Document:

EXHIBIT 10.59

                      AMENDED AND RESTATED CREDIT AGREEMENT

                  THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
February 27, 2002, is by and between WTC INDUSTRIES, INC., a Delaware
corporation, PENTAPURE INCORPORATED, a Minnesota corporation. (collectively, the
"Borrowers" and each a "Borrower), and U.S. BANK NATIONAL ASSOCIATION, a
national banking association (the "Lender").

                                    RECITALS

                  WHEREAS, the Borrowers and Robert Klas, Sr. and the Lender
previously entered into that certain Credit Agreement dated as of March 29,
2000, (as amended, the "Prior Credit Agreement") providing for the extension of
certain credit facilities by the Lender in favor of the Borrowers thereunder;
and

                  WHEREAS, the Borrowers have requested that the Lender amend
and restate the provisions of the Prior Credit Agreement and the Lender has
agreed to do so upon the terms and subject to the conditions of this Amended and
Restated Credit Agreement;

                  NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the parties agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  Section 1.1 Defined Terms. As used in this Agreement the
following terms shall have the following respective meanings:

                  "Adjusted Eurodollar Rate": With respect to each day, the rate
(rounded upward, if necessary, to the next higher one hundredth of one percent)
determined by dividing the Eurodollar Rate for such date by 1.00 minus
Eurodollar Reserve Percentage.

                  "Advance": Any portion of the outstanding Revolving Loan or
the Term Loan.

                  "Agreement": This Amended and Restated Credit Agreement.

                  "Applicable Margin": 2.50%.

                  "Board": The Board of Governors of the Federal Reserve System
or any successor thereto.

                  "Borrowing Base": As defined in Section 2.5.

                  "Borrowing Base Certificate": As defined in Section 2.5.

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                  "Business Day": Any day (other than a Saturday, Sunday or
legal holiday in the State of Minnesota) on which national banks are permitted
to be open at the location of the Lender.

                  "Cash Flow Leverage Ratio": For any period of determination
the ratio of

                  (a) the Borrowers' interest bearing indebtedness,

                  to

                  (b) the Borrowers' EBITDA for such period,

                  in each case determined on a consolidated basis in accordance
with GAAP.

                  "Closing Date": February 27, 2002.

                  "Commitment Fees": As defined in Section 2.9.

                  "Commitments": The Revolving Commitment and the Term Loan
Commitment.

                  "Default": Any event which, with the giving of notice (whether
such notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.

                  "EBITDA": For any period of determination, the consolidated
net income of the Borrowers before deductions for income taxes, interest
expense, depreciation and amortization, all as determined in accordance with
GAAP.

                  "Eurodollar Business Day": A Business Day which is also a day
for trading by and between banks in United States dollar deposits in the
interbank Eurodollar market and a day on which banks are open for business in
New York City.

                  "Eurodollar Rate": With respect to each day, the rate per
annum at which United States dollar deposits having a maturity of thirty days
are quoted on Telerate Page 3750, at 10:00 A.M. (Minneapolis time) on such date
or, if such date is not a Eurodollar Business Day, the most recent Eurodollar
Business Day. "Telerate Page 3750" means the display designated as page 3750 on
Telerate System Incorporated (or such other page as may replace page 3750 on
such service for the purpose of displaying London interbank offered rates of
major banks for United States dollar deposits).

                  "Eurodollar Rate Advance": An Advance with respect to which
the interest rate is determined by reference to the Adjusted Eurodollar Rate.

                  "Eurodollar Reserve Percentage": As of any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve requirement
(including any basic, supplemental or emergency reserves) for a member Lender of
the Federal Reserve System, with deposits comparable in amount to those held by
the Lender, in respect of "Eurocurrency Liabilities" as such term is defined in
Regulation D of the Board. The rate of interest applicable to any outstanding
Eurodollar Rate Advances shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.

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                  "Event of Default": Any event described in Section 7.1.

                  "Fixed Charge Coverage Ratio": For any period of
determination, the ratio of

                  (a) the Borrowers EBITDA less cash taxes, cash distributions
and unfinanced capital expenditures,

                  to

                  (b) the Borrowers cash interest expense and mandatory payments
on principal indebtedness,

                  in each case determined on a consolidated basis for such
period in accordance with GAAP.

                  "GAAP": Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of any
date of determination.

                  "Letter of Credit": An irrevocable letter of credit issued by
the Lender for the account of a Borrower pursuant to this Agreement.

                  "Lien": With respect to any Person, any security interest,
mortgage, pledge, lien, charge, encumbrance, title retention agreement or
analogous instrument or device (including the interest of each lessor under any
capitalized lease), in, of or on any assets or properties of such Person, now
owned or hereafter acquired, whether arising by agreement or operation of law.

                  "Loan Documents": This Agreement, the Notes, and any documents
described in Section 3.1(a)(vii).

                  "Notes": The Revolving Note and the Term Note, any note
hereafter issued under this Agreement and as each of the same may be modified,
amended, extended or renewed from time to time.

                  "Person": Any natural person, corporation, partnership,
limited partnership, joint venture, firm, association, trust, unincorporated
organization, government or governmental agency or political subdivision or any
other entity, whether acting in an individual, fiduciary or other capacity.

                  "Regulatory Change": Any change after the date of this
Agreement in federal, state or foreign laws or regulations or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of banks including the Lender under any federal, state or foreign
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.

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                  "Revolving Commitment": The obligation of the Lender to make
Advances to the Borrowers on the Revolving Loan in an aggregate principal amount
outstanding at any time not to exceed the Revolving Commitment Amount upon the
terms and subject to the conditions and limitations of this Agreement.

                  "Revolving Commitment Amount": As defined in Section 2.1(a).

                  "Revolving Commitment Fees": As defined in Section 2.9.

                  "Revolving Loan": As defined in Section 2.1(a).

                  "Revolving Maturity Date": As defined in Section 2.1(a).

                  "Revolving Note": As defined in Section 2.3.

                  "Subsidiary": Any corporation or other entity of which
securities or other ownership interests having ordinary voting power for the
election of a majority of the board of directors or other Persons performing
similar functions are owned by a Borrower either directly or through one or more
Subsidiaries.

                  "Term Loan": As defined in Section 2.1(b).

                  "Term Loan Commitment": The obligation of the Lender to make a
term loan to the Borrowers in the Term Loan Commitment Amount upon the terms and
subject to the conditions and limitations of this Agreement.

                  "Term Loan Commitment Amount": As defined in Section 2.1(b).

                  "Term Note": As defined in Section 2.3.

                  "Total Liabilities": At the time of any determination, the
amount, on a consolidated basis of all items of indebtedness of the Borrowers
and the Subsidiaries that would constitute "liabilities" for balance sheet
purposes in accordance with GAAP.

                  "Total Revolving Outstandings": As of any date of
determination, the sum of (a) the aggregate unpaid principal balance of
Revolving Loans outstanding on such date, (b) the aggregate maximum amount
available to be drawn under Letters of Credit outstanding on such date and (c)
the aggregate amount of Unpaid Drawings on such date.

                  "Unpaid Drawing": As defined in Section 2.18.

                  "Warrant Agreement": That certain warrant agreement dated as
of March 29, 2000 between the Borrower WTC Industries, Inc. and the Lender.

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                  Section 1.2 Accounting Terms and Calculations. Except as may
be expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP.

                  Section 1.3 Other Definitional Terms, Terms of Construction.
The words "hereof," "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to Sections, Exhibits,
Schedules and the like references are to Sections, Exhibits, Schedules and the
like of this Agreement unless otherwise expressly provided. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." Unless the context in which used herein otherwise clearly requires,
"or" has the inclusive meaning represented by the phrase "and/or." All
incorporations by reference of covenants, terms, definitions or other provisions
from other agreements are incorporated into this Agreement as if such provisions
were fully set forth herein, and include all necessary definitions and related
provisions from such other agreements. All covenants, terms, definitions and
other provisions from other agreements incorporated into this Agreement by
reference shall survive any termination of such other agreements until the
obligations of the Borrower under this Agreement and the Notes are irrevocably
paid in full and the Revolving Commitment is terminated.

                                   ARTICLE II

                                TERMS OF LENDING

                  Section 2.1 The Commitments. On the terms and subject to the
conditions hereof, the Lender agrees to make the following lending facilities
available to the Borrowers:

                           2.1 (a) Revolving Credit. A revolving loan (the
         "Revolving Loan") to the Borrowers available as Advances at any time
         and from time to time from the Closing Date to May 1, 2004 (the
         "Revolving Maturity Date"), during which period a Borrower may borrow,
         repay and reborrow in accordance with the provisions hereof, provided,
         that the unpaid principal amount of revolving Advances shall not at any
         time exceed $3,000,000 (the "Revolving Commitment Amount"); and
         provided, further, that no revolving Advance will be made if, after
         giving effect thereto, Total Revolving Outstandings would exceed the
         Borrowing Base.

                           2.1(b) Term Loan. A term loan (the "Term
         Loan") to the Borrowers in an aggregate amount not to exceed $5,000,000
         (the "Term Loan Commitment Amount").

                           2.1(c) Joint and Several Liability. The obligations
         of each Borrower hereunder and under the Revolving Note, the Term Note
         and any other documents executed by it in connection with loans made
         under this Agreement shall be joint and several; provided that in no
         event shall the amount payable by any such Borrower exceed an aggregate
         amount equal to the largest amount that would not render such
         Borrower's obligations subject to avoidance under Section 548 of the
         United States Bankruptcy Code or any applicable provision of comparable
         state law.

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                  Section 2.2 Procedure for Advances and the Term Loan. Any
request by a Borrower for an Advance on the Revolving Loan shall be in writing
or by telephone and must be given so as to be received by the Lender not later
than 2:00 (St. Paul, Minnesota time) on the requested Advance date. Each request
for an Advance shall be irrevocable and shall be deemed a representation by the
Borrowers that on the requested Advance date and after giving effect to such
Advance the applicable conditions specified in Article III have been and will
continue to be satisfied. Each request for an Advance shall specify (i) the
requested Advance date (which must be a Eurodollar Business Day), and (ii) the
amount of such Advance which shall be in a minimum amount of $10,000 or, if
more, an integral multiple thereof. Unless the Lender determines that any
applicable condition specified in Article III has not been satisfied, the Lender
will make available to the Borrowers at the Lender's principal office in St.
Paul, Minnesota in immediately available funds not later than 3:00 PM (St. Paul
time) on the requested Advance date the amount of the requested Advance. On the
Closing Date, unless the Lender determines that any applicable condition
specified in Article III has not been satisfied, the Lender will make available
to the Borrowers at the Lender's principal office in St. Paul, Minnesota in
immediately available funds, not later the 3:00 PM (St. Paul time) the principal
amount of the Term Loan.

                  Section 2.3 The Notes. The Advances on the Revolving Loan
shall be evidenced by a single promissory note of the Borrower (the "Revolving
Note"), substantially in the form of Exhibit 2.3 (a) hereto, in the amount of
the Revolving Commitment Amount originally in effect. The Term Loan shall be
evidenced by a promissory note (the "Term Note"), substantially in the form of
Exhibit 2.3 (b) hereto, in an amount equal to the Term Loan Commitment Amount.
The Lender shall enter in its ledgers and records the amount of each Advance
made and the payments made thereon, and the Lender is authorized by the Borrower
to enter on a schedule attached to the Notes a record of such Advances and
payments.

                  Section 2.4 Interest Rates, Interest Payments and Default
Interest. Interest shall accrue and be payable on the Advances and the Term Loan
as follows:

                           2.4 (a) Each Advance on the Revolving Loan shall bear
interest on the unpaid principal amount thereof at a rate per annum equal to the
sum of (i) the Adjusted Eurodollar Rate, plus (ii) the Applicable Margin.

                           2.4 (b) Each Advance on the Term Loan shall bear
interest on the unpaid principal amount thereof at a rate per annum equal to the
sum of (i) the Adjusted Eurodollar Rate, plus (ii) the Applicable Margin.

                           2.4 (c) Upon the happening of any Event of Default
and during the continuance thereof, each Advance and the Term Loan, as
applicable, shall, at the option of the Lender, bear interest at the rate
otherwise applicable thereto, plus 2.0%.

                           2.4 (d) Interest shall be payable on all Advances and
on the Term Loan, as applicable, on the first day of each month commencing April
1, 2002 and on the first day of each month thereafter and on the Revolving
Maturity Date for Revolving Loans and on maturity of the Term Loan; provided
that interest under clause (c) shall be payable on demand.

