Document:

EXHIBIT 10.1

                      DISTRIBUTOR AND LICENSE AGREEMENT

           DISTRIBUTOR AND LICENSE AGREEMENT, dated  as of November 3,  2000,
 between CARRINGTON LABORATORIES, INC.,  a Texas corporation  ("Carrington"),
 and MEDLINE INDUSTRIES, INC., an Illinois corporation ("Medline").

           WHEREAS, Carrington  manufactures and  sells a  dermal  management
 product line,  which  it  presently markets  itself  through  employees  and
 independent sale representatives;

           WHEREAS, Medline has extensive experience in marketing products to
 the hospital, nursing home and home health markets and sells certain  dermal
 management products of its own to such markets;

           WHEREAS, Carrington desires that Medline take over the U.S.  sales
 and marketing function  of its dermal  management business  by becoming  its
 exclusive distributor in the United States upon the terms and subject to the
 conditions set forth in this Agreement;

           WHEREAS, Medline desires  to become the  exclusive distributor  in
 the United States  of Carrington's dermal  management products  and to  take
 over Carrington's present employee sales  force and independent sale  agents
 upon the terms and  subject to the conditions  set forth in this  Agreement;
 and

           WHEREAS, Medline desires that  certain dermal management  products
 presently sold under  the Medline brand  be also sold  under the  Carrington
 brand, and Carrington  is willing to  license certain Carrington  trademarks
 for such purpose upon the terms and  subject to the conditions set forth  in
 this Agreement.

           NOW, THEREFORE, the parties hereto agree as follows:

           1.   Distributorship.

                1.1. Appointment and Duties.  Effective December 1, 2000 (the
 "Effective  Date"),  Carrington  hereby   appoints  Medline  its   exclusive
 distributor of  the  dermal management  products  listed in  Exhibit  A,  as
 amended by addition or deletion from  time to time by mutual agreement  (the
 dermal  management  products  listed  on  Exhibit  A,  as  so  amended,  the
 "Products"), for distribution  and sale to  the hospital,  nursing home  and
 home health  care markets  (the "Markets")  in  the United  States,  Canada,
 Puerto Rico and the Virgin Islands  (the "Territory"), subject to the  terms
 and conditions set forth in this Agreement.  The Products listed on  Exhibit
 A as attached  to this  Agreement are, as  of the  date hereof,  all of  the
 dermal  management  products  sold  by  Carrington  to  the  Market  in  the
 Territory.  Medline accepts  such appointment and  agrees to use  reasonable
 business efforts consistent with Medline's  approach of offering best  value
 for customers and sales representatives, to  sell Products to the Market  in
 the Territory.   Medline  will purchase  such  quantities of  Products  from
 Carrington as may be necessary,  in Medline's reasonable judgment,  properly
 to service and  maintain appropriate inventory  levels for customers  within
 the Territory.  Between the date  hereof and the Effective Date,  Carrington
 and Medline  will take  appropriate steps  to effectuate  the assumption  by
 Medline of its responsibilities hereunder and Carrington will cease  selling
 the Products to  the Market in  the Territory at  the close  of business  on
 November 30, 2000.
<PAGE>

                1.2. Exceptions  to  Exclusivity.    During  the  Term    (as
 hereinafter defined),  Carrington  will  not  directly  or  indirectly  sell
 Products to the Market in the Territory, except that:

                     (a)  Carrington may continue to sell Products by  direct
 sale to purchasers who are natural persons and who order such quantities  of
 Products which do not suggest an intent to resell Products.

                     (b)  Carrington will not  assign the existing  contracts
 listed on Exhibit B.  Carrington  will continue to honor its obligations  to
 supply Products under such  contracts through this  Agreement.  Medline  and
 Carrington will  jointly  manage and  service  the accounts  which  are  the
 subject of such contracts.   It is  the intent of  the parties that  Medline
 receive the  same economic  benefits and  undertake substantially  the  same
 obligations from  the sale  of  Products under  such  contracts as  if  such
 contracts had  been  assigned  to Medline,  without  any    compensation  to
 Carrington  for  jointly  managing  the  account.    Without  limiting   the
 generality of the  preceding sentence, if  such accounts are  not billed  by
 Medline, Medline will  nevertheless receive compensation  equivalent to  the
 gross margins it would have received  had it acted as distributor  hereunder
 for such accounts in the form  of credits against amounts due to  Carrington
 from Medline under this Agreement.   For all Products sold by Medline  after
 the Effective Date, Medline will be responsible for any distributor  rebates
 and contract administration  fees under such  contracts, either by  directly
 paying same  or adjustment  of the  credits provided  for in  the  preceding
 sentence of this Section 1.2(b), as appropriate.

                     (c)  For  the   avoidance   of  doubt,   the   exclusive
 distribution rights granted by Carrington to Medline hereunder do not  limit
 the sale of any product, other than the Products, by Carrington to the  oral
 care, nutriceutical, veterinary or consumer products markets.

                     (d)  It is the intent of this Agreement that Medline  be
 the exclusive distributor  of all Carrington  dermal management products  to
 the  Market  in  the  Territory.     Accordingly,  if  Carrington   develops
 enhancements of  any  Product or  new  dermal management  products  that  it
 reasonably believes are suitable  for sale to the  Market in the  Territory,
 Carrington will make such enhancements or new products available to  Medline
 for distribution under this Agreement as  additions to or substitutions  for
 existing Products.  If Medline wishes to distribute such enhancements of any
 Product or new dermal management products, it will notify Carrington  within
 90 days of notification from Carrington  of the enhancement or new  product.
 If Medline  does not  wish to  distribute such  Product enhancement  or  new
 dermal management  product, Carrington  may sell,  or  appoint one  or  more
 distributors to sell,  such Product  enhancements or  new dermal  management
 products to the Market in the Territory so  long as they are not sold  under
 the Trademarks  (as hereinafter  defined) and  no  such enhancement  or  new
 Product competes with an existing Product.

                1.3. Territory.   Carrington  will  use  reasonable  business
 efforts to  protect  the exclusivity  granted  to Medline  in  Section  1.1.
 Without limiting the generality  of the foregoing,  it will cease  supplying
 any purchaser of  the Products inside  or outside of  the Territory if  such
 purchaser is reasonably believed to be  reselling Products to the Market  in
 the Territory.
<PAGE>

                1.4. Sales Outside the Territory.  In any geographic area  in
 which Carrington does  not have an  exclusive distributor  for the  Products
 (and Carrington will promptly after the execution of this Agreement  deliver
 to Medline  a  list  of the  geographic  areas  in which  it  has  appointed
 exclusive distributors of the  Products and promptly  notify Medline of  any
 changes to such list),  Medline may sell Products  to any customer which  is
 not at the time a customer of Carrington.  Before accepting any order from a
 customer outside the Territory, Medline will contact Carrington to ascertain
 if such customer is a  current Carrington customer.   If Medline is able  to
 develop significant sales  of Products in  any geographic  area outside  the
 Territory, Carrington and  Medline will enter  into good faith  negotiations
 concerning the amendment of this Agreement  to include such geographic  area
 in the Territory.

                1.5. Prices and Terms, etc.  (a)  All Products will initially
 be sold by Carrington to Medline at  the prices listed on Exhibit A,  unless
 an authorized special price has been agreed to in writing in accordance with
 the procedures described  in Section 1.6.   All prices  include freight  and
 insurance to a Medline distribution  center; provided, that Carrington  will
 bill Medline, and Medline will pay Carrington for, freight and insurance for
 any orders (for shipment  to one location  at one time)  of Products with  a
 value of less than $5,000.  Medline will pay Carrington for all Products not
 later than 30 days after date of invoice.

                     (b)  The prices set forth in Exhibit A shall be firm and
 not subject to change during the first  two Contract Years (as such term  is
 defined in Section 9).  Thereafter, Carrington may, by not less than 90 days
 notice,  increase the price of each Product not more often than yearly by  a
 percentage not  exceeding the  percentage increase  in its  direct costs  of
 manufacturing or having  manufactured such Product  since the  later of  the
 Effective Date or the most recent price adjustment pursuant to this  Section
 1.5(b).  Medline  shall have the  right to audit,  on reasonable notice  and
 under reasonable conditions,  Carrington's cost information  to confirm  any
 increase in direct costs.  If Medline informs Carrington that Medline cannot
 increase the  resale  price  of  any Product  by  the  percentage  by  which
 Carrington  has  so  increased  its  price  (provided,  however,  that   the
 provisions of this and  the next sentence of  this Section 1.5(b) shall  not
 apply to  any  price increase  by  Carrington not  in  excess of  the  price
 increases permitted under  the terms of  the Novation Contract),  Carrington
 and Medline shall  negotiate in good  faith a price.  If the parties  cannot
 agree on a price  adjustment for any Product,  Medline may have the  Product
 manufactured by a third party and Carrington will take all necessary actions
 to assist  Medline in  having the  Product manufactured  by a  third  party,
 including but  not  limited  to  selling to  Medline  or  such  third  party
 sufficient quantities  of Acemannan  Hydrogel_  (and any  other  proprietary
 components) at a competitive fair market price to manufacture the Product in
 the quantities  required  by  Medline.    Notwithstanding  anything  to  the
 contrary set forth in this Section  1.5(b), if Carrington is able to  reduce
 its cost of any Product that is outsourced, Carrington will promptly  notify
 Medline and the price  then in effect  will be reduced  by one-half of  such
 reduction.

                     (c)  Carrington will not make any material change in any
 Product, or  change the  manufacturer of  any Product  which is  outsourced,
 without the  written consent  of Medline,  which shall  not be  unreasonably
 withheld or delayed.
<PAGE>

                     (d)  Carrington  will,  at  Medline's  request,  provide
 documentation of  its cost  increases underlying  any price  adjustment  and
 Medline will, at Carrington's request, from time to time provide  Carrington
 with the resale  prices of  any Product for  which Carrington  has not  been
 accorded a full cost-based price increase  because of the fifth sentence  of
 Section 1.5(b).

                     (e)  Carrington represents  and  warrants that  (i)  the
 prices listed on Exhibit A represent, for the period beginning January  2000
 and ending September 2000, on a weighted average basis, a not less than 44.9
 percent discount from  Carrington's current  actual selling  prices for  the
 Products, after  taking  into account  all  relevant factors  including  any
 distribution rebates, contract administration  fees, and other discounts  or
 rebates (other than tracing or tracking fees ("Tracking Fees")) and (ii)  it
 has made no commitments that have altered or would reasonably be expected to
 alter those  results  after the  Effective  Date.  In the  event  that  such
 discount is reduced as the result  of any actions taken or commitments  made
 by Carrington prior to the Effective Date (but not as a result of any action
 taken by  Medline thereafter  such as  change in  product mix  or  pricing),
 Medline shall have the right to offset, against amounts owed to  Carrington,
 the actual dollar loss to Medline up to the  date of payment as a result  of
 such reduced  discount  and  the parties  shall  adjust  Product  prices  to
 compensate for such reduced discount..

