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                                CREDIT AGREEMENT

                                 by and between

             GEL TECH, L.L.C., an Arizona limited liability company


                                       and


                 IMPERIAL BANK, a California banking corporation






                                   Dated as of

                                January 11, 2000






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<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

RECITALS ...................................................................   1

ARTICLE 1      DEFINITION OF TERMS .........................................   2
     1.1       Definitions .................................................   2
     1.2       References ..................................................   8
     1.3       Accounting Terms ............................................   8

ARTICLE 2      THE RLC .....................................................   9
     2.1       RLC Commitment ..............................................   9
     2.2       Revolving Line of Credit ....................................   9
     2.3       RLC Payments ................................................   9
     2.4       Excess Balance Payment ......................................  10
     2.5       Conditions ..................................................  10
     2.6       Other RLC Advances by Lender ................................  10
     2.7       Assignment ..................................................  10

ARTICLE 3      PAYMENTS AND FEES PROVISIONS ................................  12
     3.1       Payments ....................................................  12
     3.2 (a)   RLC Non-Use Fee .............................................  12
         (b)   RLC Fee .....................................................  13
     3.3       Computations ................................................  13
     3.4       Maintenance of Accounts .....................................  13

ARTICLE 4      SECURITY ....................................................  14
     4.1       Security ....................................................  14
     4.2       Security Documents ..........................................  14

ARTICLE 5      CONDITIONS PRECEDENT ........................................  15
     5.1       Initial or Any Subsequent Advance ...........................  15
     5.2       No Event of Default .........................................  16
     5.3       No Material Adverse Effect ..................................  16
     5.4       Representations and Warranties ..............................  16

ARTICLE 6      REPRESENTATIONS AND WARRANTIES ..............................  17
     6.1       Recitals ....................................................  17
     6.2       Organization and Good Standing ..............................  17
     6.3       Authorization and Power .....................................  17
     6.4       Security Documents ..........................................  17
     6.5       No Conflicts or Consents ....................................  17
     6.6       No Litigation ...............................................  17

                                      -i-
<PAGE>
     6.7       Financial Condition .........................................  18
     6.8       Taxes .......................................................  18
     6.9       No Stock Purchase ...........................................  18
     6.10      Advances ....................................................  18
     6.11      Enforceable Obligations .....................................  18
     6.12      No Default ..................................................  18
     6.13      Significant Debt Agreements .................................  18
     6.14      ERISA .......................................................  19
     6.15      Compliance with Law .........................................  19
     6.16      Solvent .....................................................  19
     6.17      Investment Borrower Act .....................................  19
     6.18      Title .......................................................  19
     6.19      Survival of Representations, Etc. ...........................  19
     6.20      Environmental Matters .......................................  19
     6.21      Licenses, Tradenames ........................................  19
     6.22      Year 2000 Compliance ........................................  20

ARTICLE 7      AFFIRMATIVE COVENANTS .......................................  21
     7.1       Financial Statements, Reports and Documents .................  21
     7.2       Maintenance of Existence and Rights; Conduct of
                 Business; Management ......................................  22
     7.3       Operations and Properties ...................................  22
     7.4       Authorizations and Approvals ................................  22
     7.5       Compliance with Law .........................................  22
     7.6       Payment of Taxes and Other Indebtedness .....................  22
     7.7       Compliance with Significant Debt Agreements and
                 Other Agreements ..........................................  22
     7.8       Compliance with Credit Documents ............................  22
     7.9       Notice of Default ...........................................  23
     7.10      Other Notices ...............................................  23
     7.11      Books and Records; Access; Audits ...........................  23
     7.12      ERISA Compliance ............................................  23
     7.13      Further Assurances ..........................................  23
     7.14      Insurance ...................................................  24
     7.15      Year 2000 Compliance ........................................  24
     7.16      Deposit Accounts ............................................  25

ARTICLE 8      NEGATIVE COVENANTS ..........................................  26
     8.1       Existence ...................................................  26
     8.2       Amendments to Organizational Documents ......................  26
     8.3       Margin Stock ................................................  26
     8.4       Distributions ...............................................  26
     8.5       Liens .......................................................  26
     8.6       Transfer Collateral .........................................  26
     8.7       Merger; Sale of Assets ......................................  26

                                      -ii-
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     8.8       Indebtedness ................................................  26
     8.9       Financial Covenants .........................................  27

ARTICLE 9      EVENTS OF DEFAULT ...........................................  28
     9.1       Events of Default ...........................................  28
     9.2       Remedies Upon Event of Default ..............................  30
     9.3       Performance by Lender .......................................  31

ARTICLE 10     MISCELLANEOUS ...............................................  32
     10.1      Modification ................................................  32
     10.2      Waiver ......................................................  32
     10.3      Payment of Expenses .........................................  32
     10.4      Notices .....................................................  32
     10.5      Governing Law; Jurisdiction, Venue; Waiver of Jury Trial ....  33
     10.6      Invalid Provisions ..........................................  33
     10.7      Binding Effect ..............................................  34
     10.8      Entirety ....................................................  34
     10.9      Headings ....................................................  34
     10.10     Survival ....................................................  34
     10.11     No Third Party Beneficiary ..................................  34
     10.12     Time ........................................................  34
     10.13     Reference Provision .........................................  34
     10.14     Schedules and Exhibits Incorporated .........................  36
     10.15     Counterparts ................................................  36
     10.16     Participations ..............................................  36



EXHIBIT "A"    Form of Advance  Notice
EXHIBIT "B"    Form of Compliance Certificate
EXHIBIT "C"    Form of Borrowing Base Certificate
EXHIBIT "D"    Form of Waiver/Release of Lien Rights

                                     -iii-
<PAGE>
                                CREDIT AGREEMENT


     BY THIS CREDIT  AGREEMENT  (together with any amendments or  modifications,
the "Credit  Agreement"),  entered into as of this 11th day of January,  2000 by
and between GEL TECH, L.L.C., an Arizona limited liability company ("Borrower"),
and  IMPERIAL  BANK,  a  California  banking  corporation  (the  "Lender"),   in
consideration  of the mutual  promises  herein  contained and for other valuable
consideration, the parties hereto do hereby agree as follows:

                                    RECITALS

     A. Borrower has  requested  that Lender  establish the following  financial
accommodations:

          (1) A revolving line of credit  facility  (the "RLC") in the principal
amount of ONE  MILLION  AND NO/100  DOLLARS  ($1,000,000.00)  for the purpose of
funding Borrower's short-term working capital.

     B. As a condition for extending such financial  accommodations,  Lender has
required that Borrower enter into this Credit Agreement,  establishing the terms
and conditions thereof.

                                      -1 -
<PAGE>
                                    ARTICLE 1

                               DEFINITION OF TERMS

     1.1.  Definitions.  For the purposes of this Credit  Agreement,  unless the
context  otherwise  requires,  the  following  terms  shall have the  respective
meanings assigned to them in this Article 1 or in the Section hereof referred to
below:

          "Advance" means an RLC Advance.

          "Affiliate"  of  any  Person  means  any  Person  which,  directly  or
indirectly, Controls or is Controlled by such Person.

          "Authorized  Manager"  means one or more  managers  of  Borrower  duly
authorized  (and so certified to Lender by the member of Borrower  pursuant to a
borrowing authorization from time to time satisfactory to Lender in the exercise
of Lender's reasonable discretion),  acting alone, to request Advances under the
provisions  of  this  Credit  Agreement  and  execute  and  deliver   documents,
instruments,  agreements,  reports,  statements and  certificates  in connection
herewith.

          "Banking  Day" means a day of the year on which banks are not required
or authorized to close in Inglewood, California and/or Phoenix, Arizona.

          "Borrower": See the Preamble hereto.

          "Borrowing  Base" means the sum of (i) the  Eligible  Accounts  Amount
plus (ii) the Eligible Deposit Amount.

          "Borrowing Base Certificate" means a certificate  substantially in the
form attached hereto as Exhibit C.

          "Closing Date" means the date of delivery of this Credit Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Collateral" means all property subject to the Security Documents.

          "Control"  when used  with  respect  to any  Person  means the  power,
directly  or  indirectly,  to direct the  management  policies  of such  Person,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms  "controlling" and "controlled"  have meanings  correlative to the
foregoing.

          "Controlled Group" means,  severally and collectively,  the members of
the group  controlling,  controlled  by and/or in common  control  of  Borrower,
within the meaning of Section 4001(b) of ERISA.

                                      -2-
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          "Credit Agreement": See the Preamble hereto.

          "Credit  Documents" means this Credit  Agreement,  the Note (including
any renewals,  extensions and refundings thereof),  the Security Documents,  the
Triparty  Agreement and any written  agreements,  certificates or documents (and
with respect to this Credit  Agreement  and such other  written  agreements  and
documents,  any  amendments or  supplements  thereto or  modifications  thereof)
executed or delivered pursuant to the terms of this Credit Agreement.

          "Default  Rate" means at any time five percent (5%) per annum over the
then applicable interest rate.

          "Dollars"  and the sign "$" mean lawful  currency of the United States
of America.

          "Eligible  Accounts"  means those  accounts  receivable  of  Borrower,
except Eligible Accounts shall not include any of the following:

               (a) Account  balances over ninety (90) calendar days from invoice
          date.

               (b)  Accounts  with  respect  to which the  account  debtor is an
          officer, director,  shareholder,  employee, subsidiary or affiliate of
          Borrower.

               (c)  Accounts  with  respect to which 25% or more of the  account
          debtor's  total  accounts or  obligations  outstanding to Borrower are
          more than 90 calendar days from invoice date.

               (d)  As  to   accounts   representing   more  than  the   Maximum
          Concentration  Percentage of  Borrower's  total  accounts  receivable,
          outstanding at any time the balance in excess of Maximum Concentration
          Percentage   is  not  eligible,   where  the  "Maximum   Concentration
          Percentage" means 40% as to Borrower's accounts with Walgreens, Kmart,
          McKesson  Drug  and  Costco,  and  20% as to  all  other  accounts  of
          Borrower.

               (e) Accounts with respect to  international  transactions  unless
          insured  by an  insurance  company  acceptable  to  Lender in its sole
          discretion  or covered by letters of credit  issued or  confirmed by a
          bank acceptable to Lender or unless otherwise acceptable to Lender, in
          its sole and absolute discretion.

               (f) Credit  balances  greater than ninety (90) calendar days from
          invoice date.

                                      -3-
<PAGE>
               (g)  Accounts  where the account  debtor is a seller to Borrower,
          whereby a  potential  offset  (contra)  exists,  to the  extent of the
          offset.

               (h) Consignment or guaranteed sales.

               (i) Bill and hold accounts.

               (j) Contracts receivable.

               (k) Progress billings.

          "Eligible  Accounts  Amount"  means an amount  equal to fifty  percent
(50.0%) of the Eligible Accounts.

          "Eligible Deposit Amount" means an amount equal to one hundred percent
(100.0%) of all cash of Borrower on deposit with Lender plus all funds  invested
by Borrower with Lender.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
amended,  together  with all final and  permanent  regulations  issued  pursuant
thereto.  References  herein to sections and  subsections of ERISA are deemed to
refer to any successor or substitute provisions therefor.

          "Event of Default": See Section 9.1 hereof.

          "Exchange Act" means the Securities Exchange Act of 1934.

