Contract
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF THE SAID ACT AND APPLICABLE STATE SECURITIES
LAWS
HAVE BEEN COMPLIED WITH OR UNLESS COMPLIANCE WITH SUCH PROVISIONS IS NOT
REQUIRED.
NEXMED,
INC.
7.5%
Senior Secured Note
Due
December 31, 2007
New
York,
NY
November
30, 2006
FOR
VALUE
RECEIVED, the undersigned, NEXMED, INC., a Nevada corporation (the “Company”),
hereby promises to pay to Metronome LPC 1, Inc., or its registered assigns,
the
principal sum of TWO
MILLION DOLLARS AND ZERO CENTS
($2,000,000.00), or so much thereof as shall not have been prepaid, on the
earlier of (i) December 31, 2007 or (ii) the closing by the Company on the
sale
of the East Windsor Property (as such term is defined in the Purchase Agreement;
the earlier date of the preceding clauses (i) and (ii) being the “Maturity
Date”),
with
interest (computed on the basis of a 360-day year of twelve 30-day months)
on
the principal amount hereof from time to time outstanding and unpaid (the
“Interest”),
payable as provided in the next succeeding paragraph hereof, at the rate 7.5%
per annum from the date of issuance hereof (being the date first written above,
or the most recent date to which interest has been paid hereon, to but including
the date on which said principal amount shall be paid in full; provided,
however, if the Company has not entered into a contract for the sale of the
East
Windsor Property on or prior to May 31, 2007, and the amount owing hereunder
(including all accrued interest and costs) is not repaid by such date, the
rate
of interest shall increase to 8.5% per annum
The
Company shall pay interest (a) quarterly, commencing on February 1, 2007, and
until the date on which the principal of and all accrued and unpaid interest
on
this Note shall be paid in full, (b) on the Maturity Date, and (c) upon the
payment or prepayment of any principal owing under this Note (but only on the
principal amount so prepaid or paid). If the first day of the calendar month
on
which Interest is due is not a Business Day, then such day for payment of
Interest shall be the next succeeding Business Day and interest shall accrue
by
reason of such extension. At the Company’s sole option, it may make an Interest
payment in kind in the form of common stock of the Company (“Common
Stock”).
If
Interest is paid in Common Stock, the value of the Common Stock shall be
calculated as ninety percent (90%) of the volume weighted average trading price
for five (5) trading days prior to the interest payment date with a floor
valuation equal to $0.48 per share.
The
principal of this Note may be prepaid, in whole or ratably in part, at any
time
upon not less than five (5) nor more than twenty (20) days’ prior written notice
to the holder hereof, together with all interest then accrued and unpaid thereon
(or on the portion thereof being so prepaid, as the case may be), but without
premium or penalty.
All
cash
payments shall be in such coin or currency of the United States of America
as at
the time of payment shall be legal tender for payment of public and private
debts.
This
Note
is issued pursuant to, is entitled to the benefits of, and is subject to the
terms of the Securities Purchase Agreement, dated as of November 30, 2006 (the
“Purchase
Agreement”),
between the Company, NexMed (U.S.A.), Inc. and Metronome LPC 1, Inc., providing
for the issuance of the 7.5% Senior Secured Notes due December 31, 2007 of
the
Company, in the aggregate principal amount of $2,000,000.00.
This
Note
evidences senior indebtedness of the Company with the exception of Debt (as
defined in the Purchase Agreement) secured by a mortgage on the East Windsor
Property (as defined in the Purchase Agreement) which is senior to the
indebtedness set forth herein. Pursuant to the terms set forth in the Purchase
Agreement, this Note shall be secured by a security interest in the Company’s
right, title and interest in and to certain property of the Company to the
Security Agreement (as defined in the Purchase Agreement).
Upon
the
occurrence and during the continuation of any Event of Default (as defined
in
the Purchase Agreement), the outstanding principal amount of the Note, and
to
the extent permitted by applicable law, any interest payments thereon not paid
when due, and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any bankruptcy
proceeding under Title 11 of the United States Code or other applicable
insolvency laws) payable in cash at a rate of 12% per annum (computed on the
basis of a 360-day year of twelve 30-day months). Payment or acceptance of
the
increased rates of interest is not a permitted alternative to timely payment
and
shall not constitute a waiver of any Event of Default or otherwise prejudice
or
limit any rights or remedies under the Purchase Agreement. The maximum rate
of
interest, including default interest, charged hereunder shall not exceed the
highest rate permitted by law.
This
Note
shall be governed by and construed in accordance with the laws of the State
of
New York.
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NEXMED,
INC.
By
/s/
Xxxx
Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Its:
Vice President and Chief Financial
Officer
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