EXHIBIT
10.31

     

    LOCK-UP
AGREEMENT

     

    September
10, 2010

    DAWSON
JAMES SECURITIES, INC.

    As
exclusive placement agent for NexMed, Inc.

    925 South
Federal Highway, Suite 600

    Boca
Raton, FL 33432

     

    Re:         
NEXMED, INC. –
FOLLOW-ON PUBLIC OFFERING

     

    Ladies
and Gentlemen:

     

    The
undersigned understands that you, as exclusive placement agent have entered into
an engagement letter agreement (the “Engagement
Agreement”) with NexMed, Inc., a Nevada corporation (the “Company”), providing
for the follow-on public offering (the “Public Offering”) of
Units (“Units”), each Unit
consisting of (i) common stock (“Common Stock”) and
(ii)  warrants of the Company, all as more fully described in the
prospectus which is part of the Company’s registration statement on
Form S-1, as amended from time to time (the “Registration
Statement”).

     

    In
consideration of the Engagement Agreement and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of Dawson James Securities, Inc.
(“Dawson
James”), the undersigned will not, for a period commencing on the
effective date of the Registration Statement (the “Effective Date”) and
ending 90-days after the latest closing of the Public Offering (such period, the
“Lock-Up
Period”): (1) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option (including without limitation any short sale)
or contract to purchase, purchase any option, contract to sell, grant any
option, right or warrant to purchase, pledge, establish an open “put equivalent
position” within the meaning of Rule 16(a)-1(h) under the Securities Exchange
Act of 1934, as amended, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock, or any securities of the Company that
are substantially similar to the Common Stock, or any securities convertible
into or exercisable or exchangeable for Common Stock (including, but not limited
to, Common Stock which may be deemed to be beneficially owned by the undersigned
in accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant), currently or hereafter owned (the “Lock-Up Securities”);
(2) enter into any swap, option, future, forward or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Lock-Up Securities, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, or (3) publicly announce an intention to
do any of the transactions described in clause (1) or
(2) above.  In addition, the undersigned agrees that, without the
prior written consent of Dawson James, it will not, during the Lock-Up Period,
make any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any substantially similar securities of the
Company, including but not limited to, any security convertible into or
exercisable or exchangeable for Common Stock.

    


    Notwithstanding
the foregoing, the undersigned may issue warrants, options and shares of capital
stock in connection with (i)(a) the conversion of convertible debt or the
exercise of warrants and options outstanding prior to the closing of the Public
Offering and (b) the undersigned’s grant of options to its officers, directors,
employees and consultants under its stock option plan and (ii) as contemplated
by the Engagement Agreement.

    


    Subject
to certain exceptions, in the event that either (i) during the last 17 days of
the Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs or (ii) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-Up Period, then
in either case, the expiration of the Lock-Up Period will be extended until the
expiration of the 18-day period beginning on the date of issuance of an earnings
release or the occurrence of the material news or event, as applicable, unless
Dawson James waives in writing such an extension.  The undersigned
understands and agrees that Dawson James may, in its sole discretion and at any
time or from time to time before the termination of the Lock-Up Period, without
notice, release all or any portion of the Lock-Up Securities.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
undersigned represents and warrants that it is not a party to any agreement or
understanding that would cause a breach of this Lock-Up Agreement if it were
entered into during the period in which the restrictions set forth herein are
effective.

     

    The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company’s transfer agent and registrar against the transfer of the Lock-Up
Securities except in compliance with the foregoing restrictions.

    


    In
furtherance of the foregoing, any duly appointed transfer agent for the
registration or transfer of the securities described herein is hereby authorized
to decline to make any transfer of securities if such transfer would constitute
a violation or breach of this Lock-Up Agreement.

     

    The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Lock-Up Agreement.  All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall
be binding upon the successors or assigns of the undersigned.

     

    The
undersigned understands that Dawson James is proceeding with the Public Offering
in reliance upon this Lock-Up Agreement.

    


     

    THIS
LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF FLORIDA, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.

     

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	
              NexMed,
      Inc.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Mark Westgate

            
	 
      	 
      	
              Name:
      Mark Westgate

            
	 
      	 
      	
              Title:
      Vice President & Chief Financial
Officer

            


    

     

     

    Accepted
as of the date first set forth above:

     

    DAWSON
JAMES SECURITIES, INC.

    
      	 
      	 
      
	 
      	 
      	 
      
	
              By:

            	
              /s/
      Joseph Balagot

            	 
      
	 
      	
              Name:
      Joseph E. Balagot

            	 
      
	 
      	
              Title:
      Senior Managing Director