Document:

EXHIBIT 10.6

               FIRST AMENDMENT TO CREDIT AGREEMENT

          FIRST  AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
dated  as  of  October 8, 2002, among Vanguard Health  Systems,
Inc. (the "Borrower"), the lenders from time to time party to the
Credit  Agreement referred to below (the "Lenders"), and Bank  of
America,  N.A.,  as  Administrative  Agent  (the  "Administrative
Agent").  Unless otherwise indicated, all capitalized terms  used
herein and not otherwise defined herein shall have the respective
meanings  provided to such terms in the Credit Agreement referred
to below.

                      W I T N E S S E T H:

          WHEREAS,  the  Borrower, the Lenders,  the  Joint  Lead
Arrangers,  the Administrative Agent, the Syndication  Agent  and
the  Co-Documentation Agents are parties to a  Credit  Agreement,
dated as of July 30, 2001 (the "Credit Agreement"); and

          WHEREAS,  subject to the terms and conditions  of  this
Amendment, the parties hereto wish to amend the Credit  Agreement
as herein provided;

          NOW, THEREFORE, it is agreed:

I.   Consent.

      1.   Notwithstanding anything to the contrary contained  in
Sections  9.01, 9.02, 9.04 and 9.05 of the Credit Agreement,  the
BHS  Acquisition shall be permitted in accordance with the  terms
of  that certain Purchase and Sale Agreement, dated as of October
8, 2002, among the Borrower, VHS San Antonio Partners, L.P. and
the  Baptist Health System (as in effect on the date hereof,  the
"BHS   Acquisition  Agreement"),  provided  that  (i)   the   BHS
Acquisition Agreement and all other documentation related thereto
shall be in the form delivered on October 7, 2002 to the Lenders
with such amendments, modifications or waivers thereto as may  be
agreed  to  by the Administrative Agent or the Required  Lenders,
(ii)  any  Liens  on  any assets acquired  as  part  of  the  BHS
Acquisition shall not have been incurred in anticipation  of  the
BHS  Acquisition  and shall not attach to any other  property  or
assets  of the Borrower or any of its Subsidiaries and (iii)  any
Indebtedness   assumed  by  the  Borrower  and  its  Subsidiaries
pursuant to the BHS Acquisition Agreement (x) shall not exceed in
aggregate  principal amount $10,000,000, (y) shall not constitute
debt  for  borrowed money (it being understood  and  agreed  that
Capitalized  Lease  Obligations and purchase  money  Indebtedness
shall not constitute debt for borrowed money for purposes of this
clause  (y)), and (z) shall not have been incurred in  connection
with,   or   in  anticipation  or  contemplation  of,   the   BHS
Acquisition.

II.  Amendments and Modifications to Credit Agreement.

     1.    Section 1.01(d)(iv) of the Credit Agreement is  hereby
restated in its entirety as follows:

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<PAGE>

     "(iv)  shall  not  (x) in the case of the  Incremental  Term
Loans  provided pursuant to the Incremental Term Loan  Commitment
Agreement  delivered  in  connection with  the  First  Amendment,
exceed  $200,000,000 in aggregate principal amount for  all  such
Incremental Term Loans made by all Incremental Term Loan  Lenders
party to such Incremental Term Loan Commitment Agreement and  (y)
in  the  case of Incremental Term Loans other than those incurred
pursuant  to  preceding  sub-clause (x), exceed  $150,000,000  in
aggregate  principal amount for all such other  Incremental  Term
Loans made by all Incremental Term Loan Lenders pursuant to  this
sub-clause  (y)  and  the  various other  Incremental  Term  Loan
Commitment  Agreements,  provided that  the  aggregate  principal
amount  of  such  other Incremental Term Loans  may  exceed  such
$150,000,000  amount so long as at the time of the incurrence  of
such  other Incremental Term Loans in excess of such $150,000,000
amount  the Consolidated Senior Leverage Ratio (calculated  on  a
Post-Test Period Pro Forma Basis and assuming that all such other
Incremental Term Loans to be incurred on such date or pursuant to
any   other   then  existing  Incremental  Term  Loan  Commitment
Agreements have been incurred and the proceeds thereof have  been
applied  in a manner as certified to by an Authorized Officer  of
the Borrower to the Administrative Agent) is less than 2.50:1.00,
provided  further, however, that in no event shall the  aggregate
principal  amount  of  all Incremental Term  Loans  made  by  all
Incremental Term Loan Lenders pursuant to this sub-clause (y) and
the  various  Incremental Term Loan Commitment Agreements  (other
than  those  provided as described in preceding  sub-clause  (x))
exceed $250,000,000".

     2.    Section 1.13(a)(iv) of the Credit Agreement is  hereby
restated in its entirety as follows:

     "(iv)  the  aggregate  amount of all Incremental  Term  Loan
Commitments  permitted to be provided pursuant  to  this  Section
1.13  shall  not  (x)  in the case of the Incremental  Term  Loan
Commitments  provided  pursuant  to  the  Incremental  Term  Loan
Commitment  Agreement  delivered in  connection  with  the  First
Amendment, exceed $200,000,000 and (y) in the case of Incremental
Term Loan Commitments other than those described in preceding sub-
clause  (x), exceed $150,000,000, provided that the Borrower  may
request  Incremental Term Loan Commitments (under this sub-clause
(y)) to be provided (as set forth in this Section 1.13) in excess
of  $150,000,000 so long as at the time of such request  and  the
provision   of  such  Incremental  Term  Loan  Commitments,   the
Consolidated  Senior Leverage Ratio (calculated  on  a  Post-Test
Period  Pro  Forma  Basis and assuming that all Incremental  Term
Loans  to  be  incurred, pursuant to such Incremental  Term  Loan
Commitments  (and any other then existing Incremental  Term  Loan
Commitment  Agreements)  have  been  incurred  and  the  proceeds
thereof  have  been  applied in a manner as certified  to  by  an
Authorized  Officer of the Borrower to the Administrative  Agent)
is  less  than 2.50:1.00, provided further, however, that  in  no
event  shall  the  aggregate amount  of   Incremental  Term  Loan
Commitments (other than those provided as described in  preceding
sub-clause (x)) permitted to be provided pursuant to this Section
1.13 exceed $250,000,000".

     3.    Section  7.08(b)  of the Credit  Agreement  is  hereby
amended by (i) inserting the text "(other than Incremental B Term
Loans)"  immediately following the text "Incremental Term  Loans"
and  (ii)  inserting the following sentence at the  end  of  such
Section 7.08(b):

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<PAGE>

           "All  proceeds from Incremental B Term Loans shall  be
used solely (i) to finance, in part, the BHS Acquisition and (ii)
to pay fees and expenses incurred in connection therewith".

     4.    Section  9.02(viii) is hereby amended by (i)  deleting
clause  (I)  of  the  second proviso contained  in  such  Section
9.02(viii) in its entirety and inserting the following new clause
"(I)" in lieu thereof:

          "(I) the Consolidated Senior Leverage Ratio on the last
day  of the most recently ended Test Period determined on a Post-
Test  Period  Pro  Forma Basis (and after giving  effect  to  any
Indebtedness   incurred  in  connection   with   such   Permitted
Acquisition  or  to  finance same) is less  than  the  Designated
Consolidated Senior Leverage Ratio Level on such last day and";

     and  (ii)  deleting  the reference to the ratio  "0.50:1.00"
contained in clause (II) of the second proviso contained in  such
Section  9.02(viii) and inserting the ratio "0.70:1.00"  in  lieu
thereof.

     5.    Section  9.03(vii) of the Credit Agreement  is  hereby
amended  by:  (i) inserting the text "(I)" immediately  preceding
the  text  "PIK  Preferred Stock (x) prior to  January  1,  2008"
appearing  in  such  Section 9.03(vii), (ii)  deleting  the  text
"clauses  (x)  and (y)" appearing in such Section  9.03(vii)  and
inserting  the text "sub-clauses (x) and (y) of this clause  (I)"
in lieu thereof and (iii) inserting the following new clause (II)
before  the  semi-colon  appearing at the  end  of  such  Section
9.03(vii):

           "and  (II) BHS PIK Preferred Stock (x) prior to eighth
year  anniversary  of  the consummation of the  BHS  Acquisition,
solely  through  the issuance of additional  shares  of  BHS  PIK
Preferred Stock (and not in cash) and (y) thereafter, in cash  so
long as no Default or Event of Default then exists or would arise
therefrom, in the case of each of sub-clauses (x) and (y) of this
clause (II) pursuant to the BHS PIK Preferred Stock Documents".

     6.    Section 9.04 of the Credit Agreement is hereby amended
by:  (a)  deleting the word "and" appearing at the end of  clause
(xvi)  thereof, (b) redesignating existing clause (xvii)  thereof
as  clause  (xviii)  and (c) inserting the following  new  clause
(xvii) immediately following clause (xvi) of such Section 9.04:

           "(xvii)   unsecured subordinated Indebtedness  of  the
Borrower,  but not any Subsidiary thereof, incurred  pursuant  to
the  Convertible  Subordinated Debt, in  an  aggregate  principal
amount  not  to  exceed  $17,641,800  less  the  amount  of   any
repayments  thereof  after  the First Amendment  Effective  Date;
and".

     7.    Section  9.07(b)  of the Credit  Agreement  is  hereby
amended by deleting the table in such Section in its entirety and
inserting the following table in lieu thereof:

     "Period                                       Amount

     July 1, 2002 through June 30, 2003         $80,000,000

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     "Period					   Amount

     July 1, 2003 through June 30, 2004         $60,000,000

     July 1, 2004 through June 30, 2005         $50,000,000

     July 1, 2005 through June 30, 2006         $45,000,000

     Each  fiscal  year of the  Borrower        $50,000,000"
     ended after June 30, 2006                        .

      8.   (a)  Section 9.07(d) of the Credit Agreement is hereby
amended by deleting references to "$75,000,000" and "$25,000,000"
appearing  in  such  Section  9.07(d)  and  inserting  the   text
"$250,000,000" and "$50,000,000", respectively, in lieu thereof;

           (b)   Section 9.07(d) of the Credit Agreement  is
hereby further amended by restating clause (ii) of the first
sentence thereof in its entirety as follows:

           "(ii)  on  the  date  of  the making  of  any  Capital
Expenditure  pursuant to this clause (d) the Consolidated  Senior
Leverage  Ratio on the last day of the most recently  ended  Test
Period  shall  be  less than the Designated  Consolidated  Senior
Leverage Ratio Level on such last day".

     9.   Section 9.08 of the Credit Agreement is hereby  amended
by  deleting  the  table appearing in such Section  9.08  in  its
entirety and inserting the following table in lieu thereof:

               "Test Period Ending On    Ratio
               September 30, 2002        2.00:1.00
               December 31, 2002         2.00:1.00
               March 31, 2003            2.00:1.00
               June 30, 2003             2.00:1.00
               September 30, 2003        2.00:1.00
               December 31, 2003         2.15:1.00
               March 31, 2004            2.15:1.00
               June 30, 2004             2.30:1.00
               September 30, 2004        2.30:1.00
               December 31, 2004         2.45:1.00
               March 31, 2005            2.45:1.00
               June 30, 2005 and         2.60:1.00".
	       thereafter

     10.  Section 9.09 of the Credit Agreement is hereby amended
by deleting the table appearing in such Section 9.09 in its entirety and
inserting the following table in lieu thereof:

               "Test Period Ending On    Ratio
               September 30, 2002        5.50:1.00
               December 31, 2002         5.50:1.00
               March 31, 2003            5.50:1.00

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<PAGE>

               "Test Period Ending On    Ratio
               June 30, 2003             5.50:1.00
               September 30, 2003        5.50:1.00
               December 31, 2003         5.25:1.00
               March 31, 2004            5.25:1.00
               June 30, 2004             5.00:1.00
               September 30, 2004        5.00:1.00
               December 31, 2004         4.75:1.00
               March 31, 2005            4.75:1.00
               June 30, 2005             4.50:1.00
               September 30, 2005        4.50:1.00
               December 31, 2005         4.25:1.00".
	       and thereafter

     11.   Section 9.10(a)(i) of the Credit Agreement  is  hereby
amended  by  inserting  the text ", any Convertible  Subordinated
Debt"  immediately  after  the text "Senior  Subordinated  Notes"
appearing therein.