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                  Section 2.5 Borrowing Base and Mandatory Prepayment. The
Borrowing Base shall be equal to 80% of the face value of Eligible Receivables.
"Eligible Receivables" is defined on Schedule 1 hereto. The Borrowers shall
deliver borrowing base certificates in the form attached hereto (a "Borrowing
Base Certificate") to the Lender (i) dated as of the last day of each month, by
the 30th day of the next month and (ii) dated as of the date the Lender requests
such a certificate within 10 days of the Lender's request for the certificate.
Each such certificate shall state the amount of Eligible Receivables and the
Borrowing Base as of the end of the previous month or the date of the Lender's
request, as appropriate. Any limitations on Advances or required prepayments
relating to the Borrowing Base shall be based on the latest Borrowing Base
Certificate the Borrowers shall have delivered to the Lender. If Total Revolving
Outstandings at any time exceed the Borrowing Base, the Borrowers shall
immediately prepay the Revolving Note by the amount of that excess.

                  Section 2.6 Repayment.

                           2.6 (a) Repayment of the Revolving Note. Principal of
         the Revolving Note shall be payable in full on the Revolving Maturity
         Date.

                           2.6 (b) Repayment of the Term Note. Principal of the
         Term Note is payable as provided in the Term Note.

                           Section 2.7 Optional Prepayments. The Borrower may
         prepay Advances and the Term Loan, in whole or in part, at any time,
         without premium or penalty. Any prepayment must be accompanied by
         accrued and unpaid interest on the amount prepaid. Each partial
         prepayment shall be in a minimum amount of $10,000. Amounts paid
         (unless following an acceleration or upon termination of the Commitment
         in whole) or prepaid on Advances on the Revolving Loan under this
         Section may be reborrowed upon the terms and subject to the conditions
         and limitations elsewhere in this Agreement. Amounts paid on the Term
         Loan may not be reborrowed.

                  Section 2.8 Optional Reduction of Revolving Commitment Amounts
or Termination of Commitments. The Borrowers may, at any time, upon not less
than 5 Business Days prior written notice to the Lender, reduce the Revolving
Commitment Amount, with any such reduction in a minimum amount of $100,000;
provided, however, the Borrowers may not at any time reduce the Revolving
Commitment Amount below the then unpaid principal balance of the Revolving Note.
The Borrowers may, at any time, upon not less than 30 Business Days prior
written notice to the Lender, terminate the Revolving Commitment in its
entirety. Upon termination of the Revolving Commitment pursuant to this Section,
the Borrower shall pay to the Lender all unpaid obligations of the Borrower to
the Lender hereunder.

                  Section 2.9 Revolving Commitment Fee. The Borrowers shall pay
to the Lender fees (the "Revolving Commitment Fees") in an amount determined by
applying a rate of 0.25% per annum to the average daily unused Revolving
Commitment Amount for the period from the date of this Agreement to the
Revolving Maturity Date. Such Revolving Commitment Fees are payable in arrears
monthly on the last day of each month and on the Revolving Maturity Date.

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                  Section 2.10 Computation. Revolving Commitment Fees and
interest on the Notes shall be computed on the basis of actual days elapsed and
a year of 360 days.

                  Section 2.11 Capital Adequacy. In the event that any
Regulatory Change reduces or shall have the effect of reducing the rate of
return on the Lender's capital or the capital of its parent corporation (by an
amount the Lender deems material) as a consequence of the Commitments and/or the
Advances to a level below that which the Lender or its parent corporation could
have achieved but for such Regulatory Change (taking into account the Lender's
policies and the policies of its parent corporation with respect to capital
adequacy), then the Borrower shall, within five days after written notice and
demand from the Lender, pay to the Lender additional amounts sufficient to
compensate the Lender or its parent corporation for such reduction. Any
determination by the Lender under this Section and any certificate as to the
amount of such reduction given to the Borrower by the Lender shall be final,
conclusive and binding for all purposes, absent error.

                  Section 2.12 Use of Proceeds. The proceeds of the initial
Advance on the Revolving Loan shall be used first for working capital. Any
remaining balance of the initial Advance on the Revolving Loan and the proceeds
of any subsequent Advance thereon shall be used for a Borrower's general
business purposes in a manner not in conflict with any of the Borrowers'
covenants in this Agreement. The proceeds of the Term Loan shall be used to
refinance existing term indebtedness and for capital expenditures.

                  Section 2.13 Increased Cost. If any Regulatory Change:

                  (a) shall subject the Lender to any tax, duty or other charge
         with respect to its Eurodollar Rate Advances, the Notes, its obligation
         to make Eurodollar Rate Advances or shall change the basis of taxation
         of payment to the Lender of the principal of or interest on Eurodollar
         Rate Advances or any other amounts due under this Agreement in respect
         of Eurodollar Rate Advances or its obligation to make Eurodollar Rate
         Advances (except for changes in the rate of tax on the overall net
         income of the Lender imposed by the jurisdiction in which the Lender's
         principal office is located); or

                  (b) shall impose, modify or deem applicable any reserve,
         special deposit, capital requirement or similar requirement (including,
         without limitation, any such requirement imposed by the Board, but
         excluding with respect to any Eurodollar Rate Advance any such
         requirement to the extent included in calculating the applicable
         Adjusted Eurodollar Rate) against assets of, deposits with or for the
         account of, or credit extended by, the Lender or shall impose on the
         Lender or on the interbank Eurodollar market any other condition
         affecting its Eurodollar Rate Advances, the Notes or its obligation to
         make Eurodollar Rate Advances;

and the result of any of the foregoing is to increase the cost to the Lender of
making or maintaining any Eurodollar Rate Advance, or to reduce the amount of
any sum received or receivable by the Lender under this Agreement or under the
Notes, then, within 30 days after demand by the Lender, the Borrower shall pay
to the Lender such additional amount or amounts as will compensate the Lender
for such increased cost or reduction. The Lender will promptly notify the
Borrower of any event of which it has knowledge, occurring after the date
hereof, which will entitle the Lender to compensation pursuant to this Section.
A certificate of the Lender claiming compensation under this Section, setting
forth the additional amount or amounts to be paid to it hereunder and stating in
reasonable detail the basis for the charge and the method of computation, shall
be conclusive in the absence of error. In determining such amount, the Lender
may use any reasonable averaging and attribution methods.

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                  Section 2.14 Structuring Fee. The provisions of the Warrant
Agreement shall remain in full force and effect and all references therein to
the Credit Agreement shall be deemed to be references to this Agreement. All
references to Section 2.19 of the Credit Agreement shall be deemed references to
this Section 2.14.

                  Section 2.15 Letters of Credit. Upon the terms and subject to
the conditions of this Agreement, the Lender agrees to issue Letters of Credit
for the account of a Borrower from time to time between the Closing Date and the
Revolving Maturity Date in such amounts as a Borrower shall request up to an
aggregate amount at any time outstanding not exceeding the Revolving Commitment
Amount; provided that no Letter of Credit will be issued in any amount which,
after giving effect to such issuance, would cause Total Revolving Outstandings
to exceed the lesser of the Revolving Commitment Amount or the Borrowing Base.

                  Section 2.16 Procedures for Letters of Credit. Each request
for a Letter of Credit shall be made by a Borrower in writing, by telex,
facsimile transmission or electronic conveyance received by the Lender by 2:00
p.m., Minneapolis time, on a Business Day which is not less than one Business
Day preceding the requested date of issuance (which shall also be a Business
Day). Each request for a Letter of Credit shall be deemed a representation by
the Borrowers that on the date of issuance of such Letter of Credit and after
giving effect thereto the applicable conditions specified in Article III have
been and will be satisfied. The Lender may require that such request be made on
such letter of credit application and reimbursement agreement form as the Lender
may from time to time specify, along with satisfactory evidence of the authority
and incumbency of the officials of the Borrower making such request.

                  Section 2.17 Terms of Letters of Credit. Letters of Credit
shall be issued in support of obligations of a Borrower. All Letters of Credit
must expire not later than the Business Day preceding the Revolving Commitment
Maturity Date. No Letter of Credit may have a term longer than 12 months.

                  Section 2.18 Agreement to Repay Letter of Credit Drawings. If
the Lender has received documents purporting to draw under a Letter of Credit
that the Lender believes conform to the requirements of the Letter of Credit, or
if the Lender has decided that it will comply with the Borrower's written or
oral request or authorization to pay a drawing on any Letter of Credit that the
Lender does not believe conforms to the requirements of the Letter of Credit, it
will notify the Borrowers of that fact. The Borrowers shall reimburse the Lender
by 9:30 a.m. (Minneapolis time) on the day on which such drawing is to be paid
in immediately available funds in an amount equal to the amount of such drawing.
Any amount by which the Borrowers have failed to reimburse the Lender for the
full amount of such drawing by 10:00 a.m. on the date on which the Lender in its
notice indicated that it would pay such drawing, until reimbursed from the
proceeds of Loans pursuant to Section 2.20 is an "Unpaid Drawing."

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                  Section 2.19 Obligations Absolute. The obligation of the
Borrowers under Section 2.18 to repay the Bank for any amount drawn on any
Letter of Credit and to repay the Bank for any Revolving Loans made under
Section 2.20 to cover Unpaid Drawings shall be absolute, unconditional and
irrevocable, shall continue for so long as any Letter of Credit is outstanding
notwithstanding any termination of this Agreement, and shall be paid strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including without limitation the following circumstances:

                  (a) Any lack of validity or enforceability of any Letter of
         Credit;

                  (b) The existence of any claim, setoff, defense or other right
         which a Borrower may have or claim at any time against any beneficiary,
         transferee or holder of any Letter of Credit (or any Person for whom
         any such beneficiary, transferee or holder may be acting), the Lender
         or any other Person, whether in connection with a Letter of Credit,
         this Agreement, the transactions contemplated hereby, or any unrelated
         transaction; or

                  (c) Any statement or any other document presented under any
         Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect whatsoever.

Neither the Lender nor its officers, directors or employees shall be liable or
responsible for, and the obligations of the Borrowers to the Lender shall not be
impaired by:

                  (i)      The use which may be made of any Letter of Credit or
                           for any acts or omissions of any beneficiary,
                           transferee or holder thereof in connection therewith;

                  (ii)     The validity, sufficiency or genuineness of
                           documents, or of any endorsements thereon, even if
                           such documents or endorsements should, in fact, prove
                           to be in any or all respects invalid, insufficient,
                           fraudulent or forged;

                  (iii)    The acceptance by the Lender of documents that appear
                           on their face to be in order, without responsibility
                           for further investigation, regardless of any notice
                           or information to the contrary; or

                  (iv)     Any other action of the Lender in making or failing
                           to make payment under any Letter of Credit if in good
                           faith and in conformity with U.S. or foreign laws,
                           regulations or customs applicable thereto.

Notwithstanding the foregoing, the Borrowers shall have a claim against the
Lender, and the Lender shall be liable to the Borrowers, to the extent, but only
to the extent, of any direct, as opposed to consequential, damages suffered by a
Borrower which such Borrower proves were caused by the Lender's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms thereof.

                  Section 2.20 Loans to Cover Unpaid Drawings. Whenever any
Unpaid Drawing exists, the Lender is authorized (and each Borrower here so
authorize the Lender) to, and shall, make a Revolving Loan to the Borrower in an

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amount equal to the amount of the Unpaid Drawing. The Lender shall apply the
proceeds of such Revolving Loan directly to reimburse itself for such Unpaid
Drawing. If at the time the Lender makes a Revolving Loan pursuant to the
provisions of this Section, the applicable conditions precedent specified in
Article III shall not have been satisfied, the Borrowers shall pay to the Lender
interest on the funds so advanced at a floating rate per annum equal to the sum
of the Adjusted Eurodollar Rate plus the Applicable Margin plus two percent
(2.00%).

                  Section 2.21 Letter of Credit Fees. For each Letter of Credit
issued, the Borrowers shall pay to the Lender, in advance payable on the date of
issuance, a fee (a "Letter of Credit Fee") in an amount determined by applying a
per annum rate of two percent (2.0%) to the original face amount of the Letter
of Credit for the period from the date of issuance to the scheduled expiration
date of such Letter of Credit, and for any renewal thereof, if any. In addition
to the Letter of Credit Fee, the Borrowers shall pay to the Lender, on demand,
all issuance, amendment, drawing and other fees regularly charged by the Lender
to its letter of credit customers and all out-of-pocket expenses incurred by the
Lender in connection with the issuance, amendment, administration or payment of
any Letter of Credit.

                                   ARTICLE III

                              CONDITIONS PRECEDENT

                  Section 3.1 Conditions of Initial Revolving Advance and Term
Loan. The obligation of the Lender to make the initial Advance on the Revolving
Loan and the Term Loan hereunder shall be subject to the prior or simultaneous
fulfillment of each of the following conditions:

                           3.1 (a) Documents. The Lender shall have received the
following:

                           (i) The Notes executed by a duly authorized officer
                  (or officers) of the Borrowers, dated the Closing Date.

