Document:

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CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION. THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

                ASSET PURCHASE AND TRADEMARK ASSIGNMENT AGREEMENT

         ASSET PURCHASE AND TRADEMARK ASSIGNMENT AGREEMENT entered
between KOFFOLK, Inc., a Delaware corporation ("Purchaser"), having an address
at One Parker Plaza, Fort Lee, New Jersey 07024, U.S. and MERCK & CO., INC., a
New Jersey corporation ("Seller"), having an address at One Merck Drive,
Whitehouse Station, New Jersey 08889 and having an Effective Date of August 5,
1996.

                            ARTICLE 1 -- DEFINITIONS

         The following terms as used in this Agreement shall have the meanings
set forth below:

          SECTION 1.1 "Acquired Assets" means the United States ("U.S.")
trademark NICARB(R), as set forth in Schedule A, and United States Food and Drug
Administration New Animal Drug Application for the Products, as set forth in
Schedule B, but specifically excluding all Excluded Assets.

          SECTION 1.2 "Affiliate" means with respect to a party to this
Agreement (i) any corporation or business entity fifty (50%) percent or more of
the voting stock of which is owned directly or indirectly by a party; or (ii)
any corporation or business entity which directly or indirectly owns fifty (50%)
percent or more of the voting stock of a party; or (iii) any corporation or
business entity under the direct or indirect control of a corporation or
business entity as described in clause (i) or (ii).

          SECTION 1.3 "Agreement" or "this Agreement" means this Asset Purchase
and Trademark Assignment Agreement, including all Schedules hereto.

          SECTION 1.4 "Assumed Liabilities" means the liabilities to be assumed
by Purchaser pursuant hereto, namely all claims and complaints (including,
without limitation, all damages, losses, expenses and liabilities), relating to
any or all of the Acquired Assets, following the Effective Date including,
without limitation, (i) all liabilities arising out of the sale, purchase,
consumption or use of the Products following the Effective Date and (ii) all
liabilities arising out of any generation, treatment, storage, transportation,
disposal or release, of any hazardous material, substance, waste, or any toxic
or other material regulated by any federal, state, or local environmental
statute, rule or regulation following the Effective Date.

          SECTION 1.5 "Excluded Assets" means all assets of Seller other than
the Acquired Assets, including without limitation, the animal drug Applications
for nicarbazin and trademark NICARB(R) as registered by Seller outside of the
U.S., and any other trademark, tradename, New Drug and/or New Animal Drug
Application, product registration, intellectual

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property, information, know-how and other assets of Seller.

          SECTION 1.6 "Excluded Liabilities" means the liabilities retained by
Seller pursuant hereto, namely all claims and complaints (including, without
limitation, all damages, losses, expenses and liabilities), relating to any or
all of the Acquired Assets, prior to the Effective Date including, without
limitation, (i) all liabilities arising out of the sale, purchase, consumption
or use of the Products prior to the Effective Date and (ii) all liabilities
arising out of any generation, treatment, storage, transportation, disposal or
release, of any hazardous material, substance, waste or any toxic or other
material regulated by any federal, state or local environmental statute, rule or
regulation prior to the Effective Date.

          SECTION 1.7 "Execution Date" means the date as provided in Section
          3.1.

          SECTION 1.8 "Liens and Encumbrances" means, with respect to the
Acquired Assets, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, including, without limitation, the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

          SECTION 1.9 "New Animal Drug Applications" and "NADAs" mean the
applications for the Product prepared in conformance with applicable U.S. Food
and Drug Administration ("FDA") regulations for filing with the FDA for
marketing authorization of the Products within the United States, as described
in Schedule B.

          SECTION 1.10 "Person" means an individual, a corporation, a
partnership, an association, a trust, or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

          SECTION 1.11 "Product" or "Products" means the nicarbazin based
products for treatment of coccidiosis in poultry marketed by Seller in the U.S.
under the trademark NICARB(R).

          SECTION 1.12 "Trademark" or "Trademarks" means the trademark and
trademark registrations for the Products as set forth in Schedule A.

                         ARTICLE II -- PURCHASE AND SALE

          SECTION 2.1 Purchase and Sale. On the terms and conditions set forth
in this Agreement, Seller agrees to sell, convey, assign and transfer to
Purchaser, and Purchaser agrees to purchase, on the Effective Date, the Acquired
Assets, subject only to Seller's retained right to use any information within
the Acquired Assets to the extent it relates to the Excluded Assets or to any
products hereinafter developed by Seller. The Purchaser shall not acquire
pursuant hereto any assets or rights of any kind or nature, real or personal,
tangible or intangible, other than the Acquired Assets and such rights as may be
set forth herein, and Seller shall retain all other assets, including, with ut
limitation, the Excluded Assets.

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          SECTION 2.2 Assumption of Liabilities. On the terms and subject to the
conditions of this Agreement, the Purchaser agrees to assume the Assumed
Liabilities. The parties understand and agree that Purchaser does not and should
not assume or become liable for any liabilities, obligations, commitments or
debts, contingent or otherwise, of Seller, including without limitation, any
claims arising from the sale, purchase, consumption, or use of Products sold by
Seller prior to the Execution Date. However, nothing in this Section 2.2 shall
restrict, reduce or in any way affect the obligations of Purchaser pursuant to
Section 8.3 of this Agreement.

          SECTION 2.3 Purchase Price.

                      (a) Purchaser shall pay to Seller, in consideration for
the Acquired Assets [

                                    ]:

[                                         ]

[                                         ]

                      (b) [

                     ] by federal wire funds according to the wire transfer fund
instructions above.

          SECTION 2.4 Personal Guaranty. On the Execution Date, Purchaser will
deliver to Seller a Letter and Personal Guaranty, in the form attached hereto as
Schedule C from its owner, guaranteeing all of Purchaser's payments required
under this Agreement.

          SECTION 2.5 Interest on Late Payments/Acceleration of Payments. In the
event that any payment by Purchaser under this Agreement is made thirty (30) or
more days later than when due, Purchaser shall pay interest to Seller, on all
such payments, in the amount of the prime rate reported in the Wall Street
Journal on the payment due date, plus one percentage point, such interest to be
accrued on a daily basis. Purchaser shall indemnify Seller for all costs and
expenses (including but not limited to attorney's fees) incurred in attempt(s)
to collect any payments due under this Agreement. In the event Purchaser fails
to make any payment required under this Agreement within sixty (60) days of the
date when due, Seller shall provide notice to Purchaser of its default in
payment, and shall permit Purchaser an additional sixty (60) days from the date
of such notice within which to make all payments then due to Seller, together
with any interest owed. If Purchaser fails within that period to make the
requisite payment(s), Seller shall be entitled to [

                                    ].

                                        3

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          SECTION 2.6 Breach; Notice. Except as provided in Section 2.5, in the
event that either party breaches its obligations under this Agreement, the
non-breaching party shall provide notice of the breach to the breaching party
and shall permit the breaching party sixty (60) days in which to cure the
breach.

                            ARTICLE III -- EXECUTION

          SECTION 3.1 The Execution.

                      (a) The Execution cf this Agreement shall take place on
July 17, 1996 ("Execution Date"). Purchaser and Seller shall on that date sign
two (2) originals, one (1) fully executed original to be provided to each party.

                      (b) On the Execution Date, Seller shall provide to
Purchaser an appropriately executed and authenticated Trademark Assignment to
the Purchaser, in the form of Schedule D hereto. Purchaser shall hold the
Trademark Assignment in escrow for filing with the U.S. Patents and Trademarks
Office on or after August 5,1996.

                      (c) Purchaser shall pay to Seller the [
                     ]  by wire transfer in federal funds available to Seller
on August 2, 1996, payable to such entities as designated in Section 2.3(b).

                      (d) Seller shall pay or cause to be paid any and all
transfer, stamp, sales or other similar taxes or duties payable in connection
with the sale or transfer of the Acquired Assets to Purchaser.

                      (e) Purchaser shall pay or cause to be paid any and all
costs and expenses relating to the transfer and assignment to Purchaser of the
Trademarks, including, without limitation, all costs and taxes with respect to
recordation of transfer. Recordation of transfer and assignment of the
Trademarks shall be the responsibility of Purchaser.

                      (f) At any time or from time to time after the closing,
Seller shall, at the request of Purchaser and Purchaser's expense, execute and
deliver any further instruments or documents and take such further action as
Buyer may reasonably request in order to accomplish consummation of the
transactions contemplated hereby.

              ARTICLE IV -- SELLER'S REPRESENTATIONS AND WARRANTIES

          Seller represents and warrants that:

          SECTION 4.1 Corporate Existence and Authorization; Contravention.

                      (a) Seller is a corpolation duly organized, validly
existing and in good standing under the laws of the State of New Jersey.

                      (b) The execution, delivery and performance by Seller of
this

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Agreement is within Seller's corporate power, have been duly authorized by all
necessary corporate action and do not contravene or constitute a default under
any provision of the certificate of incorporation or by-laws of Seller or any
provision of applicable law or regulation or of any judgment, injunction, order
or decree binding upon Seller or to which any Acquired Asset is subject, or any
indenture, bank loan, credit, or other agreement binding upon Seller or to which
the Acquired Assets are subject. This Agreement is a legal, valid and binding
agreement of Seller enforceable in accordance w th its terms.

