Exhibit
      10.5

     

    SUBSIDIARY
      GUARANTY

     

    SUBSIDIARY
      GUARANTY, dated as of June 30, 2008, made by NexMed (U.S.A), Inc., a Delaware
      corporation (the “Guarantor”),
      in
      favor of each of the Holders (as defined below).

     

    W
      I T N E S S E T H:

     

    Whereas,
      pursuant
      to that certain Purchase Agreement (the “Purchase
      Agreement”)
      dated
      on or about the date hereof by and among NexMed, Inc., a Nevada corporation
      (the
“Company”),
      and
      the Purchasers named therein (the “Purchasers”),
      the
      Company issued to the Purchasers the Company’s 7% Convertible Notes Due December
      31, 2011 (the “Notes”);
      and

     

    Whereas,
      the
      Guarantor is a wholly-owned subsidiary of the Company; and

     

    Whereas,
      as a
      condition precedent to the Purchasers’ purchase of the Notes and in order to
      induce the Purchasers to purchase the Notes and make the loans evidenced by
      the
      Notes, the Company agreed that the Guarantor would guaranty the obligations
      under the Notes in accordance with the terms set forth in this Guaranty, the
      Notes, the Mortgage (as defined herein) and the Purchase Agreement.


     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing premises and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      and
      to induce the Holders to make and maintain the loans evidenced by the Notes,
      Guarantor hereby agrees with the Holders as follows:

     

    SECTION
      1. DEFINED
      TERMS

     

    1.1  Definitions

     

    (a) Capitalized
      terms used herein and not otherwise defined herein shall have the meanings
      given
      to them in the Notes or Purchase Agreement.

     

    (b) The
      following terms shall have the following meanings:

     

    “Guaranty”
means
      this Subsidiary Guaranty, as the same may be amended, supplemented or otherwise
      modified from time to time.

     

    “Holders”
mean
      all of the Holders (as identified in each Note) of the Notes.

     

    “Mortgage”
means
      the Mortgage, Security Agreement and Assignment of Leases and Rents executed
      by
      the Guarantor in favor of the Purchasers on or about the date hereof, securing
      the Company’s Obligations under the Notes and the Guarantor’s obligations
      hereunder.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Obligations”
mean
      the collective reference to the unpaid principal of and default interest on
      the
      Notes and Accreted Amounts thereunder and all other obligations and liabilities
      of the Company to the Holders (including, without limitation, default interest
      accruing at the then applicable rate provided in the Notes after the maturity
      of
      the Notes and interest accruing at the then applicable rate after the filing
      of
      any petition in bankruptcy, or the commencement of any insolvency,
      reorganization or like proceeding, relating to the Company, if a claim for
      post-filing or post-petition interest is allowed in such proceeding, and
      including, without limitation, the conversion of Notes into Common Stock),
      whether direct or indirect, absolute or contingent, due or to become due, or
      now
      existing or hereafter incurred, which may arise under, out of, or in connection
      with, the Purchase Agreement, the Notes, this Guaranty, the Mortgage or the
      other Agreements, or any other document made, delivered or given in connection
      therewith, in each case whether on account of principal, interest, fees,
      indemnities, costs, expenses or otherwise (including, without limitation, all
      reasonable fees and disbursements of counsel to the Holders that are required
      to
      be paid by the Company or the Guarantor pursuant to the terms of any of the
      foregoing agreements). 

     

    “Person”
shall
      mean and include an individual, a partnership, a corporation (including a
      business trust), a joint stock company, a limited liability company, an
      unincorporated association, a joint venture or other entity or a governmental
      authority.

     

    1.2  Other
      Definitional Provisions. The
      words
“hereof,” “herein”, “hereto” and “hereunder” and words of similar import when
      used in this Guaranty shall refer to this Guaranty as a whole and not to any
      particular provision of this Guaranty, and Section references are to this
      Guaranty unless otherwise specified. The meanings given to terms defined herein
      shall be equally applicable to both the singular and plural forms of such
      terms.

     

    SECTION
      2. GUARANTY

     

    2.1  Guaranty.
      The
      Guarantor hereby absolutely, unconditionally and irrevocably guarantees to
      the
      Holders and their respective successors, indorsees, transferees and assigns,
      the
      prompt and complete payment and performance by the Company when due (whether
      at
      the stated maturity, by acceleration or otherwise) of the
      Obligations.

