Document:

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                               PURCHASE AGREEMENT

NexMed, Inc.
350 Corporate Boulevard
Robbinsville, New Jersey  08691

Ladies & Gentlemen:

     The undersigned purchaser (the "Purchaser") hereby confirms its agreement
with you as follows:

     1. This Purchase Agreement (the "Purchase Agreement") is made by and
between NexMed, Inc., a Nevada corporation (the "Company"), and the Purchaser as
of the date this Purchase Agreement is accepted by the Company below (the
"Effective Date").

     2. This Purchase Agreement is one of a series of purchase agreements of the
Company relating to the offering (the "Offering") of Units ("Units"), each Unit
consisting of five shares of the Company's Common Stock, par value $.001 per
share (the "Common Stock"), and one two (2) year warrant (the "Warrant") to
purchase one share of the Company's Common Stock. A maximum of $8.5 million will
be raised in the Offering. Each Unit of five shares of Common Stock and one
Warrant will be sold for $11.25 (the "Purchase Price"). Each Warrant will have
an exercise price of $2.81.

     3. The Company and the Purchaser agree that the Purchaser will purchase
from the Company, and the Company will sell to the Purchaser _______ Units, at
the Purchase Price per Unit and pursuant to the Terms and Conditions for
Purchase of Common Stock attached hereto as Annex I and incorporated herein by
reference as if fully set forth herein.

     4. The Company makes no representation that this Purchase Agreement will be
accepted by the Company; however, the Company will accept or reject this
Purchase Agreement by no later than 5:00 P.M. (Eastern Standard Time) on July
15, 2002.

     5. Purchaser hereby agrees not to engage, directly or indirectly, in any
short sale or third party short sales of Common Stock or hold a "put equivalent
position" with respect to the Common Stock (as defined in Rule 16a-1 of the 1934
Act) of the Company's Common Stock for a twenty (20) day period prior to and for
a one hundred fifty (150) day period following the Closing Date (as defined in
Annex 1).

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     Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.

                                    PURCHASER

                                    ----------------------------------
                                    Print Name

                                    By:
                                       -------------------------------

                                    Title:
                                          ----------------------------

                                    Address:
                                            --------------------------

                                    ----------------------------------

ACCEPTED as of  ____________, 2002

NEXMED, INC.

By:________________________________

Title:_______________________________

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                                                                         ANNEX I

                TERMS AND CONDITIONS FOR PURCHASE OF COMMON STOCK

1.   Authorization and Sale of the Securities.

     1.1 Authorization of the Common Stock. The Company has authorized the
issuance and sale of up to three million seven hundred eighty eight thousand
(3,788,000) shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock") and the issuance of up to 757,600 warrants to purchase one (1)
share of the Company's Common Stock each (the "Warrant") in the form attached
hereto as Exhibit 1.1.

     1.2 Sale of Common Stock. Subject to the terms and conditions hereof, the
Purchaser will purchase the number of Units agreed upon by the Purchaser at the
Purchase Price, as set forth in the Purchase Agreement by and between the
Company and the Purchaser (the "Purchase Agreement"). For each Unit, the
Purchaser shall receive five shares of Common Stock and a Warrant to purchase a
share of Common Stock. The shares of Common Stock sold to Purchaser pursuant to
the Purchase Agreement are hereinafter referred to as the "Initial Shares" and
the shares of Common Stock arising from the exercise of the Warrant are
hereinafter referred to as the "Warrant Shares." The Initial Shares, the Warrant
and the Warrant Shares are hereinafter collectively referred to as the
"Securities."

     2. Closing Date.

     2.1 Closing Date. The closing of the purchase and sale of the Common Stock
in the Offering hereunder (the "Closing") shall be held at the offices of Katten
Muchin Zavis Rosenman, 575 Madison Avenue, New York, New York 10022, at 9:00
a.m. New York time, on June 28, 2002 or at such other time within ten (10)
business days thereof as the Company may select. The date of the Closing of the
purchase or sale of Common Stock in connection with the Offering is hereinafter
referred to as the "Closing Date." As of the Closing Date, the Company shall
prepare a certificate or certificates registered in the name of the Purchaser
representing the Initial Shares to be purchased by such Purchaser under the
Purchase Agreement, and the Purchaser shall send to the Company a wire transfer
(in accordance with the instructions set forth on Exhibit 2.1(a) hereto) in the
amount of the purchase price of the Common Stock to be purchased by such
Purchaser, payable to the Company's order. Funds received prior to the Closing
Date will not bear interest.

     2.2 Warrant Issuance. The Company will issue a Warrant to purchase
one-fifth (1/5th) of a share of the Company's Common Stock per whole share of
Common Stock purchased by the Purchaser at the Closing at an exercise price per
share of Common Stock of $2.81 per share. The Warrant will be issued as of the
Closing and the Company shall deliver the Warrant Certificate to the Purchaser
as promptly as practicable after the Closing Date.

     3. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser as of the Closing Date as follows:

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     3.1 Organization and Standing. Each of the Company and its material
subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation with full
corporate power and corporate authority to own, lease and operate its properties
and conduct its businesses as described in the SEC Documents (as defined below);
each of the Company and its material subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership or leasing of properties or the conduct of its business
as presently conducted require such qualification, except where the failure to
be so qualified would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations, or business of the Company and
its material subsidiaries taken as a whole.

     3.2 Corporate Power; Authorization. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver the Purchase Agreement, to sell and issue the Securities and to carry
out and perform all of its obligations hereunder. The Purchase Agreement has
been duly authorized, executed and delivered on behalf of the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) rights to indemnification hereunder may be
limited by applicable law.

     3.3 Validity of Securities. The Company has full corporate power and lawful
authority to sell the Common Stock on the terms and conditions contemplated
herein, and when so sold against payment therefor as provided herein, the
Initial Shares and, when issued, the Warrants will be validly authorized and
issued, fully paid and nonassessable. The issuance and delivery of each of the
Initial Shares and the Warrants is not subject to preemptive or any similar
rights of the stockholders of the Company or any liens or encumbrances arising
through the Company and when the Warrant Shares are issued in accordance with
the terms of the Warrants, they will be validly issued and outstanding, fully
paid and nonassessable.

     3.4 SEC Documents; Financial Statements. The Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, the Company's Quarterly
Report on Forms 10-Q for the quarterly period ended March 31, 2002, and the
Company's Current Report on Form 8-K dated June 12, 2002 (the "SEC Documents")
as filed by the Company with the Securities and Exchange Commission (the
"Commission") have been made available to the Purchaser. The SEC Documents
conform in all material respects to the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as applicable, and the rules,
regulations and instructions of the Commission thereunder. The SEC Documents did
not as of their dates contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. Except as may be
indicated in the notes to the Financial Statements, the Financial Statements
have been prepared in accordance with

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generally accepted accounting principles consistently applied and fairly
present, in all material respects, the consolidated financial position of the
Company and its subsidiaries at the dates thereof and the consolidated results
of their operations, stockholders' equity and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring
adjustments).

     3.5 Subsequent Events. Since March 31, 2002 and except as disclosed in the
SEC Documents, (i) neither the Company nor any of its subsidiaries has incurred
any liabilities or obligations, contingent or otherwise, that are material in
the aggregate to the Company and its subsidiaries, taken as a whole, except in
the ordinary course of business, and (ii) there has been no material adverse
change in the condition (financial or otherwise), earnings, operations, business
of the Company and its subsidiaries, taken as a whole, as presently conducted.

     3.6 Legal Proceedings. Except as set forth in the SEC Documents, there are
no material legal proceedings or to the knowledge of the Company threatened, to
which the Company or any subsidiary is a party or to which property of the
Company or any subsidiary is subject.

     3.7 Government Approval. Subject to compliance with the provisions of
applicable securities laws of state or foreign jurisdictions, no other approval
of any public body (state or federal) is or will, on the Closing Date be
necessary in connection with the offer, issue and sale of the Initial Shares and
the Warrant as contemplated herein.

     3.8 No Breach. The consummation of the transactions contemplated in the
Purchase Agreement and the fulfillment of the terms thereof will not result in a
breach of any of the terms or provisions of, or constitute a default under, the
Company's Certificate of Incorporation, the Company's by-laws, or any material
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which it is bound.

     3.9 Licenses and Consents. To the knowledge of the Company, each of the
Company and its material subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders and
permits from state, federal and other regulatory authorities that are material
to the conduct of its business, all of which are valid and in full force and
effect, except to the extent that the failure to have or be in compliance with
such would not have a material adverse effect on the Company's business or
results of operations.

     3.10 Outstanding Stock. All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable; all issued and outstanding shares of capital stock of each
material subsidiary of the Company have been duly authorized and validly issued
and are fully paid and nonassessable.

     3.11 Intellectual Property. Except as set forth in the SEC Documents, to
the best of the Company's knowledge, each of the Company and its subsidiaries
owns or possesses adequate rights to use all material patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names and
copyrights which are described in the SEC Documents; except as set forth in the
SEC Documents, the Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of the Company by
others with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business of the Company and its material subsidiaries,
taken as a whole, as presently conducted; and, except as set forth in the SEC
Documents, the Company has not received any notice of, and has no

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knowledge of, any infringement of or conflict with the asserted rights of others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, or business of the Company and its material subsidiaries,
taken as a whole, as presently conducted.

