Document:

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                                                                    EXHIBIT 10.4

CONFIDENTIAL TREATMENT REQUESTED -- EDITED COPY

                          REGISTRATION RIGHTS AGREEMENT

      REGISTRATION RIGHTS AGREEMENT, dated as of October 26, 2000, by and
between SciClone Pharmaceuticals, Inc., a California corporation (the
"Company"), and UBS AG, London Branch (the "Purchaser") entered into in
connection with the issuance of (i) 6% Convertible Notes due 2005 convertible
into shares of Common Stock, no par value ("Common Stock"), of the Company
pursuant to the Purchase Agreement referred to below and (ii) options to
purchase Zero Coupon Convertible Notes due 2005 convertible into shares of
Common Stock of the Company pursuant to the Option Agreement referred to below.

      1. Certain Definitions.

      For purposes of this Registration Rights Agreement, the following terms
shall have the following respective meanings:

            (a) "Commission" shall mean the Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.

            (b) "Convertible Notes" shall mean the 6% Convertible Notes due 2005
of the Company to be issued and sold to the Purchaser pursuant to the Purchase
Agreement, and any Zero Coupon Convertible Notes due 2005 of the Company that
may be issued pursuant to the Option Agreement, and any Convertible Note issued
in exchange therefor or in lieu thereof.

            (c) "Effective Time" shall mean the date on which the Commission
declares the Shelf Registration effective or on which the Shelf Registration
otherwise becomes effective.

            (d) "Exchange Act" shall mean the Securities Exchange Act of 1934,
or any successor thereto, as the same shall be amended from time to time.

            (e) "Initial Notes" means the up to $2,000,000 principal amount of
Convertible Notes issued pursuant to the Purchase Agreement.

            (f) "Issue Date" shall mean the date on which a Convertible Note is
initially issued.

            (g) "Option Agreement" means the Option Agreement of even date
herewith between the Company and the Purchaser.

            (h) "Option Notes" means the Convertible Notes, if any, issued
pursuant to the Option Agreement.

            (i) The term "person" shall mean a corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or governmental agency.

            (j) "Purchase Agreement" means the Convertible Note Purchase
Agreement of even date herewith between the Company and the Purchaser.

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            (k) "Registrable Securities" means any Shares, Option Notes or
shares of Common Stock issuable in lieu thereof subject to registration under
the Securities Act pursuant to this Agreement.

            (l) "Registration Expenses" shall have the meaning assigned thereto
in Section 4 hereof.

            (m) "Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.

            (n) "Shares" means the shares of Common Stock issuable upon exercise
of the Convertible Notes.

            (o) "Shelf Registration" shall have the meaning assigned thereto in
Section 2 hereof.

      In addition, capitalized terms not defined herein shall have the meaning
ascribed in the Convertible Notes.

      2. Shelf Registration of Shares; Other Registrations.

            (a) Not later than October 26, 2001, the Company shall file under
the Securities Act a "shelf registration" statement providing for the
registration of, and the sale on a continuous or delayed basis by the Purchaser
of, all Shares issuable upon conversion of the Initial Notes, pursuant to Rule
415 under the Securities Act and/or any similar rule that may be adopted by the
Commission (the "Shelf Registration"). The Company agrees to use its
commercially reasonable efforts to cause the Shelf Registration to become or be
declared effective no later than 45 calendar days after the filing thereof and
to keep such Shelf Registration continuously effective for a period ending on
the earliest to occur of (i) the second anniversary of the latest Issue Date of
any Initial Note, (ii) notification to the Company by the Purchaser that it has
sold all Shares issuable upon conversion of the Initial Notes so owned by it, or
(iii) such time as the Purchaser may sell all of such Shares pursuant to Rule
144(k) under the Securities Act. The Company further agrees, if necessary, to
supplement or make amendments to the Shelf Registration, if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration or by the Securities Act or rules and
regulations thereunder for shelf registration, and the Company agrees to furnish
to the Purchaser a copy of any such supplement or amendment prior to its being
used and/or filed with the Commission, and will not file any such supplement or
amendment to which the Purchaser reasonably objects.

            (b) Notwithstanding the foregoing, following the effectiveness of
the Shelf Registration, the Company may, at any time, suspend the effectiveness
of such Shelf Registration for up to 60 days, as appropriate (a "Suspension
Period"), by giving notice to the Purchaser, if the Company shall have
determined that the Company may be required to disclose any material corporate
development which disclosure may have a material adverse effect on the Company.
The Company will use its commercially reasonable efforts to minimize the length
of any Suspension Period. Notwithstanding the foregoing, no more than one
Suspension Period may occur within any 180 day period. The Purchaser agrees
that, upon receipt of any notice from the

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Company of a Suspension Period, the Purchaser shall forthwith discontinue
disposition of shares covered by the Shelf Registration until the Purchaser (i)
is advised in writing by the Company that the use of the applicable prospectus
may be resumed, (ii) has received copies of a supplemental or amended
prospectus, if applicable, and (iii) has received copies of any additional or
supplemental filings which are incorporated or deemed to be incorporated by
reference in such prospectus.

