Document:

INVESTOR RIGHTS AGREEMENT

      This Investor Rights Agreement (this "Agreement") is made and entered into
as  of  December  17,  2004  among  NexMed,  Inc.,  a  Nevada  corporation  (the
"Company"),  and each of the  purchasers  executing this Agreement and listed on
Schedule 1 attached hereto (collectively, the "Purchasers").

      This  Agreement  is being  entered  into  pursuant to the Common Stock and
Warrant  Purchase  Agreement,  dated as of the date  hereof,  by and  among  the
Company and the Purchasers (the "Purchase Agreement").

      The Company and the Purchasers hereby agree as follows:

      1. Definitions.

      Capitalized  terms used and not  otherwise  defined  herein shall have the
meanings given such terms in the Purchase Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

      "Advice" shall have the meaning set forth in Section 3(m).

      "Affiliate"  means,  with  respect to any  Person,  any other  Person that
directly or indirectly controls or is controlled by or under common control with
such Person.  For the  purposes of this  definition,  "control,"  when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the  direction  of the  management  and policies of such Person,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms of  "affiliated,"  "controlling"  and  "controlled"  have meanings
correlative to the foregoing.

      "Blackout Period" shall have the meaning set forth in Section 3(n).

      "Board" shall have the meaning set forth in Section 3(n).

      "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.

      "Commission" means the Securities and Exchange Commission.

      "Common  Stock" means the  Company's  Common  Stock,  par value $0.001 per
share.

      "Effectiveness Period" shall have the meaning set forth in Section 2.

      "Event" shall have the meaning set forth in Section 8(e).

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Filing Date" means the twentieth (20th) day following the Closing Date.

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      "Holder" or  "Holders"  means the holder or  holders,  as the case may be,
from time to time of Registrable  Securities,  including without  limitation the
Purchasers and their assignees.

      "Indemnified Party" shall have the meaning set forth in Section 5(c).

      "Indemnifying Party" shall have the meaning set forth in Section 5(c).

      "Losses" shall have the meaning set forth in Section 5(a).

      "Nasdaq" shall mean The Nasdaq Stock Market.

      "Person"  means  an  individual  or  a  corporation,  partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company, joint stock company,  government (or an agency or political subdivision
thereof) or other entity of any kind.

      "Proceeding"  means an action,  claim,  suit,  investigation or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

      "Prospectus" means the prospectus  included in any Registration  Statement
(including,  without  limitation,  a prospectus  that  includes any  information
previously omitted from a prospectus filed as part of an effective  registration
statement in reliance upon Rule 430A  promulgated  under the Securities Act), as
amended or supplemented by any prospectus supplement,  with respect to the terms
of the  offering of any portion of the  Registrable  Securities  covered by such
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including post-effective  amendments, and all material incorporated
by reference in such Prospectus.

      "Registrable  Securities"  means (a) the  Shares  and the  Warrant  Shares
(without  regard to any  limitations  on beneficial  ownership  contained in the
Warrants)  or other  securities  issued or  issuable  to each  Purchaser  or its
transferee  or  designee  (i) upon  exercise of the  Warrants,  or (ii) upon any
distribution with respect to, any exchange for or any replacement of such Shares
or Warrants or (iii) upon any conversion, exercise or exchange of any securities
issued in connection with any such  distribution,  exchange or replacement;  (b)
securities   issued  or  issuable   upon  any  stock  split,   stock   dividend,
recapitalization  or similar  event with respect to the  foregoing;  and (c) any
other security  issued as a dividend or other  distribution  with respect to, in
exchange  for,  in  replacement  or  redemption  of,  or  in  reduction  of  the
liquidation  value  of,  any  of the  securities  referred  to in the  preceding
clauses;  provided,  however, that such securities shall cease to be Registrable
Securities  when such securities have been sold to or through a broker or dealer
or underwriter in a public  distribution or a public  securities  transaction or
when such securities may be sold without any restriction pursuant to Rule 144(k)
as  determined  by the  counsel to the  Company  pursuant  to a written  opinion
letter, addressed to the Company's transfer agent to such effect as described in
Section 2 of this Agreement.

      "Registration   Statement"  means  the  registration  statements  and  any
additional registration statements contemplated by Section 2, including (in each
case) the Prospectus,  amendments and supplements to such registration statement
or  Prospectus,  including  pre- and  post-effective  amendments,  all  exhibits
thereto,  and all  material  incorporated  by  reference  in  such  registration
statement.

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      "Rule 144" means Rule 144  promulgated by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 158" means Rule 158  promulgated by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 415" means Rule 415  promulgated by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Special Counsel" means Peter J. Weisman, P.C.

      "Warrant  Shares"  means  the  shares of Common  Stock  issuable  upon the
exercise  of the  warrants  issued or to be issued  to the  Purchasers  or their
assignees or designees in  connection  with the offering  consummated  under the
Purchase Agreement.

      2.  Registration.  As soon as possible following the Closing Date (but not
later  than the  Filing  Date),  the  Company  shall  prepare  and file with the
Commission a "shelf" Registration  Statement covering all Registrable Securities
for a secondary or resale offering to be made on a continuous  basis pursuant to
Rule 415. The  Registration  Statement  shall be on Form S-3 (or if such form is
not available to the Company on another form  appropriate for such  registration
in  accordance  herewith).  The Company  shall use its best efforts to cause the
Registration  Statement to be declared  effective  under the  Securities Act not
later than sixty (60) days after the  Closing  Date  (including  filing with the
Commission a request for  acceleration of  effectiveness in accordance with Rule
461  promulgated  under the  Securities Act within five (5) Business Days of the
date that the Company is notified  (orally or in writing,  whichever is earlier)

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by the Commission  that a Registration  Statement will not be "reviewed," or not
be  subject  to  further  review)  and  to  keep  such  Registration   Statement
continuously  effective  under  the  Securities  Act  until  such date as is the
earlier  of (x)  the  date  when  all  Registrable  Securities  covered  by such
Registration  Statement have been sold or (y) the date on which all  Registrable
Securities  may be sold  without  any  restriction  pursuant  to Rule  144(k) as
determined by the counsel to the Company  pursuant to a written  opinion letter,
addressed to the  Company's  transfer  agent to such effect (the  "Effectiveness
Period").  Upon the initial filing  thereof,  the  Registration  Statement shall
cover at least 100% of the  Shares  and 110% of the  shares of Common  Stock for
issuance upon the exercise of the Warrants.  Such  Registration  Statement  also
shall cover,  to the extent  allowable  under the  Securities  Act and the Rules
promulgated  thereunder  (including Securities Act Rule 416), such indeterminate
number of additional  shares of Common Stock resulting from stock splits,  stock
dividends or similar transactions with respect to the Registrable Securities.

      3. Registration Procedures.

      In connection with the Company's registration  obligations hereunder,  the
Company shall:

      (a) Prepare and file with the Commission on or prior to the Filing Date, a
Registration  Statement  on Form S-3 (or if such  form is not  available  to the
Company  on  another  form  appropriate  for  such  registration  in  accordance
herewith) (which shall include a Plan of Distribution  substantially in the form
of Exhibit A attached  hereto),  and cause the Registration  Statement to become
effective and remain effective as provided herein;  provided,  however, that not
less than  three  (3)  Business  Days  prior to the  filing of the  Registration
Statement or any related Prospectus or any amendment or supplement thereto,  the
Company shall (i) furnish to the Special  Counsel,  copies of all such documents
proposed  to be  filed,  which  documents  (other  than  those  incorporated  by
reference)  will be subject to the review of such Special  Counsel,  and (ii) at
the  request  of any  Holder  cause its  officers  and  directors,  counsel  and
independent  certified public  accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of counsel to such Holders, to conduct a
reasonable  investigation  within the meaning of the Securities Act. The Company
shall  not  file  the  Registration  Statement  or any  such  Prospectus  or any
amendments  or  supplements  thereto to which the  Holders of a majority  of the
Registrable Securities or the Special Counsel shall reasonably object in writing
within three (3) Business Days after their receipt  thereof,  unless  counsel to
the Company determines in writing that such objection is without merit.

      (b) (i) Prepare and file with the Commission  such  amendments,  including
post-effective  amendments, to the Registration Statement as may be necessary to
keep the  Registration  Statement  continuously  effective as to the  applicable
Registrable  Securities  for the  Effectiveness  Period  and to the  extent  any
Registrable  Securities  are not  included in such  Registration  Statement  for
reasons other than the failure of the Holder to comply with Section 3(m) hereof,
shall  prepare  and  file  with  the  Commission  such  additional  Registration
Statements  in order  to  register  for  resale  under  the  Securities  Act all
Registrable  Securities;  (ii)  cause the  related  Prospectus  to be amended or
supplemented by any required  Prospectus  supplement,  and as so supplemented or
amended to be filed  pursuant  to Rule 424 (or any  similar  provisions  then in
force)  promulgated  under the  Securities  Act;  (iii)  respond as  promptly as
possible,  and in no event later than 10 Business Days, to any comments received
from the Commission with respect to the Registration  Statement or any amendment
thereto and as promptly as possible provide the Holders true and complete copies
of all  correspondence  from and to the Commission  relating to the Registration
Statement;  and (iv) comply in all material  respects with the provisions of the
Securities  Act and the  Exchange  Act with  respect to the  disposition  of all
Registrable   Securities  covered  by  the  Registration  Statement  during  the
applicable  period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.

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      (c)  Notify  the  Holders  of  Registrable  Securities  to be sold and the
Special  Counsel as promptly as possible (A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed  (but in no event in the case of this  subparagraph  (A),  less than
three (3) Business Days prior to date of such filing);  (B) when the  Commission
notifies  the  Company  whether  there will be a "review"  of such  Registration
Statement and whenever the Commission  comments in writing on such  Registration
Statement;   and  (C)  with  respect  to  the  Registration   Statement  or  any
post-effective amendment, when the same has become effective (which notice shall
be  delivered to the Lead  Investor and Special  Counsel on the same day as such
effectiveness),  and after the effectiveness  thereof: (i) of any request by the
Commission or any other Federal or state  governmental  authority for amendments
or  supplements  to the  Registration  Statement or Prospectus or for additional
information; (ii) of the issuance by the Commission of any stop order suspending
the  effectiveness  of the  Registration  Statement  covering  any or all of the
Registrable  Securities or the initiation of any  Proceedings  for that purpose;
(iii) of the  receipt by the  Company of any  notification  with  respect to the
suspension of the  qualification  or exemption from  qualification of any of the
Registrable  Securities  for  sale in any  jurisdiction,  or the  initiation  or
threatening  of any  Proceeding  for such  purpose;  and  (iv) if the  financial
statements  included  in  the  Registration   Statement  become  ineligible  for
inclusion  therein or of the  occurrence  of any event that makes any  statement
made in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration  Statement,  Prospectus or other
documents so that, in the case of the Registration  Statement or the Prospectus,
as the case may be, it will not contain any untrue  statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements  therein, in the light of the circumstances under which they
were made,  not  misleading.  Without  limitation  to any  remedies to which the
Holders may be entitled under this Agreement,  if any of the events described in
Sections 3(c)(C)(i), 3(c)(C)(ii), 3(c)(C)(iii) or 3(c)(C)(iv) occur, the Company
shall use its best efforts to respond to and correct the event.

      (d) Use its best efforts to avoid the issuance of, or, if issued, use best
efforts to obtain the withdrawal of, (i) any order suspending the  effectiveness
of the Registration  Statement or (ii) any suspension of the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

      (e) If requested  by any Holder of  Registrable  Securities,  (i) promptly
incorporate  in a  Prospectus  supplement  or  post-effective  amendment  to the
Registration  Statement such information as the Company reasonably agrees should
be  included  therein  and (ii) make all  required  filings  of such  Prospectus
supplement or such  post-effective  amendment as soon as  practicable  after the
Company has  received  notification  of the matters to be  incorporated  in such
Prospectus supplement or post-effective amendment;  provided,  however, that the
Company  shall not be required to take any action  pursuant to this Section 3(e)
that would, in the written opinion of counsel for the Company  (addressed to the
Special  Counsel),  violate  applicable  law.

