CONFORMED COPY

                              DATED 7th August 1998



                       HUNTINGDON LIFE SCIENCES GROUP plc

                                     - and -

                        HUNTINGDON LIFE SCIENCES LIMITED

                                     - and -

                          HUNTINGDON LIFE SCIENCES INC.

                                     - and -

                                    THE BANKS

                                     - and -

                          NATIONAL WESTMINSTER BANK Plc
                                    as Agent









                              FACILITIES AGREEMENT
          (to replace the facilities agreement dated 1st November 1995)
           relating to a revolving loan facility of (pound)24,500,000










                                   WILDE SAPTE
                                       ---

                                     LONDON


<PAGE>




                                TABLE OF CONTENTS


Clause        Heading                                            Page Number

1.            DEFINITIONS AND INTERPRETATION................................1
1.1           Definitions...................................................1
1.2           Clause Headings..............................................10
1.3           Interpretation...............................................10

2.            CONDITIONS PRECEDENT.........................................11

3.            FACILITIES...................................................11
3.1           Facilities...................................................11
3.2           Obligations Several..........................................12
3.3           Rights Several...............................................12

4.            PURPOSE......................................................12
4.1           Purpose of the Revolving Credit Facility.....................12
4.2           Undertaking by the Parent....................................12
4.3           No Liability.................................................12

5.            DRAWDOWN AND PARTICIPATIONS..................................13
5.1           Drawdown under the Revolving Credit Facility.................13
5.2           Drawdown.....................................................13
5.3           Participations and Payments..................................14
5.4           Repayment of Existing Facility...............................14
5.5           Confirmation.................................................14

6.            INTEREST.....................................................15
6.1           Interest Rate................................................15
6.2           Interest Periods.............................................15
6.3           Default Interest.............................................15
6.4           Calculation and Payment of Interest..........................16
6.5           Agent's Determination........................................16
6.6           Adjustment to Margin.........................................16

7.            REPAYMENT AND REDUCTION......................................16
7.1           Repayment....................................................16
7.2           Prepayment...................................................17
7.3           Mandatory Prepayment on Wilmslow Disposal
              and other Disposals..........................................17
7.4           Cancellation.................................................17

8.            CHANGES IN CIRCUMSTANCES.....................................18
8.1           Illegality...................................................18
8.2           Increased Costs..............................................18
8.3           Market disruption............................................19
8.4           Mitigation...................................................21
8.5           Certificates.................................................21

9.            PAYMENTS.....................................................21
9.1           Time and Place...............................................21
9.2           Business Days................................................22
9.3           Indemnity and Breakage Costs.................................22
9.4           Grossing-up..................................................22
9.5           Prepayment Right.............................................24
9.6           Accounts as Evidence.........................................24
9.7           Currency of Account..........................................25
9.8           Borrowers' Payments..........................................25
9.9           Banks' Payments..............................................25
9.10          Appropriation................................................25

10.           SECURITY.....................................................26

11.           REPRESENTATIONS AND WARRANTIES...............................26
11.1          Acknowledgement of Reliance..................................26
11.2          Representations and Warranties...............................26
11.3          Repetition...................................................29

12.           UNDERTAKINGS.................................................29
12.1          Information Undertakings.....................................29
12.2          Positive Covenants...........................................31
12.3          Negative Covenants...........................................32

13.           DEFAULT......................................................34
13.1          Defaults.....................................................34
13.2          Acceleration etc.............................................36
13.3          Acceleration of Existing Facilities, Existing Ancillary
              Facilities or Bridging Facility  ........................    37
13.4          Appointment of receiver etc..................................37

14.           SET-OFF AND PRO RATA PAYMENTS AND DEPOSIT ACCOUNT............37
14.1          Set-Off......................................................37
14.2          Deposit Account..............................................37
14.3          Pro Rata Sharing.............................................38

15.           THE AGENT AND THE BANKS......................................39
15.1          Appointment and Duties.......................................39
15.2          Payments and Information Received............................39
15.3          Defaults.....................................................40
15.4          Assumptions..................................................40
15.5          Legal Proceedings............................................40
15.6          No Liability.................................................40
15.7          Credit Decisions.............................................40
15.8          Advisers.....................................................41
15.9          Relationship with Banks......................................41
15.10         Agent's position as a Bank...................................41
15.11         Indemnity....................................................41
15.12         Resignation..................................................42
15.13         Change of Office.............................................42
15.14         Scope of Duties..............................................42
15.15         Consents.....................................................42
15.16         Evidence.....................................................43
15.17         Security.....................................................43

16.           FEES AND EXPENSES............................................43
16.1          Expenses.....................................................43
16.2          Agency Fees..................................................44
16.3          Non-Utilisation Fee..........................................44
16.4          Participation Fee............................................44
16.5          Documentary Taxes Indemnity..................................44
16.6          VAT..........................................................44

17.           SEVERABILITY, WAIVERS, REMEDIES CUMULATIVE...................45
17.1          Severance....................................................45
17.2          Waivers......................................................45

18.           NOTICES......................................................45
18.1          Method.......................................................45
18.2          Delivery.....................................................45
18.3          Addresses....................................................46
18.4          Deemed Receipt...............................................46
18.5          Notices to the Banks.........................................46

19.           ASSIGNMENTS AND TRANSFERS....................................46
19.1          Benefit of Agreement.........................................46
19.2          Assignments and Transfers by the Borrowers...................47
19.3          Assignments and Transfers by Banks...........................47
19.4          Disclosure of Information....................................48

20.           CURRENCY INDEMNITY...........................................48
20.2          General......................................................49

21.           PRIORITIES...................................................49
21.1          Priority Order...............................................49
21.2          Co-Operation.................................................49

22.           ANNOUNCEMENTS................................................49

23.           CONFLICT.....................................................50

24.           LAW AND JURISDICTION.........................................50
24.1          Law..........................................................50
24.2          Jurisdiction.................................................50

SCHEDULE 1 - THE BANKS.....................................................52
SCHEDULE 2 - DRAWDOWN NOTICE...............................................53
SCHEDULE 3 - MANDATORY COST RATE...........................................54
SCHEDULE 4 - FORM OF TRANSFER CERTIFICATE..................................56
SCHEDULE 5 - EXISTING SECURITY.............................................60
SCHEDULE 6 - CONDITIONS PRECEDENT..........................................61
SCHEDULE 7 - PARTICIPATION IN RISK SHARING.................................62



<PAGE>


                                            
THIS AGREEMENT is made on the 7th day of August 1998

BY:


(1) HUNTINGDON LIFE SCIENCES GROUP Plc, a company incorporated under the laws of
    England and Wales with registered number 502370 having its registered office
    at Woolley Road, Alconbury, Huntingdon, Cambridgeshire PE18 6ES (the
    "Parent");

(2) HUNTINGDON LIFE sciences LIMITED, a company  incorporated under the
    laws of England and Wales with  registered  number  01815730 having
    its  registered  office at  Woolley  Road,  Alconbury,  Huntingdon,
    Cambridgeshire PE18 6ES ("HLSL");

(3) HUNTINGDON  LIFE SCIENCES  INC., a company  incorporated  under the
    laws of the State of Delaware,  USA having its registered office at
    9 East Loockerman Street,  City of Dover,  County of Kent, State of
    Delaware, United States of America ("HLS");

(4) THE BANKS as defined below; and

(5) NATIONAL  WESTMINSTER  BANK  Plc,  of 3rd  Floor,  Juno  Court,  24
    Prescott  Street,  London E1 8BB as the Agent (as such term is more
    particularly defined below).


NOW IT IS HEREBY AGREED as follows:


1.           DEFINITIONS AND INTERPRETATION

1.1          Definitions

             In  this  Agreement  the  following   expressions  shall  have  the
             following meanings (except where the context otherwise requires):

             "Accounts"  means  the  audited   consolidated  annual  report  and
             accounts  of the  Parent  and its  Subsidiaries  together  with the
             relative directors' report and auditors' report.

             "Agent"  means  National  Westminster  Bank Plc in its  capacity as
             agent and trustee for the Banks and each successor  Agent appointed
             from time to time under Clause 15.12.

             "Auditors"  means  Arthur  Andersen or such other firm of chartered
             accountants of  internationally  recognised  standing as shall have
             been appointed as auditors of the Parent and its Subsidiaries.

             "Available Commitment" means, in relation to a Bank, its Commitment
             less its Participation in all outstanding Revolving Advances.

             "Available Revolving Credit Facility" means the aggregate of the
             Available Commitments of the Banks.

             "Banks" means each of the banks and financial  institutions  listed
             in Schedule 1, their respective successors and each Bank Transferee
             and "Bank" shall be construed accordingly.

             "Bank Transferee" has the meaning attributed thereto in Clause 19.

             "Borrowers"  means  all  and  each  of the  Parent,  HLSL,  HLS and
             "Borrower" shall be construed accordingly as the context requires.

             "Bridging  Facility" means a bridging facility of  (pound)1,000,000
             being  provided  by  NatWest  pursuant  to the  terms  of a  letter
             addressed to the Borrowers of even date herewith.

             "Business  Day"  means a day on which  banks and  foreign  exchange
             markets are open in London for the  transaction  of business of the
             nature required by this Agreement.

             "Capital   Expenditure"  has  the  meaning  given  thereto  by  the
             established  accounting  policies  of the Group in  relation to its
             cashflow statements as at the date hereof.

             "Ciba Geigy Agreement" means the agreement referred to in paragraph
             (d) of the  definition of Permitted  Indebtedness  and the security
             relating thereto.

             "Certified Copy" means, in relation to any document, a copy of such
             document  bearing the endorsement  "Certified a true,  complete and
             accurate copy of the original, which has not been amended otherwise
             than by a document,  a Certified Copy of which is attached  hereto"
             signed and dated by a duly  authorised  officer  of the  company in
             question.

             "Change" means the introduction, implementation, repeal, withdrawal
             or change in, or in the  interpretation  or application of, (a) any
             law,  regulation,  practice or  concession,  or (b) any  directive,
             requirement,  request or guidance  (whether or not having the force
             of law but if not  having  the  force  of law,  one  which  applies
             generally to a class or category of financial institutions of which
             that Bank forms  part and  compliance  with which is in  accordance
             with the general  practice of those financial  institutions) of the
             European Community, any central bank including the European Central
             Bank, or any other fiscal, monetary,  regulatory or other authority
             which has jurisdiction  over that Bank and which in any case is not
             known as at the date of this Agreement.

             "Charging  Group"  means each of the  Borrowers  and each and every
             member of the Group that has executed a Security Document.

             "Circular" means the circular to be issued by the Parent relating
             to the Placings.

             "Comerica" means Comerica Bank.

             "Commitment"  means, in relation to each Bank, the principal amount
             described  as such set opposite its name in Schedule 1 or under the
             "Amount of Commitment  Transferred" in the Schedule to any relevant
             Transfer  Certificate,  in each case as reduced or cancelled  under
             the terms of this Agreement.

             "Commitment   Percentage"  means  in  relation  to  each  Bank  the
              percentage specified against its name in Column 3 of Schedule 1.

             "Commitment  Period"  means the period  starting on the date hereof
             and ending on 30th August 2000.

             "Company  System"  means each item of  equipment  and the  software
             programmes  used by the Group in the course of its business,  which
             is material for the purposes of the Group's business.

             "Conditions Precedent" means each of the conditions set out in
             Schedule 6 and referred to in Clause 2.

             "Default" means any of the events specified in Clause 13.1.

             "Default Occurrence" means any event,  occurrence or omission which
             with the passing of time,  giving of notice or  satisfaction of any
             other condition would be a Default.

             "Deposit  Account"  means the  deposit  account  in the name of the
             Parent with the Agent into which the Transaction Proceeds are to be
             paid.

             "DKB" means Dresdner Kleinwort Benson.

             "Disposal" means a sale,  transfer or other disposal  (including by
             way of lease or loan) by a person of all or part of its business or
             assets.

             "Disposal  Proceeds" means, in respect of a Disposal by a member of
             the Group, the gross  consideration  received by the Group for that
             Disposal less all costs and expenses directly  incurred  (including
             any VAT chargeable) in respect of that Disposal.

             "Dormant Subsidiary" means, at any given time, a company within the
             Group which is at such time  dormant  within the meaning of section
             250(3) of the Companies Act 1985 the value of whose assets does not
             exceed in aggregate (pound)5,000.

             "Drawdown  Date" means any date,  being a Business  Day, on which a
             Revolving  Advance is made, or is proposed to be made pursuant to a
             Drawdown Notice.

             "Drawdown Notice" means a notice substantially in the form set out
             in Schedule 2.

             "Encumbrance"  means any  mortgage,  charge,  assignment  by way of
             security, pledge, hypothecation,  lien, right of set-off, retention
             of title  provision,  trust or flawed  asset  arrangement  (for the
             purpose of, or which has the effect of,  granting  security) or any
             other security  interest of any kind whatsoever,  or any agreement,
             whether  conditional  or otherwise,  to create any of the same, but
             excluding any  agreement to sell or otherwise  dispose of any asset
             on terms  whereby such asset is or may be leased to or  re-acquired
             or acquired by any Group Company.

             "Environment"  means all or any of the following  media;  air, land
             (including  buildings and any other  structures or erections in, on
             or under it and any soil and  anything  below the surface of land),
             land  covered  with  water and water  (including  sea,  ground  and
             surface water).

             "Environmental  Claim" means any written notice from any regulatory
             authority or government agency, alleging any breach,  contravention
             or  violation of any  Environmental  Law by any member of the Group
             (other than the TMG  Companies)  or the  existence of any liability
             arising from any such breach, contravention or violation including,
             without limitation, liability to conduct, pay for or for damages in
             respect of any clean-up, remediation, administrative cost or charge
             or expense,  damage to the  Environment  or any  natural  resource,
             property loss or damage,  personal injury or any penalty  attaching
             or  relating  to the  presence,  emission,  release  or leak of any
             Hazardous Material in or to the Environment.

             "Environmental  Law" means all statutes,  treaties and conventions,
             directives  and  regulations  whether  of  a  criminal,   civil  or
             administrative  nature, and the rules of Common Law, relating to or
             concerning:

             (a)    pollution or contamination of the Environment;

             (b)    harm, whether actual or potential to ecological systems;

             (c)    the generation, manufacture,  processing, distribution,
                    use (including abuse),  treatment,  storage,  disposal,
                    transport or handling of Hazardous Materials; and

             (d)    the  emission,  leak,  release  or  discharge  into the
                    Environment  of noise,  vibration,  dust,  fumes,  gas,
                    odours, smoke, steam, effluvia,  heat, light, radiation
                    (of any kind), infection,  electricity or any Hazardous
                    Material   and  any   matter   or  thing   capable   of
                    constituting  a nuisance or an  actionable  tort of any
                    kind in respect of such matters.

             "Existing  Ancillary  Facilities"  means the  Terminable  Indemnity
             Facility and the Forex  Facility  made  available to the Parent and
             HLSL  pursuant to a facility  letter dated 7th  September  1997 (as
             amended).

             "Existing  Facilities" means the sterling Revolving Credit Facility
             of  (pound)19,500,000  made available to the Borrowers by the Banks
             pursuant to the  facilities  agreement  dated 1st November 1995 and
             the  overdraft  facility  of  (pound)5,000,000  made  available  by
             National  Westminster  Bank  Plc  as  overdraft  bank  pursuant  to
             facility  letters  dated 26th February 1998 and 17th March 1998 (as
             varied and amended from time to time).

             "Existing Facilities  Outstandings" means at any time the aggregate
             of all amounts outstanding under the Existing Facilities.

             "Finance  Lease"  means any  lease,  hire  agreement,  credit  sale
             agreement,  purchase  agreement,   conditional  sale  agreement  or
             instalment  sale and purchase  agreement which should be treated in
             accordance  with SSAP 21 (or any  successor  thereto)  as a finance
             lease or in the same way as a finance lease.

             "Final Repayment Date" means 31st August 2000.

             "Financial  Year" in relation to a company has the meaning ascribed
             to such expression by section 223 of the Companies Act 1985.

             "Financing   Documents"  means  this  Agreement  and  the  Security
             provided that any reference to the expression "Financing Documents"
             contained in the Security shall be construed as a reference to this
             Agreement and the Security.

             "First  Drawdown  Date"  means the date on which the  Parent  first
             draws down a Revolving Advance under this Agreement.

             "FNBM" means The First National Bank of Maryland.

             "GAAP" means,  means  accounting  principles,  concepts,  bases and
             policies generally adopted and accepted in England.

             "Group"  means the Parent and each  Subsidiary  of the Parent  from
             time to time during the Security  Period and Group Company shall be
             construed accordingly.

             "Hazardous  Materials"  means any  element  or  substance,  whether
             natural or artificial, and whether consisting of gas, liquid, solid
             or vapour,  whether on its own or in any combination with any other
             element  or  substance,  which is  listed,  identified,  defined or
             determined by any Environmental Law to be harmful to mankind or any
             living organism or damaging to the Environment.

             "Headroom"  means,  with respect to the Revolving  Credit Facility,
             the difference (if any) between the Revolving Credit Facility Limit
             and the Revolving Loan at any time  (including,  in calculating the
             amount of the Revolving  Loan on any Interest  Date,  any Revolving
             Advance  proposed to be drawn on such Interest Date for the purpose
             of  repaying  in whole or in part  one or more  maturing  Revolving
             Advances in aggregate in the same or a greater amount).

             "Indebtedness"  means , in relation to any person,  its  obligation
             (whether present or future,  actual or contingent,  as principal or
             surety) for the payment or repayment  of money  (whether in respect
             of interest, principal or otherwise) incurred in respect of:

             (a)         moneys borrowed or raised;

             (b)         any bond, note, loan stock, debenture or similar
                         instrument;

             (c)         any acceptance credit, bill discounting, note purchase,
                         factoring or documentary credit facility;

             (d)         any Finance Lease;

             (e)         any bond,  stand-by  letter of credit or other  similar
                         instrument  issued in connection with any  indebtedness
                         of the type referred to in any other  paragraph of this
                         definition;

             (f)         any  interest  rate or currency  swap  agreement or any
                         other hedging or  derivatives  instrument or agreement;
                         or

             (g)         any guarantee,  indemnity or similar  insurance against
                         financial  loss given in respect of the  obligation  of
                         any person in respect of any  indebtedness  of the type
                         referred to in this definition.

             For the  avoidance of doubt  Indebtedness  does not include  credit
             incurred in the ordinary course of trading.

             "Investor Placing" means the raising by the Parent of new equity by
             means of a subscription by the Investors for  120,000,000  ordinary
             shares  of  5  pence   each  in  the   Parent  in  order  to  raise
             (pound)15,000,000 (gross).

             "Investor  Placing  Agreement"  means  the  agreement  of even date
             herewith  between  the  Parent,  the  directors  of the  Parent and
             certain investors documenting the Investor Placing.

             "Investors"  means the persons defined as the  "Subcribers" for the
             purposes of the Investor  Placing  Agreement or such other  persons
             who may replace or join the  foregoing  as parties to the  Investor
             Placing Agreement.

             "Interest Date" means the last day of an Interest Period.

             "Interest  Period" means each period  determined in accordance with
             Clause 6.2 for the purpose of  calculating  interest  on  Revolving
             Advances or overdue amounts respectively.

