confidential Information
includes the foregoing and other information protected under the Illinois Trade
Secrets Act.  Confidential Information does not include: (i)
information that at the time of disclosure is in the public domain through no
fault of Executive; (ii) information received from a third party outside of the
Company that was disclosed without a breach of any confidentiality obligation;
(iii) information approved for public release by written authorization of the
Company; or (iv) information that is required by law or an order of any court,
agency or proceeding to be disclosed.  Executive acknowledges and
agrees that the Company shall retain exclusive ownership of all right, title,
and interest in the Confidential Information, including any and all worldwide
copyrights, trade secrets, patent, and confidential and proprietary information
rights.  Executive agrees to undertake the following obligations,
which Executive acknowledges to be reasonably designed to protect the Company’s
legitimate business interests without unnecessarily or unreasonably restricting
Executive’s post-employment opportunities:

       

      (a)           Executive
agrees that he will not at any time, whether during or after the cessation of
his employment, reveal or permit any other person or entity to reveal, any of
the Confidential Information to any person or any entity, except, and only to
the extent, as may be required in the ordinary course of performing Executive’s
assigned duties as an Executive of the Company, and Executive agrees to keep
secret, and take all necessary precautions against disclosure of, all
Confidential Information and all matters entrusted to him and not to use or
attempt to use any Confidential Information in any manner that may cause injury
or loss, or may be calculated to cause injury or loss, whether directly or
indirectly, to the Company or its customers;

       

      (b)           Executive
agrees that during and after his employment he shall not remove, copy, duplicate
or otherwise reproduce, use or permit to be used any notes, memoranda, reports,
lists, records, drawings, sketches, specifications, software programs, data,
documentation or other materials of any nature relating to any matter within the
scope of the business of the Company or concerning any of its dealings or
affairs except as required to perform Executive’s duties for the
Company;

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

     

    (c)           Upon
cessation of his employment relationship with the Company, Executive shall
immediately deliver to the Company all Confidential Information and other
materials relating to the Company in his possession or delivered to him by the
Company, including computer programs, files, notes, records, memoranda, reports,
lists, drawings, sketches, specifications, data, charts, and other documents,
materials and things (“Materials”), whether or not containing Confidential
Information, whether or not prepared by Executive, it being agreed that all
Materials shall be and remain the sole and exclusive property of the
Company;

     

    (d)           Without
limiting the obligations of Section 7.1(c), Executive agrees that while
Executive is employed by the Company prior to his Date of Termination and for a
period of one year following his Date of Termination he will not, whether alone
or as employee, owner, partner, officer, director, consultant, agent, executive,
independent contractor, or stockholder of any firm, corporation or other
commercial enterprise, directly or indirectly solicit business from: (i) any
customer of the Company with which Executive had contact, participated in the
contact, or about which Executive had knowledge of Confidential Information by
reason of Executive’s employment with the Company within the one year period
preceding the Date of Termination, or (ii) any current customer prospect of the
Company for whom Executive directly or indirectly assisted in the preparation or
submission of a proposal made by the Company to such customer prospect during
the one year period preceding the Date of Termination, unless the Company
acknowledges in writing its intent not to further pursue such customer prospect;
provided, further, that Executive shall, however, be permitted to own securities
of any public company not in excess of 5% of any class of such securities and to
own stock, partnership interests or other securities of any non-public entity
not in excess of 5% of any class of such securities, and such ownership shall
not be considered to be in competition with the Company; and

     

    (e)           Except
as may be required in the ordinary course of performing his duties as an
employee of the Company, while employed prior to his Date of Termination and
during the one year period immediately following the Date of Termination,
Executive shall not, directly or indirectly, solicit or attempt to solicit any
employee of the Company to work for any person, partnership or entity other than
the Company, or engage in any activity that would cause any such employee to
violate any agreement with the Company, or dissuade, or attempt to dissuade, any
such employee from faithfully discharging such employee’s contractual and
fiduciary obligations to serve the Company’s interests with undivided
loyalty.