                           (ii) A copy of the corporate resolutions of each
                  Borrower authorizing the execution, delivery and performance
                  of this Agreement and the Notes and containing an incumbency
                  certificate showing the names and titles, and bearing the
                  signatures of, the officers of such Borrower authorized to
                  execute this Agreement and the Notes, certified as of the
                  Closing Date by the Secretary or an Assistant Secretary of
                  each Borrower.

                           (iii) A copy of the Articles or Certificate of
                  Incorporation of each Borrower with all amendments thereto,
                  certified by the appropriate governmental official of the
                  jurisdiction of its incorporation as of a date not more than
                  30 days prior to the Closing Date (or a certificate of no
                  change).

                           (iv) A certificate of good standing for each Borrower
                  in the jurisdiction of its incorporation and in Minnesota,
                  certified by the appropriate governmental officials as of a
                  date not more than 30 days prior to the Closing Date.

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                           (v) A copy of the bylaws of each Borrower, certified
                  as of the Closing Date by the Secretary or an Assistant
                  Secretary of such Borrower (or a certificate of no change).

                           (vi) The opinion of counsel to the Borrowers covering
                  such matters as the Lender may request.

                           (vii) A Security Agreement in form and substance
                  satisfactory to the Lender and duly executed by each Borrower.

                           (viii) The initial Borrowing Base Certificate
                  required under Section 2.5.

                           (ix) A reaffirmation of subordination agreement in
                  form and substance satisfactory to the Lender duly executed by
                  Borrower WTC Industries, Inc. and Robert Klas, Sr.

                           (x) The Lender shall have received a letter from the
                  Borrowers' accountants in form and substance reasonably
                  satisfactory to the Lender verifying that the audited
                  consolidated financial statements of the Borrowers for the
                  fiscal year ended December 31, 2001 when issued will have no
                  significant variations from the preliminary statements for
                  such period previously furnished to the Lender.

                           3.1 (b) Other Matters. All organizational and legal
proceedings relating to the Borrower and all instruments and agreements in
connection with the transactions contemplated by this Agreement shall be
satisfactory in scope, form and substance to the Lender and its counsel, and the
Lender shall have received all information and copies of all documents,
including records of corporate proceedings, which it may reasonably have
requested in connection therewith, such documents where appropriate to be
certified by the proper Borrower or governmental authorities.

                           3.1 (c) Fees and Expenses. The Lender shall have
received all fees and other amounts due and payable by the Borrowers on or prior
to the Closing Date, including the reasonable fees and expenses of counsel to
the Lender payable pursuant to Section 8.2.

                           3.1 (d) Perfection. The Security Agreement (or
financing statements with respect thereto) shall have been appropriately filed
to the satisfaction of the Lender and the priority and perfection of the Lien
created thereby shall have been established to the satisfaction of the Lender.

                  Section 3.2 Conditions Precedent to all Advances. The Lender
shall not have any obligation to make any Advances (including Advances after the
initial Advance) hereunder unless all representations and warranties of the
Borrower made in this Agreement remain true and correct and no Default or Event
of Default exists.

                                       12
<PAGE>

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  Each Borrower represents and warrants to the Lender:

                  Section 4.1 Organization, Standing, Etc. Each Borrower is a
corporation duly incorporated and validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted, to
enter into this Agreement and to issue the Notes issued by it and to perform its
obligations hereunder and thereunder. This Agreement and the Notes have been
duly authorized by all necessary corporate action and when executed and
delivered will be the legal and binding obligations of the Borrowers. The
execution and delivery of this Agreement and the Notes will not violate any
Borrower's Articles or Certificate of Incorporation or bylaws or any law
applicable to such Borrower. No governmental consent or exemption is required in
connection with any Borrower's execution and delivery of this Agreement and the
Notes.

                  Section 4.2 Financial Statements and No Material Adverse
Change. The Borrowers' audited consolidated financial statements for WTC
Industries, Inc. as at December 31, 2000 and its unaudited consolidated
financial statements for WTC Industries, Inc. as at December 31, 2001, as
heretofore furnished to the Lender, have been prepared in accordance with GAAP.
Neither Borrower has any material obligation or liability not disclosed in such
financial statements, and there has been no material adverse change in the
condition of either Borrower since the dates of such financial statements.

                  Section 4.3 Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of any Borrower, threatened against or
affecting any Borrower which, if determined adversely to such Borrower, would
have a material adverse effect on the condition of any Borrower. No Borrower is
in violation of any law or regulation (including environmental laws and
regulations and laws relating to employee benefit plans) where such violation
could reasonably be expected to impose a material liability on any Borrower.

                  Section 4.4 Taxes. Each Borrower has filed all federal, state
and local tax returns required to be filed and has paid or made provision for
the payment of all taxes due and payable pursuant to such returns and pursuant
to any assessments made against it or any of its property (other than taxes,
fees or charges the amount or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
accordance with GAAP have been provided on the books of such Borrower).

                  Section 4.5 Subsidiaries. WTC Industries, Inc. has no
Subsidiaries other than PentaPure Incorporated. PentaPure Incorporated has no
Subsidiaries.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

                  Until the Revolving Commitment shall have expired or been
terminated and the Notes evidencing the Revolving Loan and the Term Loan and all
of the Borrowers' other obligations to the Lender under this Agreement shall
have been paid in full, unless the Lender shall otherwise consent in writing:

                                       13
<PAGE>

                  Section 5.1 Financial Statements and Reports. The Borrowers
will furnish to the Lender:

                           5.1 (a) As soon as available and in any event within
120 days after the end of each fiscal year of the Borrowers, audited
consolidated financial statements of the Borrowers consisting of at least
statements of income, cash flow and changes in stockholders' equity, and a
balance sheet as at the end of such year, setting forth in each case in
comparative form corresponding figures from the previous annual audit, certified
by independent certified public accountants selected by the Borrower and
acceptable to the Lender.

                           5.1 (b) As soon as available and in any event within
45 days after the end of each fiscal quarter, unaudited consolidated financial
statements for the Borrowers for such quarter and for the period from the
beginning of such fiscal year to the end of such fiscal quarter, substantially
similar to the annual audited statements.

                           5.1 (c) As soon as practicable and in any event
within 30 days after the end of each fiscal quarter, a statement signed by the
chief financial officer of the Borrowers stating that as at the end of such
fiscal quarter there did not exist any Default or Event of Default or, if such
Default or Event of Default existed, specifying the nature and period of
existence thereof and what action the Borrower proposes to take with respect
thereto.

                           5.1 (d) Immediately upon any officer of a Borrower
becoming aware of any Default or Event of Default, a notice describing the
nature thereof and what action the Borrowers propose to take with respect
thereto.

                           5.1(e) As soon as practicable and in any event within
30 days after the end of each month a Borrowing Base Certificate and, upon
request of the Lender, an accounts receivable aging report.

                           5.1(f) From time to time, such other information
regarding the business, operation and financial condition of the Borrower as the
Lender may reasonably request.

                  Section 5.2 Corporate Existence. Subject to the provisions of
Section 6.1, each Borrower will maintain its corporate existence in good
standing under the laws of its jurisdiction of incorporation and its
qualification to transact business in each jurisdiction where failure so to
qualify would permanently preclude such Borrower from enforcing its rights with
respect to any material asset or would expose such Borrower to any material
liability.
                  Section 5.3 Insurance. Each Borrower will maintain with
financially sound and reputable insurance companies such insurance as may be
required by law and such other insurance in such amounts and against such
hazards as is customary in the case of reputable corporations engaged in the
same or similar business and similarly situated.

                  Section 5.4 Payment of Taxes and Claims. Each Borrower will
file all tax returns and reports which are required by law to be filed by it and
will pay before they become delinquent, all taxes, assessments and governmental
charges and levies imposed upon it or its property and all claims or demands of
any kind (including those of suppliers, mechanics, carriers, warehousemen,
landlords and other like Persons) which, if unpaid, might result in the creation
of a Lien upon its property.

                                       14
<PAGE>

                  Section 5.5 Inspection. Each Borrower will permit any Person
designated by the Lender to visit and inspect any of the properties, books and
financial records of such Borrower, to examine and to make copies of the books
of accounts and other financial records of such Borrower, and to discuss the
affairs, finances and accounts of such Borrower with its officers at such
reasonable times and intervals as the Lender may designate. Each Borrower shall
also allow the Lender and its agents to conduct periodic collateral audits of
such Borrower's accounts and inventory at such intervals as the Lender may
choose, and the Borrower shall pay the Lender's costs of such audits.

                  Section 5.6 Maintenance of Properties. Each Borrower will
maintain its properties in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.

                  Section 5.7 Books and Records. Each Borrower will keep
adequate and proper records and books of account in which full and correct
entries will be made of its dealings, business and affairs.

                  Section 5.8 Compliance. Each Borrower will comply in all
material respects with all laws, rules and regulations to which it may be
subject.

                  Section 5.9 Notice of Litigation. Each Borrower will give
prompt written notice to the Lender of the commencement of any action, suit or
proceeding affecting such Borrower.

                  Section 5.10 Plans. Each Borrower will maintain any employee
benefit plans in compliance with all material requirements of applicable laws
and regulations.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

                  Until the Revolving Commitment shall have expired or been
terminated and the Notes evidencing the Revolving Loan and the Term Loan and all
of each Borrower's other obligations to the Lender under this Agreement shall
have been paid in full, unless the Lender shall otherwise consent in writing:

                  Section 6.1 Merger. Each Borrower will not merge or
consolidate or enter into any analogous reorganization or transaction with any
Person or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution) or permit any Subsidiary to do any of the foregoing; provided,
however, that the Borrowers may merge with each other and any Subsidiary may be
merged with or liquidated into a Borrower or any wholly-owned Subsidiary (if the
Borrower or such wholly-owned Subsidiary is the surviving corporation).

                                       15
<PAGE>

                  Section 6.2 Sale of Assets. Each Borrower will not, and will
not permit any Subsidiary to, sell, transfer, lease or otherwise convey all or
any substantial part of its assets except for sales and leases of inventory in
the ordinary course of business.

                  Section 6.3 Investments. Each Borrower will not, and will not
permit any Subsidiary to, make any loans, advances or extensions of credit to
any other Person (except for trade and customer accounts receivable for
inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms) or purchase or acquire any
stock or other debt or equity securities of or any interest in any other Person
or any integral part of any business or the assets comprising such business or
part thereof, except for:

                           6.3 (a) Investments in readily marketable direct
obligations issued or unconditionally guaranteed by the United States government
or any agency thereof and supported by the full faith and credit of the United
States.

                           6.3 (b) Certificates of deposit or bankers'
acceptances issued by any commercial Bank organized under the laws of the United
States or any State thereof which has (i) combined capital and surplus of at
least $100,000,000, and (ii) a credit rating with respect to its unsecured
indebtedness from a nationally recognized rating service that is satisfactory to
the Lender.

                           6.3 (c) Commercial paper given the highest rating by
a nationally recognized rating service.

                           6.3 (d) Repurchase agreements relating to securities
of the kind described in subsection (a) of this Section.

                           6.3 (e) Other readily marketable investments in debt
securities which are reasonably acceptable to the Lender.

                           6.3 (f) Travel advances to officers and employees in
the ordinary course of business.

                           6.3 (g) Investments by a Borrower in, or a license
agreement with, Polymerics which are not otherwise prohibited by this Agreement.

Any investments under clauses (a), (b), (c) or (d) above must mature within one
year of the acquisition thereof by the Borrower.

                  Section 6.4 Indebtedness. Each Borrower will not, and will not
permit any Subsidiary to, borrow any money or issue any bonds, debentures or
other debt securities or otherwise become obligated on any interest-bearing
indebtedness except for the Term Loan and Advances on the Revolving Loan under
this Agreement, and except for unsecured indebtedness to Klas and The Tapemark
Company.

                  Section 6.5 Liens. Each Borrower will not, and will not permit
any Subsidiary to, create, incur, assume or suffer to exist any Lien, or enter
into any arrangement for the acquisition of any property through conditional
sale, lease-purchase or other title retention agreements except:

                                       16
<PAGE>

                           6.5 (a) Liens granted to the Lender.

                           6.5 (b) Liens existing on the date of this Agreement
and disclosed on Exhibit 6.5 hereto.

                           6.5 (c) Deposits or pledges to secure payment of
workers' compensation, unemployment insurance, old age pensions or other social
security obligations arising in the ordinary course of business of the Borrower.

                           6.5 (d) Liens for taxes, fees, assessments and
governmental charges not delinquent.

