THIS
      WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED
      OR
      TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
      ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT
      REQUIRED.

    


     

    Warrant
      No. __ 

     

    COMMON
      STOCK PURCHASE WARRANT

     

    Warrant

     

    To
      Purchase 2,663,400
      Shares
      of Common Stock of NEXMED, INC.

     

    THIS
      IS
      TO CERTIFY THAT [RA
      CAPITAL BIOTECH FUND, L.P.]/
      [SOUTHPOINT
      MASTER FUND, LP],
      or
      registered assigns (the “Holder”), is entitled, during the Exercise Period (as
      hereinafter defined), to purchase from NexMed, Inc., a Nevada corporation (the
      “Company”), the Warrant Stock (as hereinafter defined and subject to adjustment
      as provided herein), in whole or in part, at a purchase price of $0.79 per
      share, all on and subject to the terms and conditions hereinafter set
      forth.

     

    1. Definitions.
      As used
      in this Warrant, the following terms have the respective meanings set forth
      below: 

     

    “Affiliate”
means
      any person or entity that, directly or indirectly through one or more
      intermediaries, controls or is controlled by or is under common control with
      a
      person or entity, as such terms are used in and construed under Rule 144 under
      the Securities Act. With respect to a Holder of Warrants, any investment fund
      or
      managed account that is managed on a discretionary basis by the same investment
      manager as such Holder will be deemed to be an Affiliate of such
      Holder.

     

    “Appraised
      Value”
means,
      in respect of any share of Common Stock on any date herein specified, the fair
      saleable value of such share of Common Stock (determined without giving effect
      to the discount for (i) a minority interest or (ii) any lack of liquidity of
      the
      Common Stock or to the fact that the Company may have no class of equity
      registered under the Exchange Act) as of the last day of the most recent fiscal
      month ending prior to such date specified, based on the value of the Company
      on
      a fully-diluted basis, as determined by a nationally recognized investment
      banking firm selected by the Company’s Board of Directors and having no prior
      relationship with the Company. 

     

    “Business
      Day”
means
      any day except Saturday, Sunday and any day which shall be a legal holiday
      or a
      day on which banking institutions in the State of New Jersey generally are
      authorized or required by law or other government actions to close.


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Change
      of Control”
means
      the (i) acquisition by an individual or legal entity or group (as set forth
      in
      Section 13(d) of the Exchange Act) of more than one-half of the voting rights
      or
      equity interests in the Company; or (ii) sale, conveyance, or other disposition
      of all or substantially all of the assets, property or business of the Company
      or the merger into or consolidation with any other corporation (other than
      a
      wholly owned subsidiary corporation) or effectuation of any transaction or
      series of related transactions where holders of the Company’s voting securities
      prior to such transaction or series of transactions fail to continue to hold
      at
      least 50% of the voting power of the Company (or, if other than the Company,
      the
      successor or acquiring entity) immediately following such transaction.


     

    “Closing
      Date”
means
      December 20, 2006.

     

    “Commission”
means
      the Securities and Exchange Commission or any other federal agency then
      administering the Securities Act and other federal securities laws.


     

    “Common
      Stock”
means
      (except where the context otherwise indicates) the Common Stock, $0.001 par
      value per share, of the Company as constituted on the Closing Date, and any
      capital stock into which such Common Stock may thereafter be changed or
      converted, and shall also include (i) capital stock of the Company of any other
      class (regardless of how denominated) issued to the holders of shares of Common
      Stock upon any reclassification thereof which is also not preferred as to
      dividends or assets on liquidation over any other class of stock of the Company
      and which is not subject to redemption and (ii) shares of common stock of any
      successor or acquiring corporation received by or distributed to the holders
      of
      Common Stock of the Company in the circumstances contemplated by Section 4.4.
      

     

    “Current
      Market Price”
means,
      in respect of any share of Common Stock on any date herein specified,


     

    (1) if
      there
      shall not then be a public market for the Common Stock, the higher of


     

    (a)
      the
      book value per share of Common Stock at such date, and 

     

    (b)
      the
      Appraised Value per share of Common Stock at such date, 

     

    or

     

    (2) if
      there
      shall then be a public market for the Common Stock the average of the daily
      market prices for the five (5) consecutive Trading Days immediately before
      such
      date. The daily market price for each such Trading Day shall be (i) the closing
      bid price on such day on the principal stock exchange (including Nasdaq) on
      which such Common Stock is then listed or admitted to trading, or quoted, as
      applicable, (ii) if no sale takes place on such day on any such exchange, the
      last reported closing bid price on such day as officially quoted on any such
      exchange (including Nasdaq), (iii) if the Common Stock is not then listed or
      admitted to trading on any stock exchange, the last reported closing bid price
      on such day in the over-the-counter market, as furnished by the National
      Association of Securities Dealers Automatic Quotation System or the National
      Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged
      in the business of reporting such prices, as furnished by any similar firm
      then
      engaged in such business, or (v) if there is no such firm, as furnished by
      any
      member of the NASD selected mutually by the holder of this Warrant and the
      Company or, if they cannot agree upon such selection, as selected by two such
      members of the NASD, one of which shall be selected by holder of this Warrant
      and one of which shall be selected by the Company. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Current
      Warrant Price”
means,
      in respect of a share of Common Stock at any date herein specified, the price
      at
      which a share of Common Stock may be purchased pursuant to this Warrant on
      such
      date. Unless and until the Current Warrant Price is adjusted pursuant to the
      terms herein, the initial Current Warrant Price shall be $0.79 per share of
      Common Stock. 

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, or any similar federal statute,
      and the rules and regulations of the Commission thereunder, all as the same
      shall be in effect from time to time. 

     

    “Exercise
      Period”
means
      the period during which this Warrant is exercisable pursuant to Section 2.1.
      

     

    “Expiration
      Date”
means
      December 20, 2011.

     

    “GAAP”
means
      generally accepted accounting principles in the United States of America as
      from
      time to time in effect. 

     

    “NASD”
means
      the National Association of Securities Dealers, Inc., or any successor
      corporation thereto. 

     

    “Other
      Property”
has
      the
      meaning set forth in Section 4.4. 

     

    “Person”
means
      any individual, sole proprietorship, partnership, joint venture, trust,
      incorporated organization, association, corporation, limited liability company,
      institution, public benefit corporation, entity or government (whether federal,
      state, county, city, municipal or otherwise, including, without limitation,
      any
      instrumentality, division, agency, body or department thereof). 

     

    “Purchase
      Agreement”
means
      that certain Common Stock and Warrant Purchase Agreement dated as of December
      20, 2006 among the Company and the other parties named therein, pursuant to
      which this Warrant was originally issued. 