     12.   Section 9.10(a)(ii) of the Credit Agreement is  hereby
amended by: (i) deleting the text "or" immediately after the text
"Existing Indebtedness" and inserting a comma in lieu thereof and
(ii) inserting the text "or any BHS PIK Preferred Stock Document"
immediately  after the text "any PIK Preferred  Stock"  appearing
therein.

     13.   Section 9.10(a)(iii) of the Credit Agreement is hereby
amended by (i) inserting the text ", any Convertible Subordinated
Debt  Document" immediately after the first reference to  "Senior
Subordinated Note Document" appearing therein, (ii) inserting the
text  "(I) in the case of amendments and/or modifications to  the
Senior  Subordinated Note Documents or the Permitted Subordinated
Note  Documents only" immediately preceding clause (x)  appearing
therein  and (iii) inserting the following clause "(II)"  at  the
end of the Section:

            "and   (II)   in   the  case  of  amendments   and/or
modifications  to  the Convertible Subordinated  Debt  Documents,
technical amendments or modifications thereto which do not  amend
or  modify the subordination provisions contained therein and are
not  adverse  to  the  interest of the Lenders  in  any  material
respect".

     14.   Section  9.10(b)  of the Credit  Agreement  is  hereby
amended  by inserting the text ", Convertible Subordinated  Debt"
immediately  following  each reference  to  "Senior  Subordinated
Notes" appearing therein.

     15.   Section 9.12(a)(i) of the Credit Agreement  is  hereby
amended  by:  (i)  redesignating  existing  clause  (y)  of   the
parenthetical statement appearing therein as clause (z) and  (ii)
inserting the following new clause "(y)" immediately after clause
(x) of such parenthetical statement thereof:

           ", (y) the issuance of the BHS PIK Preferred Stock  on
the First Amendment Effective Date and the issuance of additional
shares  of  BHS  PIK  Preferred Stock  in  payment  of  regularly
accruing  dividends on theretofore outstanding BHS PIK  Preferred
Stock".

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<PAGE>

     16.   The  definition  of "Additional  Capital  Expenditures
Amount"  appearing  in Section 11.01 of the Credit  Agreement  is
hereby restated in its entirety as follows:

           "Additional Capital Expenditures Amount"  shall  mean,
(I) for the fiscal year of the Borrower ending June 30, 2003,  an
amount  (not  less  than  $0) equal to the  product  of  (a)  .05
multiplied  by the remainder of (x) the consolidated net  revenue
for  such  fiscal year attributable to Health Care Assets  (other
than  health maintenance organizations, physician practices,  the
physician  practice  management business of  Watermark  Physician
Services, Inc. and BHS) of the Borrower and its Subsidiaries less
(y)  the consolidated net revenue for the Borrower's fiscal  year
ended  June 30, 2002 (determined on a pro forma basis in a manner
consistent  with the methodology used in preparing the  financial
statements referred to in Section 7.05(b)) attributable to Health
Care   Assets   (other  than  health  maintenance  organizations,
physician  practices, the physician practice management  business
of  Watermark  Physician Services, Inc. and BHS) of the  Borrower
and  its  Subsidiaries,  and (II) for  any  fiscal  year  of  the
Borrower  after its fiscal year ending June 30, 2003,  an  amount
(not less than $0) equal to the product of (a) .05 multiplied  by
the remainder of (x) the consolidated net revenue for such fiscal
year  attributable  to  Health Care  Assets  (other  than  health
maintenance organizations, physician practices and the  physician
practice  management  business of Watermark  Physician  Services,
Inc.)  of the Borrower and its Subsidiaries less (y) the  sum  of
(1)  the consolidated net revenue for the Borrower's fiscal  year
ended  June 30, 2002 (determined on a pro forma basis in a manner
consistent  with the methodology used in preparing the  financial
statements referred to in Section 7.05(b)) attributable to Health
Care   Assets   (other  than  health  maintenance  organizations,
physician  practices, the physician practice management  business
of  Watermark  Physician Services, Inc. and BHS) of the  Borrower
and  its  Subsidiaries  and (2) the net revenue  attributable  to
Health Care Assets of BHS for the fiscal year ended June 30, 2003
(determined on a pro forma basis in a manner consistent with  the
methodology  used in preparing the financial statements  referred
to in Section 7.05(b)), (in each case as determined in good faith
by  an  Authorized  Officer  of the Borrower  and  set  forth  in
reasonable detail in the Compliance Certificate delivered by  the
Borrower  to  the Administrative Agent within 90  days  following
each  fiscal  year  end  of  the  Borrower  pursuant  to  Section
8.01(d)).

     17.   The  definition  of "Change of Control"  appearing  in
Section  11.01  of  the  Credit Agreement is  hereby  amended  by
restating clause (z) thereof in its entirety as follows:

           "(z)  a "Change of Control", as defined in the  Senior
Subordinated  Note  Documents, the Convertible Subordinated  Debt
Documents  or the BHS PIK Preferred Stock Documents, shall  occur
under  the  Senior Subordinated Note Documents,  the  Convertible
Subordinated  Debt  Documents  or the  BHS  PIK  Preferred  Stock
Documents, as the case may be, or a comparable event, whether  or
not  so titled shall occur under any Permitted Subordinated  Note
Document".

     18.   The definition of "Consolidated Senior Debt" appearing
in Section 11.01 of the Credit Agreement is hereby amended by (i)
deleting  the  word "and" appearing at the end of the  sub-clause
(y)(i)  thereof  and inserting a comma in lieu thereof  and  (ii)
inserting at the end of such definition the text ", and (iii) the
aggregate  principal amount of all Convertible Subordinated  Debt
outstanding  at  such time (to the extent same are  reflected  in
Consolidated Debt at such time)".

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<PAGE>

     19.   The  definition  of "Specified Construction  Projects"
appearing  in  Section 11.01 of the Credit  Agreement  is  hereby
amended  by  inserting the text "(including for this purpose  any
construction project for the addition of hospital bed  capacity)"
immediately  following the first instance the text  "Health  Care
Assets" appears in said definition.

     20.  Section 11.01 of the Credit Agreement is hereby further
amended  by inserting in the appropriate alphabetical  order  the
following new definitions:

          "BHS" shall mean the five-hospital network known as the
Baptist Health Systems located in San Antonio, Texas.

          "BHS Acquisition" shall mean the acquisition of BHS  by
one or more Subsidiaries of the Borrower.

          "BHS   PIK  Preferred  Stock"  shall  mean  pay-in-kind
preferred  stock of the Borrower $0.01 par value per  share,  and
any  additional  shares thereof issued as pay-in-kind  Dividends,
issued to the seller of BHS as partial consideration for the  BHS
Acquisition.

          "BHS  PIK  Preferred  Stock Document"  shall  mean  the
Certificate  of Designation, Preferences and Rights for  the  BHS
PIK  Preferred  Stock,  as  in  effect  on  the  First  Amendment
Effective  Date  and  as  the same may be  amended,  modified  or
supplemented  from  time  to time in accordance  with  the  terms
hereof and thereof.

          "Convertible  Subordinated Debt" shall  mean  unsecured
convertible subordinated debt of the Borrower evidenced  by  that
certain  8.18% Convertible Subordinated Note due 2012  issued  to
the   seller  of  BHS  as  partial  consideration  for  the   BHS
Acquisition,  as in effect on the First Amendment Effective  Date
and  as  the  same may be amended, modified or supplemented  from
time to time in accordance with the terms hereof and thereof.

          "Convertible  Subordinated Debt Documents"  shall  mean
that  certain  8.18% Convertible Subordinated Note due  2012  and
each other document or agreement relating to the issuance of such
Convertible Subordinated Note due 2012.

          "Designated  Consolidated Senior Leverage Ratio  Level"
shall  mean, on the last day of any Test Period set forth  below,
the ratio set forth opposite such Test Period:

   Test Period Ending On                  Ratio
   September 30, 2002                     3.00:1.00
   December 31, 2002                      3.00:1.00
   March 31, 2003                         3.00:1.00
   June 30, 2003                          3.00:1.00
   September 30, 2003                     3.00:1.00
   December 31, 2003                      2.75:1.00
   March 31, 2004                         2.75:1.00
   June 30, 2004                          2.75:1.00
   September 30, 2004                     2.75:1.00
   December 31, 2004 and thereafter       2.50:1.00

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<PAGE>

          "First  Amendment"  shall mean the First  Amendment  to
this Credit Agreement, dated October 8, 2002.

          "First Amendment Effective Date" shall have the meaning
provided in the First Amendment.

          "Incremental  B Term Loans" shall mean the  Loans  made
pursuant  to  the  Incremental  Term  Loan  Commitment  Agreement
executed  and delivered by the Lenders party thereto on the  date
hereof in connection with the First Amendment.

     21.   Section 11.02(b)(i) of the Credit Agreement is  hereby
amended  by: (i) deleting the text "0.5" appearing in clause  (x)
of the proviso of such Section 11.02(b)(i) and inserting the text
"0.7"  in lieu thereof and (ii) deleting the text "50%" appearing
in  clause  (y)  of the proviso of such Section  11.02(b)(i)  and
inserting the text "70%" in lieu thereof.

      22.  Notwithstanding anything to the contrary contained  in
Section  9.07  of  the  Credit Agreement, the  Borrower  and  the
Lenders hereby agree that the Borrower shall not be permitted  to
carry  over any of the Unused Capital Expenditure Amount for  the
Borrower's  fiscal year ending June 30, 2002 to make any  Capital
Expenditures in its fiscal year ending June 30, 2003 or   in  any
future fiscal year of the Borrower.

     23.   The  Borrower and each Lender hereby agrees  that  the
sole  "lead  arranger" and "book manager"  with  respect  to  the
Incremental  B Term Loans is Banc of America Securities  LLC  and
that  there is no other "lead arranger", "book manager" or  other
agent with respect thereto.

III. Miscellaneous Provisions.

     1.    In  order  to  induce the Lenders to enter  into  this
Amendment, the Borrower hereby represents and warrants that:

          (a)   no  Default or Event of Default exists as of  the
     First  Amendment  Effective Date (as  defined  below),  both
     before   and  immediately  after  giving  effect   to   this
     Amendment; and

          (b)    all   of   the  representations  and  warranties
     contained  in  the  Credit Agreement and  the  other  Credit
     Documents  are true and correct in all material respects  on
     the  First  Amendment Effective Date, both before and  after
     giving  effect  to this Amendment, with the same  effect  as
     though such representations and warranties had been made  on
     and  as  of  the  First Amendment Effective Date  (it  being
     understood that any representation or warranty made as of  a
     specific  date  or  for a given period  shall  be  true  and
     correct  in all material respects as of such specified  date
     or such given period, as the case may be).

     2.    This  Amendment is limited as specified and shall  not
constitute  a  modification, acceptance or waiver  of  any  other
provision of the Credit Agreement or any other Credit Document.

				-8-
<PAGE>

     3.    This  Amendment  may  be executed  in  any  number  of
counterparts  and  by the different parties  hereto  on  separate
counterparts,  each  of  which  counterparts  when  executed  and
delivered  shall be an original, but all of which shall  together
constitute  one  and  the same instrument.   A  complete  set  of
counterparts   shall  be  lodged  with  the  Borrower   and   the
Administrative Agent.