                           6.5 (e) Liens of carriers, warehousemen, mechanics
and materialmen, and other like Liens arising in the ordinary course of
business, for sums not due.

                           6.5 (f) Liens incurred or deposits or pledges made or
given in connection with, or to secure payment of, indemnity, performance or
other similar bonds.

                           6.5 (g) Encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property and landlord's Liens under leases on the premises rented, which do not
materially detract from the value of such property or impair the use thereof in
the business of the Borrower.

                  Section 6.6 Contingent Obligations. Each Borrower will not,
and will not permit any Subsidiary to, guarantee or otherwise become liable on
the indebtedness of any other Person.

                  Section 6.7 Cash Flow Leverage Ratio. The Borrowers will not
permit the Cash Flow Leverage Ratio, as of the last day of any fiscal quarter
for the four consecutive fiscal quarters ending on that date, to be greater than
(i) 3.50 to 1.0 from March 31, 2002 through September 30, 2002, and (ii) 2.00 to
1.0 on December 31, 2002 and at every fiscal quarter end thereafter.

                  Section 6.8 Fixed Charge Coverage Ratio. The Borrowers will
not permit the Fixed Charge Coverage Ratio, as of the last day of any fiscal
quarter determined on a year to date basis, to be less than 1.50 to 1.0
commencing with the fiscal quarter ending March 31, 2002.

                                   ARTICLE VII

                         EVENTS OF DEFAULT AND REMEDIES

                  Section 7.1 Events of Default. The occurrence of any one or
more of the following events shall constitute an Event of Default:

                           7.1 (a) The Borrowers shall fail to make when due,
whether by acceleration or otherwise, any payment of principal of or interest on
the Notes or any other obligations of a Borrower, or any of them, to the Lender
pursuant to this Agreement.

                                       17
<PAGE>

                           7.1 (b) Any representation or warranty made by or on
behalf of any Borrower in this Agreement or by or on behalf of any Borrower in
any certificate, statement, report or document herewith or hereafter furnished
to the Lender pursuant to this Agreement shall prove to have been false or
misleading in any material respect on the date as of which the facts set forth
are stated or certified.

                           7.1 (c) The Borrowers shall fail to comply with
Sections 5.2, 5.3, 6.1, 6.2, 6.7 or 6.8.

                           7.1 (d) The Borrowers shall fail to comply with any
other agreement, covenant, condition, provision or term contained in this
Agreement (other than those hereinabove set forth in this Section 7.1) and such
failure to comply shall continue for 20 calendar days after whichever of the
following dates is the earliest: (i) the date the Borrower gives notice of such
failure to the Lender, (ii) the date the Borrower should have given notice of
such failure to the Lender pursuant to Section 5.1, or (iii) the date the Lender
gives notice of such failure to the Borrower.

                           7.1 (e) Any Borrower or any Subsidiary shall become
insolvent or shall generally not pay its debts as they mature or shall apply
for, shall consent to, or shall acquiesce in the appointment of a custodian,
trustee or receiver of a Borrower or such Subsidiary or for a substantial part
of the property thereof or, in the absence of such application, consent or
acquiescence, a custodian, trustee or receiver shall be appointed for a Borrower
or such Subsidiary or for a substantial part of the property thereof and shall
not be discharged within 60 days, or a Borrower shall make an assignment for the
benefit of creditors.

                           7.1 (f) Any bankruptcy, reorganization, debt
arrangement or other proceedings under any bankruptcy or insolvency law shall be
instituted by or against a Borrower or any Subsidiary and, if instituted against
a Borrower or any Subsidiary, shall have been consented to or acquiesced in by a
Borrower or such Subsidiary or shall remain undismissed for 60 days, or an order
for relief shall have been entered against a Borrower or such Subsidiary.

                           7.1 (g) Any dissolution or liquidation proceeding
shall be instituted by or against a Borrower or any Subsidiary and, if
instituted against a Borrower or such Subsidiary, shall be consented to or
acquiesced in by a Borrower or such Subsidiary or shall remain for 60 days
undismissed.

                           7.1 (h) A judgment or judgments for the payment of
money in excess of the sum of $50,000 in the aggregate shall be rendered against
a Borrower or any Subsidiary and either (i) the judgment creditor executes on
such judgment or (ii) such judgment remains unpaid or undischarged for more than
60 days from the date of entry thereof or such longer period during which
execution of such judgment shall be stayed during an appeal from such judgment.

                           7.1 (i) The maturity of any material indebtedness for
borrowed money or capitalized lease obligations of a Borrower or any Subsidiary
(other than indebtedness under this Agreement) shall be accelerated, or a

                                       18
<PAGE>

Borrower or any Subsidiary shall fail to pay any such material indebtedness when
due (after the lapse of any applicable grace period) or any event shall occur or
condition shall exist and shall continue for more than the period of grace, if
any, applicable thereto and shall have the effect of causing, or permitting the
holder of any such indebtedness to cause, such material indebtedness to become
due prior to its stated maturity or to realize upon any collateral given as
security therefor. For purposes of this Section, indebtedness of the Borrower
shall be deemed "material" if it exceeds $50,000 as to any item of indebtedness
or in the aggregate for all items of indebtedness with respect to which any of
the events described in this Section has occurred.

                           7.1 (j) Any execution or attachment shall be issued
whereby any substantial part of the property of a Borrower or any Subsidiary
shall be taken or attempted to be taken and the same shall not have been vacated
or stayed within 60 days after the issuance thereof.

                           7.1 (k) Any default not otherwise described above
shall occur under any other Loan Document and remain unremedied for 30 calendar
days.

                  Section 7.2 Remedies. If (a) any Event of Default described in

Sections 7.1 (e), (f) or (g) shall occur with respect to a Borrower, the
Revolving Commitment shall automatically terminate and the Notes and all other
obligations of the Borrower to the Lender under this Agreement shall
automatically become immediately due and payable, or (b) any other Event of
Default shall occur and be continuing, then the Lender may (i) declare the
Revolving Commitment terminated, whereupon the Commitment shall terminate, and
(ii) declare the Notes and all other obligations of the Borrower to the Lender
under this Agreement to be forthwith due and payable, whereupon the same shall
immediately become due and payable, in each case without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in the Notes to the contrary notwithstanding. Upon
the occurrence of any of the events described in clauses (a) or (b) of the
preceding sentence the Lender may exercise all rights and remedies under this
Agreement, the Notes and any related agreements and under any applicable law.

                  Section 7.3 Offset. In addition to the remedies set forth in
Section 7.2, upon the occurrence of any Event of Default and thereafter while
the same be continuing, each Borrower hereby irrevocably authorizes the Lender
to set off all sums owing by a Borrower to the Lender against all deposits and
credits of any Borrower with, and any and all claims of any Borrower against,
the Lender.

                  Section 7.4 Release of Security Interest. Upon payment in full
of the obligations of the Borrowers under the Notes evidencing the Revolving
Loan and the Term Loan and termination or expiration of the Revolving Commitment
and all outstanding Letters of Credit, the Lender shall release its security
interest in the property of each Borrower.

                                       19
<PAGE>

                                  ARTICLE VIII

                                  MISCELLANEOUS

                  Section 8.1 Modifications. Notwithstanding any provisions to
the contrary herein, any term of this Agreement may be amended with the written
consent of the Borrowers; provided that no amendment, modification or waiver of
any provision of this Agreement or consent to any departure by the Borrowers
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Lender, and then such amendment, modifications, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.

                  Section 8.2 Costs and Expenses. Whether or not the
transactions contemplated hereby are consummated, the Borrower agrees to
reimburse the Lender upon demand for all reasonable out-of-pocket expenses paid
or incurred by the Lender (including filing and recording costs and fees and
expenses of Dorsey & Whitney LLP, counsel to the Lender) in connection with the
negotiation, preparation, approval, review, execution, delivery, amendment,
modification, interpretation, collection and enforcement of this Agreement and
the Notes. The obligations of the Borrower under this Section shall survive any
termination of this Agreement.

                  Section 8.3 Waivers, etc. No failure on the part of the Lender
or the holder of either or any Note to exercise and no delay in exercising any
power or right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right. The rights and remedies of
the Lender hereunder are cumulative and not exclusive of any right or remedy the
Lender otherwise has.

                  Section 8.4 Notices. Except when telephonic notice is
expressly authorized by this Agreement, any notice or other communication to any
party in connection with this Agreement shall be in writing and shall be sent by
manual delivery, telegram, telex, facsimile transmission, overnight courier or
United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party
shall have specified to the other party hereto in writing. All periods of notice
shall be measured from the date of delivery thereof if manually delivered, from
the date of sending thereof if sent by telegram, telex or facsimile
transmission, from the first Business Day after the date of sending if sent by
overnight courier, or from four days after the date of mailing if mailed;
provided, however, that any notice to the Lender under Article II hereof shall
be deemed to have been given only when received by the Lender.

                  Section 8.5 Successors and Assigns; Disposition of Loans. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that a Borrower may not
assign its rights or delegate its obligations hereunder without the prior
written consent of the Lender. The Lender may at any time sell, assign,
transfer, grant participations in, or otherwise dispose of any portion of the
Revolving Commitment and the Term Loan and/or Advances to banks or other
financial institutions. The Lender may disclose any information regarding the
Borrowers in the Lender's possession to any prospective buyer or participant.

                                       20
<PAGE>

                  SECTION 8.6 GOVERNING LAW AND CONSTRUCTION. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS.

                  SECTION 8.7 CONSENT TO JURISDICTION. AT THE OPTION OF THE
LENDER, THIS AGREEMENT AND THE NOTES MAY BE ENFORCED IN ANY FEDERAL COURT OR
MINNESOTA STATE COURT SITTING IN HENNEPIN OR RAMSEY COUNTY; AND THE BORROWERS
CONSENT TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT
THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT A BORROWER COMMENCES
ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT,
THE LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE
OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

                  SECTION 8.8 WAIVER OF JURY TRIAL. EACH BORROWER AND THE LENDER
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES AND ANY OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  Section 8.9 Captions. The captions or headings herein and any
table of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.

                  Section 8.10 Entire Agreement. This Agreement and the other
Loan Documents embody the entire agreement and understanding between the
Borrower and the Lender with respect to the subject matter hereof and thereof.
This Agreement supersedes all prior agreements and understandings relating to
the subject matter hereof. This Agreement amends and restates the Prior Credit
Agreement which is hereby terminated. All amounts outstanding under the Prior
Credit Agreement on the date hereof shall be deemed refinanced by this Agreement
and shall be repaid and shall bear interest in accordance with the terms of this
Agreement.

                  Section 8.11 Waiver of Suretyship Defenses. The obligations of
each Borrower hereunder are absolute, unconditional, complete and continuing and
shall not be released in whole or in part by any action or thing which might,
but for this provision, be deemed a legal or equitable discharge of a surety or
guarantor, other than irrevocable payment and performance in full of the
obligations hereunder. No notice of such obligations or of any renewal or

                                       21
<PAGE>

extension thereof need be given to a Borrower and none of the foregoing acts
shall release any Borrower from liability hereunder. Each Borrower hereby
expressly waives (a) demand of payment, presentment, protest, notice of
dishonor, nonpayment or nonperformance on any and all forms of such obligations;
(b) notice of acceptance of this Agreement and any Note hereunder, and any
notice of any liability to which it may apply; (c) all other notices and demands
of any kind and description relating to such obligations now or hereafter
provided for by any agreement, statute, law, rule or regulation. No Borrower
shall be exonerated with respect to its liabilities hereunder by any act or
thing except irrevocable payment and performance of such obligations. The
liabilities of each Borrower hereunder shall not be affected or impaired by any
failure, delay, neglect or omission on the part of the Lender to realize upon
any of the obligations hereunder of any Borrower to the Lender. No act or
omission of the Lender, whether or not such action or failure to act varies or
increases the risk of, or affects the rights or remedies of a Borrower, shall
affect or impair the obligations of any other Borrower hereunder. Each Borrower
hereby waives any and all right to cause a marshaling of the assets of any
Borrower or any other action by any court or other governmental body with
respect thereto and further waives any and all requirements that the Lender
institute any action or proceeding at law or in equity, or obtain any judgment,
against any other Borrower or any other Person as a condition precedent to
making demand on or bringing any action or obtaining and/or enforcing a judgment
against, any Borrower hereunder.

                  Section 8.12 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and either of the parties hereto may execute this Agreement
by signing any such counterpart.

                                       22
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.

                                        WTC INDUSTRIES, INC.