             "Lending  Office"  means,  in  relation  to each Bank,  the lending
             office  details of which are set out in Schedule 1 of the  relative
             Transfer Certificate or such other lending office through which its
             Commitment is maintained  and through  which its  Participation  is
             made and maintained under this Agreement.

             "LIBOR" means, in relation to a Revolving  Advance or other sum and
             in relation to a particular Interest Period:

             (a)         the rate of the offered quotation for Sterling deposits
                         for a period  comparable to that Interest  Period which
                         appears on the display designated as "Page 3750" on the
                         Telerate  Service (or such other page or service as may
                         replace  it  for  the  purpose  of  displaying   London
                         interbank  offered  rates of prime  banks for  Sterling
                         deposits)  at or about  11.00 a.m.  on the first day of
                         that Interest Period; or

             (b)         if no such  display  rate is  available,  the  rate per
                         annum  (rounded  upwards to four  decimal  places)  (as
                         quoted to the Agent at its  request)  at which  NatWest
                         was   offering   deposits  in  Sterling  in  an  amount
                         comparable with that Revolving Advance or other sum, as
                         the  case  may  be,  to  leading  banks  in the  London
                         interbank  market for a period  equal to that  Interest
                         Period at or about  11.00 a.m. on the first day of that
                         Interest Period.

             "Majority Banks" means a group of Banks whose Commitments comprise
             at least 662/3 per cent. of the Total Commitments.

             "Mandatory Cost Rate" means, the rate determined in accordance with
             Schedule 3.

             "Margin" means, (i) 1.75 per cent. per annum in respect of drawings
             up to  (pound)19,500,000  in aggregate  under the Revolving  Credit
             Facility;  and (ii) subject to Clause 6.6, 1.0 per cent.  per annum
             in respect of that portion of the drawings which for the time being
             are in excess of (pound)19,500,000 in aggregate under the Revolving
             Credit Facility.

             "Material  Adverse  Effect" means a material  adverse effect on the
             business,  assets or  financial  condition  of the Group taken as a
             whole which affects the ability of the  Borrowers  taken as a whole
             to perform their payment obligations under the Financing Documents.

             "NatWest  Obligations" means (pound)100,000 of the monies from time
             to time owing to NatWest by the  Parent  under the  Revolving  Loan
             together  with  all  moneys  owing to  NatWest  in  respect  of the
             Existing Ancillary Facilities.

             "NatWest" means National Westminster Bank Plc.

             "Net  Proceeds"  means in relation to the Security the net proceeds
             of sale or other  realisation of the assets subject to the Security
             after  discharge  of all  direct  costs  incurred  in such  sale or
             realisation,  the discharge of any prior ranking  claims and, where
             appropriate,  all costs, charges, fees and expenses of any receiver
             or similar officer appointed pursuant to the Security.

             "New  Jersey  Mortgage"  means  the  mortgage  over the New  Jersey
             Property dated 16th January 1998.

             "New Jersey  Property"  means the land and  buildings  owned by HLS
             known as Mettlers Road, East Millstone,  NJ 08877, United States of
             America as recorded  with the County  Clerk of  Somerset  County as
             Lots 11.01,  11.02 and 11.03 in Block 512,  Township  of  Franklyn,
             Somerset County, New Jersey.

             "Non-Material Subsidiary" means at any given time, a company within
             the Group the value of whose assets does not exceed (pound)200,000.

             "Outstandings"  means in  relation  to each Bank,  at the time of a
             distribution of the Net Proceeds,  the amount owing to that Bank by
             all the Borrowers  under this  Agreement in respect of the Priority
             Obligations.

             "Participation"  means,  in  relation  to a  Bank  and a  Revolving
             Advance,  the part of such Revolving Advance or the Revolving Loan,
             as the case may be, made  available or to be made available by such
             Bank and thereafter the part of such Advance or the Revolving Loan,
             as the case may be, owing to such Bank from time to time.

             "Participation  Percentage"  means, at any time, in relation to the
             Banks the percentage of their participation in the risk incurred by
             the  Overdraft  Bank  under the  Overdraft  Facility  as set out in
             Schedule 7 of this Agreement.

             "Permitted Encumbrance" means:

             (i)      any Encumbrance constituted or evidenced by any of the
                      Financing Documents;

             (ii)     any rights of set-off or liens arising in the ordinary
                      course of business;

             (iii)    any  arrangements  for  retention  of  title  to  goods
                      arising in the ordinary course of business;

             (iv)     Encumbrances existing as at the date hereof;

             (v)      any  Encumbrance  which the  Banks  have at any time in
                      writing agreed shall be a Permitted Encumbrance;

             (vi)     any  Encumbrance  over goods or  documents  of title to
                      goods or  negotiable  instruments  in  respect  thereof
                      created in support of any documentary  credit or letter
                      of credit transaction  entered into by a company within
                      the  Group  in  the  ordinary  course  of  its  trading
                      activities;

             (vii)    in the case of a company becoming a member of the Group
                      after the date hereof, any Encumbrance existing over the
                      assets of that member of the Group at the time it became
                      a member of the Group provided that (a)the principal
                      amount secured thereby is not increased, (b) such
                      Encumbrance is not created in contemplation of or in
                      connection with its becoming a member of the Group,
                      (c) such Encumbrance is discharged within 180 days after
                      such company becoming a member of the Group, and (d) no
                      other member of the Group has provided any guarantee,
                      support or other financial accommodation in relation to
                      the amount secured thereby;

             (viii)   any  Encumbrance  existing over any assets  acquired by
                      any  member  of the  Group at the time of  acquisition,
                      provided that (a) the principal  amount secured thereby
                      is not increased,  (b) such  Encumbrance is not created
                      in   contemplation   of  or  in  connection   with  the
                      acquisition  of such  asset by any member of the Group,
                      and (c) such Encumbrance is discharged  within 180 days
                      after  the  asset is  required  by such  member  of the
                      Group;

             (ix)     any Encumbrance  arising out of the right of a clearing
                      bank to  combine  or  consolidate  any  accounts  or to
                      set-off or  transfer  any sum or sums  standing  to the
                      credit of any account in or towards satisfaction of any
                      present or future  liabilities  to that clearing  bank;
                      and

             (x)      in the case of HLS, Encumbrances for taxes, assessments
                      or governmental charges or levies not yet delinquent or
                      which are being  actively  contested  in good  faith by
                      appropriate   proceedings  and,  where  the  obligation
                      secured  by such  Encumbrance  is not more than 60 days
                      overdue,  Encumbrances placed on the property of HLS or
                      any  Subsidiary  of it securing  claims of mechanics or
                      suppliers arising in the ordinary course of business.

             "Permitted Indebtedness" means:

             (a)   Indebtedness under any Financing Document;

             (b)   Indebtedness existing at the date of this Agreement of the 
                   Group Companies;

             (c)   Indebtedness of any Group Company to another Group Company;

             (d)   without  limitation  to (b) above,  Indebtedness  owing
                   under an asset purchase agreement dated 14th March 1997
                   between Ciba Geigy plc, the Parent and HLSL;

             (e)   Indebtedness  incurred  with the  consent  of the Agent
                   acting on the instructions of the Majority Banks;

             (f)   Indebtedness  under  Finance  Leases  in  an  aggregate
                   principal  amount  of  up  to  (pound)750,000  in  each
                   Financial Year of the Group; and

             (g)   any  Indebtedness  which  refinances  any  Indebtedness
                   referred to in (a), (b), (c), (d), (e) or (f) up to the
                   amount then outstanding above.

             "Placings" mean the Investor Placing and the Shareholder Placing.

             "Priority  Obligations"  means all moneys  owing,  obligations and
             other liabilities of the Borrowers to the Banks and the Agent under
             the Revolving Credit Facility.

             "Qualifying  Bank" means an institution which is a bank as defined
             by section 840A of the Income and Corporation Taxes Act 1988.

             "Revolving  Advance" means each revolving  advance drawn down under
             the  Revolving  Credit  Facility  or,  as  the  case  may  be, the
             outstanding principal amount of each such revolving advance.

             "Revolving Credit Facility" means the Revolving Credit Facility
             referred to in Clause 3.1.1.

             "Revolving Credit Facility Limit" means, subject to Clauses 7.3 and
             7.4, (pound)24,500,000.

             "Revolving Loan" means, at any time, the aggregate of all Revolving
             Advances outstanding at that time.

             "Security"  means the documents  listed in Schedule 5 together with
             any other guarantees and documents  creating  security executed and
             delivered  on or before or after the date  hereof by any  member of
             the Group securing the  obligations  and  liabilities of any of the
             Borrowers and the other  members of the Group under this  Agreement
             and the Existing Ancillary Facilities (and Security Documents shall
             be defined accordingly).

             "Security  Period" means the period starting on the date hereof and
             ending on the date on which all of the  obligations and liabilities
             of the  members of the Group under each of this  Agreement  and the
             Security are discharged in full and none of the Agent and the Banks
             has any continuing  obligation in relation to the Revolving  Credit
             Facility and the Existing Ancillary Facilities.

             "Shareholder Placing" means the raising by the Parent of new equity
             by means of a placing and open offer of 57,003,431  ordinary shares
             of 5 pence  each in the  Parent  in order to  raise  not less  than
             (pound)7,000,000 (gross).

             "Shareholder  Placing  Agreement"  means the agreement of even date
             herewith  between the Parent and DKB  relating  to the  Shareholder
             Placing.

             "Shareholders" means certain institutional shareholders of the
             Parent.

             "SSAP"  together  with a number  means the  statement  of  standard
             accounting   practice   issued  by  the   Institute   of  Chartered
             Accountants  for application in England and Wales and identified by
             reference to that number.

             "Sterling",  "Pounds" and "(pound)"  means the lawful  currency for
             the time being of the United Kingdom.

             "Subsidiary"  has the meaning  ascribed to it by section 736 of the
             Companies   Act  1985  and   "Subsidiaries"   shall  be   construed
             accordingly.

             "Tax"  includes  all present and future  taxes,  charges,  imposts,
             duties, levies, deductions, withholdings of any kind whatsoever, or
             any amount  payable on  account  of or as  security  for any of the
             foregoing,  by  whomsoever  on  whomsoever  and  wherever  imposed,
             levied,   collected,   withheld  or  accrued,   together  with  any
             penalties,   additions,  fines,  surcharges  or  interest  relating
             thereto and "Taxes" and "Taxation" shall be construed accordingly.

             "TMG  Companies"  means,  but  only for so long as  Travers  Morgan
             Limited,  (a  company   incorporated  in  England  and  Wales  with
             registered number 2232567) is in administration or liquidation, all
             and each of Travers Morgan Limited, and each of its Subsidiaries as
             at the date of this  Agreement and "TMG Company" shall be construed
             accordingly.

             "Total Commitments" means the aggregate of the Banks' Commitments.

             "Transaction  Proceeds"  means the monies (net of costs) raised by
             the Parent pursuant to the Placings.

             "Transfer Certificate" means a transfer certificate in
             substantially the form set out in Schedule 4.

             "VAT" means value added tax as provided  for in the Value Added Tax
             Act  1994  and   legislation   (whether   delegated  or  otherwise)
             supplemental to that Act or in any primary or secondary legislation
             promulgated  by the  European  Community  or any  official  body or
             agency of the European Community, and any tax similar or equivalent
             to value  added tax  imposed by any  country  other than the United
             Kingdom  and any  similar  Tax or any  turnover  Tax  replacing  or
             introduced in addition to any of the same.

             "Wilmslow Disposal" means the Disposal of the Wilmslow Property.

             "Wilmslow  Property" means the property situated at Wilmslow, near
             Manchester and owned by HLSL.

1.2          Clause Headings

             Clause headings are for convenience of reference only and shall not
             affect the construction of this Agreement.

1.3          Interpretation

             In this Agreement, unless the context otherwise requires:

             (a)         references to this Agreement include the Schedules;

             (b)         references to Clauses and Schedules are to be construed
                         as references to the Clauses of, and Schedules to, this
                         Agreement as amended from time to time;

             (c)         references  to any person  shall be  construed so as to
                         include that person's permitted assigns, transferees or
                         successors in title;

             (d)         references  to  statutes  and other  legislation  shall
                         include all re-enactments and amendments thereof;

             (e)         references to (or to any specified  provisions  of) any
                         Financing  Document  or any  other  document  shall  be
                         construed as  references  to such  Financing  Document,
                         that  provision or that  document as amended or novated
                         or supplemented, as the case may be, from time to time;

             (f)         references  to a document  being in the  "agreed  form"
                         means that  document  the form and content of which has
                         been  approved by the Agent and which has been endorsed
                         on it the words "in an agreed  form" and is  initialled
                         on behalf of or by the Agent and the Parent;

             (g)         accounting terms shall be construed so as to be
                         consistent with GAAP;

             (h)         references to the singular shall include the plural and
                         vice  versa and  references  by way of male,  female or
                         neuter pronoun shall include references to all genders;

             (i)         the  words  "including"  and "in  particular"  shall be
                         construed as being by way of  illustration  or emphasis
                         only and shall not be construed as, nor shall they take
                         effect as,  limiting the  generality  of any  foregoing
                         words;

             (j)         unless  otherwise  stated  herein the  obligations  and
                         liabilities  of the Borrowers  herein are the joint and
                         several  obligations  and liabilities of the Borrowers;
                         and

             (k)         references to working capital  purposes or requirements
                         or similar expressions shall include without limitation
                         Capital Expenditure and the payment or repayment of any
                         other amount payable under the Financing Documents, the
                         Bridging Facility, the Existing Facilities
                         and the Existing Ancillary Facilities.


2.           CONDITIONS PRECEDENT

2.1          Notwithstanding any other term of this Agreement, none of the Agent
             and the Banks shall be under any  obligation  to make the Revolving
             Credit  Facility  available to the  Borrowers  unless the Agent has
             notified  the  Parent and the Banks  that it has  received  all the
             documents and items listed in Schedule 6.

2.2          The Agent on  receipt  of all the  documents  listed in  Schedule 6
             shall as soon as practicable acknowledge to the Borrowers that such
             documents  have been  received  and,  accordingly,  subject  to the
             satisfaction of the Conditions  Precedent  referred to in paragraph
             (ii),  (iii) and (iv) of Schedule 6 and the  applicable  conditions
             precedent  set out in Clause  5.2.1(b),  (c) and (d), the Revolving
             Credit Facility is available for drawing.


3.           FACILITIES

3.1.         Facilities

3.1.1        Subject to the terms and  conditions  of this  Agreement  the Banks
             agree to make available to the Parent, a sterling  revolving credit
             facility in the maximum principal amount of (pound)24,500,000.

3.1.2        For  the  avoidance  of  doubt,   it  is  hereby   declared   that,
             notwithstanding any other provision of this Agreement:

             (i)         the aggregate of the Revolving Advances shall not, at
                         any time, exceed the Total Commitments; and

             (ii) no Bank shall be obliged to lend more than its Commitment.

3.2          Obligations Several

3.2.1        The obligations of the Banks under this Agreement are several.

3.2.2        The failure of a Bank to carry out its obligations  hereunder shall
             not  relieve  any  other  party  hereto  of any of its  obligations
             hereunder.

3.2.3        None of the Banks shall be responsible for the obligations of any
             others hereunder.

3.3          Rights Several

3.3.1        Without  prejudice to the provisions of this Agreement  relating to
             or requiring  action by all or any of the Banks, the rights of each
             of the Banks and the Agent are  several and all  amounts  due,  and
             obligations  owed,  to each of them are  separate  and  independent
             debts or, as the case may be, obligations.

3.3.2        Each Bank and the Agent  may,  except as  otherwise  stated in this
             Agreement, separately enforce its rights hereunder.

3.4          Existing Ancillary Facilities

             NatWest  agrees to  continue  to  provide  the  Existing  Ancillary
             Facilities on the same terms and conditions  which apply thereto on
             the date  hereof  save  that the  same  may  only be  withdrawn  or
             cancelled  or  required  to  be  repaid  in  accordance   with  the
             provisions of Clause 13.2.


4.           PURPOSE

4.1          Purpose of the Revolving Credit Facility

             The proceeds of the Revolving Credit Facility shall be used:

             (i)  to repay the Existing Facilities Outstandings; and thereafter

             (ii) for the general working capital purposes of the Group.

4.2          Undertaking by the Parent

             The  Parent  undertakes  that it  will  use  the  Revolving  Credit
             Facility only as permitted by this Clause 4.

4.3          No Liability

             Neither the Agent nor any of Banks shall be concerned as to the use
             or application of the proceeds of the Revolving Credit Facility.


5.           DRAWDOWN AND PARTICIPATIONS

5.1          Drawdown under the Revolving Credit Facility

5.1.1        Revolving  Advances  shall be made to the Parent at any time during
             the  Commitment  Period when  requested by the Parent by means of a
             Drawdown  Notice in  accordance  with  Clause  5.3. At the close of
             business on the last day of the Commitment  Period,  the Commitment
             of each Bank shall be automatically cancelled.

5.1.2        Revolving  Advances  shall be drawn in Sterling  and shall be in an
             amount of at least (pound)1,000,000 and be an integral multiple of,
             (pound)500,000,  or, if less, the amount of the Available Revolving
             Credit Facility.

5.1.3        No more than 8 Revolving Advances shall be outstanding at any
             one time.

5.1.4        No Revolving  Advance shall be made if the making of that Revolving
             Advance  would result in the  Revolving  Loan  exceeding  the Total
             Commitments.

5.2          Drawdown

5.2.1        Whenever the Parent wishes a Revolving Advance to be made, it shall
             give a Drawdown  Notice to the Agent to be received  not later than
             11.00  a.m.  (London  time) two (2)  Business  Days  prior to,  the
             relative  Drawdown  Date PROVIDED  THAT  notwithstanding  any other
             provision of this Agreement  (save for Clause  5.2.5),  no Drawdown
             Notice  may be served in  respect  of a  Revolving  Advance  and no
             Revolving Advance will be made:

             (a)   unless the Conditions Precedent shall have been satisfied; or

             (b)   if a Default or, a Default Occurrence, has occurred and
                   is  continuing  unremedied  and  unwaived  by the Agent
                   acting on the  instructions of the Majority Banks or if
                   a Default  would occur on the making of such  Revolving
                   Advance; or

             (c)   unless the  representations and warranties deemed to be
                   repeated  pursuant to Clause 11.3 are, or will be, true
                   and  accurate in all  material  respects on the date on
                   which the relative Drawdown Notice is served and on the
                   relative Drawdown Date; or

             (d)   in respect  of a  Revolving  Advance,  if the making of
                   such  Revolving  Advance  would cause the amount of the
                   Revolving Loan to be greater than the Revolving  Credit
                   Facility Limit.

5.2.2        Subject  always to the other  terms of this  Agreement,  a Drawdown
             Notice  shall be  irrevocable  and the  Parent  shall be obliged to
             borrow in accordance with its terms.

5.2.3        Revolving  Advances  shall be made only on a Business  Day  falling
             before the end of the Commitment Period.

5.2.4        Promptly upon receipt of the same, the Agent shall notify the Banks
             of its receipt of a Drawdown Notice.

5.2.5        Clauses  5.2.1(b)  and (c) shall not apply in the case of the first
             drawdown  under the Revolving  Facility to the extent used to repay
             the Existing Facility Outstandings or any other drawdown in respect
             of a  Revolving  Advance  used to  repay in whole or in part one or
             more  maturing  Revolving  Advances in  aggregate  in the same or a
             greater amount.