     3.12 Common Stock Registration. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is quoted on the NASDAQ Stock Market and
the Company has taken no action designed to, or, to the Company's knowledge,
likely to, have the effect of terminating the registration of the Common Stock
under the Exchange Act or removing the Common Stock from quotation on the NASDAQ
Stock Market, nor has the Company received notification that the Commission or
NASD is contemplating terminating such registration or quotation.

     3.13 Private Placement. The Company has not taken any action inconsistent
with the treatment of the sale of the Common Stock pursuant to the Purchase
Agreement as a private placement exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act") pursuant to the
provisions of Section 4(2) thereof and Regulation D thereunder. Assuming the
accuracy of the purchasers' representations and warranties in the Purchase
Agreement and the compliance by each purchaser with all of its covenants and
agreements, the offer, sale, and issuance by the Company of the Common Stock to
the purchasers as contemplated herein constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act.

     4. Representations and Warranties of the Purchaser; Access to Information;
Independent Investigation. The Purchaser hereby represents and warrants to the
Company as follows:

     4.1 Investment Intent. The Purchaser is purchasing the Common Stock and
Warrants for investment for its own account only and not with a view to, or for
resale in connection with, any "distribution" thereof within the meaning of the
Securities Act. The Purchaser understands that the Securities have not been
registered under the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which exemptions
may depend upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

     4.2 Investment Experience. The Purchaser is an "accredited investor" within
the meaning of Rule 501 of the Commission, and was not organized for the
specific purpose of

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acquiring the Common Stock. The Purchaser is aware of the Company's business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Common Stock and Warrants. The Purchaser has such business and financial
experience as is required to give it the capacity to protect its own interests
in connection with the purchase of the Securities.

     4.3 Authorization. This Purchase Agreement has been duly and validly
authorized, executed and delivered on behalf of the Purchaser and is a valid and
binding agreement of the Purchaser enforceable in accordance with its terms,
subject as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally.

     4.4 Compliance with Securities Laws and Regulations. All subsequent offers
and sales of the Securities by the Purchaser shall be made pursuant to
registration under the Securities Act and qualification under the applicable
state securities laws or pursuant to exemptions from registration and
qualification.

     4.5 Reliance by Company. The Purchaser understands that the Common Stock
and Warrants are being offered and sold to it in reliance on specific exemptions
from the registration and qualification requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser's compliance with the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire the Securities.

     4.6 No Government Approval. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Common Stock and
Warrants.

     4.7 No Legal, Tax or Investment Advice. The Purchaser understands that
nothing in the Purchase Agreement or any other materials presented to the
Purchaser in connection with the purchase and sale of the Common Stock and
Warrants constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Securities.

     4.8 Access to Information. The Purchaser acknowledges that it has had the
opportunity to ask questions, to receive answers concerning the terms and
conditions of the Offering from the Company and to obtain any additional
information from the Company that the Company possesses or can acquire without
unreasonable effort or expense regarding the Offering. Purchaser has received
and read the SEC Documents and acknowledges that no private placement memorandum
or similar document has been prepared in connection with the Offering and the
Company has not made any representations or warranties other than as
specifically set forth herein.

     4.9 Individual Investor. If Purchaser is a natural person, Purchaser makes
the additional representations and warranties set forth on Exhibit 4.9 attached
hereto.

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     4.10 Sufficiency of Proceeds. The Purchaser acknowledges and understands
that the Company's current expenditure for its general corporate overhead and
the ongoing clinical studies is approximately $1.8 million per month. The
Company currently has approximately $8 million in cash and cash equivalents. The
Company intends to use the proceeds of this Offering for general corporate
purposes.

     4.11 Risk and Suitability. The Purchaser acknowledges and realizes that
Purchaser's purchase of the Securities involves a high degree of risk. In
addition the Purchaser has such knowledge and experience in business and
financial matters, including, without limitation, investment in restricted
securities of biotechnology and pharmaceutical companies, as will enable
Purchaser to evaluate the merits and risks of an investment in the Securities
and to make an informed investment decision. The Purchaser understands that the
Company anticipates, based on currently proposed plans and assumptions relating
to its operations, that the proceeds of this Offering, together with the
Company's available cash and cash equivalents, will provide sufficient working
capital to meet the Company's needs for approximately the next 8 months
(assuming the sale of all the shares of Common Stock offered). In the event that
the Company's plans change or its assumptions change or prove to be inaccurate
(due to unanticipated expenses, delays, problems, difficulties or otherwise),
the Company would be required to seek additional financing sooner than
anticipated. The Company has no current arrangements with respect to, or sources
of, additional financing, and it is not anticipated that existing stockholders
will provide any portion of the Company's future financing requirements. There
can be no assurance that additional financing will be available to the Company
on commercially reasonable terms, or at all.

     5. Restrictions on Transfer, Information and Registration Rights.

     5.1 Restrictions on Transferability. The Securities shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom, or in the absence of compliance with any term of the
Purchase Agreement. Without limiting the foregoing, (i) the Securities may be
offered, resold, pledged or otherwise transferred only (A) in a transaction
meeting the requirements of Rule 144 of the Commission ("Rule 144"), or in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so requests)
or (B) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and (ii) Purchaser will
be required to notify any subsequent purchaser of the resale restrictions set
forth above. The Company shall be entitled to give stop transfer instructions to
the transfer agent with respect to the Securities in order to enforce the
foregoing restrictions.

     5.2 Restrictive Legends. Each certificate representing any of the
Securities shall bear substantially the following legend (in addition to any
legends required under applicable securities laws).

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     In the Case of All Securities:

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
          INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE
          SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER
          THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES
          LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
          EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
          THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR
          UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE
          COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE
          SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS
          THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER
          RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
          CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A
          PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY
          (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).

     5.3 Registration on Form S-3.

          5.3.1 Filing of Registration Statement. The Company shall use its best
     efforts to secure effectiveness of, as soon as practicable, and shall file
     no later than sixty (60) days after the Closing Date (unless such
     registration is not permitted under the applicable rules and regulations of
     the Commission), a registration statement on Form S-3 (the "Registration
     Statement") with the Commission under the Securities Act to register the
     resale of the Initial Shares and Warrant Shares (the "Registrable
     Securities"); provided however, that in the event the Company fails (due to
     an action or inaction of the Company) to be eligible to file a registration
     statement on Form S-3, the Company shall file a registration statement on
     Form S-1.

          5.3.2 Registration Expenses. The Company shall pay all Registration
     Expenses (as defined below) in connection with any registration,
     qualification or compliance hereunder, and each holder of Registrable
     Securities (the "Holders") shall pay all Selling Expenses (as defined
     below) and other expenses that are not Registration Expenses relating to
     the Registrable Securities resold by such Holder. "Registration Expenses"
     shall mean all expenses, except for Selling Expenses, incurred by the
     Company in complying with the registration provisions herein described,
     including, without limitation, all registration, qualification and filing
     fees, printing expenses, fees and disbursements of counsel for the Company,
     blue sky fees and expenses and the expense of any special audits incident
     to or required by any such registration. "Selling Expenses" shall mean all
     selling commissions,

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     underwriting fees and stock transfer taxes applicable to the Registrable
     Securities and all fees and disbursements of counsel for any Holder.

          5.3.3 Additional Company Obligations. In the case of any registration
     effected by the Company pursuant to these registration provisions, the
     Company will use its reasonable efforts to: (i) keep such registration
     effective until two years after the Closing Date (or such earlier date as
     all of the Registrable Securities have been sold or may be sold under Rule
     144); (ii) prepare and file with the SEC such amendments and supplements to
     the Registration Statement and the prospectus used in connection with the
     Registration Statement as may be necessary to comply with the provisions of
     the Securities Act with respect to the disposition of the Registrable
     Securities; (iii) furnish such reasonable number of prospectuses and other
     documents incident thereto, including any amendment of or supplement to the
     prospectus, as a Holder from time to time may reasonably request; (iv)
     cause all such Registrable Securities registered as described herein to be
     listed on each securities exchange and quoted on each quotation service on
     which similar securities issued by the Company are then listed or quoted;
     (v) provide a transfer agent and registrar for all Registrable Securities
     registered pursuant to the Registration Statement and a CUSIP number for
     all such Registrable Securities; (vi) reasonable efforts to comply with all
     applicable rules and regulations of the Commission, and (vii) file the
     documents required of the Company and otherwise use its best efforts to
     maintain requisite blue sky clearance in (A) all jurisdictions in which any
     of the Registrable Securities are originally sold and (B) all other states
     specified in writing by a Holder as may reasonably be required to sell such
     Holder's Registrable Securities, provided as to clause (B), however, that
     the Company shall not be required to qualify to do business or consent to
     service of process in any state in which it is not now so qualified or has
     not so consented.

          5.3.4 Rule 144(k); Holder Information. No Holder shall be entitled to
     sell under the Registration Statement with respect to a resale of
     Registrable Securities if Rule 144(k) is available with respect to such
     sale. In addition, each Holder of Registrable Securities shall furnish to
     the Company such information and such representations and covenants
     regarding such Holder and the distribution proposed by such Holder as the
     Company may reasonably request in writing and as shall be reasonably
     required in connection with any registration, qualification or compliance
     described herein. Such Holder shall represent that such information is true
     and complete.