     

    “Restricted
      Common Stock”
means
      shares of Common Stock which are, or which upon their issuance upon the exercise
      of any Warrant would be required to be, evidenced by a certificate bearing
      the
      restrictive legend set forth in Section 3.2. 

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, or any similar federal statute, and
      the
      rules and regulations of the Commission thereunder, all as the same shall be
      in
      effect at the time. 

     

    “Trading
      Day”
means
      any day on which the primary market on which shares of Common Stock are listed
      is open for trading. 

     

    “Transfer”
means
      any disposition of any Warrant or Warrant Stock or of any interest in either
      thereof, which would constitute a sale thereof within the meaning of the
      Securities Act. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Warrants”
means
      this Warrant and all warrants issued upon transfer, division or combination
      of,
      or in substitution for, any thereof. All Warrants shall at all times be
      identical as to terms and conditions and date, except as to the number of shares
      of Common Stock for which they may be exercised. 

     

    “Warrant
      Price”
means
      an amount equal to (i) the number of shares of Common Stock being purchased
      upon
      exercise of this Warrant pursuant to Section 2.1, multiplied by (ii) the Current
      Warrant Price. 

     

    “Warrant
      Stock”
means
      the 2,663,400
      shares
      of Common Stock to be purchased upon the exercise hereof, subject to adjustment
      as provided herein. 

     

    2. Exercise
      of Warrant.
      

     

    2.1. Manner
      of Exercise.
      From
      and after the date that is six (6) months after the date of issuance hereof
      and
      until 5:00 P.M., New York time, on the Expiration Date (the “Exercise Period”),
      the Holder may exercise this Warrant, on any Business Day, for all or any part
      of the number of shares of Warrant Stock purchasable hereunder.

     

    (i) In
      order
      to exercise this Warrant, in whole or in part, the Holder shall deliver to
      the
      Company at its principal office or at the office or agency designated by the
      Company pursuant to Section 12, (i) a written notice of Holder’s election to
      exercise this Warrant, which notice shall specify the number of shares of
      Warrant Stock to be purchased, and (ii) (A) payment of the Warrant Price as
      provided herein or (B) by notifying the Company that this Warrant is being
      exercised pursuant to a Cashless Exercise (as defined in Section 2.1(ii) below).
      The Holder shall not be required to deliver the original Warrant in order to
      effect an exercise hereunder. Execution and delivery of a written notice of
      Holder’s election to exercise this Warrant with respect to less than all of the
      Warrant Shares shall have the same effect as cancellation of the original
      Warrant and issuance of a new Warrant evidencing the right to purchase the
      remaining number of Warrant Shares. Such notice shall be substantially in the
      form of the subscription form appearing at the end of this Warrant as
Exhibit
      A,
      duly
      executed by the Holder or its agent or attorney. On or before the third
      (3rd)
      Business Day following the date on which the Company has received each of the
      written notice of Holder’s election to exercise this Warrant and the Warrant
      Price (or notice of a Cashless Exercise) (the “Exercise Delivery Documents”),
      the Company shall transmit by facsimile an acknowledgment of confirmation of
      receipt of the Exercise Delivery Documents to the Holder and the Company’s
      transfer agent. Upon receipt of Exercise Delivery Documents, the Company shall,
      as promptly as practicable, and in any event within five (5) Business Days
      thereafter, execute or cause to be executed and deliver or cause to be delivered
      to the Holder a certificate or certificates representing the aggregate number
      of
      full shares of Warrant Stock issuable upon such exercise, together with cash
      in
      lieu of any fraction of a share, as hereinafter provided. The stock certificate
      or certificates so delivered shall be, to the extent possible, in such
      denomination or denominations as the Holder shall request in the notice and
      shall be registered in the name of the Holder or such other name as shall be
      designated in the notice. This Warrant shall be deemed to have been exercised
      and such 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
      to have become a Holder of record of such shares for all purposes, as of the
      date when the notice, together with the payment of the Warrant Price and this
      Warrant, is received by the Company as described above. If this Warrant shall
      have been exercised in part, the Company shall, at the time of delivery of
      the
      certificate or certificates representing Warrant Stock, deliver to the Holder
      a
      new Warrant evidencing the rights of the Holder to purchase the unpurchased
      shares of Common Stock called for by this Warrant, which new Warrant shall
      in
      all other respects be identical with this Warrant, or at the request of the
      Holder, appropriate notation may be made on this Warrant and the same returned
      to the Holder. NOTWITHSTANDING
      ANY PROVISION OF THIS WARRANT TO THE CONTRARY, UNTIL THE DATE THE RIGHTS
      AGREEMENT AMENDMENT (AS DEFINED IN THE SECURITIES PURCHASE AGREEMENT) IS
      APPROVED, THIS WARRANT WILL NOT BE EXERCISABLE.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (ii) Notwithstanding
      anything contained herein to the contrary, the Holder may, in its sole
      discretion, exercise this Warrant in whole or in part and, in lieu of making
      the
      cash payment otherwise contemplated to be made to the Company upon such exercise
      in payment of the Warrant Price, elect instead to receive upon such exercise
      the
“Net Number” of shares of Common Stock determined according to the following
      formula (a “Cashless Exercise”):

     

    Net
      Number = (A
      x
      B) - (A x C)

    B

     

    For
      purposes of the foregoing formula:

     

    A=
      the
      total number of shares with respect to which this Warrant is then being
      exercised.

     

    B=
      the
      Current Market Price on the date immediately preceding the date of the Exercise
      Notice.

     

    C=
      the
      Current Warrant Price then in effect for the applicable Warrant Shares at the
      time of such exercise.

     

    (iii) Payment
      of the Warrant Price may be made at the option of the Holder by:
      (i) certified or official bank check payable to the order of the Company,
      (ii) wire transfer to the account of the Company or (iii) the surrender and
      cancellation of a portion of shares of Common Stock then held by the Holder
      or
      issuable upon such exercise of this Warrant, which shall be valued and credited
      toward the total Warrant Price due the Company for the exercise of the Warrant
      based upon the Current Market Price of the Common Stock. All shares of Common
      Stock issuable upon the exercise of this Warrant pursuant to the terms hereof
      shall be validly issued and, upon payment of the Warrant Price, shall be fully
      paid and nonassessable and not subject to any preemptive rights.

     

    2.2. Fractional
      Shares.
      The
      Company shall not be required to issue a fractional share of Common Stock upon
      exercise of any Warrant. As to any fraction of a share which the Holder of
      one
      or more Warrants, the rights under which are exercised in the same transaction,
      would otherwise be entitled to purchase upon such exercise, the Company shall
      pay an amount in cash equal to the Current Market Price per share of Common
      Stock on the date of exercise multiplied by such fraction.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    2.3. Continued
      Validity.
      A
      Holder of shares of Common Stock issued upon the exercise of this Warrant,
      in
      whole or in part (other than a Holder who acquires such shares after the same
      have been publicly sold pursuant to a Registration Statement under the
      Securities Act or sold pursuant to Rule 144 thereunder), shall continue to
      be
      entitled with respect to such shares to all rights to which it would have been
      entitled as the Holder under Sections 10 and 13 of this Warrant.

