Document:

<PAGE>

                                                                   Exhibit 10.11

                                                   EXECUTION COPY

                               U.S. $500,000,000

                          FIVE YEAR CREDIT AGREEMENT

                          Dated as of August 8, 2000

                                     Among

                               MONSANTO COMPANY

                                      and

                             PHARMACIA CORPORATION

                                 as Borrowers,
                                 -- ---------

                       THE INITIAL LENDERS NAMED HEREIN

                              as Initial Lenders,
                              -- ------- -------

                                CITIBANK, N.A.

                           as Administrative Agent,
                           -- -------------- -----

                           THE CHASE MANHATTAN BANK

                             as Syndication Agent,
                             -- ----------- -----

               COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES
                                      and

                                 BANK ONE, NA

                          as Co-Documentation Agents
                          -- ---------------- ------

                                      and

              SALOMON SMITH BARNEY INC. and CHASE SECURITIES INC.

                 as Co-Lead Arrangers and Joint Book Managers
                 -- ------- --------- --- ----- ---- --------
<PAGE>

                               TABLE OF CONTENTS

                                                                            Page

                                   ARTICLE I

                       DEFINITIONS AND ACCOUNTING TERMS
<TABLE>
<CAPTION>
<S>                                                                           <C>
SECTION 1.01. Certain Defined Terms.............................................   1
SECTION 1.02. Computation of Time Periods.......................................  11
SECTION 1.03. Accounting Terms..................................................  11

                                  ARTICLE II
                       AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Revolving Credit Advances.....................................  12
SECTION 2.02. Making the Revolving Credit Advances..............................  12
SECTION 2.03. The Competitive Bid Advances......................................  13
SECTION 2.04. Fees..............................................................  15
SECTION 2.05. Termination or Reduction of the Commitments.......................  16
SECTION 2.06. Repayment of Revolving Credit Advances............................  16
SECTION 2.07. Interest on Revolving Credit Advances; Regulation D Compensation..  16
SECTION 2.08. Interest Rate Determination.......................................  17
SECTION 2.09. Optional Conversion of Revolving Credit Advances..................  17
SECTION 2.10. Optional Prepayments of Revolving Credit Advances.................  18
SECTION 2.11. Increased Costs...................................................  18
SECTION 2.12. Illegality........................................................  19
SECTION 2.13. Payments and Computations.........................................  20
SECTION 2.14. Taxes.............................................................  21
SECTION 2.15. Sharing of Payments, Etc..........................................  22
SECTION 2.16. Use of Proceeds...................................................  23
SECTION 2.17. Extension of Termination Date.....................................  23
SECTION 2.18. Evidence of Debt..................................................  24
</TABLE>

                                       i
<PAGE>

                                  ARTICLE III

                    CONDITIONS TO EFFECTIVENESS AND LENDING
<TABLE>
<CAPTION>

<S>                                                                                         <C>
SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01 and 2.03.............  25
SECTION 3.02. Conditions Precedent to Monsanto Effective Date.............................  26
SECTION 3.03. Conditions Precedent to Each Revolving Credit Borrowing and Extension Date..  27
SECTION 3.04. Conditions Precedent to Each Competitive Bid Borrowing......................  27
SECTION 3.05. Determinations Under Sections 3.01 and 3.02.................................  28

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers.............................  28
SECTION 4.02. Representation and Warranty of the Lenders..................................  29

                                   ARTICLE V

                          COVENANTS OF THE BORROWERS

SECTION 5.01. Affirmative Covenants.......................................................  29
SECTION 5.02. Negative Covenants..........................................................  30
SECTION 5.03. Financial Covenant..........................................................  32

                                  ARTICLE VI
                               EVENTS OF DEFAULT

SECTION 6.01. Events of Default...........................................................  32

                                  ARTICLE VII

                                   THE AGENT

SECTION 7.01. Authorization and Action.................................................... 33
SECTION 7.02. Agent's Reliance, Etc....................................................... 34
SECTION 7.03. Citibank and Affiliates..................................................... 34
SECTION 7.04. Lender Credit Decision...................................................... 34
SECTION 7.05. Indemnification............................................................. 34
SECTION 7.06. Successor Agent............................................................. 35
SECTION 7.07. Other Agents................................................................ 35
</TABLE>

                                      ii
<PAGE>

                                  ARTICLE VIII
                                 MISCELLANEOUS
<TABLE>
<CAPTION>

<S>                                                                                      <C>
SECTION 8.01. Amendments, Etc............................................................  35
SECTION 8.02. Notices, Etc...............................................................  35
SECTION 8.03. No Waiver; Remedies........................................................  35
SECTION 8.04. Costs and Expenses.........................................................  36
SECTION 8.05. Right of Set-off...........................................................  36
SECTION 8.06. Binding Effect.............................................................  37
SECTION 8.07. Assignments and Participations.............................................  37
SECTION 8.08. Confidentiality............................................................  39
SECTION 8.09. Governing Law..............................................................  39
SECTION 8.10. Execution in Counterparts..................................................  39
SECTION 8.11. Jurisdiction, Etc..........................................................  39
SECTION 8.12. Resignation of Pharmacia as Borrower.......................................  39
SECTION 8.13. Waiver of Jury Trial.......................................................  39

Schedules
---------
Schedule I             -  List of Applicable Lending Offices
Schedule 3.01(b)       -  Disclosed Litigation

Exhibits
-------
Exhibit A-1            -  Form of Revolving Credit Note
Exhibit A-2            -  Form of Competitive Bid Note
Exhibit B-1            -  Form of Notice of Revolving Credit Borrowing
Exhibit B-2            -  Form of Notice of Competitive Bid Borrowing
Exhibit C              -  Form of Assignment and Acceptance
Exhibit D              -  Form of Assumption Agreement
Exhibit E              -  Form of Notice of Extension of Termination Date
</TABLE>

                                      iii
<PAGE>

                          FIVE YEAR CREDIT AGREEMENT

                          Dated as of August 8, 2000

          MONSANTO COMPANY, a Delaware corporation ("Monsanto"), PHARMACIA
                                                     --------
CORPORATION, a Delaware corporation ("Pharmacia" and, together with Monsanto,
                                      ---------
the "Borrowers"), the banks, financial institutions and other institutional
     ---------
lenders (the "Initial Lenders") listed on the signature pages hereof, CITIBANK,
              ---------------
N.A.  ("Citibank"), as administrative agent (the "Agent") for the Lenders (as
        --------                                  -----
hereinafter defined), SALOMON SMITH BARNEY INC. and CHASE SECURITIES INC., as
co-lead arrangers and joint book managers, THE CHASE MANHATTAN BANK, as
syndication agent, and COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES
("Commerzbank") and BANK ONE, NA, as co-documentation agent, agree as follows:
-------------

                                   ARTICLE I

                       DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.01. Certain Defined Terms.  As used in this Agreement, the
                        ---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          "Advance" means a Revolving Credit Advance or a Competitive Bid
           -------
     Advance.

          "Affiliate" means, as to any Person, any other Person that, directly
           ---------
     or indirectly, controls, is controlled by or is under common control with
     such Person or is a director or officer of such Person.  For purposes of
     this definition, the term "control" (including the terms "controlling",
     "controlled by" and "under common control with") of a Person means the
     possession, direct or indirect, of the power to vote 5% or more of the
     Voting Stock of such Person or to direct or cause the direction of the
     management and policies of such Person, whether through the ownership of
     Voting Stock, by contract or otherwise.

          "Agent's Account" means the account of the Agent maintained by the
           ---------------
     Agent at Citibank with its office at 399 Park Avenue, New York, New York
     10043, Account No. 36852248, Attention: William Clark.

          "Aggregate Amount of Financing Outstanding" at any time means the
           -----------------------------------------
     aggregate amount of proceeds received in connection with a Permitted
     Receivables Financing, less (a) any amounts collected in connection with
     the accounts receivable sold, conveyed or otherwise transferred pursuant to
     such financing and (b) the amount of any defaulted accounts receivable the
     uncollectibility of which is a risk assumed by the transferee of such
     accounts receivable.

          "Applicable Lending Office" means, with respect to each Lender, such
           -------------------------
     Lender's Domestic Lending Office in the case of a Base Rate Advance and
     such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
     Advance and, in the case of a Competitive  Bid Advance, the office of such
     Lender notified by such Lender to the Agent as its Applicable Lending
     Office with respect to such Competitive Bid Advance.

<PAGE>

          "Applicable Margin"  means, as to any Borrower, for Base Rate Advances
           -----------------
     made to such Borrower, 0.0% per annum and, for Eurodollar Rate Advances
     made to such Borrower as of any date, a percentage per annum determined by
     reference to the Public Debt Rating of such Borrower in effect on such date
     as set forth below:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
Public Debt Rating                          Public Debt Rating                      Applicable Margin for
(Short Term Rating)                         (Long Term Rating)                      Eurodollar Rate Advances
S&P/Moody's                                 S&P/Moody's
---------------------------------------------------------------------------------------------------------------
Level 1                                     Level 1
-------                                     -------
A-1+ and P-1                                A+ or A1                                0.180%
---------------------------------------------------------------------------------------------------------------
Level 2                                     Level 2
-------                                     -------
Lower than Level 1 but at least             Lower than Level 1 but at least
A-1 and P-1                                 A or A2                                 0.220%
---------------------------------------------------------------------------------------------------------------
Level 3                                     Level 3
-------                                     -------
Lower than Level 2 but                      Lower than Level 2 but at at least
at least A-1 or P-1                         A- or A3                                0.305%
---------------------------------------------------------------------------------------------------------------
Level 4                                     Level 4
-------                                     -------
Lower than Level 3 but                      Lower than Level 3 but at
at least A-2 and P-2                        least  BBB+ or Baa1                     0.500%
---------------------------------------------------------------------------------------------------------------
Level 5                                     Level 5
-------                                     -------
Lower than Level 4                          Lower than Level 4                      0.800%
---------------------------------------------------------------------------------------------------------------
</TABLE>

          "Applicable Percentage"  means, as to any Borrower, a percentage per
           ---------------------
     annum determined by reference to the Public Debt Rating of such Borrower in
     effect on such date as set forth below:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------
<S>                                        <C>                                        <C>
Public Debt Rating                          Public Debt Rating                         Applicable
(Short Term Rating)                         (Long Term Rating)                         Percentage
S&P/Moody's                                 S&P/Moody's
--------------------------------------------------------------------------------------------------------------
Level 1                                     Level 1
-------                                     -------
A-1+ and P-1                                A+ or A1                                   0.070%
--------------------------------------------------------------------------------------------------------------
Level 2                                     Level 2
-------                                     -------
Lower than Level 1 but                      Lower than Level 1 but at
at least A-1 and P-1                        least  A and A2                            0.080%
--------------------------------------------------------------------------------------------------------------
Level 3                                     Level 3
-------                                     -------
Lower than Level 2 but                      Lower than Level 2 but at least
at least A-1 or P-1                         A- or A3                                   0.095%
--------------------------------------------------------------------------------------------------------------
Level 4                                     Level 4
-------                                     -------
Lower than Level 3 but                      Lower than Level 3 but at least
at least A-2 and P-2                        BBB+ or Baa1                               0.125%
--------------------------------------------------------------------------------------------------------------
Level 5                                     Level 5
-------                                     -------
Lower than Level 4                          Lower than Level 4                         0.200%
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                       2
<PAGE>

          "Applicable Utilization Fee"  means, as to any Borrower, for each date
           --------------------------
     on which the aggregate principal amount of the Advances exceeds 25% of the
     aggregate Commitments, a percentage per annum determined by reference to
     the Public Debt Rating of such Borrower in effect on such date as set forth
     below:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------
Public Debt Rating                          Public Debt Rating                  Applicable
(Short Term Rating)                         (Long Term Rating)                  Utilization Fee
S&P/Moody's                                 S&P/Moody's
--------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                <C>
Level 1                                     Level 1
-------                                     -------
A-1+ and P-1                                A+ or A1                            0.050%
--------------------------------------------------------------------------------------------------------------
Level 2                                     Level 2
-------                                     -------
Lower than Level 1 but                      Lower than Level 1 but
at least A-1 and P-1                        at least A or A2                    0.050%
--------------------------------------------------------------------------------------------------------------
Level 3                                     Level 3
-------                                     -------
Lower than Level 2 but                      Lower than Level 2 but at least
at least A-1 or P-1                         A- or A3                            0.100%
--------------------------------------------------------------------------------------------------------------
Level 4                                     Level 4
-------                                     -------
Lower than Level 3 but                      Lower than Level 3 but at least
at least A-2 and P-2                        BBB+ or Baa1                        0.125%
--------------------------------------------------------------------------------------------------------------
Level 5                                     Level 5
-------                                     -------
Lower than Level 4                          Lower than Level 4                  0.250%
--------------------------------------------------------------------------------------------------------------
</TABLE>

          "Assignment and Acceptance" means an assignment and acceptance entered
           -------------------------
     into by a Lender and an Eligible Assignee, and accepted by the Agent, in
     substantially the form of Exhibit C hereto.

          "Assuming Lender" has the meaning specified in Section 2.17(c).
           ---------------

          "Assumption Agreement" has the meaning specified in Section 2.17(c).
           --------------------

          "Base Rate" means a fluctuating interest rate per annum in effect from
           ---------
     time to time, which rate per annum shall at all times be equal to the
     highest of:

                (a)  the rate of interest announced publicly by Citibank in New
          York, New York, from time to time, as Citibank's base rate;

                (b)  the sum (adjusted to the nearest 1/4 of 1% or, if there is
          no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1%
          per annum, plus (ii) the rate obtained by dividing (A) the latest
                     ----
          three-week moving average of secondary market morning offering rates
          in the United States for three-month certificates of deposit of major
          United States money market banks, such three-week moving average
          (adjusted to the basis of a year of 360 days) being determined weekly
          on each Monday (or, if such day is not a Business Day, on the next
          succeeding Business Day) for the three-week period ending on the
          previous Friday by Citibank on the basis of such rates reported by
          certificate of deposit dealers to and published by the Federal Reserve
          Bank of New York or, if such publication shall be suspended or
          terminated, on the basis of quotations for such rates received by
          Citibank from three New York certificate of deposit dealers of
          recognized standing selected by Citibank, by (B) a percentage equal to
          100% minus the average of the daily percentages specified during such
          three-week period by the Board of Governors of the Federal Reserve
          System (or any successor) for determining the maximum reserve
          requirement (including, but not limited to, any emergency,
          supplemental or other marginal reserve requirement) for Citibank with
          respect to liabilities consisting of or including (among other
          liabilities) three-month U.S. dollar non-personal time deposits in the
          United States, plus (iii) the average during such three-week period
                         ----
          of the annual assessment rates estimated by Citibank for determining
          the then

                                       3
<PAGE>

     current annual assessment payable by Citibank to the Federal Deposit
     Insurance Corporation (or any successor) for insuring U.S. dollar deposits
     of Citibank in the United States; and

              (c)  1/2 of one percent per annum above the Federal Funds Rate.

     "Base Rate Advance" means an Advance that bears interest as provided
      -----------------
     in Section 2.07(a)(i).

          "Borrowing" means a Revolving Credit Borrowing or a Competitive Bid
           ---------
     Borrowing.

          "Business Day" means a day of the year on which banks are not required
     or authorized by law to close in New York City and, if the applicable
     Business Day relates to any Eurodollar Rate Advances, on which dealings are
     carried on in the London interbank market.

          "Commitment" means as to any Lender (a) the amount set forth opposite
           ----------
     such Lender's name on the signature pages hereof, (b) if such Lender has
     become a Lender hereunder pursuant to an Assumption Agreement, the amount
     set forth in such Assumption Agreement or (c) if such Lender has entered
     into any Assignment and Acceptance, the amount set forth for such Lender in
     the Register maintained by the Agent pursuant to Section 8.07(d), as such
     amount may be reduced pursuant to Section 2.05.

          "Competitive Bid Advance" means an advance by a Lender to a Borrower
           -----------------------
     as part of a Competitive Bid Borrowing resulting from the competitive
     bidding procedure described in Section 2.03 and refers to a Fixed Rate
     Advance or a LIBO Rate Advance.

          "Competitive Bid Borrowing" means a borrowing consisting of
           -------------------------
     simultaneous Competitive Bid Advances from each of the Lenders whose offer
     to make one or more Competitive Bid Advances as part of such borrowing has
     been accepted by the Borrower under the competitive bidding procedure
     described in Section 2.03.

          "Competitive Bid Note" means a promissory note of the Borrower of a
           --------------------
     Competitive Bid Advance payable to the order of any Lender, in
     substantially the form of Exhibit A-2 hereto, evidencing the indebtedness
     of such Borrower to such Lender resulting from such Competitive Bid Advance
     made by such Lender.

