| 1. | Term of      Employment.  Subject to the terms and conditions set      forth in Section 6 of this Agreement, Executive’s employment with the      Company shall be “at will,” and the Company and Executive shall each have      the right to terminate Executive’s employment hereunder.  The      term of Executive’s employment hereunder is referred to herein as the      “Employment      Term.” |
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| 2. | Position. |
|----|-----------|

|   | (a) | During      the Employment Term, Executive shall be employed by the Company as      President and Chief Executive Officer, and shall have such duties,      authority, and responsibility as are commensurate with his position,      subject to the direction of the Company’s Board of Directors (the “Board”). |
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|   | (b) | During      the Employment Term, Executive shall devote all of his business time and      attention to the performance of his duties hereunder faithfully and to the      best of his abilities and shall not undertake employment with, or      participate in, the conduct of the business affairs of any other person,      corporation, or entity; provided, that nothing      shall preclude Executive from (i) with the prior approval of the Board,      serving as a director, trustee or member of another business organization      or (ii) participating in the affairs of any recognized charitable      organizations, or in any community affairs, of Executive’s      choice. |
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|   | (c) | Executive’s      duties hereunder shall be performed for the Company worldwide, with      principal business activities expected to be at the Company’s offices in      East Windsor, New Jersey and/or San Diego,  California. |
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| 3. | Compensation. |
|----|---------------|

|   | (a) | Base      Salary.  During the Employment Term, the Company shall      pay Executive a base salary, subject to increase at the discretion of the      Board, at the initial annual rate of $300,000 (the “Base Salary”),      payable in regular installments in accordance with the Company’s usual      payroll practices. |
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|   | (b) | Annual      Bonus.  With respect to each calendar year during the      Employment Term, Executive shall be eligible to earn an annual bonus award      (the “Bonus”) in an      amount not to exceed 65% of Executive’s annual Base Salary.  The      amount of the Bonus shall be determined by the Board, or the Compensation      Committee of the Board (the “Compensation      Committee”), in its sole discretion, based upon the achievement by      the Company of objective performance measures established and determined      by the Board or the Compensation Committee in consultation with Executive      no later than the end of the first month of such calendar year; it is      agreed that one of such objective performance measures shall be the      payment to Executive of a bonus of $100,000 each year for every $1 million      in revenue growth realized through non-acquisition and non-licensing      activities achieved during such year.  The Bonus, if any, with      respect to each calendar year in the Employment Term shall be paid as      promptly as practicable following the delivery of the Company’s audited      financial statements for such year, but not later than March 15 of the      calendar year following the calendar year for which the Bonus is      payable.  Unless otherwise stated herein, the Bonus shall not      accrue until the date on which it is paid, and Executive must be employed      on the date the Bonus is paid in order to receive the    Bonus. |
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|   | (c) | Stock Option Grant;      Equity Awards. |
|--------|-----|-----------------------------------------|

|   | (i) | Subject      to approval by the Board or the Compensation Committee and subject to      stockholder approval of an increase in the number of shares authorized for      issuance under the Company’s 2006 Stock Incentive Plan, the Company shall      grant to Executive an award for 1,500,000 shares of restricted stock (the      “Award”).      The Award shall vest with respect to 300,000 shares on the first      anniversary of employment, 500,000 shares on the second anniversary of      employment and the remaining 700,000 shares on the third anniversary of      employment.  All unvested shares underlying the Award shall vest      immediately upon (i) a “Change in Control,” as defined in Appendix A, (ii)      Executive’s termination without Cause pursuant to Section 6(c) or (iii)      Executive’s resignation for Good Reason pursuant to Section      6(d). |
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|   | (ii) | In      addition, the Compensation Committee shall consider annually whether to      grant any equity-based compensation awards to the Executive in accordance      with the terms and subject to the conditions of the Company’s equity      compensation plans. |