     

    2.4. Restrictions
      on Exercise Amount.

     

    (i) Unless
      a
      Holder delivers to the Company irrevocable written notice prior to the date
      of
      issuance hereof or sixty-one days prior to the effective date of such notice
      that this Section 2.4(i) shall not apply to such Holder, the Company shall
      not
      issue to the Holder, and the Holder may not acquire, a number of shares of
      Warrant Stock to the extent that, upon such exercise, the number of shares
      of
      Common Stock then beneficially owned by such holder and its Affiliates and
      any
      other persons or entities whose beneficial ownership of Common Stock would
      be
      aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act
      (including shares held by any “group” of which the holder is a member, but
      excluding shares beneficially owned by virtue of the ownership of securities
      or
      rights to acquire securities that have limitations on the right to convert,
      exercise or purchase similar to the limitation set forth herein) would exceed
      9.9% of the total number of shares of Common Stock of the Company then issued
      and outstanding. For purposes hereof, “group” has the meaning set forth in
      Section 13(d) of the Exchange Act and applicable regulations of the Commission,
      and the percentage held by the holder shall be determined in a manner consistent
      with the provisions of Section 13(d) of the Exchange Act. Each delivery of
      a
      notice of exercise by a Holder will constitute a representation by such Holder
      that it has evaluated the limitation set forth in this paragraph and determined,
      based on the most recent public filings by the Company with the Commission,
      that
      the issuance of the full number of shares of Warrant Stock requested in such
      notice of exercise is permitted under this paragraph.

     

    (ii) In
      the
      event the Company is prohibited from issuing shares of Warrant Stock as a result
      of any restrictions or prohibitions under applicable law or the rules or
      regulations of any stock exchange, interdealer quotation system or other
      self-regulatory organization, the Company shall as soon as possible seek the
      approval of its stockholders and take such other action to authorize the
      issuance of the full number of shares of Common Stock issuable upon exercise
      of
      this Warrant.

     

    3. Transfer,
      Division and Combination.
      

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    3.1. Transfer.
      The
      Warrants and the Warrant Stock shall be freely transferable, subject to
      compliance with all applicable laws, including, but not limited to the
      Securities Act; provided, however, that a Holder must obtain the prior written
      consent of the Company in order to transfer Warrants representing the right
      to
      purchase less than 100,000 shares of Warrant Stock. If, at the time of the
      surrender of this Warrant in connection with any transfer of this Warrant or
      the
      resale of the Warrant Stock, this Warrant or the Warrant Stock, as applicable,
      shall not be registered for resale under the Securities Act, the Company may
      require, as a condition of allowing such transfer (i) that the Holder or
      transferee of this Warrant or the Warrant Stock as the case may be, furnish
      to
      the Company a written opinion of counsel that is reasonably acceptable to the
      Company to the effect that such transfer may be made without registration under
      the Securities Act, (ii) that the Holder or transferee execute and deliver
      to
      the Company an investment letter in form and substance acceptable to the Company
      and substantially in the form attached as Exhibit
      B
      hereto
      and (iii) that the transferee be an “accredited investor” as defined in Rule
      501(a) promulgated under the Securities Act. Transfer of this Warrant and all
      rights hereunder, in whole or in part, in accordance with the foregoing
      provisions, shall be registered on the books of the Company to be maintained
      for
      such purpose, upon surrender of this Warrant at the principal office of the
      Company referred to in Section 2.1 or the office or agency designated by the
      Company pursuant to Section 12, together with a written assignment of this
      Warrant substantially in the form of Exhibit
      C
      hereto
      duly executed by the Holder or its agent or attorney and funds sufficient to
      pay
      any transfer taxes payable upon the making of such transfer. Upon such surrender
      and, if required, such payment, the Company shall execute and deliver a new
      Warrant or Warrants in the name of the assignee or assignees and in the
      denomination specified in such instrument of assignment, and shall issue to
      the
      assignor a new Warrant evidencing the portion of this Warrant not so assigned,
      and this Warrant shall promptly be cancelled. Following a transfer that complies
      with the requirements of this Section 3.1, the Warrant may be exercised by
      a new
      Holder for the purchase of shares of Common Stock regardless of whether the
      Company issued or registered a new Warrant on the books of the
      Company.
      In
      connection with any transfer of this Warrant after the Registration Statement
      (as defined in the Registration Rights Agreement) is declared effective under
      the Securities Act, the Holder
      or
      transferee of this Warrant shall
      reimburse the Company for its reasonable out of pocket costs in connection
      with
      such transfer (including without limitation the reasonable attorneys fees for
      preparing and filing a prospectus supplement with the SEC and/or delivering
      an
      updated opinion letter to the Seller’s transfer agent).

     

    3.2. Restrictive
      Legends.
      Each
      certificate for Warrant Stock initially issued upon the exercise of this
      Warrant, and each certificate for Warrant Stock issued to any subsequent
      transferee of any such certificate shall be stamped or otherwise imprinted
      with
      legends in substantially the following form: 

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
      TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
      ACT OR UNLESS NEXMED, INC. (THE “COMPANY”) HAS RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS
      NOT
      REQUIRED.” 

     

    “THE
      SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
      IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN REGISTRATION RIGHTS
      AGREEMENT DATED AS OF DECEMBER 20, 2006, AS AMENDED FROM TIME TO TIME, AMONG
      THE
      COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH
      AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
      OF
      RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.”

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    3.3. Division
      and Combination; Expenses; Books.
      This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office or agency of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 3.1 as to any transfer which may be involved in such division or
      combination, the Company shall execute and deliver a new Warrant or Warrants
      in
      exchange for the Warrant or Warrants to be divided or combined in accordance
      with such notice. The Company shall prepare, issue and deliver at its own
      expense the new Warrant or Warrants under this Section 3. The Company agrees
      to
      maintain, at its aforesaid office or agency, books for the registration and
      the
      registration of transfer of the Warrants.

     

    4. Adjustments.
      The
      number of shares of Common Stock for which this Warrant is exercisable, and
      the
      price at which such shares may be purchased upon exercise of this Warrant,
      shall
      be subject to adjustment from time to time as set forth in this Section 4.
      The
      Company shall give the Holder notice of any event described below which requires
      an adjustment pursuant to this Section 4 in accordance with Sections 5.1 and
      5.2. 

