<PAGE>   1
[BANK ONE LOGO]

                                 LOAN AGREEMENT                     EXHIBIT 10-0

<TABLE>
<CAPTION>
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   PRINCIPAL     LOAN DATE    MATURITY     LOAN NO.   CALL    COLLATERAL   ACCOUNT    OFFICER    INITIALS
<S>             <C>         <C>           <C>         <C>          <C>     <C>          <C>        <C>
$9,000,000.00    12-01-2000  12-01-2001              119217       326                  70656
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References in the shaded area are for Lender's use only and do not limit the applicability of this document
to any particular loan or item.
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Borrower: Zila Inc., A Delaware corporation   Lender: Bank One, Arizona, NA
          5227 North 7th Street                       Phoenix Commercial Banking
          Phoenix, AZ 85014-2800                      201 North Central
                                                      Phoenix, AZ 85004
===========================================================================================================
</TABLE>

THIS LOAN AGREEMENT between Zila Inc., a Delaware corporation ("Borrower") and
Bank One, Arizona, NA ("Lender") is made and executed as of December 1, 2000.
This Agreement governs all loans, credit facilities and/or other financial
accommodations described herein and, unless otherwise agreed to in writing by
Lender and Borrower, all other present and future loans, credit facilities and
other financial accommodations provided by Lender to Borrower. All such loans,
credit facilities and other financial accommodations, together with all
renewals, extensions and modifications thereof, are referred to in this
Agreement individually as the "Loan" and collectively as the "Loans." Borrower
understands and agrees that: (a) in granting, renewing, or extending any Loan,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in this Agreement; and (b) all such Loans shall be and shall remain
subject to the following terms and conditions of this Agreement.

TERM.  This Agreement shall be effective as of December 1, 2000, and shall
continue thereafter until all Loans and other obligations owing by Borrower to
Lender hereunder have been paid in full and Lender has no commitments or
obligations to make further Advances under the Loans to Borrower.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code as adopted in
the State of Arizona. All references to dollar amounts shall mean amounts in
lawful money of the United States of America.

     AGREEMENT. The word "Agreement" means this Loan Agreement, as may be
     amended or modified from time to time, together with all exhibits and
     schedules attached hereto from time to time.

     ACCOUNT. The word "Account" means a trade account receivable of Borrower
     for goods sold or leased or for services rendered by Borrower in the
     ordinary course of its business.

     ACCOUNT DEBTOR. The words "Account Debtor" mean the person or entity
     obligated upon an Account.

     ADVANCE. The word "Advance" means any advance or other disbursement of
     Loan proceeds under this Agreement.

     BORROWER. The word "Borrower" means Zila Inc., a Delaware corporation.

     BORROWING BASE. The words "Borrowing Base" mean the sum of (i) 80.000% of
     the aggregate amount of Eligible Accounts, plus (ii) 50.000% of the
     aggregate amount of Eligible Inventory.

     COLLATERAL. The word "Collateral" means and includes without limitation all
     property and assets granted as collateral for any Loan, whether real or
     personal property, whether granted directly or indirectly, whether granted
     now or in the future, and whether granted in the form of a security
     interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien, charge, lien or title retention contract, lease or
     consignment intended as a security device, or any other security or lien
     interest whatsoever, whether created by law, contract, or otherwise.

     COMMITTED SUM. The words "Committed Sum" mean an amount equal to
     $9,000,000.00.

     ELIGIBLE ACCOUNTS. The words "Eligible Accounts" mean, at any time, all of
     Borrower's accounts which contain terms and conditions acceptable to
     Lender and in which Lender has a first lien security interest, less the
     amount of all returns, discounts, credits, and offsets of any nature;
     provided, however, unless otherwise agreed to by Lender in writing,
     Eligible Accounts do not include:

          (a) Accounts with respect to which the Account Debtor is an officer,
          an employee or agent of Borrower and to which the Account Debtor is a
          subsidiary of, or affiliated with or related to Borrower or its
          shareholders, officers, or directors.

          (b) All Accounts with respect to which Borrower has furnished a
          payment and/or performance bond and that portion of any Accounts for
          or representing retainage, if any, until all prerequisites to the
          immediate payment of such retainage have been satisfied.

          (c) Accounts with respect to which goods are placed on consignment or
          subject to a guaranteed sale or other terms by reason of which the
          payment by the Account Debtor may be conditional.

          (d) Accounts with respect to which the Account Debtor is not a
          resident of, or whose principal place of business is located outside
          of, the United States or its territories, except to the extent such
          Accounts are supported by insurance, bonds or other assurances
          satisfactory to Lender in its sole and absolute discretion.

          (e) Accounts with respect to which Borrower is or may become liable
          to the Account Debtor for goods sold or services rendered by the
          Account Debtor to Borrower.

          (f) Accounts which are subject to dispute, counterclaim, or setoff.

          (g) Accounts with respect to which all goods have not been shipped or
          delivered, or all services have not been rendered, to the Account
          Debtor.

          (h) Accounts with respect to which Lender, in its sole discretion,
          deems the creditworthiness or financial condition of the Account
          Debtor to be unsatisfactory.

          (i) Accounts of any Account Debtor who has filed or has had filed
          against it a petition in bankruptcy or an application for relief
          under any provision of any state or federal bankruptcy, insolvency,
          or debtor-in-relief acts; or who has had appointed a trustee,
          custodian, or receiver for the assets of such Account Debtor; or who
          has made an assignment for the benefit of creditors or has become
          insolvent or fails generally to pay its debts (including its
          payrolls) as such debts become due.

          (j) Accounts with respect to which the Account Debtor is the United
          States government or any department or agency of the United States,
          except to the extent an acknowledgement of assignment to Lender of
          any such Accounts in compliance with the Federal Assignment of Claims
          Act and other applicable laws has been received by Lender.