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| 4. | Employee      Benefits.  During the Employment Term, Executive shall be      eligible for inclusion, to the extent permitted by law, as a full-time      employee of the Company or any of its subsidiaries, in any and all of the      following plans, programs, and policies in effect at the time: (i)      pension, profit sharing, savings, and other retirement plans and programs,      (ii) life and health (medical, dental, hospitalization, short-term and      long-term disability) insurance plans and programs, (iii) stock option and      stock purchase plans and programs, (iv) accidental death and dismemberment      protection plans and programs, (v) travel accident insurance plans and      programs, (vi) vacation policy (Executive shall have six weeks of paid      vacation per calendar year), and (vii) other plans and programs sponsored      by the Company or any subsidiary for employees or executives generally,      including any and all plans and programs that supplement any or all of the      foregoing types of plans or programs.  Nothing in this Agreement      shall preclude the Company or any of its subsidiaries or affiliates from      terminating or amending any employee benefit plan or program from time to      time after the date of thisAgreement. |
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| 5. | Business Expenses and      Perquisites.  The Company shall reimburse to Executive,      or pay directly, all reasonable expenses incurred by Executive in      connection with the business of the Company, and its subsidiaries and      affiliates, including but not limited to business-class travel, reasonable      accommodations, and entertainment, subject to documentation in accordance      with the Company’s policy. |
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| 6. | Termination.  Subject      to this Section 6, either party may terminate this Agreement at any time      and from time to time.  In the event of the termination of      Executive’s employment, the Employment Term shall end on the day of such      termination. |
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|   | (a) | By the Company for      Cause. The Company may, for Cause, terminate Executive’s employment      hereunder at any time by written notice to Executive.  For      purposes of this Agreement, the term “Cause” shall      mean Executive’s (i) engaging in fraud against the Company or      misappropriation of funds of the Company, (ii) disregard or failure to      follow specific and reasonable directives of the Board, (iii) willful      failure to perform his duties as President and Chief Executive Officer of      the Company, (iv) willful misconduct resulting in material injury to the      Company, (v) violation of the terms of the Confidential Information and      Intellectual Property Agreement between Executive the Company referred to      in Section 11 below, (vi) conviction of, or Executive’s plea of guilty or      no contest to, a felony or any crime involving as a material element fraud      or dishonesty, or (vii) material breach (not covered by clauses (i)      through (vi) of this paragraph) of any of the other provisions of this      Agreement; provided, that, in the case of subclauses (ii), (iii) or (vii),      Cause shall not exist if the act or omission deemed to constitute Cause is      cured (if curable) by Executive within thirty (30) days after written      notice thereof to Executive by the Company.  For purposes of the      foregoing, no act, or failure to act, on Executive’s part shall be      considered “willful” unless done, or omitted to be done, by Executive      other than in good faith, and without reasonable belief that his action or      omission was in furtherance of the interests of the    Company. |
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|   | (b) | Disability or      Death.  If Executive should suffer a Permanent      Disability, the Company may terminate Executive’s employment hereunder      upon ten (10) or more days’ prior written notice to      Executive.  If Executive should pass away during the term of      this Agreement, Executive’s employment shall be deemed terminated on his      date of death.  For purposes of this Agreement, a “Permanent      Disability” shall be deemed to have occurred only when Executive has      qualified for benefits (including satisfaction of any applicable waiting      period) under the Company’s or a subsidiary’s long-term disability      insurance arrangement.  In the event of the termination of      Executive’s employment hereunder by reason of Permanent Disability or      death, the Employment Term shall end on the day of such termination and      the Company shall pay, no later than the payroll cycle following      Executive’s termination, to Executive or Executive’s legal representative      (in the event of Permanent Disability), or any beneficiary or      beneficiaries designated by Executive to the Company in writing, or to      Executive’s estate if no such beneficiary has been so designated (in the      event of Executive’s death), a single lump sum payment of: (i) any accrued      but unpaid Base Salary, less applicable deductions, including salary in      respect of any accrued and accumulated vacation, due to Executive at the      date of such termination; (ii) any amounts owing, but not yet paid,      pursuant to Section 5 hereof. |