          5.3.5 Additional Holder Obligations. Each Holder covenants and agrees
     with the Company that it will promptly notify the Company in writing (i) if
     any information previously supplied by such Holder to the Company for
     inclusion in the registration statement is no longer complete or accurate
     and (ii) when it has completed the sale of all Registrable Securities
     registered under the registration statement.

          5.3.5.1 Allowed Delay. For not more than twenty (20) consecutive days
     on which there is trading in the Common Stock on the principal market or
     exchange on which the Common Stock is then trading (a "Trading Day"), and
     for a total of not more than thirty (30) Trading Days in any twelve (12)
     consecutive month period, the Company may delay the disclosure of material
     non-public information concerning the Company, by terminating or suspending
     effectiveness of any registration contemplated by this Section not
     containing such

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     information, the disclosure of which at the time is not, in the good faith
     opinion of the Company, in the best interests of the Company (an "Allowed
     Delay"); provided, that the Company shall promptly (a) notify the Purchaser
     in writing of the existence of (but in no event, without the prior written
     consent of the Purchaser, shall the Company disclose to the Purchaser any
     of the facts or circumstances regarding) material non-public information
     giving rise to an Allowed Delay, and (b) advise the Purchaser in writing
     (as provided in Section 6.6 hereof) to cease all sales under the
     Registration Statement until the end of the Allowed Delay. The Allowed
     Delay shall commence when such notice is received by Purchaser. The Company
     shall have no further obligation to keep the Registration Statement in
     effect after the second anniversary of the Closing Date (the "Registration
     Period"). The duration of the Registration Period will be extended by the
     number of days of any and all Allowed Delays.

          5.3.5.2 Mechanics. Each Purchaser hereby covenants and agrees that it
     will not sell any Registrable Securities pursuant to the Registration
     Statement during the periods of an Allowed Delay as set forth in this
     Section 5.3.5. Subject to the foregoing, when a Holder is entitled to sell
     and gives notice of its intent to sell pursuant to the Registration
     Statement, the Company shall furnish to such Holder a reasonable number of
     copies of a supplement to or an amendment of such prospectus as may be
     necessary so that, as thereafter delivered to the purchaser(s) of such
     shares, such prospectus shall not include an untrue statement of material
     fact or omit to state a material fact required to be stated therein or
     necessary to make the statements therein not misleading or incomplete in
     the light of the circumstances then existing.

     5.4 Indemnification and Contribution.

          5.4.1 Indemnification by the Company. The Company agrees to indemnify
     and hold harmless each Holder from and against any losses, claims, damages
     or liabilities (or actions or proceedings in respect thereof) to which such
     Holder may become subject (under the Securities Act or otherwise) insofar
     as such losses, claims, damages or liabilities (or actions or proceedings
     in respect thereof) arise out of, or are based upon, any untrue statement
     of a material fact contained in the Registration Statement, on the
     effective date thereof; provided, however, that the Company shall not be
     liable in any such case to the extent that such loss, claim, damages or
     liability arises out of, or is based upon (i) an untrue statement or
     alleged untrue statement made in such Registration Statement in reliance
     upon and in conformity with written information furnished to the Company by
     or on behalf of such Holder specifically for use in preparation of the
     Registration Statement or (ii) any untrue statement in any prospectus that
     is corrected in any subsequent prospectus that was delivered to the Holder
     prior to the pertinent sale or sales by the Holder.

          5.4.2 Indemnification by Holder. Each Holder, severally and not
     jointly, agrees to indemnify and hold harmless the Company from and against
     any losses, claims, damages or liabilities (or actions or proceedings in
     respect thereof) to which the Company may become subject (under the
     Securities Act or otherwise) insofar as such losses, claims, damages or
     liabilities (or actions or proceedings in respect thereof) arise out of, or
     are based upon an untrue statement made in such Registration Statement in
     reliance upon and in conformity with written information furnished to the
     Company by or on behalf of such Holder specifically for use in preparation
     of the Registration Statement, provided, however, that no Holder shall be
     liable in

                                      I-9
<PAGE>

     any such case for (i) any untrue statement included in any Prospectus which
     statement has been corrected, in writing, by such Holder and delivered to
     the Company at least three business days before the sale from which such
     loss occurred or (ii) any untrue statement in any prospectus that is
     corrected in any subsequent prospectus that was delivered to the Holder
     prior to the pertinent sale or sales by the Holder, and each Holder,
     severally and not jointly, will, as incurred, reimburse the Company for any
     legal or other expenses reasonably incurred in investigating, defending or
     preparing to defend any such action, proceeding or claim. No Holder shall
     be required to indemnify the Company in an amount in excess of the net
     amount received by the Holder from the sale of the Registrable Securities
     to which such indemnity relates.

          5.4.3 Indemnification Procedures. Promptly after receipt by any
     indemnified person of a notice of a claim or the beginning of any action in
     respect of which indemnity is to be sought against an indemnifying person
     pursuant to this Section 5.4, such indemnified person shall notify the
     indemnifying person in writing of such claim or of the commencement of such
     action, and, subject to the provisions hereinafter stated, in case any such
     action shall be brought against an indemnified person and the indemnifying
     person shall have been notified thereof, the indemnifying person shall be
     entitled to participate therein, and, to the extent that it shall wish, to
     assume the defense thereof, with counsel reasonably satisfactory to the
     indemnified person. After notice from the indemnifying person to such
     indemnified person of the indemnifying person's election to assume the
     defense thereof, the indemnifying person shall not be liable to such
     indemnified person for any legal expenses subsequently incurred by such
     indemnified person in connection with the defense thereof; provided,
     however, that if there exists or shall exist a conflict of interest that
     would make it inappropriate in the reasonable opinion of counsel for the
     indemnified person for the same counsel to represent both the indemnified
     person and such indemnifying person or any affiliate or associate thereof,
     the indemnified person shall be entitled to retain its own counsel at the
     expense of such indemnifying person; provided, however, that in the case of
     the immediately preceding proviso the indemnifying person shall not be
     responsible for the legal expenses of more than one counsel for all
     indemnified persons.

          5.4.4 Contribution in Lieu of Indemnity. If the indemnification
     provided for in this Section 5.4 is unavailable to or insufficient to hold
     harmless an indemnified party under Section 5.4.1 or 5.4.2 above in respect
     of any losses, claims, damages or liabilities (or actions or proceedings in
     respect thereof) referred to therein, then each indemnifying party shall
     contribute to the amount paid or payable by such indemnified party as
     result of such losses, claims, damages or liabilities (or actions in
     respect thereof), as well as any other relevant equitable considerations.
     The relative fault shall be determined by reference to, among other things,
     whether the untrue or alleged untrue statement of a material fact or the
     omission or alleged omission to state a material fact relates to
     information supplied by the Company on the one hand or a Holder on the
     other and the parties' relative intent, knowledge, access to information
     and opportunity to correct or prevent such statement or omission. The
     Company and the Holders agree that it would not be just and equitable if
     contribution pursuant to this Section 5.4.4 were determined by pro rata
     allocation (even if the Holders were treated as one entity for such
     purpose) or by any other method of allocation which does not take account
     of the equitable considerations referred to above in this Section 5.4.4.
     The amount paid or payable by an indemnified party as a result of the
     losses, claims, damages or liabilities (or actions in respect thereof)
     referred to above in this Section 5.4.4 shall be deemed to include any
     legal or other

                                      I-10
<PAGE>

     expenses reasonably incurred by such indemnified party in connection with
     investigating or defending any such action or claim. Notwithstanding the
     provisions of this Section 5.4.4, no Holder shall be required to contribute
     any amount in excess of the net amount received by the Holder from the sale
     of the Registrable Securities to which such loss relates. No person or
     entity guilty of fraudulent misrepresentation (within the meaning of
     Section 11(f) of the Securities Act) shall be entitled to contribution from
     any person who was not guilty of such fraudulent misrepresentation. The
     Holders' obligations in this Section 5.4.4 to contribute are several in
     proportion to their respective sales of Registrable Securities to which
     such loss relates and not joint.

          5.5.1 Reports Under the Exchange Act. With a view to make available to
     the Purchasers or Holders the benefits of Rule 144 promulgated under the
     Securities Act and any other rule or regulation of the SEC that may at any
     time permit a Purchaser or Holder to sell Securities to the public without
     registration or pursuant to a registration on Form S-3, the Company will
     covenant and agree to use reasonable efforts to: (i) make and keep public
     information available, as those terms are understood and defined in Rule
     144, at all times after the Closing; (ii) file with the SEC in a timely
     manner all reports and other documents required of the Company under the
     Securities Act and the Exchange Act; and (iii) furnish to any Purchaser or
     Holder, so long as the Purchaser or Holder owns any Securities forthwith
     upon request, (A) a written statement by the Company that it has complied
     with the reporting requirements of Rule 144, the Securities Act and the
     Exchange Act, (B) a copy of the most recent annual or quarterly report of
     the Company, and (C) such other information as may be reasonably requested
     in order to avail any Purchaser or Holder of any rule or regulation of the
     SEC that permits the selling of any such Securities without registration or
     pursuant to such Form S-3.

