Document:

Exhibit 10.6

                            STOCK PURCHASE AGREEMENT

            THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into
this 22nd day of March 1999, by and between NexMed International Limited, a
corporation organized under the laws of the British Virgin Islands (the
"Seller") and Vergemont International Limited a corporation organized under the
laws of the Turks and Caicos Islands ("Acquirer").

                                    RECITALS

            WHEREAS, Seller wishes to sell and Acquirer wishes to purchase, all
of the issued and outstanding capital stock of NexMed (Asia) Limited, a
corporation organized under the laws of Hong Kong (the "Company"), consisting of
two (2) shares of Company Common Stock (as hereinafter defined), pursuant to the
terms and conditions set forth in this Agreement;

            NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

            Section 1.1 Defined Terms. When used in this Agreement, the
following terms shall have the meanings set forth in this Article I. All article
and section numbers used in this Agreement refer to articles and sections of
this Agreement unless otherwise specifically described.

            "Affiliate" means, with respect to any specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person.

            "Code" means the Internal Revenue Service Code of 1986, as amended.

            "Company Balance Sheet" means the audited statements of assets and
liabilities for the Company as of December 31, 1998.

            "Company Income Statement" means the audited statements of income
for the Company as of December 31, 1998.

            "Company Common Stock" means the ordinary shares of the Company,
HK$1.00 par value, per share.

            "Contract" means all written contracts, agreements, indentures,
notes, loans, licenses, leases, commitments, insurance policies, plans,
arrangements, sales orders and purchase orders of every kind to which the
Company is bound which are not terminable at will or which do not involve the
expenditure over its unexpired life of more than US$50,000.
<PAGE>

            "Governmental Entity" means any government or any court, arbitral
tribunal, administrative agency or commission or other governmental or other
regulatory authority or agency, federal, state, local or foreign.

            "Intellectual Property" means domestic and foreign patents, patent
applications, inventions, invention disclosures, trademark and service mark
applications, registered trademarks, registered service marks, copyrights,
trademarks, service marks, trade names, material trade secrets, know-how,
formulae and processes and all other similar items of intellectual property.

            "Knowledge of the Company" means the actual knowledge of the
executive officers of the Company or the Seller.

            "Lien" means any adverse claim, restriction on voting or transfer or
pledge, lien, charge, encumbrance or security interest of any kind.

            "Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a Governmental Entity.

            "Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means all forms of taxation, whenever created or imposed, whether
imposed by a local, municipal, state, foreign, federal or other governmental
body or authority, and, without limiting the generality of the foregoing, shall
include income, gross receipts, ad valorem, excise, value-added, sales, use,
transfer, franchise, license, stamp, occupation, withholding, employment,
payroll, property or environmental tax or premium, together with any interest,
penalty, addition to tax or additional amount imposed by any governmental body
or authority responsible for the imposition of any such tax (a "Taxing
Authority").

            "Taxable Period" means any taxable year or any other period that is
treated as a taxable year with respect to which any Tax may be imposed under any
applicable statute, rule or regulation.

            "Tax Return" means any return, extension, report, statement,
information statement and the like required to be filed with any Taxing
Authority.

            Section 1.2 Other Terms. Other terms may be defined elsewhere in
this Agreement and, for the purposes of this Agreement, those other terms shall
have the meanings specified in those other portions. Meanings specified in this
Agreement shall be applicable to both the singular and plural forms of such
terms and to the masculine, feminine and neuter genders, as the context
requires.

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                                   ARTICLE II
                         PURCHASE AND SALE OF THE SHARES

            Section 2.1 Transfer of the Shares. Subject to the terms and
conditions set forth herein, Acquirer hereby purchases from the Seller, and the
Seller hereby sells to Acquirer, two (2) shares of Company Common Stock,
representing all issued and outstanding shares of Company Common Stock, in
exchange for the Purchase Price (as defined below).

            Section 2.2 The Purchase Price. The total consideration (the
"Purchase Price") to be paid by the Acquirer for the Shares shall be
US$4,000,000.

            Section 2.3 Deliveries. Simultaneously with the execution and
delivery of this Agreement, (i) the Company shall deliver one or more share
certificates representing all of the shares of Company Common Stock, duly
endorsed or accompanied by executed stock powers in blank against payment of the
Purchase Price by Acquirer, (ii) the Acquirer shall deliver the Purchase Price,
as set forth in Section 2.4(a) and (b), (iii) NexMed Inc., a Nevada corporation
("NexMed"), and the Parent of the Seller, shall issue the Warrant, as set forth
in 2.4(c) below and (iii) the Seller, the Company, and Acquirer shall execute,
deliver and acknowledge, or cause to be executed, delivered and acknowledged,
such certificates and other documents related to the consummation of the
transactions contemplated hereby as may be reasonably requested by the parties
hereto.

            Section 2.4 Payment of Purchase Price. The Purchase Price shall be
paid as follows:

            (a) US $2,000,000 by the delivery by the Acquirer to the Seller of a
wire transfer of funds or a certified or bank cashier's checks to such account
numbers and depositories designated by the Seller by notice in writing to the
Acquirer;

            (b) delivery by the Acquirer to the Seller of two (2) promissory
notes of the Acquirer substantially in the forms attached hereto as Exhibits A
and B (the "Notes"). The Notes shall be registered in the name of the Seller and
shall be dated the date of issue thereof; and

            (c) issuance by NexMed of a Warrant substantially in the form of
Exhibit (C) hereto.

                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES CONCERNING
                           THE SELLER AND THE COMPANY

            The Seller hereby represents and warrants to the Acquirer as
follows:

            Section 3.1 Organization and Qualification. Each of the Seller and
the Company are duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation and have the corporate
power and authority to own, lease

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and operate their properties and to carry on their businesses as are now being
conducted.

            Section 3.2 Authorization and Validity of Agreement. The Seller has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby in accordance
with the terms hereof. The Seller's Board of Directors have duly authorized the
execution, delivery and performance of this Agreement by the Seller, and no
other corporate proceedings on the part of the Seller is necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Seller and, assuming this Agreement
constitutes the legal, valid and binding obligation of the Acquirer, it
constitutes the legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms, except as such enforcement may be
limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

            Section 3.3 Capitalization; Subsidiaries. (a) As of the date of this
Agreement, the authorized capital stock of the Company consists of 10,000
HK$1.00 shares of Company Common Stock, of which two (2) shares of Company
Common Stock are issued and outstanding, all of which are owned beneficially by
the Seller, including the one (1) share of Company Common Stock that is recorded
in the name of Y. Joseph Mo who is the trustee and nominal owner of that one (1)
share for the Seller. No shares of the Company Common Stock are reserved for
issuance pursuant to outstanding stock options or in respect of future grants of
stock options. All of such shares so owned by the Seller are validly issued,
fully paid and nonassessable and are owned by it free and clear of any Liens,
restraints on alienation, or any restrictions with respect to the
transferability or assignability thereof (other than restrictions on transfer
imposed by federal and state securities laws). There are no outstanding
subscriptions, options, warrants, calls, rights, commitments or any other
agreements to which the Seller or the Company is a party or by which the Seller
or the Company is bound which obligate the Seller or the Company to (i) issue,
deliver or sell or cause to be issued, delivered or sold any additional shares
of the Company Common Stock or any other capital stock of the Company or any
other securities convertible into, or exercisable or exchangeable for, or
evidencing the right to subscribe for, any such shares of the Company Common
Stock or any other capital stock of the Company or (ii) purchase, redeem or
otherwise acquire any shares of the Company Common Stock or any other capital
stock of the Company.

            (b) The Company has no direct or indirect subsidiaries other than
NexMed Pharmaceuticals (Zhongshan) Ltd., a joint-venture organized under the
laws of the People's Republic of China ("NexMed China").

            (c) The Company is the record owner of seventy (70) percent of all
of the outstanding shares of capital stock of NexMed China, there are no proxies
with respect to any such shares, and no equity securities of NexMed China are or
may become required to be issued by reason of any options, warrants, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable or exercisable for, shares
of any capital stock of NexMed China, and there are no contracts, commitments,

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understandings or arrangements by which the Company or NexMed China is bound to
issue, redeem, purchase or sell additional shares of capital stock of NexMed
China or securities convertible into or exchangeable or exercisable for any such
shares. All of such shares so owned by the Company are validly issued, fully
paid and nonassessable and are owned by it free and clear of Liens, restraints
on alienation, or any other restrictions with respect to the transferability or
assignability thereof (other than restrictions on transfer imposed by federal or
state securities laws). The Company is not a party to any voting trust or other
agreement or understanding with respect to the voting of any capital stock of
NexMed China.

            Section 3.4 Consent and Approvals. Neither the execution and
delivery of this Agreement by the Seller nor the consummation by the Seller of
the transactions contemplated hereby will require on the part of the Seller any
filing with or notification to any Governmental Entity, except where the failure
to make such filing or notification would not materially adversely effect the
business, assets, condition (financial or otherwise), revenues or rights
(collectively, the "Condition") of the Seller or prevent the consummation of the
transactions contemplated hereby.

            Section 3.5 No Conflict or Violation. Neither the execution,
delivery or performance of this Agreement nor the consummation of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provisions of either the Seller's or the Company's Memorandum or the
Seller's or the Company's Articles of Association, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, vesting,
payment, exercise, acceleration, suspension or revocation) under, any of the
terms, conditions or provisions of any material Contract to which either the
Seller or the Company or their predecessors in interest is a party or by which
the Seller or the Company or any of their properties or assets are bound, (iii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Seller or the Company or any of their properties or assets,
(iv) result in the creation or imposition of any Lien on any asset of the Seller
or the Company or (v) cause the suspension or revocation of any permit, license,
governmental authorization, consent or approval necessary for the Seller or the
Company to conduct its business as currently conducted, except, in the case of
clauses (ii), (iii), (iv) and (v), for violations, breaches, defaults,
terminations, cancellations, accelerations, creations, impositions, suspensions
or revocations that would not materially adversely effect the Condition of
either of the Seller or the Company.

            Section 3.6 Financial Statements. The Seller has provided the
Acquirer with copies of the Company Balance Sheet and the Company Income
Statement and certain projections regarding the future performance and operating
results of the Company (the "Projections"). The Company Balance Sheet (including
any related notes and schedules thereto) fairly presents, in all material
respects, the financial position of the Company as of its date and the Company
Income Statement fairly presents, in all material respects, the results of
operations of the Company for the periods set forth therein, in accordance with
the ordinary accounting practices in Hong Kong (subject in each case to normal
year-end adjustments, footnotes and other presentation items). The Acquirer
acknowledges that the Projections were prepared for illustrative purposes only,
involve risks and uncertainties and are subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
beyond the control of the Seller and that actual results could differ materially
from those anticipated in the

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Projections. Acquirer acknowledges that it is not relying on the Projections in
any respect in making its decision to acquire the Company Common Stock from the
Seller.

            Section 3.7 Litigation. There is no suit, action, proceeding or
investigation (whether at law or equity, before or by any federal, state or
foreign commission, court, tribunal, board, agency or instrumentality, or before
any arbitrator) pending or, to the Knowledge of the Company, threatened against
or affecting the Company, the outcome of which would materially adversely effect
the Condition of the Company.

            Section 3.8 Legal Compliance. The Company has complied with all
material applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of all
Governmental Entities, except where the failure to comply would not materially
adversely effect the Condition of the Company.

            Section 3.9 Insurance. The Company is insured and will remain so
until the date hereof, in the amounts and against risks consistent with the
Company's past practice. Effective on the date hereof, the Seller shall have no
further obligation to insure the Company.

            Section 3.10 Taxes.