     

    7.2         Non
Competition.  Without limiting the obligation imposed by
Section 7.1, and to more fully protect the Confidential Information, Executive
hereby agrees that while he is employed by the Company prior to the Date of
Termination and for a period of one year following the Date of Termination, he
will not, directly or indirectly, anywhere in the world where the Company
conducts business, render services to any Conflicting Organization in any
capacity in which the Confidential Information of the Company would reasonably
be considered to be useful to the Conflicting Organization; provided, however,
that Executive may render services to a Conflicting Organization (and which has
separate and distinct divisions), as long as such services are being rendered
solely to a part of the business that is separate and distinct from the part of
the business that renders such person or entity a Conflicting
Organization.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    If, at the time of enforcement of
Sections 7.1 and 7.2, a court shall hold that the duration, scope, area or
activity restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope, area or activity
restrictions reasonable and enforceable under such circumstances shall be
substituted for the stated duration, scope, area or activity
restrictions.

     

    7.3         Remedies.  Executive
recognizes and agrees that a breach of any or all of the provisions of Sections
7.1 and 7.2 will constitute immediate and irreparable harm to the Company for
which damages cannot be readily calculated and for which damages are an
inadequate remedy.  Accordingly, Executive acknowledges that in
addition to any and all remedies at law, the Company shall be entitled, without
bond, to specific performance or injunctive or other equitable relief to prevent
the breach or threatened breach of Executive’s obligations under this
Agreement.

     

    7.4         Intellectual
Property.  During the employment period, Executive shall
disclose immediately to the Company all ideas, inventions and business plans
that he makes, conceives, discovers or develops during the course of his
employment with the Company, including any inventions, modifications,
discoveries, developments, improvements, computer programs, processes, products
or procedures (whether or not protectable upon application by copyright, patent,
trademark, trade secret or other proprietary rights) (“Work Product”) that: (i)
relate to the business of the Company or any customer or supplier to the Company
or any of the products or services being developed, manufactured, sold or
otherwise provided by the Company or that may be used in relation therewith;
(ii) result from tasks assigned to Executive by the Company; or (iii) result
from the use of the premises or personal property (whether tangible or
intangible) owned, leased or contracted for by the Company.  Executive
agrees that any Work Product shall be the property of the Company and, if
subject to copyright, shall be considered a “work made for hire” within the
meaning of the Copyright Act of 1976, as amended (the “Act”).  If and
to the extent that any such Work Product is found as a matter of law not to be a
“work made for hire” within the meaning of the Act, Executive expressly assigns
to the Company all right, title and or interest in and to the Work Product, and
all copies thereof, and the copyright, patent, trademark, trade secret and all
their proprietary rights in the Work Product, without further consideration,
free from any claim, lien for balance due or rights of retention thereto on the
part of Executive.

     

    (a)           To
the extent applicable, pursuant to Illinois Employee Patent Act, the Company
hereby notifies Executive that the preceding paragraph does not apply to any
inventions for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on the
Executive’s own time, unless: (i) the invention relates (a) to the Company’s
business, or (b) to the Company’s actual or demonstrably anticipated research or
development, or (ii) the invention results from any work performed by the
Executive for the Company.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    (b)           Executive
agrees that upon disclosure of Work Product to the Company, Executive will,
during his employment and at any time thereafter, at the request and cost of the
Company execute and deliver all such documents and perform all such acts as the
Company or its duly authorized agents may reasonably require: (i) to apply for,
obtain and vest in the name of the Company alone (unless the Company otherwise
directs) letters patent, copyrights or other analogous protection in any country
throughout the world, and when so obtained or vested to renew and restore the
same; and (ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous
protection.

     

    (c)           In
the event that the Company is unable, after reasonable effort, to secure
Executive’s signature on any letters patent, copyright or other analogous
protection relating to Work Product, whether because of Executive’s physical or
mental incapacity or for any other reason whatsoever, Executive hereby
irrevocably designates and appoints the Company and its duly authorized officers
and agents as his agent and attorney-in-fact, to act for and on his behalf to
execute and file any such application or applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent, copyright and other analogous protection with the same legal force and
effect as if personally executed by Executive.