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|   | (c) | By the Company without      Cause.  The Company may, without Cause, terminate      Executive’s employment hereunder at any time upon ten (10) or more days’      written notice to Executive.  The Company, in its sole      discretion, may provide the Executive with ten (10) days’ pay in lieu of      notice.  In the event Executive’s employment is terminated      pursuant to this Section 6(c), the Employment Term shall end on the day of      such termination and the Company shall pay to Executive, no later than the      payroll cycle following Executive’s termination, in one lump sum: (i) any      accrued but unpaid Base Salary, less applicable deductions, including      salary in respect of any accrued and accumulated vacation, due to      Executive at the date of such termination, and (ii) any amounts owing, but      not yet paid, pursuant to Section 5hereof. |
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|   | (d) | Resignation by      Executive for Good Reason. If any of the events described below      occurs during the Employment Term, Executive may terminate Executive’s      employment hereunder for Good Reason by written notice to the Company      identifying the event or omission constituting Good Reason not more than      one (1) month following the occurrence of such event and, in the case of      subclauses (ii), (iii), or (iv) below, a failure by the Company to cure      such act or omission within thirty (30) days after receipt of such written      notice.  In the event that Executive elects to terminate      employment pursuant to this Section 6(d), the Employment Term and      Executive’s employment hereunder will be terminated effective as of the      later of thirty-one (31) days after the Company’s receipt of Executive’s      notice of termination or thirty-one (31) days after the event, and      Executive’s resignation for Good Reason pursuant to this Section 6(d)      shall be treated for all purposes as a termination without Cause pursuant      to Section 6(c) and the provisions of Section 6(c) shall apply to such      termination, including the payment of Severance.  The occurrence      of any of the following events without Executive’s consent shall permit      Executive to terminate Executive’s employment for “Good Reason” pursuant      to this Section 6(d): |
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|   | (i) | A      “Change in Control” (as defined in Appendix A      attached hereto) occurs; |
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|   | (ii) | The      failure by the Company to observe or comply in any material respect with      any of the material provisions of this  Agreement; |
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|   | (iii) | A      material diminution in Executive’sduties; |
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|   | (iv) | The      assignment to Executive of duties that are materially inconsistent with      Executive’s duties or that materially impair Executive’s ability to      function as the President and Chief Executive Officer of the Company;      or |
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|   | (v) | The      relocation of Executive’s primary office from a location that is more than      50 miles from both (a) the Company’s executive office that constitutes      Executive’s primary office location at the time of relocation and (b)      Executive’s primary residence at the time of such    relocation. |
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|   | (e) | By Executive without      Good Reason.  Executive may terminate the Employment Term      and Executive’s employment hereunder at any time without Good Reason upon      thirty (30) days advance written notice to the Company.  In the      event Executive’s employment is terminated pursuant to this Section 6(e),      the Company shall pay to Executive, no later than ten (10) days after the      last day of Executive’s employment, in one lump sum, the sum of (i) any      accrued but unpaid Base Salary, less applicable deductions, including      salary in respect of any accrued and accumulated vacation, due to      Executive at the date of such termination, and (ii) any amounts owing, but      not yet paid, pursuant to Section 5hereof. |
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|   | (f) | Release.  Notwithstanding      any other provision of this Agreement to the contrary, Executive      acknowledges and agrees that any and all payments and benefits to which      Executive is entitled under Section 6(b), 6(c) or 6(d), with the exception      of accrued salary, accrued vacation payments, and payments pursuant to      Section 5 of this Agreement, are conditioned upon and subject to      Executive’s first executing a general waiver and release (and the      expiration of any associated revocation period), in such reasonable and      customary form as shall be prepared by the Company, of all claims      Executive may have against the Company, and related entities and      individuals.  |
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| 7. | Required Postponement      for Specified Executives. |
|----|------------------------------------------------------|