                     (f)  Carrington shall be  responsible for Tracking  Fees
 payable to distributors (i) who are currently distributors of the  Products,
 (ii) with respect to Tracking Fees calculated as a percentage of sales, at a
 rate not higher than the rate paid by Carrington for the latest  calculation
 period preceding the Effective  Date and only with  respect to sales of  the
 Products, and (iii) with  respect to fixed or  periodic Tracking Fees,  only
 Tracking Fees that Medline  would not have  to pay such  fee absent sale  of
 Products to  such  Distributors.   Medline  will  make  reasonable  business
 efforts, consistent with the parties' mutual goal of increasing sales of the
 Products, to  reduce Tracking  Fees.   Medline will  invoice Carrington  for
 Tracking Fees for which Carrington is responsible under this Section  1.5(f)
 upon payment  thereof,  including  copies of  invoices  received  from  each
 distributor, and Carrington  will either credit  the amount  of the  invoice
 against amounts due from Medline to Carrington or pay Medline within 30 days
 the invoiced amount.

                1.6. Special Pricing.  Special pricing for  specific Products
 to a particular  customer may be  authorized by Carrington  in writing  from
 time to time at its sole discretion to assist Medline in selling Products to
 significant customers.  Such special pricing shall be reflected in invoices,
 but shall be limited  to quantities ordered for  the specific customer  (and
 Medline, at Carrington's  request, will furnish  Carrington with sales  data
 pertaining to such customer).
<PAGE>

                1.7. Support  by  Carrington,  etc.    Carrington  will   use
 reasonable business efforts to support Medline, at a level comparable to the
 support it offers other distributors of  its products, at such customers  in
 the Territory and  at such trade  shows as Carrington  and Medline may  from
 time to time agree to with technical service and other support.   Carrington
 will also  provide assistance  to Medline  in  obtaining new  contracts  and
 renewals of  existing  contracts.   In  addition,  Carrington  will  provide
 product training,  customer  seminars,  and  other  activities  designed  to
 support customer purchases,  subject to resource  availability.   Carrington
 and Medline will  meet not less  often than quarterly  to discuss  marketing
 plans, possible new products and any other issues that may arise under  this
 Agreement.

                1.8. Reporting Requirements.   Medline will from time to time
 (but not  more  frequently than  quarterly)  promptly upon  the  request  of
 Carrington  furnish  Carrington  with  a  list  of  customers  and  customer
 locations to which it  has shipped Products during  the period specified  in
 the request,  together  with the  specific  Products shipped  to  each  such
 customer and customer location, the quantity of each Product shipped and the
 price paid for  such Product.   Upon termination of  this Agreement for  any
 reason, Medline will, not later than 30 days prior to the effective date  of
 such termination, furnish Carrington with such information for the  Contract
 Year then in course and the preceding Contract Year.

                1.9. Insurance.   Medline and  Carrington will  at all  times
 during the  term  of  this Agreement  maintain  workmen's  compensation  and
 product liability insurance  with liability limits  and insurance  companies
 acceptable to the other, naming the other as an additional insured.

           2.   Purchase of  Carrington Inventory.   Medline  will,   on  the
 Effective  Date,  purchase  Carrington's  then  existing  inventory  of  the
 Products (the  "Inventory"), exclusive  of damaged,  defective, obsolete  or
 otherwise unsalable items  and Products needed  to fill  orders received  by
 Carrington prior to the Effective Date, at the prices set forth on Exhibit A
 and on  the terms  and conditions  set forth  in Section  1.5(a).   Physical
 transfer of the Inventory will commence  as soon as possible after the  date
 hereof.  Title and risk of loss will transfer upon payment by Medline of the
 purchase price of the Inventory, except  that Medline will bear the risk  of
 loss of any Inventory transferred to it  prior to payment therefor.  In  the
 event that (a) Medline has  not sold the entire  Inventory by June 1,  2001,
 Carrington will credit Medline, not later than 30 days after presentation of
 a statement, 50 percent of the price  paid by Medline to Carrington for  any
 Products in the Inventory that have not been sold by Medline by June 1, 2001
 and (b) in the event Medline has  not sold the entire Inventory by  December
 1, 2001,  Carrington will  credit  Medline, not  later  than 30  days  after
 presentation of a  statement, the amount  obtained by  subtracting from  the
 price paid by Medline to Carrington  for any Products in the Inventory  that
 have not been sold by December 1,  2001, any amount repaid by Carrington  to
 Medline pursuant  to clause  (a) of  this sentence.   Medline  will  satisfy
 orders for any  Product from  the Inventory  before using  any such  Product
 subsequently ordered  from  Carrington and  will  refund to  Carrington  any
 amount paid to Medline by Carrington pursuant to this Section 2 with respect
 to any unsold Inventory  that is subsequently sold.   The Inventory will  be
 delivered to Medline  at such times  and in such  quantities as Medline  may
 reasonably request and Carrington will cause any Inventory in its possession
 to be covered by its property and casualty insurance.  Carrington represents
 and warrants that, upon payment  therefor, Medline will obtain  unencumbered
 title to the Inventory, that the Inventory is salable in the ordinary course
 of Carrington's  business  as  presently  conducted  and  is  not  obsolete,
 outdated or damaged.
<PAGE>

           3.   Forecasts and Orders.

                3.1. Forecasts.  Prior  to the Effective  Date, Medline  will
 deliver  to  Carrington  (a)  a   non-binding  forecast  of  its   estimated
 requirements of each Product for the four month period ended March 31,  2001
 and each of  the three-month  periods ending   June  30,   September 30  and
 December 31,  2001 and  (b) a  firm forecast,  which shall  be binding  upon
 Medline and Carrington, of the amount of each Product to be delivered during
 the period commencing on the date hereof and ending March 31, 2001,  stating
 the dates of requested  delivery, the quantity of  each Product required  on
 each such  date and  the location  to which  each delivery  is to  be  made.
 Subsequently, Medline  will deliver  to Carrington,  60  days prior  to  the
 commencement of each  calendar quarter of  each Contract  Year during  which
 this Agreement is  in effect, (x)  a firm forecast,  which shall be  binding
 upon Medline and Carrington, of the  amount of each Product to be  purchased
 during the  immediately following  calendar quarter,  stating the  dates  of
 requested delivery, the quantity of each Product required on each such  date
 and the location to which each delivery is to be made, and (y) a non-binding
 forecast setting  forth, to  the best  of Medline's  ability, its  estimated
 requirements of  each Product  for each  of  the three  subsequent  calendar
 quarters.

                3.2. Increases From Forecasts.  If the amount of any  Product
 set forth in such firm forecasts for the four months ended March 31, 2001 or
 any calendar quarter exceeds the amount for such calendar quarter set  forth
 in the preceding forecast  referred to in  Section 3.1 by  more than 11  per
 cent, Carrington shall  be under no  obligation to supply  such excess,  but
 shall use commercially reasonable  efforts to do so.   Without limiting  the
 generality of  the  foregoing,  Carrington will  allocate  any  shortage  in
 supplies, goods  outsourced  or  manufacturing  capacity  between  Medline's
 requirements and Carrington's other needs pro  rata and will, to the  extent
 commercially reasonable, substitute supplies of a different Product that  is
 available and is acceptable to customers as a substitute for the Product  in
 short supply.

                3.3. Purchase Orders.  Subject to the foregoing provisions of
 this Section 3, Medline  will from time to  time submit definitive  purchase
 orders to Carrington  setting forth  the quantities  of each  Product to  be
 supplied, desired delivery dates  and shipping instructions consistent  with
 the industry norm for  the time required for  the manufacture, shipment  and
 delivery of  Products  in  the quantities  ordered.    Carrington  will  use
 commercially reasonable efforts to  accommodate any difference between  such
 purchase orders and the forecasts provided pursuant to Section 3.1.

           4.   Carrington Warranties.

                     (a)  Carrington warrants that, at  the time of  shipment
 by Carrington, all Products  sold and delivered  pursuant to this  Agreement
 will conform to the specifications therefor.

                     (b)  Carrington warrants  that  all  Products  sold  and
 shipped to Medline  pursuant to  this Agreement will,  at the  time of  such
 shipment, not  be  adulterated  or misbranded  within  the  meaning  of  any
 applicable federal, state or municipal law, as such laws are constituted and
 effective at  the time  of shipment  and that  no such  Product will  be  an
 article which  may not  be introduced  into  interstate commerce  under  the
 provisions of any applicable federal, state or municipal law.
<PAGE>
                     (c)  Carrington further warrants  that, at  the time  of
 shipment, all  Products  sold  and  shipped  to  Medline  pursuant  to  this
 Agreement will be in compliance with all applicable governmental regulations
 and will have been manufactured in  accordance with applicable current  good
 manufacturing practices ("cGMP") regulations as set forth in 21 CFR 210,  as
 then in effect, in a facility that is ISO 9000 certified.

                     (d)  THE WARRANTIES  SET FORTH  IN  THIS SECTION  4,  OR
 OTHERWISE EXPLICITLY SET FORTH IN THIS AGREEMENT, ARE EXPRESSLY IN LIEU  OF,
 AND CARRINGTON  EXPRESSLY  DISCLAIMS  AND  NEGATES,  ALL  OTHER  WARRANTIES,
 EXPRESSED OR IMPLIED, ARISING  BY OPERATION OF  LAW OR OTHERWISE,  INCLUDING
 IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

           5.   Indemnification.

                5.1. By Carrington.  Carrington agrees to indemnify and  hold
 harmless Medline  and  its  employees,  officers,  directors,  stockholders,
 successors and assigns from and against  any and all losses, damages,  costs
 and expenses, including reasonable legal fees and expenses incident thereto,
 arising from any suit, claim  or demand of any  third party relating to  (a)
 any design or manufacturing defect in any Product, (b) any statement on  any
 labeling of or literature supplied or approved by Carrington for any Product
 that is false or violates any law or regulation of the United States or  any
 agency, state or locality thereof, and  (c) any infringement by any  Product
 or any labeling, packaging or product  literature approved or authorized  by
 Carrington of any patent, trademark, copyright, design or other intellectual
 property right of any third party.

                5.2. By Medline.    Medline  agrees  to  indemnify  and  hold
 harmless Carrington and  its employees,  officers, directors,  stockholders,
 successors and assigns from and against  any and all losses, damages,  costs
 and expenses, including reasonable legal fees and expenses incident thereto,
 arising from any suit, claim  or demand of any  third party relating to  (a)
 any representations or claims made by Medline or any of its employees, sales
 representatives or distributors not contained in the labeling, packaging  or
 literature furnished or approved by Carrington for the Products, or (b)  any
 infringement by any  labeling, packaging  or literature  for any  Carrington
 Product not furnished or  approved by Carrington  of any patent,  trademark,
 copyright, design  or other intellectual property right of any third party.