            (c) Not later than the earlier of (a) July 31, 2005 or (b) 30 days
after any issuance of any Option Notes, or shares of Common Stock in lieu
thereof pursuant to the Option Agreement, the Company shall file under the
Securities Act a "shelf registration" statement providing for the registration
of, and the sale on a continuous or delayed basis by the Purchaser of, such
Option Notes, any Shares issuable upon conversion thereof or in payment thereof,
and/or shares of Common Stock issued in lieu thereof, pursuant to Rule 415 under
the Securities Act and/or any similar rule that may be adopted by the
Commission. The Company agrees to use its commercially reasonable efforts to
cause such shelf registration to become or be declared effective no later than
30 calendar days after the required filing date thereof and to keep such shelf
registration continuously effective for a period ending on the earliest to occur
of (i) the 180th day after such issuance of the Option Notes or shares of Common
Stock in lieu thereof, (ii) notification to the Company by the Purchaser that it
has sold all such Option Notes or shares of Common Stock so owned by it, or
(iii) such time as the Purchaser may sell all of such Option Notes or shares of
Common Stock pursuant to Rule 144(k) under the Securities Act. The Company
further agrees, if necessary, to supplement or make amendments to the such shelf
registration statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such shelf
registration or by the Securities Act or rules and regulations thereunder for
shelf registration, and the Company agrees to furnish to the Purchaser a copy of
any such supplement or amendment prior to its being used and/or filed with the
Commission, and will not file any such supplement or amendment to which the
Purchaser reasonably objects.

      3. Registration Procedures.

         (a) In connection with any obligation of the Company to register the
Registrable Securities, the Company shall use its commercially reasonable
efforts to effect or cause such registration to permit the sale of the
Registrable Securities by the Purchaser in accordance with the intended method
or methods of distribution thereof described in the applicable registration
statement. In connection therewith, the Company shall, within the time specified
in Section 2 above:

                  (i) prepare and file with the Commission a registration
statement on any form which may be utilized by the Company and which shall
permit the disposition of the Registrable Securities in accordance with the
intended method or methods thereof, as specified in writing by the Purchaser;

                  (ii) comply with the provisions of the Securities Act with
respect to the disposition of all of the Registrable Securities covered by such
registration statement in accordance with the intended methods of disposition by
the Purchaser set forth in such registration statement;

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                  (iii) provide (A) the Purchaser, (B) the underwriters (which
term, for purposes of this Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(a)(11) of the Securities Act), if
any, thereof, (C) the sales or placement agent, if any, therefor, (D) counsel
for such underwriters or agent, and (E) one counsel for the Purchaser the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment or supplement thereto;

                  (iv) for a reasonable period prior to the filing of such
registration statement, and throughout the period specified in Section 2 hereof,
make available for inspection by the parties referred to in Section 3(a)(iii)
above who shall certify to the Company that they have a current intention to
sell the Registrable Securities pursuant to the registration statement such
financial and other information and books and records of the Company, and cause
the officers, employees, counsel and independent certified public accountants of
the Company to respond to such inquiries, as shall be reasonably necessary, in
the judgment of the respective counsel referred to in such Section, to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or records
provided by the Company until such time as (A) such information becomes a matter
of public record (whether by virtue of its inclusion in such registration
statement or otherwise), or (B) such person shall be required so to disclose
such information pursuant to the subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter (subject to the
requirements of such order, and only after such person shall have given the
Company prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such registration statement or the
prospectus included therein or in an amendment to such registration statement or
an amendment or supplement to such prospectus in order that such registration
statement, prospectus, amendment or supplement, as the case may be, does not
contain an untrue statement of a material fact or omit to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading;

                  (v) promptly notify the Purchaser, the sales or placement
agent, if any, therefor and the managing underwriter or underwriters, if any,
thereof and confirm such advice in writing, (A) when such registration statement
or the prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become effective,
(B) of any comments by the Commission and by the Blue Sky or securities
commissioner or regulator of any state with respect thereto or any request by
the Commission for amendments or supplements to such registration statement or
prospectus or for additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of such registration statement or
the initiation or overt threatening of any proceedings for that purpose, (D) if
at any time the representations and warranties of the Company contemplated by
Section 5 hereof cease to be true and correct in all material respects, (E) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in any jurisdiction or
the initiation or overt threatening of any proceeding for such purpose, or (F)
at any time when a prospectus is required to be delivered under the Securities
Act, if such registration statement, prospectus, prospectus amendment or
supplement or post-effective amendment, or any document incorporated by

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reference in any of the foregoing, contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;

                  (vi) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;

                  (vii) if requested by any managing underwriter or
underwriters, any placement or sales agent or the Purchaser, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as is required by the applicable rules and regulations of the
Commission that such managing underwriter or underwriters, such agent or the
Purchaser specifies should be included therein relating to the terms of the sale
of such Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being sold by the Purchaser, or
agent or to any underwriters, the name and description of the Purchaser, agent
or underwriter, the offering price of such Registrable Securities and any
discount, commission or other compensation payable in respect thereof, the
purchase price being paid therefor by such underwriters and with respect to any
other terms of the offering of the Registrable Securities to be sold by the
Purchaser or agent or to such underwriters; and make all required filings of
such prospectus supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment;