     

    4.1. Stock
      Dividends, Subdivisions and Combinations.
      If at
      any time while this Warrant is outstanding the Company shall: 

     

    (i) declare
      a
      dividend or make a distribution on its outstanding shares of Common Stock in
      shares of Common Stock, 

     

    (ii) subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock, or 

     

    (iii) combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock, then: 

     

    (1) the
      number of shares of Common Stock acquirable upon exercise of this Warrant
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock that would have been acquirable under this Warrant
      immediately prior to the record date for such dividend or distribution or the
      effective date of such subdivision or combination would own or be entitled
      to
      receive after such record date or the effective date of such subdivision or
      combination, as applicable, and 

     

    (2) the
      Current Warrant Price shall be adjusted to equal: 

     

    (A) the
      Current Warrant Price in effect at the time of the record date for such dividend
      or distribution or of the effective date of such subdivision or combination,
      multiplied by the number of shares of Common Stock into which this Warrant
      is
      exercisable immediately prior to the adjustment, divided by 

     

    (B) the
      number of shares of Common Stock into which this Warrant is exercisable
      immediately after such adjustment. 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clauses
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination. 

     

    4.2. Certain
      Other Distributions.
      If at
      any time while this Warrant is outstanding the Company shall cause the holders
      of its Common Stock to be entitled to receive any dividend or other distribution
      of: 

     

    (i) cash,
      

     

    (ii) any
      evidences of its indebtedness, any shares of stock of any class or any other
      securities or property or assets of any nature whatsoever (other than cash
      or
      additional shares of Common Stock as provided in Section 4.1 hereof), or


     

    (iii) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property or assets of any nature whatsoever, then: 

     

    (1) the
      number of shares of Common Stock acquirable upon exercise of this Warrant shall
      be adjusted to equal the product of the number of shares of Common Stock
      acquirable upon exercise of this Warrant immediately prior to the record date
      for such dividend or distribution, multiplied by a fraction (x) the numerator
      of
      which shall be the Current Warrant Price per share of Common Stock at the date
      of taking such record and (y) the denominator of which shall be such Current
      Warrant Price minus the amount allocable to one share of Common Stock of any
      such cash so distributable and of the fair value (as determined in good faith
      by
      the Board of Directors of the Company) of any and all such evidences of
      indebtedness, shares of stock, other securities or property or warrants or
      other
      subscription or purchase rights so distributable; and 

     

    (2) the
      Current Warrant Price in effect immediately prior to the record date fixed
      for
      determination of stockholders entitled to receive such distribution shall be
      adjusted to equal (x) the Current Warrant Price multiplied by the number of
      shares of Common Stock acquirable upon exercise of this Warrant immediately
      prior to the adjustment, divided by (y) the number of shares of Common Stock
      acquirable upon exercise of this Warrant immediately after such adjustment.
      A
      reclassification of the Common Stock (other than a change in par value, or
      from
      par value to no par value or from no par value to par value) into shares of
      Common Stock and shares of any other class of stock shall be deemed a
      distribution by the Company to the holders of its Common Stock of such shares
      of
      such other class of stock within the meaning of this Section 4.2 and, if the
      outstanding shares of Common Stock shall be changed into a larger or smaller
      number of shares of Common Stock as a part of such reclassification, such change
      shall be deemed a subdivision or combination, as the case may be, of the
      outstanding shares of Common Stock within the meaning of Section
      4.1.

     

    4.3. Other
      Provisions Applicable to Adjustments.
      The
      following provisions shall be applicable to the making of adjustments of the
      number of shares of Common Stock into which this Warrant is exercisable and
      the
      Current Warrant Price provided for in Section 4: 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (a)
      When
      Adjustments to Be Made.
      The
      adjustments required by Section 4 shall be made whenever and as often as any
      specified event requiring an adjustment shall occur, except that any that would
      otherwise be required may be postponed (except in the case of a subdivision
      or
      combination of shares of the Common Stock, as provided for in Section 4.1)
      up
      to, but not beyond the date of exercise if such adjustment either by itself
      or
      with other adjustments not previously made adds or subtracts less than 1% of
      the
      shares of Common Stock into which this Warrant is exercisable immediately prior
      to the making of such adjustment. Any adjustment representing a change of less
      than such minimum amount (except as aforesaid) which is postponed shall be
      carried forward and made as soon as such adjustment, together with other
      adjustments required by this Section 4 and not previously made, would result
      in
      a minimum adjustment or on the date of exercise. For the purpose of any
      adjustment, any specified event shall be deemed to have occurred at the close
      of
      business on the date of its occurrence. 

     

    (b)
      Fractional
      Interests.
      In
      computing adjustments under this Section 4, fractional interests in Common
      Stock
      shall be taken into account to the nearest 1/100th of a share. 

     

    (c)
      When
      Adjustment Not Required.
      If the
      Company undertakes a transaction contemplated under this Section 4 and as a
      result takes a record of the holders of its Common Stock for the purpose of
      entitling them to receive a dividend or distribution or subscription or purchase
      rights or other benefits contemplated under this Section 4 and shall, thereafter
      and before the distribution to stockholders thereof, legally abandon its plan
      to
      pay or deliver such dividend, distribution, subscription or purchase rights
      or
      other benefits contemplated under this Section 4, then thereafter no adjustment
      shall be required by reason of the taking of such record and any such adjustment
      previously made in respect thereof shall be rescinded and annulled.


     

    (d)
      Escrow
      of Stock.
      If
      after any property becomes distributable pursuant to Section 4 by reason of
      the
      taking of any record of the holders of Common Stock, but prior to the occurrence
      of the event for which such record is taken, a holder of this Warrant exercises
      the Warrant during such time, then such holder shall continue to be entitled
      to
      receive any shares of Common Stock issuable upon exercise hereunder by reason
      of
      such adjustment and such shares or other property shall be held in escrow for
      the holder of this Warrant by the Company to be issued to holder of this Warrant
      upon and to the extent that the event actually takes place. Notwithstanding
      any
      other provision to the contrary herein, if the event for which such record
      was
      taken fails to occur or is rescinded, then such escrowed shares shall be
      canceled by the Company and escrowed property returned to the Company.


