EATONTOWN, N.J., March 20 /PRNewswire-FirstCall/ -- QMed, Inc., (Nasdaq: QMED) today announced that in order to have time to continue to pursue a strategic alternative and to satisfy its need for working capital in the immediate future, the Company has entered into an agreement with Michael Cox, former CEO of QMed, John Gargana, a former director of QMed and Barry Levine, to receive up to $750,000 in working capital for the Company. The financing is structured to provide $375,000 to the Company at closing, with an additional $375,000 to be deposited into an escrow account, which could be released at the Company's request, in two stages, upon achieving certain milestones in connection with the possible sale of the Company or its assets, within certain specified time frames. Either the Company, on reaching the milestones, or such investors, may require the release of such funds to the Company. The loan proceeds plus interest, together with up to $620,000 in severance obligations owed to Mr. Cox (as to which he has agreed to forbear, as noted below), will be secured by substantially all assets of the Company, other than securities and other investment property. As noted above, Mr. Cox has agreed to forbear on his severance obligations of up to $620,000, until the earlier of January 15, 2009 and the closing of either an asset or stock sale.
At the closing of this financing, the Company will issue to the
Investors warrants to acquire up to 19.9% of the Company's common stock at
an exercise price of $.001 per share; of which, warrants to purchase up to
9.95% of the Company's common stock will immediately be exercisable, with
the balance becoming exercisable in proportion to the remaining proceeds in
the escrow being released to the Compa
|SOURCE QMed, Inc.|
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