     

    Article VIII —
LIMITATION ON PAYMENTS AND BENEFITS

     

    Notwithstanding
any provision of this Agreement to the contrary, if any amount or benefit to be
paid or provided under this Agreement would be an “Excess Parachute Payment”
within the meaning of Section 280G of the Code or any successor provision
thereto(which the parties agree will not include any portion of payments
allocated to the non-solicitation and non-compete provisions of Article VII
which are classified as payments of reasonable compensation for purposes of
Section 280G of the Code), then the payments and benefits to be paid or provided
under this Agreement shall be reduced to the minimum extent necessary so that no
portion of any such payment or benefit as so reduced constitutes an Excess
Parachute Payment.

     

    Article IX —
MISCELLANEOUS

     

    9.1         Clawback
Provision.  In the event of a restatement of the Company’s
previously issued financial statements, the Board will review the circumstances
regarding the restatement and all performance-based compensation awarded to the
Executive that is attributable to performance during the time periods
restated.  If the Board determines that (i) the restatement is
required due to the failure of the Company’s management to act reasonably and
(ii) the Executive received more compensation than he would have received absent
the restated financial statements, then the Board will take action to recoup any
such excess compensation and the Executive agrees to repay such
amount.  Notwithstanding any other provision in this Agreement, in
such event, the Executive may be required to (x) repay some or all of any bonus
or other performance-based compensation received, (y) repay any gains realized
on the exercise of stock options or on the open-market sale of vested shares; or
(z) have his future compensation adjusted.  In the event the Executive
does not agree with the Board’s determination as to (A)  whether the
restatement is required due to the failure of the Company’s management to act
reasonably or (B) the amount of the excess compensation received, the Executive
may submit the matter to binding arbitration in Chicago, Illinois (unless the
parties agree in writing to a different location), before a single arbitrator in
accordance with the American Arbitration Association’s National Rules for the
Resolution of Employment Disputes then in effect. The decision and award made by
the arbitrator shall be final, binding and conclusive on all parties hereto for
all purposes, and judgment may be entered thereon in any court having
jurisdiction thereof.  Except as set forth below, the Company shall
pay the costs of the arbitration, including administrative fees and the fees of
the arbitrator.  Each party shall be responsible for the fees and
costs of their attorneys and  the expenses of their
witnesses.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    9.2           Approvals. The
Company represents and warrants to Executive it has taken all corporate action
necessary to authorize this Agreement.

     

    9.3           Full
Settlement.  The exclusive method for the Company to terminate
its obligations to provide compensation or benefits to Executive pursuant to
Articles IV and V of this Agreement is to terminate Executive’s employment in
compliance with all applicable requirements of Sections 6.1, 6.2, 6.3, 6.4 or
6.5 of this Agreement, as applicable, and to make the payments and provide the
benefits specified in such applicable Section.

     

    9.4           No
Mitigation.  In no event shall Executive be obligated to seek
other employment or take any other action to mitigate the amounts payable to
Executive under any of the provisions of this Agreement, nor shall the amount of
any payment hereunder be reduced by any compensation earned as a result of
Executive’s employment by another employer, except that any continued welfare
benefits provided for by Section 6.3(f) or Section 6.4(c) shall not duplicate
any benefits that are provided to Executive and his family by such other
employer and shall be secondary to any coverage provided by such other
employer.

     

    9.5           Enforcement.  If
the Company fails to pay any amount provided under this Agreement when due, the
Company shall pay interest on such amount at an annual rate equal to the lesser
of (i) (A) the highest rate of interest charged by the Company’s principal
lender on its revolving credit agreements plus 200 basis points, or (B) in the
absence of such a lender, 200 basis points over the prime commercial lending
rate announced by The Wall Street Journal in effect from time to time during the
period of such nonpayment, or (ii) the highest legally-permissible interest rate
allowed to be charged under applicable law.