     

    2.2  Nature
      of Guaranty.
      Guarantor’s liability under this Guaranty shall be unlimited, open and
      continuous for so long as this Guaranty remains in force. Guarantor intends
      to
      guaranty at all times the performance and prompt payment when due, whether
      at
      maturity or earlier by reason of acceleration or otherwise, of all Obligations.
      Accordingly, no payments made upon the Obligations will discharge or diminish
      the continuing liability of Guarantor in connection with any remaining portions
      of the Obligations or any of the Obligations which subsequently arises or is
      thereafter incurred or contracted. No payment made by the Company, the
      Guarantor, any other guarantor or any other Person or received or collected
      by
      the Holders from the Company, the Guarantor, any other guarantor or any other
      Person by virtue of any action or proceeding or any set-off or appropriation
      or
      application at any time or from time to time in reduction of or in payment
      of
      the Obligations shall be deemed to modify, reduce, release or otherwise affect
      the liability of Guarantor hereunder which shall, notwithstanding any such
      payment (other than payment and performance in full of the Obligations), remain
      liable for the Obligations until the Obligations are paid and performed in
      full.

     

    
      
        
        

      

      
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    2.3  Duration
      of Guaranty.
      This
      Guaranty will take effect when received by the Holders without the necessity
      of
      any acceptance by the Holders, or any notice to Guarantor or to the Company,
      and
      will continue in full force until all the Obligations incurred or contracted
      shall have been fully and finally paid and satisfied and all other obligations
      of Guarantor under this Guaranty shall have been performed in full. All
      renewals, extensions, substitutions, and modifications of the Obligations,
      release of any other guarantor or termination of any other guaranty, of the
      Obligations shall not affect the liability of Guarantor under this Guaranty.
      This Guaranty is irrevocable and is binding upon Guarantor and Guarantor’s
      successors and assigns so long as any of the guaranteed Obligations remain
      unpaid.

     

    2.4  No
      Subrogation.
      Notwithstanding any payment made by the Guarantor hereunder or any set-off
      or
      application of funds of the Guarantor by the Holders, the Guarantor shall not
      be
      entitled to be subrogated to any of the rights of the Holders against the
      Company or any other guarantor or guaranty or right of offset held by the
      Holders for the payment of the Obligations, nor shall the Guarantor seek or
      be
      entitled to seek any contribution or reimbursement from the Company or any
      other
      guarantor in respect of payments made by the Guarantor hereunder, until all
      amounts owing to the Holders by the Company on account of the Obligations are
      paid in full. If any amount shall be paid to the Guarantor on account of such
      subrogation rights at any time when all of the Obligations shall not have been
      paid and performed in full, such amount shall be held in trust for the benefit
      of the Holders, segregated from other funds of the Guarantor, and shall,
      forthwith upon receipt by the Guarantor, be turned over to the Holders in the
      exact form received by such Guarantor (duly indorsed by the Guarantor to the
      Holders, if required), to be applied against the Obligations, whether matured
      or
      unmatured, in such order as the Holders may determine.

     

    2.5  Amendments,
      Etc. With Respect To The Obligations.
      Guarantor shall remain obligated hereunder notwithstanding that, without any
      reservation of rights against the Guarantor and without notice to or further
      assent by the Guarantor, any demand for payment or performance of any of the
      Obligations made by any of the Holders may be rescinded by such Holder and
      any
      of the Obligations continued, and the Obligations, or the liability of any
      other
      Person upon or for any part thereof, or guaranty therefor or right of offset
      with respect thereto, may, from time to time, in whole or in part, be renewed,
      extended, amended, modified, accelerated, compromised, waived, surrendered
      or
      released by the Holders, and the Purchase Agreement, the Notes and the other
      Agreements and any other documents executed and delivered in connection
      therewith may be amended, modified, supplemented or terminated, in whole or
      in
      part, as the Holders may deem advisable from time to time, and any guaranty
      or
      right of offset at any time held by the Purchasers for the payment of the
      Obligations may be sold, exchanged, waived, surrendered or
      released.