     

    4.4. Reorganization,
      Reclassification, Merger, Consolidation or Disposition of Assets.
      

     

    (a)
      If
      there shall occur a Change of Control and, pursuant to the terms of such Change
      of Control, shares of common stock of the successor or acquiring corporation,
      or
      any cash, shares of stock or other securities or property of any nature
      whatsoever (including warrants or other subscription or purchase rights) in
      addition to or in lieu of common stock of the successor or acquiring corporation
      (“Other Property”), are to be received by or distributed to the holders of
      Common Stock of the Company, then the Holder of this Warrant shall have the
      right thereafter to receive, upon the exercise of the Warrant, the number of
      shares of common stock of the successor or acquiring corporation or of the
      Company, if it is the surviving corporation, and the Other Property receivable
      upon or as a result of such Change of Control by a holder of the number of
      shares of Common Stock into which this Warrant is exercisable immediately prior
      to such event. 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (b)
      In
      case of any such Change of Control described in Section 4.4(a) above, the
      resulting, successor or acquiring entity (if other than the Company) and, if
      an
      entity different from the successor or acquiring entity, the entity whose
      capital stock or assets the holders of the Common Stock are entitled to receive
      as a result of such Change of Control, shall expressly assume the due and
      punctual observance and performance of each and every covenant and condition
      contained in this Warrant to be performed and observed by the Company and all
      the obligations and liabilities hereunder, subject to such modifications as
      may
      be deemed appropriate (as determined by resolution of the Board of Directors
      of
      the Company) in order to provide for adjustments of shares of the Common Stock
      into which this Warrant is exercisable which shall be as nearly equivalent
      as
      practicable to the adjustments provided for in Section 4. For purposes of
      Section 4, common stock of the successor or acquiring corporation shall include
      stock of such corporation of any class which is not preferred as to dividends
      or
      assets on liquidation over any other class of stock of such corporation and
      which is not subject to redemption and shall also include any evidences of
      indebtedness, shares of stock or other securities which are convertible into
      or
      exchangeable for any such stock, either immediately or upon the arrival of
      a
      specified date or the happening of a specified event and any warrants or other
      rights to subscribe for or purchase any such stock. The foregoing provisions
      of
      this Section 4 shall similarly apply to successive Change of Control
      transactions. 

     

    4.5. Other
      Action Affecting Common Stock.
      In case
      at any time or from time to time the Company shall take any action in respect
      of
      its Common Stock, other than the payment of dividends permitted by Section
      4 or
      any other action described in Section 4, then, unless such action will not
      have
      a materially adverse effect upon the rights of the holder of this Warrant,
      the
      number of shares of Common Stock or other stock into which this Warrant is
      exercisable and/or the purchase price thereof shall be adjusted in such manner
      as may be equitable in the circumstances. 

     

    4.6. Certain
      Limitations.
      Notwithstanding anything herein to the contrary, the Company agrees not to
      enter
      into any transaction which, by reason of any adjustment hereunder, would cause
      the Current Warrant Price to be less than the par value per share of Common
      Stock. 

     

    4.7. Stock
      Transfer Taxes.
      The
      issue of stock certificates upon exercise of this Warrant shall be made without
      charge to the holder for any tax in respect of such issue. The Company shall
      not, however, be required to pay any tax which may be payable in respect of
      any
      transfer involved in the issue and delivery of shares in any name other than
      that of the holder of this Warrant, and the Company shall not be required to
      issue or deliver any such stock certificate unless and until the person or
      persons requesting the issue thereof shall have paid to the Company the amount
      of such tax or shall have established to the satisfaction of the Company that
      such tax has been paid. 

     

    5. Notices
      to Warrant Holders.
      

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    5.1. Certificate
      as to Adjustments.
      Upon
      the occurrence of each adjustment or readjustment of the Current Warrant Price,
      the Company, at its expense, shall promptly compute such adjustment or
      readjustment in accordance with the terms hereof and prepare and furnish to
      the
      Holder of this Warrant a certificate setting forth such adjustment or
      readjustment and showing in detail the facts upon which such adjustment or
      readjustment is based. The Company shall, upon the written request at any time
      of the Holder of this Warrant, furnish or cause to be furnished to such Holder
      a
      like certificate setting forth (i) such adjustments and readjustments, (ii)
      the
      Current Warrant Price at the time in effect and (iii) the number of shares
      of
      Common Stock and the amount, if any, or other property which at the time would
      be received upon the exercise of Warrants owned by such Holder. 

     

    5.2. Notice
      of Corporate Action.
      If at
      any time: 

     

    (a) the
      Company shall take a record of the holders of its Common Stock for the purpose
      of entitling them to receive a dividend (other than a cash dividend payable
      out
      of earnings or earned surplus legally available for the payment of dividends
      under the laws of the jurisdiction of incorporation of the Company) or other
      distribution, or any right to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property, or to receive any other right, or 

     

    (b) there
      shall be any capital reorganization of the Company, any reclassification or
      recapitalization of the capital stock of the Company or any consolidation or
      merger of the Company with, or any sale, transfer or other disposition of all
      or
      substantially all the property, assets or business of the Company to, another
      corporation, or

     

    (c) there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;

     

    then,
      in
      any one or more of such cases, the Company shall give to the Holder (i) at
      least
      20 days’ prior written notice of the date on which a record date shall be
      selected for such dividend, distribution or right or for determining rights
      to
      vote in respect of any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up, and (ii) in the case of any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up, at least 20 days’ prior written notice of the date when the same shall take
      place. Such notice in accordance with the foregoing clause also shall specify
      (i) the date on which any such record is to be taken for the purpose of such
      dividend, distribution or right, the date on which the holders of Common Stock
      shall be entitled to any such dividend, distribution or right, and the amount
      and character thereof, and (ii) the date on which any such reorganization,
      reclassification, merger, consolidation, sale, transfer, disposition,
      dissolution, liquidation or winding up is to take place and the time, if any
      such time is to be fixed, as of which the holders of Common Stock shall be
      entitled to exchange their shares of Common Stock for securities or other
      property deliverable upon such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up. Each such written notice shall be sufficiently given if addressed to the
      Holder at the last address of the Holder appearing on the books of the Company
      and delivered in accordance with Section 16.2. 

     

    5.3. No
      Rights as Stockholder.
      This
      Warrant does not entitle the Holder to any voting or other rights as a
      stockholder of the Company prior to exercise and payment for the Warrant Price
      in accordance with the terms hereof.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    6. No
      Impairment.
      The
      Company shall not by any action, including, without limitation, amending its
      articles of incorporation or through any reorganization, transfer of assets,
      consolidation, merger, dissolution, issue or sale of securities or any other
      voluntary action, avoid or seek to avoid the observance or performance of any
      of
      the terms of this Warrant, but will at all times in good faith assist in the
      carrying out of all such terms and in the taking of all such actions as may
      be
      necessary or appropriate to protect the rights of the Holder against impairment.
      Without limiting the generality of the foregoing, the Company will (a) not
      increase the par value of any shares of Common Stock receivable upon the
      exercise of this Warrant above the amount payable therefor upon such exercise
      immediately prior to such increase in par value, (b) take all such action as
      may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable shares of Common Stock upon the exercise
      of
      this Warrant, and (c) use its best efforts to obtain all such authorizations,
      exemptions or consents from any public regulatory body having jurisdiction
      thereof as may be necessary to enable the Company to perform its obligations
      under this Warrant. Upon the request of the Holder, the Company will at any
      time
      during the period this Warrant is outstanding acknowledge in writing, in form
      satisfactory to the Holder, the continuing validity of this Warrant and the
      obligations of the Company hereunder.