5.3          Participations and Payments

5.3.1        Subject  always to the  other  terms of this  Agreement,  each Bank
             acting  through  its  Lending  Office,  agrees  to  contribute  its
             Participation  in  each  Revolving  Advance  in the  amount  of its
             Participation  being that proportion  which its undrawn  Commitment
             bears to the undrawn part of the Total  Commitments on the relative
             Drawdown Date.

5.3.2        Subject to  receiving  written  notification  from the Agent of the
             terms  of a  Drawdown  Notice,  each  Bank  shall  on the  relative
             Drawdown  Date make  available  to the Agent to such account as the
             Agent may have  previously  specified for this  purpose,  not later
             than 11.00 a.m. (London time) on such date in immediately available
             funds,  an amount in  Sterling  equal to its  Participation  in the
             requested Revolving Advance.

5.4          Repayment of Existing Facilities

5.4.1        The Borrowers hereby  irrevocably  instruct the Agent and the Agent
             agrees  to  apply  such  part  of the  Transaction  Proceeds  as is
             necessary to repay the Bridging Facility in full.

5.4.2        The repayment of the Bridging Facility shall be made on the date of
             receipt by the Agent of the Transaction Proceeds.

5.4.3        No indemnity  payment,  breakage costs,  prepayment or cancellation
             fees or other  amounts shall be payable in respect of any repayment
             in  accordance  with this Clause 5.4 other than  pursuant to a side
             letter dated today's date between the Parent and the Agent.

5.4.4        On and  with  effect  from the date of  repayment  of the  Bridging
             Facility,   the  Bridging  Facility  shall  be  terminated  and  be
             cancelled.

5.4.5        The repayment of the Existing  Facilities  Outstandings by means of
             the  drawing  of the first  Revolving  Advance on any date shall be
             permitted notwithstanding that the repayment would not otherwise be
             permitted but for this Clause 5.

5.4.6        On and  with  effect  from the date of  repayment  of the  Existing
             Facilities   Outstandings,   the  Existing   Facilities   shall  be
             terminated and cancelled.

5.4.7        The Existing  Facilities are hereby amended to the extent necessary
             to give effect to this Clause 5.4.

5.5          Confirmation

             The Banks warrant and undertake to each of the Borrowers that apart
             from  this  Revolving  Credit  Facility,   the  Existing  Ancillary
             Facilities,  the Existing  Facilities and the Bridging Facility are
             the only lending  facilities  which are made available to the Group
             by the Banks as at the date hereof.


6.           INTEREST

6.1          Interest Rate

             Interest shall accrue on each Revolving  Advance in respect of each
             Interest Period at the rate, in each case,  determined by the Agent
             to be the aggregate of:

             (i)         the Margin;
             (ii)        LIBOR; and
             (iii)       Mandatory Cost Rate.

6.2          Interest Periods

6.2.1        The Parent shall select an Interest Period for a Revolving  Advance
             in the relevant  Drawdown Notice.  Interest Periods in respect of a
             Revolving  Advance may be of one or three months'  duration or such
             other period as the Banks  (acting  reasonably)  may agree with the
             Parent.

6.2.2        No Interest  Period shall extend beyond Final Repayment Date and if
             an Interest Period purports so to do, it shall nevertheless  expire
             on Final Repayment Date.

6.2.3        Any Interest  Period which  commences on the last Business Day in a
             month  or on a  Business  Day for  which  there  is no  numerically
             corresponding  day in the month in which that Interest Period is to
             end,  shall  (subject to Clause 6.2.4) end on the last Business Day
             in that later month.

6.2.4        Any Interest Period which would otherwise end on a day which is not
             a Business Day, shall end on the next  succeeding  Business Day or,
             if that  day  falls  in the  following  month,  on the  immediately
             preceding Business Day.

6.3          Default Interest

6.3.1        If a Borrower fails to pay any sum payable under any Financing
             Document on the due date, such Borrower shall pay default interest
             on such sum (or, as the case may be, the amount thereof for the
             time being due and unpaid) to the Agent for the account of the
             Agent or the Banks, as the case may be, from the due date to the
             date of actual payment in full calculated by reference to
             successive Interest Periods (each of such duration as the Agent
             may from time to time select (but not shorter than one week) and
             the first beginning on the relative due date) at the
             rate per annum being the aggregate of:

             (i)         1 per cent. per annum;

             (ii)        the Margin;

             (iii)       LIBOR; and

             (iv)        the Mandatory Cost Rate.

6.3.2        So long as the default  continues,  such rate shall be recalculated
             in  accordance  with the  provisions of this Clause 6.3 on the last
             day of each such Interest  Period and unpaid  interest then payable
             but unpaid under this Clause shall if not paid be compounded at the
             end of each Interest Period.

6.4          Calculation and Payment of Interest

6.4.1        Promptly following the beginning of each Interest Period, the Agent
             will  notify  the  relative  Borrower  of the  rate and  amount  of
             interest  payable for such Interest Period (but in the case of such
             interest  calculated under Clause 6.3, any such  notification  need
             not be made more frequently than weekly).  Such notification  shall
             set out in reasonable detail the basis of computation of the amount
             of interest so payable.

6.4.2        Interest due from the relative Borrower to any of the Agent and the
             Banks under this Agreement shall:

             (i)    accrue from day to day at the appropriate rate calculated
                    under this Clause 6;

             (ii)   except as otherwise provided in this Agreement, be paid
                    by the  relative  Borrower to the Agent for the account
                    of the  Banks or the  Agent,  as the  case  may be,  in
                    arrear on each Interest Date,  save that in the case of
                    any Interest  Period which is for longer than 3 months,
                    the relative  Borrower shall pay interest at the end of
                    each 3  month  period  during  such  period  and on the
                    relative Interest Date;

             (iii)  be calculated on the basis of the actual number of days
                    elapsed and a 365 day year; and

             (iv) be payable after as well as before judgment.

6.5          Agent's Determination

             The determination by the Agent of any interest payable under any of
             Clauses 6.1 and 6.3 shall  constitute  prima facie  evidence of the
             amount payable by the relative Borrower.

6.6          Adjustment to Margin

             The  Margin of 1% per annum  applicable  to  drawings  in excess of
             (pound)19,500,000  shall  only  apply for so long as there  remains
             standing to the credit of the  Deposit  Account the sum of at least
             (pound)5,000,000.  For each pound by which the amount  standing  to
             the credit of the Deposit Account is reduced below (pound)5,000,000
             the  Margin  shall be  increased  to 2% per annum in  respect of an
             equivalent amount of drawings in excess of (pound)19,500,000.


7.           REPAYMENT

7.1          Repayment of the Revolving Loan

7.1.1        Subject to the terms of this Agreement, the Parent shall repay each
             Revolving Advance in full on the relevant Interest Date by means of
             a payment to the Agent (for the account of the Banks).

7.1.2        Subject to the terms of this  Agreement,  any amounts  repaid under
             this Agreement may be re-borrowed.

7.1.3        If all or part of an  existing  Revolving  Advance  is to be repaid
             from the proceeds of all or part of a new Revolving  Advance,  then
             as between each Bank and the  Borrower,  the amount to be repaid by
             the Borrower  shall be set off against the amount to be advanced by
             that Bank in relation to the new Revolving Advance and the party to
             whom the smaller  amount is to be paid shall pay to the other party
             a sum equal to the difference between the two amounts.

7.1.4        For the  avoidance of doubt the  Revolving  Loan shall be repaid by
             the Borrower in full on the Final Repayment Date.

7.2          Prepayment

             Subject to Clauses  7.3,  8 and 9 the  Borrower  may not prepay any
             Revolving Advance before the end of its Interest Period.

7.3          Mandatory Prepayment on Wilmslow Disposal and other Disposals

7.3.1        On  completion  of the Wilmslow  Disposal the Parent shall  procure
             that there is paid into its current  account  with  NatWest the net
             proceeds of sale  received by HLSL of the Wilmslow  Property  after
             deduction only of any amounts owing under the Ciba Geigy  Agreement
             and the direct costs  (including  any VAT)  incurred in relation to
             such sale (the "Net Wilmslow Proceeds").

7.3.2        On completion of any Disposals or series of connected  Disposals in
             respect of which the Disposal  Proceeds  exceed  (pound)50,000  the
             Parent shall  procure  that there is paid into its current  account
             with NatWest the Disposal Proceeds.

7.3.3        If there is sufficient  Headroom in the Revolving  Credit  Facility
             the Revolving Credit Limit shall be reduced by an amount equivalent
             to the Net Wilmslow  Proceeds or the relevant Disposal Proceeds (as
             the  case may  be).  To the  extent  that  there is not  sufficient
             Headroom the  Revolving  Credit Limit shall be reduced by an amount
             equivalent  to the Net Wilmslow  Proceeds or the relevant  Disposal
             Proceeds (as the case may be) on the next Interest  Date.  Any such
             reduction shall reduce each Bank's Commitment rateably.

7.4          Cancellation

7.4.1        The Parent may, by giving the Agent not less than 2 Business  Days'
             prior notice,  cancel all or part of the Available Revolving Credit
             Facility (but if in part, in a minimum  amount of  (pound)1,000,000
             and an integral multiples of (pound)500,000).

7.4.2        Any notice of  cancellation  shall be irrevocable and shall specify
             the date on which the cancellation shall take effect and the amount
             of the  cancellation.  The Agent shall promptly notify the Banks of
             receipt of any such notice.

7.4.3        The Parent may not borrow any part of the Revolving Credit Facility
             which has been cancelled. Any cancellation shall reduce each Bank's
             Commitment rateably.

7.4.4        The  Parent  may not  cancel  all or part of the  Revolving  Credit
             Facility except as expressly provided in this Agreement.


8.           CHANGES IN CIRCUMSTANCES

8.1          Illegality

             If by  reason of a Change it is or  becomes  illegal  for a Bank to
             maintain its  Commitment  or to continue to make  available or fund
             its Participation in any Revolving Advance, then:

             (a)         that Bank shall notify the Agent and the Parent; and

             (b)         (i)     the Commitment of that Bank shall be cancelled
                                 immediately; and

                         (ii)    the Parent  shall  prepay to the Agent (for
                                 the  account  of  that  Bank)  that  Bank's
                                 Participation  in  all  Revolving  Advances
                                 (together  with  accrued  interest  on  the
                                 amount  prepaid and all other amounts owing
                                 to that Bank under this Agreement) within 5
                                 Business  Days of  demand by that Bank (or,
                                 if permitted  by the  relevant  law, on the
                                 next   Interest   Date   of  the   relevant
                                 Revolving Advances).

             Any such prepayment under paragraph  (b)(ii) above shall be subject
             to Clause 9.3.

8.2          Increased Costs

8.2.1        If, after the date of this Agreement,  a Change occurs which causes
             an  Increased  Cost (as defined in Clause  8.2.3) to a Bank (or any
             company of which that Bank is a  Subsidiary)  then the Parent shall
             pay (as additional  interest) to the Agent (for the account of that
             Bank) within 5 Business  Days of demand all amounts which that Bank
             certifies to be necessary to  compensate  that Bank (or any company
             of which that Bank is a Subsidiary) for the Increased Cost.

8.2.2        Any demand made under  Clause  8.2.1 shall be made by the  relevant
             Bank  through the Agent and shall set out in  reasonable  detail so
             far as is  practicable  the basis of  computation  of the Increased
             Cost.

8.2.3        In this Clause 8.2:

             "Increased  Cost"  means any cost to, or  reduction  in the  amount
             payable  to, or  reduction  in the return on capital or  regulatory
             capital achieved by, a Bank (or any company of which that Bank is a
             Subsidiary)  to the extent that it arises,  directly or indirectly,
             as a result of the Change and is  attributable to the Commitment or
             Participation in any Revolving  Advance of that Bank or the funding
             of that Bank's Participation in any Revolving Advance:

             (a) any Tax Liability (other than Tax on Overall Net Income)
                 incurred by  that Bank;

             (b) any changes in the basis or timing of  Taxation  (other
                 than  Tax on  Overall  Net  Income)  of  that  Bank  in
                 relation  to its  Commitment  or  Participation  in any
                 Revolving  Advance  or to the  funding  of that  Bank's
                 Participation in any Revolving Advance;

             (c) the cost to that Bank (or any company of which that Bank is a
                 Subsidiary) of complying with, or the reduction in the amount
                 payable to or reduction in the return on capital or regulatory
                 capital achieved by that Bank (or any company of which that
                 Bank is a Subsidiary) as a result of complying with, any
                 capital adequacy or similar requirements howsoever arising,
                 including as a result of an increase in the amount of capital
                 to be allocated to the Revolving Credit Facility or of a
                 change to the weighting of that Bank's
                 Commitment or Participation in any Revolving Advance; and

             (d) the cost to that Bank of  complying  with any  reserve,
                 cash ratio,  special deposit or liquidity  requirements
                 (or any other similar requirements).

             "Tax Liability" means, in respect of any person:

             (a)   any liability or any increase in the liability of that
                   person to make any payment of or in respect of Tax;

             (b)   the loss of any relief, allowance,  deduction or credit
                   in  respect  of Tax  which  would  otherwise  have been
                   available to that person;

             (c)   the  setting off  against  income,  profits or gains or
                   against any Tax  liability  of any  relief,  allowance,
                   deduction  or credit  in  respect  of Tax  which  would
                   otherwise have been available to that person; and

             (d)   the loss or setting off against any Tax  liability of a
                   right to  repayment of Tax which would  otherwise  have
                   been available to that person.

             For  the  purposes  of this  definition  of  "Tax  Liability",  any
             question of whether or not any relief, allowance, deduction, credit
             or right to  repayment  of Tax has been lost or set off, and if so,
             the  date on  which  that  loss or  set-off  took  place,  shall be
             conclusively determined by the relevant person's auditors.

             "Tax on Overall Net  Income"  means,  in  relation  to a Bank,  Tax
             (other than Tax deducted or withheld  from any payment)  imposed on
             the net  profits  of that  Bank by the  jurisdiction  in which  its
             Lending Office or its head office is situated.

8.2.4        The Parent  shall not be obliged to make a payment in respect of an
             Increased  Cost  under  this  Clause  8.2 to the  extent  that  the
             Increased Cost has been compensated for by the payment of Mandatory
             Cost  Rate  or  the  operation  of  Clause  9.4  (or  would  be  so
             compensated but for the operation of Clause 9.4.4 or Clause 19).

8.2.5        If the Parent is required to pay any amount to a Bank under this
             Clause 8.2, then, without prejudice to that obligation and so
             long as the circumstances giving rise to the relevant Increased
             Cost are continuing and subject to the Parent giving the
             Agent and that Bank not less than 10 Business Days' prior notice
             (which shall be irrevocable), the Parent may prepay all, but not
             part, of that Bank's Participation in the Revolving Loan together
             with accrued interest on the amount prepaid.  Any such prepayment
             shall be subject to Clause 9.3.  On any such prepayment the
             Commitment of the relevant Bank shall be automatically cancelled.

8.3          Market disruption

8.3.1        If, in relation to an Revolving Advance and a particular Interest
             Period:

             (a)     the Agent  determines  that,  because of  circumstances
                     affecting  the  London  interbank   market   generally,
                     reasonable   and  adequate   means  do  not  exist  for
                     ascertaining  LIBOR for that Revolving Advance for that
                     Interest Period; or

             (b)     the Agent has been  notified  by a group of Banks whose
                     Commitments  together  exceed 50 per cent. of the Total
                     Commitments that in their opinion:

                     (i)     matching  deposits  may not be available to
                             them in the London  interbank market in the
                             ordinary  course of  business to fund their
                             Participations  in that  Revolving  Advance
                             for that Interest Period; or

                     (ii)    the  cost  to them  of  obtaining  matching
                             deposits  in the  London  interbank  market
                             would  be  in  excess  of  LIBOR  for  that
                             Interest Period,

             the Agent shall  promptly  notify the Parent and the Banks of that
             event (such notice being a "market disruption notice").

8.3.2        If a market disruption notice applies to a proposed Revolving
             Advance, that Revolving Advance shall not be made.  Instead, the
             Agent and the Borrowers shall immediately enter into negotiations
             for a period of not more than 30 Business Days with a view to
             agreeing a substitute basis for calculating the interest rate for
             the Revolving Advance or for funding the Revolving Advance
             (whether in Sterling or another currency).  Any substitute basis
             agreed by the Agent (with the consent of all the Banks) and the
             Borrowers shall take effect in accordance with its terms
             and be binding on all the Parties.  This Clause 8.3.2 shall not
             apply in respect of a proposed Revolving Advance used to repay one
             or more maturing Revolving Advances in aggregate in the same
             amount or a greater amount and Clause 8.3.3 shall apply instead.

8.3.3        If a market disruption notice applies to an outstanding Revolving
             Advance, then:

             (a)   the Agent and the Parent shall  immediately  enter into
                   negotiations  for a period of not more that 30 Business
                   Days with a view to  agreeing  a  substitute  basis for
                   calculating  the  rate of  interest  for the  Revolving
                   Advance or for funding the Revolving  Advance  (whether
                   in Sterling or another currency);

             (b)   any  substitute  basis agreed under Clause  8.3.3(a) by
                   the Agent  (with the  consent of all the Banks) and the
                   Parent shall take effect in  accordance  with its terms
                   and be binding on all the Parties;

             (c)   if no substitute basis is agreed under Clause 8.3.3(a),
                   then, subject to Clause 8.3.4, each Bank shall (through the
                   Agent) certify before the last day of the Interest Period to
                   which the market disruption notice relates a substitute
                   basis for maintaining its Participation in the Revolving
                   Advance which shall reflect the cost to the Bank of funding
                   its Participation in the Revolving Advance from whatever
                   sources it reasonably selects plus the Margin and
                   (if applicable) Mandatory Cost Rate; and

             (d)   each substitute  basis so certified shall be binding on
                   the Parent and the certifying  Bank and treated as part
                   of this Agreement.

8.3.4        If no substitute  basis is agreed under Clause  8.3.3(a),  then, so
             long as the  circumstances  giving  rise to the  market  disruption
             notice  continue and subject to the Parent giving the Agent and the
             Banks  not  less  than  10  days'  prior  notice  (which  shall  be
             irrevocable),  the Parent may prepay the Revolving Advance to which
             the market disruption notice applies together with accrued interest
             on the  amount  prepaid.  Any such  prepayment  shall be subject to
             Clause 9.3.

8.3.5        If circumstances  which gave or would give rise to the service of a
             market  disruption notice cease, the original basis for calculating
             LIBOR will again apply.

8.4          Mitigation

8.4.1        If any  circumstances  arise in respect of any Bank which would, or
             upon the giving of notice would,  result in the operation of Clause
             8.1, 8.2, 8.3 or 9.4 to the detriment of the Parent, then that Bank
             shall:

             (a)  promptly upon becoming aware of those circumstances and their
                  results,  notify the Agent and the Parent; and

             (b)  in consultation with the Agent and the Parent, take
                  reasonable steps to mitigate the effects of those
                  circumstances (including changing its Lending Office or
                  consulting with the Parent with a view to transferring some
                  or all of its rights and obligations under this Agreement to
                  another bank or other financial institution acceptable to
                  the Parent) in a manner which will avoid the circumstances in
                  question and on terms reasonably acceptable to the Agent, the\
                  Parent and thatBank,

             provided  that no Bank shall be obliged to take any steps  which in
             its reasonable opinion would or might have an adverse effect on its
             business  or  financial  condition  or the  management  of its  Tax
             affairs  or cause  it to incur  any  material  additional  costs or
             expenses.