                      (c) Except for the requirement that both Purchaser and
Seller provide written notice, in the form attached hereto as Schedule E, of the
transfer of title to the NADA from Seller to Purchaser, the execution, delivery
and performance by Seller of this Agreement, and the consummation by Seller of
the transactions contemplated hereby, require no action by or in respect of, or
filing with, any gvernmental body, agency or official or any other consent of
any person, firm or other entity.

          SECTION 4.2 Title to Acquired Assets.

                      (a) Seller has good title to all of the Acquired Assets,
free and clear of all Liens and Encumbrances.

                      (b) (i) To the best of Seller's knowledge, no product,
formula, formulation, Trademark, process, method, substance, or other material
(an "Item") which is part of the Acquired Assets infringes any rights owned or
held by any other person other than Seller, and (ii) to the best of Seller's
knowledge no Item currently being manufactured, distributed, sold or used by any
person infringes any rights of Seller to the Acquired Assets.

          SECTION 4.3 Litigation.

                      (a) There are no private or governmental proceedings,
claims, actions, or investigations in the United States of America against
Seller relating to the Products pending or, to the knowledge of Seller,
threatened, which are likely (either individually or in the aggregate) to result
in an adverse decision imposing a judgment, fine or penalty.

                      (b) There are no judgments, decrees or orders of any
court or other governmental body in the United States of America binding upon
Seller relating to the Products.

          SECTION 4.4 Compliance with Laws. (i) Seller is in compliance in all
material respects with all applicable U.S. federal, state or local laws,
regulations or orders or other requirements of any governmental, regulatory or
administrative agency or authority or court or other tribunal in the United
States of America relating to the Products (including, without limitation, the
U.S. Food, Drug & Cosmetic Act, as amended, the regulations thereunder, and the
transfer of the Acquired Assets pursuant to this Agreement is in compliance
therewith), and (ii) Seller is not now charged with, and to the best of the
knowledge of Seller is not now under investigation with respect to, any
violation of any applicable law, regulation, order or requirements in the United
States of America which relate to the Products. Seller has filed all reports
relating to the Products required to be filed with any governmental, regulatory
or

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administrative agency or authority in the United States of America if failure to
file such report would result in a fine or a penalty.

          SECTION 4.5 Sufficiency of Transfer. The Acquired Assets and the
rights transferred under this Agreement include all assets used or held by
Seller for use primarily in connection with the Products as of the date hereof,
except for the Excluded Assets. Upon consummation of the transactions
contemplated hereby, Purchaser will have acquired good title in and to the
Acquired Asset in each case free and clear of all Liens and Encumbrances.

          SECTION 4.6 Transfer Document. The assignments and transfer documents
to be delivered to Purchaser pursuant to Section 3.1 will be in appropriate form
and sufficient to convey, transfer and assign to Purchaser good title to the
Acquired Assets.

          SECTION 4.7 NADA Review. Seller has provided Purchaser with the
opportunity to review the true, accurate and complete NADAs for the Products,
which include information concerning any side effects, injury, toxicity or
sensitivity reaction, or any unexpected incidents, whether or not serious or
unexpected, relating to the Products ("Adverse Experiences"), which Seller has
reported to the FDA during the three (3) years immediately preceding the
Execution Date. Any additional information regarding Adverse Experiences
received by Seller before the Effective Date but not yet reported to the FDA,
will be provided to Purchaser within fourteen (14) days after Effective Date.
For purposes of this Section 4.7, "serious" is deemed to have the meaning set
forth in Section 6.4 of this Agreement. Additionally, Seller has allowed
Purchaser to meet with officials of the Food and Drug Administration, Centers
for Veterinary Medicine to review the approval status of the NADAs for the
Products.

          SECTION 4.8 Disclosure. No representation or warranty by Seller in
this Agreement contains any untrue statement of material facts.

             ARTICLE V -- PURCHASER'S REPRESENTATIONS AND WARRANTIES

          Purchaser represents and warrants that:

          SECTION 5.1 Corporate Existence and Authorization; Contravention.
Purchaser is a corporation duly organized and validly existing under the laws of
the State of Delaware. The execution, delivery and performaiice by Purchaser of
this Agreement are within Purchaser's power, have been duly authorized by all
necessary action and do not contravene or constitute a default under the
constitutive documents of Purchaser or of applicable law or regulation or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
Purchaser. This Agreement is a legal, valid and binding agreement of Purchaser
enforceable in accordance with its terms. To the best of Purchaser's knowledge,
except for the requirement that both Purchaser arid Seller provide written
notice, in the form attached hereto as Schedule E, of the transfer of title to
the NADA from Seller to Purchaser, the execution, delivery and performance by
Purchaser of this Agreement require no action by or in respect of, or filing
with, any governmental body, agency or official, or any other consent.

          SECTION 5.2 Solvency. Purchaser is financially sound and fully solvent
and has no reason to anticipate any inability to perform, or material difficulty
performing, any of its

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obligations set forth in this Agreement.

          SECTION 5.3 Disclosure. No representation or warranty by Purchaser in
this Agreement contains any untrue statement of material fact.

                        ARTICLE VI -- SELLER'S COVENANTS

          Seller agrees that:

          SECTION 6.1 Filings. Seller will use its reasonable efforts in good
faith to file or cause to be filed with the FDA, by the Effective Date, the
notice (substantially in the form of Schedule E attached hereto), required to be
filed by it in connection with its sale of the NADA and to make promptly any
further filings pursuant thereto as may be necessary to consummate the
transactions contemplated hereby.

          SECTION 6.2 No Encumbrances. Any Liens and Encumbrances with respect
to any of the Acquired Assets represented, created or secured by a mortgage,
deed of trust, security agreement or similar instrument shall be satisfied of
record on or prior to the Execution Date by Seller.

          SECTION 6.3 Confidentiality. For a period often (10) years following
the Execution Date, Seller will, and will cause each of its Affiliates and
employees to, preserve the confidentiality of all confidential, proprietary and
trade secret information used or held for use primarily in connection with the
Acquired Assets, provided that (i) Seller may use and disclose any such
information which has been publicly disclosed (other than by Seller or any
Affiliate thereof in breach of its obligations under this Section) or as
otherwise permitted under this Agreement; or to the extent such information
related to Excluded Assets, provided that, if such information relates to both
Acquired Assets and Excluded Assets, Seller will maintain its confidentiality
only to the extent that maintenance of its confidentiality does not unreasonably
interfere with Seller's ability to use, market or sell any or all of the
Excluded Assets; and (ii) to the extent that Seller or any Affiliate thereof may
become legally compelled to disclose any of such information. Seller or such
Affiliate may (to the extent so compelled) disclose such information if they
shall have first used reasonable efforts in good faith, and shall have afforded
Purchaser the opportunity, to obtain an appropriate protective order, or other
satisfactory assurance of confidential treatment, for the information required
to be so disclosed.

          SECTION 6.4 Adverse Reaction Reporting. Seller shall notify Purchaser
of any information concerning any side effect, injury, toxicity, sensitivity
reaction, or any incidents, whether or not serious or unexpected, relating to
the Products, of which Seller receives notice on or after the Execution Date,
including providing copies of all such adverse experience reports within two (2)
weeks of Seller's receipt of such reports. For purposes of this Section 6.4 and
for purposes of Section 7.7, "serious" means an experience which is (1) one
resulting in severe disability or death of one or more animals, (2) one that is
life threatening to man, or (3) one involving a large number of animals; and
"unexpected" means a condition or development not listed in the then-current
FDA-approved labeling for the Product, and includes those experiences that show
a significant increase in incidence or severity over what appears on the
labeling of the Product or in NADA trials or that are a failure of the Product
to achieve claimed activity.

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                      ARTICLE VII -- PURCHASER'S COVENANTS

          Purchaser agrees that:

          SECTION 7.1 Confidentiality. For a period of ten (10) years following
the Execution Date, Purchaser will, and will cause each of its Affiliates and
employees to, preserve the confidentiality of all confidential, proprietary and
trade secret information and material included within the Acquired Assets, or
disclosed hereunder, which relates to any Excluded Assets, provided that (i)
Purchaser may use and disclose any such information which has been publicly
disclosed (other than by Purchaser or an" Affiliate thereof in breach of its
obligations under this Section) or as otherwise permitted under this Agreement;
or to the extent such information relates to the Acquired Assets, provided that,
if such information relates to both Acquired Assets and Excluded Assets,
Purchaser will maintain its confidentiality only to the extent that maintenance
of its confidentiality does not unreasonably interfere with Purchaser's ability
to use, market, or sell units of the Products in the ordinary course of
business; and (ii) to the extent that Purchaser or any Affiliate thereof may
become legally compelled to disclose any of such information, Purchaser or such
Affiliate may (to the extent so compelled) disclose such information if they
shall have first used reasonable efforts in good faith, and shall have afforded
Seller the opportunity to obtain an appropriate protective order, or other
satisfactory assurance of confidential treatment, for the information required
to be so disclosed.