          5.6 Placement Agent Commission. In the event the Offering is
     consummated, the Company will pay to Security Research Associates, Inc.
     ("SRA") a Transaction Fee consisting of (i) 5% of the gross proceeds from
     the Offering received by the Company from investors introduced by SRA to
     the Company (the "SRA Investors"), and (ii) 3 year warrants to acquire a
     number of shares of the Company's common stock equal to 10% of the
     aggregate gross proceeds from the Offering received by the Company from SRA
     Investors divided by the price per share of the Company's securities paid
     by the SRA Investors. The warrants will have an exercise price of $2.81 per
     warrant share. All warrants issued will have piggyback registration rights
     and will include customary adjustments in the event of stock dividends
     and/or stock splits, reclassifications, reorganizations and/or business
     combinations involving the Company. These are similar to the registration
     rights the Company is providing to the SRA Investors. The Company will also
     reimburse SRA periodically, upon request, or upon termination of its
     services for its reasonable out-of-pocket expenses incurred in connection
     with its financial advisory services and the Offering, including the fees
     and expenses of legal counsel, travel expenses and printing, provided that
     any item of expense exceeding one thousand dollars ($1,000) shall have been
     approved by the Company in writing prior to incurrence.

     6. Miscellaneous.

          6.1 Waivers and Amendments. With the written consent of the Company
     and the record holders of more than fifty percent (50%) of the Securities
     (on a converted-to-Common

                                      I-11
<PAGE>

     Stock basis) then outstanding that have not previously been sold in a
     public offering, the terms of the Purchase Agreement may be waived or
     amended.

          6.2 Governing Law. This Purchase Agreement shall be governed by and
     construed in accordance with the internal laws of the State of New York
     without regard to its conflicts of laws principles. The Purchaser hereby
     irrevocably submits to the jurisdiction of any State or United States
     Federal court sitting in the State of New York over any action or
     proceeding arising out of or relating to this Purchase Agreement or any
     agreement contemplated hereby, and the Purchaser hereby irrevocably agrees
     that all claims in respect of such action or proceeding may be heard and
     determined in such State or Federal court. The Purchaser further waives any
     objection to venue in such State and any objection to an action or
     proceeding in such State on the basis of a non-convenient forum. The
     Purchaser further agrees that any action or proceeding brought against the
     Company shall be brought only in the State or United States Federal courts
     sitting in the State of New York. THE PURCHASER AGREES TO WAIVE ITS RIGHTS
     TO A JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
     OF THIS PURCHASE AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
     HEREBY.

          6.3 Survival. The representations, warranties, covenants and
     agreements made herein shall survive any investigation made by the Company
     or the Purchaser and the Closing.

          6.4 Successors and Assigns. Subject to Section 5, the provisions
     hereof shall inure to the benefit of, and be binding upon, the successors,
     assigns, heirs, executors and administrators of the parties hereto
     (specifically including successors in interest to the Securities).

          6.5 Entire Agreement. The Purchase Agreement (including all Exhibits
     thereto) constitutes the full and entire understanding and agreement
     between the parties with regard to the subject hereof.

          6.6 Notices, etc. All notices and other communications required or
     permitted hereunder shall be effective upon receipt and shall be in writing
     and may be delivered in person, by facsimile, or nationally recognized
     overnight delivery service, addressed (a) if to the Purchaser, at the
     address set forth on the signature page hereof or at such other address as
     the Purchaser shall have furnished the Company in writing, or (b) if to the
     Company, at its address set forth at the beginning of the Purchase
     Agreement, or at such other address as the Company shall have furnished to
     the Purchaser in writing.

          6.7 Severability. If any provision of the Purchase Agreement shall be
     judicially determined to be invalid, illegal or unenforceable, the
     validity, legality and enforceability of the remaining provisions shall not
     in any way be affected or impaired thereby.

          6.8 Titles and Subtitles. The titles of the paragraphs and
     subparagraphs of the Purchase Agreement are for convenience of reference
     and shall not, by themselves, determine the construction of the Purchase
     Agreement.

                                      I-12
<PAGE>

          6.9 Counterparts. The Purchase Agreement may be executed in any number
     of counterparts, each of which be an original, but all of which together
     shall constitute one instrument.

                                      I-13
<PAGE>

                                                                     EXHIBIT 1.1

Warrant No. ____________

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS
BOUND BY THE TERMS OF A PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND
THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).

                           WARRANT TO PURCHASE SHARES
                         OF COMMON STOCK OF NEXMED, INC.

     This certifies that _______ (the "Holder"), for value received is entitled
to purchase from NexMed, Inc., a Nevada corporation (the "Company"), ___________
(________) fully paid and nonassessable shares of the Company's Common Stock,
par value $.001 per share (the "Warrant Shares") at a price of Two Dollars and
Eighty-One Cents ($2.81) per share (the "Stock Purchase Price") at any time or
from time to time on or after the Commencement Date (as defined below) up to and
including 5:00 p.m. (Eastern time) on the Expiration Date (as defined below),
upon surrender to the Company at its principal office at 350 Corporate
Boulevard, Robbinsville, New Jersey 08691 (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto duly filled in and signed and upon payment
by cash, cashier's check or wire transfer of immediately available funds of the
aggregate Stock Purchase Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof, such
exercise to be conditioned upon the accuracy of all representations and
warranties contained in such Form of Subscription. The Stock Purchase Price and
the number of shares purchasable hereunder are subject to adjustment as provided
in Section 3 of this Warrant. "Commencement Date" means the date of issuance of
this Warrant and "Expiration Date" means the earlier of (i) two (2) years from
the date hereof, or (ii) the occurrence of an event, the proposal of which is
described in subsection (d) of Section 3.4 which causes termination of this
Warrant under Section 3.4. This Warrant is issued pursuant to the Purchase
Agreement between the Company and Holder dated as of the date hereof (the
"Purchase Agreement"). Terms not specifically defined herein shall in

                                      W-1
<PAGE>

this Warrant and the exhibits hereto have the meanings ascribed to them in the
Purchase Agreement.

     This Warrant is subject to the following terms and conditions:

     1. Exercise; Issuance of Certificates: Payment for Shares. This Warrant is
exercisable at the option of Holder at any time or from time to time on or after
the Commencement Date and prior to or on the Expiration Date for all or a
portion of the shares of Warrant Shares which may be purchased hereunder. The
Company agrees that the shares of Warrant Shares purchased under this Warrant
shall be and are deemed to be issued to Holder as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares. Subject to the provisions of
Section 2, certificates for the shares of Warrant Shares so purchased, together
with any other securities or property to which Holder is entitled upon such
exercise, shall be delivered to Holder by the Company's transfer agent at the
Company's expense within a reasonable time after this Warrant has been
exercised. Each stock certificate so delivered shall be in such denominations of
Warrant Shares as may be requested by Holder and shall be registered in the name
of Holder or such other name as shall be designated by Holder, subject to the
limitations contained in Section 2. If, upon exercise of this Warrant, fewer
than all of the shares of Warrant Shares evidenced by this Warrant are purchased
prior to the date of expiration of this Warrant, one or more new warrants
substantially in the form of, and on the terms in, this Warrant will be issued
for the remaining number of shares of Warrant Shares not purchased upon exercise
of this Warrant.

     2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will use its best efforts to at all times have authorized and reserved,
for the purpose of issue or transfer upon exercise of this Warrant, a sufficient
number of shares of authorized but unissued Common Stock. When and as required
to provide for the exercise of the rights represented by this Warrant, the
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange or automated quotation system upon which the Common Stock may be
listed.

     3. Adjustment of Stock Purchase Price; Number of Shares. The Stock Purchase
Price and the number of Warrant Shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3.

          3.1 Adjustment of Purchase Price. In the event that the Company at any
     time or from time to time after the issuance of this Warrant shall declare
     or pay, without consideration, any dividend on the Common Stock payable in
     Common Stock or in any right to

                                      W-2
<PAGE>

     acquire Common Stock for no consideration, or shall effect a subdivision of
     the outstanding shares of Common Stock into a greater number of shares of
     Common Stock (by stock split, reclassification or otherwise than by payment
     of a dividend in Common Stock or in any right to acquire Common Stock), or
     in the event the outstanding shares of Common Stock shall be combined or
     consolidated, by reclassification or otherwise, into a lesser number of
     shares of Common Stock, then the Stock Purchase Price in effect immediately
     prior to such event shall, concurrently with the effectiveness of such
     event, be proportionately decreased or increased, as appropriate. In the
     event that the Company shall declare or pay, without consideration, any
     dividend on the Common Stock payable in any right to acquire Common Stock
     for no consideration, then the Company shall be deemed to have made a
     dividend payable in Common Stock in an amount of shares equal to the
     maximum number of shares issuable upon exercise of such rights to acquire
     Common Stock. Upon each adjustment of the Stock Purchase Price pursuant to
     this Section 3.1, the holder of this Warrant shall thereafter be entitled
     to purchase, at the Stock Purchase Price resulting from such adjustment,
     the number of shares of Common Stock obtained by multiplying the Stock
     Purchase Price in effect immediately prior to such adjustment by the number
     of shares of Common Stock purchasable pursuant hereto immediately prior to
     such adjustment, and dividing the product thereof by the Stock Purchase
     Price resulting from such adjustment.

          3.2 Adjustments for Reclassification and Reorganization. If the Common
     Stock shall be changed into the same or a different number of shares of any
     other class or classes of stock, whether by capital reorganization,
     reclassification or otherwise (other than a subdivision or combination of
     shares provided for in Section 3.1), the Stock Purchase Price then in
     effect shall, concurrently with the effectiveness of such reorganization or
     reclassification, be proportionately adjusted so that this Warrant shall
     represent the right to purchase, in lieu of the number of shares of Common
     Stock which this Warrant would otherwise represent the right to purchase, a
     number of shares of such other class or classes of stock equivalent to the
     number of shares of Common Stock which this Warrant would have otherwise
     entitled the holder to purchase immediately before that change.

