[FIRST UNION LOGO]


                                PROMISSORY NOTE

$1,000,000.00                                                 September 11, 2001


Q-Med, Inc.
100 Metro Park South
Laurence Harbor, New Jersey 08878
(Individually and collectively "Borrower")

First Union National Bank
190 River Road
Summit, New Jersey 07901
(Hereinafter referred to as "Bank")

Borrower  promises  to pay to the order of Bank,  in lawful  money of the United
States of  America,  at its office  indicated  above or  wherever  else Bank may
specify,  the sum of One Million and No/100 Dollars  ($1,000,000.00) or such sum
as may be  advanced  and  outstanding  from time to time,  with  interest on the
unpaid  principal  balance  at the  rate  and  on the  terms  provided  in  this
Promissory Note  (including all renewals,  extensions or  modifications  hereof,
this "Note").

LOAN  AGREEMENT.  This Note is subject to the  provisions  of that  certain Loan
Agreement between Bank and Borrower of even date herewith, as modified from time
to time.

SECURITY.  Borrower  has  granted  Bank a security  interest  in the  collateral
described  in the  Loan  Documents,  including,  but not  limited  to,  personal
property  collateral  described in that certain Security  Agreement of even date
herewith.  INTEREST RATE. The unpaid  principal  balance of this Note shall bear
interest from the date hereof at the lower of the Bank's Prime Rate minus 1.00%,
as that rate may  change  from time to time in  accordance  with  changes in the
Bank's Prime Rate,  or the LIBOR Market Index Rate plus 1.50%,  as that rate may
change from day to day in accordance with changes in the LIBOR Market Index Rate
("Interest Rate"). "Bank's Prime Rate" shall be that rate announced by Bank from
time to time as its prime rate and is one of several interest rate bases used by
Bank.  Bank lends at rates both above and below Bank's Prime Rate,  and Borrower
acknowledges  that Bank's  Prime Rate is not  represented  or intended to be the
lowest or most favorable rate of interest  offered by Bank.  "LIBOR Market Index
Rate",  for any day, is the rate for 1 month U.S. dollar deposits as reported on
Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is
not a London  business day, then the immediately  preceding  London business day
(or if not so  reported,  then as  determined  by Bank from  another  recognized
source or interbank quotation).

DEFAULT  RATE.  In addition to all other  rights  contained  in this Note,  if a
Default  (as  defined  herein)  occurs and as long as a Default  continues,  all
outstanding  Obligations  shall  bear  interest  at the  Interest  Rate  plus 3%
("Default Rate").  The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION  (ACTUAL/360).  Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual  number of days in the
applicable  period  ("Actual/360   Computation").   The  Actual/360  Computation
determines the annual  effective yield by taking the stated (nominal) rate for a
year's period and then dividing said rate by 360 to determine the daily periodic
rate to be applied for each day in the  applicable  period.  Application  of the
Actual/360  Computation produces an annualized effective interest rate exceeding
that of the nominal rate.

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REPAYMENT  TERMS.  This Note  shall be due and  payable in  consecutive  monthly
payments of accrued interest only, commencing on October 1, 2001, and continuing
on the same day of each month  thereafter  until fully paid.  In any event,  all
principal and accrued interest shall be due and payable on August 26, 2002.

AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT.  Borrower  authorizes Bank
to debit demand deposit account number  2011312438616  or any other account with
Bank (routing  number  021200025)  designated in writing by Borrower,  beginning
October 1, 2001 for any payments due under this Note. Borrower further certifies
that Borrower holds legitimate  ownership of this account and preauthorizes this
periodic debit as part of its right under said ownership.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations  shall be applied to accrued interest and then
to principal.  If a Default occurs,  monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.

If any  payment  received  by Bank under this Note or other  Loan  Documents  is
rescinded,  avoided or for any reason  returned  by Bank  because of any adverse
claim or threatened  action,  the returned  payment  shall remain  payable as an
obligation  of all persons  liable  under this Note or other Loan  Documents  as
though such payment had not been made.

DEFINITIONS. Loan Documents. The term "Loan Documents" used in this Note and the
other Loan  Documents  refers to all documents  executed in  connection  with or
related to the loan  evidenced  by this Note and any prior notes which  evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued  pursuant  to any loan  agreement  to which  this  Note is  subject,  any
applications  for such  letters of credit and any other  documents  executed  in
connection therewith or related thereto, and may include,  without limitation, a
commitment letter that survives closing, a loan agreement,  this Note,  guaranty
agreements,  security agreements,  security  instruments,  financing statements,
mortgage  instruments,  any  renewals  or  modifications,  whenever  any  of the
foregoing are executed,  but does not include swap  agreements (as defined in 11
U.S.C. ss. 101). Obligations. The term "Obligations" used in this Note refers to
any and all  indebtedness  and other  obligations  under  this  Note,  all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C.  ss. 101) between Borrower and Bank whenever
executed. Certain Other Terms. All terms that are used but not otherwise defined
in any of the Loan Documents shall have the definitions  provided in the Uniform
Commercial Code.