     4.    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS  OF  THE
PARTIES  HEREUNDER  SHALL BE CONSTRUED  IN  ACCORDANCE  WITH  AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

     5.    This Amendment shall become effective on the date (the
"First  Amendment  Effective Date") when each  of  the  following
conditions shall have been satisfied:

          (i)   the Borrower and the Required Lenders shall  have
     signed  a  counterpart hereof (whether the same or different
     counterparts) and shall have delivered (including by way  of
     facsimile transmission) the same to the Administrative Agent
     at the Notice Office;

          (ii)  each  of the Lenders shall have received  audited
     consolidated  financial statements of  BHS  for  its  fiscal
     years  2000,  2001 and 2002, which (x) in the case  of  such
     financial statements for BHS' fiscal year 2001, shall not be
     materially  different,  in the reasonable  judgment  of  the
     Administrative  Agent,  from  the  draft  audited  financial
     statements for such year previously received by the  Lenders
     unless such differences are acceptable to the Administrative
     Agent  and (y) in the case of such financial statements  for
     BHS'   fiscal  year  2002,  shall  demonstrate   that   BHS'
     consolidated EBITDA for such fiscal year 2002 was  at  least
     $10,000,000; and

          (iii)      (x)  an  Incremental  Term  Loan  Commitment
     Agreement  in the form of Exhibit A to this Amendment  shall
     have  been  executed and delivered by the Borrower  and  the
     Incremental Term Loan Lenders party thereto providing for up
     to, but no more than, $200 million of Incremental Term Loans
     (as   defined  in  such  Incremental  Term  Loan  Commitment
     Agreement)  to  be  funded  by such  Incremental  Term  Loan
     Lenders  on  the  terms thereof and of the Credit  Agreement
     (and  such amount of Incremental Term Loans, when  added  to
     the cash utilized by the Borrower as contemplated in Section
     7(a)  of  such  Incremental Term Loan Commitment  Agreement,
     shall be sufficient to effect the BHS Acquisition), (y) each
     of  the  conditions precedent set forth in such  Incremental
     Term   Loan   Commitment   Agreement   (including,   without
     limitation,  the  consummation of  the  BHS  Acquisition  as
     provided  therein) shall have been satisfied and not  waived
     except with the approval of the Required Lenders and (z) the
     Incremental  Term  Loans described in preceding  clause  (x)
     shall  have been funded, and the BHS Acquisition shall  have
     been  consummated,  in  each  case  concurrently  with   the
     occurrence of the First Amendment Effective Date.

     6.    From and after the First Amendment Effective Date, all
references  in the Credit Agreement and each of the other  Credit
Documents  to  the  Credit  Agreement  shall  be  deemed  to   be
references to the Credit Agreement as modified hereby.

                         *      *      *

				-9-
<PAGE>

          IN  WITNESS  WHEREOF, each of the  parties  hereto  has
caused  a  counterpart of this Amendment to be duly executed  and
delivered as of the date first above written.

                              VANGUARD HEALTH SYSTEMS, INC.,
                               as Borrower

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              BANK OF AMERICA, N.A.,
                               Individually and as Administrative
                              Agent

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              MORGAN STANLEY SENIOR FUNDING, INC.

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              WACHOVIA BANK, NATIONAL ASSOCIATION
                              (f/k/a First Union National Bank)

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              GENERAL ELECTRIC CAPITAL
                              CORPORATION

                              By:________________________________
                                 Name:
                                 Title:

<PAGE>

                              LASALLE BANK NATIONAL ASSOCIATION

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              CREDIT SUISSE FIRST BOSTON

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              UBS AG, STAMFORD BRANCH

                              By:________________________________
                                 Name:
                                 Title:

                              CREDIT LYONNAIS AMERICAS

                              By:/s/_____________________________
                                 Name:
                                 Title:

                              By:/s/_____________________________
                                 Name:
                                 Title:

<PAGE>

                                                        EXHIBIT A

           INCREMENTAL TERM LOAN COMMITMENT AGREEMENT

                     [Bank of America, N.A.]
                         [Other Lenders]

Vanguard Health Systems, Inc.
20 Burton Hills Boulevard
Suite 100
Nashville, TN  37215

Re:  Incremental Term Loan Commitments

Ladies and Gentlemen:

          Reference is hereby made to the Credit Agreement, dated
as  of  July 30, 2001 (as amended, modified or supplemented  from
time  to  time,  the "Credit Agreement"), among  Vanguard  Health
Systems, Inc. (the "Borrower" or "you"), the lenders from time to
time  party  thereto (the "Lenders"), Banc of America  Securities
LLC  and  Morgan  Stanley Senior Funding,  Inc.,  as  Joint  Lead
Arrangers   and  Book  Managers,  Bank  of  America,   N.A.,   as
Administrative  Agent  (in  such  capacity,  the  "Administrative
Agent"),  Morgan  Stanley Senior Funding,  Inc.,  as  Syndication
Agent and Wachovia Bank, National Association (formerly known  as
First   Union   National  Bank)  and  General  Electric   Capital
Corporation, as Co-Syndication Agents.  Unless otherwise  defined
herein,  capitalized terms used herein shall have the  respective
meanings  set  forth in the Credit Agreement (for  this  purpose,
after  giving effect to the First Amendment to Credit  Agreement,
dated October 8, 2002 (the "First Amendment")).

          Each  Lender  (each an "Incremental Term Loan  Lender")
party   to  this  letter  agreement  (this  "Agreement")   hereby
severally  agrees to provide the Incremental Term Loan Commitment
set  forth opposite its name on Annex I attached hereto (for each
such  Incremental  Term Loan Lender, its "Incremental  Term  Loan
Commitment").   Each  Incremental Term Loan  Commitment  provided
pursuant  to  this Agreement shall be subject to  the  terms  and
conditions  set forth in the Credit Agreement, including  Section
1.13 thereof.

          Each Incremental Term Loan Lender, the Borrower and the
Administrative  Agent acknowledge and agree that the  Incremental
Term  Loan Commitments provided pursuant to this Agreement  shall
constitute  Incremental Term Loan Commitments of  the  respective
Tranche  specified  in  Annex I attached  hereto  and,  upon  the
incurrence of Incremental Term Loans pursuant to such Incremental
Term  Loan  Commitments, shall constitute Incremental Term  Loans
under  such  specified  Tranche for all purposes  of  the  Credit
Agreement and the other Credit Documents.

          Each  Incremental  Term Loan Lender  and  the  Borrower
further  agree  that, with respect to the Incremental  Term  Loan
Commitments  provided  by  such  Incremental  Term  Loan   Lender
pursuant  to  this Agreement, such Incremental Term  Loan  Lender
shall receive such

<PAGE>

upfront  fees,  if any, as are specified in  Annex  I  attached
hereto,  which  upfront  fee shall be due  and  payable  to  such
Incremental  Term Loan Lender upon the Agreement  Effective  Date
(as defined below) or as otherwise specified in said Annex I.

          Each   Incremental  Term  Loan  Lender  party  to  this
Agreement (i) confirms that it has received a copy of the  Credit
Agreement and the other Credit Documents, together with copies of
the  financial  statements referred to  therein  and  such  other
documents  and information as it has deemed appropriate  to  make
its own credit analysis and decision to enter into this Agreement
and,  to  the  extent applicable, to become a  Lender  under  the
Credit  Agreement,  (ii) agrees that it will,  independently  and
without  reliance  upon the Administrative  Agent  or  any  other
Lender  and based on such documents and information as  it  shall
deem  appropriate at the time, continue to make  its  own  credit
decisions  in  taking  or  not taking  action  under  the  Credit
Agreement, (iii) appoints and authorizes the Administrative Agent
and  the  Collateral Agent to take such action as  agent  on  its
behalf and to exercise such powers under the Credit Agreement and
the other Credit Documents as are delegated to the Administrative
Agent  and the Collateral Agent, as the case may be, by the terms
thereof,  together with such powers as are reasonably  incidental
thereto,  (iv)  agrees that it will perform  in  accordance  with
their  terms  all of the obligations which by the  terms  of  the
Credit  Agreement are required to be performed by it as a Lender,
and  (v) in the case of each lending institution organized  under
the  laws  of a jurisdiction outside the United States,  attaches
the  applicable forms described in Section 4.04(b) of the  Credit
Agreement  certifying  as  to  its  entitlement  to  a   complete
exemption  from United States withholding taxes with  respect  to
all  payments to be made under the Credit Agreement and the other
Credit  Documents.   Upon  the date of (i)  the  execution  of  a
counterpart  of  this  Agreement by such  Incremental  Term  Loan
Lenders,  the  Administrative Agent, the Borrower,  the  Majority
Lenders  of  each  Tranche (if any) required to  consent  to  the
provision of the Incremental Term Loan Commitments to be provided
pursuant to this Agreement as provided in Section 1.13(a)(ix) and
1.13(a)(x), as the case may be, of the Credit Agreement, (ii) the
delivery  to  the Administrative Agent of a fully  executed  copy
(including by way of counterparts and by facsimile) hereof, (iii)
the  payment of any fees required in connection herewith and (iv)
the satisfaction of all conditions precedent set forth in Section
7  of Annex I hereto (such date, the "Agreement Effective Date"),
each  Incremental  Term Loan Lender party  hereto  (i)  shall  be
obligated to make the Incremental Term Loans provided to be  made
by  it as provided in this Agreement on the terms, and subject to
the conditions, set forth in the Credit Agreement and (ii) to the
extent  provided  in this Agreement, shall have  the  rights  and
obligations  of  a Lender thereunder and under the  other  Credit
Documents.   The maximum number of drawings with respect  to  the
Incremental  Term  Loan  Commitments provided  pursuant  to  this
Agreement  shall  be  as specified in Annex  I  attached  hereto.
Furthermore,  any  undrawn  Incremental  Term  Loan   Commitments
provided  pursuant  to this Agreement shall expire  on  the  date
specified in Annex I attached hereto.

          The  Borrower acknowledges and agrees that (i) it shall
be  liable  for  all Obligations with respect to the  Incremental
Term   Loan   Commitments  provided  hereby  including,   without
limitation,  any Loans made pursuant thereto and  (ii)  all  such
Obligations (including any such Loans) shall be entitled  to  the
benefits of the Security Documents.  Attached hereto as Annex  II
are   executed  resolutions  of  the  Borrower  authorizing   the
incurrence of the Incremental Term Loans to be incurred  pursuant
to the Incremental Term Loan Commitments provided hereunder.

				2
<PAGE>

          Each  Subsidiary Guarantor acknowledges and agrees that
all  Obligations  with  respect  to  the  Incremental  Term  Loan
Commitments  provided hereby and any Loans made pursuant  thereto
shall  (i)  be  fully  guaranteed pursuant  to  the  Subsidiaries
Guaranty in accordance with the terms and provisions thereof  and
(ii)  be entitled to the benefits of the Security Documents,  and
attached  hereto  as  Annex III are resolutions  from  each  such
Subsidiary Guarantor covering the matters set forth in  preceding
clauses (i) and (ii).

          The   Obligations  to  be  incurred  pursuant  to   the
Incremental   Term  Loan  Commitments  provided   hereunder   are
permitted   by,   and   constitute  "Senior   Indebtedness"   and
"Designated Senior Indebtedness" (or any similar terms) under (i)
the   Convertible   Subordinated  Debt  and   (ii)   the   Senior
Subordinated  Note  Documents, and, after  the  issuance  of  any
Permitted  Subordinated Notes, the Permitted Senior  Subordinated
Note  Documents, and attached hereto as Annex IV are calculations
showing that such Obligations are permitted by the terms  of  the
documentation referred to in this clause (ii).

          Attached  hereto  as Annex V is an opinion  of  Waller,
Lansden,  Dortch  & Davis counsel to the Borrower,  delivered  as
required pursuant to Section 1.13(b)(v) of the Credit Agreement.

          You may accept this Agreement by executing the enclosed
copies in the space provided below, and returning a copy of  same
to  us before the close of business on October ___, 2002.  If you
do  not  so  accept this Agreement by such time, our  Incremental
Term Loan Commitments set forth in this Agreement shall be deemed
cancelled.

          After  the execution and delivery to the Administrative
Agent  of  a fully executed copy of this Agreement (including  by
way  of counterparts and by facsimile) by the parties hereto  and
the  effectiveness  hereof  in  accordance  with  the  provisions
herein, this Agreement shall constitute a Credit Document and may
only  be  changed,  modified or varied by written  instrument  in
accordance with the requirements for the modification  of  Credit
Documents pursuant to Section 13.12 of the Credit Agreement.

				3
<PAGE>

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                              Very truly yours,

                              BANK OF AMERICA, N.A.

                              By__________________________
                                Name:
                                Title:

                              [OTHER INCREMENTAL TERM
                                    LOAN LENDERS]

Agreed and Accepted
this ___ day of October ___, 2002

VANGUARD HEALTH SYSTEMS, INC.