    ELIGIBLE INVENTORY. The words "Eligible Inventory" mean, at any time, the
    aggregate value of all of Borrower's inventory as defined below except:

          (a) Inventory which is not owned by Borrower free and clear of all
          security interests, liens, encumbrances, and claims of third parties,
          except Lender's security interest.

          (b) Inventory which Lender, in its sole and absolute discretion,
          deems to be obsolete, unsalable, damaged, defective, or unfit for
          further processing.

          (c) Inventory which has been returned or rejected.

          (d) Inventory which is held by others on consignment, sale on
          approval or otherwise not in Borrower's physical possession, except
          upon the written consent of Lender.

          (e) Inventory located outside the United States.

     For purposes of this Agreement, Eligible Inventory shall be valued at the
     lower of cost or market value.

     ERISA. The word "ERISA" means the Employee Retirement Income Security Act
     of 1974, as amended.

     GRANTOR. The word "Grantor" means and includes each and all of the persons
     or entities granting a Security Interest in any Collateral for any of the
     Loans.

     GUARANTOR. The word "Guarantor" means and includes without limitation, each
     and all of the guarantors, sureties, and accommodation parties for any of
     the Loans.

     INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
     the Note, including all principal and accrued interest thereon, together
     with all other liabilities, costs and expenses for which Borrower is
     responsible under this Agreement or under any of the Related Documents. In
     addition, the word "Indebtedness" includes all other obligations, debts and
     liabilities, plus any accrued interest
<PAGE>   2
12-01-2000                             LOAN AGREEMENT                     Page 2
Loan No                                 (Continued)
================================================================================

     thereon, owing by Borrower, or any one or more of them, to Lender of any
     kind or character, now existing or hereafter arising, as well as all
     present and future claims by Lender against Borrower, or any one or more of
     them, and all renewals, extensions, modifications, substitutions and
     rearrangements of any of the foregoing; whether such Indebtedness arises by
     note, draft, acceptance, guaranty, endorsement, letter of credit,
     assignment, overdraft, indemnity agreement or otherwise; whether such
     Indebtedness is voluntary or involuntary, due or not due, direct or
     indirect, absolute or contingent, liquidated or unliquidated; whether
     Borrower may be liable individually or jointly with others; whether
     Borrower may be liable primarily or secondarily or as debtor, maker,
     comaker, drawer, endorser, guarantor, surety, accommodation party or
     otherwise.

     INVENTORY. The word "Inventory" means all raw materials and all tangible
     personal property, goods, merchandise and other personal property now owned
     or hereafter acquired by Borrower which is held for sale or lease in the
     ordinary course of Borrower's business, excluding all work in progress,
     spare parts, packaging materials, supplies and any advertising costs
     capitalized into inventory.

     LENDER. The word "Lender" means Bank One, Arizona, NA, its successors and
     assigns.

     LINE OF CREDIT. The words "Line of Credit" mean the credit facility
     described in the Section titled "LINE OF CREDIT" below.

     NOTE. The word "Note" means any and all promissory note or notes which
     evidence Borrower's Loans in favor of Lender, as well as any amendment,
     modification, renewal or replacement thereof.

     PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
     interests securing Indebtedness owed by Borrower to Lender; (b) liens for
     taxes, assessments, or similar charges either (i) not yet due, or (ii)
     being contested in good faith by appropriate proceedings and for which
     Borrower has established adequate reserves; (c) purchase money liens or
     purchase money security interests upon or in any property acquired or held
     by Borrower in the ordinary course of business to secure any Indebtedness
     permitted under this Agreement; and (d) liens and security interests which,
     as of the date of this Agreement, have been disclosed to and approved by
     the Lender in writing.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation the Note and all credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Note.

     SECURITY AGREEMENT. The words "Security Agreement" mean and include without
     limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     SECURITY INTEREST. The words "Security Interest" mean and include without
     limitation any type of security interest, whether in the form of a lien,
     charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien or title retention contract, lease or consignment intended as
     a security device, or any other security or lien interest whatsoever,
     whether created by law, contract, or otherwise.

LINE OF CREDIT. Subject to the other terms and conditions herein, Lender hereby
establishes a Line of Credit for Borrower through which Lender agrees to make
advances to Borrower from time to time from the effective date of this Agreement
until the maturity date of the Note evidencing the Line of Credit, provided the
aggregate amount of such advances outstanding at any time does not exceed the
lesser of the amount equal to the Borrowing Base or an amount equal to the
Committed Sum. Within the foregoing limits, Borrower may borrow, partially or
wholly prepay, and reborrow under this Agreement.

     BORROWING BASE COMPLIANCE. If at any time the aggregate principal amount
     outstanding under the Line of Credit shall exceed the applicable Borrowing
     Base, Borrower shall pay to Lender an amount equal to the difference
     between the outstanding principal balance under the Line of Credit and the
     Borrowing Base.

     REPRESENTATIONS AND WARRANTIES CONCERNING ACCOUNTS. With respect to the
     Accounts, Borrower represents and warrants to Lender: (a) Each Account
     represented by Borrower to be an Eligible Account for purposes of this
     Agreement conforms to the requirements of the definition of an Eligible
     Account; and (b) All Account information listed on reports and schedules
     delivered to Lender will be true and correct, subject to immaterial
     variance.


