Document:

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

    

    

    Warrant
      No. NEXM-____ 

    

    COMMON
      STOCK PURCHASE WARRANT

    

    Warrant

    

    To
      Purchase _________ Shares of Common Stock of NEXMED, INC.

    

    THIS
      IS TO CERTIFY THAT ___________, or registered assigns (the “Holder”), is
      entitled, during the Exercise Period (as hereinafter defined), to purchase
      from
      NexMed, Inc., a Nevada corporation (the “Company”), the Warrant Stock (as
      hereinafter defined and subject to adjustment as provided herein), in whole
      or
      in part, at a purchase price of $1.11 per share, all on and subject to the
      terms
      and conditions hereinafter set forth.

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    “Closing
      Date”
      means January 23, 2006.

    

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

    

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

    

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

    

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

    

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

    

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

    

    or

    

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

    

    
      
        
        

      

      
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    “Current
      Warrant Price”
      means, in respect of a share of Common Stock at any date herein specified,
      the
      price at which a share of Common Stock may be purchased pursuant to this Warrant
      on such date. Unless and until the Current Warrant Price is adjusted pursuant
      to
      the terms herein, the initial Current Warrant Price shall be $1.11 per share
      of
      Common Stock. 

    

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

    

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

    

    “Expiration
      Date”
      means January 23, 2010.

    

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

    

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

    

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

    

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

    

    “Purchase
      Agreement”
      means that certain Common Stock and Warrant Purchase Agreement dated as of
      January 23, 2006 among the Company and the other parties named therein, pursuant
      to which this Warrant was originally issued. 

    

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

    

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

    

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

    

    
      
        
        

      

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

    

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

    

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

    

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

    

    2. Exercise
      of Warrant.
      

    

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

    

    In
      order to exercise this Warrant, in whole or in part, the Holder shall deliver
      to
      the Company at its principal office or at the office or agency designated by
      the
      Company pursuant to Section 12, (i) a written notice of Holder’s election to
      exercise this Warrant, which notice shall specify the number of shares of
      Warrant Stock to be purchased, (ii) payment of the Warrant Price as provided
      herein, and (iii) this Warrant. Such notice shall be substantially in the form
      of the subscription form appearing at the end of this Warrant as Exhibit
      A,
      duly executed by the Holder or its agent or attorney. Upon receipt thereof,
      the
      Company shall, as promptly as practicable, and in any event within five Business
      Days thereafter, execute or cause to be executed and deliver or cause to be
      delivered to the Holder a certificate or certificates representing the aggregate
      number of full shares of Warrant Stock issuable upon such exercise, together
      with cash in lieu of any fraction of a share, as hereinafter provided. The
      stock
      certificate or certificates so delivered shall be, to the extent possible,
      in
      such denomination or denominations as the Holder shall request in the notice
      and
      shall be registered in the name of the Holder or such other name as shall be
      designated in the notice. This Warrant shall be deemed to have been exercised
      and such certificate or certificates shall be deemed to have been issued, and
      the Holder or any other Person so designated to be named therein shall be deemed
      to have become a Holder of record of such shares for all purposes, as of the
      date when the notice, together with the payment of the Warrant Price and this
      Warrant, is received by the Company as described above. If this Warrant shall
      have been exercised in part, the Company shall, at the time of delivery of
      the
      certificate or certificates representing Warrant Stock, deliver to the Holder
      a
      new Warrant evidencing the rights of the Holder to purchase the unpurchased
      shares of Common Stock called for by this Warrant, which new Warrant shall
      in
      all other respects be identical with this Warrant, or at the request of the
      Holder, appropriate notation may be made on this Warrant and the same returned
      to the Holder.

    

    
      
        
        

      

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

    

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

    

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

    

    2.4. Restrictions
      on Exercise Amount.
      

    

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

    

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

    

    
      
        
        

      

      
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    3. Transfer,
      Division and Combination.
      

    

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

    

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

    

    
      
        
        

      

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

    

    “THE
      SALE,
      TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
      SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT
      DATED AS OF JANUARY 23, 2006, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY
      AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT
      MAY
      BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
      CERTIFICATE TO THE SECRETARY OF THE COMPANY.”

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

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

    

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

    

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

    

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

    

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

    

    (i) cash,
      

    

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

    

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

    

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

    

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

    

    
      
        
        

      

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

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

    

    5. Notices
      to Warrant Holders.
      

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    13. Financial
      and Business Information.
      

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    15. Redemption.

    

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

    

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

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    16.
       Miscellaneous.
      

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    [Signature
      Page Follows]

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	Dated: January ___, 2006 	 	 
	 	 	 
	 	NEXMED,
              INC.
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              
Name:
	 	Title: 
	 	 

    

     

    
      	Attest: 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	By: 	 	 	 
	
              
                

              
Name:	 	 	
            
	Title: Secretary 	 	 	 

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    SUBSCRIPTION
      FORM

    [To
      be executed only upon exercise of Warrant]

    

    NexMed,
      Inc.

    350
      Corporate Boulevard

    Robbinsville,
      NJ 08691

    Attention:
      Chief Financial Officer 

    Facsimile
      No.: 609-208-1622

    

    Wells
      Fargo Bank, N.A.

    Shareowner
      Services

    161
      North
      Concord Exchange Street

    South
      St
      Paul, MN 55075-1139
Attn: Suzy
      Swits

    Fax:
      651-450-4078

     

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

    

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

    

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

    
      
        	 	 	 	 
	 	 	 	 
	
              	 	 	
                

                (Name)

              
	 	 	 	
                
  
	 	 	 	
                
  
	 	 	 	
                

                (Address) 

              

      

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

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (Delete
      following paragraph if not applicable:)

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

    
      	 	 	 	 
	 	 	 	 
	
              
(Name
              of Registered Owner) 	 	 	
            
	 	 	 	 
	
              
(Signature
              of Registered Owner)  	 	 	 
	 	 	 	 
	
              
(Street
              Address)  	 	 	 
	 	 	 	 
	
              
(State)
              (Zip Code)  	 	 	 

    

    

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

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FORM
      OF INVESTMENT REPRESENTATION LETTER

    

    
      	
              Re:

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

            

    

    

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

    

    
      	 	
              □

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

            

    

    

    
      	 	
              □

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

            

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      	 	 	 	 
	Transferee
              Name: 	 	 	 
	
              
                

              

            	 	 	
            
	
              By:

            	 	 	 
	
              
                
Name:
Title:  

            	 	 	 
	
               

            	 	 	 

    

    
       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    EXHIBIT
      C

    

    ASSIGNMENT
      FORM

    

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

    
      
        	 	 	 	 
	 	 	 	 
	
                

              	 	 	
              
	 	 	 	 
	
                
  	 	 	 
	
                
(Name
                and Address of Assignee)  	 	 	 
	 	 	 	 
	
                
(Number
                of Shares of Common
                Stock) 	 	 	 

      

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

    
      	
            	 	 	 
	Dated: 	 	 	 
	
              
                

              

            	 	 	
            
	 	 	 	 
	
              
(Print
              Name and Title)  	 	 	 
	 	 	 	 
	
              
(Signature)  	 	 	 
	 	 	 	 
	
              
(Witness) 	 	 	 

    

     

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

     

    
      
        
        

      

      
        21COMMON
      STOCK AND WARRANT PURCHASE AGREEMENT

    

    by
      and
      among

    

    NexMed,
      Inc., as Issuer and Seller

    

    and

    

    the
      Purchasers named herein, as Purchasers

    

    

    

    

    

    

    

    

    

    

    
 

    January
      23, 2006

    

    

    

     

    
      

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Table
      of Exhibits and Schedules

    

    Exhibit
      A Form
      of
      Warrant

    

    Exhibit
      B Form
      of
      Registration Rights Agreement

    

    Exhibit
      C Form
      of
      Opinion of Seller’s Counsel

    

    Exhibit
      D Form
      of
      Opinion of Nevada Counsel

     

    
      	Schedule
              1 	Purchasers
              and Shares of Common Stock and Warrants Purchased 
	 	 
	Schedule 3.10 	Litigation 
	 	 
	Schedule 3.11 	Absence of Certain Changes 
	 	 
	Schedule 3.15 	Intellectual Property 
	 	 
	Schedule 3.17 	Preemptive Rights 
	 	 
	Schedule 3.19 	Subsidiaries and
              Investments 
	 	 
	Schedule 3.20 	Capitalization 
	 	 
	Schedule 3.21 	Options, Warrants, Rights 
	 	 
	Schedule 3.22 	Employees, Employment Agreements and
              Employee
              Benefit Plans 
	 	 
	Schedule 3.27 	Brokers 

    

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    COMMON
      STOCK AND WARRANT PURCHASE AGREEMENT (the “Agreement”) dated as of January 23,
      2006, by and among NexMed, Inc., a Nevada corporation (the “Seller”), and each
      of the persons listed on Schedule
      1
      hereto
      (each is individually referred to as a “Purchaser” and collectively, the
“Purchasers”).

    

    W
      I T N E
      S S E T H:

    

    WHEREAS,
      each of the Purchasers is willing to purchase from the Seller, and the Seller
      desires to sell to the Purchasers, shares of the Seller’s common stock, $0.001
      par value (the “Common Stock”), and Common Stock Purchase Warrants in the form
      of Exhibit A hereto (the “Warrants”) entitling the holders thereof to purchase
      additional shares of Common Stock, for an aggregate purchase price of up to
      $8
      million, as more fully set forth herein.

    

    NOW
      THEREFORE, in consideration of the mutual promises and representations,
      warranties, covenants and agreements set forth herein, the parties hereto,
      intending to be legally bound, hereby agree as follows: 

    

    ARTICLE
      I
      - PURCHASE AND SALE

    

    1.1 Purchase
      and Sale.

    

    (a) On
      the
      terms and subject to the conditions set forth in this Agreement, at the Closing
      (as defined in Section 2.2), the Seller will sell and each of the Purchasers
      will purchase the number of shares of Common Stock set forth on Schedule
      1
      hereto at
      a price per share equal to $1.11. In addition, each Purchaser shall receive
      at
      the Closing Warrants to purchase the number of shares (rounded to the nearest
      whole share) of Common Stock equal to 40% of the number of Shares purchased
      by
      such Purchaser at Closing hereunder as set forth on Schedule
      1
      hereto.

    

    (b) The
      shares
      of Common Stock to be issued upon Closing hereunder are referred to herein
      as
      the “Shares,” and the shares of Common Stock issuable upon exercise of the
      Warrants are referred to herein as the “Warrant Shares.”

    

    1.2 Terms
      of the Warrants.
      The
      terms and provisions of the Warrants are more fully set forth in the form of
      Common Stock Purchase Warrant, attached hereto as Exhibit
      A.