          SECTION 7.2 FDA Filings. Purchaser will use its reasonable efforts in
good faith to file or cause to be filed with the FDA, by August 5,1996, the
notice, documents and/or other materials required to be filed by it in
connection with its purchase of the Acquired Assets and to make promptly any
further filings and take any actions required of it as may be necessary to
consummate the transactions contemplated hereby.

          SECTION 7.3 Post-Closing; Use of Names. Beginning on the Effective
Date Purchaser will mark clearly all units of the Products manufactured to
indicate Purchaser's ownership of the Products and will not use the words, names
or combined letters "Merck", "Merck & Co., Inc.", "Merck AgVet", "MSD AGVTR",
"MMD", "Merck Sharp & Dohme", or any variation thereof or other word, name or
letter combination substantially similar thereto, or any other trade name or
trademark of Seller in connection with the Products, or as part of the name of
the Purchaser or any Affiliate, after the Execution Date, except to the extent
necessary to comply with its obligations pursuant to the Toll Manufacturing
Agreement relating to the Products entered into between Purchaser and Seller
effective August 5,1996.

          SECTION 7.4 Cooperation in Litigation. From and after the Effective
Date, Purchaser agrees that in the defense of any litigation, hearing,
regulatory proceeding or investigation or other similar matter relating to tho
Acquired Assets, Purchaser will make available to Seller during normal business
hours, but without unreasonably disrupting its business, all personnel and
records as to the Acquired Assets held by Purchaser and reasonably necessary to
permit the effective defense or investigation of such matters.

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          SECTION 7.5 Adverse Reaction Reporting. Effective on the Effective
Date, Purchaser shall be responsible for reporting adverse experiences with
respect to the Products in conformance with all applicable laws, rules and
regulations and shall send to Seller, throughout the term of this Agreement,
copies of all such adverse experience reports, with all serious and unexpected
adverse experiences (and government forms) sent within two (2) weeks of
Purchaser's receipt, and all non-serious adverse experiences (and government
forms) sent to Seller on a quarterly basis addressed to Seller.

          SECTION 7.6 Resale; Abandonment. Purchaser agrees not to resell or
abandon the NADA for the Products, or effect any substantial change in ownership
or control of Purchaser, on or before payments required under Section 2.3 are
made. If Purchaser resells or abandons such NADA, or effects such a substantial
change of ownership or control after payment in full of the payments required
under Section 2.3, Purchaser agrees to provide advance written notice of same to
Seller. Notwithstanding the foregoing, Purchaser shall be entitled to transfer
the Acquired Assets or any interest in Purchaser to an Affiliate of Purchaser
without violating the provisions of this section, provided that no such transfer
shall operate to release Purchaser from any of its obligations hereunder. In the
event of Purchaser's breach of this Section 7.8, in addition to all other
remedies available to Seller in law or equity, Seller is entitled to accelerate
and receive immediate payment by Purchaser of all payments required under this
Agreement during the term of this Agreement, whether or not such payments are
yet due.

          SECTION 7.7 Territorial Limitation; Other Products. Purchaser agrees
to sell units of the Products only within the United States. Except for
submissions to be made by Purchaser in connection with CODEX/JECFA, Purchaser
further agrees that it will use the information and data contained within the
NADA(s) for the Product solely for maintaining the registration(s) for Product
in the United States arid will make no use whatsoever of the information and
data contained in the NADA(s) outside of the United States.

          SECTION 7.8 Authorization for Manufacture of the Products. Purchaser
agrees that Seller shall continue to toll manufacture the Products after the
Effective Date pursuant to the terms of the Toll Manufacturing Agreement entered
between the parties effective August 5, 1996.

          SECTION 7.9 Change in Corporate Status/Ownership or Control of
Purchaser. Except as provided for in Section 7.6, in the event of any
substantial change in the status, ownership or control of Purchaser, Seller is
entitled to accelerate and receive immediate payment by Purchaser of all
payments required under this Agreement during the term of this Agreement,
regardless of whether or not such payments are yet due.

                    ARTICLE VIII -- SURVIVAL; INDEMNIFICATION

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          SECTION 8.1 Survival: Remedy for Breach. All representations,
warranties and indemnities of the parties contained herein shall survive the
Execution Date forever. The covenants and agreements of Seller and Purchaser
hereunder that require by their terms performance or compliance on and after the
Execution Date shall continue in force thereafter in accordance with their
terms.

          SECTION 8.2 Indemnification by Seller. Seller shall indemnify
Purchaser against and defend Purchaser against any and all damage, loss,
liability and expense (including, without limitation, reasonable expense s of
investigation and attorneys' fees and expenses in connection with any action,
suit or proceeding brought against Purchaser and/or its Affiliate(s) and
penalties and the cost of remedial action under applicable laws and regulations)
incurred or suffered by Purchaser arising out of (i) any misrepresentation or
breach of covenant, agreement, representation or warranty of Seller contained in
this Agreement or (ii) any Excluded Liability, provided, however, that Purchaser
shall not be entitled to any indemnification under this Section 8.2, except for
claims under sections 4.2 and 4.5, unless and until the amount of claims for
which Purchaser is entitled to be indemnified exceeds in the aggregate $100,000
(the "Deductible"), in which event Purchaser is entitled to receive with respect
to such claims the entire amount of the Deductible.

          SECTION 8.3 Indemnification by Purchaser.

                      (a) Purchaser shall indemnify Seller against and agrees
to hold Seller harmless from any and all damage, loss, liability and expense
(including without limitation, reasonable expenses of investigation and
attorneys' fees and expenses in connection with any action, suit or proceeding
brought against Seller and/or its Affiliate(s)) and suffered by Seller and/or
its Affiliate(s) arising out of (i) any misrepresentation or breach of covenant,
agreement, representation or warranty of Purchaser contained in this Agreement,
or (ii) any Assumed Liability.

                      (b) If Seller or any Affiliate thereof has retained any
liability which would otherwise be an Assumed Liability as a result of the
failure to obtain the consent of a third party to transfer such liability to
Purchaser, Purchaser shall indemnify Seller against and agrees to hold Seller
harmless from any such liability incurred with respect to any period beginning
on or after the Execution Date, provided that Seller notifies Purchaser of the
existence of such failure to obtain consent in a notice expressly referring to
this Section 8.3 (b).

          SECTION 8.4 Indemnification; Notice and Settlements. A party seeking
indemnification pursuant to Section 8.2 or 8.3 (an "indemnified party") shall
give prompt notice to the party from whom such indemnification is sought (the
"indemnifying party") of the assertion of any claim, or the commencement of any
action or proceeding, in respect of which indemnity may be sought hereunder. The
indemnifying party shall have the right to, and shall at the request of the
indemnified party, assume the defense, with counsel reasonably satisfactory to
the indemnified party, or any such suit, action or proceeding at its own
expense. An indemnifying party shall not be liable under Section 8.2 or 8.3 for
any settlement effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought hereunder, which consent
shall not be unreasonably withheld.

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                           ARTICLE IX -- MISCELLANEOUS

          SECTION 9.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given:

                            if to Seller to:

                            Merck & Co., Inc.
                            P.O. Box 2000
                            Rahway, New Jersey 0706 3
                            Attention:
                                       President
                                       Merck AgVet Division

                            if to Purchaser to:

                            Koffolk, Inc.
                            One Parker Plaza
                            Fort Lee, New Jersey 07024
                            Attention: President

or such other address as such party may hereafter specify by written notice to
the other party. Each such notice, request or other communication shall be
effective when received at the address specified in this Section 9.1

          SECTION 9.2 Expenses. All legal and other costs and expenses incurred
in connection herewith and the transactions contemplated hereby shall (except as
otherwise provided herein) be paid by the party incurring such expenses.

          SECTION 9.3 Bulk Sales Statutes. Purchaser hereby waives compliance by
Seller with any applicable bulk sales statutes in any jurisdiction in connection
with the transactions under this Agreement.

          SECTION 9.4 Limitation on Sellers Representations and Warranties.
PURCHASER ACKNOWLEDGES THAT EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT, SELLER HAS MADE NO REPRESENTATION OR
WARRANTY WHATSOEVER AND PURCHASER HAS NOT RELIED ON ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, EXCEPT THOSE EXPRESSLY SET FORTH IN THIS
AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, PURCHASER
ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, PURCHASER IS
ACQUIRING THE ACQUIRED ASSETS WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES AS TO
THE FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR CONDITION OF THE
ACQUIRED ASSETS OR AS TO ANY

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OTHER MATTER.

          SECTION 9.5 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and assigns; provided that this Agreement may not be assigned by
either party without the written consent of the other party hereto.

          SECTION 9.6 Entire Agreement; Amendment. This Agreement, including,
without limitation, the Schedules hereto, embodies the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes any and
all prior agreements with respect thereto. This Agreement may be amended, and
any provisions hereof waived, but only in writing signed by both parties.

          SECTION 9.7 Captions; Construction. Captions herein are inserted for
convenience of reference only and shall be ignored in the construction or
interpretation of this Agreement. Unless otherwise specified, the words
"herein", "hereof" and terms of like import shall be deemed to refer to the
Agreement as a whole and not merely to a single part thereof.

