Document:

<PAGE>

                                                                    Exhibit 10.6

================================================================================
================================================================================

                               STONERIDGE, INC.
                                as the Borrower

                           THE LENDERS NAMED THEREIN
                                  as Lenders

                           DLJ CAPITAL FUNDING, INC.
                             as Syndication Agent

                              NATIONAL CITY BANK
                    as a Lender, a Letter of Credit Issuer,
               the Administrative Agent and the Collateral Agent

                        PNC BANK, NATIONAL ASSOCIATION
                            as Documentation Agent

                             ____________________

                                AMENDMENT NO. 5
                        dated as of September 28, 2001
                                      to
                             the CREDIT AGREEMENT

                                  dated as of

                               December 30, 1998
                             _____________________

================================================================================
================================================================================
<PAGE>

                      AMENDMENT NO. 5 TO CREDIT AGREEMENT

     THIS AMENDMENT NO. 5 TO CREDIT AGREEMENT, is dated as of September 28, 2001
(this "Amendment"), among the following:

          (i)    STONERIDGE, INC., an Ohio corporation (herein, together with
     its successors and assigns, the "Borrower");

          (ii)   the Lenders party to the Credit Agreement, as hereinafter
     defined;

          (iii)  DLJ CAPITAL FUNDING, INC., a Delaware corporation, as
     Syndication Agent;

          (iv)   NATIONAL CITY BANK, a national banking association, as a
     Lender, the Letter of Credit Issuer, the Administrative Agent and the
     Collateral Agent under the Credit Agreement (the "Administrative Agent");
     and

          (v)    PNC BANK, NATIONAL ASSOCIATION, a national banking association,
      as the Documentation Agent:

     PRELIMINARY STATEMENTS:

     (1) The Borrower, the Lenders, the Syndication Agent, the Documentation
Agent and the Administrative Agent are parties to the Credit Agreement, dated as
of December 30, 1998 (as amended and as the same may from time to time be
further amended, restated or otherwise modified, the "Credit Agreement"; the
terms defined therein are used herein as so defined).

     (2) The parties hereto desire to modify certain terms and provisions of the
Credit Agreement, all as more fully set forth below.

     NOW, THEREFORE, the parties hereby agree as follows:

     Section 1.  Amendments.
                 ----------

     1.1  Amended Definition.  Section 1.1 of the Credit Agreement is hereby
          ------------------
amended to delete the definition of "Borrowing Base Termination Date" therefrom
and to insert in place thereof the following:

          "Borrowing Base Termination Date" shall mean the date upon which the
      Revolving Commitments shall have been terminated and all Revolving Loans
      irrevocably paid in full.

     1.2. Pricing Changes.  The Credit Agreement is hereby amended to delete
          ---------------
section 2.7(g) therefrom and to insert in place thereof the following:

          (g) Interest Rate Margins.   As used herein the terms "Applicable
      Prime Rate Margin" and "Applicable Eurodollar Margin" shall mean the
      applicable rates determined in accordance with the following provisions:
<PAGE>

           (i)   for any date prior to September 28, 2001, the Applicable Prime
  Rate Margin and the Applicable Eurodollar Margin for all Loans shall be
  determined in accordance with this section 2.7(g) as in effect prior to
  September 28, 2001;

           (ii)  subject at all times to section 2.7(c), on September 28, 2001,
  and thereafter the Applicable Prime Rate Margin and the Applicable Eurodollar
  Margin for all Loans shall be the number of basis points determined in
  accordance with the Pricing Grid Table set forth below for the time periods
  set forth in such Pricing Grid Table; and

           (iii) notwithstanding anything in subpart (ii) above to the
  contrary, but subject at all times to section 2.7(c), upon receipt by the
  Borrower of the proceeds of Subordinated Indebtedness in accordance with the
  conditions set forth in section 9.2(h) in an amount greater than or equal to
  $100,000,000, then on and after the date that the Borrower shall have
  complied, with respect to such proceeds, to the requirements of section 5.2,
  (A) the Applicable Prime Rate Margin for Revolving Loans and Term A Loans
  shall be 250 basis points and the Applicable Eurodollar Margin for Revolving
  Loans and Term A Loans shall be 400 basis points, and (B) the Applicable Prime
  Rate Margin for Term B Loans shall be 350 basis points and the Applicable
  Eurodollar Margin for Term B Loans shall be 500 basis points.

                               PRICING GRID TABLE
                          (Expressed in Basis Points)

<TABLE>
<CAPTION>
================================================================================================================
                                         Applicable         Applicable
                                         Prime Rate         Eurodollar
                                         Margin for         Margin for         Applicable          Applicable
                                         Revolving          Revolving          Prime Rate          Eurodollar
                                         Loans and          Loans and          Margin for          Margin for
         Time Period                    Term A Loans       Term A Loans       Term B Loans      for Term B Loans
================================================================================================================
<S>                             <C>                <C>                <C>                 <C>
From September 28, 2001                    250.00             400.00              350.00               500.00
 through March 30, 2002
----------------------------------------------------------------------------------------------------------------
From March 31, 2002 through                275.00             425.00              375.00               525.00
 June 29, 2002
----------------------------------------------------------------------------------------------------------------
From June 30, 2002 through                 300.00             450.00              400.00               550.00
 September 29, 2002
----------------------------------------------------------------------------------------------------------------
On September 30, 2002 and                  325.00             475.00              425.00               575.00
 thereafter
================================================================================================================
</TABLE>

     1.3. Additional Interest. Section 2.7 of the Credit Agreement is hereby
          -------------------
amended to add the following new subpart (h) thereto:

         (h) Additional Interest.  In addition to the interest payable pursuant
     to  subparts (a) and (b) above, and subject to the rights of the
     Administrative Agent and the Lenders to charge default interest pursuant to
     subpart (c) above, on and after September 28,
<PAGE>

     2001, the Borrower shall pay additional interest on the aggregate unpaid
     principal amount of each Loan outstanding from time to time at the rate of
     1% per annum (the "Additional Interest"); provided, that with respect to
     Additional Interest relating to any Revolving Loan denominated in Alternate
     Currency, such Additional Interest shall (i) accrue and be payable in
     Dollars and (ii) shall be calculated based upon the Dollar equivalent
     amount of such Alternate Currency as determined in accordance with the last
     sentence of section 1.4. The Additional Interest applicable to each
     Facility shall accrue daily and be due and payable on the Maturity Date
     applicable to such Facility. The Additional Interest shall constitute part
     of the Obligations, shall be evidenced by the respective Notes of each of
     the Lenders or, in the Lender Register, as the case may be, and shall not
     be transferred independently of the principal relating thereto (or
     Commitment relating thereto, in the event that such principal shall have
     been repaid).

     1.4. Commitment Fee.  The Credit Agreement is hereby amended to delete
          --------------
subpart (ii) from section 4.1(a) thereof and to insert in place thereof the
following:

                (ii) As used herein, the term "Applicable Commitment Fee Rate"
          shall mean (A) for any date prior to September 28, 2001, the
          Applicable Commitment Fee Rate as determined in accordance with this
          section 4.1(a)(ii) as in effect prior to September 28, 2001, and (B)
          on September 28, 2001, and thereafter, the Applicable Commitment Fee
          Rate shall be 50 basis points per annum.

     1.5. Monthly Reporting.  Section 8.1 of the Credit Agreement is hereby
          -----------------
amended to add the following new subpart (m) thereto:

          (m) Monthly Financial Statements.  As soon as available and in any
     event within 45 days after the end of each month, an internally prepared
     financial statement for the most recently completed month in form and
     substance acceptable to the Administrative Agent.

     1.6. Amendment to Indebtedness Covenant.  Section 9.2 of the Credit
          ----------------------------------
Agreement is hereby amended to add the following new subpart (h) thereto
immediately after subpart (g):

          (h) Subordinated Indebtedness:  In addition to the Indebtedness
     permitted pursuant to subparts (a) through (h) above, additional
     Subordinated Indebtedness, so long as (i) such Subordinated Indebtedness
     shall be unsecured, (ii) the aggregate principal amount of such
     Subordinated Indebtedness shall not exceed $125,000,000, (iii) no Default
     or Event of Default shall then exist or immediately after the incurrence of
     any such Subordinated Indebtedness would exist, (iv) the proceeds of such
     Subordinated Indebtedness shall have been applied by the Borrower in
     accordance with section 5.2, (v) after giving effect to the incurrence of
     such Subordinated Indebtedness, the Borrower shall be in compliance with
     the financial covenants set forth in sections 9.8, 9.9, 9.10 and 9.11 and
     (vi) the documentation relating to such Subordinated Indebtedness shall be
     form and substance satisfactory to the Administrative Agent.

     1.7. Amendment to Certain Financial Covenants.  Sections 9.8, 9.9, 9.10 and
          ----------------------------------------
9.11 of the Credit Agreement are hereby retroactively amended such that, for any
date prior to June 29, 2001, the Borrower shall be required to comply with such
sections as in effect prior to the Amendment
<PAGE>

Effective Date (as defined below), and, on June 30, 2001 and thereafter, such
sections shall be amended in their entirety to read as follows:

          9.8.  Consolidated Total Debt/Consolidated EBITDA Ratio.  The Borrower
      shall not permit at any time for the most recently completed four fiscal
      quarters the ratio of Consolidated Total Debt to Consolidated EBITDA to
      exceed the ratio specified below for the time period specified below:

        ----------------------------------------------------------------------
                      Time Period                                  Ratio
        ----------------------------------------------------------------------
        On June 30, 2001 through September 29, 2001            Not Applicable
        ----------------------------------------------------------------------
        On September 30, 2001 through June 29, 2002             5.00 to 1.00
        ----------------------------------------------------------------------
        On June 30, 2002 through September 29, 2002             4.50 to 1.00
        ----------------------------------------------------------------------
        On September 30, 2002 through December 30, 2002         4.00 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2002 through March 30, 2003             3.50 to 1.00
        ----------------------------------------------------------------------
        On March 31, 2003 through June 29, 2003                 3.25 to 1.00
        ----------------------------------------------------------------------
        On June 30, 2003 through September 29, 2003             3.00 to 1.00
        ----------------------------------------------------------------------
        On September 30, 2003 through December 30, 2003         2.75 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2003 and thereafter                     2.50 to 1.00
        ----------------------------------------------------------------------

          9.9.  Interest Coverage Ratio. The Borrower shall not permit at any
      time its Interest Coverage Ratio to be less than the ratio specified below
      for the time period specified below:

        ----------------------------------------------------------------------
                        Time Period                                Ratio
        ----------------------------------------------------------------------
        On June 30, 2001 through September 29, 2001             2.60 to 1.00
        ----------------------------------------------------------------------
        On September 30, 2001 through December 30, 2001         2.15 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2001 through September 29, 2002         2.10 to 1.00
        ----------------------------------------------------------------------
        On September 30, 2002 through December 30, 2002         2.30 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2002 through March 30, 2003             2.60 to 1.00
        ----------------------------------------------------------------------
        On March 31, 2003 through June 29, 2003                 3.00 to 1.00
        ----------------------------------------------------------------------
        On June 30, 2003 through September 29, 2003             3.50 to 1.00
        ----------------------------------------------------------------------
        On September 30, 2003 and thereafter                    3.75 to 1.00
        ----------------------------------------------------------------------

          9.10. Fixed Charge Coverage Ratio. The Borrower shall not permit at
      any time its Fixed Charge Coverage Ratio be less than the ratio specified
      below for the time period specified below:

        ----------------------------------------------------------------------
                          Time Period                              Ratio
        ----------------------------------------------------------------------
        On June 30, 2001 through September 29, 2001             1.10 to 1.00
        ----------------------------------------------------------------------
        On September 30, 2001 through December 30, 2001         1.00 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2001 through March 30, 2002             1.15 to 1.00
        ----------------------------------------------------------------------
        On March 31, 2002 through June 29, 2002                 1.20 to 1.00
        ----------------------------------------------------------------------
        On June 30, 2002 through September 29, 2002             1.25 to 1.00
        ----------------------------------------------------------------------
<PAGE>

        ----------------------------------------------------------------------
        On September 30, 2002 through December 30, 2002         1.45 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2002 through December 30, 2003          1.50 to 1.00
        ----------------------------------------------------------------------
        On December 31, 2003 and thereafter                     2.00 to 1.00
        ----------------------------------------------------------------------

          9.11.  Minimum Consolidated EBITDA. The Borrower shall not permit at
     any time for the most recently completed four fiscal quarters its
     Consolidated EBITDA for the time period specified below to be less than the
     amount specified below, provided that, in the event the Borrower and/or its
     Subsidiaries complete any Acquisition after the Effective Date (other than
     the Hi-Stat Acquisition), each of the amounts specified below shall be
     increased by an amount equal to 85% of the consolidated earnings before
     interest, income taxes, depreciation and amortization attributable to the
     business and assets acquired in each such Acquisition for the most recently
     completed period of four fiscal quarters preceding the date such
     Acquisition is completed:

       -------------------------------------------------------------------------
                      Time Period                                     Amount
       -------------------------------------------------------------------------
       On June 30, 2001 through September 29, 2001                Not Applicable
       -------------------------------------------------------------------------
       On September 30, 2001 through December 30, 2001              $ 64,000,000
       -------------------------------------------------------------------------
       On December 31, 2001 through March 30, 2002                  $ 64,000,000
       -------------------------------------------------------------------------
       On March 31, 2002 through June 29, 2002                      $ 62,000,000
       -------------------------------------------------------------------------
       On June 30, 2002 through September 29, 2002                  $ 64,000,000
       -------------------------------------------------------------------------
       On September 30, 2002 through December 30, 2002              $ 73,000,000
       -------------------------------------------------------------------------
       On December 31, 2002 through March 30, 2003                  $ 79,000,000
       -------------------------------------------------------------------------
       On March 31, 2003 through June 29, 2003                      $ 87,000,000
       -------------------------------------------------------------------------
       On June 30, 2003 through September 29, 2003                  $ 95,000,000
       -------------------------------------------------------------------------
       On September 30, 2003 through December 30, 2003              $ 95,000,000
       -------------------------------------------------------------------------
       On December 31, 2003 through December 30, 2004               $140,000,000
       -------------------------------------------------------------------------
       On December 31, 2004 and thereafter                          $150,000,000
       -------------------------------------------------------------------------

      At the time that the Borrower and/or its Subsidiaries complete an
      Acquisition requiring an adjustment to the foregoing amounts, the Borrower
      shall deliver to the Administrative Agent and the Lenders a certificate of
      its chief financial or accounting officer or another Authorized Officer,
      reasonably satisfactory in form and substance to the Administrative Agent,
      as to the amounts of such adjustments, and setting forth the calculations
      and other financial information (including copies of financial statements
      of the business acquired in the Acquisition) used in determining such
      adjustments.

     1.8. Amendment to Section 9.12.  Section 9.12 of the Credit Agreement is
          -------------------------
hereby amended such that, for any date prior to September 28, 2001, the Borrower
shall be required to comply with such section as in effect prior to the
Amendment Effective Date, and, on September 28, 2001 and thereafter, such
section shall be amended in its entirety to read as follows:
<PAGE>

          9.12.  Consolidated Capital Expenditures.  The Borrower shall not, and
      shall not permit any of its Subsidiaries to, make or incur Consolidated
      Capital Expenditures during the time period specified below to be in
      excess of the amount specified below, except that, in the event that
      actual Consolidated Capital Expenditures for any period (other than the
      2001 fiscal year of the Borrower) shall be less than the maximum amount
      permitted for such period, 50% of the difference may be carried over to
      the next applicable period, but not to any subsequent period:

       ----------------------------------------------------------------------
                                   Period                            Amount
       ----------------------------------------------------------------------
       Fiscal quarter ending September 30, 2001                   $10,000,000
       ----------------------------------------------------------------------
       Fiscal quarter ending December 31, 2001                    $ 5,000,000
       ----------------------------------------------------------------------
       Fiscal year ending December 31, 2002                       $21,500,000
       ----------------------------------------------------------------------
       Fiscal year ending December 31, 2003 and each fiscal year  $32,000,000
        thereafter
       ----------------------------------------------------------------------

     ;provided, however, that the Borrower shall not, and shall not permit any
     of its Subsidiaries to, make or incur Consolidated Capital Expenditures for
     the period from January 1, 2002 through June 30, 2002 in excess of the
     aggregate amount of $10,750,000.

     1.9. Amendment to Section 9.13.  The Credit Agreement is hereby amended to
          -------------------------
delete section 9.13 of the Credit Agreement therefrom in its entirety and to
insert in place thereof the following:

          9.13.  Certain Leases.  The Borrower will not permit the aggregate
     annual payments (excluding any property taxes, insurance or maintenance
     obligations paid by the Borrower and its Subsidiaries as additional rent or
     lease payments) by the Borrower and its Subsidiaries on a consolidated
     basis under agreements to rent or lease any real or personal property for a
     period exceeding 12 months (including any renewal or similar option
     periods), other than any leases constituting Capital Leases, to exceed 5%
     of the Borrower's Consolidated Net Worth as of the most recently completed
     Testing Period.

     Section 2.  Representations and Warranties.
                 ------------------------------

     The Borrower represents and warrants as follows:

     2.1. Authorization and Validity of Amendment.  This Amendment has been duly
          ---------------------------------------
authorized by all necessary corporate action on the part of the Borrower, has
been duly executed and delivered by a duly authorized officer of the Borrower,
and constitutes the valid and binding agreement of the Borrower, enforceable
against the Borrower in accordance with its terms.

     2.2. Representations and Warranties.   The representations and warranties
          ------------------------------
of the Credit Parties contained in the Credit Agreement or in the other Credit
Documents are true and correct in all material respects on and as of the
Amendment Effective Date, as though made on and as of the Amendment Effective
Date, except to the extent that such representations and warranties expressly
relate to an earlier specified date, in which case such representations and
warranties are hereby reaffirmed as true and correct in all material respects as
of the date when made.
<PAGE>

     2.3. No Event of Default.  No Default or Event of Default exists or
          -------------------
hereafter will begin to exist.

     2.4. Compliance.  The Borrower is in full compliance with all covenants and
          ----------
agreements contained in the Credit Agreement, as amended hereby, and the other
Credit Documents to which it is a party.

     2.5. No Claims.  The Borrower is not aware of any claim or offset against,
          ---------
or defense or counterclaim to, any of its obligations or liabilities under the
Credit Agreement or any other Credit Document.

     Section 3.  Ratifications.
                 -------------

     Except as expressly modified and superseded by this Amendment, the terms
and provisions of the Credit Agreement are ratified and confirmed and shall
continue in full force and effect.

     Section 4.  Binding Effect.
                 --------------

     This Amendment shall become effective on the date set forth in the opening
paragraph of this Amendment (the "Amendment Effective Date"), subject to the
satisfaction of the following conditions on or before such date:

          (a)  the Borrower shall have caused each Subsidiary Guarantor to
     consent and agree to and acknowledge the terms of this Amendment;

          (b)  the Borrower shall have paid to the Administrative Agent, for the
     pro rata benefit of each Lender that shall have executed this Amendment on
     or before 12:00 noon on September 28, 2001, in an amount equal to (i) 50
     basis points, times (ii) the aggregate amount of the Commitments of such
     Lenders;

          (c)  the Borrower shall have paid all reasonable legal fees and
     expenses of the Administrative Agent in connection with this Amendment and
     the documents executed in connection therewith; and

          (d)  the Borrower shall have provided such other items and shall have
     satisfied such other conditions as may be reasonably required by the
     Administrative Agent and the Lenders.

     Section 5.  Miscellaneous.
                 -------------

          5.1. Survival of Representations and Warranties.  All representations
               ------------------------------------------
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any subsequent Loan or other Credit Event shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.

          5.2. Reference to Credit Agreement.  The Credit Agreement and any and
               -----------------------------
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the

                                       7
<PAGE>

terms of the Credit Agreement as amended hereby, are hereby amended so that any
reference therein to the Credit Agreement shall mean a reference to the Credit
Agreement as amended hereby.

          5.3. Severability.  Any term or provision of this Amendment held by a
               ------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.

          5.4. Applicable Law.  This Amendment shall be governed by and
               --------------
construed in accordance with the laws of the State of Ohio without regard to
conflicts of laws provisions.

          5.5. Headings.  The headings, captions and arrangements used in this
               --------
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

          5.6. Entire Agreement.  This Amendment is specifically limited to the
               ----------------
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.  Except as set forth herein,
the Credit Agreement shall remain in full force and effect and be unaffected
hereby.

          5.7. Waiver of Claims.  The Borrower, by signing below, hereby waives
               ----------------
and releases Administrative Agent and each of the Lenders and their respective
directors, officers, employees, attorneys, affiliates and subsidiaries from any
and all claims, offsets, defenses and counterclaims of which the Borrower is
aware, such waiver and release being with full knowledge and understanding of
the circumstances and effect thereof and after having consulted legal counsel
with respect thereto.

          5.8. Counterparts.  This Amendment may be executed by the parties
               ------------
hereto separately in one or more counterparts and by facsimile signature, each
of which when so executed shall be deemed to be an original, but all of which
when taken together shall constitute one and the same agreement.