          "Competitive Bid Reduction" has the meaning specified in Section 2.01.
           -------------------------

          "Confidential Information" means information that any Borrower
           ------------------------
     furnishes to the Agent or any Lender which information is non-public,
     confidential or proprietary in nature, but does not include any such
     information (a) that is or becomes generally available to the public other
     than as the result of an unauthorized disclosure by the Agent or any Lender
     or (b) that is or becomes available to the Agent or such Lender from a
     source other than a Borrower and the Agent or such Lender had no reason to
     believe that such source did not have legitimate possession of such
     information or such source was under any obligation to keep such
     information confidential.

          "Consenting Lender" has the meaning specified in Section 2.17(b).
           -----------------

          "Consolidated" refers to the consolidation of accounts in accordance
           ------------
     with GAAP.

          "Consolidated Net Worth" at any time, means the sum of the capital
           ----------------------
     stock (excluding treasury stock and capital stock subscribed for and
     unissued) and surplus (including earned surplus, capital surplus and the
     balance of the current profit and loss account not transferred to surplus)
     accounts of such Borrower and its Subsidiaries appearing on the most recent
     consolidated balance sheet of such Borrower and its Subsidiaries delivered
     pursuant to Section 5.01(f)(i) or (ii), as applicable, prepared in
     accordance with generally accepted accounting principles consistent with
     those applied in the preparation of the financial statements referred to in
     Section 4.01(e).

                                       4
<PAGE>

          "Convert", "Conversion" and "Converted" each refers to a conversion of
           -------    ----------       ---------
     Revolving Credit Advances of one Type into Revolving Credit Advances of the
     other Type pursuant to Section 2.08 or 2.09.

          "Debt" of any Person means, without duplication, (a) all indebtedness
           ----
     of such Person for borrowed money, (b) all obligations of such Person for
     the deferred purchase price of property or services (other than trade
     payables not overdue by more than 60 days incurred in the ordinary course
     of such Person's business), (c) all obligations of such Person evidenced by
     notes, bonds, debentures or other similar instruments, (d) all obligations
     of such Person created or arising under any conditional sale or other title
     retention agreement with respect to property acquired by such Person (even
     though the rights and remedies of the seller or lender under such agreement
     in the event of default are limited to repossession or sale of such
     property), (e) all obligations of such Person as lessee under leases that
     have been or should be, in accordance with GAAP, recorded as capital
     leases, (f) all obligations, contingent or otherwise, of such Person in
     respect of acceptances, letters of credit or similar extensions of credit,
     (g) all obligations of such Person in respect of Hedge Agreements, (h) all
     Debt of others referred to in clauses (a) through (g) above or clause (i)
     below guaranteed directly or indirectly in any manner by such Person, or in
     effect guaranteed directly or indirectly by such Person through an
     agreement (1) to pay or purchase such Debt or to advance or supply funds
     for the payment or purchase of such Debt, (2) to purchase, sell or lease
     (as lessee or lessor) property, or to purchase or sell services, primarily
     for the purpose of enabling the debtor to make payment of such Debt or to
     assure the holder of such Debt against loss, (3) to supply funds to or in
     any other manner invest in the debtor (including any agreement to pay for
     property or services irrespective of whether such property is received or
     such services are rendered) or (4) otherwise to assure a creditor against
     loss, and (i) all Debt referred to in clauses (a) through (h) above secured
     by (or for which the holder of such Debt has an existing right, contingent
     or otherwise, to be secured by) any Lien on property (including, without
     limitation, accounts and contract rights) owned by such Person, even though
     such Person has not assumed or become liable for the payment of such Debt.

          "Debt for Borrowed Money" of any Person means, without duplication,
           -----------------------
     (a) all indebtedness of such Person for borrowed money, (b) all obligations
     of such Person evidenced by notes, bonds, debentures or other similar
     instruments, (c) all obligations of such Person as lessee under leases that
     have been or should be, in accordance with GAAP, recorded as capital
     leases, (d) during the term of a Permitted Receivables Financing, the
     Aggregate Amount of Financing Outstanding in connection with domestic
     accounts receivable pursuant to such financing and (e) all Debt of others
     referred to in clauses (a) through (d) above guaranteed directly or
     indirectly in any manner by such Person.

          "Default" means any Event of Default or any event that would
           -------
     constitute an Event of Default but for the requirement that notice be given
     or time elapse or both.

          "Disclosed Litigation" has the meaning specified in Section 3.01(b).
           --------------------

          "Domestic Lending Office" means, with respect to any Lender, the
           -----------------------
     office of such Lender specified as its "Domestic Lending Office" opposite
     its name on Schedule I hereto or in the Assumption Agreement or the
     Assignment and Acceptance pursuant to which it became a Lender, or such
     other office of such Lender as such Lender may from time to time specify to
     the Borrowers and the Agent.

          "EDGAR" means the electronic disclosure system for the receipt,
           -----
     storage, retrieval and dissemination of public documents filed with the
     Securities and Exchange Commission.

          "Effective Date" has the meaning specified in Section 3.01.
           --------------

          "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
           -----------------
     and (iii) any other Person approved by the Agent and, unless an Event of
     Default has occurred and is continuing at the time any assignment is
     effected in accordance with Section 8.07, the Borrowers, such approval not
     to be unreasonably withheld or delayed; provided, however, that neither any
                                             --------  -------
     Borrower nor an Affiliate of any Borrower shall qualify as an Eligible
     Assignee.

                                       5
<PAGE>

          "Environmental Action" means any action, suit, demand, demand letter,
           --------------------
     claim, notice of non-compliance or violation, notice of liability or
     potential liability, investigation, proceeding, consent order or consent
     agreement relating to any Environmental Law, Environmental Permit or
     Hazardous Materials or arising from alleged injury or threat of injury to
     health, safety or the environment, including, without limitation, (a) by
     any governmental or regulatory authority for enforcement, cleanup, removal,
     response, remedial or other actions or damages and (b) by any governmental
     or regulatory authority or any third party for damages, contribution,
     indemnification, cost recovery, compensation or injunctive relief.

          "Environmental Law" means any federal, state, local or foreign
           -----------------
     statute, law, ordinance, rule, regulation, code, order, judgment, decree or
     written judicial policy or guidance that is publicly available, in each
     case relating to pollution or protection of the environment, health and
     safety as they relate to Hazardous Materials or natural resources,
     including, without limitation, those relating to the use, handling,
     transportation, treatment, storage, disposal, release or discharge of
     Hazardous Materials.

          "Environmental Permit" means any permit, approval, identification
           --------------------
     number, license or other authorization required under any Environmental
     Law.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
           -----
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder.

          "ERISA Affiliate" means any Person that for purposes of Title IV of
           ---------------
     ERISA is a member of any Borrower's controlled group, or under common
     control with any Borrower, within the meaning of Section 414 of the
     Internal Revenue Code.

          "ERISA Event" means (a) the occurrence of a reportable event, within
           -----------
     the meaning of Section 4043 of ERISA, with respect to any Plan unless the
     30-day notice requirement with respect to such event has been waived by the
     PBGC; (b) the application for a minimum funding waiver with respect to a
     Plan; (c) the provision by the administrator of any Plan of a notice of
     intent to terminate such Plan pursuant to Section 4041(c) of ERISA
     (including any such notice with respect to a plan amendment referred to in
     Section 4041(e) of ERISA); (d) the cessation of operations at a facility of
     any Borrower or any ERISA Affiliate in the circumstances described in
     Section 4062(e) of ERISA; (e) the withdrawal by any Borrower or any ERISA
     Affiliate from a Multiple Employer Plan during a plan year for which it was
     a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
     conditions for the imposition of a lien under Section 302(f) of ERISA shall
     have been met with respect to any Plan; (g) the adoption of an amendment to
     a Plan requiring the provision of security to such Plan pursuant to Section
     307 of ERISA; or (h) the institution by the PBGC of proceedings to
     terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of
     any event or condition described in Section 4042 of ERISA that constitutes
     grounds for the termination of, or the appointment of a trustee to
     administer, a Plan.

          "Eurocurrency Liabilities" has the meaning assigned to that term in
           ------------------------
     Regulation D of the Board of Governors of the Federal Reserve System, as in
     effect from time to time.

          "Eurodollar Lending Office" means, with respect to any Lender, the
           -------------------------
     office of such Lender specified as its "Eurodollar Lending Office" opposite
     its name on Schedule I hereto or in the Assumption Agreement or the
     Assignment and Acceptance pursuant to which it became a Lender (or, if no
     such office is specified, its Domestic Lending Office), or such other
     office of such Lender as such Lender may from time to time specify to the
     Borrowers and the Agent.

          "Eurodollar Rate" means, for any Interest Period for each Eurodollar
           ---------------
     Rate Advance comprising part of the same Revolving Credit Borrowing, an
     interest rate per annum equal to the rate per annum (rounded upwards, if
     necessary, to the nearest 1/100 of 1%) appearing on Telerate Markets Page
     3750 (or any successor page) as the London interbank offered rate for
     deposits in U.S. dollars at approximately 11:00 A.M. (London time) two
     Business Days prior to the first day of such Interest Period for a term
     comparable to such Interest Period or, if for any reason such rate is not
     available, the average (rounded upward to the nearest whole multiple of
     1/16 of 1% per annum, if such average is not such a multiple) of the rate
     per annum at which deposits in U.S. dollars are offered by the principal
     office of each of the

                                       6
<PAGE>

     Reference Banks in London, England to prime banks in the London interbank
     market at 11:00 A.M. (London time) two Business Days before the first day
     of such Interest Period in an amount substantially equal to such Reference
     Bank's ratable share of an amount equal to such Revolving Credit Borrowing
     to be outstanding during such Interest Period and for a period equal to
     such Interest Period. If the Telerate Markets Page 3750 (or any successor
     page) is unavailable, the Eurodollar Rate for any Interest Period for each
     Advance comprising part of the same Revolving Credit Borrowing shall be
     determined by the Agent on the basis of applicable rates furnished to and
     received by the Agent from the Reference Banks two Business Days before the
     first day of such Interest Period, subject, however, to the provisions of
                                        -------  -------
     Section 2.08.

          "Eurodollar Rate Advance" means an Advance that bears interest as
           -----------------------
     provided in Section 2.07(a)(ii).

          "Eurodollar Rate Reserve Percentage" for any Interest Period for all
           ----------------------------------
     Eurodollar Rate Advances or LIBO Rate Advances comprising part of the same
     Borrowing means the reserve percentage applicable two Business Days before
     the first day of such Interest Period under regulations issued from time to
     time by the Board of Governors of the Federal Reserve System (or any
     successor) for determining the maximum reserve requirement (including,
     without limitation, any emergency, supplemental or other marginal reserve
     requirement) for a member bank of the Federal Reserve System in New York
     City with respect to liabilities or assets consisting of or including
     Eurocurrency Liabilities (or with respect to any other category of
     liabilities that includes deposits by reference to which the interest rate
     on Eurodollar Rate Advances or LIBO Rate Advances is determined) having a
     term equal to such Interest Period.

          "Events of Default" has the meaning specified in Section 6.01.
           -----------------

          "Extension Date" has the meaning specified in Section 2.17(b).
           --------------

          "Federal Funds Rate" means, for any period, a fluctuating interest
           ------------------
     rate per annum equal for each day during such period to the weighted
     average of the rates on overnight Federal funds transactions with members
     of the Federal Reserve System arranged by Federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or, if
     such rate is not so published for any day that is a Business Day, the
     average of the quotations for such day on such transactions received by the
     Agent from three Federal funds brokers of recognized standing selected by
     it.

          "Fixed Rate Advances" has the meaning specified in Section 2.03(a)(i).
           -------------------

          "Funded Debt" at any time, means Debt for Borrowed Money in respect of
           -----------
     the Advances made to a Borrower, in the case of a Borrower, at such time
     and all other Debt for Borrowed Money that by its terms matures more than
     one year after the date of its creation or matures within one year from
     such date but is renewable or extendible, at the option of such Person, to
     a date more than one year after such date or arises under a revolving
     credit or similar agreement that obligates the lender or lenders to extend
     credit during a period of more than one year after such date as set forth
     in the then most recent financial statements of such Borrower and its
     Subsidiaries delivered pursuant to Section 5.01(f)(i) or (ii), as
     applicable, prepared in accordance with generally accepted accounting
     principles consistent with those applied in preparation of the financial
     statements referred to in Section 4.01(e).

          "GAAP" has the meaning specified in Section 1.03.
           ----

          "Hazardous Materials" means (a) petroleum and petroleum products,
           -------------------
     byproducts or breakdown products, radioactive materials, asbestos-
     containing materials, polychlorinated biphenyls and radon gas and (b) any
     other chemicals, materials or substances designated, classified or
     regulated as hazardous or toxic or as a pollutant or contaminant under any
     Environmental Law.

                                       7
<PAGE>

          "Hedge Agreements" means interest rate swap, cap or collar agreements,
           ----------------
     interest rate future or option contracts, currency swap agreements,
     currency future or option contracts and other similar agreements.

          "Information Memorandum" means the information memorandum dated July
           ----------------------
     11, 2000 (including all exhibits and attachments thereto) used by the Agent
     in connection with the syndication of the Commitments, as up-dated from
     time to time by any subsequent filings by either Borrower with the
     Securities and Exchange Commission.

          "Interest Period" means, for each Eurodollar Rate Advance comprising
           ---------------
     part of the same Revolving Credit Borrowing and each LIBO Rate Advance
     comprising part of the same Competitive Bid Borrowing, the period
     commencing on the date of such Eurodollar Rate Advance or LIBO Rate Advance
     or the date of the Conversion of any Base Rate Advance into such Eurodollar
     Rate Advance and ending on the last day of the period selected by the
     relevant Borrower pursuant to the provisions below and, thereafter, with
     respect to Eurodollar Rate Advances, each subsequent period commencing on
     the last day of the immediately preceding Interest Period and ending on the
     last day of the period selected by the such Borrower pursuant to the
     provisions below.  The duration of each such Interest Period shall be one,
     two, three or six months or, if available to all Lenders, nine or twelve
     months, as the relevant Borrower may, upon notice received by the Agent not
     later than 11:00 A.M. (New York City time) on the third Business Day prior
     to the first day of such Interest Period, select; provided, however, that:
                                                       --------  -------

                (i)   the Borrowers may not select any Interest Period that ends
          after the Termination Date;

                (ii)  Interest Periods commencing on the same date for
          Eurodollar Rate Advances comprising part of the same Revolving Credit
          Borrowing or for LIBO Rate Advances comprising part of the same
          Competitive Bid Borrowing shall be of the same duration;

                (iii) whenever the last day of any Interest Period would
          otherwise occur on a day other than a Business Day, the last day of
          such Interest Period shall be extended to occur on the next succeeding
          Business Day, provided, however, that, if such extension would cause
                        --------  -------
          the last day of such Interest Period to occur in the next following
          calendar month, the last day of such Interest Period shall occur on
          the next preceding Business Day; and

                (iv)  whenever the first day of any Interest Period occurs on
          the last day of a calendar month or on a day of an initial calendar
          month for which there is no numerically corresponding day in the
          calendar month that succeeds such initial calendar month by the number
          of months equal to the number of months in such Interest Period, such
          Interest Period shall end on the last Business Day of such succeeding
          calendar month.

          "Internal Revenue Code" means the Internal Revenue Code of 1986, as
           ---------------------
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder.

          "Lenders" means the Initial Lenders, each Assuming Lender that shall
           -------
     become a party hereto pursuant to Section 2.17 and each Person that shall
     become a party hereto pursuant to Section 2.11, Section 2.12 or Section
     8.07.

          "Leverage Ratio" of a Borrower means the ratio of Consolidated Funded
           --------------
     Debt of such Borrower and its Subsidiaries to the sum of Consolidated
     Funded Debt of such Borrower and its Subsidiaries plus Consolidated Net
                                                       ----
     Worth.