    

    1.3 Transfers;
      Legends.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (a) Except
      as
      required by federal securities laws and the securities law of any state or
      other
      jurisdiction within the United States or as otherwise set forth in this
      Agreement or the Related Documents, the Shares, Warrants and Warrant Shares
      (collectively, the “Securities”) may be transferred, in whole or in part, by any
      of the Purchasers at any time. Any such transfer shall be made by a Purchaser
      in
      accordance with applicable law. In connection with any transfer of Securities
      other than pursuant to an effective registration statement under the Securities
      Act of 1933, as amended (the “Securities Act”), or to the Seller, the Seller may
      require the transferor thereof to furnish to the Seller an opinion of counsel
      selected by the transferor, such counsel and the form and substance of which
      opinion shall be reasonably satisfactory to the Seller and Seller’s counsel, to
      the effect that such transfer does not require registration under the Securities
      Act; provided, that in the case of a transfer pursuant to Rule 144 under the
      Securities Act, no opinion shall be required if the transferor provides the
      Seller with a customary seller’s representation letter, and if such sale is not
      pursuant to subsection (k) of Rule 144, a customary broker’s representation
      letter and Form 144. 
      Notwithstanding the foregoing, the Seller hereby consents to and agrees to
      register on the books of the Seller and with any transfer agent for the
      securities of the Seller, without any such legal opinion, any transfer of
      Securities by a Purchaser to an Affiliate of such Purchaser, provided that
      the
      transferee certifies to the Seller that it is an Affiliate of such Purchaser
      and
      an “accredited investor” as defined in Rule 501(a) under the Securities Act and
      that it is acquiring the Securities solely for investment purposes (subject
      to
      the qualifications hereof) and not with a view to, or for, resale, distribution
      or fractionalization thereof in whole or in part in violation of the Securities
      Act. Any transferee shall agree to be bound by the terms of the Registration
      Rights Agreement and this Agreement. The Seller shall reissue certificates
      evidencing the Securities upon surrender of certificates evidencing the
      Securities being transferred in accordance with this Section 1.3(a). In
      connection with any transfer of Warrants after the Registration Statement (as
      defined in the Registration Rights Agreement) is declared effective under the
      Securities Act, the transferor of such Warrants shall reimburse the Seller
      for
      its reasonable out of pocket costs in connection with such transfer (including
      without limitation the reasonable attorneys fees for preparing and filing a
      prospectus supplement with the SEC and/or delivering an updated opinion letter
      to the Seller’s transfer agent). An “Affiliate” means any Person (as such term
      is defined below) that, directly or indirectly through one or more
      intermediaries, controls or is controlled by or is under common control with
      a
      Person, as such terms are used in and construed under Rule 144 under the
      Securities Act. With respect to a Purchaser, any investment fund or managed
      account that is managed on a discretionary basis by the same investment manager
      as such Purchaser will be deemed to be an Affiliate of such Purchaser. A
“Person” means any individual or corporation, partnership, trust, incorporated
      or unincorporated association, joint venture, limited liability company, joint
      stock company, government (or an agency or subdivision of any thereof) or other
      entity of any kind.

     

    (b) The
      certificates representing the Securities shall bear the following
      legends:

    

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

    

    “THE
      SALE,
      TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
      SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT
      DATED AS OF JANUARY 23, 2006, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY
      AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT
      MAY
      BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
      CERTIFICATE TO THE SECRETARY OF THE COMPANY.”

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    ARTICLE
      II
      - PURCHASE PRICE AND CLOSING

    

    2.1 Purchase
      Price.
      The
      aggregate purchase price (the “Purchase Price”) to be paid by each Purchaser to
      the Seller to acquire the Shares and the applicable Warrants shall be the total
      amounts set forth opposite such Purchaser’s name on Schedule
      1
      hereto.

    

    2.2 The
      Closing.
      The
      closing of the transactions contemplated under this Agreement (the “Closing”)
      will take place as promptly as practicable, but no later than five (5) business
      days following satisfaction or waiver of the conditions set forth in Sections
      6.1(a) and 6.2(a) (other than those conditions which by their terms are not
      to
      be satisfied or waived until the Closing), at the offices of Seller’s counsel.
      The date on which the Closing occurs is the “Closing Date.”

    

    ARTICLE
      III - REPRESENTATIONS AND WARRANTIES OF THE SELLER

    

    The
      Seller
      represents and warrants to the Purchasers as follows:

    

    3.1 Corporate
      Existence and Power; Subsidiaries.
      The
      Seller and its Subsidiaries are corporations duly incorporated, validly existing
      and in good standing under the laws of the state in which they are incorporated,
      and have all corporate powers required to carry on their business as now
      conducted. The Seller and its Subsidiaries are duly qualified to do business
      as
      a foreign corporation and are in good standing in each jurisdiction where the
      character of the property owned or leased by them or the nature of their
      activities makes such qualification necessary, except for those jurisdictions
      where the failure to be so qualified would not have a Material Adverse Effect
      on
      the Seller or any of its Subsidiaries. For purposes of this Agreement, the
      term
“Material Adverse Effect” means, with respect to any person or entity, a
      material adverse effect on its and its Subsidiaries’ condition (financial or
      otherwise), business, properties, assets, liabilities (including contingent
      liabilities) or results of operations taken as a whole. True and complete copies
      of the Seller’s Articles of Incorporation, as amended, and Bylaws, as amended,
      as currently in effect and as will be in effect on the Closing Date
      (collectively, the “Articles and Bylaws”), have previously been provided to the
      Purchasers. For purposes of this Agreement, the term “Subsidiary” or
“Subsidiaries” means, with respect to any entity, any corporation or other
      organization of which securities or other ownership interests having ordinary
      voting power to elect a majority of the board of directors or other persons
      performing similar functions are directly or indirectly owned by such entity
      or
      of which such entity is a partner or is, directly or indirectly, the beneficial
      owner of 50% or more of any class of equity securities or equivalent profit
      participation interests. The Seller has no Subsidiaries other than the
      following, each of which, unless otherwise indicated, is wholly-owned by the
      Seller:

     

    
      
        	
              	
                (a)

              	
                NexMed
                  Holdings, Inc., a Delaware
                  corporation,

              

      

      
        	 	 	 

      

    

    
      
        	
              	
                (b)

              	
                NexMed
                  (U.S.A.), Inc., a Delaware
                  corporation,

              

      

      
        	 	 	 

      

    

    
      	 	
              (c)

            	
              NexMed
                International Limited, organized under British Virgin Islands
                law,

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

       

    

    
      	 	
              (1)

            	
              NexMed
                (Americas) Limited, organized under Nova Scotia law and a wholly-owned
                subsidiary of NexMed International Limited,
                and

            

    

    

    
      	 	
              (2)

            	
              NexMed
                International (Hong Kong) Ltd. organized under Hong Kong law and
                a
                wholly-owned subsidiary of NexMed International
                Limited.

            

    

    

    3.2 Corporate
      Authorization.
      The
      execution, delivery and performance by the Seller of this Agreement, the
      Warrants and the Registration Rights Agreement, and each of the other documents
      executed pursuant to and in connection with this Agreement (collectively, the
      “Related Documents”), and the consummation of the transactions contemplated
      hereby and thereby (including, but not limited to, the sale and delivery of
      the
      Shares and the Warrants, and the subsequent issuance of the Warrant Shares
      upon
      exercise of the Warrants) have been duly authorized, and no additional corporate
      or stockholder action is required for the approval of this Agreement. The
      Warrant Shares have been duly reserved for issuance by the Seller. This
      Agreement and the Related Documents have been or, to the extent contemplated
      hereby or by the Related Documents, will be duly executed and delivered and
      constitute the legal, valid and binding agreement of the Seller, enforceable
      against the Seller in accordance with their terms, except as may be limited
      by
      bankruptcy, reorganization, insolvency, moratorium and similar laws of general
      application relating to or affecting the enforcement of rights of creditors,
      and
      except as enforceability of its obligations hereunder are subject to general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding in equity or at law).

    

    3.3 Charter,
      Bylaws and Corporate Records.
      The
      minute books of the Seller and its Subsidiaries contain complete and accurate
      records of all meetings and other corporate actions of the board of directors,
      committees of the board of directors, incorporators and stockholders of the
      Seller and its Subsidiaries from September 15, 1995 to the date hereof. All
      material corporate decisions and actions have been validly made or taken. All
      corporate books, including without limitation the share transfer register,
      comply with applicable laws and regulations and have been regularly updated.
      Such books fully and correctly reflect all the decisions of the
      stockholders.

     

    3.4 Governmental
      Authorization.
      Except
      as otherwise specifically contemplated in this Agreement and the Related
      Documents, and except for: (i) the filing of a Form D with respect to the Shares
      and Warrants under Regulation D under the Securities Act; (ii) the filing of
      the
      Registration Statement with the Commission; (iii) the application(s) to each
      trading market for the listing of the Shares and the Warrant Shares for trading
      thereon; and (iv) any filings required under state securities laws that are
      permitted to be made after the date hereof, the execution, delivery and
      performance by the Seller of this Agreement and the Related Documents, and
      the
      consummation of the transactions contemplated hereby and thereby (including,
      but
      not limited to, the sale and delivery of the Shares and Warrants and the
      subsequent issuance of the Warrant Shares upon exercise of the Warrants, as
      applicable) by the Seller require no action by or in respect of, or filing
      with,
      any governmental body, agency, official or authority. Notwithstanding the
      foregoing, the Seller makes no representation or warranty with respect to the
      compliance of the transactions contemplated by this Agreement with Rule 4350(i)
      of the National Association of Securities Dealers, Inc. (“NASD”).

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    3.5 Non-Contravention.
      The
      execution, delivery and performance by the Seller of this Agreement and the
      Related Documents, and the consummation by the Seller of the transactions
      contemplated hereby and thereby (including the issuance of the Shares and
      Warrant Shares) do not and will not (a) contravene or conflict with the Articles
      and Bylaws of the Seller and its Subsidiaries or any material agreement to
      which
      the Seller is a party or by which it is bound; (b) contravene or conflict with
      or constitute a violation of any provision of any law, regulation, judgment,
      injunction, order or decree binding upon or applicable to the Seller or its
      Subsidiaries; (c) constitute a default (or would constitute a default with
      notice or lapse of time or both) under or give rise to a right of termination,
      cancellation or acceleration or loss of any benefit under any material
      agreement, contract or other instrument binding upon the Seller or its
      Subsidiaries or under any material license, franchise, permit or other similar
      authorization held by the Seller or its Subsidiaries; or (d) result in the
      creation or imposition of any Lien (as defined below) on any asset of the Seller
      or its Subsidiaries. For purposes of this Agreement, the term “Lien” means, with
      respect to any asset, any mortgage, lien, pledge, charge, security interest,
      claim or encumbrance of any kind in respect of such asset.