                                        By /s/ Greg Jensen
                                           -------------------------------------
                                        Print Name Greg Jensen
                                                   -----------------------------
                                        Title CFO
                                              ----------------------------------
Borrower's Address:
1000 Apollo Road
Eagan, Minnesota  55120

                                        PENTAPURE INCORPORATED

                                        By /s/ Greg Jensen
                                           -------------------------------------
                                        Print Name Greg Jensen
                                                   -----------------------------
                                        Title CFO
                                              ----------------------------------
Borrower's Address:
1000 Apollo Road
Eagan, Minnesota  55120

                                        U.S. BANK NATIONAL ASSOCIATION

                                        By /s/ Jerome R. Welle
                                           -------------------------------------
                                        Print Name Jerome R. Welle
                                                   -----------------------------
                                        Title VP
                                              ----------------------------------
Lender's Address:
U.S. Bank National Association
Firstar Center
101 East Fifth
St. Paul, Minnesota 55101
Fax (651) 229-6434

                                       23
<PAGE>

                                 REVOLVING NOTE

$3,000,000                                                     February 27, 2002
                                                             St. Paul, Minnesota

                  FOR VALUE RECEIVED, WTC INDUSTRIES, INC., a Delaware
corporation and PENTAPURE INCORPORATED, a Minnesota corporation, hereby jointly
and severally promise to pay to the order of U.S. BANK NATIONAL ASSOCIATION (the
"Lender") at its office in St. Paul, Minnesota, in lawful money of the United
States of America in immediately available funds on the Revolving Maturity Date
(as such term and each other capitalized term used herein are defined in the
Credit Agreement hereinafter referred to) the principal amount of THREE MILLION
DOLLARS AND NO CENTS ($3,000,000) or, if less, the aggregate unpaid principal
amount of all Revolving Advances made by the Lender under the Credit Agreement,
and to pay interest (computed on the basis of actual days elapsed and a year of
360 days) in like funds on the unpaid principal amount hereof from time to time
outstanding at the rates and times set forth in the Credit Agreement.

                  This note is the Revolving Note referred to in the Amended and
Restated Credit Agreement dated as of February 27, 2002 (as the same may be
hereafter from time to time amended, restated or modified, the "Credit
Agreement") between the undersigned and the Lender. This note is secured, it is
subject to certain permissive and mandatory prepayments and its maturity is
subject to acceleration, in each case upon the terms provided in said Credit
Agreement.

                  In the event of default hereunder, the undersigned agrees to
pay all costs and expenses of collection, including reasonable attorneys' fees.
The undersigned waives demand, presentment, notice of nonpayment, protest,
notice of protest and notice of dishonor.

<PAGE>

                  THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL
LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

                                        WTC INDUSTRIES, INC.

                                        By /s/ Greg Jensen
                                           -------------------------------------
                                        Title CFO
                                              ----------------------------------

                                        PENATPURE INCORPORATED

                                        By /s/ Greg Jensen
                                           -------------------------------------
                                        Title CFO
                                              ----------------------------------
<PAGE>

                                    TERM NOTE

$5,000,000                                                     February 27, 2002
                                                             St. Paul, Minnesota

                  FOR VALUE RECEIVED, WTC INDUSTRIES, INC., a Delaware
corporation, and PENTAPURE INCORPORATED, a Minnesota corporation, hereby jointly
and severally promise to pay to the order of U.S. BANK NATIONAL ASSOCIATION (the
"Lender") at its office in St. Paul, Minnesota, in lawful money of the United
States of America in immediately available funds, the principal amount of FIVE
MILLION DOLLAR AND NO CENTS ($5,000,000) or if less, the full amount of the Term
Loan (as such term and each capitalized term used herein are defined in the
Credit Agreement hereinafter defined), and to pay interest (computed on the
basis of actual days elapsed and a year of 360 days) in like funds on the unpaid
principal amount hereof from time to time outstanding at the rate set forth in
the Credit Agreement.

                  Principal shall be paid in equal installments of $140,000,
plus accrued unpaid interest, commencing on April 1, 2002 and continuing on the
first day of each month through February 1, 2005, with one final installment
equal to the entire remaining unpaid principal balance and all accrued and
unpaid interest on March 1, 2005.

                  This note is the Term Note referred to in the Amended and
Restated Credit Agreement dated as of February 27, 2002 (as the same may
hereafter be from time to time amended, restated or otherwise modified, the
"Credit Agreement") between the undersigned and the Lender. This note is secured
and its maturity is subject to acceleration, in each case upon the terms
provided in said Credit Agreement.

                  In the event of default hereunder, the undersigned agrees to
pay all costs and expenses of collection, including reasonable attorneys' fees.
The undersigned waives demand, presentment, notice of nonpayment, protest,
notice of protest and notice of dishonor.

<PAGE>

                  THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL
LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

                                        WTC INDUSTRIES, INC.

                                        By /s/ Greg Jensen
                                           -------------------------------------
                                        Title CFO
                                              ----------------------------------

                                        PENATPURE INCORPORATED

                                        By /s/ Greg Jensen
                                           -------------------------------------
                                        Title CFO
                                              ----------------------------------

<PAGE>

                    REAFFIRMATION OF SUBORDINATION AGREEMENT

         The undersigned, Robert C. Klas, Sr. ("Junior Creditor"), hereby
reaffirms that Subordination Agreement made and given by the Junior Creditor to
U.S. Bank National Association (the "Senior Creditor"), dated as of March 29,
2000 (the "Subordination Agreement"), remains in full force and effect. The
Junior Creditor has reviewed the terms of an Amended and Restated Credit
Agreement between the Senior Creditor and WTC Industries, Inc. (the "Company")
and its affiliate PentaPure Incorporated of even date herewith and reaffirms
that the Subordination Agreement continues in full force and effect and applies
to all indebtedness of the Company to the Junior Creditor as described therein
provided, however, that the Convertible Promissory Note in the original
principal amount of $750,000 dated as of March 29, 2000 from the Company to the
Junior Creditor has been repaid in full in connection with the Amended and
Restated Credit Agreement described above.

         Dated as of: February 27, 2002

                                               /s/ Robert C. Klas, Sr.
                                               --------------------------------
                                               Robert C. Klas, Sr.

                                               Agreed and Acknowledged:

                                               WTC Industries, Inc.

                                               By  /s/ Greg Jensen
                                                   ----------------------------
                                               Its  CFO
                                                   ----------------------------EXHIBIT 10.61

CERTAIN INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2.

                                                                        09-19-01

                                OPTION AGREEMENT

This Agreement is made as of October 2, 2001 by and among PentaPure
Incorporated, a Minnesota corporation ("PentaPure"), Xxxxxxxxxx, Inc., a
Delaware corporation ("Xxxxxxxxxx"), xxxxxxxxxxxxxxxxxx ("xxxxxxx"),
xxxxxxxxxxxx ("Xxxxxxx") and XXXXXXX ("XXXXXXX") (Xxxxxxx, Xxxxxxx and XXXXXXX
being each a "Stockholder" and collectively the "Stockholders").

                                    Recitals:

         The Stockholders own all of the outstanding capital stock of
Xxxxxxxxxx. PentaPure is entering into a Supply Agreement dated October 2, 2001
with Xxxxxxxxxx (the "Supply Agreement") under which Xxxxxxxxxx will supply to
PentaPure (and PentaPure will purchase) approximately xxxxxxxxxxxx carbon blocks
or more during a xxxx month period. The parties also desire that PentaPure
purchase from Xxxxxxxxxx xxxx newly issued shares of Xxxxxxxxxx common stock for
$xxxxxxxxx, and that Xxxxxxxxxx and the Stockholders grant PentaPure certain
options to purchase Xxxxxxxxxx common stock.

                                   Agreement:

         NOW, THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties agree as follows:

         1. Initial Purchase of xxx% Interest. Xxxxxxxxxx agrees to issue and
sell to PentaPure, and PentaPure agrees to purchase from Xxxxxxxxxx,
xxxxxxxxxxxxxxxxx shares of Xxxxxxxxxx common stock (the "Common Stock") for a
total purchase price of $xxxxxxx. These xxxx shares (referred to herein as the
"Initial Purchase") shall constitute xxxxx% of the then outstanding shares of
Common Stock. The Initial Purchase shall occur as of the date of this Agreement,
and a stock certificate representing the Initial Purchase shall be signed and
delivered to PentaPure at the time this Agreement is executed. PentaPure shall
pay the purchase price for the Initial Purchase in xxxxxx installments of
$xxxxxx each, which shall be paid on the xxth, xxth and xxxth day after
Xxxxxxxxxx has commenced production of the carbon blocks to be delivered to
PentaPure under the Supply Agreement. Xxxxxxxxxx shall give PentaPure written
notice and provide reasonable verification of the date of such commencement.

         2. Repurchase if PentaPure Does Not Exercise First Option. In the event
that PentaPure does not exercise the First Option (as defined below) prior to
its expiration on July 31, 2002, then no later than July 31, 2003 Xxxxxxx and
Xxxxxxx shall repurchase from PentaPure and pay cash for the shares constituting
the Initial Purchase at the same price of $xxxxxxxx per share as was paid by
PentaPure to acquire them. Xxxxxxx and Xxxxxxx shall each be obligated to pay
his pro rata portion of the shares (75% and 25% respectively), provided that if
either Xxxxxxx or Xxxxxxx should default in repurchasing the shares he or it is
obligated to repurchase, the other shall repurchase the shares that should have
been repurchased by the defaulting party. The closing of such repurchase shall
be governed by Section 7 below. Upon completion of such repurchase and payment,
this Option Agreement and the Buy-Sell Agreement shall terminate.

<PAGE>

         3. First Option to Purchase Additional xxxx% Interest. Xxxxxxxxxx
hereby grants PentaPure the right and option (the "First Option") to purchase
from Xxxxxxxxxx xxx shares of Xxxxxxxxxx Common Stock, constituting (after
giving effect to the purchase under Section 1 above) xxxx% of the then
outstanding shares of Xxxxxxxxxx Common Stock. Xxxxxxxxxx and the Stockholders
warrant that the exercise of the First Option would result in PentaPure owning a
total of xxx shares constituting a total of xxxxx% of the then outstanding
shares of Xxxxxxxxxx Common Stock. The First Option shall be exercisable by
PentaPure giving written notice to Xxxxxxxxxx at any time not later than
xxxxxxxx (the "xxxxxxxxxxxxxxxxxxx"), at which time the First Option shall
expire. The purchase price for the First Option Shares shall be $xxxxxxx, which
shall be payable in cash at the closing of the First Option exercise.

         4. Second Option. (a) Xxxxxxx, Xxxxxxx and XXXXXXX hereby grant
PentaPure the right and option (the "Second Option") to purchase from them a
total of xxx shares of Xxxxxxxxxx Common Stock, or if there has been any
increase above xxxxx in the number of outstanding shares of Common Stock, that
number of shares of the Company Common Stock which together with the Initial
Shares and the First Option Shares constitutes xx% of the outstanding Common
Stock (such xxx or greater number of shares being referred to herein as the
"Second Option Shares"). xxxx% of the Second Option Shares shall be sold to
PentaPure by Xxxxxxx, xxxx% shall be sold to PentaPure by Xxxxxxx and xx% shall
be sold to PentaPure by XXXXXXX. If one or more of the Stockholders should
default in selling to PentaPure his or its portion of the Second Option Shares,
the others shall sell to PentaPure the shares that should have been sold by the
defaulting Stockholder(s). PentaPure shall be entitled to exercise the Second
Option only if it has exercised the First Option. The Second Option shall be
exercisable by PentaPure giving written notice to Xxxxxxx, Xxxxxxx and XXXXXXX
at any time not later than xxxxxxxxxxxxx (the "xxxxxxxxxxxxxxxxxxxxxxx"), at
which time the Second Option shall expire. The purchase price for the Second
Option Shares shall be a total of $xxxxxxx, which shall be payable in cash at
the closing of the Second Option exercise and allocated among Xxxxxxx, Xxxxxxx
and XXXXXXX in proportion to the number of shares sold by each at that closing.

         (b) The First Option and the Second Option are each included in the
meaning of the term "Option" and are collectively referred to herein as the
"Options." The First Option Shares and Second Option Shares are each included in
the meaning of the term "Option Shares."

         (c) PentaPure agrees that it will not, without the prior written
consent of all of the Stockholders, directly or indirectly acquire or enter into
any agreement to acquire any shares of the Company's capital stock by any means
other than the exercise of the Options provided in this Agreement or the
exercise of rights granted under the Buy-Sell Agreement referred to below.

         5. Escrow; Buy-Sell Agreement. At the time this Agreement is executed,
PentaPure and the Stockholders shall also execute an Escrow Agreement with a
commercial bank or trust company in the form attached hereto as Exhibit 1 (the
"Escrow Agreement") and a Buy-Sell Agreement in the form attached hereto as
Exhibit 2 (the "Buy-Sell Agreement").