          "LIBO Rate" means, for any Interest Period for all LIBO Rate Advances
           ---------
     comprising part of the same Competitive Bid Borrowing, an interest rate per
     annum equal to the rate per annum (rounded upward to the nearest 1/100 of
     1%) appearing on Telerate Markets Page 3750 (or any successor page) as the
     London interbank offered rate for deposits in U.S. dollars at approximately
     11:00 A.M. (London time) two

                                       8
<PAGE>

     Business Days prior to the first day of such Interest Period for a term
     comparable to such Interest Period or, if for any reason such rate is not
     available, the average (rounded upward to the nearest whole multiple of
     1/16 of 1% per annum, if such average is not such a multiple) of the rate
     per annum at which deposits in U.S. dollars are offered by the principal
     office of each of the Reference Banks in London, England to prime banks in
     the London interbank market at 11:00 A.M. (London time) two Business Days
     before the first day of such Interest Period in an amount substantially
     equal to the amount that would be the Reference Banks' respective ratable
     shares of such Borrowing if such Borrowing were to be a Revolving Credit
     Borrowing to be outstanding during such Interest Period and for a period
     equal to such Interest Period.  If the Telerate Markets Page 3750 (or any
     successor page) is unavailable, the LIBO Rate for any Interest Period for
     each LIBO Rate Advance comprising part of the same Competitive Bid
     Borrowing shall be determined by the Agent on the basis of applicable rates
     furnished to and received by the Agent from the Reference Banks two
     Business Days before the first day of such Interest Period, subject,
                                                                 -------
     however, to the provisions of Section 2.08.
     -------

          "LIBO Rate Advance" has the meaning specified in Section 2.03(a)(i).
           -----------------

          "Lien" means any lien, security interest or other charge or
           ----
     encumbrance of any kind, or any other type of preferential arrangement
     having the effect of security, including, without limitation, the lien or
     retained security title of a conditional vendor.

          "Long Term Rating" has the meaning assigned in the definition of
           ----------------
     "Public Debt Rating".

          "Material Adverse Change" means any material adverse change in the
           -----------------------
     financial condition or results of operations of either Borrower or either
     Borrower and its Consolidated Subsidiaries taken as a whole.

          "Material Adverse Effect" means a material adverse effect on (a) the
           -----------------------
     financial condition or results of operations of either Borrower or either
     Borrower and its Consolidated Subsidiaries taken as a whole or (b) the
     ability of either Borrower to perform its obligations under this Agreement
     or any Note to which it is a party.

          "Material Subsidiary" of either Borrower means, at any time, a
           -------------------
     domestic Consolidated Subsidiary of such Borrower having (i) at least 10%
     of the total Consolidated assets of such Borrower and its Subsidiaries
     (determined as of the last day of the most recent fiscal quarter of such
     Borrower) or (ii) at least 10% of the Consolidated net sales of such
     Borrower and its Subsidiaries for the twelve month period ending on the
     last day of the most recent fiscal quarter of such Borrower.

          "Monsanto Effective Date" has the meaning specified in Section 3.02.
           -----------------------

          "Moody's" means Moody's Investors Service, Inc.
           -------

          "Multiemployer Plan" means a multiemployer plan, as defined in Section
           ------------------
     4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate is making
     or accruing an obligation to make contributions, or has within any of the
     preceding five plan years made or accrued an obligation to make
     contributions.

          "Multiple Employer Plan" means a single employer plan, as defined in
           ----------------------
     Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
     Borrower or any ERISA Affiliate and at least one Person other than the
     Borrowers and the ERISA Affiliates or (b) was so maintained and in respect
     of which any Borrower or any ERISA Affiliate could have liability under
     Section 4064 or 4069 of ERISA in the event such plan has been or were to be
     terminated.

          "Net Asset Transfer" means the transfer by Pharmacia to Monsanto of,
           ------------------
     among other things, certain assets and liabilities comprising the
     agricultural business of Pharmacia, as more particularly described in the
     Information Memorandum.

                                       9
<PAGE>

          "Non-Consenting Lender" has the meaning specified in Section 2.17(b).
           ---------------------

          "Note" means a Revolving Credit Note or a Competitive Bid Note.
           ----

          "Notice of Revolving Credit Borrowing" has the meaning specified in
           ------------------------------------
     Section 2.02(a).

          "Notice of Competitive Bid Borrowing" has the meaning specified in
           -----------------------------------
     Section 2.03(a).

          "PBGC" means the Pension Benefit Guaranty Corporation (or any
           ----
     successor).

          "Permitted Receivables Financing"  means any financing pursuant to
           -------------------------------
     which the Borrower or any Subsidiary of the Borrower may sell, convey, or
     otherwise transfer to a Receivables Subsidiary or any other Person, or
     grant a security interest in, any accounts receivable (and related assets)
     of the Borrower or such Subsidiary, provided that such financing shall be
     on customary market terms and shall be with limited or no recourse to the
     Borrower and its Subsidiaries (other than the Receivables Subsidiary)
     except to the extent customary for such transactions.

          "Person" means an individual, partnership, corporation (including a
           ------
     business trust), joint stock company, trust, unincorporated association,
     joint venture, limited liability company or other entity, or a government
     or any political subdivision or agency thereof.

          "Plan" means a Single Employer Plan or a Multiple Employer Plan.
           ----

          "Public Debt Rating" means, as to any Borrower as of any date, the
           ------------------
     lowest rating that has been most recently announced by either S&P or
     Moody's, as the case may be, for any class of non-credit enhanced long-term
     senior unsecured debt issued by such Borrower (its "Long Term Rating"), or,
                                                         ----------------
     if such Borrower does not have in effect a rating for non-credit enhanced
     long-term senior unsecured debt, the lowest rating that has been most
     recently announced by either S&P or Moody's, as the case may, be for such
     Borrower's commercial paper (its "Short Term Rating").  For purposes of the
                                       -----------------
     foregoing, (a) if only one of S&P and Moody's shall have in effect a Public
     Debt Rating, the Applicable Margin, the Applicable Percentage and the
     Applicable Utilization Fee shall be determined by reference to the
     available rating; (b) if neither S&P nor Moody's shall have in effect a
     Public Debt Rating, the Applicable Margin, the Applicable Percentage and
     the Applicable Utilization Fee will be set in accordance with Level 3 under
     the definition of "Applicable Margin", "Applicable Percentage" or
                        -----------------    ---------------------
     "Applicable Utilization Fee", as the case may be; (c) if the ratings
     ---------------------------
     established by S&P and Moody's shall fall within different levels, the
     Applicable Margin, the Applicable Percentage and the Applicable Utilization
     Fee shall be based upon the higher rating; (d) if any rating established by
     S&P or Moody's shall be changed, such change shall be effective as of the
     date on which such change is first announced publicly by the rating agency
     making such change; and (e) if S&P or Moody's shall change the basis on
     which ratings are established, each reference to the Public Debt Rating
     announced by S&P or Moody's, as the case may be, shall refer to the then
     equivalent rating by S&P or Moody's, as the case may be.

          "Receivables Subsidiary" means a bankruptcy-remote, special-purpose
           ----------------------
     wholly owned Subsidiary formed in connection with a Permitted Receivables
     Financing.

          "Reference Banks" means Citibank, The Chase Manhattan Bank and
           ---------------
     Commerzbank; provided that the Borrower may at any time substitute another
                  --------
     Lender as one of the Reference Banks, but such substitution shall terminate
     after 30 days if within such period the Required Lenders shall have
     notified the Agent of their objection to such substitution.

          "Register" has the meaning specified in Section 8.07(c).
           --------

          "Required Lenders" means at any time Lenders owed more than 50% of the
           ----------------
     then aggregate unpaid principal amount of the Revolving Credit Advances
     owing to Lenders, or, if no such principal amount is then outstanding,
     Lenders having more than 50% of the Commitments.

                                      10
<PAGE>

          "Revolving Credit Advance" means an advance by a Lender to a Borrower
           ------------------------
     as part of a Revolving Credit Borrowing and refers to a Base Rate Advance
     or a Eurodollar Rate Advance (each of which shall be a "Type" of  Revolving
                                                             ----
     Credit Advance).

          "Revolving Credit Borrowing" means a borrowing consisting of
           --------------------------
     simultaneous Revolving Credit Advances of the same Type made by each of the
     Lenders pursuant to Section 2.01.

          "Revolving Credit Note" means a promissory note of a Borrower payable
           ---------------------
     to the order of any Lender, in substantially the form of Exhibit A-1
     hereto, evidencing the aggregate indebtedness of the Borrower to such
     Lender resulting from the Revolving Credit Advances made to such Borrower
     by such Lender.

          "S&P" means Standard & Poor's, a division of The McGraw-Hill
           ---
     Companies, Inc.

          "Short Term Rating" has the meaning assigned in the definition of
           -----------------
     "Public Debt Rating".

          "Single Employer Plan" means a single employer plan, as defined in
           --------------------
     Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
     Borrower or any ERISA Affiliate and no Person other than the Borrowers and
     the ERISA Affiliates or (b) was so maintained and in respect of which any
     Borrower or any ERISA Affiliate could have liability under Section 4069 of
     ERISA in the event such plan has been or were to be terminated.

          "Subsidiary" of any Person means any corporation, partnership, joint
           ----------
     venture, limited liability company, trust or estate of which (or in which)
     more than 50% of (a) the issued and outstanding capital stock having
     ordinary voting power to elect a majority of the Board of Directors of such
     corporation (irrespective of whether at the time capital stock of any other
     class or classes of such corporation shall or might have voting power upon
     the occurrence of any contingency), (b) the interest in the capital or
     profits of such limited liability company, partnership or joint venture or
     (c) the beneficial interest in such trust or estate is at the time directly
     or indirectly owned or controlled by such Person, by such Person and one or
     more of its other Subsidiaries or by one or more of such Person's other
     Subsidiaries.

          "Termination Date" means the earlier of  (a) August 8, 2005, subject
           ----------------
     to the extension thereof pursuant to Section 2.17 and (b) the date of
     termination in whole of the Commitments pursuant to Section 2.05 or 6.01;

     provided, however, that the Termination Date of any Lender that is a Non-
     --------  -------
     Consenting Lender to any requested extension pursuant to Section 2.17 shall
     be the Termination Date in effect immediately prior to the applicable
     Extension Date for all purposes of this Agreement.

          "Voting Stock" means capital stock issued by a corporation, or
           ------------
     equivalent interests in any other Person, the holders of which are
     ordinarily, in the absence of contingencies, entitled to vote for the
     election of directors (or persons performing similar functions) of such
     Person, even if the right so to vote has been suspended by the happening of
     such a contingency.

          SECTION 1.02. Computation of Time Periods.  In this Agreement in
                        ---------------------------
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".

          SECTION 1.03. Accounting Terms. All accounting terms not
                        ----------------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
                                                             ----

                                      11
<PAGE>

                                  ARTICLE II

                       AMOUNTS AND TERMS OF THE ADVANCES

        SECTION 2.01. The Revolving Credit Advances. Each Lender severally
                      -----------------------------
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances to any Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an aggregate amount
not to exceed at any time outstanding such Lender's Commitment, provided that
                                                                --------
the aggregate amount of the Commitments of the Lenders shall be deemed used from
time to time to the extent of the aggregate amount of the Competitive Bid
Advances then outstanding and such deemed use of the aggregate amount of the
Commitments shall be allocated among the Lenders ratably according to their
respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"), provided, further, that no
                     ----------------------------------------------
Revolving Credit Advances shall be made to Monsanto until the Monsanto Effective
Date. Each Revolving Credit Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Revolving Credit Advances of the same Type made on the same day by
the Lenders ratably according to their respective Commitments. Within the limits
of each Lender's Commitment, the Borrowers may borrow under this Section 2.01,
prepay pursuant to Section 2.10 and reborrow under this Section 2.01.

        SECTION 2.02. Making the Revolving Credit Advances.  (a) Each
                      ------------------------------------
Revolving Credit Borrowing shall be made on notice, given not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, or not later than 11:00 A.M. (New York
City time) on the date of the proposed Revolving Credit Borrowing in the case of
a Revolving Credit Borrowing consisting of Base Rate Advances, by the relevant
Borrower to the Agent, which shall give to each Lender prompt notice thereof by
telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "Notice
                                                                          ------
of Revolving Credit Borrowing") shall be by telephone, confirmed immediately in
-----------------------------
writing, or telecopier or telex, in substantially the form of Exhibit B-1
hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type
of Advances comprising such Revolving Credit Borrowing, (iii) aggregate amount
of such Revolving Credit Borrowing, and (iv) in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Each Lender shall, before 1:00 P.M. (New York City time) on
the date of such Revolving Credit Borrowing, make available for the account of
its Applicable Lending Office to the Agent at the Agent's Account, in same day
funds, such Lender's ratable portion of such Revolving Credit Borrowing. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower that requested such Revolving Credit Borrowing at the Agent's
address referred to in Section 8.02.

        (b)   Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrowers may not select Eurodollar Rate Advances for any Revolving
Credit Borrowing if the aggregate amount of such Revolving Credit Borrowing is
less than $15,000,000 or if the obligation of the Lenders to make Eurodollar
Rate Advances shall then be suspended pursuant to Section 2.08 or 2.12 and (ii)
the Eurodollar Rate Advances may not be outstanding as part of more than six
separate Revolving Credit Borrowings.

        (c)   Each Notice of Revolving Credit Borrowing shall be irrevocable and
binding on the Borrower providing such notice. In the case of any Revolving
Credit Borrowing that the related Notice of Revolving Credit Borrowing specifies
is to be comprised of Eurodollar Rate Advances, such Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill on or before the date specified in such Notice
of Revolving Credit Borrowing for such Revolving Credit Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Revolving Credit Advance to be made by such Lender as part of
such Revolving Credit Borrowing when such Revolving Credit Advance, as a result
of such failure, is not made on such date.

        (d)   Unless the Agent shall have received notice from a Lender prior to
the date of any Revolving Credit Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the relevant Borrower on such date a

                                      12
<PAGE>

corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Agent, such Lender and the Borrower
that requested such Borrowing severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to such Borrower until the date such
amount is repaid to the Agent, at (i) in the case of such Borrower, the interest
rate applicable at the time to Revolving Credit Advances comprising such
Revolving Credit Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Lender's Revolving Credit Advance as
part of such Borrowing for purposes of this Agreement.

        (e)   The failure of any Lender to make the Revolving Credit Advance to
be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Revolving Credit Advance to be made
by such other Lender on the date of any Revolving Credit Borrowing.

        SECTION 2.03. The Competitive Bid Advances.  (a) Each Lender
                      ----------------------------
severally agrees that any Borrower may make Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 30 days prior to the Termination Date
in the manner set forth below; provided that, following the making of each
                               --------
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the Lenders
(computed without regard to any Competitive Bid Reduction) and provided, further
                                                               --------  -------
that no Competitive Bid Advances shall be requested by Monsanto until the
Monsanto Effective Date.

        (i)   Any Borrower may request a Competitive Bid Borrowing under this
     Section 2.03 by delivering to the Agent, by telecopier or telex, a notice
     of a Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"),
                                        -----------------------------------
     in substantially the form of Exhibit B-2 hereto, specifying therein the
     requested (v) date of such proposed Competitive Bid Borrowing, (w)
     aggregate amount of such proposed Competitive Bid Borrowing, (x) in the
     case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
     Interest Period, or in the case of a Competitive Bid Borrowing consisting
     of Fixed Rate Advances, maturity date for repayment of each Fixed Rate
     Advance to be made as part of such Competitive Bid Borrowing (which
     maturity date may not be earlier than the date occurring 30 days after the
     date of such Competitive Bid Borrowing or later than the Termination Date),
     (y) interest payment date or dates relating thereto, and (z) other terms
     (if any) to be applicable to such Competitive Bid Borrowing, not later than
     10:00 A.M. (New York City time) (A) at least one Business Day prior to the
     date of the proposed Competitive Bid Borrowing, if such Borrower shall
     specify in the Notice of Competitive Bid Borrowing that the rates of
     interest to be offered by the Lenders shall be fixed rates per annum (the
     Advances comprising any such Competitive Bid Borrowing being referred to
     herein as "Fixed Rate Advances") and (B) at least five Business Days prior
                -------------------
     to the date of the proposed Competitive Bid Borrowing, if such Borrower
     shall instead specify in the Notice of Competitive Bid Borrowing that the
     rates of interest be offered by the Lenders are to be based on the LIBO
     Rate (the Advances comprising such Competitive Bid Borrowing being referred
     to herein as "LIBO Rate Advances"). Each Notice of Competitive Bid
                   ------------------
     Borrowing shall be irrevocable and binding on the Borrower giving such
     Notice of Competitive Bid Borrowing. The Agent shall in turn promptly
     notify each Lender of each request for a Competitive Bid Borrowing received
     by it from a Borrower by sending such Lender a copy of the related Notice
     of Competitive Bid Borrowing.