                 [Remainder of page intentionally left blank.]

                                       8
<PAGE>

          5.9. JURY TRIAL WAIVER.  EACH OF THE PARTIES TO THIS AMENDMENT HEREBY
               -----------------
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY HERETO
HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

          IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered as of the date first above written.

                                   STONERIDGE, INC.
                                   By:    /s/ Kevin P. Bagby
                                      ----------------------------------------
                                   Name:  Kevin P. Bagby
                                        --------------------------------------
                                   Title: Vice President-Finance
                                         -------------------------------------
                                          & Chief Financial Officer
                                         --------------------------

                                   NATIONAL CITY BANK,
                                    as a Lender and the Administrative Agent
                                   By:    /s/ Pat Pastore
                                      ----------------------------------------
                                   Name:  Pat Pastore
                                        --------------------------------------
                                   Title: Vice President
                                         -------------------------------------

                                   DLJ CAPITAL FUNDING, INC., as
                                    the Syndication Agent
                                   By:________________________________________
                                   Name:______________________________________
                                   Title:_____________________________________

                                   PNC BANK, NATIONAL ASSOCIATION,
                                    as a Lender and as the Documentation
                                    Agent
                                   By:    /s/ Joseph G. Moran
                                      ---------------------------------------
                                   Name:  Joseph G. Moran
                                        -------------------------------------
                                   Title: Vice President
                                         ------------------------------------

                   [SIGNATURE PAGES OF OTHER LENDERS FOLLOW]

                                       9
<PAGE>

                 Signature Page to Stoneridge Amendment No. 5
                 --------------------------------------------

THE BANK OF NOVA SCOTIA                 AMMC CDO I, LIMITED
By:    /s/ N. Bell                       By: American Money Management Corp.,
       -----------------------------         as Collateral Manager
Name:  N. Bell                          By:    /s/ David P. Meyer
       -----------------------------           -------------------------------
Title: Assistant Agent                  Name:  David P. Meyer
       -----------------------------           -------------------------------
                                        Title: Vice President
KZH ING-2, LLC                                 -------------------------------
By:    /s/ Susan Lee
       -----------------------------    AMMC CDO II, LIMITED
Name:  Susan Lee                         By: American Money Management Corp.,
       -----------------------------         as Collateral Manager
Title: Authorized Agent                 By:    /s/ David P. Meyer
       -----------------------------           -------------------------------
                                        Name:  David P. Meyer
KZH ING-3, LLC                                 -------------------------------
By:    /s/ Susan Lee                    Title: Vice President
       -----------------------------           -------------------------------
Name:  Susan Lee
       -----------------------------    THE TRAVELERS INSURANCE COMPANY
Title: Authorized Agent                 By:    /s/ Matthew J. McInerny
       -----------------------------           -------------------------------
                                        Name:  Matthew J. McInerny
KZH RIVERSIDE, LLC                             -------------------------------
By:    /s/ Susan Lee                    Title: Assistant Investment Officer
       -----------------------------           -------------------------------
Name:  Susan Lee
       -----------------------------    TRAVELERS CORPORATE LOAN FUND, INC.
Title: Authorized Agent                  By: Travelers Asset Management
       -----------------------------         International Company, LLC

KZH SOLEIL, LLC                         By:    /s/ Matthew J. McInerny
By:    /s/ Susan Lee                           -------------------------------
       -----------------------------    Name:  Matthew J. McInerny
Name:  Susan Lee                               -------------------------------
       -----------------------------    Title: Assistant Investment Officer
Title: Authorized Agent                        -------------------------------
       -----------------------------
                                        COLUMBUS LOAN FUNDING, LTD.
KZH SOLEIL-2, LLC                        By:  Travelers Asset Management
By:    /s/ Susan Lee                          International Company, LLC
       -----------------------------    By:    /s/ Matthew J. McInerny
Name:  Susan Lee                               -------------------------------
       -----------------------------    Name:  Matthew J. McInerny
Title: Authorized Agent                        -------------------------------
       -----------------------------    Title: Assistant Investment Officer
                                               -------------------------------
SUNTRUST BANK
By:    /s/ William C. Humphries
       -----------------------------
Name:  William C. Humphries
       -----------------------------
Title: Director
       -----------------------------

                     Signature Page to Amendment No. 5 to
                          the Credit Agreement among
                       Stoneridge, Inc., as the Borrower
                          the Lenders party thereto,
               National City Bank, as the Administrative Agent,
           DLJ Capital Funding, Inc., as the Syndication Agent, and
          PNC Bank, National Association, as the Documentation Agent

                                       10
<PAGE>

                 Signature Page to Stoneridge Amendment No. 5
                 --------------------------------------------

<TABLE>
<S>                                           <C>
VAN KAMPEN CLO I, LIMITED                     FIRST DOMINION FUNDING II
 By: Van Kampen Management, Inc.,             By:     /s/ David H. Lerner
     as Collateral Manager                           -----------------------------------------
By:     /s/ Darvin D. Pierce                  Name:   David H. Lerner
       -----------------------------------           -----------------------------------------
Name:   Darvin D. Pierce                      Title:  Authorized Signatory
       -----------------------------------           -----------------------------------------
Title:  Executive Director
       -----------------------------------    STEIN ROE & FARNHAM INCORPORATED
                                               As Agent for Keyport Life Insurance Company
VAN KAMPEN PRIME RATE INCOME TRUST            By:     /s/ James R. Fellows
 By: Van Kampen Investment Advisory Corp.            -----------------------------------------
By:     /s/ Darvin D. Pierce                  Name:   James R. Fellows
       -----------------------------------           -----------------------------------------
Name:   Darvin D. Pierce                      Title:  Sr. Vice President & Portfolio Manager
       -----------------------------------           -----------------------------------------
Title:  Executive Director
       -----------------------------------    STEIN ROE FLOATING RATE LIMITED
                                               LIABILITY COMPANY
BANK AUSTRIA CREDITANSTALT                    By:     /s/ James R. Fellows
By:     /s/ Clifford L. Wells                        -----------------------------------------
       -----------------------------------    Name:   James R. Fellows
Name:   Clifford L. Wells                            -----------------------------------------
       -----------------------------------    Title:  Senior Vice President
Title:  Senior Vice President                        -----------------------------------------
       -----------------------------------
                                              NATIONAL CITY BANK
BANK AUSTRIA CREDITANSTALT                    By:     /s/ Pat Pastore
By:     /s/ Stanley M. Guralnick                     -----------------------------------------
       -----------------------------------    Name:   Pat Pastore
Name:   Stanley M. Guralnick                         -----------------------------------------
       -----------------------------------    Title:  Vice President
Title:  Vice President                               -----------------------------------------
       -----------------------------------
                                              ABN AMRO BANK N.V.
GALAXY CLO 1999-1, LTD.                       By:     /s/ Judith M. Bresnen
 By: SAI Investment Adviser, Inc.                    -----------------------------------------
     as Collateral Manager                    Name:   Judith M. Bresnen
By:     /s/ John G. Lapham                           -----------------------------------------
       -----------------------------------    Title:  Group Vice President
Name:   John G. Lapham                               -----------------------------------------
       -----------------------------------
Title:  Authorized Agent                      ABN AMRO BANK N.V.
       -----------------------------------    By:     /s/ John M. Pastore
                                                     -----------------------------------------
ARCHIMEDES FUNDING II, LTD.                   Name:   John M. Pastore
 By: ING Capital Advisors LLC,                       -----------------------------------------
     as Collateral Manager                    Title:  Assistant Vice President
By:     /s/ Greg M. Masuda, CFA                      -----------------------------------------
       -----------------------------------
Name:   Greg M. Masuda, CFA                   COMERICA BANK
       -----------------------------------    By:     /s/ Nicholas G. Mester
Title:  Vice President                               -----------------------------------------
       -----------------------------------    Name:   Nicholas G. Mester
                                                     -----------------------------------------
                                              Title:  Vice President
                                                     -----------------------------------------
</TABLE>

                     Signature Page to Amendment No. 5 to
                          the Credit Agreement among
                       Stoneridge, Inc., as the Borrower
                          the Lenders party thereto,
               National City Bank, as the Administrative Agent,
           DLJ Capital Funding, Inc., as the Syndication Agent, and
          PNC Bank, National Association, as the Documentation Agent

                                       11
<PAGE>

                 Signature Page to Stoneridge Amendment No. 5
                 --------------------------------------------

<TABLE>
<S>                                              <C>
                                                 PAM CAPITAL FUNDING LP by Highland Capital
BANKBOSTON NA                                    Management, L.P. as Collateral Manager
By:       /s/ Jack M. Harcourt                   By:        /s/ Mark K. Okada
         -----------------------------------              -----------------------------------------
Name:     Jack M. Harcourt                       Name:      Mark K. Okada
         -----------------------------------              -----------------------------------------
Title:    Managing Director                      Title:     Executive Vice President
         -----------------------------------              -----------------------------------------

FIFTH THIRD BANK, NE OH                          FLEET NATIONAL BANK
By:       /s/ Christopher S. Helmeci             By:        /s/ Jack M. Harcourt
         -----------------------------------              -----------------------------------------
Name:     Christopher S. Helmeci                 Name:      Jack M. Harcourt
         -----------------------------------              -----------------------------------------
Title:    Vice President                         Title:     Managing Director
         -----------------------------------              -----------------------------------------

FIRSTAR BANK                                     BLACK DIAMOND CLO 1998-1 LTD
By:       /s/ Thomas W. Cherry                   By:        /s/ Paul Cope
         -----------------------------------              -----------------------------------------
Name:     Thomas W. Cherry                       Name:      Paul Cope
         -----------------------------------              -----------------------------------------
Title:    Vice President                         Title:     Director
         -----------------------------------              -----------------------------------------

MELLON BANK, N.A.                                BLACK DIAMOND CLO 2000-1 LTD
By:       /s/ John J. Ligday, Jr.                By:        /s/ Paul Cope
         -----------------------------------              -----------------------------------------
Name:     John J. Ligday, Jr.                    Name:      Paul Cope
         -----------------------------------              -----------------------------------------
Title:    Vice President                         Title:     Director
         -----------------------------------              -----------------------------------------

MERCANTILE BANK                                  FREMONT INVESTMENT & LOAN
By:       /s/ Thomas W. Cherry                   By:        /s/ Kannika Viravan
         -----------------------------------              -----------------------------------------
Name:     Thomas W. Cherry                       Name:      Kannika Viravan
         -----------------------------------              -----------------------------------------
Title:    Vice President and Attorney in Fact    Title:     Vice President
         -----------------------------------              -----------------------------------------