     

    
      
        
        

      

      
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    2.6  Guaranty
      Absolute And Unconditional.
      Guarantor hereby waives any and all notice of the creation, renewal, extension
      or accrual of any of the Obligations and notice of or proof of reliance by
      the
      Holders upon the guaranty contained in this Section 2 or acceptance of the
      guaranty contained in this Section 2; the Obligations, and any of them, shall
      conclusively be deemed to have been created, contracted or incurred, or renewed,
      extended, amended or waived, in reliance upon the Guaranty contained in this
      Section 2; and all dealings between the Company and the Guarantor, on the one
      hand, and the Holders, on the other hand, likewise shall be conclusively
      presumed to have been had or consummated in reliance upon the guaranty contained
      in this Section 2. Guarantor hereby waives, to the extent permitted by law,
      diligence, presentment, protest, demand for payment and notice of default or
      nonpayment to or upon the Company or the Guarantor with respect to the
      Obligations. Guarantor understands and agrees that the guaranty contained in
      this Section 2 shall be construed as a continuing, absolute and unconditional
      Guaranty of payment and performance without regard to (a) the validity or
      enforceability of the Purchase Agreement, Notes or any of the other Agreements,
      any of the Obligations or any other guaranty or right of offset with respect
      thereto at any time or from time to time held by the Holders, (b) any defense,
      set-off or counterclaim (other than a defense of actual payment and performance
      of all Obligations) which may at any time be available to or be asserted by
      the
      Company or any other Person against the Holders, or (c) any other circumstance
      whatsoever (with or without notice to or knowledge of the Company or Guarantor)
      which constitutes, or might be construed to constitute, an equitable or legal
      discharge of the Company for the Obligations, or of Guarantor under the guaranty
      contained in this Section 2, in bankruptcy or in any other instance. When making
      any demand hereunder or otherwise pursuing its rights and remedies hereunder
      against Guarantor, the Holders may, but shall be under no obligation to, make
      a
      similar demand on or otherwise pursue such rights and remedies as they may
      have
      against the Company or any other Person or against any other guaranty for the
      Obligations or any right of offset with respect thereto, and any failure by
      the
      Holders to make any such demand, to pursue such other rights or remedies or
      to
      collect any payments from the Company or any other Person or to realize upon
      any
      such other guaranty or to exercise any such right of offset, or any release
      of
      the Company or any other Person or any such other guaranty or right of offset,
      shall not relieve Guarantor of any obligation or liability hereunder, and shall
      not impair or affect the rights and remedies, whether express, implied or
      available as a matter of law, of the Holders against any Guarantor.

     

    2.7  Reinstatement.
      The
      guaranty contained in this Section 2 shall continue to be effective, or be
      reinstated, as the case may be, if at any time payment, or any part thereof,
      of
      any of the Obligations is rescinded or must otherwise be restored or returned
      by
      the Holders upon the insolvency, bankruptcy, dissolution, liquidation or
      reorganization of the Company, Guarantor or any other guarantor of the
      Obligations, or upon or as a result of the appointment of a receiver, intervenor
      or conservator of, or trustee or similar officer for, the Company, Guarantor
      or
      any other guarantor of the Obligations or any substantial part of its property,
      or otherwise, all as though such payments had not been made.

     

    2.8  Payments.
      Guarantor hereby guarantees that payments hereunder will be paid to the Holders
      without set-off or counterclaim in U.S. dollars at the addresses set forth
      or
      referred to on the signature pages to the Purchase Agreement (or as otherwise
      required by the Notes) or by wire transfer pursuant to instructions provided
      to
      the Guarantor by the Holders.

     

    
      
        
        

      

      
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    SECTION
      3. REPRESENTATIONS
      AND WARRANTIES

     

    Guarantor
      represents and warrants to the Holders that:

     

    3.1  Organization,
      Good Standing and Qualification.
      The
      Guarantor is a corporation duly incorporated, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation and has all
      requisite corporate power and authority to carry on its business as now
      conducted and own its properties. The Guarantor is duly qualified to do business
      as a foreign corporation and is in good standing in each jurisdiction in which
      the conduct of its business or its ownership or leasing of property makes such
      qualification or licensing necessary unless the failure to so qualify would
      not
      be reasonably likely to result in a Material Adverse Effect. The Guarantor
      does
      not have any subsidiaries, except for New Brunswick Medical Inc, a Delaware
      corporation which is a wholly-owned subsidiary of the Guarantor, which
      subsidiary does not own a material amount of assets. The Guarantor is a
      wholly-owned subsidiary of the Company and owns, and has good and marketable
      title to, all the Mortgaged Property (as defined in the Mortgage) free and
      clear
      of all liens, claims, encumbrances and defects except those that would not
      individually or in the aggregate materially affect the value thereof or
      materially interfere with the use made or currently planned to be made
      thereof.