8.4.2        Nothing in this Clause 8.4 shall limit, reduce, affect or otherwise
             qualify  the  rights of any Bank or the  obligations  of the Parent
             under  Clauses  8.1,  8.2,  8.3 and  9.4  other  than as  expressly
             provided.

8.4.3        Each Bank  undertakes to notify the Parent as soon as is reasonably
             practical of any matter of which the Bank becomes aware which would
             or might  reasonably be expected to give rise to any  obligation or
             liability on the part of the Parent under this Clause 8.

8.5          Certificates

             The  certificate or  notification  of the Agent or, as the case may
             be, the relevant Bank as to any of the matters in relation to which
             this Clause 8 provides  for a  certificate  or  notification  to be
             given  shall be in  reasonable  detail  and  shall  be prima  facie
             evidence of the contents thereof.


9.           PAYMENTS

9.1          Time and Place

             All  payments  to be  made by the  Borrowers  in  relation  to this
             Agreement  shall be made on the due date in  immediately  available
             funds in Sterling by no later than 12.00 noon (London  time) to the
             appropriate account in London of the Agent which account shall have
             been previously specified by the Agent.

9.2          Business Days

             If, but for this Clause, any sum would become due for payment under
             this  Agreement on a day which is not a Business  Day, such payment
             shall be made on the next succeeding  Business Day PROVIDED THAT if
             the next succeeding  Business Day falls in the next calendar month,
             then  such  payment  shall  be  made on the  immediately  preceding
             Business Day.

9.3          Indemnity and Breakage Costs

9.3.1        Each Borrower  agrees to indemnify  each Bank on demand against any
             loss or expense (including,  but not limited to any loss or expense
             sustained or incurred or to be sustained or incurred by any Bank in
             liquidating  or employing  deposits  acquired or contracted  for to
             effect or maintain its  Participation  in the Revolving Loan or any
             part  thereof  other than any loss of  Margin)  which such Bank has
             sustained or incurred as a consequence of any of:

             (i)    a  Revolving  Advance  not being  made,  following  the
                    service  of  a   Drawdown   Notice  by  reason  of  the
                    non-fulfilment  of any of the  Conditions  Precedent or
                    otherwise (save as may arise as a result of the failure
                    of such Bank to comply with its obligations hereunder);

             (ii)   a failure of the  Borrowers  to make payment on the due
                    date of any sum due under this Agreement; and

             (iii)  the repayment of the Revolving Loan or the  termination
                    of the Revolving Credit Facility pursuant to Clause 13.

9.3.2        If any prepayment or repayment is made otherwise than on an
             Interest Date, each Borrower shall on demand pay to the Agent, for
             the account of the Banks, such additional amount (not being an
             amount to which the indemnity in Clause 9.3.1 applies) as the
             Agent may certify is necessary to compensate the Banks or any of
             them for any loss or expense on account of funds borrowed,
             contracted for or utilised to fund the amounts so repaid or
             prepaid.  Any certifications issued by the Agent pursuant to this
             Clause shall be in reasonable detail and constitute
             prima facie evidence of the contents thereof.

9.4          Grossing-Up

9.4.1        Subject to Clause  9.4.2,  all sums payable to any of the Agent and
             the Banks by a Borrower  pursuant to or in  connection  with any of
             the Financing  Documents  shall be paid in full without any set-off
             or counterclaim  whatsoever and free and clear of all deductions or
             withholdings whatsoever save only as may be required by law.

9.4.2        If any  deduction or  withholding  is required by law in respect of
             any payment due to any of the Agent and the Banks pursuant to or in
             connection  with  any  of the  Financing  Documents,  the  relative
             Borrower shall:

             (a)         ensure or procure that the deduction or  withholding is
                         made and  that it does not  exceed  the  minimum  legal
                         requirement therefor;

             (b)         pay,  or  procure  the  payment  of,  the  full  amount
                         deducted or withheld to the relevant  Taxation or other
                         authority in accordance with the applicable law;

             (c)         (i)   subject to Clause 9.4.4 increase the payment in
                               respect of which the deduction or withholding is
                               required so that the net amount received by the
                               payee (which expression when used in this Clause
                               9.4.2 shall mean the Agent or any Bank) after
                               the deduction or withholding (and after taking
                               account of any further deduction or withholding
                               which is required to be made as a consequence
                               of the increase) shall be equal to the amount
                               which the payee would have  been entitled to
                               receive in the absence of any requirement
                               to make any deductions or withholdings; or

                         (ii)  subject to Clause 9.4.4. if the payment is to be
                               made by any other Borrower, pay directly to the
                               payee such sum (a "compensating sum") as will,
                               after taking into account any deduction or
                               withholding which the relative Borrower is
                               obliged to make from the compensating sum,
                               enable the payee to receive, on the due date for
                               payment, a net sum equal to the sum which the
                               payee would have received in the absence of any
                               obligation to make any deductions or
                               withholdings; and

             (d)         as soon as  reasonably  practicable  deliver or procure
                         the delivery to the relative payee of receipts or other
                         documentation  reasonably  satisfactory  to  the  payee
                         evidencing each of the deductions or withholdings which
                         has been made.

9.4.3    If the Agent is obliged to make any deduction or withholding from any
         payment to any of the Banks (an "agency payment") which represents an
         amount or amounts received by the Agent from any Borrower under any of
         the Financing Documents, the relative Borrower shall pay directly to
         the relative Bank such sum (an "agency compensating sum") as will,
         after taking into account any deduction or withholding which the
         relative Borrower is obliged to make from the agency compensating sum,
         enable such Bank to receive, on the due date for payment of the agency
         payment, an amount equal to the agency payment which such Bank would
         have received in the absence of any obligation to make any deductions
         or withholdings.

9.4.4    The  Borrowers  shall not be required to pay an  additional  amount
         under  this  Clause  9.4 if the  payment  in  respect  of which the
         deduction or  withholding is required is a payment of interest on a
         Revolving Advance and:

             (a)   at the time the  Revolving  Advance was made,  the Bank
                   making  the  relevant   Revolving  Advance  was  not  a
                   Qualifying  Bank  otherwise  than as a consequence of a
                   Change  occurring after the date of this Agreement (and
                   the  obligation  to deduct or  withhold  would not have
                   arisen if the  Advance  had been  made by a  Qualifying
                   Bank); or

             (b)   at the time when the interest is paid, the Bank to which
                   the relevant payment is made is not beneficially entitled
                   to it or, being beneficially entitled to it, the Bank is
                   not within the charge to United Kingdom corporation tax as
                   respects it otherwise than as a consequence of a Change
                   occurring after the date of this Agreement(and the
                   obligation to deduct or withhold would not have arisen if
                   the Bank had been beneficially entitled to the interest
                   and had been within the charge to United Kingdom
                   corporation tax as respects it).

9.4.5        (a)   If any of the Banks determines, in its absolute discretion
                   acting in good faith, that it has received, realised,
                   utilised and retained a Tax benefit by reason of any
                   deduction or withholding in respect of which a Borrower
                   has made an increased payment or paid a compensating sum
                   or an agency compensating sum under Clause 9.4, such Bank
                   shall, provided that the Agent and each Bank has received
                   all amounts which are then due and payable by the Borrowers
                   under any of the Financing Documents, pay to such Borrower
                   (to the extent that such Bank can do so without prejudicing
                   the amount of such benefit or repayment and the right of
                   such Bank, to obtain any other benefit, relief or allowance
                   which may be available to it) such amount, if any, as such
                   Bank, in its absolute discretion shall in good faith
                   determine, will leave such Bank in no worse position than it
                   would have been in if the  deduction
                   or withholding had not been required PROVIDED THAT:

                   (i)   each Bank shall have an absolute discretion
                         as to the time at which  and the  order and
                         manner in which it realises or utilises any
                         Tax  benefit  and shall not be  obliged  to
                         arrange its  business or its Tax affairs in
                         any  particular way in order to be eligible
                         for  any   credit  or  refund  or   similar
                         benefit;

                   (ii)  no Bank shall be obliged  to  disclose  any
                         information  regarding  its  business,  Tax
                         affairs or Tax computations;

                   (iii) if a Bank has made a payment to a Borrower pursuant to
                         this Clause 9.4.5 on account of any Tax benefit and it
                         subsequently transpires that such Bank did not receive
                         that Tax benefit, or received a lesser Tax benefit, the
                         relative Borrower shall, on demand, pay to such Bank
                         such sum not exceeding the amount of the said payment
                         made by it to the Borrower as the relative Bank may
                         determine as being necessary to restore its after-Tax
                         position to that which it would have been had no
                         adjustment under this Clause (iii) been necessary.

             (b)    No Bank shall be obliged to make any payment under this
                    Clause 9.4.5 if, by doing so, it would  contravene  the
                    terms of any applicable law or any notice, direction or
                    requirement of any governmental or regulatory authority
                    (whether or not having the force of law).

9.5          Prepayment Right

             If a Borrower  is  required  to make an  increased  payment for the
             account of a Bank under  Clause 9.4.2 or 9.4.3 (but only so long as
             such requirement exists), subject to giving the Agent and such Bank
             not less than 10 Business  Days' prior written  notice (which shall
             be  irrevocable),  the  relative  Borrower  may prepay  such Bank's
             Participation  in  the  Revolving  Credit  Facility  together  with
             accrued interest thereon PROVIDED THAT any such prepayment shall be
             subject  to the  provisions  of  Clause  9.3  above.  On  any  such
             prepayment  the  Commitment  of the relevant Bank will be cancelled
             and reduced to zero.

9.6          Accounts as Evidence

             Each Bank shall  maintain in accordance  with its usual practice an
             account or  accounts,  which  account  or  accounts  shall,  in the
             absence of manifest  error,  as between the Borrowers and such Bank
             be prima facie  evidence of the amounts from time to time  advanced
             by, owing to, paid and repaid to such Bank under this Agreement.

9.7          Currency of Account

             All  payments  to be made by a Borrower  in respect of a  Revolving
             Advance,  whether  of  interest  or  principal,  shall  be  made in
             Sterling.   All  payments  to  be  made  under  any   indemnity  or
             reimbursement provision of this Agreement relating to costs, losses
             and expenses shall be paid in Sterling.

9.8          Borrowers' Payments

9.8.1        The Agent may assume that each  Borrower will make all payments due
             from it under this  Agreement on the due date and the Agent may, in
             reliance upon such  assumption,  make available to each Bank on any
             payment date an amount equal to such Bank's  pro-rata share of such
             assumed payment.

9.8.2        If a Borrower does not in fact make such payment to the Agent, each
             Bank shall  forthwith on demand by the Agent repay to the Agent the
             amount made available to such Bank (together with interest  thereon
             at the rate  determined  by the Agent as being its cost of  funding
             such payment).

9.9          Banks' Payments

9.9.1        The Agent may assume that each Bank has made its Participation in a
             Revolving  Advance  available to the Agent on the relative Drawdown
             Date and the  Agent may in  reliance  upon  such  assumption,  make
             available to the Parent a corresponding amount.

9.9.2        If such  corresponding  amount is not in fact made available to the
             Agent by such Bank,  the Agent shall be  entitled  to recover  such
             corresponding  amount  (together with interest  thereon at the rate
             determined  by  the  Agent  as  being  its  cost  of  funds  in the
             circumstances) on demand from the relative Borrower.

9.9.3        Where the  Agent has made  available  an  amount to a  Borrower  in
             reliance upon the  assumption  contained in Clause 9.9.1 but a Bank
             has not made its  Participation in the relevant  Revolving  Advance
             available to the Agent then, unless that Bank notified the Agent in
             writing  prior to the relevant  Drawdown  Date that it would not be
             making its Participation in such Revolving Advance available,  that
             Bank shall:

             (a)         if  the   relative   Borrower   does  not   refund  the
                         corresponding  amount  to the  Agent  within  three (3)
                         Business  Days,  reimburse  the Agent  for such  amount
                         (together with interest  thereon at the rate determined
                         by  the  Agent  as  being  its  cost  of  funds  in the
                         circumstances) on demand; and

             (b)         indemnify the Agent from and against all losses, costs,
                         charges  and  expenses  which  the  Agent  may incur or
                         sustain  by  reason of that  Bank not  having  made its
                         Participation   in  the  relevant   Revolving   Advance
                         available.

9.10         Appropriation

             If the Parent shall pay a sum in relation to the  Revolving  Credit
             Facility  which is less than the total amount due and payable under
             this  Agreement  on the day on which  such  sum is paid the  Parent
             hereby  waives  any  rights  it may have to make any  appropriation
             thereof as between  any  amounts so due and  payable and the sum so
             paid  shall be applied in or  towards  satisfaction  of  principal,
             interest,  fees and other sums which are due or overdue for payment
             on that day in such order as the Banks may determine  PROVIDED THAT
             each Bank shall receive its pro-rata share of any such sum.


10.          SECURITY

             Subject  to  Clause  14  the  obligations  and  liabilities  of the
             Borrowers to the Agent and each Bank under this Agreement  shall be
             secured by the interests and rights  granted in favour of the Agent
             as trustee for itself and the Banks under the Security.


11.          REPRESENTATIONS AND WARRANTIES

11.1         Acknowledgement of Reliance

             Each Borrower hereby  acknowledges that the Agent and each Bank has
             entered into this  Agreement  and accepted the security  granted in
             favour of the Agent  under the  Security  in full  reliance  on the
             representations  and  warranties  made or  deemed  to be  made  and
             repeated under this Clause 11.

11.2         Representations and Warranties

             The Parent hereby  represents and warrants to each of the Banks and
             the Agent that save as disclosed  in the Circular or in  paragraphs
             5, 6, 7 and 8 of Schedule 4 to the Investor Placing Agreement:

             (a)         Status:  each member of the Charging Group is a limited
                         company  incorporated  under  the laws of  England  and
                         Wales  or,  in the case of HLS,  under  the laws of the
                         State of Delaware, USA and it possesses the capacity to
                         sue and be sued in its own  name  and has the  power to
                         carry on its business and to own its property and other
                         assets;

             (b)         Powers and authority: each member of the Charging Group
                         has  power  to   execute,   deliver   and  perform  its
                         obligations  under the Financing  Documents to which it
                         is  a  party   and  to  carry   out  the   transactions
                         contemplated  by  such  Financing   Documents  and  all
                         necessary  corporate,  shareholder and other action has
                         been or will  be  taken  to  authorise  the  execution,
                         delivery and performance of the same;

             (c)         Binding obligations:  the obligations of each member of
                         the  Charging  Group under the  Financing  Documents to
                         which it is a party,  constitute  its legal,  valid and
                         binding obligations and are in full force and effect;

             (d)         Contraventions: the execution,delivery and performance
                         by each member of the Charging Group of the Financing
                         Documents to which it is a party does not:

                         (i)         contravene any applicable law or regulation
                                     or any order of any  governmental  or other
                                     official  authority,  body or agency or any
                                     judgment,  order  or  decree  of any  court
                                     having  jurisdiction  over  it  where  such
                                     contravention would have a Material Adverse
                                     Effect;

                         (ii)        conflict  with,  or result in any breach of
                                     any  of  the  terms  of,  or  constitute  a
                                     default  under,   any  agreement  or  other
                                     instrument  to  which  it is a party or any
                                     licence or other  authorisation to which it
                                     is  subject  or by  which  it or any of its
                                     property is bound  other than the  Existing
                                     Facility  where  such  conflict,  breach or
                                     default  would  have  a  Material   Adverse
                                     Effect; or

                         (iii)       contravene or conflict with the  provisions
                                     of   its   Memorandum   and   Articles   of
                                     Association  (or,  in the case of HLS,  its
                                     certificate of incorporation and by-laws);

             (e)    Insolvency: (other than in respect of a solvent winding-up,
                    dissolution or re-organisation previously notified to the
                    Agent in writing) no member of the Group (other than the
                    TMG Companies any  Non-Material Subsidiary and any Dormant
                    Subsidiary) has taken any action nor, to the best of the
                    knowledge, information or belief of the Parent have any
                    steps been taken or legal proceedings started or
                    threatened against it for winding-up, dissolution or
                    re-organisation, the enforcement of any Encumbrance over
                    its assets or for the appointment of a receiver,
                    administrative receiver, or administrator, trustee or
                    similar officer of it or of any material part or all of its
                    assets or revenues;

             (f)    No default:  after the First Drawdown Date each member of
                    the Group(other than the TMG Companies any Non-Material
                    Subsidiary and any Dormant Subsidiary) is not (nor would be
                    with any of the giving of notice, lapse of time,
                    determination of materiality and other condition) in breach
                    of or in default under any deed, instrument or any agreement
                    to which it is a party (other than the Ciba Geigy
                    Agreement) or which is binding on it or any of its assets
                    to an extent or in a manner which has a Material Adverse
                    Effect;

             (g)    Litigation: save as disclosed in writing to the Agent prior
                    to the date hereof, no action, litigation, arbitration or
                    administrative proceeding has been served on or, to the best
                    of the knowledge, information or belief of the Parent is
                    pending or threatened against any member of the Group
                    (other than the TMG Companies any Non-Material
                    Subsidiary and any Dormant Subsidiary) which is reasonably
                    likely to be adversely determined and if so adversely
                    determined would have a Material Adverse Effect and nor is
                    there subsisting any unsatisfied judgment or award given
                    against any of them by any court, board of
                    arbitration or other body which has not been disclosed in
                    writing to the Agent which would have a Material Adverse
                    Effect;

             (h)    Accounts:

                    (i)         each of the latest Accounts  required to be
                                delivered  pursuant  to Clause  12.1(a)  is
                                prepared in accordance  with GAAP and gives
                                a true  and  fair  view  of  the  financial
                                position  of the  Parent  as at the date to
                                which  the same were  prepared  and for the
                                period then ended;

                    (ii)        each set of management accounts required to
                                be  delivered  under Clause  12.1(b)  shows
                                with  reasonable  accuracy in all  material
                                respects  the  financial  condition  of the
                                member  of the  Group in  respect  of which
                                they were  prepared  during  the  period to
                                which they relate; and

                    (iii)       all  material  liabilities  (contingent  or
                                otherwise)  which  should  have been  fully
                                disclosed  or  reserved   against  in  such
                                management  accounts,  were so disclosed or
                                reserved against therein;

             (i)    Encumbrances:  no  Encumbrance  (other  than  Permitted
                    Encumbrances)  exists  over  all  or  any  part  of the
                    present or future  revenues  or assets of any member of
                    the Group  (other than the TMG  Companies,  any Dormant
                    Subsidiary or any Non-Material  Subsidiary) which would
                    have a Material Adverse Effect;

             (j)    Authorisations: all material licences, consents, exemptions,
                    clearances, filings, registrations and authorisations which
                    are or may be necessary to enable each member of the
                    Charging Group to perform its obligations under the
                    Financing Documents to which it is a party and the
                    fulfilment of the transactions contemplated by such
                    documents and for the proper conduct of its business or
                    which are required in connection with the execution,
                    delivery, validity, enforceability or admissibility in
                    evidence of the Financing Documents are in full force
                    and effect save where the absence of any of the same would
                    not have a Material Adverse Effect;

