LOAN AGREEMENT
                                   $2,000,000
                                     between
                            THE FEMALE HEALTH COMPANY
                                   as Borrower
                                       and
                                 HEARTLAND BANK
                                    as Lender
                            Dated as of May 18, 2001



<PAGE>

                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>

                                                                                Page
                                                                                ----
<S>                                                                             <C>
ARTICLE 1 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
     Section  1.1  Definitions . . . . . . . . . . . . . . . . . . . . . . . .     1
     Section  1.2  Other Provisions. . . . . . . . . . . . . . . . . . . . . .     6
     Section  1.3  Exhibits and Schedules. . . . . . . . . . . . . . . . . . .     7

ARTICLE 2 - CREDIT FACILITY. . . . . . . . . . . . . . . . . . . . . . . . . .     1
     Section  2.1  Revolving Credit Loans. . . . . . . . . . . . . . . . . . .     7
     Section  2.2  Repayment of Revolving Credit Loan. . . . . . . . . . . . .     7
     Section  2.3  Revolving Credit Note . . . . . . . . . . . . . . . . . . .     7
     Section  2.4  Prepayment of Credit Loan . . . . . . . . . . . . . . . . .     8

ARTICLE 3 - GENERAL LOAN PROVISIONS. . . . . . . . . . . . . . . . . . . . . .     8
     Section  3.1  Interest. . . . . . . . . . . . . . . . . . . . . . . . . .     8
     Section  3.3  Increased Costs and Reduced Returns . . . . . . . . . . . .     8
     Section  3.4  Manner of Payment . . . . . . . . . . . . . . . . . . . . .     9
     Section  3A.1  Payments . . . . . . . . . . . . . . . . . . . . . . . . .     9

ARTICLE 4 - CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . .    10
     Section  4.1 Conditions Precedent to All Loans. . . . . . . . . . . . . .    10
     Section  4.3  Conditions  Precedent  to Subsequent Term Loan A
                   Advances and Revolving Loan Advances. . . . . . . . . . . .    11

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER . . . . . . . . . . . .    12
     Section  5.1 Representations and Warranties . . . . . . . . . . . . . . .    12
     Section  5.2 Survival of Representations and Warranties, Etc. . . . . . .    14

ARTICLE 6 - AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . .    15
     Section  6.1 Preservation of Corporate Existence and Similar Matters. . .    15
     Section  6.2 Compliance with Applicable Law . . . . . . . . . . . . . . .    15
     Section  6.3 Payment of Taxes and Claims. . . . . . . . . . . . . . . . .    15
     Section  6.4 Accounting Methods and Financial Records . . . . . . . . . .    15
     Section  6.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . .    15
     Section  6.6 Hazardous Waste and Substances; Environmental Requirements .    15
     Section  6.7 Accuracy of Information. . . . . . . . . . . . . . . . . . .    15
     Section  6.8 Revisions or Updates to Schedules. . . . . . . . . . . . . .    16
     Section  6.10 Conduct of Business . . . . . . . . . . . . . . . . . . . .    16
     Section  6.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . .    16
     Section  6.11. Issuance of Shares . . . . . . . . . . . . . . . . . . . .    16
     Section  6.12  Reservation of Shares Upon Conversion. . . . . . . . . . .    16

ARTICLE 7 - INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
     Section  7.1 Financial Statements . . . . . . . . . . . . . . . . . . . .    16
     Section  7.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . .    17
     Section  7.3 Copies of Other Reports. . . . . . . . . . . . . . . . . . .    17
     Section  7.4 Notice of Litigation and Other Matters . . . . . . . . . . .    17
     Section  7.5 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . .    18


<PAGE>
ARTICLE 8 - NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .    18
     Section  8.1 Merger, Consolidation and Sale of Assets . . . . . . . . . .    18
     Section  8.2 Transactions with Affiliates . . . . . . . . . . . . . . . .    18
     Section  8.3. Protection of Lender's Rights . . . . . . . . . . . . . . .    18
     Section  8.4  Dividends/Distributions . . . . . . . . . . . . . . . . . .    18
     Section  8.5 Reclassification, Merger, Sale of Assets, etc. . . . . . . .    18
     Section  8.6 Split, Subdivision or Combination of Shares. . . . . . . . .    19
     Section  8.7 No Impairment. . . . . . . . . . . . . . . . . . . . . . . .    19
     Section  8.8 Warrants . . . . . . . . . . . . . . . . . . . . . . . . . .    19

ARTICLE 9 - DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    19
     Section  11.1 Events of Default . . . . . . . . . . . . . . . . . . . . .    19
     Section  9.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . .    21
     Section  9.3 Application of Proceeds. . . . . . . . . . . . . . . . . . .    21
     Section  9.4 Miscellaneous Provisions Concerning Remedies . . . . . . . .    21

ARTICLE 10 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .    22
     Section  10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . .    22
     Section  10.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .    22
     Section  10.3 Stamp and Other Taxes . . . . . . . . . . . . . . . . . . .    23
     Section  10.4 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . .    23
     Section  10.5 Dispute Resolution. . . . . . . . . . . . . . . . . . . . .    23
     Section  10.7 Reversal of Payments. . . . . . . . . . . . . . . . . . . .    24
     Section  10.8 Injunctive Relief . . . . . . . . . . . . . . . . . . . . .    24
     Section  10.9 Accounting Matters. . . . . . . . . . . . . . . . . . . . .    24
     Section  10.10 Assignment; Participation. . . . . . . . . . . . . . . . .    24
     Section  10.11 Amendments . . . . . . . . . . . . . . . . . . . . . . . .    24
     Section  10.12 Performance of Borrowers' Duties . . . . . . . . . . . . .    24
     Section  10.13 Indemnification. . . . . . . . . . . . . . . . . . . . . .    25
     Section  10.14 All Powers Coupled with Interest . . . . . . . . . . . . .    25
     Section  10.15 Survival . . . . . . . . . . . . . . . . . . . . . . . . .    25
     Section  10.16 Severability of Provisions . . . . . . . . . . . . . . . .    25
     Section  10.17 Governing Law. . . . . . . . . . . . . . . . . . . . . . .    25
     Section  10.18 Counterparts . . . . . . . . . . . . . . . . . . . . . . .    25
     Section  10.19 Final Agreement. . . . . . . . . . . . . . . . . . . . . .    25
     Section  10.20 Purchase of Insurance. . . . . . . . . . . . . . . . . . .    25
     Section  10.21 Oral Agreements. . . . . . . . . . . . . . . . . . . . . .    26
</TABLE>


<PAGE>
                             EXHIBITS AND SCHEDULES

EXHIBIT  A     FORM  OF  LOAN  NOTE



SCHEDULE  5.1(m)     Borrower  locations
SCHEDULE  5.1(p)     ERISA
SCHEDULE  5.1(r)     Capital  Structure




<PAGE>

                                 LOAN AGREEMENT

     This Loan Agreement is entered into as of this 18th day of May, 2001 by and
between  THE  FEMALE  HEALTH  COMPANY,  a Wisconsin corporation ("Borrower") and
HEARTLAND  BANK,  a  federal  savings  bank  (the  "Lender");

                                   WITNESSETH:

     WHEREAS,  the  Borrower  desires to establish a credit facility with Lender
for the purpose of redeeming some of the outstanding corporate securities issued
by  the  Borrower;  and

     WHEREAS, upon and subject to the terms and conditions set forth herein, the
Lender  is  willing  to  make  loans  and  advances  to  the  Borrower.

     NOW,  THEREFORE,  the  Borrower  and  the  Lender  hereby agree as follows:

                             ARTICLE 1 - DEFINITIONS

     Section  1.1     Definitions.  For  the  purposes  of  this  Agreement:
                      -----------

     "Affiliate"  means,  with  respect  to a Person, (a) any officer, director,
      ---------
employee,  member  or  managing  agent  of such Person, (b) any spouse, parents,
brothers,  sisters,  children  and  grandchildren  of  such  Person,  (c)  any
association,  partnership, trust, entity or enterprise in which such Person is a
director, officer or general partner, (d) any other Person that, (i) directly or
indirectly,  through  one or more intermediaries, controls, or is controlled by,
or  is under common control with, such given Person, (ii) directly or indirectly
beneficially  owns  or  holds  5%  or  more  of  any  class  of  voting stock or
partnership,  membership  or  other interest of such Person or any Subsidiary of
such  Person, or (iii) 5% or more of the voting stock or partnership, membership
or  other interest of which is directly or indirectly beneficially owned or held
by  such  Person  or  a Subsidiary of such Person.  The term "control" means the
possession,  directly  or  indirectly,  of  the  power  to  direct  or cause the
direction  of the management and policies of a Person, whether through ownership
of  voting  securities  or  partnership  or  other  interests,  by  contract  or
otherwise.

     "Agreement"  means  this  Agreement,  including  the Exhibits and Schedules
      ---------
hereto, and all amendments, modifications and supplements hereto and thereto and
restatements  hereof  and  thereof.

     "Agreement  Date"  means  the  date  as  of  which this Agreement is dated.
      ---------------

     "Benefit  Plan"  means an employee benefit plan as defined in Section 3(35)
      -------------
of  ERISA  (other than a Multiemployer Plan) in respect of which a Person or any
Related  Company  is,  or  within  the  immediately  preceding  6  years was, an
"employer"  as  defined in Section 3(5) of ERISA, including such plans as may be
established  after  the  Agreement  Date.

     "Borrower" means The Female Health Company, a Wisconsin corporation and its
      --------
successors  and  assigns.

     "Borrowing  Officer"  means  each  individual  of  Borrower  who  is  duly
      ------------------
authorized  by  Borrower  to  submit  a  request  for  a  Loan  Advance.


                                        1
<PAGE>
     "Business  Day" means any day other than a Saturday, Sunday or other day on
      -------------
which  banks  in  St.  Louis,  Missouri  are  authorized  to  close.

     "Code"  means  the  Internal  Revenue Code of 1986, as amended from time to
      ----
time.

     "Credit  Loan"  means  the  loan  made to Borrower pursuant to SECTION 2.1.
      ------------

     "Credit  Note"  means  the  Promissory Note made by Borrower payable to the
      ------------
order  of  the Lender evidencing the obligation of Borrower to pay the aggregate
unpaid  principal  amount  of  the Credit Loan made to it by the Lender (and any
promissory  note  or notes that may be issued from time to time in substitution,
renewal,  extension,  replacement  or  exchange  therefor).

     "Default"  means  any of the events specified in SECTION 9.1 that, with the
      -------
passage  of  time  or  giving  of  notice  or both, would constitute an Event of
Default.

     "Default  Rate"  means  the  annual  rate  described  in  SECTION  3.1(B).
      -------------

     "Dollar"  and  "$"  means  freely  transferable  United  States  dollars.
      ------         -

     "Effective  Date"  means  the  later of (a) the Agreement Date, and (b) the
      ---------------
first  date  on  which all of the conditions set forth in SECTION 4.1 shall have
been  fulfilled  or  waived  by  the  Lender.

     "Effective Interest Rate" means the rate of interest per annum on the Loans
      -----------------------
in  effect  from  time  to  time  pursuant  to  the  provisions  of Section 3.1.

     "Environmental  Laws"  means all federal, state, local and foreign laws now
      -------------------
or  hereafter  in effect relating to pollution or protection of the environment,
including  laws  relating  to  emissions,  discharges,  releases  or  threatened
releases  of  pollutants,  contaminants,  chemicals  or  industrial,  toxic  or
hazardous  substances  or  wastes  into  the  environment  (including,  without
limitation,  ambient  air,  surface  water,  ground  water or land) or otherwise
relating  to the manufacture, processing, distribution, use, treatment, storage,
disposal,  removal, transport or handling of pollutants, contaminants, chemicals
or  industrial,  toxic  or  hazardous  substances  or  wastes,  and  any and all
regulations,  notices or demand letters issued, entered, promulgated or approved
thereunder.

     "ERISA"  mean  the  Employee  Retirement Income Security Act of 1974, as in
      -----
effect  from  time  to  time,  and  any  successor  statute.

     "Event  of  Default"  means  any  of  the  events specified in SECTION 9.1.
      ------------------

     "Financing  Statements"  means  the  Uniform  Commercial  Code  financing
      ---------------------
statements executed and delivered by Guarantors to the Lender, naming the Lender
as  secured  party and Guarantor as debtor, in connection with the perfection of
the  security interests granted by this Agreement or the other Guaranty Security
Documents.

     "GAAP"  means generally accepted accounting principles in the United States
      ----
consistently  applied  and  maintained  throughout  the  period  indicated  and
consistent  with  the  prior  financial  practice  of  the  Person  referred to.