        (ii)  Each Lender may, if, in its sole discretion, it elects to do so,
     irrevocably offer to make one or more Competitive Bid Advances to the
     Borrower requesting such proposed Competitive Bid Borrowing as part of such
     proposed Competitive Bid Borrowing at a rate or rates of interest specified
     by such Lender in its sole discretion, by notifying the Agent (which shall
     give prompt notice thereof to the relevant Borrower), before 9:30 A.M. (New
     York City time) on the date of such proposed Competitive Bid Borrowing, in
     the case of a Competitive Bid Borrowing consisting of Fixed Rate Advances
     and before 10:00 A.M. (New York City time) three Business Days before the
     date of such proposed Competitive Bid Borrowing, in the case of a
     Competitive Bid Borrowing consisting of LIBO Rate Advances, of the minimum
     amount and maximum amount of each Competitive Bid Advance which such Lender
     would be willing to make as part of such proposed Competitive Bid Borrowing
     (which amounts may, subject to the

                                      13
<PAGE>

     proviso to the first sentence of this Section 2.03(a), exceed such Lender's
     Commitment, if any), the rate or rates of interest therefor and such
     Lender's Applicable Lending Office with respect to such Competitive Bid
     Advance; provided that if the Agent in its capacity as a Lender shall, in
              --------
     its sole discretion, elect to make any such offer, it shall notify the
     relevant Borrower of such offer at least 30 minutes before the time and on
     the date on which notice of such election is to be given to the Agent by
     the other Lenders. If any Lender shall elect not to make such an offer,
     such Lender shall so notify the Agent, before 10:00 A.M. (New York City
     time) on the date on which notice of such election is to be given to the
     Agent by the other Lenders, and such Lender shall not be obligated to, and
     shall not, make any Competitive Bid Advance as part of such Competitive Bid
     Borrowing; provided that the failure by any Lender to give such notice
                --------
     shall not cause such Lender to be obligated to make any Competitive Bid
     Advance as part of such proposed Competitive Bid Borrowing.

         (iii)   The Borrower requesting such proposed Competitive Bid Borrowing
     shall, in turn, before 10:30 A.M. (New York City time) on the date of such
     proposed Competitive Bid Borrowing, in the case of a Competitive Bid
     Borrowing consisting of Fixed Rate Advances and before 11:00 A.M. (New York
     City time) three Business Days before the date of such proposed Competitive
     Bid Borrowing, in the case of a Competitive Bid Borrowing consisting of
     LIBO Rate Advances, either:

               (x)  cancel such Competitive Bid Borrowing by giving the Agent
           notice to that effect, or

               (y)  accept one or more of the offers made by any Lender or
           Lenders pursuant to paragraph (ii) above, in its sole discretion, by
           giving notice to the Agent of the amount of each Competitive Bid
           Advance (which amount shall be equal to or greater than the minimum
           amount, and equal to or less than the maximum amount, notified to the
           relevant Borrower by the Agent on behalf of such Lender for such
           Competitive Bid Advance pursuant to paragraph (ii) above) to be made
           by each Lender as part of such Competitive Bid Borrowing, and reject
           any remaining offers made by Lenders pursuant to paragraph (ii) above
           by giving the Agent notice to that effect. The relevant Borrower
           shall accept the offers made by any Lender or Lenders to make
           Competitive Bid Advances in order of the lowest to the highest rates
           of interest offered by such Lenders. If two or more Lenders have
           offered the same interest rate, the amount to be borrowed at such
           interest rate will be allocated among such Lenders in proportion to
           the amount that each such Lender offered at such interest rate.

        (iv)  If the relevant Borrower notifies the Agent that such Competitive
     Bid Borrowing is cancelled pursuant to paragraph (iii)(x) above, the Agent
     shall give prompt notice thereof to the Lenders and such Competitive Bid
     Borrowing shall not be made.

        (v)   If the relevant Borrower accepts one or more of the offers made
     by any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent
     shall in turn promptly notify (A) each Lender that has made an offer as
     described in paragraph (ii) above, of the date and aggregate amount of such
     Competitive Bid Borrowing and whether or not any offer or offers made by
     such Lender pursuant to paragraph (ii) above have been accepted by such
     Borrower, (B) each Lender that is to make a Competitive Bid Advance as part
     of such Competitive Bid Borrowing, of the amount of each Competitive Bid
     Advance to be made by such Lender as part of such Competitive Bid
     Borrowing, and (C) each Lender that is to make a Competitive Bid Advance as
     part of such Competitive Bid Borrowing, upon receipt, that the Agent has
     received forms of documents appearing to fulfill the applicable conditions
     set forth in Article III.  Each Lender that is to make a Competitive Bid
     Advance as part of such Competitive Bid Borrowing shall, before 12:00 noon
     (New York City time) on the date of such Competitive Bid Borrowing
     specified in the notice received from the Agent pursuant to clause (A) of
     the preceding sentence or any later time when such Lender shall have
     received notice from the Agent pursuant to clause (C) of the preceding
     sentence, make available for the account of its Applicable Lending Office
     to the Agent at the Agent's Account, in same day funds, such Lender's
     portion of such Competitive Bid Borrowing.  Upon fulfillment of the
     applicable conditions set forth in Article III and after receipt by the
     Agent of such funds, the Agent will make such funds available to the
     relevant Borrower at the Agent's address referred to in Section 8.02.
     Promptly after each Competitive Bid Borrowing the Agent will notify each
     Lender of the amount of the Competitive Bid

                                      14
<PAGE>

    Borrowing, the consequent Competitive Bid Reduction and the dates upon which
    such Competitive Bid Reduction commenced and will terminate.

        (vi)  If the relevant Borrower notifies the Agent that it accepts one or
    more of the offers made by any Lender or Lenders pursuant to paragraph
    (iii)(y) above, such notice of acceptance shall be irrevocable and binding
    on such Borrower. Such Borrower shall indemnify each Lender against any
    loss, cost or expense incurred by such Lender as a result of any failure to
    fulfill on or before the date specified in the related Notice of Competitive
    Bid Borrowing for such Competitive Bid Borrowing the applicable conditions
    set forth in Article III, including, without limitation, any loss (excluding
    loss of anticipated profits), cost or expense incurred by reason of the
    liquidation or reemployment of deposits or other funds acquired by such
    Lender to fund the Competitive Bid Advance to be made by such Lender as part
    of such Competitive Bid Borrowing when such Competitive Bid Advance, as a
    result of such failure, is not made on such date.

        (b)   Each Competitive Bid Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrowers shall be
in compliance with the limitation set forth in the proviso to the first sentence
of subsection (a) above.

        (c)   Within the limits and on the conditions set forth in this Section
2.03, the Borrowers may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03, provided that a Competitive Bid Borrowing shall not be made within three
      --------
Business Days of the date of any other Competitive Bid Borrowing.

        (d)   Each Borrower shall repay to the Agent for the account of each
Lender that has made a Competitive Bid Advance to such Borrower, on the maturity
date of each Competitive Bid Advance (such maturity date being that specified by
such Borrower for repayment of such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above and provided in the Competitive Bid Note evidencing such Competitive Bid
Advance), the then unpaid principal amount of such Competitive Bid Advance.  No
Borrower shall have any right to prepay any principal amount of any Competitive
Bid Advance unless, and then only on the terms, specified by the relevant
Borrower for such Competitive Bid Advance in the related Notice of Competitive
Bid Borrowing delivered pursuant to subsection (a)(i) above and set forth in the
Competitive Bid Note evidencing such Competitive Bid Advance.

        (e)   Each Borrower shall pay interest on the unpaid principal amount of
each Competitive Bid Advance made to it from the date of such Competitive Bid
Advance to the date the principal amount of such Competitive Bid Advance is
repaid in full, at the rate of interest for such Competitive Bid Advance
specified by the Lender making such Competitive Bid Advance in its notice with
respect thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by such Borrower for such Competitive
Bid Advance in the related Notice of Competitive Bid Borrowing delivered
pursuant to subsection (a)(i) above, as provided in the Competitive Bid Note
evidencing such Competitive Bid Advance.  Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on the
amount of unpaid principal of and interest on each Competitive Bid Advance owing
to a Lender, payable in arrears on the date or dates interest is payable
thereon, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Competitive Bid Advance under the terms of
the Competitive Bid Note evidencing such Competitive Bid Advance unless
otherwise agreed in such Competitive Bid Note.

        (f)   The indebtedness of a Borrower resulting from each Competitive Bid
Advance made to such Borrower as part of a Competitive Bid Borrowing shall be
evidenced by a separate Competitive Bid Note of such Borrower payable to the
order of the Lender making such Competitive Bid Advance.

        SECTION 2.04. Fees. (a)  Facility Fee.  The Borrowers agree to pay
                      ----       ------------
to the Agent for the account of each Lender a facility fee on the aggregate
amount of such Lender's Commitment from the Effective Date in the case of each
Initial Lender and from the later of the Effective Date and the effective date
specified in the Assumption Agreement or the Assignment and Acceptance pursuant
to which it became a Lender in the case of each other Lender until the
Termination Date at a rate per annum equal to the Applicable Percentage in
effect from time

                                      15
<PAGE>

to time, payable in arrears quarterly on the last day of each March, June,
September and December commencing September 30, 2000, and on the Termination
Date.

        (b)   Agent's Fees.  The Borrowers shall pay to the Agent for its own
              ------------
account such fees as may from time to time be agreed between the Borrowers and
the Agent.

        SECTION 2.05. Termination or Reduction of the Commitments.  The
                      -------------------------------------------
Borrowers shall have the right, upon at least three Business Days' notice to the
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that each partial reduction
                                           --------
shall be in the aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and provided further that the aggregate amount of
                                 -------- -------
the Commitments of the Lenders shall not be reduced to an amount that is less
than the aggregate principal amount of the Competitive Bid Advances then
outstanding.

        SECTION 2.06. Repayment of Revolving Credit Advances.  Each Borrower
                      --------------------------------------
shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Revolving Credit Advances
made to such Borrower then outstanding.

        SECTION 2.07. Interest on Revolving Credit Advances; Regulation D
                      ---------------------------------------------------
Compensation.  (a)  Scheduled Interest.  Each Borrower shall pay interest on the
------------        ------------------
unpaid principal amount of each Revolving Credit Advance made to such Borrower
owing to each Lender from the date of such Revolving Credit Advance until such
principal amount shall be paid in full, at the following rates per annum:

        (i)   Base Rate Advances.  During such periods as such Revolving Credit
              ------------------
     Advance is a Base Rate Advance, a rate per annum equal at all times to the
     sum of (x) the Base Rate in effect from time to time plus (y) the
                                                          ----
     Applicable Margin in effect from time to time plus (2) the Applicable
                                                   ----
     Utilization Fee, if any, in effect from time to time, payable in arrears
     quarterly on the last day of each March, June, September and December,
     during such periods and on the date such Base Rate Advance shall be
     Converted or paid in full.

        (ii)  Eurodollar Rate Advances.  During such periods as such Revolving
              ------------------------
     Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all
     times during each Interest Period for such Revolving Credit Advance to the
     sum of (x) the Eurodollar Rate for such Interest Period for such Revolving
     Credit Advance plus (y) the Applicable Margin in effect from time to time
                    ----
     plus (z) the Applicable Utilization Fee, if any, in effect from time to
     ----
     time, payable in arrears on the last day of such Interest Period and, if
     such Interest Period has a duration of more than three months, on each day
     that occurs during such Interest Period every three months from the first
     day of such Interest Period and on the date such Eurodollar Rate Advance
     shall be Converted or paid in full.

        (b)   Default Interest.  Upon the occurrence and during the continuance
              ----------------
of an Event of Default under Section 6.01(a), each Borrower shall pay interest
on (i) the unpaid principal amount of each Revolving Credit Advance made to it
owing to each Lender, payable in arrears on the dates referred to in clause (a)
above, at a rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on such Revolving Credit Advance pursuant to clause
(a) above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above.

        (c)   Regulation D Compensation.  Each Lender that is subject to reserve
              -------------------------
requirements of the Board of Governors of the Federal Reserve System (or any
successor) may require the Borrowers to pay, contemporaneously with each payment
of interest on Eurodollar Rate Advances or LIBO Rate Advances, additional
interest on the related Eurodollar Rate Advances or LIBO Rate Advances, as
applicable, of such Lender at the rate per annum equal to the excess of (i)(A)
the applicable Eurodollar Rate or LIBO Rate, divided by (B) one minus the
Eurodollar Rate Reserve Percentage over (ii) the rate specified in clause
(i)(A).  Any Lender wishing to require payment of such additional interest shall
so notify the Agent and the Borrowers, in which case such additional interest on
the Eurodollar Rate Advances or LIBO Rate Advances, as applicable, of such
Lender shall be payable to

                                      16
<PAGE>

such Lender at the place indicated in such notice with respect to each Interest
Period commencing after the giving of such notice.

        SECTION 2.08. Interest Rate Determination.  (a) Each Reference Bank
                      ---------------------------
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate and each LIBO Rate.  If any one or more of the Reference
Banks shall not furnish such timely information to the Agent for the purpose of
determining any such interest rate, the Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.
The Agent shall give prompt notice to the Borrowers and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for
the purpose of determining the interest rate under Section 2.07(a)(ii).

        (b)   If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrowers and the
Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and (ii) the obligation of the Lenders to make, or to Convert Revolving
Credit Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrowers and the Lenders that the circumstances causing
such suspension no longer exist.

        (c)   If any Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify such Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.

        (d)   On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.

        (e)   Upon the occurrence and during the continuance of any Event of
Default, (i) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.

        (f)      If Telerate Markets Page 3750 (or any successor page) is
unavailable and fewer than two Reference Banks furnish timely information to the
Agent for determining the Eurodollar Rate or LIBO Rate for any Eurodollar Rate
Advances or LIBO Rate Advances, as the case may be,

        (i)     the Agent shall forthwith notify the Borrowers and the Lenders
    that the interest rate cannot be determined for such Eurodollar Rate
    Advances,

        (ii)    with respect to Eurodollar Rate Advances, each such Advance will
    automatically, on the last day of the then existing Interest Period
    therefor, Convert into a Base Rate Advance (or if such Advance is then a
    Base Rate Advance, will continue as a Base Rate Advance), and

        (iii)  the obligation of the Lenders to make Eurodollar Rate Advances or
    LIBO Rate Advances, or to Convert Revolving Credit Advances into, Eurodollar
    Rate Advances shall be suspended until the Agent shall notify the Borrowers
    and the Lenders that the circumstances causing such suspension no longer
    exist.

        SECTION 2.09. Optional Conversion of Revolving Credit Advances.  Each
                      ------------------------------------------------
Borrower may on any Business Day, upon notice given to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12,
Convert all Revolving Credit Advances made to it of one Type comprising the same
Borrowing into Revolving Credit Advances of the other Type; provided, however,
                                                            --------  -------
that any Conversion of Eurodollar Rate Advances into Base Rate Advances

                                      17
<PAGE>

shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result
in more separate Revolving Credit Borrowings than permitted under Section
2.02(b).  Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Revolving
Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for each such
Advance.  Each notice of Conversion shall be irrevocable and binding on the
Borrower giving such notice.

        SECTION 2.10.  Optional Prepayments of Revolving Credit Advances.  Each
                       -------------------------------------------------
Borrower may, in the case of Eurodollar Rate Advances, upon at least two
Business Days' notice to the Agent and, in the case of Base Rate Advances, upon
notice to the Agent not later than 10:00 A.M. (New York City time) on the date
of the proposed prepayment, stating in each case the proposed date and aggregate
principal amount of the prepayment, and if such notice is given such Borrower
shall, prepay the outstanding principal amount of the Revolving Credit Advances
made to it comprising part of the same Revolving Credit Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that (x) each partial
                                 --------  -------
prepayment shall be in an aggregate principal amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) in the event of any
such prepayment of a Eurodollar Rate Advance, such Borrower shall be obligated
to reimburse the Lenders in respect thereof pursuant to Section 8.04(c).

        SECTION 2.11. Increased Costs.  (a)  If, due to either (i) the
                      ---------------
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances or LIBO Rate Advances
(excluding for purposes of this Section 2.11 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.14 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross income
by the United States or by the foreign jurisdiction or state under the laws of
which such Lender is organized or has its Applicable Lending Office or any
political subdivision thereof), then such Lender may from time to time give
notice of such circumstances to the Borrower (with a copy of such notice to the
Agent); provided, however, that each Lender agrees, before giving any such
        --------  -------
notice, to use its reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such designation would avoid the need for, or reduce the
amount of, such increased costs and would not be disadvantageous to such Lender.
The amount sufficient to compensate such Lender in light of such increase in
costs to such Lender or any corporation controlling such Lender shall be
determined by such Lender in good faith on a basis that allocates the amounts
sufficient to compensate such Lender in light of such increase ratably among all
applicable Advances.  A certificate specifying the event referred to in this
Section 2.11(a), the amount sufficient to compensate such Lender and the basis
of its calculations (which shall be reasonable), submitted in good faith to the
Borrower and the Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.  Each Lender agrees to provide reasonably
prompt notice to the Borrower of the occurrence of any event referred to in the
first sentence of this Section 2.11(a).