           6.   Carrington Sales Staff.  Exhibit C lists all sales staff  and
 independent sales representatives for the Products.  Promptly following  the
 execution  of  this  Agreement,  Medline  will  make  offers  of  employment
 effective the  Effective Date  to such  members of  Carrington's sale  staff
 ("Sales Employees")  as  determined  by  Medline  in  its  sole  discretion.
 Carrington will assist Medline in  any necessary discussions with  employees
 and will provide Medline with up to $150,000 reimbursement of any signing or
 stay bonuses paid to Sales Employees promptly upon presentation of  invoices
 for the amounts so actually paid.  Carrington will also seek the consent  of
 Mears Medical Sales Associates, an independent sales representative for  the
 Products,  to  the  assignment  of  the  Independent  Sales   Representative
 Agreement with Carrington to Medline.   Medline will not be responsible  for
 any salaries, bonuses, commissions or other compensation  of Sales Employees
 or independent  sales representatives  that accrue  prior to  the  Effective
 Date.
<PAGE>

           7.   Trademark License.

                7.1. License.  Subject  to the terms  and conditions  hereof,
 Carrington hereby  grants  to Medline  for  the  term of  this  Agreement  a
 nonexclusive right and license  to use the  Carrington trademarks listed  on
 Exhibit  D  (the  "Trademarks")  in  connection  with  (a)  the   marketing,
 advertisement, promotion and distribution of the Products in the  Territory,
 (b) the manufacture, marketing, advertisement, promotion and distribution of
 any of the Medline products (the "Medline Products") supplied by  Carrington
 to Medline under a Supply Agreement, of even date herewith, which Carrington
 and Medline agree are appropriately to be sold under the Trademarks, and (c)
 such additional dermal  management products  as Carrington  and Medline  may
 from time to time agree to.   Such grant is nondivisible, nonassignable  and
 nonsublicensable.  The license hereby granted extends only to the  Products,
 such Medline  Products  and  such  additional  dermal  management  products.
 Medline will  not make  or authorize  any use,  direct or  indirect, of  the
 Trademarks with any other products.

                7.2. Packaging Requirements.    (a)  Medline  will  sell  the
 Products, any  Medline  Products  labeled as  Carrington  products  and  any
 additional dermal management  products as  Carrington and  Medline may  from
 time to  time agree  may  bear the  Trademarks  under the  Trademarks  using
 properly labeled Carrington  packaging.  Medline  agrees to  use only  those
 tags, labels, imprints, cartons and other packaging, and only the format  or
 formats and designs of tags, labels,  imprints, cartons and other  packaging
 which are  presently used  for Products,  supplied  by Carrington  or  which
 Carrington shall first authorize and approve in writing; provided,  however,
 that Carrington's prior approval shall not be required for Medline's use  of
 any such items  which is  consistent with  Carrington's use  of such  items.
 Medline shall use Trademarks  upon or in  connection with Products,  Medline
 Products and such other  dermal management products with  the symbol TM  or,
 where a United States Federal Trademark Registration has been obtained, with
 the symbol R.  Repacking of the  Products may be undertaken by Medline  only
 with Carrington's express written authorization and in accordance with  such
 requirements as Carrington may  specify, as well  as governmental and  other
 legal requirements covering quality, safety, health, labeling, etc. that may
 apply to the repackaged Product.

                (b)  In order to  assure that the  appearance and quality  of
 the tags, labels, imprints, cartons and  other packaging are of such  style,
 nature and appearance  and quality  as to be  adequate and  suited to  their
 exploitation to the best advantage and to the protection and enhancement  of
 the goodwill pertaining to the Trademarks,  Carrington retains the right  to
 approve or  disapprove  of  such  style,  nature,  appearance  and  quality.
 Medline shall submit for Carrington=s approval  prototype samples of any  of
 its cartons, containers, packaging, tags  and labels bearing the  Trademarks
 prior to any use thereof by  Medline; provided, however, that Medline  shall
 not be required  to submit,  and Carrington's  prior approval  shall not  be
 required for, and  such samples  where Medline's  use of  the Trademarks  is
 consistent with Carrington's use of the Trademarks.  In the event Carrington
 fails to approve such material in writing within 30 days after the same  has
 been furnished to  Carrington, it shall  be deemed  rejected by  Carrington.
 Except as  otherwise  provided in  Section  7,  Medline shall  not  sell  or
 distribute any Products hereunder  or any Medline  Products or other  dermal
 management products  under the  Trademarks unless  and until  the  prototype
 samples thereof have been approved by Carrington in writing.  After  samples
 have been approved, Medline shall at  regular intervals, but not less  often
 than three times per year, submit additional random samples of the  cartons,
 labels, tapes, containers, packaging, wrapping materials so that  Carrington
 can  determine  if  they  remain  in  conformity  with  the  standards   and
 specifications then in effect for such materials.
<PAGE>

                7.3. Medline Cooperation.  Carrington  may in its  discretion
 file applications for trademark registration or take other actions which  it
 deems necessary  to protect  its rights.   Such  actions shall  be taken  at
 Carrington=s own  expense.   Medline agrees  to  cooperate with  and  assist
 Carrington as required to obtain such protection.

                7.4. Covenants.    (a)    Medline  shall  not,  directly   or
 indirectly, register, or attempt to register,  in any country, territory  or
 jurisdiction, any of the Trademarks (or  any other trademark, trade name  or
 logo of Carrington) or any derivations or adaptations thereof, or any  word,
 symbol or design which is so similar thereto as to suggest association  with
 or a sponsorship  by Carrington.   Medline will  conduct its  business in  a
 manner designed to protect  the reputation and  integrity of the  Trademarks
 and the goodwill associated therewith.

                     (b)  Medline shall not attack the title of Carrington in
 and to  the Trademarks,  nor will  it  attack the  validity of  the  license
 granted hereunder.

                7.5. Ownership, etc.   Medline acknowledges  and agrees  that
 Carrington is  the  sole owner  of  all right,  title  and interest  in  the
 Trademarks and all goodwill relating thereto, and that Medline shall not, by
 reason of this  Agreement or otherwise,  acquire any right,  title or  other
 interest therein, other than  the limited rights  of use granted  hereunder.
 All goodwill arising from the use  of the Trademarks by Medline shall  inure
 solely to the benefit of Carrington, and Medline hereby irrevocably  assigns
 to Carrington  all other  rights including  any  copyrights created  in  any
 article, label, design  or other material  bearing the  Trademarks, and  any
 goodwill created by or arising out of such use.

                7.6. Medline Product  Standards.    To  the  extent  used  in
 connection with any Medline Product or  other dermal management product  not
 manufactured by or otherwise  under the control  of Carrington, Medline  may
 only use the  Trademarks on products  that conform to  the standards of  the
 Products,  and  all  product  containers,  packaging,  product   literature,
 advertising and other materials bearing the  Trademarks or any of them  must
 be submitted as set forth in this Section 7 to Carrington for approval prior
 to their use.

                7.7. Promotional Materials.   The  cost of  all   promotional
 materials, including artwork, involving Products and Medline Products, shall
 be borne  by Medline.    All artwork  and  designs involving  the  Products,
 Medline Products or other dermal  management products bearing any  Trademark
 and any reproduction thereof, shall  notwithstanding their creation and  use
 by Medline, be and remain the property of Carrington, and Carrington, to the
 extent otherwise consistent with  this Agreement, shall  be entitled to  use
 the same or to  license the use of  the same to  others; provided, that  any
 artwork produced by Medline for Medline Products or other dermal  management
 products that does not use Carrington  trade dress may, upon removal of  the
 Trademarks, continue to be used by Medline without any other restriction.
<PAGE>

                7.8. Non-Assignability of  License.   The rights  granted  to
 Medline hereunder  are  personal  in nature.    Without  Carrington's  prior
 written consent, Medline may not, by operation of law or otherwise,  assign,
 transfer, sublicense, pledge,  hypothecate or  otherwise permit,  authorize,
 dispose of or  encumber the  right to  use or  any use  of any  part of  the
 Trademarks, whether  to  or by  a  receiver or  trustee  of Medline  or  any
 affiliate of  Medline or  any  other third  party,  and any  such  attempted
 assignment, transfer, sublicense, pledge, hypothecation or other permission,
 authorization, disposition or encumbrance in violation of this section shall
 be void ab initio.

                7.9. Royalty.  If Medline uses any  of the Trademarks on  any
 Medline Products or  other dermal management  products not manufactured  for
 Medline by Carrington (the "Trademarked Products"), Medline agrees to pay to
 Carrington a royalty  in an amount  equal to a  percentage of  net sales  of
 Trademarked Products in any  Contract Year determined  by the aggregate  net
 sales by Medline of the Products and the Trademarked Products ("Net  Sales")
 as follows:

                (a)  If Net Sales  are less than  $12.5 million, the  royalty
                     rate is one percent;

                (b)  If Net Sales are equal to or more than $12.5 million but
                     less than $15 million, the royalty rate is two percent;

                (c)  If Net Sales are equal to  or more than $15 million  but
                     less than  $17.5  million,  the royalty  rate  is  three
                     percent;

                (d)  If Net Sales are equal to or more than $17.5 million but
                     less than $20 million, the royalty rate is four percent;
                     and

                (e)  If Net Sales are equal to or more than $20 million,  the
                     royalty rate is five percent.

 Carrington and  Medline further  agree that,  with  respect to  high  volume
 commodity products, the maximum royalty rate  will be two percent.   Medline
 will, not later than 30 days  after the end of  any Contract Year for  which
 royalties are due under this Section 7.9, pay Carrington the full amount  of
 such royalties and deliver to Carrington  a statement showing in  sufficient
 detail the quantities and the prices  at which any such Medline Products  or
 dermal management products were  sold during such  calendar quarter and  its
 Net Sales used for  the calculation of the  royalty rate.  Carrington  shall
 have the right to audit Medline's  books and records to verify the  accuracy
 of such  statements.   If any  such audit  results in  an increase  of  five
 percent or  more in  the amount  payable by  Medline for  any such  calendar
 quarter, Medline will  pay any out  of pocket costs  incurred by  Carrington
 (including without limitation  the fees of  outside auditors) in  connection
 with such audit.