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      (f) Furnish to each Holder and the Special  Counsel,  without  charge,  at
least one  conformed  copy of each  Registration  Statement  and each  amendment
thereto,  including financial statements and schedules,  and all exhibits to the
extent  requested  by such  Person  (including  those  previously  furnished  or
incorporated by reference)  promptly after the filing of such documents with the
Commission.

      (g)  Promptly  deliver to each  Holder and the  Special  Counsel,  without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus)  and each  amendment  or  supplement  thereto  as such  Persons  may
reasonably  request;  and  the  Company  hereby  consents  to the  use  of  such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto.

      (h) Prior to any public offering of Registrable  Securities,  use its best
efforts to register  or qualify or  cooperate  with the selling  Holders and the
Special  Counsel  in  connection  with the  registration  or  qualification  (or
exemption  from  such   registration  or   qualification)  of  such  Registrable
Securities  for offer and sale  under  the  securities  or Blue Sky laws of such
jurisdictions  within the United  States as any Holder  requests in writing,  to
keep each such registration or qualification (or exemption  therefrom) effective
during  the  Effectiveness  Period  and to do any and all  other  acts or things
necessary or advisable to enable the  disposition in such  jurisdictions  of the
Registrable Securities covered by a Registration Statement;  provided,  however,
that the Company  shall not be required to qualify  generally  to do business in
any  jurisdiction  where it is not then so  qualified or to take any action that
would subject it to general service of process in any  jurisdiction  where it is
not then so subject  or subject  the  Company  to any  material  tax in any such
jurisdiction where it is not then so subject.

      (i) Cooperate  with the Holders to facilitate the timely  preparation  and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration  Statement,  which  certificates  shall be free, to the extent
permitted by  applicable  law and the  Purchase  Agreement,  of all  restrictive
legends,  and to enable such Registrable  Securities to be in such denominations
and registered in such names as any Holder may request at least two (2) Business
Days prior to any sale of Registrable Securities.  In connection therewith,  the
Company shall promptly after the  effectiveness  of the  Registration  Statement
(but no later  than  one day  thereafter)  cause an  opinion  of  counsel  to be
delivered to and  maintained  with its transfer  agent,  together with any other
authorizations,  certificates  and  directions  required by the transfer  agent,
which  authorize  and  direct  the  transfer  agent  to issue  such  Registrable
Securities  without legend upon sale by the Holder of such shares of Registrable
Securities under the Registration Statement.

      (j) Upon the occurrence of any event contemplated by Section  3(c)(C)(iv),
as  promptly  as  possible,  prepare a  supplement  or  amendment,  including  a
post-effective  amendment,  to the Registration Statement or a supplement to the
related  Prospectus or any document  incorporated  or deemed to be  incorporated
therein  by  reference,  and file  any  other  required  document  so  that,  as
thereafter  delivered,  neither the  Registration  Statement nor such Prospectus
will contain an untrue  statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements  therein,
in the light of the circumstances under which they were made, not misleading.

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      (k)  Cause  all  Registrable  Securities  relating  to  such  Registration
Statement  to be  listed  on  NASDAQ  and any  other  United  States  securities
exchange,  quotation system, market or over-the-counter  bulletin board, if any,
on which similar securities issued by the Company are then listed.

      (l)  Comply  in all  material  respects  with  all  applicable  rules  and
regulations  of the  Commission  and make  generally  available  to its security
holders  earnings  statements  satisfying the provisions of Section 11(a) of the
Securities  Act and Rule 158 not later than 45 days after the end of any 3-month
period  (or 90 days  after the end of any  12-month  period if such  period is a
fiscal  year)  commencing  on the first day of the first  fiscal  quarter of the
Company after the effective date of the Registration Statement,  which statement
shall conform to the requirements of Rule 158.

      (m) Request  each  selling  Holder to furnish to the  Company  information
regarding such Holder and the distribution of such Registrable  Securities as is
required by law or the Commission to be disclosed in the Registration  Statement
by sending to each selling Holder a Selling Shareholder Questionnaire,  the form
of which is  attached  as  Exhibit  B, and the  Company  may  exclude  from such
registration  the  Registrable  Securities  of any such  Holder who fails (i) to
furnish  such  information  or (ii) to  agree to  furnish,  upon  request,  such
additional  information regarding such Holder as may later be required by law to
be disclosed, in each case, within a reasonable time prior to the filing of each
Registration  Statement,  supplemented  Prospectus  and/or amended  Registration
Statement.

      If the Registration Statement refers to any Holder by name or otherwise as
the holder of any  securities  of the  Company,  then such Holder shall have the
right to require (if such  reference  to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the  reference to such Holder in any  amendment or supplement to the
Registration  Statement  filed or  prepared  subsequent  to the time  that  such
reference ceases to be required.

      Each Holder agrees by its acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the  occurrence of any event of the
kind described in Section 3(c)(C)(i), 3(c)(C)(ii),  3(c)(C)(iii), 3(c)(C)(iv) or
3(n),  such Holder will forthwith  discontinue  disposition of such  Registrable
Securities under the  Registration  Statement until such Holder's receipt of the
copies of the  supplemented  Prospectus  and/or amended  Registration  Statement
contemplated  by Section 3(j), or until it is advised in writing (the  "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental  filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

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      (n) If (i) there is material non-public  information regarding the Company
which the Company's Board of Directors (the "Board")  reasonably  determines not
to be in the  Company's  best  interest to disclose and which the Company is not
otherwise  required  to  disclose,  or  (ii)  there  is a  significant  business
opportunity  (including,  but not limited to, the  acquisition or disposition of
assets  (other  than  in  the  ordinary  course  of  business)  or  any  merger,
consolidation,  tender  offer or other  similar  transaction)  available  to the
Company which the Board  reasonably  determines  not to be in the Company's best
interest to disclose and which the Company  would be required to disclose  under
the Registration  Statement,  then the Company may postpone or suspend filing or
effectiveness  of a  registration  statement  for a  period  not  to  exceed  30
consecutive  days,  provided  that the Company  may not  postpone or suspend its
obligation under this Section 3(n) for more than 45 days in the aggregate during
any 12 month period (each, a "Blackout Period").

      4. Registration Expenses.

      All fees and expenses  incident to the  performance of or compliance  with
this  Agreement by the Company shall be borne by the Company  whether or not the
Registration  Statement  is filed or becomes  effective  and  whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and  expenses  referred to in the  foregoing  sentence  shall  include,  without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses  (A) with  respect to filings  required to be made with Nasdaq
and each other securities exchange, quotation system, market or over-the-counter
bulletin  board on which  Registrable  Securities  are required  hereunder to be
listed, (B) with respect to filings required to be made with the Commission, and
(C) in compliance  with state  securities or Blue Sky laws  (including,  without
limitation,  fees and  disbursements  of Special Counsel in connection with Blue
Sky  qualifications  of the  Registrable  Securities  and  determination  of the
eligibility of the Registrable  Securities for investment under the laws of such
jurisdictions  as the  Holders  of a  majority  of  Registrable  Securities  may
designate)), (ii) printing expenses (including, without limitation,  expenses of
printing certificates for Registrable Securities and of printing or photocopying
prospectuses), (iii) messenger, telephone and delivery expenses, (iv) Securities
Act liability insurance, if the Company so desires such insurance,  (v) fees and
expenses of all other  Persons  retained by the Company in  connection  with the
consummation of the  transactions  contemplated  by this  Agreement,  including,
without limitation,  the Company's independent public accountants (including, in
the case of an  underwritten  offering,  the expenses of any comfort  letters or
costs  associated  with the  delivery by  independent  public  accountants  of a
comfort letter or comfort letters) and legal counsel, and (vi) fees and expenses
of the Special Counsel in connection with any Registration  Statement hereunder.
In addition,  the Company shall be responsible for all of its internal  expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including,  without limitation, all salaries and expenses of its
officers and employees  performing legal or accounting  duties),  the expense of
any annual audit, the fees and expenses  incurred in connection with the listing
of the Registrable Securities on any securities exchange as required hereunder.

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      5. Indemnification.

      (a) Indemnification by the Company. The Company shall, notwithstanding any
termination  of this  Agreement,  indemnify and hold  harmless each Holder,  the
officers,  directors,  agents,  brokers  (including  brokers  who offer and sell
Registrable  Securities  as  principal as a result of a pledge or any failure to
perform under a margin call of Common Stock),  investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the  Securities  Act or Section  20 of the  Exchange  Act) and the
officers,  directors,  agents and employees of each such controlling  Person, to
the fullest  extent  permitted by  applicable  law, from and against any and all
losses,  claims,  damages,  liabilities,  costs (including,  without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses"),  as  incurred,  arising  out of or  relating to any untrue or alleged
untrue  statement of a material fact contained or  incorporated  by reference in
the Registration  Statement,  any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged  omission of a material  fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or amendment or supplement  thereto, in the
light of the circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information  regarding such Holder furnished in writing to
the Company by such Holder  expressly  for use therein,  which  information  was
reasonably  relied on by the  Company for use therein or to the extent that such
information  relates to (x) such Holder and was reviewed and expressly  approved
in writing by such Holder expressly for use in the Registration Statement,  such
Prospectus or such form of prospectus or in any amendment or supplement  thereto
or (y) such Holder's  proposed method of distribution of Registrable  Securities
as set forth in Exhibit A (or as such  Holder  otherwise  informs the Company in
writing); or (ii) in the case of an occurrence of an event of the type described
in Section 3(c)(C)(ii),  3(c)(C)(iii),  3(c)(C)(iv) or 3(n), the use by a Holder
of an  outdated  or  defective  Prospectus  after the  delivery to the Holder of
written notice from the Company that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice  contemplated in Section 3(m).
The Company  shall  notify the Holders  promptly of the  institution,  threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement. Such indemnity shall remain in full
force and  effect  regardless  of any  investigation  made by or on behalf of an
Indemnified  Party (as  defined in  Section  5(c) to this  Agreement)  and shall
survive the transfer of the Registrable Securities by the Holders.

      (b)  Indemnification  by Holders.  Each Holder  shall,  severally  and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents and employees of such controlling  Persons, to the
fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  arising solely out of or based solely upon any untrue  statement of a
material fact contained in the Registration  Statement,  any Prospectus,  or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based  solely  upon any  omission  of a material  fact  required to be
stated therein or necessary to make the  statements  therein (in the case of any
Prospectus  or form of prospectus  or  supplement  thereto,  in the light of the
circumstances  under which they were made) not  misleading,  to the extent,  but
only to the extent,  that (i) such untrue  statement or omission is contained in
or omitted  from any  information  so furnished in writing by such Holder to the

                                       9
<PAGE>

Company  specifically  for  inclusion  in the  Registration  Statement  or  such
Prospectus and that such  information was reasonably  relied upon by the Company
for use in the Registration Statement,  such Prospectus,  or in any amendment or
supplement  thereto,  or to the extent that such information relates to (x) such
Holder and was  reviewed  and  expressly  approved  in  writing  by such  Holder
expressly for use in the Registration Statement,  such Prospectus,  or such form
of prospectus  or in any  amendment or  supplement  thereto or (y) such Holder's
proposed  method  of  distribution  of  Registrable  Securities  as set forth in
Exhibit A (or as such Holder  otherwise  informs the Company in writing) or (ii)
in the  case of an  occurrence  of an event of the  type  described  in  Section
3(c)(C)(ii),  3(c)(C)(iii),  3(c)(C)(iv)  or  3(n),  the use by a  Holder  of an
outdated or  defective  Prospectus  after the  delivery to the Holder of written
notice from the Company that the  Prospectus  is outdated or defective and prior
to the  receipt by such  Holder of the  Advice  contemplated  in  Section  3(m);
provided,  however,  that the indemnity agreement contained in this Section 5(b)
shall not apply to amounts paid in settlement  of any Losses if such  settlement
is effected without the prior written consent of the Holder, which consent shall
not be unreasonably withheld. Notwithstanding anything to the contrary contained
herein,  the Holder shall be liable under this Section 5(b) for only that amount
as does not exceed the net  proceeds  to such  Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.