|   | (a) | Specified Executive      Delay.  Notwithstanding anything in this Agreement to the      contrary, if required by section 409A of the Internal Revenue Code of      1986, as amended (the “Code”) and if      Executive is considered a Specified Executive (as defined herein) and      payment of any amounts under this Agreement is required to be delayed for      a period of six months after separation from service pursuant to Section      409A of the Code, payment of such amounts shall be delayed as required by      section 409A, and the accumulated amounts shall be paid in a lump sum      payment within five days after the end of the six-month      period.  If Executive dies during the postponement period prior      to the payment of benefits, the amounts withheld on account of section      409A shall be paid to the personal representative of Executive’s estate      within 60 days after the date of Executive’s  death. |
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|   | (b) | “Specified      Executive” shall mean an employee who, at any time during the      12-month period ending on the identification date, is a “specified      employee” under section 409A of the Code, as determined by the      Compensation Committee of the Board or its delegate.  The      determination of Specified Executives, including the number and identity      of persons considered officers and the identification date, shall be made      by the Compensation Committee or its delegate in accordance with the      provisions of section 409A of the Code and the regulations issued      thereunder. |
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| 8. | No Mitigation;      Employee Benefit Plans.  Executive shall not be required      to mitigate amounts payable to him under this Agreement by seeking other      employment or otherwise, and there shall be no offset against amounts      payable to Executive under this Agreement on account of Executive’s      subsequent employment.  Amounts payable to Executive under this      Agreement shall not be offset by any claims that the Company may have      against Executive, and such amounts payable to Executive under this      Agreement shall not be affected by any other circumstances, including,      without limitation, any counterclaim, recoupment, defense, or other right      that the Company may have against Executive or others; provided, however, that      payments made to Executive as a result of the termination of Executive’s      employment hereunder shall not be considered as includible compensation      with respect to any employee benefit plans maintained by the Company,      except to the extent otherwise required bylaw. |
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| 9. | Indemnification.  In      the event that Executive is made a party or threatened to be made a party      to any action, suit, or proceeding, whether civil, criminal,      administrative, or investigative (a “Proceeding”),      by reason of Executive’s employment with, or serving as an officer of, the      Company, the Company shall indemnify and hold Executive harmless, and      defend Executive to the fullest extent authorized by the laws of the state      in which the Company is incorporated, as the same exist and may hereafter      be amended, against any and all claims, demands, suits, judgments,      assessments, and settlements (collectively the “Claims”),      including all expenses incurred or suffered by Executive in connection      therewith (excluding, however, any legal fees incurred by Executive for      Executive’s own counsel, except as otherwise provided in this Section 9,      and excluding any Proceedings initiated by executive), and such      indemnification shall continue as to Executive even after Executive is no      longer employed by the Company hereunder, and shall inure to the benefit      of Executive’s heirs, executors, and administrators; provided, however, that      Executive promptly gives written notice to the Company of any such Claims      (although Executive’s failure to promptly give notice shall not affect the      Company’s obligations under this Section 9 except to the extent that such      failure prejudices the Company or its ability to defend such      Claims).  The Company shall have the right to undertake, with      counsel or other representatives of its own choosing, the defense or      settlement of any Claims.  In the event that the Company shall      fail to notify Executive, within ten days of its receipt of Executive’s      written notice, that the Company has elected to undertake such defense or      settlement, or if at any time the Company shall otherwise fail to      diligently defend or pursue settlement of such Claims, then Executive      shall have the right to undertake the defense, compromise, or settlement      of such Claims, in which event the Company shall hold Executive harmless      from any legal fees incurred by Executive for Executive’s      counsel.  Neither Executive nor the Company shall settle any      Claims without the prior written consent of the other, which consent shall      not be unreasonably withheld or delayed.  In the event that the      Company submits to Executive a bona fide settlement offer from the      claimant of Claims (which settlement offer shall include as an      unconditional term thereof the giving by the claimant or the plaintiff to      Executive a release from all liability in respect of such Claims), and      Executive refuses to consent to such settlement, then thereafter the      Company’s liability to Executive for indemnification hereunder with      respect to such Claims shall not exceed the settlement amount included in      such bona fide settlement offer, and Executive shall either assume the      defense of such Claims or pay the Company’s attorneys’ fees and other      out-of-pocket costs incurred thereafter in continuing the defense of such      Claims.  