          "Financial Covenants": See Section 8.9 hereof.

          "GAAP"  means  those  generally  accepted  accounting  principles  and
practices  which are  recognized as such by the American  Institute of Certified
Public  Accountants  acting  through its Accounting  Principles  Board or by the
Financial  Accounting  Standards  Board or through other  appropriate  boards or
committees thereof and which are consistently  applied for all periods after the
date hereof so as to properly reflect the financial  condition,  and the results
of operations  and changes in the  financial  position,  of Borrower,  including
without limitation  accounting rules promulgated  pursuant to Regulations SX and
SK, except that any accounting  principle or practice  required to be changed by
the said Accounting Principles Board or Financial Accounting Standards Board (or
other appropriate board or committee of the said Boards) in order to continue as
a generally accepted accounting principle or practice may be so changed.

          "Governmental  Authority"  means  any  government  (or  any  political
subdivision  or  jurisdiction   thereof),   court,   bureau,   agency  or  other
governmental authority having jurisdiction over Borrower or any of its business,
operations or properties.

                                      -4-
<PAGE>

          "Indebtedness"  of a  Person  means  each  of the  following  (without
duplication):  (a) obligations of that Person to any other Person for payment of
borrowed  money,  (b) capital lease  obligations,  (c) notes and drafts drawn or
accepted by that Person payable to any other Person, whether or not representing
obligations  for borrowed  money (but without  duplication of  indebtedness  for
borrowed  money),  (d) any  obligation  for the  purchase  price of property the
payment of which is deferred  for more than one year or  evidenced  by a note or
equivalent instrument,  (e) guarantees of Indebtedness of third parties, and (f)
a recourse or nonrecourse payment obligation of any other Person that is secured
by a Lien on any  property  of the first  Person,  whether or not assumed by the
first  Person,  up to the fair market value (from time to time) of such property
(absent  manifest  evidence  to the  contrary,  the  fair  market  value of such
property  shall be the  amount  determined  under GAAP for  financial  reporting
purposes).

          "IP Security Agreement": See Section 4.1(b) hereof.

          "Lender": See the Preamble hereto.

          "Lien" means any lien, mortgage,  security interest, tax lien, pledge,
encumbrance,  conditional  sale or title  retention  arrangement,  or any  other
interest in property  designed to secure the repayment of  Indebtedness  whether
arising by agreement or under any statute or law, or otherwise.

          "Liquidity  Percentage" means at any time Borrower's  Eligible Deposit
Amount as a percentage of the RLC Balance.

          "Loan" or "Loans" means the RLC.

          "Material  Adverse  Effect" means any  circumstance or event which (i)
has any  material  adverse  effect upon the  validity or  enforceability  of any
Credit Document,  (ii) materially impairs the ability of Borrower to fulfill its
obligations under the Credit  Documents,  or (iii) causes an Event of Default or
any event which,  with notice or lapse of time or both, would become an Event of
Default.

          "Maturity Date" means the RLC Maturity Date.

          "Maximum RLC Loan Amount": See Section 2.1 hereof.

          "Net  Income"  means,  for any period,  the net income of Borrower for
such period, determined in accordance with GAAP.

          "Note" or "Notes" means the RLC Note.

          "Obligation"  means all present and future  indebtedness,  obligations
and liabilities of Borrower to Lender, and all renewals and extensions  thereof,
or any part thereof, arising pursuant to this Credit Agreement or represented by
the  Note,  including  without  limitation  the Loan and all  interest  accruing

                                      -5-
<PAGE>
thereon,  and attorneys' fees incurred in the enforcement or collection thereof,
regardless of whether such indebtedness, obligations and liabilities are direct,
indirect, fixed, contingent,  joint, several or joint and several; together with
all indebtedness,  obligations and liabilities of Borrower  evidenced or arising
pursuant to any of the other Credit  Documents,  and all renewals and extensions
thereof, or part thereof.

          "Payment Date" means the first day of each month, provided that if any
such  day is not a  Banking  Day,  then  such  Payment  Date  shall  be the next
successive Banking Day.

          "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation,  and  any
successor  to  all  or  substantially   all  of  the  Pension  Benefit  Guaranty
Corporation's functions under ERISA.

          "Permitted Liens" means:

               (a) Liens in Lender's favor.

               (b) Liens for taxes not delinquent.

               (c) Liens  resulting  from  purchase  money  financing  as to the
          personal property so financed and any sales proceeds therefrom.

          "Person"  includes an individual,  a corporation,  a joint venture,  a
partnership,   a  trust,  a  limited   liability   company,   an  unincorporated
organization or a government or any agency or political subdivision thereof.

          "Plan" means an employee defined benefit plan or other plan maintained
by  Borrower  for  employees  of Borrower  and covered by Title IV of ERISA,  or
subject to the minimum funding standards under Section 412 of the Code.

          "Prime Rate" means the interest rate per annum  publicly  announced by
Lender,  or its successors,  as its "prime rate" as in effect from time to time.
Borrower  acknowledges that the Prime Rate is not necessarily the best or lowest
rate  offered by Lender and Lender may lend to its  customers  at rates that are
at, above or below its Prime Rate.

          "Quarterly  End Date" means each March 31, June 30,  September  30 and
December 31.

          "Regulation  U"  means  Regulation  U  promulgated  by  the  Board  of
Governors  of the  Federal  Reserve  System,  12 C.F.R.  Part 221,  or any other
regulation hereafter promulgated by said Board to replace the prior Regulation U
and having substantially the same function.

          "Reportable  Event"  means  any  "reportable  event" as  described  in
Section  4043(b)  of ERISA  with  respect  to which the  thirty  (30) day notice
requirement has not been waived by the PBGC.

                                      -6-
<PAGE>
          "RLC": See Recital A hereof.

          "RLC Advance" means a disbursement of the proceeds of the RLC.

          "RLC Balance" means the aggregate  outstanding principal amount of all
RLC Advances.

          "RLC Commitment" means One Million And No/100 Dollars ($1,000,000.00).

          "RLC Fee": See Section 3.2(b) hereof.

          "RLC Maturity Date" means January 10, 2001.

          "RLC Non-Use Fee": See Section 3.2(a) hereof.

          "RLC Note" means that Revolving  Promissory Note of even date herewith
in the amount of the RLC Commitment, executed by Borrower and delivered pursuant
to the terms of this Credit Agreement,  together with any renewals,  extensions,
modifications or replacements thereof.

          "Security Agreement": See Section 4.1(a) hereof.

          "Security Documents": See Section 4.2 hereof.

          "Significant  Debt  Agreement"  means all documents,  instruments  and
agreements   executed  by  Borrower,   evidencing,   securing  or  ensuring  any
Indebtedness of Borrower or any guaranty in excess of $100,000.00 in outstanding
principal (or principal equivalent) amount.

          "Subordinated Debt" means Indebtedness of Borrower subordinated to the
payment of the Obligation pursuant to written agreements acceptable to Lender.

          "Subsidiary"  means  any  corporation  of which  more  than 50% of the
outstanding  shares of capital stock having  general voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation,
irrespective  of whether or not at the time stock of any other  class or classes
shall  have or  might  have  voting  power by  reason  of the  happening  of any
contingency, is at the time directly or indirectly owned by the Borrower, by the
Borrower  and  one  or  more  other  Subsidiaries,  or  by  one  or  more  other
Subsidiaries.

          "Triparty Agreement": See Section 5.1(k) hereof.

          "Variable  Rate"  means the rate per  annum  equal to the sum of three
percent  (3.0%) and the Prime Rate per annum as in effect from time to time. The
Variable Rate will change on each day that the "Prime Rate" changes.

                                      -7-
<PAGE>
          "Variable  Rate Advance"  means an Advance that bears  interest at the
Variable Rate.

     1.2 References.  Capitalized terms shall be equally  applicable to both the
singular  and the  plural  forms of the terms  therein  defined.  References  to
"Credit Agreement," "this Agreement," "herein," "hereof,"  "hereunder," or other
like words mean this  Credit  Agreement  as amended,  supplemented,  restated or
otherwise modified and in effect from time to time.

     1.3 Accounting Terms.  Except as expressly provided to the contrary herein,
all  accounting  terms shall be interpret ed and all  accounting  determinations
shall be made in accordance with GAAP,  except as otherwise  specifically  provi
ded for  herein.  To the extent any change in GAAP  affects any  computation  or
determination  required  to be mad e pursuant  to this  Credit  Agreement,  such
computation  or  determination  shall be made as if such  change in GAAP had not
occurred  unless  Borrower and Lender agree in writing on an  adjustment to such
computation or determination t o account for such change in GAAP.

                                      -8-
<PAGE>
                                    ARTICLE 2

                                     THE RLC

     2.1 RLC  Commitment.  Subject to the  conditions  herein set forth,  Lender
agrees to make the RLC available to or for the benefit of Borrower, and Borrower
agrees to draw upon the RLC,  in the  manner  and upon the terms and  conditions
herein expressed, amounts that shall not exceed the lesser of the following (the
"Maximum RLC Loan Amount"):

          (a) The RLC Commitment.

          (b) The Borrowing Base.

     2.2 Revolving Line of Credit.

          (a)  Subject  to the terms  and  conditions  set forth in this  Credit
Agreement,  the RLC  shall be a  revolving  line of  credit,  against  which RLC
Advances may be made to Borrower,  repaid by Borrower and new RLC Advances  made
to Borrower, as Borrower may request,  provided that (i) no RLC Advance shall be
made if an Event of Default  shall be  continuing,  (ii) no RLC Advance shall be
made that would cause the outstanding principal balance of the RLC to exceed the
Maximum RLC Loan Amount,  and (iii) no RLC Advance shall be made on or after the
RLC Maturity Date.

          (b) The RLC shall be evidenced by the RLC Note.

     2.3 RLC Payments. The RLC shall bear interest and be payable to Lender upon
the following terms and conditions:

          (a) Interest shall accrue on the unpaid principal of an RLC Advance at
the Variable Rate.

          (b) All interest  shall be computed on the basis of a 360-day year and
accrue on a daily basis for the actual number of days  elapsed.  All accrued and
unpaid interest  through the end of the preceding month shall be due and payable
on each Payment Date.

          (c) The  entire  unpaid  principal  balance,  all  accrued  and unpaid
interest,  and all other  amounts  payable  under the RLC Note  shall be due and
payable in full on the RLC Maturity Date.

          (d) Each request for an RLC Advance shall be substantially in the form
attached hereto as Exhibit "A" from an Authorized Officer and

                                      -9-
<PAGE>
shall,  in  addition to  complying  with the other  requirements  in this Credit
Agreement, specify the date and amount of the requested RLC Advance.

          (e) If any payment of interest  and/or  principal  is not  received by
Lender within ten (10) days of when such payment is due, then in addition to the
remedies conferred upon Lender under the Credit Documents, a late charge of five
percent  (5%) of the amount of the  installment  due and unpaid will be added to
the  delinquent  amount to  compensate  Lender for the expense of  handling  the
delinquency  for any payment past due in excess of ten (10) days,  regardless of
any notice and cure period.

          (f) Upon the  occurrence  of an Event of Default  and after  maturity,
including maturity upon acceleration,  the unpaid principal balance, all accrued
and unpaid interest and all other amounts payable  hereunder shall bear interest
at the Default Rate.