      (c) Conduct of  Indemnification  Proceedings.  If any Proceeding  shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"Indemnified  Party"),  such Indemnified  Party promptly shall notify the Person
from whom  indemnity is sought (the  "Indemnifying  Party") in writing,  and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably  satisfactory to the Indemnified Party and the payment of all
reasonable  fees and  expenses  incurred in  connection  with  defense  thereof;
provided,  that the failure of any  Indemnified  Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only) to the  extent  that it  shall be  finally
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or further  review) that such failure  shall have  proximately
and materially adversely prejudiced the Indemnifying Party.

      An Indemnified  Party shall have the right to employ  separate  counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party has agreed in writing to pay such
fees and expenses;  or (2) the Indemnifying  Party shall have failed promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory to such Indemnified Party in any such Proceeding;  or (3) the named
parties to any such Proceeding  (including any impleaded  parties)  include both
such Indemnified  Party and the Indemnifying  Party, and such Indemnified  Party
shall have been advised by counsel in writing  (with a copy to the  Indemnifying
Party) that a conflict of interest is likely to exist if the same  counsel  were
to represent such Indemnified  Party and the Indemnifying  Party (in which case,
if such  Indemnified  Party notifies the  Indemnifying  Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying  Party, the

                                       10
<PAGE>

Indemnifying  Party shall not have the right to assume the  defense  thereof and
such counsel shall be at the reasonable expense of the Indemnifying  Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected  without its written  consent,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such  Proceeding and does not impose any monetary
or other obligation or restriction on the Indemnified Party.

      All  reasonable  fees and  expenses of the  Indemnified  Party  (including
reasonable  fees  and  expenses  to  the  extent  incurred  in  connection  with
investigating   or  preparing  to  defend  such   Proceeding  in  a  manner  not
inconsistent  with this  Section)  shall be paid to the  Indemnified  Party,  as
incurred,  within  ten (10)  Business  Days of  written  notice  thereof  to the
Indemnifying Party, which notice shall be delivered no more frequently than on a
monthly  basis  (regardless  of  whether  it is  ultimately  determined  that an
Indemnified Party is not entitled to indemnification  hereunder;  provided, that
the  Indemnifying  Party may require  such  Indemnified  Party to  undertake  to
reimburse  all such fees and  expenses  to the extent it is  finally  judicially
determined  that  such  Indemnified  Party is not  entitled  to  indemnification
hereunder).

      (d)  Contribution.  If a claim for  indemnification  under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or refusal of a
governmental  authority to enforce such  indemnification  in accordance with its
terms (by reason of public policy or otherwise),  then each Indemnifying  Party,
in lieu of indemnifying such Indemnified  Party,  shall contribute to the amount
paid or payable by such  Indemnified  Party as a result of such Losses,  in such
proportion as is appropriate  to reflect the relative fault of the  Indemnifying
Party and  Indemnified  Party in  connection  with the  actions,  statements  or
omissions that resulted in such Losses as well as any other  relevant  equitable
considerations.  The relative fault of such  Indemnifying  Party and Indemnified
Party shall be  determined  by  reference  to, among other  things,  whether any
action in  question,  including  any untrue or  alleged  untrue  statement  of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information  supplied by, such  Indemnifying  Party or
Indemnified  Party,  and the  parties'  relative  intent,  knowledge,  access to
information  and  opportunity  to correct or prevent such  action,  statement or
omission.  The amount paid or payable by a party as a result of any Losses shall
be deemed to include,  subject to the limitations set forth in Section 5(c), any
reasonable  attorneys'  or other  reasonable  fees or expenses  incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified  for such fees or expenses if the  indemnification  provided  for in
this  Section  was  available  to such  party  in  accordance  with  its  terms.
Notwithstanding  anything to the contrary  contained herein, the Holder shall be
required to contribute  under this Section 5(d) for only that amount as does not
exceed the net  proceeds to such  Holder as a result of the sale of  Registrable
Securities pursuant to such Registration Statement.

                                       11
<PAGE>

      The  parties  hereto  agree  that it would  not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any Person
who was not guilty of such fraudulent misrepresentation.

      The indemnity and contribution agreements contained in this Section are in
addition  to any  liability  that  the  Indemnifying  Parties  may  have  to the
Indemnified  Parties.  The indemnity and contribution  agreements  herein are in
addition  to  and  not  in  diminution  or  limitation  of  any  indemnification
provisions under the Purchase Agreement.

      6. Rule 144.

      As long as any Holder owns any Shares,  Warrants  or Warrant  Shares,  the
Company  covenants to timely file (or obtain  extensions in respect  thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. As long as any Holder owns any Shares,  Warrants or Warrant Shares,  if the
Company is not  required to file reports  pursuant to Section  13(a) or 15(d) of
the Exchange  Act, it will prepare and furnish to the Holders and make  publicly
available in accordance  with Rule 144(c)  promulgated  under the Securities Act
annual and  quarterly  financial  statements,  together  with a  discussion  and
analysis  of such  financial  statements  in form  and  substance  substantially
similar to those that would  otherwise  be  required  to be  included in reports
required  by Section  13(a) or 15(d) of the  Exchange  Act, as well as any other
information  required  thereby,  in the time period that such filings would have
been  required to have been made under the  Exchange  Act.  The Company  further
covenants  that it will take such  further  action as any Holder may  reasonably
request,  all to the extent  required from time to time to enable such Person to
sell Shares and Warrant  Shares  without  registration  under the Securities Act
within the limitation of the exemptions  provided by Rule 144 promulgated  under
the Securities  Act,  including  compliance  with the provisions of the Purchase
Agreement  relating to the transfer of the Shares and Warrant  Shares.  Upon the
request of any  Holder,  the  Company  shall  deliver  to such  Holder a written
certification  of a duly  authorized  officer as to whether it has complied with
such requirements.

      7. Covenants of Purchasers.

      In connection  with the  Registration  Statement,  each of the  Purchasers
covenants as follows:

      (a) Unless and until such  Purchaser  has provided  written  notice to the
Company to the contrary,  all sales of Registrable  Securities by such Purchaser
shall be made without  payment of underwriting  discounts or commissions  except
for the usual and customary commission paid to brokers or dealers.

      (b) Such  Purchaser  shall  advise the Company of any  arrangement  with a
broker or dealer for the sale of such Purchaser's Registrable Securities through
a block  trade,  special  offering,  exchange  or  secondary  distribution  or a
principal purchase by a broker or dealer, and the details of such transaction.

                                       12
<PAGE>

      (c) Such Purchaser shall comply with all prospectus delivery  requirements
with respect to sales of the  Registrable  Securities to the extent  required by
the Securities Act and other applicable law.

      (d) Such Purchaser  shall report to the Company,  upon written  request of
the Company, whether all Registrable Securities held by such Purchaser have been
sold or otherwise transferred.

      8. Miscellaneous.

      (a) Remedies.  In the event of a breach by the Company or by a Holder,  of
any of their  obligations under this Agreement,  each Holder or the Company,  as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

      (b) No  Inconsistent  Agreements.  Except as  otherwise  disclosed  in the
Purchase  Agreement,  neither the Company nor any of its subsidiaries is a party
to an  agreement  currently  in  effect,  nor  shall the  Company  or any of its
subsidiaries,  on or after the date of this Agreement,  enter into any agreement
with respect to its securities that is  inconsistent  with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Without limiting the generality of the foregoing, without the written consent of
the Holders of a majority of the then outstanding  Registrable  Securities,  the
Company  shall not grant to any  Person  the right to  request  the  Company  to
register  any  securities  of the Company  under the  Securities  Act unless the
rights so granted are subject in all respects to the prior rights in full of the
Holders set forth herein,  and are not otherwise in conflict with the provisions
of this Agreement.

      (c)  Notice of  Effectiveness.  Within  two (2)  Business  Days  after the
Registration  Statement  which  includes the  Registrable  Securities is ordered
effective by the  Commission,  the Company shall deliver,  and shall cause legal
counsel for the Company to deliver,  to the transfer agent for such  Registrable
Securities (with copies to the Holders whose Registrable Securities are included
in such Registration Statement) confirmation that the Registration Statement has
been declared effective by the Commission in the form attached hereto as Exhibit
C. On the day that  such  Registration  Statement  is  declared  effective,  the
Company   shall  furnish  to  the   Investors   for   completion   the  investor
representation letter attached as Annex I to Exhibit C.

                                       13
<PAGE>

      (d)  Piggy-Back  Registrations.  If at  any  time  when  there  is  not an
effective Registration Statement covering all of the Registrable Securities, the
Company shall  determine to prepare and file with the  Commission a registration
statement  relating to an offering  for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form  S-8  (each  as  promulgated  under  the  Securities  Act)  or its  then
equivalents relating to equity securities to be issued solely in connection with
any  acquisition  of any entity or  business  or equity  securities  issuable in
connection with stock option or other employee  benefit plans, the Company shall
send  to  each  Holder  of  Registrable   Securities   written  notice  of  such
determination  and,  if within  seven (7)  Business  Days after  receipt of such
notice, any such Holder shall so request in writing (which request shall specify
the  Registrable  Securities  intended  to be disposed  of by the  Holder),  the
Company will cause the registration  under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Holder, to
the extent required to permit the  disposition of the Registrable  Securities so
to be  registered,  provided that if at any time after giving  written notice of
its intention to register any  securities and prior to the effective date of the
registration  statement filed in connection with such registration,  the Company
shall determine for any reason not to register or to delay  registration of such
securities,  the  Company  may, at its  election,  give  written  notice of such
determination to such Holder and, thereupon,  (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such  registration (but not from its obligation to
pay expenses in  accordance  with  Section 4 hereof),  and (ii) in the case of a
determination to delay registering,  shall be permitted to delay registering any
Registrable  Securities being  registered  pursuant to this Section 8(d) for the
same period as the delay in registering such other securities. The Company shall
include  in such  registration  statement  all or any  part of such  Registrable
Securities such Holder requests to be registered;  provided,  however,  that the
Company shall not be required to register any Registrable Securities pursuant to
this  Section  8(d) that are  eligible  for sale  pursuant to Rule 144(k) of the
Securities Act. In the case of an underwritten public offering,  if the managing
underwriter(s)  or  underwriter(s)  should reasonably object to the inclusion of
the Registrable Securities in such registration  statement,  then if the Company
after  consultation with the managing  underwriter  should reasonably  determine
that the inclusion of such Registrable  Securities,  would materially  adversely
affect the offering  contemplated in such registration  statement,  and based on
such determination  recommends inclusion in such registration statement of fewer
or none of the  Registrable  Securities  of the Holders,  then (x) the number of
Registrable  Securities of the Holders included in such  registration  statement
shall  be  reduced  pro-rata  among  such  Holders  (based  upon the  number  of
Registrable  Securities  requested to be included in the  registration),  if the
Company after consultation with the  underwriter(s)  recommends the inclusion of
fewer Registrable  Securities,  or (y) none of the Registrable Securities of the
Holders shall be included in such registration  statement,  if the Company after
consultation  with the  underwriter(s)  recommends the inclusion of none of such
Registrable Securities;  provided, however, that if securities are being offered
for the  account  of other  persons or  entities  as well as the  Company,  such
reduction  shall not represent a greater  fraction of the number of  Registrable
Securities  intended to be offered by the Holders  than the  fraction of similar
reductions imposed on such other persons or entities (other than the Company).