                                        2
<PAGE>
     "Governmental  Approvals"  means  all  authorizations, consents, approvals,
      -----------------------
licenses  and exemptions of, registrations and filings with, and reports to, all
governmental  bodies,  whether  federal,  state,  local,  foreign  national  or
provincial,  and  all  agencies  thereof.

     "Governmental  Authority"  means any government or political subdivision or
      -----------------------
any  agency,  authority,  bureau,  central  bank,  commission,  department  or
instrumentality  of either, or any court, tribunal, grand jury or arbitrator, in
each  case  whether  foreign  or  domestic.

     "Guarantors"  means,  collectively,  Stephen  M. Dearholt, James R. Kerber,
      ----------
Thomas  Bodine,  Geneva  O. Parrish 1996 Living Trust and such other Persons who
may  in  the  future  Guarantee  any  of  the  Obligations.

     "Guaranty", "Guaranteed" or to "Guarantee," as applied to any obligation of
      --------    ----------         ---------
another  Person  shall  mean  and  include:

     (a)     a guaranty (other than by endorsement of negotiable instruments for
collection  in  the ordinary course of business), directly or indirectly, in any
manner,  of  any  part  or  all  of  such  obligation  of such other Person, and

     (b)     an  agreement,  direct  or  indirect,  contingent or otherwise, and
whether  or  not  constituting  a  guaranty, the practical effect of which is to
assure  the  payment  or  performance  (or  payment  of  damages in the event of
nonperformance)  of  any  part  or  all  of such obligation of such other Person
whether  by  (i)  the  purchase of securities or obligations, (ii) the purchase,
sale  or  lease  (as  lessee  or  lessor) of property or the purchase or sale of
services  primarily for the purpose of enabling the obligor with respect to such
obligation  to  make  any  payment  or performance (or payment of damages in the
event  of nonperformance) of or on account of any part or all of such obligation
or  to  assure the owner of such obligation against loss, (iii) the supplying of
funds  to, or in any other manner investing in, the obligor with respect to such
obligation,  (iv) repayment of amounts drawn down by beneficiaries of letters of
credit,  or (v) the supplying of funds to or investing in a Person on account of
all  or  any part of such Person's obligation under a guaranty of any obligation
or indemnifying or holding harmless, in any way, such Person against any part or
all  of  such  obligation.

     "Guaranty  Security  Documents"  means  each  (a)  Financing Statement, (b)
      -----------------------------
Pledge  Agreement,  and  (c)  other writing executed and delivered by any Person
guaranteeing  the  Obligations.

     "Guaranty  Sublimits"  shall  equal  the  aggregate  amount  of Obligations
      -------------------
guaranteed  by  the  Guarantors  pursuant  to  the  Limited  Guaranties.

     "Indebtedness" of any Person means, without duplication (a) all obligations
      ------------
for money borrowed or for the deferred purchase price of property or services or
in  respect  of  reimbursement  obligations  under  letters  of  credit, (b) all
obligations  represented  by  bonds,  debentures, notes and accepted drafts that
represent  extensions  of  credit,  (c)  all  obligations (including, during the
noncancellable  term  of any lease in the nature of a title retention agreement,
all  future  payment  obligations  under  such lease discounted to their present
value  in  accordance  with  GAAP)  secured by any Lien to which any property or
asset  owned  or  held  by such Person is subject, whether or not the obligation
secured  thereby  shall have been assumed by such Person, (d) all obligations of
other  Persons  which such Person has Guaranteed, including, but not limited to,
all  obligations of such Person consisting of recourse liability with respect to
accounts receivable sold or otherwise disposed of by such Person, (e) the sum of
all  undrawn  amounts and all drawings under any letters of credit for which the
Person  has  reimbursement obligations, and (f) in the case of Borrower (without
duplication),  the  Loans.

     "Lender"  means  Heartland Bank, a federal savings bank, and its successors
      ------
and  assigns.


                                        3
<PAGE>
     "Lender's Office" means the office of the Lender specified in or determined
      ---------------
in  accordance  with  the  provisions  of  SECTION  10.1(C).

     "Liabilities"  means  all  liabilities of a Person determined in accordance
      -----------
with  GAAP  and  includable  on  a  balance  sheet  of  such  Person prepared in
accordance  with  GAAP.

     "Lien"  as  applied  to the property of any Person means: (a) any mortgage,
      ----
deed  to  secure debt, deed of trust, lien, pledge, charge, lease constituting a
capitalized  lease  obligation,  conditional  sale  or  other  title  retention
agreement, or other security interest, security title or encumbrance of any kind
in  respect  of  any  property  of  such  Person  or  upon the income or profits
therefrom,  (b) any arrangement, express or implied, under which any property of
such  Person is transferred, sequestered or otherwise identified for the purpose
of  subjecting  the  same  to  the payment of Indebtedness or performance of any
other  obligation in priority to the payment of the general, unsecured creditors
of such Person, (c) any Indebtedness which is unpaid more than 30 days after the
same  shall  have  become  due  and  payable  and  which  if unpaid might by law
(including,  but not limited to, bankruptcy and insolvency laws) or otherwise be
given  any  priority whatsoever over general unsecured creditors of such Person,
and  (d)  the filing of, or any agreement to give, any financing statement under
the  UCC  or  its  equivalent  in  any  jurisdiction.

     "Limited  Guaranties"  means  those  certain  Continuing  Secured  Limited
      -------------------
Guaranties  issued  in favor of the Lender by each of the Guarantors dated as of
the  date  hereof.

     "Loans"  means  any  loan made to Borrower pursuant to SECTIONS 2.1 and all
      -----
extensions,  renewals  and  modifications  thereto,  as  well  as all such Loans
collectively.

     "Loan  Documents"  means,  collectively,  this  Agreement,  the  Note,  the
      ---------------
Registration Rights Agreement, the Warrant, the Guaranty Security Documents, the
Limited  Guaranties  and  each other instrument, agreement and document executed
and  delivered  by  Borrower  in  connection  with this Agreement and each other
instrument,  agreement  or  document  referred to herein or contemplated hereby.

     "Loan  Maturity  Date"  means  May  18,  2004.
      --------------------

     "Material  Adverse  Effect"  means  any act, omission, event or undertaking
      -------------------------
which would, singly or in the aggregate, have a material adverse effect upon (a)
the  business,  assets,  properties,  liabilities,  condition  (financial  or
otherwise),  results  of  operations or business prospects of Borrower, (b) upon
the  ability  of Borrower to perform any obligations under this Agreement or any
other  Loan  Document  to  which  it  is a party, or (c) the legality, validity,
binding  effect,  enforceability  or  admissibility  into  evidence  of any Loan
Document  or the ability of Lender to enforce any rights or remedies under or in
connection  with  any  Loan  Document;  in  any case, whether resulting from any
single  act,  omission,  situation, status, event, or undertaking, together with
other  such  acts,  omissions,  situations,  statuses,  events, or undertakings.

     "Multiemployer  Plan"  means  a  "multiemployer plan" as defined in Section
      -------------------
4001(a)(3)  of  ERISA  to  which  Borrower  or  a Related Company is required to
contribute  or  has  contributed  within  the  immediately  preceding  6  years.

     "Note"  means  the  Credit  Note,  the  form of which is attached hereto as
      ----
EXHIBIT  A,  and  any  amendments,  modifications,  restatements,  replacements,
renewals  or  refinancings  thereof.


                                        4
<PAGE>
     "Obligations"  means,  in  each  case whether now in existence or hereafter
      -----------
arising, (a) the principal of and interest and premium, if any, on, and expenses
related  to,  the  Loans  and  (b)  all  indebtedness, liabilities, obligations,
overdrafts, covenants and duties of Borrower to the Lender of every kind, nature
and  description,  direct  or  indirect, absolute or contingent, due or not due,
contractual  or  tortious,  liquidated  or  unliquidated,  and  whether  or  not
evidenced  by  any  note and whether or not for the payment of money under or in
respect  of  the  Loans,  this  Agreement,  any  Note  or  any of the other Loan
Documents.

     "Obligors"  means Borrower, Guarantors, each party to the Guaranty Security
      --------
Documents (other than the Lender), and each other party at any time primarily or
secondarily,  directly  or  indirectly,  liable  on  any  of  the  Obligations.

     "PBGC"  means  the  Pension  Benefit  Guaranty Corporation or any successor
      ----
agency.

     "Person"  means an individual, corporation, partnership, association, trust
      ------
or  unincorporated  organization  or  a  government  or  any agency or political
subdivision  thereof.

     "Pledge  Agreements"  means those certain pledge agreements entered into by
      ------------------
and  between  Lender and each Guarantor, dated as of even date herewith, whereby
each  Guarantor  pledged,  to  Lender,  its interest in certain warrants for the
purchase  of  stock  in Borrower, and the corresponding shares of stock issuable
upon  exercise  of  the  warrants.

     "Registration  Rights  Agreement"  means  that  certain Registration Rights
      -------------------------------
Agreement entered into by and between Borrower and Lender, dated as of even date
herewith,  whereby  Borrower  agreed  to  provide to Lender certain registration
rights under the Securities Act of 1933, as amended, with respect to the Shares.

     "Related  Company"  means, as to any Person, any (a) corporation which is a
      ----------------
member  of  the  same  controlled  group  of corporations (within the meaning of
Section  414(b)  of  the Code) as such Person, (b) partnership or other trade or
business  (whether or not incorporated) under common control (within the meaning
of  Section  414(c)  of  the  Code)  with such Person, or (c) member of the same
affiliated  service  group (within the meaning of Section 414(m) of the Code) as
such Person or any corporation described in CLAUSE (A) above or any partnership,
trade  or  business  described  in  CLAUSE  (B)  above.

     "Restricted  Distribution"  by  any  Person  means  (a)  its  retirement,
      ------------------------
redemption,  purchase,  or  other  acquisition for value of any capital stock or
other  equity securities or partnership interests issued by such Person, (b) the
declaration or payment of any dividend or distribution on or with respect to any
such securities or partnership interests, (c) any loan or advance by such Person
to,  or other investment by such Person in, the holder of any of such securities
or partnership interests, and (d) any other payment by such Person in respect of
such  securities  or  partnership  interests.

     "Restricted  Payment" means (a) any redemption, repurchase or prepayment or
      -------------------
other  retirement, prior to the stated maturity thereof or prior to the due date
of  any  regularly  scheduled  installment  or amortization payment with respect
thereto,  of  any Indebtedness of a Person (other than the Obligations and trade
debt),  and (b) the payment by any Person of the principal amount of or interest
on  any  Indebtedness  (other  than  trade  debt)  owing to an Affiliate of such
Person.

     "Security  Interest" means the Liens of the Lender on and in any collateral
      ------------------
effected  by  any  of  the  Guaranty Security Documents or pursuant to the terms
hereof  or  thereof.

     "Shares"  means  shares  of  common  stock  of  the  Borrower issuable upon
      ------
exercise  of  the  Warrant.


                                        5
<PAGE>
     "Subsidiary"  means  a  Person  of which an aggregate of 50% or more of the
      ----------
stock  of  any  class or classes or 50% or more of membership or other ownership
interests  is  owned of record or beneficially by such other Person or by one or
more  Subsidiaries  of such other Person or by such other Person and one or more
Subsidiaries of such Person, (i) if the holders of such stock or other ownership
interests  (A) are ordinarily, in the absence of contingencies, entitled to vote
for the election of a majority of the directors (or other individuals performing
similar  functions)  of  such  Person, even though the right so to vote has been
suspended  by  the happening of such a contingency, or (B) are entitled, as such
holders, to vote for the election of a majority of the directors (or individuals
performing  similar  functions)  of  such Person, whether or not the right so to
vote  exists by reason of the happening of a contingency, or (ii) in the case of
such  other  ownership  interests,  if  such  ownership  interests  constitute a
majority  voting  interest.

     "Termination  Event"  means  (a) a "Reportable Event" as defined in Section
      ------------------
4043(b)  of ERISA, but excluding any such event as to which the provision for 30
days'  notice to the PBGC is waived under applicable regulations, (b) the filing
of  a notice of intent to terminate a Benefit Plan or the treatment of a Benefit
Plan  amendment  as  a  termination  under  Section  4041  of  ERISA, or (c) the
institution of proceedings to terminate a Benefit Plan by the PBGC under Section
4042  of  ERISA  or the appointment of a trustee to administer any Benefit Plan.

     "UCC"  means  the Uniform Commercial Code as in effect from time to time in
      ---
the  State  of  Missouri.