        (b)   If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) after the date
hereof affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of this type, then,
such Lender may from time to time give notice of such circumstances to the
Borrower (with a copy of such notice to the Agent); provided, however, that each
                                                    --------  -------
Lender agrees, before giving any such notice, to use its reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such
designation would avoid the need for, or reduce the amount of, the cost to such
Lender of such increase in the amount of capital maintained by such Lender and
would not be disadvantageous to such Lender.  The amount sufficient to
compensate such Lender in light of such increase in capital maintained by such
Lender or any corporation controlling such Lender shall be determined by such
Lender in good faith to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend hereunder.  A certificate specifying the event referred to in this
Section 2.11(b), the amount sufficient to compensate such Lender and the basis
of its calculations (which shall be reasonable), submitted in good faith to the
Borrower and the Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.  Each Lender

                                      18
<PAGE>

agrees to provide reasonably prompt notice to the Borrower of the occurrence of
any event referred to in the first sentence of this Section 2.11(b).

        (c)   The Borrower shall, within five days of receiving a notice from
any Lender pursuant to clause (a) or (b) of this Section 2.11, elect (and shall
notify such Lender and the Agent of such election) to:

        (i)   pay to the Agent for the account of such Lender, from time to time
     commencing on the date of notice by such Lender and as specified by such
     Lender, (A) the amount such Lender has set forth in the certificate which
     such Lender has delivered to the Borrower pursuant to clause (a) of this
     Section 2.11 or (B) the amount such Lender has set forth in the certificate
     which such Lender has delivered to the Borrower pursuant to clause (b) of
     this Section 2.11, as the case may be; or

        (ii)  terminate such Lender's Commitment on a date which shall be
     specified in the notice sent by the Borrower, and such Lender's Commitment
     shall terminate on such date; provided, however, that the aggregate amount
                                   --------  -------
     of the Commitments of the Lenders shall not be reduced, as a result of any
     such termination, to an amount that is less than the sum of the aggregate
     principal amount of the Advances then outstanding; provided, further, that
                                                        --------  -------
     such termination shall not be effective if, after giving effect to such
     termination, the aggregate amount of the Commitments so terminated or
     assigned under this Section 2.11 and Section 2.12(b) during the term of
     this Agreement would exceed 25% of the aggregate amount of the Commitments
     as of the Effective Date; and provided further, that upon termination of a
                                   -------- -------
     Lender's Commitment under this Section 2.11(c)(ii), the Borrower shall on
     the date such termination becomes effective pay, prepay or cause to be
     prepaid the aggregate principal amount of all Advances owing to such
     Lender, together with accrued interest thereon to the date of payment of
     such principal amount, all facility fees and other fees payable to such
     Lender and all other amounts payable to such Lender under this Agreement
     (including, but not limited to, any increased costs or other additional
     amounts (computed in accordance with this Section 2.11), and any Taxes,
     incurred by such Lender prior to the effective date of such termination and
     amounts payable under Section 8.04(a)).  Upon such payments and
     prepayments, the obligations of such Lender hereunder, by the provisions
     hereof, shall be released and discharged.  Such Lender's rights under
     Sections 2.11, 2.14 and 8.04(b), and its obligations under Section 7.05,
     shall survive such release and discharge as to matters occurring prior to
     date of such termination; or

        (iii)   require that such Lender assign to the Borrower's designated
     assignee or assignees, in accordance with the terms of Section 8.07, all
     Advances then owing to such Lender and all rights and obligations of such
     Lender hereunder; provided that (A) each such assignment shall be either an
                       --------
     assignment of all of the rights and obligations of the assigning Lender
     under this Agreement or an assignment of a portion of such rights and
     obligations made concurrently with another such assignment or assignments
     which together cover all of the rights and obligations of the assigning
     Lender under this Agreement, (B) no Lender shall be obligated to make any
     such assignment as a result of a demand by the Borrower pursuant to this
     Section 2.11(c) unless and until such Lender shall have received one or
     more payments from either the Borrower or one or more assignees in an
     aggregate amount at least equal to the aggregate outstanding principal
     amount of all Advances owing to such Lender, together with accrued interest
     thereon to the date of payment of such principal amount, all facility fees
     and other fees payable to such Lender and all other amounts payable to such
     Lender under this Agreement (including, but not limited to, any increased
     costs or other additional amounts (computed in accordance with this Section
     2.11), and any Taxes, incurred by such Lender prior to the effective date
     of such assignment and amounts payable under Section 8.04(a)) and (C) each
     such assignment shall be made pursuant to an Assignment and Acceptance;
     provided, however, that such assignment shall not be effective if, after
     --------  -------
     giving effect to such assignment, the aggregate amount of the Commitments
     so assigned or terminated under this Section 2.11 and Section 2.12(b)
     during the term of this Agreement would exceed 25% of the aggregate amount
     of the Commitments as of the Effective Date.  Upon such payments and
     prepayments, the obligations of such Lender hereunder, by the provisions
     hereof, shall be released and discharged; provided, however, that such
                                               --------
     Lender's rights under Sections 2.11, 2.14 and 8.04(b), and its obligations
     under Section 7.05, shall survive such release and discharge as to matters
     occurring prior to the date of termination of such Lender's Commitment.

        SECTION 2.12. Illegality.  (a) Notwithstanding any other provision of
                      ----------
this Agreement, if any Lender (any such Lender being referred to herein as an
"Affected Lender") shall notify the Agent that the
 ---------------

                                      19
<PAGE>

introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
LIBO Rate Advances or to fund or maintain Eurodollar Rate Advances or LIBO Rate
Advances hereunder, the obligation of the Lenders to make, or to Convert
Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist. The Borrower's right to require an
assignment in accordance with clause (b)(ii) below shall not be effective to the
extent that Lenders representing a majority of the Commitments then outstanding
shall be "Affected Lenders".

        (b)  The Borrower shall, within five days of receiving a notice from any
Affected Lender pursuant to clause (a) of this Section 2.12, elect (and shall
notify such Affected Lender and the Agent of such election) to:

        (i)  prepay in full all Eurodollar Rate Advances or LIBO Rate Advances
     then outstanding, together with interest thereon, unless in the case of
     Eurodollar Rate Advances the Borrower, within five Business Days of written
     notice from the Agent, converts all Eurodollar Rate Advances of all Lenders
     then outstanding into Base Rate Advances in accordance with Section 2.09;
     or

        (ii) require that such Affected Lender assign to the Borrower's
     designated assignee or assignees, in accordance with the terms of Section
     8.07, all Advances then owing to such Affected Lender and all rights and
     obligations of such Affected Lender hereunder; provided that (A) each such
                                                    --------
     assignment shall be either an assignment of all of the rights and
     obligations of the assigning Affected Lender under this Agreement or an
     assignment of a portion of such rights and obligations made concurrently
     with another such assignment or assignments which together cover all of the
     rights and obligations of the assigning Affected Lender under this
     Agreement, (B) no Affected Lender shall be obligated to make any such
     assignment as a result of a demand by the Borrower pursuant to this Section
     2.12(b) unless and until such Affected Lender shall have received one or
     more payments from either the Borrower or one or more assignees in an
     aggregate amount at least equal to the aggregate outstanding principal
     amount of all Advances owing to such Affected Lender, together with accrued
     interest thereon to the date of payment of such principal amount, all
     facility fees and other fees payable to such Affected Lender and all other
     amounts payable to such Affected Lender under this Agreement (including,
     but not limited to, any increased costs or other additional amounts
     (computed in accordance with Section 2.11), and any Taxes, incurred by such
     Affected Lender prior to the effective date of such assignment and amounts
     payable under Section 8.04(a)) and (C) each such assignment shall be made
     pursuant to an Assignment and Acceptance; provided, however, that such
                                               --------  -------
     assignment shall not be effective if, after giving effect to such
     assignment, the aggregate amount of the Commitments so assigned or
     terminated under this Section 2.12(b) and Section 2.11 during the term of
     this Agreement would exceed 25% of the aggregate amount of the Commitments
     as of the Effective Date. Upon such payments and prepayments, the
     obligations of such Affected Lender hereunder, by the provisions hereof,
     shall be released and discharged; provided, however, that such Affected
                                       --------  -------
     Lender's rights under Sections 2.11, 2.14 and 8.04(b), and its obligations
     under Section 7.05, shall survive such release and discharge as to matters
     occurring prior to the date of termination of such Affected Lender's
     Commitment.

        SECTION 2.13.    Payments and Computations.  (a) Each Borrower shall
                         -------------------------
make each payment hereunder and under the Notes not later than 11:00 A.M. (New
York City time) on the day when due in U.S. dollars to the Agent at the Agent's
Account in same day funds. The Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.03,
2.11, 2.14 or 8.04(c)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon any Assuming Lender becoming a Lender hereunder as a result of
an extension of the Termination Date pursuant to Section 2.17, and upon the
Agent's receipt of such Lender's Assumption Agreement and recording of the
information contained therein in the Register, from and after the applicable
Extension Date, the Agent shall make all payments hereunder and under any Notes
issued in connection therewith in respect of the interest assumed thereby to the
Assuming Lender. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date specified in such

                                      20
<PAGE>

Assignment and Acceptance, the Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.

        (b)    All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurodollar Rate or the LIBO Rate or
the Federal Funds Rate or in respect of Fixed Rate Advances and of facility fees
shall be made by the Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or facility fees are payable.
Each determination by the Agent of an interest rate and of facility fees
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

        (c)  Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause payment of
        --------  -------
interest on or principal of Eurodollar Rate Advances or LIBO Rate Advances to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.

        (d)  Unless the Agent shall have received notice from the relevant
Borrower prior to the date on which any payment is due to the Lenders hereunder
that such Borrower will not make such payment in full, the Agent may assume that
such Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent such Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.

        SECTION 2.14. Taxes.  (a) Any and all payments by the Borrowers
                      -----
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
                 ---------
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If any Borrower shall be required by law to
                            -----
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.

        (b)  In addition, the Borrowers shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as "Other
                                                                     -----
Taxes").
-----

        (c)  The Borrowers shall indemnify each Lender and the Agent for and
hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.14) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto.

                                      21
<PAGE>

This indemnification shall be made within 30 days from the date such Lender or
the Agent (as the case may be) makes written demand therefor.

        (d)  Within 30 days after the date of any payment of Taxes, the Borrower
making such payment shall furnish to the Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of such Borrower through an account or branch outside the United States or by or
on behalf of such Borrower by a payor that is not a United States person, if
such Borrower determines that no Taxes are payable in respect thereof, such
Borrower shall furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and subsection
(e), the terms "United States" and "United States person" shall have the
                -------------       --------------------
meanings specified in Section 7701 of the Internal Revenue Code.

        (e)  Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assumption
Agreement or the Assignment and Acceptance pursuant to which it becomes a Lender
in the case of each other Lender, and from time to time thereafter as requested
in writing by the Borrowers (but only so long as such Lender remains lawfully
able to do so), shall provide each of the Agent and the Borrowers with two
original Internal Revenue Service forms W-8BEN or W-8ECI, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes. If the form
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; provided,
                                                                  --------
however, that, if at the date of the Assignment and Acceptance pursuant to which
-------
a Lender assignee becomes a party to this Agreement, the Lender assignor was
entitled to payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form W-8BEN or W-8ECI, that the Lender reasonably considers to
be confidential, the Lender shall give notice thereof to the Borrowers and shall
not be obligated to include in such form or document such confidential
information.

        (f)  For any period with respect to which a Lender has failed to provide
the Borrowers with the appropriate form described in Section 2.14(e) (other than
                                                                      ----- ----
if such failure is due to a change in law occurring subsequent to the date on
which a form originally was required to be provided, or if such form otherwise
is not required under subsection (e) above), such Lender shall not be entitled
to indemnification under Section 2.14(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
                                             --------  -------
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as the Lender shall reasonably
request to assist the Lender to recover such Taxes.

        (g)  Any Lender claiming any additional amounts payable pursuant to this
Section 2.14 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

        SECTION 2.15. Sharing of Payments, Etc.  If any Lender shall obtain any
                      ------------------------
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Revolving Credit Advances owing to it
(other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its ratable
share of payments on account of the Revolving Credit Advances obtained by all
the Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Credit Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
                   --------  -------
payment is thereafter recovered from such purchasing Lender, such purchase from

                                      22
<PAGE>

each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
such Borrower in the amount of such participation.

        SECTION 2.16.    Use of Proceeds.  The proceeds of the Advances shall be
                         ---------------
available (and each Borrower agrees that it shall use such proceeds) solely for
general corporate purposes of such Borrower and its Subsidiaries.

        SECTION 2.17.    Extension of Termination Date.  (a) At least 60 days
                         -----------------------------
but not more than 90 days prior to each anniversary of the Effective Date, the
Borrowers, by written notice to the Agent, may request an extension of the
Termination Date in effect at such time by one year from its then scheduled
expiration. The Agent shall promptly notify each Lender of such request, and
each Lender shall in turn, in its sole discretion, not earlier than 30 days but
not later than 20 days prior to such anniversary date, notify the Borrowers and
the Agent in writing as to whether such Lender will consent to such extension,
such notice to be in substantially the form of Exhibit E hereto. If any Lender
shall fail to notify the Agent and the Borrowers in writing of its consent to
any such request for extension of the Termination Date at least 20 days prior to
such anniversary date, such Lender shall be deemed to be a Non-Consenting Lender
with respect to such request. The Agent shall notify the Borrowers in writing
not later than 15 days prior to such anniversary date of the decision of the
Lenders regarding the Borrowers' request for an extension of the Termination
Date.

        (b)  If all the Lenders consent in writing to any such request in
accordance with subsection (a) of this Section 2.16, the Termination Date in
effect at such time shall, effective as at the applicable anniversary of the
Effective Date (the "Extension Date"), be extended for one year; provided that
                     --------------                              --------
on each Extension Date, the applicable conditions set forth in Article III shall
be satisfied. If less than all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.16, the Termination
Date in effect at such time shall, effective as at the applicable Extension
Date, be extended as to those Lenders that so consented (each a "Consenting
                                                                 ----------
Lender") but shall not be extended as to any other Lender (each a "Non-
------                                                             ----
Consenting Lender"). To the extent that the Termination Date is not extended as
-----------------
to any Lender pursuant to this Section 2.16 and the Commitment of such Lender is
not assumed in accordance with subsection (c) of this Section 2.16 on or prior
to the applicable Extension Date, the Commitment of such Non-Consenting Lender
shall automatically terminate in whole on such unextended Termination Date
without any further notice or other action by the Borrowers, such Lender or any
other Person; provided that such Non-Consenting Lender's rights under Sections
              --------
2.11, 2.14 and 8.04, and its obligations under Section 7.05, shall survive the
Termination Date for such Lender as to matters occurring prior to such date. It
is understood and agreed that no Lender shall have any obligation whatsoever to
agree to any request made by the Borrowers for any requested extension of the
Termination Date.

        (c)  If less than all of the Lenders consent to any such request
pursuant to subsection (a) of this Section 2.17, the Agent shall promptly so
notify the Consenting Lenders, and each Consenting Lender may, in its sole
discretion, give written notice to the Agent not later than 10 days prior to the
Extension Date of the amount of the Non-Consenting Lenders' Commitments for
which it is willing to accept an assignment. If the Consenting Lenders notify
the Agent that they are willing to accept assignments of Commitments in an
aggregate amount that exceeds the amount of the Commitments of the Non-
Consenting Lenders, such Commitments shall be allocated among the Consenting
Lenders willing to accept such assignments in such amounts as are agreed between
the Borrowers and the Agent. If after giving effect to the assignments of
Commitments described above there remains any Commitments of Non-Consenting
Lenders, the Borrowers may arrange for one or more Consenting Lenders or other
Eligible Assignees that agrees to an extension of the Termination Date (an
"Assuming Lender") to assume, effective as of the Extension Date, any Non-
 ---------------
Consenting Lender's Commitment and all of the obligations of such Non-Consenting
Lender under this Agreement thereafter arising, without recourse to or warranty
by, or expense to, such Non-Consenting Lender; provided, however, that the
                                               --------  -------
amount of the Commitment of any such Assuming Lender as a result of such
substitution shall in no event be less than $10,000,000 unless the amount of the

                                      23
<PAGE>

Commitment of such Non-Consenting Lender is less than $10,000,000, in which case
such Assuming Lender shall assume all of such lesser amount; and provided
                                                                 --------
further that:
-------

        (i)  any such Consenting Lender or Assuming Lender shall have paid to
     such Non-Consenting Lender (A) the aggregate principal amount of, and any
     interest accrued and unpaid to the effective date of the assignment on, the
     outstanding Advances, if any, of such Non-Consenting Lender plus (B) any
                                                                 ----
     accrued but unpaid facility fees owing to such Non-Consenting Lender as of
     the effective date of such assignment;

        (ii) all additional costs reimbursements, expense reimbursements and
     indemnities payable to such Non-Consenting Lender, and all other accrued
     and unpaid amounts owing to such Non-Consenting Lender hereunder, as of the
     effective date of such assignment shall have been paid to such Non-
     Consenting Lender; and

        (iii)  with respect to any such Assuming Lender, the applicable
     processing and recordation fee required under Section 8.07(a) for such
     assignment shall have been paid by the Assuming Lender;

provided further that such Non-Consenting Lender's rights under Sections 2.11,
-------- -------
2.14 and 8.04, and its obligations under Section 7.05, shall survive such
substitution as to matters occurring prior to the date of substitution.  At
least three Business Days prior to any Extension Date, (A) each such Assuming
Lender, if any, shall have delivered to the Borrowers and the Agent an
assumption agreement in substantially the form of Exhibit D (each an "Assumption
                                                                      ----------
Agreement") or an Assignment and Acceptance, as appropriate, duly executed by
---------
such Assuming Lender, such Non-Consenting Lender, the Borrowers and the Agent,
(B) any such Consenting Lender shall have delivered confirmation in writing
satisfactory to the Borrowers and the Agent as to the increase in the amount of
its Commitment and (C) each Non-Consenting Lender being replaced pursuant to
this Section 2.17 shall have delivered to the Agent any Note or Notes held by
such Non-Consenting Lender.  Upon the payment or prepayment of all amounts
referred to in clauses (i), (ii) and (iii) of the immediately preceding
sentence, each such Consenting Lender or Assuming Lender, as of the Extension
Date, will be substituted for such Non-Consenting Lender under this Agreement
and shall be a Lender for all purposes of this Agreement, without any further
acknowledgment by or the consent of the other Lenders, and the obligations of
each such Non-Consenting Lender hereunder shall, by the provisions hereof, be
released and discharged.