                                       14
<PAGE>

      (e) Failure to File Registration  Statement and Other Events.  The Company
and the Holders agree that the Holders will suffer  damages if the  Registration
Statement is not filed on or prior to the thirty-fifth  (35th) day following the
Closing  Date and  maintained  in the  manner  contemplated  herein  during  the
Effectiveness  Period.  The Company and the Holders  further agree that it would
not be  feasible  to  ascertain  the  extent  of such  damages  with  precision.
Accordingly,  if (i) the Registration  Statement is not filed on or prior to the
thirty-fifth (35th) day following the Closing Date, or (ii) the Company fails to
file with the Commission a request for  acceleration in accordance with Rule 461
promulgated  under the  Securities Act within five (5) Business Days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration  Statement will not be "reviewed," or not subject
to  further  review,  or (iii)  the  Registration  Statement  is filed  with and
declared effective by the Commission but thereafter ceases to be effective as to
all  Registrable  Securities  at  any  time  prior  to  the  expiration  of  the
Effectiveness   Period,   without  being  succeeded  promptly  by  a  subsequent
Registration Statement filed with the Commission,  except as otherwise permitted
by this  Agreement,  including  pursuant to Section 3(n), or (iv) trading in the
Common Stock shall be  suspended or if the Common Stock is delisted  from Nasdaq
or any other securities exchange,  quotation system,  market or over-the-counter
bulletin  board on which  Registrable  Securities  are required  hereunder to be
listed  (each an  "Exchange"),  without  immediately  being  listed on any other
Exchange, for any reason for more than one (1) Business Day, other than pursuant
to Section  3(n),  or (v) the exercise  rights of the Holders under the Warrants
are suspended for any reason  without the consent of the particular  Holder,  or
(vi) the Company has breached  Section 3(n) of this  Agreement (any such failure
or breach  being  referred to as an "Event"),  the Company  shall pay in cash as
liquidated  damages  for such  failure  and not as a penalty  to each  Holder an
amount equal to two percent (2%) of such Holder's pro rata share of the purchase
price paid by all Holders for the Shares purchased and then outstanding pursuant
to the  Purchase  Agreement  for the initial  thirty  (30) day period  until the
applicable Event has been cured,  which shall be pro rated for such periods less
than thirty (30) days and two percent  (2%) of such  Holder's  pro rata share of
the purchase price paid by all Holders for Shares purchased and then outstanding
pursuant to the Purchase  Agreement for each  subsequent  thirty (30) day period
until the  applicable  Event has been  cured  which  shall be pro rated for such
periods  less than  thirty  days (the  "Periodic  Amount").  Payments to be made
pursuant to this Section 8(e) shall be due and payable  immediately  upon demand
in immediately  available cash funds. The parties agree that the Periodic Amount
represents a reasonable  estimate on the part of the parties,  as of the date of
this Agreement,  of the amount of damages that may be incurred by the Holders if
the Registration  Statement is not filed on or prior to the thirty-fifth  (35th)
day following the Closing Date and maintained in the manner  contemplated herein
during the  Effectiveness  Period or if any other Event as described  herein has
occurred.  Notwithstanding the foregoing,  the Company shall remain obligated to
cure the breach or correct the condition  that caused the Event,  and the Holder
shall have the right to take any action  necessary  or desirable to enforce such
obligation.

      (f) Specific Enforcement, Consent to Jurisdiction.

            (i)  The  Company  and  the  Holders   acknowledge  and  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in  addition  to any other  remedy to which any of them may be entitled by
law or equity.

                                       15
<PAGE>

            (ii) Each of the  Company  and the  Holders  (i) hereby  irrevocably
      submits to the  exclusive  jurisdiction  of the state and  federal  courts
      located in New York City, New York for the purposes of any suit, action or
      proceeding  arising out of or relating to this  Agreement  and (ii) hereby
      waives,  and agrees not to assert in any such suit,  action or proceeding,
      any claim that it is not personally  subject to the  jurisdiction  of such
      court,  that the suit,  action or proceeding is brought in an inconvenient
      forum or that the venue of the suit,  action or  proceeding  is  improper.
      Each of the Company and the Holders  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(f) shall affect or
      limit any right to serve process in any other manner permitted by law.

      (g) Amendments and Waivers.  The provisions of this  Agreement,  including
the provisions of this sentence,  may not be amended,  modified or supplemented,
and waivers or  consents to  departures  from the  provisions  hereof may not be
given,  unless the same shall be in writing  and signed by the  Company  and the
Holders of 75% of the Registrable  Securities.  Notwithstanding the foregoing, a
waiver or consent to depart from the provisions  hereof with respect to a matter
that relates  exclusively to the rights of Holders and that does not directly or
indirectly  affect  the rights of other  Holders  may be given by Holders of the
Registrable  Securities  to which  such  waiver or  consent  relates;  provided,
however,  that the provisions of this sentence may not be amended,  modified, or
supplemented  except  in  accordance  with  the  provisions  of the  immediately
preceding sentence.

      (h) 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 earlier of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time, on
a Business Day, (ii) 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 date and earlier than 11:59 p.m., New York City
time, on such date,  (iii) the Business Day  following  the date of mailing,  if
sent by nationally  recognized overnight courier service such as Federal Express
or (iv) actual receipt by the party to whom such notice is required to be given.
The  addresses for such  communications  shall be with respect to each Holder at
its  address set forth  under its name on  Schedule 1 attached  hereto,  or with
respect to the Company, addressed to:

                                    NexMed, Inc.
                                    350 Corporate Boulevard
                                    Robbinsville, NJ  08691
                                    Attention:  Chief Financial Officer
                                    Facsimile No.:  609-208-1622

                                       16
<PAGE>

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 Company shall be sent to Katten Muchin
Zavis Rosenman, 575 Madison Avenue, New York, NY 10022, Attn: Robert Kohl, Esq.,
Facsimile No. (212)  940-8776.  Copies of notices to any Holder shall be sent to
the addresses, if any, listed on Schedule 1 attached hereto.

      (i) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors  and  permitted  assigns and
shall  inure to the  benefit of each  Holder  and its  successors  and  assigns;
provided, that the Company may not assign this Agreement or any of its rights or
obligations  hereunder  without the prior  written  consent of each Holder;  and
provided,  further,  that each  Holder may assign  its rights  hereunder  in the
manner and to the Persons as permitted under the Purchase Agreement.

      (j)  Assignment  of  Registration   Rights.  The  rights  of  each  Holder
hereunder,  including  the  right  to  have  the  Company  register  for  resale
Registrable Securities in accordance with the terms of this Agreement,  shall be
automatically  assignable by each Holder to any transferee of such Holder of all
or a portion of the Shares,  the Warrants or the Registrable  Securities if: (i)
the Holder  agrees in writing  with the  transferee  or  assignee to assign such
rights,  and a copy of such  agreement  is  furnished  to the  Company  within a
reasonable time after such assignment,  (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such  transferee or assignee,  and (b) the  securities  with
respect to which such  registration  rights are being  transferred  or assigned,
(iii)  following  such transfer or assignment  the further  disposition  of such
securities by the transferee or assignees is restricted under the Securities Act
and applicable  state  securities  laws,  (iv) at or before the time the Company
receives the written  notice  contemplated  by clause (ii) of this Section 8(j),
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions of this Agreement,  and (v) such transfer shall have been made
in accordance with the applicable  requirements of the Purchase  Agreement.  The
rights to assignment  shall apply to the Holders (and to subsequent)  successors
and assigns.

      The Company may require,  as a condition of allowing  such  assignment  in
connection  with a transfer of Shares,  Warrants or  Registrable  Securities (i)
that the Holder or transferee of all or a portion of the Shares, the Warrants or
the Registrable  Securities 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 (iii) that
the transferee be an "accredited investor" as defined in Rule 501(a) promulgated
under the Securities Act.

                                       17
<PAGE>

      (k) Counterparts;  Facsimile. This Agreement may be executed in any number
of  counterparts,  each of  which  when so  executed  shall be  deemed  to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.  In the event that any signature is delivered by electronic  image or
facsimile  transmission,  such signature shall create a valid binding obligation
of the party  executing (or on whose behalf such signature is executed) the same
with the  same  force  and  effect  as if such  electronic  image  or  facsimile
signature were the original thereof.

      (l) Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of New York,  without regard to principles
of conflicts of law thereof.

      (m) Cumulative  Remedies.  The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

      (n) Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable in any respect,  the remainder of the terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

      (o)  Headings.  The  headings  herein  are for  convenience  only,  do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

      (p)  Registrable  Securities  Held  by the  Company  and  its  Affiliates.
Whenever  the  consent  or  approval  of Holders of a  specified  percentage  of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or its Affiliates (other than any Holder or transferees or successors or
assigns thereof if such Holder is deemed to be an Affiliate  solely by reason of
its holdings of such Registrable Securities) shall not be counted in determining
whether  such  consent or  approval  was given by the  Holders of such  required
percentage.

      (q)  Obligations  of  Purchasers.   The  Company   acknowledges  that  the
obligations of each Purchaser  under this  Agreement,  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 this Agreement.  The decision of each Purchaser to enter into to
this  Agreement  has been  made by such  Purchaser  independently  of any  other
Purchaser.  The Company  further  acknowledges  that  nothing  contained in this
Agreement, and no action taken by any Purchaser pursuant hereto, shall be deemed
to constitute 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.   Each  Purchaser  shall  be  entitled  to
independently protect and enforce its rights, including without limitation,  the
rights  arising out of this  Agreement,  and it shall not be  necessary  for any
other  Purchaser to be joined as an additional  party in any proceeding for such
purpose.

                                       18
<PAGE>

      Each Purchaser acknowledges and agrees that it has been represented by its
own separate legal counsel in their review and negotiation of this Agreement and
with  respect  to  the  transactions   contemplated   hereby.   For  reasons  of
administrative  convenience  only,  this  Agreement has been prepared by Special
Counsel  (counsel for The Tail Wind Fund Ltd.  ("TWF")) and the Special  Counsel
will  perform  certain  duties  under  this  Agreement.  Such  counsel  does not
represent all of the  Purchasers  but only TWF and Solomon  Strategic  Holdings,
Inc. The Company has elected to provide all  Purchasers  with the same terms and
Agreement for the  convenience of the Company and not because it was required or
requested  to do so by  the  Purchasers.  The  Company  acknowledges  that  such
procedure  with respect to this  Agreement in no way creates a presumption  that
the  Purchasers  are in any way acting in concert or as a group with  respect to
this Agreement or the transactions contemplated hereby or thereby.

                            [signature page follows]

                                       19
<PAGE>

      IN WITNESS  WHEREOF,  the parties hereto have caused this Investor  Rights
Agreement to be duly executed by their respective  authorized  persons as of the
date first indicated above.

COMPANY:

NEXMED, INC.

By: /s/ Y. Joseph Mo
    ----------------
Name:  Y. Joseph Mo, Ph. D.
Title:   President & C.E.O.

                                       20
<PAGE>

PURCHASER:
Print Exact Name: THE TAIL WIND FUND LTD.
By:      TAIL WIND ADVISORY & MANAGEMENT LTD., as investment manager
         By:        /s/ David Crook
            --------------------------------------------------------------------
         Name:      David Crook
         Title:     CEO

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       21
<PAGE>

PURCHASER:
Print Exact Name: BRISTOL INVESTMENT FUND, LTD.

         By:        /s/ Paul Kessler
            --------------------------------------------------------------------
         Name:      Paul Kessler
         Title:     Director

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       22
<PAGE>

PURCHASER:
Print Exact Name: XMARK OPPORTUNITY FUND, Ltd.

         By:        /s/ David C. Cavalier
            --------------------------------------------------------------------
         Name:      David C. Cavalier
         Title:     C.O.O.

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       23
<PAGE>

PURCHASER:
Print Exact Name: XMARK OPPORTUNITY FUND, Ltd.