          SECTION 9.8 Public Announcement. No press release, public
announcement, confirmation or other information regarding this Agreement or
related matters shall be made by either party without the prior written consent
of the other party (other than as necessary to perform the provisions of this
Agreement or to its employees or as may be required by law or by any applicable
rules of any stock exchange; provided that disclosure to employees shall not
result in a requirement of public disclosure under such applicable law or
rules).

          SECTION 9.9 Returned Products. For purposes of this Section 9.9,
"Returned Products" means any Products sold by Seller before the Execution Date
and returned to Purchaser. Purchaser shall notify Seller of receipt of any
Returned Products and shall immediately remit all such Returned Products to
Seller at: Merck & Co., Inc., Branch Operations, 4545 Oleatha Ave. St. Louis,
Missouri 63115, at the sole expense of Seller. All credits and/or reimbursements
that may be due customers for Returned Products shall be the sole responsibility
of Seller.

          SECTION 9.10 Governing Law; Jurisdiction. This Agreement shall be
governed by, interpreted and construed, and all claims and disputes, whether in
tort, contract or otherwise be resolved in accordance with the substantive laws
of the State of New York, United States of America without reference to any
rules of conflict or laws or renvoi. In the event of any controversy or claim
arising out of or relating to this Agreement, performance hereunder, termination
hereof, or relationship created hereby, each party irrevocably submits to the
exclusive jurisdiction of the courts of the Supreme Court of the State of New
York and the U.S. District Court for the Southern District of New York for the
purposes of any suit, action or other proceeding arising out of this Agreement
or transactions contemplated hereby. Each party irrevocably and unconditionally
waives any objection to the laying of venue in the courts of New York as stated
above and that any such action was brought in an inconvenient forum.
Notwithstanding the foregoing, in the event of a threatened disclosure in
violation of this Agreement, MERCK shall have the right to seek injunctive
relief from any competent court in the jurisdiction where the disclosure is
threatened to prevent such disclosure pending resolution

                                       12

<PAGE>

of the merits of the dispute.

          SECTION 9.11 Cooperation. Each party agrees to execute such further
papers, agreements, documents, instruments and the like as may be reasonably
necessary or desirable to effect the purpose of this Agreement and to carry out
its provisions.

          SECTION 9.11 Waiver. No waiver by any party in one or more instances
of any of the provisions of this Agreement or the breach thereof shall establish
a precedent for any other instance with respect to that or any other provision.
Furthermore, in case of waiver of a particular provision, all other provisions
of this Agreement will continue in full force and effect.

          SECTION 9.13 Severance. If any provision of this Agreement is held to
be invalid or unenforceable, all other provisions shall nevertheless continue in
full force and effect.

          IN WITNESS WHEREOF, this Agreement has been signed by authorized
representatives on behalf of each of the parties hereto as of the day and year
first above written.

MERCK & CO., INC.                          KOFFOLK, INC.

By: /s/ John M. Preston                    By: /s/ Jack C. Bendheim
    -------------------                        --------------------
        Dr. John M. Preston                    Jack C. Bendheim
        President                              President
        Merck AgVet Division

                                       13

<PAGE>

                                   SCHEDULE A

                               TRADEMARKS
                               ----------
TRADEMARK                REG. NO./LOCATION         REG. DATE

NICARB(R)              631617/United States         July 31, 1956
                                                    July 31, 1976 (renewed)

<PAGE>

                                   SCHEDULE B

                        U.S. NEW ANIMAL DRUG APPLICATION

                                                        NADA #
                                                        ------

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

[                                                ]

<PAGE>

                                   SCHEDULE C

Personal Guaranty

Merck & Co., Inc.
One Merck Drive
P.O. Box 100
Whitehouse Station, NJ 08889-0100

Gentlemen:

I understand that Koffolk, Inc., a wholly-owned subsidiary of Phillips Brothers,
is indebted to you by virtue of an Asset Purchase and Trademark Transfer
Agreement ("Agreement") entered into between Merck & Co., Inc. and Koffolk and
effective as of August 5, 1996. I further understand that it is your desire to
obtain a personal guarantee of the payments under this Agreement by me. I also
understand that as consideration for your executing this Agreement, this
personal guarantee of payment by me is required by you.

Therefore, I have determined that it is in my best interests as the owner of
Koffolk, Inc. to personally guarantee payment of the payment obligations of
Koffolk, Inc. to you under this Agreement.

I agree as follows:

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

[

]

                                               By:     ____________________
                                                       Jack C. Bendheim

State of __________________

County of ________________

Subscribed and sworn to before

<PAGE>

me this ____ day of _______ 1996

---------------------------------
Notary Public

<PAGE>

                                   SCHEDULE D

                            U.S. TRADEMARK ASSIGNMENT

          WHEREAS, MERCK & CO., INC., a New Jersey corporation, having its
principal offices at One Merck Drive, Whitehouse Station, New Jersey 08889-0100,
has adopted, used, is using and is the owner of the following trademarks now
registered in the United States Patent and Trademark Office:

TRADEMARK          REGISTRATION NO.            DATE OF REGISTRATION
---------          ----------------            --------------------
NICARB(R)               631617                     July 31, 1956
                                                   July 31, 1976 (renewed)

          WHEREAS, Koffolk, Inc., a Delaware corporation having its principal
offices at One Parker Plaza, Fort Lee, New Jersey 07024, U.S.A., is desirous of
acquiring said registered trademarks,

          NOW, THEREFORE, in consideration of the sum of One ($1.00) Dollar and
other good and valuable consideration, the receipt of which is hereby
acknowledged, MERCK & CO., INC., as of August 5,1996 hereby assigns to Koffolk,
Inc. all right, title and interest in the United States in and to said
trademarks together with the goodwill of the business symbolized by said
trademarks and registrations thereof.

Signed this 17th day of July, 1996

                                           MERCK & CO., INC.

                                           By: ______________________________
                                                    Dr. John M. Preston
                                                    President
                                                    Merck AgVet Division

State of
                              ss.
County of

Subscribed and sworn to before
me this day of 1996.

--------------------
Notary Public

<PAGE>

                                   SCHEDULE E

Food and Drug Administration
5600 Fishers Lane
Rockville, MD 20857

Dear _____________

Pursuant to 21 CFR 514.106, we are notifying you that as of August 5,1996, Merck
Research Laboratories is transferring ownership and all rights and
responsibilities for [                                   ] to Koffolk, Inc.

Please direct questions or need for additional information concerning the
transfer of these NADAs to Ms. Rosalind Dunn, Associate Director, Regulatory
Affairs, Coordination and Planning, Merck & Co., Inc. (Phone (908)594-4624/Fax
(908)594-4395).

Beginning today, August 5,1996, all communication to the sponsor should be
addressed to:

                                Koffolk, Inc.
                                One Parker Plaza
                                Fort Lee, New Jersey 07024
                                Attn: Jack C. Bendheim
                                      President

                                      Sincerely yours,

                                      Rosalind S. Dunn
                                      Associate Director
                                      Regulatory Affairs
                                      Coordination & Planning

Certified No.<PAGE>

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

                           DISTRIBUTORSHIP AGREEMENT

         THIS AGREEMENT, dated as of the 5th day of August, 1996, by and
between Merck & Co., Inc., a corporation duly organized and existing under the
laws of the state of New Jersey having an address at One Merck Drive,
Whitehouse Station, New Jersey 08889 and operating through its Merck AgVet
Division, (hereinafter referred to as "MERCK")

                                      AND

Koffolk, Inc., a business entity duly organized and existing under the laws of
the state of Delaware having an address at One Parker Plaza, Fort Lee, New
Jersey 07024 (hereinafter referred to as "KOFFOLK").

                                  WITNESSETH:

         WHEREAS, MERCK is the inventor, developer and supplier of products
used for animal health purposes; and

         WHEREAS, KOFFOLK desires to distribute, promote, advertise and sell
certain of such products for animal health purposes in the United States in
accordance with the Food and Drug Administration registration obtained by
MERCK; and

         WHEREAS, KOFFOLK shall maintain the necessary sales force and
organization to properly service the territory;

         NOW, THEREFORE, in consideration of the premises and of the
performance of the mutual covenants hereinafter set forth, the parties hereto
agree as follows:

1.       DEFINITIONS

         Each term defined below shall, for the purpose of this Agreement,
have the following meaning and shall include the singular and the plural:

         (a) "Product" or "Products" shall mean the finished animal health
products containing amprolium as the active ingredient [

                           ].

         (b) "Territory" shall mean the United States of America, excluding
its territories and possessions.

         (c) "Trademark(s)" shall mean the trademarks AMPROL, AMPROL Plus or
other appropriate trademarks designated by Merck AgVet, which are licensed to
KOFFOLK in the Territory by MERCK pursuant to the Trademark License Agreement
of even date.

         (d) "Exclusive Distribution Period" shall mean that period of
[                    ] from the Effective Date of the Agreement and any
applicable renewal periods.

         (e)"Affiliate" shall mean with respect to a party to this Agreement
(i) any corporation or business entity, fifty percent (50%) or more of the
voting stock of which is owned directly or indirectly by a party; (ii) any

<PAGE>

corporation or business entity which directly or indirectly owns fifty percent
(50%) or more of the voting stock of a party; or (iii) any corporation or
business entity under the direct or indirect control of a corporation or
business entity as described in clause (i) or (ii).