            (a) All Tax Returns required to be filed with any Taxing Authority
on or prior to the date hereof by or with respect to the Company have been
filed, except Tax Returns for which requests for extensions have been timely
filed or where the failure to file such Tax Returns would not materially
adversely effect the Condition of the Company, and all such filed Tax Returns
are complete in all material respects;

            (b) The Company has paid all Taxes shown as due and payable on Tax
Returns that have been filed;

            (c) The Company has paid or accrued on the Company's balance sheet
all Taxes payable by it for all Taxable Periods ending on or before the date
hereof for which no Tax Return has yet been filed;

            (d) No federal, state, local or foreign audits, examinations or
other administrative or court proceedings are presently pending with regard to
any Tax Returns or Taxes of the Company and, which, if determined adversely,
would materially adversely effect the Condition of the Company; and

            (e) There are no Liens for Taxes on the assets of the Company,
except for Liens that would not materially adversely effect the Condition of the
Company.

            Section 3.11 Intellectual Property. Neither the Seller nor the
Company has received any notice that the products or activities of the Company
or the use thereof violate, infringe or otherwise conflict with the Intellectual
Property of third parties, except for such violations, infringements or
conflicts that would not materially adversely effect the Condition of the
Company.

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<PAGE>

            Section 3.12 Contracts. Attached hereto is a list of all Contracts
to which the Company or NexMed China is a party. To the Seller's Knowledge, the
Company is in material compliance with all material terms under such Contracts.

            Section 3.13 Actions Not in Ordinary Course. Since September 30,
1998 the Company (i) has operated only in the ordinary course, consistent with
past practices, (ii) has not (other than in the ordinary course of business),
acquired or disposed of any assets or entered into any Contracts, commitments or
leases which would have a material and adverse impact upon the Condition of the
Company, (iii) has not (a) entered into or performed any material transaction,
Contract or commitment or (b) made or awarded any wage or salary increase or
provided any bonus or material increase in any fringe benefits to any employee
of the Company, except bonus payments consistent with past practices.

            Section 3.14 No Change. Since September 30, 1998, there has not been
(i) any material adverse change (whether or not in the ordinary course of
business) in the Condition of the Company as reflected on the Company's most
recent balance sheet or (ii) any damage, destruction or loss, whether or not
covered by insurance, affecting the Condition of the Company.

            Section 3.15 Real Property. The Company has a valid and existing
lease or sublease for, and is in peaceful and undisturbed possession of the
property located at Room #2208, Windsor House, 311 Gloucester Road, Causeway
Bay, Hong Kong (the "Company Leased Property"). The lease for the Company Leased
Property is valid and enforceable in accordance with its terms, is in full force
and effect, and there is not under such Lease any default by the Company or, to
the Knowledge of the Company, by any landlord or lessor under such Lease.
Neither the Seller nor the Company has received any notice of any violation of
any applicable zoning ordinance, building code, use or occupancy restriction, or
violation of any thereof, or any condemnation action or proceeding with respect
to the Company Leased Property.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                                 OF THE ACQUIRER

            The Acquirer hereby represents and warrants to the Seller and the
Company as follows:

            Section 4.1 Organization. Acquirer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted.

            Section 4.2 Authorization and Validity of Agreement. Acquirer has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby in accordance
with the terms hereof. Acquirer's Board of Directors has duly authorized the
execution, delivery and performance of this

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Agreement by Acquirer, and no other corporate proceedings on the part of
Acquirer are necessary to authorize this Agreement or the transactions
contemplated hereby. The Agreement has been duly executed and delivered by
Acquirer and, assuming this Agreement constitutes the legal, valid and binding
obligation of the Seller, it constitutes the legal, valid and binding obligation
of Acquirer, enforceable against Acquirer in accordance with its terms, except
as such enforcement may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

            Section 4.3 Consents and Approvals. Neither the execution and
delivery of this Agreement by Acquirer nor the consummation by Acquirer of the
transactions contemplated hereby will require on the part of Acquirer any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not materially adversely effect the Condition of the Acquirer or prevent the
consummation of the transactions contemplated hereby.

            Section 4.4 No Conflict or Violation. Neither the execution,
delivery or performance of this Agreement by Acquirer, nor the consummation by
Acquirer of the transactions contemplated hereby, nor compliance by Acquirer
with any of the provisions hereof, will (i) conflict with or result in any
breach of any provisions of the Acquirer's charter or by-laws (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
vesting, payment, exercise, acceleration, suspension or revocation) under, any
of the terms, conditions or provisions of any material note, bond, mortgage,
deed of trust, security interest, indenture, license, contract, agreement, plan
or other instrument or obligation to which Acquirer is a party or by which
Acquirer or any of its properties or assets may be bound or affected, or (ii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Acquirer or any of its properties or assets, except for
violations, breaches, defaults, terminations, cancellations, accelerations,
creations, impositions, suspensions or revocations that would not, individually
or in the aggregate, materially adversely effect the Condition of the Acquirer
or its ability perform its obligations under this Agreement.

            Section 4.5 Litigation. There is no suit, action, proceeding or
investigation (whether at law or equity, before or by any federal, state or
foreign commission, court, tribunal, board, agency or instrumentality, or before
any arbitrator) pending or threatened against or affecting Acquirer the outcome
of which would in any manner impair the ability of Acquirer to perform its
obligations hereunder or to consummate the transactions contemplated hereby.

            Section 4.6 Brokers and Finders. In connection with the transactions
contemplated hereby, Shannon Limited, an investment consulting firm located at
Room 1602 Chit Lee Commercial Building, 30-36 Shau Kei Wan Road, Hong Kong, has
acted as a finder to facilitate the completion of the subject Agreement. The
Company, therefore, agrees to pay Shannon Limited a six (6) percent finder's fee
upon the receipt in full or in partial amounts of the proposed $4 million
proceeds as defined under Section 2.2, and a warrant to purchase 200,000

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shares of the common stock of NexMed, Inc., par value of $.001 per share, at an
exercise price of US$3.00 per share prior to March 21, 2001. Acquirer has not
incurred any other obligation to pay a brokerage, finders or other fee or
commission to any Person other than Shannon Limited heretofore mentioned.

            Section 4.7 Investment Representation. Acquirer acknowledges that
the Company Common Stock is not registered under the securities laws of any
jurisdiction and that it is acquiring the Company Common Stock for its own
account, and not with a view to the distribution thereof. Acquirer is a
sophisticated investor with knowledge and experience in financial matters and
has received information from the Seller concerning the Company and has had the
opportunity to obtain additional information in order to evaluate the purchase
contemplated hereby.

                                    ARTICLE V
              COVENANTS OF THE SELLER, THE COMPANY AND THE ACQUIRER

            The parties hereto agree that:

            Section 5.1 Efforts. Subject to the terms and conditions of this
Agreement and applicable law, each of the parties hereto shall act in good faith
and use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated hereby
as soon as practicable, including such actions or things as the other party may
reasonably request in order to cause any of the conditions to such other party's
obligation to consummate the transactions contemplated by this Agreement to be
fully satisfied.

            Section 5.2 Transfer Taxes. All transfer, documentary, sales, use,
registration and other such Taxes, and any penalties, interest and additions to
such Taxes, that are incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by Acquirer. The parties to this
Agreement shall cooperate in the timely making of all filings, returns, reports
and forms as may be required in connection therewith.

            Section 5.3 Implied Warranties. Except as expressly provided in this
Agreement, the Seller has not made and is not making any representation or
warranty whatsoever to Acquirer as to the Company. Without limiting the
foregoing, Acquirer acknowledges that Acquirer, together with its advisors, has
made its own investigation of the Company and is not relying on any implied
warranties (whether of merchantability or fitness for a particular purpose or
otherwise), or upon any representation or warranty whatsoever not set forth in
this Agreement.

            Section 5.4 Survival of Representations and Warranties. The
representations and warranties of the parties made in this Agreement or provided
herein shall not survive the Closing Date except that the representations and
warranties made in Sections 3.1, 3.2, 3.3 and 4.1 and 4.2 hereof, shall survive
indefinitely and the representations and warranties of the Company made in
Section 3.10 shall survive the expiration of the applicable statute of
limitations relating to such matters.

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            Section 5.5 Management Consulting Services. The Acquirer shall enter
into a management consulting agreement with Mr. Y. Joseph Mo substantially in
the form attached hereto as Exhibit D.

                                   ARTICLE VI
                                  MISCELLANEOUS

            Section 6.1 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, mailed or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) or sent by fax (with
immediate confirmation) or nationally recognized overnight courier service, as
follows:

            (a)   if to Acquirer, to:

                  Vergemont International Limited
                  Suite 2401-2408
                  24F, CITIC Tower
                  One Tim Mei Avenue
                  Central, Hong Kong

                  Attention: Mr. Tsu-Huang Wu

            (b)   if to the Seller or the Company, to:

                  NexMed International Limited
                  Room 2208, Windsor House
                  311 Gloucester Road
                  Causeway Bay, Hong Kong

                  Attention: Dr. Y. Joseph Mo

                  with a copy to:

                  Pryor Cashman Sherman & Flynn LLP
                  410 Park Avenue
                  New York, NY 10022

                  Attention: Selig D. Sacks, Esq.

or to such other Person or address or facsimile number as either party shall
specify by like written notice to the other party hereto (any such notice of a
change of address to be effective only upon actual receipt thereof).

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<PAGE>

            Section 6.2 Entire Agreement. This Agreement (including the
schedules, exhibits and other documents referred to herein), constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior written or oral and all contemporaneous oral
agreements and undertakings between any of the parties hereto with respect to
the subject matter hereof.

            Section 6.3 Assignment; Binding Effect. Neither this Agreement nor
any of the rights, benefits or obligations hereunder may be assigned, in whole
or in part, by either party, except by operation of law and any such purported
assignment shall be null and void, provided, however, that, without the prior
written consent of the other party hereto, Acquirer may assign all or part of
this Agreement and their rights hereunder (a) to an Affiliate or (b) from and
after the closing to a Person, not a party to this Agreement, who acquires
substantially all of the assets of Acquirer and who assumes all of the
obligations of Acquirer hereunder, provided, further, in each such case that no
such assignment shall release Acquirer from its duties and obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.

            Section 6.4 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
(including, without limitation, fees and disbursements of counsel, financial
advisors and accountants) shall be borne by the party which incurs such cost or
expense.

            Section 6.5 Amendments. This Agreement may only be amended or
modified by an instrument in writing signed on behalf of each of the parties
hereto.

            Section 6.6 Waivers. At any time prior to the date hereof, the
Company, on the one hand, or Acquirer, on the other hand, may, to the extent
legally allowed, (a) extend the time specified herein for the performance of any
of the obligations or other acts of the other, (b) waive any inaccuracies in the
representations and warranties of the other contained herein or in any document
delivered pursuant hereto or (c) waive compliance by the other with any of the
agreements or covenants of such other party contained herein. Any such extension
or waiver shall be valid only if set forth in a written instrument signed on
behalf of the party to be bound thereby. No such extension or waiver shall
constitute a waiver of, or estoppel with respect to, any subsequent or other
breach or failure to strictly comply with the provisions of this Agreement. The
failure of either party to insist on strict compliance with this Agreement or to
assert any of its rights or remedies hereunder or with respect hereto shall not
constitute a waiver of such rights or remedies.

            Section 6.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated thereby is not affected in any manner
materially adverse to either party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as

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<PAGE>

possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.

            Section 6.8 Captions. The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.

            Section 6.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.

            Section 6.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Hong Kong, without regard to any
applicable principles of conflicts of law.

            Section 6.11 Limitations of Remedies. Neither party hereto shall be
liable to the other for indirect, special, incidental, consequential or punitive
damages claimed by such other party resulting from such first party's breach of
its obligations, agreements, representations or warranties hereunder, provided
that nothing hereunder shall preclude any recovery by an indemnified party
against an indemnifying party for third party claims.

         [The remainder of this page has been left blank intentionally.]

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            IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement as of the date first above written.

