[FIRST UNION LOGO]


                               SECURITY AGREEMENT

                                                              September 11, 2001
Q-Med, Inc.
100 Metro Park South
Laurence Harbor, New Jersey 08878
(Individually and collectively "Debtor")

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

For value received and to secure payment and  performance of the Promissory Note
executed by Debtor (also referred to herein as "Borrower")  dated  September 11,
2001, in the original  principal amount of  $1,000,000.00,  payable to Bank, and
any extensions,  renewals, modifications or novations thereof (the "Note"), this
Security  Agreement and the other Loan Documents,  and any other  obligations of
Debtor  to Bank  however  created,  arising  or  evidenced,  whether  direct  or
indirect, absolute or contingent, now existing or hereafter arising or acquired,
and whether or not evidenced by a Loan Document,  including swap  agreements (as
defined  in 11 U.S.C.  ss.101),  future  advances,  and all  costs and  expenses
incurred by Bank to obtain, preserve,  perfect and enforce the security interest
granted herein and to maintain, preserve and collect the property subject to the
security interest (collectively,  "Obligations"), Debtor hereby grants to Bank a
continuing  security interest in and lien upon the following described property,
whether  now  owned or  hereafter  acquired,  and any  additions,  replacements,
accessions,  or  substitutions  thereof and all cash and  non-cash  proceeds and
products thereof (collectively, "Collateral"):

All of the  investment  property,  financial  assets,  cash,  equity  interests,
instruments,  and/or  general  intangibles,  which are held in or credited to an
account with First Union Securities,  Inc., who is a Securities Intermediary (as
defined herein) of the Debtor (the "Account"), and the Account itself, described
as  follows:  Account  No.  6850-0152;  and all  rights to which  Debtor  now or
hereafter  becomes  entitled by reason of its interest in any of the  previously
described Collateral.

Debtor hereby represents and agrees that:

OWNERSHIP.  Debtor owns the Collateral.  The Collateral is free and clear of all
liens,  security  interests,  and claims  except  those  previously  reported in
writing to and approved by Bank,  and Debtor will keep the  Collateral  free and
clear from all liens, security interests and claims, other than those granted to
or  approved  by Bank.  All  securities  and  security  entitlements  pledged as
Collateral are fully paid and non-assessable.  All income,  dividends,  earnings
and profits  with  respect to the  Collateral  shall be  reported  for state and
federal income tax purposes as attributable to the Debtor and not Bank and Third
Party (as defined  herein),  and Bank or any other person  authorized  to report
income distributions, is authorized to issue IRS Forms 1099 indicating Debtor as
the recipient of such income, earnings and profits.

NAME AND OFFICES;  JURISDICTION OF ORGANIZATION.  The name and address of Debtor
appearing at the beginning of this  Agreement are Debtor's  exact legal name and
the address of its chief executive office.  There has been no change in the name
of Debtor,  or the name under which Debtor  conducts  business,  within the five
years  preceding  the date hereof  except as  previously  reported in writing to
Bank.  Debtor  has not moved its chief  executive  office  within the five years
preceding  the date  hereof  except as  previously  reported in writing to Bank.
Debtor is organized  under the laws of the State of Delaware and has not changed
the  jurisdiction of its  organization  within the five years preceding the date
hereof  except as  previously  reported  in writing to Bank.

<PAGE>

TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims.  Debtor will not  transfer,  sell,  or lease
Collateral (except as permitted herein). Debtor agrees to pay promptly all taxes
and  assessments  upon  or for  the  use of  Collateral  and  on  this  Security
Agreement. At its option, Bank may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on Collateral.  Debtor agrees to
reimburse  Bank,  on demand,  for any such payment made by Bank.  Any amounts so
paid shall be added to the Obligations.