     2.4 Excess Balance Payment. There shall be due and payable from Borrower to
Lender,  and  Borrower  shall  repay to Lender,  within five (5) days of written
demand  from  Lender,  from time to time,  any  amount by which the  outstanding
principal balance of the RLC exceeds the Maximum RLC Loan Amount.

     2.5  Conditions.  Lender shall have no  obligation  to make any RLC Advance
unless and until all of the conditions and requirements of this Credit Agreement
are fully  satisfied.  However,  Lender in its sole and absolute  discretion may
elect to make one or more RLC Advances prior to full satisfaction of one or more
such conditions and/or requirements. Notwithstanding that such an RLC Advance or
RLC Advances are made, such unsatisfied conditions and/or requirements shall not
be waived or released thereby. Borrower shall be and continue to be obligated to
fully satisfy such  conditions  and  requirements,  and Lender,  at any time, in
Lender's sole and absolute  discretion,  may stop making RLC Advances  until all
conditions and requirements are fully satisfied.

     2.6 Other RLC Advances by Lender.  Lender,  after giving  fifteen (15) days
prior written  notice to Borrower to allow for corrective  action,  from time to
time,  may make RLC  Advances in any amount in payment of accrued and unpaid (i)
insurance premiums, taxes,  assessments,  liens or encumbrances existing against
property  encumbered  by the Security  Documents,  (ii) any charges and expenses
that are the obligation of Borrower under this Credit  Agreement or any Security
Document,  and (iii) any charges or matters  necessary  to preserve the property
encumbered  by the  Security  Documents or to cure any still  existing  Event of
Default.

     2.7 Assignment.  Borrower shall have no right to any RLC Advance other than
to have the  same  disbursed  by  Lender  in  accordance  with the  disbursement
provisions  contained  in this Credit  Agreement.  Any  assignment  or transfer,
voluntary or involuntary,  of this Credit Agreement or any right hereunder shall
not be binding  upon or in any way affect  Lender  without its written  consent;
Lender  may  make  RLC  Advances  under  the  disbursement   provisions  herein,
notwithstanding any such assignment or transfer.

                                      -10-
<PAGE>
                                     ARTICLE

                          PAYMENTS AND FEES PROVISIONS

     3.1 Payments.

          (a) All payments and  prepayments  by the Borrower of principal of and
interest on the Note and all fees,  expenses and any other Obligation payable to
Lender in connection with the Loans shall be  nonrefundable  and made in Dollars
or  immediately  available  funds to Lender not later than 2:00 p.m.,  (Phoenix,
Arizona local time) on the dates called for under this Credit Agreement,  at the
office of Lender in Phoenix,  Arizona.  Funds  received after such hour shall be
deemed to have been received by Lender on the next Banking Day.

          (b) Unless  otherwise  required by  applicable  law,  payments will be
applied first to accrued, unpaid interest, then to principal,  and any remaining
amount to any unpaid collection costs, late charges and other charges; provided,
however,  upon  delinquency or other default,  Lender reserve the right to apply
payments among  principal,  interest,  late charges,  collection costs and other
charges at its discretion.

          (c)  Interest  shall be due and  payable on the Loans on each  Payment
Date and on the Maturity Date.

          (d)  Whenever any payment to be made  hereunder  shall be stated to be
due on a day which is not a Banking Day,  such payment shall be made on the next
succeeding  Banking  Day,  and such  extension  of time  shall  in such  case be
included in the computation of interest, commission or fee, as the case may be.

          (e) Borrower  authorizes Lender to collect all interest,  fees, costs,
and/or expenses due under this Credit  Agreement by charging  Borrower's  demand
deposit account number 97005486 with Lender, or any other demand deposit account
maintained by Borrower with Lender, for the full amount thereof. Should there be
insufficient  funds in any such demand deposit account to pay all such sums when
due, the full amount of such deficiency  shall be immediately due and payable by
Borrower.

     3.2 (a) RLC Non-Use Fee: Borrower agrees to pay Lender a quarterly fee (the
"RLC Non-Use Fee") in an annualized  amount equal to one-half  percent (0.5%) of
the  average  daily  undrawn  balance  of the RLC  Commitment  during  the prior
calendar  quarterly period.  The RLC Non-Use Fee shall initially accrue from the
Closing  Date and shall be due and payable in arrears  within  three (3) Banking
Days after written  notice of such amount due by Lender to Borrower and shall be

                                      -11-
<PAGE>
non-refundable.  The  first  such  payment  shall be due on March  31,  2000 and
thereafter on each Quarterly End Date.

          (b) RLC Fee:  Borrower  agrees to pay to Lender on the Closing  Date a
fee  (the  "RLC  Fee")  in an  amount  equal to one  percent  (1.0%)  of the RLC
Commitment.  Lender agrees to apply the RLC Fee to any  origination fee that may
be charged by Lender on any future  increase  in the RLC  Commitment  so long as
such increase is requested by Borrower within 180 days of the Closing Date.

     3.3  Computations.  All fees and  interest on the Note shall be computed on
the basis of a year of 360-days/year  and accrue on a daily basis for the actual
number of days elapsed.

     3.4 Maintenance of Accounts.  Lender shall maintain, in accordance with its
usual  practice,  an account or  accounts  evidencing  the  indebtedness  of the
Borrower and the amounts  payable and paid from time to time  hereunder.  In any
legal action or proceeding in respect of this Credit Agreement, the entries made
in the ordinary course of business in such account or accounts shall be evidence
of the  existence  and  amounts  of the  obligations  of  the  Borrower  therein
recorded.  The failure to record any such amount  shall not,  however,  limit or
otherwise affect the obligations of the Borrower  hereunder to repay all amounts
owed  hereunder,  together with all interest  accrued thereon as provided in the
Note.

                                      -12-
<PAGE>
                                     ARTICLE

                                    SECURITY

     4.1 Security. So long as the Loan is outstanding,  Borrower shall cause the
Loan and Borrower's obligations under this Credit Agreement to be secured at all
times by the following:

          (a)  a  valid  and  effective   security   agreement   (the  "Security
Agreement"),  duly executed and delivered by or on behalf of Borrower,  granting
Lender a valid and enforceable security interest in all of its personal property
as described therein, subject to no prior Liens except for Permitted Liens; and

          (b) by a valid and effective  intellectual property security agreement
(the "IP Security  Agreement")  duly  executed and  delivered by or on behalf of
Borrower,  granting Lender a valid and enforceable  security  interest in all of
its intellectual  property described  therein,  subject to no prior Liens except
for Permitted Liens.

     4.2 Security  Documents.  All of the  documents  required by this Article 4
shall be in form satisfactory to Lender and Lender's counsel, and, together with
any  Financing  Statements  for filing  and/or  recording,  and any other  items
required  by Lender  to fully  perfect  and  effectuate  the liens and  security
interests  of Lender  contemplated  by the Security  Agreement,  and this Credit
Agreement,  may  heretofore  or  hereinafter  be  referred  to as the  "Security
Documents."

                                      -13-
<PAGE>
                                     ARTICLE

                              CONDITIONS PRECEDENT

     The  obligation of Lender to make any Loan and to make each and any Advance
hereunder is subject to the full prior satisfaction at each such time of each of
the following conditions precedent:

     5.1  Initial or Any  Subsequent  Advance.  Prior to its making the  initial
Advance or any subsequent Advance, Lender shall have received the following each
in form and substance satisfactory to Lender:

          (a) This Credit Agreement.  This Credit  Agreement,  duly executed and
delivered to Lender by Borrower.

          (b) The RLC Note. The RLC Note,  duly executed,  drawn to the order of
Lender and otherwise as provided in Article 2 hereof.

          (c)  Organizational  Documents.  A copy  of the  current  organization
documents of Borrower,  including all amendments  thereto,  certified as current
and complete by the appropriate  authority of the state of Borrower's formation,
together  with  evidence of its good  standing in the state of formation  and in
every other state in which it is doing  business or the conduct of its  business
requires such standing for the enforcement of material contracts.

          (d) Secretary Certificate. A certificate of the secretary of Borrower,
signed by the duly  appointed  secretary  thereof  and issued as of the  Closing
Date,  certifying  that (i) attached  thereto is a true and complete copy of its
organizational  documents in effect on the date of passage of the authorizations
described  immediately  below and at all  subsequent  times to and including the
date of the  certificate,  (ii) attached  thereto is a true and complete copy of
any of its  resolutions or  authorizations  authorizing the Loan, the execution,
delivery,  and  performance  of this  Credit  Agreement,  the Note,  the  Credit
Documents,  and all advances of credit hereunder, and that such resolutions have
not been modified, rescinded, or amended and are in full force and effect, (iii)
no change has been made to its charter  documents other than as reflected in the
certified  copies  submitted  in  connection  with the  delivery  of this Credit
Agreement  or as approved in writing by Lender,  and (iv) set forth  therein and
appropriately  identified are the names, current official titles, and signatures
of its officers  authorized to sign this Credit Agreement and other documents to
be delivered hereunder and/or to act as Authorized Manager hereunder.

          (e) Security  Agreement.  The Security  Agreement,  duly  executed and
delivered to Lender by Borrower.

                                      -14-
<PAGE>
          (f) IP Security Agreement.  The IP Security  Agreement,  duly executed
and delivered to Lender by Borrower  and, if required by Lender,  filed with the
US Patent Office.

          (g) Compliance Certificate.  A Compliance Certificate substantially in
the  form of  Exhibit  "B"  attached  hereto,  indicating  that  Borrower  is in
compliance with the Financial Covenants as of September 30, 1999.

          (h) Fees and Costs. Payment of the RLC Fee and costs of the Lender.

          (i)  Financing  Statements.  Financing  Statements,  duly executed and
delivered to Lender by Borrower.

          (j)  Accounts  Receivable.   A  listing  and  aging  of  the  accounts
receivable of Borrower as of September 30, 1999.

          (k)  Triparty  Agreement.  A Triparty  Agreement,  duly  executed  and
delivered to Lender by Borrower and Gum Tech International,  Inc. (the "Triparty
Agreement").

          (l) Borrower's  Financial  Statements.  Borrower's  September 30, 1999
financial statements.

          (m)  Landlord  Waivers.  Lien  waivers  substantially  in the  form of
Exhibit "D" attached  hereto,  executed by the landlord of each leased  premises
where collateral is located, if any.

          (n) Additional  Information.  Such other  information and documents as
may reasonably be required by Lender or Lender's counsel.

     5.2 No Event of Default.  No Event of Default known to Borrower  shall have
occurred and be continuing, or result from Lender's making of any Loan.

     5.3 No Material Adverse Effect. Since the date of the most recent financial
statements provided to Lender by Borrower,  no change shall have occurred in the
business or financial  condition of Borrower that could have a Material  Adverse
Effect.

     5.4  Representations  and Warranties.  The  representations  and warranties
contained  in  Article  6  hereof  shall  be true and  correct  in all  material
respects, with the same force and effect as though made on and as of the Closing
Dat e (other than those of such  representations  which by their  express  terms
speak  to a date  prior  to that  date,  whic h  representations  shall,  in all
material respects, be true and correct as of such respective date).