     

    9.6           Release.  Notwithstanding
any provisions of this Agreement to the contrary, the Company’s obligations to
make payments under Sections 6.3, 6.4 and 6.5, other than the obligation to pay
Accrued Base Salary and Accrued Annual Bonus (the “Termination Payments”), are
expressly conditioned upon the Executive’s execution of a release and waiver
substantially in the form attached hereto as Exhibit B (the “Release”), and the
expiration of the revocation period.  The Company shall deliver a copy
of the Release to Executive within five (5) days following Executive’s
termination of employment and, within forty-five (45) days thereafter, the
Release shall be executed and returned to the Company by
Executive.  Termination Payments shall commence pursuant to the
schedules provided herein on the first practicable payroll date following the
expiration of the revocation period or the 60th day following the Executive’s
termination of employment, whichever comes last.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    9.7           Beneficiary.  If
Executive dies prior to receiving all of the amounts payable to him in
accordance with the terms and conditions of this Agreement, such amounts shall
be paid to the beneficiary designated by Executive in writing to the Company
during his lifetime, or if no such beneficiary is designated, to Executive’s
estate.  Such payments shall be made in a lump sum to the extent so
payable and, to the extent not payable in a lump sum, in accordance with the
terms of this Agreement.  Such payments shall not be less than the
amount payable to Executive as if Executive had lived to the date of payment and
were the payee.  Executive, without the consent of any prior
beneficiary, may change his designation of beneficiary or beneficiaries at any
time or from time to time by submitting to the Company a new designation in
writing.

     

    9.8           Assignment;
Successors.  The Company may not assign its respective rights
and obligations under this Agreement without the prior written consent of
Executive except to a successor of the Company’s business.  This
Agreement shall be binding upon and inure to the benefit of Executive, his
estate and Beneficiaries, the Company and the successors and permitted assigns
of the Company.

     

    9.9           Non-Alienation.  Except
as is otherwise expressly provided herein, benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, prior to actually being received by
Executive, and any such attempt to dispose of any right to benefits payable
hereunder shall be void.

     

    9.10         Severability.  If
all or any part of this Agreement is declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any portion of this
Agreement not declared to be unlawful or invalid.  Any provision so
declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such provision to the fullest extent
possible while remaining lawful and valid.

     

    9.11         Amendment;
Waiver.  This Agreement shall not be amended or modified except
by written instrument executed by the Company and Executive.  A waiver
of any term, covenant or condition contained in this Agreement shall not be
deemed a waiver of any other term, covenant or condition, and any waiver of any
default in any such term, covenant or condition shall not be deemed a waiver of
any later default thereof or of any other term, covenant or
condition.

     

    9.12         Notices.  All
notices hereunder shall be in writing and delivered by hand, by
nationally-recognized delivery service that guarantees overnight delivery, or by
first-class, registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              If
      to the Company, to:

            	
              Corporate
      Secretary

            

    

    
      	
               
      

            	
              AMCOL
      International Corporation

            

    

    
      	
               
      

            	
              2870
      Forbs Avenue

            

    

    
      	
               
      

            	
              Hoffman
      Estates, IL  60192

            

    

     

    
      	
               
      

            	
              If
      to Executive, to:

            	
              At
      his most recent home address.

            

    

     

    Either
party may from time to time designate a new address by notice given in
accordance with this Section. Notice shall be effective when actually received
by the addressee.

     

    9.13           Counterparts.  This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same instrument.

     

    9.14           Captions.  The
captions of this Agreement are not a part of the provisions hereof and shall
have no force or effect.

     