     "Unfunded  Vested Accrued Benefits" means, with respect to any Benefit Plan
      ---------------------------------
at  any  time,  the amount (if any) by which (a) the present value of all vested
nonforfeitable  benefits  under  such  Benefit  Plan exceeds (b) the fair market
value of all Benefit Plan assets allocable to such benefits, as determined using
such  reasonable  actuarial  assumptions  and  methods  as  are specified in the
Schedule  B (Actuarial Information) to the most recent Annual Report (Form 5500)
filed  with  respect  to  such  Benefit  Plan.

     "Warrant"  means  that  certain  Warrant,  dated  as  of even date herewith
      -------
executed by the Borrower in favor Lender whereby Lender is entitled to subscribe
for  and  purchase  Shares  from  Borrower.

     Section  1.2     Other  Provisions.
                      -----------------

     (a)     All  terms  in  this  Agreement,  the Exhibits and Schedules hereto
shall  have  the  same  defined  meanings when used in any other Loan Documents,
unless  the  context  shall  require  otherwise.

     (b)     Except as otherwise expressly provided herein, all accounting terms
not  specifically  defined or specified herein shall have the meanings generally
attributed  to  such  terms under GAAP including, without limitation, applicable
statements  and  interpretations  issued  by  the Financial Accounting Standards
Board  and  bulletins,  opinions,  interpretations  and statements issued by the
American  Institute  of  Certified  Public  Accountants  or  its  committees.

     (c)     All  personal  pronouns used in this Agreement, whether used in the
masculine,  feminine  or  neuter  gender,  shall  include all other genders; the
singular  shall  include  the plural, and the plural shall include the singular.

     (d)     The  words  "hereof", "herein" and "hereunder" and words of similar
import  when used in this Agreement shall refer to this Agreement as a whole and
not  to  any  particular  provisions  of  this  Agreement.

     (e)     Titles  of  Articles  and  Sections  in  this  Agreement  are  for
convenience only, do not constitute part of this Agreement and neither limit nor
amplify  the  provisions of this Agreement, and all references in this Agreement
to  Articles,  Sections, Subsections, paragraphs, clauses, subclauses, Schedules
or  Exhibits  shall  refer  to  the  corresponding Article, Section, Subsection,
paragraph,  clause  or  subclause  of,  or Schedule or Exhibit attached to, this
Agreement,  unless specific reference is made to the articles, sections or other
subdivisions  or  divisions of, or to schedules or exhibits to, another document
or  instrument.


                                        6
<PAGE>
     (f)     Each  definition of a document in this Agreement shall include such
document  as  amended,  modified,  supplemented or restated from time to time in
accordance  with  the  terms  of  this  Agreement.

     (g)     Except  where  specifically  restricted,  reference to a party to a
Loan  Document  includes  that  party  and  its successors and assigns permitted
hereunder  or  under  such  Loan  Document.

     (h)     Unless  otherwise  specifically stated, whenever a time is referred
to in this Agreement or in any other Loan Document, such time shall be the local
time  in  St.  Louis,  Missouri.

     (i)     Whenever the phrases "to the knowledge of Borrower," or "known to,"
or  words  of  similar  import  relating  to  the knowledge of Borrower are used
herein,  such  phrase  shall  mean  and refer to (i) the actual knowledge of the
President,  the  chief  financial  officer  or  any  officer  or  manager of the
Borrower,  or  (ii)  the knowledge that such Persons would have obtained if they
had engaged in good faith in the diligent performance of their duties, including
the making of such reasonable specific inquiries (excepting those situations and
circumstances  wherein  a  reasonably  prudent  person  would  not  consider  it
appropriate  to  make  any  such inquiry) as may be necessary of the appropriate
persons in a good faith attempt to ascertain the accuracy of the matter to which
such  phrase  relates.

     (j)     The  terms  accounts,  chattel  paper,  documents,  equipment,
instruments,  general intangibles and inventory, as and when used (without being
capitalized)  in  this  Agreement or the Guaranty Security Documents, shall have
the  meanings  given  those  terms  in  the  UCC.

     Section  1.3     Exhibits  and  Schedules.  All  Exhibits  and  Schedules
                      ------------------------
attached  hereto  are  by  reference  made  a  part  hereof.


                           ARTICLE 2 - CREDIT FACILITY

     Section 2.1     Credit Loans.  Upon the terms and subject to the conditions
                     ------------
of,  and  in  reliance  upon the representations and warranties made under, this
Agreement, the Lender shall make Credit Loans to Borrower from time to time from
the date hereof to the Loan Maturity Date (each, a "Loan Advance"), as requested
by  Borrower  in  accordance  with  the  terms of SECTION 2.1.2, in an aggregate
principal  amount  outstanding  not  to  exceed  at  any  time  $2,000,000.

     2.1.1     Limitation  on  Loan  Advances.  Notwithstanding  anything to the
               ------------------------------
contrary  contained  herein,  no Loan Advance will be made if such advance would
result  in  the aggregate amount of all Credit Loans to exceed the lesser of the
(a)  $2,000,000.00 (the "Loan Commitment"), or (b) the Maximum Available Amount.
No  Loan  Advance will be made on or after the Loan Maturity Date.  The "Maximum
Available  Amount"  on  any  date shall be a Dollar amount equal to the Guaranty
Sublimits  divided  by  one  and  twenty  five  one  hundredths  (1.25).

     2.1.2     Loan  Advance Borrowing Procedure. Subject to the Loan Commitment
               ---------------------------------
and  the  limitations  set  forth herein, Borrower may request a Loan Advance by
submitting a Loan Advance Request to Lender via mail or facsimile in the form of
EXHIBIT  A  attached  to  the  Note.  Every  such  advance  request  shall  be
irrevocable.  Only  a  request from a Borrowing Officer to Lender that specifies
(i) the amount of the Loan Advance, to be made and (ii) the date the proceeds of
such  Loan  Advance  is  requested  to  be made available to Borrower (the "Loan
Advance  Date") shall be treated as a "Loan Advance Request".  Each Loan Advance
Request  shall  be  written.  Provided  that  all  conditions  precedent thereto
hereunder  have  been  met,  Lender  will make the amount of each such requested
advance  available  to Borrower in immediately available funds in Dollars at the
Lender's  Office.


                                        7
<PAGE>
     Section  2.2     Repayment  of  Credit  Loan.  The  Credit  Loan is due and
                      ---------------------------
payable and shall be repaid in full by the Borrower on the Loan Maturity Date in
the  amount  of  the  then unpaid balance of the Credit Loan and all accrued and
unpaid  interest  thereon.

     Section  2.3     Credit  Note.  The  Credit  Loan  and  the  obligation  of
                      ------------
Borrower  to  repay  such Credit Loan shall be evidenced by a single Credit Note
payable  to  the  order  of  the  Lender.  Such  Credit  Note shall be dated the
Effective  Date  and  be  duly  and  validly executed and delivered by Borrower.

     Section  2.4     Prepayment  of  Credit  Loan.
                      ----------------------------

               (a)     Voluntary  Prepayments.  Borrower shall have the right at
                       ----------------------
any  time and from time to time, to wholly or partially repay the Credit Loan at
any  time  without  premium  or  penalty.  Any  amount  prepaid  many  not  be
re-borrowed.

               (b)     Mandatory  Prepayments.  If  at any time the Credit Loans
                       ----------------------
exceed  the Maximum Available Amount, Borrower shall on demand make a payment to
Lender  in  the  amount of the excess.  Each such prepayment shall be applied to
reduce  the  Credit  Loan.


                       ARTICLE 3 - GENERAL LOAN PROVISIONS
     Section  3.1     Interest.
                      --------

     (a)     Interest Rate of Credit Loans.  The Credit Loan shall bear interest
             -----------------------------
at  a  per  annum  rate  equal  to ten percent (10%) ("Loan Rate") on the unpaid
principal amount of the Credit Loans for each day from the day a Credit Loan was
made  until the Credit Loans are paid in full (whether at maturity, by reason of
acceleration  or  otherwise).

     (b)     Default  Rate.  From  and  after  the  occurrence  of  an  Event of
             -------------
Default,  the  unpaid  principal  amount  of each Obligation shall bear interest
until  paid  in  full  (or,  if earlier, until such Event of Default is cured or
waived  in writing by the Lender) at a rate per annum equal to four percent (4%)
plus  the  rate  otherwise  in effect under SECTION 3.1, payable on demand.  The
interest  rate provided for in this SECTION 3.1(B) shall to the extent permitted
by applicable law apply to and accrue on the amount of any judgment entered with
respect  to  any Obligation and shall continue to accrue at such rate during any
proceeding  described  in  SECTION  9.1(G)  or  (H).

     (c)     The interest rates provided for in SECTIONS 3.1(A) and (B) shall be
computed  on  the  basis  of  a  year  of 360 days and the actual number of days
elapsed.

     (d)     It  is  not  intended  by the Lender, and nothing contained in this
Agreement,  any Note or any other Loan Document shall be deemed, to establish or
require  the  payment  of  a  rate  of  interest  in  excess of the maximum rate
permitted  by  applicable  law  (the  "Maximum  Rate").  If,  in  any month, the
Effective Interest Rate, absent such limitation, would have exceeded the Maximum
Rate, then the Effective Interest Rate for that month shall be the Maximum Rate,
and  if,  in  future months, the Effective Interest Rate would otherwise be less
than  the  Maximum  Rate,  then  the Effective Interest Rate shall remain at the
Maximum Rate until such time as the amount of interest paid hereunder equals the
amount  of  interest which would have been paid if the same had not been limited
by  the  Maximum Rate.  In the event the Lender receives, collects or applies as
interest  any  sum  in  excess  of the Maximum Rate, such excess amount shall be
applied  to the reduction of the principal balance of the applicable Obligation,
and,  if  no  such  principal  is  then outstanding, such excess or part thereof
remaining  shall  be  paid  to  Borrower.


                                        8
<PAGE>
Section  3.2     Increased  Costs  and Reduced Returns.  Borrower agrees that if
                 -------------------------------------
any  law  now  or hereafter in effect and whether or not presently applicable to
the  Lender or any request, guideline or directive of any Governmental Authority
(whether  or  not  having  the force of law and whether or not failure to comply
therewith  would be unlawful) or the interpretation or administration thereof by
any  Governmental  Authority, shall either (a)(i) impose, affect, modify or deem
applicable  any  reserve,  special  deposit,  capital  maintenance  or  similar
requirement  against  any  Loan,  (ii)  impose on the Lender any other condition
regarding  any  Loan,  this  Agreement,  the  Note  or  the  facilities provided
hereunder,  or  (iii)  result  in  any  requirement  regarding  capital adequacy
(including any risk-based capital guidelines) affecting the Lender being imposed
or modified or deemed applicable to the Lender, or (b) subject the Lender to any
taxes,  not  including  taxes  on  the  income  of  Lender,  on  the  recording,
registration,  notarization or other formalization of the Loans or the Note, and
the  result  of  any  event  referred  to in CLAUSE (A) or (B) above shall be to
increase the cost to the Lender of making, funding or maintaining any Loan or to
reduce  the  amount  of any sum receivable by the Lender or the Lender's rate of
return  on  capital  with  respect  to  any Loan to a level below that which the
Lender  could  have  achieved  but  for  such imposition, modification or deemed
applicability  (taking  into consideration the Lender's policies with respect to
capital  adequacy)  by  an  amount  deemed  by  Lender  (in  the exercise of its
discretion)  to  be  material,  then,  upon demand by the Lender, Borrower shall
immediately  pay  to  the Lender additional amounts which shall be sufficient to
compensate  the  Lender  for such increased cost, tax or reduced rate of return,
and  which amount shall be reimbursed to Borrower if Lender receives a refund or
credit  therefor.  A certificate of the Lender to Borrower claiming compensation
under this SECTION 3.2 shall be final, conclusive and binding on all parties for
all purposes in the absence of manifest error.  Such certificate shall set forth
the  nature  of  the occurrence giving rise to such compensation, the additional
amount  or  amounts  to  be  paid  to it hereunder, and the method by which such
amounts  were  determined.  In  determining  such amount, the Lender may use any
reasonable  averaging  and  attribution  methods.

     Section 3.3     Manner of Payment.  Each payment (including prepayments) by
                     -----------------
Borrower  on  account of the principal of or interest on the Loans or of any fee
or other amounts payable to the Lender under this Agreement or any Note shall be
made  not  later  than  2:00  p.m.  on the date specified for payment under this
Agreement  (or  if  such day is not a Business Day, the next succeeding Business
Day)  to the Lender at the Lender's Office, in Dollars, in immediately available
funds  and  shall  be  made  without  any  setoff,  counterclaim  or  deduction
whatsoever.  Borrower hereby irrevocably authorize the Lender and each Affiliate
of  the  Lender  to charge any account of Borrower maintained with the Lender or
such  Affiliate  with  such amounts as may be necessary from time to time to pay
any  Obligations  when  due.