LATE CHARGE.  If any payments  are not timely made,  Borrower  shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.

ATTORNEYS'  FEES AND OTHER  COLLECTION  COSTS.  Borrower shall pay all of Bank's
reasonable  expenses  incurred  to  enforce or  collect  any of the  Obligations
including, without limitation, reasonable arbitration,  paralegals',  attorneys'
and experts' fees and expenses,  whether  incurred without the commencement of a
suit,  in  any  trial,  arbitration,  or  administrative  proceeding,  or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this  paragraph,  exceed the maximum  lawful rate,  the effective  interest rate
under this Note shall be the maximum  lawful  rate,  and any amount  received by
Bank in excess of such rate shall be applied to  principal  and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEFAULT.  If any of the following occurs, a default  ("Default") under this Note
shall  exist:  Nonpayment;  Nonperformance.  The  failure  of timely  payment or
performance  of the  Obligations  or  Default  under this Note or any other Loan
Documents. False Warranty. A warranty or representation made or deemed

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<PAGE>

made in the  Loan  Documents  or  furnished  Bank in  connection  with  the loan
evidenced by this Note proves  materially  false, or if of a continuing  nature,
becomes  materially  false.  Cross  Default.  At Bank's  option,  any default in
payment or  performance of any  obligation  under any other loans,  contracts or
agreements of Borrower,  any  Subsidiary  or Affiliate of Borrower,  any general
partner of or the holder(s) of the majority ownership interests of Borrower with
Bank or its  affiliates  ("Affiliate"  shall  have the  meaning as defined in 11
U.S.C.  ss. 101,  except that the term  "Borrower"  shall be substituted for the
term "Debtor"  therein;  "Subsidiary"  shall mean any business in which Borrower
holds, directly or indirectly, a controlling interest).  Cessation;  Bankruptcy.
The death of,  appointment  of a guardian for,  dissolution  of,  termination of
existence of, loss of good standing  status by,  appointment  of a receiver for,
assignment for the benefit of creditors of, or commencement of any bankruptcy or
insolvency proceeding by or against Borrower, its Subsidiaries or Affiliates, if
any,  or any  general  partner of or the  holder(s)  of the  majority  ownership
interests of Borrower,  or any party to the Loan  Documents.  Material  Business
Alteration.  Without prior written consent of Bank, a material alteration in the
kind or type of  Borrower's  business.  Material  Capital  Structure or Business
Alteration.  Without prior written consent of Bank, (i) a material alteration in
the kind or type of Borrower's  business or that of Borrower's  Subsidiaries  or
Affiliates, if any; (ii) the sale of substantially all of the business or assets
of Borrower, any of Borrower's Subsidiaries or Affiliates or any guarantor, or a
material  portion  (10% or more) of such  business  or  assets if such a sale is
outside  the  ordinary  course of  business of  Borrower,  or any of  Borrower's
Subsidiaries or Affiliates or any guarantor, or more than 50% of the outstanding
stock or  voting  power of or in any such  entity in a single  transaction  or a
series  of  transactions;  (iii) the  acquisition  of  substantially  all of the
business or assets or more than 50% of the outstanding  stock or voting power of
any other entity; or (iv) should any Borrower or any of Borrower's  Subsidiaries
or Affiliates or any guarantor enter into any merger or consolidation.

REMEDIES  UPON  DEFAULT.  If a  Default  occurs  under  this  Note  or any  Loan
Documents,  Bank may at any time thereafter,  take the following  actions:  Bank
Lien.  Foreclose  its  security  interest or lien  against  Borrower's  accounts
without notice.  Acceleration Upon Default. Accelerate the maturity of this Note
and, at Bank's option, any or all other Obligations, whereupon this Note and the
accelerated Obligations shall be immediately due and payable; provided, however,
if the Default is based upon a bankruptcy or insolvency  proceeding commenced by
or against  Borrower or any guarantor or endorser of this Note, all  Obligations
shall automatically and immediately be due and payable. Cumulative. Exercise any
rights and remedies as provided under the Note and other Loan  Documents,  or as
provided  by law or equity.  FINANCIAL  AND OTHER  INFORMATION.  Borrower  shall
deliver to Bank such  information  as Bank may  reasonably  request from time to
time,  including  without  limitation,   financial  statements  and  information
pertaining to Borrower's  financial  condition.  Such information shall be true,
complete, and accurate.