                              NEXMED INTERNATIONAL LIMITED

                              By:
                                  -------------------------------
                                  Y. Joseph Mo, Ph.D.
                                  Managing Director

                              NEXMED (ASIA) LIMITED

                              By:
                                  -------------------------------
                                  Y. Joseph Mo, Ph.D.
                                  Managing Director

                              VERGEMONT INTERNATIONAL LIMITED

                              By:
                                  -------------------------------
                                  Tsu-Huang Wu
                                  Managing Director

                                       13
<PAGE>

EXHIBIT A

                                    TERM NOTE

US $1,000,000                                               Date: March 22, 1999

      This Term Note is executed and delivered under and pursuant to the terms
of that certain Stock Purchase Agreement, dated as of the date hereof (as
amended, supplemented, restated or modified from time to time, the "Purchase
Agreement") by and among Vergemont International Limited, a Turks and Caicos
Islands corporation (the "Payor") with its principal place of business located
at Suite 2401-2408, 24F CITIC Tower, One Tim Mei Avenue, Central, Hong Kong and
NexMed International Limited, a British Virgin Islands corporation (the
"Payee"), with its principal place of business located at Room #2208 Windsor
House, 311 Gloucester Road, Causeway Bay, Hong Kong. Capitalized terms not
otherwise defined herein shall have the meanings provided in the Purchase
Agreement.

      FOR VALUE RECEIVED, Payor hereby promises to pay to the order of the
Payee, at its principal place of business located at Room #2208 Windsor House,
311 Gloucester Road, Causeway Bay, Hong Kong, or at such other place as the
Payee may from time to time designate to Payor in writing:

      (i) the principal sum of One Million U.S. Dollars (US$1,000,000.00) on
June 30, 2000; and

      (ii) interest (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid principal amount hereof beginning January 1, 2000 at a
rate of six percent (6%) per annum, payable quarterly, with the first such
interest payment date being on March 31, 2000 until the principal hereof shall
have been paid in full, and on the maturity date hereof. In no event, however,
shall interest exceed the maximum interest rate permitted by law.

      This Note is one of the Term Notes referred to in the Pledge Agreement and
is secured, inter alia, by the liens granted pursuant to the Pledge Agreement
and the Payee, is entitled to the benefits of the Pledge Agreement and is
subject to all of the agreements, terms and conditions therein contained.

      Upon the happening of any of the following events (each, an "Event of
Default"): any breach by the Payor of the Purchase Agreement or the Pledge
Agreement; any breach by the Payor of that certain License Agreement dated the
date hereof relating to certain of the Payee's proprietary products; the
dissolution of the Payor, the commencement by the Payor of a foreclosure
proceeding; the suspension of business by the Payor, the filing by the Payor of
a petition in bankruptcy, whether voluntary or involuntary; the filing by the
Payor of an application, whether voluntary or involuntary, for reorganization or
any arrangement or readjustment of indebtedness; the appointment by the Payor of
any receiver, trustee, liquidator or any committee; an assignment by the Payor
for the benefit of creditors; or the sending by the Payor of notice of an
intended bulk sale; any Event of Default described in the Pledge Agreement; the
Payor defaults in the payment of any principal of or interest on any Note to the

                                       14
<PAGE>

Payee when the same shall become due, whether by the terms thereof or otherwise
herein provided, and such default continues for five (5) days; then, in any such
event, this Note, if not then due, shall, at the option of the Payee or holder
hereof, become immediately due and payable without demand or notice and all
other debts or obligations of the Payor to the Payee, whether due or not due and
whether direct, indirect or contingent and howsoever evidenced, shall, at the
option of the Payee, also become immediately due and payable without demand or
notice.

      All rights and remedies of the Payee under applicable law and this Note
are cumulative and not exclusive. No single, partial or delayed exercise by the
Payee of any right or remedy shall preclude full and timely exercise by the
Payee at any time of any right or remedy of the Payee without notice. No waiver
shall be effective unless made specifically in writing by the Payee.

      The substantive laws of Hong Kong shall govern, without reference to its
choice of law rules, the validity, construction, enforcement and interpretation
of this Note.

      In any action or other legal proceeding relating to this Note, the Payor
(i) consents to the personal jurisdiction of any court located in Hong Kong,
(ii) waives objection to the laying of venue, (iii) waives personal service of
process, (iv) consents to service of process by registered or certified mail
directed to the Payor at the last address shown in the Payee's records relating
to this Note, with such service of process to be deemed completed five (5) days
after mailing and (v) WAIVES ANY RIGHT TO TRIAL BY JURY with respect to this
Note or to assert any counterclaim or setoff or recoupment with respect to this
Note. In any proceeding, a copy of this Note kept in the Payee's course of
business shall be admitted into evidence as an original.

      Payor expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind.

                              VERGEMONT INTERNATIONAL LIMITED

                              By:
                                 ---------------------------
                                 Tsu-Huang Wu
                                 Managing Director

                              NEXMED INTERNATIONAL LIMITED

                              By:
                                 ---------------------------
                                 Y. Joseph Mo, Ph.D.
                                 Managing Director

                                       15
<PAGE>

EXHIBIT B

                                    TERM NOTE

US $1,000,000                                               Date: March 22, 1999

      This Term Note is executed and delivered under and pursuant to the terms
of that certain Stock Purchase Agreement dated as of the date hereof (as
amended, supplemented, restated or modified from time to time, the "Purchase
Agreement") by and among Vergemont International Limited, a Turks and Caicos
Islands corporation (the "Payor") with its principal place of business located
at Suite 2401-2408, 24F CITIC Tower, One Tim Mei Avenue, Central, Hong Kong and
NexMed International Limited, a British Virgin Islands corporation (the
"Payee"), with its principal place of business located at Room #2208 Windsor
House, 311 Gloucester Road, Causeway Bay, Hong Kong. Capitalized terms not
otherwise defined herein shall have the meanings provided in the Purchase
Agreement.

      FOR VALUE RECEIVED, Payor hereby promises to pay to the order of the
Payee, at its principal place of business located at Room #2208 Windsor House,
311 Gloucester Road, Causeway Bay, Hong Kong, or at such other place as the
Payee may from time to time designate to Payor in writing, the principal sum of
One Million U.S. Dollars (US$1,000,000.00) on November 12, 1999;

      This Note is one of the Term Notes referred to in the Pledge Agreement and
is secured, inter alia, by the liens granted pursuant to the Pledge Agreement
and the Payee, is entitled to the benefits of the Pledge Agreement and is
subject to all of the agreements, terms and conditions therein contained.

      Upon the happening of any of the following events (each, an "Event of
Default"): any breach by the Payor of the Purchase Agreement or the Pledge
Agreement; any breach by the Payor of that certain License Agreement dated the
date hereof relating to certain of the Payee's proprietary products; the
dissolution of the Payor, the commencement by the Payor of a foreclosure
proceeding; the suspension of business by the Payor, the filing by the Payor of
a petition in bankruptcy, whether voluntary or involuntary; the filing by the
Payor of an application, whether voluntary or involuntary, for reorganization or
any arrangement or readjustment of indebtedness; the appointment by the Payor of
any receiver, trustee, liquidator or any committee; an assignment by the Payor
for the benefit of creditors; or the sending by the Payor of notice of an
intended bulk sale; any Event of Default described in the Pledge Agreement; the
Payor defaults in the payment of any principal of or interest on any Note to the
Payee when the same shall become due, whether by the terms thereof or otherwise
herein provided, and such default continues for five (5) days; then, in any such
event, this Note, if not then due, shall, at the option of the Payee or holder
hereof, become immediately due and payable without demand or notice and all
other debts or obligations of the Payor to the Payee, whether due or not due and
whether direct, indirect or contingent and howsoever evidenced, shall, at the
option of the Payee, also become immediately due and payable without demand or
notice.

                                       16
<PAGE>

      All rights and remedies of the Payee under applicable law and this Note
are cumulative and not exclusive. No single, partial or delayed exercise by the
Payee of any right or remedy shall preclude full and timely exercise by the
Payee at any time of any right or remedy of the Payee without notice. No waiver
shall be effective unless made specifically in writing by the Payee.

      The substantive laws of Hong Kong shall govern, without reference to its
choice of law rules, the validity, construction, enforcement and interpretation
of this Note.

      In any action or other legal proceeding relating to this Note, the Payor
(i) consents to the personal jurisdiction of any court located in Hong Kong,
(ii) waives objection to the laying of venue, (iii) waives personal service of
process, (iv) consents to service of process by registered or certified mail
directed to the Payor at the last address shown in the Payee's records relating
to this Note, with such service of process to be deemed completed five (5) days
after mailing and (v) WAIVES ANY RIGHT TO TRIAL BY JURY with respect to this
Note or to assert any counterclaim or setoff or recoupment with respect to this
Note. In any proceeding, a copy of this Note kept in the Payee's course of
business shall be admitted into evidence as an original.

      Payor expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind.

                              VERGEMONT INTERNATIONAL LIMITED

                              By:
                                  --------------------------
                                  Tsu-Huang Wu
                                Managing Director

                              NEXMED INTERNATIONAL LIMITED

                              By:
                                  --------------------------
                                  Y. Joseph Mo, Ph.D.
                                  Managing Director

                                       17
<PAGE>

EXHIBIT C

THE WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE THEREOF
HAVE BEEN ISSUED BY NEXMED, INC. (THE "COMPANY") PURSUANT TO REGULATION S,
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE
NOT BEEN REGISTERED UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE
ACCOUNT OF A "U.S. PERSON" (AS THAT TERM IS DEFINED IN REGULATION S) DURING THE
PERIOD COMMENCING ON THE EXERCISE OF THIS WARRANT CERTIFICATE AND ENDING ONE (1)
YEAR FOLLOWING EXERCISE OF THIS WARRANT CERTIFICATE (THE "RESTRICTED PERIOD").
THE COMPANY WILL NOTIFY THE TRANSFER AGENT OF THE DATE OF THE EXPIRATION OF SUCH
RESTRICTED PERIOD. FOLLOWING EXPIRATION OF THE RESTRICTED PERIOD, THESE
SECURITIES MAY NOT BE OFFERED OR SOLD UNLESS SUCH OFFER OR SALE IS REGISTERED OR
EXEMPT FROM REGISTRATION UNDER THE ACT.

                                     WARRANT
                           to Purchase Common Stock of
                                  NEXMED, INC.
                             Expiring June 30, 2000

      This Warrant certifies that Vergemont International Limited, or its
registered and permitted assigns (the "Holder"), is entitled to, subject to the
terms set forth below, subscribe for and purchase from NEXMED, INC., a Nevada
corporation (the "Company"), 2,000,000 (TWO MILLION) duly authorized, validly
issued, fully paid and non-assessable shares of the Company's common stock,
U.S.$.001 par value per share (the common stock, including any stock into which
it may be changed, reclassified, or converted, and as it may be adjusted
pursuant to Section 4(A) below, is herein referred to as the "Common Stock").
This Warrant is issued pursuant to the Regulation S Securities Subscription
Agreement dated ____________, by and among the Holder and the Company.

      This Warrant is subject to the following provisions, terms and conditions:

Section 1. Exercise of Warrant.

      To exercise this Warrant in whole or in part, the Holder shall deliver to
the Company at its principal office, (a) a written notice, in substantially the
form of the Exercise Notice appearing at the end of this Warrant, of the
Holder's election to exercise this Warrant, which notice shall specify the
number of shares of Common Stock to be purchased, (b) cash or a certified check
payable to the Company in an amount equal to the aggregate purchase price of the
number of shares of Common Stock being purchased, and (c) this Warrant. The
Company shall as promptly as practicable, and in any event within 15 days
thereafter, execute and deliver or cause to be executed and delivered, in
accordance with such notice, a stock certificate or certificates representing
the aggregate number of shares of Common Stock specified in such notice. The

                                       18
<PAGE>

stock certificate or certificates so delivered shall be in such denominations as
may be specified in such notice and shall be issued in the name of the Holder or
such other name as shall be designated in such notice. Such stock certificate or
certificates shall be deemed to have been issued and the Holder or any other
person so designated to be named therein shall be deemed for all purposes to
have become a holder of record of such shares immediately prior to the close of
business on the date such notice is received by the Company as aforesaid. If
this Warrant shall have been exercised only in part, the Company shall, at the
time of delivery of said stock certificate or certificates, deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
remaining shares of Common Stock called for by this Warrant, which new Warrant
shall in all other respects be identical to this Warrant, or, at the request of
the Holder, appropriate notation may be made on this Warrant and the same
returned to the Holder. The Company shall pay all expenses, taxes and other
charges payable in connection with the preparation, issue and delivery of such
stock certificates and new Warrants, except that, in case such stock
certificates or new Warrants shall be registered in a name or names other than
the name of the Holder, funds sufficient to pay all stock transfer taxes that
are payable upon the issuance of such stock certificates or new Warrants shall
be paid by the Holder at the time of delivering the notice of exercise mentioned
above.