     Section  3.4     Payments.
                      --------

     (a)     Scheduled Payments on Credit Loan.  Borrower shall make payments of
             ---------------------------------
interest accrued on the Credit Loans monthly, in arrears, beginning on the first
day  of  the  second  full  calendar  month  following  the  Effective  Date and
continuing  on  the  first day of each calendar month thereafter and on the Loan
Maturity Date.  Borrower shall pay interest accrued on the Credit Loan after the
Loan  Maturity  Date,  on  demand.

     (b)     Final Payment. On the Loan Maturity Date, Borrower shall pay to the
             -------------
Lender,  in  same  day  funds,  an  amount  equal to the aggregate amount of the
respective  Loans  outstanding  and  due  on  such  date,  together with accrued
interest  thereon,  all fees payable to the Lender pursuant to the provisions of
this  Agreement,  any  and  all  other  Obligations  then  outstanding.


                                        9
<PAGE>
     (c)     Interest  Calculation.  For  purposes of interest calculation only,
             ---------------------
(i)  a  payment  by  check, draft or other instrument received on a Business Day
shall  be  deemed  to have been applied to the relevant Obligation on the second
following  Business  Day, (ii) a payment in cash or by wire transfer received at
or before 2:00 p.m., St. Louis, Missouri time, on a Business Day shall be deemed
to  have  been applied to the relevant Obligation on the Business Day when it is
received, and (iii) a payment in cash or by wire transfer received on a day that
is  not  a  Business  Day  or  after  2:00  p.m., St. Louis, Missouri time, on a
Business  Day shall be deemed to have been applied to the relevant Obligation on
the  next  Business  Day.

     (d)     Returned  Instruments.  If  a  payment  is  made by check, draft or
             ---------------------
other  instrument and the check, draft or other instrument is returned to Lender
unpaid,  the  application  of the payment to the Obligation will be reversed and
will  be  treated  as  never  having  been  made.

     (e)     Compelled  Return  of  Payments  or Proceeds.  If Lender is for any
             --------------------------------------------
reason  compelled  to  surrender  any  payment or any proceeds of any collateral
under the Guaranty Security Documents because such payment or the application of
such  proceeds is for any reason invalidated, declared fraudulent, set aside, or
determined to be void or voidable as a preference, an impermissible setoff, or a
diversion  of trust funds, then this Agreement and the Obligations to which such
payment or proceeds was applied or intended to be applied shall be revived as if
such  application was never made; and Borrower shall be liable to pay to Lender,
and  shall  indemnify  Lender  for  and  hold Lender harmless from any loss with
respect  to,  the  amount of such payment or proceeds surrendered.  This Section
shall  be  effective notwithstanding any contrary action that Lender may take in
reliance  upon  its  receipt of any such payment or proceeds.  Any such contrary
action  so  taken  by Lender shall be without prejudice to Lender's rights under
this Agreement and shall be deemed to have been conditioned upon the application
of such payment or proceeds having become final and irrevocable.  The provisions
of  this  Section  shall  survive  the  payment  and  satisfaction of all of the
Obligations.

     (f)     Due  Dates Not on Business Days.  If any payment required hereunder
             -------------------------------
becomes  due  on  a date that is not a Business Day, then such due date shall be
deemed  automatically  extended  to  the  next  Business  Day.


                        ARTICLE 4 - CONDITIONS PRECEDENT

     Section  4.1     Conditions  Precedent  to  All Loans.  Notwithstanding any
                      ------------------------------------
other  provision of this Agreement, the Lender's obligation to make all Loans is
subject  to  the  fulfillment  of  each  of the following conditions prior to or
contemporaneously  with  the  making  of  each  such  Loans:

     (a)     Closing  Documents.  The  Lender  shall  have  received each of the
             ------------------
following  documents, or otherwise shall confirm the continuing effectiveness of
any  such documents, all of which shall be satisfactory in form and substance to
the  Lender  and  its  counsel:

     (1)     this  Agreement,  duly  executed  and  delivered  by  Borrower;

     (2)     certified  copies  of  the Articles of Incorporation and by-laws of
Borrower  and  any  Subsidiary  of  Borrower as in effect on the Effective Date;


                                       10
<PAGE>
     (3)     certified  copies  of  all  corporate action, including shareholder
approval,  if  necessary, taken by Borrower to authorize the execution, delivery
and  performance  of  this  Agreement  and  the  other  Loan  Documents  and the
borrowings  under  this  Agreement;

     (4)     certificates  of incumbency and specimen signatures with respect to
each  of the officers of Borrower who are authorized to execute and deliver this
Agreement  or any other Loan Document on behalf of the Borrower or any document,
certificate  or  instrument to be delivered in connection with this Agreement or
the  other  Loan  Documents  and  to  request  borrowings  under this Agreement;

     (5)     a  certificate  evidencing  the  good  standing  of Borrower in the
jurisdiction  of its incorporation and in each other jurisdiction in which it is
qualified  as  a  foreign  corporation  to  transact  business;

     (6)     the  Financing  Statements  duly  executed  and  delivered  by each
Guarantor, and evidence satisfactory to the Lender that the Financing Statements
have  been  filed  in  each  jurisdiction  where such filing may be necessary or
appropriate  to  perfect  the  Security  Interest;

     (7)     copies  of  all the financial statements referred to in SECTION 5.1
and  meeting  the  requirements  thereof;

     (8)     a  certificate of the President of Borrower stating that (a) all of
the  representations  and  warranties  made  or  deemed  to  be  made under this
Agreement  are  true and correct as of the Effective Date, both with and without
giving  effect  to  the Loans to be made at such time and the application of the
proceeds  thereof, (b) no Default or Event of Default exists, and (c) states the
Guaranty  Sublimits;

     (9)     copies  of  each  of the other Loan Documents, duly executed by the
parties  thereto with evidence satisfactory to the Lender and its counsel of the
due  authorization, binding effect and enforceability of each such Loan Document
on  each  such  party and such other documents and instruments as the Lender may
reasonably  request;  and

     (10)     opinion  of  Borrower's  counsel opining to such matters as Lender
and/or  its  legal  counsel  may  require.

     (c)     No Injunctions, Etc.  Except as disclosed in Borrower's most recent
             -------------------
10Q  furnished  to  Lender  for  the quarter ended December 31, 2000, no action,
proceeding, investigation, regulation or legislation shall have been instituted,
threatened or proposed before any court, governmental agency or legislative body
to  enjoin,  restrain or prohibit or to obtain substantial damages in respect of
or  which  is  related to or arises out of this Agreement or the consummation of
the  transactions contemplated hereby or which, in the Lender's sole discretion,
would  make  it  inadvisable to consummate the transactions contemplated by this
Agreement.

     (d)     Material Adverse Change.  As of the Effective Date, there shall not
             -----------------------
have  occurred any change which, in the Lender's sole discretion, has had or may
have  a  Material  Adverse  Effect  as compared to the condition of Borrower and
Guarantors  presented  by  the  most recent financial statements of Borrower and
Guarantors.


                                       11
<PAGE>
     (e)     Solvency.  The  Lender shall have received evidence satisfactory to
             --------
it  that,  after  giving  effect to any such Loan (i) Borrower has assets having
value,  both  at fair value and at present fair saleable value, greater than the
amount of its liabilities, and (ii) Borrower's assets are sufficient in value to
provide  Borrower  with  sufficient  working  capital to enable it profitably to
operate its businesses and to meet its obligations as they become due, and (iii)
Borrower  has  adequate  capital  to  conduct the business in which they are and
propose  to  be  engaged.

     (f)     No Default or Event of Default.  There shall be no Default or Event
             ------------------------------
of  Default  and  all of the representations and warranties made or deemed to be
made  under  this Agreement shall be true and correct at such time both with and
without  giving  effect to the Loans to be made at such time and the application
of  the  proceeds  thereof, except that representations and warranties which, by
their terms, are applicable only to the Agreement Date shall be true and correct
only  as  of  that  date.

     Section  4.2     Conditions  Precedent  to  Subsequent  Loan  Advances.
                      -----------------------------------------------------
Notwithstanding  any  other provision of this Agreement, the Lender's obligation
to  make  any  subsequent  advance  under  the  Credit  Loans  is subject to the
fulfillment  of  each  of the following conditions prior to or contemporaneously
with  the  making  of  each  such  future  Credit  Loan:

     (a)     All  of  the  conditions  in  Section  4.1  have  been  and  remain
                                           ------------
satisfied;

     (b)     The  representations and warranties contained in the Loan Documents
shall  be  true  and correct in all material respects as of the time of any such
advance  and  with  the same force and effect as if made at such time, with such
exceptions as have been disclosed to Lender in writing by Borrower as addenda to
the  Schedules  and  are reasonably satisfactory to Lender, such representations
and  warranties  shall  be deemed made with respect to the most recent Financial
Statements  and  other  financial  data  delivered  by  Borrower  to  Lender;

     (c)     There  shall  be  no  Existing  Default  and no Default or Event of
Default  will  occur  as a result of the making of the Loan Advance, as the case
may  be,  or  Borrower's  use  of  the  proceeds  thereof;

     (d)     Since  the  date  of  the  most  recent  prior  Loan  Advance,  as
applicable,  there shall not have been any change which has had or is reasonably
likely  to  have  a  Material  Adverse  Effect  on  Borrower;  and

     (e)     Certificate of Borrowing Officer certifying (a) the proceeds of the
Loan  will  be  used  for the purpose authorized pursuant to SECTION 6.5 of this
Agreement,  and  (b)  the  Guaranty  Sublimits.


             ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER

     Section  5.1     Representations  and  Warranties.  Borrower represents and
                      --------------------------------
warrants  to  the  Lender  as  follows:

     (a)     Organization;  Power;  Qualification.  Borrower  is  a corporation,
             ------------------------------------
duly  organized,  validly  existing  and  in good standing under the laws of the
jurisdiction of its incorporation, has the power and authority to own properties
and to carry on business as now being and hereafter proposed to be conducted and
is  duly  qualified  and authorized to do business in each jurisdiction in which
failure  to be so qualified and authorized would have a Material Adverse Effect.


                                       12
<PAGE>
     (b)     Subsidiaries  and  Ownership  of  Borrower.  Borrower  has  one
             ------------------------------------------
wholly-owned  Subsidiary:  The  Female  Health  Company  U.K.

     (c)     Authorization  of  Agreement,  Note,  Loan Documents and Borrowing.
             ------------------------------------------------------------------
Borrower has the right and power and has taken all necessary action to authorize
it  to  execute,  deliver  and perform this Agreement and each of the other Loan
Documents  to  which it is a party in accordance with their respective terms and
to  borrow  hereunder.  This  Agreement  and each of the other Loan Documents to
which it is a party have been duly executed and delivered by the duly authorized
officers  of  Borrower and each is, or when executed and delivered in accordance
with  this  Agreement will be, a legal, valid and binding obligation of Borrower
enforceable  in  accordance  with  its  terms.

     (d)     Compliance  of  Agreement,  Note, Loan Documents and Borrowing with
             -------------------------------------------------------------------
Laws,  Etc.  The  execution, delivery and performance of this Agreement and each
----------
of  the  other  Loan  Documents  to which Borrower is a party in accordance with
their  respective terms and the borrowings hereunder do not and will not, by the
passage of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any applicable law relating to Borrower or Guarantors or any
of  their  Affiliates, (ii) conflict with, result in a breach of or constitute a
default  under (A) the articles of incorporation or by-laws of Borrower, (B) any
indenture,  agreement  or  other instrument to which Borrower or Guarantors is a
party  or  by  which  any  of its, his or their property may be bound or (C) any
Governmental  Approval relating to Borrower or Guarantor, or, (iii) result in or
require  the  creation  or  imposition  of  any Lien upon or with respect to any
property  now  owned  or  hereafter  acquired  by  Borrower.

     (e)     Compliance  with Law; Governmental Approvals.  Borrower (i) has all
             --------------------------------------------
Governmental  Approvals,  including permits relating to federal, state and local
Environmental  Laws,  ordinances  and regulations required by any applicable law
for  it  to  conduct its business, each of which is in full force and effect, is
final  and not subject to review on appeal and is not the subject of any pending
attack  by  direct or collateral proceeding, and (ii) is in compliance with each
Governmental  Approval  applicable  to  it  and  in  compliance  with  all other
applicable  laws  relating  to  it,  including,  without  being  limited to, all
Environmental  Laws  and  all  occupational health and safety laws applicable to
Borrower  or  its  properties, except in the case of both (i) and (ii) above for
instances  of noncompliance which would not, singly or in the aggregate, cause a
Default  or Event of Default or have a Material Adverse Effect and in respect of
which  adequate  reserves  have  been  established  on  the  books  of Borrower.