          3.3 Notice of Adjustment. Upon any adjustment of the Stock Purchase
     Price or any increase or decrease in the number of shares of Common Stock
     purchasable upon the exercise of this Warrant, the Company shall within
     five business days give written notice thereof, by first class mail,
     postage prepaid (or by international delivery service, for international
     addresses), addressed to the registered holder of this Warrant at the
     address of such holder as shown on the books of the Company. The notice
     shall be signed by the Company's chief financial officer and shall state
     the Stock Purchase Price resulting from such adjustment and the increase or
     decrease, if any, in the number of shares purchasable at such price upon
     the exercise of this Warrant, setting forth in reasonable detail the method
     of calculation and the facts upon which such calculation is based.

          3.4 Other Notices. If at any time:

               (a) the Company shall propose to declare any cash dividend upon
          its Common Stock;

                                      W-3
<PAGE>

               (b) the Company shall propose to declare or make any dividend or
          other distribution to the holders of its Common Stock, whether in
          cash, property or other securities;

               (c) the Company shall propose to effect any reorganization or
          reclassification of the capital stock of the Company or any
          consolidation or merger of the Company with or into another
          corporation or any sale, lease or conveyance of all or substantially
          all of the property of the Company; or

               (d) the Company shall propose to effect a voluntary or
          involuntary dissolution, liquidation or winding-up of the Company;

then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, or international delivery service for
international deliveries, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least fifteen (15)
business days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend or distribution
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, at least fifteen (15) business days' written notice
of, the date when the same shall take place. Any notice given in accordance with
clause (i) above shall also specify, in the case of any such dividend or
distribution, the record date for such dividend or distribution, if after the
Commencement Date. Any notice given in accordance with clause (ii) above shall
also specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation/merger,
sale, lease, conveyance, dissolution, liquidation or winding-up, as the case may
be and in connection with the occurrence of an event described in clause (d)
above such notice shall specify the anticipated net equity value that will
accrue to Common Stock holders so that the Holder can make an informed decision
whether or not to exercise this Warrant. In the event that the Holder of the
Warrant does not exercise this Warrant prior to the occurrence of an event
described in clause (a) or (b) above, the Holder shall not be entitled to
receive the benefits accruing to existing holders of the Common Stock in such
event. Upon the occurrence of an event described in clause (c), the Holder shall
be entitled thereafter, upon payment of the Stock Purchase Price in effect
immediately prior to such action, to receive upon exercise of this Warrant the
class and number of shares which the Holder would have been entitled to receive
after the occurrence of such event had this Warrant been exercised immediately
prior to such event. In connection with the transactions described in clause
(c), the Company will require each person (other than the Company) that may be
required to deliver any cash, stock, securities or other property upon the
exercise of this Warrant as provided herein to assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant (x) the
obligations of the Company under this Warrant and (y) the obligation to deliver
to such Holder such cash, stock, securities or other property as such Holder may
be entitled to receive in accordance with the provisions of this Section 3. Upon
the occurrence of an event the proposal of which is described in clause (d),
this Warrant shall terminate. Notwithstanding any other provision hereof, no
Holder shall have the right to obtain an injunction or restraining order

                                      W-4
<PAGE>

or otherwise interfere with or prevent the occurrence of any of the actions
described in (a) - (d) above.

     4. Issue Tax. The issuance of certificates for the Warrant Shares upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.

     5. No Voting or Dividend Rights; Limitation of Liability. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof the
right to vote or to consent or to receive notice as a stockholder in respect of
meetings of stockholders for the election of directors of the Company or any
other matters or any rights whatsoever as a stockholder of the Company. Except
for the adjustment to the Stock Purchase Price pursuant to Section 3.2 in the
event of a dividend on the Common Stock payable in shares of Common Stock, no
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Warrant Shares, and no mere enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company whether such liability is
asserted by the Company or by its creditors.

     6. Restrictions on Transferability of Securities: Compliance With
Securities Act.

          6.1 Restrictions on Transferability. The Warrant and the Warrant
     Shares (collectively, the "Securities") shall not be transferable except
     upon the conditions specified in the Purchase Agreement, which conditions
     are intended to insure compliance with the provisions of the Securities Act
     and applicable "blue sky" law.

          6.2 Restrictive Legend. Each certificate representing the Securities
     or any other securities issued in respect of the Securities upon any stock
     split, stock dividend, recapitalization, merger, consolidation or similar
     event, shall (unless otherwise permitted by the provisions of the Purchase
     Agreement) be stamped or otherwise imprinted with a legend substantially in
     the following form (in addition to any legend required under applicable
     state securities laws)

     In the Case of Warrant and Warrant Shares:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
     INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD,
     TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED

                                      W-5
<PAGE>

     UNDER THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES
     LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
     FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND THE QUALIFICATION
     REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY
     RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
     REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED
     BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO
     CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF
     THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE
     HOLDERS) IS BOUND BY THE TERMS OF A PURCHASE AGREEMENT BETWEEN THE ORIGINAL
     PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE
     COMPANY).

          6.3 Exchange of Warrant. Subject to the terms and conditions hereof,
     including the restrictions on transfer in this Section 6 and in the
     Purchase Agreement, upon surrender of this Warrant to the Company with a
     duly executed Assignment Form in the form attached hereto and funds
     sufficient to pay any transfer tax, the Company shall, without charge,
     execute and deliver a new Warrant or Warrants of like tenor in the name of
     the assignee named in such Assignment Form and this Warrant shall promptly
     be canceled. The term "Warrant" as used herein shall be deemed to include
     any Warrants issued in exchange for this Warrant.

          6.4 Ownership of Warrant. The Company may deem and treat the person in
     whose name this Warrant is registered as the holder and owner hereof
     (notwithstanding any notations of ownership or writing hereon made by
     anyone other than the Company) for all purposes and shall not be affected
     by any notice to the contrary, until presentation of this Warrant for
     registration of transfer as provided in Section 6.3.

     7. Modification and Waiver. Except as otherwise provided herein, this
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.

     8. Notices. Except as otherwise provided herein, any notice, request or
other document required or permitted to be given or delivered to the holder
hereof or the Company shall be delivered or shall be sent by United States
certified or registered mail, postage prepaid, (or international delivery
service for international deliveries) to Holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor in the
first paragraph of this Warrant.

     9. Descriptive Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
governed by and construed in accordance with the internal laws of the State of
New York without regard to its conflicts of laws principles. The

                                      W-6
<PAGE>

Holder hereby irrevocably submits to the jurisdiction of any State or United
States Federal court sitting in the State of New York over any action or
proceeding arising out of or relating to this Warrant or any agreement
contemplated hereby, and the Holder hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such State
or Federal court. The Holder further waives any objection to venue in such State
and any objection to an action or proceeding in such State on the basis of a
non-convenient forum. The Holder further agrees that any action or proceeding
brought against the Company shall be brought only in the State or United States
Federal courts sitting in the State of New York. THE HOLDER AGREES TO WAIVE ITS
RIGHTS TO A JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS WARRANT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.

     10. Lost Warrants or Stock Certificates. The Company represents and
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant or stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity and, if requested, bond reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.

     11. Amendment. This Warrant is one of a series of warrants (the "Warrant
Series") to purchase, in the aggregate, up to seven hundred fifty seven thousand
(757,600) and six hundred shares of the Company's Common Stock. This Warrant
maybe amended only with the written approval of the Company and (i) the Holder
of this Warrant or (ii) the holders of a majority of the warrants in the Warrant
Series; provided, however, that any amendment effected pursuant to (ii) above
shall be made in the same manner to all Warrants in the Warrant Series and shall
be binding upon all holders of Warrants in the Warrant Shares.

     12. Binding Effect; Benefits. This Warrant shall inure to the benefit of
and shall be binding upon the Company and the Holder and their respective heirs,
legal representatives, successors and permitted assigns. Nothing in this
Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Holder, or their respective heirs, legal
representatives, successors or permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant.

     13. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the market price of the Common Stock, which shall be, on any date,
the closing price for the Common Stock or the closing bid if no sales were
reported, as quoted on the exchange or market that is the primary trading market
for the Company.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers, thereunto duly authorized this _____ day of __________, 2002.

                                      W-7
<PAGE>

                                      NexMed, Inc.

                                      By: _________________________
                                          Name:
                                          Title:

                                      W-8
<PAGE>

                              FORM OF SUBSCRIPTION

                  (To be signed only upon exercise of Warrant)

To:  NexMed, Inc.

     The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise such Warrant for, and to purchase thereunder,
_________________ (__________________) shares of common stock (the "Common
Stock") of NexMed, Inc. (the "Company"), and herewith makes payment in the
amount of $________ therefore. The certificates for such shares should be issued
in the name of, and delivered to, __________________ whose address is
__________________

     The undersigned represents, unless the exercise of this Warrant has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
that (i) the undersigned is acquiring such Common Stock for his, her or its own
account for investment and not with a view to or for sale in connection with any
distribution thereof (except for any resale pursuant to a registration statement
under the Securities Act), (ii) the undersigned has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the undersigned's investment in the shares of Common Stock,
(iii) the undersigned has received all of the information the undersigned
requested from the Company and the undersigned considers necessary or
appropriate for deciding whether to purchase the shares, (iv) the undersigned
has the ability to bear the economic risks of the undersigned's prospective
investment and (v) the undersigned is able, without materially impairing his,
her or its financial condition, to hold the shares of Common Stock for an
indefinite period of time and to suffer complete loss on the undersigned's
investment.