      All shares of Common Stock issued upon the exercise of this Warrant shall
be validly issued, fully paid and non-assessable.

      The Company shall not be required upon any exercise of this Warrant to
issue a certificate representing any fraction of a share of Common Stock, but,
in lieu thereof, shall pay to the Holder cash in an amount equal to a
corresponding fraction (calculated to the nearest 1/100 of a share) of the
purchase price of one share of Common Stock as of the date of receipt by the
Company of notice of exercise of this Warrant.

Section 2. Terms and Conditions of Warrants.

      (A) Exercise Period. Each Warrant shall be exercisable at any time on or
after the date hereof (the "Exercise Date"), and shall expire at 5:00 p.m., New
York City time, on June 30, 2000 (the "Expiration Date").

      (B) Purchase Price. The purchase price per share of Common Stock shall be
US$2.50 if the Warrant is exercised on or prior to June 30, 1999 or US$3.00 if
the Warrant is exercised after June 30, 1999.

      (C) Payment of Purchase Price upon Exercise. The purchase price of the
Common Stock as to which a Warrant is exercised shall be paid to the Company at
the time of exercise in cash.

      (D) Transferability and Exercise of Warrants. This Warrant shall be
exercisable (a) only under circumstances such that the issue of Common Stock
issuable upon such exercise or conversion is exempt from the requirements of
registration under the Securities Act of 1933, as amended (the "1933 Act"), and
any applicable state securities law or (b) upon registration of such Common
Stock in compliance therewith. This Warrant and the Common Stock issuable upon
the exercise thereof shall only be transferable under circumstances such that
the transfer is

                                       19
<PAGE>

exempt from the requirements of registration under the 1933 Act and any
applicable state securities law. By acceptance hereof, the Holder agrees to
comply with such laws.

      (E) Investment Representation. The Holder, by acceptance hereof, (i)
hereby represents that he or she is an "Accredited Investor" under Rule 501(a)
of Regulation D promulgated under Section 4(2) of the 1933 Act, and (ii)
acknowledges that this Warrant and, to the extent not registered under the 1933
Act, any Common Stock purchased or acquired pursuant hereto is being or will be
acquired solely for the Holder's own account and not as a nominee for any other
party, and with a current investment intent and not with a view to distribution
thereof. The Holder (or any person acting under Sections 2(D) above) shall
deliver to the Company, at the time of any exercise of this Warrant or portion
thereof, a written representation that the shares of Common Stock to be acquired
upon such exercise are to be acquired for investment and not for resale or with
a view to the distribution thereof, and, if applicable, that he or she is the
original Holder of this Warrant. Delivery of such representation prior to the
delivery of any Common Stock issued upon exercise of a Warrant and prior to the
expiration of the Warrant period shall be a condition precedent to the right of
the Holder or such other person to purchase any Common Stock. In the event
certificates for Common Stock are delivered upon the exercise of this Warrant
with respect to which such an investment representation has been obtained, the
Company may cause a legend or legends to be placed on such certificates to make
appropriate reference to such representations and to restrict transfer in the
absence of compliance with applicable federal or state securities laws.

      (F) Absence of Default. The Holder may not exercise the Warrant if there
has been an Event of Default (as such term is defined therein) which has not
been cured prior to the exercise of this Warrant under the Term Notes dated
March 22, 1999 which have been issued by the Holder in favor of NexMed
International Limited pursuant to that certain Stock Purchase Agreement dated
March 22, 1999 between the Holder and NexMed International Limited.

Section 3. Transfer, Division and Combination.

      The Company agrees to maintain at its principal office books for the
registration and transfer of this Warrant, and, subject to the provisions of
Section 2(D) hereof, this Warrant and all rights hereunder are transferable, in
whole or in part, on such books at such office, upon surrender of this Warrant
at such office, together with a written assignment of this Warrant duly executed
by the Holder or his agent or attorney and funds sufficient to pay any stock
transfer taxes payable upon the making of such transfer. Upon such surrender and
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denominations specified in such
instrument of assignment, and this Warrant shall promptly be canceled. A Warrant
may be exercised by a new holder for the purchase of shares of Common Stock
without having a new Warrant issued. All of the provisions of this Section 3 are
subject to the provisions of Sections 2(D) above.

Section 4. General Provisions

      (A) Certain Adjustments. In the event of any change in the Common Stock by
reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination

                                       20
<PAGE>

or exchange of shares, or of any similar change affecting the Common Stock, the
number and kind of shares subject to this Warrant and the purchase price per
share thereof shall be appropriately adjusted consistent with such change in
such manner as the Board of Directors of the Company (the "Board") may deem
equitable to prevent substantial dilution or enlargement of the rights granted
to, or available for, the Holder hereunder. Any adjustment of this Warrant
pursuant to this Section 4(A) shall be made only to the extent not constituting
a "modification" within the meaning of Section 424(h)(3) of the Internal Revenue
Code of 1986, as amended from time to time, unless the Holder shall agree
otherwise. The Board shall give notice to the Holder of any adjustment made
pursuant to this Section 4(A) and, upon notice, such adjustment shall be
effective and binding for all purposes under this Warrant.

      (B) Merger or Consolidation. In case of any consolidation of the Company
with, or merger of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute or deliver to the Holder a
supplemental warrant agreement providing that the holder of each Warrant then
outstanding or to be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such warrant, the kind
and amount of shares of stock and other securities and property receivable upon
such consolidation or merger, by a holder of the number of shares of Common
Stock of the Company for which such warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments, which shall be
identical to the adjustments provided in Section 4. The above provisions shall
similarly apply to successive consolidations or mergers.

      (C) Taxes. The Company may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of all federal, state and
local taxes required by law to be withheld with respect to this Warrant,
including, but not limited to (i) deducting the amount required to be withheld
from any other amount then or thereafter payable to the Holder, and (ii)
requiring the Holder to pay to the Company the amount required to be withheld as
a condition of releasing Common Stock. In addition, subject to such rules and
regulations as the Board shall from time to time establish, the Holder shall be
permitted to satisfy federal, state and local taxes, if any, imposed upon the
issuance of Common Stock at a rate up to the Holder's maximum marginal tax rate
with respect to each such tax by (i) irrevocably electing to have the Company
deduct from the number of shares Common Stock otherwise deliverable upon
exercise of a Warrant such number of shares of Common Stock as shall have a
value equal to the amount of tax to be withheld, (ii) delivering to the Company
such portion of the Common Stock delivered upon exercise of the Warrant as shall
have a value equal to the amount of tax to be withheld, or (iii) delivering to
the Company such Common Stock or combination of Common Stock and cash as shall
have a value equal to the amount of tax to be withheld.

      (D) General Creditor Status. The Holder shall have no right, title, or
interest whatsoever in or to any investments, which the Company may make to aid
it in meeting its obligations hereunder. Nothing contained herein, and no action
taken pursuant hereto, shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Company and the Holder or any
other person. To the extent that any person or entity acquires a right to
receive

                                       21
<PAGE>

payments from the Company hereunder, such right shall be no greater than the
right of an unsecured general creditor of the Company.

      (E) No Liability of Board Members. The Holder of this Warrant agrees that
no member of the Board shall be personally liable by reason of any contract or
other instrument executed by such member or on his or her behalf in his or her
capacity as a member of the Board nor for any mistake of judgment made in good
faith.

Section 5. Covenant to Reserve Shares of Common Stock.

      The Company covenants and agrees that it will at all times reserve and set
apart and have, free from preemptive rights, a number of shares of authorized
but unissued Common Stock sufficient to enable it at any time to fulfill all its
obligations hereunder.

Section 6. Notices.

      In the event that:

            (a) the Company proposes to pay any dividend payable in stock (of
      any class or classes) or any obligations or stock convertible into or
      exchangeable for shares of Common Stock upon its Common Stock or make any
      distribution (other than ordinary cash dividends) to the holders of its
      Common Stock;

            (b) the Company proposes to grant to the holders of its Common Stock
      generally any rights or warrants (excluding any warrants granted to any
      employee, director, officer, contractor or consultant of the Company
      pursuant to any plan approved by the Board of Directors of the Company);

            (c) the Company proposes to effect any capital reorganization or
      reclassification of capital stock of the Company;

            (d) the Company proposes to consolidate with, or merge into, any
      other Company or to transfer its property as an entirety or substantially
      as an entirety; or

            (e) the Company proposes to effect the liquidation, dissolution or
      winding up of the Company,

then the Company shall cause notice of any such intended action to be given to
the holder of this Warrant not less than 30 days before the date on which the
transfer books of the Company shall close or a record shall be taken for such
stock dividend, distribution or granting of rights or Warrants, or the date when
such capital reorganization, reclassification, consolidation, merger, transfer,
liquidation, dissolution or winding up shall be effective, as the case may be.

      Any notice or other document required or permitted to be given or
delivered to the holder of this Warrant shall be delivered by facsimile
transmission, reliable courier or first-class mail postage prepaid to the holder
of this Warrant at the last address shown on the books of the

                                       22
<PAGE>

Company maintained for the registry and transfer of this Warrant. Any notice or
other document required or permitted to be given or delivered to holders of
record of Common Stock issued pursuant to this Warrant shall be delivered by
facsimile, reliable courier or first-class mail postage prepaid to such holder
at such holder's address as the same appears on the stock records of the
Company. Any notice or other document required or permitted to be given or
delivered to the Company shall be delivered by facsimile transmission, reliable
courier or first-class mail postage prepaid to the principal office of the
Company or delivered to the office of one of the Company's executive officers at
such address, or such other address as shall have been furnished by the Company
to the holders of record of this Warrant and the holders of record of such
Common Stock.

Section 7. Limitation of Liability; Not Shareholders.

      No provision of this Warrant shall be construed as conferring upon the
Holder the right to vote or to consent or to receive dividends or to receive
notice as a shareholder in respect of meetings of shareholders for the election
of directors of the Company or any other matter whatsoever as shareholders of
the Company. No provision hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of Holder
for the purchase price or as a shareholder of the Company, whether such
liability is asserted by the Company, creditors of the Company or others.

Section 8. Loss, Destruction, etc, of Warrant.

      Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of this Warrant, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of this Warrant, the Company
will make and deliver a new Warrant, of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant. Any Warrant issued under the provisions
of this Section 8 in lieu of any Warrant alleged to be lost, destroyed or
stolen, or of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.

Section 9. Amendments.

      Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally or in writing, provided that any term of this
Warrant may be amended or the observance of such term may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Company and the holders of the
Warrants that are exercisable for a number of shares of Common Stock that
represent in the aggregate at least a majority of the total number of shares of
Common Stock for which all of the Warrants are then exercisable (whether or not
the holder of this Warrant consents).

                                       23
<PAGE>

Section 10. Governing Law and Consent to Jurisdiction.

      This Warrant shall be governed by the laws of the State of New York
without regard to its conflict of laws, principles or rules. This Warrant shall
be deemed to have been executed and delivered at and shall be deemed to have
been made in New York, New York.

      Any legal action, suit or proceeding arising out of or relating to this
Warrant may only be instituted in any federal court of the Southern District of
New York or any state court located in New York County, State of New York, and
the Company agrees not to assert, by way of motion, as a defense or otherwise,
in any action, suit or proceeding, any claim that it is not subject personally
to the jurisdiction of such courts, that the action, suit or proceeding if
brought in such courts, would be an inconvenient forum, that the venue of the
action, suit or proceeding, if brought in any of such courts, is improper or
that this Warrant or the subject matter may not be enforced in or by such courts
on jurisdictional grounds.