     (f)     Litigation.  Except  as  disclosed  in  Borrower's  most recent 10Q
             ----------
furnished  to  Lender  for  the  quarter  ended  December 31, 2000, there are no
actions,  suits  or  proceedings  pending  against  or in any other way relating
adversely  to  or affecting Borrower or any Guarantor or any of its, his, her or
their property in any court or before any arbitrator of any kind or before or by
any  governmental  body.

     (g)     Tax  Returns  and  Payments.  All  United States federal, state and
             ---------------------------
local  and  foreign  national, provincial and local and all other tax returns of
Borrower  and  Guarantors  required by applicable law to be filed have been duly
filed,  and  all  United  States  federal, state and local and foreign national,
provincial  and  local  and  all other taxes, assessments and other governmental
charges  or  levies upon such entities and their properties, income, profits and
assets  which  are  due  and  payable have been paid, except any such nonpayment
which  is  at  the  time permitted under SECTION 8.3.  The charges, accruals and
reserves on the books of Borrower in respect of United States federal, state and
local  taxes  and  foreign  national,  provincial and local taxes for all fiscal
years  and  portions  thereof since the organization of such entities are in the
judgment  of  Borrower  adequate.


                                       13
<PAGE>
     (h)     Burdensome  Provisions.  Neither Borrower nor any of the Guarantors
             ----------------------
is a party to any indenture, agreement, lease or other instrument, or subject to
any  charter  or corporate restriction, Governmental Approval or applicable law,
compliance  with  the  terms  of  which  might  have  a Material Adverse Effect.

     (i)     Financial  Statements.  Borrower has furnished to the Lender a copy
             ---------------------
of  (i)  its certified audited financial statement as of September 30, 2000, and
the  related  statements  of  income,  cash  flow  and retained earnings for the
twelve-month  period  then ended and a summary of adjustments to such statements
to  comply  with  GAAP,  and (ii) the balance sheet as of March 31, 2001 and the
related  statement of income for the 12 (and 6) month period, respectively, then
ended.  Such  financial  statements  are  complete  and  correct in all material
respects  and present fairly and in all material respects the financial position
of  Borrower  as  at the dates thereof and the results of operations of Borrower
for  the  periods then ended, subject to normal year-end adjustments.  Except as
disclosed  or  reflected  in  such  financial  statements  or the notes thereto,
Borrower  did  not  have  any material liabilities, contingent or otherwise, and
there  were  no  material  unrealized  or  anticipated  losses  of  Borrower.

     (j)     Adverse  Change.  Since  the  date  of  the  financial  statements
             ---------------
described  in  CLAUSE  (I)  of  SECTION  5.1(I),  (i) no change in the business,
assets,  liabilities,  condition (financial or otherwise), results of operations
or  business  prospects  of  Borrower  has occurred that has had, or may have, a
Material Adverse Effect, and (ii) no event has occurred or failed to occur which
has  had,  or  may  have,  a  Material  Adverse  Effect.

     (k)     Absence of Defaults.  Borrower is not in default under its articles
             -------------------
of  incorporation  or  by-laws  and  no  event  has  occurred which has not been
remedied,  cured or waived (i) that constitutes a Default or an Event of Default
or  (ii) that constitutes or that, with the passage of time or giving of notice,
or  both,  would  constitute a default or event of default by Borrower under any
material  agreement  (other than this Agreement) or judgment, decree or order to
which  Borrower  is a party or by which Borrower or any of its properties may be
bound  or  which  would require Borrower to make any payment thereunder prior to
the  scheduled  maturity  date  therefor.

     (l)     Accuracy and Completeness of Information.  All written information,
             ----------------------------------------
reports  and  other  papers  and  data  produced by or on behalf of Borrower and
furnished  to  the Lender were, at the time the same were so furnished, complete
and  correct  in  all  material  respects  to  the  extent necessary to give the
recipient  a true and accurate knowledge of the subject matter, no fact is known
to  Borrower which has had, or may in the future have, a Material Adverse Effect
which has not been set forth in the financial statements or disclosure delivered
prior  to  the Effective Date, in each case referred to in SECTION 5.1(I), or in
such written information, reports or other papers or data or otherwise disclosed
in  writing  to the Lender prior to the Effective Date.  The documents furnished
or  written  statements,  taken  as  a  whole, made to the Lender by Borrower in
connection  with  the negotiation, preparation or execution of this Agreement or
any of the Loan Documents do not contain any untrue statement of a fact material
to  the  creditworthiness  of  Borrower and do not omit to state a material fact
necessary  in  order  to  make  the statements contained therein not misleading.

     (m)     Place  of  Business.  The  chief  executive  office  and  business
             -------------------
locations  of  Borrower  is  set  forth  in  SCHEDULE  5.1(M).

     (n)     Federal  Regulations.  Borrower  is  not engaged, principally or as
             --------------------
one  of  its  important  activities, in the business of extending credit for the
purpose  of "purchasing" or "carrying" any "margin stock" (as each of the quoted
terms is defined or used in Regulations G and U of the Board of Governors of the
Federal  Reserve  System).


                                       14
<PAGE>
     (o)     Investment Company Act.  Borrower is not an "investment company" or
             ----------------------
a  company  "controlled" by an "investment company" (as each of the quoted terms
is  defined  or  used  in  the  Investment  Company  Act  of  1940, as amended).

     (p)     ERISA.  Neither  Borrower  nor  any  Related  Company  maintains or
             -----
contributes  to  any  Benefit  Plan  other than those listed on SCHEDULE 5.1(P).
Each  Benefit Plan is in substantial compliance with ERISA, and neither Borrower
nor any Related Company has received any notice asserting that a Benefit Plan is
not  in  compliance  with  ERISA.  No  material  liability  to  the PBGC or to a
Multiemployer  Plan  has  been,  or  is  expected by Borrower to be, incurred by
Borrower  or  any  Related  Company.

     (q)     Employee  Relations.  Borrower  is  not  party  to  any  collective
             -------------------
bargaining  agreement.  Borrower knows of no pending, threatened or contemplated
strikes,  work stoppage or other labor disputes involving its employees or those
of  its  Subsidiaries.

     (r)     Shares;  Warrants.  A  description  of  the  capital  structure  of
             -----------------
Borrower,  including,  the total number and classes of shares authorized, issued
and  outstanding in each such class, a description of any and all stock options,
and  a  description  of  any  and  all warrants convertible into common stock of
Borrower  are  set  forth  on  SCHEDULE  5.1(R)  attached hereto, which schedule
contains  the names of the parties to which stock options and warrants have been
issued,  as  well  as the amount of any and all such options and warrants. There
are  no  claims,  liens  or  encumbrances presently existing or outstanding with
respect  to  the  Shares.

     Section  5.2     Survival  of  Representations  and  Warranties,  Etc.  All
                      ----------------------------------------------------
representations  and  warranties  set  forth in this ARTICLE 5 and in other Loan
Documents  (including,  but not limited to, any such representation, warranty or
statement  made in or in connection with any amendment thereto) shall constitute
representations  and  warranties made under this Agreement.  All representations
and  warranties  made under this Agreement shall be made or deemed to be made at
and  as  of the Agreement Date, at and as of the Effective Date and at and as of
the  date of each Loan, including, but not limited to, each Loan Advance, except
that representations and warranties which, by their terms are applicable only to
one  such  date  shall  be  deemed  to be made only at and as of such date.  All
representations  and  warranties  made or deemed to be made under this Agreement
shall survive and not be waived by the execution and delivery of this Agreement,
any investigation made by or on behalf of the Lender or any borrowing hereunder.


                        ARTICLE 6 - AFFIRMATIVE COVENANTS

     Until  all of the Obligations have been indefeasibly paid in full, Borrower
and  Subsidiaries  will:

     Section  6.1     Preservation  of  Corporate Existence and Similar Matters.
                      ---------------------------------------------------------
Preserve  and maintain its corporate existence, rights, franchises, licenses and
privileges  in  the  jurisdiction  of  its  incorporation and qualify and remain
qualified  as  a  foreign  corporation  and  authorized  to  do business in each
jurisdiction  in  which  the  character  of  its properties or the nature of its
business  requires such qualification or authorization, except to the extent the
failure  to  do  so  would  not  have  a  Material  Adverse  Effect.

     Section 6.2     Compliance with Applicable Law.  Comply with all applicable
                     ------------------------------
laws  relating  to  Borrower.


                                       15
<PAGE>
     Section 6.3     Payment of Taxes and Claims.  Pay or discharge when due (a)
                     ---------------------------
all  taxes,  assessments  and  governmental charges or levies imposed upon it or
upon  its  income or profits or upon any properties belonging to it, and (b) all
lawful  claims  of  materialmen, mechanics, carriers, warehousemen and landlords
for labor, materials, supplies and rentals which, if unpaid, would become a Lien
on  any  properties  of  Borrower.

     Section  6.4     Accounting  Methods  and  Financial  Records.  Maintain  a
                      --------------------------------------------
system  of accounting, and keep such books, records and accounts (which shall be
true  and  complete),  as  may  be required or as may be necessary to permit the
preparation  of  financial  statements  in  accordance  with  GAAP  consistently
applied.

     Section  6.5     Restrictions  on  Use  of Proceeds.  Borrower will use the
                      ----------------------------------
proceeds of the Credit Loan only (i) to redeem some of the outstanding corporate
securities  issued  by  the  Borrower,  (ii) any excess proceeds remaining after
redemption  of  the  outstanding  corporate  securities may be used to repay the
twelve  percent  (12%)  promissory  notes  owed  by  Borrower  to members of the
Borrower's board of directors, and (iii) pay costs, expenses and fees related to
the  transaction contemplated by this Agreement up to a maximum amount of eighty
five  thousand  dollars  ($85,000).

     Section 6.6     Hazardous Waste and Substances; Environmental Requirements.
                     ----------------------------------------------------------
In addition to, and not in derogation of, the requirements of SECTION 6.2 and of
the  Guaranty  Security  Documents,  governmental  standards  and  regulations
applicable to Borrower or to any of its assets in respect of occupational health
and  safety  laws, rules and regulations and Environmental Laws, promptly notify
the  Lender  of  its receipt of any notice of a violation of any such law, rule,
standard or regulation and indemnify and hold the Lender harmless from all loss,
cost,  damage,  liability,  claim  and  expense  incurred by or imposed upon the
Lender  on  account  of Borrower's failure to perform its obligations under this
SECTION  6.6.

     Section 6.7     Accuracy of Information.  All written information, reports,
                     -----------------------
statements  and  other papers and data furnished to the Lender, whether pursuant
to  ARTICLE  7 or any other provision of this Agreement or any of the other Loan
Documents,  shall be, at the time the same is so furnished, complete and correct
in  all  material  respects  to the extent necessary to give the Lender true and
accurate  knowledge  of  the  subject  matter.

     Section  6.8     Revisions  or  Updates  to  Schedules.  Should  any of the
                      -------------------------------------
information  or disclosures provided on any of the Schedules originally attached
hereto  become incorrect in any material respect, Borrower shall provide as soon
as  possible (but by no later than the end of the then current fiscal quarter of
Borrower)  to the Lender such revisions or updates to such Schedule(s) as may be
necessary or appropriate to update or correct such Schedule(s); PROVIDED that no
such  revisions  or updates to any Schedule(s) shall be deemed to have cured any
breach  of  warranty  or  representation  resulting  from  the  inaccuracy  or
incompleteness  of any such Schedule(s) unless and until the Lender, in its sole
discretion,  shall  have  accepted  in writing such revisions or updates to such
Schedule(s).

     Section  6.9     Conduct  of  Business.  Engage  only  in  businesses  in
                      ---------------------
substantially the same fields as the businesses conducted on the Effective Date.

     Section  6.10     Insurance.  Borrower  shall  at  all  times  maintain, in
                       ---------
addition  to  the  insurance required by any of the Guaranty Security Documents,
insurance  with  responsible  insurance  companies  against  such risks, in such
amounts  as  in  amounts and under policies issued by insurers acceptable to the
Lender,  including  such  theft,  hazard,  public liability, products liability,
third party property damage and business interruption insurance as is consistent
with  reasonable  business  practices.  All  premiums on such insurance shall be
paid  by  Borrower  and  copies  of  the  policies  delivered  to  the  Lender.


                                       16
<PAGE>
     Section 6.11.     Issuance of Shares.  In the event of Lender's exercise of
                       ------------------
the  Warrant,  the  Borrower covenants that the Shares shall be duly and validly
issued,  fully-paid  and  non-assessable.