     The undersigned is an "accredited investor" as defined in Regulation D of
the Securities and Exchange Commission on the date hereof.

DATED: _______________________

                                           -----------------------------------
                                           (Signature must conform in all
                                           respects to name of holder as
                                           specified on the face of the
                                           Warrant)

                                           -----------------------------------

                                           -----------------------------------
                                           (Address)

                                      W-9
<PAGE>

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.

                                 ASSIGNMENT FORM

               (To be executed only upon transfer of this Warrant)

     For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto __________________ (the "Assignee") the
right represented by such Warrant to purchase ___________ Warrant Shares and all
other rights of the Holder with respect thereto under the within Warrant, and
appoints ________________ as Attorney to make such transfer on the books of
NexMed, Inc. maintained for such purpose, with full power of substitution in the
premises.

     The undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired for investment and that the Assignee will not offer,
sell or otherwise dispose of this Warrant or any Warrant Shares to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of this Warrant,
the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired for investment and not with a view toward distribution or resale.

Dated: ___________________

                                 Signature
                                           -------------------------------

                                           -------------------------------
                                                    (Print Name)

                                           -------------------------------
                                                  (Street Address)

                                           -------------------------------
                                           (City)      (State)  (Zip Code)

                                      W-10
<PAGE>

                                                                  EXHIBIT 2.1(a)

                           WIRE TRANSFER INSTRUCTIONS

Bank Name:                     First Union National Bank

Bank ABA Number:               031201467

Bank Address:                  NJ5311
                               12 North Main Street
                               Robbinsville, NJ  08691
                               Tel: 1-609-259-8500; Fax: 1-609-259-7695

Account Name:                  NEXMED (USA), INC.
  (Beneficiary)                350 Corporate Boulevard
                               Robbinsville, NJ  08691
                               Tel: 1-609-208-9688; Fax: 1-609-208-1621

Account Number:                96100-25023 (CAP)

<PAGE>

                                                                     EXHIBIT 4.9

                       INVESTMENT REPRESENTATION STATEMENT

     1. Information Concerning the Company. Purchaser represents and warrants
that Purchaser has been provided with such information concerning the Company
that Purchaser deems necessary and appropriate to enable Purchaser to evaluate
the financial risk inherent in making an investment in the Securities and has
received and read the SEC Documents. Purchaser further acknowledges that
Purchaser has received satisfactory and complete information concerning the
business and financial condition of the Company in response to all inquiries in
respect thereof.

     2. Economic Risk and Suitability. Purchaser represents and warrants as
follows:

          2.1 Purchaser realizes that Purchaser's purchase of the Securities
     involves a high degree of risk and will be a highly speculative investment
     and that Purchaser is able, without impairing Purchaser's financial
     condition, to hold the Securities for an indefinite period of time and to
     suffer a complete loss of Purchaser's investment.

          2.2 Purchaser has carefully considered and has, to the extent
     Purchaser believes such discussions necessary, discussed with Purchaser's
     professional, legal, tax and financial advisors the suitability of an
     investment in the Securities for the particular legal, tax and financial
     situation of Purchaser and that Purchaser and/or Purchaser's advisors have
     determined that the Securities are a suitable investment for Purchaser.

          2.3 Purchaser has such knowledge and experience in business and
     financial matters as will enable Purchaser to evaluate the merits and risks
     of an investment in the Securities and to make an informed investment
     decision.

          2.4 Purchaser has carefully read this Agreement and the SEC Documents
     and the Company has made available to Purchaser or Purchaser's advisors all
     information and documents requested by Purchaser relating to investment in
     the Securities, and has provided answers to Purchaser's satisfaction to all
     of Purchaser's questions concerning the Company and the Securities to be
     acquired.

          2.5 Purchaser understands that neither the Company nor any of its
     officers/directors, has any obligation to register the Securities under any
     federal or state securities act or law except as otherwise expressly set
     forth in Section 5 of the Purchase Agreement.

          2.6 All information that Purchaser has provided concerning himself or
     herself, his or her financial position and (each of) his or her
     representative(s), if any, is correct and complete as of the date set forth
     below, and if there should be any material change in such information,
     Purchaser will provide such information to the Company as soon as
     practicable thereafter.

<PAGE>

          2.7 Purchaser understands that the Company is relying on the truth and
     accuracy of the declarations, representations, warranties and agreements
     made by Purchaser to the Company herein in transferring the Securities to
     Purchaser.

          2.8 Purchaser confirms that Purchaser has received no general
     solicitation or general advertisement and has attended no seminar or
     meeting (whose attendees have been invited by any general solicitation or
     general advertisement) and has received no advertisement, article, notice
     or other communication published in any newspaper, magazine, or similar
     media or broadcast or television or radio regarding the Offering of the
     Securities.

     3. Status of Purchaser. Purchaser represents and warrants that Purchaser is
an "Accredited Investor", as defined in Rule 501 of the Commission because
Purchaser is either:

        (a)  A natural person whose individual net worth, or joint net worth
             with that person's spouse, at the time of his/her purchase,
             exceeds $1 million; or

        (b)  A natural person who had individual income in excess of $200,000
             in each of the two most recent years or joint income with that
             person's spouse in excess of $300,000 in each of those years and
             has a reasonable expectation of reaching the same income level in
             the current year.

     4. Residency. The undersigned is a bona fide resident of ________________.

                                              ---------------------------------
                                                     Signature of Purchaser

                                       2<PAGE>

                                                                   EXHIBIT 10.61

                              AMENDED AND RESTATED
                             ALAMOSA HOLDINGS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

     1. Purpose. The Alamosa Holdings, Inc. Employee Stock Purchase Plan was
established for the benefit of employees of Alamosa Holdings, Inc., a Delaware
corporation (the "Company"), and its Designated Subsidiaries. The Alamosa
Holdings, Inc. Employee Stock Purchase Plan was amended and restated effective
August 6, 2002 (the "Plan"). The Plan is intended to provide the employees of an
Employer with an opportunity to purchase common shares, par value $.01, of the
Company (the "Shares"). It is the intention of the Company that the Plan qualify
as an "employee stock purchase plan" within the meaning of Section 423 of the
Code, and the provisions of the Plan shall be construed in a manner consistent
with the requirements of such Section of the Code.

     2. Definitions.

        a. "Board" shall mean the Board of Directors of the Company.

        b. "Change in Capitalization" shall mean any increase, reduction, or
change or exchange of Shares for a different number or kind of shares or other
securities of the Company by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, share dividend, share split or reverse
share split, combination or exchange of shares, repurchase of Shares, change in
corporate structure or otherwise.

        c. "Change of Control" means any of the following: (i) Continuing
Directors cease to constitute at least fifty percent (50%) of the members of the
Board; (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; (iii) any consolidation, merger or
share exchange of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which Company Shares would be converted
into cash, securities or other property; or (iv) any sale, lease, exchange or
other transfer (excluding transfer by way of pledge or hypothecation) in one
transaction or a series of related transactions, of all or substantially all of
the assets of the Company; provided, however, that a transaction described in
clause (iii) or (iv) shall not constitute a Change in Control hereunder if after
such transaction (I) Continuing Directors constitute at least fifty percent
(50%) of the members of the Board of Directors of the continuing, surviving or
acquiring entity, as the case may be or, if such entity has a parent entity
directly or indirectly holding at least a majority of the

<PAGE>

voting power of the voting securities of the continuing, surviving or acquiring
entity, Continuing Directors constitute at least fifty percent (50%) of the
members of the Board of Directors of the entity that is the ultimate parent of
the continuing, surviving or acquiring entity, and (II) the continuing,
surviving or acquiring entity (or the ultimate parent of such continuing,
surviving or acquiring entity) assumes all outstanding Stock Options under this
Plan; provided, further, that a transaction described in clause (iv) shall not
constitute a Change in Control hereunder if such transaction occurs upon or as a
result of a default by the Company or any of its affiliates under (a) any credit
agreement or related agreement among the Company or any of its affiliates or
successors and Nortel Networks Inc. or any other lender, whether or not such
credit agreement or related agreement exists on the date of this Plan, or (b)
any management agreement or related agreement among the Company any or any of
its affiliates or successors and Sprint Spectrum, LP, SprintCom, Inc.,
WirelessCo, LP, Sprint Communications Company, LP or any of their affiliates or
successors, whether or not such management agreement or related agreement exists
on the date of this Plan. "Continuing Directors" means Board members who (x) at
the date of this Plan were directors or (y) become directors after the date of
this Plan and whose election or nomination for election by the Company's
stockholders was approved by a vote of a majority of the directors then in
office who were directors at the date of this Plan or whose election or
nomination for election was previously so approved.

        d. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

        e. "Committee" shall mean the Compensation Committee or any other
committee of members of the Board appointed by the Board to administer the Plan
and to perform the functions set forth herein.

        f. "Company" shall mean Alamosa Holdings, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.