     

    3.2  Authorization.
      The
      Guarantor has full power and authority and has taken all requisite action on
      the
      part of the Guarantor, its officers, directors and stockholders necessary for
      (i) the authorization, execution and delivery of this Guaranty and the Mortgage,
      and (ii) authorization of the performance of all obligations of the Guarantor
      hereunder and thereunder. This Guaranty and the Mortgage constitute legal,
      valid
      and binding obligations of the Guarantor, enforceable against the Guarantor
      in
      accordance with their terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability, relating to or affecting
      creditors’ rights generally.

     

    3.3  Consents.
      The
      execution, delivery and performance by the Company of this Guaranty and the
      Mortgage require no consent of, action by or in respect of, or filing with,
      any
      Person, governmental body, agency, or official, other than the filing of the
      Mortgage with the appropriate office in Mercer County in the State of New
      Jersey, the filing of a UCC-1 financing statement fixture filing with Mercer
      County in the State of New Jersey, the filing of a UCC-1 financing statement
      describing the Mortgaged Property (as defined in the Mortgage) with the
      Secretary of State of the State of Delaware, and the filing of the release
      and/or satisfaction of the mortgage on the Mortgaged Property currently held
      by
      Twin Rivers Associates LLC with the appropriate office in Mercer County in
      the
      State of New Jersey.

     

    3.4  No
      Conflict, Breach, Violation or Default; Compliance with Law.
      The
      execution, delivery and performance of this Guaranty and the Mortgage by the
      Guarantor will not conflict with or result in a breach or violation of any
      of
      the terms and provisions of, or constitute a default under (i) the Guarantor’s
      Certificate of Incorporation (including any certificates of designation) or
      the
      Guarantor’s Bylaws, both as in effect on the date hereof (copies of which have
      been provided to the Purchasers before the date hereof), or (ii) except where
      it
      would not have a Material Adverse Effect, (A) any statute, rule, regulation
      or
      order of any governmental agency or body or any court, domestic or foreign,
      having jurisdiction over the Guarantor or any of its properties, or (B) any
      agreement or instrument to which the Guarantor is a party or by which the
      Guarantor is bound or to which any of the properties of the Guarantor is
      subject. Except where it would not have a Material Adverse Effect, the Guarantor
      (i) is not in violation of any statute, rule or regulation applicable to the
      Guarantor or its assets, (ii) is not in violation of any judgment, order or
      decree applicable to the Guarantor or its assets, and (iii) is not in breach
      or
      violation of any agreement, note or instrument to which it or its assets are
      a
      party or are bound or subject. The Guarantor has not received notice from any
      Person of any claim or investigation that, if adversely determined, would render
      the preceding sentence untrue or incomplete.

     

    
      
        
        

      

      
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    3.5  Incorporation
      by Reference.
      All the
      representations and warranties made in Sections 4.6, 4.7, 4.8, 4.9, 4.12, 4.13,
      4.14, 4.15, 4.16, 4.18, 4.19, 4.20 and 4.26 of the Purchase Agreement are true,
      accurate and complete as of the date hereof as such representations and
      warranties relate and apply to the Guarantor mutatis
      mutandis.

     

    3.6  No
      Limitation of Guaranty.
      No
      representations, warranties or agreements of any kind have been made to or
      with
      Guarantor which would limit or qualify in any way the terms of this
      Guaranty.

     

    3.7  Company’s
      Request.
      This
      Guaranty is executed at the Company’s request and not at the request of the
      Holders.

     

    3.8  Obtaining
      Company Information.
      Guarantor has established adequate means of obtaining from the Company on a
      continuing basis information regarding the Company’s financial
      condition.

     

    3.9  Solvency.
      As of
      the date hereof and after giving effect to the transactions contemplated hereby
      (a) the property of Guarantor, at a fair valuation, will exceed its debt; (b)
      the capital of Guarantor will not be unreasonably small to conduct its business;
      (c) Guarantor will not have incurred debts, or have intended to incur debts,
      beyond its ability to pay such debts as they mature; and (d) the present fair
      salable value of the assets of Guarantor will be greater than the amount that
      will be required to pay its probable liabilities (including debts) as they
      become absolute and matured. For purposes of this Section 3.9, “debt” means any
      liability on a claim, and “claim” means (i) the right to payment, whether or not
      such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
      matured, unmatured, undisputed, legal, equitable, secured or unsecured, or
      (ii)
      the right to an equitable remedy for breach of performance if such breach gives
      rise to a right to payment, whether or not such right to an equitable remedy
      is
      reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured
      or unsecured.