         By:        /s/ David C. Cavalier
            --------------------------------------------------------------------
         Name:      David C. Cavalier
         Title:     C.O.O.

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       24
<PAGE>

PURCHASER:
Print Exact Name: XMARK FUND, L.P.

         By:        /s/ David C. Cavalier
            --------------------------------------------------------------------
         Name:      David C. Cavalier
         Title:     C.O.O.

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       25
<PAGE>

PURCHASER:
Print Exact Name: XMARK FUND, L.P.

         By:        /s/ David C. Cavalier
            --------------------------------------------------------------------
         Name:      David C. Cavalier
         Title:     C.O.O.

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       26
<PAGE>

PURCHASER:
Print Exact Name: ENABLE GROWTH PARTNERS

         By:        /s/ Mitch Levine
            --------------------------------------------------------------------
         Name:      Mitch Levine
         Title:     Managing Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       27
<PAGE>

PURCHASER:
Print Exact Name: RONALD S. LASHIN

         By:        /s/ Ronald S. Loshin
            --------------------------------------------------------------------
         Name:      Ronald S. Loshin
         Title:     Purchaser

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       28
<PAGE>

PURCHASER:
---------
Print Exact Name: HARVEY LAMM

         By:        /s/ Harvey Lamm
            --------------------------------------------------------------------
         Name:      Harvey Lamm
         Title:

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       29
<PAGE>

PURCHASER:
Print Exact Name: RANDALL R. McCATHREN

         By:        /S/ Randall R. McCathren
            --------------------------------------------------------------------
         Name:      Randall R. McCathren
         Title:     President

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       30
<PAGE>

PURCHASER:
Print Exact Name: RICHARD T. SCHLIESMANN

         By:        /s/ Richard T. Schliesmann
            --------------------------------------------------------------------
         Name:      Richard T. Schliesman
         Title:     Purchaser

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       31
<PAGE>

PURCHASER:
---------
Print Exact Name: JIM SHROYER

         By:        /s/ Jim Shroyer
            --------------------------------------------------------------------
         Name:      Jim Shroyer
         Title:     Purchaser

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       32
<PAGE>

PURCHASER:
Print Exact Name: DANIEL M. O'NEILL

         By:        /s/ Daniel M. O'Neill
            --------------------------------------------------------------------
         Name:      Daniel M. O'Neill
         Title:

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       33
<PAGE>

PURCHASER:
Print Exact Name: LAURENCE ZALL

         By:        /s/ Laurence Zall
            --------------------------------------------------------------------
         Name:      Laurence Zall
         Title:

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       34
<PAGE>

PURCHASER:
Print Exact Name: CADUCEUS MASTER FUND LIMITED

         By:        /s/ Samuel D. Isaly
            --------------------------------------------------------------------
         Name:      Samuel D. Isaly
         Title:     Investment Advisor

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       35
<PAGE>

PURCHASER:
Print Exact Name: CADUCEUS CAPITAL II, L.P.

         By:        /s/ Samuel D. Isaly
            --------------------------------------------------------------------
         Name:      Samuel D. Isaly
         Title:     General Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       36
<PAGE>

PURCHASER:
Print Exact Name: UBS EUCALYPTUS FUND, LTD.

         By:        /s/ Samuel D. Isaly
            --------------------------------------------------------------------
         Name:      Samuel D. Isaly
         Title:     JU Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       37
<PAGE>

PURCHASER:
Print Exact Name: PW EUCALYPTUS FUND, LTD.

         By:        /s/ Samuel D. Isaly
            --------------------------------------------------------------------
         Name:      Samuel D. Isaly
         Title:     JU Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       38
<PAGE>

PURCHASER:
Print Exact Name: HFR SHC AGGRESSIVE MASTER TRUST

         By:        /s/ Samuel D. Isaly
            --------------------------------------------------------------------
         Name:      Samuel D. Isaly
         Title:     Investment Advisor

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       39
<PAGE>

PURCHASER:
Print Exact Name: OMICRON MASTER TRUST

         By:        /s/ Bruce Bernstein
            --------------------------------------------------------------------
         Name:      Bruce Bernstein
         Title:     Managing Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       40
<PAGE>

PURCHASER:
Print Exact Name: MIDSUMMER INVESTMENT LTD.

         By:        /s/ Scott D. Kaufman
            --------------------------------------------------------------------
         Name:      Scott D. Kaufman
         Title:

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       41
<PAGE>

PURCHASER:
Print Exact Name: CLARION CAPITAL CORPORATION

         By:        /s/ Morton  A. Cohen
            --------------------------------------------------------------------
         Name:      Morton A. Cohen
         Title:     Chairman

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       42
<PAGE>

PURCHASER:
Print Exact Name: CHULA PARTNERS, L.P.

         By:        /s/ Warren Berman
            --------------------------------------------------------------------
         Name:      Warren Berman
         Title:     General Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       43
<PAGE>

PURCHASER:
Print Exact Name: ALLISON L. BERMAN TRUST

         By:        /s/ Barry Praver
            --------------------------------------------------------------------
         Name:      Barry Praver
         Title:     Trustee

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       44
<PAGE>

PURCHASER:
Print Exact Name: ANN BERMAN CREDIT SHELTER TRUST

         By:        /s/ Warren Berman
            --------------------------------------------------------------------
         Name:      Warren Berman
         Title:     Trustee

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       45
<PAGE>

PURCHASER:
Print Exact Name: ARI D. BERMAN TRUST

         By:        /s/ Barry Praver
            --------------------------------------------------------------------
         Name:      Barry Praver
         Title:     Trustee

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       46
<PAGE>

PURCHASER:
Print Exact Name: CHRISTOPHER H. BERG REVOCABLE TRUST UA 3-28-95

         By:        /s/ Chris Berg
            --------------------------------------------------------------------
         Name:      Chris Berg
         Title:     Trustee

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       47
<PAGE>

PURCHASER:
Print Exact Name: PROMED PARTNERS, L.P.

         By:        /s/ Barry Kurokawa
            --------------------------------------------------------------------
         Name:      Barry Kurokawa
         Title:     Managing Director

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       48
<PAGE>

PURCHASER:
Print Exact Name: PROMED PARTNERS II, L.P.

         By:        /s/ Barry Kurokawa
            --------------------------------------------------------------------
         Name:      Barry Kurokawa
         Title:     Managing Director

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       49
<PAGE>

PURCHASER:
Print Exact Name: PROMED OFFSHORE FUND, LTD.

         By:        /s/ Barry Kurokawa
            --------------------------------------------------------------------
         Name:      Barry Kurokawa
         Title:     Director

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       50
<PAGE>

PURCHASER:
Print Exact Name: PROMED OFFSHORE FUND II, LTD.

         By:        /s/ Barry Kurokawa
            --------------------------------------------------------------------
         Name:      Barry Kurokawa
         Title:     Director

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       51
<PAGE>

PURCHASER:
Print Exact Name: ROBERT C. CIRICILLO

         By:        /s/ Robert C. Ciricillo
            --------------------------------------------------------------------
         Name:      Robert C. Ciricillo
         Title:

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       52
<PAGE>

PURCHASER:
Print Exact Name: ROSMOR LIMITED PARTNERSHIP

         By:        /s/ Morton A. Cohen
            --------------------------------------------------------------------
         Name:      Morton A. Cohen
         Title:     General Partner

         [Omnibus NexMed, Inc. Investor Rights Agreement Signature Page]

                                       53
<PAGE>

                                   SCHEDULE 1

                                   PURCHASERS

<PAGE>

                                    EXHIBIT A

                              PLAN OF DISTRIBUTION

      We are  registering  the shares of common  stock on behalf of the  selling
security  holders.  Sales of shares  may be made by  selling  security  holders,
including   their   respective   donees,   transferees,    pledgees   or   other
successors-in-interest  directly to  purchasers  or to or through  underwriters,
broker-dealers  or  through  agents.  Sales may be made from time to time on the
Nasdaq National  Market,  any other exchange or market upon which our shares may
trade in the future,  in the  over-the-counter  market or  otherwise,  at market
prices prevailing at the time of sale, at prices related to market prices, or at
negotiated  or fixed  prices.  The  shares  may be sold by one or more of,  or a
combination of, the following:

-     a block trade in which the  broker-dealer  so engaged will attempt to sell
      the shares as agent but may  position and resell a portion of the block as
      principal to facilitate the  transaction  (including  crosses in which the
      same broker acts as agent for both sides of the transaction);

-     purchases   by  a   broker-dealer   as   principal   and  resale  by  such
      broker-dealer,  including  resales  for  its  account,  pursuant  to  this
      prospectus;

-     ordinary  brokerage  transactions  and  transactions  in which the  broker
      solicits purchases;

-     through options, swaps or derivatives;

-     in privately negotiated transactions;

-     in making short sales or in transactions to cover short sales; and

-     put or call option transactions relating to the shares.

      The  selling  security  holders  may effect  these  transactions  by
selling shares directly to purchasers or to or through broker-dealers, which may
act as agents or principals.  These  broker-dealers may receive  compensation in
the form of discounts,  concessions  or  commissions  from the selling  security
holders and/or the purchasers of shares for whom such  broker-dealers may act as
agents or to whom they sell as principals,  or both (which  compensation as to a
particular  broker-dealer  might be in excess  of  customary  commissions).  The
selling  security  holders  have  advised us that they have not entered into any
agreements,   understandings   or   arrangements   with  any   underwriters   or
broker-dealers regarding the sale of their securities.

      The selling  security  holders may enter into  hedging  transactions  with
broker-dealers  or  other  financial  institutions.  In  connection  with  those
transactions,  the broker-dealers or other financial  institutions may engage in
short sales of the shares or of securities  convertible into or exchangeable for
the shares in the course of  hedging  positions  they  assume  with the  selling
security  holders.  The selling  security holders may also enter into options or
other  transactions with  broker-dealers or other financial  institutions  which
require  the   delivery  of  shares   offered  by  this   prospectus   to  those
broker-dealers  or other  financial  institutions.  The  broker-dealer  or other
financial institution may then resell the shares pursuant to this prospectus (as
amended or  supplemented,  if  required  by  applicable  law,  to reflect  those
transactions).

                                       54
<PAGE>

      The selling security holders and any broker-dealers that act in connection
with the sale of shares may be deemed to be "underwriters" within the meaning of
Section 2(11) of the  Securities Act of 1933,  and any  commissions  received by
broker-dealers  or any  profit on the  resale of the  shares  sold by them while
acting as principals may be deemed to be  underwriting  discounts or commissions
under the Securities  Act. The selling  security  holders may agree to indemnify
any agent,  dealer or broker-dealer that participates in transactions  involving
sales of the shares against liabilities, including liabilities arising under the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling  security  holder has agreed,  severally  and not  jointly,  to
indemnify us against some  liabilities  in  connection  with the offering of the
shares, including liabilities arising under the Securities Act.

      The selling  security  holders will be subject to the prospectus  delivery
requirements  of the  Securities  Act. We have  informed  the  selling  security
holders that the anti-manipulative  provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in the market.

      Selling security holders also may resell all or a portion of the shares in
open market  transactions  in reliance upon Rule 144 under the  Securities  Act,
provided they meet the criteria and conform to the requirements of Rule 144.

      Upon  being  notified  by  a  selling  security  holder  that  a  material
arrangement  has been entered into with a  broker-dealer  for the sale of shares
through a block trade,  special  offering,  exchange  distribution  or secondary
distribution  or a purchase by a broker or dealer,  we will file a supplement to
this prospectus,  if required  pursuant to Rule 424(b) under the Securities Act,
disclosing:

-     the name of each such  selling  security  holder and of the  participating
      broker-dealer(s);

-     the number of shares involved;

-     the initial price at which the shares were sold;

-     the  commissions   paid  or  discounts  or  concessions   allowed  to  the
      broker-dealer(s), where applicable;

-     that such broker-dealer(s) did not conduct any investigation to verify the
      information set out or incorporated by reference in this prospectus; and

-     other facts material to the transactions.