<PAGE>

         6. Repurchase if PentaPure Does Not Exercise Second Option. In the
event that PentaPure exercises the First Option but does not exercise the Second
Option prior to its expiration on xxxxxxxxxxxxx, then on or before July 31, 2003
each Shareholder may repurchase from PentaPure the First Option Shares for the
same purchase price, paid in cash, at which they purchased by PentaPure. The
closing of such repurchase shall be governed by Section 7 below. Upon completion
of such repurchase and payment, this Option Agreement and the Buy-Sell Agreement
shall terminate.

         7. Closing. Unless the parties otherwise agree, each closing of an
Option and purchase of Option Shares pursuant to this Agreement (each an "Option
Closing") shall be completed thirty days after notice of exercise of the Option
is given, at 10:00 AM, Minneapolis time, at the offices of Lindquist & Vennum
P.L.L.P., 4200 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota. The
date of each Option Closing is a "Closing Date." At each Closing:

         (a) the Stockholders selling the Option Shares shall deliver to
PentaPure a certificate signed by each of them stating that the representations
and warranties contained in Section 8 are correct on and as of the Closing Date
as though made on and as of such date, except to the extent specified in writing
in an updated Disclosure Schedule attached to the certificate;

         (b) the Stockholders selling the Option Shares shall deliver to
PentaPure stock certificates representing the Option Shares being purchased by
PentaPure; and

         (c) PentaPure shall deliver to the Stockholders who are selling the
Option Shares payment of the purchase price for exercise of the Option being
exercised.

         8. Representations and Warranties by the Stockholders. Xxxxxxxxxx and
the Stockholders jointly and severally represent and warrant to PentaPure that,
except as expressly stated in the Disclosure Statement attached hereto as
Exhibit 4 (the "Disclosure Statement"):

                  8.1 Organization. Xxxxxxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
is duly qualified as a foreign corporation in the State of Xxxxxxxx, and has
the requisite corporate power and authority to own its properties and to carry
on its business in all material respects as it is now being conducted.
Xxxxxxxxxx has the requisite corporate power and authority to perform its
obligations under this Agreement. Xxxxxxxxxx does not have any direct or
indirect equity interest in any other Person (as defined below).

                  8.2 Qualification. Xxxxxxxxxx is duly qualified or licensed as
a foreign corporation in good standing in each jurisdiction wherein the nature
of its activities or of its properties owned or leased makes such qualification
or licensing necessary and failure to be so qualified or licensed would have a
material adverse impact on its business.

                  8.3 Financial Statements. Attached hereto as Exhibit 5 are the
following (the "Financial Statements"): (i) the unaudited financial statements
of Xxxxxxxxxx as of December 31, 2000, and (ii) the unaudited financial
statements of Xxxxxxxxxx as of July 31, 2001 and for the seven months then ended
(the "Balance Sheet Date"). The Financial Statements (i) are in accordance with
the books and records of Xxxxxxxxxx, (ii) presents fairly the financial

<PAGE>

condition of Xxxxxxxxxx as of the dates of the balance sheets included in those
financial statements, and (iii) have been, in all material respects, prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior accounting periods. Specifically, but not by way of
limitation, the balance sheet for the Balance Sheet Date, or notes thereto,
disclose all of the debts, liabilities and obligations of any nature (whether
absolute, accrued contingent and whether due or to become due) of Xxxxxxxxxx at
the Balance Sheet Date which, individually or in the aggregate, are material and
which in accordance with generally accepted principles would be required to be
disclosed in such balance sheet, and the omission of which would, in the
aggregate, have a material adverse impact on Xxxxxxxxxx. The balance sheet for
the Balance Sheet Date includes appropriate reserves for all taxes and other
liabilities accrued at such date but not yet payable.

                  8.4 Tax Returns and Audits. All required federal, state and
local tax returns or appropriate extension requests of Xxxxxxxxxx have been
filed, and all federal, state and local taxes required to be paid with respect
to such returns have been paid or due provision for the payment thereof has been
made. Xxxxxxxxxx is not delinquent in the payment of any such tax or in the
payment of any assessment or governmental charge. Xxxxxxxxxx has not received
notice of any tax deficiency proposed or assessed against it, and has not
executed any waiver of any statute of limitations on the assessment or
collection of any tax. None of the Company's tax returns has been audited by
governmental authorities in a manner to bring such audits to the Company's
attention. Xxxxxxxxxx does not have any tax liabilities, except those reflected
in Exhibit 4 hereto and those incurred in the ordinary course of business since
the Balance Sheet Date.

                  8.5 Changes, Dividends, etc. Since the Balance Sheet Date,
Xxxxxxxxxx has not: (a) incurred any debts, obligations or liabilities,
absolute, accrued or contingent and whether due or to become due, except current
liabilities incurred in the ordinary course of business, which (individually or
in the aggregate) will not materially and adversely affect the business,
properties or prospects of Xxxxxxxxxx; (b) paid any obligation or liability
other than, or discharged or satisfied any liens or encumbrances other than
those securing, current liabilities, in each case in the ordinary course of
business; (c) declared or made any payment or distribution to its stockholders
as such, or purchased or redeemed any of its shares of capital stock or other
securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to
lien, charge, security interest or other encumbrance any of its assets, tangible
or intangible, except in the ordinary course of business; (e) sold, transferred
or leased any of its assets except in the ordinary course of business; (f)
canceled or compromised any debt or claim, or waived or released any right of
material value; (g) suffered any physical damage, destruction or loss (whether
or not covered by insurance) materially and adversely affecting the properties,
business or prospects of Xxxxxxxxxx; (h) entered into any transaction other than
in the ordinary course of business; (i) encountered any labor difficulties or
labor union organizing activities; (j) issued or sold any shares of capital
stock or other securities or granted any options, warrants or other purchase
rights with respect thereto other than as contemplated by this Agreement; (k)
made any acquisition or disposition of any material assets or become involved in
any other material transaction, other than for fair value in the ordinary course
of business; (1) increased the compensation payable, or to become payable, to
any of its directors or employees, or made any bonus payment or similar
arrangement with any directors or employees or increased the scope or nature of
any fringe benefits provided for its employees or directors; or (m) agreed to do
any of the foregoing other than pursuant hereto. There has been no material
adverse change in the financial condition, operations, results of operations or
business of Xxxxxxxxxx since the Balance Sheet Date.

<PAGE>

                  8.6 Title to Properties and Encumbrances. Xxxxxxxxxx has good
and marketable title to all its owned properties and assets, including without
limitation the properties and assets reflected in the Financial Statements and
the properties and assets used in the conduct of its business, except for
property disposed of in the ordinary course of business since the Balance Sheet
Date, which properties and assets are not subject to any mortgage, pledge,
lease, lien, charge, security interest, encumbrance or restriction, except those
which are expressly identified in the Disclosure Schedule. The plant, offices
and equipment owned and leased by Xxxxxxxxxx have been kept in good condition
and repair in the ordinary course of business, and Xxxxxxxxxx has not been
threatened with any action or proceeding under any building or zoning ordinance,
law or regulation.

                  8.7 Litigation; Governmental Proceedings. There are no legal
actions, suits, arbitrations or other legal, administrative or governmental
proceedings or investigations pending or, to the knowledge of Xxxxxxxxxx,
threatened against Xxxxxxxxxx, its properties, assets or business, and
Xxxxxxxxxx is not aware of any facts which are likely to result in or form the
basis for any such action, suit or other proceeding. Xxxxxxxxxx is not in
default with respect to any judgment, order or decree of any court or any
governmental agency or instrumentality. Xxxxxxxxxx has not been threatened with
any action or proceeding under any business or zoning ordinance, law or
regulation.

                  8.8 Compliance with Applicable Laws and Other Instruments. The
business and operations of Xxxxxxxxxx have been and are being conducted in
accordance with all applicable laws, rules and regulations of all governmental
authorities. Neither the execution nor delivery of, nor the performance of or
compliance with, this Agreement nor the consummation of the transactions
contemplated hereby will conflict with, or, with or without the giving of notice
or passage of time, result in any breach of, or constitute a default under, or
result in the imposition of any lien or encumbrance upon any asset or property
of Xxxxxxxxxx pursuant to, any applicable law, administrative regulation or
judgment, order or decree of any court or governmental body, any agreement or
other instrument to which Xxxxxxxxxx is a party or by which it or any of its
properties, assets or rights is bound or affected, and will not violate the
Certificate of Incorporation or Bylaws of Xxxxxxxxxx. Xxxxxxxxxx is not in
violation of its Certificate of Incorporation or its Bylaws nor in violation of,
or in default under, any lien, indenture, mortgage, lease, agreement,
instrument, commitment or arrangement in any material respect.

                  8.9 Outstanding Debt. Xxxxxxxxxx has no indebtedness for
borrowed money, except as otherwise set forth in the Financial Statements.
Xxxxxxxxxx is not in default in the payment of the principal of or interest or
premium on any such indebtedness for borrowed money, and no event has occurred
or is continuing under the provisions of any instrument, document or agreement
evidencing or relating to any such indebtedness for borrowed money which with
the lapse of time or the giving of notice, or both, would constitute an event of
default thereunder.

<PAGE>

                  8.10 Authorization. This Agreement is a valid and binding
agreement of the Stockholders enforceable in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights generally, and except for judicial limitations on the
enforcement of the remedy of specific enforcement and other equitable remedies.

                  8.11 Retirement Plans. Xxxxxxxxxx does not have any retirement
plan in which any employees of Xxxxxxxxxx participate that is subject to any
provision of the Employee Retirement Income Security Act of 1974 and of the
regulations adopted pursuant thereto ("ERISA").

                  8.12 Environmental and Safety Laws. To the Stockholders
knowledge, Xxxxxxxxxx is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and no
material expenditures are or will be required in order to comply with any such
existing statute, law or regulation.

                  8.13 Xxxxxxxxxx Capital Stock. The authorized capital stock of
Xxxxxxxxxx consists of xxxx shares of common stock, of which xxxx shares are
issued and outstanding that are owned beneficially and of record as follows: xxx
shares by Xxxxxxx, xxx shares by Xxxxxxx and xxx shares by XXXXXXX. The managing
partner of XXXXXXX is Xxxx Xxxxxxx. All of the outstanding shares of capital
stock of Xxxxxxxxxx were duly authorized and validly issued and are fully paid
and nonassessable. There are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities or other
agreements or arrangements of any character or nature whatever, except as
otherwise disclosed in the Disclosure Schedule, under which Xxxxxxxxxx is or may
be obligated to issue capital stock or other securities of any kind representing
an ownership interest or contingent ownership interest in Xxxxxxxxxx. Neither
the offer nor the purchase of the Option Shares constitutes an event, under any
anti-dilution provisions of any securities issued or issuable by Xxxxxxxxxx or
any agreements with respect to the issuance of securities by Xxxxxxxxxx, which
will either increase the number of shares issuable pursuant to such provisions
or decrease the consideration per share to be received by Xxxxxxxxxx pursuant to
such provisions. No holder of any security of Xxxxxxxxxx is entitled to any
preemptive or similar rights to purchase securities from Xxxxxxxxxx, except as
otherwise contemplated by this Agreement. All outstanding securities of
Xxxxxxxxxx have been issued in full compliance with an exemption or exemptions
from the registration and prospectus delivery requirements of the Securities Act
and from the registration and qualification requirements of all applicable state
securities laws.

                  8.14 Option Shares. The shares constituting the Initial
Purchase and the Option Shares, when purchased and paid for pursuant to the
terms of this Agreement, will be duly authorized, validly issued and
outstanding, fully paid, nonassessable and will be owned and held by PentaPure
free and clear of all pledges, liens, encumbrances or restrictions created or
suffered to exist by Xxxxxxxxxx or any Stockholder. The certificates
representing the Initial Shares and the Option Shares to be delivered by
Xxxxxxxxxx (or by the Stockholders, as the case may be) upon will be genuine and
valid.

<PAGE>

                  8.15 Patents and Other Intangible Rights. Xxxxxxxxxx owns or
possesses adequate licenses or other rights to use all patents, patent
applications, trademarks, trademark applications, service marks, service mark
applications, trade names, copyrights, manufacturing processes, formulae, trade
secrets, customer lists and know how (collectively, "Intellectual Property")
necessary or desirable to the conduct of its business as conducted and as
proposed to be conducted, and no claim is pending or, to the best of any
Stockholder's knowledge, threatened to the effect that the operations of
Xxxxxxxxxx infringe upon or conflict with the asserted rights of any other
person under any Intellectual Property, and to the best of any Stockholder's
knowledge there is no basis for any such claim (whether or not pending or
threatened). The Disclosure Schedule lists and identifies the Intellectual
Property. Except as described on the Disclosure Schedule, no claim is pending or
threatened to the effect that any such Intellectual Property owned or licensed
by Xxxxxxxxxx, or which Xxxxxxxxxx otherwise has the right to use, is invalid or
unenforceable by Xxxxxxxxxx, and to the best of any Stockholder's knowledge
there is not basis for any such claim (whether or not pending or threatened). To
the best of any Stockholder's knowledge, all technical information developed by
and belonging to Xxxxxxxxxx which has not been patented has been kept
confidential. Xxxxxxxxxx has not granted or assigned to any other person or
entity any right to manufacture, have manufactured, assemble or sell the
products or proposed products or to provide the services or proposed services of
Xxxxxxxxxx.