     

    SECTION
      4. COVENANTS

     

    4.1  Limitations
      on Transactions.
      So long
      as any Notes remain outstanding, the Guarantor shall not directly or indirectly,
      create, incur, assume or permit or suffer to exist any lien, mortgage, security
      interest or encumbrance (other than statutory liens imposed by law incurred
      in
      the ordinary course of business for sums not yet delinquent or being contested
      in good faith, if such reserve or other appropriate provision, if any, as shall
      be required by GAAP shall have been made in respect thereof) upon any of the
      Mortgaged Property (as defined in the Mortgage) except for those created by
      the
      Mortgage and shall not directly or indirectly sell, transfer or lease any of
      the
      Mortgaged Property, subject to Section 7.2(c) of the Purchase
      Agreement.

     

    
      
        
        

      

      
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    4.2  No
      Conflicting Agreements.
      The
      Guarantor will not take any action, enter into any agreement or make any
      commitment that would conflict or interfere in any material respect with the
      obligations to the Holders under the Agreements.

     

    4.3  Insurance.
      So long
      as any Notes remain outstanding, the Guarantor shall have in full force and
      effect (a) insurance reasonably believed by the Guarantor to be adequate on
      all
      assets and activities, covering property damage and loss of income by fire
      or
      other casualty, and (b) insurance reasonably believed to be adequate protection
      against all liabilities, claims and risks against which it is customary for
      companies similarly situated as the Guarantor to insure.

     

    4.4  Compliance
      with Laws.
      So long
      as any Notes remain outstanding, the Guarantor will use reasonable efforts
      to
      comply with all applicable laws, rules, regulations, orders and decrees of
      all
      governmental authorities, except to the extent non-compliance (in one instance
      or in the aggregate) would not have a Material Adverse Effect

     

    4.5  Corporate
      Existence;
      Merger and Consolidation.
      So
      long
      as any Notes remain outstanding, the Guarantor shall maintain its corporate
      existence. The Guarantor shall not consolidate with or merge with or into,
      or
      convey, transfer or lease all or substantially all its assets to, any Person,
      except to the same extent that the Company is so permitted, and in accordance
      with the same provisions applicable to the Company, in the Purchase Agreement
      or
      the Notes (with the assumption of obligations applying to the assumption of
      the
      obligations under this Guaranty).

     

    4.7  Taxes.
      The
      Guarantor shall pay, and shall cause each of its subsidiaries to pay, prior
      to
      delinquency, all material taxes, assessments, and governmental levies except
      such as are contested in good faith and by appropriate proceedings or where
      the
      failure to effect such payment is not adverse in any material respect to the
      Guarantor or the Holders.

     

    4.8  Stay,
      Extension and Usury Laws.
      The
      Guarantor covenants (to the extent that it may lawfully do so) that it shall
      not
      at any time insist upon, plead, or in any manner whatsoever claim or take the
      benefit or advantage of, any stay, extension or usury law wherever enacted,
      now
      or at any time hereafter in force, that may affect the covenants or the
      performance of this Guaranty; and the Guarantor (to the extent that it may
      lawfully do so) hereby expressly waives all benefit or advantage of any such
      law, and covenants that it shall not, by resort to any such law, hinder, delay
      or impede the execution of any right herein granted to the Holders, but shall
      suffer and permit the execution of every such right as though no such law has
      been enacted.

     

    
      
        
        

      

      
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    SECTION
      5.  SECURITY

     

    5.1  The
      Obligations and Guarantor’s obligations hereunder and under the other Agreements
      are secured by Mortgaged Property (as defined in the Mortgage) pursuant to
      the
      terms of the Mortgage (or the Escrow Funds (as defined in the Purchase
      Agreement), if the Mortgage is defeased pursuant to Section 7.2(c) of the
      Purchase Agreement). 

     

    SECTION
      6. WAIVERS;
      SUBORDINATION

     

    6.1  Guarantor’s
      Waivers.
      

     

    (a) Holder’s
      Actions.
      Notwithstanding any other waivers by the Guarantor pursuant to this Guaranty
      and
      except as prohibited by applicable law, the Guarantor waives any right to
      require a Holder to: (i) continue lending money or to extend other credit to
      the
      Company; (ii) resort for payment or to proceed directly or at once against
      any
      person, including the Company or any other guarantor; (iii) commit any act
      or
      omission of any kind at any time with respect to any matter whatsoever; or
      (iv)
      demand and/or enforce compliance with the terms of any agreement by any other
      party thereto.