LINE OF CREDIT ADVANCES.  Borrower may borrow, repay and reborrow,  and Bank may
advance and readvance under this Note  respectively  from time to time until the
maturity hereof (each an "Advance" and together the "Advances"),  so long as the
total  principal  balance  outstanding  under this Note at any one time does not
exceed the  principal  amount  stated on the face of this  Note,  subject to the
limitations  described  in any loan  agreement  to which  this Note is  subject.
Bank's  obligation to make Advances under this Note shall  terminate if Borrower
is in Default. As of the date of each proposed Advance, Borrower shall be deemed
to represent that each  representation  made in the Loan Documents is true as of
such date.

If Borrower  subscribes to Bank's cash management services and such services are
applicable  to this line of credit,  the terms of such service shall control the
manner in which funds are  transferred  between the  applicable  demand  deposit
account  and the line of  credit  for  credit  or  debit to the line of  credit.
WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan  Documents  shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same  Default on a future  occasion.  Neither the failure nor any
delay on the part of Bank in exercising any right,  power,  or remedy under this
Note and other Loan  Documents  shall operate as a waiver  thereof,  nor shall a
single or  partial  exercise  thereof  preclude  any other or  further  exercise
thereof or the exercise of any other right, power or remedy.

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<PAGE>

Each Borrower or any person liable under this Note waives presentment,  protest,
notice of  dishonor,  demand for  payment,  notice of  intention  to  accelerate
maturity,  notice  of  acceleration  of  maturity,  notice of sale and all other
notices of any kind. Further,  each agrees that Bank may extend, modify or renew
this Note or make a novation of the loan  evidenced by this Note for any period,
and  grant  any  releases,  compromises  or  indulgences  with  respect  to  any
collateral  securing  this Note,  or with  respect to any other  Borrower or any
other person liable under this Note or other Loan Documents,  all without notice
to or consent of each  Borrower or each person who may be liable under this Note
or any other Loan  Document and without  affecting  the liability of Borrower or
any person who may be liable under this Note or any other Loan Document.

MISCELLANEOUS  PROVISIONS.  Assignment.  This Note and the other Loan  Documents
shall  inure to the  benefit  of and be  binding  upon  the  parties  and  their
respective  heirs,  legal  representatives,   successors  and  assigns.   Bank's
interests in and rights under this Note and the other Loan  Documents are freely
assignable,  in whole or in part, by Bank. In addition,  nothing in this Note or
any of the other Loan  Documents  shall prohibit Bank from pledging or assigning
this Note or any of the other  Loan  Documents  or any  interest  therein to any
Federal  Reserve  Bank.  Borrower  shall not  assign  its  rights  and  interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written  consent is null and void. Any assignment
shall not  release  Borrower  from the  Obligations.  Applicable  Law;  Conflict
Between  Documents.  This Note and, unless otherwise  provided in any other Loan
Document,  the other Loan Documents shall be governed by and construed under the
laws of the state named in Bank's  address  shown above  without  regard to that
state's conflict of laws  principles.  If the terms of this Note should conflict
with the terms of any loan  agreement  or any  commitment  letter that  survives
closing, the terms of this Note shall control.  Borrower's  Accounts.  Except as
prohibited by law, Borrower grants Bank a security interest in all of Borrower's
accounts with Bank and any of its affiliates. Jurisdiction. Borrower irrevocably
agrees to  non-exclusive  personal  jurisdiction  in the  state  named in Bank's
address shown above. Severability. If any provision of this Note or of the other
Loan  Documents  shall be  prohibited  or invalid  under  applicable  law,  such
provision  shall be  ineffective  but only to the extent of such  prohibition or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining  provisions of this Note or other such document.  Notices. Any notices
to Borrower shall be  sufficiently  given, if in writing and mailed or delivered
to the  Borrower's  address  shown  above  or such  other  address  as  provided
hereunder,  and to Bank,  if in writing and mailed or delivered to Bank's office
address  shown above or such other  address as Bank may specify in writing  from
time to time. In the event that Borrower changes  Borrower's address at any time
prior to the date the Obligations are paid in full,  Borrower agrees to promptly
give written  notice of said change of address by registered or certified  mail,
return receipt requested,  all charges prepaid. Plural; Captions. All references
in the Loan Documents to Borrower, guarantor, person, document or other nouns of
reference  mean both the singular  and plural form,  as the case may be, and the
term  "person"  shall  mean any  individual,  person  or  entity.  The  captions
contained in the Loan Documents are inserted for convenience  only and shall not
affect the meaning or interpretation of the Loan Documents. Use of Proceeds. The
proceeds of the loan(s)  evidenced by this Note shall be used for the commercial
purposes of Borrower.  Advances.  Bank may, in its sole  discretion,  make other
advances which shall be deemed to be advances  under this Note,  even though the
stated  principal  amount  of this  Note may be  exceeded  as a result  thereof.
Posting of Payments.  All payments  received  during normal  banking hours after
2:00 p.m.  local time at the office of Bank first  shown  above  shall be deemed
received at the opening of the next banking day. Joint and Several  Obligations.
Each person who signs this Note as a Borrower (as defined herein) is jointly and
severally   obligated.   Fees  and  Taxes.   Borrower  shall  promptly  pay  all
documentary,  intangible  recordation  and/or similar taxes on this  transaction
whether assessed at closing or arising from time to time.