    9.15           Section
409A.  The parties intend that the compensation and benefits to
be provided under this Agreement shall be exempt from or compliant with the
requirements of Code Section 409A of the Code and this Agreement shall be
interpreted and applied in a manner consistent with such
intent.  Notwithstanding anything in this Agreement to the contrary,
if payment of any amounts under this Agreement would be subject to additional
taxes and interest under Code Section 409A because the timing of such payments
is not delayed as provided in Section 409A(a)(2)(B)(i) of the Code and the
regulations thereunder, then any such payments to which Executive would
otherwise be entitled during the first six months following the date of his
Termination of Employment shall be accumulated and paid on the second business
day that is six months after the date of such Termination of Employment with
Company, or such earlier date upon which such payments can be paid under Code
Section 409A of the Code without being subject to such additional taxes and
interest.  Further, notwithstanding anything in this Agreement to the
contrary, if benefits to be made available under this Agreement would be subject
to additional taxes and interest under Code Section 409A because the provision
of such benefits is not delayed for the first six months following the date of
Executive’s Termination of Employment with Company as provided in Code Section
409A(a)(2)B)(i) of the Code and the regulations thereunder, such benefits shall
not be delayed; however, Executive shall pay to Company, at the time or times
such benefits are provided, the fair market value of such benefits, and Company
shall reimburse Executive for any such payments on or within ten days following
the expiration of such six-month period.  Executive hereby agrees to
be bound by Company’s determination of its “specified employees” (as such term
is defined in Code Section 409A) in accordance with any of the methods permitted
under the regulations issued under Code Section 409A of the Code, which shall be
determined annually by the Company.  The Company makes no
representation or warranty and shall have no liability to Executive or any other
person if any provisions of this Agreement are determined to constitute deferred
compensation subject to Code Section 409A but do not satisfy an exemption from,
or the conditions of, such section.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    9.16           Entire
Agreement.  As of the Effective Date, this Agreement will form
the entire agreement between the parties hereto with respect to the subject
matter contained in the Agreement and shall supersede all prior agreements,
promises and representations regarding employment, compensation, severance or
other payments contingent upon termination of employment, whether in writing or
otherwise.

     

    9.17           Applicable
Law.  This Agreement shall be interpreted and construed in
accordance with the laws of the State of Illinois, without regard to its choice
of law principles.

     

    9.18           Survival of Executive’s
Rights.  All of Executive’s post-termination rights hereunder,
including Executive’s rights to compensation and benefits under Article VI of
this Agreement, and his post-termination obligations, including but not limited
to his obligations under Article VII (Covenants) and Article IX (Miscellaneous),
shall survive the termination of Executive’s employment and the termination of
this Agreement.

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement on the date set forth
below.

     

    
      
        
          
            
              
                
                  
                    
                      	
                              AMCOL
      INTERNATIONAL CORPORATION

                            
	 
      
	 
      
	
                              By:
      /s/ James W. Ashley

                            
	
                              Its:  Secretary

                            
	
                              Date:  February
      2, 2009

                            
	 
      
	 
      
	
                              EXECUTIVE

                            
	 
	
                              /s/ Donald W. Pearson

                            	
                               

                            
	
                              Date:  February
      2,
2009

                            

                    

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
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    Exhibit
A

     

    Named
Executives

     

    Gary L.
Castagna

     

    Ryan F.
McKendrick

     

    Donald W.
Pearson

     

    Lawrence
E. Washow

     

    
      
        
        

      

      
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    Exhibit
B

     

    FORM OF
EMPLOYMENT

    SEPARATION AGREEMENT AND
MUTUAL RELEASE

     

    AMCOL International Corporation
(“Employer”) and [Executive’s Name] (“Executive”) hereby agree as
follows:

     

    1.           Executive’s
employment with Employer terminated on ______________ (“the Termination
Date”).

     

    2.           Employer
denies that it is liable to Executive for any reason whatsoever, and the entry
into this Separation Agreement and Release shall not constitute any admission or
evidence of unlawful discrimination or improper conduct, and should not be
construed as an admission of fault, wrongdoing, or
liability.  However, in consideration of the mutual promises herein,
Employer will provide Executive with the following:

     

    [INSERT
AMOUNTS TO BE PAID]

     

    Executive
acknowledges that he has received good and valuable consideration for the
promises herein.  Payment will be made as set forth in Executive’s
Employment Agreement.