     

    (b) Insolvency.
      If now
      or hereafter the Company shall be or become insolvent and the Obligations under
      the Notes have not been paid and performed in full, Guarantor hereby waives
      and
      relinquishes in favor of the Holders and Company, and their respective
      successors and assigns (subject to Section 2.7 above, until all Obligations
      have
      been paid in full), any claim or right to payment Guarantor may now have or
      hereafter have or acquire against the Company, by subrogation or otherwise,
      such
      that at no time shall Guarantor be or become a “creditor” of the Company within
      the meaning of 11 U.S.C. Section 547(b) or any successor provision of the United
      States Federal bankruptcy laws. 

     

    (c) Guarantor’s
      Rights and Defenses.
      Guarantor also waives any and all rights or defenses arising by reason of (i)
      any “one action” or “anti-deficiency” law or any other law which may prevent the
      Holders from bringing any action, including a claim for deficiency, against
      the
      Guarantor, before or after the commencement or completion of any foreclosure
      action, either judicially or by exercise of a power of sale; (ii) any election
      of remedies by the Holders which destroys or otherwise adversely affects the
      Guarantor’s subrogation rights or the Guarantor’s rights to proceed against the
      Company for reimbursement, including without limitation, any loss of rights
      Guarantor may suffer by reason of any law limiting, qualifying, or discharging
      the Obligations; (iii) any disability or other defense of the Company, of any
      other guarantor, or of any other person, or by reason of the cessation of the
      Company’s liability from any cause whatsoever, other than payment in full in
      legal tender or by performance in full, of the Obligations; (iv) any statute
      of
      limitations, if at the time any action or suit brought by the Holders against
      the Guarantor is commenced there is outstanding Obligations which are not barred
      by any applicable statute of limitations; (v) any defenses given to guarantors
      at law or in equity other than actual payment and performance of the
      Obligations; or (vi) any act, omission, election or waiver by the Holders of
      the
      type set forth in this Guaranty.

     

    
      
        
        

      

      
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    (d) No
      Set-off, Counterclaim, Etc.
      Guarantor further waives and agrees not to assert or claim at any time any
      deductions to the amount guaranteed under this Guaranty for any claim of
      set-off, counterclaim, counter demand, recoupment or similar right.

     

    6.2  Guarantor’s
      Understanding With Respect to Waivers.
      Guarantor warrants and agrees that each of the waivers set forth herein is
      made
      with Guarantor’s full knowledge of its significance and consequences and that,
      under the circumstances, the waivers are reasonable and not contrary to public
      policy or law. If any such waiver is determined to be contrary to any applicable
      law or public policy, such waiver shall be effective only to the extent
      permitted by law or public policy.

     

    6.3  Subordination
      of the Company’s Debts to Guarantor.
      Guarantor agrees that the Obligations of the Company to the Holders, whether
      now
      existing or hereafter created, shall be prior to any claim that the Guarantor
      may now have or hereafter acquire against the Company, whether or not the
      Company becomes insolvent. Guarantor hereby expressly subordinates to the
      Obligations any claim Guarantor may have against the Company, upon any account
      whatsoever (including without limitation all intercompany obligations owing
      to
      Guarantor from the Company), to any claim that the Holders may now or hereafter
      have against the Company; provided,
      however,
      that
      the Company may make payments on such claims that represent bona fide claims
      for
      money lent or property transferred to the Company in the ordinary course of
      the
      business of the Guarantor and the Company unless and until an Event of Default
      (including without limitation any default under the Agreements which with notice
      or passage of time or both would become an Event of Default) shall have occurred
      under the Notes. In the event of any dissolution, winding up, liquidation,
      readjustment, reorganization or similar proceedings, through bankruptcy, by
      an
      assignment for the benefit of creditors, by voluntary liquidation, or otherwise,
      the assets of the Company applicable to the payment of the claims of both the
      Holders and the Guarantor shall be paid to the Holders.

     

    SECTION
      7. MISCELLANEOUS

     

    7.1  Amendments
      In Writing.
      None of
      the terms or provisions of this Guaranty may be amended, supplemented or
      otherwise modified except by an instrument in writing signed by the Guarantor
      and 75% in interest of the Holders, and no provision hereof may be waived other
      than by an instrument in writing signed by the party against whom enforcement
      is
      sought.