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its duly authorized officer.

Dated: ___________, 1999

                              NEXMED, INC.

                              By:
                                  -----------------------------
                                  Y. Joseph Mo, Ph.D.
                                  President & CEO

                                       24
<PAGE>

                                 EXERCISE NOTICE

      The undersigned, the Holder, hereby elects to exercise purchase rights
represented by such Warrant for, and to purchase thereunder, ____________ shares
of the Common Stock covered by such Warrant and herewith makes payment in full
therefor of US$_________ cash and/or by cancellation of US$__________ of
indebtedness of the Company to the Holder hereof and requests that, subject to
the terms and conditions of the Warrant, certificates for such shares (and any
securities or property deliverable upon such exercise) be issued in the name of
and delivered to ______________________ whose address is
_______________________________________, and whose social security or employer
identification number is ____________.

      The undersigned agrees that, in the absence of an effective registration
statement with respect to Common Stock issued upon this exercise, the
undersigned is acquiring such Common Stock for the Holder's own account and not
as a nominee for any other party, for investment and not with a view to
distribution thereof and that the certificate or certificates representing such
Common Stock may bear a legend substantially as follows:

      THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
      THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
      APPLICABLE STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR
      TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
      UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE
      SHARES MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS
      WARRANT CERTIFICATE, AND NO TRANSFER OF THESE SHARES SHALL BE VALID OR
      EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.

      In addition, the undersigned agrees that, in the absence of an effective
registration statement with respect to Common Stock issued upon this exercise,
stop transfer instructions will be entered on the Company's stock transfer
records with respect to Common Stock issued upon this exercise.

Dated:
                                          ---------------------------
                                          Signature

                                       25
<PAGE>

EXHIBIT D

                         Vergemont International Limited
                                 Suite 2401-2408
                                24F, CITIC Tower
                               One Tim Mei Avenue
                               Central, Hong Kong

March 22, 1999

Y. Joseph Mo, Ph.D
NexMed International Limited
Room 2208, Windsor House
311 Gloucester Road
Causeway Bay, Hong Kong

Dear Dr. Mo,

            Vergemont International Limited ("the "Company") would like to
retain your services as a consultant to the Company following the consummation
of the transactions contemplated by that certain Stock Purchase Agreement, (the
"Purchase") dated the date hereof between the Company and NexMed International
Limited ("NexMed") on the terms set forth in this letter. You have served as a
key executive of NexMed and its subsidiaries, and through such service, have
acquired special and unique knowledge, abilities and expertise that would be
valuable to the Company during its transition period following the Purchase.

            The Company wishes you to advise its Board of Directors, executives
and other key employees on all aspects of its business, and to continue serving
as the Legal Representative of NexMed Pharmaceuticals (Zhongshan) Ltd.,
following the Purchase for a period of twelve (12) months from the date hereof
(the "Consulting Period"). During the Consulting Period, you will make your
services available to the Company for up to five (5) days each quarter and the
Company will reimburse you for all of your reasonable out of pocket expenses in
connection with your providing such services. Additionally, should any executive
or key employee request that you travel on behalf of the Company, the Company
will reimburse you for all reasonable travel expenses; provided, however, that
you not be required to travel more than one (1) time during any quarterly
period. The Company further agrees that any such travel shall be arranged at
such time(s) as are mutually convenient to both you and the Company.

            During the Consulting Period, we agree to indemnify and hold
harmless NexMed including its parent company and subsidiaries, and their
officers, directors, employees, shareholders, representatives and agents from
and against any and all losses, liabilities, claims, damages, deficiencies,
costs and expenses including reasonable attorney's fees, based upon, arising out
of, or otherwise in respect of your performance of any services hereunder
approved by us. The foregoing indemnification provisions shall survive the
expiration or earlier termination of this agreement.

                                       26
<PAGE>

            If you are in agreement with the foregoing terms, kindly execute
this letter below and return it to the undersigned.

                                   Sincerely,

                                   Vergemont International Limited

                                   By:
                                       -------------------------------
                                       Tsu-Huang Wu
                                       Managing Director

AGREED AND ACCEPTED

----------------------------
Y. Joseph Mo, Ph.D.
Managing Director
NexMed International Limited

                                       27Exhibit 10.7

                                LICENSE AGREEMENT

      This License Agreement ("Agreement"), entered into as of this 22nd day of
March, 1999 by and between NexMed International Limited, a British Virgin
Islands corporation, with a principal place of business at Suite 2208, 22/F,
Windsor House, 311 Gloucester Road, Hong Kong ("NexMed") and Vergemont
International Limited, a company organized under the laws of Turks & Caicos
Islands with a principal place of business at Suite 2401-2408, 24F, CITIC Tower,
One Tim Mei Avenue, Central, Hong Kong ("Vergemont").

      WHEREAS, NexMed is a medical and pharmaceutical technology company with a
focus on the development and commercialization of, among other things, topical
treatment products based on a penetration enhancement technology; and

      WHEREAS, NexMed has developed and is the proprietary owner of the NexMed
Know-How (as defined below) relating to the use of Penetration Enhancement
Ingredients in conjunction with Compounds A, B,C,D (as defined below); and

      WHEREAS, Vergemont desires to secure certain rights with respect to
making, using and selling certain products incorporating such Know-How.

      NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, Vergemont and NexMed agree as follows:

I. DEFINITIONS

      1.01 "Affiliate" shall mean, with respect to either party, any individual
or any legally-distinct corporation, firm or other form of business
organization, which directly or indirectly owns, controls, is controlled by, or
is under common control with, a party hereto. An entity shall be regarded as
being in control of another entity if the former entity has the direct or
indirect power to order or cause the direction of the policies of the other
entity, whether through ownership of fifty percent (50%) or more in the United
States or thirty percent (30%) or more outside the United States of the
outstanding voting securities of that entity, through other dominant equity
ownership, or by contract, statute, regulation, or otherwise.

      1.02 "Agreement Year" shall mean the twelve month period ending on an
anniversary of the Approval Date.

      1.03 "Application for Approval" shall mean all submissions related to
investigational use of the Licensed Products (such as an IND for the Licensed
Products filed with the FDA or the equivalent filing with a Regulatory Authority
in the Territory) and all submissions related to marketing approval (such as an
NDA or equivalent filing).

      1.04 "Clinical Trials Program" shall have the meaning set forth in Section
3.02 hereof.
<PAGE>

      1.05 "Combination Product" shall have the meaning set forth in Section
4.03 hereof.

      1.06 "Compound A" shall mean alprostadil, "Compound B" shall mean
acyclovir, "Compound C" shall mean ketoprofen, and Compound D shall mean
vitamins A/C/E.

      1.07 "Dollars" means lawful currency of the United States of America.

      1.08 "Exclusive" shall mean, when used in connection with a specific grant
of a license hereunder, that (except to the extent such rights are specifically
retained herein) the granting party shall have no further right in the
Territory, for so long as such grant remains effective, to manufacture, sell or
use the Licensed Products or to grant to third parties any license in connection
with the manufacture, use or sale of the Licensed Products in the Territory.

      1.09 "FDA" shall mean the United States Food and Drug Administration or
any successor Regulatory Authority in the United States.

      1.10 "Field" shall mean the development and commercialization of
therapeutic products based on proprietary delivery systems including topical
treatment products based on a penetration enhancement technology which may
enable the active drug/ingredient to be better absorbed through the skin.

      1.11 "Indication for Use" shall be for use as NexMed and Vergemont may
agree.

      1.12 "IND" (Investigational New Drug Application) means an application for
an "Investigational Exemption for a New Drug" filed with a Regulatory Authority
(as defined below).

      1.13 "Know-How" shall mean any and all technical data, drawings,
documentation, and other information, including information disclosed in an
issued patent or patent application. Know-How relating to the Field, which is
owned by NexMed as of the date hereof or is independently generated, acquired or
licensed, with the right to sublicense, by NexMed during the term of this
Agreement is referred to herein as "NexMed Know-How."

      1.14 "NDA" (New Drug Application) shall mean an application submitted to a
Regulatory Authority, which contains all necessary details of the manufacture
and testing of a new drug, for purposes of obtaining regulatory approval to
market such new drug in such country or region, for a particular indication.

      1.15 "Net Sales" shall mean the gross amount invoiced by Vergemont or any
sublicensee of Vergemont for arm's-length sales of Licensed Products to a third
party or parties which are not Affiliates of Vergemont, after deducting, if not
already deducted in the actual amount invoiced, normal and customary trade
discounts actually allowed, returns and credits. No deduction from the invoice
price shall be taken for any other costs, including taxes, transportation,
insurance and postage charges, in computing Net Sales except that separately
billed or invoiced transportation costs, sales taxes and value added taxes shall
not be included in the computation of Net Sales.

      1.16 "Licensed Products" shall mean five (5) pharmaceutical formulations
which include an alprostadil cream for male erectile dysfunction, an alprostadil
cream for female sexual dysfunction,

                                       2
<PAGE>

an acyclovir anti-viral cream for herpes simplex, a ketoprofen or non-steroid
anti-inflammatory drug, (NSAID) containing cream, and a vitamins A/C/E
equivalent cream, either now known or hereafter developed which utilizes or
incorporates NexMed Know-How and which is/are intended and promoted for
treatment of the Indication for Use in humans.

      1.17 "Licensed Period" shall mean the ten- (10) years following the
approval of each of the Licensed Products in each country of the Territory.

      1.18 "Other Item" shall mean a physiologically constituent or product sold
together with a Licensed Product in the same preparation.

      1.19 "Person" shall mean any individual, estate, trust, partnership, joint
venture, association, firm, corporation, company, or other legal entity.

      1.20 "Pre-Clinical Development Program" shall have the meaning set forth
in Article II hereof.

      1.21 "Penetration Enhancement Ingredient" shall mean all ingredients
either now known or hereafter developed by NexMed or using NexMed Know-How that
enhances the performance and absorption of Compounds A,B,C and D.

      1.22 "Proprietary Information" shall have the meaning set forth in Section
3.04(a) hereof.

      1.23 "Reimbursement Price" shall mean the price for the Licensed Products
as approved by the local governments in the Territory.

      1.24 "Regulatory Authority" shall mean the agency, if any, of the national
government within the Territory with which the Licensed Products must be
registered or by which the Licensed Products must be approved prior to
manufacture, use or sale in the Territory.

      1.25 "Sale" or "Sold" shall mean the transfer for value (cash and/or
otherwise) in an arm's-length transaction of a Licensed Products in the
Territory by Vergemont, Vergemont Affiliate, or Vergemont sublicensee to a
nonaffiliated third-party distributor, agent or end user after obtaining all
necessary government approvals applicable to such sale. Sales shall be accounted
for when shipped, and credits and refunds shall be accounted for when booked by
Vergemont in accordance with Vergemont's standard accounting practices.

      1.26 "Territory" shall mean countries in Asia, (i.e., Bangladesh, Burma,
Cambodia, China, India, Japan, Korea, Indonesia, Kazakhstan, Kyrgyzstan, Laos,
Malaysia, Mongolia, Pakistan, the Philippines, Singapore, Taiwan, Tajikistan,
Thailand, Turkmenistan, Uzbakistan, and Vietnam), as well as Australia and New
Zealand.

                                       3
<PAGE>

II. PRE-CLINICAL DEVELOPMENT PROGRAM

      2.01 Funding of Pre-Clinical Studies. Pursuant to the terms and conditions
contained herein, Vergemont shall pay for the total costs of pre-clinical and
other development programs in the Territory for the Licensed Products (such
programs hereinafter collectively referred to as the "Pre-Clinical Development
Program", even though they may continue during the period of clinical trials).
Such costs shall include all costs incurred by NexMed upon the demand of service
requested by Vergemont, including but not limited to all costs of developing the
drug master file included in the Pre-Clinical Development Program, costs of
developing good manufacturing practices for the Licensed Products, costs of
manufacturing initial quantities of the Licensed Products for clinical trials,
the costs of all necessary animal studies and trials and the costs of any other
development work.