                7.10.     Termination  of  License.  In  the  event  of   the
 termination of  this Agreement,  the license  granted under  this Section  7
 shall immediately terminate, except  that Medline may  continue to sell  its
 existing stock  of  Products  and  of  Medline  Products  and  other  dermal
 management products carrying Trademarks in accordance with the provisions of
 Section 10.4.
<PAGE>

           8.   Base Royalty  Payment.   In consideration  of the  rights  to
 distribute the Products and  to use the  Trademarks granted hereby,  Medline
 will pay Carrington   (a) on each  of December 1, 2000  and March 1, June  1
 and September 1, 2001, the sum of $875,000; (b) on each of December 1,  2001
 and March 1, June 1 and September 1, 2002, the sum of $750,000; (c) on  each
 of December 1, 2002 and March  1, June 1 and September  1, 2003, the sum  of
 $625,000; (d) on each of December 1, 2003 and March 1, June 1 and  September
 1, 2004, the sum of $500,000; and (e) on each of December 1, 2004 and  March
 1, June 1 and September 1,  2005,  the sum of $375,000.   In the event  this
 Agreement is terminated by Medline pursuant to Section 10.1, Carrington will
 refund to  Medline, not  later than  10  days after  the effective  date  of
 termination, the  amount  by  which such  payments  received  prior  to  the
 effective  date  of  such  termination   exceeds  the  number  obtained   by
 multiplying $208,333.33 by the number of  months elapsed from the  Effective
 Date to the effective date of such termination, rounded to the nearest whole
 month.  The obligation set forth in the preceding sentence of this Section 8
 will be secured  by a  security interest in  the Trademarks  evidenced by  a
 Security Agreement in substantially the form set forth in Exhibit E.

           9.   Term.  The term of this Agreement (the "Term") shall commence
 on the date hereof and shall continue until November 30, 2005.  For purposes
 of this Agreement, each 12-month period following the Effective Date  hereof
 shall be considered a Contact Year.

           10.  Termination.

                10.1.     Termination for  Cause.    This  Agreement  may  be
 terminated on  30 days'  written notification  under any  one of  the  below
 conditions:

                     (a)  By either Carrington or Medline, if the other party
                          attempts to assign this Agreement without its prior
                          written consent;

                     (b)  By Carrington, if  Medline discontinues its  dermal
                          management product business;

                     (c)  By either Medline or Carrington, if the other party
                          files  for  or   is  petitioned  into   bankruptcy;
                          insolvency, liquidation or dissolution of assets;

                     (d)  By either Medline or Carrington, if the other party
                          fails generally to pay its debts and obligations in
                          accordance with their terms;

                     (e)  By Carrington,  if  Medline fails  to  make  timely
                          payment  of  any  Carrington  invoice  under   this
                          Agreement (other  than  amounts  disputed  in  good
                          faith) and such failure continues for 10 days after
                          notice thereof;

                     (f)  By either Medline or Carrington, if the other party
                          materially breaches any term  or condition of  this
                          Agreement (other than payment of invoices) and such
                          breach  is  not   corrected  within   45  days   of
                          notification of such breach by the other party; and
<PAGE>

                     (g)  By either Medline or Carrington if the other  party
                          fails  to   materially  perform   its   obligations
                          hereunder for any  reason set forth  in Section  14
                          and such failure continues for 180 days or more.

                10.2.     Obligations Upon  Termination.   Upon  termination,
 Medline will pay  Carrington in full  the amounts shown  on any  outstanding
 invoices in accordance with the payment  terms set forth in Section 1.5  and
 any royalty payable pursuant to  Section 7.9.  No  payment of any kind  from
 either party to the  other on account of  the termination of this  Agreement
 shall be due  to the  other party and  neither party  will   make any  claim
 therefor.  The provisions of Sections 1.8, 2 (as to Carrington's  repurchase
 obligation only),  4, 5,  7.4(a) (first  sentence only),  7.4(b), 7.5,  7.7,
 7.10,  8  (penultimate  sentence  only),  10.3,  11  and  17  shall  survive
 termination of this Agreement.

                10.3.     Disposal of Stock  Upon Termination or  Expiration.
 Upon the termination or expiration of  this Agreement, Medline will, at  the
 election of Carrington, (a) return all Products, Medline Products and  other
 dermal management products bearing the Trademarks to Carrington, which shall
 refund the purchase price  thereof (such return to  be with (i) freight  and
 insurance prepaid if Carrington has terminated  this Agreement for cause  or
 if the  Term  of  this Agreement  has  expired,  or (ii)  with  freight  and
 insurance to be paid by Carrington, if Medline has terminated this Agreement
 for cause), or (b) continue selling its stock of Products, Medline  Products
 and  other  dermal  management   products  bearing  the  Trademarks   (using
 commercially reasonable  efforts  to do  so)  for  a period  of  six  months
 (provided that, without the consent of Carrington, no such sale of  Products
 shall be at a price which  is more than 10  percent below the resale  prices
 set forth on Exhibit A, as such prices  have been amended from time to  time
 by mutual  agreement  of the  parties),  returning all  remaining  stock  of
 Products, Medline  Products and  other  dermal management  products  bearing
 Trademarks at the end of such  six-month period, with freight and  insurance
 charged as set  forth above,  for a refund  of the  purchase price  thereof.
 Carrington will pay Medline for returned Products within 30 days of receipt.

                10.4.     Effect of Termination or Expiration.  Upon or after
 the expiration  of  termination  of  this  Agreement,  except  as  otherwise
 specifically provided  in this  Section 10,  all rights  granted to  Medline
 hereunder shall forthwith revert to Carrington and Carrington shall be  free
 to license others to use  the Trademarks or any  of them in connection  with
 the sale and distribution  of the Products.   Medline will refrain from  the
 use of the Trademarks, or any further direct or indirect reference to or any
 thing deemed by  Carrington to be  similar to the  Trademarks in  connection
 with the distribution or  sale of Medline's products  except as provided  in
 Section 10.3.

           11.  Confidentiality.    The  Confidential  Disclosure  Agreement,
 dated  December  24,   1997  (the   "Confidentiality  Agreement"),   between
 Carrington and Medline, shall continue in effect during the Term and may not
 be terminated  except  by an  instrument  executed by  both  Carrington  and
 Medline, notwithstanding anything set forth in the Confidentiality Agreement
 to the contrary.
<PAGE>

           12.  Right of First Offer. In the event that Carrington decides to
 sell any of the Trademarks or any other intellectual property pertaining  to
 or the assets  supporting the production  of the Products  (without, in  the
 case of such  assets, having arranged  for replacement thereof  in a  manner
 that will not interrupt the supply to Medline of Products), Carrington  will
 notify Medline (the "Offer Notice"), specifying the price and the terms  and
 conditions upon which  it is  willing to  sell.   Upon receipt  of an  Offer
 Notice, the parties will negotiate in good faith for a period of 30 days (or
 until Medline informs  Carrington that it  is not  interested in  purchasing
 such intellectual property  or assets  if prior to  the end  of such  30-day
 period).  If Carrington and Medline agree on the terms of such purchase  and
 sale, the closing shall take place  on a date not  later than 60 days  after
 receipt of the  Offer Notice.   If Carrington and  Medline do  not reach  an
 agreement, Carrington may sell the intellectual property or assets to one or
 more third parties; provided, however, that if Carrington offers to sell the
 intellectual property or assets  at a price lower  than the lowest price  it
 had indicated to  Medline it would  accept (whether contained  in the  Offer
 Notice or later conveyed to Medline  in negotiations or otherwise under  the
 terms of  this  Section 12)  or  on  terms and  conditions  materially  more
 advantageous to the purchaser than those last offered to Medline, Carrington
 will notify Medline (a "Subsequent Offer Notice"), stating such lower  price
 or more advantageous terms and conditions,  and Medline may, within 10  days
 of its receipt of  the Subsequent Offer Notice,  accept such price or  terms
 and conditions and thereupon purchase  the intellectual property or  assets.
 If Medline does not  accept such price or  terms and conditions,  Carrington
 shall be free to  sell the intellectual  property or assets  to one or  more
 third parties at such  price and on such  terms and conditions.   Carrington
 will not sell such  Trademarks, intellectual property or  assets to a  third
 party unless  such third  party agrees  to be  bound by  the terms  of  this
 Agreement, to the extent applicable to the property sold.

           13.  No Agency.  It  is expressly agreed  and acknowledged by  the
 parties hereto that  Medline is an  independent contractor selling  entirely
 for its own account.  Medline is solely responsible for all of its  expenses
 and  costs,  including  costs  of  invoicing,  collection  and  credit,  and
 delivery.    Nothing  contained  herein  shall  be  construed  to  create  a
 partnership, joint venture or the relationship  of employer and employee  or
 principal and agent of  any kind on behalf  of Carrington, or grant  Medline
 authority to bind Carrington  in any respect whatsoever.   Medline shall  be
 responsible for any  representation it makes  with respect  to the  Products
 that are not set forth in Carrington's own Product literature.

           14.  Force Majeure.    Neither  Carrington nor  Medline  shall  be
 liable for any failure to perform hereunder (other than payment of  invoices
 and royalties when  due) due, in  whole or in  part, to  any contingency  or
 cause beyond  its reasonable  control,  including without  limitation  fire,
 explosion, earthquake,  storm,  flood,  drought, or  other  adverse  weather
 conditions, accident, crop failure,  breakdown of machinery,  transportation
 or handling difficulties, strike, lockout, or other labor difficulties (from
 whatever cause arising,  and whether  or not  the demands  of employees  are
 reasonable or within its  power to grant), war,  insurrection, riot, act  of
 God or  the  public  enemy,  any  law,  act,  order,  proclamation,  decree,
 regulation, ordinance, instruction, or request of any governmental or  other
 public authority, any  order, judgement  or decree  of any  court, delay  or
 failure of carriers or contractors, labor  shortage, or inability to  obtain
 transportation equipment,  raw materials,  fuel, power,  plant equipment  or
 materials required for maintenance or repairs.
<PAGE>

           15.  No Waiver.  The  failure by either  Carrington or Medline  to
 enforce, at  any  time, any  of  the provisions  of  this Agreement,  or  to
 exercise any option  which is  herein provided, or  to require  at any  time
 performance of any of the provisions herein, shall in no way be construed to
 be a waiver of  such provisions, nor in  any way to  affect the validity  of
 this Agreement or any part thereof,  or the right of Carrington or  Medline,
 as the case may be, to thereafter enforce each and every such provision.