                                      -15-
<PAGE>
                                    ARTICLE 6

                         REPRESENTATIONS AND WARRANTIES

     To induce  Lender to make the Loan,  Borrower  represents  and  warrants to
Lender that:

     6.1  Recitals.  The recitals  and  statements  of intent  appearing in this
Credit Agreement are true and correct.

     6.2 Organization and Good Standing. It is duly organized,  validly existing
and in good standing in all states  and/or  countries in which the nature of its
business and property makes such qualifications necessary or appropriate. It has
the legal power and authority to own its  properties  and assets and to transact
the  business in which it is engaged and is or will be qualified in those states
and/or countries  wherein the nature of its proposed  business and property will
make such qualifications necessary or appropriate in the future.

     6.3  Authorization  and Power. It has the power and requisite  authority to
execute,  deliver and  perform  this  Credit  Agreement,  the Note and the other
Credit  Documents to be executed by it; it is duly  authorized to, and has taken
all action,  corporate or  otherwise,  necessary  to  authorize it to,  execute,
deliver  and  perform  this  Credit  Agreement,  the Note and such other  Credit
Documents and is and will continue to be duly  authorized to perform this Credit
Agreement, the Note and such other Credit Documents.

     6.4 Security  Documents.  The liens,  security  interests  and  assignments
created by the Security  Documents will, when granted,  be valid,  effective and
enforceable liens, security interests and assignments,  except to the extent (if
any) otherwise agreed in writing by Lender.

     6.5 No Conflicts or Consents.  Neither the  execution  and delivery of this
Credit Agreement, the Note or the other Credit Documents to which it is a party,
nor the consummation of any of the transactions herein or therein  contemplated,
nor  compliance  with the  terms  and  provisions  hereof  or with the terms and
provisions  thereof,  (a) will  materially  contravene or conflict with: (i) any
provision  of law,  statute  or  regulation  to  which it is  subject,  (ii) any
judgment, license, order or permit applicable to it, (iii) any indenture, credit
agreement, mortgage, deed of trust, or other agreement or instrument to which it
is a party or by which it may be bound,  or to which it may be  subject,  or (b)
will  violate  any  provision  of  its  organizational  documents.  No  consent,
approval, authorization or order of any court or Governmental Authority or other
Person is required in  connection  with the  execution and delivery by it of the
Credit  Documents  or to  consummate  the  transactions  contemplated  hereby or
thereby, or if required,  such consent,  approval,  authorization or order shall
have been obtained.

     6.6 No  Litigation.  Except  for those  matters  that have been  previously
disclosed to Lender in writing, there are no actions, suits or legal, equitable,
arbitration or administrative  proceedings  pending,  or to its actual knowledge
overtly threatened, against Borrower that would, if adversely determined, have a
Material  Adverse  Effect.

                                      -16-
<PAGE>
     6.7  Financial  Condition.  It  has  delivered  to  Lender  copies  of  the
Borrower's most recent financial statements.  Such financial statements,  in all
material  respects,  fairly and  accurately  present the  financial  position of
Borrower as of such date, have been prepared in accordance with GAAP and neither
contain  any untrue  statement  of a material  fact nor fail to state a material
fact required in order to make such financial  statement not  misleading.  Since
the date thereof,  Borrower has not discovered any  obligations,  liabilities or
indebtedness  (including  contingent and indirect liabilities and obligations or
unusual  forward or long-term  commitments)  which in the aggregate are material
and adverse to the  financial  position or business of Borrower that should have
been but were not reflected in such  financial  statements.  No changes having a
Material Adverse Effect have occurred in the financial  condition or business of
Borrower since the date of such financial statements.

     6.8 Taxes. It has filed or caused to be filed all returns and reports which
are required to be filed by any jurisdiction, and has paid or made provision for
the  payment  of all  taxes,  assessments,  fees or other  governmental  charges
imposed upon its  properties,  income or franchises,  as to which the failure to
file or pay would have a Material  Adverse  Effect,  except such  assessments or
taxes,  if  any,  which  are  being  contested  in  good  faith  by  appropriate
proceedings.

     6.9  No  Stock  Purchase.   No  part  of  the  proceeds  of  any  financial
accommodation  made by Lender in connection  with this Credit  Agreement will be
used to purchase or carry "margin  stock," as that term is defined in Regulation
U, or to extend  credit to others for the purpose of purchasing or carrying such
margin stock.

     6.10  Advances.  Each  request for an Advance or for the  extension  of any
financial  accommodation  by Lender  whatsoever  shall constitute an affirmation
that the representations  and warranties  contained herein are, true and correct
as of the time of such request.  All  representations and warranties made herein
shall survive the execution of this Credit  Agreement,  all advances of proceeds
of the  Loans  and  the  execution  and  delivery  of all  other  documents  and
instruments in connection with the Loans and/or this Credit  Agreement,  so long
as Lender has any  commitment  to lend  hereunder  and until the Loans have been
paid in full and all of Borrower's obligations under this Credit Agreement,  the
Note and all Security Documents have been fully discharged.

     6.11 Enforceable Obligations. This Credit Agreement, the Note and the other
Credit  Documents  are the legal,  valid and binding  obligations  of  Borrower,
enforceable  against Borrower in accordance with their respective terms,  except
as limited by  bankruptcy,  insolvency or other laws or equitable  principles of
general application relating to the enforcement of creditors' rights.

     6.12 No Default.  No event or condition has occurred and is continuing that
constitutes an Event of Default.

     6.13  Significant  Debt  Agreements.  It is not in default in any  material
respect under any Significant Debt Agreement.

                                      -17-
<PAGE>
     6.14 ERISA.  (a) No Reportable  Event has occurred and is  continuing  with
respect to any Plan;  (b) PBGC has not  instituted  proceedings to terminate any
Plan;  (c) neither the Borrower,  any member of the  Controlled  Group,  nor any
duly-appointed  administrator  of a Plan (i) has incurred any  liability to PBGC
with  respect to any Plan other than for premiums not yet due or payable or (ii)
has  instituted or intends to institute  proceedings to terminate any Plan under
Section  4041 or  4041A  of  ERISA;  and (d)  each  Plan of  Borrower  has  been
maintained and funded in all material  respects in accordance with its terms and
in all material  respects in accordance with all provisions of ERISA  applicable
thereto. Neither the Borrower nor any of its Subsidiaries participates in, or is
required  to make  contributions  to, any  Multi-employer  Plan (as that term is
defined in Section 3(37) of ERISA).

     6.15  Compliance  with Law. It is in substantial  compliance with all laws,
rules,  regulations,  orders, writs, injunctions and decrees that are applicable
to it, or its properties, noncompliance with which would have a Material Adverse
Effect.

     6.16  Solvent.  It (both  before  and  after  giving  effect  to the  Loans
contemplated hereby) is solvent, has assets having a fair value in excess of the
amount  required to pay its probable  liabilities  on its existing debts as they
become absolute and matured,  and has, and will have, access to adequate capital
for the  conduct of its  business  and the ability to pay its debts from time to
time incurred in connection therewith as such debts mature.

     6.17 Investment  Borrower Act. It is not, and is not directly or indirectly
controlled  by, or acting on behalf  of,  any  person  which is, an  "Investment
Borrower" within the meaning of the Investment Borrower Act of 1940, as amended.

     6.18 Title. It has good and marketable title to the Collateral.

     6.19 Survival of  Representations,  Etc. All representations and warranties
by Borrower  herein shall  survive the making of the Loan and the  execution and
delivery  of the  Note;  any  investigation  at any time made by or on behalf of
Lender  shall not diminish  Lender's  right to rely on the  representations  and
warranties herein.

     6.20  Environmental  Matters.  Except as previously  disclosed to Lender in
writing,  it,  to the  best of its  knowledge  after  due  investigation,  is in
compliance in all material  respects with all applicable  environmental,  health
and safety  statutes and  regulations  and  Borrower  does not have any material
contingent  liability in  connection  with any improper  treatment,  disposal or
release into the environment of any hazardous or toxic waste or substance.

     6.21  Licenses,  Tradenames.  It,  as of the  date  hereof,  possesses  all
necessary  trademarks,  tradenames,  copyrights,  patents,  patent  rights,  and
licenses to conduct its  business as now  operated,  without any known  conflict
with valid  trademarks,  tradenames,  copyright  patents and  license  rights of
others.

                                      -18-
<PAGE>
     6.22 Year 2000 Compliance.  Borrower and its  Subsidiaries,  as applicable,
have  reviewed the areas  within  their opera tions and business  which could be
adversely affected by, and have developed or are developing a program to address
on a timely  basis,  the Year 2000  Problem  and have made  related  appropriate
inquiry  of  material  suppliers  and vend  ors,  and based on such  review  and
program,  the Year 2000  Problem will not have a Material  Adverse  Effect upo n
their financial condition,  operations or business as now conducted.  "Year 2000
Problem" means the possibility th at any computer applications or equipment used
by Borrower may be unable to  recognize  and  properly  perform d ate  sensitive
functions  involving  certain dates prior to and any dates on or after  December
31, 1999.

                                      -19-
<PAGE>
                                    ARTICLE 7

                              AFFIRMATIVE COVENANTS

     Until  payment  in full of the Loans and the  complete  performance  of the
Obligation, Borrower agrees that:

     7.1 Financial Statements, Reports and Documents. It shall deliver, or cause
to be delivered, to Lender each of the following:

          (a) Annual  Statements  of Borrower.  As soon as available  and in any
event  within  ninety (90) days after the close of each fiscal year of Borrower,
audited financial statements of Borrower,  including its balance sheet as of the
close of such fiscal year and  statements  of income of Borrower for such fiscal
year,  in each  case  setting  forth in  comparative  form the  figures  for the
preceding  fiscal  year,  all  in  reasonable   detail  and  accompanied  by  an
unqualified  opinion  thereon of  independent  public  accountants of recognized
national  standing  selected by Borrower and acceptable to Lender, to the effect
that such financial statements have been prepared in accordance with GAAP.

          (b) Monthly Statements of Borrower.  As soon as available,  and in any
event  within  twenty (20) days after the end of each month  (except for that at
the close of the fiscal year), copies of the balance sheet of Borrower as of the
end of such month,  and  statement  of income of Borrower for that month and for
the portion of the fiscal year ending with such month, all in reasonable  detail
and fairly stated,  certified by Borrower and prepared by Borrower in accordance
with GAAP.

          (c)  Compliance  Certificate  of  Borrower.  At the end of each weekly
period  until  Borrower's  Net Income is positive  for at least two  consecutive
fiscal  quarters,  and thereafter  within twenty (20) days after the end of each
month,  a  certificate  signed  by  the  Authorized  Manager  of  the  Borrower,
substantially in the form of Exhibit "B" attached hereto certifying that after a
review of the activities of Borrower during such period,  Borrower has observed,
performed and fulfilled each and every obligation and covenant  contained herein
and no Event of Default exists under any of the same or, if any Event of Default
shall have occurred,  specifying the nature and status thereof, and stating that
all financial  statements of Borrower  delivered to Lender during the respective
period  pursuant to Sections  7.1(a) and 7.1(b)  hereof,  to his/her  knowledge,
fairly  present in all material  respect the financial  position of the Borrower
and the results of its  operations  at the dates and for the periods  indicated,
and have been prepared in accordance  with GAAP,  together with a calculation of
the Financial Covenants.