                  (viii) furnish to the Purchaser, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the respective
counsel referred to in Section 3(a)(iii) a copy of such registration statement
in the form in which it became effective, each such amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein) and such number of copies of such registration statement
(excluding exhibits thereto and documents incorporated by reference therein
unless specifically so requested by the Purchaser, agent or underwriter, as the
case may be) and of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as the Purchaser, such agent, if any, and such underwriter, if any,
may reasonably request in order to facilitate the offering and disposition of
the Registrable Securities owned by the Purchaser, offered or sold by such agent
or underwritten by such underwriter and to permit such Purchaser or such agent
and underwriter to satisfy the prospectus delivery requirements of the
Securities Act; and the Company hereby consents to the use of such prospectus
(including such preliminary and summary prospectus) and any amendment or
supplement thereto by the Purchaser and by any such agent and underwriter, in
each case in the form most recently provided to such party by the Company, in
connection with the offering and sale of the Registrable Securities covered by
the prospectus (including such preliminary and summary prospectus) or any
supplement or amendment thereto;

                  (ix) use its commercially reasonable efforts to (A) register
or qualify the Registrable Securities to be included in such registration
statement under such securities laws or blue sky laws of such jurisdictions as
the Purchaser and each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or

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qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions during
the respective periods such registration statements are required to remain
effective under Section 2 above and for so long as may be necessary to enable
the Purchaser or any agent or underwriter to complete its distribution of
Registrable Securities pursuant to such registration statement and (C) take any
and all other actions as may be reasonably necessary or advisable to enable the
Purchaser, such agent, if any, and such underwriter, if any, to consummate the
disposition in such jurisdictions of such Registrable Securities; provided,
however, that the Company shall not be required for any such purpose to (I)
qualify as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section
3(a)(ix) or (II) consent to general service of process in any such jurisdiction;

                  (x) use its commercially reasonable efforts to obtain the
consent or approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration or the
offering or sale in connection therewith or to enable the Purchaser to offer, or
to consummate the disposition of, its Registrable Securities;

                  (xi) cooperate with the Purchaser and the managing
underwriters, if any, to facilitate the timely preparation and delivery of any
certificates representing Registrable Securities to be sold, which certificates
shall be printed, lithographed or engraved, or produced by any combination of
such methods, and which shall not, once sold under such registration statement,
bear any restrictive legends; and, in the case of an underwritten offering,
enable such Registrable Securities to be in such denominations and registered in
such names as the managing underwriters may request at least two business days
prior to any sale of the Registrable Securities:

                  (xii) enter into one or more underwriting agreements,
engagement letters, agency agreements or similar agreements, as appropriate,
including (without limitation) customary provisions relating to indemnification
and contribution, and take such other actions in connections therewith as the
Purchaser shall request in order to expedite or facilitate the disposition of
the Registrable Securities;

                  (xiii) notify the Purchaser in writing of any proposal by the
Company to amend or waive any provision of these Registration Rights pursuant to
Section 7(g) hereof and of any amendment or waiver effected pursuant thereto,
each of which notices shall contain the text of the amendment or waiver proposed
or effected, as the case may be;

                  (xiv) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate as a
member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the By-Laws
of the National Association of Securities Dealers, Inc. ("NASD") thereof,
whether as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such broker-dealer in complying with the
requirements of such Rules and By-Laws, including, without limitation, by
providing such information to such broker-dealer as may be required in order for
such broker-dealer to comply with the requirements of the Rules of Fair Practice
of the NASD;

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                  (xv) comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders as soon as
practicable but in any event not later than eighteen months after the effective
date of such registration statement, an earning statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act (including, at
the option of the Company, Rule 158 thereunder); and

                  (xvi) in the case of Shares or other shares of Common Stock,
use its commercially reasonable efforts to have the Shares or such other shares
approved for trading on the Nasdaq National Market.

            (b) In the event that the Company would be required, pursuant to
Section 3(a)(v)(F) above, to notify the Purchaser, the placement or sales agent,
if any, therefor and the managing underwriters, if any, thereof, the Company
shall, as promptly as practicable, prepare and furnish to the Purchaser, to each
placement or sales agent, if any, and to each underwriter, if any, a reasonable
number of copies of a prospectus supplemented or amended in form and substance
reasonably satisfactory to them, so that, as thereafter delivered to purchasers
of Registrable Securities, such prospectus shall not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing. The Purchaser agrees that upon receipt of any
notice from the Company pursuant to Section 3(a)(v)(F) hereof, the Purchaser
shall forthwith discontinue the disposition of Registrable Securities pursuant
to the registration statement applicable to such Registrable Securities until
the Purchaser shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, the Purchaser shall deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in the Purchaser's possession of the prospectus covering such
Registrable Securities at the time of receipt of such notice.

