CONFIDENTIAL

Binding Commitment for $3 million Credit Line
for NexMed, Inc.
(NASDAQ: NEXM)

Lender:
Southpoint Master Fund LP
   
Total Amount:
$3 million
   
Draw Down:
Each Draw Down shall not exceed $600,000 per 30 days. NexMed (the “Company”)
will draw down only when the Company’s cash and cash equivalents is below $1
million. The Company will give notice to the Investor at least 5 days prior to
any Draw Down, and has the right to make no Draw Down and up to five Draw Downs
during the Term of the Credit Line.
   
Term:
The Credit Line expires on December 31, 2008. In the event the results from the
Novartis Phase 3 trials on NexMed’s anti-fungal product are negative, then
further Draw Downs on the Credit Line shall be prohibited.
   
Repayment:
Repayment of Draw Downs shall be made in shares of NEXM stock or cash at the
Lender’s option on December 31, 2008. The number of shares issued shall be equal
to the amount of the Draw Down divided by $1.01 (92.5% of the 5 day VWAP for the
five day period ended May 9, 2008). Lender shall notify the Company 5 days prior
to repayment date as to whether repayment shall be in NEXM shares or cash.
   
Warrants:
In consideration for making available the Credit Line, the Lender shall receive
warrants to purchase 250,000 shares of NEXM common stock, which shall vest
immediately upon the execution of the Commitment. The Warrants shall have a
three-year term at an exercise price of $1.15 (105% of the 5 day VWAP for the
five day period ended May 9, 2008). The re-sale of the shares issued upon the
exercise of the Warrants shall have piggyback registration rights. All other
terms and conditions of the Warrants shall be identical to the warrants dated
January 23, 2006 held by the Lender.
   
Registration:
NexMed shall file a Registration Statement within 30 days of its re-payment in
full if shares are issued. The NEXM shares issued will be restricted until the
contemplated Registration Statement becomes effective. All other terms and
conditions of the Registration Statement shall be identical to the registration
statement filed in connection with the January 23, 2006 private placement of
NEXM stock.

 
 
 
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Effectiveness:
Both parties agree that this Commitment shall become binding upon execution by
both parties.

Agreed by NexMed, Inc.:
 

/s/ Mark Westgate
 
Name: Mark Westgate
 
Title: Vice President & CFO
 
Date: May 12, 2008
 

Agreed by Southpoint Master Fund LP:
By: Southpoint GP, LP, its general partner
By: Southpoint GP, LLC, its general partner

/s/ Robert Butts
 
Name: Robert Butts
 
Title: Member
 
Date: May 12, 2008
 

 
 
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