        (d)  If the Lenders having more than 50% of the Commitments (after
giving effect to any assignments pursuant to subsection (b) of this Section
2.17) consent in writing to a requested extension (whether by execution or
delivery of an Assumption Agreement, an Assignment and Acceptance or otherwise)
not later than one Business Day prior to such Extension Date, the Agent shall so
notify the Borrowers, and, upon satisfaction of the applicable conditions set
forth in Article III, the Termination Date then in effect shall be extended for
the additional one year period as described in subsection (a) of this Section
2.17, and all references in this Agreement, and in the Notes, if any, to the
"Termination Date" shall, with respect to each Consenting Lender and each
 ----------------
Assuming Lender for such Extension Date, refer to the Termination Date as so
extended. Promptly following each Extension Date, the Agent shall notify the
Lenders (including, without limitation, each Assuming Lender) of the extension
of the scheduled Termination Date in effect immediately prior thereto and shall
thereupon record in the Register the relevant information with respect to each
such Consenting Lender and each such Assuming Lender.

        SECTION 2.18. Evidence of Debt.  (a) Each Lender shall maintain in
                      ----------------
accordance with its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from each Advance owing
to such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder in respect
of Advances. Each Borrower agrees that upon notice by any Lender to such
Borrower (with a copy of such notice to the Agent) to the effect that a Note is
required or appropriate in order for such Lender to evidence (whether for
purposes of pledge, enforcement or otherwise) the Advances owing to, or to be
made by, such Lender, such Borrower shall promptly execute and deliver to such
Lender a Note payable to the order of such Lender in a principal amount up to
the Commitment of such Lender.

        (b)  The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if

                                      24
<PAGE>

appropriate, the Interest Period applicable thereto, (ii) the terms of each
Assumption Agreement and each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from each Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Agent from each Borrower hereunder and
each Lender's share thereof.

        (c)  Entries made in good faith by the Agent in the Register pursuant to
subsection (b) above, and by each Lender in its account or accounts pursuant to
subsection (a) above, shall be prima facie evidence of the amount of principal
                               ----- -----
and interest due and payable or to become due and payable from each Borrower to,
in the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement, absent manifest error; provided,
                                                                    --------
however, that the failure of the Agent or such Lender to make an entry, or any
-------
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrowers under this
Agreement.

                                  ARTICLE III

                    CONDITIONS TO EFFECTIVENESS AND LENDING

        SECTION 3.01.    Conditions Precedent to Effectiveness of Sections 2.01
                         ------------------------------------------------------
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
--------
as of the first date (the "Effective Date") on which the following conditions
                           --------------
precedent have been satisfied:

        (a)  As of the Effective Date, there shall have occurred no Material
     Adverse Change since December 31, 1999, other than any changes reflected in
     subsequent filings by either Borrower with the Securities and Exchange
     Commission prior to the date hereof.

        (b)  As of the Effective Date, there shall exist no action, suit,
     investigation, litigation or proceeding affecting any Borrower or any of
     its Consolidated Subsidiaries pending or, to its knowledge, threatened
     before any court, governmental agency or arbitrator that (i) could be
     reasonably likely to have a Material Adverse Effect other than the matters
     described on Schedule 3.01(b) hereto (the "Disclosed Litigation") or (ii)
                                                --------------------
     purports and is reasonably likely to affect the legality, validity or
     enforceability of this Agreement or any Note or the consummation of the
     transactions contemplated hereby.

        (c)  As of the Effective Date, Pharmacia shall not have been notified
     that anything has come to the attention of the Lenders during the course of
     their due diligence investigation to lead them to believe that the
     Information Memorandum was or has become misleading, incorrect or
     incomplete in any material respect; without limiting the generality of the
     foregoing, the Lenders shall have been given such access to the management,
     records, books of account, contracts and properties of the Borrowers and
     their Subsidiaries as they shall have reasonably requested.

        (d)  All governmental and third party consents and approvals necessary
     in connection with the transactions contemplated hereby shall have been
     obtained (without the imposition of any conditions that are not acceptable
     to the Lenders) and shall remain in effect, and no law or regulation shall
     be applicable in the reasonable judgment of the Lenders that restrains,
     prevents or imposes materially adverse conditions upon the transactions
     contemplated hereby.

        (e)  The Borrowers shall have notified each Lender and the Agent in
     writing as to the proposed Effective Date.

        (f)  The Borrowers shall have paid all accrued fees and expenses of the
     Agent and the Lenders (including the accrued fees and expenses of counsel
     to the Agent).

        (g)  On the Effective Date, the following statements shall be true and
     the Agent shall have received for the account of each Lender a certificate
     signed by a duly authorized officer of Pharmacia, dated the Effective Date,
     stating that:
                                      25
<PAGE>

        (i)  The representations and warranties of Pharmacia contained in
     Section 4.01 are correct on and as of the Effective Date, and

        (ii) No event has occurred and is continuing that constitutes a Default.

   (h)  The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the Agent
and (except for the Revolving Credit Notes) in sufficient copies for each
Lender:

        (i)  The Revolving Credit Notes to the order of the Lenders to the
     extent requested by any Lender pursuant to Section 2.18.

        (ii) Certified copies of the resolutions of the Board of Directors of
     Pharmacia approving this Agreement and the Revolving Credit Notes to be
     delivered by it, and of all documents evidencing other necessary corporate
     action and governmental approvals, if any, with respect to this Agreement
     and such Notes.

        (iii)  A certificate of the Secretary or an Assistant Secretary of
    Pharmacia certifying the names and true signatures of the officers of such
    Borrower authorized to sign this Agreement and such Notes to be delivered by
    it and the other documents to be delivered by it hereunder.

        (iv) A favorable opinion of the General Counsel or Associate General
     Counsel of Pharmacia, in form and substance satisfactory to the Agent.

        (v)  A favorable opinion of Shearman & Sterling, counsel for the Agent,
     in form and substance satisfactory to the Agent.

     (i)  The Borrowers shall have terminated the commitments, and paid in full
all Debt, interest, fees and other amounts outstanding, under (i) the 364-Day
Credit Agreement dated as of August 10, 1999 among Monsanto Company, the lenders
and agents parties thereto and Citibank, as administrative agent and (ii) the
Five-Year Credit Agreement dated as of August 15, 1994, as amended and restated
as of February 2, 1995 and as amended and restated as of February 13, 1996 among
Monsanto Company, the lenders and agents parties thereto and Citibank, as
administrative agent, and each of the Lenders that is a party to each such
credit agreement hereby waives, upon execution of this Agreement the requirement
of prior notice under each such credit agreement relating to the termination of
commitments thereunder.

        SECTION 3.02. Conditions Precedent to Monsanto Effective Date.  Sections
                      -----------------------------------------------

2.01 and 2.03 shall become effective as to Monsanto on and as of the first date
(the "Monsanto Effective Date") on which the following conditions precedent have
      -----------------------
been satisfied:

       (a)  On the Monsanto Effective Date, the following statements shall be
 true and the Agent shall have received for the account of each Lender a
 certificate signed by a duly authorized officer Monsanto, dated the Monsanto
 Effective Date, stating that:

        (i)  The representations and warranties of Monsanto contained in Section
     4.01 are correct on and as of the Monsanto Effective Date, and

        (ii)  No event has occurred and is continuing that constitutes a
Default.

      (b)  The Agent shall have received on or before the Monsanto Effective
Date the following, each dated such day, in form and substance satisfactory to
the Agent and in sufficient copies for each Lender:

        (i)  Certified copies of the resolutions of the Board of Directors of
Monsanto approving (or ratifying) this Agreement and the Notes to be delivered
by it, and of all documents

                                      26
<PAGE>

     evidencing other necessary corporate action and governmental approvals, if
     any, with respect to this Agreement and such Notes.

        (ii)   A certificate of the Secretary or an Assistant Secretary of
     Monsanto certifying the names and true signatures of the officers of
     Monsanto authorized to sign this Agreement and the Notes to be delivered by
     it and the other documents to be delivered hereunder.

        (iii)  A favorable opinion of the General Counsel or Associate General
     Counsel of Monsanto, in form and substance satisfactory to the Agent.

        (iv)   A certified, executed copy of each of the "separation agreement",
     the "corporate agreement", the "tax sharing agreement", the "intellectual
     property transfer agreement" and the "employee benefits and compensation
     allocation agreement" (as described in Monsanto's Form S-1 attached to the
     Information Memorandum) relating to the Net Asset Transfer and a copy of
     Monsanto's up-dated Form S-1 relating to the Net Asset Transfer.

        (c)  The Net Asset Transfer shall have been consummated in a manner not
materially inconsistent with the manner described in the Information Memorandum
(and this condition shall be deemed to have been satisfied if the Agent or any
Lender has not given notice to the contrary to the Borrower within 5 Business
Days after actual receipt by the Agent or such Lender, as applicable, of the
documents described in Section 3.02(b)(iv)) and (B) that immediately after
consummation of the Net Asset Transfer, Consolidated Net Worth of Monsanto is at
least $5,750,000,000.

        SECTION 3.03. Conditions Precedent to Each Revolving Credit Borrowing
                      -------------------------------------------------------
and Extension Date. The obligation of each Lender to make a Revolving Credit
    --------------
Advance on the occasion of each Revolving Credit Borrowing and each extension of
Commitments pursuant to Section 2.17 shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Revolving Credit Borrowing or the applicable Extension Date the following
statements shall be true (and each of the giving of the applicable Notice of
Revolving Credit Borrowing, request for Commitment Extension and the acceptance
by the relevant Borrower of the proceeds of such Revolving Credit Borrowing
shall constitute a representation and warranty by such Borrower that on the date
of such Revolving Credit Borrowing or such Extension Date such statements are
true):

        (a)  the representations and warranties contained in Section 4.01
     (except in the case of each Revolving Credit Borrowing, the representations
     set forth in subsection (e) thereof and in subsection (f)(i) thereof) are
     correct on and as of the date of such Revolving Credit Borrowing or such
     Extension Date, before and after giving effect to such Revolving Credit
     Borrowing or such Extension Date and to the application of the proceeds
     therefrom, as though made on and as of such date, and

        (b)  no event has occurred and is continuing, or would result from such
     Revolving Credit Borrowing or such Extension Date or from the application
     of the proceeds therefrom, that constitutes a Default.

        SECTION 3.04. Conditions Precedent to Each Competitive Bid Borrowing.
                      ------------------------------------------------------
The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, (ii) on or before the date of
such Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing, the
Agent shall have received a Competitive Bid Note payable to the order of such
Lender for each of the one or more Competitive Bid Advances to be made by such
Lender as part of such Competitive Bid Borrowing, in a principal amount equal to
the principal amount of the Competitive Bid Advance to be evidenced thereby and
otherwise on such terms as were agreed to for such Competitive Bid Advance in
accordance with Section 2.03, and (iii) on the date of such Competitive Bid
Borrowing the following statements shall be true (and each of the giving of the
applicable Notice of Competitive Bid Borrowing and the acceptance by the
relevant Borrower of the proceeds of such Competitive Bid Borrowing shall
constitute a representation and warranty by such Borrower that on the date of
such Competitive Bid Borrowing such statements are true):

                                      27
<PAGE>

        (a)  the representations and warranties contained in Section 4.01
(except the representations set forth in the last sentence of subsection (e)
thereof and in subsection (f)(i) thereof) are correct on and as of the date of
such Competitive Bid Borrowing, before and after giving effect to such
Competitive Bid Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date, and

        (b)  no event has occurred and is continuing, or would result from such
Competitive Bid Borrowing or from the application of the proceeds therefrom,
that constitutes a Default.

        SECTION 3.05.  Determinations Under Sections 3.01 and 3.02.  For
                       -------------------------------------------
purposes of determining compliance with the conditions specified in Section 3.01
and 3.02, each Lender shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Agent responsible for the transactions contemplated by this
Agreement shall have received notice from such Lender prior to the date that the
Borrowers, by notice to the Lenders, designate as the proposed Effective Date or
Monsanto Effective Date, as the case may be, specifying its objection thereto.
The Agent shall promptly notify the Lenders of the occurrence of the Effective
Date or Monsanto Effective Date, as the case may be.

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES

        SECTION 4.01.    Representations and Warranties of the Borrowers.  Each
                         -----------------------------------------------
Borrower represents and warrants as follows:

        (a)  Such Borrower is a corporation duly organized, validly existing and
     in good standing under the laws of the State of Delaware.

        (b)  The execution, delivery and performance by such Borrower of this
     Agreement and the Notes to be delivered by it, and the consummation of the
     transactions contemplated hereby, are within such Borrower's corporate
     powers, have been duly authorized by all necessary corporate action, and do
     not contravene (i) such Borrower's charter or by-laws or (ii) law or any
     contractual restriction binding on or affecting such Borrower.

        (c)  No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body or any other
     third party is required for the due execution, delivery and performance by
     such Borrower of this Agreement or the Notes to be delivered by it, other
     than those authorizations, approvals, notices, filings and actions that
     have been obtained, filed or taken on or before the Effective Date (in the
     case of Pharmacia) or the Monsanto Effective Date (in the case of
     Monsanto).

        (d)  This Agreement has been, and each of the Notes to be delivered by
     it when delivered hereunder will have been, duly executed and delivered by
     such Borrower. This Agreement is, and each of the Notes when delivered
     hereunder will be, the legal, valid and binding obligation of such Borrower
     enforceable against such Borrower in accordance with their respective
     terms.

        (e)  The Consolidated balance sheet of such Borrower and its
     Subsidiaries as at December 31, 1999, and the related Consolidated
     statements of income and cash flows of such Borrower and its Subsidiaries
     for the fiscal year then ended, accompanied by an opinion of
     PricewaterhouseCoopers LLP or Deloitte & Touche LLP, as applicable,
     independent public accountants, and the Consolidated balance sheet of the
     Borrower and its Subsidiaries as at March 31, 2000, and the related
     Consolidated statements of income and cash flows of such Borrower and its
     Subsidiaries for the three months then ended, duly certified by the Chief
     Financial Officer, Treasurer, Assistant Treasurer, Controller or Assistant
     Controller of such Borrower, copies of which have been furnished to each
     Lender, fairly present, subject, in the case of said balance sheet as at
     March 31, 2000, and said statements of income and cash flows for the three
     months then ended, to year-end audit adjustments, the Consolidated
     financial condition of such Borrower and its Subsidiaries as at such dates
     and the Consolidated results of the operations of such Borrower and its

                                      28
<PAGE>

     Subsidiaries for the periods ended on such dates, all in accordance with
     generally accepted accounting principles consistently applied. Except as
     disclosed in Pharmacia's Quarterly Report on Form 10-Q for the quarter
     ending March 31, 2000 and Monsanto's Form S-1 filed on May 12, 2000, as
     amended, since December 31, 1999, there has been no Material Adverse
     Change.