                                       55
<PAGE>

      In addition,  if required under applicable law or the rules or regulations
of the  Commission,  we will file a supplement to this prospectus when a selling
security  holder  notifies us that a donee or pledgee  intends to sell more than
500 shares of common stock.

      We are paying all expenses and fees in connection with the registration of
the shares. The selling security holders will bear all brokerage or underwriting
discounts or commissions paid to  broker-dealers  in connection with the sale of
the shares.

                                       56
<PAGE>

                                    EXHIBIT B

                                  NEXMED, INC.

                    Form of Selling Shareholder Questionnaire

      This  Questionnaire  and  Agreement  is  being  furnished  to  all  of the
individuals  and  entities  who hold shares of the  Company's  Common  Stock and
Warrants to purchase  shares of the Company's  Common Stock issued in connection
with the Common Stock and Warrant  Purchase  Agreement  dated  December 17, 2004
between the Company and the Purchasers listed on Schedule 1 thereto (such shares
of Common Stock and the shares of Common  Stock  issuable on the exercise of the
Warrants, collectively "the Shares"), that are to be registered for resale under
a registration statement on Form S-3 (the "Registration  Statement") to be filed
with the  Securities  and  Exchange  Commission  in  connection  with the public
offering of the Shares by the  undersigned  (the  "Offering").  The Company will
rely on the information  supplied by you in response to this  Questionnaire  and
Agreement to prepare such registration statement.

Please Print or Type.

1.    Name of individual or entity:

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

2.    Address of principal  place of business or, if an  individual,  address of
      residence

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

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

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

3.    Jurisdiction  of  formation or  incorporation  (if the  undersigned  is an
      entity):

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

4.    Telephone and fax numbers:

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

5.    Contact person:

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

      SHARES PURCHASED IN DECEMBER ___, 2004 OFFERING

6.    Number of Shares of Common Stock purchased by Purchaser in connection with
      the  December  17,  2004  Common  Stock and  Warrant  Purchase  Agreement:

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

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

7.    Number of Shares  issuable  upon the  exercise  of Warrants  purchased  in
      connection  with the December  17, 2004 Common Stock and Warrant  Purchase
      Agreement:

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

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

                                       57
<PAGE>

8.    Do you wish for all Shares  listed in  Questions 6 and 7 to be  registered
      for resale in the Registration Statement?

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

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

         Yes                                No
             --------------                    ---------------

SHARES  HELD BY  UNDERSIGNED  OTHER THAN THOSE  PURCHASED  IN  DECEMBER  2, 2004
OFFERING

9.    Number of shares of Common  Stock  owned by the  undersigned,  other  than
      those  shares  purchased in  connection  with the December 17, 2004 Common
      Stock and Warrant Purchase Agreement:

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

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

10.   Number of shares  issuable  upon the  exercise  of  Warrants  owned by the
      undersigned,  other than those Warrants  purchased in connection  with the
      December 17, 2004 Common Stock and Warrant Purchase Agreement:

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

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

11.   Number of shares  issuable upon conversion of the Company's 5% Convertible
      Notes:

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

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

12.   Relationship  of the undersigned or its affiliates with the Company or its
      affiliates,  other  than as a  holder  of  Shares  (include  any  material
      relationship within the past three years). If "none", so state:

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

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

13.   Are you a member,  an affiliate of a member, or a person associated with a
      member,  of the National  Association  of  Securities  Dealers,  Inc. (the
      "NASD")?

          Yes                               No
              -------------                    ---------------

      If the answer to Question 13 is "yes", state (a) the name of any such NASD
      member,  (b) the nature of your  affiliation or association with such NASD
      member,  (c)  information  as to such NASD member's  participation  in any
      capacity in the offering or the original placement of the Securities.

14.   If you answered "yes" to Question 13 above,  please fill out the following
      table  with  respect  to any  purchases  from  the  Company  or any of its
      affiliates in a private  placement  within twelve months prior to the date
      hereof (excluding your purchase of the Shares).

                             Amount
                             and Name of  Price or Other
Date of Purchase   Seller    Securities   Consideration
----------------   ------    ----------   -------------

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

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

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

                                       58
<PAGE>

15.   Have you entered into any agreements,  understandings or arrangements with
      any underwriters or broker-dealers regarding the sale of the Shares?

         Yes                                No
             --------------                    ---------------

The  undersigned  consents to the  disclosure of the answers to the above in the
registration statement.

IN WITNESS WHEREOF, the undersigned executed this Questionnaire and Agreement on
this ___ day of ______, 2004.

                                          ______________________________________

                                          ______________________________________
                                          (Signature)

                                          ______________________________________

                                          ______________________________________
                                          (Print Name and Title, if applicable)

                                       59
<PAGE>

                                    EXHIBIT C

                         FORM OF NOTICE OF EFFECTIVENESS

                            OF REGISTRATION STATEMENT

[Date]

Wells Fargo Bank Minnesota, N.A.
Shareowner Services
161 North Concord Exchange Street
South St Paul, MN 55075-1139
Attn:    Suzy Swits
Fax: 651-450-4078
Tel: 651-450-4120

Re: NexMed, Inc.

Ladies and Gentlemen:

We are  counsel to NexMed,  Inc.  (the  "Company")  and have been  requested  to
furnish you with an opinion with  respect to (a) the removal of the  restrictive
legend from  certificates  representing  shares of the  Company's  common stock,
$0.001  par  value  per  share  (the  "Common  Shares")  currently  held  by the
individuals  and/or  entities who are listed,  and in the amounts set forth,  in
Column  A  on  Schedule  A  attached  hereto   (individually,   a  "Holder"  and
collectively, the "Holders") and (b) certain issuances of the Common Shares upon
exercise  of the  Company's  warrants  listed in Column B on Schedule A attached
hereto (the  "Warrants") in each case held by the Holders and in the amounts set
forth in Column B on Schedule A.

Please be advised that the Common Shares  referred to above have been registered
for resale by the  Holders  under the  Securities  Act of 1933 (the "1933  Act")
pursuant to a Registration  Statement on Form S-3 (File No.  333-_______)  filed
with the Securities and Exchange Commission ____________, and declared effective
on _____________ (the "Registration Statement").

For the purposes of rendering the opinions  expressed  herein,  we have examined
and relied upon such  documents as we have deemed  relevant and necessary as the
basis for said opinions.  In such examination we have assumed the genuineness of
all signatures,  the authenticity of all documents  submitted to us as certified
or photostatic  copies, and the authenticity of the originals of such documents.
As to  questions  of fact  material to the opinions  expressed  herein,  we have
relied, without independent  investigation or verification,  upon the statements
of fact  contained  in the  documents  which  we  have  examined.  Based  on the
foregoing,  and with due regard to such legal  considerations  as we have deemed
relevant,  we are of the opinion that for so long as the Company remains current
in its filings  under the  Securities  Exchange Act of 1934 (the "1934 Act") and
the Registration Statement remains effective under the 1933 Act:

                                       60
<PAGE>

1.    upon  your  receipt  of (a) a  legended  certificate  and/or  certificates
      representing  a number of Common Shares set forth opposite a Holder's name
      in  Column  A  of  Schedule  A  attached  hereto,   together  with  (b)  a
      representation  from such  Holder in the form of Annex I  attached  hereto
      stating that it has sold or intends to resell such Common Shares solely in
      accordance with the Registration Statement, certificates representing such
      Common Shares may be issued to such Holder free of any restrictive legend;
      and

2.    upon your receipt of (a) written  instructions  from the  Secretary of the
      Company  stating  that  any  Warrants  held by a  Holder  have  been  duly
      exercised,  and the  number  of  Common  Shares  to be  issued  upon  such
      exercise,  together with (b) a representation from such Holder identifying
      the Warrants that it is exercising  into Common Shares and stating that it
      has  current  plans to resell such Common  Shares in  accordance  with the
      Registration  Statement  in the form of the  representation  contained  in
      Annex I (which  representation  may be contained in the Subscription  Form
      delivered upon exercise of such Warrants),  certificates representing such
      Common Shares, in an amount up to the number of unissued Common Shares set
      forth  opposite  such  Holder's  name in Column B of  Schedule  A attached
      hereto,  may be issued to such  Holder in  accordance  with the  Company's
      instructions, free of any restrictive legend.

This is to  advise  you  that,  to the  extent  a  Holder  does  not  furnish  a
representation  letter as set forth in  paragraphs  1 or 2 above for any  Common
Shares,  then  certificates  for those  Common  Shares  should be issued  with a
restrictive legend.

This opinion  letter being  provided to you as of the date hereof in  connection
with the issuance of certificates representing up to the number of Common Shares
set forth  opposite the names of the Holders listed on Schedule A, is solely for
your benefit and may not be used, circulated, quoted or otherwise referred to or
relied  upon  by you for any  other  purpose,  or by any  other  person  for any
purpose, without our prior written consent.

Very truly yours.

KATTEN MUCHIN ZAVIS ROSENMAN

By: ________________________________
              A Partner

                                       61

<PAGE>

                                    SCHEDULE A
                                    ----------

                                     COLUMN A                  COLUMN B
                                     --------                  --------

                                                            COMMON SHARES
     NAME OF                      COMMON SHARES             ISSUABLE WITH
SELLING SHAREHOLDER              CURRENTLY OWNED          RESPECT TO WARRANTS
-------------------              ---------------          -------------------
                                                        A WARRANTS  B WARRANTS
                                                        ----------  ----------

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

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

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

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

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

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

                                       62
<PAGE>

                                     ANNEX I

                              HOLDER REPRESENTATION

Dated: ___________

Wells Fargo Bank Minnesota, N.A.
Shareowner Services
161 North Concord Exchange Street
South St Paul, MN 55075-1139
Attn:    Suzy Swits
Fax: 651-450-4078
Tel: 651-450-4120

Re:      NexMed, Inc.

Dear Ms. Swits:

In connection with a private placement  transaction  ("Private Placement") which
was consummated on or about December 17, 2004, NexMed,  Inc.  ("Company") issued
to the undersigned  ("Holder") shares of the Company's common stock,  $0.001 par
value per share ("Common Shares"),  and warrants ("Warrants") to purchase Common
Shares. Holder hereby represents to you that: (check below as appropriate)

      |_|   it has sold or has  current  plans to  resell  _____________  Common
            Shares purchased by Holder in connection with the Private Placement,
            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; and/or

      |_|   it has exercised  Warrant(s)  No. ___, and in  connection  with such
            exercise has purchased  _____________ Common Shares, and it has sold
            or has current plans to resell  _____________ of such Common Shares,
            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.

Please  contact  _____________________  at (___)  __________  if you require any
further representation, confirmation or information. Thank you.

Holder Name:      __________________________
                  By: _______________________
                  Name:
                  Title:

                                       62INDEMNITY AGREEMENT

      THIS INDEMNITY AGREEMENT (this "Agreement") is made and entered into this
21st day of December, 2004, between World Waste Technologies, Inc., a California
corporation (the "Company"), and James L. Ferris ("Indemnitee").

                                    RECITALS:

      A. Indemnitee, as a member of the Company's Board of Directors and/or an
officer of the Company, performs valuable services for the Company.

      B. The Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for corporate directors, officers, employees,
controlling persons, agents and fiduciaries, the significant increases in the
cost of such insurance and the general reductions in the coverage of such
insurance.

      C. The Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors, officers, employees,
controlling persons, agents and fiduciaries to expensive litigation risks at the
same time as the availability and coverage of liability insurance has been
severely limited.

      D. The stockholders of the Company have adopted Bylaws (the "Bylaws")
providing for the indemnification of the officers, directors, agents and
employees of the Company to the maximum extent authorized by the California
Corporations Code, as amended ("CCC").