By:_____________________________
   Name:
   Title:

BANK OF AMERICA, N.A.,
as Administrative Agent

By:_____________________________
   Name:
   Title:

				4
<PAGE>

Each  Subsidiary  Guarantor  acknowledges  and  agrees  to   the
foregoing  provisions of this Incremental Term  Loan  Commitment
Agreement,   specifically  including  the  acknowledgments   and
agreements made by it pursuant to the seventh paragraph  of  the
Incremental Term Loan Commitment Agreement.
901:
                                 VHS ACQUISITION CORPORATION
                                 VHS OUTPATIENT CLINICS, INC.
                                 VHS OF PHOENIX, INC.
                                 VHS OF ARROWHEAD, INC.
                                 PLEASANT PROPERTIES, INC.
                                 VHS OF SOUTH PHOENIX, INC.
                                 VHS IMAGING CENTERS, INC.
                                 VHS OF ANAHEIM, INC.
                                 VHS OF ORANGE COUNTY, INC.
                                 VHS HOLDING COMPANY, INC.
                                 VHS OF HUNTINGTON BEACH, INC.
                                 VHS OF ILLINOIS, INC.
                                 MACNEAL HEALTH PROVIDERS, INC.
                                 MACNEAL MANAGEMENT SERVICES,
                                 INC.
                                 MIDWEST CLAIMS PROCESSING, INC.
                                 PROS TEMPORARY STAFFING, INC.
                                 WATERMARK PHYSICIAN SERVICES,
                                 INC.
                                 VHS GENESIS LABS, INC.
                                 MACNEAL MEDICAL RECORDS, INC.
                                 VANGUARD HEALTH MANAGEMENT,
                                 INC.
                                 TRINITY MEDCARE, INC.
                                 V-II ACQUISITION CO., INC.
                                 VANGUARD HEALTH FINANCIAL
                                 COMPANY, INC.
                                 VHS OF RANCOCAS, INC.
                                 VHS PHOENIX HEALTH PLAN, INC.
                                 HOSPITAL DEVELOPMENT OF
                                 WEST PHOENIX, INC.
                                 HOSPITAL DEVELOPMENT COMPANY
                                 NUMBER 1, INC.
                                 HOSPITAL DEVELOPMENT COMPANY
                                 NUMBER 2, INC.
                                 VOLUNTEER INSURANCE LTD.,
                                 each as a Guarantor

				5
<PAGE>

                                 By:_____________________________
                                    Title:

                                 Duly authorized to sign on behalf of
                                   each of the foregoing entities

                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 1, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 2, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 3, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 4, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 5, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 6, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 7, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 8, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 9, INC.
                                 VHS ACQUISITION SUBSIDIARY
                                   NUMBER 10, INC.,
                                 each as a Guarantor

                                 By:_____________________________
                                    Title:

				6
<PAGE>

                                 Duly authorized to sign on behalf of
                                 each of the foregoing entities

                                 THE ANAHEIM VHS LIMITED
                                 PARTNERSHIP, as a Guarantor

                                 By:  VHS of Anaheim, Inc., its
                                 General Partner

                                 By:_____________________________
                                    Title:

                                 THE HUNTINGTON BEACH VHS LIMITED
                                 PARTNERSHIP, as a Guarantor
                                 By:  VHS of Huntington Beach,
                                 Inc., its General Partner

                                 By:_____________________________
                                    Title:

                                 HEALTHCARE COMPLIANCE, L.L.C.,
                                 as a Guarantor

                                 By:  Vanguard Health
                                 Management, Inc., its Member

                                 By:_____________________________
                                    Title:

                                 VHS SAN ANTONIO PARTNERS, L.P.,
                                 as a Guarantor

                                 By:  VHS Acquisition Subsidiary
                                 Number 5, Inc., its General
                                 Partner

                                 By:_____________________________
                                    Title:

				7
<PAGE>

                                 THE VHS ARIZONA IMAGING CENTERS
                                 LIMITED PARTNERSHIP, as a Guarantor
                                 By:  VHS Imaging Centers, Inc.,
                                 its General Partner

                                 By:_____________________________
                                    Title:

				8
<PAGE>

							ANNEX I

                    TERMS AND CONDITIONS FOR
           INCREMENTAL TERM LOAN COMMITMENT AGREEMENT

1.   Incremental Term Loan Commitment Amounts (as of the
     Agreement Effective Date):

                                        Amount of Incremental
          Name of Lender                Term Loan Commitment

          Total                         $200,000,000

2.   Designation of Tranche of Incremental Term Loan Commitments
     (and Incremental Term Loans to be funded thereunder): B

3.   Maturity Date ________, 2009 (the "Incremental Term Loan
     Maturity Date").

4.   Dates for, and amounts of, Scheduled Incremental Term Loan
     Repayments:

      Date                    Amount
March 31, 2003     0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2003      0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2003 0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

December 31, 2003  0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

March 31, 2004     0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2004      0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2004 0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

<PAGE>

December 31, 2004  0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

March 31, 2005     0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2005      0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2005 0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

December 31, 2005  0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

March 31, 2006     0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2006      0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2006 0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

December 31, 2006  0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

March 31, 2007     0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2007      0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2007 0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

December 31, 2007  0.25% of the initial
                   agreement principal

				2
<PAGE>

		   amount of Incremental Term Loans
                   hereunder

March 31, 2008     0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2008      0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2008 0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

December 31, 2008  0.25% of the initial
                   agreement principal amount of
                   Incremental Term Loans
                   hereunder

March 31, 2009     23.5% of the initial
                   aggregate principal amount of
                   Incremental Term Loans
                   hereunder

June 30, 2009      23.5% of the initial
                   aggregate principal amount of
                   Incremental Term Loans
                   hereunder

September 30, 2009 23.5% of the initial
                   aggregate principal amount of
                   Incremental Term Loans
                   hereunder

Incremental  Term  23.5% of the initial
Loan Maturity      aggregate principal amount of
Date               Incremental Term Loans
                   hereunder

5.   Rules for application of voluntary and mandatory
     prepayments:

          As    provided    in   Sections   4.01(a)(vi)(A)    and
          4.02(h)(iv)(A), as the case may be, i.e., (1) first, to
          reduce  the  Scheduled Incremental Term Loan Repayments
          which  will become due within twelve months  after  the
          date of such prepayment in direct order of maturity  of
          the  dates  of  such  Scheduled Incremental  Term  Loan
          Repayments and (2) second, to the extent in  excess  of
          the  amount required to be applied as provided  in  the
          preceding  clause  (1), to reduce  the  then  remaining
          Scheduled  Incremental Term Loan Repayments  on  a  pro
          rata  basis  (based  on  the then  remaining  principal
          amounts   of  such  Scheduled  Incremental  Term   Loan
          Repayments).

				3
<PAGE>

6.   Interest Rates:

          Applicable   Margin  for  Incremental  B   Term   Loans
          maintained as (i) Base Rate Loans shall be _____%,  and
          (ii) Eurodollar Loans shall be _____%.

          It  is  understood and agreed that prior to the earlier
          of  (i)  the 90th day following the incurrence  of  the
          Incremental Term Loans hereunder and (ii) the date upon
          which  the Administrative Agent shall determine in  its
          sole  discretion  that the primary syndication  of  the
          Incremental  Term Loans has been completed, Incremental
          Term  Loans maintained as Eurodollar Loans may only  be
          incurred having (x) one week Interest Periods, each  of
          which  shall begin and end on the same day of the week,
          or  (y) any otherwise allowed Interest Period (pursuant
          to Section 1.09 of the Credit Agreement) so long as the
          Borrower pays any breakage costs incurred by any Lender
          in connection with such primary syndication.

7.   Other Conditions:

	     (a)  The structure and all terms of, and the documentation for,
	each component of the BHS Acquisition shall be as set forth in
	the BHS Acquisition Agreement (as defined in Section I.1 of the
	First Amendment) and the documentation related thereto, in each
	case delivered on October 7, 2002 to the Lenders and the
	Incremental Term Loan Lenders party to the Incremental Term Loan
	Commitment Agreement to which this Annex I is attached, with such
	amendments, modifications or waivers thereto as may be agreed to
	by the Administrative Agent or the Required Lenders (for this
	purpose determined including each Lender's Revolving Loan
	Commitments as well as such Lender's Incremental Term Loan
	Commitments and Incremental Term Loans (the "Aggregate Required
	Lenders")), and such documentation shall be in full force and
	effect.  The BHS Acquisition shall have been consummated in
	accordance with the respective documentation therefore in all
	material respects and in accordance with all applicable laws.

	     (b)  After giving effect to the BHS Acquisition and financings
	incurred in connection therewith, the Borrower and its
	Subsidiaries will have no outstanding Indebtedness or preferred
	stock other than: (w) the PIK Preferred Stock, (x) the BHS PIK
	Preferred Stock, (y) Indebtedness outstanding under the Credit
	Agreement and (z) Indebtedness outstanding as permitted pursuant
	to Section 9.04 of the Credit Agreement on the Agreement
	Effective Date.

	     (c)  The Borrower shall have received cash proceeds in an amount
	equal to at least $50,000,000 from either the MSCP Group or
	management or both in consideration of common equity issued by
	the Borrower to them.

	     (d)  The Borrower shall have issued to the seller of BHS the
	Convertible Subordinated Debt, and each of the Convertible
	Subordinated Debt Documents shall be in the form delivered on
	October 7, 2002 to the Lenders and the Incremental Term Loan
	Lenders party to the Incremental Term

				4
<PAGE>

	Loan Commitment Agreement to which this Annex I is attached,
	with such amendments, modifications or waivers thereto as may be
	agreed to by the Administrative Agent or the Aggregate Required
	Lenders.

 	     (e)  VHS Acquisition Subsidiary Number 5, Inc. shall have issued
	19.9% of its capital stock to the seller of BHS and the
	documentation related thereto shall be in the form delivered on
	October 7, 2002 to the Lenders and the Incremental Term Loan
	Lenders party to the Incremental Term Loan Commitment Agreement
	to which this Annex I is attached, with such amendments,
	modifications or waivers thereto as may be agreed to by the
	Administrative Agent or the Aggregate Required Lenders.

	     (f)  The Borrower shall have utilized approximately $45,000,000
	of its cash on hand (subject to adjustments to such amount in
	connection with Special Capital Expenditures (as defined below)
	and any purchase price adjustment in connection with the BHS
	Acquisition) to finance, in part, the BHS Acquisition and to pay
	fees and expenses in connection therewith prior to the
	utilization of the Incremental Term Loans to be incurred pursuant
	to the Incremental Term Loan Commitment Agreement to which this
	Annex I is attached for such purpose.  No Loans other than the
	Incremental Term Loans to be incurred pursuant to the Incremental
	Term Loan Commitment Agreement to which this Annex I is attached
	shall be incurred to finance any part of the BHS Acquisition or
	to pay any fees or expenses in connection therewith.  For the
	purposes of this Section 7, the term "Special Capital
	Expenditures" shall mean both (i) BHS' cost of Capital
	Expenditures made after July 15, 2002 and prior to the Agreement
	Effective Date, in an amount not to exceed $3,500,000, in
	connection with making those repairs related to life and safety
	issues which state regulators have requested that BHS make as
	soon as practicable and (ii) BHS' cost of other non-routine
	capital expenditures made after July 15, 2002 that are approved
	in writing by both BHS and Borrower.

	     (g)  All necessary governmental (domestic and foreign) and third
	party approvals and/or consents required in connection with the
	transactions contemplated by the BHS Acquisition and otherwise
	referred to in the First Amendment shall have been obtained and
	remain in effect.  Additionally, there shall not exist any
	judgment, order, injunction or other restraint prohibiting or
	imposing materially adverse conditions upon the BHS Acquisition
	or the transactions contemplated by the Incremental Term Loan
	Commitment Agreement to which this Annex I is attached.