             (k)    No Encumbrances created:  the execution of the Financing
                    Documents by  the members of the Charging Group and the
                    exercise of each of their respective rights and the
                    performance of each of their respective
                    obligations thereunder will not result in the creation of
                    any Encumbrance (other than a Permitted Encumbrance) over
                    or in respect of  any of their present or future revenues,
                    assets or undertakings save  where the creation of such
                    encumbrance would not have a Material Adverse Effect;

             (l)         Taxes: each of the members of the Group (other than the
                         TMG Companies,  each  Non-Material  Subsidiary and each
                         Dormant   Subsidiary)  has  complied  in  all  material
                         respects with all Taxation laws in all jurisdictions in
                         which it is subject to  Taxation  where  non-compliance
                         would have a Material Adverse Effect;

             (m)         Environmental law:  to the best of its knowledge and
                         belief each of the members of the Group save for the
                         TMG Companies is currently complying with and has at
                         all times complied with Environmental Law, every
                         consent, authorisation, licence or approval required by
                         each such member of the Group save for the TMG
                         Companies (including those required under or pursuant
                         to any Environmental Law) in connection  ith the
                         conduct of their respective business and the ownership,
                         use, exploitation or occupation of their respective
                         property and assets has been obtained and is in full
                         force and effect, there has been no default in the
                         observance of the conditions and restrictions (if any)
                         imposed in, or in connection with, any of the same save
                         where any such non-compliance, breach or default would
                         not have a Material Adverse Effect and, to the
                         knowledge of the officers of the Parent, no
                         circumstances have arisen (i) which would entitle any
                         person to  revoke, suspend, amend, vary, withdraw or
                         refuse to amend any of the  same or (ii) which has
                         given rise to an Environmental Claim against
                         any such member of the Group (save for any TMG Company)
                         in either case which would have a Material Adverse
                         Effect having regard to the cost to such member of the
                         Group of meeting such Environmental Claim; and

             (n)         Year 2000: it will have used all reasonable  endeavours
                         to  ensure  that the  Company  System  will  have  been
                         produced,  tested  and  amended  in such a manner on or
                         before 31st December 1999 which will ensure that:

                         (i)         a change of,  reference to or use of a date
                                     before,  on or after 31st  December 1999 in
                                     the   operation  of  the  Company   System,
                                     whether alone or in  conjunction  with each
                                     other  Company  System,  will  not  have  a
                                     Material Adverse Effect; and

                         (ii)        the inclusion of a date or dates before, on
                                     or  after  31st  December  1999 in the date
                                     information  exchanged  with  any  item  of
                                     equipment and software  programme  which is
                                     not a Company  System  but with  which that
                                     Company  System  routinely  exchanges  date
                                     information  in the course of its  business
                                     will not have Material Adverse Effect,

                         and without prejudice to the generality of (i) and (ii)
                         above,  each Company  System  will,  in  responding  to
                         two-digit date input and providing date output, resolve
                         any  ambiguity  as to  century  in a  manner  which  is
                         consistent, clearly defined and apparent to the user.

11.3         Repetition

             The  representations  and  warranties  set out in Clause 11.2 shall
             survive  the  execution  of  this   Agreement  and  (save  for  the
             representations  and warranties  made under Clauses  11.2(d)(i) and
             (ii),  (e),  (i), (k), (l), and (m) and save in relation to matters
             to which the Agent acting on the instructions of the Majority Banks
             shall have consented)  shall be deemed to be repeated by the Parent
             on each  Drawdown  Date  and  each  Interest  Date as if made  with
             reference  to the facts  and  circumstances  existing  at that time
             PROVIDED  THAT the  wording  in second  set of  brackets  in Clause
             11.2(f)  shall not apply when such  representation  and warranty is
             deemed to be so repeated.


12.          UNDERTAKINGS

12.1         Information Undertakings

             The Parent  hereby  undertakes  and agrees  with the Agent and each
             Bank that  throughout  the  Security  Period that other than as the
             Agent acting on the  instructions of the Majority Banks may consent
             it shall:

             (a)         Accounts: as soon as the same become available,  but in
                         any event  within 120 days after the end of each of its
                         Financial Years,  deliver to the Agent for distribution
                         to the Banks,  copies in sufficient  numbers for all of
                         them of the Accounts;

             (b)         Management  Accounts:   as  soon  as  the  same  become
                         available,  but in any event  within 35 days  after the
                         end of each period of one month  during each  Financial
                         Year  of  the   Parent,   deliver   to  the  Agent  for
                         distribution to the Banks, copies in sufficient numbers
                         for all of them of monthly  management  accounts  (on a
                         consolidated and  non-consolidated  basis) of the Group
                         for such period to include:

                         (i)         a statement of profit and loss;

                         (ii)        a balance sheet;

                         (iii)       a cashflow statement;

                         (iv)        a commentary  comparing  where  appropriate
                                     all such  information  with the  estimates,
                                     forecasts and  projections  in the cashflow
                                     forecasts provided to the Banks in relation
                                     to such period;

             (c)         Interim Accounts:  as soon as they become available but
                         in any  event  within  60  days  after  the end of each
                         successive  period  of 3  months  during  each  of  its
                         Financial Years,  deliver to the Agent for distribution
                         to the Banks, its quarterly accounts, interim statement
                         and preliminary announcement;

             (d)         Other   Information:   furnish   to  the   Agent   such
                         information,  documents and records about the business,
                         financial  condition,  operations  and prospects of any
                         member  of the Group as the Agent may from time to time
                         reasonably require;

             (e)         GAAP:  ensure  that all  Accounts  and other  financial
                         information  submitted to the Agent have been  prepared
                         in accordance with GAAP;

             (f)         Shareholder   documents:   deliver   to  the  Agent  in
                         sufficient  copies  for all of the Banks all  documents
                         despatched  by  it to  its  shareholders  or  creditors
                         generally at the same time that they are so despatched;
                         and

             (g)         Default, litigation, etc: on becoming aware of the same
                         promptly notify the Agent of:

                         (i)         any Default and any Default Occurrence;

                         (ii)        any     litigation,      arbitration     or
                                     administrative proceeding commenced against
                                     any member of the Group  (other  than a TMG
                                     Company or a Dormant Subsidiary) in respect
                                     of which the  potential  liability for such
                                     member   of  the  Group  is  in  excess  of
                                     (pound)500,000; and

                         (iii)       any  Encumbrance  (other  than a  Permitted
                                     Encumbrance)  attaching  to the  assets  or
                                     revenues of any member of the Group.

             (h)         Cashflow: provide the Agent (when it provides the Agent
                         with the monthly management  accounts) rolling cashflow
                         forecasts  in  respect of the Group  relating  to the 3
                         month period  starting on that date (the need for these
                         to be reviewed by the Agent 3 months  after the date of
                         this Agreement);

             (i)         Annual budget: provide the Agent with sufficient copies
                         for all of the Banks of the Group's  budget for 1999 by
                         31st January 1999; and

             (j)         Plans  and   Projections:   provide   the  Agent   with
                         sufficient  copies for all of the Banks or any strategy
                         papers,  plans or projections  relating to any proposed
                         Disposals  to be made by the  Group  within  14 days of
                         such papers being approved by the board of the relevant
                         Group Company.

12.2         Positive Covenants

             The Parent  hereby  undertakes  and agrees  with the Agent and each
             Bank that,  throughout the Security  Period,  it shall and it shall
             procure that each of the companies in the Group (other than the TMG
             Companies  and in the case of (a), (b) and (c) below,  Non-Material
             Subsidiaries  or  Dormant  Subsidiaries)  shall  unless  the  Agent
             (acting on the  instructions of the Majority Banks) shall otherwise
             agree:

             (a)   Further documents:  at the request of the Agent subject
                   to Clause 14.2 execute or procure the  execution of all
                   such  documents  as  are in the  opinion  of the  Agent
                   (acting reasonably), necessary to ensure that the Agent
                   and the Banks  obtain the full  benefit of their rights
                   and benefits under the Financing Documents;

             (b)   Insurance:  comply with all its obligations relating to
                   insurances   contained  in  the  Security  and  without
                   limitation  to the  foregoing  maintain  insurances  in
                   respect  of  such  assets  and in such  amounts  as are
                   reasonable  with regard to the size of its business and
                   the value of its assets;

             (c)   Authorisations:  at all times comply with all laws and
                   regulations applicable to it and which are necessary in
                   relation to the conduct of its business generally and obtain,
                   effect and maintain in full force and effect all governmental
                   and other regulatory consents, licences, exemptions,
                   clearances, filings, registrations and authorisations
                   required for (i) the conduct of its business generally where
                   the non-compliance with or absence of which would have a
                   Material Adverse Effect and (ii) the validity, enforceability
                   or, as the case may be, admissibility in evidence of the
                   Financing Documents;

             (d)   Environmental Compliance:  use all reasonable endeavours to
                   comply with all requirements of Environmental Law applicable
                   to each such company (including without limitation, obtaining
                   and maintaining in full force and effect all consents,
                   authorisations, licences or approvals required from time to
                   time in connection with the conduct of its business and the
                   ownership, use, exploitation or occupation of its property
                   and assets) save where any non-acceptance, breach of default
                   would not have a Material Adverse Effect and promptly notify
                   the Agent of (i) any Environmental Claim which has been made
                   or threatened against any member of the Group or (to the
                   knowledge of the Parent) against any occupier of any property
                   owned or leased by any member of the Group or of any
                   circumstance that arises which might give rise to
                   any such Environmental Claim and (ii) any revocation,
                   suspension, amendment, variation, withdrawal or refusal to
                   grant any consent, authorisation, licence or approval,
                   which in the case of either (i) or (ii) would give rise to
                   an Environmental Claim against any such member
                   of the Group which would have a Material Adverse Effect; and

             (e)   Payment of US taxes:  in respect of HLS only, will pay all
                   taxes in the USA which if not paid would result in the
                   taxation authorities in the USA having a prior claim over
                   the New Jersey Property or the proceeds of sale thereof
                   ahead of the Banks, provided that if HLS wants to dispute
                   the payment of any tax levied against it the Banks
                   shall allow the non payment of the relevant taxes subject to
                   HLS first paying an amount equivalent to the amount of the
                   taxes into a separate deposit account with FNBM which cannot
                   be reduced or used by HLS until the conclusion of the
                   dispute with the relevant taxing authority. Provided that no
                   reduction of any sums in such deposit account by
                   reason of any application by FNBM in accordance with this
                   Agreement (whether by way of set-off, consolidation or
                   combination of accounts or enforcement of Security or
                   otherwise) shall give rise to a default
                   under the provisions of this Clause 12.2(e).

12.3         Negative Covenants

             The  Parent  hereby  undertakes  with the  Agent and each Bank that
             during  the  Security  Period  it shall  not and the  Parent  shall
             procure that none of the companies in the Group (other than the TMG
             Companies, the Dormant Subsidiaries and, in respect of (b), (c) and
             (d) the Non-Material  Subsidiaries)  shall unless the Agent (acting
             on the instructions of the Banks) otherwise agrees:

             (a)         Negative  pledges:  other than Permitted  Encumbrances,
                         create or permit to subsist any Encumbrance over any of
                         its  undertaking and assets from time to time where the
                         same would have a Material Adverse Effect;

             (b)         Change of business:  make any change in its business as
                         at  present   conducted,   which  would   result  in  a
                         substantial  change  in  the  nature  of  the  business
                         carried  on by the  Group  as a whole  or  carry on any
                         other  business which is substantial in relation to the
                         business of the Group as at present conducted;

             (c)         Mergers:  merge or  consolidate  with any other  person
                         other than a member of the Charging Group;

             (d)         Disposals:  make a Disposal other than:

                         (i)     in the ordinary course of its trading
                                 activities; or

                         (ii)    where the proceeds of the Disposal are used
                                 within a  reasonable  period to purchase an
                                 asset to replace  the asset the  subject of
                                 that Disposal; or

                         (iii)   where the Disposal is of obsolete assets; or

                         (iv)    where the Disposal is of a kind referred to in
                                 Clause 7.3; or
                       
                         (v)     where the Disposal is made by a Group Company
                                 to a member of the Charging Group; or

                         (vi)    a Disposal on arm's length terms where the
                                 aggregate value  of the assets which are the
                                 subject of a Disposal by Members of the Group
                                 (other than in accordance with  paragraphs
                                 (i), (ii), (iii), (iv) and (v) above) in any
                                 Financial Year of the Parent does not exceed
                                 (pound)500,000. For the purposes of this
                                 paragraph, the value of any asset
                                 shall be the greater of its book value and the
                                 consideration received for it;

                       where such Disposal would have a Material Adverse Effect

             (e)         Indebtedness:   incur  any   indebtedness   other  than
                         Permitted  Indebtedness  where  to do so  would  have a
                         Material Adverse Effect;

             (f)         Dividends:  in  respect  of the  Parent,  make,  pay or
                         declare  before 31st August 2000 any  dividend or other
                         distribution  in relation to any shares forming part of
                         its issued share capital;

             (g)         Acquisitions:  acquire  any  business  of, or shares or
                         securities of, any company (other than a Group Company)
                         other than where:

                         (i)         the aggregate of the consideration  payable
                                     for, and Indebtedness assumed by members of
                                     the  Group  in  connection  with  all  such
                                     acquisitions  made by  members of the Group
                                     in any  Financial  Year of the Parent  does
                                     not exceed (pound)100,000; and

                         (ii)        promptly on such acquisition:

                             (A)  if the acquisition is of a business, the
                                  business and assets of the business become
                                  subject to the Existing Security; or

                             (B)  if the acquisition is of shares comprising
                                  more than 50 per cent. of the issued share
                                  capital of a company, subject to any legal or
                                  contractual prohibition or limitation on the
                                  giving of any guarantee and debenture (or its
                                  equivalent under relevant law), that company
                                  executes a guarantee and debenture (or the
                                  equivalent documents (in a form approved by
                                  the Agent) under the laws of the jurisdiction
                                  of that company's incorporation) and delivers
                                  the same to the Agent;

             (h)   Capital Expenditure:

                   no  member  of  the  Group   shall  incur  any  Capital
                   Expenditure if it would result in the aggregate Capital
                   Expenditure incurred by the Group in any period set out
                   in Column A below exceeding the amount set out opposite
                   such period in Column B below:

                  Column A                              Column B
                  Period                               Amount ((pound)m)

                  1st July 1998 to 31st December 1998       4
                  1st July 1998 to 30th June 1999           8
                  1st July 1998 to 31st December 1999      12
                  1st July 1998 to 30th June 2000          16

             (i)   Deposit Account:  withdraw any monies from the Deposit
                   Account other than for the Group's general working capital
                   requirements.  For the avoidance of doubt the restriction
                   contained in this Clause 12.3(i) will prevent the Parent
                   from transferring any monies standing to the credit of the
                   Deposit Account into any account in the name of, or on
                   behalf of, any Group Company with another bank or financial
                   institution (other than FNBM where such monies are to be used
                   by HLS for its general working capital requirements). For the
                   avoidance of doubt the provisions of this Clause 12.3(i) will
                   not prevent the transfer of any such monies to another 
                   account of a Borrower with the  Agent for that Borrower's
                   general working capital requirements.


13.          DEFAULT

13.1         Defaults

             There shall be a Default if:

             (a)   Non Payment: any amount payable under this Agreement in
                   respect of principal, interest or the Participation Fee
                   referred to in Clause 16.4 is not paid by the  relative
                   Borrower  at the place at which it is  expressed  to be
                   payable and within 3 Business Days of the due date; or

             (b)   Other defaults:  except where such failure has been disclosed
                   in the Circular or in paragraphs 5, 6, 7 and 8 of Schedule 4
                   to the Investor Placing Agreement any member of the Charging
                   Group fails to comply with any of its obligations and
                   undertakings under any of the Financing Documents (other
                   than the obligations and undertakings referred to in the
                   foregoing Clause 13.1(a)) which failure (other than
                   any breach of the provisions of Clause 12.3) would have a
                   Material Adverse Effect and, if such failure is capable of
                   remedy, such Default is not remedied within 15 Business Days
                   after notice of such failure  has been given by the Parent
                   to the Agent or (if earlier) within 15 Business Days, of the
                   Agent becoming aware of such failure and giving
                   notice thereof to the Parent; or

             (c)   Breach of representation or warranty:  any representation,
                   warranty or statement made or deemed to be repeated by any
                   member of the Charging Group under this Agreement or in any
                   notice, certificate or statement of fact referred to in or
                   delivered under this Agreement is or proves to have been
                   incorrect when made or deemed to have been repeated and
                   such incorrectness would result in a Material Adverse Effect
                   and if the subject matter of such incorrectness is capable
                   of correction it is not corrected within 15 Business Days
                   after notice of the breach in question has been given by the
                   Parent to the Agent or (if earlier) within 15 Business Days
                   of the Agent becoming aware of the breach and
                   giving notice thereof to the Parent; or

             (d)   Financing  Documents:  subject to Clauses 13.4 and 14.2
                   any of the  Financing  Documents is not or ceases to be
                   in  full   force  and   effect  or  the   validity   or
                   enforceability  of  any  of  the  terms  of  any of the
                   Financing  Documents  shall be  contested by any of the
                   members of the Group; or

             (e)   Cross-default:  any Indebtedness  (other than under the
                   Existing   Ancillary   Facilities   or,  the   Existing
                   Facilities  or  the  Bridging  Facility)  of any of the
                   members of the Group  (other than the TMG  Companies or
                   any  Dormant   Company)  in   aggregate  in  excess  of
                   (pound)1,000,000:

                   (i)  is declared to be or otherwise becomes due and payable
                        prior to its specified maturity; or

                   (ii) is not paid when due or within any applicable grace
                        period;

             (f)   Attachments  or  distress:  a creditor or  encumbrancer
                   attaches  or  takes   possession  of,  or  a  distress,
                   execution,  sequestration or other process is levied or
                   enforced  upon or sued  out  against,  any  part of the
                   undertaking  and  assets of any of the  members  of the
                   Group  other  than  the TMG  Companies  or any  Dormant
                   Company  (having  a value of at  least  (pound)500,000)
                   which would have a Material Adverse Effect and the same
                   is not  discharged  or  terminated  within  21  days of
                   commencement; or

             (g)   Inability to pay debts: any of the members of the Group
                   (other than the TMG Companies any Non-Material Subsidiary or
                   any Dormant Subsidiary):

                   (i)    suspends payment of its debts generally or is
                          unable or admits its inability to pay its debts
                          as they fall due; or

                   (ii)   commences  negotiations  with its creditors
                          generally   with  a  view  to  the  general
                          readjustment or rescheduling of all or part
                          of  its   Indebtedness   which   it   would
                          otherwise  not be able  to pay as it  falls
                          due; or

                   (iii)  proposes or enters into any  composition or
                          other  arrangement  for the  benefit of its
                          creditors   generally   or  any   class  of
                          creditors; or

                   (iv)   takes  any  steps to  wind-up  or  dissolve
                          itself or file any  petition  or action for
                          relief under any bankruptcy,  insolvency or
                          moratorium law; or