ARBITRATION.  Upon  demand of any party  hereto,  whether  made  before or after
institution of any judicial proceeding,  any claim or controversy arising out of
or relating to the Loan Documents  between parties hereto (a "Dispute") shall be
resolved by binding  arbitration  conducted under and governed by the Commercial
Financial Disputes  Arbitration Rules (the "Arbitration  Rules") of the American
Arbitration  Association (the "AAA") and the Federal  Arbitration Act.  Disputes
may include,  without limitation,  tort claims,  counterclaims,  a dispute as to
whether a matter is subject to arbitration,  claims brought as class actions, or
claims arising from documents  executed in the future. A judgment upon the award
may be

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<PAGE>

entered in any court having  jurisdiction.  Notwithstanding the foregoing,  this
arbitration  provision  does not  apply to  disputes  under or  related  to swap
agreements.  Special Rules.  All arbitration  hearings shall be conducted in the
city named in the  address of Bank first  stated  above.  A hearing  shall begin
within 90 days of demand for  arbitration and all hearings shall conclude within
120 days of demand for  arbitration.  These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited  procedures set forth in Rule 51 et seg. of the  Arbitration
Rules  shall be  applicable  to claims of less than  $1,000,000.00.  Arbitrators
shall be licensed  attorneys  selected  from the  Commercial  Financial  Dispute
Arbitration  Panel of the AAA.  The parties do not waive  applicable  Federal or
state substantive law except as provided herein.  Preservation and Limitation of
Remedies.  Notwithstanding  the preceding binding  arbitration  provisions,  the
parties agree to preserve,  without diminution,  certain remedies that any party
may exercise before or after an arbitration  proceeding is brought.  The parties
shall  have the  right to  proceed  in any court of  proper  jurisdiction  or by
self-help to exercise or prosecute the following  remedies,  as applicable:  (i)
all rights to foreclose  against any real or personal property or other security
by exercising a power of sale or under  applicable  law by judicial  foreclosure
including  a  proceeding  to  confirm  the sale;  (ii) all  rights  of  sel~help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful  possession of personal  property;  (iii) obtaining  provisional or
ancillary remedies  including  injunctive  relief,  sequestration,  garnishment,
attachment,  appointment  of  receiver  and  filing  an  involuntary  bankruptcy
proceeding;  and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's  entitlement to such remedies is
a Dispute.  Waiver of Exemplary  Damages.  The parties agree that they shall not
have a remedy of punitive or  exemplary  damages  against  other  parties in any
Dispute and hereby  waive any right or claim to punitive  or  exemplary  damages
they have now or which may arise in the future in  connection  with any  Dispute
whether the Dispute is resolved by  arbitration  or  judicially.  Waiver of Jury
Trial. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY  WAIVED  ANY  RIGHT  THEY MAY HAVE TO JURY  TRIAL  WITH  REGARD TO A
DISPUTE.

IN WITNESS  WHEREOF,  Borrower,  on the day and year first  above  written,  has
caused this Note to be executed under seal.

PLACE OF EXECUTION AND DELIVERY.  Borrower  hereby  certifies that this Note and
the Loan  Documents  were  executed in the State of New Jersey and  delivered to
Bank in the State of New Jersey.

                                  Q-Med, Inc.
                                  Taxpayer Identification Number: 22-2468665


                                  By:
                                     -------------------------------------(SEAL)
                                     Michael W. Cox, President and Treasurer


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