            (c) The Company may require the Purchaser to furnish to the Company
in writing such information regarding the Purchaser and the Purchaser's intended
method of distribution of such Registrable Securities as the Company may from
time to time reasonably request in writing, but only to the extent that such
information is required in order to comply with such Securities Act. The
Purchaser agrees to notify the Company in writing as promptly as practicable of
any inaccuracy or change in information previously furnished by the Purchaser to
the Company or of the occurrence of any event in either case as a result of
which any prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding the Purchaser or the Purchaser's
intended method of distribution of such Registrable Securities or omits to state
any material fact regarding the Purchaser or the Purchaser's intended method of
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to the Company in writing
any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain,
with respect to the Purchaser or the distribution of such Registrable
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. The Purchaser agrees
that upon delivering any written notice to the Company pursuant to this Section
3(c), the Purchaser shall forthwith discontinue the disposition of Registrable
Securities pursuant to the registration statement applicable to such Registrable
Securities until

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the Purchaser shall have the received copies of such amended or supplemented
prospectus, and if so directed by the Company, the Purchaser shall deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in the Purchaser's possession of the prospectus covering such
Registrable Securities at the time of receipt of such notice.

      4. Registration Expenses.

      The Company agrees to bear and to pay or cause to be paid promptly
upon request being made therefor all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
(i) all Commission and any NASD registration and filing fees and expenses, (ii)
all fees and expenses in connection with the qualification of the Registrable
Securities for offering and sale under the State securities and blue sky laws
referred to in Section 3(a)(x) hereof, including reasonable fees and
disbursements, not to exceed $5,000, of counsel for the placement or sales agent
or underwriters in connection with such qualifications, (iii) all fees and
expenses in connection with the approval for trading of the Shares or other
shares of Common Stock on the Nasdaq National Market, (iv) all expenses relating
to the preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Registrable Securities and all
other documents relating hereto, (v) internal expenses (including, without
limitation, all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), and (vi) fees, disbursements and
expenses of counsel and independent certified public accountants of the Company
(including the expenses of any opinions or "cold comfort" letters required by or
incident to such performance and compliance) (collectively, the "Registration
Expenses"). Notwithstanding the foregoing, the Purchaser shall pay all agency
fees and commissions and underwriting discounts and commissions attributable to
the sale of the Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by the Purchaser.

      5. Representations and Warranties.

      The Company represents and warrants to, and agrees with, the Purchaser
that:

            (a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(a)(ix) hereof and any further
amendments or supplements to any such registration statement or prospectus, when
it becomes effective or is filed with the Commission, as the case may be, and,
in the case of an underwritten offering of Registrable Securities, at the time
of the closing under the underwriting agreement relating thereto will conform in
all material respects to the requirements of the Securities Act, and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at all times subsequent to the Effective Time when a prospectus
would be required to be delivered under the Securities Act, other than from (i)
such time as a notice has been given to the Purchaser pursuant to Section
3(a)(vi)(F) hereof until (ii) such time as the Company furnishes an amended or
supplemented prospectus pursuant to Section 3(b) hereof, each such registration
statement, and each prospectus (including any summary prospectus) contained
therein or furnished pursuant to Section 3(c)(ix) hereof, as then amended

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or supplemented, will conform in all material respects to the requirements of
the Securities Act, and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Purchaser expressly
for use therein.

            (b) Any documents incorporated by reference in any prospectus
referred to in Section 5(a) hereof, when they become or became effective or are
or were filed with the Commission, or if amended, when amended, as the case may
be, will conform or conformed in all material respects to the requirements of
the Exchange Act, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Purchaser expressly
for use therein.

      6. Indemnification.

         (a) Indemnification by the Company. Upon the registration of
Registrable Securities pursuant to Section 2 hereof, and in consideration of the
agreements of the Purchaser contained herein, and as an inducement to the
Purchaser to purchase the Convertible Notes and enter into the Option Agreement,
the Company shall, and it hereby agrees to, indemnify and hold harmless the
Purchaser and each person who participates as a placement or sales agent or as
an underwriter in any offering or sale of such Registrable Securities against
any losses, claims, damages or liabilities, joint or several, to which the
Purchaser or any such agent or underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
registration statement under which such Registrable Securities were registered
under the Securities Act, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to the Purchaser, agent or
underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company shall, and it hereby agrees to, reimburse the
Purchaser, such agent and such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any such person in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, or preliminary, final or summary
prospectus, or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such person expressly for use
therein.

            (b) Indemnification by the Purchaser and any Agents and
Underwriters. The Company may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to Section 2
hereof and to entering into any underwriting agreement with respect thereto,
that the Company shall have received an undertaking reasonably

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satisfactory to it from the Purchaser and each underwriter named in any such
underwriting agreement, severally and not jointly, to (i) indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such registration statement, or any preliminary,
final or summary prospectus contained therein or furnished by the Company to the
Purchaser, agent or underwriter, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Purchaser or underwriter expressly
for use therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.

            (c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.

            (d) Contribution. Each party hereto agrees that, if for any reason
the indemnification provisions contemplated by Section 6(a) or Section 6(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by indemnified party on
the one hand and the indemnifying party on the other from any offering of the
Registrable Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the indemnifying party and the
indemnified party in connection with the statements or

                                       10
<PAGE>   11

CONFIDENTIAL TREATMENT REQUESTED -- EDITED COPY

omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchaser on the other shall be deemed to be in the same proportion as
the total purchase price received by the Company upon issuance of Convertible
Notes to the Purchaser bears to the difference between the proceeds from the
offering of the Registrable Securities received by the Purchaser and such
purchase price. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Purchaser or any agents or underwriters or all
of them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), absent fraudulent misrepresentation by the
Purchaser, the Purchaser shall not be required to contribute any amount in
excess of the amount by which the dollar amount of the proceeds received by the
Purchaser from the sale of any Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) exceeds the amount of any damages
which the Purchaser have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission, and absent
fraudulent misrepresentation by an underwriter, no such underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Purchaser's and any
underwriters' obligations in this Section 6(d) to contribute shall be several in
proportion to the principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.