     REPRESENTATIONS AND WARRANTIES CONCERNING INVENTORY. With respect to the
     Inventory, Borrower represents and warrants to Lender; (a) All Inventory
     represented by Borrower to be Eligible Inventory for purposes of this
     Agreement conforms to the requirements of the definition of Eligible
     Inventory; (b) All Inventory values listed on schedules delivered to Lender
     will be true and correct, subject to immaterial variance; (c) The value of
     the Inventory will be determined on a consistent accounting basis; (d)
     Except as reflected in the Inventory schedules delivered to Lender, all
     Eligible Inventory is now and at all times hereafter will be of good and
     merchantable quality, free from defects; and (e) Lender, its assigns, or
     agents shall have the right at any time and at Borrower's expense to
     inspect and examine the Inventory and to check and test the same as to
     quality, quantity, value, and condition.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each request for an Advance, as
of the date of any renewal, extension or modification of any Loan, and at all
times any Loans or Lender's commitment to make Loans hereunder is outstanding:

     ORGANIZATION. Borrower is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the State of Delaware, is
     qualified to do business in the State of Arizona as a foreign corporation,
     and is duly qualified and in good standing in all other states in which
     Borrower is doing business. Borrower has the full power and authority to
     own its properties and to transact the businesses in which it is presently
     engaged or presently proposes to engage.

     AUTHORIZATION. The execution, delivery, and performance of this Agreement
     and all Related Documents to which Borrower is a party have been duly
     authorized by all necessary action by Borrower; do not require the consent
     or approval of any other person, regulatory authority or governmental body;
     and do not conflict with, result in a violation of, or constitute a default
     under (a) any provision of its articles of incorporation or organization,
     or bylaws, or any agreement or other instrument binding upon Borrower or
     (b) any law, governmental regulation, court decree, or order applicable to
     Borrower. Borrower has all requisite power and authority to execute and
     deliver this Agreement and all other Related Documents to which Borrower is
     a party.

     FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
     Lender truly and completely discloses Borrower's financial condition as of
     the date of the statement, and there has been no material adverse change in
     Borrower's financial condition subsequent to the date of the most recent
     financial statement supplied to Lender. Borrower has no material contingent
     obligations except as disclosed in such financial statements.

     LEGAL EFFECT. This Agreement and all other Related Documents to which
     Borrower is a party constitute legal, valid and binding obligations of
     Borrower enforceable against Borrower in accordance with their respective
     terms, except as limited by bankruptcy, insolvency or similar laws of
     general application relating to the enforcement of creditors' rights and
     except to the extent specific remedies may generally be limited by
     equitable principles.

     PROPERTIES. Except for Permitted Liens, Borrower is the sole owner of, and
     has good title to, all of Borrower's properties free and clear of all
     Security Interests, and has not executed any security documents or
     financing statements relating to such properties. All of Borrower's
     properties are titled in Borrower's legal name, and Borrower has not used,
     or filed a financing statement under, any other name for at least the last
     six (6) years.

     COMPLIANCE. Except as disclosed in writing to Lender (a) Borrower is
     conducting Borrower's businesses in material compliance with all applicable
     federal, state and local laws, statutes, ordinances, rules, regulations,
     orders, determinations and court decisions, including without limitation,
     those pertaining to health or environmental matters, and (b) Borrower
     otherwise does not have any known material contingent liability in
     connection with the release into the environment, disposal or the improper
     storage of any toxic or hazardous substance or solid waste.

     LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, and no other event has occurred which
     may in any one case or in the aggregate materially adversely affect
     Borrower's financial condition or properties, other than litigation,
     claims, or other events, if any, that have been disclosed to and
     acknowledged by Lender in writing.

     TAXES. All tax returns and reports of Borrower that are or were required to
     be filed, have been filed, and all taxes, assessments and other
     governmental charges have been paid in full, except those that have been
     disclosed in writing to Lender which are presently being or to be contested
     by Borrower in good faith in the ordinary course of business and for which
     adequate reserves have been provided.

     LIEN PRIORITY. Unless otherwise previously disclosed to and approved by
     Lender in writing, Borrower has not entered into any Security Agreements,
     granted a Security Interest or permitted the filing or attachment of any
     Security Interests on or affecting any of the Collateral, except in favor
     of Lender.

     LICENSES, TRADEMARKS AND PATENTS. Borrower possesses and will continue to
     possess all permits, licenses, trademarks, patents and rights thereto which
     are needed to conduct Borrower's business and Borrower's business does not
     conflict with or violate any valid rights of others with respect to the
     foregoing.

<PAGE>   3
  12-01-2000
  Loan No             LOAN AGREEMENT                   Page 3
                      (Continued)

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  COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
  business or commercial related purposes approved by Lender and such proceeds
  will not be used for the purchasing or carrying of "margin stock" as defined
  in Regulation U issued by the Board of Governors of the Federal Reserve
  System.

  INELIGIBLE SECURITIES. No portion or any advance or Loan made hereunder shall
  be used directly or indirectly to purchase ineligible securities, as defined
  by applicable regulations of the Federal Reserve Board, underwritten by Lender
  or any other affiliate of Banc One Corporation during the underwriting period
  and for 30 days thereafter.

  EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
  have any liability complies in all material respects with all applicable
  requirements of law and regulations, and (i) no Reportable Event nor
  Prohibited Transaction (as defined in ERISA) has occurred with respect to any
  such plan, (ii) Borrower has not withdrawn from any such plan or initiated
  steps to do so, (iii) no steps have been taken to terminate any such plan, and
  (iv) there are no unfunded liabilities other than those previously disclosed
  to Lender in writing.

  LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business, or
  Borrower's chief executive office if Borrower has more than one place of
  business, is located at 5227 North 7th Street, Phoenix, AZ 85014-2800. Unless
  Borrower has designated otherwise in writing this location is also the office
  or offices where Borrower keeps its records concerning the Collateral.

  INFORMATION. All information heretofore or contemporaneously herewith
  furnished by Borrower to Lender for the purposes of or in connection with this
  Agreement or any transaction contemplated hereby is, and all information
  hereafter furnished by or on behalf of Borrower to Lender will be, true and
  accurate in every material respect on the date as of which such information is
  dated or certified; and none of such information is or will be incomplete by
  omitting to state any material fact necessary to make such information not
  misleading.

  SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and agrees
  that Lender, without independent investigation, is relying upon the above
  representations and warranties in extending the Loans to Borrower. Borrower
  further agrees that the foregoing representations and warranties shall be
  continuing in nature and shall remain in full force and effect during the term
  of this Agreement.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

  LITIGATION. Promptly inform Lender in writing of (a) all material adverse
  changes in Borrower's financial condition, (b) all existing and all threatened
  litigation, claims, investigations, administrative proceedings or similar
  actions affecting Borrower or any Guarantor which could materially affect the
  financial condition of Borrower or the financial condition of any Guarantor,
  and (c) the creation, occurrence or assumption by Borrower of any actual or
  contingent liabilities not permitted under this Agreement.

  FINANCIAL RECORDS. Maintain its books and records in accordance with generally
  accepted accounting principles, applied on a consistent basis, and permit
  Lender to examine, audit and make and take away copies or reproductions of
  Borrower's books and records at all reasonable times. If Borrower now or at
  any time hereafter maintains any records (including without limitation
  computer generated records and computer software programs for the generation
  of such records) in the possession of a third party, Borrower, upon request of
  Lender, shall notify such party to permit Lender free access to such records
  at all reasonable times and to provide Lender with copies of any records it
  may request, all at Borrower's expense.

  ADDITIONAL INFORMATION. Furnish such additional information and statements,
  lists of assets and liabilities, agings of receivables and payables, inventory
  schedules, budgets, forecasts, tax returns, and other reports with respect to
  Borrower's financial condition and business operations as Lender may request
  from time to time.

  INSURANCE. Maintain fire and other risk insurance, public liability insurance,
  and such other insurance as Lender may require with respect to Borrower's
  properties and operations, in form, amounts, coverages and with insurance
  companies reasonably acceptable to Lender. Borrower, upon request of Lender,
  will deliver to Lender from time to time the policies or certificates of
  insurance in form satisfactory to Lender, including stipulations that
  coverages will not be cancelled or diminished without at least thirty (30)
  days' prior written notice to Lender. In connection with all policies covering
  assets in which Lender holds or is offered a Security Interest for the Loans,
  Borrower will provide Lender with such loss payable or other endorsements as
  Lender may require.

  INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on each
  existing insurance policy showing such information as Lender may reasonably
  request, including without limitation the following: (a) the name of the
  insurer; (b) the risks insured; (c) the amount of the policy; (d) the
  properties insured; (e) the then current property values on the basis of which
  insurance has been obtained, and the manner of determining those values; and
  (f) the expiration date of the policy.

  GUARANTIES. Prior to or contemporaneously with the execution of this
  Agreement, furnish to Lender guaranty agreements executed by the guarantors
  named below covering such Loans or other Indebtedness and otherwise being in
  form and substance satisfactory to Lender in its sole and absolute discretion:

             GUARANTORS
             ----------

             INTEGRATED DENTAL TECHNOLOGIES, INC.
             RYKER DENTAL OF KENTUCKY, INC.
             BIO-DENTAL TECHNOLOGIES CORPORATION
             ZILA PHARMACEUTICALS, INC.
             ZILA TECHNOLOGIES, INC.
             INTER-CAL CORPORATION
             OXYCAL LABORATORIES, INC.
             OXYCAL EXPORT, INC.

  OTHER AGREEMENTS. Comply with all terms and conditions of all other
  agreements, whether now or hereafter existing, between Borrower and any other
  party and notify Lender immediately in writing of any default in connection
  with any other such agreements.

  LOAN FEES AND CHARGES. In addition to all other agreed upon fees and charges,
  pay the following: COMMITMENT FEE $61,500.00.

  LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
  operations, unless specifically consented to the contrary by Lender in
  writing.

  TAXES, CHARGES AND LIENS. Pay and discharge when due all of its indebtedness
  and obligations, including without limitation all assessments, taxes,
  governmental charges, levies and liens, of every kind and nature, imposed upon
  Borrower or its properties, income, or profits, prior to the date on which
  penalties would attach, and all lawful claims that, if unpaid, might become a
  lien or charge upon any of Borrower's properties, income, or profits; provided
  however, Borrower will not be required to pay and discharge any such
  assessment, tax, charge, levy, lien or claim so long as (a) the legality of
  the same shall be contested in good faith by appropriate proceedings, and (b)
  Borrower shall have established on its books adequate reserves with respect to
  such contested assessment, tax, charge, levy, lien, or claim in accordance
  with generally accepted accounting principles. Borrower, upon demand of
  Lender, will furnish to Lender evidence of payment of the assessments, taxes,
  charges, levies, liens and claims and will authorize the appropriate
  governmental official to deliver to Lender at any time a written statement of
  any assessments, taxes, charges, levies, liens and claims against Borrower's
  properties, income, or profits.

  PERFORMANCE. Perform and comply with all terms, conditions, and provisions set
  forth in this Agreement and in the Related Documents in a timely manner, and
  promptly notify Lender if Borrower learns of the occurrence of any event which
  constitutes an Event of Default under this Agreement or under any of the
  Related Documents.

  OPERATIONS. Conduct its business affairs in a reasonable and prudent manner
  and in compliance with all applicable federal, state and municipal laws,
  ordinances, rules and regulations respecting its properties, charters,
  businesses and operations, including without limitation, compliance with the
  Americans With Disabilities Act, all applicable environmental statutes,
  rules, regulations and ordinances and with all minimum funding standards and
  other requirements of ERISA and other laws applicable to Borrower's employee
  benefit plans.

  COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
  WITHIN FORTY-FIVE (45) DAYS AFTER EACH FISCAL QUARTER with a certificate
  executed by Borrower's chief financial officer, or other officer or person
  acceptable to Lender, (a) certifying that the representations and warranties
  set forth in this Agreement are true and correct as of the date of the
  certificate and that, as of the date of the certificate, no Event of Default
  exists under this Agreement, and (b) demonstrating compliance with all
  financial covenants set forth in this Agreement.

  ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all respects
  with all federal, state and local environmental laws, statutes, regulations
  and ordinances; not cause or permit to exist, as a result of an intentional or
  unintentional action or omission on its part or on the part of any third
  party, on property owned and/or occupied by Borrower, any environmental
  activity where damage may result to the environment, unless such environmental
  activity is pursuant to and in compliance with the conditions of a permit
  issued by the appropriate federal, state or local governmental authorities;
  and furnish to Lender promptly and in any event within thirty (30) days after
  receipt thereof a copy of any notice, summons, lien, citation, directive,
  letter or other communication from any governmental agency or instrumentality
  concerning any intentional or unintentional action or omission on Borrower's
  part in connection with any environmental activity whether or not there is
  damage to the environment and/or other natural resources.











<PAGE>   4
                                LOAN AGREEMENT
12-01-2000                        (Continued)                             Page 4
Loan No
--------------------------------------------------------------------------------
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     BORROWING BASE CERTIFICATE.  Within 45 days after each month, Borrower
     shall deliver to Lender a borrowing base certificate, in form and detail
     satisfactory to Lender, along with such supporting documentation as Lender
     may request, including without limitation, an accounts receivable aging
     report and/or a list or schedule of Borrower's accounts receivable,
     inventory and/or equipment.

     ADDITIONAL ASSURANCES.  Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, financing
     statements, instruments, documents and other agreements as Lender or its
     attorneys may reasonably request to evidence and secure the Loans and to
     perfect all Security Interests.


NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

     MAINTAIN BASIC BUSINESS.  Engage in any business activities substantially
     different than those in which Borrower is presently engaged.

     CONTINUITY OF OPERATIONS.  Cease operations, liquidate, dissolve or merge
     or consolidate with or into any other entity.

     INDEBTEDNESS.  Create, incur or assume additional indebtedness for borrowed
     money, including capital leases, or guarantee any indebtedness owing by
     others, other than (a) current unsecured trade debt incurred in the
     ordinary course of business, (b) indebtedness owing to Lender, (c)
     borrowings outstanding as of the date hereof and disclosed to Lender in
     writing, and (d) any borrowings otherwise approved by Lender in writing.

     LIENS.  Mortgage, assign, pledge, grant a security interest in or otherwise
     encumber Borrower's assets, except as allowed as a Permitted Lien.

     TRANSFER OF ASSETS.  Transfer, sell or otherwise dispose of any of
     Borrower's assets other than in the ordinary course of business.

     CHANGE IN MANAGEMENT.  Permit a change in the senior executive or
     management personnel of Borrower.

     TRANSFER OF OWNERSHIP.  Permit the sale, pledge or other transfer of any
     ownership interest in Borrower.

CONDITIONS PRECEDENT TO ADVANCES.  Lender's obligation to make any Advances or
to provide any other financial accommodations to or for the benefit of Borrower
hereunder shall be subject to the conditions precedent that as of the date of
such advance or disbursement and after giving effect thereto (a) all
representations and warranties make to Lender in this Agreement and the Related
Documents shall be true and correct as of and as if made on such date, (b) no
material adverse change in the financial condition of Borrower or any Guarantor
since the effective date of the most recent financial statements furnished to
Lender, or in the value of any Collateral, shall have occurred and be
continuing, (c) no event has occurred and is continuing, or would result from
the requested advance or disbursement, which with notice or lapse of time, or
both, would constitute an Event of Default, (d) no Guarantor has sought,
claimed or otherwise attempted to limit, modify or revoke such Guarantor's
guaranty of any Loan, and (e) Lender has received all Related Documents
appropriately executed by Borrower and all other proper parties.

ADDENDUM.  An addendum, titled "ADDENDUM", is attached to this document and by
this reference is made a part of this document just as if all the provisions,
terms and conditions of the ADDENDUM had been fully set forth in this document.

RIGHT OF SETOFF.  Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or any other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of Default
under this Agreement:

     DEFAULT ON INDEBTEDNESS.  Failure of Borrower to make any payment when due
     on any of the indebtedness.

     OTHER DEFAULTS.  Failure of Borrower, any Guarantor or any Grantor to
     comply with or to perform when due any other term, obligation, covenant or
     condition contained in this Agreement, the Note or in any of the other
     Related Documents, or failure of Borrower to comply with or to perform any
     other term, obligation, covenant or condition contained in any other
     agreement now existing or hereafter arising between Lender and Borrower.

     FALSE STATEMENTS.  Any warranty, representation or statement made or
     furnished to Lender under this Agreement or the Related Documents is false
     or misleading in any material respect.

     DEFAULT TO THIRD PARTY.  The occurrence of any event which permits the
     acceleration of the maturity of any indebtedness owing by Borrower, Grantor
     or any Guarantor to any third party under any agreement or undertaking.

     BANKRUPTCY OR INSOLVENCY.  If the Borrower, Grantor or any Guarantor: (i)
     becomes insolvent, or makes a transfer in fraud of creditors, or makes an
     assignment for the benefit of creditors, or admits in writing its inability
     to pay its debts as they become due; (ii) generally, is not paying its
     debts as such debts become due; (iii) has a receiver, trustee or custodian
     appointed for, or take possession of, all or substantially all of the
     assets of such party or any of the Collateral, either in a proceeding
     brought by such party or in a proceeding brought against such party and
     such appointment is not discharged or such possession is not terminated
     within sixty (60) days after the effective date thereof or such party
     consents to or acquiesces in such appointment or possession; (iv) files a
     petition for relief under the United States Bankruptcy Code or any other
     present or future federal or state insolvency, bankruptcy or similar laws
     (all of the foregoing hereinafter collectively called "APPLICABLE
     BANKRUPTCY LAW") or an involuntary petition for relief is filed against
     such party under any Applicable Bankruptcy Law and such involuntary
     petition is not dismissed within sixty (60) days after the filing thereof,
     or an order for relief naming such party is entered under any Applicable
     Bankruptcy Law, or any composition, rearrangement, extension,
     reorganization or other relief of debtors now or hereafter existing is
     requested or consented to by such party; (v) fails to have discharged
     within a period of sixty (60) days any attachment, sequestration or similar
     writ levied upon any property of such party; or (vi) fails to pay within
     thirty (30) days any final money judgment against such party.