	     (h)  No litigation by any entity (private or governmental) shall
	be pending or threatened with respect to the BHS Acquisition, the
	Incremental Term Loans to be incurred pursuant to the Incremental
	Term Loan Commitment Agreement to which this Annex I is attached
	or the Credit Agreement or any documentation executed in
	connection therewith, or could reasonably be expected to have a
	material adverse effect on the business, property, assets,
	liabilities

				5
<PAGE>

	(actual or contingent), operations or condition
	(financial or otherwise) of the Borrower and its Subsidiaries
	taken as a whole.

	     (i)  The Administrative Agent shall have received legal opinions
	from counsel, and covering matters, acceptable to the
	Administrative Agent.  None of the Incremental Term Loans to be
	incurred pursuant to the Incremental Term Loan Commitment
	Agreement to which this Annex I is attached or any other
	financing to the Borrower (and neither the guaranties thereof nor
	the security thereof) shall cause a violation or breach of any
	agreement relating to any existing Indebtedness of the Borrower
	or any of its Subsidiaries (including, without limitation, the
	Senior Subordinated Notes and the Convertible Subordinated Debt),
	or any other material contract, of the Borrower or any of its
	Subsidiaries.

	     (j)  All costs, fees, expenses (including, without limitation,
	legal fees and expenses) and other compensation contemplated by
	the First Amendment and the Incremental Term Loan Commitment
	Agreement to which this Annex I is attached, payable to the
	Lender and the Administrative Agent shall have been paid to the
	extent due.

	     (k)  The existing and new Subsidiary Guarantors shall have
	executed and delivered (or acknowledged) the Subsidiaries
	Guaranty.  Each new Subsidiary Guarantor which is required to
	execute a counterpart of the Subsidiaries Guaranty shall be
	required to sign a counterpart of each of the Security Documents
	and, to the extent required, enter into Mortgages, and thereby
	provide a security interest in all of the Collateral owned by
	each such new Subsidiary Guarantor to secure all Obligations
	(including the Incremental Term Loans) owed by each such new
	Subsidiary Guarantor under the Credit Documents to which it is a
	party.

	     (l)  The shareholders of the VHS Acquisition Subsidiary Number 5,
	Inc. shall have executed a Shareholders Agreement which shall
	provide that VHS Acquisition Subsidiary Number 5, Inc. may take
	any action required by the Credit Agreement including, without
	limitation, becoming a party to the Subsidiaries Guaranty and the
	Security Documents, which Shareholders Agreement shall be in the
	form delivered on October 7, 2002 to the Lenders and the
	Incremental Term Loan Lenders party to the Incremental Term Loan
	Commitment Agreement to which this Annex I is attached, with such
	amendments, modifications or waivers thereto as may be agreed to
	by the Administrative Agent or the Aggregate Required Lenders.

	     (m)  The Borrower shall have issued to the seller of BHS the BHS
	PIK Preferred Stock, and the BHS PIK Preferred Stock Document
	shall be in the form delivered on October 7, 2002 to the Lenders
	and the Incremental Term Loan Lenders party to the Incremental
	Term Loan Commitment Agreement to which this Annex I is attached,
	with such amendments, modifications or waivers thereto as may be
	agreed to by the Administrative Agent or the Aggregate Required
	Lenders.

				6
<PAGE>

	     (n)  The Lenders shall have received from the chief financial
	officer of the Borrower a solvency certificate, in form of
	Exhibit L to the Credit Agreement.

	     (o)  The Required Lenders (for this purpose excluding any
	Lender's Incremental Term Loans and Incremental Term Loan
	Commitments provided pursuant to the Incremental Term Loan
	Commitment Agreement to which this Annex I is attached) shall
	have executed and delivered the First Amendment.

	     (p)  The Borrower shall be in compliance with each of Section
	9.08 and 9.09 of the Credit Agreement (after giving effect to the
	First Amendment), with the calculations necessary to determine
	such compliance to be made on a Pro Forma Basis after giving
	effect to the BHS Acquisition, the incurrence of the Incremental
	Term Loans pursuant to the Incremental Term Loan Commitment
	Agreement to which this Annex I is attached and all other
	transactions consummated in connection therewith, and the
	Borrower shall have delivered to the Administrative Agent and
	each Lender (including, for this purpose each Incremental Term
	Loan Lender) an officer's certificate from the Chief Financial
	Officer of the Borrower certifying as to the matters above and
	setting forth in reasonable detail the calculations necessary to
	certify to such matters.

	     (q)  All representations and warranties contained in the
	Credit Agreement and the other Credit Documents shall be true and
	correct in all material respects as of the Agreement Effective
	Date (although any representations and warranties which
	specifically relate to a given date or period shall be true and
	correct in all material respects as of the respective date or for
	the respective period, as the case may be).

	     (r)  No Default or Event of Default shall exist and be
	continuing on the Agreement Effective Date.

8.   Maximum  Number  of Drawings permitted with respect  to  the
     Incremental Term Loan Commitments provided pursuant  to  the
     Incremental Term Loan Commitment Agreement to which this Annex I
     is attached:   1

9.   Expiration date of any undrawn Incremental Term Loan
     Commitments provided pursuant to the Incremental Term Loan
     Commitment Agreement pursuant to which this Annex 1 is attached:
     5:30 pm (EST) January 3, 2003, or, if earlier, the termination of
     that certain Purchase and Sale Agreement, dated as of October
     8, 2002, among the Borrower, VHS San Antonio Partners, L.P. and
     the Baptist Health System.

				7<PAGE>
                                                                   Exhibit 10.33

                        CONFIDENTIAL TREATMENT REQUESTED.
    CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN
         SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                LICENSE AGREEMENT

This LICENSE AGREEMENT (this "Agreement") effective as of the 9th day of June
1999, is entered into by and between Permatec Technologie AG, a Swiss
corporation having its place of business at Grienbachstrasse 17, CH-6301 Zug,
Switzerland (hereinafter referred to as "LICENSOR") and SOLVAY Pharmaceuticals
B.V., a Dutch corporation having its place of business at C. J. Van Houtenlaan
36, NL 1381 CP Weesp, The Netherlands (hereinafter referred to as "LICENSEE";
both LICENSOR and LICENSEE hereinafter referred to as "Party" and the "Parties",
respectively).

                                   WITNESSETH:

WHEREAS, LICENSOR is a company active in the field of drug delivery and has in
particular expertise in innovative developments in the area of transdermal and
transmucosal delivery routes; and

WHEREAS, LICENSOR has developed a technology platform known as Combi Gel(TM)
consisting of gel formulations combining Estradiol with a progestative as active
ingredients and owns or has rights to certain patents and owns certain
proprietary know-how related to thereto; and

WHEREAS, LICENSEE is a company which markets pharmaceutical products and is
interested, on the basis of all results, data and related information made
available by LICENSOR to LICENSEE, in having granted the rights to register the
Combi-Gel NETA (as defined below) in the Territory (as defined below), and upon
approval to manufacture, market, distribute and sell the Product (as defined
below) in the Territory; and

WHEREAS, LICENSOR is prepared to grant to LICENSEE under the terms and
conditions set forth hereafter a license under the Patents and Know-How (both as
defined below) to seek registration of the Combi-Gel NETA in the Territory, and,
upon receipt of such approval(s), to manufacture, market, distribute and sell
the Product for use and sale in the Territory.

NOW THEREFORE, for and in consideration of the premises, mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
Parties hereby agree as follows:

1.   Definitions
     -----------

     For purposes of this Agreement, the terms defined in this Section 1. shall
     have the following meanings:

1.1  "Affiliate" shall mean, with respect to either Party hereto, any
     corporation, partnership or other entity controlled by, controlling or
     under common control with, such Party, with "control"

<PAGE>

     meaning direct or indirect beneficial ownership of more than 50% of the
     voting power of, or more than 50% of ownership interest in, such
     corporation, partnership or other entity.

1.2  "Combi-Gel NETA" shall mean the Combi-Gel containing Estradiol and
     Norethindrone acetate in all concentrations as the sole active ingredients
     for pharmaceutical use with humans developed by LICENSOR prior to the
     effective date of this Agreement first written hereinabove, which is based
     on and/or makes use of and/or is derived by use of the Patents and/or the
     Know-How, and which is described in Appendix A attached hereto.

1.3  "Development Plan" shall mean the plan for the development of the Combi-Gel
     NETA agreed upon by the Parties as attached hereto as Appendix B.

1.4  "Know-How" shall mean all information and data, which are not generally
     known including, but not limited to, patent claims and related information
     not yet disclosed to the public, formulae, procedures, protocols,
     techniques and results of experimentation and testing, which (a) relate to
     a Combi-Gel and/or the Combi-Gel NETA and/or the Product, and (b) are
     necessary or useful to seek Registration for, and/or to manufacture,
     market, distribute and sell, the Product in the Territory, all to the
     extent presently or during the term of this Agreement owned or otherwise
     acquired by, and at the free disposition of, LICENSOR.

1.5  "Major Market Countries" shall mean each of Germany, France and the United
     Kingdom.

1.6  "Net Sales" shall mean the adjusted gross amount invoiced on all sales of
     the Product (including, but not limited to, Hospital Sales, Mail orders and
     Retail Sales), in the Territory, by SOLVAY and/or its Affiliates and/or
     sub-licensee(s) in "bona fide" arm's length sales to independent third
     parties in the trade, as per invoices, less only (i) freight insurance and
     handling charges (when invoiced as additional charges), (ii) returns,
     withdrawals, recalls and allowances actually paid or granted, including
     cash and trade discounts, and (iii) sales taxes, value added taxes, duties
     and other governmental charges (including Federal and state rebates in
     connection with the sale), all in accordance with generally accepted and
     customary trade practices.

1.7  "Patents" shall mean all patents and patent applications filed or having
     presently or in the future legal force in any country of the Territory
     owned by LICENSOR which claim the Combi-Gel NETA and/or the Product, or the
     process to manufacture Combi-Gel NETA and/or the Product, including but not
     limited to the patents and patent applications listed in Appendix C hereto,
     together with all patents that in the future issue therefrom in any country
     of the Territory, including utility, model and design patents and
     certificates of invention, and all divisionals, continuations,
     continuations-in-part, reissues, renewals, extensions, substitutions,
     confirmations or additions to any such patents and patent applications.

1.8  "Product" shall mean the Combi-Gel NETA, for which LICENSEE has been
     granted the Registration.

1.9  "Registration" shall mean the granting of any and all approvals and
     registrations of Product by any Regulatory Authority, including without
     limitation price approval, which are

                                       2

<PAGE>

     required and/or necessary under any applicable law, rule, regulation or
     other governmental order to market, distribute and sell the Product in any
     country of the Territory.

1.10 "Regulatory Authority" shall mean any governmental authority in any country
     of the Territory competent to approve pharmaceutical products for
     manufacturing, marketing, distribution and sale in any country of the
     Territory and/or to approve the price for pharmaceutical products to be
     sold in any country of the Territory.

1.11 "Territory" shall mean all the countries and territories in the world
     except for the countries listed in Appendix D, provided that in the event
     that LICENSEE duly and timely exercises its option under Section 6. below,
     the countries constituting the Extended Territory (as defined in Section
     6.1 below) shall thereafter also be covered by the term Territory.

2.   Grant of License
     ----------------

2.1  LICENSOR hereby grants to LICENSEE the exclusive, sub-licensable right and
     license (hereinafter referred to a the "License") to pursue the development
     in accordance with the Development Plan as required in order to apply for
     Registration(s) for the Combi-Gel NETA, and upon receipt of such
     Registration, to manufacture, market, distribute and sell the Product, in
     the Territory, and to use the Patents and Know-How exclusively for that
     purpose, all in accordance with the provisions contained in this Agreement
     and subject to the payment of the Milestone Payments and the Royalty
     pursuant to Section 5. below.

2.2  For the avoidance of doubt, LICENSEE explicitly acknowledges and agrees
     that the License under the Patents and the Know-How granted hereunder is
     strictly limited to the Combi-Gel NETA (as defined in Section 1.2 above)
     and the Product (as defined in Section 1.6 above), and LICENSOR does not
     grant any license with respect to any other product under its proprietary
     technology platform consisting of gel formulations combining Estradiol with
     a progestative (other than Norethindrone Acetate) as active ingredients. It
     is, however, expressly understood that LICENSEE shall have a right of first
     refusal on any gel formulation developed by LICENSOR on its own combining
     Estradiol with any other progestative. LICENSOR shall offer to LICENSEE the
     same rights for such other combination as set out in 2.1 hereinabove under
     an agreement comparable to this Agreement with the commercial terms and
     conditions to be mutually agreed upon by the Parties in good faith
     negotiations. LICENSEE may exercise such right of first refusal within
     three (3) months following the receipt of the respective offer.