            (e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of the
Purchaser, any agent and any underwriter and each person, if any, who controls
the Purchaser or any agent or underwriter within the meaning of the Securities
Act; and the obligations of the Purchaser and any agents and underwriters
contemplated by this Section 6 shall be in addition to any liability which the
Purchaser or any such agent or underwriter, respectively, may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company (including any person who, with his consent, is named in any
registration statement as about to become a director of the Company) and to each
person, if any, who controls the Company within the meaning of the Securities
Act.

                                       11
<PAGE>   12

CONFIDENTIAL TREATMENT REQUESTED -- EDITED COPY

      7. Miscellaneous.

            (a) No Inconsistent Agreements. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant, registration
rights with respect to shares of Common Stock or any other securities which
would be inconsistent with the terms contained in this Agreement.

            (b) Specific Performance. The parties hereto acknowledge that there
may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions hereof, in any court of the United
States or any State thereof having jurisdiction.

            (c) Notices. Any notice or other communication required or permitted
to be given hereunder shall be deemed effectively given when personally
delivered, telexed, transmitted by facsimile or mailed by pre-paid certified
mail, return receipt requested, or by telephone when confirmed in writing by one
of the preceding methods addressed as follows (as applicable):

                      If to the Company, to:

                      SciClone Pharmaceuticals, Inc.
                      901 Mariner's Island Blvd., #205
                      San Mateo, California  94404

                      [****]
                      with a copy to:

                      Gray Cary Ware & Freidenrich
                      400 Hamilton Avenue
                      Palo Alto, California  94301

                      [****]

                      If to the Purchaser, to:

                      UBS AG, London Branch
                      [****]

                      [****]

                      [****]

                      [****]

                                       12
<PAGE>   13

CONFIDENTIAL TREATMENT REQUESTED -- EDITED COPY

                      [****]

                      [****]

or to such other address or number and to the attention of such other person as
either party may designate by written notice to the other party. Notice shall be
effective upon actual receipt.

            (d) Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth this Agreement or
made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
the Purchaser, any director, officer or partner of the Purchaser, any agent or
underwriter or any director, officer or partner thereof, or any controlling
person of any of the foregoing.

            (e) Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

            (f) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.

            (g) Entire Agreement; Amendments. This Agreement and the other
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
Purchaser.

            (h) Assignment. In connection with any permitted transfer of the
Convertible Notes or any portion thereof in a principal amount of not less than
$2,000,000 the Purchaser may assign its rights hereunder in respect of such
Convertible Notes to the transferee. Upon such assignment the transferee shall,
insofar as the transferred Convertible Notes are concerned, be entitled to all
of the rights, and be subject to all of the obligations, of the Purchaser under
this Agreement, and all references to the "Purchaser" herein shall thereafter be
deemed to include the Purchaser, or such transferee, or both, as the
circumstances warrant.

            (i) Counterparts. This agreement may be executed by the parties
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.

                                       13
<PAGE>   14

CONFIDENTIAL TREATMENT REQUESTED -- EDITED COPY

            Agreed to and accepted as of the date referred to above.

                                        SciClone Pharmaceuticals, Inc.

                                        By:
                                              ----------------------------------
                                        Name:  Donald R. Sellers
                                        Title: President and Chief Executive
                                               Officer

                                        UBS AG, LONDON BRANCH

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

                                       14<PAGE>   1
                                                                    Exhibit 10.1

                       FIRST AMENDMENT TO CREDIT AGREEMENT
                       -----------------------------------

                  THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment" or
"First Amendment") has been executed as of the 14th day of May, 2001, (the
"First Amendment Effective Date"), by INDIAN-MARTIN AG, a Swiss corporation,
("Company"), and BANK ONE, INDIANA, NATIONAL ASSOCIATION, a national banking
association ("Bank").

                                    RECITALS
                                    --------

         1. Company and Bank (collectively, the "Parties") are parties to a
Credit Agreement, dated as of May 15, 2000 (as in effect immediately prior to
the execution of this Amendment, the "Existing Agreement").

         2. The Parties have determined that it is in their best interests to
amend the Existing Agreement, effective as of the First Amendment Effective
Date, as set forth in this First Amendment, and subject to the terms and
conditions of this First Amendment.

                                    AGREEMENT
                                    ---------

         NOW THEREFORE, in consideration of the Recitals and for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged by each of the Parties to this First Amendment, it is agreed as
follows:

         1. DEFINITIONS. Terms which are defined in the Existing Agreement shall
have the same meanings in this Amendment as are ascribed to them in the Existing
Agreement, as amended hereby, excepting only those terms which are expressly
defined in this Amendment, which shall have the meanings ascribed to them in
this Amendment.