Regardless of which party is conducting the defense of      any such Claims, the other party, with counsel or other representatives of      its own choosing and at its sole cost and expense, shall have the right to      consult with the party conducting the defense of such Claims and its      counsel or other representatives concerning such Claims and Executive and      the respective counsel or other representatives shall cooperate with      respect to such Claims.  The party conducting the defense of any      such Claims and its counsel shall in any case keep the other party and its      counsel (if any) fully informed as to the status of such Claims and any      matters relating thereto.  Executive and the Company shall      provide to the other such records, books, documents, and other materials      as shall reasonably be necessary for each to conduct or evaluate the      defense of any Claims, and will generally cooperate with respect to any      matters relating thereto.  This Section 9 shall remain in effect      after this Agreement is terminated, regardless of the reasons for such      termination.  The indemnification provided to Executive pursuant      to this Section 9 shall not supersede or reduce any indemnification      provided to Executive under any separate agreement, or the By-Laws of the      Company; in this regard, it is intended that this Agreement shall expand      and extend Executive’s rights to receive  indemnification. |
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| 10. | Withholding.  The      Company shall have the right to deduct and withhold from all payments to      Executive hereunder all payroll taxes, income tax withholding and other      federal, state and local taxes and charges which currently are or which      hereafter may be required by law to be so deducted and      withheld. |
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| 11. | Additional      Agreements.  As a condition to his employment hereunder,      Executive shall execute and deliver to the Company a Confidential      Information and Intellectual Property Agreement in the form attached      hereto as Exhibit A,      which shall be incorporated herein byreference. |
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| 12. | Non-Assignability.  Executive’s      rights and benefits hereunder are personal to Executive, and shall not be      alienated, voluntarily or involuntarily assigned, or      transferred. |
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| 13. | Binding      Effect.  This Agreement shall be binding upon the parties      hereto, and their respective assigns, successors, executors,      administrators, and heirs.  In the event the Company becomes a      party to any merger, consolidation, or reorganization, this Agreement      shall remain in full force and effect as an obligation of the Company or      its successor(s) in interest.  None of the payments provided for      by this Agreement shall be subject to seizure for payment of any debts or      judgments against Executive or Executive’s beneficiary or beneficiaries,      nor shall Executive or any such beneficiary or beneficiaries have any      right to transfer or encumber any right or benefit    hereunder. |
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| 14. | Entire Agreement;      Modification. |
|-----|--------------------------------------|

|   | (a) | This      Agreement supersedes all prior agreements between the Company and      Executive relating to the subject matter hereof, with the exception of the      Confidential Information and Intellectual Property      Agreement.  This Agreement sets forth the entire understanding      among the parties hereto with respect to the subject matter hereof, may      not be changed orally, and may be changed only by an agreement in writing      signed by the parties hereto. |
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|   | (b) | Executive      acknowledges that from time to time, the Company may establish, maintain      and distribute manuals, handbooks or personnel policies, and officers or      other representatives of the Company may make written or oral statements      relating to personnel policies and procedures.  Such manuals,      handbooks and statements are intended only for general      guidance.  No policies, procedures or statements of any nature      by or on behalf of the Company (whether written or oral, and whether or      not contained in any manual or handbook or personnel policies), and no      acts or practices of any nature, shall be construed to modify this      Agreement or to create express or implied obligations of any nature to      Executive. |
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| 15. | Notices.  All      notices and communications hereunder shall be in writing, sent by      certified or registered mail, return receipt requested, postage prepaid;      by facsimile transmission, with proof of the time and date of receipt      retained by the transmitter; or by hand-delivery properly      receipted.  The actual date of receipt as shown by the return      receipt therefore, the facsimile transmission sheet, or the hand-delivery      receipt, as the case may be, shall determine the date on which (and, in      the case of a facsimile, the time at which) notice was      given.  All payments required hereunder by the Company to      Executive shall be sent postage prepaid, or, at Executive’s election,      shall be transferred to Executive electronically to such bank account as      Executive may designate in writing to the Company, including designation      of the applicable electronic address.  The foregoing items      (other than any electronic transfer to Executive) shall be addressed as      follows (or to such other address as the Company and Executive may      designate in writing from time totime): |