2.3  Notwithstanding any sub-license(s) to be granted by LICENSEE hereunder,
     LICENSEE shall continue to be bound by any and all obligations under this
     Agreement, as if no sub-license was granted, and LICENSEE shall be
     responsible for any and all acts, deeds and omissions of any of its
     sub-licensee(s) hereunder, during the term of this Agreement.

                                       3

<PAGE>

3.   Pharmaceutical and Technical Development
     ----------------------------------------

3.1  Promptly upon execution of this Agreement or receipt of the first Milestone
     Payment referred to in Section 5.1(a) below, which ever is the later,
     LICENSOR shall initiate and thereafter pursue the development steps for the
     Combi-Gel NETA listed in the Development Plan to fall within the
     responsibility of LICENSOR. Upon completion of such development steps,
     LICENSOR shall provide LICENSEE with a copy of all information, data and
     Know-How freely available to LICENSOR necessary and/or useful to allow
     LICENSEE to manufacture or have manufactured the batches of Combi-Gel NETA
     necessary for applying for Registration and for stability testing.

3.2  LICENSEE shall be solely responsible for and undertakes to diligently
     pursue to meet the time-frame set forth in the Development Plan, at its own
     cost, any and all development steps, actions and other activities
     necessary, required or useful to seek and apply for Registration of the
     Combi-Gel(TM) NETA, including without limitation the development steps
     listed in the Development Plan falling within the responsibility of
     LICENSEE, provided that LICENSOR shall provide such reasonable assistance
     and support to LICENSEE with respect to such development steps upon
     LICENSEE's request at the cost and expense of LICENSEE.

3.3  Any and all cost incurred by LICENSOR in connection with the performance of
     the development steps within its responsibility pursuant to the Development
     Program and any assistance and support provided upon request by LICENSOR
     under Sections 3.1 and 3.2 above, shall be reimbursed by LICENSEE on the
     basis of actual cost, plus any and all out-of-pocket expenses, incurred or
     spent by LICENSOR in connection therewith. In the event that LICENSOR, upon
     request or with the consent of LICENSEE, charges any third party with all
     or part of such activities, LICENSEE shall reimburse LICENSOR the cost
     invoiced by such third party plus an amount equal to twenty percent (20%)
     of such invoice amount(s) to cover LICENSOR's workload associated with the
     instruction and supervision of such third party. LICENSOR shall provide
     LICENSEE with respective invoices, which shall be payable by LICENSEE
     within thirty (30) days as of receipt.

3.4  The Parties agree to set up, within thirty (30) days after the mutual
     execution of this Agreement a steering committee (the "Steering
     Committee"), consisting of four (4) qualified members, of which each Party
     may nominate two (2) members. The Steering Committee shall be responsible
     for the supervision of the due and timely development of the Combi-Gel NETA
     pursuant to the Development Plan as provided for in this Section 3.

3.5  The Steering Committee shall meet on a regular basis and upon request of
     any of its members, but at least quarterly, and each Party shall at such
     meetings of the Steering Committee provide the other Party with a written
     update on, and with all results and data generated and achieved under, the
     development steps performed by either Party pursuant to the Development
     Plan. Furthermore, each Party shall promptly inform the other Party in such
     meetings of the Steering Committee of any occurred or envisaged delays in
     the timely performance of its responsibilities under the Development Plan.

                                       4

<PAGE>

3.6  The Steering Committee may amend, alter or change, by resolution mutually
     agreed upon by all of its members, the Development Plan and the time-limits
     for the major development steps contained therein. The Steering Committee
     shall strive to always reach unanimous decisions. In case unanimous
     decisions cannot be reached, the principal officers of LICENSEE and
     LICENSOR or their designees should try to dissolve the dispute. If such
     principal officers of the Parties, despite good faith and diligent
     negotiations, are unable to agree upon a decision, the principal executive
     officers of both LICENSEE and LICENSOR shall convene and attempt in good
     faith to find a solution acceptable to both Parties. In the event that such
     solution may not be found, the principal executive officer of LICENSEE
     shall have the final decision. In the event that the timeframe contained in
     the Development Plan is delayed by any such decision of the principal
     executive officer of LICENSEE by more then twelve (12) months, then
     LICENSOR shall have the right to terminate this Agreement, unless such
     decision is based on scientific and/or technical reasons only.

4.   Registration of the Combi-Gel NETA
     ----------------------------------

4.1  Promptly upon completion of all development steps under the Development
     Plan required therefor, LICENSEE undertakes to initiate and thereafter
     diligently pursue any and all steps and action referred to in Section 3.2
     above as they are necessary and/or required to submit to any competent
     Regulatory Authority in all Major Market Countries of the Territory, at its
     own cost, under its sole responsibility and its own name, request(s) for
     Registration of the Combi-Gel NETA (hereinafter the "Request"); for all
     other countries of the Territory, where Registration of the Combi-Gel NETA
     is commercially viable, LICENSEE shall use all commercially reasonable
     efforts to prepare and submit such Requests. Upon submission of any such
     Request, LICENSEE shall promptly inform LICENSOR thereof, and thereafter,
     LICENSEE shall use all commercially reasonable efforts to prosecute each
     such Request submitted and keep LICENSOR promptly informed on all
     developments related thereto.

4.2  Furthermore, LICENSEE undertakes to inform LICENSOR of all material
     developments and correspondence exchanged with any Regulatory Authority in
     connection with any Request and/or any Registration, including the
     obtention of any Registration by providing a copy of the letter of
     allowance.

5.   License Fees and Royalties
     --------------------------

5.1  As consideration for the License granted by LICENSOR to LICENSEE under this
     Agreement, and in consideration of the development of the Combi-Gel NETA
     prior to the effective date of this Agreement first written above by
     LICENSOR, LICENSEE undertakes to pay to LICENSOR a license fee in the
     aggregate amount of USD 5 million (five million United States Dollars),
     which license fee shall be payable by LICENSEE in four (4) payments (each a
     "Milestone Payment") within thirty (30) days after the occurrence of the
     following events:

                                       5

<PAGE>

     (a)  a first Milestone Payment in the amount of USD 1.0 million
          (one-million United States Dollars) upon execution of this Agreement;
          and

     (b)  a second Milestone Payment in the amount of USD 1.0 million
          (one-million United States Dollars) upon initiation of PhaseIIb/III
          clinical trials; and

     (c)  a third Milestone Payment in the amount of USD 1.0 million
          (one-million United States Dollars) upon the filing of the first
          Request to any Regulatory Authority; and

     (d)  a fourth Milestone Payment in the amount of USD 2.0 million
          (two-million United States Dollars) upon receipt of the first
          Registration for the Product in any one Major Market Country.

5.2  In addition to the Milestone Payments under Section 5.1 above, LICENSEE
     shall pay to LICENSOR as further consideration for the License granted
     hereunder a royalty (the "Royalty") in an amount equal to five percent (5%)
     of Net Sales of Product on a country-by-country basis, during a period (the
     "Royalty Term") of (i) fifteen (15) years as from the first commercial sale
     of Product in each country of the Territory, or (ii) until the expiration
     of the last Patent in such country of the Territory, which ever is the
     later. In the event that during the Royalty Term in any country of the
     Territory (i) no Patent is in force, and/or (ii) a third party Competing
     Product is marketed, then the Royalty rate shall be reduced to *****
     percent (**%) of Net Sales of Product in such country only, whereby
     "Competing Product" shall mean a product being a similar formulation
     containing the same two active ingredients for the identical indications as
     Product, which does not infringe any claim under the Patents.

5.3  All Royalty under Section 5.2 above shall be payable quarterly, and
     LICENSEE shall remit to LICENSOR within six (6) weeks after the end of each
     calendar quarter, for the first time after the fifth Milestone Payment
     under Section 5.1(e) became due, the amount of Royalty due with respect of
     Net Sales achieved in the preceding calendar quarter. LICENSEE shall
     deliver to LICENSOR, along with such remittance of Royalty payment, a
     detailed statement on a country-by-country basis (hereinafter referred to
     as the "Royalty Report") of the Net Sales of Product achieved and the
     applied Royalty rate under Section 5.2, to which the Royalty payment
     relates. All Royalty Reports shall be prepared in accordance with generally
     accepted accounting principles consistently applied from applicable period
     to period and shall be certified by an officer of LICENSEE as being so
     prepared, true, accurate and correct.

5.4  Unless otherwise agreed by the Parties in writing, all payments under this
     Section 5. shall be made in United States Dollars and to such place or
     account as LICENSOR reasonably requests from time to time in writing. To
     the extent that Net Sales of Product will be calculated in any currency
     other than United States Dollars, LICENSEE shall convert calculation of
     such Net Sales from such other currency into United States Dollars at the
     average of the selling/buying exchange rate published by the Wall Street
     Journal Europe at the last day of the calendar quarter during which such
     Net Sales were made.

                                       6

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

6.   Extension of Territory
     ----------------------

6.1  LICENSOR hereby grants LICENSEE the right and option (the "Option") to
     extend the Territory as defined in the first sentence of Section 1.11 above
     to include also the country of Canada (the "Extended Territory").

6.2  LICENSEE may exercise its option under Section 6.1 by written notice at no
     cost at any time during the first three (3) months (the "Option Period")
     after the effective date first written above. During such Option Period,
     LICENSEE shall evaluate with the Regulatory Authority in Canada whether any
     additional and/or specific requirements for the filing of a Request and/or
     for the Registration in Canada are to be met.

6.3  In the event that LICENSEE shall duly and timely exercise the Option, then
     the Parties shall negotiate in good faith and mutually agree upon the
     increase of Milestone Payments under Section 5.1 above as additional
     consideration for the inclusion of the Extended Territory. In the event
     that LICENSEE shall not duly and timely exercise the Option, then the
     Option granted under this Section 6. shall lapse and fall away, and
     LICENSOR shall retain any and all rights to and interest in the Combi-Gel
     NETA and the Product in the Extended Territory.

7.   Inspection and Audit
     --------------------

7.1  During the term of this Agreement and during a period of twelve (12) months
     after its expiration or termination for any reason, upon the written
     request of LICENSOR and not more than once each calendar year, LICENSEE
     shall permit an independent certified public accountant selected by
     LICENSOR and acceptable to LICENSEE (not to be withheld or delayed
     unreasonably) to have access during regular business hours to such of the
     records of LICENSEE and its Affiliates and sub-licensee(s) as may be
     reasonably necessary to verify the accuracy of the Royalty Reports for any
     year ending not more than thirty-six (36) months prior to the date of such
     audit request. The accounting firm shall disclose to LICENSOR only whether
     the Royalty Reports and records of LICENSEE and the amount of Royalty
     actually paid are correct or not and the specific details concerning any
     discrepancies; no other information shall be shared. The Parties agree to
     accept such written audit report as final and binding upon them.

7.2  If such accounting firm concludes that additional Royalty were owed during
     any such period audited, LICENSEE shall pay within fourteen (14) days the
     difference between the Royalty paid and the Royalty due as of the date
     LICENSOR delivers to LICENSEE such accounting firm's written report so
     concluding. The fees and expenses charged by such accounting firm with
     respect to any such audit shall be paid by LICENSOR, provided however, that
     if any such audit discloses that Royalty payable by LICENSEE for any
     audited period are more than one-hundred ten percent (110%) of the Royalty
     actually paid for such period, then LICENSEE shall pay all reasonable fees
     and expenses charged by such accounting firm with respect to such audit.

                                       7

<PAGE>

8.   Proprietary Right and Patents
     -----------------------------

8.1  The LICENSOR shall retain title to and full ownership in the Patents and
     the Know-How including, but not limited to, any and all developments and
     inventions related thereto, if any (hereinafter collectively referred to as
     "LICENSOR IPR").