     Section 6.12     Reservation of Shares Upon Conversion.  The Borrower shall
                      -------------------------------------
at  all  times  reserve and keep available out of its authorized but unissued or
treasury  shares  of  common  stock,  solely  for  the  purpose of effecting the
exercise of the Warrant, such number of its shares of common stock as shall from
time  to time be sufficient to effect the exercise of the Warrant; and if at any
time  the  number of authorized but unissued shares of common stock shall not be
sufficient  to  effect  the  exercise  of the Warrant, in addition to such other
remedies  as  shall  be available to the Lender under any of the Loan Documents,
the  Borrower  will  either  take  such  corporate action as may be necessary to
increase  its  authorized  but unissued shares of common stock to such number of
shares  as  shall be sufficient for such purposes, or the Borrower will take any
and  all  action  necessary  to  reduce the amount of common stock held by other
shareholders  of  the  Borrower  in  order to make a sufficient amount of common
stock  available  for  the  Lender  fully  exercise  the  Warrant.


                             ARTICLE 7 - INFORMATION

     Until  all of the Obligations have been indefeasibly paid in full, Borrower
will  furnish  to  the  Lender  at  the  Lender's  Office:

     Section  7.1     Financial  Statements.
                      ---------------------

     (a)     Certified  Year-End  Statements.  As  soon as available, but in any
             -------------------------------
event  within  120 days after the end of each fiscal year of Borrower, copies of
the balance sheet of Borrower, as at the end of such fiscal year and the related
statements  of  income, shareholders' equity and cash flow for such fiscal year,
in  each  case  setting  forth  in comparative form the figures for the previous
year-end  and  reported  on,  without  qualification,  certified  by independent
certified public accountants selected by Borrower, and acceptable to the Lender.

     (b)     Quarterly  Financial  Statements.  As soon as available, but in any
             --------------------------------
event  within 45 days after the end of each fiscal quarter of Borrower copies of
the unaudited balance sheet of Borrower as at the end of such fiscal quarter and
the  related  unaudited  income  statement  for  such fiscal quarter and for the
portion  of  the fiscal year of Borrower through such quarter, and, with respect
to  such quarterly financial statements delivered at the end of each fiscal year
of  Borrower, such financial statement shall be certified by the chief financial
officer of Borrower to the best of his or her knowledge as presenting fairly the
financial condition and results of operations of Borrower as at the date thereof
and  for the periods ended on such date, subject to normal year end adjustments.

     (c)     Guarantor  Financial  Statements.  As soon as available, but in any
             --------------------------------
event within 30 days after the filings of annual federal income tax returns, the
financial  statements of each Guarantor and the most recent filed federal income
tax  return,  including without limitation, a balance sheet and income statement
as  of  the  end  of  such  fiscal  year.  Any  and all such guarantor financial
statements  shall  be  in  a  form  that  is  acceptable  to Lender, in its sole
reasonable  discretion.

          All  such  financial  statements  shall be complete and correct in all
material  respects  and,  commencing  with  annual  financial statements for the
fiscal  year  ending  September 30, 2000, all such financial statements shall be
prepared  in  accordance  with  GAAP  (except, with respect to interim financial
statements,  for  the omission of footnotes) applied consistently throughout the
periods  reflected  therein.


                                       17
<PAGE>
     Section  7.2     Authorization.  Borrower  authorizes the Lender to discuss
                      -------------
the financial condition of Borrower with Borrower's independent certified public
accountants  and  agrees  that such discussion or communication shall be without
liability  to  either  the  Lender  or  Borrower's  independent certified public
accountants.

     Section  7.3     Copies  of  Other  Reports.
                      --------------------------

     (a)     Promptly  upon  receipt  thereof,  copies  of  all reports, if any,
submitted  to Borrower by its independent public accountants, including, without
limitation,  all  management  reports.

     (b)     Promptly upon preparation and filing of the same, copies of any and
all  filings with the Securities and Exchange Commission ("SEC"), including, but
not  limited  to, Forms 10-K, 10-Q and any other material reports filed with the
SEC.

     (c)     From  time  to time and promptly upon each request, such forecasts,
data,  certificates,  reports,  statements,  opinions  of  counsel, documents or
further  information  regarding  the  business,  assets,  liabilities, financial
condition,  results  of  operations  or  business  prospects  of  Guarantors and
Borrower  as  the Lender may reasonably request.  The rights of the Lender under
this SECTION 7.4(C) are in addition to and not in derogation of its rights under
any  other  provision  of  this  Agreement  or  any  Loan  Document.

     Section  7.4     Notice  of  Litigation  and  Other  Matters.
                      -------------------------------------------

     Notice  of:  (a)     the commencement of all proceedings and investigations
by  or  before  any  governmental  or  nongovernmental  body and all actions and
proceedings  in  any  court or before any arbitrator against or in any other way
relating  adversely  to,  or  adversely  affecting,  a  Guarantor, Borrower, any
Subsidiary  of  Borrower  or  any  of  their  respective  property,  assets  or
businesses, (b) any amendment of the articles of incorporation and/or by-laws of
Borrower,  (c)  any  change  in  the  business,  assets,  liabilities, financial
condition, results of operations or business prospects of a Guarantor, Borrower,
any  Subsidiary of Borrower and any change in the executive officers of Borrower
which  would  reasonably  be expected to have a Material Adverse Effect, and (d)
any  (i)  Default  or  Event of Default, or (ii) event that constitutes or that,
with the passage of time or giving of notice or both, would constitute a default
or  event  of  default  by  Borrower  or Guarantors under any material agreement
(other  than  this  Agreement) to which Borrower or Guarantors are a party or by
which Borrower or Guarantors or any of its or their property may be bound if the
exercise of remedies thereunder by the other party to such agreement would have,
either  individually  or  in  the  aggregate,  a  Material  Adverse  Effect.

     Section 7.5     ERISA.  As soon as possible and in any event within 30 days
                     -----
after Borrower knows, or has reason to know, that: (a)     any Termination Event
with  respect  to  a  Benefit Plan has occurred or will occur, (b) the aggregate
present  value  of  the  Unfunded  Vested  Accrued  Benefits under all Plans has
increased  to  an  amount  in excess of $0, or (c) Borrower are in "default" (as
defined  in  Section  4219(c)(5)  of  ERISA)  with  respect  to  payments  to  a
Multiemployer  Plan required by reason of its complete or partial withdrawal (as
described  in Section 4203 or 4205 of ERISA) from such Multiemployer Plan, (d) a
certificate  of the President or the chief financial officer of Borrower setting
forth  the details of such of the events described in CLAUSES (A) through (C) as
applicable  and  the  action  which is proposed to be taken with respect thereto
and,  simultaneously  with  the  filing  thereof, copies of any notice or filing
which  may  be  required  by  the  PBGC  or  other  agency  of the United States
government  with  respect to such of the events described in CLAUSES (A) through
(C)  as  applicable.



                                       18
<PAGE>
                         ARTICLE 8 - NEGATIVE COVENANTS

     Until  all of the Obligations have been indefeasibly paid in full, Borrower
will  not directly or indirectly, and will not permit any Subsidiary directly or
indirectly:

     Section  8.1     Merger,  Consolidation  and  Sale  of  Assets.  Merge  or
                      ---------------------------------------------
consolidate  with  any  other  Person  or  sell,  lease or transfer or otherwise
dispose  of  all  or  a  substantial  portion  of  its  assets  to  any  Person.

     Section  8.2     Transactions with Affiliates.  Effect any transaction with
                      ----------------------------
any  Affiliate  on  a basis less favorable to Borrower than would be the case if
such  transaction  had  been  effected  with  a  Person  not  an  Affiliate.

     Section  8.3.     Protection  of  Lender's Rights.  By any amendment of the
                       -------------------------------
Borrower's  Articles  of Incorporation or By-laws, or through any consolidation,
merger,  reorganization,  transfer  of  assets,  dissolution,  issue  or sale of
securities  or  any  other  voluntary  action,  seek  to avoid the observance or
performance  hereof, but will at all times take such actions as are necessary or
appropriate  in order to protect the rights of, Lender under the Loan Documents,
including,  but not limited to, this Agreement, the Warrant and the Registration
Rights  Agreement.

     Section  8.4     Dividends/Distributions.  Declare,  pay  or  set apart for
                      -----------------------
payment  any cash dividend or other distribution (or take any action which would
have  an  equivalent  effect)  to  the  shareholders  of the Borrower, until the
Obligations  have  been  paid  in  full.

     Section  8.5     Reclassification, Merger, Sale of Assets, etc  Reorganize,
                      ---------------------------------------------
change  its  capital  structure,  change the outstanding amount of Shares (other
than,  upon prior notice to the Lender, the issuance of shares to raise capital)
or  change  any  of  the  shareholders  rights  under the Borrower's Articles of
Incorporation  or any shareholder agreement, or merge with, sale or convey to or
with  another  corporation,  limited  liability  company,  or  other  business
organization,  any  of  the  property  of  the  Borrower,  as  an  entirety  or
substantially  as  an  entirety,  at  any time before the payment in full of the
Obligations,  absent  the  Lender's  express  prior  written  consent.

     Section  8.6     Split,  Subdivision  or Combination of Shares. At any time
                      ---------------------------------------------
before  payment of the Obligations in full, subdivide its outstanding Shares, by
split-up  or  otherwise,  or combine its outstanding Shares, or issue additional
shares  of  its  capital  stock in payment of a stock dividend in respect of its
Shares,  without  proportionately  increasing the number of shares issuable upon
the  exercise of the Warrant, or proportionately decreasing the same in the case
of  a  combination.

     Section  8.7     No  Impairment  By  amendment  of  its  Articles  of
                      --------------
Incorporation  or through any reorganization, transfer of assets, consolidation,
merger,  dissolution,  issuance  or  sale  of  securities or any other voluntary
action,  avoid or seek to avoid the observance or performance of the terms to be
observed  or  performed hereunder by the Borrower, but will at all times in good
faith assist in the carrying out of all the provisions of the Loan Documents and
in  the taking of all such action as may be necessary or appropriate in order to
protect  the  rights  of  the  Lender  against  impairment.


                                       19
<PAGE>
     Section  8.8     Warrants.  Authorize  or  issue  any  warrant  for  the
                      --------
subscription  an  purchase  of  shares  of common stock of Borrower, without the
express  prior  written  consent  of  Lender.


                               ARTICLE 9 - DEFAULT

     Section  9.1     Events of Default.  Each of the following shall constitute
                      -----------------
an  Event of Default, whatever the reason for such event and whether it shall be
voluntary  or  involuntary or be effected by operation of law or pursuant to any
judgment  or  order  of  any  court  or  any  order,  rule  or regulation of any
governmental  or  nongovernmental  body:

     (a)     Default in Payment of Loans.  Borrower shall default in any payment
             ---------------------------
of  principal  of,  or interest on, any of the Loans or the Note on the due date
(whether  at  maturity,  by  reason  of  acceleration  or  otherwise).

     (b)     Other  Payment  Default.  Borrower shall default in the payment, as
             -----------------------
and  when  due,  of  principal of or interest on, any other Obligation, and such
default  shall  continue  for  five  (5)  days  after  demand.

     (c)     Misrepresentation.  Any  representation  or warranty made or deemed
             -----------------
to  be  made  by  any  of  the  Borrower  under this Agreement or any other Loan
Document or any amendment hereto or thereto shall at any time prove to have been
incorrect  or  misleading  in  any  material  respect  when  made.

     (d)     Default  in  Performance.  (i)  Borrower  shall  default  in  the
             ------------------------
performance  or observance of a term, covenant, condition or agreement contained
in  ARTICLES  6,  7  OR  8;  (ii)  Borrower  shall default in the performance or
observance of any other term, covenant, condition or agreement contained in this
Agreement  and the default is not cured to the satisfaction of Lender within ten
(10)  days  after  the  sooner  to  occur of Borrower' receipt of notice of such
default  from Lender or the date on which such default first became known to any
officer  of  Borrower;  or  (iii)  Borrower  shall default in the performance or
observance  of any non-payment term, covenant, condition or agreement related to
the  Loans  and  the passage without cure of the applicable cure period, if any.

     (e)     Indebtedness  Cross-Default.  (i)  Borrower or any Subsidiary shall
             ---------------------------
fail  to  pay  when  due  and  payable  the  principal  of  or  interest  on any
Indebtedness  (other than the Loans or Note), which Indebtedness is in an amount
equal  to  or  greater than $100,000.00 or (ii) the maturity of any Indebtedness
shall  have  been accelerated as a result of such default or event of default in
accordance  with  the  provisions  of  any  indenture,  contract  or  instrument
providing  for  the  creation  of  or  concerning  such Indebtedness, where such
Indebtedness  is  in an amount equal to or greater than $100,000.00 or (iii) any
event  shall  have occurred and be continuing which, with or without the passage
of  time or the giving of notice, or both, would permit any holder or holders of
such  Indebtedness,  any  trustee  or  agent  acting on behalf of such holder or
holders or any other Person, to accelerate such maturity where such Indebtedness
is  in  an  amount  equal  to  or  greater  than  $100,000.00.