    

    3.6 SEC
      Documents.
      The
      Seller is obligated under the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”) to file reports pursuant to Sections 13 or 15(d) thereof (all
      such reports filed or required to be filed by the Seller, including all exhibits
      thereto or incorporated therein by reference, and all documents filed by the
      Seller under the Securities Act hereinafter called the “SEC Documents”). The
      Seller has filed all reports or other documents required to be filed under
      the
      Exchange Act. All SEC Documents filed by the Seller as of or for any period
      beginning on or after January 1, 2003, (i) were prepared in all material
      respects in accordance with the requirements of the Exchange Act and (ii) did
      not at the time they were filed (or, if amended or superseded by a filing prior
      to the date hereof, then on the date of such filing) contain any untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary in order to make the statements therein, in light
      of
      the circumstances under which they were made, not misleading. The Seller has
      previously delivered to the Purchaser a correct and complete copy of each report
      (including, without limitation, the Seller’s 2005 Proxy Statement) which the
      Seller filed with the Securities and Exchange Commission (the “SEC” or the
“Commission”) under the Exchange Act for any period ending on or after December
      31, 2003 (the “Recent Reports”) to the extent not available via EDGAR. None of
      the information about the Seller or any of its Subsidiaries which has been
      disclosed to the Purchasers herein or in the course of discussions and
      negotiations with respect hereto which is not disclosed in the Recent Reports
      is
      or was required to be so disclosed, and no material non-public information
      has
      been disclosed to the Purchasers.

    

    3.7 Financial
      Statements.
      Each of
      the Seller’s audited consolidated balance sheet and related consolidated
      statements of income, cash flows and changes in stockholders’ equity (including
      the related notes) as of and for the years ended December 31, 2004 and December
      31, 2003, as contained in the Recent Reports (collectively, the “Seller’s
      Financial Statements” or the “Financial Statements”) (x) present fairly in all
      material respects the financial position of the Seller and its Subsidiaries
      on a
      consolidated basis as of the dates thereof and the results of operations, cash
      flows and stockholders’ equity as of and for each of the periods then ended, and
      (y) were prepared in accordance with generally accepted accounting principals
      (“GAAP”) applied on a consistent basis throughout the periods involved, in each
      case, except as otherwise indicated in the notes thereto.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    3.8 Compliance
      with Law.
      The
      Seller and its Subsidiaries are in compliance and have conducted their business
      so as to comply with all laws, rules and regulations, judgments, decrees or
      orders of any court, administrative agency, commission, regulatory authority
      or
      other governmental authority or instrumentality, domestic or foreign, applicable
      to their operations, the violation of which would cause a Material Adverse
      Affect. There are no judgments or orders, injunctions, decrees, stipulations
      or
      awards (whether rendered by a court or administrative agency or by arbitration),
      including any such actions relating to affirmative action claims or claims
      of
      discrimination, against the Seller or its Subsidiaries or against any of their
      properties or businesses.

    

    3.9 No
      Defaults.
      The
      Seller and its Subsidiaries are not, nor have they received notice that they
      would be with the passage of time, giving of notice, or both, (i) in violation
      of any provision of their Articles and Bylaws (ii) in default or violation
      of
      any term, condition or provision of (A) any judgment, decree, order, injunction
      or stipulation applicable to the Seller or its Subsidiaries or (B) any material
      agreement, note, mortgage, indenture, contract, lease or instrument, permit,
      concession, franchise or license to which the Seller or its Subsidiaries are
      a
      party or by which the Seller or its Subsidiaries or their properties or assets
      may be bound, and no circumstances exist which would entitle any party to any
      material agreement, note, mortgage, indenture, contract, lease or instrument
      to
      which such Seller or its Subsidiaries are a party, to terminate such as a result
      of such Seller or its Subsidiaries, having failed to meet any material provision
      thereof including, but not limited to, meeting any applicable milestone under
      any material agreement or contract.

    

    3.10 Litigation.
      Except
      as disclosed in the Recent Reports or on Schedule
      3.10,
      there is
      no action, suit, proceeding, judgment, claim or investigation pending or, to
      the
      best knowledge of the Seller, threatened against the Seller and its Subsidiaries
      which could, individually or in the aggregate, reasonably be expected to have
      a
      Material Adverse Effect on the Seller or its Subsidiaries or which in any manner
      challenges or seeks to prevent, enjoin, alter or materially delay any of the
      transactions contemplated hereby, and there is no basis for the assertion of
      any
      of the foregoing. Each Purchaser acknowledges that it is aware that the Company
      has received notice from The Nasdaq Stock Market that the Common Stock is not
      in
      compliance with applicable listing requirements, and that such Purchaser has
      reviewed the Company’s Form 8-K filed with the Commission on January 6,
      2006.

    

    There
      are
      no claims or complaints existing or, to the knowledge of the Seller or its
      Subsidiaries threatened, for product liability in respect of any product of
      the
      Seller or its Subsidiaries, and the Seller and its Subsidiaries are not aware
      of
      any basis for the assertion of any such claim.

    

    3.11 Absence
      of Certain Changes.
      Since
      December 31, 2004, the Seller has conducted its business only in the ordinary
      course and there has not occurred, except as set forth in the Recent Reports
      or
      any exhibit thereto or incorporated by reference therein:

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (a) Any
      event
      that could reasonably be expected to have a Material Adverse Effect on the
      Seller or any of its Subsidiaries;

    

    (b) Any
      amendments or changes in the Articles or Bylaws of the Seller and its
      Subsidiaries.

    

    (c) Any
      damage, destruction or loss, whether or not covered by insurance, that would,
      individually or in the aggregate, have or would be reasonably likely to have,
      a
      Material Adverse Effect on the Seller and its Subsidiaries;

    

    (d) Except
      as
      set forth in the Recent Reports or on Schedule
      3.11(d),
      any

    

    (i) incurrence,
      assumption or guarantee by the Seller or its Subsidiaries of any debt for
      borrowed money other than for equipment leases; 

    

    (ii) issuance
      or sale of any securities convertible into or exchangeable for securities of
      the
      Seller other than to directors, employees and consultants pursuant to existing
      equity compensation or stock purchase plans of the Seller; 

    

    (iii) issuance
      or sale of options or other rights to acquire from the Seller or its
      Subsidiaries, directly or indirectly, securities of the Seller or any securities
      convertible into or exchangeable for any such securities, other than options
      issued to directors, employees and consultants in the ordinary course of
      business in accordance with past practice; 

    

    (iv) issuance
      or sale of any stock, bond or other corporate security, other than upon the
      exercise or conversion of convertible securities;

    

    (v) discharge
      or satisfaction of any material Lien, other than current liabilities incurred
      since December 31, 2004 in the ordinary course of business; 

    

    (vi) declaration
      or making any payment or distribution to stockholders or purchase or redemption
      of any share of its capital stock or other security; 

    

    (vii) sale,
      assignment or transfer any of its intangible assets except in the ordinary
      course of business, or cancellation of any debt or claim except in the ordinary
      course of business;

    

    (viii) waiver
      of
      any right of substantial value whether or not in the ordinary course of
      business;

    

    (ix) material
      change in officer compensation except in the ordinary course of business and
      consistent with past practices; or 

    

    (x) other
      commitment (contingent or otherwise) to do any of the foregoing.

    

    
      
        
        

      

      
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    (e) Any
      creation, sufferance or assumption by the Seller or any of its Subsidiaries
      of
      any Lien on any asset (other than Liens existing on the date hereof or in
      connection with equipment leases and working capital lines of credit set forth
      on Schedule
      3.11(e))
      or any
      making of any loan, advance or capital contribution to or investment in any
      Person in an aggregate amount which exceeds $25,000 outstanding at any
      time;

    

    (f) Any
      entry
      into, amendment of, relinquishment, termination or non-renewal by the Seller
      or
      its Subsidiaries of any material contract, license, lease, transaction,
      commitment or other right or obligation, other than in the ordinary course
      of
      business; or

    

    (g) Any
      transfer or grant of a right with respect to the trademarks, trade names,
      service marks, trade secrets, copyrights or other intellectual property rights
      owned or licensed by the Seller or its Subsidiaries, except as among the Seller
      and its Subsidiaries. 

    

    3.12 No
      Undisclosed Liabilities.
      Except
      as set forth in the Recent Reports, and except for liabilities and obligations
      incurred in the ordinary course of business since December 31, 2004, as of
      the
      date hereof, (i) the Seller and its Subsidiaries do not have any material
      liabilities or obligations (absolute, accrued, contingent or otherwise) which,
      and (ii) there has not been any aspect of the prior or current conduct of the
      business of the Seller or its Subsidiaries which may form the basis for any
      material claim by any third party which if asserted could result in any such
      material liabilities or obligations which, are not fully reflected, reserved
      against or disclosed in the balance sheet of the Seller as at December 31,
      2004.

    

    3.13 Taxes.
      All tax
      returns and tax reports required to be filed with respect to the income,
      operations, business or assets of the Seller and its Subsidiaries have been
      timely filed (or appropriate extensions have been obtained) with the appropriate
      governmental agencies in all jurisdictions in which such returns and reports
      are
      required to be filed, and all of the foregoing as filed are correct and complete
      and, in all material respects, reflect accurately all liability for taxes of
      the
      Seller and its Subsidiaries for the periods to which such returns relate, and
      all amounts shown as owing thereon have been paid. All income, profits,
      franchise, sales, use, value added, occupancy, property, excise, payroll,
      withholding, FICA, FUTA and other taxes (including interest and penalties),
      if
      any, collectible or payable by the Seller and its Subsidiaries or relating
      to or
      chargeable against any of its material assets, revenues or income or relating
      to
      any employee, independent contractor, creditor, stockholder or other third
      party
      through the Closing Date, will have been fully collected and paid by such date
      if due by such date or provided for by adequate reserves in the Financial
      Statements as of and for the periods ended December 31, 2004 (other than taxes
      accruing after such date) and all similar items due through the Closing Date
      will have been fully paid by that date or provided for by adequate reserves,
      whether or not any such taxes were reported or reflected in any tax returns
      or
      filings. No taxation authority has sought to audit the records of the Seller
      or
      any of its Subsidiaries for the purpose of verifying or disputing any tax
      returns, reports or related information and disclosures provided to such
      taxation authority, or for the Seller’s or any of its Subsidiaries’ alleged
      failure to provide any such tax returns, reports or related information and
      disclosure. No material claims or deficiencies have been asserted against or
      inquiries raised with the Seller or any of its Subsidiaries with respect to
      any
      taxes or other governmental charges or levies which have not been paid or
      otherwise satisfied, including claims that, or inquiries whether, the Seller
      or
      any of its Subsidiaries has not filed a tax return that it was required to
      file,
      and, to the best of the Seller’s knowledge, there exists no reasonable basis for
      the making of any such claims or inquiries. Neither the Seller nor any of its
      Subsidiaries has waived any restrictions on assessment or collection of taxes
      or
      consented to the extension of any statute of limitations relating to
      taxation.

    

    
      
        
        

      

      
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    3.14 Interests
      of Officers, Directors and Other Affiliates.
      The
      description of any interest held, directly or indirectly, by any officer,
      director or other Affiliate of Seller (other than the interests of the Seller
      and its Subsidiaries in such assets) in any property, real or personal, tangible
      or intangible, used in or pertaining to Seller’s business, including any
      interest in the Intellectual Property (as defined in Section 3.15 hereof),
      as
      set forth in the Recent Reports, is true and complete, and no officer, director
      or other Affiliate of the Seller has any interest in any property, real or
      personal, tangible or intangible, used in or pertaining to the Seller’s
      business, including the Seller’s Intellectual Property, other than as set forth
      in the Recent Reports.