      E. Indemnitee does not regard the current protection available for the
Company's directors, officers, employees, controlling persons, agents and
fiduciaries as adequate under the present circumstances, and Indemnitee and
other directors, officers, employees, controlling persons, agents and
fiduciaries of the Company may not be willing to serve or continue to serve in
such capacities without additional protection.

      F. The Bylaws and the CCC, by their non-exclusive nature, permit contracts
between the Company and its directors, officers, employees, controlling persons,
agents or fiduciaries with respect to indemnification of such directors.

      G. The Company (a) desires to attract and retain the involvement of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to be involved with the Company and (b) wishes to
provide for the indemnification and advancing of expenses to Indemnitee to the
maximum extent permitted by law.

      H. In view of the considerations set forth above, the Company desires that
Indemnitee be indemnified by the Company as set forth herein.

<PAGE>

                                   AGREEMENT:

      NOW, THEREFORE, in consideration of Indemnitee's service to the Company,
the parties hereto agree as follows:

      1. INDEMNITY OF INDEMNITEE. The Company hereby agrees to indemnify
Indemnitee to the fullest extent permitted by law, even if such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation (the "Certificate"), the Company's Bylaws
or by statute. In the event of any change after the date of this Agreement in
any applicable law, statute or rule which expands the right of a California
corporation to indemnify a member of its Board of Directors or an officer,
employee, controlling person, agent or fiduciary, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a California corporation to
indemnify a member of its Board of Directors or an officer, employee, agent or
fiduciary, such change, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder except as set forth
in Section 9(a) hereof.

      2. ADDITIONAL INDEMNITY. The Company hereby agrees to hold harmless and
indemnify the Indemnitee:

            (a) Against any and all expenses incurred by Indemnitee, as set
      forth in Section 3(a) below; and

            (b) Otherwise to the fullest extent not prohibited by the
      Certificate, the Bylaws or the CCC.

      3. INDEMNIFICATION RIGHTS.

            (a) Indemnification of Expenses. The Company shall indemnify and
      hold harmless Indemnitee, together with Indemnitee's partners, affiliates,
      employees, agents and spouse and each person who controls any of them or
      who may be liable within the meaning of Section 15 of the Securities Act
      of 1933, as amended (the "Securities Act"), or Section 20 of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), to the
      fullest extent permitted by law if Indemnitee was or is or becomes a party
      to or witness or other participant in, or is threatened to be made a party
      to or witness or other participant in, any threatened, pending or
      completed action, suit, proceeding or alternative dispute resolution
      mechanism, or any hearing, inquiry or investigation that Indemnitee and
      the Company believe might lead to the institution of any such action,
      suit, proceeding or alternative dispute resolution mechanism, whether
      civil, criminal, administrative, investigative or other (hereinafter a
      "Claim") against (i) any and all expenses (including attorneys' fees) and
      all other costs, expenses and obligations incurred in connection with
      investigating, defending, being a witness in or participating in
      (including on appeal), or preparing to defend, be a witness in or
      participate in, a Claim, (ii) judgments, fines, penalties and amounts paid
      in settlement (if such settlement is approved in advance by the Company,
      which approval shall not be unreasonably withheld) of a Claim and (iii)
      any federal, state, local or foreign taxes imposed on Indemnitee as a
      result of the actual or deemed receipt of any payments under this
      Agreement (collectively, hereinafter "Expenses"), including all interest,
      assessments and other charges paid or payable in connection with or in
      respect of such Expenses, incurred by Indemnitee by reason of (or arising
      in part out of) any event or occurrence related to the fact that
      Indemnitee is or was a director, officer, employee, controlling person,
      agent or fiduciary of the Company or any subsidiary of the Company, or is
      or was serving at the request of the Company as a director, officer,
      employee, controlling person, agent or fiduciary of another corporation,
      partnership, joint venture, trust or other enterprise, or by reason of any
      action or inaction on the part of Indemnitee while serving in such
      capacity including, without limitation, any and all losses, claims,
      damages, expenses and liabilities, joint or several (including any
      investigation, legal and other expenses incurred in connection with, and
      any amount paid in settlement of, any action, suit, proceeding or any
      claim asserted) under the Securities Act, the Exchange Act or other
      federal or state statutory law or regulation, at common law or otherwise,
      which relate directly or indirectly to the registration, purchase, sale or
      ownership of any securities of the Company or to any fiduciary obligation
      owed with respect thereto (hereinafter an "Indemnification Event"). The
      Company shall make such payment of Expenses as soon as practicable but in
      any event no later than 25 days after written demand by Indemnitee
      therefor is presented to the Company.

                                       2
<PAGE>

            (b) Reviewing Party. Notwithstanding the foregoing, (i) the
      obligations of the Company under Section 2 shall be subject to the
      condition that the Reviewing Party (as described in Section 11(e) hereof)
      shall not have determined (in a written opinion, in any case in which the
      Independent Legal Counsel as defined in Section 11(d) hereof is involved)
      that Indemnitee would not be permitted to be indemnified under applicable
      law and (ii) and Indemnitee acknowledges and agrees that the obligation of
      the Company to make an advance payment of Expenses to Indemnitee pursuant
      to Section 4(a) (an "Expense Advance") shall be subject to the condition
      that, if, when and to the extent that the Reviewing Party determines that
      Indemnitee would not be permitted to be so indemnified under applicable
      law, the Company shall be entitled to be reimbursed by Indemnitee (who
      hereby agrees to reimburse the Company) for all such amounts theretofore
      paid; provided, however, that if Indemnitee has commenced or thereafter
      commences legal proceedings in a court of competent jurisdiction to secure
      a determination that Indemnitee should be indemnified under applicable
      law, any determination made by the Reviewing Party that Indemnitee would
      not be permitted to be indemnified under applicable law shall not be
      binding and Indemnitee shall not be required to reimburse the Company for
      any Expense Advance until a final judicial determination is made with
      respect thereto (as to which all rights of appeal therefrom have been
      exhausted or lapsed). Indemnitee's obligation to reimburse the Company for
      any Expense Advance shall be unsecured and no interest shall be charged
      thereon. If there has not been a Change in Control (as defined in Section
      11(c) hereof), the Reviewing Party shall be selected by the Board of
      Directors, and if there has been such a Change in Control (other than a
      Change in Control which has been approved by a majority of the Company's
      Board of Directors who were directors immediately prior to such Change in
      Control), the Reviewing Party shall be the Independent Legal Counsel
      referred to in Section 3(e) hereof. If there has been no determination by
      the Reviewing Party or if the Reviewing Party determines that Indemnitee
      substantively would not be permitted to be indemnified in whole or in part
      under applicable law, Indemnitee shall have the right to commence
      litigation seeking an initial determination by the court or challenging
      any such determination by the Reviewing Party or any aspect thereof,
      including the legal or factual bases therefor, and the Company hereby
      consents to service of process and to appear in any such proceeding. Any
      determination by the Reviewing Party otherwise shall be conclusive and
      binding on the Company and Indemnitee.

                                       3
<PAGE>

            (c) Contribution. If the indemnification provided for in Section
      3(a) above for any reason is held by a court of competent jurisdiction to
      be unavailable to an Indemnitee in respect of any losses, claims, damages,
      expenses or liabilities referred to therein, then the Company, in lieu of
      indemnifying Indemnitee thereunder, shall contribute to the amount paid or
      payable by Indemnitee as a result of such losses, claims, damages,
      expenses or liabilities (i) in such proportion as is appropriate to
      reflect the relative benefits received by the Company and Indemnitee or
      (ii) if the allocation provided by clause (i) above is not permitted by
      applicable law, in such proportion as is appropriate to reflect not only
      the relative benefits referred to in clause (i) above but also the
      relative fault of the Company and Indemnitee in connection with the action
      or inaction which resulted in such losses, claims, damages, expenses or
      liabilities, as well as any other relevant equitable considerations. In
      connection with the registration of the Company's securities, the relative
      benefits received by the Company and Indemnitee shall be deemed to be in
      the same respective proportions that the net proceeds from the offering
      (before deducting expenses) received by the Company and the Indemnitee, in
      each case as set forth in the table on the cover page of the applicable
      prospectus, bear to the aggregate public offering price of the securities
      so offered. The relative fault of the Company and Indemnitee shall be
      determined by reference to, among other things, whether the untrue or
      alleged untrue statement of a material fact or the omission or alleged
      omission to state a material fact relates to information supplied by the
      Company or Indemnitee and the parties' relative intent, knowledge, access
      to information and opportunity to correct or prevent such statement or
      omission.

            The Company and Indemnitee agree that it would not be just and
      equitable if contribution pursuant to this Section 3(c) were determined by
      pro rata or per capita allocation or by any other method of allocation
      which does not take account of the equitable considerations referred to in
      the immediately preceding paragraph. In connection with the registration
      of the Company's securities, in no event shall an Indemnitee be required
      to contribute any amount under this Section 3(c) in excess of the lesser
      of (i) that proportion of the total of such losses, claims, damages or
      liabilities indemnified against equal to the proportion of the total
      securities sold under such registration statement which is being sold by
      Indemnitee or (ii) the proceeds received by Indemnitee from its sale of
      securities under such registration statement. No person found guilty of
      fraudulent misrepresentation (within the meaning of Section 10(f) of the
      Securities Act) shall be entitled to contribution from any person who was
      not found guilty of such fraudulent misrepresentation.

            (d) Survival Regardless of Investigation. The indemnification and
      contribution provided for herein will remain in full force and effect
      regardless of any investigation made by or on behalf of Indemnitee or any
      officer, director, employee, agent or controlling person of Indemnitee.

                                       4
<PAGE>

            (e) Change in Control. After the date hereof, the Company agrees
      that if there is a Change in Control of the Company (other than a Change
      in Control which has been approved by a majority of the Company's Board of
      Directors who were directors immediately prior to such Change in Control)
      then, with respect to all matters thereafter arising concerning the rights
      of Indemnitee to payments of Expenses under this Agreement or any other
      agreement or under the Company's Certificate or Bylaws as now or hereafter
      in effect, Independent Legal Counsel (as defined in Section 11(d) hereof)
      shall be selected by Indemnitee and approved by the Company (which
      approval shall not be unreasonably withheld). Such counsel, among other
      things, shall render its written opinion to the Company and Indemnitee as
      to whether and to what extent Indemnitee would be permitted to be
      indemnified under applicable law. The Company agrees to abide by such
      opinion and to pay the reasonable fees of the Independent Legal Counsel
      referred to above and to fully indemnify such counsel against any and all
      reasonable expenses (including attorneys' fees), claims, liabilities and
      damages arising out of or relating to this Agreement or its engagement
      pursuant hereto.

            (f) Mandatory Payment of Expenses. Notwithstanding any other
      provision of this Agreement, to the extent that Indemnitee has been
      successful on the merits or otherwise, including, without limitation, the
      dismissal of an action without prejudice, in the defense of any action,
      suit, proceeding, inquiry or investigation referred to in Section 3(a)
      hereof or in the defense of any claim, issue or matter therein, Indemnitee
      shall be indemnified against all Expenses incurred by Indemnitee in
      connection herewith.

      4. EXPENSES; INDEMNIFICATION PROCEDURE.

            (a) Advancement of Expenses. The Company shall advance all Expenses
      incurred by Indemnitee. The advances to be made hereunder shall be paid by
      the Company to Indemnitee as soon as practicable but in any event no later
      than ten business days after written demand by Indemnitee therefor to the
      Company.

            (b) Notice/Cooperation by Indemnitee. Indemnitee shall give the
      Company notice in writing in accordance with Section 15 of this Agreement
      as soon as practicable of any Claim made against Indemnitee for which
      indemnification will or could be sought under this Agreement.