     (f)     Other  Cross-Defaults.  Borrower  shall default in the payment when
             ---------------------
due  or  in  the performance or observance of any obligation or condition of any
material  agreement,  contract,  security  or  lease.

     (g)     Voluntary  Bankruptcy Proceeding.  Any Obligor shall (i) commence a
             --------------------------------
voluntary  case  under  the  federal  bankruptcy  laws  (as  now or hereafter in
effect), (ii) commence a proceeding seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up  or  composition for adjustment of debts, (iii) consent to or fail to contest
in  a  timely  and  appropriate  manner  any  petition  filed  against  it in an
involuntary  case  under  such  bankruptcy laws or other laws, (iv) apply for or

                                       20
<PAGE>
consent  to,  or  fail  to  contest  in  a  timely  and  appropriate manner, the
appointment  of,  or the taking of possession by, a receiver, custodian, trustee
or  liquidator  of  itself or of a substantial part of its property, domestic or
foreign, (v) admit in writing its inability to pay its debts as they become due,
(vi)  make  a general assignment for the benefit of creditors, or (vii) take any
corporate  action  for  the  purpose  of  authorizing  any  of  the  foregoing.

     (h)     Involuntary  Bankruptcy  Proceeding.  A  case  or  other proceeding
             -----------------------------------
shall  be  commenced  against any Obligor in any court of competent jurisdiction
seeking  (i)  relief  under  the federal bankruptcy laws (as now or hereafter in
effect)  or  under  any other laws, domestic or foreign, relating to bankruptcy,
insolvency,  reorganization,  winding  up  or  adjustment  of debts, or (ii) the
appointment  of  a  trustee,  receiver, custodian, liquidator or the like of any
Obligor or of all or any substantial part of the assets, domestic or foreign, of
any  Obligor, and such case or proceeding shall continue undismissed or unstayed
for  a  period  of 60 consecutive calendar days, or an order granting the relief
requested  in  such  case  or proceeding against any Obligor (including, but not
limited  to,  an  order  for relief under such federal bankruptcy laws) shall be
entered.

     (i)     Loan Documents.  Any event of default or Event of Default under any
             --------------
other  Loan Document shall occur or any Obligor shall default in the performance
or  observance  of any material term, covenant, condition or agreement contained
in,  or the payment of any other sum covenanted to be paid by any Obligor under,
any such Loan Document; or any provision of this Agreement, or of any other Loan
Document  after  delivery  thereof  hereunder,  shall for any reason cease to be
valid and binding, or any Obligor or other party thereto (other than the Lender)
shall  so  state in writing; or this Agreement or any other Loan Document, after
delivery  thereof  hereunder,  shall  for  any  reason  cease to create a valid,
perfected  and,  first  priority  Lien  on,  or security interest in, any of the
collateral  purported  to  be  covered  thereby.

     (j)     Judgment.  A judgment or judgments in an amount, individually or in
             --------
the  aggregate,  in excess of $50,000.00 shall be entered against any Obligor by
any court and such judgment or order shall continue undischarged or unstayed for
30  days.

     (k)     Attachment.  A  warrant  or  writ  of  attachment  or  execution or
             ----------
similar  process  shall  be  issued against any property of any Obligor and such
warrant  or  process  shall  continue  undischarged  or  unstayed  for  60 days.

     (l)     Material  Adverse  Change.  There  occurs any act, omission, event,
             -------------------------
undertaking  or  circumstance or series of acts, omissions, events, undertakings
or  circumstances  which have, or in the sole judgment of the Lender would have,
either  individually  or  in  the  aggregate,  a  Material  Adverse  Effect.

     (m)     ERISA.  (i)  Any  Termination  Event with respect to a Benefit Plan
             -----
shall  occur that, after taking into account the excess, if any, of (A) the fair
market  value  of  the  assets of any other Benefit Plan with respect to which a
Termination  Event  occurs  on  the  same  day (but only to the extent that such
excess  is  the  property of Borrower) over (B) the present value on such day of
all  vested nonforfeitable benefits under such other Benefit Plan, results in an
Unfunded  Vested  Accrued Benefit in excess of $___, (ii) any Benefit Plan shall
incur an "accumulated funding deficiency" (as defined in Section 412 of the Code
or  Section 302 of ERISA) for which a waiver has not been obtained in accordance
with  the  applicable provisions of the Code and ERISA, or (iii) Borrower are in
"default"  (as  defined in Section 4219(c)(5) of ERISA) with respect to payments
to  a Multiemployer Plan resulting from Borrower' complete or partial withdrawal
(as  described  in  Section 4203 or 4205 of ERISA) from such Multiemployer Plan.

     (n)     Change  of  Management.  Any  change,  without  the  prior  written
             ----------------------
consent  of  Lender  on  each  occasion,  in the following executive officers of
Borrower:  Chief  Executive  Officer.


                                       21
<PAGE>
     Section  9.2     Remedies.
                      --------

     (a)     Automatic  Acceleration  and  Termination  of Facilities.  Upon the
             --------------------------------------------------------
occurrence  of  an  Event of Default specified in SECTION 9.1(G) or (H), (i) the
principal of and the interest on the Loans and the Note at the time outstanding,
and all other amounts owed to the Lender under this Agreement or any of the Loan
Documents  and  all  other  Obligations,  shall thereupon become due and payable
without  presentment,  demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or any of the Loan Documents to
the  contrary  notwithstanding,  and  (ii)  the commitment of the Lender to make
advances  under  this  Agreement  shall  immediately  terminate.

     (b)     Other  Remedies.  If  any Event of Default (other than as specified
             ---------------
in  SECTION 9.1(G) or (H)) shall have occurred and be continuing, the Lender, in
its  sole and absolute discretion, may do any of the following:  (i) declare the
principal of and interest on the Loans and the Note at the time outstanding, and
all  other  amounts  owed  to the Lender under this Agreement or any of the Loan
Documents  and all other Obligations, to be forthwith due and payable, whereupon
the  same  shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived, anything
in  this  Agreement  or  the  Loan  Documents  to  the contrary notwithstanding,
together  with  interest on such amounts at the Default Rate; and (ii) terminate
the  Loan  and  any  commitment  of  the  Lender  to  make  advances  hereunder.

     (c)     Further  Remedies.  If any Event of Default shall have occurred and
             -----------------
be continuing, the Lender, in its sole and absolute discretion, may exercise any
and  all  of  its  rights  under any and all of the Guaranty Security Documents.

     Section  9.3     Application  of Proceeds.  All proceeds from each sale of,
                      ------------------------
or  other realization upon, all or any part of any collateral under the Guaranty
Security  Documents  following an Event of Default shall be applied or paid over
as  follows:  (a)  First:  to  the payment of all costs and expenses incurred in
connection  with such sale or other realization, including reasonable attorneys'
fees,  (b)  Second:  to  the payment of the Obligations (with Borrower remaining
liable  for  any  deficiency)  in  any order which the Lender may elect, and (c)
Third:  the  balance  (if  any)  of  such proceeds shall be paid to Borrower or,
subject  to  any  duty  imposed  by  law or otherwise, to whomsoever is entitled
thereto.

     Section  9.4     Miscellaneous  Provisions  Concerning  Remedies.
                      -----------------------------------------------

     (a)     Rights  Cumulative.  The  rights  and  remedies of the Lender under
             ------------------
this  Agreement, the Note and each of the Loan Documents shall be cumulative and
not  exclusive  of  any  rights  or  remedies which it would otherwise have.  In
exercising  such rights and remedies, the Lender may be selective and no failure
or delay by the Lender in exercising any right shall operate as a waiver of such
right  nor  shall  any single or partial exercise of any power or right preclude
its  other  or  further  exercise  or  the exercise of any other power or right.

     (b)     Limitation  of  Liability.  Nothing  contained in this ARTICLE 9 or
             -------------------------
elsewhere  in  this Agreement or in any of the Loan Documents shall be construed
as  requiring or obligating the Lender or any agent or designee of the Lender to
make  any  demand  or to make any inquiry as to the nature or sufficiency of any
payment  received  by  it or to present or file any claim or notice, and neither
the  Lender  nor  any  of  its  agents  or designees shall have any liability to
Borrower  for  actions  taken pursuant to this ARTICLE 9, any other provision of
this Agreement or any of the Loan Documents, so long as the Lender or such agent
or  designee  shall  act  reasonably  and  in  good  faith.


                                       22
<PAGE>
     (c)     Appointment  of  Receiver.  In any action under this ARTICLE 9, the
             -------------------------
Lender shall be entitled to the appointment of a receiver, without notice of any
kind  whatsoever,  to  exercise  such  power as the court shall confer upon such
receiver.


                           ARTICLE 10 - MISCELLANEOUS

     Section  10.1     Notices.
                       -------

     (a)     Method  of  Communication.  All  notices  and  the  communications
             -------------------------
hereunder  and  thereunder  shall  be  in  writing.  Notices in writing shall be
delivered  personally  or  sent  by  overnight  courier service, by certified or
registered  mail,  postage  pre-paid,  or by facsimile transmission and shall be
deemed  received,  in the case of personal delivery, when delivered, in the case
of  overnight  courier  service, on the next Business Day after delivery to such
service, in the case of mailing, on the third day after mailing (or, if such day
is a day on which deliveries of mail are not made, on the next succeeding day on
which  deliveries  of mail are made) and, in the case of facsimile transmission,
upon  transmittal.

     (b)     Addresses for Notices.  Notices to any party shall be sent to it at
             ---------------------
the following addresses, or any other address of which all the other parties are
notified  in  writing.

             If  to  Borrower:        The  Female  Health  Company
                                      875  North  Michigan  Avenue
                                      Chicago,  Illinois  60611
                                      Attention:  O.  B.  Parrish
                                      Facsimile  No.:  312/280-9360

             If  to  the  Lender:     Heartland  Bank
                                      212  S.  Central  Avenue
                                      St.  Louis,  Missouri  63105
                                      Attention:  David  Puricelli
                                                  Andrew  S.  Love
                                      Facsimile  No.:  314/512-8501

     (c)     Lender's  Office.  The  Lender  hereby  designates  its  office
             ----------------
designated  above  or  any subsequent office which shall have been specified for
such  purpose by written notice to Borrower, as the office to which payments due
are  to  be  made  and  at  which  Loans  will  be  disbursed.

     Section  10.2     Expenses.  Borrower  agree  to pay or reimburse on demand
                       --------
all  costs  and  expenses incurred by the Lender, including, without limitation,
the  reasonable  fees  and  disbursements  of  counsel,  in  connection with the
preparation,  due diligence, administration, enforcement and termination of this
Agreement  and  each of the other Loan Documents including.  The foregoing shall
not  be  construed to limit any other provisions of the Loan Documents regarding
costs  and  expenses  to  be  paid  by  Borrower.

     Section  10.3     Stamp  and  Other  Taxes.  Borrower  will pay any and all
                       ------------------------
stamp,  registration,  recordation  and similar taxes, fees or charges and shall
indemnify  the  Lender  against  any  and  all  liabilities  with  respect to or
resulting  from any delay in the payment or omission to pay any such taxes, fees
or  charges, which may be payable or determined to be payable in connection with
the execution, delivery, performance or enforcement of this Agreement and any of
the  Loan  Documents  or  the  perfection  of  any  rights  or security interest
thereunder.


                                       23
<PAGE>
     Section  10.4     Setoff.  In  addition  to  any  rights  now  or hereafter
                       ------
granted  under  applicable law, and not by way of limitation of any such rights,
upon  and after the occurrence of any Default or Event of Default, the Lender is
hereby  authorized  by Borrower at any time or from time to time, without notice
to  Borrower  or  to  any  other  Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or  special,  time  or  demand,  including,  but  not  limited  to, indebtedness
evidenced  by  certificates  of  deposit,  whether matured or unmatured) and any
other  indebtedness at any time held or owing by the Lender to or for the credit
or  the  account  of  Borrower  against  and  on  account  of  the  Obligations
irrespective  of  whether or not (a) the Lender shall have made any demand under
this  Agreement  or  any  of  the  Loan  Documents, or (b) the Lender shall have
declared  any  or  all  of the Obligations to be due and payable as permitted by
SECTION  9.2  and  although  such  Obligations shall be contingent or unmatured.