8.2  LICENSEE shall not, directly or indirectly through its officers, directors,
     employees, agent, affiliates, customers or other controlled or associated
     third parties, acquire any proprietary interest in or other right to
     LICENSOR IPR, other than provided in this Agreement.

8.3  LICENSOR shall use all commercially reasonable efforts, at its own cost, to
     prepare, prosecute and maintain all patent applications and patent
     constituting Patents, and shall keep LICENSEE fully and promptly informed
     on any developments or changes relating thereto. If the LICENSOR decides
     not to further prosecute any patent application constituting Patents,
     LICENSOR shall promptly inform LICENSEE of such decision in writing, and
     the Parties shall, upon LICENSEE's written request, meet to discuss any
     appropriate action.

8.4  If LICENSEE becomes aware of (i) any product or activity of any kind that
     involves or may involve an infringement or violation of LICENSOR IPR, or
     (ii) any third-party action, claim or dispute (including, but not limited
     to, actions for declaratory judgment alleging the invalidity or
     non-infringement) based upon or arising out of LICENSOR IPR, then LICENSEE
     shall promptly notify LICENSOR in writing of any such infringement,
     violation, action, claim or dispute. LICENSOR undertakes to take and
     control the commercially feasible and appropriate, as determined at
     LICENSOR's sole discretion, course of action to enforce, or otherwise abate
     the infringement of, or defend third-party actions regarding LICENSOR IPR.
     LICENSOR shall keep LICENSEE regularly informed on any such action. Where
     and to the extent necessary to recover damages suffered by LICENSEE by any
     such infringement, LICENSEE shall be made, upon its written request and
     where possible, an additional party to any such action taken by LICENSOR.

8.5  LICENSEE shall retain title to and ownership of all results and data
     generated and achieved by LICENSEE hereunder and the Registration(s) for
     the Product in the Territory, subject to Sections 8.6, 10.4(iv) and 10.7
     below. LICENSEE shall be responsible for and shall control, at its own
     cost, the preparation, prosecution and maintenance of all Registration(s)
     and shall keep LICENSOR fully and promptly informed on any developments or
     changes relating thereto. During the term of this Agreement, LICENSEE
     shall, at its sole cost, take all steps necessary to prosecute and/or
     maintain all Registrations.

                                       8

<PAGE>

8.6  LICENSOR shall be entitled to use any and all data and results, including
     without limitation clinical data, generated by LICENSEE under Section 3.2
     above to apply or have applied for and obtain Registrations for Product in
     any country outside the Territory, provided that if such Registration of
     Product is obtained by or on behalf of LICENSOR, than the Parties shall, in
     good faith negotiations, mutually agree on an adequate consideration to
     LICENSEE for such use of the results and data, which consideration shall
     reasonably reflect the commercial benefit of such use to LICENSOR in such
     country(ies).

9.   Confidentiality
     ---------------

9.1  LICENSEE shall maintain in confidence all Know-How and other information of
     LICENSOR disclosed by LICENSOR hereunder (the "Confidential Information"),
     and shall not use, disclose or grant the use of any of the Confidential
     Information except on a need-to-know basis to its Affiliates and
     sub-licensee(s) and the respective directors, officers, employees, agents,
     consultants, clinical investigators or other permitted contractors, to the
     extent such disclosure is reasonably necessary in connection with
     LICENSEE's activities as expressly authorised by this Agreement. To the
     extent that disclosure is authorised by this Agreement, prior to
     disclosure, LICENSEE shall obtain agreement in writing of any such person
     to hold in confidence and not make e use of the Confidential Information
     for any purpose other than authorised by this Agreement. LICENSEE shall
     notify LICENSOR promptly upon the discovery of the unauthorised use or
     disclosure of any Confidential Information.

9.2  The obligations of confidentiality and non-use in Section 9.1 above shall
     not apply to the extent that (a) LICENSEE (i) is required to disclose
     information by law, regulation or order of a governmental agency or a court
     of competent jurisdiction, or (ii) is required to disclose information to
     any Regulatory Authority for purposes of obtaining Registrations, provided
     in each case that LICENSEE shall provide LICENSOR with a copy of the
     Confidential Information submitted, or (b) LICENSEE can demonstrate that
     (i) the disclosed information was public knowledge, other than as a result
     of actions of LICENSEE or its Affiliates or sublicensee(s) or their
     respective directors, officers and employees in violation hereof, or (ii)
     the disclosed information was rightfully known by LICENSEE as shown by its
     written records prior to the date of disclosure to it by LICENSOR
     hereunder, or (iii) any Confidential Information was independently
     developed by LICENSEE without any use of Confidential Information as shown
     by its written records.

9.3  The confidentiality obligations under this Section 9. shall be effective
     during the entire term of this Agreement and for a period of five (5) years
     after the expiration or earlier termination hereof. LICENSOR shall be
     entitled to injunctive remedies and relief against LICENSEE and any third
     parties for any breach or threatened breach of the confidentiality
     obligations under this Section 9. In the event of a breach of the
     confidentiality obligations under this Section 9. by LICENSEE or its
     Affiliates or sub-licensee(s) and their respective directors, officers,
     employees or any other person who

                                       9

<PAGE>

     were given access to the Confidential Information by LICENSEE, LICENSOR
     shall be entitled to receive from LICENSEE any and all actual costs and
     damages caused by any such breach.

9.4  The confidentiality and non-use obligations contained in this Section 9.
     shall apply mutatis mutandis to LICENSOR with respect to any confidential
     information and data relating to LICENSEE's business affairs, trade secrets
     and commercial plans disclosed to LICENSOR during the term of this
     Agreement, if any.

10.  Term and Termination
     --------------------

10.1 This Agreement shall enter into force as of the effective date first
     written herein above and shall, unless earlier terminated in accordance
     with the provisions of Section 10.2 below, expire on a country-by-country
     basis upon expiration of the Royalty Term in each country of the Territory.
     Upon expiration of the Royalty Term in each country of the Territory
     pursuant to this Section 10.1 and payment by LICENSEE of all Milestone
     Payments and Royalties due hereunder, the License granted hereunder shall
     be deemed a perpetual, fully paid-up and royalty-free license for each such
     country of the Territory.

10.2 At any time during the term of this Agreement, this Agreement may be
     terminated by giving written notice to that effect, as follows:

     (a)  by either Party, if the other Party is in default or in breach of any
          term or provision hereof and such default or breach continues and is
          not remedied within thirty (30) days upon the other Party's written
          request to remedy such default or breach; or

     (b)  by either Party, if the other Party goes into liquidation, voluntarily
          or otherwise, other than for the sole purpose or reorganization, or
          goes into bankruptcy or makes an assignment for the benefit of
          creditors, or in the event of a receiver being appointed of the other
          Party's property or parts thereof; or

     (c)  by either Party (the "Notified Party") within ninety (90) days upon
          receipt of the written notice of the other Party (the "Notifying
          Party") that the effective control of all or a substantial part
          (greater than fifty percent 50%) of the pharmaceutical business of
          such Notifying Party, whether by sale of stock or assets, passes into
          the hands of a pharmaceutical competitor of the Notified Party, and
          the Notified Party can reasonably demonstrate to the Notifying Party
          that continuation of this Agreement would materially affect and
          negatively influence its business; or

     (d)  by LICENSOR in case of a breach by LICENSEE of any of the
          confidentiality provisions of Section 9 above; or

     (e)  by LICENSOR, if LICENSEE does not file a Request for Registration in
          any Major Market Country(ies) of the Territory within six (6) months
          after receipt of

                                       10

<PAGE>

          the first Registration by a Regulatory Authority, with respect to
          those Major Market Countries only where no Request has been timely
          filed, and in each case only if LICENSEE does not file such Request
          within one (1) month after LICENSOR's written request to do so,
          subject to Section 12.6 below; or

     (f)  by LICENSOR, if LICENSEE does not file a Request for Registration in
          any country(ies) of the Territory not being a Major Market Country
          within six (6) months after receipt of the first Registration of a
          Regulatory Authority in a Major Market Country (or the reference
          country under the mutual recognition procedure of the European Union,
          if applicable), with respect to those countries only where no Request
          has been timely filed, and in each case only if LICENSEE does not file
          such Request within one (1) month after LICENSOR's written request to
          do so, subject to Section 12.6 below; or

     (g)  by LICENSOR, if any Regulatory Authority has finally denied the
          Registration (or any material part thereof) for the Product in any
          country of the Territory, with respect to such country or countries
          only; or

     (h)  by LICENSOR, if LICENSEE ceases to market and sell Product in any
          country of the Territory, and the marketing and sale is not resumed by
          LICENSEE within two (2) month as of LICENSOR's respective notice, with
          respect to such country or countries only.

10.3 The termination of this Agreement shall be without prejudice to any rights
     and obligations of either Party accrued prior to the effective date of such
     termination. LICENSEE shall forthwith make all payments due and outstanding
     to LICENSOR at the date of termination. Except as explicitly otherwise
     stated in this Agreement, LICENSOR shall not be obliged to refund upon
     termination of this Agreement to LICENSEE any payments, including without
     limitation the Milestone Payments or the extension fee under Section 6.
     above, made by LICENSEE to LICENSOR prior to such termination pursuant to
     the provisions of this Agreement.

10.4 In the event of termination of this Agreement for whatsoever reason, then
     the License shall immediately be terminated and LICENSEE shall (i)
     immediately refrain from using directly or indirectly in any way the
     Patents, Know-How and Confidential Information, and (ii) return to LICENSOR
     all materials, documentation, information, data and other things furnished
     by LICENSOR in connection with this Agreement, including without limitation
     any and all Confidential Information and LICENSOR IPR, together with all
     copies thereof in LICENSEE's possession or under its control, which were
     achieved, produced or received hereunder, all free of any charge, and (iii)
     deliver to LICENSOR any and all studies, data, results and protocols
     achieved, produced or gained by LICENSEE in performing the development
     steps set forth in the Development Plan, all free of any charge, and (iv)
     transfer any and all Registrations for Product to LICENSOR or any third
     party designated by LICENSOR in writing, if any, and to execute any
     document and perform any other act necessary or required for that purpose,
     all free of any cost to LICENSOR, subject to Sections 10.5 and 10.7 below.
     LICENSOR shall have the

                                       11

<PAGE>

     right, but no obligation, to use, at its sole discretion, any and all such
     material, including without limitation Registrations, if any, for its own
     purposes and benefit.

10.5 In the event only that this Agreement is terminated by LICENSEE pursuant to
     Section 10.2(a) above, then LICENSOR shall be obliged to reimburse to
     LICENSEE all cost and expenses directly incurred by LICENSEE to generate,
     acquire or receive the studies, data, results, protocols and Registrations
     (if any) to be delivered by LICENSEE to LICENSOR pursuant to Sections
     10.4(iii) and l0.4(iv) above.

10.6 In the event that any termination hereunder is limited to one or more
     countries of the Territory as provided for in Sections 10.2(e), (f), (g)
     and (h) above, than the effects of termination shall only apply to such
     country or countries of the Territory, but shall not affect in any way the
     validity of this Agreement with respect to any other country of the
     Territory.

10.7 In the event that the Agreement with respect to any country or countries of
     the Territory, for which Registration of Product has been obtained, is
     terminated pursuant to Section 10.2(i) above, then LICENSEE shall be
     obliged to transfer such Registration(s) in such country(ies) of the
     Territory to LICENSOR or any third party(ies) designated by LICENSOR,
     against a mutually acceptable consideration payable by LICENSOR (or such
     third party) to LICENSEE, which consideration shall be negotiated in good
     faith between the Parties.

10.8 Notwithstanding anything contained in Sections 10.4 and 10.5 above, the
     termination of this Agreement by either Party shall not limit remedies
     which may be otherwise available in law or equity to either Party.

11.  Representations and Warranties
     ------------------------------

11.1 LICENSOR represents and warrants that it has all rights regarding Patents,
     Know-How and the Combi-Gel NETA necessary to grant the License hereunder.
     Notwithstanding the preceding sentence, LICENSOR does not assume any
     responsibility and makes no representation or warranty that the performance
     of this Agreement, the Combi-Gel NETA and/or the Product, do not infringe
     any third party's patents, patent applications or other intellectual
     property rights. Furthermore, LICENSOR makes no representation or warranty,
     express or implied, with respect to the Combi-Gel NETA and/or the Product
     and/or the Know-how, including without limitation, any warranty of
     completeness, accuracy, merchantability or fitness for a particular purpose
     thereof, in particular with respect to the intended purpose of successful
     Registration in any country of the Territory.

