NEXMED,
INC.




AGREEMENT
EVIDENCING THE GRANT OF A 

NON-QUALIFIED
STOCK OPTION UNDER THE 

NEXMED,
INC. RECOGNITION AND RETENTION 

STOCK
INCENTIVE PLAN TO _______________




Agreement
(this "Agreement") effective as of November 1, 2004 (the "Grant Date"), between
NexMed, Inc., a Nevada corporation (the "Company"), and _________
("Grantee").




1.
  Grant
of Option. Pursuant
to the NexMed, Inc. Recognition and Retention Stock Incentive Plan (the "Plan"),
the Company hereby grants to Grantee, as of the Grant Date, a non-qualified
stock option (the "Option"), to purchase an aggregate of ______
shares (the
"Option Shares") of Common Stock of the Company (the "Common Stock") at a price
of $_____ per share subject to adjustment and the other terms and conditions set
forth herein and in the Plan.




2.  Grantee
Bound by Plan. Enclosed
is a copy of the Plan, which is incorporated herein by reference and made a part
hereof. The Plan shall govern all aspects of this Agreement except as otherwise
specifically stated herein. Grantee hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof. Unless
otherwise defined herein, capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Plan. The Plan should be carefully
examined before any decision is made to exercise this Option.




3.  Exercise
of Option. (a)
Vesting. Subject
to the earlier termination of the Option as provided herein and in the Plan, the
Option may be exercised, by written notice to the Company at any time and from
time to time after the Grant Date, but, except as otherwise provided below, such
Option shall not be exercisable for more than the number of Option Shares which
are then vested. This Option shall vest in _______ installments as
follows:




(i)  ___% of
the Stock Option Shares (which represents _______ Stock Option Shares) shall
vest immediately;

(ii)  ___% of
the Stock Option Shares (which represents _______ Stock Option Shares) shall
vest on the date of the ____ Annual Meeting of Shareholders.




(b) Early
Expiration of Option. (i)
Upon the termination of the Grantee's service with the Company (including any
subsidiary thereof) for any reason, including death, any portion of the Option
granted hereunder that is not vested and exercisable on the date of such
termination shall automatically expire and be forfeited as of such date and the
vested portion of the Option shall expire in accordance with subsections (ii)
and (iii) of Section 3(b), or, in the event of the Grantee's death, Section 5,
as applicable;










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(ii) In
the event that the Grantee's service with the Company (including any subsidiary
thereof) is terminated for Cause, the Grantee shall automatically forfeit his
right to exercise any portion of the Option granted hereunder which shall
automatically be cancelled effective on the date of such
termination.

 

(iii) If,
however, the Grantee's service is terminated for any reason other than for
Cause, any portion of the Option granted hereunder that is vested but has not
been exercised as of the date of such termination shall automatically expire, if
not exercised, on the ninetieth (90th) day
following Grantee’s termination of service with the Company, provided, however,
that if the Grantee’s service terminates due to his retirement or permanent
disability, the portion of the Option that is vested but has not been exercised
as of the date of the Grantee’s termination of service due to retirement or
permanent disability shall remain exercisable, subject to the terms and
conditions of Section 3 (c) of this Agreement, for a period of one year
following the date of the Grantee’s termination of service with the Company.





(c)  Normal
Expiration of Option. This
Option shall not be exercisable after the tenth anniversary of the Grant Date.
This Option may not be exercised for a fraction of a share of Common Stock.
Unvested Options are subject to cancellation as provided in the
Plan.

 

(d)  Accelerated
Vesting. All of
the Grantee's outstanding but unvested stock options shall vest immediately upon
the occurrence of a Change in Control (as defined in Appendix A
hereto).