    

    3.15 Intellectual
      Property.
      Other
      than as set forth in the Recent Reports: 

    

    (a) the
      Seller
      or a Subsidiary thereof has the right to use or is the sole and exclusive owner
      of all right, title and interest in and to all foreign and domestic patents,
      patent rights, trademarks, service marks, trade names, brands and copyrights
      (whether or not registered and, if applicable, including pending applications
      for registration) owned, used or controlled by the Seller and its Subsidiaries
      (collectively, the “Rights”) and in and to each material invention, software,
      trade secret, technology, product, composition, formula, method of process
      used
      by the Seller or its Subsidiaries (the Rights and such other items, the
“Intellectual Property”), and, to the Seller’s knowledge, has the right to use
      the same, free and clear of any claim or conflict with the rights of others;
      

    

    (b) no
      royalties or fees (license or otherwise) are payable by the Seller or its
      Subsidiaries to any Person by reason of the ownership or use of any of the
      Intellectual Property except as set forth on Schedule
      3.15;
      

    

    (c) there
      have
      been no claims made against the Seller or its Subsidiaries asserting the
      invalidity, abuse, misuse, or unenforceability of any of the Intellectual
      Property, and, to its knowledge, there are no reasonable grounds for any such
      claims; 

    

    (d) neither
      the Seller nor its Subsidiaries have made any claim of any violation or
      infringement by others of its rights in the Intellectual Property, and to the
      best of the Seller’s knowledge, no reasonable grounds for such claims exist; and

    

    (e) neither
      the Seller nor its Subsidiaries have received notice that it is in conflict
      with
      or infringing upon the asserted rights of others in connection with the
      Intellectual Property.

    

    3.16 Restrictions
      on Business Activities.
      Other
      than as set forth in the Recent Reports, there is no agreement, judgment,
      injunction, order or decree binding upon the Seller or its Subsidiaries which
      has or could reasonably be expected to have the effect of prohibiting or
      materially impairing any business practice of the Seller or its Subsidiaries,
      any acquisition of property by the Seller or its Subsidiaries or the conduct
      of
      business by the Seller or its Subsidiaries as currently conducted or as
      currently proposed to be conducted by the Seller.

    

    
      
        
        

      

      
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    3.17 Preemptive
      Rights.
      Except
      as set forth in Schedule
      3.17,
      none of
      the stockholders of the Seller possess any preemptive rights in respect of
      the
      Shares or Warrant Shares to be issued to the Purchasers upon exercise of the
      Warrants, as applicable. Each Purchaser which is also a holder of the Company’s
      Series C 6% Cumulative Convertible Preferred Stock (the “Series C Stock”) hereby
      acknowledges that the Company has fully complied with Section 10 of the
      Certificate of Designation of the Series C Stock in connection with such
      Purchaser’s participation rights in this offering, and waives all other rights
      with respect to such Section 10 in connection with this offering.

    

    3.18 Insurance.
      The
      insurance policies providing insurance coverage to the Seller or its
      Subsidiaries including for product liability are adequate for the business
      conducted by the Seller and its Subsidiaries (currently limited to the testing
      phase) and are sufficient for compliance by the Seller and its Subsidiaries
      with
      all requirements of law and all material agreements to which the Seller or
      its
      Subsidiaries are a party or by which any of their assets are bound. All of
      such
      policies are in full force and effect and are valid and enforceable in
      accordance with their terms, and the Seller and its Subsidiaries have complied
      with all material terms and conditions of such policies, including premium
      payments. None of the insurance carriers has indicated to the Seller or its
      Subsidiaries an intention to cancel any such policy.

    

    3.19 Subsidiaries
      and Investments.
      Except
      as set forth in the Recent Reports or on Schedule
      3.19,
      the
      Seller has no Subsidiaries or Investments. For purposes of this Agreement,
      the
      term “Investments” shall mean, with respect to any Person, all advances, loans
      or extensions of credit to any other Person, all purchases or commitments to
      purchase any stock, bonds, notes, debentures or other securities of any other
      Person, and any other investment in any other Person, including partnerships
      or
      joint ventures (whether by capital contribution or otherwise) or other similar
      arrangement (whether written or oral) with any Person, including but not limited
      to arrangements in which (i) the Person shares profits and losses, (ii) any
      such
      other Person has the right to obligate or bind the Person to any third party,
      or
      (iii) the Person may be wholly or partially liable for the debts or obligations
      of such partnership, joint venture or other arrangement.

    

    3.20 Capitalization.
      The
      authorized capital stock of the Seller consists of 120,000,000 shares of common
      stock, $0.001 par value per share, of which 55,517,785 shares are issued and
      outstanding as of the date hereof, and 10,000,000 shares of preferred stock,
      issuable in one or more classes or series, with such relative rights and
      preferences as the Board of Directors may determine, none of which has been
      authorized for issuance other than 1,000,000 shares of Series A Junior
      Participating Preferred Stock, $0.001 par value per share, none of which,
      immediately prior to the Closing, has been issued or is outstanding, 800 shares
      of the Company’s Series B 8% Cumulative Convertible Preferred Stock, 800 of
      which have been issued and none of which, immediately prior to the Closing,
      are
      outstanding and 600 shares of the Company’s Series C Stock, 445 of which have
      been issued and 99.5 of which, immediately prior to Closing, are outstanding.
      All shares of the Seller’s issued and outstanding capital stock have been duly
      authorized, are validly issued and outstanding, and are fully paid and
      nonassessable. No securities issued by the Seller from the date of its
      incorporation to the date hereof were issued in violation of any statutory
      or
      common law preemptive rights. There are no dividends which have accrued or
      been
      declared but are unpaid on the capital stock of the Seller. All taxes required
      to be paid by Seller in connection with the issuance and any transfers of the
      Seller’s capital stock have been paid. Except as set forth on Schedule
      3.20,
      all
      permits or authorizations required to be obtained from or registrations required
      to be effected with any Person in connection with any and all issuances of
      securities of the Seller from the date of the Seller’s incorporation to the date
      hereof have been obtained or effected, and all securities of the Seller have
      been issued and are held in accordance with the provisions of all applicable
      securities or other laws.

    

    
      
        
        

      

      
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    3.21 Options,
      Warrants, Rights.
      Except
      as set forth in the Recent Reports or on Schedule
      3.21,
      there
      are no outstanding (a) securities, notes or instruments convertible into or
      exercisable for any of the capital stock or other equity interests of the Seller
      or its Subsidiaries; (b) options, warrants, subscriptions or other rights to
      acquire capital stock or other equity interests of the Seller or its
      Subsidiaries; or (c) commitments, agreements or understandings of any kind,
      including employee benefit arrangements, relating to the issuance or repurchase
      by the Seller or its Subsidiaries of any capital stock or other equity interests
      of the Seller or its Subsidiaries, any such securities or instruments
      convertible or exercisable for securities or any such options, warrants or
      rights. Except as set forth on Schedule
      3.21,
      neither
      the Seller nor the Subsidiaries have granted anti-dilution rights to any person
      or entity in connection with any outstanding option, warrant, subscription
      or
      any other instrument convertible or exercisable for the securities of the Seller
      or any of its Subsidiaries. Other than the rights granted to the Purchasers
      under the Registration Rights Agreement, there are no outstanding rights which
      permit the holder thereof to cause the Seller or the Subsidiaries to file a
      registration statement under the Securities Act or which permit the holder
      thereof to include securities of the Seller or any of its Subsidiaries in a
      registration statement filed by the Seller or any of its Subsidiaries under
      the
      Securities Act, and there are no outstanding agreements or other commitments
      which otherwise relate to the registration of any securities of the Seller
      or
      any of its Subsidiaries for sale or distribution in any jurisdiction, except
      as
      set forth on Schedule
      3.21.

    

    3.22 Employees,
      Employment Agreements and Employee Benefit Plans.
      Except
      as set forth in the Recent Reports or on Schedule
      3.22,
      there
      are no employment, consulting, severance or indemnification arrangements,
      agreements, or understandings between the Seller and any officer, director,
      consultant or employee of the Seller or its Subsidiaries (the “Employment
      Agreements”). Except as set forth in the Recent Reports or on Schedule
      3.22,
      no
      Employment Agreement provides for the acceleration or change in the award,
      grant, vesting or determination of options, warrants, rights, severance
      payments, or other contingent obligations of any nature whatsoever of the Seller
      or its Subsidiaries in favor of any such parties in connection with the
      transactions contemplated by this Agreement. Except as disclosed in the Recent
      Reports or on Schedule
      3.22,
      the
      terms of employment or engagement of all directors, officers, employees, agents,
      consultants and professional advisors of the Seller and its Subsidiaries are
      such that their employment or engagement may be terminated upon not more than
      two weeks’ notice given at any time without liability for payment of
      compensation or damages and the Seller and its Subsidiaries have not entered
      into any agreement or arrangement for the management of their business or any
      part thereof other than with their directors or employees.

    

    3.23 Absence
      of Certain Business Practices.
      Neither
      the Seller, nor any Affiliate of the Seller, nor to the knowledge of the Seller,
      any agent or employee of the Seller, any other Person acting on behalf of or
      associated with the Seller, or any individual related to any of the foregoing
      Persons, acting alone or together, has: (a) received, directly or indirectly,
      any rebates, payments, commissions, promotional allowances or any other economic
      benefits, regardless of their nature or type, from any customer, supplier,
      trading company, shipping company, governmental employee or other Person with
      whom the Seller has done business directly or indirectly; or (b) directly or
      indirectly, given or agreed to give any gift or similar benefit to any customer,
      supplier, trading company, shipping company, governmental employee or other
      Person who is or may be in a position to help or hinder the business of the
      Seller (or assist the Seller in connection with any actual or proposed
      transaction) which (i) may subject the Seller to any damage or penalty in any
      civil, criminal or governmental litigation or proceeding, (ii) if not given
      in
      the past, may have had an adverse effect on the Seller or (iii) if not continued
      in the future, may adversely affect the assets, business, operations or
      prospects of the Seller or subject the Seller to suit or penalty in any private
      or governmental litigation or proceeding.

    

    
      
        
        

      

      
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    3.24 Products
      and Services.
      To the
      knowledge of the Seller and except as disclosed in the Recent Reports, there
      exists no set of facts (i) which could furnish a basis for the withdrawal,
      suspension or cancellation of any registration, license, permit or other
      governmental approval or consent of any governmental or regulatory agency with
      respect to any product or service developed or provided by the Seller or its
      Subsidiaries, (ii) which could furnish a basis for the withdrawal, suspension
      or
      cancellation by order of any state, federal or foreign court of law of any
      product or service, or (iii) which could have a Material Adverse Effect on
      the
      continued operation of any facility of the Seller or its Subsidiaries or which
      could otherwise cause the Seller or its Subsidiaries to withdraw, suspend or
      cancel any such product or service from the market or to change the marketing
      classification of any such product or service. Each product or service provided
      by Seller or its Subsidiaries has been provided in accordance in all material
      respects with the specifications under which such product or service normally
      is
      and has been provided and the provisions of all applicable laws or regulations.
      