     

    7.2  Notices.
      All
      notices, requests and demands to or upon the Holders or Guarantor hereunder
      shall be effected in the manner provided for in Section 9.4 of the Purchase
      Agreement or Section 3(h) of the Notes; provided
      that
      any
      such notice, request or demand to or upon Guarantor shall be addressed to
      Guarantor at:

     

    c/o
      NexMed, Inc.

    89
      Twin
      Rivers Drive

    East
      Windsor, NJ 08520

    Fax:
      (609) 426-0340

    Attention:
      Chief Financial Officer

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    or
      at
      such other address as Guarantor may designate by ten days’ advance written
      notice to all Holders.

    


    7.3  No
      Waiver By Course Of Conduct; Cumulative Remedies. The
      Holders shall not by any act (except by a written instrument pursuant to Section
      7.1), delay, indulgence, omission or otherwise be deemed to have waived any
      right or remedy hereunder or to have acquiesced in any Event of Default. No
      failure to exercise, nor any delay in exercising, on the part of the Holders,
      any right, power or privilege hereunder shall operate as a waiver thereof.
      No
      single or partial exercise of any right, power or privilege hereunder shall
      preclude any other or further exercise thereof or the exercise of any other
      right, power or privilege. A waiver by any Holder of any right or remedy
      hereunder on any one occasion shall not be construed as a bar to any right
      or
      remedy which such Holder would otherwise have on any future occasion. The rights
      and remedies herein provided are cumulative, may be exercised singly or
      concurrently and are not exclusive of any other rights or remedies provided
      by
      law.

     

    7.4  Enforcement
      Expenses; Indemnification.

     

    (a) Guarantor
      agrees to pay or reimburse the Holders for all their reasonable costs and
      expenses incurred in collecting against the Guarantor under the guaranty
      contained in Section 2 or otherwise enforcing or preserving any rights under
      this Guaranty and the other Agreements to which such Guarantor is a party,
      including, without limitation, the reasonable fees and disbursements of counsel
      to the Holders.

     

    (b) Guarantor
      agrees to pay, and to save the Holders harmless from, any and all liabilities
      with respect to, or resulting from any delay in paying, any and all stamp,
      excise, sales or other taxes (other than any taxes based upon any Holder’s net
      income) which may be payable or determined to be payable in connection with
      any
      of the transactions contemplated by this Guaranty.

     

    (c) Guarantor
      agrees to pay, and to save the Holders harmless from, any and all liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses or disbursements of any kind or nature whatsoever with respect to
      the
      execution, delivery, enforcement, performance and administration of this
      Guaranty to the extent the Company would be required to do so pursuant to the
      Purchase Agreement or the other Agreements.

     

    (d) The
      agreements in this Section shall survive repayment of the Obligations and all
      other amounts payable under the Notes and the other Agreements.

     

    7.5  Successors
      And Assigns.
      This
      Guaranty shall be binding upon the successors and assigns of Guarantor and
      shall
      inure to the benefit of the Holders and their respective successors and assigns;
      provided
      that
      Guarantor may not assign, transfer or delegate any of its rights or obligations
      under this Guaranty without the prior written consent of the holders of 75%
      of
      the outstanding Principal Amount of Notes.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    7.6  Set-Off.
      Guarantor hereby irrevocably authorizes the Holders at any time and from time
      to
      time while an Event of Default shall have occurred and be continuing, without
      notice to Guarantor or any other guarantor of the Obligations, any such notice
      being expressly waived by Guarantor, to set-off and appropriate and apply any
      and all deposits (general or special, time or demand, provisional or final),
      in
      any currency, and any other credits, indebtedness or claims, in any currency,
      in
      each case whether direct or indirect, absolute or contingent, matured or
      unmatured, at any time held or owing by the Holders to or for the credit or
      the
      account of Guarantor, or any part thereof in such amounts as the Holders may
      elect, against and on account of the obligations and liabilities of Guarantor
      to
      the Holders hereunder and claims of every nature and description of the Holders
      against Guarantor, in any currency, whether arising hereunder, under the Notes,
      any of the other Agreements or otherwise, as the Holders may elect, whether
      or
      not the Holders have made any demand for payment and although such obligations,
      liabilities and claims may be contingent or unmatured. The Holders shall notify
      such Guarantor promptly of any such set-off and the application made by the
      Holders of the proceeds thereof, provided
      that
      the
      failure to give such notice shall not affect the validity of such set-off and
      application. The rights of the Holders under this Section are in addition to
      other rights and remedies (including, without limitation, other rights of
      set-off) which the Holders may have.