             (h)   Insolvency proceedings: any proceedings are started for the
                   winding-up dissolution or reorganisation (otherwise than
                   while solvent  and on terms previously approved in writing
                   by the Banks) of any Group  Company (other than the TMG
                   Companies, any Non-Material Subsidiary or any Dormant
                   Subsidiary) except where such a winding-up petition is
                   discharged within 21 days of its presentation or a receiver,
                   administrative receiver, trustee, supervisor or similar
                   officer is appointed in respect of any Group Company
                   (other than the TMG Companies, any Non-Material Subsidiary
                   or any Dormant Subsidiary) or any material part of its
                   revenues and assets;

             (i)   Adjudication or appointment:  any  adjudication,  order
                   or, as the case may be, appointment is made under or in
                   relation  to  any  of the  proceedings  referred  to in
                   Clause 13.1(h); or

             (j)   Administrators:   a  petition  is   presented   for  an
                   administration  order  to be  made in  relation  to any
                   Group Company (other than any TMG Company, Non-Material
                   Subsidiary   or  Dormant   Subsidiary)   which  is  not
                   withdrawn  within 2 Business  Days of its  presentation
                   provided  that such 2 Business  Days grace period shall
                   not  apply if the  Court  abridges  the  notice  period
                   required  pursuant to Rule 2.7 of the Insolvency  Rules
                   1986; or

             (k)   Analogous  proceedings:  any event occurs or proceeding
                   is taken with respect to any member of the Group (other
                   than  a TMG  Company  a  Non-Material  Subsidiary  or a
                   Dormant  Subsidiary) in any jurisdiction to which it is
                   subject  which has an effect  equivalent  or similar to
                   any of the events mentioned in Clauses 13.1(h),  (i) or
                   (j)  and  which  would  result  in a  Material  Adverse
                   Effect; or

             (l)   Cessation of business:  any of the members of the Group
                   (other than the TMG Companies, any Non-Material Subsidiary
                   or any Dormant Subsidiary) suspends, ceases or threatens to
                   suspend or cease to carry on its business or sells, transfers
                   or otherwise disposes of in any one transaction or series of
                   transactions the whole or any substantial part of its assets
                   other than to a member of the Charging Group without the
                   prior written consent of the Banks where the same would
                   result in a Material Adverse Effect; or

             (m)   Change  of  control:  a  person  other  than any of the
                   Investors   (whether   alone  or   together   with  any
                   associated  person or persons)  becomes the  beneficial
                   owner  of  the  issued  share  capital  of  the  Parent
                   carrying a right to exercise  more than 50 per cent. of
                   the votes at a general  meeting of the Parent  (for the
                   purposes of this Clause "associated person" is a person
                   who is "acting in concert" (as defined in the City Code
                   on Takeovers and Mergers) with that person,

                   PROVIDED  that  any  action  taken  pursuant  to  or in
                   connection with the Ciba Geigy Agreement shall not be a
                   Default  unless  the same  results  in a Default  under
                   sub-Clauses (g)-(k) above.

13.2         Acceleration etc.

             At any time when any Default  remains  unremedied  and unwaived the
             Agent may with the agreement of the Majority Banks by notice to the
             Parent  cancel the  Revolving  Credit  Facility in whole or in part
             and:

             (i)         require  the   Borrowers   immediately   to  repay  the
                         Revolving  Loan and  repay or  provide  cash  cover for
                         contingent  liabilities  under the  Existing  Ancillary
                         Facilities  together with accrued  interest thereon and
                         immediately  to pay all other sums  payable  under this
                         Agreement,  whereupon the same shall become immediately
                         due and payable; or

             (ii)        place the  Revolving  Loan and the  Existing  Ancillary
                         Facilities on demand,  whereupon the same and all other
                         sums payable hereunder shall become repayable on demand
                         made by the Agent on the  instructions  of the Majority
                         Banks.

             Upon the  service  of any  such  notice  by the  Agent  the  Banks'
             obligations shall be terminated and each of the Banks'  Commitments
             shall be cancelled and reduced to zero.

13.3         Acceleration of Existing Facilities, Existing Ancillary Facilities
             or Bridging Facility

             During the period  between the date of this Agreement and the First
             Drawdown  Date,  the Banks  shall not make  demand  for any  amount
             outstanding under the Existing  Facilities,  the Existing Ancillary
             Facilities or the Bridging  Facility  unless (i) a Default  remains
             unremedied  and  unwaived  hereunder or (ii) either of the Investor
             Placing   Agreement  and  the  Shareholder   Placing  Agreement  is
             terminated  by any party  thereto or (iii)  either of the  Investor
             Placing  Agreement or the  Shareholder  Placing  Agreement fails to
             become unconditional in accordance with its respective terms by 4th
             September  1998 or such later date as may be agreed for  completion
             in accordance with its respective terms.

13.4         Appointment of receiver etc

             Notwithstanding  any of the provisions in the Security  neither the
             Agent nor the Banks shall be entitled to appoint an  administrative
             or other receiver or similar  officer over the whole or any part of
             the property,  assets and undertaking of any member of the Charging
             Group, or otherwise to enforce the Security,  unless there has been
             a  Default  and a demand  has been made by the  Agent  pursuant  to
             Clause 13.2.


14.          SET-OFF AND PRO-RATA PAYMENTS AND DEPOSIT ACCOUNT

14.1         Set-Off

             Each Borrower  hereby  authorises  the Agent and each Bank to apply
             any credit balance on any account of the relative Borrower with any
             of the Agent and the Banks (subject to Clause 14.2) in satisfaction
             of any sum due and payable by such  Borrower  pursuant to the terms
             of the Financing Documents.  For this purpose each of the Agent and
             the Banks is  authorised  to  purchase at its spot rate of exchange
             with the monies  standing  to the credit of any such  account  such
             other currencies as may be necessary to effect such application.

14.2         Deposit Account

14.2.1       Notwithstanding any of the provisions in any of the Security but
             subject to Clause 14.2.3 the Agent or FNBM (as the case may be)
             shall only be entitled to apply (whether by way of set-off
             consolidation or combination of accounts, enforcement of Security
             or otherwise) any monies standing to the credit of the Deposit
             Account, (or (a) HLS's account with FNBM or (b) any account of a
             Borrower with the Agent where such monies have been transferred
             from the Deposit Account for the general working capital
             requirements of HLS or any other Borrower (as the case may be) or
             (c) in the case of monies immediately required to meet payroll
             expenditure in the U.S.A. in an account with any other bank or
             financial institution) against any liabilities of the Borrowers to
             the Banks under the Financing Documents after either (i) the Agent
             has made demand for repayment in accordance with Clause 13.2
             and has appointed receivers (or in the case of HLS a similar
             officer) to the whole or substantially the whole of the property,
             assets and undertaking of any of the Borrowers or (ii) an
             administrator has been appointed to any of the Borrowers.

14.2.2       When a Default is outstanding the Agent shall have the right to
             refuse to allow any withdrawal from the Deposit Account and FNBM
             or the Agent shall have the right to refuse to allow withdrawals
             of monies transferred to HLS's account or any
             account of a Borrower with the Agent from the Deposit Account if
             (acting reasonably) the Agent or FNBM (as the case may be) is of
             the view that such  withdrawal is not being made in the ordinary
             course of business to fund bona fide payments required for the
             working capital purposes of the Group.  Neither the Agent nor FNBM
             shall otherwise have the right to restrict any transfer or
             withdrawal from the Deposit Account or of monies transferred to
             FNBM or any Borrower's account with the Agent from the Deposit
             Account in any such case for the general working capital
             requirements of the Group.

14.2.3       If any Borrower has  defaulted in making any payment due under this
             Agreement  in respect  of  interest  payable or fees,  the Agent is
             hereby irrevocably  authorised to transfer from the Deposit Account
             an amount equivalent to such unpaid amount in satisfaction thereof.

14.2.4       The Agent shall pay  interest  on the  Deposit  Account at the best
             available rates that it can reasonably  obtain for such amounts and
             periods as the Parent may specify.

14.3         Pro Rata Sharing

14.3.1       If any Bank (the "Sharing  Bank") shall at any time obtain (whether
             by way of voluntary or  involuntary  payment  right of set-off,  or
             otherwise)  a  proportion  in respect of its  Participation  in the
             Revolving  Credit  Facility  which is greater  than the  proportion
             obtained by the Bank or Banks  respectively  obtaining the smallest
             proportion of its  Participation  in the Revolving Credit Facility,
             including  a nil  receipt,  (the  amount so obtained by the Sharing
             Bank which  represents  such excess being herein called the "excess
             amount") then:

             (i)   the Sharing Bank shall  promptly pay to the Agent,  for
                   the account of the Banks, an amount equal to the excess
                   amount,  whereupon  the Agent shall notify the relative
                   Borrower of such amount and its receipt by the Agent;

             (ii)  the Agent  shall  treat  such  payment  as if it were a
                   payment  by the  relative  Borrower  on account of sums
                   owed to the Banks; and

             (iii) as between the Parent and the  Sharing  Bank the excess
                   amount shall be treated as not having been paid,  while
                   as between the  relative  Parent and each Bank it shall
                   be treated as having been paid to the extent any monies
                   are received by such Bank.

             If, because of the  liquidation  of any Borrower,  or for any other
             reason affecting any Borrower, the provisions of Clause (iii) above
             cannot be given  effect to as between the Banks on the one hand and
             the relative Borrower on the other hand then, as between the Banks,
             the  Sharing  Bank shall be treated as having  purchased  from each
             other  Bank an amount of the  Revolving  Loan owed by the  relative
             Borrower  to that Bank  which is equal to that  part of the  excess
             amount  which is paid to that  Bank  and the  Sharing  Bank  shall,
             accordingly,  be  entitled  to  receive  all  dividends  and  other
             payments  received  by that  Bank in  respect  of that  part of the
             Revolving Loan deemed to have been purchased by it.

14.3.2       Each Bank shall  forthwith  notify the Agent of any such receipt or
             recovery by it other than by payment through the Agent.

14.3.3       If any excess amount subsequently has to be wholly or partly
             refunded to a  Borrower by any Sharing Bank which has paid an
             amount equal thereto to the Agent under Clause 14.3.1, each Bank
             to which any part of that amount was distributed shall on request
             from the Sharing Bank repay to the Sharing Bank such Bank's pro
             rata share of the amount which has to be so refunded by the Sharing
             Bank.  Each Bank shall on request supply to the Agent such
             information as the Agent may from time to time request for the
             purpose of this Clause 14.3.  Notwithstanding the foregoing
             provisions of this Clause 14.3, no Sharing Bank shall be obliged to
             share any excess amount which it receives or recovers pursuant to
             legal proceedings taken by it to recover any sums owing to it
             under this Agreement with any other party which has a legal right
             to, but does not, either join in such proceedings or commence and
             diligently pursue separate proceedings to enforce its rights in the
             same or another court, unless the proceedings instituted by the
             Sharing Bank are instituted by it without prior notice having been
             given to such party through the Agent and an opportunity to such
             party to join in such proceedings.

14.3.4       Nothing  in this  Agreement  shall  oblige the Agent or any Bank to
             apply  any  credit  balance  or  other  benefit  received  from any
             Borrower  against the  liabilities  of the relative  Borrower under
             this Agreement in priority to any other liabilities of the relative
             Borrower to the Agent or that Bank.


15.          THE AGENT AND THE BANKS

15.1         Appointment and Duties

15.1.1       Each Bank hereby irrevocably appoints the Agent to act as its agent
             in  connection  with the  administration  of the  Revolving  Credit
             Facility and to act as its agent and trustee in connection with the
             Security and for such purposes irrevocably  authorises the Agent to
             take such action and to exercise and carry out all the discretions,
             authorities,   rights,   powers  and  duties  as  are  specifically
             delegated to the Agent in this Agreement and each Security Document
             together  with  such  powers  and  discretions  as  are  incidental
             thereto.

15.1.2       The Agent shall have no duties or responsibilities except those
             expressly set out in the Financing Documents.  As to any matters
             not expressly provided for by this Agreement, save in respect of
             the Security, the Agent shall, subject to the provisions hereof or
             thereof, act hereunder or thereunder or in connection herewith or
             therewith in accordance with the instructions of the Banks (but in
             the absence of any such instructions shall not be obliged to act)
             and any such instructions and any action taken by the Agent in
             accordance therewith shall be binding upon all the Banks.

15.2         Payments and Information Received

15.2.1       The Agent will promptly account to the Lending Office of each Bank
             for such Bank's due proportion of all sums received by the Agent
             for such Bank's account, whether by way of repayment or prepayment
             of principal or payment of interest, fees or otherwise.  The Agent
             shall provide the Banks with all information and copies of all
             notices which by the terms of this Agreement are to be provided or
             given to the Banks.  The Agent may retain for its own use and
             benefit (and shall not be liable to account to any of the Banks
             for all or any part of) any sums received by it by way of agency
             or management or arrangement fees or by way of reimbursement
             of expenses incurred by it.

15.2.2       The Agent shall maintain a memorandum account showing the principal
             amount of each  Revolving  Advance  for the time being  outstanding
             under this Agreement and the amount of each Bank's Participation in
             the Revolving Credit Facility from time to time.

15.2.3       Each Bank  confirms  in favour of the Agent that unless it notifies
             the Agent to the contrary it shall be the  beneficial  owner of any
             interest paid to it under this Agreement.

15.3         Defaults

             The Agent  shall  not be  obliged  to take any  steps to  ascertain
             whether any Default (other than a default in repayment of principal
             or in payment of interest,  fees or other sums due pursuant to this
             Agreement) or Default  Occurrence has happened or exists and, until
             the Agent shall have received  express  notice to the contrary from
             any  Borrower  or any Bank,  the Agent  shall be entitled to assume
             that no Default (other than as aforesaid) or Default Occurrence has
             happened  or exists.  Upon  receipt of such  notice the Agent shall
             promptly inform the Banks.

15.4         Assumptions

             The  Agent  shall  be  entitled  to  rely on any  communication  or
             document  believed by it to be genuine and correct and to have been
             communicated  or signed by the  person  by whom it  purports  to be
             communicated  or  signed  and  shall  not be  liable  to any of the
             parties  to  this  Agreement  for any of the  consequences  of such
             reliance.

15.5         Legal Proceedings

             The Agent shall not be obliged to take or commence any legal action
             or proceeding  against any Borrower or any other person arising out
             of or in  connection  with the Financing  Documents  until it shall
             have been  indemnified or secured to its  satisfaction  against any
             and all costs, claims and expenses (including,  but not limited to,
             any costs  award  which may be made  against  it as a result of any
             such legal action or proceeding not being  successful) which it may
             expend or incur in such legal action or proceeding.

15.6         No Liability

             Neither  the Agent nor any of its  directors,  employees  or agents
             shall be liable to the Banks for any action  taken or omitted to be
             taken  by it or  any  of  them  under  or in  connection  with  the
             Financing  Documents unless caused by its or their gross negligence
             or wilful  misconduct.  The Agent shall not be  responsible  to the
             Banks for any  statements,  representations  or  warranties  in the
             Financing Documents or for any information  supplied or provided or
             hereafter  to be  supplied  or  provided to any of the Banks by the
             Agent,  in respect of the  Borrowers or any other person or for any
             other  matter  relating  to  the  Revolving  Credit  Facility,  the
             Security  or  for  the   execution,   effectiveness,   genuineness,
             validity, enforceability or sufficiency of such documents or any of
             the  other  documents  referred  to herein  or  therein  or for the
             recoverability  of all or any of the  Advances  or any of the other
             sums to become due and payable pursuant hereto.

15.7         Credit Decisions

15.7.1       Each  Bank  acknowledges  that it has,  independently  and  without
             reliance on the Agent and based on such  documents and  information
             as it deemed appropriate,  made its own analysis of the transaction
             contemplated  by, and reached its own decision to enter into,  this
             Agreement and made its own investigation of the financial condition
             and  affairs  of  each of the  Borrowers  and  any  surety  for the
             Borrowers'    obligations    and   its   own   appraisal   of   the
             creditworthiness of the Borrowers and any surety for the Borrower's
             obligations.

15.7.2       Save as specifically  provided herein, the Agent shall not be under
             any duty or obligation,  either initially or on a continuing basis,
             to  provide  any  Bank  with  any  credit   information   or  other
             information  with respect to the financial  condition of any of the
             Borrowers or which is otherwise  relevant to the  Revolving  Credit
             Facility.

15.7.3       Each  Bank  further   acknowledges   and  confirms  that  it  will,
             independently  and without  reliance on the Agent and based on such
             documents and information as it shall deem appropriate at the time,
             make its own  decisions  in taking or not taking  action  under the
             Financing Documents.

15.8         Advisers

             The Agent shall be entitled to obtain and rely on the advice of any
             professional  advisers  selected by it given in connection with the
             Financing  Documents or any of the matters  contemplated  hereby or
             thereby, and shall not be liable to any of the Banks for any of the
             consequences of such reliance.

15.9         Relationship with Banks

15.9.1       In performing  its functions and duties under this  Agreement,  the
             Agent  shall  act  solely  as the  agent  for the Banks and save as
             expressly  provided  herein and in the Security shall not be deemed
             to be acting  as  trustee  for any Bank and shall not  assume or be
             deemed to have assumed any  obligation  as agent or trustee for, or
             any relationship of agency or trust with any Borrower.

15.9.2       Neither  the Agent nor any Bank  shall be under  any  liability  or
             responsibility  of any  kind to any  Borrower  or any of the  other
             Banks  arising  out of or in  relation  to any  failure or delay in
             performance  or breach  by any other  Bank or Banks or, as the case
             may be, any Borrower of any of its or their respective  obligations
             pursuant to the Financing Documents.

15.10        Agent's position as a Bank

             With  respect  to its own  Participation  in the  Revolving  Credit
             Facility, the Agent shall have the same rights and powers under and
             in respect of the  Financing  Documents  as though it were not also
             acting as agent for the Banks. The Agent may, without  liability to
             account,  accept deposits from, lend money to and generally  engage
             in any kind of  banking  or trust  business  with or for any of the
             Borrowers  as if it were not the agent or the trustee for the Banks
             under any Financing Document.

15.11        Indemnity

             The  Banks  agree  to  indemnify  the  Agent  (to  the  extent  not
             reimbursed  by the  Borrowers)  rateably  according  to the  Banks'
             respective  Participations in the Revolving Credit Facility (or, if
             no Revolving  Advance shall then be outstanding,  their  respective
             Commitments) from and against any and all liabilities, obligations,
             losses,  damages,  penalties,  actions,  judgments,  suits,  costs,
             expenses and disbursements of any kind or nature whatsoever (except
             in respect of any agency, management or other fee due to the Agent)
             which may be imposed on, incurred by or asserted  against the Agent
             in its  capacity  as agent or  trustee  for the Banks or in any way
             relating to or arising out of the Financing Documents or any action
             taken or omitted by the Agent in enforcing or preserving the rights
             of the Banks under the Financing  Documents,  provided that no Bank
             shall be liable for any portion of such  liabilities,  obligations,
             losses,  damages,  penalties,  actions,  judgments,  suits,  costs,
             expenses  or   disbursements   resulting  from  the  Agent's  gross
             negligence or wilful misconduct.