                                                 ML CBO IV (CAYMAN) LTD. by Highland Capital
SUMMIT BANK                                      Management, L.P. as Collateral Manager
By:       /s/ Jack M. Harcourt                   By:        /s/ Mark K. Okada
         -----------------------------------              -----------------------------------------
Name:     Jack M. Harcourt                       Name:      Mark K. Okada
         -----------------------------------              -----------------------------------------
Title:    Managing Director                      Title:     Executive Vice President
         -----------------------------------              -----------------------------------------

AVALON CAPITAL                                   AVALON CAPITAL LTD 2
By:       /s/ Joseph Rotondo                     By:        /s/ Joseph Rotondo
         -----------------------------------              -----------------------------------------
Name:     Joseph Rotondo                         Name:      Joseph Rotondo
         -----------------------------------              -----------------------------------------
Title:    Authorized Signatory                   Title:     Authorized Signatory
         -----------------------------------              -----------------------------------------
</TABLE>

                     Signature Page to Amendment No. 5 to
                          the Credit Agreement among
                       Stoneridge, Inc., as the Borrower
                          the Lenders party thereto,
               National City Bank, as the Administrative Agent,
           DLJ Capital Funding, Inc., as the Syndication Agent, and
          PNC Bank, National Association, as the Documentation Agent

                                       12
<PAGE>

                 Signature Page to Stoneridge Amendment No. 5
                 --------------------------------------------

<TABLE>
<S>                                                           <C>
CHARTER VIEW PORTFOLIO                                        SOMERS CDO LTD.
By: INVESCO Senior Secured Management, Inc.                   By: Mass Mutual Life Ins. Company as Collateral
as Investment Advisor                                         Manager
By:       /s/ Joseph Rotondo                                  By:        /s/ Steven J. Katz
         -----------------------------------                            -----------------------------------------
Name:     Joseph Rotondo                                      Name:      Steven J. Katz
         -----------------------------------                            -----------------------------------------
Title:    Authorized Signatory                                Title:     Second vice President and Associate
                                                                         General Counsel
         -----------------------------------                            -----------------------------------------

OASIS COLLATERALIZED HIGH INCOMEPORTOFOLIO-1 LTD
By: INVESCO Senior Secured Management, Inc.                   ML CLO XII PILGRIM AMERICA (CAYMAN)
as Subadvisor                                                 By: ING Pilgrim Investments as its Investment Manager
By:       /s/ Joseph Rotondo                                  By:        /s/ Mark F. Haak
         -----------------------------------                            -----------------------------------------
Name:     Joseph Rotondo                                      Name:      Mark F. Haak
         -----------------------------------                            -----------------------------------------
Title:    Authorized Signatory                                Title:     Assistant Vice President
         -----------------------------------                            -----------------------------------------

CERES II FINANCE LTD
By: INVESCO Senior Secured Management, Inc. as
Sub-Managing Agent (Financial)                                TORONTO DOMINION (NEW YORK), INC.
By:       /s/ Joseph Rotondo                                  By:        /s/ Stacey L. Malek
         -----------------------------------                            -----------------------------------------
Name:     Joseph Rotondo                                      Name:      Stacey L. Malek
         -----------------------------------                            -----------------------------------------
Title:    Authorized Signatory                                Title:     Vice President
         -----------------------------------                            -----------------------------------------

MASS MUTUAL LIFE INS. COMPANY
By:       /s/ Steven J. Katz
         -----------------------------------
Name:     Steven J. Katz
         -----------------------------------
Title:    Second Vice President and Associate
          General Counsel
          -----------------------------------
</TABLE>

                     Signature Page to Amendment No. 5 to
                          the Credit Agreement among
                       Stoneridge, Inc., as the Borrower
                          the Lenders party thereto,
               National City Bank, as the Administrative Agent,
           DLJ Capital Funding, Inc., as the Syndication Agent, and
          PNC Bank, National Association, as the Documentation Agent

                                       13
<PAGE>

                           GUARANTOR ACKNOWLEDGMENT
                           ------------------------

     Each of the undersigned consents and agrees to and acknowledges the terms
of the foregoing Amendment No. 5 to the Credit Agreement.  Each of the
undersigned specifically agrees to the waivers set forth in such agreement,
including, but not limited to, the jury trial waiver. Each of the undersigned
further agrees that the obligations of the each of the undersigned pursuant to
the Subsidiary Guaranty executed by each of the undersigned shall remain in full
force and effect and be unaffected hereby.

     Each of the undersigned hereby waives and releases the Administrative Agent
and the Lenders and the respective directors, officers, employees, attorneys,
affiliates and subsidiaries of the Administrative Agent and the Lenders from any
and all claims, offsets, defenses and counterclaims of which the undersigned is
aware, such waiver and release being with full knowledge and understanding of
the circumstances and effect thereof and after having consulted legal counsel
with respect thereto.

  STONERIDGE CONTROL DEVICES, INC.      STONERIDGE ELECTRONICS, INC.

  By: /s/ Kevin P. Bagby                By: /s/ Kevin P. Bagby
     -----------------------------         ------------------------------------
  Name:    Kevin P. Bagby               Name:    Kevin P. Bagby
       ---------------------------           ----------------------------------
  Title:   Director                     Title:   Director
        --------------------------            ---------------------------------

                                       14<PAGE>

                                                                   EXHIBIT 10.30

                             DATED August 22, 2001
                             ---------------------

                          Biorex Laboratories Limited

                                     -and-

                          Glycyx Pharmaceuticals, Ltd

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

                               License Agreement

                           for Japan, Korea & Taiwan

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

THE INFORMATION HEREIN MARKED BY [*] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE SEC.
<PAGE>

                               Table of Contents

<TABLE>
<S>                                                                          <C>
1.   DEFINITIONS...........................................................   1

2.   REPRESENTATIONS AND WARRANTIES........................................   7

3.   GRANT.................................................................   7

4.   DEVELOPMENT...........................................................   9

5.   COMMERCIALISATION.....................................................  10

6.   TRADE NAME............................................................  11

7.   PAYMENTS TO BIOREX....................................................  11

8.   REPORTS AND ACCOUNTING................................................  12

9.   PAYMENT TERMS.........................................................  13

10.  INFRINGEMENT..........................................................  13

11.  CONFIDENTIALITY.......................................................  14

12.  PATENT PROSECUTION AND MAINTENANCE....................................  15

13.  TERM AND TERMINATION..................................................  16

14.  INDEMNITY.............................................................  18

15.  FORCE MAJEURE.........................................................  20

16.  ASSIGNMENT............................................................  20

17.  MISCELLANEOUS.........................................................  21
</TABLE>
<PAGE>

THIS AGREEMENT is made the 22nd day of August 2001

BETWEEN:

(1)  Biorex Laboratories Limited a company incorporated in England and Wales
     having its registered office at 2 Crossfield Chambers, Gladbeck Way,
     Enfield, Middlesex, EN2 7HT, England ("Biorex"); and

(2)  Glycyx Pharmaceuticals, Ltd a company incorporated in Bermuda having its
     registered office at Milner House, 18 Parliament Street, Hamilton, HM12
     Bermuda ("Glycyx").

WHEREAS:

A.   By an agreement dated 17 September 1992 between Biorex and Glycyx, Biorex
     granted to Glycyx an exclusive licence to make, have made, use, sell and
     have sold products in certain territories excluding Japan, Korea and
     Taiwan.

B.   Biorex and Glycyx now wish to enter into an exclusive licence in respect of
     Japan, Korea and Taiwan.

IT IS AGREED AS FOLLOWS:

1.   DEFINITIONS

1.1  For the purposes of this Agreement, the terms defined in this Clause shall
     have the meanings specified below:

     "Affiliate"              means any corporation or other entity which
                              controls, is controlled by, or is under common
                              control with, a party to this Agreement. A
                              corporation or other entity shall be regarded as
                              in control of another corporation or entity if it
                              owns or directly or indirectly controls more than
                              fifty percent (50%) of the voting stock or other
                              ownership interest of the other corporation or
                              entity, or if it possesses, directly or
                              indirectly, the power to direct or cause the
                              direction of the management and policies of the
                              corporation or other entity.

     "Balsalazide"            means 5-[4(2-Carboxyethelcarbamoyl)-phenylazo]-
                              salicylic acid disodium salt dihydrate.

     "Biorex Fees"            means the fees payable to Biorex under Clause 7.1.

                                       1
<PAGE>

     "Commercial Introduction"     of any Product, means the first sale for use
                                   or consumption by the general public of such
                                   Product in a country within the Territory
                                   after required marketing and, if required,
                                   pricing approval has been granted by the
                                   governing health authority of such country.

     "Development Payments"        means payments made to Glycyx by Third
                                   Parties exclusively for (a) development work
                                   and/or (b) supply of materials provided by
                                   Glycyx provided that such development work
                                   and/or supply of materials are exclusively
                                   for the purposes of (a) obtaining regulatory
                                   approval of the Products and/or (b)
                                   conducting clinical trials or clinical
                                   studies to promote Products, in any region in
                                   the Territory.

     "Initial License Fees"        means any initial license fees received by
                                   Glycyx and/or its Affiliates in consideration
                                   of the grant of a Sublicense in the
                                   Territory.

     "Launch"                      means a commercial launch of the Product in
                                   any country in the Territory supported by
                                   such marketing expense and support and
                                   launched in such quantities as may be
                                   appropriate for the Product to have a
                                   significant effect on total sales of any
                                   similar or competitive product in such
                                   country.

     "MAA"                         means a product license application filed
                                   with the Ministry of Health and Welfare in
                                   Japan, or counterpart application for
                                   marketing approval in any other country in
                                   the Territory, with respect to a Product.

     "Manufacturing Technology"    shall mean all methods, processes, designs,
                                   data, procedures and other information owned
                                   by or licensed to Biorex or its Affiliates
                                   during the term of this Agreement that are
                                   reasonably required for pilot production or
                                   commercial manufacturing of Products,
                                   including, without limitation, final quality
                                   assurance-quality control procedures,
                                   manufacturing procedures (including
                                   conditions, times, temperatures, pressures
                                   and rates), product and raw material
                                   specifications, and other technology related
                                   thereto, including all patent and other
                                   intellectual property rights thereto.