     

    7.7  Facsimile.
      This
      Guaranty may be executed by facsimile.

     

    7.8  Severability.
      Any
      provision of this Guaranty which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

     

    7.9  Section
      Headings.
      The
      Section headings used in this Guaranty are for convenience of reference only
      and
      are not to affect the construction hereof or be taken into consideration in
      the
      interpretation hereof.

     

    7.10 Integration.
      This
      Guaranty and the other Agreements represent the agreement of the Guarantor
      and
      the Purchasers with respect to the subject matter hereof and thereof, and there
      are no promises, undertakings, representations or warranties by the Purchasers
      relative to subject matter hereof and thereof not expressly set forth or
      referred to herein or in the other Agreements.

     

    7.11 Governing
      Law; Jurisdiction.

     

    (a) Governing
      Law. THIS
      GUARANTY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
      STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF
      THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
      JURISDICTION.

     

    (b) Jurisdiction.
      The
      Guarantor irrevocably submits to the exclusive jurisdiction of any State or
      Federal Court sitting in the State of New York, County of New York, over any
      suit, action, or proceeding arising out of or relating to this Guaranty. The
      Guarantor irrevocably waives, to the fullest extent permitted by law, any
      objection which it may now or hereafter have to the laying of the venue of
      any
      such suit, action, or proceeding brought in such a court and any claim that
      suit, action, or proceeding has been brought in an inconvenient
      forum.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    The
      Guarantor agrees that the service of process upon it mailed by certified or
      registered mail (and service so made shall be deemed complete three days after
      the same has been posted as aforesaid) or by personal service shall be deemed
      in
      every respect effective service of process upon it in any such suit or
      proceeding. Nothing herein shall affect Holder's right to serve process in
      any
      other manner permitted by law. The Guarantor agrees that a final non-appealable
      judgment in any such suit or proceeding shall be conclusive and may be enforced
      in other jurisdictions by suit on such judgment or in any other lawful
      manner.

     

    (c) No
      Jury Trial.
      The
      Guarantor and, by acceptance of the benefits hereof, each Holder, knowingly
      and
      voluntarily waives any and all rights it may have to a trial by jury with
      respect to any litigation based on, or arising out of, under, or in connection
      with, this Guaranty and for any counterclaim therein.

     

    7.12 Acknowledgements.
      Guarantor hereby acknowledges that:

     

    (a) it
      has
      been advised by counsel in the negotiation, execution and delivery of this
      Guaranty and the other Agreements to which it is a party;

     

    (b) the
      Holders have no fiduciary relationship with or duty to Guarantor arising out
      of
      or in connection with this Guaranty or any of the other Agreements, and the
      relationship between the Guarantor, on the one hand, and the Holders, on the
      other hand, in connection herewith or therewith is solely that of debtor and
      creditor; and

     

    (c) no
      joint
      venture is created hereby or by the other Agreements or otherwise exists by
      virtue of the transactions contemplated hereby among the Guarantors and the
      Holders.

     

    


     

    [Signature
      Page Follows]

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed
      and delivered as of the date first above written.

     

    


    
      	 	
              GUARANTOR:

            
	 	 	 
	 	 	 
	 	
              NEXMED
                (U.S.A.), INC.

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Vivian Liu

            
	 	
              Name:

            	
              Vivian
                Liu

            
	 	
              Title:

            	
              Chief
                Executive Officer

            


    

    
 

    


    ACKNOWLEDGMENT

     

    
      	
              STATE
                OF New Jersey

            	
              )

            
	 	
              )
                ss.:

            
	
              COUNTY
                OF Mercer

            	
              )

            


    

    
 

    On
      this
      30th day of June, 2008, before me, the undersigned, personally appeared Vivian
      Liu, the Chief Executive Officer of NEXMED (U.S.A.), INC., a Delaware
      corporation, who, I am satisfied, is the person who signed the foregoing
      instrument, and he did acknowledge under oath that he signed, sealed with the
      corporate seal, and delivered the same in his capacity as such officer and
      that
      the foregoing instrument is the voluntary act and deed of such corporation,
      made
      by virtue of the authority of its board of directors.

    


     

    IN
      WITNESS WHEREOF, I have hereunto set my hand and official seal.

     

    


    
      	 	
              /s/
                Gloria J. Lapsley

            
	 	
              Notary
                Public

            


    

    
 

    (Notarial
      Seal)

     

    
      
        
        

      

      
        13