     

    7. Reservation
      and Authorization of Common Stock; Registration With Approval of Any
      Governmental Authority.
      From
      and after the Closing Date, the Company shall at all times reserve and keep
      available for issue upon the exercise of Warrants such number of its authorized
      but unissued shares of Common Stock as will be sufficient to permit the exercise
      in full of all outstanding Warrants (without regard to any ownership limitations
      provided in Section 2.4(i)). All shares of Common Stock which shall be so
      issuable, when issued upon exercise of any Warrant and payment therefor in
      accordance with the terms of such Warrant, shall be duly and validly issued
      and
      fully paid and nonassessable, and not subject to preemptive rights. Before
      taking any action which would cause an adjustment reducing the Current Warrant
      Price below the then par value, if any, of the shares of Common Stock issuable
      upon exercise of the Warrants, the Company shall take any corporate action
      which
      may be necessary in order that the Company may validly and legally issue fully
      paid and non-assessable shares of such Common Stock at such adjusted Current
      Warrant Price. Before taking any action which would result in an adjustment
      in
      the number of shares of Common Stock for which this Warrant is exercisable
      or in
      the Current Warrant Price, the Company shall obtain all such authorizations
      or
      exemptions thereof, or consents thereto, as may be necessary from any public
      regulatory body or bodies having jurisdiction thereof. If any shares of Common
      Stock required to be reserved for issuance upon exercise of Warrants require
      registration or qualification with any governmental authority under any federal
      or state law before such shares may be so issued (other than as a result of
      a
      prior or contemplated distribution by the Holder of this Warrant), the Company
      will in good faith and as expeditiously as possible and at its expense endeavor
      to cause such shares to be duly registered.

     

    8. Taking
      of Record; Stock and Warrant Transfer Books.
      In the
      case of all dividends or other distributions by the Company to the holders
      of
      its Common Stock with respect to which any provision of Section 4 refers to
      the
      taking of a record of such holders, the Company will in each such case take
      such
      a record and will take such record as of the close of business on a Business
      Day. The Company will not at any time, except upon dissolution, liquidation
      or
      winding up of the Company, close its stock transfer books or Warrant transfer
      books so as to result in preventing or delaying the exercise or transfer of
      any
      Warrant. 

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    9. Registration
      Rights.
      The
      resale
      of the
      Warrant
      Stock shall be registered in accordance with the terms and conditions contained
      in that
      certain
      Registration Rights Agreement dated of even date hereof, among the Holder,
      the
      Company and the other parties named therein (the “Registration Rights
      Agreement”). The Holder acknowledges that pursuant to the Registration Rights
      Agreement, the Company has the right to request that the Holder furnish
      information regarding such Holder and the distribution of the Warrant Stock
      as
      is required by law or the Commission to be disclosed in the Registration
      Statement (as such term is defined in the Registration Rights Agreement), and
      the Company may exclude from such registration the shares of Warrant Stock
      acquirable hereunder if Holder fails to furnish such information within a
      reasonable time prior to the filing of each Registration Statement, supplemented
      prospectus included therein and/or amended Registration Statement. 

     

    10. Supplying
      Information.
      Upon
      any default by the Company of its obligations hereunder or under the
      Registration Rights Agreement, the Company shall cooperate with the Holder
      in
      supplying such information as may be reasonably necessary for such Holder to
      complete and file any information reporting forms presently or hereafter
      required by the Commission as a condition to the availability of an exemption
      from the Securities Act for the sale of any Warrant or Restricted Common Stock.
      

     

    11. Loss
      or Mutilation.
      Upon
      receipt by the Company from the Holder of evidence reasonably satisfactory
      to it
      of the ownership of and the loss, theft, destruction or mutilation of this
      Warrant and indemnity or security reasonably satisfactory to it and
      reimbursement to the Company of all reasonable expenses incidental thereto
      and
      in case of mutilation upon surrender and cancellation hereof, the Company will
      execute and deliver in lieu hereof a new Warrant of like tenor to the Holder;
      provided, however, that in the case of mutilation, no indemnity shall be
      required if this Warrant in identifiable form is surrendered to the Company
      for
      cancellation. 

     

    12. Office
      of the Company.
      As long
      as any of the Warrants remain outstanding, the Company shall maintain an office
      or agency (which may be the principal executive offices of the Company) where
      the Warrants may be presented for exercise, registration of transfer, division
      or combination as provided in this Warrant. 

     

    13. Financial
      and Business Information.
      

     

    13.1. Quarterly
      Information.
      The
      Company will deliver to the Holder, as soon as available and in any event within
      45 days after the end of each of the first three quarters of each fiscal year
      of
      the Company, one copy of an unaudited consolidated balance sheet of the Company
      and its subsidiaries as at the end of such quarter, and the related unaudited
      consolidated statements of income, retained earnings and cash flow of the
      Company and its subsidiaries for such quarter and, in the case of the second
      and
      third quarters, for the portion of the fiscal year ending with such quarter,
      setting forth in each case in comparative form the figures for the corresponding
      periods in the previous fiscal year. Such financial statements shall be prepared
      by the Company in accordance with GAAP and accompanied by the certification
      of
      the Company’s chief executive officer or chief financial officer that such
      financial statements present fairly the consolidated financial position, results
      of operations and cash flow of the Company and its subsidiaries as at the end
      of
      such quarter and for such year-to-date period, as the case may be; provided,
      however, that the Company shall have no obligation to deliver such quarterly
      information under this Section 13.1 to the extent it is publicly available;
      and
      provided further, that if such information contains material non-public
      information, the Company shall so notify the Holder prior to delivery thereof
      and the Holder shall have the right to refuse delivery of such information.
      

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    13.2. Annual
      Information.
      The
      Company will deliver to the Holder as soon as available and in any event within
      90 days after the end of each fiscal year of the Company, one copy of an audited
      consolidated balance sheet of the Company and its subsidiaries as at the end
      of
      such year, and audited consolidated statements of income, retained earnings
      and
      cash flow of the Company and its subsidiaries for such year; setting forth
      in
      each case in comparative form the figures for the corresponding periods in
      the
      previous fiscal year; all prepared in accordance with GAAP, and which audited
      financial statements shall be accompanied by an opinion thereon of the
      independent certified public accountants regularly retained by the Company,
      or
      any other firm of independent certified public accountants of recognized
      national standing selected by the Company; provided, however, that the Company
      shall have no obligation to deliver such annual information under this Section
      13.2 to the extent it is publicly available; and provided further, that if
      such
      information contains material non-public information, the Company shall so
      notify the Holder prior to delivery thereof and the Holder shall have the right
      to refuse delivery of such information. 