WAIVERS.  Debtor  agrees  not to  assert  against  Bank as a  defense  (legal or
equitable), as a set-off, as a counterclaim, or otherwise, any claims Debtor may
have against any seller or lessor that  provided  personal  property or services
relating  to any  part of the  Collateral.  Debtor  waives  all  exemptions  and
homestead rights with regard to the Collateral. Debtor waives any and all rights
to any bond or security  which might be required by applicable  law prior to the
exercise of any of Bank's remedies  against any  Collateral.  All rights of Bank
and security interests hereunder, and all obligations of Debtor hereunder, shall
be absolute and unconditional,  not discharged or impaired  irrespective of (and
regardless of whether  Debtor  receives any notice of): (i) any lack of validity
or enforceability  of any Loan Document;  (ii) any change in the time, manner or
place of payment or performance, or in any term, of all e any of the Obligations
or the Loan Documents or any other  amendment or waiver of or any consent to any
departure from any Loan Document; (iii) any exchange,  release or non-perfection
of any collateral,  or any release of or modifications of the obligations of any
guarantor  or other  obligor;  (iv) any  amendment  or waiver of or  consent  to
departure from any Loan Document or other agreement.  To the extent permitted by
law,  Debtor hereby waives any rights under any valuation,  stay,  appraisement,
extension  or  redemption  laws now  existing or which may  hereafter  exist and
which, but for this provision, might be applicable to any sale or disposition of
the  Collateral  by Bank;  and any  other  circumstance  which  might  otherwise
constitute a defense  available  to, or a discharge of any party with respect to
the Obligations.

NOTIFICATIONS;  LOCATION  OF  COLLATERAL.  Debtor will notify Bank in writing at
least 30 days  prior to any  change in: (i)  Debtor's  chief  place of  business
and/or   residence;   (ii)   Debtor's   name   or   identity;   (iii)   Debtor's
corporate/organizational  structure; or (iv) the jurisdiction in which Debtor is
organized.  In  addition,  Debtor  shall  promptly  notify Bank of any claims or
alleged  claims  of  any  other  person  or  entity  to  the  Collateral  or the
institution  of  any  litigation,  arbitration,  governmental  investigation  or
administrative proceedings against or affecting the Collateral. Debtor will keep
Collateral  at the  location(s)  previously  provided to Bank until such time as
Bank provides written advance consent to a change of location.  Debtor will bear
the cost of  preparing  and filing any  documents  necessary  to protect  Bank's
liens.

FINANCING STATEMENTS,  POWER OF ATTORNEY. No financing statement (other than any
filed or  approved by Bank)  covering  any  Collateral  is on file in any public
filing  office.  On request of Bank,  Debtor will execute one or more  financing
statements in form  satisfactory  to Bank and will pay all costs and expenses of
filing  the same or of  filing  this  Security  Agreement  in all  public  fling
offices,  where filing is deemed by Bank to be desirable.  Bank is authorized to
file financing  statements  relating to Collateral  without  Debtor's  signature
where  authorized by law.  Debtor hereby  constitutes and appoints Bank the true
and lawful  attorney of Debtor with full power of  substitution  to take any and
all appropriate  action and to execute any and all documents or instruments that
may be necessary or desirable to accomplish  the purpose and carry out the terms
of this Security Agreement, including, without limitation, to complete, execute,
and deliver Control  Agreement(s) by Bank, Debtor and Third Party(ies)  required
in connection herewith  (individually and collectively the "Control Agreement"),
instructions  to Third  Party(ies)  regarding,  among other things,  control and
disposition  of any  Collateral,  and  endorsements  desirable  for  transfer or
delivery of any  Collateral,  registration  of any Collateral  under  applicable
laws,  retitling any Collateral,  receipt,  endorsement and/or collection of all
checks and other  orders for payment of money  payable to Debtor with respect to
Collateral.  The  foregoing  power of attorney is coupled  with an interest  and
shall be  irrevocable  until  all of the  Obligations  have  been  paid in full.
Neither  Bank nor  anyone  acting  on its  behalf  shall  be  liable  for  acts,
omissions,  errors  in  judgment,  or  mistakes  in  fact in  such  capacity  as
attorney-in-fact.  Debtor ratifies all acts of Bank as attorney-in-fact.  Debtor
agrees to take such other actions,  at Debtor's  expense,  as might be requested
for the perfection,  continuation  and  assignment,  in whole or in part, of the
security  interests  granted  herein  and to  assure  Bank's  intended  priority
position. If certificates,  passbooks, or other documentation or evidence is/are
issued  or  outstanding  as to any of the  Collateral,  Debtor  will  cause  the
security  interests of Bank to be properly  protected,  including  perfection by
notation

                                     Page 2
<PAGE>

thereon or delivery  thereof to Bank. Upon Bank's  request,  Debtor will, at its
own expense:  (i) do all things  determined  by Bank to be desirable to register
such  Collateral  or  qualify  for an  exemption  from  registration,  under the
provisions of all applicable  securities laws, and (ii) otherwise do or cause to
be done all other  acts and things as may be  necessary  to make the sale of the
Collateral valid, binding and in compliance with applicable law.