15.12        Resignation

15.12.1      Subject to the  appointment  and acceptance of a successor Agent as
             provided  below,  the Agent may resign at any time by giving to the
             Parent  and each of the Banks not less than 60 days'  notice of its
             intention to do so. Upon receipt of such notice of resignation  the
             Banks  shall  appoint  as  successor  Agent  any bank or  financial
             institution  selected  by the Parent and the Banks which is willing
             and able to act as such agent for the Banks.

15.12.2      If no such  successor  Agent  selected  by the Parent and the Banks
             shall  have  accepted  such  appointment  within 20 days  after the
             Agent's  giving  of  notice of  resignation  then the  Banks  after
             consultation with the Parent shall have the right to appoint such a
             successor Agent.

15.12.3      If no such  successor  Agent  shall have been so  appointed  by the
             Banks and shall have accepted such appointment within 40 days after
             the  Agent's  giving of notice of  resignation  then the  resigning
             Agent  may,  after  consultation  with the  Parent,  appoint as its
             successor  any reputable and  experienced  bank or other  financial
             institution with an office in London.

15.12.4      Any such appointment shall take effect upon notice thereof (which
             notice shall specify the bank in London to which payments shall be
             made thereafter) being given to the Parent and each Bank.
             Thereafter, the resigning Agent shall be discharged from any
             further obligation under the Financing Documents and its successor
             and each of the other parties hereto and thereto shall have the
             same rights and obligations inter se as they would have had if
             such successor had been a party to the Financing Documents in
             place of the resigning Agent.  The resigning Agent shall make over
             to its successor all such records as its successor requires to
             carry out its duties.

15.13        Change of Office

             The Agent may from time to time in its sole  discretion  by written
             notice to the Parent and each Bank designate a different  office in
             the  United  Kingdom  from  which  its  duties  as the  Agent  will
             thereafter be performed.

15.14        Scope of Duties

             The  Agent  may  grant  waivers,  vary the  terms of the  Financing
             Documents  and do or  omit  to do  all  such  acts  and  things  in
             connection  therewith as may (unless otherwise provided  hereunder)
             be  authorised in writing by the Majority  Banks.  Any such waiver,
             variation,  act or omission so authorised and effected by the Agent
             shall be binding  on all the Banks and the Agent  shall be under no
             liability  whatsoever  in  respect  of any  such  waiver,  consent,
             variation, act or omission. Except with the prior written agreement
             of all the  Banks,  nothing  in this  Clause  shall  authorise  (as
             between  the Agent  and the  Banks)  (i) any  change in the rate at
             which any  interest  on the  Revolving  Loan is payable  under this
             Agreement, (ii) any extension of the date for, or alteration in the
             amount or currency of, the payment of any principal, interest, fees
             or any  other  amount  payable  under  this  Agreement,  (iii)  any
             increase in any Bank's Commitment, (iv) any variation of Clauses 6,
             7 or 13 and this Clause 15 or (vi) any provision of this  Agreement
             which requires the consent of all the Banks.

15.15        Consents

             The Agent may at any time upon the  application  and at the cost of
             the Parent and without any consent of any of the Banks (only if and
             so far as in its  reasonable  opinion  the  interests  of the Banks
             shall  not be  materially  prejudiced  thereby)  give any  consent,
             approval  or licence  required of the Agent under the terms of this
             Agreement,  save where this Agreement  expressly requires that such
             consent, approval or licence should be given only with the approval
             of, or on the instructions of, the Banks.

15.16        Evidence

             The Agent may accept a  certificate  signed by any  director or the
             secretary of the Parent as to any fact or matter on which the Agent
             may need or wish to be satisfied as sufficient evidence thereof and
             a like  certificate that any assets in the opinion of the person so
             certifying have a particular  value or produce a particular  income
             or are  suitable for a particular  purpose as  sufficient  evidence
             that they have that value or produce that income or are so suitable
             and the  Agent  shall  not be bound  in any  such  case to call for
             further  evidence  or be  responsible  for  any  loss  that  may be
             occasioned by its failing to do so.

15.17        Security

15.17.1      The Agent shall accept without investigation, requisition or
             objection such title as any person may have to the undertaking,
             property and assets which are subject to the Security and shall
             not be bound or concerned to examine or enquire into nor be liable
             for any defect or failure in the title of any person whether such
             defect or failure was known to the Agent or might have been
             discovered upon examination or enquiry and whether capable of
             remedy or not nor for any failure on the part of the Agent to give
             notice to any third party of the Security to which it is party
             or otherwise perfect or register the security thereby created.

15.17.2      The Agent  shall hold the  benefit of the  Security  upon trust for
             itself and the Banks.

15.17.3      Each of the Banks hereby  confirms and agrees that it does not wish
             to  be  registered  in  accordance   with  Rule  146  of  the  Land
             Registration  Rules 1925 as the joint proprietor of any mortgage or
             charge created  pursuant to any Financing  Document and accordingly
             authorises  the Agent to hold such  mortgage  or charge in its sole
             name as agent and  trustee for the Banks and hereby  requests  H.M.
             Land  Registry to register the Agent as the sole  proprietor of any
             such mortgage or charge.


16.          FEES AND EXPENSES

16.1         Expenses

             The  Borrowers  shall,  on  demand,  pay  all  reasonable  expenses
             (including,  but not limited to, legal,  valuation  and  accounting
             fees and, in relation to (i) and (ii) below, to the extent the same
             are reasonable) and any VAT thereon incurred by:

             (i)         the Agent and the Banks in connection with the granting
                         of any release, waiver or consent or in connection with
                         any variation of any Financing Document; and

             (ii)        the  Agent  and the  Banks  in  enforcing,  perfecting,
                         protecting or preserving  (or  attempting so to do) any
                         of their rights,  or in suing for or recovering any sum
                         due from any of the Borrowers or any other person under
                         any Financing Document.

16.2         Agency Fees

             The Parent shall pay to the Agent agency fees of  (pound)4,000  per
             annum  payable  in advance  on the First  Drawdown  Date and on the
             first  anniversary  of the First  Drawdown  Date.  In addition  the
             Parent shall pay a fee of  (pound)250  for each drawdown or renewal
             of a Revolving  Advance  such fee to be payable  annually in arrear
             within 7 days of receipt by the Parent of an invoice for such fees.

16.3         Non-Utilisation Fee

             The Parent shall pay a commitment  fee to the Agent for the account
             of the Banks (pro-rata to their undrawn  Commitment) at the rate of
             0.25 per cent.  per annum on the  difference  between (i) the Total
             Commitments  and (ii) the  average  aggregate  during the period in
             question of the amount of all Revolving Advances outstanding during
             that period. Such fee shall accrue day to day on the basis of a 365
             day  year  and  the  number  of days  elapsed  in  respect  of each
             successive  period  of 6 months  from the First  Drawdown  Date and
             shall be paid in arrear on the first  Business Day after the end of
             each such  period  and on the date when the Total  Commitments  are
             reduced to zero.

16.4         Participation Fee

16.4.1       On the  First  Drawdown  Date the  Parent  shall  pay the Agent (on
             behalf of the Banks) a participation  fee of  (pound)122,500  to be
             shared  between  the  Banks in  accordance  with  their  Commitment
             Percentages. If for any period a Bank is in breach of an obligation
             to fund a Revolving Advance hereunder,  the participation fee shall
             not accrue to such Bank during such period.

16.4.2       On the first  anniversary  of the First  Drawdown  Date the  Parent
             shall  pay  the  Agent   (on   behalf  of  the   Banks)  a  further
             participation  fee of (pound)127,500 to be shared between the Banks
             in accordance with the Commitment Percentages.

16.5         Documentary Taxes Indemnity

             All stamp, documentary, registration or other like duties or Taxes,
             including any penalties,  additions,  fines, surcharges or interest
             relating  thereto,  (other than any arising from any  assignment or
             transfer by a Bank  pursuant  to Clause  19.3) which are imposed or
             chargeable on or in connection  with any of this  Agreement and the
             Security  shall be paid by the  Borrowers  PROVIDED  THAT the Agent
             shall be  entitled  but not obliged to pay any such duties or Taxes
             (whether or not they are its primary responsibility), whereupon the
             Borrowers shall on demand  indemnify the Agent against those duties
             or Taxes and  against  any costs and  expenses  so  incurred by the
             Agent in discharging them.

16.6         VAT

16.6.1       All payments  made by the Borrowers  under the Financing  Documents
             are  calculated  without  regard to Value  Added  Tax.  If any such
             payment  constitutes the whole or any part of the consideration for
             a taxable or deemed taxable supply  (whether that supply is taxable
             pursuant to the exercise of an option or otherwise) by the Agent or
             a Bank,  the amount of that payment shall be increased by an amount
             equal to the  amount  of Value  Added Tax  which is  chargeable  in
             respect of the taxable supply in question.

16.6.2       No payment or other  consideration  to be made or  furnished by the
             Agent or a Bank, to the Borrowers pursuant to or in connection with
             the Financing Documents or any transaction or document contemplated
             therein  may be  increased  or  added to by  reference  to (or as a
             result of any  increase  in the rate of) any Value  Added Tax which
             shall be or may become chargeable in respect of any taxable supply.


17.          SEVERABILITY, WAIVERS, REMEDIES CUMULATIVE

17.1         Severance

             If at any  time  any  provision  of this  Agreement  is or  becomes
             illegal,  invalid or  unenforceable in any respect under the law of
             any jurisdiction  neither the legality,  validity or enforceability
             of the remaining  provisions  hereof nor the legality,  validity or
             enforceability  of  such  provision  under  the  law of  any  other
             jurisdiction shall in any way be affected or impaired thereby.

17.2         Waivers

             No failure to exercise, nor any delay in exercising, on the part of
             the Agent or any Banks, any right or remedy hereunder shall operate
             as a waiver  thereof,  nor shall any single or partial  exercise of
             any right or remedy prevent any further or other  exercise  thereof
             or the  exercise  of any other  right or  remedy.  The  rights  and
             remedies  herein  provided are  cumulative and not exclusive of any
             rights or remedies provided by law.


18.          NOTICES

18.1         Method

             Each  communication  to be made hereunder  shall be made in writing
             but, unless otherwise stated, may be made by facsimile transmission
             or letter.

18.2         Delivery

             Any  communication  (including  any  notice  to be  made  or  given
             hereunder)  or  document to be made or  delivered  by one person to
             another  pursuant to this Agreement shall (unless the one has by 15
             days' written  notice to the other  specified  another  address) be
             made  or  delivered  to  that  other  person,  in the  case  of the
             Borrowers and the Agent at the respective addresses given in Clause
             18.3, in the case of the Banks at the respective addresses given in
             Schedule 1 or, as the case may be,  the  Schedule  of the  relative
             Transfer Certificate.

18.3         Addresses

             The addresses referred to in Clause 18.2 above are:

             (A)     the Borrowers:

                     c/o Huntingdon Life Sciences Group PLC
                     Woolley Road
                     Alconbury
                     Huntingdon
                     Cambridgeshire PE17 5HF

                     Attention:  The Company Secretary and the Finance Director
                     Fax:        (01480) 892195

             (B) the Agent:

                   National Westminster Bank Plc
                   3rd Floor
                   Juno Court
                   24 Prescott Street
                   London E1 8BB

                   Attention:  Head of NWM Agency Group
                   Fax:        (0171) 714 6167

18.4         Deemed Receipt

             Any notice given by the Agent or a Borrower shall be deemed to have
been received:

             (a)  if sent by facsimile transmission, one Business Day after the
                  day it was transmitted;

             (b)  in the case of a written notice lodged by hand, at the time of
                  actual delivery; or

             (c)  if posted, on the second Business Day following the day
                  on which it was properly despatched by first class mail
                  postage prepaid.

18.5         Notices to the Banks

             Any  notice to be given by a  Borrower  to the Banks or any of them
             may be given by serving  such notice on the Agent  together  with a
             written  instruction that such notice is to be treated as notice to
             one or  more  specified  Banks.  In the  absence  of  such  written
             instructions it shall be deemed to be a notice to the Agent alone.


19.          ASSIGNMENTS AND TRANSFERS

19.1         Benefit of Agreement

             This  Agreement  shall be binding  upon and enure to the benefit of
             each party hereto and its successors and assigns.

19.2         Assignments and Transfers by the Borrowers

             No Borrower  shall be entitled to assign or transfer  all or any of
             its rights, benefits and obligations under this Agreement.

19.3         Assignments and Transfers by Banks

19.3.1       Any Bank may at any time  (after the First  Drawdown  Date (but not
             otherwise)) transfer in accordance with Clause 19.3.3 below all but
             not part only of its rights,  benefits and obligations under any of
             the Financing Documents to any person.

19.3.2       If any Bank assigns all of its rights and benefits under any of the
             Financing  Documents in accordance with Clause 19.3.1 above,  then,
             unless and until the assignee has confirmed to the Agent, the other
             Banks and the Borrowers that it shall be under the same obligations
             towards  each of them as it would  have been under if it had been a
             party  hereto  as a  Bank,  the  Agent,  the  other  Banks  and the
             Borrowers shall not be obliged to recognise such assignee as having
             the rights  against  each of them which it would have had if it had
             been such a party hereto.

19.3.3       If any Bank (the  "Existing  Bank")  wishes to transfer  all of its
             Commitment or  Participation  in the Revolving  Credit  Facility to
             another bank, financial  institution or other person or entity (the
             "Bank  Transferee"),  such  transfer  may be  effected  by way of a
             novation by the delivery to, and the  execution  by, the Agent of a
             duly completed Transfer Certificate.

19.3.4       On the date specified in the Transfer Certificate:

             (i)         to the  extent  that in the  Transfer  Certificate  the
                         Existing  Bank  seeks to  transfer  its  Commitment  or
                         Participation  in the Revolving  Credit  Facility,  the
                         Borrowers  and the Existing Bank shall each be released
                         from  further  obligations  to each  other  under  this
                         Agreement  and their  respective  rights  against  each
                         other shall be cancelled  (such rights and  obligations
                         being  referred to in this Clause 19.3.4 as "Discharged
                         Rights and Obligations");

             (ii)        the Borrowers and the Bank Transferee shall each assume
                         obligations  towards each other and/or  acquire  rights
                         against  each other which  differ  from the  Discharged
                         Rights and  Obligations  only insofar as the  Borrowers
                         and the Bank  Transferee  have assumed and/or  acquired
                         the  same in place of the  Borrowers  and the  Existing
                         Bank;

             (iii)       the Agent,  the Borrowers,  the Bank Transferee and the
                         other  Banks  shall  acquire the same rights and assume
                         the same  obligations  among  themselves  as they would
                         have acquired and assumed had the Bank  Transferee been
                         a party  hereunder as a Bank with the rights and/or the
                         obligations  acquired  or  assumed by it as a result of
                         the transfer; and

             (iv)        a proportion  of the Existing  Bank's  rights under the
                         Security,  equal  to the  proportion  of  the  Existing
                         Bank's rights under this Agreement  being  transferred,
                         shall   automatically   be   transferred  to  the  Bank
                         Transferee.

19.3.5       The Agent will promptly complete  Transfer  Certificates on request
             by an Existing  Bank and upon  payment by such  Existing  Bank of a
             (pound)750  fee to the Agent.  Each  Borrower and each of the Banks
             hereby  irrevocably   authorise  the  Agent  to  execute  any  duly
             completed  Transfer  Certificate  on its behalf  provided that such
             authorisation  does  not  extend  to the  execution  of a  Transfer
             Certificate  on  behalf  of either  the  Existing  Bank or the Bank
             Transferee named therein.

19.3.6       The Agent  shall  promptly  notify  the Parent of the  receipt  and
             execution on its behalf by the Agent of any Transfer Certificate.

19.3.7       The  Borrowers  shall  be under no  obligation  to pay any  greater
             amount under this Agreement  following an assignment or transfer by
             a Bank  of  any  of  its  rights  or  obligations  pursuant  to the
             foregoing provisions of this Clause 19 if such greater amount would
             not have been payable but for the assignment or transfer.

19.3.8       When a Bank  assigns or  transfers  part of its rights and benefits
             hereunder it shall assign or transfer, as the case may be, the same
             percentage of its rights and benefits in relation to each Facility.

19.4         Disclosure of Information

             The Agent and the Banks may disclose any  information  furnished or
             made  available to them  hereunder by the  Borrowers to each other,
             their  professional   advisers  and  to  any  actual  or  potential
             assignee,  transferee or  sub-participant  subject to the condition
             (except where such  information  is available in the public domain)
             that each of the same  executes  in favour of the  Parent a written
             confidentiality  undertaking agreeing to keep confidential any such
             information.


20.          CURRENCY INDEMNITY

20.1         Any payment  made to or for the account of or received by the Agent
             or any Bank in respect of any moneys or liabilities due, arising or
             incurred  by the  Borrowers  to the Agent or any Bank in a currency
             (the  "Currency of  Payment")  other than the currency in which the
             payment  should have been made under this  Agreement (the "Currency
             of Obligation") in whatever circumstances (including as a result of
             a judgment  against the  Borrowers)  and for whatever  reason shall
             constitute a discharge to the  Borrowers  only to the extent of the
             Currency of Obligation  amount which the Agent or that Bank, as the
             case may be, is able on the date of receipt of such  payment (or if
             such date of receipt is not a Business Day, on the next  succeeding
             Business  Day) to purchase  with the Currency of Payment  amount at
             its spot rate of exchange (as conclusively  determined by the Agent
             or that Bank) in the London foreign exchange market.

20.2         If the amount of the Currency of Obligation which the Agent or that
             Bank is so able to purchase  falls  short of the amount  originally
             due to the  Agent or that  Bank,  as the case  may be,  under  this
             Agreement, then the Borrowers shall immediately on demand indemnify
             the Agent or that  Bank,  as the case may be,  against  any loss or
             damage arising as a result of that shortfall by paying to the Agent
             or that Bank,  as the case may be, that  amount in the  Currency of
             Obligation certified by the Agent or that Bank, as the case may be,
             as necessary so to indemnify it.

20.2         General

20.2.1       Each  indemnity  in this Clause 20 shall  constitute a separate and
             independent obligation from the other obligations contained in this
             Agreement,  shall give rise to a separate and independent  cause of
             action,  shall apply  irrespective  of any indulgence  granted from
             time  to  time  and  shall   continue  in  full  force  and  effect
             notwithstanding  any judgment or order for a liquidated sum or sums
             in respect of amounts  due under this  Agreement  or under any such
             judgment or order.

20.2.2       The  certificate of the Agent or the relevant Bank as to the amount
             of any  loss  or  damage  sustained  or  incurred  by it  shall  be
             conclusive  and binding on the  Borrowers  except for any  manifest
             error.


21.          PRIORITIES

21.1         Priority Order

21.1.1       It is hereby  agreed by and between  the parties to this  Agreement
             that on  enforcement  of the  Security  the Net  Proceeds  shall be
             applied:

             (i)         first, in discharge of the Priority Obligations; and

             (ii) second, in discharge of the NatWest Obligations.

21.1.2       The  Security  is a  continuing  security  and the  ranking  of the
             Priority Obligations and the NatWest Obligations as provided for in
             this  Agreement  shall not be  affected by any  fluctuation  in the
             amounts  from  time  to  time of the  Priority  Obligations  or the
             NatWest  Obligations  or by the  existence  at any time of a credit
             balance on any current or other accounts.