                  8.16 Schedule of Assets and Contracts. Xxxxxxxxxx does not own
any real estate. Attached hereto as Exhibit 3 is a Schedule of Assets and
Contracts containing:

                  (a) Annex A: a listing of each indenture, lease, sublease,
         license or other instrument under which Xxxxxxxxxx claims or holds a
         leasehold interest in real property;

                  (b) Annex B: a listing of all written and oral contracts,
         agreements, subcontracts, purchase orders, commitments and arrangements
         involving payments remaining to or from Xxxxxxxxxx in excess of $10,000
         and other agreements material to Xxxxxxxxxx business to which
         Xxxxxxxxxx is a party or by which it is bound, under which full
         performance (including payment) has not been rendered by any party
         thereto;

                  (c) Annex C: a listing of all collective bargaining
         agreements, employment agreements, consulting agreements,
         noncompetition agreements, nondisclosure agreements, executive
         compensation plans, profit sharing plans, bonus plans, deferred
         compensation agreements, employee pension retirement plans and employee
         benefit stock option or stock purchase plans and other employee benefit
         plans, entered into or adopted by Xxxxxxxxxx;

                  (d) Annex D: a listing of all deeds of trust, mortgages,
         security agreements, pledge agreements and other agreements or
         arrangements whereby any of the assets or properties of Xxxxxxxxxx are
         subject to any lien, encumbrance, security interest or charge;

                  (e) Annex E: a listing of all leases of personal property
         involving payment remaining to or from Xxxxxxxxxx in excess of $10,000;

<PAGE>

                  (f) Annex F: a listing of all bank accounts (or accounts with
         other financial institutions) maintained by Xxxxxxxxxx, together with
         the persons authorized to make withdrawals from such accounts; and

                  (g) Annex G: the name of each employee of Xxxxxxxxxx whose
         annual compensation is in excess of $50,000 and the remuneration
         currently payable to each such employee.

                  Xxxxxxxxxx has provided legal counsel for PentaPure with a
true and complete copy of each document referred to above which such counsel
requests to examine.

                  Xxxxxxxxxx has in all material respects substantially
performed all obligations required to be performed by it to date and is not in
default in any material respect under any of the contracts, agreements, leases,
documents, commitments or other arrangements to which it is a party or by which
it is otherwise bound. All instruments referred to above are in effect and
enforceable according to their respective terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the enforcement of creditors' rights generally, and
except for judicial limitations on the enforcement of the remedy of specific
performance and other equitable remedies), and there is not under any of such
instruments any existing material default or event of default or event which,
with notice or lapse of time or both, would constitute an event of default
thereunder. All parties having material contractual arrangements with Xxxxxxxxxx
are in substantial compliance therewith and none are in material default in any
respect thereunder. All plans or arrangements listed pursuant to clause (d)
above are fully funded to the extent that such funding is required by generally
accepted accounting principles.

                  8.17 No Brokers or Finders. No person, firm or corporation has
or will have, as a result of any act or omission of Xxxxxxxxxx or any
Stockholder, any right, interest or valid claim against or upon Xxxxxxxxxx or
PentaPure for any commission, fee or other compensation as a finder or broker,
or in any similar capacity, in connection with the transactions contemplated by
this Agreement. The Stockholders will indemnify and hold each PentaPure harmless
against any and all liability with respect to any such commission, fee or other
compensation which may be payable or determined to be payable in connection with
the transactions contemplated by this Agreement.

                  8.18 Registration Rights. Xxxxxxxxxx has not agreed to
register any of its authorized or outstanding securities under the Securities
Act.

                  8.19 Disclosure. Neither this Agreement, nor any Schedule or
Exhibit to this Agreement contains an untrue statement of a material fact or
omits a material fact necessary to make the statements contained herein or
therein not misleading. None of the statements, documents, certificates or other
items prepared or supplied by Xxxxxxxxxx with respect to the transactions
contemplated hereby contains an untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein not misleading.
There is no fact which Xxxxxxxxxx has not disclosed to PentaPure and of which
Xxxxxxxxxx is aware which materially and adversely affects or could materially
and adversely affect the business, prospects, financial condition, operations,
property or affairs of Xxxxxxxxxx or any of its subsidiaries. The financial

<PAGE>

projections and other estimates contained in the Company's Business Plan
provided to PentaPure were prepared by a consultant to Xxxxxxxxxx, and approved
by Xxxxxxxxxx, based on Xxxxxxxxxx' experience in the industry and on
assumptions as to future events which Xxxxxxxxxx, at the date of the issuance of
the Business Plan, believed to be reasonable, but which Xxxxxxxxxx cannot and
does not assure or guarantee the attainment of in any manner. The parties
acknowledge that the Business Plan assumed a significant infusion of capital
into Xxxxxxxxxx which, as a result of entering into this Agreement, will not and
is not intended to occur. PentaPure agrees that any decision to exercise an
Option shall be based solely on information concerning Xxxxxxxxxx that PentaPure
obtains from and after the date of this Agreement.

         9. Affirmative Covenants. Until the termination of this Agreement as
provided in Section 13 below, Xxxxxxxxxx agrees to abide by, and the
Stockholders jointly and severally agree that they each will cause Xxxxxxxxxx to
abide by, the following covenants:

                  9.1 Corporate Existence. Xxxxxxxxxx will maintain its
corporate existence in good standing and comply with all applicable laws and
regulations of the United States or of any state or states thereof or of any
political subdivision thereof and of any governmental authority where failure to
so comply would have a material adverse impact on Xxxxxxxxxx or its business or
operations.

                  9.2 Books of Account and Reserves. Xxxxxxxxxx will keep books
of record and account in which full, true and correct entries are made of all of
its dealings, business and affairs, in accordance with generally accepted
accounting principles. Xxxxxxxxxx will employ certified public accountants
selected by the Board of Directors of Xxxxxxxxxx who are "independent" within
the meaning of the accounting regulations of the Commission, and have annual
audits made by such independent public accountants.

                  9.3 Furnishing of Financial Statements and Information.
Beginning xxxxxxxxxxxxxxxx, Xxxxxxxxxx will deliver to PentaPure:

                  (a) as soon as practicable, but in any event within 30 days
         after the close of each month, unaudited balance sheets of Xxxxxxxxxx
         and any Subsidiaries (as hereinafter defined) as of the end of such
         month, together with the related statements of operations and cash flow
         for such month, setting forth the budgeted figures for such month and
         in comparative form figures for the corresponding month of the previous
         fiscal year, all in reasonable detail and certified by an authorized
         accounting officer of Xxxxxxxxxx, subject to year-end adjustments;

                  (b) as soon as practicable, but in any event within 60 days
         after the end of each fiscal year, a consolidated balance sheet of
         Xxxxxxxxxx and its Subsidiaries, as of the end of such fiscal year,
         together with the related consolidated statements of operations,
         stockholders, equity and cash flow for such fiscal year, setting forth
         in comparative form figures for the previous fiscal year, all in
         reasonable detail and duly certified by the Company's independent
         public accountants, which accountants shall have given Xxxxxxxxxx an
         opinion, unqualified as to the scope of the audit, regarding such
         statements;

<PAGE>

                  (c) promptly after the submission thereof to Xxxxxxxxxx,
         copies of all reports and recommendations submitted by independent
         public accountants in connection with any annual or interim audit of
         the accounts of the company or any of its Subsidiaries made by such
         accountants;

                  (d) within 10 days after Xxxxxxxxxx learns in writing of the
         commencement or threatened commencement of any material suit, legal or
         equitable, or of any material administrative, arbitration or other
         proceeding against Xxxxxxxxxx or its businesses, assets or properties,
         written notice of the nature and extent of such suit or proceeding; and

                  (e) with reasonable promptness, such other financial data
         relating to the business, affairs and financial condition of Xxxxxxxxxx
         as is available to Xxxxxxxxxx and as from time to time PentaPure may
         reasonably request.

                  9.4 Inspection. Upon 15 days notice, Xxxxxxxxxx will permit
PentaPure and any of its officers or employees, or any outside representatives
designated by such PentaPure and reasonably satisfactory to Xxxxxxxxxx, to visit
and inspect any of the properties of Xxxxxxxxxx, including its books and records
(and to make photocopies thereof or make extracts therefrom), and to discuss its
affairs, finances, and accounts with its officers, lawyers and accountants,
except with respect to trade secrets and similar confidential information, all
to such reasonable extent and at such reasonable times and intervals as such
PentaPure may reasonably request. Except as otherwise required by laws or
regulations applicable to a PentaPure, PentaPure shall maintain, and shall
require their representatives to maintain, all information obtained pursuant to
Section 3.3 hereof and this Section 3.4 on a confidential basis.

                  9.5 Payment of Taxes and Maintenance of Properties. Xxxxxxxxxx
will:

         (a) pay and discharge promptly, or cause to be paid and discharged
promptly when due and payable, all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or upon any of its properties, as
well as all material claims of any kind (including claims for labor, material
and supplies) which, if unpaid, might by law become a lien or charge upon its
property; provided, however, that Xxxxxxxxxx shall not be required to pay any
such tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings and if Xxxxxxxxxx shall have set aside on its books reserves
(segregated to the extent required by generally accepted accounting principles)
deemed adequate by it with respect thereto; and

         (b) maintain and keep, or cause to be maintained and kept, its
properties in good repair, working order and condition, and from time to time
make, or cause to be made, all repairs and renewals and replacements which in
the opinion of Xxxxxxxxxx are necessary and proper so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; Xxxxxxxxxx will maintain or cause to be maintained back-up copies of all
valuable papers and software.

<PAGE>

                  9.6 Insurance. Xxxxxxxxxx will obtain and maintain in force
such property damage, public liability, business interruption, worker's
compensation, indemnity bonds and other types of insurance as the Company's
executive officers, after consultation with an accredited insurance broker,
shall determine to be necessary or appropriate to protect Xxxxxxxxxx from the
insurable hazards or risks associated with the conduct of the Company's
business. The Company's executive officers shall periodically report to the
Board of Directors on the status of such insurance coverage. All insurance shall
be maintained in at least such amounts and to such extent as shall be determined
to be reasonable by the Board of Directors; and all such insurance shall be
effected and maintained in force under a policy or policies issued by insurers
of recognized responsibility, except that Xxxxxxxxxx may effect worker's
compensation or similar insurance in respect of operations in any state or other
jurisdiction either through an insurance fund operated by such state or other
jurisdiction or by causing to be maintained a system or systems of
self-insurance which is in accord with applicable laws.

                  9.7 Payment of Indebtedness and Discharge of Obligations.
Xxxxxxxxxx will pay or cause to be paid the principal of and interest and
premium, if any, on all indebtedness for borrowed money heretofore or hereafter
incurred or assumed by it when and as the same shall become due and payable,
unless such indebtedness for borrowed money is renewed or extended. Xxxxxxxxxx
will faithfully observe, perform and discharge all of the material covenants,
conditions and obligations which are imposed on it by any and all indentures and
other agreements securing or evidencing such indebtedness for borrowed money or
pursuant to which such indebtedness for borrowed money is issued, and will not
permit the continuance of any act or omission which is or under the provisions
thereof may be declared to be a material default thereunder, unless such default
is waived pursuant to the provisions thereof. Xxxxxxxxxx shall not be required
to make any payment or to take any other action by reason of this Section 9.7 at
any time while it shall be currently contesting in good faith by appropriate
proceedings its obligations to make such payment or to take such action provided
that Xxxxxxxxxx shall have set aside on its books reserves (segregated to the
extent required by generally accepted accounting principles) deemed adequate by
it with respect thereto.