      2.02 Transfer of Pre-Clinical Data. NexMed shall provide Vergemont the
results of studies and data generated that are currently available and later
available from prior, ongoing or future studies undertaken by NexMed.

III. CLINICAL TRIALS AND REGULATORY APPROVALS

      3.01 Funding of Regulatory Approvals.

            (a) Vergemont shall be responsible for obtaining regulatory
approvals for investigational use and marketing of the Licensed Products from
the Regulatory Authorities in the Territory and shall use its best efforts to
conduct all pre-clinical and clinical trials as rapidly as possible and to seek
all necessary regulatory approvals for Compound A, and for Compounds B,C, and D
when available. Vergemont shall pay or cause the payment of all costs and
expenses necessary to obtain each such approval, including all costs of human
clinical trials and all costs of filing each Application for Approval.

            (b) Upon determination by NexMed that sufficient data has been
compiled to permit filing of an Application for Approval for the Licensed
Products in the Territory, Vergemont shall promptly prepare and file such
Application for Approval with the Regulatory Authority in the Territory. Each
Application for Approval filed by Vergemont shall be filed in the name of
Vergemont. Vergemont shall supply to NexMed for approval, not less than 30 days
prior to filing, copies of every Application for Approval to be filed and each
document submitted in connection therewith. Vergemont shall also provide
evidence of filing within 30 days thereafter, and Vergemont will keep NexMed
informed regarding the status of each such application. NexMed shall wherever
practical be given notice of, and a right to participate in, all meetings and
discussions with Regulatory Authorities.

      3.02 Clinical Trials. Unless otherwise specifically agreed by the parties,
Vergemont shall conduct, manage and pay for all clinical trials. Such clinical
trials shall hereinafter be referred to as the "Clinical Trials Program".

      3.03 Grant and Term of Licenses.

            (a) NexMed hereby grants to Vergemont the Exclusive right and
license (including

                                       4
<PAGE>

the right to grant sublicenses) to make, have made, use and sell the Licensed
Products solely for human therapeutic uses throughout the Territory, as and to
the extent such activities are permitted to be conducted in the Territory.

            (b) Subject to the provisions of Section 4.05 hereof and Article VII
(Term and Termination), the grant of rights by NexMed to Vergemont hereunder
with respect to the Licensed Products shall continue in the Territory for the
entire term of the Agreement. At the end of the term and upon full payment of
its royalty payments, Vergemont shall then own the respective Licensed Products.

            (c) Vergemont shall be entitled to grant sublicenses during the
Licensing Period.

      3.04 Availability of Information. Subject always to the obligations set
forth in Article V herein to maintain such information confidential, so long as
this Agreement remains in effect,

            (a) all Know-How and all other information and materials related to
the development, manufacture, sale or use of a Licensed Products ("Proprietary
Information") shall be furnished by each party to the other, and significant
technical and other data and submissions shall furnished in the English
language; and

            (b) all Proprietary Information shall be owned by NexMed and where
developed by Vergemont and its Affiliates, shall be assigned by Vergemont to
NexMed. All Proprietary Information shall be made equally available to each of
the parties, subject to any obligation by which a party is contractually bound
at the time of acquiring Proprietary Information from a third party, not to
disclose such Proprietary Information.

      3.05 Diligent Efforts. Upon filing of any Application for Approval with
any Regulatory Authority to make, use or sell the Licensed Products in the
Territory, Vergemont shall use diligent, good faith, commercially reasonable
efforts (including, where appropriate, conducting, or causing to be conducted,
clinical trials) to obtain regulatory approvals and, once obtained, to
commercially exploit the Licensed Products.

IV. LICENSE FEE AND ROYALTY PAYMENTS

      4.01 Royalty Payments; Rate. [*] percent royalties on Net Sales shall be
paid by Vergemont to NexMed within thirty (30) business days after the end of
each calendar quarter in which such Net Sales are made. All payments shall be
accompanied by a statement, certified to be accurate by Vergemont, of Net Sales
of the Licensed Products by Vergemont and each of its Affiliates and permitted
sublicensees during the preceding calendar quarter on a country by country

[*] WE HAVE REQUESTED CONFIDENTIAL TREATMENT FOR THIS PORTION OF THE AGREEMENT,
WHICH PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

                                       5
<PAGE>

basis. Such statements shall show all royalties paid since the commencement of
the current Agreement Year, the quantity, description and gross sales price,
itemized deductions from gross sales price and net sales price of each Licensed
Products that was distributed and/or sold by Vergemont and each of its
Affiliates and sublicensees during the preceding calendar quarter and the amount
of royalty due. Such statements shall be furnished to NexMed by Vergemont
whether or not any Licensed Products has been sold during the calendar quarter
in which such statements are due on a country by country basis.

      4.02 Combination Products. Licensed Products may be sold in combination
with any Other Item. Vergemont must notify NexMed within thirty (30) days of the
launch of Combination Products. The invoice price of such Combination Product
shall be set by Vergemont in good faith, and Net Sales of the Licensed Products
included in the Combination Product shall be determined using the following
formulae:

            (a) If the Licensed Products and Other Items contained in the
combination are available separately, the Net Sales for purposes of calculating
royalty payments will be the result obtained by multiplying the Net Sales of the
Combination Product by the fraction A/A+B, where A is the invoiced price of the
Licensed Products in the Combination Product, and B is the invoiced price of all
Other Items in the Combination Product.

            (b) If the Combination Product includes Other Items which are not
sold separately (but the Licensed Products contained in the Combination Product
is available separately), the Net Sales for purposes of calculating royalty
payments will be the result of multiplying the Net Sales of the Combination
Product by the fraction A/C, where A is as defined above and C is the invoiced
price of the Combination Product.

            (c) If neither the Licensed Products nor the Other Items contained
in the Combination Product are sold separately, or if only the Licensed Products
is not sold separately, Vergemont shall, in good faith, propose the percentage
of the revenue from such Combination Product that is attributable to the
Licensed Products. Unless Vergemont receives written objection from NexMed to
such proposal within 45 days following NexMed's receipt of such proposal, then
the revenue so attributed to the Licensed Products shall be the Net Sales for
the purposes of Section 4.02 hereof. In the event NexMed objects to Vergemont's
proposal, Vergemont and NexMed agree to negotiate in good faith to reach a
mutually acceptable determination of the percentage and Vergemont shall not
market such Combination Product unless and until such a determination is
reached.

      4.03 Withholdings. All amounts of royalties payable by Vergemont pursuant
to this Section 4.03 shall be paid in Dollars without deducting therefrom any
tax, duty, charge, conversion or remittance fee, commission, discount or other
fee payable in respect of such royalty payment, other than taxes specified in
the next following sentence. Any and all taxes levied by a proper taxing
authority required to be withheld by Vergemont or its sublicensees on account of
royalties accruing to NexMed under this Agreement may be deducted from such
royalty payment provided that (i) such amount is promptly paid for and on behalf
of NexMed to the appropriate tax authorities, and (ii) Vergemont furnishes
NexMed with official tax receipts or other appropriate evidence of payment
issued by the appropriate tax authorities. If any tax, however denominated
(other than a withholding tax on Vergemont or sublicensee royalties), is levied
against NexMed solely because of the presence of a Vergemont facility or because
Vergemont is doing business in the Territory, then Vergemont shall pay such tax
without deduction from such royalty payment. Receipt or acceptance by NexMed of
any statement furnished pursuant to this Agreement or of any sum paid hereunder
(or the cashing of any royalty checks paid hereunder) shall not preclude NexMed
from questioning the correctness thereof at

                                       6
<PAGE>

any time, and in the event that any inconsistency or mistake (including the
improper withholding of tax) is discovered in such statements or payments, it
shall immediately be rectified and the appropriate payment made by Vergemont.

      4.04 Exploitation of the Licensed Products. Vergemont agrees to promote,
exploit and market the Licensed Products (where appropriate regulatory approval
has been obtained) through its manufacturing, marketing and sales activities,
using good faith, diligent, commercially reasonable efforts, as more
specifically set forth herein.

      4.05 Non-Dollar Sales. For purposes of determining the amount of royalties
due on Net Sales pursuant to Section 4.01 hereof, where Vergemont or any
sublicensee receives payment in a currency other than Dollars, the amount of Net
Sales in such currency shall be converted into Dollars at the prevailing
commercial rate of exchange for purchasing Dollars with such foreign currency as
quoted by Citibank, N.A. in New York on the last business day of the calendar
quarter for which the relevant royalty payment is to be made by Vergemont.

      4.06 Records. Vergemont shall (and shall cause, its Affiliates and
sublicensees to keep complete and accurate books and records relating to their
respective sales of the Licensed Products, in sufficient detail to allow the
royalties accruing hereunder to be accurately determined. Each of such persons
shall preserve such books and records for a period of six years following the
date of any statement delivered hereunder. NexMed (or its duly authorized
representatives) shall have the right at its own expense from time to time
during the term of this Agreement until the expiration of said six-year period
to inspect the relevant records of Vergemont or such Affiliate or sublicensee in
order to verify such report or statement. Vergemont and such Affiliate or
sublicensee shall make its records available for such inspection during regular
business hours at such place or places where such records are customarily kept,
upon reasonable notice from NexMed to the extent reasonably necessary to verify
the accuracy of the reports and payments required hereunder. NexMed agrees to
hold strictly confidential all such records and information, other than the
total amounts of royalties paid, and all information learned in the course of
any audit or inspection hereunder, except to the extent that it is necessary for
NexMed to reveal such information order to enforce any rights it may have under
this Agreement or if disclosure is required by law (subject to the restrictions
on publicity without consent set forth under the provisions of Section 5.02
hereof). The failure of NexMed to request verification of any report or
statement during said six-year period shall be considered acceptance of the
accuracy of such report. If the audit reveals an error in NexMed's favor which
is greater than five percent (5%) of the amount of royalties due to NexMed
specified on a particular report or statement, the reasonable cost of such
examination shall be borne by Vergemont or such Affiliate or sublicensee.

      4.07 Late Payments. Except as otherwise determined under Section 4.02
hereof, any amount which is not paid when due hereunder shall bear interest in
Dollars at the published prime rate of Citibank, N.A., New York, New York as in
effect from time to time plus three percent.

V. CONFIDENTIALITY

      5.01 Information Sharing; Confidentiality.

            (a) During the term of this Agreement, each party shall promptly
furnish (and shall

                                       7
<PAGE>

cause its Affiliates and/or sublicensees, if any, promptly to furnish) to the
other any information concerning safety or utility of the Licensed Products,
including adverse or unexpected side effects, injury or other events associated
with uses, studies, investigations or tests of the Licensed Products, whether or
not such party is required to report such events to regulatory authorities and
whether or not such event is determined to be attributable to the Licensed
Products.

            (b) Vergemont recognizes that the Proprietary Information
constitutes highly valuable, proprietary, confidential information. Vergemont
agrees that during the term of this Agreement and thereafter it will keep
confidential, and will cause its Affiliates, officers, employees, consultants,
agents and sublicensees to keep confidential, all Proprietary Information.
Vergemont shall not disclose, or permit any of its Affiliates, officers,
employees, consultants, agents and sublicensees to disclose, Proprietary
Information to any other Person nor use the same for any purpose except as set
forth in this Section 5.01 or as otherwise expressly permitted in this Agreement
or in a separate written agreement with the other party or as reasonably
required in good faith for the registration and commercialization of the
Licensed Products.

            (c) Vergemont agrees that any dissemination of Proprietary
Information to any of its Affiliates or sublicensees or to any officer,
employee, consultant or agent of it or any of its Affiliates or sublicensees
shall be made only if necessary to carry out the purposes set forth herein and
shall be limited to the maximum extent possible consistent with such purposes.
Vergemont shall take such action, and will cause its Affiliates, sublicensees,
and their respective officers, employees, consultants and agents to take such
action, to preserve the confidentiality of the Proprietary Information as it
would customarily take in order to preserve the confidentiality of other
valuable proprietary information owned by it, including advising all such
Persons of the confidentiality obligations set forth herein.