         2. AMENDMENTS TO EXISTING AGREEMENT.

         (a) AMENDMENTS TO DEFINITIONS. The following definitions, which are set
forth in Section 1.02 of the Existing Agreement, are amended and restated in
their entirety as of the First Amendment Effective Date to read as follows:

         "BORROWING BASE" means, at any date a determination thereof is made, an
         amount equal to the sum of: eighty percent (80%) of the book value of
         the Eligible Accounts PLUS one hundred percent (100%) of the Pledged
         Cash, LESS the amount of excess, if any, by which the aggregate
         Eligible Accounts outstanding at any time from any account debtor and
         its Affiliates exceeds fifteen percent (15%) of aggregate Eligible
         Accounts on such date of determination; provided however, that such
         concentration limitation shall not apply to Eligible Accounts owed by
         Sears Roebuck, Inc. so long as such account debtor is rated at least
         BBB/Baa2, or better on the senior unsecured debt ratings established
         from time to time by S&P and Moody's, respectively.

<PAGE>   2

         Further, to the extent that an Eligible Account is subject to any
         claimed set-off, offset, credit or other reduction right held by the
         account receivable debtor, then for purposes of determining the
         Borrowing Base the amount of such Eligible Account shall be reduced by
         the sum of all such claimed offsets, credits and reductions to the
         extent not covered by the Escalade Domestic Subsidiary, or
         Subsidiaries, that sold the Eligible Accounts to the Company.

         "BORROWING BASE CERTIFICATE" means a certificate (in form and substance
         substantially the same as EXHIBIT "B" attached to the First Amendment)
         which is required to be delivered to the Bank in accordance with
         Section 5.01(c)(6) of this Agreement.

         "MAXIMUM AVAILABILITY" means as of the date any determination thereof
         is to be made, the lesser of: (i) the Borrowing Base as of such date,
         and (ii) the following amounts during the respective time periods
         described:

         $10,000,000.00    May 14 through May 31, 2001
          15,000,000.00    June 1 through September 30, 2001
          25,000,000.00    October 1 through October 31, 2001
          30,000,000.00    November 1 through November 30, 2001
          25,000,000.00    December 1 through December 31, 2001
          20,000,000.00    January 1 through January 31, 2002
          10,000,000.00    February 1, 2002 through Scheduled Maturity Date

         "SCHEDULED MATURITY DATE" means May 13, 2002 and any subsequent date to
         which the Commitment may be extended by Bank pursuant to the terms of
         Section 2.01(d).

         (b) NEW DEFINITIONS. Section 1.02 of the Existing Agreement is hereby
amended, effective as of the First Amendment Effective Date, by adding thereto
in appropriate alphabetical sequence the following new definitions:

         The term "FIRST AMENDMENT" means the First Amendment to Credit
         Agreement, dated as of the First Amendment Effective Date, executed by
         and between the Parties.

         The term "FIRST AMENDMENT EFFECTIVE DATE" is used as defined in the
         Preamble of the First Amendment.

         (c) PARTIAL AMENDMENT OF SECTION 2.01(B). Section 2.01(b) of the
Existing Agreement is amended in part as the First Amendment Effective Date by
amending and restating the first sentence thereof to read as follows:

         "(b) METHOD OF BORROWING. The Obligation of the Company to repay the
         Loan shall be evidenced by a promissory note (the

                                       2
<PAGE>   3

         "NOTE") of the Company (in form and substance substantially the same as
         EXHIBIT "I" attached to the First Amendment)."

         (d) PARTIAL AMENDMENT OF SECTION 5.01(C). Section 5.01(c) of the
Existing Agreement is amended in part as of the First Amendment Effective Date
by re-designating Section 5.01(c)(7) as Section 5.01(c)(8) and adding a new
Section 5.01(c)(7) which reads as follows:

         "(7) Summary agings as to all Purchase Accounts Receivable which are
         outstanding on the books and records of the Company as of the last
         Banking Day of each month, which agings shall be provided to the Bank
         by the fifth (5th) Banking Day of the next successive month."

         3. REPRESENTATIONS AND WARRANTIES. Company represents and warrants to
Bank that:

         (a) (i) The execution, delivery and performance of this Amendment and
all agreements and documents delivered pursuant hereto by Company have been duly
authorized by all necessary corporate action and do not and will not violate any
provision of any law, rule, regulation, order, judgment, injunction or writ
presently in effect applying to Company, or its articles of incorporation, or
result in a breach of or constitute a default under any material agreement,
lease or instrument to which Company is a party or by which it or any of its
properties may be bound or affected; (ii) no authorization, consent, approval,
license, exemption or filing of a registration with any court or governmental
authority, department, agency or instrumentality is or will be necessary to the
valid execution, delivery or performance by Company of this Amendment and all
agreements and documents delivered pursuant hereto; and (iii) this Amendment and
all agreements and documents delivered pursuant hereto by Company are the legal,
valid and binding obligations of Company, as a signatory thereto, and are
enforceable against Company in accordance with the terms thereof.

         (b) After giving effect to the amendments contained in this Amendment,
the representations and warranties contained in Article III of the Agreement are
true and correct on and as of the First Amendment Effective Date with the same
force and effect as if made on and as of the First Amendment Effective Date,
except that the representation in Section 3.01(d) of the Agreement shall be
deemed to refer to the Financial Statements of Company most recently delivered
to Bank prior to the First Amendment Effective Date.