     LIQUIDATION, DEATH AND RELATED EVENTS.  If Borrower, Grantor or any
     Guarantor is an entity, the liquidation, dissolution, merger or
     consolidation of any such entity or, if any of such parties is an
     individual, the death or legal incapacity of any such individual.

     CREDITOR OR FORFEITURE PROCEEDINGS.  Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower, any creditor
     of any Grantor against any collateral securing the indebtedness, or by any
     governmental agency.

     VIOLATION OF LAW.  Any of the Real Property and/or improvements, or any use
     of any of the Real Property and/or improvements violates any law,
     ordinance, regulation or rule (Federal, state or local).

EFFECT OF AN EVENT OF DEFAULT.  If any Event of Default shall occur, Lender
may, at its option, without further notice or demand, (a) terminate all
commitments and obligations of Lender to make Loans to Borrower, if any, (b)
declare all Loans and any other indebtedness immediately due and payable, (c)
refuse to advance any additional amounts under the Note or to provide any other
financial accommodations under this Agreement, or (d) exercise all the rights
and remedies provided in the Note or in any of the Related Documents or
available at law, in equity, or otherwise; provided, however, if any Event of
Default of the type described in the "Bankruptcy or Insolvency" subsection
above shall occur, all Loans and any other indebtedness shall automatically
become due and payable, without any notice, demand or action by Lender. Except
as may be prohibited by applicable law, all of Lender's rights and remedies
shall be cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an obligation
of Borrower or of any Grantor shall not affect Lender's right to declare a
default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS.

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to
     the matters set forth in this Agreement. No alteration of or amendment to
     this Agreement shall be effective unless given in writing and signed by
     the party or parties sought to be charged or bound by the alteration or
     amendment.

     APPLICABLE LAW. This Agreement has been delivered to Lender and accepted
     by Lenders in the State of Arizona. Subject to the provisions on
     arbitration, this Agreement shall be governed by and construed in
     accordance with the laws of the State of Arizona without regard to any
     conflict of laws or provisions thereof.

     JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
     VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
     HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
     CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER
     ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT, AND ANY OTHER
     RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN LENDER AND THE BORROWER. THIS
     PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
     DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS.

     ARBITRATION. Lender and Borrower agree that upon the written demand of
     either party, whether made before or after the institution of







<PAGE>   5
12-01-2000                      LOAN AGREEMENT                        Page 5
Loan No                          (Continued)
============================================================================

    any legal proceedings, but prior to the rendering of any judgment in that
    proceeding, all disputes, claims and controversies between them, whether
    individual, joint, or class in nature, arising from this Agreement, any
    Related Document or otherwise, including without limitation contract
    disputes and tort claims, shall be resolved by binding arbitration pursuant
    to the Commercial Rules of the American Arbitration Association ("AAA"). Any
    arbitration proceeding held pursuant to this arbitration provision shall be
    conducted in the city nearest the Borrower's address having an AAA regional
    office, or at any other place selected by mutual agreement of the parties.
    No act to take or dispose of any Collateral shall constitute a waiver of
    this arbitration agreement or be prohibited by this arbitration agreement.
    This arbitration provision shall not limit the right of either party during
    any dispute, claim or controversy to seek, use, and employ ancillary, or
    preliminary rights and/or remedies, judicial or otherwise, for the purposes
    of realizing upon, preserving, protecting, foreclosing upon or proceeding
    under forcible entry and detainer for possession of, any real or personal
    property, and any such action shall not be deemed an election of remedies.
    Such remedies include, without limitation, obtaining injunctive relief or a
    temporary restraining order, invoking a power of sale under any deed of
    trust or mortgage, obtaining a writ of attachment or imposition of a
    receivership, or exercising any rights relating to personal property,
    including exercising the right of set-off, or taking or disposing of such
    property with or without judicial process pursuant to the Uniform Commercial
    Code. Any disputes, claims, or controversies concerning the lawfulness or
    reasonableness of an act, or exercise of any right or remedy, concerning any
    Collateral, including any claim to rescind, reform, or otherwise modify any
    agreement relating to the Collateral, shall also be arbitrated; provided,
    however that no arbitrator shall have the right or the power to enjoin or
    restrain any act of either party. Judgment upon any award rendered by any
    arbitrator may be entered in any court having jurisdiction. The statue of
    limitations, estoppel, waiver, laches and similar doctrines which would
    otherwise be applicable in an action brought by a party shall be applicable
    in any arbitration proceeding, and the commencement of an arbitration
    proceeding shall be deemed the commencement of any action for these
    purposes. The Federal Arbitration Act (Title 9 of the United States Code)
    shall apply to the construction, interpretation, and enforcement of this
    arbitration provision.

    CAPTION HEADINGS. Caption headings in this Agreement are for convenience
    purposes only and are not to be used to interpret or define the provisions
    of this Agreement.

    CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's sale
    or transfer, whether now or later, of one or more participation interests in
    the Loans to one or more purchasers, whether related or unrelated to Lender.
    Lender may provide, without any limitation whatsoever, to any one or more
    purchasers, or potential purchasers, any information or knowledge Lender may
    have about Borrower or about any other matter relating to the Loan, and
    Borrower hereby waives any rights to privacy it may have with respect to
    such matters. Borrower additionally waives any and all notices of sale of
    participation interests, as well as all notices of any repurchase of such
    participation interests.

    COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
    expenses, including attorneys' fees, incurred in connection with the
    preparation, execution, enforcement, modification and collection of this
    Agreement or in connection with the Loans made pursuant to this Agreement.
    Lender may hire one or more attorneys to help collect the indebtedness if
    Borrower does not pay, and Borrower will pay Lender's reasonable attorneys'
    fees.

    NOTICES. All notices required to be given under this Agreement shall be
    given in writing, and shall be effective when actually delivered or when
    deposited with a nationally recognized overnight courier or deposited in the
    United States mail, first class, postage prepaid, addressed to the party to
    whom the notice is to be given at the address shown above. Any party may
    change its address for notices under this Agreement by giving formal written
    notice to the other parties, specifying that the purpose of the notice is to
    change the party's address. To the extent permitted by applicable law, if
    there is more than one Borrower, notice to any Borrower will constitute
    notice to all Borrowers. For notice purposes, Borrower will keep Lender
    informed at all times of Borrower's current address(es).

    SEVERABILITY. If a court of competent jurisdiction finds any provision of
    this Agreement to be invalid or unenforceable as to any person or
    circumstance, such finding shall not render that provision invalid or
    unenforceable as to any other persons or circumstances. If feasible, any
    such offending provision shall be deemed to be modified to be within the
    limits of enforceability or validity; however, if the offending provision
    cannot be so modified, it shall be stricken and all other provisions of this
    Agreement in all other respects shall remain valid and enforceable.

    COUNTERPARTS. This Agreement may be executed in one or more counterparts,
    each of which shall be deemed an original and all of which together shall
    constitute the same document. Signature pages may be detached from the
    counterparts to a single copy of this Agreement to physically form one
    document.

    SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
    behalf of Borrower shall bind its successors and assigns and shall inure to
    the benefit of Lender, its successors and assigns. Borrower shall not,
    however, have the right to assign its rights under this Agreement or any
    interest therein, without the prior written consent of Lender.

    SURVIVAL. All warranties, representations, and covenants made by Borrower in
    this Agreement or in any certificate or other instrument delivered by
    Borrower to Lender under this Agreement shall be considered to have been
    relied upon by Lender and will survive the making of the Loan and delivery
    to Lender of the Related Documents, regardless of any investigation made by
    Lender or on Lender's behalf.

    TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
    Agreement.

    WAIVER. Lender shall not be deemed to have waived any rights under this
    Agreement unless such waiver is given in writing and signed by Lender. No
    delay or omission on the part of Lender in exercising any right shall
    operate as a waiver of such right or any other right. A waiver by Lender of
    a provision of this Agreement shall not prejudice or constitute a waiver of
    Lender's right otherwise to demand strict compliance with that provision or
    any other provision of this Agreement. No prior waiver by Lender, nor any
    course of dealing between Lender and Borrower, or between Lender and any
    Grantor or Guarantor, shall constitute a waiver of any of Lender's rights or
    of any obligations of Borrower or of any Grantor as to any future
    transactions. Whenever the consent of Lender is required under this
    Agreement, the granting of such consent by Lender in any instance shall not
    constitute continuing consent in subsequent instances where such consent is
    required, and in all cases such consent may be granted or withheld in the
    sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT,
AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF THE DATE SET
FORTH ABOVE.

BORROWER:

Zila Inc., a Delaware corporation

By: /s/ Joseph Hines
   ------------------------------
   Joseph Hines, President


LENDER:

Bank One, Arizona, NA

By: /s/ Hope Levin
   ------------------------------
   Authorized Officer
<PAGE>   6
                                    ADDENDUM

--------------------------------------------------------------------------------

Borrower:    Zila, Inc. a Delaware         Lender:    Bank One, Arizona, NA
             corporation                              Commercial Banking Group
             5227 North 7th Street                    201 N. Central Avenue
             Phoenix, AZ 85014-2800                   Phoenix, AZ 85004

--------------------------------------------------------------------------------

This ADDENDUM is attached to and by this reference is made a part of the
Business Loan Agreement dated December 1, 2000, and executed by Bank One,
Arizona, NA ("Lender") and ZILA, INC. a Delaware corporation ("Borrower").

BORROWING BASE. The definition of Borrowing Base is hereby deleted and the
following is inserted in its place: The words "Borrowing Base" mean the sum of
(i) 80.0% of the aggregate amount of Eligible Accounts, plus (ii) the lesser of
(a) 50.0% of the aggregate amount of Eligible Inventory or (b) 50.0% of the
aggregate amount of Eligible Accounts.

ADDITIONAL AFFIRMATIVE COVENANT - CERTAIN REPORTS. Notwithstanding any other
provision to the contrary herein or in the Related Documents, with each
borrowing base certificate to be delivered by Borrower to Lender hereunder,
Borrower shall deliver to Lender an aging and listing of all accounts
receivable, which itemizes each account debtor by name, states the total amount
payable to Borrower and contains a breakdown indicating future amounts due and
when due, current amounts due, amounts 30-59 days past due, 60-89 days past due,
and 90 or more days past due, and reflecting any credit adjustments, returns and
allowances.

ADDITIONAL AFFIRMATIVE COVENANT - ANNUAL BUDGET PROJECTIONS. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will provide Lender with, on or before September 15 of each fiscal year
end of Borrower, annual budget projections including a balance sheet, income
statement, and statement of cash flows, for the period ending July 31 of the
following year, such annual budget projections to be prepared internally and
being in a form reasonably acceptable to Lender.

ADDITIONAL AFFIRMATIVE COVENANT - FINANCIAL STATEMENTS. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will furnish Lender with, as soon as available, but in no event later
than ninety (90) days after the end of its fiscal year end, Borrower Form 10K
Financial Report.

ADDITIONAL AFFIRMATIVE COVENANT - QUARTERLY FINANCIAL STATEMENTS. Borrower
further covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will furnish Lender with, as soon as available, but in no event
later than forty-five (45) days after the end of each fiscal quarter, Borrower's
Form 10Q Financial Report.