    

    3.25 Environmental
      Matters.
      None of
      the premises or any properties owned, occupied or leased by the Seller or its
      Subsidiaries (the “Premises”) has been used by the Seller or the Subsidiaries
      or, to the Seller’s knowledge, by any other Person, to manufacture, treat,
      store, or dispose of any substance that has been designated to be a “hazardous
      substance” under applicable Environmental Laws (hereinafter defined) (“Hazardous
      Substances”) in violation of any applicable Environmental Laws. To its
      knowledge, the Seller has not disposed of, discharged, emitted or released
      any
      Hazardous Substances which would require, under applicable Environmental Laws,
      remediation, investigation or similar response activity. No Hazardous Substances
      are present as a result of the actions of the Seller or, to the Seller’s
      knowledge, any other Person, in, on or under the Premises which would give
      rise
      to any liability or clean-up obligations of the Seller under applicable
      Environmental Laws. The Seller and, to the Seller’s knowledge, any other Person
      for whose conduct it may be responsible pursuant to an agreement or by operation
      of law, are in compliance with all laws, regulations and other federal, state
      or
      local governmental requirements, and all applicable judgments, orders, writs,
      notices, decrees, permits, licenses, approvals, consents or injunctions in
      effect on the date of this Agreement relating to the generation, management,
      handling, transportation, treatment, disposal, storage, delivery, discharge,
      release or emission of any Hazardous Substance (the “Environmental Laws”).
      Neither the Seller nor, to the Seller’s knowledge, any other Person for whose
      conduct it may be responsible pursuant to an agreement or by operation of law
      has received any written complaint, notice, order, or citation of any actual,
      threatened or alleged noncompliance with any of the Environmental Laws, and
      there is no proceeding, suit or investigation pending or, to the Seller’s
      knowledge, threatened against the Seller or, to the Seller’s knowledge, any such
      Person with respect to any violation or alleged violation of the Environmental
      Laws, and, to the knowledge of the Seller, there is no basis for the institution
      of any such proceeding, suit or investigation. 

    

    
      
        
        

      

      
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    3.26 Licenses;
      Compliance With FDA and Other Regulatory Requirements.
      

    

    (a) General.
      Except
      as disclosed in the Recent Reports, the Seller holds all material
      authorizations, consents, approvals, franchises, licenses and permits required
      under applicable law or regulation for the operation of the business of the
      Seller and its Subsidiaries as currently operated (the “Governmental
      Authorizations”). All the Governmental Authorizations have been duly issued or
      obtained and are in full force and effect, and the Seller and its Subsidiaries
      are in material compliance with the terms of all the Governmental
      Authorizations. The Seller and its Subsidiaries have not engaged in any activity
      that, to their knowledge, would cause revocation or suspension of any such
      Governmental Authorizations. The Seller has no knowledge of any facts which
      could reasonably be expected to cause the Seller to believe that the
      Governmental Authorizations will not be renewed by the appropriate governmental
      authorities in the ordinary course. Neither the execution, delivery nor
      performance of this Agreement shall adversely affect the status of any of the
      Governmental Authorizations.

    

    (b) FDA.
      Without
      limiting the generality of the representations and warranties made in paragraph
      (a) above, the Seller represents and warrants that (i) the Seller and each
      of
      its Subsidiaries is in material compliance with all applicable provisions of
      the
      United States Federal Food, Drug, and Cosmetic Act (the “FDC Act”), (ii) its
      products and those of each of its Subsidiaries that are in the Seller’s control
      are not adulterated or misbranded and are in lawful distribution, (iii) the
      United States Food and Drug Administration (the “FDA”) has not initiated legal
      action with respect to the manufacturing of the Seller’s products, such as
      seizures or FDA-required recalls, and Seller uses best efforts to comply with
      applicable FDA good manufacturing practice regulations, (iv) all adverse events
      that were known to and required to be reported by Seller to the FDA have been
      reported to the FDA in a timely manner, (v) neither the Seller nor any of its
      Subsidiaries is, to their knowledge, employing or utilizing the services of
      any
      individual who has been debarred under the FDC Act, (vi) all stability studies
      required to be performed for products distributed by the Seller or any of its
      Subsidiaries have been completed or are ongoing in material compliance with
      the
      applicable FDA requirements, and (vii) the Seller and its Subsidiaries are
      in
      compliance in all material respects with all applicable provisions of the
      Controlled Substances Act.

    

    3.27 Brokers.
      Except
      as set forth on Schedule
      3.27,
      no
      broker, finder or investment banker is entitled to any brokerage, finder’s or
      other fee or commission in connection with the transactions contemplated by
      this
      Agreement, based upon any arrangement made by or on behalf of the Seller, which
      would make any Purchaser liable for any fees or commissions. 

    

    3.28 Securities
      Laws.
      Neither
      the Seller nor its Subsidiaries nor any agent acting on behalf of the Seller
      or
      its Subsidiaries has taken or will take any action which might cause this
      Agreement or the Warrants to violate the Securities Act or the Exchange Act
      or
      any rules or regulations promulgated thereunder, as in effect on the Closing
      Date. Assuming that all of the representations and warranties of the Purchasers
      set forth in Article IV are true, all offers and sales of capital stock,
      securities and notes of the Seller were conducted and completed in compliance
      with the Securities Act. All shares of capital stock and other securities issued
      by the Seller and its Subsidiaries prior to the date hereof have been issued
      in
      transactions that were either registered offerings or were exempt from the
      registration requirements under the Securities Act and all applicable state
      securities or “blue sky” laws and in compliance with all applicable corporate
      laws.

    

    
      
        
        

      

      
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    3.29 Disclosure.
      No
      representation or warranty made by the Seller in this Agreement, nor in any
      document, written information, financial statement, certificate, schedule or
      exhibit prepared and furnished by the Seller or the representatives of the
      Seller pursuant hereto or in connection with the transactions contemplated
      hereby, contains or will contain any untrue statement of a material fact, or
      omits to state a material fact necessary to make the statements or facts
      contained herein or therein not misleading in light of the circumstances under
      which they were furnished.

    

    ARTICLE
      IV
      - REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

    

    Each
      Purchaser, for itself only, hereby severally and not jointly, represents and
      warrants to the Seller as follows:

    

    4.1 Existence
      and Power.
      The
      Purchaser is duly organized, validly existing and in good standing under the
      laws of the jurisdiction of such Purchaser’s organization. The Purchaser has all
      powers required to carry on such Purchaser’s business as now
      conducted.

    

    4.2 Authorization.
      The
      execution, delivery and performance by the Purchaser of this Agreement, the
      Related Documents to which such Purchaser is a party, and the consummation
      by
      the Purchaser of the transactions contemplated hereby and thereby have been
      duly
      authorized, and no additional action is required for the approval of this
      Agreement or the Related Documents. This Agreement and the Related Documents
      to
      which the Purchaser is a party have been or, to the extent contemplated hereby,
      will be duly executed and delivered and constitute valid and binding agreements
      of the Purchaser, enforceable against such Purchaser in accordance with their
      terms, except as may be limited by bankruptcy, reorganization, insolvency,
      moratorium and similar laws of general application relating to or affecting
      the
      enforcement of rights of creditors and except that enforceability of their
      obligations thereunder are subject to general principles of equity (regardless
      of whether such enforceability is considered in a proceeding in equity or at
      law).

    

    4.3 Investment.
      The
      Purchaser is acquiring the securities described herein for its own account
      and
      not with a view to, or for sale in connection with, any distribution thereof,
      nor with the intention of distributing or reselling the same, provided, however,
      that by making the representation herein, the Purchaser does not agree to hold
      any of the securities for any minimum or other specific term and reserves the
      right to dispose of the securities at any time in accordance with or pursuant
      to
      a registration statement or an exemption under the Securities Act. The Purchaser
      is aware that none of the securities has been registered under the Securities
      Act or under applicable state securities or blue sky laws. The Purchaser is
      an
“Accredited Investor” as such term is defined in Rule 501 of Regulation D, as
      promulgated under the Securities Act (including, without limitation, if the
      Purchaser is an employee benefit plan within the meaning of the Employee
      Retirement Income Security Act of 1974 and a self-directed plan, then investment
      decisions are made solely by persons that are “Accredited
      Investors”).

    

    
      
        
        

      

      
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    4.4 Reliance
      on Exemptions.
      The
      Purchaser understands that the Shares and Warrants are being offered and sold
      to
      such Purchaser in reliance upon specific exemptions from the registration
      requirements of United States federal and state securities laws and that the
      Seller is relying upon the truth and accuracy of, and such Purchaser’s
      compliance with, the representations, warranties, agreements, acknowledgments
      and understandings of such Purchaser set forth herein in order to determine
      the
      availability of such exemptions and the eligibility of such Purchaser to acquire
      the securities.

    

    4.5 Experience
      of the Purchaser.
      The
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      The Purchaser is able to bear the economic risk of an investment in the
      securities and, at the present time, is able to afford a complete loss of such
      investment.

    

    4.6 General
      Solicitation.
      The
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

    

    ARTICLE
      V
      - COVENANTS OF THE SELLER AND PURCHASERS

    

    5.1 Insurance.
      The
      Seller and its Subsidiaries shall, from time to time upon the written request
      of
      the Purchasers, promptly furnish or cause to be furnished to the Purchasers
      evidence, in form and substance reasonably satisfactory to the Purchasers,
      of
      the maintenance of all insurance maintained by it for loss or damage by fire
      and
      other hazards, damage or injury to persons and property, including from product
      liability, and under workmen’s compensation laws. 

    

    5.2 Reporting
      Obligations.
      So long
      as any portion of the Warrants has not been exercised and has not expired by
      its
      terms, the Seller shall furnish to the Purchasers, or any other persons who
      hold
      any of the Warrants (provided that such subsequent holders give notice to the
      Seller that they hold Warrants and furnish their addresses) promptly upon their
      becoming available one copy of (A) each report, notice or proxy statement sent
      by the Seller to its stockholders generally, and of each regular or periodic
      report (pursuant to the Exchange Act) and (B) any registration statement,
      prospectus or written communication pursuant to the Securities Act relating
      to
      the issuance or registration of the Shares and the Warrant Shares and filed
      by
      the Seller with the Commission or any securities market or exchange on which
      shares of Common Stock are listed; provided, however, that the Seller shall
      have
      no obligation to deliver reports or schedules or statements (pursuant to the
      Exchange Act) under this Section 5.2 to the extent such reports are publicly
      available via EDGAR.