           16.  Notices.  All notices hereunder shall be in writing and shall
 be sent  by  (a)  telecopier  with  confirmation  of  receipt,  (b)  prepaid
 overnight delivery through a nationally  recognized courier service, or  (c)
 prepaid certified or registered mail, return receipt requested:

           If to Carrington, to:

                Carrington Laboratories, Inc.
                2001 Walnut Hill Lane
                Irving, Texas 75038
                Attention:  President

           If to Medline, to:

                Medline Industries, Inc.
                One Medline Place
                Mundelein, Illinois 60060-4486
                Attention: President

           17.  Miscellaneous.  This  Agreement, together  with the  exhibits
 hereto and  the  Supply  Agreement, constitutes  the  entire  agreement  and
 understanding between the parties hereto and supersedes all prior agreements
 and understandings relating  to the subject  matter hereof,  except for  the
 Confidentiality Agreement.  This Agreement is not assignable by either party
 without the  prior  written  consent  of the  other  party  hereto  and  any
 attempted assignment not so consented shall be void and of no legal  effect.
 This Agreement is  binding upon  and inures to  the benefit  of the  parties
 hereto and their respective  successors (whether by  merger, stock or  asset
 sale, or otherwise by operation of  contract or law) and permitted  assigns.
 This Agreement may not be amended, nor may the provisions of this  agreement
 be waived, except  by a written  instrument signed by  both parties, and  no
 modification of this Agreement or waiver of the terms or conditions  thereof
 shall be effected by the acknowledgment or acceptance of any purchase order,
 shipping or other forms containing other  or different terms or  conditions.
 This Agreement may be executed in several counterparts, each of which is  an
 original but all of  which together shall constitute  one instrument.   This
 Agreement shall be construed in accordance with and governed by the laws  of
 the State of Illinois without giving effect to its choice of law rules.
<PAGE>

           IN WITNESS WHEREOF,  the parties hereto  have caused this  Medline
 Agreement to be executed by their duly authorized representatives.

                                    CARRINGTON LABORATORIES, INC.

                                    By  /s/ Carlton E. Turner
                                    -------------------------
                                    Title:President & CEO

                                    MEDLINE INDUSTRIES, INC.

                                    By: /s/ Andy Mills
                                    ------------------
                                    Title: President

 Exhibit A  - Products and Prices
 Exhibit B  - Contracts
 Exhibit C  - Sales Employees and Independent Sales Representatives
 Exhibit D  - Trademarks
 Exhibit E  - Security Agreement

<PAGE>
                                                                    EXHIBIT A

                              CARRINGTON/MEDLINE
                      DISTRIBUTOR AND LICENSE AGREEMENT
                                  EXHIBIT A

 This Exhibit  has  been excluded  pursuant  to a  request  for  confidential
 treatment submitted  by  the  registrant  to  the  Securities  and  Exchange
 Commission and has been  filed separately with  the Securities and  Exchange
 Commission.

<PAGE>

                                                                    EXHIBIT B

                              CARRINGTON/MEDLINE
                      DISTRIBUTOR AND LICENSE AGREEMENT
                                  EXHIBIT B

 This Exhibit  has  been excluded  pursuant  to a  request  for  confidential
 treatment submitted  by  the  registrant  to  the  Securities  and  Exchange
 Commission and has been  filed separately with  the Securities and  Exchange
 Commission.

<PAGE>

                                                                    EXHIBIT C

                              CARRINGTON/MEDLINE
                      DISTRIBUTOR AND LICENSE AGREEMENT
                                  EXHIBIT C

 This Exhibit  has  been excluded  pursuant  to a  request  for  confidential
 treatment submitted  by  the  registrant  to  the  Securities  and  Exchange
 Commission and has been  filed separately with  the Securities and  Exchange
 Commission.

<PAGE>

                                                                    EXHIBIT D

                            CARRINGTON / MEDLINE
                      DISTRIBUTOR AND LICENSE AGREEMENT
                             Exhibit D - Trademarks

                           Carrington[R]  ***
                           Carrasyn[R]
                           CarraGauze[R]
                           CarraSorb[TM]
                           CarraGinate[TM]
                           CarraFilm[TM]
                           SurgiSuites[TM]
                           CarraSmart[TM]
                           CarraDres[TM]
                           CarraColloid[TM]
                           CarraKlenz[TM]
                           UltraKlenz[TM]
                           MicroKlenz[TM]
                           CarraFoam[TM]
                           CarraWash[TM]
                           CarraFree[TM]
                           CarraScent[TM]
                           CarraFresh[TM]
                           CarraDerm[TM]
                           DiaB[TM]
                           RadiaCare[TM]

                           *** As Product Name Only

<PAGE>
                                                                    EXHIBIT E

                         TRADEMARK SECURITY AGREEMENT

           THIS  TRADEMARK  SECURITY  AGREEMENT  ("Agreement")  made  as   of
 November 3,  2000, by  and between  CARRINGTON LABORATORIES,  INC., a  Texas
 corporation  ("Carrington"),  and  MEDLINE  INDUSTRIES,  INC.,  an  Illinois
 corporation ("Medline").

                             W I T N E S S E T H:

           WHEREAS, Carrington  and  Medline  are  parties  to  that  certain
 Distributor and License Agreement  dated as of even  date herewith (as  such
 agreement may be amended, modified, restated  and supplemented from time  to
 time, the "Distributor Agreement"); and

           WHEREAS, Medline has  required Carrington to  execute and  deliver
 this Agreement (i) in order to  secure the obligations of Carrington (A)  to
 pay to Medline any and all amounts pursuant to Section 8 of the  Distributor
 Agreement ("Section  8 Amounts");  and (B)  to pay  to Medline  any and  all
 damages  arising  from  or  related  to  the  rejection  or  breach  of  the
 Distributor Agreement  ("Rejection Damages")  in  connection with  an  event
 described in Section 10.1(c) or (d) of Distributor Agreement with respect to
 Carrington (the failure of Carrington to timely pay to Medline any Section 8
 Amounts or any  Rejection Damages  are each  hereinafter referred  to as  an
 "Event of Default"); and (ii) as  a condition precedent to Medline  entering
 into the Distributor Agreement;

           NOW, THEREFORE, in consideration of the premises set forth  herein
 and for other good and valuable  consideration, the receipt and  sufficiency
 of which are hereby acknowledged, Carrington agrees as follows:

           1.   Defined Terms, Etc.   Unless otherwise  defined herein,  each
 capitalized term used herein  that is defined  in the Distributor  Agreement
 shall have the meaning specified for such term in the Distributor Agreement.
 The words "hereof," "herein" and "hereunder"  and words of like import  when
 used in this Agreement shall refer to this  Agreement as a whole and not  to
 any particular provision of  this Agreement, and  section references are  to
 this Agreement  unless  otherwise  specified.  All  terms  defined  in  this
 Agreement in the singular  shall have comparable meanings  when used in  the
 plural, and vice versa, unless otherwise specified.

           2.   Incorporation of Premises.  The premises set forth above  are
 incorporated into this  Agreement by this  reference hereto and  are made  a
 part hereof.

           3.   Incorporation of the Distributor Agreement.  The  Distributor
 Agreement and  the  terms and  provisions  thereof are  hereby  incorporated
 herein in their entirety by this reference thereto.

           4.   Security Interest in Trademarks.  To secure the complete  and
 timely payment, performance and satisfaction of Carrington's obligations (A)
 to pay Medline any and all Section 8 Amounts; and (B) to pay to Medline  any
 and all Rejection Damages,  Carrington hereby grants  to Medline a  security
 interest in, as and by way of a first mortgage and security interest  having
 priority over all other security interests, with power of sale to the extent
 permitted by applicable law:
<PAGE>

           (a)  The    trademarks,    registered    trademarks,     trademark
      applications, service marks, registered service marks and service  mark
      applications listed  on Schedule  A attached  hereto  and made  a  part
      hereof, together with any  good will connected  with and symbolized  by
      any such trademarks, trademark applications, service marks,  registered
      service marks, service mark applications, and (i) all renewals thereof,
      (ii) all income, royalties, damages and payments now and hereafter  due
      and/or payable  under  and  with respect  thereto,  including,  without
      limitation, payments  under all  licenses  entered into  in  connection
      therewith and damages and payments for past or future infringements  or
      dilutions thereof, (iii) the right to sue for past, present and  future
      infringements and  dilutions  thereof,  and (iv)  all  of  Carrington's
      rights corresponding thereto throughout the world (all of the foregoing
      trademarks,  registered  trademarks  and  trademark  applications,  and
      service marks, registered service marks and service mark  applications,
      together with the items described in  clauses (i)-(iv) in this  Section
      4(a),  are  sometimes  hereinafter  individually  and/or   collectively
      referred to as the "Trademarks"); and

           (b)  rights under or  interest in any  now owned  or existing  and
      hereafter acquired or arising  trademark license agreements or  service
      mark license agreements  with any other  party relating to  any of  the
      Products, whether Carrington is a licensee  or licensor under any  such
      license agreement,  together  with  any  goodwill  connected  with  and
      symbolized by any  such trademark license  agreements or service  marks
      license agreements,  including,  without  limitation,  those  trademark
      license agreements listed on Schedule B attached hereto and made a part
      hereof (all of the foregoing  are hereinafter referred to  collectively
      as the "Licenses").

           5.   Restrictions on  Future  Agreements.   Carrington  will  not,
 without  Medline's  prior  written   consent,  enter  into  any   agreement,
 including, without limitation, any license agreement, which is  inconsistent
 with this Agreement  or the  Distributor Agreement,  and Carrington  further
 agrees that it will not take any action,  and will use its best efforts  not
 to permit any action to be  taken by others, including, without  limitation,
 licensees, or fail to take any action, which would in any respect affect the
 validity or  enforcement of  the rights  transferred to  Medline under  this
 Agreement or the rights associated with those Trademarks or Licenses.

           6.   New Trademarks  and  Licenses.    Carrington  represents  and
 warrants that (a)  the Trademarks listed  on Schedule A  include all of  the
 trademarks, registered  trademarks, trademark  applications, service  marks,
 registered  service  marks  and  service  mark  applications  now  owned  by
 Carrington which relate to any of  the Products; (b) the Licenses listed  on
 Schedule B include all of the trademark license agreements and service  mark
 license agreements pursuant to which Carrington is the licensee or  licensor
 thereunder; and (c) no other liens,  claims or security interests have  been
 granted by Carrington to any other  person or entity in such Trademarks  and
 Licenses.  If, prior to the termination of this Agreement, Carrington  shall
 (i) obtain rights  to any new  trademarks, registered trademarks,  trademark
 applications, service  marks,  registered  service  marks  or  service  mark
 applications, in each case which relate to any of the Products, (ii)  become
 entitled to the benefit of any trademarks, registered trademarks,  trademark
 applications, trademark licenses, trademark license renewals, service marks,
 registered service marks, service  mark applications, service mark  licenses
<PAGE>
 or service mark license  renewals whether as licensee  or licensor, in  each
 case which  relate to  any of  the  Products, or  (iii) enter into  any  new
 trademark license agreement or service mark license agreement, in each  case
 which relate to any of the Products, the provisions of Section 4 above shall
 automatically apply thereto and all of  the foregoing shall be deemed to  be
 Trademarks.   Carrington shall  give to  Medline  written notice  of  events
 described in clauses  (i), (ii)  and (iii) of  the preceding  sentence on  a
 quarterly basis.    Carrington  hereby  authorizes  Medline  to  modify  the
 Distributor  Agreement  by  amending  Schedule  B  to  include  any   future
 trademarks, registered  trademarks, trademark  applications, service  marks,
 registered service marks and service mark applications and by amending  this
 Agreement to include  any future  trademark license  agreements and  service
 mark license agreements, which  are Trademarks or  Licenses under Section  4
 above or under this Section 6.