ADDITIONAL AFFIRMATIVE COVENANT - CONSOLIDATING INTERIM FINANCIAL STATEMENTS.
Borrower further covenants and agrees with Lender that, while this Agreement is
in effect, Borrower will furnish Lender with, as soon as available, but in no
event later than sixty (60) days after the end of each fiscal quarter, the
balance sheet, income statement and statement of changes in financial position
of Borrower and each of its subsidiaries on a consolidating basis for the
quarter then ended, prepared and certified, subject to year end review
adjustments, as correct to the best knowledge and belief by Borrower's chief
financial officer or other officer or person acceptable to Lender.

ADDITIONAL AFFIRMATIVE COVENANT - DEBT TO TANGIBLE NET WORTH RATIO. Borrower
further covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will comply at all times with the following ratio: Maintain as
of the end of each fiscal quarter; a ratio of (a) total liabilities, to (b)
Tangible Net Worth of less than 1.0 to 1.0.

ADDITIONAL AFFIRMATIVE COVENANT - CURRENT RATIO. Borrower further covenants and
agrees with Lender that, while this Agreement is in effect, Borrower will comply
at all times with the following covenant: Maintain, as of the end of each fiscal
quarter, a ratio of current assets to current liabilities in excess of 1.50 to
1.0.

ADDITIONAL AFFIRMATIVE COVENANT - DEBT SERVICE COVERAGE RATIO. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will comply at all times with the following covenant: Maintain on a
consolidated basis, as of the end of each fiscal quarter, a ratio of (a) net
income plus Depreciation and Amortization plus nonrecurring merger related
expenses for the twelve month period then ending, to (b) current maturities of
long term debt for the same such twelve month period, of not less than 1.25 to
1.0.

ADDITIONAL AFFIRMATIVE COVENANT - WORKING CAPITAL. Borrower further covenants
and agrees with Lender that, while this Agreement is in effect, Borrower will
comply at all times with the following covenant: Maintain as of the end of each
fiscal quarter, Working Capital in excess of $10,000,000.00.
<PAGE>   7
For purposes of this Agreement and to the extent the following terms are
utilized in this Agreement: The term "Tangible Net Worth" shall mean Borrower's
total assets excluding all intangible assets (including, without limitation,
goodwill, trademarks, patents, copyrights, organization expenses, and similar
intangible items) less total liabilities. The term "Subordinated Debt" shall
mean all indebtedness owing by Borrower which has been subordinated by written
agreement to all indebtedness now or hereafter owing by Borrower to Lender,
such agreement to be in form and substance acceptable to Lender. The term
"Distributions", shall mean all dividends and other distributions made by
borrower to its shareholders, partners, owners or members, as the case may be,
other than salary, bonuses and other compensation for services expended in the
current accounting period. EXCEPT AS PROVIDED ABOVE, ALL COMPUTATIONS MADE TO
DETERMINE COMPLIANCE WITH THE REQUIREMENTS CONTAINED IN THIS PARAGRAPH SHALL BE
MADE IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, APPLIED ON A
CONSISTENT BASIS, AND CERTIFIED BY BORROWER AS BEING TRUE AND CORRECT.

AVAILABILITY FEE. Borrower shall pay to Lender an availability fee
("Availability Fee") with respect to each calendar quarter during the term of
the Note, based on the unused amount of the Note. The Availability Fee shall be
an amount equal to A x (B-C) x (D/E), where A equals thirty hundredths of a
percent (.30%); B equals the original amount of the Note; C equals the average
daily outstanding principal balance of the Line of Credit during the calendar
quarter; D equals the actual number of days elapsed during the calendar
quarter; and E equals 360. Each Availability Fee shall be due and payable to
Lender quarterly in arrears, within fifteen (15) days after Borrower's receipt
of an invoice for the Availability Fee from Lender.

ADDITIONAL NEGATIVE COVENANT -- CAPITAL EXPENDITURES. Borrower further
covenants and agrees with Lender that while this Agreement is in effect,
Borrower and all of its subsidiaries (excluding Oxycal Laboratories,
Incorporated) shall not, without the prior written consent of Lender, make or
contract to make capital expenditures, including leasehold improvements, during
any fiscal year in excess of $1,250,000.00, and Oxycal Laboratories,
Incorporated shall not, without the prior written consent of Lender, make or
contract to make capital expenditures, including leasehold improvements, during
the two (2) fiscal year period ending July 31, 2001 in excess of $6,800,000.00.
This limitation is to be measured as follows: current period net fixed assets
plus 12 months depreciation expense less prior period net fixed assets less
gain (plus loss) on sale of assets less capitalized interest.

ADDITIONAL NEGATIVE COVENANT -- INDEBTEDNESS. Borrower further covenants and
agrees with Lender that while this Agreement is in effect, Borrower and all of
its subsidiaries shall not, without the prior written consent of Lender,
create, incur or assume additional indebtedness for borrowed money, including
capital leases, or guaranty any indebtedness owing by others, other than (A)
current unsecured trade debt incurred in the ordinary course of business, (B)
indebtedness owing to Lender, (C) borrowings outstanding as of the date hereof
and disclosed to Lender in writing, (D) operating lease indebtedness of up to
$600,000.00 (excluding operating leases from Bank One) in the aggregate, and
(E) borrowings from others approved by Lender in writing.

ADDITIONAL EVENT OF DEFAULT. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Oxycal Laboratories,
Incorporated to Lender under any agreement or undertaking shall constitute an
Event of Default under this Agreement.


THIS ADDENDUM IS EXECUTED DECEMBER 1, 2000


BORROWER:


ZILA, INC., a Delaware corporation


BY: /s/ Joseph Hines
    --------------------------------
    Joseph Hines, President


LENDER:


BANK ONE, ARIZONA, NA


BY: /s/ Hope Berman Levin
    ----------------------------------
    Hope Berman Levin, Vice President