          (d) Borrowing Base Certificate. At the end of each weekly period until
Borrower's Net Income is positive for at least two consecutive  fiscal quarters,
and thereafter  within twenty (20) days after the end of each month, a Borrowing
Base Certificate substantially in the form attached hereto as Exhibit "C".

                                      -20-
<PAGE>
          (e) Other Information. Such other information concerning the business,
properties  or  financial  condition  of  Borrower  as Lender  shall  reasonably
request.

     7.2 Maintenance of Existence and Rights;  Conduct of Business;  Management.
It will preserve and maintain its  existence and all of its rights,  privileges,
licenses,  permits,  franchises  and other rights  necessary or desirable in the
normal conduct of its business, conduct its business in an orderly and efficient
manner  consistent  with  good  business  practices  and  maintain  professional
management of its business.

     7.3  Operations  and  Properties.  It will keep in good  working  order and
condition,  ordinary wear and tear  excepted,  all of its assets and  properties
which are necessary to the conduct of its business.

     7.4 Authorizations and Approvals. It will maintain, at its own expense, all
such governmental licenses,  authorizations,  consents, permits and approvals as
may be required to enable it to comply with its obligations  hereunder and under
the other  Credit  Documents  and to operate  its  businesses  as  presently  or
hereafter duly conducted.

     7.5 Compliance  with Law. It will comply with all applicable  laws,  rules,
regulations,  and all final,  nonappealable orders of any Governmental Authority
applicable to it or any of its property,  business  operations or  transactions,
including without limitation,  any environmental laws applicable to it, a breach
of which could result in a Material Adverse Effect.

     7.6 Payment of Taxes and Other Indebtedness.  It will pay and discharge (i)
all income taxes and payroll taxes, (ii) all taxes, assessments,  fees and other
governmental  charges imposed upon it or upon its income or profits, or upon any
property belonging to it, before delinquent, which become due and payable, (iii)
all lawful claims (including claims for labor,  materials and supplies),  which,
if unpaid,  might  become a Lien upon any of its  property,  and (iv) all of its
Indebtedness  as it becomes due and  payable,  except as  prohibited  hereunder;
provided,  however,  that  it  shall  not be  required  to  pay  any  such  tax,
assessment,  charge,  levy, claims or Indebtedness if and so long as the amount,
applicability  or validity thereof shall currently be contested in good faith by
appropriate  actions and  appropriate  accruals and reserves  therefor have been
established in accordance with GAAP.

     7.7 Compliance with  Significant Debt Agreements and Other  Agreements.  It
will comply in all material  respects with (i) all Significant  Debt Agreements,
and (ii) all  agreements and contracts to which it is a party, a breach of which
could result in a Material Adverse Effect.

     7.8  Compliance  with  Credit  Documents.  It will  comply with any and all
covenants and provisions of this Credit Agreement, the Note and all other Credit
Documents.

                                      -21-
<PAGE>
     7.9 Notice of Default.  It will furnish to Lender immediately upon becoming
actually  aware of the existence of any event or condition  that  constitutes an
Event of Default, a written notice specifying the nature and period of existence
thereof  and the  action  which it is taking or  proposes  to take with  respect
thereto.

     7.10 Other  Notices.  It will  promptly  notify  Lender of (a) any Material
Adverse Effect,  (b) any waiver,  release or default under any Significant  Debt
Agreement,  (c) any claim not covered by  insurance  against  Borrower or any of
Borrower's   properties,   and  (d)  the   commencement  of,  and  any  material
determination  in, any litigation with any third party or any proceeding  before
any Governmental Authority affecting it, except litigation or proceedings which,
if adversely determined, would not have a Material Adverse Effect.

     7.11 Books and Records;  Access; Audits. Upon three (3) Banking Days notice
from Lender, it will give any authorized  representative of Lender access during
normal  business hours to, and permit such  representative  to examine,  copy or
make excerpts from,  any and all books,  records and documents in its possession
of and  relating  to the Loans,  and to inspect any of its  properties.  It will
maintain  complete  and  accurate  books  and  records  of its  transactions  in
accordance with good accounting  practices.  In addition, so long as no Event of
Default  has  occurred  and  is   continuing,   it  will  give  any   authorized
representative  of Lender  access  during  normal  business  hours to  conduct a
minimum of one (1)  collateral  audit per year and the costs of such audit shall
be for the account of the Borrower.

     7.12 ERISA Compliance. With respect to its Plans, it shall (a) at all times
comply with the minimum funding  standards set forth in Section 302 of ERISA and
Section  412 of the Code or shall  have duly  obtained  a formal  waiver of such
compliance from the proper  authority;  (b) at Lender's  request,  within thirty
(30) days after the filing  thereof,  furnish  to Lender  copies of each  annual
report/return  (Form 5500  Series),  as well as all  schedules  and  attachments
required to be filed with the  Department  of Labor and/or the Internal  Revenue
Service pursuant to ERISA, in connection with each of its Plans for each year of
the plan; (c) notify Lender within a reasonable time of any fact, including, but
not limited  to, any  Reportable  Event  arising in  connection  with any of its
Plans, which constitutes  grounds for termination thereof by the PBGC or for the
appointment  by the  appropriate  United States  District  Court of a trustee to
administer such Plan,  together with a statement,  if requested by Lender, as to
the reason  therefor and the action,  if any,  proposed to be taken with respect
thereto;  and (d) furnish to Lender  within a  reasonable  time,  upon  Lender's
request,  such  additional  information  concerning  any of its  Plans as may be
reasonably requested.

     7.13 Further Assurances.  It will make, execute or endorse, and acknowledge
and  deliver  or  file  or  cause  the  same  to  be  done,  all  such  notices,
certifications and additional agreements,  undertakings or other assurances, and
take any and all such  other  action,  as Lender  may,  from time to time,  deem
reasonably necessary or proper to fully evidence the Loan.

                                      -22-
<PAGE>
     7.14 Insurance. It shall maintain in full force and effect at all times all
insurance coverages required under the terms of this Credit Agreement and/or the
Security  Documents to which it is a party.  In addition,  it shall  maintain in
full force and effect at all times:

          (a)  Policies of all risk  coverage  insurance  covering  all tangible
personalty  in which Lender has been granted or obtained a security  interest to
secure the Obligation, in coverage amounts not less than, from time to time, the
fair market value thereof.

          (b) Policies of insurance  evidencing  personal liability and property
damage  liability  coverages  in amounts not less than  $1,000,000.00  (combined
single limit for bodily  injury and  property  damage),  and an umbrella  excess
liability coverage in an amount not less than  $2,000,000.00  shall be in effect
with respect to Borrower.

          (c)  Policies of workers'  compensation  insurance in amounts and with
coverages as legally required.

Without  limitation of the foregoing,  it shall at all times maintain  insurance
coverages in scope and amount not less than,  and not less  extensive  than, the
scope and amount of insurance coverages customary in the trades or businesses in
which it is from time to time engaged.  All of the aforesaid insurance coverages
shall be issued by insurers reasonably acceptable to Lender.

     Copies of all policies of  insurance  evidencing  such  coverages in effect
from time to time and  showing  Lender as an  additional  insured and loss payee
shall be  delivered to Lender  within  fifteen (15) days of the Closing Date and
upon reasonable  notice upon issuance of new policies  thereafter.  From time to
time, promptly upon Lender's request, it shall provide evidence  satisfactory to
Lender (i) that  required  coverage in required  amounts is in effect,  and (ii)
that Lender is shown as an additional insured and loss payee with respect to all
such coverages,  as Lender's interest may appear, by standard  (non-attribution)
loss payable endorsement,  additional insured endorsement, insurer's certificate
or other means  acceptable to Lender in its reasonable  discretion.  At Lender's
option,  it shall  deliver to Lender  certified  copies of all such  policies of
insurance  in effect  from  time to time,  to be  retained  by Lender so long as
Lender shall have any  commitment  to lend  hereunder  and/or any portion of the
Obligation  shall be outstanding  or  unsatisfied.  All such insurance  policies
shall  provide  for at least  thirty  (30)  days  prior  written  notice  of the
cancellation or modification thereof to Lender.

     7.15 Year 2000 Compliance. It will perform all acts reasonably necessary to
ensure that (a) Borrower and any business in which  Borrower holds a substantial
interest,  and (b) all  customers,  suppliers  and vendors  that are material to
Borrower's  business,  become Year 2000 Compliant in a timely manner.  Such acts
shall  include,  without  limitation,  performing  a  comprehensive  review  and
assessment of all Borrower's systems and adopting a detailed plan, with itemized
budget, for the remediation,  monitoring and testing of such systems. As used in
this paragraph,  "Year 2000 Compliant" shall mean, in regard to any entity, that
all software,  hardware,  firmware,  equipment,  goods or systems utilized by or
material to the business  operations or financial condition of such entity, will
properly  perform date  sensitive  functions  before,  during and after the year
2000.   Borrower  shall,   immediately  upon  request,   provide  to  Bank  such
certifications or other evidence of Borrower's compliance with the terms of this
paragraph as Bank may from time to time require.

     7.16 Deposit Accounts.  It shall maintain its principal depository accounts
with Lender.

                                      -23-
<PAGE>
                                    ARTICLE 8

                               NEGATIVE COVENANTS

     Until payment in full of the Loans and the  performance of the  Obligation,
Borrower  shall not,  without  receiving  the prior express  written  consent of
Lender:

     8.1 Existence.  Dissolve or liquidate, or merge or consolidate with or into
any other  entity,  or turn over the  management  or operation of its  property,
assets or business  to any other  Person or make any  substantial  change in the
character of its business.

     8.2  Amendments  to  Organizational  Documents.  Amend  its  organizational
documents  if the result  thereof  could  result in the  occurrence  directly or
indirectly of a Material Adverse Effect.

     8.3 Margin  Stock.  Use any  proceeds of the Loans,  or any proceeds of any
other or future  financial  accommodation  from Lender for the purpose,  whether
immediate,  incidental or ultimate, of purchasing or carrying any "margin stock"
as that term is defined in Regulation U or to reduce or retire any  indebtedness
undertaken for such purposes  within the meaning of said  Regulation U, and will
not use such proceeds in a manner that would involve  Borrower in a violation of
Regulation U or of any other Regulation of the Board of Governors of the Federal
Reserve System, nor use such proceeds for any purpose not permitted by Section 7
of the  Exchange  Act,  or  any  of the  rules  or  regulations  respecting  the
extensions of credit promulgated thereunder.

     8.4  Distributions.  Declare or pay any dividends or make any distributions
of any kind other than distributions necessary to satisfy the tax liabilities of
the members of Borrower arising from the operations of Borrower.

     8.5 Liens. On and after the date hereof, create, issue, assume or suffer to
exist Liens upon the Collateral, except Permitted Liens.

     8.6 Transfer Collateral. Assign, transfer or convey any of its right, title
and interest in the Collateral.

     8.7  Merger;  Sale of  Assets.  (i) Sell,  lease,  transfer  or  dispose of
substantially  all of the Collateral to another entity; or (ii) consolidate with
or merge into another  entity,  or permit any  transfer of the  ownership of the
Collateral,  permit any other entity to merge into Borrower or consolidate  with
it, or permit any transfer of the ownership or power to control Borrower.

     8.8  Indebtedness.  Incur in excess of  $100,000 in the  aggregate  for any
fiscal year,  without  receiving  the prior express  written  consent of Lender,
which consent shall not be unreasonably withheld.