     

    13.3. Filings.
      The
      Company will file all regular or periodic reports (pursuant to the Exchange
      Act)
      required to be filed with the Commission and will deliver to Holder promptly
      upon their becoming available one copy of each report, notice or proxy statement
      sent by the Company to its stockholders generally, to the extent not publicly
      available.

     

    14. Limitation
      of Liability.
      No
      provision hereof, in the absence of affirmative action by the Holder to purchase
      shares of Common Stock, and no enumeration herein of the rights or privileges
      of
      the Holder hereof, shall give rise to any liability of the Holder for the
      purchase price of any Common Stock, whether such liability is asserted by the
      Company or by creditors of the Company.

     

    15. Redemption.

     

    15.1 Subject
      to the Purchase Agreement and subject to the terms set forth herein (including
      without limitation subsection 15.2 below), in the event that the closing sale
      price of the Company’s Common Stock (as reported by the Nasdaq Stock Market or
      such other principal stock exchange on which such Common Stock is then listed
      or
      admitted to trading, or quoted, as applicable) is greater than $5.00 (as
      appropriately and equitably adjusted for stock splits, reverse stock splits,
      stock dividends and the similar events) for a period (“Pricing Period”) of ten
      (10) consecutive Trading Days, the Company shall have the right, upon at least
      ten (10) Trading Days' prior written notice to the Holder (“Redemption Notice”),
      to redeem all or a portion of this Warrant representing any or all of the then
      remaining number of shares underlying this Warrant (not previously exercised),
      at a redemption price equal to $.01 per share issuable hereunder for the portion
      hereof being redeemed. Any redemption hereunder shall occur on the date
      specified in the Redemption Notice (“Redemption Date”), provided that such
      Redemption Date may not occur until at least ten (10) Trading Days following
      the
      date on which the Holder receives the Redemption Notice (the “Redemption Notice
      Date”). The Company may not deliver any Redemption Notice until after the
      completion of the Pricing Period, and must deliver any Redemption Notice within
      five (5) Trading Days following the last day of any Pricing Period. The period
      from the Redemption Notice Date to the Redemption Date shall be referred to
      herein as the “Post-Call Period”. The Holder may exercise this Warrant,
      including any portion subject to a Redemption Notice, at any time and from
      time
      to time during the period from the Redemption Notice Date through the date
      on
      which the redemption price for such Warrants is paid by the Company (and
      thereafter if such redemption price is not paid), and the Company shall honor
      all tendered subscription forms during such period. If the Company intends
      to
      redeem less than all of the then outstanding Warrants issued to Purchasers
      under
      the Purchase Agreement, it shall do so on a pro rata basis among such holders
      in
      accordance with this Section. 

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    15.2 Notwithstanding
      anything to the contrary herein, the Company shall be prohibited from exercising
      its right to redeem this Warrant pursuant to this Section if at any time during
      the Post-Call Period or during the thirty (30) consecutive Trading Days
      immediately preceding such Post-Call Period there fails to exist “Effective
      Registration”. “Effective Registration” shall mean (i) the resale of all
      Registrable Securities (as defined in the Registration Rights Agreement) is
      covered by an effective registration statement in accordance with the terms
      of
      the Registration Rights Agreement which registration statement is not subject
      to
      any suspension or stop orders; (ii) the resale of such Registrable Securities
      may be effected pursuant to a current and deliverable prospectus that is not
      subject at the time to any blackout or similar circumstance; (iii) such
      Registrable Securities are listed, or approved for listing prior to issuance,
      on
      either the New York Stock Exchange, the American Stock Exchange, the Nasdaq
      Stock Market or such other principal stock exchange on which such Common Stock
      is then listed or admitted to trading, or quoted, as applicable (each an
“Approved Market”) and are not subject to any trading suspension (nor shall
      trading generally have been suspended on such exchange or market), and the
      Company shall not have been notified of any pending or threatened proceeding
      or
      other action to delist or suspend the Common Stock on the Approved Market on
      which the Common Stock is then traded or listed; (iv) the requisite number
      of
      shares of Common Stock shall have been duly authorized and reserved for issuance
      as required by the terms of the Agreements; and (vi) none of the Company or
      any
      direct or indirect subsidiary of the Company is (1) subject to any bankruptcy
      or
      insolvency proceeding or (2) in breach of this Warrant, the Purchase Agreement
      or any Related Documents. 

     

    16.
       Miscellaneous.
      

     

    16.1 Nonwaiver
      and Expenses.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of the Holder shall operate as a waiver of such right or otherwise
      prejudice Holder’s rights, powers or remedies. If the Company fails to make,
      when due, any payments provided for hereunder, or fails to comply with any
      other
      provision of this Warrant, the Company shall pay to the Holder such amounts
      as
      shall be sufficient to cover any third party costs and expenses including,
      but
      not limited to, reasonable attorneys’ fees, including those of appellate
      proceedings, incurred by the Holder in collecting any amounts due pursuant
      hereto or in otherwise enforcing any of its rights, powers or remedies
      hereunder. 

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    16.2 Notice
      Generally.
      All
      notices, requests, demands or other communications provided for herein shall
      be
      in writing and shall be given in the manner and to the addresses set forth
      in
      the Purchase Agreement.

     

    16.3 Successors
      and Assigns.
      Subject
      to compliance with the provisions of Section 3.1, this Warrant and the rights
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and assigns of the Holder. The
      provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant, and shall be enforceable by any such Holder.
      

     

    16.4 Amendment.
      This
      Warrant may be modified or amended or the provisions of this Warrant waived
      with
      the written consent of both the Company and the Holder. 

     

    16.5 Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be modified to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provision or the remaining provisions
      of this Warrant. 

     

    16.6 Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant. 

     

    16.7 Governing
      Law.
      This
      Warrant and the transactions contemplated hereby shall be deemed to be
      consummated in the State of New York and shall be governed by and interpreted
      in
      accordance with the local laws of the State of New York without regard to the
      provisions thereof relating to conflicts of laws. The Company hereby irrevocably
      consents to the exclusive jurisdiction of the State and Federal courts located
      in New York City, New York in connection with any action or proceeding arising
      out of or relating to this Warrant. In any such litigation the Company agrees
      that the service thereof may be made by certified or registered mail directed
      to
      the Company pursuant to Section 16.2. 

     

    [Signature
      Page Follows]

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    


    


     

    IN
      WITNESS WHEREOF, NexMed, Inc. has caused this Warrant to be executed by its
      duly
      authorized officer and attested by its Secretary.

     

    Dated:
      December 20, 2006

    


    
      	 	 
	 	
              NEXMED,
                INC. 