     

    3.           Except
as set forth in this Agreement, no further payments will be made
to  Executive for wages, salary, bonus, expense reimbursement,
commissions, consulting, benefits, severance, vacation, personal days, sick pay,
disability pay or otherwise.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    4.           Executive
releases, forever discharges and covenants not to sue Employer or its current or
former parent companies, subsidiaries, affiliates, predecessors, successors,
insurers, directors, officers, employees, agents, or assigns, with respect to
any and all claims, causes of action, suits, debts, sums of money,
controversies, agreements, promises, damages, and demands whatsoever, including
attorneys’ fees and court costs, in law or equity or before any federal, state
or local administrative agency, whether known or unknown, suspected or
unsuspected, which  Executive has, had, or may have, based on any
event occurring, or alleged to have occurred, to the date of this
Agreement.  This release includes, but is not limited to, claims under
Title VII of the Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act, the Rehabilitation Act, the Age Discrimination in Employment
Act, the Employee Retirement Income Security Act, the Family and Medical Leave
Act and any federal, state or local statute, law, regulation, ordinance, or
order, and claims arising under common law, contract, implied contract, public
policy or tort.  To the extent any such claim cannot be waived as a
matter of law, it is understood that  Executive reserves the right to
file such claim, but Executive expressly waives his right to any relief of any
kind should any person or entity pursue any claim on Executive’s
behalf.  Notwithstanding the foregoing release of all claims, it is
understood and agreed that Executive’s claims for unemployment compensation, if
any, are not released.

     

    5.           Executive
expressly waives and relinquishes all rights and benefits provided to him by any
statute or other law which prohibits release of unspecified claims and
acknowledge that this release is intended to include all claims he has or may
have, whether he is aware of them or not, and that all such claims are released
by this Agreement.

     

    6.           Executive
shall not disclose any proprietary, trade secret or other confidential business
information learned solely by reason of  Executive’s employment with
Employer.  Executive agrees that the post-termination obligations of
his Employment Agreement with AMCOL International Corporation will remain in
full force and effect.

     

    7.           Executive
agrees to cooperate with Employer in regard to the transition of business
matters handled by Executive during his employment with Employer and in regard
to any litigation brought by or against Employer.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    8.           This
Agreement is strictly confidential and Executive will not inform any person of
any of its terms and conditions or the amount of severance provided herein,
except for  Executive’s attorney, members of his immediate family and
those who need to know for  Executive’s compliance with federal,
state, or local law.  Executive will instruct any persons advised
about this Agreement pursuant to this provision to keep such information
strictly confidential.

     

    9.           Executive
will not make statements about Employer or engage in conduct which could
reasonably be expected to adversely affect Employer’s reputation or
business.

     

    10.         Executive
understands that this Agreement fully sets forth all separation benefits he will
receive from Employer, and it supersedes any offers or promises, whether oral or
written, which may have been made at any time.

     

    11.         This
Agreement will not take effect until eight days after Executive signs
it.

     

    12.         Executive
may revoke this Agreement within seven days after signing it and render it null
and void.  If  Executive wishes to revoke this Agreement, he
should notify ____________________________, in writing at
_________________________ of Executive’s intent to revoke within seven days
after signing this Agreement.

     

    13.         
Executive acknowledges that he has fully read this Agreement, understands its
terms, has been advised to consult with an attorney prior to signing this
Agreement, has been given 45 days to consider this release and its
ramifications, has been given seven days after signing to rescind this
Agreement, and is entering into this Agreement knowingly and
voluntarily.  Executive further agrees that any modification of this
Agreement, whether material or not, will not restart or change the original
45-day consideration period.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

    

    
      
        
          
            	 
      	 
      	
                    THIS DOCUMENT IS A RELEASE
      OF

                    ALL CLAIMS - READ
      CAREFULLY

                    BEFORE
      SIGNING

                  
	 
      	 
      	 
      
	
                    DATED:
      ______________

                  	 
      	
                    _______________________________

                  
	 
      	 
      	
                    Executive

                  
	 	 	 
	 
      	 
      	
                    AMCOL
      INTERNATIONAL 

                    CORPORATION

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    DATED:
      ______________

                  	 
      	
                    By:____________________________

                  
	 
      	 
      	 
      
	 
      	 
      	
                    Its_______________________________

                  

          

        

      

    

     

    
      
        
        

      

      
        25Exhibit
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).

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