        (f)  There is no pending or, to the knowledge of such Borrower,
     threatened action, suit, investigation, litigation or proceeding,
     including, without limitation, any Environmental Action, affecting such
     Borrower or any of its Consolidated Subsidiaries before any court,
     governmental agency or arbitrator that (i) is reasonably likely to have a
     Material Adverse Effect (other than the Disclosed Litigation), and there
     has been no material adverse change in the status, or financial effect on
     such Borrower or any of its Consolidated Subsidiaries, of the Disclosed
     Litigation from that described on Schedule 3.01(b) hereto or (ii) purports
     to affect the legality, validity or enforceability of this Agreement, any
     Note or the consummation of the transactions contemplated hereby.

        (g)  Such Borrower is not an "investment company", or a company
     "controlled" by an "investment company", within the meaning of the
     Investment Company Act of 1940, as amended.

        SECTION 4.02.  Representation and Warranty of the Lenders.  Each Lender
                       ------------------------------------------
represents and warrants that in good faith it has not and will not rely upon any
margin stock (as such term is defined in Regulation U of the Board of Governors
of the Federal Reserve System) as collateral in the making and maintaining of
its Advances hereunder.

                                   ARTICLE V

                          COVENANTS OF THE BORROWERS

        SECTION 5.01.    Affirmative Covenants.  So long as any Advance shall
                         ---------------------
remain unpaid or any Lender shall have any Commitment hereunder, each Borrower
will:

        (a)  Compliance with Laws, Etc.  Comply, and cause each of its Material
             --------------------------
     Subsidiaries to comply, in all material respects, with all applicable laws,
     rules, regulations and orders, such compliance to include, without
     limitation, compliance with ERISA and Environmental Laws, except such non-
     compliance as would not have a Material Adverse Effect.

       (b)  Payment of Taxes, Etc. Pay and discharge, and cause each of its
            ---------------------
     Material Subsidiaries to pay and discharge, before the date on which
     penalties are attached thereto, all taxes, assessments and governmental
     charges or levies imposed upon it or upon its property; provided, however,
                                                   --------  --------  -------
     that neither Borrower nor any of its Material Subsidiaries shall be
     required to pay or discharge any such tax, assessment, charge or claim that
     is being contested in good faith and by proper proceedings or are not of
     material importance to the business, financial condition or results of
     operations of the Borrower and its Consolidated Subsidiaries.

       (c)  Maintenance of Insurance.  Maintain, and cause each of its Material
            ------------------------
     Subsidiaries to maintain, insurance with responsible and reputable
     insurance companies or associations in such amounts and covering such risks
     as is consistent with prudent business practice.  This section shall not
     prevent the use of deductible or excess loss insurance and shall not
     prevent a Borrower or a Consolidated Subsidiary from acting as a self-
     insurer or maintaining insurance with a Subsidiary or Subsidiaries so long
     as such action is consistent with sound business practice.

       (d)  Preservation of Corporate Existence, Etc.  Preserve and maintain its
            -----------------------------------------
     corporate existence, rights (charter and statutory) and franchises;

     provided, however, that each Borrower may consummate any merger or
     --------  -------
     consolidation permitted under Section 5.02(b) and provided further that
                                                       -------- -------
     neither Borrower shall be required to preserve any right or franchise if
     such Borrower shall determine that the preservation thereof is no longer
     desirable in the conduct of the business of such Borrower.

                                      29
<PAGE>

        (e)  Keeping of Books.  Keep, and cause each of its Material
             ----------------
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
business of such Borrower and each such Material Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.

        (f)  Reporting Requirements.  Furnish to the Agent, and in sufficient
             ----------------------
copies for the Lenders (provided, however, that, in the case of the
                        --------  -------
Consolidated balance sheet and Consolidated statements of income and cash flows
referred to in clause (i) below, the annual audit report and accompanying
information referred to in clause (ii) below and the reports and registration
statements referred to in clause (iv) below, such information will be deemed to
have been furnished to the Agent if it is readily available through EDGAR):

        (i)  as soon as available and in any event within 60 days after the end
     of each of the first three quarters of each fiscal year of such Borrower,
     the Consolidated balance sheet of such Borrower and its Subsidiaries as of
     the end of such quarter and Consolidated statements of income and cash
     flows of such Borrower and its Subsidiaries for the period commencing at
     the end of the previous fiscal year and ending with the end of such
     quarter, duly certified (subject to year-end audit adjustments) by the
     Chief Financial Officer, Treasurer, Assistant Treasurer, Controller,
     Assistant Controller, or other authorized financial officer of such
     Borrower as having been prepared in accordance with generally accepted
     accounting principles and certificates of the Chief Financial Officer
     Treasurer, Assistant Treasurer, Controller or Assistant Controller of such
     Borrower as to compliance with the terms of this Agreement;

        (ii) as soon as available and in any event within 180 days after the end
     of each fiscal year of such Borrower, a copy of the annual audit report for
     such year for such Borrower and its Subsidiaries, containing the
     Consolidated balance sheet of such Borrower and its Subsidiaries as of the
     end of such fiscal year and Consolidated statements of income and cash
     flows of such Borrower and its Subsidiaries for such fiscal year, in each
     case accompanied by an opinion acceptable to the Required Lenders by
     PricewaterhouseCoopers LLP, Deloitte & Touche LLP or other independent
     public accountants acceptable to the Required Lenders;

        (iii)  as soon as possible and in any event within five days after the
     determination by the Borrower of the occurrence of a Default that is
     continuing on the date of such statement, a statement of the Chief
     Financial Officer, Treasurer, Assistant Treasurer, Controller, Assistant
     Controller, or other authorized financial officer of the relevant Borrower
     setting forth details of such Default and the action that such Borrower has
     taken and proposes to take with respect thereto;

        (iv) promptly after the sending or filing thereof, copies of all
     material reports that such Borrower sends to its securityholders (or any
     class of them) or its creditors (or any class of them), and copies of all
     reports and registration statements that such Borrower or any Subsidiary
     files with the Securities and Exchange Commission;

        (v)  promptly after the commencement thereof, notice of all actions and
     proceedings before any court, governmental agency or arbitrator affecting
     such Borrower or any of its Subsidiaries of the type described in Section
     4.01(f); and

        (vi) such other information (excluding trade secrets) respecting such
     Borrower or any of its Subsidiaries as any Lender through the Agent may
     from time to time reasonably request.

        SECTION 5.02.    Negative Covenants.  So long as any Advance shall
                         ------------------
remain unpaid or any Lender shall have any Commitment hereunder, no Borrower
will:

        (a)  Liens, Etc.  Create or suffer to exist, or permit any of its
             ----------
Material Subsidiaries to create or suffer to exist, any Lien on or with respect
to any of its properties, whether now owned or hereafter

                                      30
<PAGE>

acquired, or assign, or permit any of its Material Subsidiaries to assign, any
right to receive income, other than:

        (i)   (A) Liens for taxes, assessments, governmental charges or levies
     or other amounts owed to governmental entities other than for borrowed
     money; (B) Liens imposed by law, such as materialmen's, mechanics',
     carriers', workmen's and repairmen's Liens and other similar Liens arising
     in the ordinary course of business securing obligations that are not
     overdue for a period of more than 30 days or that are being contested in
     good faith; (C) pledges or deposits to secure obligations under workers'
     compensation laws or similar legislation or to secure public or statutory
     obligations; (D) easements, rights of way and other encumbrances on title
     to real property that do not render title to the property encumbered
     thereby unmarketable or materially adversely affect the use of such
     property for its present purposes; and (E) Liens in favor of a landlord
     arising in the ordinary course of business,

        (ii) purchase money Liens upon or in any property, assets or stock
     acquired or held by the Borrower or any Material Subsidiary in the ordinary
     course of business to secure the purchase price or construction cost of
     such property or to secure Debt incurred solely for the purpose of
     financing the acquisition or construction of such property whether incurred
     prior or subsequent to such acquisition or construction, or Liens existing
     on such property at the time of its acquisition (other than any such Lien
     created in contemplation of such acquisition) or extensions, renewals or
     replacements of any of the foregoing for the same or a lesser amount,
     provided, however, that no such Lien shall extend to or cover any property
     --------  -------
     other than the property being acquired, and no such extension, renewal or
     replacement shall extend to or cover any property not theretofore subject
     to the Lien being extended, renewed or replaced,

        (iii)  Liens existing on the Effective Date,

        (iv) (A)  assignments of the right to receive income in connection with
     any Permitted Receivables Financing and (B) other Liens that would
     otherwise be prohibited; provided that the Aggregate Amount of Financing
                              --------
     Outstanding in connection with Permitted Receivables Financings described
     in clause (A), plus the aggregate principal amount of Debt secured by Liens
     described in clause (B) at any time outstanding, shall not exceed 10% of
     the Consolidated Net Worth of such Borrower at such time,

        (v)  the replacement, extension or renewal of any Lien permitted by
     clauses (ii) and (iii) above upon or in the same property theretofore
     subject thereto or the replacement, extension or renewal (without increase
     in the amount or change in any direct or contingent obligor) of the amount
     secured thereby, and

        (vi)  intercompany Liens.

    (b)  Mergers, Etc.  Merge or consolidate with or into, or convey, transfer,
         ------------
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or permit any of its Material Subsidiaries
to do so, except that (x) any Material Subsidiary of such Borrower may merge or
consolidate with or into, or dispose of assets to, any other Material Subsidiary
of such Borrower or any other Subsidiary of such Borrower that shall become a
Material Subsidiary as a result of such transaction and (y) any Material
Subsidiary of such Borrower may merge into or dispose of assets to such
Borrower, provided, in each case, that no Default shall have occurred and be
          --------
continuing at the time of such proposed transaction or would result therefrom.
Nothing in this Section 5.02(b) shall prevent the consummation of the net asset
transfer by Pharmacia to Monsanto consistent with the methodology described in
the Information Memorandum.

    (c)  Change in Nature of Business.  Make, or permit any of its Subsidiaries
         ----------------------------
to make, any material change in the nature of its business taken as a whole as
carried on at the date hereof.

                                      31
<PAGE>

        SECTION 5.03.  Financial Covenant.  So long as any Advance shall
                       ------------------
remain unpaid or any Lender shall have any Commitment hereunder, each Borrower
shall maintain at the end of each fiscal quarter of such Borrower a Leverage
Ratio of not more than 0.45:1.00.

                                  ARTICLE VI

                               EVENTS OF DEFAULT

        SECTION 6.01.  Events of Default.  If any of the following events
                       -----------------
("Events of Default") shall occur and be continuing:
  -----------------

       (a)   Any Borrower shall fail to pay any principal of any Advance when
     the same becomes due and payable; or any Borrower shall fail to pay any
     interest on any Advance or make any other payment of fees or other amounts
     payable under this Agreement or any Note within five Business Days after
     the same becomes due and payable; or

        (b)  Any representation or warranty made by any Borrower herein or by
     any Borrower (or any of its officers) in connection with this Agreement
     shall prove to have been incorrect in any material respect when made; or

        (c)  (i) Any Borrower shall fail to perform or observe any term,
     covenant or agreement contained in Section 5.01(d) or (f)(iii), 5.02(a),
     5.02(b) or 5.03, or (ii) any Borrower shall fail to perform or observe any
     term, covenant or agreement contained in Section 5.01(f)(i) or (ii) if such
     failure shall remain unremedied for 5 days after written notice thereof
     shall have been given to such Borrower by the Agent or any Lender, or (iii)
     any Borrower shall fail to perform or observe any other term, covenant or
     agreement contained in this Agreement on its part to be performed or
     observed if such failure shall remain unremedied for 30 days after written
     notice thereof shall have been given to such Borrower by the Agent or any
     Lender; or

        (d)  Any Borrower or any of its Material Subsidiaries shall fail to pay
     any principal of or premium or interest on any Debt that is outstanding in
     a principal or notional amount of at least $50,000,000 in the aggregate
     (but excluding Debt outstanding hereunder) of such Borrower or such
     Material Subsidiary (as the case may be), when the same becomes due and
     payable (whether by scheduled maturity, required prepayment, acceleration,
     demand or otherwise), and such failure shall continue after the applicable
     grace period, if any, specified in the agreement or instrument relating to
     such Debt; or any other event shall occur or condition shall exist under
     any agreement or instrument relating to any such Debt and shall continue
     after the applicable grace period, if any, specified in such agreement or
     instrument, if the effect of such event or condition is to accelerate the
     maturity of such Debt; or any such Debt shall be declared to be due and
     payable, or required to be prepaid or redeemed (other than by a regularly
     scheduled required prepayment or redemption), purchased or defeased, or an
     offer to prepay, redeem, purchase or defease such Debt shall be required to
     be made, in each case prior to the stated maturity thereof; or

        (e)  Any Borrower or any of its Material Subsidiaries shall generally
     not pay its debts as such debts become due, or shall admit in writing its
     inability to pay its debts generally, or shall make a general assignment
     for the benefit of creditors; or any proceeding shall be instituted by or
     against any Borrower or any of its Material Subsidiaries seeking to
     adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
     reorganization, arrangement, adjustment, protection, relief, or composition
     of it or its debts under any law relating to bankruptcy, insolvency or
     reorganization or relief of debtors, or seeking the entry of an order for
     relief or the appointment of a receiver, trustee, custodian or other
     similar official for it or for any substantial part of its property and, in
     the case of any such proceeding instituted against it (but not instituted
     by it), either such proceeding shall remain undismissed or unstayed for a
     period of 30 days, or any of the actions sought in such proceeding
     (including, without limitation, the entry of an order for relief against,
     or the appointment of a receiver, trustee, custodian or other similar
     official for, it or for any substantial part of its property) shall occur;
     or any Borrower or any of its Material Subsidiaries shall take any
     corporate action to authorize any of the actions set forth above in this
     subsection (e); or

                                      32
<PAGE>

         (f)  Any judgment or order for the payment of money in excess of
     $75,000,000 in the aggregate shall be rendered against any Borrower or any
     of its Material Subsidiaries and either (i) a lawsuit shall have been
     properly commenced by any creditor to enforce such judgment or order or
     (ii) such judgment is not, within 30 days after entry thereof, paid,
     bonded, discharged or stayed during appeal, or is not discharged within 30
     days after the expiration of such stay; provided, however, that the
                                             --------  -------
     rendering of any such judgment or order shall not be an Event of Default
     under this Section 6.01(f) if and for so long as (i) the amount of such
     judgment or order is covered by a valid and binding policy of insurance
     between the defendant and the insurer covering payment thereof and (ii)
     such insurer, which shall be rated at least "A" by A.M. Best Company, has
     been notified of, and has not properly disputed the claim made for payment
     of, the amount of such judgment or order; or

         (g)  Any Person or two or more Persons acting in concert (other than,
     in the case of Monsanto, Pharmacia and its Subsidiaries) shall have, on or
     after the date of this Agreement, acquired beneficial ownership (within the
     meaning of Rule 13d-3 of the Securities and Exchange Commission under the
     Securities Exchange Act of 1934), directly or indirectly, of Voting Stock
     of any Borrower (or other securities convertible into such Voting Stock)
     representing 25% or more of the combined voting power of all Voting Stock
     of such Borrower; or (ii) during any period of up to 24 consecutive months,
     commencing on or after the date of this Agreement, individuals who at the
     beginning of such 24-month period were directors of any Borrower (together
     with any new directors who (A) were properly and duly elected to the board
     of directors pursuant to such Borrower's bylaws by the affirmative vote of
     a majority of the remaining directors then in office or (B) were nominated
     by a majority of the remaining members of the board of directors of such
     Borrower and thereafter elected as directors by the shareholders of such
     Borrower) shall cease for any reason to constitute a majority of the board
     of directors of such Borrower; or

         (h)  Any Borrower or any of its ERISA Affiliates shall incur, or, in
     the reasonable opinion of the Required Lenders, shall be reasonably likely
     to incur liability in excess of $75,000,000 in the aggregate as a result of
     one or more of the following: (i) the occurrence of any ERISA Event,
     provided that the occurrence of the ERISA Event described in PBGC
     --------
     Regulation Sections 4040.23, 4043.29 or 4043.32 shall constitute an Event
     of Default under this Section 6.01(h) only if it is reasonably expected to
     result in a Material Adverse Effect, (ii) the partial or complete
     withdrawal of such Borrower or any of its ERISA Affiliates from a
     Multiemployer Plan; or (iii) the reorganization or termination of a
     Multiemployer Plan;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrowers; provided, however, that in the
                                              --------  -------
event of an actual or deemed entry of an order for relief with respect to any
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrowers.

                                  ARTICLE VII

                                   THE AGENT

        SECTION 7.01.    Authorization and Action.  Each Lender hereby appoints
                         ------------------------
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
                          --------  -------
required to take any action that exposes the Agent to personal

                                      33
<PAGE>

liability or that is contrary to this Agreement or applicable law. The Agent
agrees to give to each Lender prompt notice of each notice given to it by any
Borrower pursuant to the terms of this Agreement.