         (f)"Promotional Literature" shall mean all Products-related or
disease-related material, or similar material with respect to competitive
Products, written, oral, graphic or other prepared for distribution to or use
with the veterinary or allied professions, sales representatives, the trade,
and/or consumers.

         (g) "Calendar Year" shall mean that twelve (12) month period
commencing January 1st and ending December 31st of each year of the Agreement.

         (h) "License Agreement" shall mean the Trademark License Agreement of
even date between MERCK and KOFFOLK.

         (i) "Marketing Plan" shall mean that document prepared by KOFFOLK on
an annual basis and submitted to MERCK that contains sales forecasts and
promotional efforts of KOFFOLK for sale of the Product for the succeeding
Calendar Year.

         (j) "Effective Date" shall mean August 5,1996.

         (k) "Like Kind Exchange" shall mean an arrangement whereby MERCK
divests itself of Product via a non-cash exchange for a third party's
product(s) or rights to market and/or distribute a third party's product(s).

         (l) "Promotional Efforts" shall mean the expense, not including
salaries and related overhead expenses, associated with the planning,
production, publication and distribution of Product support material, market
support trials, meetings, merchandising allowance funds, and market research
necessary to facilitate the marketing effort.

2.       APPOINTMENT OF KOFFOLK

         (a) Subject to [

                           ], MERCK hereby appoints KOFFOLK as an exclusive
distributor in the Territory for the Products.

         (b) KOFFOLK shall sell the Products for its own account. All orders
by KOFFOLK's customers shall be promptly filled by KOFFOLK and KOFFOLK shall
assume all credit risks.

3.       PURCHASE OF PRODUCTS

         (a) MERCK shall sell, and KOFFOLK shall purchase, the Products from
MERCK at the product supply price specified in Schedule B. Product supply
prices are [                          ]. All orders shall be subject to
acceptance by MERCK or such Affiliate and all sales shall be subject to the then
current Terms and Conditions of Sale. To the extent there is any inconsistency
in the Terms and Conditions of Sale and this Agreement, this Agreement shall
govern.

         (b) KOFFOLK shall make payment to MERCK for the Product within ninety
(90) days of the date of the invoice, in the currency stated on the invoice.

         (c) KOFFOLK shall provide MERCK with a [                 ] forecast of
its expected requirements of Products, updated on a monthly basis, divided into
[                  ] of Products by pack size as of the beginning of each
[                  ]. Purchase orders shall be in writing and submitted by

                                      2

<PAGE>

KOFFOLK to MERCK by January 15 of each Calendar Year and shall specify by
product the [                                             ]. [                ].
Delivery shall be made as close to such requested dates as possible. The terms
of such purchase order shall be consistent with the provisions of this
Agreement and where inconsistent, this Agreement shall govern.

         (d) MERCK shall use reasonable efforts to fill orders that are in
excess of the quantity forecasts provided by KOFFOLK, giving consideration to
the quantity of the Products available at the time, the requirements of other
customers and the capacity of the production facility.

         (e) KOFFOLK shall inspect the Products and shall inform MERCK in
writing of any complaints regarding the quantity or quality of the same within
three (3) days of receipt of the Products by KOFFOLK. In the event that a
quality defect is not discoverable by reasonable inspection, such claim for
the quality defect shall be made in writing within three (3) days of
discovery. No quantity of the Products shall be returned to MERCK without
MERCK's express written permission, which permission shall not be unreasonably
withheld. Once permission has been given, Product will be returned to MERCK
and, at MERCK's option, either subsequently replaced within ninety (90) days
at no charge to KOFFOLK or a credit for the amount of defective Product will
be provided to KOFFOLK within thirty (30) days of its return.

4.       CERTAIN SPECIFIC RESPONSIBILITIES OF KOFFOLK

         (a) KOFFOLK shall prepare and submit to MERCK on an annual basis, a
written marketing plan for the Products which shall include sales forecasts
and promotional efforts for the year. The marketing plan for Calendar Year
1997 shall be provided by December 1,1996. Thereafter, the marketing plan for
each succeeding Calendar Year shall be provided by KOFFOLK to MERCK by
September 1st of the preceding Calendar Year.

         (b) KOFFOLK shall actively promote and distribute and use its best
efforts to expand the sales of the Products in the Territory by all
appropriate means available through the maintenance of its sales organization.

         (c) KOFFOLK shall [

]

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

         (d) If in any two (2) consecutive Calendar Years, KOFFOLK fails to
meet the Guaranteed Amounts, MERCK may terminate this Agreement upon sixty
(60) days notice to KOFFOLK.

         (e) KOFFOLK shall keep MERCK informed on a quarterly basis, in
writing, of the Promotional Efforts it will be making in connection with the
Products. Thereafter, KOFFOLK's expenditure for Promotional Efforts for each
subsequent Calendar Year shall be contained in the Marketing Plan as developed
by KOFFOLK. MERCK reserves the right to request, and KOFFOLK shall provide,
documentation to substantiate the amount spent by KOFFOLK on Promotional
Efforts in each Calendar Year of the Agreement.

         (f) KOFFOLK shall maintain sufficient stocks of the Products to
satisfy the demand for them in the Territory. Specifically, its inventory
shall, at any given time, not fall below the equivalent of the total estimated
sales for each Product in the upcoming two (2) months. The Products shall be
handled and stored in accordance with instructions provided by MERCK.

         (g) KOFFOLK acknowledges that it is aware of the terms of MERCK's
Ethical Business Practices

                                      3
<PAGE>

Policy, a copy of which is attached hereto as Attachment I and made part of
this Agreement. KOFFOLK agrees to comply fully with the requirements of said
Policy and agrees to indemnify and hold MERCK harmless from and against any
and all liabilities resulting from the violation of said policy by KOFFOLK, or
any third party that KOFFOLK has instructed to act on its behalf.

         (h) KOFFOLK agrees to develop at its own expense Promotional Literature
to be used in conjunction with the sale of the Products in the Territory. All
Promotional Literature must be consistent with the safety and efficacy data
supplied by MERCK and reviewed and approved by MERCK according to the
following provisions prior to its use:

                  (i) All Promotional Literature relating to the Products must
be submitted for approval to publish shall be addressed to:

Merck & Co., Inc.
Merck Ag Vet Division
Mr. Steve Vandeberg
Associate Director, Marketing Communications
U.S. Operations
P.O. Box 2000, WBF-224
Rahway, NJ 07065-0912

                  (ii) Within twenty (20) working days of receipt, MERCK will
either approve or reject the submission. No Promotional Literature may be
printed, published or put into use until a signed approval is received from
MERCK by KOFFOLK. Facsimile transmission will be deemed acceptable.

                  (iii) Approval of each promotional text is valid for one (1)
year unless new Product information or new regulations affecting the Products
or text become available. In the absence of any such changes, approved
literature may be printed, reprinted, used and distributed during this period.

                  (iv) An approved text may not be changed for publication
without the written authority of MERCK. This applies to all Promotional
Literature covered by this procedure. If even the most minor change of an
approved literature piece is required, the revised text must be submitted for
MERCK's approval.

                  (v) KOFFOLK shall submit, within five (5) days of
production, ten (10) printed specimens of each approved literature piece for
after-the-fact review, accompanied by a confirmation from an authorized
representative of KOFFOLK that it is worded exactly as was approved by MERCK.
Specimens and confirmations should be addressed to:

Merck & Co., Inc.
Merck AgVet Division
Mr. Steve Vandeberg
Associate Director, Marketing Communications
U.S. Operations
P.O. Box 2000, WBF-224
Rahway, NJ 07065-0912

                   (vi) Pricing information or bulletins for KOFFOLK's
internal use only that contain no safety, efficacy or other Products-related
claims are excluded from review under this procedure.

         (i) KOFFOLK shall provide MERCK with a quarterly report of (i) all
sales of Products by package size and (ii) and inventory status of the
Products which report shall be provided by the twentieth (20th) day of the

                                      4

<PAGE>

month immediately following the close of the quarterly period. Additionally,
KOFFOLK shall keep MERCK advised on a regular basis of general market,
economic and regulatory developments which may affect the promotion and sale
of the Products in the Territory.

         (j) KOFFOLK shall not make any claim, either orally or in writing,
with respect to the safety or effectiveness of the Products that is
inconsistent with and/or goes beyond approved claims for the Products, nor
shall KOFFOLK recommend the combination of the Products with any other
products, without MERCK's prior written consent.

         (k) KOFFOLK shall do nothing which will jeopardize the goodwill of
MERCK or any of its Affiliates or the reputation of the Products. The
appointment of KOFFOLK as a distributor hereunder shall not create a joint
venture, or principal-agency relationship, or franchise relationship and
nothing hereunder shall be deemed to authorize KOFFOLK to act for, represent,
or bind MERCK or any of its Affiliates, unless specific authority to act on
MERCK's behalf is granted to KOFFOLK in writing.

         (l) Both parties agree to comply with all laws and regulations and
other requirements in the Territory governing the performance of their
activities under an agreement such as this.