    

    
      
        
        

      

      
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    The
      Purchasers are hereby authorized to deliver a copy of any financial statement
      or
      any other information relating to the business, operations or financial
      condition of the Seller which may have been furnished to the Purchasers
      hereunder, to any regulatory body or agency having jurisdiction over the
      Purchasers or to any Person which shall, or shall have right or obligation
      to
      succeed to all or any part of the Purchasers’ interest in the Seller or this
      Agreement.

    

    5.3 Investigation.
      The
      representations, warranties, covenants and agreements set forth in this
      Agreement shall not be affected or diminished in any way by any investigation
      (or failure to investigate) at any time by or on behalf of the party for whose
      benefit such representations, warranties, covenants and agreements were made.
      Without limiting the generality of the foregoing, the inability or failure
      of
      the Purchasers to discover any breach, default or misrepresentation by the
      Seller under this Agreement or the Related Documents (including under any
      certificate furnished pursuant to this Agreement), notwithstanding the exercise
      by the Purchasers or other holders of the Shares of their rights hereunder
      to
      conduct an investigation shall not in any way diminish any liability
      hereunder.

    

    5.4 Further
      Assurances.
      The
      Seller shall, at its cost and expense, upon written request of the Purchasers,
      duly execute and deliver, or cause to be duly executed and delivered, to the
      Purchasers such further instruments and do and cause to be done such further
      acts as may be necessary, advisable or proper, at the reasonable request of
      the
      Purchasers, to carry out more effectually the provisions and purposes of this
      Agreement. The parties shall use their best efforts to timely satisfy each
      of
      the conditions described in Article VI of this Agreement.

    

    5.5 Use
      of
      Proceeds.
      The
      Seller covenants and agrees that the proceeds of the Purchase Price shall be
      used by the Seller for working capital and general corporate purposes; under
      no
      circumstances shall any portion of the proceeds be applied to:

    

    (i) accelerated
      repayment of debt existing on the date hereof; 

    

    (ii) the
      payment of dividends or other distributions on any capital stock of the Seller
      other than the Seller’s Series C 6% Cumulative Convertible Preferred Stock;

    

    (iii) increased
      executive compensation or loans to officers, employees, stockholders or
      directors, unless approved by a disinterested majority of the Board of
      Directors; 

    

    (iv) the
      purchase of debt or equity securities of any person, including the Seller and
      its Subsidiaries, except in connection with investment of excess cash in high
      quality (A1/P1 or better) money market instruments having maturities of one
      year
      or less; or

    

    (v) any
      expenditure not directly related to the business of the Seller.

    

    5.6 Corporate
      Existence.
      So long
      as a Purchaser owns Shares, Warrants or Warrant Shares, the Seller shall
      preserve and maintain and cause its Subsidiaries to preserve and maintain their
      corporate existence and good standing in the jurisdiction of their incorporation
      and the rights, privileges and franchises of the Seller and its Subsidiaries
      (except, in each case, in the event of a merger or consolidation in which the
      Seller or its Subsidiaries, as applicable, is not the surviving entity) in
      each
      case where failure to so preserve or maintain could have a Material Adverse
      Effect on the financial condition, business or operations of the Seller and
      its
      Subsidiaries taken as a whole.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    5.7 Licenses.
      The
      Seller shall, and shall cause its Subsidiaries to, maintain at all times all
      material licenses or permits necessary to the conduct of its business and as
      required by any governmental agency or instrumentality thereof, including
      without limitation all FDA clearances and approvals. 

    

    5.8 Taxes
      and Claims.
      The
      Seller and its Subsidiaries shall duly pay and discharge (a) all material taxes,
      assessments and governmental charges upon or against the Seller or its
      properties or assets prior to the date on which penalties attach thereto, unless
      and to the extent that such taxes are being diligently contested in good faith
      and by appropriate proceedings, and appropriate reserves therefor have been
      established, and (b) all material lawful claims, whether for labor, materials,
      supplies, services or anything else which might or could, if unpaid, become
      a
      lien or charge upon the properties or assets of the Seller or its Subsidiaries
      unless and to the extent only that the same are being diligently contested
      in
      good faith and by appropriate proceedings and appropriate reserves therefor
      have
      been established.

    

    5.9 Perform
      Covenants.
      The
      Seller shall duly comply with all the terms and covenants contained herein
      and
      in each of the instruments and documents given to the Purchasers in connection
      with or pursuant to this Agreement, all at the times and places and in the
      manner set forth herein or therein.

    

    5.10 Additional
      Covenants.
      

    

    (a) Except
      for
      transactions approved by a majority of the disinterested directors of the Board
      of Directors, neither the Seller nor any of its Subsidiaries shall enter into
      any transaction with any director, officer, employee or holder of more than
      5%
      of the outstanding capital stock of any class or series of capital stock of
      the
      Seller or any of its Subsidiaries, member of the family of any such person,
      or
      any corporation, partnership, trust or other entity in which any such person,
      or
      member of the family of any such person, is a director, officer, trustee,
      partner or holder of more than 5% of the outstanding capital stock thereof,
      with
      the exception of transactions which are consummated upon terms that are no
      less
      favorable than would be available if such transaction had been effected at
      arms-length, in the reasonable judgment of the Board of Directors.

    

    (b) The
      Seller
      shall timely prepare and file with the Securities and Exchange Commission the
      form of notice of the sale of securities pursuant to the requirements of
      Regulation D regarding the sale of the Shares and Warrants under this
      Agreement.

    

    (c) The
      Seller
      shall timely prepare and file such applications, consents to service of process
      (but not including a general consent to service of process) and similar
      documents and take such other steps and perform such further acts as shall
      be
      required by the state securities law requirements of each jurisdiction where
      a
      Purchaser resides as indicated on Schedule
      1
      with
      respect to the sale of the Shares and Warrants under this
      Agreement.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (d) Neither
      the Seller nor any of its Affiliates, nor any Person acting on its or their
      behalf, shall directly or indirectly make any offers or sales of any securities
      or solicit any offers to buy any securities under circumstances that would
      cause
      the loss of the 4(2) exemption under the Securities Act for the transactions
      contemplated hereby. 

    

    5.11 Securities
      Laws Disclosure; Publicity.
      The
      Seller shall (i) on or promptly after the Closing Date, issue a press release
      disclosing the transactions contemplated hereby, and (ii) after the Closing
      Date, timely file with the Commission a Report on Form 8-K disclosing the
      transactions contemplated hereby. Except as provided in the preceding sentence,
      neither the Seller nor the Purchasers shall make any press release or other
      publicity about the terms of this Agreement or the transactions contemplated
      hereby without the prior approval of the other unless otherwise required by
      law
      or the rules of the Commission or Nasdaq. 

    

    5.12 Like
      Treatment of Purchasers and Holders.
      Neither
      the Seller nor any of its affiliates shall, directly or indirectly, pay or
      cause
      to be paid any consideration (immediate or contingent), whether by way of
      interest, fee, payment for redemption, conversion or exercise of the Securities,
      or otherwise, to any Purchaser or holder of Securities, for or as an inducement
      to, or in connection with the solicitation of, any consent, waiver or amendment
      to any terms or provisions of this Agreement or the Related Documents, unless
      such consideration is required to be paid to all Purchasers or holders of
      Securities bound by such consent, waiver or amendment. The Seller shall not,
      directly or indirectly, redeem any Securities unless such offer of redemption
      is
      made pro rata to all Purchasers or holders of Securities, as the case may be,
      on
      identical terms.

    

    5.13 Independent
      Nature of Purchasers’ Obligations and Rights.
      The
      obligations of each Purchaser under this Agreement or any Related Documents
      are
      several and not joint with the obligations of any other Purchaser, and no
      Purchaser shall be responsible in any way for the performance of the obligations
      of any other Purchaser under any such agreement. Nothing contained herein or
      in
      any Related Documents, and no action taken by any Purchaser pursuant hereto
      or
      thereto, shall be deemed to constitute any of the Purchasers as a partnership,
      an association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated hereby or
      thereby. Each Purchaser confirms that it has independently participated in
      the
      negotiation of the transaction contemplated hereby with the advice of its own
      counsel and advisors. Each Purchaser shall be entitled to independently protect
      and enforce its rights, including, without limitation, the rights arising out
      of
      this Agreement or out of any other document contemplated hereby, and it shall
      not be necessary for any other Purchaser to be joined as an additional party
      in
      any proceeding for such purpose.

    

    ARTICLE
      VI
      - CONDITIONS TO CLOSING

    

    6.1 Conditions
      to Obligations of Purchasers to Effect the Closing.
      The
      obligations of a Purchaser to effect the Closing and the transactions
      contemplated by this Agreement shall be subject to the satisfaction at or prior
      to the Closing, of each of the following conditions, any of which may be waived,
      in writing, by a Purchaser:

    

    (a) The
      Seller
      shall deliver or cause to be delivered to each of the Purchasers the following:
      

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    1. (i) (A)
      One or
      more certificates evidencing the aggregate number of Shares of the Common Stock,
      duly authorized, issued, fully paid and non-assessable, as is indicated on
      Schedule
      1
      to be
      purchased at the Closing by such Purchaser, registered in the name of such
      Purchaser, in such denominations as are indicated on Schedule
      1
      for such
      Purchaser (“Share Certificates”) or (B) a copy of irrevocable transfer agent
      instructions (I) that have been delivered to the Seller’s transfer agent and
      (II) instruct the Seller’s transfer agent to issue the Share Certificates, (III)
      that are acknowledged in writing by the Company’s transfer agent; provided that,
      in any case, the Company shall deliver or cause to be delivered the original
      Share Certificates as soon as practicable following the Closing;

    

    (ii) One
      or
      more certificates evidencing the Warrants, registered in the name of such
      Purchaser, in such denominations as is indicated on Schedule
      1
      for such
      Purchaser, pursuant to which such Purchaser shall be initially entitled to
      purchase that number of shares of Common Stock as is indicated on Schedule
      1
      or a
      facsimile copy of such Warrant Certificates, provided that, in any case, the
      Company shall deliver or cause to be delivered the original Warrant Certificates
      as soon as practicable following the Closing.

    

    2. The
      Registration Rights Agreement, in the form attached hereto as Exhibit
      B
      (the
“Registration Rights Agreement”), duly executed by the Seller.

    

    3. A
      legal
      opinion of Katten Muchin Rosenman LLP (“Seller’s Counsel”), counsel to the
      Seller, in the form attached hereto as Exhibit
      C.

    

    4. A
      legal
      opinion of Schreck Brignone (“Nevada Counsel”), Nevada counsel to the Seller, in
      the form attached hereto as Exhibit
      D.