            (d) The restrictions contained in paragraphs (b) and (c) of this
Section 5.01 shall not apply to any Proprietary Information that:

                  (i) is, at the time of its disclosure to Vergemont, generally
available to the public or otherwise part of the public domain or, as evidenced
by written records of Vergemont, is otherwise previously known to Vergemont;

                  (ii) becomes generally available to the public or otherwise
part of the public domain after its disclosure to Vergemont through no act or
omission of Vergemont or any other person owing an obligation of confidentiality
to either party hereto; or

                  (iii) is required to be disclosed by any court or governmental
agency having proper jurisdiction, provided that NexMed is first given an
adequate opportunity to seek a protective order or similar limits on further
disclosure.

      5.02 Publicity. Neither party shall make any disclosure regarding the
existence of this Agreement nor the research hereunder except with the prior
consent of the other party to the text of the proposed disclosure, which consent
shall not be unreasonably withheld, unless the failure to make such disclosure
would (in the opinion of counsel to the disclosing party) place such party in
violation of applicable law, in which case prior notice of such disclosure shall
be given to the other party to the extent reasonably possible.

                                       8
<PAGE>

      5.03 Publication. The parties recognize the traditional right of all
scientists to publish and present promptly the results of their research.
Notwithstanding anything to the contrary contained in this Article V, the
results obtained in the course of the Pre-Clinical Development Program or the
Clinical Trials Program may be submitted for publication by Vergemont, but only
following notice to and approval by NexMed in its sole discretion. Vergemont
shall not publish information without first providing NexMed with at least
thirty (30) days prior notice of all results and information intended to be
published. NexMed shall act as expeditiously as practicable following such
notice, and shall notify Vergemont promptly of its determination. If NexMed does
not approve such publication, such results and information shall continue to be
subject to the other provisions of this Article V.

VI. MANUFACTURE AND SUPPLY

      6.01 Right to Manufacture. Subject to the limitations contained in
Sections 3.03 and 6.02 hereof, Vergemont shall have the Exclusive right (with
the right to grant sublicenses) to manufacture in finished form the Licensed
Products in the Territory. Vergemont shall comply with the requirements, good
manufacturing practices and specifications for the manufacture and use of such
Licensed Products promulgated by the Regulatory Agency in the Territory where
such Licensed Products is to be manufactured or sold.

      6.02 Component Supply. Notwithstanding the rights granted in Section 6.01,
NexMed shall have the exclusive right to manufacture and sell to Vergemont in
the Territory certain ingredients of the Licensed Products. NexMed shall sell to
Vergemont and Vergemont shall purchase exclusively from NexMed the Penetration
Enhancement Ingredients for the manufacture of the Licensed Products as
identified in Appendix A at a price equal to NexMed's full costs associated with
production of the Penetration Enhancement Ingredient plus [*]% thereof.

      6.03 Changes in Regulations. Each party shall promptly and fully advise
the other of any new regulations, instructions or specifications required by any
Regulatory Authority in the Territory of which such party becomes aware.
Vergemont agrees that the Licensed Products will, upon delivery to the carrier
designated by customers, be in conformity with said product regulations,
instructions and specifications and will not be adulterated or misbranded.

[*] WE HAVE REQUESTED CONFIDENTIAL TREATMENT FOR THIS PORTION OF THE AGREEMENT,
WHICH PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

                                       9
<PAGE>

      6.04 Quality Disputes. NexMed shall have the right to inspect the
manufacturing facilities of Vergemont and review Vergemont's procedures and to
take samples of the Licensed Products manufactured by Vergemont. If Vergemont
becomes aware that any quantity of a Licensed Products does not comply with
Sections 6.01 or 6.03 hereof, Vergemont shall promptly notify NexMed thereof.
NexMed shall be provided a sample of the suspect Licensed Products upon request.
Within sixty (60) days of receipt thereof, NexMed shall report to Vergemont in
writing of the fact and extent of the non-compliance. Vergemont shall have sixty
(60) days from the receipt of said report to replace the non-complying Licensed
Products by shipping replacement products which are in compliance with Sections
6.01 and 6.03, or to report that it considers that the original Licensed
Products did comply with Sections 6.01 and 6.03, in which case the parties shall
use their best efforts to resolve any dispute.

VII. TERM AND TERMINATION

      7.01 Term.

            (a) The term of this Agreement shall commence on the date hereof and
shall continue, unless terminated in accordance with the subsequent paragraphs
of this Article VII, for a period of ten (10) years following the Approval Date
of each Licensed Product in each country of the Territory.

            (b) Vergemont may relinquish any or all of the rights granted to it
hereunder to make, sell or use a Licensed Products in the Territory at any time,
by giving to NexMed written notice of its desire to do so at least 180 days
prior to the date on which Vergemont desires such right to be terminated. Such
relinquishment will not release Vergemont from any obligation to make payments
that have accrued prior to the effective date of relinquishment of such rights
and Vergemont shall have no right to seek reimbursement of any amounts paid
prior to such relinquishment. All rights relinquished with respect to the
Territory will return exclusively to NexMed.

      7.02 Events of Termination. If any of the following events shall occur and
be continuing, such event shall constitute an event of termination ("Event of
Termination"):

            (a) If any representation or warranty by a party hereto contained in
this Agreement shall prove to have been incorrect in any material respect when
made or deemed made.

            (b) If a party shall fail to pay any amount when due for a
particular Licensed Product hereunder or shall otherwise default in any material
respect in the performance or observance of any term, covenant or provision
contained in this Agreement or any of the other documents or instruments
delivered pursuant to, or concurrently with, this Agreement, and any such other
default shall remain unremedied for 60 days after written notice thereof to the
defaulting party from any other party with a copy to the other party. The
foregoing notwithstanding, no such other default shall constitute an Event of
Termination until 90 days after such notice, if the defaulting party shall
undertake throughout such 90-day period a reasonably diligent effort to remedy
such failure, provided, however that if by its nature such failure cannot be
cured, such failure shall constitute an Event of Termination immediately upon
occurrence.

            (c) If this Agreement shall, at any time hereafter and for any
reason, cease to be in full force and effect, or shall be declared null and
void, or the validity or enforceability of this Agreement shall be successfully
contested by a party hereto or successfully contested by any other Person.

            (d) Because each party acknowledges that the services to be rendered
by the other are personal in nature, inasmuch as the respective capabilities of
the parties hereto are uniquely valuable, and that the determination to enter
into this Agreement was based upon the unique ability of the other party to
fulfill its respective obligations hereunder, if

                  (i) such party shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, petition or apply to any tribunal for
the appointment of a custodian, receiver or

                                       10
<PAGE>

any trustee for it or a substantial part of its assets, or shall commence any
proceeding under any bankruptcy, reorganization in bankruptcy or the equivalent,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect;

                  (ii) there shall have been filed any such petition or
application against such party, or any such proceeding shall have been commenced
against it, in which an order for relief is entered or which remains undismissed
for a period of 30 days or more; or

                  (iii) such party by any act or knowing failure to act shall
indicate its consent to, approval of or acquiescence in, any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or any trustee for it or any substantial part of any of its properties,
or shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of 30 days or more.

            (e) Breach of the Stock Purchase Agreement of 3/22/99 (Appendix C
hereto).

      7.03 Termination.

            (a) Upon the occurrence of any Event of Termination set forth in
Section 7.02, the party not responsible for such Event of Termination shall have
the following rights, (i) if the responsible party is NexMed, Vergemont may, by
written notice to NexMed, relinquish its rights and terminate its future
obligations under this Agreement; (ii) if the responsible party is Vergemont,
NexMed may, by written notice to Vergemont terminate Vergemont's rights under
this Agreement.

            (b) No termination or expiration of this Agreement shall affect any
obligation of any party which arose prior to the effective date of such
termination with respect to monies owed or to confidential information. The
right of any party to terminate this Agreement as herein above provided shall
not be affected in any way by its waiver of or failure to take action with
respect to any previous default.

      7.04 Effects of Termination or Expiration.

            (a) Upon termination of this Agreement by NexMed for breach by
Vergemont,

                  (i) Vergemont shall immediately cease to have any right to
sell, exploit or in any way deal with or in the Licensed Products or to use any
NexMed Know-How or Proprietary Information or to use any trademarks or names
associated with the Licensed Products and all royalties and other payments
theretofore accrued shall become due and payable immediately to NexMed and such
termination shall be without prejudice to any rights which NexMed may otherwise
have against Vergemont.

                  (ii) Vergemont shall deliver to NexMed, as soon as practicable
and within thirty days after receipt of notice of termination or the happening
of the event which terminates this Agreement where no notice is required, a
report indicating the quantity and description of Licensed Products on hand, on
order, or in the course of manufacture as of the date of expiration or
termination. NexMed shall have the right to conduct a physical inventory of
Vergemont's premises (and those of its sublicensees) to ascertain or verify such
final report. In the event Vergemont or such sublicensee

                                       11
<PAGE>

refuses to permit NexMed to conduct such physical inventory, NexMed shall retain
all legal and equitable rights that it may have in the premises.

                  (iii) All rights granted to Vergemont hereunder shall
forthwith revert to NexMed, and all rights granted by Vergemont under any
sublicense shall forthwith terminate. NexMed shall be free to license others in
connection with the manufacture, sale and distribution of the Licensed Products
licensed hereunder, and Vergemont and each sublicensee shall refrain from
further use, manufacture, sale or distribution of the Licensed Products or any
product derived from the Licensed Products. Vergemont acknowledges that its (or
its Affiliate's or sublicensee's) failure (except as otherwise provided herein)
to cease the use, manufacture, sale or distribution of the articles covered by
this Agreement or any class or category thereof at the termination of this
Agreement will result in immediate and irremediable damage to NexMed and to the
rights of any subsequent licensee. Vergemont acknowledges and admits that there
is no adequate remedy at law for such failure to cease, use, manufacture, sale
or distribution, and Vergemont agrees that in the event of such failure NexMed
shall be entitled to equitable relief by way of temporary and permanent
injunctions and such other further relief as any court with jurisdiction may
deem just and proper. Each sublicense hereunder shall contain termination
provisions substantially identical to this Article VII.

                  (iv) Vergemont shall forthwith deliver to NexMed (and shall
cause each sublicensee to deliver) all reports, memoranda, drawings, data, flow
sheets and other documents and all copies thereof theretofore furnished by
NexMed to Vergemont or which contain or describe any Proprietary Information and
shall take all actions necessary to assign or cause to be assigned to NexMed all
of Vergemont's rights with respect to all contracts for work, results, filings,
Applications for Approval made by it or on its behalf with and approvals granted
by any Regulatory Authority.

            (b) In the event of a wrongful termination by NexMed or breach by
NexMed of a material obligation to Vergemont under this Agreement, Vergemont
shall have the right to recover damages directly and proximately caused by such
wrongful termination or breach.

            (c) The confidentiality provisions of Section 5.01 shall survive any
termination of this Agreement.

VIII. INDEMNIFICATION AND INSURANCE

      8.01 Indemnification. For purposes of this Section 8.01, "Indemnified
Parties" refers to NexMed, its officers, directors, employees and agents.

            (a) Vergemont, as indemnitor, on behalf of itself and its officers,
directors, employees, agents and representatives (including its sublicensees and
distributors, and contractors undertaking work in the Pre-Clinical Development
Program or the Clinical Trials Program) shall indemnify and hold harmless the
NexMed Indemnified Parties and each of them from any and all liability arising
out of any suit, action, legal procedures, claim or demand of whatever kind or
character based upon (i) a claim or occurrence arising from the Clinical Trials
Program, or any aspect of the Pre-Clinical Development Program undertaken by
Vergemont, or the manufacture or sale of the Licensed Products; or (ii) any
breach of any representation, warranty or agreement made by Vergemont hereunder.