         (m) KOFFOLK shall be responsible for ensuring that its customers
obtain approval of form FDA 1900 with the FDA. In order to ensure that
existing customers of the Products have obtained such approvals, MERCK shall
provide KOFFOLK, within forty-five (45) days of the Effective Date, with
copies of all forms FDA 1900 (or Forms FDA 1800, if applicable) covering the
Products which it has in its possession.

         (n) Except as required by law, neither party shall make any public
announcement in connection with the subject matter of this Agreement without
the prior approval of the other party.

5.       PROMOTIONAL AND MARKETING EXPENSES

         (a) KOFFOLK agrees to pay for all promotional, selling and marketing
costs of Products, including but not limited to customer feed assay costs,
advertising expenses, freight and distribution costs and carrying costs of
accounts receivable.

         (b) MERCK agrees to provide customer feed assays to KOFFOLK in 1996 [
                   ].

6.       CONFIDENTIALITY

         (a) For the term of this Agreement plus five (5) years thereafter all
information which is received by KOFFOLK or MERCK from the other party during
the term of this Agreement shall be maintained in strict confidence by the
receiving party. All information whether generated by KOFFOLK or MERCK shall
be disclosed only to MERCK or KOFFOLK employees and consultants who have been
instructed to treat such information in strict confidence and on a "need to
know" basis. This information shall be protected from disclosure to third
parties with at least the same degree of care used by such employees when
dealing with their employer's confidential information. Further, such
information shall not be disclosed to any other person, firm, or agency,
governmental or private, or used for purposes other than set forth herein
without the prior written consent of the disclosing party.

         (b) With respect to tangible materials provided by MERCK to KOFFOLK
under this Agreement, including samples of Products, KOFFOLK agrees to (i) not
provide such materials to third parties, (ii) not conduct demonstration trials
or protocols for the promotional use of the product except with the prior
written permission of MERCK, and (iii) return unused portions of such
materials to MERCK.

                                      5

<PAGE>

         (c) In the event KOFFOLK desires to disclose to MERCK any information
considered confidential and proprietary to KOFFOLK ("KOFFOLK Confidential
Information") during the course of this Agreement, KOFFOLK shall first provide
MERCK with notice of KOFFOLK's intent to disclose KOFFOLK Confidential
Information, then for the term of this Agreement plus three (3) years
thereafter, MERCK shall keep KOFFOLK Confidential Information confidential by
not disclosing to any third party, and shall not use for any purpose other
than pursuant to this Agreement.

         (d) The foregoing obligations shall not apply when and to the extent
such information:(I)is or becomes a part of the public domain without the
breach of this Agreement;(ii)is already known to the receiving party prior to
its disclosure or development hereunder(iii)can be shown to have been
independently developed by or on behalf of MERCK without reference or access
to KOFFOLK Confidential Information as evidenced by MERCK's written records;
or(iv)is disclosed to the receiving party by an independent third party not
under an obligation of confidence to the disclosing party with respect
thereto.

         (e) This Agreement shall not supersede any existing Confidentiality
Agreement between MERCK and KOFFOLK and/or its Affiliates with respect to any
information already or hereafter disclosed between the parties, and shall be
deemed additive to those confidentiality obligations that may have already
been assumed.

7.       PRODUCT REGISTRATION

         Registrations for the Products with the Food and Drug Administration
shall be maintained by MERCK. All fees and other expenses in connection with
the registration of the Products shall be for the account of MERCK. Product
registrations shall be in the name of MERCK or a designated Affiliate under
the separate Trademarks as owned by MERCK as set forth in Paragraph 8 and
listed in Schedule A. All product registrations so obtained shall be and
remain the property of MERCK or such Affiliate. Any registrations required
pursuant to state law to allow for distribution of the Products by KOFFOLK in
each state in the Territory, including distribution licenses, shall be applied
for, maintained by, be the property of, and for the account of KOFFOLK only.

8.       PACKAGING AND LABELING

                  KOFFOLK will promote and market the Products under labeling
and package design approved by MERCK. All packages will bear the name and logo
of MERCK, and shall identify that the Products are manufactured by MERCK.

9.       TRADEMARKS

         (a)      [

                           ], KOFFOLK shall have the exclusive right to use the
Trademarks in the Territory pursuant to the terms of this Agreement and the
Trademark License Agreement of even date annexed as Attachment 2.

         (b) Except as provided by this Agreement and/or the Trademark License
Agreement, nothing in this Agreement shall be construed as granting to KOFFOLK
any right, title, interest, or license under or to any intellectual property
of MERCK relating to the Product.

10.      REGULATORY MATTERS

         (a) The Product covered by this Agreement is registered with the
Center for Veterinary Medicine of the Food and Drug Administration (FDA).

         (b) (i) KOFFOLK agrees that it shall undertake in accordance with
applicable FDA regulations, and any other applicable laws or regulations, the
submitting of periodic drug experience reports to MERCK.

                                      6

<PAGE>

                  (ii) KOFFOLK further agrees to report to MERCK in writing
all adverse experience and adverse physical occurrence information of which it
becomes aware associated with the Products relating to hazards,
contraindications, side effects, injuries, toxicity, sensitivity reactions,
Product defects and mix-ups, whether or not the adverse experience or physical
occurrence is determined to be causally related to the Products. This
reporting obligation shall be in full compliance with the MERCK Policy and
Procedure No. 4, "Reporting Adverse Experiences and Adverse Physical
Occurrences for Animal Health Products," a copy of which is attached as
Attachment 3 and incorporated herein by reference. KOFFOLK shall submit a copy
of such report to MERCK within five (5) working days after learning of the
adverse experience or physical occurrence using the required RA 1932 Form, a
blank copy of which is attached as Attachment 4.

                  (iii) When complete information is not available within the
five-day period, KOFFOLK shall submit any available information within the
five-day period, and also submit a supplement as soon as further details
become available. MERCK shall be authorized to submit such adverse experience
or physical occurrence information to government authorities as it considers
appropriate. KOFFOLK agrees to permit MERCK to audit KOFFOLK's files for
adverse drug experience or physical occurrence on a routine basis as
determined necessary by MERCK. If MERCK becomes aware of adverse experiences
or physical occurrences which in its opinion may require a change in label
content, MERCK shall provide KOFFOLK with all information relating to such
adverse experiences or physical occurrences.

                  (iv) KOFFOLK agrees to provide a signed statement
identifying the category of its operation (i.e., wholesaler, retailer) and
stating that it will distribute the Products only under labeling provided for
in the new animal drug application for Product and approved by MERCK; that any
other labeling or advertising for the drug will prescribe, recommend and/or
suggest its use only under the conditions stated in the labeling provided for
in the application; and that it is regularly and lawfully engaged in the
distribution of Product.

                  (v) KOFFOLK will advise MERCK immediately concerning any FDA
inspections, notices, or enforcement action with respect to the Product.

11.      FORCE MAJEURE

         Neither of the parties hereto shall be liable or be in breach of any
provision hereof for any failure or delay on its part to perform any
obligation (other than the obligation to make payments when due) under any
provision of this Agreement because of force majeure, including, but not
limited to, war, riot, fire, explosion, flood, sabotage, accident or breakdown
of machinery; unavailability of fuel, labor, containers, or transportation
facilities; accidents of navigation or breakdown or damage of vessels, or
other conveyances for air, land or sea; other impediments or hindrances to
transportation; strike or other labor disturbances; government restraints or
any other cause beyond the control of the party thus failing to perform or
whose performance is thus delayed.

12.      TERM AND TERMINATION

         (a) This Agreement shall have an Effective Date as defined herein,
and unless sooner terminated as provided herein, shall remain in full force
and effect for a period of [                  ] from the Effective Date subject
to the terms and conditions set forth herein. Thereafter the Agreement shall
be renewed for successive one (1) year periods upon mutual agreement of the
parties expressed in writing at least ninety (90) days prior to expiration of
this Agreement and each successive renewal term.

         (b) Should either MERCK or KOFFOLK cease to do business or be
adjudicated as bankrupt or make an assignment for the benefit of creditors or
become involved in any insolvency proceeding or receivership proceeding, this
Agreement shall terminate immediately.

         (c) This Agreement may also be terminated by MERCK on one hundred and
eighty (180) days prior

                                      7

<PAGE>

written notice to KOFFOLK in the event that maintenance of the Product
registration or manufacture of the Product becomes infeasible as reasonably
determined by MERCK or MERCK divests Product via a Like Kind Exchange
arrangement with a third party.

         (d) Either party may terminate the Agreement in case of material
breach by the other party, such termination to be effected by sixty (60) days
prior written notice which specifically identifies the breach and provides the
opportunity for the breach to be cured within that sixty (60) day period. By
way of example without limitation, failure by KOFFOLK to follow and comply
with Paragraph 4(h) (promotional material) and Paragraph 10 (regulatory
matters) shall be considered a material breach.

         (e) MERCK may terminate this Agreement upon thirty (30) days written
notice upon a change in management or in the event that a majority of the
stock, assets or control of KOFFOLK is acquired by any other party(s) which
MERCK determines, in its sole judgment, is prejudicial to its interests. In
the event of such-change in management or control, notwithstanding the
provisions of Paragraph 13, MERCK shall have the right in its sole discretion
to purchase back any and all remaining inventory of Products at KOFFOLK's full
purchase price.