         (c) No Event of Default has occurred and is continuing or will exist
under the Agreement as of the First Amendment Effective Date.

         4. CONDITIONS. The obligation of Bank to execute and to perform this
Amendment shall be subject to full satisfaction of the following conditions
precedent on or before the First Amendment Effective Date:

         (a) Copies, certified as of the First Amendment Effective Date, of such
corporate documents of Company, as Bank may request evidencing necessary
corporate action by Company with respect to this First Amendment.

                                       3
<PAGE>   4

         (b) This Amendment shall have been duly executed and delivered by
Company to Bank and executed by Bank.

         (c) Bank shall have received such additional agreements, documents and
certifications, fully executed by Company as may be reasonably requested by
Bank.

         5. SUPPLEMENTAL DOCUMENTS AND FURTHER ASSURANCES. Company shall at any
time on or after the First Amendment Effective Date, and upon the request of
Bank, execute and deliver, or cause to be executed and delivered, such
additional documents, agreements and instruments as may be reasonably required
by Bank or appropriate to give full force and effect to the intents and purposes
of this Amendment and the Agreement. Company's failure to comply with the terms
of this Section 5 within thirty (30) days after Bank's request shall at Bank's
sole discretion and election be deemed an Event of Default under Section 7.01 of
the Agreement.

         6. BINDING ON SUCCESSORS AND ASSIGNS. All of the terms and provisions
of this Amendment shall be binding upon and inure to the benefit of the Parties
and each of their respective successors, assigns and legal representatives.

         7. GOVERNING LAW/ENTIRE AGREEMENT/SURVIVAL. This Amendment is a
contract made under, and shall be governed by and construed in accordance with,
the laws of the State of Indiana applicable to contracts made and to be
performed entirely within such state and without giving effect to the choice or
conflicts of laws, rules or principles of any foreign or domestic jurisdiction.
This Amendment constitutes and expresses the entire understanding between the
Parties with respect to the subject matter hereof, and supersedes all prior
agreements and understandings, commitments, inducements or conditions, whether
express or implied, oral or written. All covenants, agreements, undertakings,
representations and warranties made in this Amendment shall survive the
execution and delivery of this Amendment, and shall not be affected by any
investigation made by any Person. Except as expressly provided otherwise in this
Amendment, the Existing Agreement, as amended hereby, remains in full force and
effect in accordance with its terms and provisions.

         IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly
executed and delivered by their respective duly authorized signatories as of the
First Amendment Effective Date.

INDIAN-MARTIN AG, a corporation            BANK ONE, INDIANA, NATIONAL
organized and existing under               ASSOCIATION
the laws of Switzerland

By: /s/ Lars Haussmann                     By:  /s/ Steven J. Krakoski
    -----------------------------               ----------------------------
     Lars Haussmann (Director)             Steven J. Krakoski, Vice President

               ("Company")                                ("Bank")

                                       4
<PAGE>   5

                           BORROWING BASE CERTIFICATE
                           --------------------------

                  INDIAN-MARTIN AG ("Borrower"), by its duly Authorized officer
and in accordance with the requirements of that certain Credit Agreement, dated
as of May 15, 2000, as amended, restated and/or supplemented from time to time
and at any time (the "Agreement'), between Borrower and BANK ONE, INDIANA,
NATIONAL ASSOCIATION ("Bank") hereby certifies to Bank that: (a) Borrower's
Borrowing Base is $______________________, as of ____________________, (the
"Report Date"); and (b) attached to this Borrowing Base Certificate is a
calculation of Borrower's Eligible Accounts and Pledged Cash as of the Report
Date, together with supporting information and data showing Borrower's
determination of the Borrowing Base. Terms which are defined in the Agreement
shall have the same meanings herein.

                  Date:                              , 200  .
                       ------------------------------     --

                                           INDIAN-MARTIN AG

                                           By:
                                               --------------------------------
                                           ------------------------------------
                                                  (Printed Name and Title)

                                 Exhibit "B"

<PAGE>   6

                          CALCULATION OF BORROWING BASE
                          -----------------------------
<TABLE>

<S>                                                           <C>                       <C>
Gross Accounts Receivable                                                               $                   (1)
                                                                                         ------------------

Less:    (a) 61 or more days Delinquent
                                                              ------------------
         (b) Account Debtor Bankrupt
                                                              ------------------
         (c) Account Not Invoiced
                                                              ------------------
         (d) Unshipped Goods
                                                              ------------------
         (e) Conditional Obligation
                                                              ------------------
         (f) No Security Interest
                                                              ------------------
         (g) Affiliate/Governmental A/R
                                                              ------------------
         (h) Evidenced by Instrument
                                                              ------------------
         (i) Charged-off Accounts
                                                              ------------------
         (j) 10% "Taint" Rule Accounts
                                                              ------------------
                  (less amount included on line (a))

Total Exclusions from Eligible Accounts (a though j)                                  - $                   (2)
                                                                                         ------------------

Eligible Accounts (Line 1, minus Line 2)                                                $                   (3)
                                                                                         ------------------

Eligible Accounts Component of Borrowing Base (Line 3 X 80%)                            $                   (4)
                                                                                         ------------------