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| 16. | Section 409A of the      Code.  This Agreement is intended to comply with section      409A of the Code and its corresponding regulations, to the extent      applicable.  Accordingly, all provisions herein, or incorporated      herein by reference, shall be construed and interpreted to comply with      section 409A of the Code and any applicable exceptions      thereunder.  Notwithstanding anything in this Agreement to the      contrary, payments may only be made under this Agreement upon an event and      in a manner permitted by section 409A of the Code, to the extent      applicable.  As used in the Agreement, the term “termination of      employment” shall mean Executive’s separation from service with the      Company within the meaning of section 409A of the Code and the regulations      promulgated thereunder.  For purposes of section 409A, the right      to a series of payments under the Agreement shall be treated as a right to      a series of separate payments.  Any amounts payable solely on      account of an involuntary separation from service of Executive within the      meaning of section 409A of the Code shall be excludible from the      requirements of section 409A of the Code, either as involuntary separation      pay or as short-term deferral amounts to the maximum possible      extent.  All reimbursements and in-kind benefits provided under      the Agreement shall be made or provided in accordance with the      requirements of section 409A of the Code, including, where applicable, the      requirement that (i) any reimbursement shall be for expenses incurred      during Executive’s lifetime (or during a shorter period of time specified      in this Agreement), (ii) the amount of expenses eligible for      reimbursement, or in-kind benefits provided, during a calendar year may      not affect the expenses eligible for reimbursement, or in-kind benefits to      be provided, in any other calendar year, (iii) the reimbursement of an      eligible expense will be made on or before the last day of the calendar      year following the year in which the expense is incurred, and (iv) the      right to reimbursement or in-kind benefits is not subject to liquidation      or exchange for anotherbenefit. |
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| 17. | Governing Law;      Jurisdiction.  This Agreement shall be governed by, and      construed and enforced according to, the domestic laws of the State of      California without giving effect to the principles of conflict of laws      thereof, or such principles of any other jurisdiction, which could cause      the application of the substantive law of any jurisdiction other than the      State of California.  The Company and Executive agree that the      state or federal courts located in San Diego, California shall have      exclusive jurisdiction to hear and determine any dispute which may arise      under this Agreement. |
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| 18. | Severability.  The      invalidity or unenforceability of any provision of this Agreement shall      not affect the validity or enforceability of any other provision of this      Agreement, and each other provision of the Agreement shall be severable      and enforceable to the extent permitted bylaw. |
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| 19. | Headings.  The      headings of the Sections hereof are provided for convenience only and are      not to serve as a basis for interpretation or construction, and shall not      constitute a part, of thisAgreement. |
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| 20. | Signature in      Counterparts.  This Agreement may be signed in      counterparts, each of which shall be an original, with the same effect as      if the signatures thereto and hereto were upon the same      instrument. |
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|   | /s/      Bassam Damaj    |
|--------|--------------------------|
|   | Bassam      Damaj, Ph.D. |
|   |                     |
|   | NEXMED,      INC.        |
|   |                     |   |
|   | By:                      | /s/      Vivian H. Liu |
|   | Name:                    | Vivian      H. Liu |
|   | Title:                   | Executive      VicePresident |

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| Signed: |                              |   |
|---------|-----------------------------------|--------|
|    | (Employee’s      full name) |

| Type or print name: |   |   |   |
|------------------------------------|--------|--------|--------|
| Social Security Number:  |   |   | Date:  |   |   |

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| SUBJECT: | Prior      Inventions |
|----------|-----------------------|

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