     Nothing in this Agreement shall be construed as a representation made, or
     warranty given, by LICENSOR that any patent will issue based upon any
     pending patent application encompassed by the term Patents, and that any
     patent encompassed by the term Patents issued or which issues will be valid
     or enforceable.

                                       12

<PAGE>

     LICENSOR assumes no liability or responsibility hereunder for any damages
     caused to LICENSEE, third parties, animals and/or the environment by the
     manufacturing, marketing or use of the Combi-Gel NETA and/or the Product or
     the active ingredients contained therein, except to the extent that any
     such damage is attributable to the gross negligence or willful misconduct
     of LICENSOR in performing its obligations hereunder.

11.2 LICENSEE represents and warrants to use all commercially reasonable efforts
     to perform and pursue all steps and actions required for, and apply for and
     pursue the Registration for Product in each country of the Territory within
     the time-limits set forth in the Development Plan, and, upon such
     Registration(s) being granted, to market and sell Product throughout all
     Major Market Countries, and to use all commercially reasonable efforts to
     that effect in all other countries of the Territory, during the term of and
     in accordance with this Agreement.

     Furthermore, LICENSEE represents and warrants that it shall at all times
     comply with and respect any and all applicable laws, rules, regulations and
     orders, including all terms and conditions of the Registration(s) (if any),
     when manufacturing, distributing, marketing and selling the Product in any
     country of the Territory.

11.3 Subject to the specific representations and warranties given in this
     Section 11., and further subject to anything to the contrary contained in
     this Agreement, either Party shall, as to third parties, be indemnified and
     held harmless by the other Party from and against any and all losses,
     liabilities and damages (including attorney's fees) arising from any claim,
     action or other proceedings by any third party relating to any acts or
     omission of the other Party, its directors, officers, employees or agents,
     or any breach of the representations and warranties given by either Party
     in this Section 11., or the negligence or willful misconduct of such other
     Party, its directors, officers, employees or agents in performing any of
     its obligations under this Agreement.

12.  Miscellaneous Provision
     -----------------------

12.1 Entire Agreement: The terms, covenants, conditions and provisions contained
     in this Agreement, including its Appendices referred to herein and together
     with the Supply Agreement, constitute the total and complete agreement of
     the Parties regarding the subject matter hereof and supersede all prior
     understandings and agreements hereto made, and there are no other
     representations, understandings or agreements relating to the subject
     matter hereof. The provisions of this Agreement may not be waived, altered,
     amended or repealed in whole or in part except by the written consent of
     both Parties to this Agreement.

12.2 Assignment: This Agreement may not be assigned or otherwise transferred,
     nor except as expressly provided hereunder, may any right or obligation
     hereunder be assigned or transferred by either Party without the prior
     written consent of the other Party to any third party other than an
     Affiliate of such Party. Any permitted assignee shall assume all

                                       13

<PAGE>

     obligations of its assignor under this Agreement or under the respective
     rights or obligations actually assigned.

12.3 Notices: Any consent, notice or report required or permitted to be given or
     made under this Agreement by one Party to the other shall be in English and
     in writing, delivered personally or by international courier service or by
     facsimile (promptly confirmed by personal delivery or international courier
     service) addressed to the other Party at its address indicated below, or to
     such other address as shall have been notified in writing to the sending
     Party by the receiving Party from time to time, and shall take effect upon
     receipt by the addressee.

     If to LICENSOR:                   Permatec Technologie AG
                                       c/o Permatec Pharma AG
                                       Hardstrasse 18
                                       CH-4132 Muttenz, Switzerland

     with copy to:                     Rinderknecht Klein & Stadelhofer
                                       Beethovenstrasse 7
                                       CI-I-8022 Zurich, Switzerland

     If to LICENSEE:                   Solvay Pharmaceuticals B.V.
                                       C. J. Van Houtenlaan 36
                                       NL-1381CP Weesp, The Netherlands

12.4 Independent Contractors: It is expressly agreed that the Parties shall be
     independent contractors and that the relationship between the Parties shall
     not constitute a partnership, joint venture or agency. Neither Party shall
     have the authority to make any statements, representations or commitments
     of any kind, or to take any action, which shall be binding on the other
     Party, without the prior written consent of the other Party to do so.

12.5 Severability: Each Party hereby acknowledges that it does not intend to
     violate any public policy, statutory or common laws, rules, regulations,
     treaty or decision of any government agency or executive body thereof of
     any country or community or association of countries. Should one or more
     provisions of this Agreement be or become invalid, the Parties hereto shall
     substitute, by mutual consent, valid provisions for such invalid provisions
     which valid provisions in their economic effect are sufficiently similar to
     the invalid provisions that it can be reasonably assumed that the parties
     would have entered into this Agreement with such valid provisions.

12.6 Force Majeure: Neither Party hereto shall be held liable or responsible to
     the other Party nor be deemed to have defaulted under or breached this
     Agreement for failure or delay in fulfilling or performing any term of this
     Agreement when such failure or delay is caused by or results from causes
     beyond the reasonable control of the affected Party, including but not
     limited to fire, floods, embargos, war, acts of war (whether war be
     declared or not), insurrections, riots, civil commotions, strikes, lockouts
     or other labour disturbances,

                                       14

<PAGE>

     acts of God, omissions or delays in acting by any governmental authority or
     the other Party hereto.

12.7 Headings: The titles and headings used in this Agreement are intended for
     convenience only and shall not in any way affect the meaning or
     construction of any provision of this Agreement.

12.8 Waiver: The waiver by either Party hereto of any right hereunder or the
     failure to perform or of a breach by the other Party shall not be deemed a
     waiver of any other right hereunder or of any other breach or failure by
     said other Party whether of a similar nature or otherwise.

12.9 Counterparts: This Agreement may be executed in two or more counterparts,
     each of which shall be deemed an original, but all of which together shall
     constitute one and the same instrument.

13.  Dispute Resolution and Arbitration
     ----------------------------------

13.1 In the event of any dispute arising between the Parties concerning this
     Agreement, LICENSOR and LICENSEE agree that in the first place they shall
     meet for good faith discussions in an attempt to negotiate an amicable
     solution.

13.2 The Parties agree that any dispute, controversy or claim arising out of or
     relating to this Agreement, or the interpretation, breach or enforcement
     thereof, which cannot be amicably resolved pursuant to Section 13.1 above
     within two (2) months as from the first appearance of such dispute, shall
     be settled by arbitration under the Rules of Arbitration of the
     International Chamber of Commerce (the "Rules") by a panel of three (3)
     arbitrators selected in accordance with the Rules. Any arbitration
     proceeding commenced by either Party shall be held in the Paris, France,
     and the language governing any such proceedings shall be English. The
     decision of the arbitrators shall be final and binding upon the Parties,
     and judgment upon the decision by the arbitrators may be entered in any
     court of competent jurisdiction, and execution may be had thereon. The
     expense of such arbitration, including attorneys' fees, shall be allocated
     between the Parties as the arbitrators may decide and as the claims and
     interests of each party may prevail.

13.3 Notwithstanding anything contained in Section 13.2 above, either Party may
     seek preliminary or injunctive measures or relief in any competent court
     having jurisdiction.

14.  Applicable Law
     --------------

     The Parties hereby agree that this Agreement, all transactions executed
     hereunder and all relationship between the Parties in connection therewith,
     shall be construed under and be governed by the laws of Switzerland without
     reference to the conflict of law principals thereof, and shall not be
     governed by the United Nations Convention on Contracts for the
     International Sale of Goods (the Vienna Convention of April 11, 1980).

                                       15

<PAGE>

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

     The LICENSOR:                          Permatec Technologie AG

                                            /s/  J. Gonella
     ------------------------------         ------------------------------------
     (Place and Date)                       by:  Dr. J. Gonella
                                            its: President

     The LICENSEE:                          SOLVAY Pharmaceuticals B. V.

     Weesp,  9/6/99                         /s/  E. Koopmans
     ------------------------------         ------------------------------------
     (Place and Date)                       by:  E. Koopmans
                                            its: President

                                       16

<PAGE>

                                   Appendix A

                          Description of Combi-Gel NETA
                             pursuant to Section 1.2

Combi Gel(TM) NETA is a transparent, non-staining gel to be applied once-a-day
in postmenopausal women.

Based on Permatec's Combi Gel(TM)Technology, it delivers transdermal levels of
two hormones: 17-beta Estradiol and Norethindrone Acetate.

Combi Gel(TM) NETA is protected by different patents on the Combi Gel(TM)
Technology.

                                       17

<PAGE>

                                   Appendix B

                                Development Plan
                             pursuant to Section 1.3

Tentative Development Plan:  (activities to be done by Solvay Pharmaceuticals
--------------------------   unless mentioned differently)

Assumptions
-----------

1.       Start of the program by April 1, 1999
2.       ********
3.       ********

Preclinical
-----------

-        ********
-        ********
-        ********
-        ********

Pharmaceutical Development
--------------------------

Manufacturing:                                             responsibility:
                                                           ---------------
-        ********                                                       P
-        ********                                                       S
-        ********                                                       S
-        ********                                                       S

Analytical methods:
-        ********                                                       S
-        ********                                                       S
-        ********  ******** ********* ********* *******
-        ********                                                       P
-        ********                                                     S/P
-        ********                                                     S/P

Stability:
-        ********                                                       P
-        ********                                                       S

********:                                                               P

********:                                                               S

                                       18

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

********:                                                               S

********:                                                               P

********:                                                               S

S = Solvay
P = Permatec

Phase 1*

********:

-        ********
-        ********
-        ********
-        ********

Phase II / III*

********:

-        ********
-        ********
-        ********

* Planning of the milestones, assuming a start of the program on April 1, 1999
  ----------------------------------------------------------------------------

1.       End of phase I                     :                    2Q2000
2.       End of phase II/III                :                    ******
3.       ********                           :                    ******
4.       ********                           :                    ******

                                       19

***** - Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

<PAGE>

                                   Appendix C

                                 List of Patents
                             pursuant to Section 1.6

Combi GEL(TM) Technology is covered by a patent having the following title:

"A novel composition for transdermal administration of an estrogen, a progestin
or a mixture thereof".

This patent has been applied in the following countries:

Italy:                      -  Granted on 07/04/98
-----                       -  Patent Number: 1.283.102

South Africa:               -  Granted on 25/03/98
------------                -  Patent Number: 97/4981

New Zealand:                -  Granted on 19/03/98
-----------                 -  Patent Number: 328021

Europe:                     -  Date of Application: 04/06/97
------                      -  Application Number: 97108989.1
                            -  Date of Publication: 10/12/97
                            -  Publication Number: EP 0811 381

USA:                        -  Date of Application: 05/06/97
---                         -  Application Number: 08/869,982
                            -  Notice of Allowability received in November 1998

Canada:                     -  Date of Application: 05/06/97
------                      -  Application Number: 2,207,144

Australia:                  -  Date of Application: 05/06/97
---------                   -  Application Number: 24729/97

Japan:                      -  Date of Application: 05/06/97
-----                       -  Application Number: 9-185695
                            -  Date of Publication: 17/03/98
                            -  Publication Number: 10-7235 1

South Korea:                -  Date of Application: 04/06/97
-----------                 -  Application Number: 97-23 704

                                       20

<PAGE>

Taiwan:                     -  Date of Application: 06/06/97
------                      -  Application Number: 86107807

Argentina:                  -  Date of Application: 06/06/97
---------                   -  Application Number: P970102497

                                       21

<PAGE>

                                   Appendix D

                         Countries included in Territory
                            pursuant to Section 1.10

The term Territory as defined in Section 1.10 shall include all the countries
and territories in the world with the exception of:

1.   USA

2.   Canada (subject to the Option under Section 6. of the Agreement)

3.   Japan

4.   Korea

                                       22

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