            (c) No Presumptions; Burden of Proof. For purposes of this
      Agreement, the termination of any Claim by judgment, order, settlement
      (whether with or without court approval) or conviction, or upon a plea of
      nolo contendere, or its equivalent, shall not create a presumption that
      Indemnitee did not meet any particular standard of conduct or have any
      particular belief or that a court has determined that indemnification is
      not permitted by applicable law. In addition, neither the failure of the
      Reviewing Party to have made a determination as to whether Indemnitee has
      met any particular standard of conduct or had any particular belief, nor
      an actual determination by the Reviewing Party that Indemnitee has not met
      such standard of conduct or did not have such belief, prior to the
      commencement of legal proceedings by Indemnitee to secure a judicial
      determination that Indemnitee should be indemnified under applicable law,
      shall be a defense to Indemnitee's claim or create a presumption that
      Indemnitee has not met any particular standard of conduct or did not have
      any particular belief. In connection with any determination by the
      Reviewing Party or otherwise as to whether Indemnitee is entitled to be
      indemnified hereunder, the burden of proof shall be on the Company to
      establish that Indemnitee is not so entitled.

                                       5
<PAGE>

            (d) Notice to Insurers. If, at the time of the receipt by the
      Company of a notice of a Claim pursuant to Section 4(b) hereof, the
      Company has liability insurance in effect which may cover such Claim, the
      Company shall give prompt notice of the commencement of such Claim to the
      insurers in accordance with the procedures set forth in each of the
      Company's policies. The Company shall thereafter take all necessary or
      desirable action to cause such insurers to pay, on behalf of Indemnitee,
      all amounts payable as a result of such action, suit, proceeding, inquiry
      or investigation in accordance with the terms of such policies.

            Selection of Counsel. In the event the Company shall be obligated
      hereunder to pay the Expenses of any Claim, the Company shall be entitled
      to assume the defense of such Claim, with counsel approved by the
      Indemnitee (which approval shall not be unreasonably withheld) upon the
      delivery to Indemnitee of written notice of its election to do so. After
      delivery of such notice, approval of such counsel by Indemnitee and the
      retention of such counsel by the Company, the Company will not be liable
      to Indemnitee under this Agreement for any fees of counsel subsequently
      incurred by Indemnitee with respect to the same Claim; provided that (i)
      Indemnitee shall have the right to employ Indemnitee's counsel in any such
      Claim at Indemnitee's expense and (ii) if (A) the employment of counsel by
      Indemnitee has been previously authorized by the Company, (B) Indemnitee
      shall have reasonably concluded that there is a conflict of interest
      between the Company and Indemnitee in the conduct of any such defense or
      (C) the Company shall not continue to retain such counsel to defend such
      Claim, then the fees and expenses of Indemnitee's counsel shall be at the
      expense of the Company.

      5. NONEXCLUSIVITY. The indemnification provided by this Agreement shall be
in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the CCC, or otherwise. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action Indemnitee took or did not take while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity.

      6. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against any
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, Bylaw or otherwise)
of the amounts otherwise indemnifiable hereunder.

                                       6
<PAGE>

      7. PARTIAL INDEMNIFICATION. If any Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for any portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.

      8. MUTUAL ACKNOWLEDGEMENT. The Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors, officers, employees, controlling
persons, agents or fiduciaries under this Agreement or otherwise. Each
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's rights under public policy to
indemnify Indemnitee.

      9. EXCEPTIONS. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:

            (a) Claims Initiated by Indemnitee. To indemnify or advance expenses
      to any Indemnitee with respect to Claims initiated or brought voluntarily
      by Indemnitee and not by way of defense, except (i) with respect to
      actions or proceedings to establish or enforce a right to indemnify under
      this Agreement or any other agreement or insurance policy or under the
      Company's Certificate of Incorporation or Bylaws now or hereafter in
      effect relating to Claims for Indemnifiable Events, (ii) in specific cases
      if the Board of Directors has approved the initiation or bringing of such
      Claim or (iii) as otherwise required under the CCC, regardless of whether
      Indemnitee ultimately is determined to be entitled to such
      indemnification, advance expense payment or insurance recovery, as the
      case may be;

            (b) Claims Under Section 16(b). To indemnify Indemnitee for expenses
      and the payment of profits arising from the purchase and sale by
      Indemnitee of securities in violation of Section 16(b) of the Exchange Act
      or any similar successor statute; or

            (c) Claims Excluded Under the California Corporations Code. To
      indemnify Indemnitee if (i) Indemnitee did not act in good faith or in a
      manner reasonably believed by such Indemnitee to be in or not opposed to
      the best interests of the Company, (ii) with respect to any criminal
      action or proceeding, Indemnitee had reasonable cause to believe
      Indemnitee's conduct was unlawful or (iii) Indemnitee shall have been
      adjudged to be liable to the Company unless and only to the extent the
      court in which such action was brought shall permit indemnification as
      provided in the CCC.

      10. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against any
Indemnitee, any Indemnitee's estate, spouse, heirs, executors or personal or
legal representatives after the expiration of five years from the date of
accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such five-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.

                                       7
<PAGE>

      11. CONSTRUCTION OF CERTAIN PHRASES.

            (a) For purposes of this Agreement, references to the "Company"
      shall include, in addition to the resulting corporation, any constituent
      corporation (including any constituent of a constituent) absorbed in a
      consolidation or merger which, if its separate existence had continued,
      would have had power and authority to indemnify its directors, officers,
      employees, agents or fiduciaries, so that if Indemnitee is or was a
      director, officer, employee, agent, control person or fiduciary of such
      constituent corporation, or is or was serving at the request of such
      constituent corporation as a director, officer, employee, control person,
      agent or fiduciary of another corporation, partnership, joint venture,
      employee benefit plan, trust or other enterprise, Indemnitee shall stand
      in the same position under the provisions of this Agreement with respect
      to the resulting or surviving corporation as Indemnitee would have with
      respect to such constituent corporation if its separate existence had
      continued.

            (b) For purposes of this Agreement, references to "other
      enterprises" shall include employee benefit plans; references to "fines"
      shall include any excise taxes assessed on any Indemnitee with respect to
      an employee benefit plan; and references to "serving at the request of the
      Company" shall include any service as a director, officer, employee, agent
      or fiduciary of the Company which imposes duties on, or involves services
      by, such director, officer, employee, agent or fiduciary with respect to
      an employee benefit plan, its participants or its beneficiaries; and if
      any Indemnitee acted in good faith and in a manner Indemnitee reasonably
      believed to be in the interests of the participants and beneficiaries of
      an employee benefit plan, Indemnitee shall be deemed to have acted in a
      manner "not opposed to the best interests of the Company" as referred to
      in this Agreement.

            (c) For purposes of this Agreement a "Change in Control" shall be
      deemed to have occurred if (i) any "person" (as such term is used in
      Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than a trustee
      or other fiduciary holding securities under an employee benefit plan of
      the Company or a corporation owned directly or indirectly by the
      stockholders of the Company in substantially the same proportions as their
      ownership of stock of the Company, (A) who is or becomes the beneficial
      owner, directly or indirectly, of securities of the Company representing
      10% or more of the combined voting power of the Company's then outstanding
      Voting Securities, increases his or her beneficial ownership of such
      securities by 5% or more over the percentage so owned by such person or
      (B) becomes the "beneficial owner" (as defined in Rule 13d-3 under said
      Exchange Act), directly or indirectly, of securities of the Company
      representing more than 20% of the total voting power represented by the
      Company's then outstanding Voting Securities, (ii) during any period of
      two consecutive years, individuals who at the beginning of such period
      constitute the Board of Directors of the Company and any new director
      whose election by the Board of Directors or nomination for election by the
      Company's stockholders was approved by a vote of at least two-thirds of
      the directors then still in office who either were directors at the
      beginning of the period or whose election or nomination for election was
      previously so approved, cease for any reason to constitute a majority
      thereof or (iii) the stockholders of the Company approve a merger or
      consolidation of the Company with any other corporation other than a
      merger or consolidation which would result in the Voting Securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into Voting
      Securities of the surviving entity) at least 80% of the total voting power
      represented by the Voting Securities of the Company or such surviving
      entity outstanding immediately after such merger or consolidation, or the
      stockholders of the Company approve a plan of complete liquidation of the
      Company or an agreement for the sale or disposition by the Company of (in
      one transaction or a series of transactions) all or substantially all of
      the Company's assets.

                                       8
<PAGE>

            (d) For purposes of this Agreement, "Independent Legal Counsel"
      shall mean an attorney or firm of attorneys, selected in accordance with
      the provisions of Section 3(d) hereof, who shall not have otherwise
      performed services for the Company or any Indemnitee within the last three
      years (other than with respect to matters concerning the right of any
      Indemnitee under this Agreement, or of other indemnitees under similar
      indemnity agreements).

            (e) For purposes of this Agreement, a "Reviewing Party" shall mean
      any appropriate person or body consisting of a member or members of the
      Company's Board of Directors or any other person or body appointed by the
      Board of Directors who is not a party to the particular Claim for which
      Indemnitee are seeking indemnification, or Independent Legal Counsel.

            (f) For purposes of this Agreement, "Voting Securities" shall mean
      any securities of the Company that vote generally in the election of
      directors.

      12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

      13. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect with respect to Claims relating to Indemnifiable Events
regardless of whether any Indemnitee continues to serve as a director, officer,
employee, agent, controlling person or fiduciary of the Company or of any other
enterprise, including subsidiaries of the Company, at the Company's request.

                                       9
<PAGE>

      14. ATTORNEYS' FEES. In the event that any action is instituted by an
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, any Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action if Indemnitee is ultimately successful in
such action, and shall be entitled to the advancement of Expenses with respect
to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the Company
under this Agreement to enforce or interpret any of the terms of this Agreement,
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in
defense of such action (including costs and expenses incurred with respect to
Indemnitee counterclaims and cross-claims made in such action), and shall be
entitled to the advancement of Expenses with respect to such action, unless, as
a part of such action, a court having jurisdiction over such action determines
that the Indemnitee's material defenses to such action were made in bad faith or
were frivolous.

      15. NOTICE. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a) five calendar days after deposit with the U.S.
Postal Service or other applicable postal service, if delivered by first class
mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business
day after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if deliverable by facsimile transmission, with copy by
first class mail, postage prepaid, and shall be addressed if to Indemnitee, at
Indemnitee's address as set forth beneath Indemnitee's signature to this
Agreement and if to the Company at the address of its principal corporate
offices (attention: Chief Executive Officer) or at such other address as such
party may designate by ten calendar days' advance written notice to the other
party hereto.

      16. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of California
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the courts of
Santa Clara County, California, which shall be the exclusive and only proper
forum for adjudicating such a claim.

      17. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

      18. CHOICE OF LAW. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of California,
as applied to contracts between California residents, entered into and to be
performed entirely within the State of California, without regard to the
conflict of laws principles thereof.

                                       10
<PAGE>

      19. SUBROGATION. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

      20. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by all parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

      21. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.

      22. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving the Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries.

      23. CORPORATE AUTHORITY. The Board of Directors of the Company has
approved the terms of this Agreement.

      24. INDEMNIFICATION OF VENTURE CAPITAL FUNDS. If (i) Indemnitee is or was
affiliated with one or more venture capital funds that has invested in the
Company (each a "VC Fund"), (ii) a VC Fund is, or is threatened to be made, a
party to or a participant in any Proceeding, and (iii) the VC Fund's involvement
in the Proceeding is directly or indirectly related to Indemnitee's service to
the Company as a director of the Company, then the VC Fund shall be entitled to
all of the indemnification rights and remedies under this Agreement to the same
extent as Indemnitee.

                            [Signature Page Follows]

                                       11
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.

                                       COMPANY:

                                       WORLD WASTE TECHNOLOGIES, INC.

                                       By:
                                             -----------------------------------
                                       Name:
                                             -----------------------------------
                                       Title:
                                             -----------------------------------

                                       INDEMNITEE:

                                       Printed Name:
                                                    ----------------------------

                                       Address:

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

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

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

                     [Signature Page to Indemnity Agreement]

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