           7.   Royalties.  Carrington hereby agrees that the use by  Medline
 of the  Trademarks and  the Licenses  (if any)  as authorized  hereunder  in
 connection with  the exercise  of its  remedies under  Section 16  shall  be
 coextensive with  Carrington's rights  thereunder and  with respect  thereto
 and, except as set forth in the Distributor Agreement, without any liability
 for royalties or other related charges from Medline to Carrington.

           8.   Right to Inspect; Further Assignments and Security Interests.
 Medline may at  all reasonable times  have access to,  examine, audit,  make
 copies (at Carrington's expense) and extracts from and examine  Carrington's
 books, records and operations relating to  the Trademarks and the  Licenses;
 provided that,  in conducting  such  inspections and  examinations,  Medline
 shall use reasonable  efforts not to  unnecessarily disturb  the conduct  of
 Carrington's ordinary business operations.

           9.   Termination of Medline's Security  Interest.  This  Agreement
 is  made  for  collateral  security  purposes  only.  This  Agreement  shall
 terminate upon  the  earlier  to  upon  the earlier  to  occur  of  (i)  the
 expiration of the Term of the Distributor Agreement; (ii) the termination of
 the Distributor  Agreement  by Medline  pursuant  to Section  10.1  and  the
 payment by Carrington to Medline of all amounts required under Section 8  of
 the Distributor  Agreement; and  (iii) the  termination of  the  Distributor
 Agreement by Carrington pursuant to Section 10.1 thereof.  Upon  termination
 of this Agreement, Medline shall promptly execute and deliver to Carrington,
 at Carrington's expense, all termination statements and other instruments as
 may be necessary or proper to  terminate Medline's security interest in  the
 Trademarks and the Licenses,  subject to any  disposition thereof which  may
 have been made by Medline pursuant to this Agreement.

           10.  Duties of Carrington.  Carrington shall have the duty, to the
 extent  desirable  in  the  normal  conduct  of  Carrington's  business,  to
 prosecute diligently any trademark  application or service mark  application
 that is part of the Trademarks pending  as of the date hereof or  thereafter
 until the termination of this Agreement.  Carrington further agrees (i)  not
 to abandon any  Trademark or License  without the prior  written consent  of
 Medline and (ii) to use its reasonable business efforts to maintain in  full
 force and effect the Trademarks and Licenses, that are or shall be necessary
 or economically desirable in  the operation of  Carrington's business.   Any
 expenses incurred  in  connection  with the  foregoing  shall  be  borne  by
 Carrington.
<PAGE>

           11.  Medline's Right to Sue.  From and after the occurrence of  an
 Event of Default,  Medline shall  have the  right, but  shall in  no way  be
 obligated, to  bring suit  in its  own name  to enforce  the Trademarks  and
 Licenses and, if Medline shall commence any such suit, Carrington shall,  at
 the request of Medline, do any and all  lawful acts and execute any and  all
 proper documents required by Medline in aid of such enforcement.  Carrington
 shall, upon demand, promptly  reimburse Medline for  all costs and  expenses
 incurred by Medline  in the  exercise of its  rights under  this Section  11
 (including, without limitation,  reasonable fees and  expenses of  attorneys
 and paralegals for Medline).

           12.  Waivers.  Medline's failure, at any time or times  hereafter,
 to require  strict  performance  by Carrington  of  any  provision  of  this
 Agreement  shall  not  waive,  affect  or  diminish  any  right  of  Medline
 thereafter to demand strict compliance  and performance therewith nor  shall
 any course of dealing between Carrington  and Medline have such effect.   No
 single or partial exercise of any  right hereunder shall preclude any  other
 or further exercise thereof or the exercise of any other right.  None of the
 undertakings,  agreements,  warranties,  covenants  and  representations  of
 Carrington contained  in  this  Agreement  shall  be  deemed  to  have  been
 suspended or  waived by  Medline  unless such  suspension  or waiver  is  in
 writing  signed  by  an  officer  of  Medline  and  directed  to  Carrington
 specifying such suspension or waiver.

           13.  Medline's Exercise of  Rights and Remedies  upon an Event  of
 Default.  Notwithstanding anything set forth  herein to the contrary, it  is
 hereby expressly agreed  that upon the  occurrence of an  Event of  Default,
 Medline may  exercise  any of  the  rights  and remedies  provided  in  this
 Agreement.

           14.  Severability.   Whenever  possible, each  provision  of  this
 Agreement shall be interpreted in such  manner as to be effective and  valid
 under applicable law, but  the provisions of  this Agreement are  severable,
 and if any clause  or provision shall be  held invalid and unenforceable  in
 whole  or   in  part   in  any   jurisdiction,  then   such  invalidity   or
 unenforceability shall affect only such clause or provision, or part hereof,
 in such jurisdiction,  and shall  not in any  manner affect  such clause  or
 provision in any  other jurisdiction, or  any other clause  or provision  of
 this Agreement in any jurisdiction.

           15.  Modification.  This Agreement  cannot be altered, amended  or
 modified in any  way, except as  specifically provided in  Sections 4 and  6
 hereof or by a writing signed by the parties hereto.
<PAGE>

           16.  Cumulative Remedies;  Power of  Attorney.   All of  Medline's
 rights and remedies with respect to the Trademarks and the Licenses, whether
 established hereby, by any other agreements  or by law, shall be  cumulative
 and may  be  exercised singularly  or  concurrently.   From  and  after  the
 occurrence of  an Event  of Default,  and the  giving of  written notice  by
 Medline to  Carrington of  Medline's intention  to  enforce its  rights  and
 claims  against  Carrington,   Carrington  hereby  irrevocably   designates,
 constitutes and appoints Medline (and all  Persons designated by Medline  in
 its sole and absolute discretion) as Carrington's true and lawful  attorney-
 in-fact,  and  authorizes  Medline  and  any  of  Medline's  designees,   in
 Carrington's or Medline's name, from and after the occurrence of an Event of
 Default, to (a)  endorse Carrington's name  on all applications,  documents,
 papers and instruments necessary or desirable for Medline in the use of  the
 Trademarks or the Licenses, (b) assign, pledge, convey or otherwise transfer
 title in  or  dispose  of  the  Trademarks or  the  Licenses  to  anyone  on
 commercially  reasonable  terms,  (c)  grant  or  issue  any  exclusive   or
 nonexclusive license under the Trademarks or, to the extent permitted, under
 the Licenses, to anyone on commercially  reasonable terms, and (d) take  any
 other actions with  respect to  the Trademarks  or the  Licenses as  Medline
 deems in  its best  interest.   Medline  shall take  no action  pursuant  to
 clauses (a), (b), (c) or (d) of  this Section 16 without taking like  action
 with respect to the entire goodwill of Carrington's business connected  with
 the use  of, and  symbolized by,  such  Trademarks or  Licenses.  Carrington
 hereby ratifies all that such attorney shall lawfully do or cause to be done
 by virtue hereof.  This  power of attorney is  coupled with an interest  and
 shall be irrevocable until such time as (y) all of Carrington's  obligations
 under Section 8 of the Distributor Agreement have been satisfied in full and
 (z) all of Carrington's obligations to pay to Medline Rejection Damages have
 been satisfied  in  full.  Carrington  acknowledges  and  agrees  that  this
 Agreement is not intended  to limit or  restrict in any  way the rights  and
 remedies of Medline under the Distributor Agreement, but rather is  intended
 to facilitate the exercise of such rights and remedies.  Medline shall have,
 in addition to all other rights and remedies  given it by the terms of  this
 Agreement, all  rights  and remedies  allowed  by  law and  the  rights  and
 remedies of a secured party under the Uniform Commercial Code as enacted  in
 any jurisdiction in which the Trademarks  or the Licenses may be located  or
 deemed located.

           17.  Successors and Assigns.  This Agreement shall be binding upon
 Carrington and its successors and assigns, and shall inure to the benefit of
 Medline and its successors and assigns.  Carrington's successors and assigns
 shall  include,  without  limitation,  a  receiver,  trustee  or  debtor-in-
 possession to the extent that  any of the foregoing  are considered to be  a
 successor or  assign  of or  for  the Carrington;  provided,  however,  that
 Carrington  shall  not  voluntarily  assign   or  transfer  its  rights   or
 obligations hereunder without Medline's prior written consent.

           18.  Governing  Law.    This  Agreement  shall  be  construed  and
 enforced and the rights and  duties of the parties  shall be governed by  in
 all respects in accordance with the  internal laws (as opposed to  conflicts
 of law provisions) and decisions of the State of Illinois.

           19.  Notices.  All notices or other communications hereunder shall
 be given in the  manner and to  the addresses set  forth in the  Distributor
 Agreement.
<PAGE>

           20.  Medline's Duty.  Medline shall not have any duty with respect
 to the Trademarks or the Licenses.  Without  limiting  the generality of the
 foregoing,  Medline  shall not  be under any obligation to  take  any  steps
 necessary to preserve rights in the  Trademarks  or the Licenses against any
 other parties,  but  may  do so at its option,  and all expenses incurred in
 connection therewith shall be  for the sole account  of Carrington and added
 to its obligations secured hereby.

           21.  Section  Titles.     The  section  titles   herein  are   for
 convenience of  reference  only,  and  shall  not  affect  in  any  way  the
 interpretation of any of the provisions hereof.

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

                          CARRINGTON LABORATORIES, INC., a Texas corporation

                          By: /s/ Carlton E. Turner
                          -------------------------
                          Title:  President & CEO

 Accepted and agreed to as of November 3, 2000:
 MEDLINE INDUSTRIES, INC.