                                      -24-
<PAGE>
     8.9 Financial Covenants. Permit:

          (a) Its Liquidity  Percentage to be less than thirty  percent (30%) as
of the end of each weekly period until  Borrower's Net Income is positive for at
least two  consecutive  fiscal  quarters  and  thereafter  as of the end of each
monthly period.

          (b) Beginning  with that fiscal quarter ending March 31, 2000, its Net
Income to be less than $0 (i.e. net loss) in any quarter.

                                      -25-
<PAGE>
                                    ARTICLE 9

                                EVENTS OF DEFAULT

     9.1 Events of Default. An "Event of Default" shall exist if any one or more
of the following events (herein  collectively  called "Events of Default") shall
occur and be continuing:

          (a) Borrower  shall fail to pay any  principal of, or interest on, the
Note when the same shall  become due or payable and such failure  continues  for
ten (10) Banking Days after notice thereof to Borrower.

          (b) Any failure or neglect to perform or observe any of the covenants,
conditions,  provisions or agreements of Borrower contained herein, or in any of
the other Credit Documents (other than a failure or neglect  described in one or
more of the other  provisions  of this  Section 9.1) and such failure or neglect
either cannot be remedied or, if it can be remedied, it continues unremedied for
a period of thirty (30) days after written notice thereof to Borrower.

          (c) Any warranty, representation or statement contained in this Credit
Agreement  or any of the other  Credit  Documents,  or which is contained in any
certificate  or  statement  furnished  or made to Lender  pursuant  hereto or in
connection  herewith  or with the  Loans,  shall be or shall  prove to have been
false when made or furnished.

          (d) The occurrence of any material  "event of default" or "default" by
Borrower under any Credit Document, or any agreement, now or hereafter existing,
to which  Lender or an  Affiliate  of Lender,  and  Borrower or an  Affiliate of
Borrower are a party.

          (e) Borrower shall (i) fail to pay any Indebtedness of Borrower (other
than the Note) due under any  Significant  Debt  Agreement,  or any  interest or
premium thereon,  when due (whether by scheduled maturity,  required prepayment,
acceleration,  demand, or otherwise) or within any applicable grace period, (ii)
fail to perform or observe any term,  covenant,  or  condition on its part to be
performed  or  observed  under any  agreement  or  instrument  relating  to such
Indebtedness,  within any applicable  grace period when required to be performed
or  observed,  if the  effect  of such  failure  to  perform  or  observe  is to
accelerate the maturity of such Indebtedness,  or any such Indebtedness shall be
declared  to be due and  payable,  or  required  to be prepaid  (other than by a
regularly scheduled prepayment),  prior to the stated maturity thereof, or (iii)
allow the  occurrence  of any  material  event of default  with  respect to such
Indebtedness.

          (f) Any one or more of the Credit Documents shall have been determined
to be invalid or unenforceable against Borrower executing the same in accordance

                                      -26-
<PAGE>
with the respective  terms thereof,  or shall in any way be terminated or become
or be declared ineffective or inoperative,  so as to deny Lender the substantial
benefits contemplated by such Credit Document or Credit Documents.

          (g)  Borrower  or  Guarantor  shall (i) apply  for or  consent  to the
appointment  of a receiver,  trustee,  custodian,  intervenor  or  liquidator of
itself or of all or a  substantial  part of its  assets,  (ii) file a  voluntary
petition in bankruptcy or admit in writing that it is unable to pay its debts as
they become due,  (iii) make a general  assignment for the benefit of creditors,
(iv) file a petition or answer seeking  reorganization  of an  arrangement  with
creditors or to take advantage of any bankruptcy or insolvency laws, (v) file an
answer  admitting  the  material  allegations  of, or consent  to, or default in
answering,  a petition  filed against it in any  bankruptcy,  reorganization  or
insolvency  proceeding,  or  (vi)  take  corporate  action  for the  purpose  of
effecting any of the foregoing

          (h) An  involuntary  petition  or  complaint  shall be  filed  against
Borrower or  Guarantor,  seeking  bankruptcy  or  reorganization  of Borrower or
Guarantor, or the appointment of a receiver,  custodian,  trustee, intervenor or
liquidator of Borrower or Guarantor,  or all or substantially all of its assets,
and such petition or complaint  shall not have been dismissed  within sixty (60)
days of the filing thereof;  or an order,  order for relief,  judgment or decree
shall be  entered  by any court of  competent  jurisdiction  or other  competent
authority  approving a petition or complaint seeking  reorganization of Borrower
or  Guarantor,   appointing  a  receiver,   custodian,  trustee,  intervenor  or
liquidator of Borrower or Guarantor,  or all or substantially all of its assets,
and such order,  judgment or decree shall continue  unstayed and in effect for a
period of sixty (60) days.

          (i) Any final judgment(s) (excluding those the enforcement of which is
suspended  pending  appeal)  for the  payment  of money in  excess of the sum of
$250,000 in the aggregate  (other than any judgment  covered by insurance  where
coverage  has  been  acknowledged  by the  insurer)  shall be  rendered  against
Borrower, and such judgment or judgments shall not be satisfied, settled, bonded
or  discharged  at least  ten (10)  days  prior to the date on which  any of its
assets could be lawfully sold to satisfy such judgment.

          (j) Either (i) proceedings shall have been instituted to terminate, or
a notice of termination  shall have been filed with respect to, any Plans (other
than a Multi-Employer Pension Plan as that term is defined in Section 4001(a)(3)
of  ERISA)  by  Borrower,  any  member  of the  Controlled  Group,  PBGC  or any
representative  of any thereof,  or any such Plan shall be  terminated,  in each
case under Section 4041 or 4042 of ERISA, and such  termination  shall give rise
to a liability of the Borrower or the  Controlled  Group to the PBGC or the Plan
under ERISA having an effect in excess of $100,000 or (ii) a  Reportable  Event,
the  occurrence  of which  would  cause  the  imposition  of a lien in excess of
$100,000  under  Section 4062 of ERISA,  shall have occurred with respect to any

                                      -27-
<PAGE>
Plan  (other  than a  Multi-Employer  Pension  Plan as that term is  defined  in
Section 4001(a)(3) of ERISA) and be continuing for a period of sixty (60) days.

          (k) Any of the following events shall occur with respect to any Multi-
Employer  Pension Plan (as that term is defined in Section  4001(a)(3) of ERISA)
to which  Borrower  contributes  or  contributed  on behalf of its employees and
Lender  determines  in good  faith  that the  aggregate  liability  likely to be
incurred by Borrower,  as a result of any of the events specified in Subsections
(i),  (ii) and (iii)  below,  will have an  effect  in excess of  $100,000;  (i)
Borrower  incurs a withdrawal  liability  under Section 4201 of ERISA;  (ii) any
such plan is "in  reorganization"  as that term is defined  in  Section  4241 of
ERISA; or (iii) any such Plan is terminated under Section 4041A of ERISA.

          (l) The occurrence of a change in the ownership  structure without the
written consent of Lender, which will not be unreasonably withheld.

          (m) The  dissolution,  liquidation,  sale,  transfer,  lease  or other
disposal of all or substantially all of the assets or business of Borrower.

          (n) Any failure to observe any of the Financial Covenants.

          (o) A substantial change of the Borrower's  executive management group
as determined by Lender in its reasonable discretion without the written consent
of Lender which consent shall not be unreasonably withheld.

          (p) The occurrence of any adverse change in the, business, operations,
assets or financial condition of Borrower,  taken as a whole, that Lender in its
reasonable  discretion deems material,  or if Lender in good faith shall believe
that the prospect of payment or performance of the Loans is impaired.

     9.2  Remedies  Upon Event of  Default.  If an Event of  Default  shall have
occurred and be  continuing,  then Lender may, at its sole option,  exercise any
one or more of the  following  rights  and  remedies,  and  any  other  remedies
provided in any of the Credit  Documents,  as Lender in its sole  discretion may
deem necessary or appropriate, all of which remedies shall be deemed cumulative,
and not alternative:

               (i)  Cease   making   Advances   or   extensions   of   financial
          accommodations in any form to or for the benefit of Borrower,

               (ii) Declare the  principal of, and all interest then accrued on,
          the Note and any other  liabilities  hereunder to be forthwith due and
          payable,  whereupon the same shall become  immediately due and payable
          without presentment,  demand,  protest,  notice of default,  notice of
          acceleration or of intention to accelerate or other notice of any kind
          all of which Borrower  hereby  expressly  waives,  anything  contained
          herein or in the Note to the contrary notwithstanding,

               (iii) Reduce any claim to judgment, and/or

               (iv) Without notice of default or demand,  pursue and enforce any
          of  Lender'  rights  and  remedies  under  the  Credit  Documents,  or
          otherwise  provided  under  or  pursuant  to  any  applicable  law  or
          agreement;  provided,  however, that if any Event of Default specified
          in Sections  9.1(g) and 9.1(h) shall occur,  the principal of, and all
          interest on, the Note and other liabilities  hereunder shall thereupon
          become due and  payable  concurrently  therewith,  without any further
          action by Lender and without presentment,  demand,  protest, notice of
          default, notice of acceleration or of intention to accelerate or other
          notice of any kind, all of which Borrower hereby expressly waives.

     Upon the  occurrence  and during the  continuance  of any Event of Default,
Lender is  hereby  authorized  at any time and from time to time,  with five (5)
days notice to Borrower,  to setoff and apply any and all moneys,  securities or
other property of Borrower and the proceeds therefrom,  now or hereafter held or
received  by or in transit to Lender or its  agents,  from or for the account of
Borrower, whether for safe keeping, custody, pledge, transmission, collection or
otherwise,  and also upon any and all deposits  (general or special) and credits
of  Borrower,  and any and all  claims of  Borrower  against  Lender at any time
existing.  Lender agrees promptly to notify Borrower prior to and after any such
setoff and application,  provided that the failure to give such notice shall not
affect the validity of such setoff and  application.  The rights of Lender under
this  Section  9.2 are in  addition  to other  rights and  remedies  (including,
without limitation, other rights of setoff) which Lender may have.

     9.3  Performance by Lender.  Should  Borrower fail to perform any covenant,
duty or agreement with respect to the pay ment of taxes,  obtaining  licenses or
permits,  or any other  requirement  contained  herein  or in any of the  Credit
Documents  within the period  provided  herein,  if any, for  correction of such
failure,  Lender may, with five (5) days prior notice, at its option, perform or
attempt to perform such  covenant,  duty or agreement on behalf of Borrower . In
such event,  Borrower shall,  at the request of Lender,  promptly pay any amount
expended by Lender in such per  formance or attempted  performance  to Lender at
its office in  Inglewood,  California,  together  with  interest ther eon at the
Default Rate, from the date of such expenditure until paid.  Notwithstanding the
foregoing, it is e xpressly understood that Lender does not assume any liability
or  responsibility  for the  performance of any duties of Borrower  hereunder or
under any of the Credit  Documents or other control over the  management and aff
airs of Borrower.

                                      -28-
<PAGE>
                                   ARTICLE 10

                                  MISCELLANEOUS

     10.1 Modification.  All modifications,  consents,  amendments or waivers of
any  provision of any Credit  Document,  or consent to any departure by Borrower
therefrom,  shall be effective only if the same shall be in writing and accepted
by Lender.