STOCK, DIVIDENDS.  If, with respect to any securities pledged hereunder, a stock
dividend is declared,  any stock split made or right to subscribe is issued, all
the certificates for the shares representing such stock dividend, stock split or
right to subscribe will be immediately delivered,  duly endorsed, to the Bank as
additional  Collateral,  and any cash or non-cash proceeds and products thereof,
including  investment  property and security  entitlements  will be  immediately
delivered to Bank.  Debtor  acknowledges that such grant includes all investment
property and security entitlements,  now existing or hereafter arising, relating
to such  securities.  In  addition,  Debtor  agrees to execute  such notices and
instructions to securities intermediaries as Bank may reasonably request.

VALUE REQUIREMENT.  The outstanding  balance of the Obligations shall not exceed
at any time the aggregate  Adjusted Fair Market Value of the  Collateral.  If at
any time the  outstanding  balance  of the  Obligations  exceeds  the  aggregate
Adjusted Fair Market Value of the  Collateral,  Debtor shall,  within 3 business
days, either pledge and deliver additional  securities or reduce the outstanding
balance of the  Obligations so that the  outstanding  balance of the Obligations
does not exceed the aggregate Adjusted Fair Market Value of the Collateral as of
the  close  of  business  on the day  immediately  preceding  such  delivery  or
reduction.  The Bank shall be under no obligation to permit  advances during any
period of time that the outstanding balance of the Obligations exceeds (or would
exceed should a requested  advance be made) the  aggregate  Adjusted Fair Market
Value of the Collateral.

"Fair  Market  Value" means the dollar  value that  results by  multiplying  the
closing price per unit of Collateral (other than cash), as quoted or reported in
The Wall Street Journal or, if not  available,  other  customary  publication of
such  information,  by the number of units of like  Collateral.  If Fair  Market
Value cannot be determined by the foregoing  procedure,  Fair Market Value shall
be  determined  by the Bank by  reference to such public  information  as may be
available.

"Adjusted  Fair Market Value" means the dollar value that results by multiplying
the Fair Market Value of an asset  constituting  a part of the Collateral by the
applicable  percentage set forth below. The aggregate Adjusted Fair Market Value
is the sum of those products.

Collateral Type                                 Eligible % of Fair Market Value
---------------                                 -------------------------------
US Government Obligations (maturity two
  years or less)                                                   95%
Municipal Bonds (rating Aaa-Baa3; maturity
  five years or less)                                              85%
Corporate Bonds (rating Aaa-Baa3, non-convertible,
  NYSE; maturity two years or less)                                85%
A1/P1 Commercial Paper                                             85%

TRADING OF COLLATERAL.  Until a Default occurs, if securities  pledged hereunder
are held in the Account, Debtor shall have the right to vote such Collateral, to
exchange it or any part thereof for other easily marketable  investment property
or cash of at least  equivalent  value or purchase for cash  readily  marketable
investment  property,  all of which property or cash proceeds shall be placed or
paid into the Account,  to collect and receive all cash  dividends  and interest
distributed periodically in the ordinary course by the obligor or issuer of such
Collateral or part  thereof,  and unless  otherwise  restricted by this Security
Agreement,  to exercise  other  rights with respect to such  Collateral.  In the
event that,  notwithstanding  the above,  any such property or cash proceeds are
received by Debtor  (other than in the  Account) as a result of such an exchange
or purchase,  such  property or cash  proceeds  shall be held by Debtor in trust
for, and immediately delivered to, Bank.

                                     Page 3
<PAGE>

CONTROL.  Debtor will cooperate  with Bank in obtaining  control with respect to
Collateral  consisting of investment  property.  Debtor  authorizes  and directs
Third Party to comply with the terms of this Security Agreement, to enter into a
Control  Agreement,  to mark its records to show the security interest of and/or
the  transfer to Bank of the  property  pledged  hereunder  and to mail  monthly
statements to the Bank, in addition to Debtor, to the address provided herein.

COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral  pledged  except as set forth  herein;  and by way of
explanation and not by way of limitation,  Bank shall incur no liability for any
of the following:  (i) loss or depreciation of Collateral  (unless caused by its
willful misconduct or gross  negligence),  (ii) failure to present any paper for
payment or protest, to protest or dve notice of nonpayment,  or any other notice
with respect to any paper or  Collateral,  (iii)  failure to  ascertain,  notify
Debtor  of,  or take  any  action  in  connection  with  any  conversion,  call,
redemption,  retirement or any other event relating to any of the Collateral, or
failure  to notify any party  hereto  that  Collateral  should be  presented  or
surrendered  for  any  such  reason.  Debtor  acknowledges  that  Bank is not an
investment  advisor or insurer with respect to the  Collateral;  and Bank has no
duty to advise Debtor of any actual or  anticipated  changes in the value of the
Collateral.

TRANSFER OF  COLLATERAL.  Bank may assign its rights in  Collateral  or any part
thereof to any assignee who shall  thereupon  become  vested with all the powers
and rights herein given to Bank with respect to the property so transferred  and
delivered,  and Bank shall  thereafter be forever  relieved and fully discharged
from any  liability  with  respect to such  property  so  transferred,  but with
respect to any  property  not so  transferred,  Bank shall retain all rights and
powers hereby given.

INSPECTION,  BOOKS AND  RECORDS.  Debtor  will at all times  keep  accurate  and
complete  records  covering  each item of  Collateral,  including  the  proceeds
therefrom.  Bank, or any of its agents, shall have the right, at intervals to be
determined  by Bank and without  hindrance  or delay,  at Debtor's  expense,  to
inspect,  audit, and examine the Collateral and to make extracts from the books,
records, journals,  orders, receipts,  correspondence and other data relating to
Collateral,  Debtor's  business  or any other  transaction  between  the parties
hereto. Debtor will at its expense furnish Bank copies thereof upon request.

CROSS COLLATERALIZATION  LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor,  within the meaning of the Federal Consumer
Credit  Protection  Act, Bank  expressly  waives any security  interest  granted
herein in  Collateral  that Debtor uses as a principal  dwelling  and  household
goods.

ATTORNEYS'  FEES AND OTHER COSTS OF  COLLECTION.  Debtor shall pay all of Bank's
reasonable  expenses  incurred  in  enforcing  this  Security  Agreement  and in
preserving and liquidating Collateral,  including but not limited to, reasonable
arbitration,  paralegals',  attorneys'  and experts' fees and expenses,  whether
incurred with or without the  commencement  of a suit,  trial,  arbitration,  or
administrative proceeding, or in any appellate or bankruptcy proceeding.

DEFAULT.  If any of the  following  occurs,  a default  ("Default")  under  this
Security  Agreement shall exist: Loan Document Default. A default under any Loan
Document.  Collateral Loss or Destruction.  Any loss, theft, substantial damage,
or  destruction  of Collateral  not fully  covered by insurance,  or as to which
insurance  proceeds  are not  remitted  to  Bank  within  30  days of the  loss.
Collateral  Sale, Lease or Encumbrance.  Any sale,  lease, or encumbrance of any
Collateral not  specifically  permitted  herein without prior written consent of
Bank.  Levy,  Seizure  or  Attachment.  The  making  of any  levy,  seizure,  or
attachment on or of Collateral  which is not removed within 10 days. Third Party
Breach. Any default or breach by a Third Party of any provision contained in any
Control   Agreement   executed  in  connection   with  any  of  the  Collateral.
Unauthorized Termination.  Any attempt to terminate, revoke, rescind, modify, or
violate the terms of this Security  Agreement or any Control  Agreement  without
the prior written consent of Bank.