 By:  s/s Andy Mills
 --------------------
 Title: President

<PAGE>

                                  Schedule A
                                      to
                         TRADEMARK SECURITY AGREEMENT
                         ----------------------------

                                  TRADEMARKS
                                  ----------

 Country             Trademark      Serial No.             Filing Date
 -------             ---------      ----------             -----------
 United States       Carrington     75-013,311               11/1/95

 United States       CarraGauze     74-363,323               2/24/93
 Brazil

 United States       Carrasyn       74-493,220               2/22/94
 Canada
 Mexico
 Austria
 Benelux
 Denmark
 Finland
 France
 Germany
 Great Britain
 Greece
 Ireland
 Italy
 Liechtenstein
 Norway
 Portugal
 Spain
 Sweden
 Switzerland
 Australia
 China
 Japan
 South Korea
 New Zealand
 OAPI
 Singapore
 South Africa
 Argentina
 Brazil
 Chile
 Columbia
 Costa Rica
 Dominican Republic
 Venezuela

 Brazil              CarraSorb

 Brazil              CarraFilm

 Brazil              CarraKlenz
<PAGE>

                           UNREGISTERED TRADEMARKS
                           -----------------------

 Besides CarraSorb, CarraFilm and CarraKlenz, which are not registered in the
 United States, Carrington uses the following unregistered trademarks for its
 dermal management products:

 CarraGinate
 SurgiSuites
 CarraSmart
 CarraDres
 CarraColloid
 UltraKlenz
 MicroKlenz
 CarraFoam
 CarraWash
 CarraFree
 CarraScent
 CarraFresh
 CarraDerm
 DiaB
 RadiaCare

<PAGE>

                                  Schedule B
                                      to
                         TRADEMARK SECURITY AGREEMENT
                         ----------------------------

                                   LICENSES
                                   --------

 NONEEXHIBIT 10.2

                               SUPPLY AGREEMENT

           SUPPLY AGREEMENT, dated as of November 3, 2000, between CARRINGTON
 LABORATORIES,  INC.,  a  Texas   corporation  ("Carrington"),  and   MEDLINE
 INDUSTRIES, INC., an Illinois corporation ("Medline").

           WHEREAS,  Medline  and  Carrington  have  today  entered  into   a
 Distributor and License Agreement (the "Distributor and License Agreement"),
 pursuant  to  which   Medline  has  become   an  exclusive  distributor   of
 Carrington's dermal management products and Carrington has licensed  certain
 of its trademarks to Medline effective December 1, 2000;

           WHEREAS, Medline desires that  Carrington manufacture or  contract
 for the manufacture  of Medline brand  dermal management  products upon  the
 terms and  subject  to  the  conditions set  forth  in  this  Agreement  and
 Carrington is willing to do so; and

           WHEREAS, Medline desires that  certain dermal management  products
 presently sold under  the Medline brand  be also sold  under the  Carrington
 brand, and Carrington  is willing to  license certain Carrington  trademarks
 for such purpose.

           NOW, THEREFORE, the parties hereto agree as follows:

           1.   Agreement to Supply.

                1.1. Manufacture and Supply of Medline Products.  Subject  to
 Carrington being able to supply at a  delivered price less than or equal  to
 Medline's current cost  of the dermal  management products listed  (together
 with Medline's current cost including any delivery or insurance charges)  on
 Exhibit A  (the "Medline  Products"),  Carrington's acceptance  of  purchase
 orders pursuant to Section 2.2 and the conditions set forth in Section  1.2,
 Carrington agrees to supply, and Medline agrees to purchase from Carrington,
 the majority of Medline  Products (after exhaustion  of such inventories  as
 may exist at the time Carrington  takes over responsibility for any  Medline
 Product), the specifications for  or samples of  which have previously  been
 delivered to Carrington, which Carrington is  willing and able to supply  at
 such prices.  The  provisions of this  Section 1 shall  apply to any  dermal
 management products  Medline may  have manufactured  for it  in the  future,
 which shall  thereupon  become Medline  Products  for the  purpose  of  this
 Agreement.   Carrington  may either  manufacture  or outsource  the  Medline
 Products.
<PAGE>

                1.2. Validation  of  Medline  Products.    In  the  case   of
 outsourced Medline Products, Carrington will obtain a manufacturer  (subject
 to Medline's approval, which shall not be unreasonably delayed or withheld),
 inspect its  facilities and,  subject to  Medline's agreement,  provide  all
 necessary or required quality control and  quality assurance.  With  respect
 to each Medline Product, the obligations of Carrington to supply and Medline
 to purchase  shall  take  effect only  when  Carrington  has,  to  Medline's
 satisfaction, demonstrated  its  ability  to  supply  the  Medline  Product,
 validated its  manufacturing process  or  obtained suppliers  of  outsourced
 Medline Products, as the case may be, and obtained any necessary  regulatory
 approvals, and Medline has  verified the acceptability  to its customers  of
 each Medline Product manufactured  or outsourced by  Carrington.  Given  the
 lack of  complete  formulae  for  many  or  all  of  the  Medline  Products,
 Carrington acknowledges the partially subjective and customer driven  nature
 of the validation process.  With  respect to those Medline Products that  it
 manufactures, Carrington will compile a complete formula, specifications for
 raw materials and a process handbook (together, the "Process") which,  after
 validation, will provide  an objective test  of quality.   The parties  will
 cooperate in developing an appropriate transition plan.

                1.3. Changes in Medline Products.  Carrington will not change
 the  Process  for  any  Medline  Products  it  manufactures  without   prior
 notification to and the approval of Medline, which may require  revalidation
 of the Medline Product in the  event of such change. Carrington will  impose
 similar restrictions on manufacturers of outsourced Medline Products.

                1.4. Prices and Terms. (a)  All Medline Products manufactured
 by Carrington will be sold by Carrington to Medline and purchased by Medline
 from Carrington at the unit prices listed on  Exhibit A.  Exhibit A will  be
 amended from time to time as additional Medline Products are added.   Prices
 are firm for two  years, then are subject  to re-negotiation.  Except  where
 the current supplier does  not include freight and  insurance in its  price,
 all prices include freight and insurance  to a Medline distribution  center,
 provided, that Carrington will bill Medline, and Medline will pay Carrington
 for, freight and insurance if Medline's order requests shipments of  Medline
 Products with a value of less than $5,000 to any address.

                     (b)   If  Carrington can  save  Medline money  over  the
 prices Medline now pays  to its manufacturers of  the Medline Products,  the
 parties will share  the savings.   This concept  shall work  in practice  as
 follows:    All  Medline  Products  supplied  by  but  not  manufactured  by
 Carrington will be sold  by Carrington and purchased  by Medline at a  price
 equal to the sum of (i) the actual cost of manufacturing and packaging  each
 outsourced Medline Product paid to the  supplier thereof, and (ii)  one-half
 of the amount, if any, by which such cost is less than the amount  currently
 paid by Medline, as set forth on Exhibit A .  In addition, Medline will  pay
 shipping and  insurance  costs if  not  included  in the  amount  billed  to
 Carrington by the manufacturer.

                     (c)    Medline  will  pay  Carrington  for  all  Medline
 Products not later than 30 days after date of invoice.
<PAGE>

           2.   Forecasts and Orders.

                2.1. Forecasts.    Promptly  after  the  execution  of   this
 Agreement, Carrington and  Medline will  meet to  establish forecasting  and
 order procedures  so as  to give  Carrington  sufficient advance  notice  of
 Medline's requirements to allow it to satisfy such requirements and  Medline
 the flexibility  it needs  in obtaining  Medline Products.   Carrington  and
 Medline will also establish  how long in advance  of desired delivery  dates
 Medline must give Carrington purchase orders  to allow Carrington to  obtain
 supplies and manufacture the Medline Products, the parties anticipating that
 purchase orders will normally  be given three to  five months in advance  of
 desired delivery dates.

                2.2. Purchase Orders.  Subject to the foregoing provisions of
 this Section 2, Medline  will from time to  time submit definitive  purchase
 orders to Carrington setting forth the quantities of each Medline Product to
 be supplied, desired delivery dates  and shipping instructions.   Carrington
 will promptly accept such  purchase orders or reject  the purchase order  by
 informing Medline that it cannot in whole or in part fill a purchase  order.
 Carrington's rejection of  a purchase order  shall not be  a breach of  this
 Agreement but Medline  shall have the  right to obtain  any quantity of  any
 Medline Product  that Carrington  cannot supply  from another  source.   Any
 accepted purchase  order shall  be a  binding  obligation of  Carrington  to
 supply and Medline  to purchase the  Medline Products ordered  on the  dates
 specified in such purchase order.

                2.3. Late Deliveries.  Delivery of Medline Products within 15
 days of the date  specified on the purchase  order therefor shall be  deemed
 timely.    Delivery  more  than  15  days  after  the  date  specified,   or
 cancellation of an order or portion thereof less than four months before the
 delivery date, shall subject  Carrington to liquidated  damages, in lieu  of
 any other damages available at  law or equity, of  30 percent of the  normal
 invoice prices for  the Medline Products  delivered late, unless  Carrington
 gives Medline at least four months advance  notice that it will not be  able
 to make timely delivery, in which case Medline, at its election, may  cancel
 the purchase order and obtain the  Medline Products elsewhere or revise  the
 purchase order  to reflect  the  date Carrington  is  willing to  commit  to
 delivering the Medline Products on.

           3.   Acceptance of  Medline Products.   All  shipments of  Medline
 Products shall be subject  to acceptance by Medline.   Any Medline  Products
 manufactured by Carrington that conform to a Process that correctly reflects
 the validation procedures set forth above  shall be deemed acceptable.   All
 outsourced Medline Products shall be subject  to acceptance or rejection  by
 Medline in  its reasonable  discretion.   Medline can  at any  time  request
 changes to any Medline Product to reflect customer preferences or regulatory
 requirements and any such request shall, after resolution of any  applicable
 regulatory requirements  and agreement  on  appropriate pricing  changes  to
 reflect  any  increased  cost  of  manufacture  and  revalidation,   require
 Carrington to validate the modified Medline  Product in accordance with  the
 procedures outlined in Section 1.2.
<PAGE>

           4.   Carrington Warranties.

                     (a)  Carrington warrants that,  at the time of  shipment
 by Carrington,  all Medline  Products manufactured  by Carrington  sold  and
 delivered pursuant to this  Agreement will conform  to the Process  therefor
 and the  "look  and feel"  and  quality  of the  Medline  Product  validated
 pursuant to Section 1.2.

                     (b)   Carrington  warrants  that  all  Medline  Products
 manufactured by Carrington and sold and shipped to Medline pursuant to  this
 Agreement will,  at  the  time  of such  shipment,  not  be  adulterated  or
 misbranded within the meaning of any applicable federal, state or  municipal
 law, as such laws are constituted and effective at the time of shipment  and
 that no such Product or Medline Product will be an article which may not  be
 introduced into interstate commerce under  the provisions of any  applicable
 federal, state or municipal law.

                     (c)  Carrington  further warrants that,  at the time  of
 shipment, all  Medline  Products manufactured  by  Carrington and  sold  and
 shipped to Medline pursuant to this Agreement will be in compliance with all
 applicable governmental  regulations  and  will have  been  manufactured  in
 accordance with  applicable current  good manufacturing  practices  ("cGMP")
 regulations as set forth  in 21 CFR 210,  as then in  effect, in a  facility
 that is ISO 9000 certified.