                                       2
<PAGE>

     "Net Receipts"                means:

                                   (i)  the gross amount received by Glycyx or
                                        an Affiliate of Glycyx in respect of
                                        Supplies for consumption within the
                                        Territory (excluding for the avoidance
                                        of doubt, transfers or dispositions for
                                        charitable, promotional and marketing,
                                        pre-clinical, clinical, regulatory or
                                        government purposes), less deductions
                                        for:

                                        (a)  normal and customary trade,
                                             quantity and cash discounts and
                                             sales returns and allowances,
                                             including:

                                             (i)    those granted on account of
                                                    price adjustments, billing
                                                    errors, rejected goods,
                                                    damaged goods, returns and
                                                    rebates,

                                             (ii)   administrative and other
                                                    fees and reimbursements and
                                                    similar payments to
                                                    wholesalers and other
                                                    distributors, buying groups,
                                                    pharmacy benefit management
                                                    organizations, health care
                                                    insurance carriers and other
                                                    institutions, and

                                             (iii)  allowances, rebates and fees
                                                    paid to distributors

                                        (b)  customs and excise duties and other
                                             duties related to the sales to the
                                             extent that such items are included
                                             in the gross amount invoiced;

                                        (c)  rebates and similar payments made
                                             with respect to sales paid for by
                                             any governmental or regulatory
                                             authority;

                                       3
<PAGE>

                                        (d)  sales and other taxes and duties
                                             directly related to the sale or
                                             delivery of such Products (but not
                                             including taxes assessed against
                                             the income derived from such sale);
                                             and

                                        (e)  delivery, packing and insurance
                                             expenses to the extent that such
                                             expenses are included in the
                                             relevant invoice as separate items;
                                             and

                                 (ii)   the Initial License Fees and any other
                                        gross amount received by Glycyx or any
                                        Glycyx Affiliate from any Third Party
                                        under the terms of any Sublicense in so
                                        far as such amounts are attributable to
                                        the grant of rights in respect of any
                                        Product in the Territory excluding:

                                        (a)  sales taxes or other equivalent
                                             taxes levied on any invoice
                                             rendered by Glycyx (or any Glycyx
                                             Affiliate) in respect of sums due
                                             under such Sublicense (but not
                                             including taxes assessed against
                                             the income derived from such
                                             payments);

                                        (b)  any Development Payments;

                                        (c)  any sums received under sub-
                                             paragraph (i) above,

                                 (iii)  any payments recovered from infringing
                                        Third Parties as provided in Clause
                                        10.2.3

                                 but less any deductions made pursuant to
                                 Clauses 7.2 and/or 10;

     "Patent Rights"             means all rights of Biorex in the Territory to
                                 any subject matter claimed in or covered by any
                                 of the following:

                                 (i)    Japanese patent no. 1433303 and any
                                        continuations, continuation-in-part,
                                        divisions, substitutions, renewals,
                                        reissues and extensions thereof;

                                       4
<PAGE>

                                   (ii) Any and all other patent rights, now
                                        existing or hereafter acquired
                                        (including applications therefor),
                                        pertaining to the subject matter
                                        described in paragraph (a) above, or
                                        that are otherwise related to
                                        Balsalazide, or to prodrugs, analogs or
                                        isomers thereof or improvements of any
                                        of the foregoing, obtained in any
                                        country within the Territory.

     "Products"                    means products incorporating Balsalazide,
                                   whether or not such products are covered by
                                   the Patent Rights, or any other material
                                   whose manufacture, use or sale by an
                                   unlicensed third party would constitute an
                                   infringement of any Valid Claim included
                                   within the Patent Rights.

     "Report"                      means any report prepared pursuant to Clause
                                   8.1.

     "Salix"                       means Salix Pharmaceuticals Inc., a company
                                   incorporated under the laws of California
                                   having its principal place of business at
                                   8540 Colonnade Center Drive, Raleigh, NC
                                   27615, USA, a Glycyx Affiliate.

     "Sublicense"                  has the meaning given by Clause 3.2.3.

     "Sublicensee"                 has the meaning given by Clause 3.2.3.

     "Supplies"                    means any and all of the following:

                                   (b)  Products, and

                                   (c)  components of Products including,
                                        without limitation, ingredients,
                                        intermediates, Balsalazide chemical or
                                        pharmaceutical dosage forms of Products
                                        sold by Glycyx or its Affiliates to
                                        Third Parties for (i) further processing
                                        or packaging, and/or (ii) sale by Third
                                        Parties.

                                       5
<PAGE>

     "Technical Information"       means all formulae, raw material and product
                                   specifications, designs and procedures,
                                   formulation data, processes and methods,
                                   pharmacology, toxicology and other pre-
                                   clinical tests results, clinical trials data
                                   and results, know-how, trade secrets,
                                   inventions and other scientific, medical,
                                   technical and marketing data and information,
                                   including all patent and other intellectual
                                   property rights thereto, which:

                                   (a)  are owned or controlled by, or licensed
                                        to, Biorex or its Affiliates during the
                                        term of this Agreement, and

                                   (b)  that are reasonably necessary for the
                                        development, manufacture, sale or use of
                                        Products. Technical Information shall
                                        include information and method relating
                                        to the characterisation, synthesis,
                                        formulation, stability, manufacture or
                                        assay of Balsalazide.

     "Territory"                   means Japan, Korea and Taiwan.

     "Third Party"                 means any entity other than Glycyx or Biorex
                                   and their respective Affiliates.

     "Trade Name"                  means the trade name "Colazide"

     "Valid Claim"                 means a claim of an issued and unexpired
                                   patent included within the Patent Rights,
                                   which has not been held permanently revoked,
                                   unenforceable or invalid by a decision of a
                                   court or other governmental agency of
                                   competent jurisdiction, unappealable or
                                   unappealed within the time allowed for
                                   appeal, and which has not been admitted to be
                                   invalid or unenforceable through reissue or
                                   disclaimer or otherwise.

                                       6
<PAGE>

2.   REPRESENTATIONS AND WARRANTIES

2.1  Authorisation.  Biorex represents and warrants that
     -------------

     2.1.1  it has the full right and authority to grant the licenses provided
            in this Agreement and perform its obligations hereunder;

     2.1.2  to the best of Biorex's knowledge, Glycyx may exercise the licenses
            granted to it under this Agreement without conflict with or
            infringement of any rights or alleged rights of any person or
            entity;

     2.1.3  Biorex has not, and will not during the term of this Agreement, make
            any commitment or incur any obligation in conflict with the licenses
            granted in this Agreement;

     2.1.4  Biorex is, at the date of this Agreement, the sole legal owner of
            Japanese patent no. 1433303;

     2.1.5  as of the date of this Agreement, Biorex and its Affiliates have no
            patents or patent applications within the Territory, other than
            Japanese patent no. 1433303, related to Balsalazide, or to prodrugs,
            analogs or isomers thereof, or improvements or any of the foregoing;
            and

     2.1.6  as of the date of this Agreement, Biorex and its Affiliates have no
            registered trade marks or trade mark applications for the Trade Name
            within the Territory.

2.2  No other Representations. Except to the extent provided in this Clause 2,
     ------------------------
     Biorex makes no representations, extends no warranties of any kind, either
     expressed or implied, with respect to use, sale, or other disposition by
     Glycyx or its Sublicensees or its vendees or other transferees of Products
     incorporating or made by use or subject matter licensed under this
     Agreement. THE WARRANTIES EXPRESSLY SET FORTH IN THIS CLAUSE 2 BY EITHER
     PARTY ARE EXCLUSIVE AND NO OTHER WARRANTY, WRITTEN OR ORAL, INCLUDING
     WARRANTIES OF SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE, IS
     EXPRESSED OR IMPLIED.

3.   GRANT

3.1  Grant. Biorex hereby grants to Glycyx the exclusive right and license under
     -----
     the Patent Rights, the Technical Information and Manufacturing Technology
     to develop, have developed, make, have made, use, sell and have sold
     Products within the Territory. Notwithstanding the foregoing, Biorex may
     authorise Salix, its Affiliates and successors to manufacture Balsalazide
     within the Territory solely for sale and use outside the Territory.

                                       7
<PAGE>

3.2      Sublicenses.
         -----------

         3.2.1    The license granted to Glycyx under Clause 3.1 above shall
                  include the right to grant Sublicenses within the Territory.
                  Glycyx shall provide Biorex with a copy of any Sublicense
                  issued hereunder, which copy shall be maintained in confidence
                  pursuant to Clause 11. Notwithstanding the foregoing, except
                  as provided in Clause 3.2.4 Glycyx shall not grant to any
                  Third Party a sublicence or marketing rights for the
                  manufacture or sale of a Product in any other country within
                  the Territory without first obtaining Biorex's consent, which
                  shall not be withheld unreasonably.

         3.2.2    In the event that Glycyx receives from a Sublicensee hereunder
                  notice of a default by Glycyx that would give rise to a
                  termination of the Sublicense agreement, Glycyx shall promptly
                  provide such notice to Biorex. Except where Biorex enters into
                  an agreement with the Sublicensee to provide an alternative
                  arrangement in such circumstances, Glycyx shall ensure that
                  the Sublicense agreement shall provide that, in the event of
                  such a breach by Glycyx and a failure by Glycyx to cure the
                  breach within the cure period specified in the Sublicense
                  agreement, Biorex will have an additional period to cure the
                  breach and to assume Glycyx's rights and obligations under the
                  Sublicense agreement.

         3.2.3    Subject to Clause 3.2.4, in this Agreement the term
                  "Sublicense" shall mean any agreement under which Glycyx
                  grants to a Third Party (the "Sublicensee") rights to:

                  (a)   market, promote, and/or distribute Products in the
                        Territory using Supplies purchased from Glycyx; and/or

                  (b)   make, have made, use and/or sell or have sold Products
                        in the Territory.

         3.2.4    The following types of arrangements shall not be Sublicenses
                  hereunder:

                  (a)   subcontracting of Third Parties to develop the Product
                        or new Products for Glycyx; or

                  (b)   subcontracting of Third Parties to manufacture the
                        Products or ingredients for supply to Glycyx or its
                        Sublicensees only.

3.3      Documentation. Glycyx and Biorex agree to execute and file such formal
         -------------
         patent licenses and similar instruments as the other party may
         reasonably request to evidence or perfect the licenses granted herein.

                                       8
<PAGE>

4.       DEVELOPMENT

4.1      Clinical Development and Regulatory Approvals.
         ---------------------------------------------

         4.1.1  Glycyx shall procure that it and its Sublicensees shall use
                commercially reasonable efforts to obtain all necessary
                regulatory approvals to market a Product in each country within
                the Territory.

         4.1.2  Biorex and Glycyx acknowledge that additional pre-clinical and
                clinical studies may be necessary in order to apply for and
                obtain regulatory approvals in any country in the Territory, and
                hereby agree to discuss plans for such studies should they be
                necessary and to negotiate in good faith their respective rights
                and obligations relative to conducting or having such studies
                conducted.