        g. "Compensation" shall mean any earnings reportable as W-2 wages for
Federal income tax withholding purposes and any elective contributions made by
the Participant's Employer on the Participant's behalf to the Alamosa PCS
Contributions Savings Plan (or any successor plan thereto).

        h. "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of

                                       2

<PAGE>

absence agreed to in writing by the Employee's Employer, if such leave is for a
continuous period of not more than one year or re-employment upon the expiration
of such leave is guaranteed by contract or statute.

        i. "Designated Subsidiaries" shall mean the subsidiaries of the Company
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan, which may include corporations which
become subsidiaries of the Company after the adoption of the Plan.

        j. "Employee" shall mean any person, including an officer, who as of an
Offering Date has been regularly employed on a full-time basis by the Company, a
wholly owned Subsidiary of the Company or a Designated Subsidiary of the Company
for at least six months; provided, however, that an Employee shall not include
any individual whose customary period of employment is for five months or less
in any calendar year.

        k. "Employer" shall mean, as to any particular Employee, the corporation
which employs such Employee, whether it is the Company, a wholly owned
Subsidiary of the Company or a Designated Subsidiary of the Company.

        l. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

        m. "Exercise Date" shall mean the last business day of each Purchase
Period, except as the Committee may otherwise provide.

        n. "Fair Market Value" per Share as of a particular date shall mean (i)
the closing sales price per Share on such date, as reported by the Composite
Transactions reporting system or if not so reported, as reported by the New York
Stock Exchange or (ii) in the event the Shares are not traded on such date, the
closing price per Share, as so reported in the immediately preceding date on
which trading occurred, or if not so reported, as reported by any national
securities exchange on which the Shares are listed.

        o. "Offering Date" shall mean the first Trading Day of each Offering
Period of the Plan. The Offering Date of an Offering Period is the grant date
for the options offered in such Offering Period.

        p. "Offering Period" shall mean a period as described in Section 4
hereof.

                                       3

<PAGE>

        q. "Parent" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of
granting an option, each of the corporations other than the Company owns shares
possessing 50% or more of the total combined voting power of all classes of
shares in one of the other corporations in such chain.

        r. "Participant" shall mean an Employee who participates in the Plan.

        s. "Plan" shall mean the Alamosa Holdings, Inc. Employee Stock Purchase
Plan, as amended from time to time.

        t. "Plan Year" shall mean the calendar year.

        u. "Purchase Period" shall mean each approximately six-month period,
within an Offering Period, commencing on the Trading Day next following the last
previous Exercise Date in such Offering Period and ending with the next Exercise
Date in such Offering Period, except that the first Purchase Period of any
Offering Period shall commence on the first Trading Day of such Offering Period
and end with the next Exercise Date. The first Purchase Period of the first
Offering Period under the Plan shall commence on April 2, 2001 and shall end on
August 31, 2001.

        v. "Shares" shall mean shares of the common stock, par value $.01 per
share, of the Company.

        w. "Subsidiary" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
granting an option, each of the corporations other than the last corporation in
the unbroken chain owns shares possessing fifty percent (50%) or more of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.

        x. "Trading Day" shall mean a day on which national stock exchanges and
the NASDAQ system are open for trading.

        y. "Year of Service" shall mean each successive period of twelve
consecutive months (from an Employee's original employment date) during which
the Employee's hours of employment are 1,000 hours or more.

                                       4

<PAGE>

     3. Eligibility.

        a. Subject to the requirements of Section 3.b. hereof, any person who is
an Employee as of an Offering Date shall be eligible to participate in the Plan
and be granted an option for the Offering Period commencing on such Offering
Date.

        b. Notwithstanding any provisions of the Plan to the contrary, no
Employee shall be granted an option under the Plan if, immediately after the
grant, (i) such Employee (or any other person whose shares would be attributed
to such Employee pursuant to Section 424(d) of the Code) would own shares and/or
hold outstanding options to purchase shares possessing five percent (5%) or more
of the total combined voting power or value of all classes of shares of the
Company or of any Subsidiary or Parent of the Company, or (ii) such Employee's
right to purchase shares under all employee stock purchase plans (as described
in Section 423 of the Code) of the Company and any Subsidiary or Parent of the
Company would accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of Fair Market Value of such shares (determined at the time such
option is granted) for any calendar year in which such option would be
outstanding at any time. Any amounts received from an Employee which cannot be
used to purchase Shares as a result of this limitation will be returned as soon
as possible to the Employee without interest.

     4. Offering Periods. The Plan shall be implemented by a series of
consecutive, overlapping Offering Periods. The first such Offering Period shall
commence on the first Trading Day on or following April 1, 2001 and end on the
last Trading Day on or before February 28, 2003. Unless otherwise determined by
the Committee, each subsequent Offering Period shall have a duration of two
years, commencing on the first Trading Day on or after March 1 and September 1
of each year. The Plan shall continue until terminated in accordance with
Section 19 hereof. Subject to Section 19 hereof, the Committee shall have the
power to change the duration and/or the frequency of Offering Periods and/or
Purchase Periods with respect to future offerings and shall use its best efforts
to notify Employees of any such change at least 15 days prior to the scheduled
beginning of the first Offering Period to be affected. In no event shall any
option granted hereunder be exercisable more than 27 months from its date of
grant.

     To the extent permitted by any applicable laws, regulations, or stock
exchange rules, if the Fair Market Value of the Shares on any Exercise Date in
an Offering Period is lower than the Fair Market Value of the Shares on the
Offering Date of such Offering Period, then all Participants in such Offering
Period shall be automatically withdrawn from such Offering Period immediately
after the exercise

                                       5

<PAGE>

of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

     5. Grant of Option; Participation; Price.

        a. On each Offering Date the Company shall commence an offering by
granting each eligible Employee an option to purchase Shares, subject to the
limitations set forth in Sections 3b and 11 hereof. Each option so granted shall
be exercisable for the number of Shares described in Section 8 hereof and shall
be exercisable only on the Exercise Date.

        b. Each eligible Employee may elect to become a Participant in the Plan
with respect to an Offering Period by filing a subscription agreement with his
or her Employer authorizing payroll deductions in accordance with Section 6
hereof and filing it with the Company or the Employer in accordance with the
form's instructions at least ten business days prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Committee for all Employees with respect to a given offering. Such authorization
will remain in effect for subsequent Offering Periods, until modified or
terminated by the Participant by giving written notice to his or her Employer
prior to the next occurring Exercise Date. Additionally, a Participant may
participate to a greater extent by authorizing reinvestment of dividends on the
Shares held in his or her account (by giving written notice to the Company) or,
if authorized by the Committee for all Participants, by making cash payments to
be credited to his or her account under the Plan in accordance with Section 6
hereof.

        c. The option price per Share subject to an offering shall be 85% of the
Fair Market Value of a Share on (i) the Offering Date or (ii) the Exercise Date,
whichever is lower.

                                       6

<PAGE>

        6. Payroll Deductions and Cash Payments

           a. Subject to Section 5b hereof, a Participant may, in accordance
with rules and procedures adopted by the Committee, authorize a payroll
deduction of any whole percentage from one percent to ten percent of such
Participant's Compensation each pay period (the permissible range within such
percentages to be determined by the Committee from time to time). A Participant
may increase or decrease such payroll deduction (including a cessation of
payroll deductions) at any time but not more frequently than once each Purchase
Period, by filing a new authorization form with his or her Employer. All payroll
deductions made by a Participant shall be credited to such Participant's account
under the Plan.

           b. Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code(1) and Section 3b hereof, a Participant's
payroll deductions may be decreased to 0% at any time during a Purchase Period.
Payroll deductions shall recommence at the rate provided in such Participant's
subscription agreement as in effect at the beginning of the first Purchase
Period scheduled to end in the following calendar year.

           c. A Participant may withdraw from the Plan as provided in Section 9,
which will terminate his or her payroll deductions for the Purchase Period in
which such withdrawal occurs. A Participant may increase or decrease the rate
(0-10%) of his or her payroll deductions during an Offering Period by completing
and filing with the Employer a new subscription agreement authorizing a change
in payroll deduction rate. The Committee may, in its discretion, limit the
number of rate changes by a Participant during an Offering Period. A change in
rate shall be effective as of the next payroll period following the date of
filing of the new subscription agreement.

     7. Exercise of Option.

        a. Unless a Participant withdraws from the Plan as provided in Section 9
hereof, or unless the Committee otherwise provides, such Participant's election
to purchase Shares shall be exercised automatically on the Exercise Date, and
the maximum number of Shares (excluding any fractional Share) subject to such
option will be purchased for such Participant at the applicable option price
with (i) the accumulated payroll deductions, (ii) cash dividends paid on Shares
which have been credited to the Participant's account under the Plan pursuant to
Section 10

-----------------
(1)  This is the $25,000 limitation.

                                       7

<PAGE>

hereof, and (iii) any additional cash payments made by the Participant and
credited to the Participant's account under the Plan in accordance with Section
6 hereof.

        b. Any cash balance remaining in a Participant's account after an
Exercise Date will be carried forward to the Participant's account for the
purchase of Shares on the next Exercise Date if the Participant has elected to
continue to participate in the Plan. Otherwise the Participant will receive a
cash payment equal to the cash balance of his or her account.

        c. The Shares purchased upon exercise of an option hereunder shall be
credited to the Participant's account under the Plan as of the Exercise Date and
shall be deemed to be transferred to the Participant on such date (except that
no Shares purchased during the first Offering Period hereunder shall be credited
to the Participant's account until payment of the aggregate option price has
been completed within the Offering Period). Except as otherwise provided herein,
the Participant shall have all rights of a shareholder with respect to such
Shares upon their being credited to the Participant's account.