                     (d)  All  outsourced Medline Products  shall be  subject
 only to the  warranty of  the manufacturer  thereof ,  but Carrington  shall
 obtain warranties  from  such manufacturers  no  less extensive  than  those
 contained herein and either (i) provide in the contracts or purchase  orders
 with such manufacturers that  Medline is a third  party beneficiary of  such
 warranties or (ii) in case of  a warranty claim, either assign its  warranty
 rights to  Medline  or  enforce  such  warranties  on  Medline's  behalf  at
 Medline's expense.. No other warranty is given by Carrington with respect to
 outsourced Medline Products.

                     (e)   THE WARRANTIES  SET FORTH  IN  THIS SECTION  4  OR
 OTHERWISE EXPLICITLY SET FORTH IN THIS  AGREEMENT ARE EXPRESSLY IN LIEU  OF,
 AND CARRINGTON  EXPRESSLY  DISCLAIMS  AND  NEGATES,  ALL  OTHER  WARRANTIES,
 EXPRESSED OR IMPLIED, ARISING  BY OPERATION OF  LAW OR OTHERWISE,  INCLUDING
 IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

           5.   Indemnification.

                5.1. By Carrington.  Carrington agrees to indemnify and  hold
 harmless Medline  and  its  employees,  officers,  directors,  stockholders,
 successors and assigns from and against  any and all losses, damages,  costs
 and expenses, including reasonable legal fees and expenses incident thereto,
 arising from any suit, claim  or demand of any  third party relating to  any
 design or  manufacturing  defect  in any  Medline  Product  manufactured  by
 Carrington (other than the design of any Medline Product as to which Medline
 has provided Carrington with written specifications or samples to which  the
 Medline Product supplied by Carrington complies) or a failure of  Carrington
 to properly control the quality of any outsourced Medline Product for  which
 Carrington has assumed responsibility for quality control.
<PAGE>

                5.2. By  Medline.  Medline  agrees  to  indemnify  and   hold
 harmless Carrington and  its employees,  officers, directors,  stockholders,
 successors and assigns from and against  any and all losses, damages,  costs
 and expenses, including reasonable legal fees and expenses incident thereto,
 arising from any suit, claim  or demand of any  third party relating to  (a)
 any design defect in  any Medline Product manufactured  by Carrington as  to
 which Medline has provided Carrington with written specifications or samples
 to which the Medline Product supplied by Carrington complies, (b) any design
 defect in  any  Medline Product  not  manufactured by  Carrington,  (c)  any
 manufacturing defect in  a Medline Product  not manufactured by  Carrington,
 (d) any statement on any labeling  of or literature for any Medline  Product
 that is false or violates any law or regulation of the United States or  any
 agency, state or locality thereof, and  (e) any infringement by any  Medline
 Product, any  labeling,  packaging or  product  literature for  any  Medline
 Product or any labeling, packaging or literature for any Carrington  Product
 not  furnished  or  approved  by   Carrington  of  any  patent,   trademark,
 copyright, design  or other intellectual  property right of any third  party
 (other than the use of any Trademark (as such term is defined in Section  6)
 on any Medline Product pursuant to the terms of the Distributor and  License
 Agreement.

           6.   Use of Carrington Trademarks.  As more fully set forth in the
 Distributor and  License  Agreement,  Carrington has  licensed  the  use  of
 certain Carrington Trademarks (the "Trademarks") to  Medline for use in  the
 manufacture, marketing, advertisement, promotion and distribution of any  of
 the Medline Products which Carrington and Medline agree are appropriately to
 be sold under the Trademarks and such additional dermal management  products
 as Carrington and Medline may from time to  time agree to.  Such license  is
 subject to the terms and conditions set forth in the Distributor and License
 Agreement and shall terminate  upon the termination  of the Distributor  and
 License Agreement.

           7.   Term.  The term of this Agreement (the "Term") shall commence
 on the date hereof and shall continue until November 30, 2005.

           8.   Termination.

                8.1. Termination for Cause.  This Agreement may be terminated
 on 30 days' written notification under any one of the below conditions:

                     (a)  By either Carrington or Medline, if the other party
                     attempts to  assign  this Agreement  without  its  prior
                     written consent;

                     (b)  By Carrington,  if Medline discontinues its  dermal
                     management product business;

                     (c)  By either Medline or Carrington, if the other party
                     files for or is petitioned into bankruptcy,  insolvency,
                     liquidation or dissolution of assets;

                     (d)  By either Medline or Carrington, if the other party
                     fails generally  to pay  its  debts and  obligations  in
                     accordance with their terms;
<PAGE>

                     (e)   By Carrington,  if Medline  fails to  make  timely
                     payment of any  Carrington invoice  (other than  amounts
                     disputed in good faith)  and such failure continues  for
                     10 days after notice thereof;

                     (f)  By either Medline or Carrington, if the other party
                     materially  breaches  any  term  or  condition  of  this
                     Agreement (other  than  payment of  invoices)  and  such
                     breach is not corrected  within 45 days of  notification
                     of such breach by the other party; and

                     (g)  By either Medline or Carrington if the other  party
                     fails to  materially perform  its obligations  hereunder
                     for any reason set forth in Section 11 and such  failure
                     continues for 180 days or more.

                8.2. Termination  Without  Cause.    This  Agreement  may  be
 terminated by Carrington  without cause upon  one year's  written notice  to
 Medline, either  in its  entirety  or with  respect  only to  those  Medline
 Products listed in the notice of termination.

           9.   Confidentiality.    The  Confidential  Disclosure  Agreement,
 dated  December  24,   1997  (the   "Confidentiality  Agreement"),   between
 Carrington and Medline, shall continue in effect during the Term and may not
 be terminated  except  by an  instrument  executed by  both  Carrington  and
 Medline, notwithstanding anything set forth in the Confidentiality Agreement
 to the contrary.

           10.  No Agency.  It  is expressly agreed  and acknowledged by  the
 parties hereto that  Medline is an  independent contractor selling  entirely
 for its own account.  Medline is solely responsible for all of its  expenses
 and  costs,  including  costs  of  invoicing,  collection  and  credit,  and
 delivery.    Nothing  contained  herein  shall  be  construed  to  create  a
 partnership, joint venture or the relationship  of employer and employee  or
 principal and agent of  any kind on behalf  of Carrington, or grant  Medline
 authority to bind Carrington  in any respect whatsoever.   Medline shall  be
 responsible for any  representation it makes  with respect  to the  Products
 that are not set forth in Carrington's own Product literature.

           11.  Force Majeure.    Neither  Carrington nor  Medline  shall  be
 liable for any failure to perform hereunder (other than payment of  invoices
 and royalties when  due) due, in  whole or in  part, to  any contingency  or
 cause beyond  its reasonable  control,  including without  limitation  fire,
 explosion, earthquake,  storm,  flood,  drought, or  other  adverse  weather
 conditions, accident, crop failure,  breakdown of machinery,  transportation
 or handling difficulties, strike, lockout, or other labor difficulties (from
 whatever cause arising,  and whether  or not  the demands  of employees  are
 reasonable or within its  power to grant), war,  insurrection, riot, act  of
 God or  the  public  enemy,  any  law,  act,  order,  proclamation,  decree,
 regulation, ordinance, instruction, or request of any governmental or  other
 public authority, any  order, judgement  or decree  of any  court, delay  or
 failure of carriers or contractors, labor  shortage, or inability to  obtain
 transportation equipment,  raw materials,  fuel, power,  plant equipment  or
 materials required for maintenance or repairs.
<PAGE>

           12.  No Waiver.  The  failure by either  Carrington or Medline  to
 enforce, at  any  time, any  of  the provisions  of  this Agreement,  or  to
 exercise any option  which is  herein provided, or  to require  at any  time
 performance of any of the provisions herein, shall in no way be construed to
 be a waiver of  such provisions, nor in  any way to  affect the validity  of
 this Agreement or any part thereof,  or the right of Carrington or  Medline,
 as the case may be, to thereafter enforce each and every such provision.

           13.  Notices.  All notices hereunder shall be in writing and shall
 be sent  by  (a)  telecopier  with  confirmation  of  receipt,  (b)  prepaid
 overnight delivery through a nationally  recognized courier service, or  (c)
 prepaid certified or registered mail, return receipt requested:

           If to Carrington, to:

                Carrington Laboratories, Inc.
                2001 Walnut Hill Lane
                Irving, Texas 75038
                Attention:  President

           If to Medline, to:

                Medline Industries, Inc.
                One Medline Place
                Mundelein, Illinois  60060-4486
                Attention:  President

           14.  Miscellaneous.  This  Agreement, together  with the  exhibits
 hereto and the  Distributor and  License Agreement,  constitutes the  entire
 agreement and understanding  between the parties  hereto and supersedes  all
 prior agreements and understandings relating  to the subject matter  hereof,
 except for the Confidentiality Agreement.  This Agreement is not  assignable
 by either party without the prior written consent of the other party  hereto
 and any attempted assignment not so consented shall be void and of no  legal
 effect.  This Agreement  is binding upon  and inures to  the benefit of  the
 parties hereto and their respective  successors and permitted assigns.  This
 Agreement may not be  amended, nor may the  provisions of this agreement  be
 waived, except  by a  written  instrument signed  by  both parties,  and  no
 modification of this Agreement or waiver of the terms or conditions  thereof
 shall be effected by the acknowledgment or acceptance of any purchase order,
 shipping or other forms containing other  or different terms or  conditions.
 This Agreement may be executed in several counterparts, each of which is  an
 original but all of  which together shall constitute  one instrument.   This
 Agreement shall be construed in accordance with and governed by the laws  of
 the State of Illinois without giving effect to its choice of law rules.

 [Remainder of page intentionally left blank]

<PAGE>

           IN WITNESS WHEREOF,  the parties hereto  have caused this  Medline
 Agreement to be executed by their duly authorized representatives.

                                    CARRINGTON LABORATORIES, INC.

                                    By: /s/ Carlton E. Turner
                                    -------------------------
                                    Title:President & CEO

                                    MEDLINE INDUSTRIES, INC.

                                    By: /s/ Andy Mills
                                    ------------------
                                    Title:President

 Exhibit A - Medline Products and Prices

<PAGE>

                                                                    EXHIBIT A

                              CARRINGTON/MEDLINE
                               SUPPLY AGREEMENT
                                  EXHIBIT A

 This Exhibit  has  been excluded  pursuant  to a  request  for  confidential
 treatment submitted  by  the  registrant  to  the  Securities  and  Exchange
 Commission and has been  filed separately with  the Securities and  Exchange
 Commission.

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