4.2      Technical Information. Biorex shall promptly provide to Glycyx, and in
         ---------------------
         any event at least semi-annually, all Technical Information (including
         such regulatory filings) and information that it develops or acquires
         after the date hereof. In addition, Biorex shall use all reasonable
         efforts to so provide to Glycyx all similar items and information
         generated or developed by or for other licensees of Biorex and to
         permit Glycyx to use such items and information to the same extent it
         may use Technical Information hereunder. Glycyx and Sublicensees
         hereunder shall have a right to use all such Technical Information and
         information of such other licensees for purposes of this Agreement, and
         to cross-reference all such regulatory filings. In the event that
         Biorex does not obtain from any other licensee of Biorex the right to
         permit Glycyx to use such items or information, Biorex shall not
         provide to such licensee any information of Glycyx provided to Biorex
         under Clause 4.3 below.

4.3      Exchange of Data. Each party shall keep the other informed as to its
         ----------------
         progress in the development and testing of all Products and the
         preparing, filing and obtaining of the approvals necessary for
         marketing such Products. Each party shall notify the other at least
         thirty (30) days in advance of, and make available to the other party
         for review prior to submittal, all filings and correspondence to be
         submitted by such party (but not by Third Parties) to regulatory
         authorities with respect to marketing approval of such a Product, and
         all proposed publications by such party of test data or results related
         to such Products. Such items shall be made available at such party's
         principal place of business, or if reasonable to do so, they shall be
         sent to the other party. Glycyx will provide Biorex with copies of any
         similar filings, correspondence and proposed publications which it
         receives from its Sublicensees. In addition, each party shall provide
         the other with copies of such other documents as it reasonably requests
         promptly after such request.

                                       9
<PAGE>

4.4      Visit of Facilities. Representatives of Glycyx and Biorex may, upon
         -------------------
         reasonable notice and at times reasonably acceptable to the other party
         (a) visit the facilities where the clinical trials are being conducted
         with respect to Products, and the facilities where the other party
         manufactures any Product, or active compound contained therein (or has
         such a product or compound manufactured, but subject always to the
         consent of the relevant Sublicensee or subcontractor) to the extent
         relating to such product or compound; and (b) consult informally,
         during such visits and by telephone, with personnel of the other party
         performing work on such tests, trials or manufacturing.

4.5      Technical Assistance. Biorex shall at the request of Glycyx, provide to
         --------------------
         Glycyx such reasonable technical assistance as is in Biorex's control,
         with respect to the clinical testing and manufacturing of Products In
         addition, Biorex shall at the request of Glycyx, use all reasonable
         efforts to provide technical support and assistance to Sublicensees
         hereunder, including assisting in prospective Sublicensees' evaluation
         of the Products. Biorex will be reimbursed by Glycyx or such
         Sublicensee for its out-of-pocket expenses incurred in rendering such
         assistance.

4.6      Progress Reports. Glycyx shall provide to Biorex quarterly reports
         ----------------
         describing in reasonable detail its progress and its Sublicensees'
         progress in developing and securing marketing and regulatory approval
         of Products hereunder. Such obligation shall continue until the
         Commercial Introduction of the first Product, after which such reports
         shall be provided semi-annually.

5.       COMMERCIALISATION

5.1      Marketing. Subject to Clauses 5.2 and 5.3 below, with respect to each
         ---------
         Product for which Glycyx or its relevant Sublicensee has received
         necessary regulatory approvals to market such Product in a country
         within the Territory, Glycyx shall itself or shall procure that its
         relevant Sublicensee uses commercially reasonable efforts to procure:

         5.1.1   the commencement of marketing of such Product in such country
                 within one hundred and eighty days (180) days of receiving
                 approval (including, if required, pricing and reimbursement
                 approval) to market such Product in that country; and

         5.1.2   after commencing marketing of such Product in such country, to
                 meet and develop the market demand for such Product in such
                 country.

5.2      Termination for Failure to Market. If Glycyx or its relevant
         ---------------------------------
         Sublicensee fails to fulfil the Clause 5.1 obligations with respect to
         any country in the Territory for which Glycyx or its relevant
         Sublicensee has received necessary regulatory approvals to market the
         Products then:

         5.2.1   If Glycyx or its relevant Sublicensee does not remedy such
                 failure within one hundred and twenty (120) days after
                 receiving a written request to do so, Biorex shall have the
                 right to terminate Glycyx's exclusive rights in that country
                 upon written notice to Glycyx;

                                       10
<PAGE>

         5.2.2   If Glycyx or its relevant Sublicensee has not fulfilled the
                 Clause 5.1 obligations within twelve (12) months after
                 receiving approvals, Biorex may terminate Glycyx's rights in
                 that country.

5.3      Sole Remedy for Failure to Market. Clause 5.2 sets forth Biorex's sole
         ---------------------------------
         remedies for a failure by Glycyx to meet its obligations under Clauses
         5.1 and 5.2.

5.4      Excused Performance. In addition to the provisions of Clause 15,
         -------------------
         Glycyx's obligations with respect to any Product under Clause 4.1 or
         this Clause 5, are expressly conditioned upon the continuing absence of
         any adverse condition relating to the safety, quality or efficacy of
         that Product or any other restrictions or delays imposed or caused by
         governmental authorities, or other condition or event beyond Glycyx's
         control that would reasonably justify Glycyx, after consulting with
         Biorex, in exercising prudent and justifiable business judgment, to
         conclude that development or marketing of such Product should be
         delayed, suspended or stopped altogether, and Glycyx's obligation to
         develop or market any such Product shall be delayed or suspended so
         long as any such condition or event exists, but for a maximum of five
         (5) years from the commencement of such delay or suspension. In
         addition, Glycyx shall not be responsible for any delays caused by
         failure of any health regulatory agency to accept data provided by
         Biorex or by inability of Glycyx to obtain, or delays in obtaining,
         sufficient quantities of clinical materials on reasonable terms.

6.       TRADE NAME

         6.1.1   As between the parties, Glycyx shall have the right to supply
                 Products in the Territory by reference to the Trade Name and to
                 apply to register the Trade Name as a trade mark in the
                 Territory.

         6.1.2   Biorex makes no representation and gives no warranty that the
                 Trade Name can be registered as a trade mark in the Territory
                 or can be used in the Territory without infringing the rights
                 of a Third Party.

7.       PAYMENTS TO BIOREX

7.1      Biorex Fees. Subject to the provisions of Clause 10, Glycyx shall pay
         ------------
         to Biorex [*] percent ([*]%) of all Net Receipts.

7.2      Third Party Royalties. In the event that Glycyx is required to pay to a
         ---------------------
         Third Party any royalties on a Product with respect to technology
         incorporated in such Product other than the technology licensed
         hereunder, Glycyx may deduct such payment in calculating Net Receipts
         with respect to such Product for the purposes of this Agreement.

[*] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SEC.

                                       11
<PAGE>

8.       REPORTS AND ACCOUNTING

8.1      Reports. After the Commercial Introduction of a Product, Glycyx shall
         -------
         furnish to Biorex on a quarterly basis a written report covering
         Glycyx's fiscal quarters showing, on a country by country basis:

         (i)    Net Receipts for the preceding fiscal quarter;

         (ii)   withholding taxes, if any, required by law to be deducted in
                respect of such amounts; and

         (iii)  the dates of the Commercial Introductions of any Products in any
                country in the Territory during the reporting period.

         Reports shall be due forty-five (45) days following the close of each
         respective quarter. Glycyx shall keep accurate records in sufficient
         detail to enable the Net Receipts to be determined. For the avoidance
         of doubt, Glycyx shall be entitled to enter into Sublicenses in which
         the Sublicensee is required to pay royalties on a semi-annual basis. In
         case no payment is due for any quarter period hereunder, Glycyx shall
         so report.

8.2      Audits
         ------

         8.2.1  Upon the written request of Biorex, at Biorex's expense and not
                more than once each Glycyx fiscal year, Glycyx shall permit or
                procure an independent public accountant selected by Biorex and
                reasonably acceptable to Glycyx to have access during normal
                business hours to such of the records of Glycyx, its
                Sublicensees and Affiliates as may be reasonably necessary to
                verify the accuracy of the Reports made not more than thirty-six
                (36) months prior to the date of such request. Biorex may, at
                its discretion, require Glycyx to arrange such verification of
                Sublicensee reports.

         8.2.2  In the event such accountant concludes that additional amounts
                were owed during such period, the additional amounts shall be
                paid promptly. The fees charged by such accountant shall be paid
                by Biorex unless the audit establishes that the amounts payable
                by Glycyx for the audited period are more than one hundred and
                five percent (105%) of the amounts actually paid for such
                period, in which case Glycyx shall pay the reasonable fees and
                expenses charged by the accountant.

         8.2.3  Upon the expiration of thirty-six (36) months following the date
                of any Report, the calculation of Biorex Fees payable with
                respect to the quarter covered by such Report shall be binding
                and conclusive upon Biorex; and Glycyx shall be released from
                any liability or accountability with respect to Biorex Fees for
                such year.

                                       12
<PAGE>

8.3      Confidential Financial Information. Biorex agrees that all information
         ----------------------------------
         subject to review under this Clause 8 is confidential and shall cause
         its accountant to retain all such information in confidence except for
         discussions with Biorex.

9.       PAYMENT TERMS

9.1      Payment of Biorex Fees. Subject to Clause 9.2, amounts shown to have
         ----------------------
         accrued by each Report shall be due and payable on the date such Report
         is due. Glycyx shall use commercially reasonable efforts to ensure
         prompt receipt of Net Receipts.

9.2      Initial License Fees. Glycyx shall forthwith upon receipt of any
         Initial License Fees, pay to Biorex the corresponding Biorex Fee in
         respect of such Initial License Fee by electronic bank transfer into
         the bank account designated by Biorex from time to time for such
         purpose.

9.3      Currency Conversion. All payments to Biorex shall be made in British
         -------------------
         Pounds. Biorex Fees shall be first determined in the currency in which
         such amounts are received by Glycyx and then converted to its
         equivalent in British Pounds. The midpoint between the buying and
         selling rates of exchange for such currency in British Pounds, as
         quoted in The Wall Street Journal (U.S. edition) as of the last
                       -------------------
         business day of the quarter for which the calculation is made, shall be
         used for such conversion, or such other benchmark as may be agreed in
         writing between Biorex and Glycyx from time to time.

9.4      Exchange Control. Notwithstanding Clauses 9.1, 9.2 and 9.3 if at any
         ----------------
         time legal restrictions prevent the prompt remittance of part or all
         payments with respect to any country of the Territory, payment shall be
         made through such lawful means or methods as Biorex may designate.

9.5      Late Payments. Any payments that are not paid on or before the date
         -------------
         such payments are due under this Agreement shall bear interest to the
         extent permitted by applicable law at the time by the base rate laid
         down from time to time by the Bank of England plus one percent,
         calculated on the number of days such payment is delinquent. This
         Clause 9.5 shall in no way limit any other remedy available to either
         party.