         (f) Upon termination of this Agreement in accordance with its terms,
KOFFOLK shall make no claim or request compensation of any kind because of
such termination. KOFFOLK agrees to waive any statutory amount which may be
allowable or imposed for such termination such as liquidated damages or other
such statutory payments, if any.

         (g) Termination shall not extinguish obligations and liabilities of
the parties accrued prior to termination or non-renewal.

13.      TRANSITION PERIOD

         At the conclusion of the Exclusive Distribution Period, or in the
event of earlier termination under Paragraph 12 with the exception of
Paragraph 12 (e), KOFFOLK shall have the right to sell any remaining MERCK
product bearing the Product label in its inventory for a period not to exceed
three (3) months from the conclusion of the Exclusive Distribution Period or
the date of termination. KOFFOLK shall notify MERCK in writing of its existing
inventory of Products at the beginning of that three (3) month period. KOFFOLK
shall exercise its best efforts to sell existing inventory of Products during
this three (3) month period. KOFFOLK further agrees to take all reasonable
steps necessary to minimize the amount of product inventory bearing the
Product label remaining on the first day immediately following conclusion of
the Exclusive Distribution Period. The parties' respective rights and
obligations under the Agreement shall remain in full force and effect during
the Transition Period.

14.      RECALL

         (a) In the event MERCK shall be required or shall voluntarily decide
to recall any Product distributed by KOFFOLK pursuant to this Agreement, then
KOFFOLK shall fully cooperate with MERCK in connection with the recall. If
such recall is initiated because of the negligence or failure of MERCK to
comply with the terms of this Agreement, then MERCK will credit KOFFOLK for
the price it invoiced KOFFOLK for all Product returned and, in addition, MERCK
will reimburse KOFFOLK for all reasonable recall expenses in connection
therewith. If such recall is initiated because of the negligence or failure of
KOFFOLK to comply with the terms of this Agreement, then KOFFOLK will
reimburse MERCK for all reasonable recall expenses in connection therewith.

         (b) KOFFOLK agrees to abide by all decisions of MERCK to recall
Product and both parties shall fully cooperate with each other in the event of
any recall of Product under this Agreement.

15.      JURISDICTION/CHOICE OF LAW

                                      8

<PAGE>

         This Agreement shall be governed by, interpreted and construed, and
all claims and disputes, whether in tort, contract or otherwise be resolved in
accordance with the substantive laws of the State of New York, United States
of America, without reference to any rules of conflict of laws or renvois. In
the event of any controversy or claim arising out of or relating to this
Agreement, performance hereunder, termination hereof, or relationship created
hereby, each party irrevocably submits to the exclusive jurisdiction of the
courts of the Supreme Court of the State of New York and the U.S. District
Court for the Southern District of New York for the purposes of any suit,
action or other proceeding arising out of this Agreement or transactions
contemplated hereby. Each party irrevocably and unconditionally waives any
objection to the laying of venue in the courts of New York as stated above and
that any such action was brought in an inconvenient forum. Notwithstanding the
foregoing, in the event of a threatened disclosure in violation of this
Agreement, MERCK shall have the right to seek injunctive relief from any
competent court in the jurisdiction where the disclosure is threatened to
prevent such disclosure pending resolution of the merits of the dispute.

16.      PRODUCT WARRANTIES AND INDEMNIFICATION

         (a) MERCK warrants that the Products shall meet the ingredient
specifications contained on the label and conform to MERCK's specifications
for the Products when it leaves MERCK's control. MERCK makes no other
warranties, either express or implied, including warranties of merchantability
or of fitness for a particular use.

         (b) MERCK shall defend and indemnify KOFFOLK against all expenses,
claims, demands, liabilities or money judgments, including recall, incurred by
KOFFOLK arising from the negligence or fault of MERCK or from MERCK's failure
to comply with the terms of this Agreement, except to the extent that said
expenses, claims, demands, liability or money judgments are caused by the
negligence or fault on the part of KOFFOLK or KOFFOLK's failure to comply with
the terms of this Agreement.

         (c) KOFFOLK shall defend and indemnify MERCK against all expenses,
claims, demands, liabilities or money judgments, including recall, incurred by
MERCK arising from the negligence or fault of KOFFOLK or from KOFFOLK's
failure to comply with the terms of this Agreement, except to the extent that
said expenses, claims, demands, liability or money judgments are caused by the
negligence or fault on the part of MERCK or MERCK's failure to comply with the
terms of this Agreement.

17.      ENTIRE AGREEMENT

         This Agreement and Trademark License Agreement of even date comprises
the entire Agreement between the parties and merges all prior agreements
between them relative to the Products hereunder. This Agreement may not be
amended except in writing, signed by both parties referencing this Agreement.

18.      NOTICES

         All notices hereunder required to be in writing shall be sufficient
if sent by certified mail, return receipt requested, postage prepaid,
addressed as follows:

If to MERCK:      Merck & Co., Inc.
                  P.O. Box 2000
                  Rahway, NJ 07065-0912
                  Attention: President
                  Merck AgVet Division

If to KOFFOLK:    Koffolk, Inc.
                  One Parker Plaza
                  Fort Lee, New Jersey 07024

                                      9

<PAGE>

                  Attn: President

19.      SEVERABILITY

         In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions contained in this Agreement. If any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to time, duration, geographical scope, activity or
subject, it shall be construed by limiting and reducing it so as to be
enforceable to the extent compatible with applicable law.

20.      TITLES

         The titles to each paragraph of this Agreement are for reference only
and shall not be used to interpret said paragraph. All interpretations of the
meaning of each paragraph to this Agreement shall rely solely upon the wording
of the Agreement and shall not incorporate the paragraph titles for its
interpretation.

21.      AMENDMENT

         Except as otherwise expressly stated herein, this Agreement cannot be
amended or modified except by a written instrument which shall state that it
is an amendment or modification of this Agreement and which shall be signed
and dated by the parties hereto.

22.      WAIVER

         Failure by MERCK or KOFFOLK at any time to enforce any of the terms
or conditions of this Agreement shall not be deemed a continuing waiver as to
such terms or conditions, and shall not affect the right of MERCK or KOFFOLK
to later avail itself of such remedies as it may have for any subsequent
breach of such terms or conditions under the provisions of this Agreement in
equity or at law.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers or representatives as of the day
and year first above written.

KOFFOLK, INC.

By: /s/ J.C. Bendheim
    -----------------
Name:  J. C. Bendheim
Title:  Pres.

MERCK & CO, INC.

By:  /s/ John M. Preston
     -------------------
Name:  John M. Preston
Title:  President

                                      10

<PAGE>

SCHEDULE A

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

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<PAGE>

SCHEDULE B

MINIMUM SUPPLY PRICES

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

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<PAGE>

SCHEDULE C

GUARANTEED PURCHASES

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

[                                                             ]

<PAGE>

ATTACHMENT 1

ETHICAL BUSINESS PRACTICES

KOFFOLK agrees to comply with Merck & Co., Inc.'s Ethical Business Practices
policy which reflects the highest standard of corporate and individual
behavior. KOFFOLK shall adhere to business practices which are in accordance
with the letter and spirit of applicable laws and ethical principles. KOFFOLK
agrees that all transactions in connection with MERCK's business will be
accurately reflected in its books and records, and that no funds or other
assets shall be paid directly or indirectly to government officials or persons
acting on their behalf for the purpose of influencing government decisions or
actions with respect to MERCK's business. Violation of this policy on the part
of KOFFOLK, its employees, or representatives, shall result in the immediate
termination of this Agreement.

<PAGE>

ATTACHMENT 2

                          TRADEMARK LICENSE AGREEMENT

         AGREEMENT, effective as of August 5, 1 996 by and between MERCK &
CO., INC., a corporation organized and existing under the laws of the State of
New Jersey, U.S.A., with an office at Whitehouse Station, New Jersey, U.S.A.
(hereinafter "Licensor"), and KOFFOLK, INC. (including its affiliates and
subsidiaries), a business entity duly organized and existing under the laws of
Delaware (hereinafter "Licensee").

         WHEREAS, Licensor is the owner in the United States of America and
its territories (hereinafter the "Territory") of the right, title and interest
in and to the trademarks, AMPROL(R) (amprolium) and AMPROL(R) Plus and the
applications for registration and registrations thereof (hereinafter
"Trademarks'); and

         WHEREAS, Licensee desires the right and license to use the
Trademarks, in the Territory on and in association with the sale of certain
pharmaceutical preparations containing amprolium as an active ingredient [ ]
(hereinafter "Products") pursuant to the Distributorship Agreement dated
August 5, 1996 between Merck AgVet, a division of Merck & Co., Inc. and
KOFFOLK, USA (hereinafter "Distributorship Agreement");

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties herein agree as
follows:

1.       Licensor hereby grants to Licensee, for the term of the
         Distributorship Agreement, and Licensee accepts, an exclusive,
         royalty-free, non-sublicensable, non-assignable license to use the
         Trademarks in the Territory solely in connection with the packaging,
         promotion, and sale of the Products.