4.  Conditions
to Exercise. This
Option may not be exercised by Grantee unless the following conditions are
met:




(a)
Securities
Requirements. Legal
counsel for the Company must be satisfied at the time of exercise that the
issuance of Option Shares upon exercise will be in compliance with the
Securities Act of 1933, as amended (the "Securities Act") and applicable United
States federal, state, local and foreign laws; and

 

(b) Payment
of Exercise Price. At the
time of exercise of all or any portion of the Option, the Grantee must pay the
full purchase price for the Option Shares being purchased hereunder (i) in cash
(or by certified check) or (ii) by delivery of shares of Common Stock previously
acquired by the Grantee or (iii) through a combination of option (i) and (ii).
Details with respect to the methods for exercise, payment and delivery of Option
Shares, including requirements for the payment of withholding taxes applicable
thereto are as set forth in the Plan.




5.  Transferability. This
Option may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of by Grantee, except by will or the laws of descent and
distribution (in which case, such transferee shall succeed to the rights and
obligations of Grantee hereunder). During Grantee's lifetime, the Option shall
only be exercisable by Grantee. If Grantee or anyone claiming under or through
Grantee attempts to violate this Section 5, such attempted violation shall be
null and void and without effect, and the Company's obligation hereunder shall
terminate. If at the time of Grantee's death this Option has not been fully
exercised, Grantee's estate or any person who acquires the right to exercise
this Option by bequest or inheritance or by reason of Grantee's death may, at
any time within one year after the date of Grantee's death (but in no event
after the expiration of two years from the Grant Date), exercise this Option
with respect to the number of shares, determined under Section 3 above, as to
which Grantee could have exercised the Option at the time of Grantee's death.
The applicable requirements of Section 4 above must be satisfied in full at the
time of such exercise.










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6.  Administration. Any
action taken or decision made by the Company, the Board or the Committee or its
delegates arising out of or in connection with the construction, administration,
interpretation or effect of the Plan or this Agreement shall lie within its sole
and absolute discretion, as the case may be, and shall be final, conclusive and
binding on Grantee and all persons claiming under or through Grantee. By
accepting this grant or other benefit under the Plan, Grantee and each person
claiming under or through Grantee shall be conclusively deemed to have indicated
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Board or the Committee or its delegates.




7.  No
Rights as Stockholder. Unless
and until a certificate or certificates representing shares of Common Sock shall
have been issued to Grantee (or any person acting under Section 5 above),
Grantee shall not be or have any of the rights or privileges of a stockholder of
the Company with respect to shares of Common Stock acquirable upon exercise of
the Option.




8.  Investment
Representation. Grantee
hereby acknowledges that the shares of Common Stock which Grantee may acquire by
exercising the Option shall be acquired for investment without a view to
distribution, within the meaning of the Securities Act, and shall not be sold,
transferred, assigned, pledged or hypothecated in the absence of an effective
registration statement for the shares of Common Stock under the Securities Act
and applicable state securities laws or an applicable exemption from the
registration requirements of the Securities Act and any applicable state
securities laws. Grantee also agrees that the shares of Common Stock which
Grantee may acquire by exercising the Option will not be sold or otherwise
disposed of in any manner which would constitute a violation of any applicable
securities laws, whether federal or state.




9.  Listing
and Registration of Common Stock. The
Company, in its discretion, may postpone the issuance and/or delivery of shares
of Common Stock upon an exercise of this Option until registration, or other
qualification of such shares under any state and/or federal law, rule or
regulation as the Company may reasonably in good faith consider
appropriate.




10.  Notices. Any
notice hereunder to the Company shall be addressed to the Company, NexMed, Inc.,
350 Corporate Blvd., Robbinsville, NJ 08691, Attention: Secretary, and any
notice hereunder to Grantee shall be addressed to Grantee at Grantee's last
address on the records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address. Any notice shall
be deemed to have been duly given when delivered personally, one day following
dispatch if sent by reputable overnight courier, fees prepaid, or three days
following mailing if sent by registered mail, return receipt requested, postage
prepaid and addressed as set forth above.