10.      INFRINGEMENT

10.1     Infringement Rights. The provisions of this Clause 10 shall govern the
         -------------------
         parties' rights and obligations, as between themselves, with respect to
         actions against and by Third Parties for infringement of patents
         licensed under this Agreement or owned by such Third Parties. In the
         event that either party learns of a significant infringement of the
         Patent Rights within the Territory, it shall promptly notify the other
         party.

                                       13
<PAGE>

10.2     Enforcement of Patent Rights.
         ----------------------------

         10.2.1   Glycyx and its Sublicensees shall have the exclusive right to
                  bring, direct and control any action to enforce the Patent
                  Rights against infringers within the Territory.

         10.2.2   Glycyx may deduct from Net Receipts all of its costs and
                  expenses incurred in any quarterly period in enforcing the
                  Patent Rights. Any remaining undeducted costs and expenses may
                  be carried forward and deducted under the same conditions from
                  the Net Receipts in each subsequent quarter.

         10.2.3   After reimbursement to Glycyx for its unreimbursed expenses,
                  all damages and other payments recovered by Glycyx from such
                  infringing parties shall be included in Net Receipts. Biorex
                  shall cooperate with Glycyx, at Glycyx's expense, in
                  connection with any such litigation, including without
                  limitation by joining as a party if necessary or appropriate
                  and executing such documents as Glycyx may reasonably request.

10.3     Third Party Claims. In the event that Glycyx is sued by a Third Party
         ------------------
         alleging that the manufacture, sale or use of a Product in the
         Territory infringes patent rights of such Third Party, then Glycyx may
         withhold up to [*] percent ([*]%) of any Biorex Fees payable in any
         quarter with respect to the region involved in such claim and apply
         such amounts to any damages, costs, liabilities or expenses (including
         the reasonable fees of attorneys and other professionals) incurred as a
         result of such claim up to a maximum of [*] percent ([*]%) of such
         damages, costs, liabilities and expenses. All unreimbursed damages,
         costs liabilities and expenses shall thereafter be deducted in
         calculating the Net Receipts in successive quarters.

11.      CONFIDENTIALITY

11.1     General. Except as expressly otherwise provided in this Agreement, each
         -------
         party shall hold in confidence and not use or disclose to any Third
         Party (other than employees, consultants, advisors, permitted
         Sublicensees and Third Parties with whom such party is considering
         entering into a business relationship who are similarly bound in
         writing) any product, technical, manufacturing, process, marketing,
         financial, business or other information, ideas, or know-how of the
         other party that is identified in writing by the other party as
         confidential ("Proprietary Information") at the time of its disclosure
         or within thirty (30) days thereafter; provided, however, that
         Proprietary Information of a party shall not include:

         11.1.1   Items which at the time of disclosure are published or
                  otherwise generally available to the public;

         11.1.2   Items which, after disclosure to the other party, are
                  published or become generally available to the public through
                  no breach of this Agreement by the other party or the other
                  party's employees or agents; or

[*] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SEC.

                                       14
<PAGE>

         11.1.3   Items which the other can document were or are (i) in its
                  possession at the time of disclosure and not acquired directly
                  or indirectly from such party, (ii) independently developed.

11.2     Exceptions.  A party may disclose Proprietary Information of the other:
         ----------

         11.2.1   in connection with the order of a court of law or in
                  compliance with laws or regulations relating to registrations
                  or sale of securities or product approval; or

         11.2.2   if such information is also rightfully acquired from a Third
                  Party who, to the best of such party's knowledge and belief,
                  is entitled to rightfully make such disclosure, but only to
                  the extent such party complies with any restrictions imposed
                  by the Third Party;

         11.2.3   after five (5) years from the date such information is
                  disclosed to it hereunder.

11.3     Licensed Information. Any Proprietary Information of or used by Biorex
         --------------------
         which is or may be subject to an exclusive licence to Glycyx hereunder,
         shall not be disclosed by Biorex to any Third Party for use in the
         Territory except for purposes not inconsistent with such exclusive
         license and only pursuant to confidentiality and non-use restrictions
         at least as restrictive as those provided herein.

11.4     Terms of this Agreement. Glycyx and Biorex agree not to disclose the
         -----------------------
         financial terms or conditions of this Agreement to any Third Party
         without the prior written consent of the other party hereto (which
         consent shall not be unreasonably withheld), except as required by
         applicable law, or to professional advisers, or to persons with whom
         Biorex or Glycyx has entered into or proposes to enter into a business
         relationship for the purposes of raising capital to run their business,
         and then only under conditions of confidence.

12.      PATENT PROSECUTION AND MAINTENANCE

12.1     Control. Glycyx shall have the right to take such actions as are
         -------
         necessary or appropriate, with counsel of its choosing, to effect the
         patent applications within the Patent Rights and to obtain patent
         protection with respect to the subject matter therein in any country
         within the Territory. In the event that Glycyx or a Sublicensee elects
         not to prosecute or maintain a patent application or patent within the
         Patent Rights, Biorex shall have the right to do so at its own expense.

12.2     Expenses. The cost of Glycyx's preparing, filing, prosecuting and
         --------
         maintaining all patent applications and patents contemplated by this
         Agreement shall be borne by Glycyx.

                                       15
<PAGE>

12.3     Co-operation. Glycyx shall provide Biorex with copies of all material
         ------------
         documentation after Glycyx's receipt from or prior to submission to any
         governmental agency with jurisdiction to issue such patents, as
         appropriate, so that Biorex may be informed and appraised of the
         continuing prosecution. Glycyx shall consult with Biorex and its
         counsel concerning prosecution of any patent application and adopt
         reasonable suggestions made with respect thereto, and shall use its
         best efforts to amend any patent application to include claims
         reasonably requested by Biorex and required to protect the product
         contemplated to be sold under this Agreement. Biorex shall make
         available to Glycyx or its authorised attorneys, agents or
         representatives, Biorex's employees, agents or consultants necessary or
         appropriate to enable Glycyx to file, prosecute and maintain patent
         applications and resulting patents within the Patent Rights. Biorex
         shall sign or cause to have signed all documents relating to said
         patent applications or patents at no charge to Glycyx.

13.      TERM AND TERMINATION

13.1     Expiration. Unless terminated earlier pursuant to this Clause 13, this
         ----------
         Agreement shall expire fifteen (15) years from the date of Launch. Upon
         expiration of this Agreement, Glycyx shall have an irrevocable,
         non-exclusive, royalty-free licence (with the right to sublicense)
         under the Technical Information and Manufacturing Technology to make,
         have made, use, sell and have sold Products in the Territory.

13.2     Termination for Cause. Either party may terminate this Agreement
         ---------------------
         following the material breach of any material provision of this
         Agreement by the other party if the breaching party has not commenced
         to cure such breach within ninety (90) days after written notice
         thereof by the other party and thereafter proceeded diligently to cure
         such breach within a reasonable time; provided, that in no event shall
         such reasonable time to cure such breach exceed one hundred eighty
         (180) days from the date of such notice. In determining whether there
         has been a material breach of a material provision of this Agreement
         for purposes of this Clause 13.2, all of the circumstances of the
         breach shall be considered, including the breaching party's conduct,
         the hardship of termination, the extent to which the breaching party
         has performed its obligations, the extent to which the non-breaching
         party will obtain the benefits it reasonably anticipated, and similar
         factors.

13.3     Termination by Glycyx. Glycyx shall have the right to terminate this
         ---------------------
         Agreement and the licences granted herein, in whole or as to any
         specified Product or country, at any time, and from time to time, by
         giving notice in writing to Biorex. Such termination shall be effective
         ninety (90) days from the date Biorex receives such notice and all
         Glycyx's rights associated therewith shall cease as of that date;
         provided, however, that if Glycyx revokes in writing its notice of
         termination before the end of such 90 day period, such notice of
         termination shall have no effect and the rights specified in such
         notice of termination shall not terminate.

                                       16
<PAGE>

13.4     Termination by Biorex. Without prejudice to any other rights Biorex may
         ---------------------
         have to terminate under this Agreement:

         13.4.1   if Salix or Glycyx ceases business or seeks protection from
                  its creditors pursuant to Chapter 11 of the U.S. Bankruptcy
                  Code or files or has filed against it a voluntary or
                  involuntary bankruptcy procedure that is not dismissed within
                  sixty (60) days or if a receiver or assignee is appointed for
                  the benefit of its creditors or if it takes or suffers any
                  similar action in consequence of debt with respect to all or
                  substantially all of its assets; then Biorex shall have the
                  right to terminate this Agreement forthwith.

         13.4.2   if:

                  (a) a Sublicensee terminates its Sublicense with Glycyx and

                  (b) Biorex and the Sublicensee have either:

                      (i)   prior to the date of the relevant Sublicense
                            agreement; or

                      (ii)  on the same day as the date of the relevant
                            Sublicense agreement; or

                      (iii) after the date of the relevant Sublicense agreement
                            and with the consent of Glycyx, such consent not to
                            be delayed or unreasonably withheld

                      entered into an agreement under which Biorex agrees, in
                      the event of termination of the Sublicense, to grant a
                      licence directly to the Sublicensee;

                  then Glycyx's rights and licenses under this Agreement shall
                  terminate forthwith automatically in respect of the country
                  covered by the relevant Sublicense.

          13.4.3  if:

                  (a) by reason of any act or omission on the part of Glycyx, a
                      Sublicensee is entitled to a royalty-free licence to
                      manufacture Products; and

                  (b) the Sublicensee exercises such right, and such licence
                      continues for more than 180 days

                  then Biorex shall have the right to terminate Glycyx's rights
                  and licenses under this Agreement forthwith in respect of the
                  region covered by the relevant Sublicense.

                                       17
<PAGE>

13.5     Effect of Termination.
         ---------------------

         13.5.1   Upon a termination of this Agreement by Glycyx under Clause
                  13.3 above, or by Biorex under Clause 13.4 above, or by reason
                  of a material breach by Glycyx, all licenses granted to Glycyx
                  hereunder (or in the event of a partial termination the
                  licenses to the Products and countries to which such
                  termination pertains) shall terminate. In the event of such a
                  termination, Glycyx shall (to the extent that any applicable
                  Sublicense agreement allows) assign to Biorex filings made in
                  Glycyx's or its Sublicensees name with the health regulatory
                  authorities within the terminated country that pertain to the
                  Products.

         13.5.2   Expiration or termination of this Agreement shall not relieve
                  the parties of any obligation accruing prior to such
                  expiration or termination.