21.1.3       For the  avoidance of doubt it is  confirmed  that the moneys owing
             and obligations and other liabilities of the Borrowers to the Banks
             and the Agent  under this  Agreement  in  respect  of the  Priority
             Obligations  shall  rank  pari  passu in all  respects  and that on
             enforcement  the Net Proceeds shall be shared between the Banks pro
             rata on the basis of their respective Participation Percentages.

21.2         Co-Operation

             The Agent and the Banks shall  co-operate to ensure that any moneys
             in  the  hands  of a  receiver  appointed  pursuant  to  any of the
             Security are distributed in a manner consistent with the provisions
             of this Agreement.


22.          ANNOUNCEMENTS

             Without  the  consent of the Agent  (acting on behalf of all of the
             Banks),  none of the  parties  to this  Agreement  shall  make  any
             statement  or public  announcement  to the press or other  media in
             connection with any matters referred to in this Agreement, save for
             any such  announcement or disclosure that may be required by law or
             recognised Stock Exchange Rules or is contained in the Circular, or
             in respect of information is in the public domain.


23.          CONFLICT

23.1         If and to the extent of any conflict between the provisions of this
             Agreement and those of any other Financing  Document,  the terms of
             this Agreement shall prevail.

23.2         For the  avoidance of doubt,  principal  interest and other amounts
             outstanding  hereunder may only be demanded in accordance  with the
             terms of this Agreement.

23.3         Any consent  which may have been given in relation to any Financing
             Document other than this  Agreement  shall remain in full force and
             effect.

23.4         For the  avoidance of doubt,  the Agent and the Banks  confirm that
             any breach of Clause 6 of the guarantee  and debenture  between the
             Agent and the Parent as a result of the payment of the  Transaction
             Proceeds into the Deposit Account is hereby waived.

23.5         The  Agent  and HLS agree  that  they  shall  within 21 days of the
             signing of this  Agreement  execute such  instruments or agreements
             supplemental  to such of the  Security  Documents to which HLS is a
             party which are  existing as at the date of this  Agreement  as are
             necessary  in order to limit  the  Agent's  or the  Banks'  rights,
             remedies and powers under those  Security  Documents in  accordance
             with, and so as to reflect,  the provisions of this Agreement.  For
             the  avoidance  of  doubt  the  failure  by  HLS  to  execute  such
             instruments or agreements  within such 21 day period shall not be a
             Default or a Default Occurence.

23.6         For the  avoidance of doubt,  subject to the  provisions  of Clause
             13.3,  the  Existing  Facilities  shall  continue to be provided in
             accordance with their terms until the First Drawdown Date.


24.          LAW AND JURISDICTION

24.1         Law

             This Agreement  shall be governed by, and construed in all respects
             in accordance with, English law.

24.2         Jurisdiction

24.2.1       The  courts of  England  shall  have  jurisdiction  to  settle  any
             disputes  which  may  arise  out  of or  in  connection  with  this
             Agreement.

24.2.2       Subject to the following  proviso  Clause 24.2.1 is for the benefit
             of the Agent and the Banks  only and is  without  prejudice  to the
             right of the Agent and each Bank to bring any proceedings  relating
             to this  Agreement  in any  other  court  which  has  jurisdiction.
             PROVIDED THAT the Borrowers may bring proceedings  against any Bank
             in any court of the jurisdiction in which it is incorporated or has
             its main place of business.

24.2.3 For the purposes of this Agreement each Borrower and each Bank hereby:

             (i)     waives any objections on the grounds of venue or forum
                     non conveniens or any similar grounds; and

             (ii)    consents  to service of process by mail or in any other
                     manner permitted by the relevant law.


IN WITNESS  whereof the parties  hereto  have caused this  Agreement  to be duly
executed on the date set out above.


<PAGE>


                                   SCHEDULE 1

                                    THE BANKS


         Bank and Lending                     Commitment (pound)    Commitment
         Office                                                     Percentage

1.       National Westminster Bank Plc        12,224,998             49.898


         Address for Notices

         King's Cross House
         11th Floor, Phase I
         200 Pentonville Road
         London N1 9HL

         Attention:   Steve Hamilton
         Telephone:   (0171) 239 8327
         Fax:         (0171) 239 8945


2.       The First National Bank                6,971,324             28.454
         of Maryland

         Address for Notices

         25 South Charles Street
         14th Floor
         Baltimore
         MD 21201
         United States of America

         Attention:   Ronald C Lapointe
         Telephone    (410) 244 4089
         Fax:         (410) 244 4295


3.       Comerica Bank                           5,303,678             21.648

         Address for Notices

         PO Box 75000
         Detroit
         MI 48275-3329
         United States of America

         Attention:   Henry J Hajdas
         Telephone:   (313) 222 6360
         Fax:         (313) 222 5706



<PAGE>


                                   SCHEDULE 2

                                 DRAWDOWN NOTICE


To:          National Westminster Bank Plc
             3rd Floor
             Juno Court
             25 Prescott Street
             London  E1 8BB


                                                                  Date

Dear Sirs,

Facilities Agreement dated [*] August 1998 made between Huntingdon Life Sciences
Group plc,  Huntingdon  Life Sciences  Limited,  Huntingdon  Life Sciences Inc.,
certain banks and you as agent (the "Facilities Agreement").

We hereby give you notice of the  following  proposed  borrowing  of a Revolving
Advance under the Facilities  Agreement.  Words and expressions  defined therein
shall have the same meanings when used herein.

1.           Facility:
2.           Amount of Revolving Advance:
4.           Purpose:
5.           Proposed Drawdown Date:
6.           Duration of Interest Period:
7.           Payment Instructions:


SIGNED


For and on behalf of
HUNTINGDON LIFE SCIENCES GROUP plc



<PAGE>


                                   SCHEDULE 3

                               MANDATORY COST RATE


The  Mandatory  Cost Rate is an  addition  to the  interest  rate on a Revolving
Advance to compensate the Banks for the cost attributable to a Revolving Advance
resulting from the imposition from time to time under or pursuant to the Bank of
England Act 1988 (the "Act") and/or by the Bank of England  and/or the Financial
Services Authority (the "FSA") (or other United Kingdom governmental authorities
or  agencies) of a  requirement  to place  Special  Deposits  (whether  interest
bearing or not) with the Bank of England  and/or pay fees to the FSA  calculated
by reference to liabilities used to fund the Revolving Advance.

The Mandatory Cost Rate shall be the rate determined by the Agent to be equal to
the arithmetic means (rounded upward, if necessary,  to 4 decimal places) as the
rate resulting from the application of the following formula:

[OBJECT OMITTED]

where, in each case, on the day of application of a formula:

X       is the percentage of Eligible  Liabilities (in excess of any stated
        minimum)  by  reference  to which  the Agent is  required  under or
        pursuant to the Act to maintain  cash ratio  deposits with the Bank
        of England;

F       is the rate of charge equal to the average of the respective  rates
        of charge  notified  to the Agent by each Bank as being  payable by
        that Bank to the FSA  pursuant  to  paragraph  2.02 or 2.03 (as the
        case may be) of the Fees  Regulations (but where, for this purpose,
        the figures at  paragraph  2.02b and 2.03b of the Fees  Regulations
        shall be deemed to be zero) and  expressed  in pounds per  (pound)1
        million of the Fee Base of that Bank;

L       is the BBA Sterling LIBOR rate quoted at or about 11.00 a.m.
        (London time) on  Telerate (now at page 3750) on that day;

S       is the level of interest bearing Special  Deposits,  expressed as a
        percentage of Eligible Liabilities,  which the Agent is required to
        maintain  by  the  Bank  of  England  (or  other   United   Kingdom
        governmental authorities or agencies); and

D       is the percentage rate per annum payable by the Bank of England to the
        Agent on Special Deposits.

(X,  L, S and D  shall  be  expressed  in the  formula  as  numbers  and  not as
percentages, e.g. if X = 0.15% and L = 7%, XL will be calculated as 0.15 x 7 and
not as 0.15% x 7%. A negative result obtained from subtracting D from L shall be
counted as zero.).

Each Bank shall  supply  such  information  and in such  detail as the Agent may
require for the purposes of calculating the above formulae. If any Bank fails to
notify  any rate or  figures  to the  Agent,  the  Mandatory  Cost Rate shall be
determined on the basis of the rate(s) or figure(s) notified to the Agent by the
remaining Bank(s).

The Mandatory Cost Rate  attributable  to an Revolving  Advance or other sum for
any period shall be calculated at or about 11.00 a.m. (London time) on the first
day of that period for the duration of that period.

The determination of the Mandatory Cost Rate in relation to any period shall, in
the absence of manifest  error, be conclusive and binding on the Parties to this
Agreement.

If there is any change in circumstance  (including the imposition of alternative
or additional requirements) which in the reasonable opinion of the Agent renders
or will render the above formula (or any element of the formula,  or any defined
term used in the formula)  inappropriate or  inapplicable,  the Agent (following
consultation with the Borrower and the Majority Banks) shall be entitled to vary
the same by giving notice to the Parties to this  Agreement.  Any such variation
shall,  in the  absence of  manifest  error,  be  conclusive  and binding on the
Parties  to this  Agreement  and shall  apply  from the date  specified  in such
notice.

For the purposes of this Schedule:

"Eligible  Liabilities" and "Special  Deposits" have the meanings given to those
terms  under  or  pursuant  to the  Act or by the  Bank  of  England  (as may be
appropriate), on the day of the application of the formula.

"Fee Base" has the meaning  given to that term for the purposes of, and shall be
calculated in accordance with, the Fees Regulations.

"Fees Regulations" means, as appropriate, either:

(a)     the Banking Supervision (Fees) Regulations 1998; or

(b)     such regulations as from time to time may be in force,  relating to
        the payment of fees for banking  supervision  in respect of periods
        subsequent to 31st March 1999.



<PAGE>


                                   SCHEDULE 4

                          FORM OF TRANSFER CERTIFICATE

                              TRANSFER CERTIFICATE


To:          National Westminster Bank Plc
             and the other parties
             to the Facilities Agreement (as defined below)

This transfer certificate  ("Transfer  Certificate") relates to a Revolving Loan
Agreement  dated [ ] August 1998 and made by (1) Huntingdon  Life Sciences Group
plc (2) Huntingdon Life Sciences Limited,  (3) Huntingdon Life Sciences Inc, (4)
the  Banks  and (5)  National  Westminster  Bank Plc as Agent  (the  "Facilities
Agreement" which term shall include any amendments or supplements thereto).

Terms defined in the Facilities Agreement shall, unless otherwise defined,  have
the same meanings when used in this Transfer Certificate.

I.           *[Details of Existing Bank] (the "Existing Bank"):

             1.          confirms that to the extent that details  appear in the
                         Schedule  to  this  Transfer   Certificate   under  the
                         headings     "Existing    Bank's     Commitment"    and
                         "Participation   in  the  Facilities",   those  details
                         accurately    summarise   its    Commitment   and   its
                         Participation in the Facilities all or part of which is
                         to be transferred; and

             2.          requests   [Details  of  Bank  Transferee]  (the  "Bank
                         Transferee") to accept and procure,  in accordance with
                         Clause 19 of the Facilities Agreement, the substitution
                         for the Existing Bank of the Bank Transferee in respect
                         of the amount  specified in the Schedule  hereto of its
                         Commitment and its  Participation  in the Facilities by
                         signing this Transfer Certificate.

II.          The Bank  Transferee  hereby  requests each of the  Borrowers,  the
             Banks and the Agent to accept this executed Transfer Certificate as
             being  delivered  under  and for the  purposes  of Clause 19 of the
             Facilities  Agreement so as to take effect in  accordance  with the
             terms of that  Clause  on [date of  transfer]  being the date on or
             before  which an  executed  copy of this  Transfer  Certificate  is
             delivered to the Agent.

III.         The Bank Transferee:

             1.    confirms that it has received a copy of the Facilities
                   Agreement together with such other documents and information
                   as it has requested in connection with this transaction;

             2.    confirms  that it has not  relied  and will not rely on
                   the  Existing  Bank to check or  enquire  on its behalf
                   into the legality, validity,  effectiveness,  adequacy,
                   accuracy  or  completeness  of any  such  documents  or
                   information; and

             3.    agrees  that it has not relied and will not rely on any
                   of the Existing Bank, the Agent and the Banks to assess
                   or  keep  under  review  on its  behalf  the  financial
                   condition, creditworthiness, condition, affairs, status
                   or nature of any of the Borrowers or any other party to
                   the Security.



IV.          The Bank  Transferee  undertakes with the Existing Bank and each of
             the other parties to the Facilities Agreement that it will perform,
             in accordance with their terms, all those obligations which, by the
             terms  of the  Facilities  Agreement,  will be  assumed  by it upon
             delivery of the executed copy of this Transfer  Certificate  to the
             Agent.

V.           On execution  of this  Transfer  Certificate  by the Agent on their
             behalf, the Borrowers and the Banks accept the Bank Transferee as a
             party to the Facilities  Agreement in substitution for the Existing
             Bank with respect to all those rights and obligations which, by the
             terms of the  Facilities  Agreement,  will be  assumed  by the Bank
             Transferee  after  delivery of the executed  copy of this  transfer
             Certificate to the Agent.

VI.          None of the Existing Bank, the Banks and the Agent:

             1.   makes any representation or warranty or assumes any
                  responsibility with respect to the legality, validity,
                  effectiveness, adequacy or enforceability of any of the
                  Financing Documents;  or

             2.   assumes any responsibility for the financial  condition
                  of any of the  Borrowers  or any other  party to any of
                  the  Financing  Documents or any other  document or for
                  the  performance and observance by the Borrowers or any
                  other party to the  Facilities  Agreement  or any other
                  document  of its or their  obligations  and any and all
                  conditions and  warranties,  whether express or implied
                  by law or otherwise, are excluded.

VII.         The Bank  Transferee  confirms that its Lending  Office and address
             for notices for the purposes of the Facilities Agreement are as set
             out in the Schedule hereto.

VIII.        The Existing Bank hereby gives notice to the Bank  Transferee  (and
             the  Bank  Transferee  hereby  acknowledges  and  agrees  with  the
             Existing  Bank) that the Existing  Bank is under no  obligation  to
             re-purchase  (or  in any  other  manner  to  assume,  undertake  or
             discharge   any   obligation  or  liability  in  relation  to)  the
             transferred  Commitment  and  Participation  at any time after this
             Transfer Certificate shall have taken effect.

IX.          Following the date upon which this Transfer Certificate shall have
             taken effect, without limiting the provisions hereof, each of the
             Bank Transferee and the Existing Bank hereby acknowledges and
             confirms to the other that in relation to the relative Commitment
             and Participation (or part thereof) variations, amendments
             or alterations to any of the terms of any of the Financing
             Documents arising in connection with any renegotiation or
             rescheduling of the obligations hereunder shall apply to and be
             binding on the Bank Transferee alone.

X.           This Transfer Certificate shall be construed in accordance with,
             and governed by, English law.

*[Bank Transferee]

By:..........................
   (Duly Authorised)


*[Existing Bank]

By:..........................
   (Duly Authorised)


The Agent on behalf of itself and all other parties to the Facilities Agreement.

By:..........................
   (Duly Authorised)

Dated:


<PAGE>


                                  THE SCHEDULE


Existing Bank's Commitment              Amount of Commitment Transferred




Participation in the Facilities         Amount of Participation Transferred






[Bank Transferee]

Lending Office    Address for notices
*                 *
                  Attention:                *
                  Telex:            *
                  Answerback:       *



<PAGE>
<TABLE>

                                   SCHEDULE 5

                                EXISTING SECURITY
<CAPTION>

                                 Document                                     Executed by       Date
<S>                                                                            <C>             <C>
    
1.  Guarantee and Debenture in favour of the Agent as amended by a              Parent          1.11.95
    Supplemental Deed dated 20th January 1998 and a Supplemental Deed
    dated 26th February 1998

2.  Guarantee  and  Debenture  in favour of the  Agent as  amended  by a        HLSL
    21.11.95  Supplemental  Deed dated 20th January  1998 and a Supplemental
    Deed dated 26th February 1998

3.  Guarantee in favour of the Agent as amended by a Supplemental Deed          HLS             21.11.95
    dated 20th January 1998 and a Supplemental Deed dated 26th
    February 1998

4.  Security Agreement in favour of the Agent as amended by a                   HLS             21.11.95
    Supplemental Deed dated 20th January 1998 and a Supplemental Deed
    dated 26th February 1998

5.  Mortgage  in favour  of the Agent  over the New  Jersey  Property  as       HLS
    16.01.98 amended by a Supplemental Deed dated 26th February 1998

6.  Equipment Mortgage in favour of the Agent                                   HLSL            20.04.98

7.  Security Agreement incorporating an Equipment Mortgage and a                HLS             30.04.98
    Charge over an Operating Account in favour of the Agent

</TABLE>

<PAGE>


                                           SCHEDULE 6

                                      CONDITIONS PRECEDENT


The Revolving Credit Facility shall be made available to the Borrowers when:

(i)   the Agent has received the following in form and substance satisfactory
      to it:

      (a)     copies,   each  certified  to  be  true,  complete  and
              up-to-date  copies,  of  resolutions  of  each  of  the
              relevant Borrower's boards of directors authorising the
              acceptance  and execution of this  Agreement and in the
              case of the Parent  unanimously  supporting,  approving
              and  recommending  the Placings to the  shareholders of
              the Parent;

      (b)     certified copies of the Investor Placing Agreement and the
              Shareholder Placing Agreement duly executed by the parties
              thereto; and

      (c)     a certified copy of the Circular.

(ii)  the Transaction Proceeds are received by the Agent in the Deposit Account;

(iii) the Agent has received (on behalf of the Banks) the Participation Fee
      referred to in Clause 16.4.1;

(iv)  NatWest has received  repayment in full and on a permanent basis of
      all Indebtedness outstanding in respect of the Bridging Facility.



<PAGE>


                                   SCHEDULE 7

                          PARTICIPATION IN RISK SHARING


Bank                                              Participation Percentage

National Westminster Bank Plc                          49.693%

Comerica                                               21.648%

The First National Bank of Maryland                    28.454%




<PAGE>




The Borrowers

SIGNED by                  )
                           )
for and on behalf of       )        CHRISTOPHER CLIFFE
HUNTINGDON LIFE SCIENCES   )
GROUP HOLDINGS plc         )




SIGNED by                  )
                           )
for and on behalf of       )        CHRISTOPHER CLIFFE
HUNTINGDON LIFE SCIENCES   )
LIMITED                    )




SIGNED by                  )
                           )       CHRISTOPHER CLIFFE
for and on behalf of       )
HUNTINGDON LIFE SCIENCES INC.)




The Agent

SIGNED by                  )
                           )
for and on behalf of       )        S J HAMILTON
NATIONAL WESTMINSTER       )
BANK Plc                   )




The Banks

SIGNED by                  )
                           )
for and on behalf of       )        S J HAMILTON
NATIONAL WESTMINSTER       )
BANK Plc                   )




SIGNED by                  )
                           )
for and on behalf of       )        RONALD LAPOINTE
THE FIRST NATIONAL BANK OF )
MARYLAND                   )




SIGNED by                  )
                           )        HENRY HADJAS
for and on behalf of       )
COMERICA BANK              )