            
	 	 
	 	 
	 	
              By:______________________________
                

            
	 	
              Name:

            
	 	
              Title:
                

            


    

    


    Attest:
      

    


    


    


    By:______________________________

    Name:

    Title:
      Secretary 

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

       

    

    EXHIBIT
      A

     

    SUBSCRIPTION
      FORM

    [To
      be
      executed only upon exercise of Warrant]

     

    NexMed,
      Inc.

    350
      Corporate Boulevard

    Robbinsville,
      NJ 08691

    Attention:
      Chief Financial Officer 

    Facsimile
      No.: 609-208-1622

    


    Wells
      Fargo Bank, N.A.

    Shareowner
      Services

    161
      North
      Concord Exchange Street

    South
      St
      Paul, MN 55075-1139

    Attn: Suzy
      Swits

    Fax:
      651-450-4078

    


     

    1. The
      undersigned registered owner hereby elects to purchase  
      shares
      of the Common Stock of NexMed, Inc. pursuant to the terms of the attached
      Warrant, and tenders herewith payment of the purchase price of such shares
      in
      full.

     

    2. The
      undersigned registered owner hereby elects to convert the attached Warrant
      into
      Common Stock of NexMed, Inc. through “Cashless Exercise” in the manner specified
      in the Warrant. This conversion is exercised with respect to
      _____________________ of the shares of Warrant Stock covered by the
      Warrant.

     

    3. Please
      issue a certificate or certificates representing said shares in the name of
      the
      undersigned or in such other name as is specified below:

     

    


    
      	 	  

	 	
              (Name)

            
	 	 
	 	  

	 	  

	 	  

	 	
              (Address)

            


    

    


     

    and,
      if
      such shares of Common Stock shall not include all of the shares of Common Stock
      issuable as provided in this Warrant, that a new Warrant of like tenor and
      date
      for the balance of the shares of Common Stock issuable hereunder be delivered
      to
      the undersigned.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    


    (Delete
      following paragraph if not applicable:)

     

    [Holder
      hereby represents to you that it has sold or has current plans to resell all
      of
      such Common Shares received upon this exercise of this Warrant, solely in
      accordance with the terms of the Registration Statement filed with the U.S.
      Securities and Exchange Commission by the Company covering such Common Shares
      as
      described under the section entitled “Plan of Distribution”
therein.]

    


    _____________________________________

    (Name
      of
      Registered Owner) 

    


    _____________________________________

    (Signature
      of Registered Owner) 

    


    _____________________________________

    (Street
      Address) 

    


    _____________________________________

    (State)
      (Zip Code) 

    


    NOTICE:
      The signature on this subscription must correspond with the name as written
      upon
      the face of the Warrant in every particular, without alteration or enlargement
      or any change whatsoever. 

    
 

    
      
         

      

      
        20

        
          

        

      

      
         

      

       

    

    EXHIBIT
      B

    


    FORM
      OF
      INVESTMENT REPRESENTATION LETTER

     

    
      	
              Re:

            	
              Common
                Stock, par value $0.001 per share (“Common Stock”), of NexMed, Inc., a
                Nevada corporation
                (“Company”).

            


    

     

    In
      connection with the acquisition by the undersigned (“Transferee”)
      of:

     

    
      	 	
              □

            	
              warrants
                (“Warrants”) to purchase _______ shares of Common Stock,
                or

            


    

     

    
      	 	
              □

            	
              _______
                shares of Common Stock issued upon the exercise of
                Warrants,

            


    

     

    the
      Transferee hereby represents and warrants to the Company as follows:


     

    The
      Transferee (i) is an “Accredited Investor” as that term is defined in Rule 501
      of Regulation D promulgated under the Securities Act of 1933, as amended (the
      “Act”); and (ii) has the ability to bear the economic risks of such Transferee’s
      prospective investment, including a complete loss of Transferee’s investment in
      the Warrants and/or the shares of Common Stock issuable upon the exercise
      thereof (collectively, the “Securities”).

     

    The
      Transferee, by acceptance of the Securities, represents and warrants to the
      Company that the Securities and all other securities acquired upon any and
      all
      exercises of the Warrants are purchased for the Transferee’s own account, and
      not with view to distribution of either the Securities or any other securities
      purchasable upon exercise of the Warrants in violation of applicable securities
      laws. 

     

    The
      Transferee acknowledges that (i) the Securities have not been registered under
      the Act, (ii) the Securities are “restricted securities” and the certificate(s)
      representing the Securities shall bear the following legend, or a similar legend
      to the same effect, until (i) in the case of the shares of Common Stock
      underlying the Warrants, such shares shall have been registered for resale
      by
      the Transferee under the Act and effectively been disposed of in accordance
      with
      a registration statement that has been declared effective; or (ii) in the
      opinion of counsel for the Company such Securities may be sold without
      registration under the Act:

     

    “The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933 as amended, and may not be offered, sold, assigned or
      transferred, in the absence of an effective registration statement under said
      act or unless NexMed, Inc. (the “Company”) has received an opinion of counsel
      reasonably satisfactory to the Company that registration under said Act is
      not
      required.” 

     

    “The
      sale, transfer or assignment of the securities represented by this certificate
      is subject to the terms and conditions of a certain registration rights
      agreement dated as of December 20,
      2006,
      as amended from time to time, among the Company and certain holders of its
      outstanding securities. Copies of such agreement may be obtained at no cost
      by
      written request made by the holder of record of this certificate to the
      secretary of the Company.”

     

    IN
      WITNESS WHEREOF, the Transferee has caused this Investment Representation Letter
      to be duly executed this __ day of __________ 2___. 

     

    Transferee
      Name:         __________________________

    


    By:
      _______________________

    Name:

    Title:

    


    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    


    EXHIBIT
      C

     

    ASSIGNMENT
      FORM

     

    FOR
      VALUE
      RECEIVED the undersigned registered owner of this Warrant for the purchase
      of
      shares of common stock of NexMed, Inc. hereby sells, assigns and transfers
      unto
      the Assignee named below all of the rights of the undersigned under this
      Warrant, with respect to the number of shares of common stock set forth
      below:

    


    


    _______________________________________

    


    _______________________________________

    


    _______________________________________

    (Name
      and
      Address of Assignee)

    


    _______________________________________

    (Number
      of Shares of Common Stock)

    


    


    and
      does
      hereby irrevocably constitute and appoint ____________ attorney-in-fact to
      register such transfer on the books of the Company, maintained for the purpose,
      with full power of substitution in the premises. 

    


    


    Dated:_________________________________

    


    ______________________________________

    (Print
      Name and Title)

    


    ______________________________________

    (Signature)
      

    


    ______________________________________

    (Witness)

    


    


     

    NOTICE:
      The signature on this assignment must correspond with the name as written upon
      the face of the Warrant in every particular, without alteration or enlargement
      or any change whatsoever. 

     

    
      
         

      

      
        22