         13.5.3   Upon termination of this Agreement by either party, Glycyx
                  shall provide Biorex with a written inventory of all Products
                  in process of manufacture or in stock, and Glycyx (and its
                  Affiliates and Sublicensees) shall have the privilege of
                  disposing of such Products within a period of one hundred
                  eighty (180) days; provided, however, that Glycyx shall pay
                  Biorex Fees on any sales of such Products at the rate and at
                  the time herein provided and shall render Reports thereon.

         13.5.4   In event of any termination of this Agreement or any licenses
                  granted hereunder, whether in whole or in part, any
                  Sublicense, marketing or other distribution rights granted by
                  Glycyx hereunder shall survive, and the relevant Sublicense
                  and/or distribution agreements, if any, shall be deemed
                  assigned to Biorex, except where Biorex and the relevant
                  Sublicensee enter into an agreement to provide an alternative
                  arrangement in the event of such termination.

         13.5.5   Upon the expiration or termination of this Agreement for any
                  reason, the parties' rights and obligations under the
                  following provisions shall survive: Clause 1, Clauses 6, 8.2,
                  8.3 and Clauses 9, 11, 13, 14 and 17; provided that the
                  indemnification provision of Clause 14 shall survive only with
                  respect to claims that are made prior to three (3) years after
                  expiration or termination of this Agreement. In addition, upon
                  expiration of this Agreement under Clause 13.1 above, the
                  parties rights and obligations under Clause 4 shall survive.

14.      INDEMNITY

14.1     Glycyx. Subject to Biorex's compliance with its obligations set forth
         ------
         in Clause 14.3 below, Glycyx agrees to indemnify and hold Biorex, its
         Affiliates and their employees and agents harmless from and against any
         losses, claims, damages, liabilities or actions (including reasonable
         attorneys' fees and court and other expenses of litigation)
         (collectively, the "Liabilities") suffered or incurred in connection
         with Third Party claims for personal injuries or any Product recall to
         the extent caused by:

                                       18
<PAGE>

         14.1.1   any failure to test for or provide adequate warnings of
                  adverse side effects to the extent such failure arises out of
                  acts or omissions in connection with the performance of
                  Glycyx's clinical testing obligations hereunder;

         14.1.2   any manufacturing defect in any Product or other material
                  manufactured by Glycyx or its subcontractors; or

         14.1.3   any other act or omission (without regard to culpable conduct)
                  of Glycyx or its subcontractors in connection with the
                  activities contemplated under this Agreement, except to the
                  extent such Liabilities resulted from negligence, recklessness
                  or intentional misconduct of Biorex.

14.2     Biorex. Subject to Glycyx's compliance with its obligations set forth
         ------
         in Clause 14.3, Biorex agrees to indemnify and hold Glycyx, its
         Affiliates, and Sublicensees and their employees and agents harmless
         from and against any Liabilities suffered or incurred in connection
         with third party claims for personal injuries or any Product recall to
         the extent caused by:

         14.2.1   any failure to test for or provide adequate warnings of
                  adverse side effects to the extent such failure arises out of
                  acts or omissions in connection with Biorex's clinical testing
                  obligations hereunder;

         14.2.2   any manufacturing defect in any Product or other material
                  manufactured by Biorex or its subcontractors; or

         14.2.3   any other act or omission (without regard to culpable conduct)
                  of Biorex or its subcontractors in connection with the
                  activities contemplated under this Agreement, except to the
                  extent such Liabilities resulted from negligence, recklessness
                  or intentional misconduct of Glycyx or its Affiliates,
                  sublicensees or subcontractors.

         Notwithstanding the foregoing, Biorex shall not be obligated to
         indemnify Glycyx or its Affiliates, Sublicensees or subcontractors with
         respect to Liabilities incurred in the course of human clinical trials
         conducted by Glycyx (itself or through subcontractors), or with respect
         to Liabilities resulting from the use of Products supplied by Biorex as
         clinical trials materials for use in such clinical trials.

14.3     Procedure. A party (the "Indemnitee") that intends to claim
         ---------
         indemnification under this Clause 14 shall promptly notify the other
         party (the "Indemnitor") in writing of any loss, claim, damage,
         liability or action in respect of which the Indemnitee or any of its
         Affiliates, employees or agents intend to claim such indemnification,
         and the Indemnitor shall have the right to participate in, and, to the
         extent the Indemnitor so desires, jointly with any other Indemnitor
         similarly noticed, to assume the defence thereof with counsel mutually
         satisfactory to the parties; provided, however, that an Indemnitee
         shall have the right to retain its own counsel, with the fees and
         expenses to be paid by the Indemnitee, if representation of such
         Indemnitee by the counsel retained by the

                                       19
<PAGE>

         Indemnitor would be inappropriate due to actual or potential differing
         interests between such Indemnitee and any other party represented by
         such counsel in such proceeding. The indemnity agreement in this Clause
         14 shall not apply to amounts paid in settlement of any loss, claim,
         damage, liability or action if such settlement is effected without the
         consent of the Indemnitor, which consent shall not be withheld
         unreasonably. The failure to deliver written notice to the Indemnitor
         within a reasonable time after the commencement of any such action, if
         prejudicial to its ability to defend such action, shall relieve such
         Indemnitor of any liability to the Indemnitee under this Clause 14, but
         the omission so to deliver written notice to the Indemnitor shall not
         relieve it of any liability that it may have to any Indemnitee
         otherwise than under this Clause 14. The Indemnitee under this Clause
         14, its employees and agents, shall cooperate fully with the Indemnitor
         and its legal representatives in the investigation of any action, claim
         or liability covered by this indemnification.

15.      FORCE MAJEURE

         Neither party shall be held liable or responsible to the other party
         nor be deemed to have defaulted under or breached this Agreement for
         failure or delay in fulfilling or performing any term of this Agreement
         when such failure or delay is caused by or results from causes beyond
         the reasonable control of the affected party or from fire, floods,
         embargoes, war, acts of war (whether war be declared or not),
         insurrections, riots, civil commotions, strikes, lockouts or other
         labour disturbances, acts of God or acts, omissions or delays in acting
         by any governmental authority or the other party.

16.      ASSIGNMENT

         This Agreement may not be assigned or otherwise transferred, nor,
         except as expressly provided hereunder, may any right or obligations
         hereunder be assigned or transferred, by either party without the
         written consent of the other party; provided, however that either
         Biorex or Glycyx may, without such consent, assign this Agreement and
         its rights and obligations hereunder in connection with the transfer or
         sale of all or substantially all of its business, if such assets
         include substantially all of the assets relating to its performance of
         its respective obligations hereunder, or in the event of its merger or
         consolidation with another company at any time during the term of this
         Agreement. Any purported assignment in violation of the preceding
         sentence shall be void. Any permitted assignee shall assume all
         obligations of its assignor under this Agreement. No assignment shall
         relieve either party of responsibility for the performance of any
         accrued obligation which such party then has hereunder.

                                       20
<PAGE>

17.      MISCELLANEOUS

17.1     Notices. Any notice or report required or permitted to be given or made
         -------
         under this Agreement by one of the parties hereto to the other shall be
         in writing, delivered personally or by facsimile (and promptly
         confirmed by personal delivery or courier) or courier, postage prepaid,
         addressed to such other party at its address indicated below, or to
         such other address as the addressee shall have last furnished in
         writing to the addressor and shall be effective upon receipt by the
         addressee.

         Glycyx Pharmaceuticals, Ltd
         8540 Colonnade Center Drive
         Raleigh
         NC 27615
         USA
         Attention: President

         (with a copy to Salix at the same address).

         Biorex Laboratories Limited
         2 Crossfield Chambers
         Gladbeck Way
         Enfield
         Middlesex EN2 7HT
         Attention: Managing Director

17.2     Applicable Law. This Agreement  shall be governed by and construed in
         --------------
         accordance with the laws of England, without regard to conflicts of
         laws provisions.

17.3     Export Laws. Biorex shall procure and maintain all U.K. export licenses
         -----------
         required for it to transfer to Glycyx and its Sublicensees all
         Technical Information, Patent Rights, Manufacturing Technology and
         other technical data, and shall comply with all other U.K. laws,
         regulations and governmental directives relating to the export of
         technical data, goods and services.

17.4     No Consequential Damages. EXCEPT AS PROVIDED IN CLAUSE 14, IN NO EVENT
         ------------------------
         SHALL EITHER GLYCYX OR BIOREX OR THEIR AFFILIATES BE LIABLE FOR
         SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
         WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS, PRODUCTION, USE OR
         SALES) BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

                                       21
<PAGE>

17.5     Entire Agreement. This Agreement contains the entire understanding of
         ----------------
         the parties with respect to the subject matter hereof in respect of the
         Territory. All express or implied agreements and understandings, either
         oral or written, heretofore made are expressly excluded provided that
         nothing in this Agreement shall speak to exercise or limit liability
         for fraud. This Agreement may be amended, or any term hereof modified,
         only by a written instrument duly executed by both parties hereto.

17.6     Headings. The captions to the several Clauses and Clauses hereof are
         --------
         not a part of this Agreement, but are merely guides or labels to assist
         in locating and reading the several Clauses hereof.

17.7     Independent Contractors. It is expressly agreed that Glycyx and Biorex
         -----------------------
         shall be independent contractors and that the relationship between the
         two parties shall not constitute a partnership, joint venture or
         agency. Neither Glycyx nor Biorex shall have the authority to make any
         statements, representations or commitments of any kind, or to take any
         action, which shall be binding on the other, without the prior written
         authorisation of the other party to do so.

17.8     Waiver. The waiver by either party of any right hereunder or the
         ------
         failure to perform or of a breach by the other party shall not be
         deemed a waiver of any other right hereunder or of any other breach or
         failure by said other party whether of a similar nature or otherwise.

17.9     Further Assurances. Glycyx shall use commercially reasonable efforts to
         -------------------
         ensure that each of its Sublicensees and subcontractors shall observe
         and perform all the obligations and restrictions applicable to it under
         this Agreement.

17.10    Severability. In case any one or more of the provisions contained in
         ------------
         this Agreement shall for any reason be held to be invalid, illegal or
         unenforceable in any respect, such invalidity, illegality or
         unenforceability shall not affect any other provisions hereof, but this
         Agreement shall be construed as if such invalid or illegal or
         unenforceable provisions had never been contained herein.

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

For and on behalf of:                       For and on behalf of:
Biorex Laboratories Limited                 Glycyx Pharmaceuticals, Ltd

Signed:     .signature..................    Signed:    .signature...............

Full Name:  LILY BAXENDALE .............    Full Name: ROBERT P. RUSCHER .......

Job Title:  MANAGING DIRECTOR ..........    Job Title: PRESIDENT & CEO .........

                                       22

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