     10.2 Waiver.  No failure to exercise,  and no delay in  exercising,  on the
part of Lender, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial  exercise  thereof  preclude  any other  further  exercise
thereof or the exercise of any other right.  The rights of Lender  hereunder and
under the Credit  Documents shall be in addition to all other rights provided by
law. No  modification or waiver of any provision of this Credit  Agreement,  the
Note or any Credit  Documents,  nor  consent to  departure  therefrom,  shall be
effective  unless in writing and no such consent or waiver  shall extend  beyond
the particular case and purpose involved.  No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.

     10.3  Payment of  Expenses.  Borrower  shall pay all costs and  expenses of
Lender  (including,  without  limitation,  the attorneys' fees of Lender's legal
counsel)  incurred by Lender in connection with the  documentation of the Loans,
and the  preservation  and  enforcement  of  Lender's  rights  under this Credit
Agreement, the Note, and/or the other Credit Documents;  provided, however, that
notwithstanding  the  aforesaid,  with respect to any legal  action  between the
parties  hereto that is pursued to judgment the  prevailing  party only shall be
reimbursed  by the other party for all costs and  expenses  (including,  without
limitation,  reasonable  attorneys'  fees and costs) incurred in connection with
the preservation and enforcement of its rights under this Credit Agreement,  the
Note and/or other Credit  Documents.  In addition,  Borrower shall pay all costs
and  expenses  of  Lender  in  connection  with  the  negotiation,  preparation,
execution and delivery of any and all amendments,  modifications and supplements
of or to this Credit Agreement, the Note or any other Credit Document.  Borrower
shall  receive a written  estimate of all legal fees and related legal costs and
will have an  opportunity  to review all such  estimates  prior to its approval,
which shall not be unreasonably withheld.

     10.4 Notices.  Except for telephonic  notices permitted herein, any notices
or other  communications  required  or  permitted  to be  given  by this  Credit
Agreement or any other documents and instruments  referred to herein must be (i)
given in writing and  personally  delivered  or mailed by prepaid  certified  or
registered  mail  or  sent  by  overnight  delivery  service,  or  (ii)  made by
telefacsimile  delivered  or  transmitted,  to the party to whom such  notice or
communication is directed, to the address of such party as follows:

         Borrower:        GEL TECH, INC.
                          246 East Watkins Street
                          Phoenix, Arizona 85004
                          Attention:  William J. Hemelt
                          Telecopier: (602) 420-9949

         Lender:          Imperial Bank
                          9920 South La Cienega Boulevard
                          Suite 636
                          Inglewood, California  90301
                          Attention:  Lending Services
                          Telecopier:  (310) 417-5695

         With a copy to:  Imperial Bank
                          400 East Van Buren
                          Suite 900
                          Phoenix, Arizona  85004
                          Attention: Edmund Ozorio
                          Telecopier:  (602) 261-7881

Any notice to be personally  delivered may be delivered to the principal offices
(determined as of the date of such delivery) of the party to whom such notice is
directed.  Any such notice or other  communication  shall be deemed to have been
given (whether actually  received or not) on the day it is personally  delivered
as aforesaid;  or, if mailed,  on the third day after it is mailed as aforesaid;
or, if transmitted by telefacsimile,  on the day that such notice is transmitted
as  aforesaid.  Any party may change its  address  for  purposes  of this Credit
Agreement by giving notice of such change to the other parties  pursuant to this
Section 10.4.

     10.5 Governing Law;  Jurisdiction,  Venue; Waiver of Jury Trial. The Credit
Documents  shall be governed by and construed in accordance with the substantive
laws (other than conflict laws) of the State of California, except to the extent
Lender has greater rights or remedies  under Federal law,  whether as a national
bank or  otherwise,  in which case such  choice of  California  law shall not be
deemed to deprive  Lender of any such rights and  remedies  as may be  available
under Federal law. Subject to the provisions of Section 10.13 hereof, each party
consents to the personal  jurisdiction  and venue of the state courts located in
Los Angeles,  State of California in connection with any controversy  related to
this  Agreement,  waives  any  argument  that  venue  in any  such  forum is not
convenient and agrees that any litigation initiated by any of them in connection
with this Agreement shall be venued in the Superior Court of Los Angeles County,
California.  The  parties  waive  any  right to trial by jury in any  action  or
proceeding  based  on or  pertaining  to  this  Agreement  or any of the  Credit
Documents.

     10.6 Invalid Provisions. If any provision of any Credit Document is held to
be illegal,  invalid or  unenforceable  under  present or future laws during the
term of this Credit  Agreement,  such provision shall be fully  severable;  such
Credit  Document shall be construed and enforced as if such illegal,  invalid or
unenforceable  provision had never comprised a part of such Credit Document; and
the remaining  provisions of such Credit Document shall remain in full force and
effect  and shall not be  affected  by the  illegal,  invalid  or  unenforceable
provision or by its severance from such Credit Document. Furthermore, in lieu of
each such illegal,  invalid or  unenforceable  provision there shall be added as
part of such Credit  Document a provision  mutually  agreeable  to Borrower  and
Lender as similar in terms to such illegal,  invalid or unenforceable  provision
as may be possible and be legal, valid and enforceable.

     10.7 Binding Effect.  The Credit  Documents shall be binding upon and inure
to the benefit of Borrower and Lender and their respective  successors,  assigns
and legal representatives; provided, however, that Borrower may not, without the
prior  written  consent  of  Lender,  assign  any  rights,   powers,  duties  or
obligations thereunder.

     10.8 Entirety. The Credit Documents embody the entire agreement between the
parties and supersede all prior agreements and understandings,  if any, relating
to the subject matter hereof and thereof.

     10.9 Headings.  Section  headings are for convenience of reference only and
shall in no way affect the interpretation of this Credit Agreement.

     10.10 Survival.  All representations and warranties made by Borrower herein
shall survive delivery of the Note and the making of the Loans.

     10.11 No Third Party Beneficiary. The parties do not intend the benefits of
this  Credit  Agreement  to inure to any  third  party,  nor shall  this  Credit
Agreement  be  construed  to make or render  Lender  liable to any  materialman,
supplier, contractor,  subcontractor,  purchaser or lessee of any property owned
by  Borrower,  or for  debts or  claims  accruing  to any such  persons  against
Borrower.  Notwithstanding  anything  contained herein or in the Note, or in any
other Credit Document,  or any conduct or course of conduct by any or all of the
parties  hereto,  before or after  signing  this Credit  Agreement or any of the
other  Credit  Documents,  neither  this Credit  Agreement  nor any other Credit
Document  shall be  construed  as creating  any right,  claim or cause of action
against Lender, or any of its officers, directors, agents or employees, in favor
of any materialman, supplier, contractor, subcontractor,  purchaser or lessee of
any  property  owned by  Borrower,  nor to any other person or entity other than
Borrower.

     10.12 Time. Time is of the essence hereof.

     10.13 Reference Provision.

          (a) Each  controversy,  dispute or claim ("Claim") between the parties
arising out of or relating to this Agreement and/or any of the Credit Documents,
which is not settled in writing  within ten days after the "Claim Date" (defined
as the date on which a party gives  written  notice to all other  parties that a
controversy, dispute or claim exists), will be settled by a reference proceeding
in Los Angeles,  California, in accordance with the provisions of Section 638 et
seq. of the  California  Code of Civil  Procedure,  or their  successor  section
("CCP"),  which shall  constitute the exclusive remedy for the settlement of any
Claim,  including whether such Claim is subject to the reference  proceeding and
the parties  waive their rights to initiate any legal  proceedings  against each
other in any court or jurisdiction  other than the Superior Court of Los Angeles

                                      -29-
<PAGE>
(the "Court"). The referee shall be a retired Judge selected by mutual agreement
of the  parties,  and if they cannot so agree with in thirty days (30) after the
Claim Date,  the referee shall be selected by the Presiding  Judge of the Court.
The referee  shall be appointed to sit as a temporary  judge,  as  authorized by
law. The referee  shall (a) be  requested  to set the matter for hearing  within
sixty  (60) days  after the Claim  Date and (b) try any and all issues of law or
fact and report a statement of decision  upon them,  if possible,  within ninety
(90) days of the Claim Date. Any decision rendered by the referee will be final,
binding and conclusive and judgment shall be entered  pursuant to CCP 644 in the
Court.  All discovery  permitted by this  Agreement  shall be completed no later
than fifteen (15) days before the first hearing date established by the referee.
The referee may extend such period in the event of a party's  refusal to provide
requested  discovery for any reason whatsoever,  including,  without limitation,
legal objections  raised to such discovery or unavailability of a witness due to
absence or  illness.  No party  shall be entitled  to  "priority"  in  conducing
discovery.  Depositions may be taken by either party upon seven (7) days written
notice,  and,  request  for  production  of  inspection  of  documents  shall be
responded  to within ten (10) days  after  service.  All  disputes  relating  to
discovery  which  cannot be resolved by the parties  shall be  submitted  to the
referee whose decision shall be final and binding upon the parties.

          (b)  The  referee  shall  be  required  to  determine  all  issues  in
accordance  with  existing  case  law and the  statutory  laws of the  State  of
California.  The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding.  The referee shall
be  empowered  to  enter  equitable  as well as legal  relief,  to  provide  all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the  reference  proceeding  which  shall  dispose of all of the claims of the
parties  that are the subject to the  reference.  The parties  hereto  expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or  appealable  judgment  entered by the  referee.  The parties  expressly
reserve the right to findings of fact,  conclusions of law, a written  statement
of  decision,  and the  right to move for a new trial or a  different  judgment,
which new trial,  if granted,  is also to be a reference  proceeding  under this
provision.

          (c) No  provision  of  Paragraphs  (a) or (b) of this  Section  10.13,
however,  shall limit the right of Lender to bring action for  possession of any

                                      -30-
<PAGE>
collateral  in any  jurisdiction,  wherever  located,  in  accordance  with  the
provisions of the Security Documents.

     10.14  Schedules  and Exhibits  Incorporated.  All  schedules  and exhibits
attached hereto,  if any, are hereby  incorporated into this Credit Agreement by
each reference thereto as if fully set forth at each such reference.

     10.15  Counterparts.  This  Credit  Agreement  may be  executed in multiple
counterparts,  each of which, when so executed,  shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.

     10.16  Participations.  Lender,  at any time, shall have the right to sell,
assign, transfer, negotiate or grant participation interests in the Loans and in
any documents and instruments executed in connection  herewith.  Borrower hereby
acknowledges  and agrees that any such  disposition  shall give rise to a direct
obligation  of  Borrower  to  each  such  assignee  or  participant.  Lender  is
authorized  to  furnish  to  any  participant  or  prospective  participant  any
information  or  document  that Lender may have or obtain  regarding  the Loans,
Borrower or any guarantor of the Loans.

     IN WITNESS WHEREOF,  the undersigned have executed this Credit Agreement as
of the day and year first above written.