Pledged Cash (Valued @ 100%)                                                            $                   (5)
                                                                                         ------------------

Account Exclusions from Borrowing Base
         >7 1/2%/12 1/2% Concentration Limits
                                                              ------------------
         Offsets, Credits and Reductions
                                                              ------------------
                  to Eligible Accounts

                                                              SUBTOTAL                  $                   (6)
                                                                                         ------------------

Borrowing Base (Line 4, plus Line 5, minus Line 6)                                      $                   (7)
                                                                                         ------------------

Less:    Outstanding Loan Balance                                                     - $                   (8)
                                                                                         ------------------

Available Credit, or (repayment required)                                               $                   (9)
                                                                                         ------------------
         (Line 7 minus Line 8)
</TABLE>

<PAGE>   7

                                 REVOLVING NOTE
                                 --------------

$30,000,000.00                                             Dated:  May 14, 2001
                                                             Due:  May 13, 2002

                  FOR VALUE RECEIVED, on or before May 13, 2002, INDIAN-MARTIN
AG, a corporation organized and existing under the laws of Switzerland
("COMPANY"), unconditionally promises to pay to the order of BANK ONE, INDIANA,
NATIONAL ASSOCIATION, a national banking association ("BANK"), at Bank One
Tower, Mail Code IN 1-0046, 111 Monument Circle, Indianapolis, IN 46277, or such
other place as Bank may designate by written notice to Company, the principal
sum of Thirty Million Dollars and 00/100 ($30,000,000.00), or so much of such
amount as may be disbursed by Bank as Advances made on the Loan under the terms
of the Credit Agreement (as hereinafter defined), together with interest thereon
at the rates and calculated as provided in the Credit Agreement. Interest
accruing on the principal balance of this Note outstanding from time to time
shall be due and payable by Company on such dates and in accordance with the
terms of the Credit Agreement. All amounts paid on this Note shall be applied in
accordance with the terms of the Credit Agreement.

                  This Note is the "Note" referred to in the Credit Agreement,
to which reference is made for the conditions and procedures under which
Advances, payments, readvances and repayments may be made prior to the maturity
of this Note, for the terms upon which Company may make prepayments from time to
time and at any time prior to the maturity of this Note and the terms of any
prepayment premiums, penalties and other charges which may be due and payable in
connection therewith, and for the terms and conditions upon which the maturity
of this Note may be accelerated and the unpaid balance of principal and accrued
interest thereon declared immediately due and payable.

                  If any installment of principal or interest due under the
terms of this Note prior to maturity is not paid in full within ten (10) days of
the date when due, then Bank at its option and without prior notice to Company,
may assess a late payment fee in an amount equal to the greater of Twenty Five
and 00/100 Dollars ($25.00) or Five Percent (5%) of the amount past due up to
the maximum of $1,500.00 per late charge. Each late payment fee assessed shall
be due and payable on the earlier of the next regularly scheduled interest
payment date or the maturity of this Note. Waiver by Bank of any late payment
fee assessed, or the failure of Bank in any instance to assess a late payment
fee shall not be construed as a waiver by Bank of its right to assess late
payment fees thereafter.

                  If any installment of interest due under the terms of this
Note falls due on a day which is not a Banking Day, the due date shall be
extended to the next succeeding Banking Day and interest will be payable at the
applicable rate for the period of such extension.

                  All amounts payable under this Note shall be payable without
relief from valuation and appraisement laws, and with all collection costs and
attorneys' fees.

                                   Exhibit "I"

<PAGE>   8
                  The holder of this Note, at its option, may make extensions of
time for payment of the indebtedness evidenced by this Note, or approve
reductions of the payments thereon, release any Collateral securing payment of
such indebtedness or accept a renewal Note or Notes therefor, all without notice
to Company or any endorser(s), and Company and all endorsers hereby severally
consent to any such extensions, reductions, releases and renewals, all without
notice, and agree that any such action shall not release or discharge any of
them from any liability hereunder. Company and endorser(s), jointly and
severally, waive demand, presentment for payment, protest, notice of protest and
notice of nonpayment or dishonor of this Note and each of them consents to all
extensions of the time of payment thereof.

                  As used in this Note, the term "Credit Agreement" means that
certain Credit Agreement, dated as of even date herewith, by and between Company
and Bank, as the same hereafter may be amended, modified and/or restated from
time to time and at any time. Terms which are defined in the Credit Agreement
and which are not otherwise defined in this Note shall have the same meanings in
this Note as are ascribed to them in the Credit Agreement. The principal amount
of this Note outstanding from time to time shall be determined by reference to
the books and records of Bank on which shall be recorded each Advance under the
Loan evidenced by this Note, and all payments by Company on account of such
Loan. Such books and records shall be deemed PRIMA FACIE to be correct as to
such matters, absent demonstrative or manifest error.

                  This Note is made under and will be governed in all cases by
the substantive laws of the State of Indiana without reference to the choice or
conflicts of laws rules or principles of any foreign or domestic jurisdiction.

                            INDIAN-MARTIN AG, a corporation organized
                               and existing under the laws of Switzerland

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

                               -----------------------------------------
                                      (Printed Name and Title)

                                       2

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