THE TRANSFER OF THIS NOTE IS RESTRICTED BY AND PURSUANT TO A NOTE PURCHASE
AGREEMENT DATED AS OF DECEMBER 18, 1997, AS AMENDED, A COPY OF WHICH IS ON FILE
AT THE OFFICES OF THE COMPANY.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
Q-MED, INC.
16.00% CONVERTIBLE SUBORDINATED NOTE DUE DECEMBER 18, 2002
No. ____ December 18, 1997
FOR VALUE RECEIVED, the undersigned, Q-MED, INC. (herein called the
"Company"), corporation duly organized and existing under the laws of the State
of Delaware, hereby promises to pay to XXXXX PARTNERS III, L.P., a Delaware
limited partnership (the "Purchaser"), or its registered assigns on December 18,
2002 (the "Maturity Date") the sum of the Principal Amount (as defined below),
plus accrued and unpaid interest on the Principal Amount of this Note as of such
date. The outstanding principal amount of this Note shall initially be the sum
of ______________________________________________________ ($_____________) and
shall be increased on each anniversary of the date hereof by the interest
accrued but unpaid under this Note as of such date (the "Principal Amount").
Interest will accrue on the unpaid Principal Amount, at the rate of 16% per
annum (computed on the basis of a 360-day year of twelve 30-day months) until
the Maturity Date. If any Event of Default shall have occurred, to the extent
permitted by law, from and including the date of such Event of Default to, but
not including, the date such Event of Default is cured or waived, interest will
accrue at the rate of 20% per annum (computed on the basis of a 360-day year of
twelve 30-day months). If the date on which any such payment is required to be
made pursuant to the provisions of this Note occurs on a day other than a
Business Day, such payment shall be due and payable on the next succeeding
Business Day.
Payments of principal of, and interest and premium on, this Note, are to be
made in lawful money of the United States of America, or at the Purchaser's
option, in the number of shares of Common Stock determined by dividing the
payment to be made by the Conversion Price then in effect, at the address
specified by such holder for such purpose in Section 6.1 to the Note Purchase
Agreement (as defined below).
This Note is being issued pursuant to a Note Purchase Agreement, dated as
of December ___, 1997 as amended (the "Note Purchase Agreement"), between the
Company and the Purchaser. Defined terms used herein which are defined in the
Note Purchase Agreement shall have the same meaning as such terms have in the
Notes Purchase Agreement. This Note is entitled to the benefits of, and is
subject to the terms contained in, the Note Purchase Agreement. The provisions
of the Note Purchase Agreement are hereby incorporated in this Note to the same
extent as if set forth at length herein.
The Company may deem and treat the person in whose name this Note is
registered pursuant to Section 5 of the Note Purchase Agreement as the holder
and owner hereof for the purpose of receiving payments and for all other
purposes whatsoever, notwithstanding any notations of ownership or transfer
hereon and notwithstanding that this Note is overdue, and the Company shall not
be affected by any notice to the contrary until presentation of this Note for
registration of transfer as provided in Section 5 of the Agreement. This Note
may be transferred or exchanged and, if lost, stolen, damaged or destroyed, this
Note may be replaced, only in the manner and upon the conditions set forth in
the Note Purchase Agreement.
This Note is subject to redemption, in whole but not in part, only under
certain circumstances, and to the extent provided, in the Note Purchase
Agreement.
In case an Event of Default shall happen and be continuing, the principal
amount of this Note, the premium, and all accrued interest may become or be
declared due and payable only in the manner and with the effect provided in the
Note Purchase Agreement.
In certain circumstances involving the occurrence of a Change in Control,
the holder of this Note has the right to require the Company to repurchase the
Note at the price specified in the Note Purchase Agreement.
Subject to and upon compliance with the provisions of the Note Purchase
Agreement, the holder of this Note is entitled to convert this Note into fully
paid and non-assessable shares of Common Stock of the Company at the conversion
price, subject to adjustment, specified in the Note Purchase Agreement.
The indebtedness evidenced by this Note and the payment of the principal of
(and premium, if any) and interest on, and other obligations in respect of, this
Note, to the extent and in the manner provided in the Note Purchase Agreement,
(i) are secured by a security interest in certain of the Company's assets and
(ii) are subordinate and subject in right of payment to the prior payment in
full in cash of all Senior Indebtedness, and this Note is issued subject to the
provisions of the Note Purchase Agreement with respect thereto. The holder of
this Note, by accepting the same, agrees to and shall be bound by such
provisions.
No reference herein and no provision of this Note or of the Note
Purchase Agreement shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in
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the coin or currency, as prescribed herein and in the Note Purchase Agreement,
or to convert this Note as provided in the Note Purchase Agreement.
No service charge shall be made of any registration of transfer, exchange
or conversion, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
This Note shall be governed by and construed and enforced in accordance
with the laws of the State of New York.
Q-MED, INC.
By:
-------------------------
Xxxxxxx X. Xxx
President
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