                                   GEL TECH, L.L.C., an Arizona limited
                                   liability company


                                By:
                                      ------------------------------------------

                                Name:
                                      ------------------------------------------

                                Title:
                                      ------------------------------------------


                                   IMPERIAL BANK, a California banking
                                   corporation


                                By:
                                      ------------------------------------------

                                Name:
                                      ------------------------------------------

                                Title:
                                      ------------------------------------------
<PAGE>
                                   EXHIBIT "A"

                             FORM OF ADVANCE NOTICE


Imperial Bank
One Arizona Center
400 East Van Buren, Suite 900
Phoenix, Arizona  85004
Attention: Edmund Ozorio
Telecopier:  (602) 261-7881

                                                           Date:_____________

                                                           Time:______________

Dear Edmund:

     The undersigned,  Gel Tech,  L.L.C.,  an Arizona limited  liability company
("Borrower"), refers to the Credit Agreement dated as of January 11, 2000 (as it
may hereafter be amended, modified,  extended or restated from time to time, the
"Credit  Agreement"),  between Borrower and Imperial Bank, a California  banking
corporation.  Capitalized  terms used herein and not  otherwise  defined  herein
shall have the meanings assigned to such terms in the Credit Agreement.

     The Borrower  hereby  gives notice that it requests an Advance  pursuant to
the Credit Agreement and sets forth below the terms of such requested Advance:

     A.   Date of Advance ____________________

     B.   Principal Amount of Advance ____________________

                                        Sincerely,

                                        GEL TECH, L.L.C., an Arizona limited
                                        liability company


                                By:
                                      ------------------------------------------

                                Name:
                                      ------------------------------------------

                                Title:
                                      ------------------------------------------
<PAGE>
                                   EXHIBIT "B"

                             COMPLIANCE CERTIFICATE
                                FOR PERIOD ENDING

                               ------------------
                              ("REPORTING PERIOD")



Imperial Bank
400 East Van Buren, Suite 900
Phoenix, Arizona  85004
Attention: Edmund Ozorio
Telecopier:  (602) 261-7881                            Date:  _____________



Dear Ladies and Gentlemen:

     This  Compliance  Certificate  refers to the Credit  Agreement  dated as of
January 11, 2000 (as it may hereafter be amended, modified, extended or restated
from time to time, the "Credit Agreement"), between Gel Tech, L.L.C., an Arizona
limited  liability  company (the  "Borrower")  and  Imperial  Bank, a California
banking  corporation.  Capitalized  terms used and not otherwise  defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

     Pursuant to Section 7.1 of the Credit  Agreement,  the undersigned,  hereby
certifies that:

     1. To the  best of the  undersigned's  knowledge,  after  a  review  of the
activities  of Borrower  during the  Reporting  Period,  Borrower has  observed,
performed and fulfilled each and every obligation and covenant  contained in the
Credit  Agreement  and  no  "Event  of  Default"  thereunder  exists  [or if so,
specifying the nature and extent thereof and any corrective  actions taken or to
be taken].

     2. All  financial  statements  of Borrower  delivered to Lender  during the
Reporting Period, if any, to the undersigned's knowledge,  fairly present in all
material  respect the financial  position of the Borrower and the results of its
operations at the dates and for the periods  indicated and have been prepared in
accordance with GAAP.

     3. As of the last day of the Reporting Period,  the computations below were
true and correct:
<PAGE>

     Section 8.9 - FINANCIAL COVENANTS:

          (a)  LIQUIDITY PERCENTAGE

     Numerator: Cash on deposit with Lender                          $

                plus: Funds invested with Lender                     $

                equals: Eligible Deposit Amount                     A$

     Denominator: RLC Balance                                       B$

     A divided by B equals                                        A/B__________%

     Minimum                                                               30.0%

     (b) NET INCOME (FISCAL QUARTER STARTING 3/31/00)             (in thousands)

     Actual                                                         $
                        ------------   ------------  ------------   ------------


     Minimum                                                        $          0
                                                                    ------------



                                        GEL TECH, L.L.C., an Arizona limited
                                        liability company



                                By:
                                      ------------------------------------------

                                Name:
                                      ------------------------------------------

                                Title:
                                      ------------------------------------------
<PAGE>
                                   EXHIBIT "C"

                           BORROWING BASE CERTIFICATES






<PAGE>
                                   EXHIBIT "D"


When recorded, return to:

Streich Lang, P.A.
Renaissance One
Two North Central Avenue
Phoenix, Arizona  85004-2391
Attention: Henry A. Perras, Esq.


                          WAIVER/RELEASE OF LIEN RIGHTS


     To induce IMPERIAL BANK, a California banking corporation, whose address is
400 East Van Buren,  Suite  900,  Phoenix,  Arizona  85004  (hereinafter  called
"Lender"),  to grant  and/or  continue  financial  accommodations  to GEL  TECH,
L.L.C., an Arizona limited liability company,  whose address is 246 East Watkins
Street,  Phoenix,  Arizona 85004 (hereinafter called "Debtor"),  the undersigned
covenants and agrees as follows:

     1.  Debtor  has  executed a  Security  Agreement  dated  January  11,  2000
(hereinafter  called the  "Security  Agreement"),  granting to Lender a security
interest in that property of Debtor  described in the Security  Agreement and on
Schedule  "A"  attached  hereto and made a part hereof  (hereinafter  called the
"Collateral").  The  Collateral  includes,  but is  not  limited  to,  fixtures,
equipment, machinery, furniture and furnishings that are now or hereafter may be
installed,  placed or located on the real  property  described  on Schedule  "B"
attached hereto (hereinafter called the "Real Property"),  which is owned by the
undersigned or in which the undersigned has or claims a lien or interest.

     2. The  undersigned  hereby  consents to the Security  Agreement and to all
liens,  security  interests and rights of Lender in the Collateral  arising from
the Security  Agreement  and waives and releases all rights of levy for rent and
all liens, security interests,  claims, rights and demands of every kind against
the Collateral.

     3. The undersigned hereby grants permission to Lender, its officers, agents
and  employees,  to enter,  at any time, the Real Property or any other premises
where the  Collateral may be found and to remove the  Collateral,  provided that
Lender shall promptly  reimburse the  undersigned  for the cost of repairing any
physical  injury  done to the Real  Property  as a result of the  removal of the
Collateral.
<PAGE>
     4. The  Collateral  shall at all  times be  personal  property,  shall  not
constitute  fixtures or be part of the Real Property and shall not be subject to
distraint or execution by the undersigned or to any claim of the undersigned.

     5. The undersigned shall notify any purchaser of the Real Property, and any
subsequent  mortgagee or other encumbrance holder or claimant,  of the existence
of this  Waiver/Release  Agreement,  which shall be binding upon the  executors,
administrators, successors, assigns and transferees of the undersigned and shall
inure to the benefit of the successors and assigns of Lender.

     6. In the event of any default  under its lease or  agreement  with Debtor,
then  prior  to:  (i)  terminating  its lease or  agreement  with  Debtor,  (ii)
incurring any  attorneys'  fees, or (iii)  incurring any other expenses which it
would,  but for this  provision,  charge Debtor,  the  undersigned  shall notify
Lender in writing at the above  address of such default and allow Lender 30 days
after  receipt of such  notice to remedy  any such  default on behalf of Debtor;
provided, however, that if the default cannot reasonably be remedied within that
30-day period,  the undersigned  shall not terminate its lease or agreement with
Debtor or incur any  attorneys'  fees or other  expenses so long as Lender shall
commence  to remedy  the  default  within  that  30-day  period  and  thereafter
diligently prosecute the remedy to completion.

     IN WITNESS  WHEREOF,  the undersigned has executed this Agreement this ____
day of ____________________.


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

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


                                By:
                                      ------------------------------------------

                                Name:
                                      ------------------------------------------

                                Title:
                                      ------------------------------------------


                                Address:

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

                                             -----------------------------------
<PAGE>
STATE OF ____________________ )
                              ) ss.
County of ___________________ )



     The  foregoing  instrument  was  acknowledged  before me this  _____ day of
__________________________,  by __________________________________________,  the
____________________________  of  ______________________________________________
_______________________, on behalf of said ________________.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                      ------------------------------------------
                                      Notary Public


My commission expires:


----------------------
<PAGE>
                                  SCHEDULE "A"

                             COLLATERAL DESCRIPTION


     All of the property described below in, to or under which Debtor now
has or hereafter acquires any right, title or interest,  whether present, future
or contingent,  and in Debtor's  expectancy to acquire such property (all of the
property described on this schedule is herein called the "Collateral"):

          (a) All  accounts,  general  intangibles,  instruments,  documents and
     chattel paper  (including all accounts  receivable,  notes,  drafts,  lease
     agreements and security  agreements),  and all goods,  if any,  represented
     thereby, whether now existing or hereafter acquired or created from time to
     time in the course of Debtor's business;

          (b) All inventory now owned or hereafter acquired, including all goods
     held for sale or lease in Debtor's business, as now or hereafter conducted,
     and all  materials,  work  in  process  and  finished  goods  used or to be
     consumed in Debtor's  business (whether or not the inventory is represented
     by  warehouse  receipts  or bills of lading or has been or may be placed in
     transit or delivered to a public warehouse);

          (c) All  equipment  now owned or  hereafter  acquired,  including  all
     furniture, fixtures, furnishings,  vehicles (whether titled or non-titled),
     machinery,  materials and  supplies,  wherever  located,  including but not
     limited  to such  items  described  on the  collateral  schedule  (if  any)
     attached hereto and by this reference made a part hereof, together with all
     parts,   accessories,   attachments,   additions  thereto  or  replacements
     therefor;

          (d) All  instruments,  documents  and  chattel  paper  now  held by or
     hereafter delivered to Secured Party, together with all property rights and
     security  interests  evidenced thereby,  all increases thereof  (including,
     without  limitation,  stock  dividends),  all  profits  therefrom  and  all
     transformations thereof,  including but not limited to such items described
     on the collateral  schedule (if any) attached  hereto and by this reference
     made   a   part   hereof   (all    hereinafter    called   the    "Specific
     Collateral-in-Possession");

          (e) All tax refund claims,  all policies or  certificates of insurance
     covering any of the  Collateral,  all  contracts,  agreements  or rights of
     indemnification,  guaranty or surety relating to any of the Collateral, and
     all claims,  awards,  loss payments,  proceeds and premium refunds that may
     become payable with respect to any such policies, certificates,  contracts,
     agreements or rights;
<PAGE>
          (f) All ledger cards, invoices, delivery receipts,  worksheets,  books
     of accounts, statements,  correspondence,  customer lists, files, journals,
     ledgers and records in any form,  written or  otherwise,  related to any of
     the Collateral;

          (g)  Tradenames,   trademarks,  trademark  applications,   copyrights,
     copyright  applications,  service  marks  and  the  entire  goodwill  of or
     associated with the business now or hereafter conducted by the Debtor;

          (h) All claims for loss or damage to or in connection  with any of the
     Collateral,  all  other  claims  in any  form  for the  payment  of  money,
     including  tort claims,  and all rights with respect to such claims and all
     proceeds thereof;

          (i) All accessions to any of the Collateral; and

          (j)  All  products  and  proceeds  of the  Collateral,  in  any  form,
     including  all  proceeds  received,  due or to  become  due from any  sale,
     exchange  or  other  disposition  of any of the  Collateral,  whether  such
     proceeds  are cash or  noncash  in nature  or are  represented  by  checks,
     drafts, notes or other instruments for the payment of money.

All "Collateral Schedules," if any, attached hereto are hereby incorporated into
this collateral description as if set forth here and at each reference thereto.
<PAGE>



                                  SCHEDULE "B"

                                  REAL PROPERTY