    

    5. A
      certificate of the Secretary of the Seller (the “Secretary’s Certificate”), in
      form and substance satisfactory to the Purchasers, certifying as follows:

    

    (i) that
      attached to the Secretary’s Certificate is a true and complete copy of the
      Articles of Incorporation of the Seller, as amended, including any and all
      certificates of designation;

    

    (ii) that
      a
      true copy of the Bylaws of the Seller, as amended to the Closing Date, is
      attached to the Secretary’s Certificate;

    

    (iii) that
      attached thereto are true and complete copies of the resolutions of the Board
      of
      Directors of the Seller authorizing the execution, delivery and performance
      of
      this Agreement and the Related Documents, instruments and certificates required
      to be executed by it in connection herewith and approving the consummation
      of
      the transactions in the manner contemplated hereby including, but not limited
      to, the authorization and issuance of the Shares and Warrants; 

    

    (iv) the
      names
      and true signatures of the officers of the Seller signing this Agreement and
      all
      other documents to be delivered in connection with this Agreement;

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (v) such
      other
      matters as required by this Agreement; and

    

    (vi) such
      other
      matters as the Purchasers may reasonably request.

    

    6. Seller
      shall have applied to each U.S. securities exchange, interdealer quotation
      system and other trading market where its Common Stock is currently listed
      or
      qualified for trading or quotation for the listing or qualification of the
      Shares and the Warrant Shares for trading or quotation thereon in the time
      and
      manner required thereby.

    

    7. Such
      other
      documents as the Purchasers shall reasonably request.

    

    6.2 Conditions
      to Obligations of the Seller to Effect the Closing.
      The
      obligations of the Seller to effect the Closing and the transactions
      contemplated by this Agreement shall be subject to the satisfaction at or prior
      to the Closing of each of the following conditions, any of which may be waived,
      in writing, by the Seller:

    

    (a) Each
      of
      the Purchasers shall deliver or cause to be delivered to the Seller (i) payment
      of the Purchase Price set forth opposite each Purchaser’s name on Schedule
      1,
      in cash
      by wire transfer of immediately available funds to an account designated in
      writing by Seller prior to the date hereof; (ii) an executed copy of this
      Agreement; (iii) an executed copy of the Registration Rights Agreement; and
      (iv)
      such other documents as the Seller shall reasonably request.

    

    ARTICLE
      VII - INDEMNIFICATION, TERMINATION AND DAMAGES

    

    7.1 Survival
      of Representations.
      Except
      as otherwise provided herein, the representations and warranties of the Seller
      and the Purchasers contained in or made pursuant to this Agreement shall survive
      the execution and delivery of this Agreement and the Closing Date and shall
      continue in full force and effect for a period of three (3) years from the
      Closing Date; provided, however, that the Seller’s warranties and
      representations under Sections 3.13 (Taxes), 3.19 (Subsidiaries and
      Investments), 3.20 (Capitalization), and 3.21 (Options, Warrants, Rights),
      shall
      survive the Closing Date and continue in full force and effect until the
      expiration of all applicable statutes of limitation; and further provided that
      the Seller’s warranties and representations under Section 3.25 (Environmental
      Matters) shall survive the Closing Date and continue in full force and effect
      for a period of six (6) years from the Closing Date. The Seller’s and the
      Purchasers’ warranties and representations shall in no way be affected by any
      investigation of the subject matter thereof made by or on behalf of the Seller
      or the Purchasers.

    

    7.2 Indemnification.
      

    

    (a) The
      Seller
      agrees to indemnify and hold harmless the Purchasers, their Affiliates, each
      of
      their officers, directors, employees and agents and their respective successors
      and assigns, from and against any losses, damages, or expenses which are caused
      by or arise out of (i) any breach or default in the performance by the Seller
      of
      any covenant or agreement made by the Seller in this Agreement or in any of
      the
      Related Documents; (ii) any breach of warranty or representation made by the
      Seller in this Agreement or in any of the Related Documents (iii) any and all
      third party actions, suits, proceedings, claims, demands, judgments, costs
      and
      expenses (including reasonable legal fees and expenses) incident to any of
      the
      foregoing.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (b) Each
      Purchaser, severally and not jointly, agrees to indemnify and hold harmless
      the
      Seller, its Affiliates, each of their officers, directors, employees and agents
      and their respective successors and assigns, from and against any losses,
      damages, or expenses which are caused by or arise out of (A) any breach or
      default in the performance by such Purchaser of any covenant or agreement made
      by such Purchaser in this Agreement or in any of the Related Documents; (B)
      any
      breach of warranty or representation made by such Purchaser in this Agreement
      or
      in any of the Related Documents; and (C) any and all third party actions, suits,
      proceedings, claims, demands, judgments, costs and expenses (including
      reasonable legal fees and expenses) incident to any of the foregoing; provided,
      however, that such Purchaser’s liability under this Section 7.2(b) shall not
      exceed the Purchase Price paid by such Purchaser hereunder.

    

    7.3 Indemnity
      Procedure.
      A party
      or parties hereto agreeing to be responsible for or to indemnify against any
      matter pursuant to this Agreement is referred to herein as the “Indemnifying
      Party” and the other party or parties claiming indemnity is referred to as the
“Indemnified Party”. An Indemnified Party under this Agreement shall, with
      respect to claims asserted against such party by any third party, give written
      notice to the Indemnifying Party of any liability which might give rise to
      a
      claim for indemnity under this Agreement within sixty (60) business days of
      the
      receipt of any written claim from any such third party, but not later than
      twenty (20) days prior to the date any answer or responsive pleading is due,
      and
      with respect to other matters for which the Indemnified Party may seek
      indemnification, give prompt written notice to the Indemnifying Party of any
      liability which might give rise to a claim for indemnity; provided, however,
      that any failure to give such notice will not waive any rights of the
      Indemnified Party except to the extent the rights of the Indemnifying Party
      are
      materially prejudiced.

    

    The
      Indemnifying Party shall have the right, at its election, to take over the
      defense or settlement of such claim by giving written notice to the Indemnified
      Party at least fifteen (15) days prior to the time when an answer or other
      responsive pleading or notice with respect thereto is required. If the
      Indemnifying Party makes such election, it may conduct the defense of such
      claim
      through counsel of its choosing (subject to the Indemnified Party’s approval of
      such counsel, which approval shall not be unreasonably withheld), shall be
      solely responsible for the expenses of such defense and shall be bound by the
      results of its defense or settlement of the claim. The Indemnifying Party shall
      not settle any such claim without prior notice to and consultation with the
      Indemnified Party, and no such settlement involving any equitable relief or
      which might have an adverse effect on the Indemnified Party may be agreed to
      without the written consent of the Indemnified Party (which consent shall not
      be
      unreasonably withheld). So long as the Indemnifying Party is diligently
      contesting any such claim in good faith, the Indemnified Party may pay or settle
      such claim only at its own expense and the Indemnifying Party will not be
      responsible for the fees of separate legal counsel to the Indemnified Party,
      unless the named parties to any proceeding include both parties or
      representation of both parties by the same counsel would be inappropriate due
      to
      conflicts of interest or otherwise. If the Indemnifying Party does not make
      such
      election, or having made such election does not, in the reasonable opinion
      of
      the Indemnified Party proceed diligently to defend such claim, then the
      Indemnified Party may (after written notice to the Indemnifying Party), at
      the
      expense of the Indemnifying Party, elect to take over the defense of and proceed
      to handle such claim in its discretion and the Indemnifying Party shall be
      bound
      by any defense or settlement that the Indemnified Party may make in good faith
      with respect to such claim. In connection therewith, the Indemnifying Party
      will
      fully cooperate with the Indemnified Party should the Indemnified Party elect
      to
      take over the defense of any such claim. The parties agree to cooperate in
      defending such third party claims and the Indemnified Party shall provide such
      cooperation and such access to its books, records and properties as the
      Indemnifying Party shall reasonably request with respect to any matter for
      which
      indemnification is sought hereunder; and the parties hereto agree to cooperate
      with each other in order to ensure the proper and adequate defense
      thereof.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    With
      regard to claims of third parties for which indemnification is payable
      hereunder, such indemnification shall be paid by the Indemnifying Party upon
      the
      earlier to occur of: (i) the entry of a judgment against the Indemnified Party
      and the expiration of any applicable appeal period, or if earlier, five (5)
      days
      prior to the date that the judgment creditor has the right to execute the
      judgment; (ii) the entry of an unappealable judgment or final appellate decision
      against the Indemnified Party; or (iii) a settlement of the claim.
      Notwithstanding the foregoing, the reasonable expenses of counsel to the
      Indemnified Party shall be reimbursed on a current basis by the Indemnifying
      Party. With regard to other claims for which indemnification is payable
      hereunder, such indemnification shall be paid promptly by the Indemnifying
      Party
      upon demand by the Indemnified Party.

    

    ARTICLE
      VIII - MISCELLANEOUS

    

    8.1 Further
      Assurances.
      Each
      party agrees to cooperate fully with the other parties and to execute such
      further instruments, documents and agreements and to give such further written
      assurances as may be reasonably requested by any other party to better evidence
      and reflect the transactions described herein and contemplated hereby and to
      carry into effect the intents and purposes of this Agreement, and further agrees
      to take promptly, or cause to be taken, all actions, and to do promptly, or
      cause to be done, all things necessary, proper or advisable under applicable
      law
      to consummate and make effective the transactions contemplated hereby, to obtain
      all necessary waivers, consents and approvals, to effect all necessary
      registrations and filings, and to remove any injunctions or other impediments
      or
      delays, legal or otherwise, in order to consummate and make effective the
      transactions contemplated by this Agreement for the purpose of securing to
      the
      parties hereto the benefits contemplated by this Agreement.

    

    8.2 Fees
      and Expenses.
      The
      parties hereto shall pay their own costs and expenses in connection
      herewith.

    

    8.3 Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      prior to 5:00 p.m. (New York City time) on a business day, (b) the next business
      day after the date of transmission, if such notice or communication is delivered
      via facsimile at the facsimile number specified in this Section on a day that
      is
      not a business day or later than 5:00 p.m. (New York City time) on any business
      day, (c) the business day following the date of mailing, if sent by U.S.
      nationally recognized overnight courier service such as Federal Express, or
      (d)
      actual receipt by the party to whom such notice is required to be given. The
      address for such notices and communications shall be as follows:

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    If
      to the
      Purchasers at each Purchaser’s address set forth under its name on Schedule
      1
      attached
      hereto, or with respect to the Seller, addressed to: 

    

    NexMed,
      Inc.

    350
      Corporate Boulevard

    Robbinsville,
      NJ 08691

    Attention:
      Chief Financial Officer 

    Facsimile
      No.: 609-208-1622

    

    or
      to such
      other address or addresses or facsimile number or numbers as any such party
      may
      most recently have designated in writing to the other parties hereto by such
      notice. Copies of notices to the Seller shall be sent to Katten Muchin Rosenman
      LLP, 575 Madison Avenue, New York, NY 10022, Attn: Robert Kohl, Esq., Facsimile
      No. (212) 940-8776. Copies of notices to any Purchaser shall be sent to the
      addresses, if any, listed on Schedule
      1
      attached
      hereto.

    

    Unless
      otherwise stated above, such communications shall be effective when they are
      received by the addressee thereof in conformity with this Section. Any party
      may
      change its address for such communications by giving notice thereof to the
      other
      parties in conformity with this Section.