                  9.8 Retirement Plans. Xxxxxxxxxx will cause each retirement
plan of Xxxxxxxxxx in which any employees of Xxxxxxxxxx participate that is
subject to the provisions of ERISA and the documents and instruments governing
each such plan to be conformed to when necessary, and to be administered in a
manner consistent with, those provisions of ERISA which may, from time to time,
become effective and operative with respect to such plans; if requested by
PentaPure in writing from time to time, furnish to PentaPure a copy of any
annual report with respect to each such plan that Xxxxxxxxxx files with the
Secretary of Labor pursuant to ERISA; and at such time as such insurance shall
be available at rates deemed commercially reasonable by Xxxxxxxxxx, maintain
insurance against the contingent liability against the net worth of Xxxxxxxxxx
imposed in respect of each such plan by the provisions of ERISA.

                  9.9 Preparation and Approval of Budgets. In the event that
PentaPure exercises the First Option, then for each fiscal year of Xxxxxxxxxx
thereafter at least one month prior to the beginning of the fiscal year
Xxxxxxxxxx shall prepare and submit to its Board of Directors, for its review
and approval, an annual plan for such year, which shall include monthly capital
and operating expense budgets, cash flow statements and profit and loss
projections itemized in such detail as the Board of Directors may reasonably
request. Each annual plan shall be modified as often as is necessary in the
judgment of the Board of Directors to reflect changes required as a result of
operating results and other events that occur, or may be reasonably expected to
occur, during the year covered by the annual plan, and copies of each such
modification shall be submitted to the Board of Directors. Xxxxxxxxxx will,
simultaneously with the submission thereof to the Board of Directors, deliver a
copy of each such annual plan and modification thereof to PentaPure.

<PAGE>

                  9.10 Board of Directors. (a) In the event that PentaPure
exercises the First Option, it shall have the right to designate one member of
Xxxxxxxxxx Board of Directors, which shall consist of not more than four
persons. In the event that PentaPure exercises both the First Option and the
Second Option, PentaPure shall have the right to designate two members of
Xxxxxxxxxx Board of Directors, which shall consist of the two PentaPure
representatives, two representatives of the Stockholders, and a fifth director
who is mutually agreed upon by PentaPure and the Stockholders.

         (b) Members of the Board of Directors designated by PentaPure shall be
entitled to all of the rights and subject to all of the obligations of all
directors of Xxxxxxxxxx, as provided in its Articles of Incorporation, Bylaws
and by law. Xxxxxxxxxx shall notify PentaPure of all regular meetings and
special meetings of the Board of Directors of Xxxxxxxxxx at least ten business
days in advance of such meetings, and afford any representative designated by
PentaPure the right and opportunity to attend any such meeting. Such
representative(s) shall be entitled to receive all written materials and other
information given to directors of Xxxxxxxxxx in connection with any such meeting
at the time such materials or information are given to such directors.
Xxxxxxxxxx agrees, as a general practice, to hold a meeting of its Board of
Directors at least once every quarter.

         10. Negative Covenants. In the event that PentaPure exercises the First
Option, then until the termination of this Agreement as provided in Section 11
below (or such other period as is stated below as to certain specific
covenants), the Stockholders jointly and severally agree that they each will
cause Xxxxxxxxxx to abide by the covenants set forth below:

                  10.1 Liens. If PentaPure exercises the First Option, then from
and after such exercise Xxxxxxxxxx will not grant or create, incur, assume or
suffer to exist any lien, pledge, or security interest which applies to all or
substantially all of its assets, except for liens, pledges or security interests
granted to or held by one or more commercial banks or other regulated commercial
lenders.

                  10.2 Indebtedness. If PentaPure exercises the First Option,
then from and after such exercise Xxxxxxxxxx will not incur, create, assume or
permit to exist any indebtedness for borrowed money or indebtedness evidenced by
promissory notes, bonds, debentures or similar obligations, except for
indebtedness to one or more commercial banks or other regulated commercial
lenders, and loans from Stockholders.

                  10.3 Guaranties. Xxxxxxxxxx will not assume, guarantee,
endorse or otherwise become directly or contingently liable in connection with
any obligations of any other person, except:

         (a) the endorsement of negotiable instruments by Xxxxxxxxxx for deposit
or collection or similar transactions in the ordinary course of business; and

<PAGE>

         (b) guaranties, endorsements and other direct or contingent liabilities
in connection with the obligations of other Persons in existence on the date
hereof and listed on the Disclosure Schedule.

                  10.4 Investments and Loans. Xxxxxxxxxx will not purchase or
hold beneficially any stock or other securities or evidences of indebtedness of,
make or permit to exist any loans or advances to, or make any investment or
acquire any interest whatsoever in any other Person except:

         (a) investments in existence on the date hereof and listed on the
Disclosure Schedule;

         (b) investments in direct obligations of the United States of America
or any agency or instrumentality thereof whose obligations constitute full faith
and credit obligations of the United States of America having a maturity of one
year or less, commercial paper issued by U.S. corporations rated "A-1" or "A-2"
by Standard & Poors Corporation or "P-1" or "P-2" by Moody's Investors Service
or certificates of deposit or bankers' acceptances having a maturity of one year
or less issued by members of the Federal Reserve System having deposits in
excess of $100,000,000;

         (c) loans in the ordinary course of business to officers and employees
of Xxxxxxxxxx as travel advances and the like not exceeding at any one time an
aggregate of $10,000; and

         (d) advances in the ordinary course of business in the form of progress
payments, prepaid rent or security deposits.

                  10.5 [Intentionally deleted.]

                  10.6 Sale of Assets. Xxxxxxxxxx will not sell, lease, assign,
transfer or otherwise dispose of (whether in one transaction or in a series of
transactions) all or a material part of its assets to any other Person;
provided, however, that the restrictions contained in this Section shall not
apply to or prevent sales or leases by a Xxxxxxxxxx of its properties in the
ordinary course of business or sales or leases by a Xxxxxxxxxx of its surplus,
obsolete or worn-out properties. For purposes of this Section, "material part"
means 10% or more of the book value of assets of Xxxxxxxxxx as determined in
accordance with generally accepted accounting principles.

                  10.7 Consolidation and Merger. Xxxxxxxxxx will not consolidate
with or merge into any Person, or permit any other Person to merge into it, or
acquire (in a transaction analogous in purpose or effect to a consolidation or
merger) all or substantially all the assets of any other Person.

                  10.8 Sale and Leaseback. Xxxxxxxxxx will not enter into any
arrangement, directly or indirectly, with any other Person whereby Xxxxxxxxxx
shall sell or transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or lease as lessee such property
or any part thereof or any other property which Xxxxxxxxxx intends to use for
substantially the same purpose or purposes as the property being sold or
transferred.

<PAGE>

                  10.9 Stockholder Compensation. If PentaPure exercises the
First Option, then from and after such exercise Xxxxxxxxxx will not pay any
wage, salary or bonus to, or provide any fringe benefits for, any of the
Stockholders, or any relative or affiliate of any of the Stockholders, except
for services actually rendered by the recipient and in amounts which are
reasonable as compensation for such services.

                  10.10 Restrictions on Nature of Business. Xxxxxxxxxx will not
engage in any line of business materially different from that presently engaged
in by it, specifically, air and water filtration, and porous plastic components.

                  10.11 Issuance of Stock. Until the Second Option has been
exercised or expired, Xxxxxxxxxx will not issue any new capital stock.

         11. Limited Exclusivity. The Stockholders shall cause Xxxxxxxxxx not to
sell or otherwise supply any of its products, either directly or indirectly, to:
(a) xxxxxxxxxxxxxxxx or any of its subsidiaries; (b) any manufacturer of
refrigerators (including without limitation xxxxx) anywhere in the world; or (c)
to any customer or end-user located in the country of xxxxx or for eventual
delivery to or use by anyone in the country of xxxxx. Notwithstanding the
foregoing, Xxxxxxxxxx shall be free to sell its products to manufacturers who
incorporate them into finished goods which are then delivered to customers or
end-users in the country of xxxxx, and the provisions of this Section 9 shall
not apply where the Stockholders do not have knowledge that products supplied by
Xxxxxxxxxx are being used in one or more of the restricted applications referred
to above.

         12. Certain Definitions. Except as otherwise expressly provided or
unless the context otherwise requires, the terms defined in this Section have
the following meanings:

         "Ancillary Agreements" means the Escrow Agreement and the Buy-Sell
Agreement.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated organization, government, or any agency or political subdivision
thereof.

         "Subsidiary" shall mean any corporation, association or other business
entity more than a majority (by number of votes) of the voting stock of which is
owned or controlled, directly or indirectly, by Xxxxxxxxxx or by one or more of
its Subsidiaries or both.

         13. Termination. This Agreement and the Escrow Agreement shall
terminate upon the earliest of:

         (a) xxxxxxxxxxxxx, if PentaPure has not give timely notice exercising
the First Option and does not subsequently close the purchase of the First
Option Shares;

<PAGE>

         (b) the date that the Stockholders complete the repurchase of the First
Option Shares, if PentaPure has not given timely notice exercising the Second
Option and does not subsequently close the purchase of the Second Option Shares;

         (c) if PentaPure cancels or terminates the Supply Agreement for a
reason other than breach by Xxxxxxxxxx, then within 30 days after such
cancellation the Stockholders may give written notice to PentaPure cancelling
this Agreement and the Escrow Agreement.

Upon termination of this Agreement and the Escrow Agreement, any Option Shares
not purchased by PentaPure shall be released from escrow and returned to their
owner. In the event that this Agreement terminates under clause (a) above
because PentaPure does not exercise the First Option, then the Buy-Sell
Agreement shall also terminate with the termination of this Agreement.

         14. No Waiver; Cumulative Remedies. No failure or delay on the part of
any party in exercising any right, power or remedy hereunder or under the
Ancillary Agreements shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder or under the other Ancillary Agreements. The remedies herein and in
the other Ancillary Agreements provided are cumulative and not exclusive of any
remedies provided by law.

         15. Amendments, Etc. No amendment, modification, termination or waiver
of any provision of this Agreement or the Ancillary Agreements or consent to any
departure therefrom shall be effective unless the same shall be in writing and
signed by the parties and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

         16. Addresses for Notices, Etc. Except as otherwise expressly provided
herein, all notices, requests, demands and other communications provided for
hereunder and under the Ancillary Agreements shall be in writing and mailed or
delivered to the applicable party at its address indicated below:

         If to Xxxxxxxxxx or to any Stockholder: to Xxxxxxxxxx and to all of the
Stockholders, at Xxxxxxxxxx, Xxx, xxxx Xxxxxx Xxxxx xx, Xxxxxxxx, Xxxxxxxx
xxxxx, Attention: President

         If to PentaPure: 1000 Apollo Road, Eagan, Minnesota 55121, Attention:
President

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. All such notices, requests, demands and other communications
shall, when mailed, be effective when deposited in the mails, by certified or
registered mail, addressed as aforesaid.

         17. Costs and Expenses. In the event that any party to this Agreement
or the Ancillary Agreements commences any litigation or arbitration proceeding
to enforce this Agreement or an Ancillary Agreement following a breach thereof
by another party, the prevailing party in such litigation or arbitration shall
be entitled to recover its costs incurred in such litigation or arbitration,
including without limitation reasonable attorneys fees.

<PAGE>

         18. Binding Effect, Assignment. This Agreement and the Ancillary
Agreements shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns,
except that the parties shall not have the right to assign their respective
rights hereunder or any interest herein without the prior written consent of all
the other parties. Notwithstanding the foregoing, the PentaPure's rights and
obligations under this Agreement and the Ancillary Agreements shall be
assignable by it to any purchaser or all or substantially all of PentaPure's
business or that of PentaPure's parent corporation.

         19. Time of the Essence. Time is of the essence as to the payment and
performance of all obligations and agreements of Xxxxxxxxxx under this Agreement
and the Ancillary Agreements.

         20. Governing Law. This Agreement and the Ancillary Agreements shall be
governed by, and construed in accordance with, the laws of the State of
Xxxxxxxx.

         21. Severability of Provisions. Any provision of this Agreement or the
Ancillary Agreements which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.

         22. Headings. Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

         23. Arbitration of Disputes. Any and all disputes between any of the
parties hereto which arise under this Agreement, or relate to any alleged breach
of this Agreement, shall be submitted to binding arbitration before a single
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. The arbitration shall be held in Xxxxxx, Xxxxxxxx
unless the parties to the arbitration agree to another location. Judgment on the
arbitrator's decision may be entered in any court having jurisdiction.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

STOCKHOLDERS:                            PENTAPURE INCORPORATED

                                         By   /s/ James J. Carbonari
-----------------------------------         -----------------------------------
         XXXXxxxxxx                      Its  CEO
                                            -----------------------------------
-----------------------------------
         xxxxxxxxxxxx

XXXXXXXXXXXX                             WTC INDUSTRIES, INC.

By                                       By   /s/ James J. Carbonari
   --------------------------------         -----------------------------------
Its                                      Its  CEO
   --------------------------------         -----------------------------------

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