     8. Delivery of Shares.

        a. As promptly as practicable after receipt by the Company of a written
request for withdrawal of Shares from any Participant, the Company shall arrange
the delivery to such Participant of a share certificate representing the Shares
in the Participant's account which the Participant requests to withdraw. Subject
to Section 8b hereof, withdrawals may be made no more frequently than once each
Offering Period. Shares received upon share dividends or share splits shall be
treated as having been purchased on the Exercise Date of the Shares to which
they relate.

        b. Notwithstanding anything in Section 8a hereof to the contrary, Shares
may be withdrawn by a Participant more than once during an Offering Period under
the following circumstances: (i) within 60 days following a Change in Control of
the Company or (ii) upon the approval of the Committee, in its sole discretion.

     9. Withdrawal; Termination of Employment.

        a. A Participant may withdraw at any time all, but not less than all,
cash amounts in his or her account under the Plan that have not been used to
purchase Shares (including, without limitation, the payroll deductions, cash
dividends and cash payments credited to such Participant's account) by giving

                                       8

<PAGE>

written notice to the Company prior to the next occurring Exercise Date. All
such payroll deductions, cash dividends and cash payments credited to such
Participant's account shall be paid to such Participant promptly after receipt
of such Participant's notice of withdrawal and such Participant's option for the
Offering Period in which the withdrawal occurs shall be automatically
terminated. No further payroll deductions for the purchase of Shares will be
made for such Participant during such Offering Period, and any additional cash
dividends during the Offering Period shall be distributed to the Participant.

        b. Upon termination of a Participant's Continuous Status as an Employee
during the Offering Period for any reason, including voluntary termination,
retirement or death, the payroll deductions, cash dividends and cash payments
credited to such Participant's account that have not been used to purchase
Shares (and, as to the first Offering Period, any such amounts credited to the
account for partial payment for Shares as to which payment has not been
completed) shall be returned (and any future cash dividends shall be
distributed) to such Participant or, in the case of such Participant's death, to
the person or persons entitled thereto under Section 13 hereof, and such
Participant's option will be automatically terminated.

        c. A Participant's withdrawal from an Offering Period will not have any
effect upon such Participant's eligibility to participate in a succeeding
Offering Period or in any similar plan which may hereafter be adopted by the
Company.

    10. Dividends and Interest.

        a. Cash dividends paid on Shares held in a Participant's account shall
be credited to such Participant's account and used in addition to payroll
deductions (and cash contributions, if any) to purchase Shares on the Exercise
Date. Dividends paid in Shares or share splits of the Shares shall be credited
to the accounts of Participants. Dividends paid in property other than cash or
Shares shall be distributed to Participants as soon as practicable.

        b. No interest shall accrue on or be payable with respect to any cash
amount credited to a Participant under the Plan.

    11. Shares.

        a. Subject to adjustment as provided in Section 17 hereof, the maximum
number of Shares which shall be reserved for sale under the Plan shall be
600,000 Shares, plus an annual increase to be added on the first day of the

                                       9

<PAGE>

Company's fiscal year beginning in 2002 equal to the lesser of (i) 200,000
Shares or (ii) such lesser amount determined by the Committee. Such Shares shall
be either authorized and unissued Shares or Shares which have been reacquired by
the Company. If the total number of Shares which would otherwise be subject to
options granted pursuant to Section 5a hereof on an Offering Date exceeds the
number of Shares then available under the Plan (after deduction of all Shares
for which options have been exercised or are then outstanding), the Committee
shall make a pro rata allocation of the Shares remaining available for option
grant in as uniform a manner as shall be practicable and as it shall determine
to be equitable. In such event, the Committee shall give written notice to each
Participant of such reduction of the number of option Shares affected thereby
and shall similarly reduce the rate of payroll deductions, if necessary.

        b. Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or, at the election of the
Participant, in the name of the Participant and another person as joint tenants
with rights of survivorship.

    12. Administration. The Plan shall be administered by the Committee, and the
Committee may select administrator(s) to whom its duties and responsibilities
hereunder may be delegated. The Committee shall have full power and authority,
subject to the provisions of the Plan, to promulgate such rules and regulations
as it deems necessary for the proper administration of the Plan, to interpret
the provisions and supervise the administration of the Plan, and to take all
action in connection therewith or in relation thereto as it deems necessary or
advisable. Any decision reduced to writing and signed by a majority of the
members of the Committee shall be fully effective as if it had been made at a
meeting duly held. Except as otherwise provided by the Committee, each Employer
shall be charged with all expenses incurred in the administration of the Plan
with respect to such Employer's Employees. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan, and all members of the Committee shall be fully
indemnified by the Company with respect to any such action, determination or
interpretation. All decisions, determinations and interpretations of the
Committee shall be final and binding on all persons, including the Company, the
Participant (or any person claiming any rights under the Plan from or through
any Participant) and any shareholder.

    13. Designation of Beneficiary.

                                       10

<PAGE>

        a. A Participant may file with the Company, on forms supplied by the
Company, a written designation of a beneficiary who is to receive any Shares and
cash remaining in such Participant's account under the Plan in the event of the
Participant's death.

        b. Such designation of beneficiary may be changed by the Participant at
any time by written notice to the Company, on forms supplied by the Company. In
the event of the death of a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
Participant's death, the Company shall deliver such Shares and/or cash to the
executor or administrator of the estate of the Participant or, if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Shares and/or cash to the
spouse or to any one or more dependents or relatives of the Participant in
accordance with the applicable laws of descent and distribution, or if no
spouse, dependent or relative is known to the Company, then to such other person
as the Company may designate.

    14. Transferability. Neither payroll deductions, dividends, dividend
reinvestments or cash payments credited to a Participant's account nor any
rights with regard to the exercise of an option or to receive Shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
by the Participant (other than by will, the laws of descent and distribution or
as provided in Section 13 hereof). Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 9
hereof.

    15. Use of Funds. All payroll deductions, dividends, reinvested
dividends and additional cash payments received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall
not be obligated to segregate such funds.

    16. Reports. Individual accounts will be maintained for each Participant
in the Plan. Statements of account will be given to Participants as soon as
practicable following each Offering Period, which statements will set forth the
amounts of payroll deductions, dividends, dividend reinvestments and additional
cash payments, the per Share purchase price, the number of Shares purchased, the
aggregate Shares in the Participant's account and the remaining cash balance, if
any.

    17. Effect of Certain Changes. In the event of a Change in Capitalization or
the distribution of an extraordinary dividend, the Committee shall conclusively
determine the appropriate equitable adjustments, if any, to be made

                                       11

<PAGE>

under the Plan, including without limitation adjustments to the number of Shares
which have been authorized for issuance under the Plan but have not yet been
placed under option, as well as the price per Share covered by each option under
the Plan which has not yet been exercised. In the event of a Change in Control
of the Company, Offering Periods shall terminate unless otherwise provided by
the Committee.

    18. Term of Plan. Subject to the Board's right to discontinue the Plan
(and thereby end its Term) pursuant to Section 19 hereof, the Term of the Plan
(and its last Offering Period) shall end on the tenth anniversary of the
commencement of the first Offering Period. Upon any discontinuance of the Plan,
unless the Committee shall determine otherwise, any assets remaining in the
Participants' accounts under the Plan shall be delivered to the respective
Participant (or the Participant's legal representative) as soon as practicable.

    19. Amendment to and Discontinuance of Plan. The Board may at any time
amend, suspend or discontinue the Plan. Except as provided in Section 17 hereof,
no such suspension or discontinuance may adversely affect options previously
granted and no amendment may make any change in any option theretofore granted
which adversely affects the rights of any Participant which accrued prior to the
date of effectiveness of such amendment without the consent of such Participant.
No amendment shall be effective unless it receives the requisite approval of the
shareholders of the Company if such shareholder approval of such amendment is
required to comply with Rule 16b-3 under the Exchange Act or Section 423 of the
Code or to comply with any other applicable law, regulation or stock exchange
rule.

    20. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

    21. Regulations and Other Approvals; Governing Law.

        a. This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Delaware
without giving effect to the choice of law principles thereof, except to the
extent that such law is preempted by federal law.

        b. The obligation of the Company to sell or deliver Shares with respect
to options granted under the Plan shall be subject to all applicable laws,

                                       12

<PAGE>

rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Committee.

        c. To the extent applicable hereto, the Plan is intended to comply with
Rule 16b-3 under the Exchange Act, and the Committee shall interpret and
administer the provisions of the Plan in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.

    22. Withholding of Taxes. If the Participant makes a disposition, within
the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any Share or Shares issued to such Participant pursuant to such
Participant's exercise of an option, and such disposition occurs within the
two-year period commencing on the day after the Offering Date or within the
one-year period commencing on the day after the Exercise Date, such Participant
shall, within ten (10) days of such disposition, notify the Company thereof and
thereafter immediately deliver to the Company any amount of Federal, state or
local income taxes and other amounts which the Company informs the Participant
the Company is required to withhold.

    23. Effective Date. The Plan shall be effective as of April 1, 2001,
subject to the approval of the Plan by the shareholders of the Company within 12
months before or after the date the Plan is adopted.

                                       13

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