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11.  Binding
Effect. This
Agreement shall be binding upon and inure to the benefit of any successors to
the Company and all persons lawfully claiming under Grantee.




12.  Governing
Law. The
validity, construction, interpretation administration and effect of the Plan,
and of its rules and regulations, and rights relating to the Plan and to this
Agreement, shall be governed by the substantive laws, but not the choice of law
rules, of the State of Nevada.




IN
WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of
the date first above written.





	 	NexMed,
      Inc.
      


      


      


      ______________________












 







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GRANTEE
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE NEXMED, INC.
RECOGNITION AND RETENTION STOCK INCENTIVE PLAN WHICH IS INCORPORATED HEREIN BY
REFERENCE, SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
SERVICE BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH GRANTEE’S RIGHT
OR THE COMPANY’S RIGHT TO TERMINATE SERVICE AT ANY TIME, WITH OR WITHOUT
CAUSE.

 



Grantee
acknowledges receipt of a copy of the Plan and represents that he is familiar
with the terms and provisions thereof, and hereby accepts this Option subject to
all of the terms and provisions of the Plan thereof except as otherwise
specifically stated in this Option Agreement. Grantee has reviewed the Plan and
this Option Agreement in this entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option Agreement and fully understands
all provisions of this Option Agreement. Grantee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under the Plan.





	 	GRANTEE

      


      


      


      ______________________




 

 







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Appendix
A

Change
in Control




For the
purpose of this Agreement, a "Change in Control" shall be deemed to have taken
place if: 




A. Individuals
who, on the date hereof, constitute the Board (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof, whose election or
nomination for election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee
for director, without written objection to such nomination) shall be an
Incumbent Director; provided,
however,
that, no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director; 




B. Any
"Person" (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934 (the "Exchange Act") and as used in Sections 13(d)(3) and 14(d)(2)
of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company's
then outstanding securities eligible to vote for the election of the Board (the
"Voting Securities"); provided,
however,
that, the
event described in this paragraph B shall not be deemed to be a Change in
Control by virtue of any of the following acquisitions: (i) by the Company or
any subsidiary of the Company in which the Company owns more than 25% of the
combined voting power of such entity (a "Subsidiary"), (ii) by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, (iii) by any underwriter temporarily holding the Company's Voting
Securities pursuant to a public offering of such Voting Securities, (iv)
pursuant to a Non-Qualifying Transaction (as defined in paragraph C immediately
below), (v) pursuant to any acquisition by Executive or by any Person which is
an "affiliate" (within the meaning of 17 C.F.R. § 230.405) of Executive (an
"Excluded Person"); 




C. The
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its Subsidiaries
that requires the approval of the Company's stockholders, whether for such
transaction or the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business Combination: (i) more
than 25% of the total voting power of (A) the corporation resulting from such
Business Combination (the "Surviving Corporation"), or (B) if applicable, the
ultimate parent corporation that directly or indirectly has beneficial ownership
of 100% of the voting securities eligible to elect directors of the Surviving
Company (the "Parent Corporation"), is represented by the Company's Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the Company's Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same proportion
as the voting power of the Company's Voting Securities among the holders thereof
immediately prior to the Business Combination, (ii) no Person (other than (A)
any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation or (B) an Excluded Person is or
becomes the beneficial owner, directly or indirectly, of 25% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (iii) at least a majority of the members of the board
of directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) following the consummation of the Business
Combination were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria specified in (i), (ii)
and (iii) above shall be deemed to be a "Non-Qualifying Transaction");











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D. A sale of
all or substantially all of the Company's assets, other than to an Excluded
Person; 




E. The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or 




F. Such
other events as the Board may designate. 




Notwithstanding
the foregoing, a Change in Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 25% of the
Company's Voting Securities as a result of the acquisition of the Company's
Voting Securities by the Company which reduces the number of the Company's
Voting Securities outstanding; provided,
that, if
after such acquisition by the Company such person becomes the beneficial owner
of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.













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