2.       Licensee shall use the Trademarks only for the Products supplied by
         Licensor. From time to time, upon request of Licensor, Licensee shall
         submit samples of any of the Products to Licensor or its duly appointed
         agent to insure compliance with Licensor's storage and handling
         specifications. Licensor, or its duly appointed agent, shall have the
         right to inspect the premises of Licensee, and Licensee shall permit
         such inspection, at any reasonable time, to confirm that Licensee is
         adhering to Licensor's standards and specifications used in the
         repackaging, storage and sale of the Products, pursuant to the
         Distributorship Agreement under which Licensee is licensed herein to
         use the Trademarks. Licensee shall not sell or otherwise dispose of,
         any of the Products under the Trademarks that fail to comply with the
         standards and specifications of Licensor as determined by Licensor.
         Any economic loss resulting from the failure of Product to conform to
         Licensor's quality control standards and requirements, caused by an
         action or failure to act by Licensee pursuant to the terms of the
         Distributorship Agreement, shall be borne by Licensee.

3.       Licensee shall use the Trademarks only in such form and manner as shall
         be approved in writing from time to time by Licensor. Licensee
         undertakes to comply with all laws pertaining to the Trademarks in
         force at any time in the Territory including, but not limited to,
         compliance with marking requirements. Use of the Trademarks by
         Licensee on labels and packaging or on other printed material shall
         be presented as AMPROL and AMPROL(R)Plus accompanied by an
         appropriate statement that such trademarks are "Licensed Trademarks",
         or such other appropriate legend as Licensor shall direct. The
         Trademarks shall always be given distinctive typographical treatment
         when used by Licensee. Copies of all labels, packaging and other
         printed material on which the Trademarks is used shall be submitted
         to Licensor for approval prior to use in accordance with the terms of
         the Distributorship Agreement. Licensee shall not use the Trademarks
         in any manner whatsoever which may jeopardize the significance,
         distinctiveness or validity thereof.

4.       The Trademarks shall at all times remain the exclusive property of
         Licensor and all use of the Trademarks

<PAGE>

         hereunder shall inure to the benefit of Licensor. Nothing in this
         Agreement shall be construed as granting or transferring to Licensee
         any right, title or interest in and to the Trademarks either by
         operation of law or otherwise except the right to use the same during
         the term of this Agreement, as provided in this Agreement and in the
         Distributorship Agreement.

5.       Licensee agrees that it shall not use the Trademarks in combination
         with any other trademark or trade name of its own or any third party
         or as a component of its business name or to characterize its
         business in any other way; and that it will use the Trademarks only
         on, or in connection with, the Products, and will not use or permit
         use of the Trademarks in connection with goods other than the
         Products; and that the Trademarks and the goodwill associated
         therewith, are and shall continue to be the exclusive property of
         Licensor.

6.       Licensor agrees to maintain the trademark registrations for the
         Trademarks. However, if the Trademarks are not in use in a particular
         jurisdiction of the Territory, Licensor may allow the registration to
         expire. Licensee agrees to cooperate with Licensor in providing
         information, specimens, and documentation that may be useful or
         required in order to effect trademark registrations, or for
         maintenance and renewal of trademark registrations for the
         Trademarks.

7.       Licensee shall, at all times, execute any documents reasonably
         required by Licensor to record Licensee as a registered user or
         licensee of the Trademarks. Licensee agrees to cooperate as requested
         by Licensor in arranging for such recordings and/or entries, or in
         maintaining, varying or canceling such recordings and/or entries in
         the event of amendment to, or termination of, this Agreement for any
         reason.

8.       In the event that Licensee learns of any infringement or threatened
         infringement of the Trademarks, or any passing-off, Licensee shall
         immediately notify Licensor or its authorized representative in
         writing giving particulars thereof and Licensee shall provide
         necessary information and assistance to Licensor or its authorized
         representatives in the event that Licensor decides that proceedings
         should be commenced or defended. The commencement, strategies,
         termination and settlement of any action relating to the validity
         and/or infringement of the Trademarks shall be decided. by Licensor.
         Any such proceedings shall be at the expense of Licensor, and any
         recoveries shall be to the benefit of Licensor. Nothing herein,
         however, shall be deemed to require Licensor to enforce the
         Trademarks against others.

9.       Licensee shall promptly notify Licensor of any claims arising out of
         the use of the Trademarks, and Licensor will provide for the defense
         thereof with counsel of its own selection and will pay all costs and
         expenses incurred in so defending against such claims, provided such
         use of the Trademarks by Licensee was in accordance with the terms of
         this Agreement and the Distributorship Agreement. Licensee shall also
         have the right to participate in the defense of any such claim with
         attorneys of its own selection, at its own expense, however, the
         extent to which any such claim shall be prosecuted, defended or
         settled, will be solely within the discretion of Licensor. Licensor
         hereby indemnifies and shall hold harmless Licensee from and against
         the cost and expenses of any claims, demands, causes of action,
         judgments, damages or liabilities, arising out of the use by Licensee
         of the Trademarks in accordance with the terms of this Agreement,
         provided that written notice of such claim, demand or cause of action
         is promptly given to Licensor and Licensee cooperates fully with
         Licensor in the defense of such claim, demand or cause of action.

10.      Licensee agrees to indemnify and hold Licensor harmless from and
         against any and all claims and agrees to reimburse Licensor for any
         and all losses, damages, costs, fees, expenses, liabilities and
         obligations of any kind (including reasonable attorney's fees and
         other reasonable legal costs and expenses) that Licensor may at any
         time suffer or incur, or become subject to as a result of or arising
         from the unauthorized use of the Trademarks by Licensee. Licensee
         shall have the right to defend any such action or proceeding with
         attorneys of its own selection, and Licensor shall have the right to
         be represented by attorneys of its

<PAGE>

         selection.

11.      This Agreement shall be effective as of the date first written above
         and shall continue in force for as long as the Distributorship
         Agreement remains in effect, and shall terminate upon termination of
         the Distributorship Agreement.

12.      This Agreement shall terminate immediately and automatically in the
         event that Licensee makes any assignment for the benefit of creditors
         or shall file for, or have filed against it, a petition for
         bankruptcy; or if Licensee is dissolved or loses its charter by
         forfeit or otherwise or if a trustee or receiver is appointed for
         Licensee or for any of its property in any proceeding, or if any
         court takes jurisdiction of the property of Licensee by foreclosure
         or otherwise.

13.      In the event that Licensee defaults or breaches any of the provisions
         of this Agreement, Licensor shall have the right to terminate this
         Agreement upon thirty(30) days written notice to Licensee, provided,
         however, that if Licensee, within the said thirty (30) day period,
         cures the default or breach to the satisfaction of Licensor, the
         Agreement shall continue in full force and effect.

14.      Upon termination of this Agreement for whatever reason, Licensee
         shall promptly discontinue any further use of the Trademarks, and
         shall not use any trademark which, in the reasonable opinion of
         Licensor, is confusingly similar to the Trademarks, except that after
         termination of this Agreement, Licensee may for a period of twelve
         (12) months immediately following termination, sell existing stocks
         of the Products bearing the Trademarks without removing the
         Trademarks provided that such Products comply with the standards and
         specifications of Licensor, in force at the time of termination.

15.      The failure of a party to require the performance of any term of this
         Agreement or the waiver by a party of any breach of this Agreement
         shall not prevent a subsequent enforcement of such term nor be deemed
         a waiver of any subsequent breach.

16.      Should Licensee be or become aware of any applicable laws or
         regulations which are inconsistent with the provisions of this
         Agreement, Licensee shall promptly notify Licensor of such
         inconsistency.

17.      The remedies provided for in this Agreement are not exclusive of other
         remedies available to the parties.

18.      This Agreement may be assigned by Licensor to an affiliate without
         approval, otherwise it may be assigned by either party only with the
         written approval of the other party.

19.      This Agreement shall be binding upon and inure to the benefit of any
         successors in interest of each party.

20.      All notices provided for herein shall be deemed sufficient if in
         writing and delivered or sent by pre-paid registered or certified
         mail, facsimile, cablegram or telex to the party hereto at its
         address specified in Paragraph 18 of the Distributorship Agreement or
         to such other business address as may have been furnished in writing
         by the intended recipient to the sender. The date of mailing, faxing,
         cabling or telexing shall be deemed to be the date on which such
         notice or request has been given.

21.      This Agreement, and its construction, interpretation, performance and
         breach shall be governed according to the laws of the State of New
         Jersey.

22.      This Agreement and the Distributorship Agreement constitute the
         entire agreement and understanding between the parties and supersedes
         all previous agreements between them concerning the matters covered
         herein, whether written, oral or implied. This Agreement may only be
         changed or modified by written agreement signed by both parties.

<PAGE>

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

KOFFOLK, INC.

By: /s/ J.C. Bendheim
    -----------------
Name:  J. C. Bendheim
Title:  Pres.

MERCK & CO, INC.

By:  /s/ John M. Preston
     -------------------
Name:  John M. Preston
Title:  President

<PAGE>

MERCK AGVET DIVISION POLICY AND PROCEDURE
REPORTING ADVERSE EXPERIENCES AND ADVERSE PHYSICAL OCCURRENCES FOR ANIMAL
HEALTH PRODUCTS
Date:    03/01/94
Supercedes:   10/30/92

CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION.  THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.

[                                                             ]

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