REMEDIES ON DEFAULT  (INCLUDING POWER OF SALE). If a Default occurs,  all of the
Obligations shall be immediately due and payable,  without notice and Bank shall
have all the rights and remedies of a secured party under the Uniform Commercial
Code. Without limitation thereto, Bank shall have the

                                     Page 4
<PAGE>

following rights and remedies:  (i) to take immediate  possession of Collateral,
without notice or resort to legal process,  and for such purpose,  to enter upon
any  premises on which  Collateral  or any part  thereof may be situated  and to
remove the same therefrom,  or, at its option, to render Collateral  unusable or
dispose of said  Collateral  on  Debtor's  premises;  (ii) to require  Debtor to
assemble  the  Collateral  and  make it  available  to  Bank  at a  place  to be
designated  by Bank;  (iii) to exercise  its right of set-off or bank lien as to
any monies of Debtor  deposited in accounts of any nature  maintained  by Debtor
with Bank or affiliates of Bank,  without advance notice,  regardless of whether
such accounts are general or special;  (iv) to dispose of Collateral,  as a unit
or in parcels,  separately or with any real property interests also securing the
Obligations, in any county or place to be selected by Bank, at either private or
public  sale (at which  public sale Bank may be the  purchaser)  with or without
having  the  Collateral  physically  present at said sale.  In  addition  to the
foregoing,  Bank  shall be  authorized  to:  notify  Third  Party  to  terminate
immediately any trading,  other rights or entitlements of Debtor with respect to
the Collateral and any  distributions  to Debtor from the  Collateral;  transfer
into Bank's name or the name of its nominee,  all or any part of the Collateral;
receive all interest,  dividends,  and other proceeds of the Collateral;  notify
any person obligated on any Collateral of the security  interest of Bank therein
and require  such person to make  payment  directly  to Bank;  demand,  sue for,
collect or receive the  Collateral  and any  proceeds  thereof,  and/or make any
settlement or compromise as Bank deems desirable with respect to any Collateral;
and exercise any voting, conversion,  registration,  purchase or other rights of
an owner,  holder or entitlement  holder of the  Collateral.  Debtor agrees that
Bank may exercise its rights under this Security  Agreement  without  regard for
the actual or potential  tax  consequences  to Debtor under federal or state law
and without regard to any instructions or directives given Bank by Debtor.

Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank,  at least 5 days prior to
such  action,  shall  constitute  reasonable  notice to Debtor.  Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein.  Bank  shall be  entitled  to apply  the  proceeds  of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the  Collateral,  to  Obligations  in such  order and  manner as Bank may
determine.  Collateral  that is  subject  to  rapid  declines  in  value  and is
customarily  sold  in  recognized  markets  may  be  disposed  of by  Bank  in a
recognized  market for such collateral  without providing notice of sale. Debtor
waives any and all requirements  that the Bank sell or dispose of dl or any part
of the  Collateral at any  particular  time,  regardless  of whether  Debtor has
requested such sale or disposition.

REMEDIES  ARE  CUMULATIVE.  No failure on the part of Bank to  exercise,  and no
delay in exercising,  any right,  power or remedy  hereunder  shall operate as a
waiver thereof,  nor shall any single or partial  exercise by Bank or any right,
power or remedy hereunder  preclude any other or further exercise thereof or the
exercise  of any right,  power or  remedy.  The  remedies  herein  provided  are
cumulative and are not exclusive of any remedies  provided by law, in equity, or
in other Loan Documents.

MISCELLANEOUS.  (i) Amendments and Waivers. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank.  No waiver by Bank of any Default shall
operate  as a waiver of any other  Default  or of the same  Default  on a future
occasion.  (ii) Assignment.  All rights of Bank hereunder are freely assignable,
in whole or in part,  and shall  inure to the benefit of and be  enforceable  by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and  interest  hereunder  without  the prior  written  consent of Bank,  and any
attempt by Debtor to assign  without  Bank's prior  written  consent is null and
void.  Any  assignment  shall not  release  Debtor  from the  Obligations.  This
Security  Agreement  shall be  binding  upon  Debtor,  and the  heirs,  personal
representatives,  successors,  and  assigns of  Debtor.  (iii)  Applicable  Law;
Conflict  Between  Documents.  This Security  Agreement shall be governed by and
construed  under the law of the  jurisdiction  named in the  address of the Bank
first shown above (the  "Jurisdiction")  without  regard to that  Jurisdiction's
conflict  of laws  principles,  except to the extent that the UCC  requires  the
application  of the  law of a  different  jurisdiction.  If any  terms  of  this
Security  Agreement  conflict  with the terms of any  commitment  letter or loan
proposal, the terms of this Security Agreement shall control. (iv) Jurisdiction.
Debtor  irrevocably  agrees  to  non-exclusive   personal  jurisdiction  in  the
Jurisdiction  in which  the  office  of Bank as  stated  above is  located.  (v)
Severability. If any provision of this Security