                                       12
<PAGE>

            (b) Anything to the contrary in this Article VIII notwithstanding,
Vergemont shall not be obligated to indemnify an Indemnified Party for acts of
negligence or willful misconduct or for any violation of any warranty,
representation or agreement made by such Indemnified Party, hereunder.

      8.02 Scope of Indemnification.

            (a) The agreement to indemnify and hold harmless from liability set
forth herein shall include, without limitation, all damages of every kind,
reasonable attorney fees, all costs and expenses which may be levied against and
out-of-pocket costs incurred by the Indemnified Parties in connection with any
suit, action, legal proceeding, claim or demand.

            (b) Compliance by Vergemont with the insurance provision of this
Agreement shall not relieve Vergemont from liability under this indemnity
provision.

            (c) Vergemont acknowledges and hereby agrees that the obligations
set forth in this Section 8.02 shall survive the termination or expiration of
this Agreement for a period of eight years.

            (d) The Indemnified Parties will cooperate with Vergemont at
Vergemont's expense in the defense of any suit. Vergemont shall be liable for
any costs resulting from any settlement made without its consent.

      8.03 Insurance. Vergemont hereby agrees to name NexMed as an additional
insured with respect to the Licensed Products to the same extent that it
maintains product liability insurance with respect to any product or compound it
sells in countries where product liability insurance is available, but in no
event less than one (1) million U.S. dollars per product. If such insurance is
obtained, such insurance policy shall provide that it may not be canceled or
amended by the insurer in a manner which restricts coverage applicable to this
Section 8.03 without at least 30 days written notice to NexMed. Vergemont shall
furnish NexMed a Certificate of Insurance including a specimen copy of the
additional insured endorsement within 30 days after the first marketing approval
date of any given Licensed Product in any country within the Territory.

IX. IMPROVEMENTS

      If NexMed, on the one hand, or Vergemont and/or its Affiliates and
sublicensee(s), on the other hand, develop or acquire Know-How relating to the
manufacture, use or sale of the Licensed Products, or make Licensed Products
improvements or process improvements, all such additional Know-How and
improvements shall be assigned to and be the property of NexMed. Such additional
Know-How and improvements shall be promptly transferred and/or communicated to
NexMed and shall become part of the NexMed Know-How, and by the provisions
hereof shall be licensed to Vergemont for use in the Territory in connection
with the Licensed Products hereunder without further or additional royalty.

X. TRADEMARKS

      The parties hereto shall mutually select the name(s) or trademarks to be
used by Vergemont in

                                       13
<PAGE>

connection with sales of the Licensed Products in the Territory. Any such
trademarks shall be registered in the name of NexMed as the owner thereof,
NexMed shall hereby license the trademarks set forth in Appendix B hereto to
Vergemont, for so long as this Agreement is in effect, solely for use in
connection with the Licensed Products in the Territory without further or
additional royalty. NexMed shall approve in advance the quality of the Licensed
Products, and all uses of the marks in association therewith, including
packaging, advertising and marketing materials using the marks. Vergemont hereby
agrees to maintain such trademarks in force and to take any and all actions
necessary to protect NexMed's rights in these trademarks.

XI. WARRANTIES AND LIMITATIONS ON RIGHTS

      11.01 Warranties. Each of the parties hereto hereby represents and
warrants to the other party that, as of the date hereof: (a) such party has all
the requisite resources, power and authority to execute, deliver and perform
this Agreement; (b) the terms of this Agreement are not inconsistent with any
other contractual and/or legal obligations such party may have, or with such
party's policies or the policies of any entity with which such party is
associated; (c) such party has not engaged and shall not engage in any act
inconsistent with this Agreement, particularly that would allow any third party,
including any government or government agency, to acquire, own or possess any
right or interest inconsistent with the other party's rights under this
Agreement; and (d) this Agreement has been duly authorized and, when executed
and delivered by such party, shall constitute a legal, binding obligation,
enforceable against such party, according to its terms.

      11.02 Limitation on Warranties. NexMed has not received any notice that
Compounds A, B, C, and D, the Penetration Enhancement Ingredients, or the
Licensed Products (a) are not novel entities or (b) infringe the patent rights
of others.

      11.03 Disclaimer. Vergemont and NexMed each understands that neither party
can guarantee the reliability of its research findings and conclusions, and
therefore, except as expressly set forth in this Agreement, NEITHER PARTY HAS
MADE OR MAKES ANY GUARANTEES AND EXTENDS ANY WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY PROVIDED HEREIN. there ARE NO EXPRESS OR
IMPLIED WARRANTIES OF DESIGN, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR THAT ANY LICENSED PRODUCTS IDENTIFIED WILL NOT INFRINGE ANY PATENT,
COPYRIGHT, TRADEMARK, OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY INDEPENDENT
THIRD PARTY. FURTHER, THERE ARE NO OTHER EXPRESS OR IMPLIED WARRANTIES ARISING
FROM COURSE OF DEALING, USAGE OR TRADE PRACTICES OR OF ANY OTHER KIND.

      11.04 Limitations on Rights. Nothing in this Agreement shall be construed
as:

            (a) conferring rights to use in advertising, publicity, promotional
or sales literature the name of the other party without the prior written
consent of the other party in each instance; or

            (b) granting, by implication, estoppel, or otherwise as a result of
either this Agreement, any activities hereunder or the relationship of the
parties, any license, title, ownership or other rights to the other party's
Confidential Information or under patents or know-how of the other

                                       14
<PAGE>

party except as necessary to accomplish the purposes of this Agreement or except
as explicitly provided herein.

      Each party acknowledges that by virtue of this Agreement it acquires only
such rights as set forth under the terms and conditions of this Agreement.

XII. MISCELLANEOUS

      12.01 Notices. All notices required or permitted hereunder shall be
transmitted, or at least immediately affirmed, in writing by facsimile, followed
by confirmation of that facsimile either by registered or certified mail,
postage prepaid, return receipt requested, or by overnight courier, addressed as
follows, or to such other address as may be designated from time to time by
notice given by the respective party:

If to Vergemont:   Vergemont International Limited
                   Suite 2401-2408
                   22F, CITIC Tower
                   One Tim Mei Avenue
                   Central, Hong Kong

If to NexMed:      NexMed International Limited
                   Suite 2208, 22/F, Windsor House
                   311 Gloucester Road
                   Causeway Bay, Hong Kong

      12.02 Independence of Parties. The status of each party under this
Agreement is that of an independent contractor, and neither party has the right
or authority to assume or create any obligation, accept legal process, make
commitments, incur any charges or otherwise bind or act on behalf of the other
or limit the other in any manner whatsoever, except as expressly stated herein.
Neither this Agreement nor any act hereunder shall be construed as constituting
the foundation of a partnership, association, agency, joint venture or any other
entity.

      12.03 No Third-Party Beneficiaries. No person or entity not a party to
this Agreement, including any employee of any party to this Agreement, shall
have or acquire any rights by reason of this Agreement, nor shall any party have
any obligations or liabilities to such person or entity by reason of this
Agreement.

      12.04 No Waiver. Failure by either party to enforce, or delay in
exercising, or partial exercise of any covenants or rights or remedies under
this Agreement shall not be deemed or construed as a waiver of such rights nor
shall a waiver by either party in one or more instances be construed as
constituting a continuing waiver or as a waiver in other or subsequent
instances.

      12.05 Entire Agreement. This Agreement constitutes the complete and entire
understanding between the parties with licenses conveyed hereunder, superseding
and replacing all prior oral or written agreements, communications,
representations, proposals, or negotiations specifically relating to the
activities hereunder and subject matter hereof. No change or addition to or

                                       15
<PAGE>

variation or amendment of this Agreement, nor any cancellation or waiver of any
of the terms or provisions hereof, nor any alteration or modification of any of
the terms and conditions hereof, shall be effective or valid and binding on
either party unless in writing and signed by a duly-authorized representative of
the party against which the provision is applied.

      12.06 Arbitration. (a) Solely for the purposes of determining governing
law and jurisdiction, the parties acknowledge and agree that this Agreement
constitutes a contract pertaining to a transaction covering in the aggregate not
less than $1,000,000. This Agreement is made and delivered in New York and shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within the State
of New York.

            (b) In the event of any dispute under this Agreement, whether as to
the validity, construction, enforce-ability or performance of this Agreement or
any of its provisions or otherwise, both parties shall endeavor to settle such
dispute amicably between themselves. In the event that the parties fail to
agree, such dispute shall be settled by arbitration. Said arbitration shall be
conducted in the New York County, New York, in accordance with the rules then
obtaining of the American Arbitration Association with one arbitrator. The award
of the arbitrator shall be final and binding upon the parties and enforcement
thereof may be obtained in any court of competent jurisdiction. The unsuccessful
party to such arbitration shall pay to the successful party all costs and
expenses, including reasonable attorney's fees incurred therein by such
successful party.

      12.07 Headings. Article and Section headings are inserted in this
Agreement for convenience of reference only and no construction, meaning,
interpretation or inference shall be derived from them.

      12.08 Governmental Compliance and Effect of Invalidity. This Agreement and
performance hereunder is subject to the restrictions, limitations, terms and
conditions of all applicable governmental regulations, approvals and clearances.
If any term or provision of this Agreement is held invalid, illegal or
unenforceable in any respect, for any reason, that invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this
Agreement shall be interpreted as if such term or provision, to the extent the
same shall have been held to be invalid, illegal or unenforceable, had never
been contained herein, with the other provisions of this Agreement remaining in
force.

      12.09 Assignability. This Agreement and the rights, obligations,
privileges, and interests hereof may not be assigned by either party, except
that either party may assign this Agreement and rights and interests, in whole
or in part, (i) to any of its Affiliates or (ii) with the consent of the other
party, which consent shall not be unreasonably withheld, to any purchaser of all
or substantially all of its stock or assets of such party or to any acquirer or
successor corporation resulting from any merger or consolidation with or into
such successor corporation.

      12.10 Succession. This Agreement and the rights and obligations granted
and undertaken hereunder shall be binding upon and inure to the benefit of the
parties hereto, and their permitted assign(s), successor(s), trustee(s) or
receiver(s) in bankruptcy.

      12.11 Government Compliance. NexMed and Vergemont shall comply with all

                                       16
<PAGE>

supranational, federal, state, and local laws, ordinances and regulations
applicable to the shipment, handling, storage, testing, use, development, sale
and/or disposal of any compound hereunder.

      12.12 Force Majeure. If either party shall be delayed, interrupted in or
prevented from the performance of any obligation hereunder by reason of Force
Majeure including fire, flood, other natural disasters, war (declared or
undeclared), public disaster, strike or labor differences, governmental
enactment, rule or regulation, or any other cause beyond such party's control,
such party shall not be liable to the other therefor; and the time for
performance of such obligation shall be extended for a period equal to the
duration of the contingency which occasioned the delay, interruption or
prevention. The party invoking such Force Majeure rights of this paragraph must
notify the other party within a period of 15 days after the first and the last
day of the Force Majeure unless the Force Majeure renders such notification
impossible, in which case notification will be made as soon as possible. If the
delay resulting from the Force Majeure exceeds six months, the party not
invoking the Force Majeure rights may terminate the contract in accordance with
the conditions stipulated in this Agreement.

                                       17
<PAGE>

      IN WITNESS WHEREOF, authorized representatives of the parties have duly
executed this Agreement in duplicate.

                                          NEXMED INTERNATIONAL LIMITED

                                          By:
                                              -----------------------
                                              Y. Joseph Mo
                                              Managing Director

                                          VERGEMONT INTERNATIONAL LIMITED

                                          By:
                                              -----------------------
                                              Tsu-Huang Wu
                                              Managing Director

                                       18
<PAGE>

                                   APPENDIX A

Penetration Enhancement Ingredients:

Alkyl (N, N-Disubstituted Amino)- Acetate and Salts thereof.

                                       19
<PAGE>

                                   APPENDIX B

Trademarks Covered Under License Agreement:

BEFAR

GOLDEN RHINO

NEXMED

                                       20
<PAGE>

                                   APPENDIX C

The Stock Purchase Agreement of March 22, 1999.

                                       21

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