     SECTION  10.5     Dispute  Resolution.
                       -------------------

     (a)     Consent  to  Jurisdiction;  Waiver  of  Venue Objection; Service of
             -------------------------------------------------------------------
Process.  WITHOUT  LIMITING  THE  RIGHT  OF  THE  LENDER  TO BRING ANY ACTION OR
-------
PROCEEDING  AGAINST THE BORROWER OR AGAINST PROPERTY OF THE BORROWER ARISING OUT
OF  OR  RELATING  TO  THIS  AGREEMENT  (AN  "ACTION")  IN  THE  COURTS  OF OTHER
JURISDICTIONS,  THE  BORROWER  HEREBY  IRREVOCABLY  SUBMITS  TO  AND ACCEPTS THE
NON-EXCLUSIVE  JURISDICTION  OF  ANY  MISSOURI  STATE COURT OR ANY FEDERAL COURT
SITTING  IN ST. LOUIS CITY OR COUNTY, AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT  ANY  ACTION MAY BE HEARD AND DETERMINED IN SUCH MISSOURI STATE COURT OR IN
SUCH  FEDERAL  COURT.  THE  BORROWER HEREBY IRREVOCABLY WAIVES AND DISCLAIMS, TO
THE  FULLEST  EXTENT  THAT  THE  BORROWER  MAY EFFECTIVELY DO SO, ANY DEFENSE OR
OBJECTION  (INCLUDING,  WITHOUT  LIMITATION,  ANY  DEFENSE OR OBJECTION TO VENUE
BASED  ON  THE  GROUNDS  OF  FORUM NON CONVENIENS) WHICH THE BORROWER MAY NOW OR
HEREAFTER  HAVE  TO  THE  MAINTENANCE  OF  ANY  ACTION IN ANY JURISDICTION.  THE
BORROWER  HEREBY  IRREVOCABLY AGREES THAT THE SUMMONS AND COMPLAINT OR ANY OTHER
PROCESS  IN  ANY  ACTION  IN  ANY  JURISDICTION  MAY BE SERVED BY MAILING (USING
CERTIFIED  OR REGISTERED MAIL, POSTAGE PREPAID) TO THE BORROWER'S ADDRESS.  SUCH
SERVICE  WILL  BE  COMPLETE  ON  THE  DATE SUCH PROCESS IS SO DELIVERED, AND THE
BORROWER  WILL  HAVE  THIRTY  DAYS  FROM  SUCH COMPLETION OF SERVICE IN WHICH TO
RESPOND  IN  THE MANNER PROVIDED BY LAW.  THE BORROWER MAY ALSO BE SERVED IN ANY
OTHER  MANNER  PERMITTED  BY  LAW, IN WHICH EVENT THE BORROWER'S TIME TO RESPOND
SHALL  BE  THE  TIME  PROVIDED  BY  LAW.

     (b)     Waiver  of Jury Trial.  TO THE FULLEST EXTENT PERMITTED BY LAW, THE
             ---------------------
BORROWER  HEREBY  WAIVES  AND  DISCLAIMS  ANY  RIGHT TO TRIAL BY JURY (WHICH THE
LENDER  ALSO  WAIVES  AND  DISCLAIMS)  IN  ANY  ACTION,  SUIT,  PROCEEDING  OR
COUNTERCLAIM  OF  ANY  KIND  ARISING  OUT  OF  OR  RELATING  TO  THIS  NOTE.

     Section  10.7     Reversal  of  Payments.  To  the  extent Borrower makes a
                       ----------------------
payment or payments to the Lender or the Lender receives any payment or proceeds
of  any  collateral  for the Guaranty Security Documents for Borrower's benefit,
which  payment(s)  or proceeds or any part thereof are subsequently invalidated,
declared  to  be  fraudulent  or  preferential,  set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or  federal  law, common law or equitable cause, then, the Lender shall have the
continuing  and  exclusive  right  to  apply,  reverse  and re-apply any and all
payments  to  any

                                       24
<PAGE>
portion  of  the  Obligations,  and,  to  the extent of such payment or proceeds
received,  the  Obligations  or  part  thereof intended to be satisfied shall be
revived  and  continued in full force and effect, as if such payment or proceeds
had  not  been  received  by  the  Lender.

     Section 10.8     Injunctive Relief.  Borrower recognizes that, in the event
                      -----------------
Borrower  fails  to  perform,  observe  or  discharge  any of its obligations or
liabilities  under  this Agreement, any remedy of law may prove to be inadequate
relief  to  the  Lender;  therefore,  Borrower  agrees  that  the Lender, at the
Lender's  option, shall be entitled to temporary and permanent injunctive relief
in  any  such  case  without  the  necessity  of  proving  actual  damages.

     Section  10.9     Accounting  Matters.  All  financial  and  accounting
                       -------------------
calculations,  measurements  and  computations  made for any purpose relating to
this  Agreement,  including,  without  limitation,  all computations utilized by
Borrower  to  determine  whether it is in compliance with any covenant contained
herein,  shall,  unless  there is an express written direction or consent by the
Lender  to  the  contrary,  be  performed  in  accordance  with  GAAP.

     Section  10.10     Assignment;  Participation.  All  the provisions of this
                        --------------------------
Agreement  shall  be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Borrower may not assign
or  transfer  any  of its rights under this Agreement.  The Lender may assign or
participate  to  one  or  more  Persons,  all  or  a  portion  of its rights and
obligations  hereunder  and  under  the  Note  and,  in connection with any such
assignment,  may  assign  its rights and obligations under the Guaranty Security
Documents.  The  Lender may, in connection with any assignment or participation,
disclose  to  the  assignee  or participant any information relating to Borrower
furnished  to  the  Lender  by  or  on  behalf  of  Borrower.

     Section  10.11     Amendments.  Any  term, covenant, agreement or condition
                        ----------
of  this  Agreement  or any of the other Loan Documents may be amended or waived
and any departure therefrom may be consented to if, but only if, such amendment,
waiver  or  consent  is  in  writing signed by the Lender and, in the case of an
amendment, by Borrower.  Unless otherwise specified in such waiver or consent, a
waiver  or  consent  given  hereunder  shall  be  effective only in the specific
instance  and  for  the  specific  purpose  for  which  given.

     Section  10.12     Performance of Borrower' Duties.  Borrower's obligations
                        -------------------------------
under  this  Agreement  and  each  of  the  Loan Documents shall be performed by
Borrower  at its sole cost and expense.  If Borrower shall fail to do any act or
thing  which  it  has  covenanted  to do under this Agreement or any of the Loan
Documents,  the  Lender may (but shall not be obligated to) do the same or cause
it  to  be done either in the name of the Lender or in the name and on behalf of
Borrower,  and  Borrower  hereby  irrevocably  authorizes  the Lender so to act.

     Section 10.13     Indemnification.  Borrower agrees to reimburse the Lender
                       ---------------
for all reasonable costs and expenses, including counsel fees and disbursements,
incurred  and  to  indemnify  and  hold the Lender harmless from and against all
losses  suffered  by  the  Lender, other than losses resulting from the Lender's
gross  negligence  or willful misconduct, in connection with (a) the exercise by
the  Lender  of any right or remedy granted to it under this Agreement or any of
the  Loan  Documents,  (b)  any  claim,  and the prosecution or defense thereof,
arising  out  of  or in any way connected with this Agreement or any of the Loan
Documents.


                                       25
<PAGE>
     Section 10.14     All Powers Coupled with Interest.  All powers of attorney
                       --------------------------------
and other authorizations granted to the Lender and any Persons designated by the
Lender pursuant to any provisions of this Agreement or any of the Loan Documents
shall be deemed coupled with an interest and shall be irrevocable so long as any
of  the  Obligations  remain  unpaid  or  unsatisfied or the Loans have not been
terminated.

     Section  10.15     Survival.  Notwithstanding  any  termination  of  this
                        --------
Agreement,  (a)  until  all  Obligations  have  been paid in full and the Credit
Facility  terminated,  the  Lender  shall retain its Security Interest and shall
retain  all  rights  under  this  Agreement  and  each  of the Guaranty Security
Documents  with  as  fully as though this Agreement had not been terminated, and
(b) the indemnities to which the Lender is entitled under the provisions of this
ARTICLE  10  and  any  other  provision of this Agreement and the Loan Documents
shall  continue  in  full  force and effect and shall protect the Lender against
events  arising  after  such  termination  as  well  as  before.

     Section  10.16     Severability  of  Provisions.  Any  provision  of  this
                        ----------------------------
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction  shall,  as to such jurisdiction, be ineffective only to the extent
of  such  prohibition  or unenforceability without invalidating the remainder of
such  provision  or  the remaining provisions hereof or thereof or affecting the
validity  or  enforceability  of  such  provision  in  any  other  jurisdiction.

     Section 10.17     Governing Law.  This Agreement and the Note and the other
                       -------------
Loan  Documents shall be construed in accordance with and governed by the law of
the  State  of  Missouri.

     Section  10.18     Counterparts.  This  Agreement  may  be  executed in any
                        ------------
number of counterparts and by different parties hereto in separate counterparts,
each  of  which  when so executed shall be deemed to be an original and shall be
binding  upon  all parties, their successors and assigns, and all of which taken
together  shall  constitute  one  and  the  same  agreement.

     Section  10.19     Final  Agreement.  This  Agreement  and  the  other Loan
                        ----------------
Documents  are  intended  by  the  parties  hereto  as  the  final, complete and
exclusive  expression  of  the  agreement among them with respect to the subject
matter  hereof  and  thereof.  This  Agreement  and  the  other  Loan  Documents
supersede  any  and  all  prior  oral  or written agreements between the parties
hereto  relating  to  the  subject  matter  hereof  and  thereof.

     SECTION  10.20     PURCHASE  OF  INSURANCE.  UNLESS  YOU, BORROWER, PROVIDE
                        -----------------------
EVIDENCE  OF  THE  INSURANCE  COVERAGE  REQUIRED  BY YOUR AGREEMENT WITH US, THE
LENDER, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS UNDER
THIS  AGREEMENT.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS.  THE
COVERAGE  THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT
IS  MADE  AGAINST  YOU.  YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT
ONLY  AFTER  PROVIDING  EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY
THIS AGREEMENT.  IF WE PURCHASE INSURANCE, YOU WILL BE RESPONSIBLE FOR THE COSTS
OF  THAT  INSURANCE,  INCLUDING  THE  INSURANCE  PREMIUM, INTEREST AND ANY OTHER
CHARGES  WE  MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL
THE  EFFECTIVE  DATE  OF  THE  CANCELLATION OF EXPIRATION OF THE INSURANCE.  THE
COSTS  OF  THE  INSURANCE  MAY  BE  ADDED  TO  YOUR TOTAL OUTSTANDING BALANCE OR
OBLIGATION.  THE  COSTS  OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE
YOU  MAY  BE  ABLE  TO  OBTAIN  ON  YOUR  OWN.


                                       26
<PAGE>
     SECTION  10.21     ORAL AGREEMENTS.  ORAL AGREEMENTS OR COMMITMENTS TO LOAN
                        ---------------
MONEY,  EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES  TO  EXTEND  OR  RENEW  SUCH  DEBT ARE NOT ENFORCEABLE.  TO PROTECT YOU
(BORROWER)  AND  US  (CREDITOR)  FROM  MISUNDERSTANDING  OR  DISAPPOINTMENT, ANY
AGREEMENTS  WE  REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS  THE  COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE  MAY  LATER  AGREE  IN WRITING TO MODIFY IT.  THE LOAN DOCUMENTS, AS AMENDED,
MODIFIED  AND SUPPLEMENTED HEREBY, ARE INCORPORATED HEREIN BY THIS REFERENCE AND
SHALL  BE  DEEMED  TO  CONSTITUTE  A  PART  OF  THIS  WRITING.


                                       27
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed  in  St.  Louis,  Missouri by their duly authorized officers in several
counterparts  all  as  of  the  day  and  year  first  written  above.

                  THIS AGREEMENT CONTAINS A BINDING JURY WAIVER
                 PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

                                            BORROWER:

                                            THE  FEMALE  HEALTH  COMPANY


                                            By:
                                               ---------------------------------
                                            Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------

                                            LENDER:

                                            HEARTLAND  BANK


                                            By:
                                               ---------------------------------
                                            Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------


                                       28
<PAGE>
STATE  OF  _________________     )
                                 )  ss.
________  OF  _______________    )


          On  this  ___  day  of  May,  2001,  before  me  appeared
_______________________,  to  me  known  to  be  the person described in and who
executed  the  foregoing  instrument,  as the _____________ of The Female Health
Company,  a Wisconsin corporation, and acknowledged that he executed the same as
the free act and deed of said corporation and is acting for and on behalf of and
as  an  officer  of  the  said  corporation.


                                   ____________________________________
                                   Notary  Public

My  Commission  Expires:


                                   ____________________________


                                       29