                                     Page 5
<PAGE>

Agreement shall be prohibited by 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  Security  Agreement.  (vi)  Notices.  Any  notices  to Debtor  shall be
sufficiently  given,  if in writing  and mailed or  delivered  to the address of
Debtor 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 Debtor changes  Debtor's  mailing address at any time prior to the date the
Obligations  are paid in full,  Debtor agrees to promptly give written notice of
said  change  of  address  by  registered  or  certified  mail,  return  receipt
requested,  all charges prepaid.  (vii) Captions.  The captions contained herein
are  inserted  for  convenience  only  and  shall  not  affect  the  meaning  or
interpretation of this Security  Agreement or any provision  hereof.  The use of
the plural  shall  also mean the  singular,  and vice  versa.  (viii)  Joint and
Several  Liability.  If more than one party has signed this Security  Agreement,
such  parties  are jointly  and  severally  obligated  hereunder.  (ix)  Binding
Contract. Debtor by execution and Bank by acceptance of this Security Agreement,
agree  that each  party is bound by all terms and  provisions  of this  Security
Agreement.

DEFINITIONS.  Loan Documents. The term "Loan Documents" refers to all documents,
including  this  Agreement,  whether  now or  hereafter  existing,  executed  in
connection  with  or  related  to the  Obligations,  and  may  include,  without
limitation  and whether  executed by Debtor or others,  commitment  letters that
survive closing, loan agreements, promissory notes, guaranty agreements, deposit
or other similar agreements,  other security  agreements,  letters of credit and
applications for letters of credit, 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).  Third  Party.  The term "Third  Party"  means each and every
Broker,  Collateral  Agent or Securities  Intermediary  maintaining a securities
account, and acting in such capacity,  for Debtor with respect to some or all of
the  Collateral.  UCC. "UCC" means the Uniform  Commercial Code as presently and
hereafter enacted in the  Jurisdiction.  Terms defined in the UCC. Any term used
in this Agreement and in any financing  statement  filed in connection  herewith
which is defined in the UCC and not otherwise  defined in this  Agreement or any
other  Loan  Document  has the  meaning  given to the  term in the  UCC.  Debtor
acknowledges  and understands  that any such term relating to the description of
Collateral  may be defined in one or both of (i) the version of Article 9 of the
UCC as enacted and in force in the  Jurisdiction  on the date this  Agreement is
signed  by  Debtor  or  (ii)  a  revised   version  of  Article  9  of  the  UCC
(substantially  in the form of Revised Article 9 (2000 Revision) version thereof
promulgated by the National  Conference of  Commissioners  on Uniform State Laws
and the American Law  Institute)  ("Revised  Article 9") enacted and in force in
the Jurisdiction at any relevant future time. In light of the foregoing,  Debtor
agrees that,  if terms  defining  items or classes of  Collateral  change or are
added as a result of the enactment of Revised Article 9 in the Jurisdiction, the
meaning to be ascribed to any such term with respect to any  particular  item or
class of Collateral  hereunder and the interpretation  thereof after the date of
such enactment  shall be (a) if such term is defined in both versions of Article
9 and such  definitions  differ,  the  broader or more  encompassing  of the two
definitions,  regardless of  duplication,  and (b) if such term is defined under
only one of the versions of Article 9, the definition in that version.

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

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


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

                                     Page 6
<PAGE>

      Payer's Request for Taxpayers Identification Number and Certification



Account Name      Q-Med, Inc.
Address           100 Metro Park South
                  Laurence Harbor, New Jersey 08878


                                 W-9 Substitute

Taxpayer Identification Number 22-2468665

Check this box if you are not subject to backup withholding under the

provisions of Section 3406(a)(1)(C) of the Internal Revenue Code ----------> [ ]

Check this box if you qualify as a Non-Resident Alien ---------------------> [ ]

Date August 27, 2001

Certification - Under penalties of perjury, I certify that the information
provided on this form is true, correct and complete.


                              Q-Med, Inc.

                              Signature:
                                        ----------------------------------------
                                         Michael W. Cox, President and Treasurer