    

    8.4 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and enforced in accordance with the
      laws
      of the State of New York without reference to the conflicts of laws principles
      thereof.

    

    8.5 Jurisdiction
      and Venue.
      This
      Agreement shall be subject to the exclusive jurisdiction of the Federal District
      Court, Southern District of New York and if such court does not have proper
      jurisdiction, the State Courts of New York County, New York. The parties to
      this
      Agreement agree that any breach of any term or condition of this Agreement
      shall
      be deemed to be a breach occurring in the State of New York by virtue of a
      failure to perform an act required to be performed in the State of New York
      and
      irrevocably and expressly agree to submit to the jurisdiction of the Federal
      District Court, Southern District of New York and if such court does not have
      proper jurisdiction, the State Courts of New York County, New York for the
      purpose of resolving any disputes among the parties relating to this Agreement
      or the transactions contemplated hereby. The parties irrevocably waive, to
      the
      fullest extent permitted by law, any objection which they may now or hereafter
      have to the laying of venue of any suit, action or proceeding arising out of
      or
      relating to this Agreement, or any judgment entered by any court in respect
      hereof brought in New York County, New York, and further irrevocably waive
      any
      claim that any suit, action or proceeding brought in Federal District Court,
      Southern District of New York and if such court does not have proper
      jurisdiction, the State Courts of New York County, New York has been brought
      in
      an inconvenient forum. Each of the parties hereto consents to process being
      served in any such suit, action or proceeding, by mailing a copy thereof to
      such
      party at the address in effect for notices to it under this Agreement and agrees
      that such service shall constitute good and sufficient service of process and
      notice thereof. Nothing in this Section 8.5 shall affect or limit any right
      to
      serve process in any other manner permitted by law.

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    8.6 Successors
      and Assigns.
      This
      Agreement is personal to each of the parties and may not be assigned without
      the
      written consent of the other parties; provided, however, that any of the
      Purchasers shall be permitted to assign this Agreement to any Person to whom
      it
      assigns or transfers securities issued or issuable pursuant to this Agreement.
      Any assignee must be an “accredited investor” as defined in Rule 501(a)
      promulgated under the Securities Act.

    

    8.7 Severability.
      If any
      provision of this Agreement, or the application thereof, shall for any reason
      or
      to any extent be invalid or unenforceable, the remainder of this Agreement
      and
      application of such provision to other persons or circumstances shall continue
      in full force and effect and in no way be affected, impaired or
      invalidated.

    

    8.8 Entire
      Agreement.
      This
      Agreement and the other agreements and instruments referenced herein constitute
      the entire understanding and agreement of the parties with respect to the
      subject matter hereof and supersede all prior agreements and
      understandings.

    

    8.9 Other
      Remedies.
      Except
      as otherwise provided herein, any and all remedies herein expressly conferred
      upon a party shall be deemed cumulative with and not exclusive of any other
      remedy conferred hereby or by law, or in equity on such party, and the exercise
      of any one remedy shall not preclude the exercise of any other.

    

    8.10 Amendment
      and Waivers.
      Subject
      to Section 5.12, any term or provision of this Agreement may be amended, and
      the
      observance of any term of this Agreement may be waived (either generally or
      in a
      particular instance and either retroactively or prospectively) only by a writing
      signed by the Seller and the Purchasers purchasing at least 75% of the Shares
      hereunder, and such waiver or amendment, as the case may be, shall be binding
      upon all Purchasers. The waiver by a party of any breach hereof or default
      in
      the performance hereof shall not be deemed to constitute a waiver of any other
      default or any succeeding breach or default. This Agreement may not be amended
      or supplemented by any party hereto except pursuant to a written amendment
      executed by the Seller and the Purchasers purchasing at least 75% of the Shares
      hereunder. No amendment shall be effected to impact a holder of Securities
      in a
      disproportionately adverse fashion without the consent of such individual
      holder.

    

    8.11 No
      Waiver.
      The
      failure of any party to enforce any of the provisions hereof shall not be
      construed to be a waiver of the right of such party thereafter to enforce such
      provisions.

    

    8.12 Construction
      of Agreement; Knowledge.
      For
      purposes of this Agreement, the term “knowledge,” when used in reference to a
      corporation means the knowledge of the directors and executive officers of
      such
      corporation (including, if applicable, any person designated as a chief
      scientific, medical or technical officer) assuming such persons shall have
      made
      inquiry that is customary and appropriate under the circumstances to which
      reference is made, and when used in reference to an individual means the
      knowledge of such individual assuming the individual shall have made inquiry
      that is customary and appropriate under the circumstances to which reference
      is
      made.

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    8.13 Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original as against any party whose signature appears thereon and all of
      which together shall constitute one and the same instrument. This Agreement
      shall become binding when one or more counterparts hereof, individually or
      taken
      together, shall bear the signatures of all of the parties reflected hereon
      as
      signatories. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

    

    8.14 No
      Third Party Beneficiary.
      Nothing
      expressed or implied in this Agreement is intended, or shall be construed,
      to
      confer upon or give any person other than the parties hereto and their
      respective heirs, personal representatives, legal representatives, successors
      and permitted assigns, any rights or remedies under or by reason of this
      Agreement.

    

    8.15 Waiver
      of Trial by Jury.
      THE
      PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING
      RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

    

    [Signature
      Page Follows]

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 	 
	SELLER: 	 	 	 
	 	 	 	 
	NEXMED, INC. 	 	 	 
	 	 	 	 
	 	 	 	 
	By:/s/ Mark
              Westgate	 	 	 
	
              
                

              
Name: Mark Westgate	 	 	
            
	Title:
              Vice
              President and Chief Financial Officer	 	 	 

    

    
      	 	 	 	 
	PURCHASERS: 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	By:
              /s/ 	 	 	 
	
              
                

              
Name: 	 	 	
            
	Title:
	 	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
Schedule
      1

    
      	 	 	 	 	 
	
              Name,
                Address and Fax
Number of Purchaser

            	
              Copies
                of Notices to

            	
              Shares
                of Common Stock Purchased

            	
              Common
                Stock
Underlying
Warrants

            	
              Purchase
                Price

            
	 	 	 	 	 
	
              The
                Tail Wind Fund Ltd.

            	
              Peter
                J. Weisman, P.C.

            	
              404,495

            	
              161,798
                

            	
              $360,000
                

            
	
              Solomon
                Strategic Holdings

            	 	
              33,708

            	
              13,483
                

            	
              $30,000
                

            
	
              Southpoint
                Fund LP

            	 	
              354,443

            	
              141,777
                

            	
              $315,454
                

            
	
              Southpoint
                Qualified Fund LP

            	 	
              1,411,394

            	
              564,558
                

            	
              $1,256,141
                

            
	
              Southpoint
                Offshore Operating Fund LP

            	
              1,604,950

            	
              641,980
                

            	
              $1,428,406
                

            
	
              Scopia
                Partners LLC

            	
              Scopia
                Partners LLC

            	
              72,893

            	
              29,157
                

            	
              $64,875
                

            
	
              Scopia
                Partners QP LLC

            	
              Scopia
                Partners QP LLC

            	
              201,124

            	
              80,450
                

            	
              $179,000
                

            
	
              Scopia
                PX LLC

            	
              Scopia
                PX LLC

            	
              417,837

            	
              167,135
                

            	
              $371,875
                

            
	
              Scopia
                International Limited

            	
              Same
                as above

            	
              530,618

            	
              212,247
                

            	
              $472,250
                

            
	
              Scopia
                PX International Limited

            	
              Same
                as above

            	
              182,023

            	
              72,809
                

            	
              $162,000
                

            
	
              Loeb
                Partners Corporation

            	 	
              1,000,000

            	
              400,000
                

            	
              $890,000
                

            
	
              Michael
                Balog

            	 	
              112,359

            	
              44,944
                

            	
              $100,000
                

            
	
              Harris
                Kaplan

            	 	
              112,359

            	
              44,944
                

            	
              $100,000
                

            
	
              Akros
                Absolute Return Fund

            	 	
              25,000

            	
              10,000
                

            	
              $22,250
                

            
	
              Akros
                Capital Fund LP

            	 	
              75,000

            	
              30,000
                

            	
              $66,750
                

            
	
              Thomas
                Geiger

            	 	
              56,180

            	
              22,472
                

            	
              $50,000
                

            
	
              Joe
                Dibenedetto Jr., MD

            	 	
              56,180

            	
              22,472
                

            	
              $50,000
                

            
	
              IRA
                FBO Paul Miller

            	 	
              56,180

            	
              22,472
                

            	
              $50,000
                

            
	
              Van
                Hart

            	 	
              44,944

            	
              17,978
                

            	
              $40,000
                

            
	
              MDNH
                Trading Corp.

            	 	
              44,944

            	
              17,978
                

            	
              $40,000
                

            
	
              MDNH
                Partners LP

            	 	
              22,471

            	
              8,988
                

            	
              $20,000
                

            
	
              Provident
                Premier Master Fund

            	 	
              112,359

            	
              44,944
                

            	
              $100,000
                

            
	
              Charles
                E. Lanphier TTEE, Lanphier Capital Managemen, Inc., PT, FBO Charles
                Lanphier

            	 	
              56,180

            	
              22,472
                

            	
              $50,000
                

            
	
              Clarion
                Capital Corporation

            	 	
              280,899

            	
              112,359
                

            	
              $250,000
                

            
	
              Chula
                Partners, LP

            	 	
              112,359

            	
              44,944
                

            	
              $100,000
                

            
	
              Regions
                Bank as custodian for Arkansas Knee Clinic Profit Sharing
                Plan

            	 	
              168,539

            	
              67,416
                

            	
              $150,000
                

            
	
              Tan
                Equity Partners

            	 	
              280,899

            	
              112,359
                

            	
              $250,000
                

            
	
              Cherrytrust
                & Co

            	 	
              280,899

            	
              112,359
                

            	
              $250,000
                

            
	
              Peter
                & Carol Read Revocable Trust

            	 	
              280,899

            	
              112,359
                

            	
              $250,000
                

            
	
              Jacqueline
                J Wells Revocable Trust

            	 	
              56,180

            	
              22,472
                

            	
              $50,000
                

            
	
              Prasad
                Yalamanchili

            	 	
              112,359

            	
              44,943
                

            	
              $100,000
                

            
	
              George
                Egan

            	 	
              28,090

            	
              11,236
                

            	
              $25,000
                

            
	
              James
                E Quinn

            	 	
              28,090

            	
              11,236
                

            	
              $25,000
                

            
	
              Namtor
                Growth Fund

            	 	
              224,719

            	
              89,888
                

            	
              $200,000
                

            
	
              Iroquois
                Capital

            	 	
              280,899

            	
              112,359
                

            	
              $250,000
                

            
	
              SDS
                Capital Group SPC, LTD.

            	 	
              224,719

            	
              89,888
                

            	
              $200,000
                

            
	
              Totals:

            	 	
              9,347,191
                

            	
              3,738,876

            	
              $8,319,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]