        SECTION 7.02.    Agent's Reliance, Etc. Neither the Agent nor any of its
                         ---------------------
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
Lender that made any Advance as the holder of the Debt resulting therefrom until
the Agent receives and accepts an Assumption Agreement entered into by an
Assuming Lender as provided in Section 2.17 or an Assignment and Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section 8.07; (ii) may consult with legal counsel (including
counsel for the Borrowers), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of any Borrower or to inspect the property (including the
books and records) of any Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.

        SECTION 7.03.    Citibank and Affiliates.  With respect to its
                         -----------------------
Commitment, the Advances made by it and any Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of any Borrower or any such Subsidiary, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.

        SECTION 7.04.    Lender Credit Decision.  Each Lender acknowledges that
                         ----------------------
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.

        SECTION 7.05.    Indemnification.  The Lenders agree to indemnify the
                         ---------------
Agent (to the extent not reimbursed by the Borrowers), ratably according to the
respective principal amounts of the Revolving Credit Advances then owed to each
of them (or if no Revolving Credit Advances are at the time outstanding, ratably
according to the respective amounts of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of this Agreement or any action taken or
omitted by the Agent under this Agreement (collectively, the "Indemnified
                                                              -----------
Costs"), provided that no Lender shall be liable for any portion of the
-----    --------
Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrowers. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.

                                      34
<PAGE>

        SECTION 7.06.    Successor Agent.  The Agent may resign at any time by
                         ---------------
giving written notice thereof to the Lenders and the Borrowers and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

        SECTION 7.07.    Other Agents.  Each Lender hereby acknowledges that
                         ------------
neither the documentation agent nor any other Lender designated as any "Agent"
on the signature pages hereof has any liability hereunder other than in its
capacity as a Lender.

                                 ARTICLE VIII

                                 MISCELLANEOUS

        SECTION 8.01.    Amendments, Etc. No amendment or waiver of any
                         ---------------
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by any Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
                                  --------  -------
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Advances, or the number of Lenders, that shall be required for
the Lenders or any of them to take any action hereunder or (f) amend this
Section 8.01; provided further that no amendment, waiver or consent shall,
              -------- -------
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note; and provided further that this Section 8.01 shall not
                           -------- -------
apply to changes in Commitments pursuant to Section 2.11, Section 2.12, Section
2.17 or any other Section of this Agreement.

        SECTION 8.02.  Notices, Etc. All notices and other communications
                       ------------
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to Pharmacia, at its address at 100 Route 206 North, Peapack, New Jersey,
07977, Attention: Alexandra Van Horne, Treasurer; if to Monsanto, at its address
at 800 N. Lindbergh Boulevard, St Louis, Missouri 63167, Attention: Chief
Financial Officer, with an information copy to the Secretary at the same
address, if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at Two Penns Way, New
Castle, Delaware 19720, Attention: Bank Loan Syndications Department; or, as to
the Borrowers or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrowers and the Agent. All such notices and communications shall, when
mailed, telecopied, telegraphed or telexed, be effective upon receipt. Delivery
by telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.

        SECTION 8.03.  No Waiver; Remedies.  No failure on the part of any
                       -------------------
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor

                                      35
<PAGE>

shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

        SECTION 8.04.    Costs and Expenses.  (a) The Borrowers agree to pay on
                         ------------------
demand all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrowers further agree to pay on demand all reasonable costs and
expenses of the Agent and the Lenders, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable fees and expenses of counsel for the
Agent and each Lender in connection with the enforcement of rights under this
Section 8.04(a).

        (b)  Each Borrower severally agrees to indemnify and hold harmless the
Agent and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
                                                     -----------------
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the actual or proposed use
of the proceeds of the Advances by such Borrower or any of its Subsidiaries or
(ii) the actual or alleged presence of Hazardous Materials on any property of
such Borrower or any of its Subsidiaries or any Environmental Action relating in
any way to such Borrower or any of its Subsidiaries, except to the extent such
claim, damage, loss, liability or expense resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Borrowers also agree not to assert any
claim against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Advances.

        (c)  If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or LIBO Rate Advance is made by any Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10
or 2.12, acceleration of the maturity of the Advances pursuant to Section 6.01
or for any other reason, or by an Eligible Assignee to a Lender other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a result
of a demand by the Borrowers pursuant to Section 8.07(a), the Borrowers shall,
upon demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.

        (d)  Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.

        SECTION 8.05.    Right of Set-off.  Nothing herein shall derogate any
                         ----------------
Lender's right, if any, if and to the extent payment owed to such Lender is not
made when due hereunder or under any Note held by such Lender, to set off from
time to time against any or all of a Borrower's deposit (general or special,
time or demand, provisional or final) accounts with such Lender any amount so
due. Each Lender agrees promptly to notify such

                                      36
<PAGE>

Borrower after any such set off and application made by such Lender, provided
that the failure to give such notice shall not affect the validity of such set
off and application. The rights of each Lender under this Section 8.05 are in
addition to other rights and remedies which such Lender may have.

        SECTION 8.06.    Binding Effect.  This Agreement shall become effective
                         --------------
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrowers and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrowers, the Agent and each Lender and their respective successors and
assigns, except that the Borrowers shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.

        SECTION 8.07.    Assignments and Participations.  (a) Each Lender may
                         ------------------------------
and, if demanded by the Borrowers (following a demand by such Lender pursuant to
Section 2.11 or Section 2.12) upon at least 5 Business Days' notice to such
Lender and the Agent or if required pursuant to Section 2.17, will assign to one
or more Persons all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Revolving Credit Advances owing to it and any Revolving Credit Note or Notes
held by it, and any Competitive Bid Advances or Competitive Bid Notes held by it
required to be assigned pursuant to Section 2.11 or Section 2.12) with the
consent of the Agent and, so long as no Default has occurred and is continuing,
the Borrowers (which consent shall not unreasonably be withheld); provided,
                                                                  --------
however, that (i) each such assignment shall be of a constant, and not a
-------
varying, percentage of all rights and obligations under this Agreement (other
than any Competitive Bid Advances owing to it and any Competitive Bid Notes held
by it, except any such Competitive Bid Advances or Competitive Bid Notes
required to be assigned pursuant to Section 2.11 or Section 2.12), (ii) except
in the case of an assignment to an Affiliate of such Lender or a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, and (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Revolving Credit Note
subject to such assignment and a processing and recordation fee of $3,500. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(other than its rights under Sections 2.11, 2.14 and 8.04 to the extent any
claim thereunder relates to an event arising prior to such assignment) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

        (b)  By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such

                                      37
<PAGE>

action as agent on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.

        (c)  The Agent shall maintain at its address referred to in Section 8.02
a copy of each Assumption Agreement and each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
                                                       --------
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.

        (d)  Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Revolving Credit Note or Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrowers.

        (e)  Each Lender may sell participations to one or more banks or other
entities (other than any Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and any
Note or Notes held by it); provided, however, that (i) such Lender's obligations
                           --------  -------
under this Agreement (including, without limitation, its Commitment to the
Borrowers hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrowers, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note or the Guaranty, or any
consent to any departure by any Borrower therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Advances or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Advances or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation.
Upon the sale of a participation pursuant to this Section 8.07(e), such Lender
shall promptly provide notice to the Borrowers of the sale of a participation
(other than a sale of a participation pursuant to Section 2.15); provided,
                                                                 --------
however, that the failure by such Lender to provide such notice shall not
-------
invalidate the sale of such participation.

        (f)  Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to any Borrower furnished to such Lender by or on behalf of
any Borrower; provided that, prior to any such disclosure, the assignee or
              --------
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information relating to any Borrower
received by it from such Lender; provided further that, so long as no Default
                                 -------- -------
has occurred and is continuing, the Borrower shall have consented in advance to
the disclosure of any non-public information, such consent not to be
unreasonably withheld.

        (g)  Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

        (h)  Each Lender agrees that it will not assign any right, obligation or
Note, or sell any participation, in any manner or under any circumstances that
would require registration, qualification or filings under the securities laws
of the United States of America, of any state or any country.

                                      38
<PAGE>

        SECTION 8.08.    Confidentiality.  Neither the Agent nor any Lender
                         ---------------
shall disclose any Confidential Information to any other Person without the
consent of the Borrowers, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, to
the extent contemplated by Section 8.07(f), to actual or prospective assignees
and participants, and then only on a confidential basis, (b) as required by any
law, rule or regulation or judicial process, provided that the Agent or such
                                             --------
Lender, as the case may be, has notified the Borrower and has otherwise taken
reasonable steps to protect such information from any unnecessary disclosure,
and (c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking, provided that, without prejudice to its
                                      --------
right to disclose to such examiner or regulator, the Agent and the Lenders agree
to use reasonable efforts to limit the amount of Confidential Information which
is disclosed.

        SECTION 8.09.    Governing Law.  This Agreement and the Notes shall be
                         -------------
governed by, and construed in accordance with, the laws of the State of New
York.

        SECTION 8.10.    Execution in Counterparts.  This Agreement may be
                         -------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

        SECTION 8.11.    Jurisdiction, Etc. (a) Each of the parties hereto
                         -----------------
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
the Notes in the courts of any jurisdiction.

        (b)  Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any New
York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

        SECTION 8.12.    Resignation of Pharmacia as Borrower.  At any time
                         ------------------------------------
after the Monsanto Effective Date and upon the payment and performance in full
of all Pharmacia's indebtedness, liabilities and obligations under this
Agreement and the Notes, then so long as at such time no Notice of Revolving
Credit Borrowing or Notice of Competitive Bid Borrowing by Pharmacia is
outstanding and no Default has occurred and is continuing, Pharmacia may
terminate its status as a Borrower hereunder upon delivery of written notice to
such effect to the Agent (which notice the Agent shall forward promptly to the
Lenders). Thereafter, the Lenders shall have no further obligations to make any
Advances to Pharmacia and Pharmacia shall have no further obligations under this
Agreement (other than its obligations under Sections 2.11, 2.14 and 8.04 to the
extent any liability thereunder relates to an event arising prior to such
termination) and shall not be deemed to be a Borrower hereunder for any other
circumstance or purpose.

        SECTION 8.13.    Waiver of Jury Trial.  Each of the Borrowers, the Agent
                         --------------------
and the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.

                                      39
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                    MONSANTO COMPANY

                                    By____________________________
                                      Title:

                                    PHARMACIA CORPORATION

                                    By____________________________
                                      Title:

                                    CITIBANK, N.A.,
                                      as Agent

                                    By____________________________
                                      Title:

                                Initial Lenders
                                ---------------

Commitment
----------
$63,333,333.33                      CITIBANK, N.A.

                                    By____________________________
                                      Title:

$63,333,333.33                      THE CHASE MANHATTAN BANK

                                    By____________________________
                                      Title:

$53,333,333.33                      BANK ONE, NA (MAIN OFFICE CHICAGO)

                                    By____________________________
                                      Title:

$53,333,333.33                      COMMERZBANK AG, NEW YORK AND
                                    GRAND CAYMAN BRANCHES

                                    By____________________________
                                      Title:

                                      40
<PAGE>

$36,666,666.67                      THE BANK OF TOKYO - MITSUBISHI, LTD.,
                                    CHICAGO BRANCH

                                    By____________________________
                                      Title:

$36,666,666.67                      FLEET NATIONAL BANK

                                    By____________________________
                                      Title:

$36,666,666.67                      SOCIETE GENERALE

                                    By____________________________
                                      Title:

$23,333,333.33                      BANCA COMMERCIALE ITALIANA, CHICAGO BRANCH

                                    By____________________________
                                      Title:

$16,666,666.67                      BARCLAYS BANK PLC

                                    By____________________________
                                      Title:

$16,666,666.67                      BBL INTERNATIONAL (U.K) LIMITED

                                    By____________________________
                                      Title:

$16,666,666.67                      THE BANK OF NEW YORK

                                    By____________________________
                                      Title:

$16,666,666.67                      CREDIT AGRICOLE INDOSUEZ

                                    By____________________________
                                      Title:

$16,666,666.67                      KBC BANK N.V.

                                    By____________________________
                                      Title:

                                      41
<PAGE>

$16,666,666.67                      THE NORTHERN TRUST COMPANY

                                    By____________________________
                                      Title:

$16,666,666.67                      WACHOVIA BANK, N.A.

                                    By____________________________
                                      Title:

$16,666,666.67                      WESTPAC BANKING CORPORATION

                                    By____________________________
                                      Title:

$500,000,000   Total of the Commitments

                                      42
<PAGE>

                                                                    SCHEDULE I -
                                                      APPLICABLE LENDING OFFICES

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
Name of Initial Lender                      Domestic Lending Office                  Eurodollar Lending Office
----------------------                      -----------------------                  -------------------------
--------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                                     <C>
BANCA COMMERCIALE ITALIANA, CHICAGO         Banca Commerciale Italiana,              Banca Commerciale Italiana, Chicago
BRANCH                                      Chicago Branch                           Branch
                                            150 N. South LaSalle, Suite 1500         150 N. South LaSalle, Suite 1500
                                            Chicago, IL 60604                        Chicago, IL 60604
                                            Attn:  Credit Administration             Attn:  Credit Administration
                                            T:  312-992-5110                         T:  312-992-5110
                                            F:  312-992-5111                         F:  312-992-5111
 --------------------------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK                        The Bank of New York                     The Bank of New York
                                            101 Barclay Street                       101 Barclay Street
                                            New York, NY 10286                       New York, NY 10286
                                            Attn:  Keith Stiell                      Attn:  Keith Stiell
                                            T:  212-635-8216                         T:  212-635-8216
                                            F:  212-635-7926                         F:  212-635-7926
--------------------------------------------------------------------------------------------------------------------
BANK ONE, NA (MAIN OFFICE CHICAGO)          Bank One, NA, (Main Office Chicago)      Bank One, NA, (Main Office Chicago)
                                            Chicago, Illinois                        Chicago, Illinois
                                            ABA: 071000013                           ABA: 071000013
                                            LS2 Incoming                             LS2 Incoming
                                            481152860000                             481152860000
                                            Ref: Monsanto Co                         Ref: Monsanto Co
                                            Attn:  Ben Oliva                         Attn:  Ben Oliva
                                            Tel:  312-732-5987                       Tel:  312-732-5987
                                            Fax: 312-732-4840/3013                   Fax:  312-732-4840/3013
--------------------------------------------------------------------------------------------------------------------
THE BANK OF TOKYO-MITSUBISHI, LTD.,         The Bank of Tokyo - Mitsubishi, Ltd.,    The Bank of Tokyo - Mitsubishi,
CHICAGO BRANCH                              Chicago Branch                           Ltd., Chicago Branch
                                            227 West Monroe Street, Suite 2300       227 West Monroe Street, Suite 2300
                                            Chicago, IL 60606                        Chicago, IL 60606
                                            Attn: Janice Hennig                      Attn: Janice Hennig
                                            Tel:  312-696-4710                       Tel:  312-696-4710
                                            Fax:  312-696-4532                       Fax:  312-696-4532
--------------------------------------------------------------------------------------------------------------------
BARCLAYS BANK PLC                           Barclays Bank PLC                        Barclays Bank PLC
                                            Mark Williams                            Mark Williams
                                            Global Services Unit                     Global Services Unit
                                            5 The North Colonnade                    5 The North Colonnade
                                            Canary Wharf                             Canary Wharf
                                            London El4 4BB                           London El4 4BB
                                            Tel:  020-7773-6436                      Tel:  020-7773-6436
                                            Fax:  020-7773-6807                      Fax:  020-7773-6807
--------------------------------------------------------------------------------------------------------------------
BBL INTERNATIONAL (U.K.) LIMITED            BBL International (U.K.) Limited         BBL International (U.K.) Limited
                                            6 Broadgate                              6 Broadgate
                                            London, EC2M 2AJ                         London, EC2M 2AJ
                                            Attn:  Credit Department                 Attn:  Credit Department
                                            T:  44-171-247-5566                      T:  44-171-247-5566
                                            F:  44-171-562-0208                      F:  44-171-562-0208
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                                    <C>
THE CHASE MANHATTAN BANK                   The Chase Manhattan Bank                The Chase Manhattan Bank
                                           270 Park Avenue, 48th Floor             270 Park Avenue, 48th Floor
                                           New York, NY 10017                      New York, NY 10017
                                           Attn:  Stephen P. Rochford              Attn:  Stephen P. Rochford
                                           T:  212-270-7275                        T:  212-270-7275
                                           F:  212-270-5135                        F:  212-270-5135
--------------------------------------------------------------------------------------------------------------------
CITIBANK, N.A.                             Citibank, N.A.                          Citibank, N.A.
                                           Two Penns Way                           Two Penns Way
                                           Suite 200                               Suite 200
                                           New Castle, DE 19720                    New Castle, DE 19720
                                           Attn: Ann Hieronimus                    Attn: Ann Hieronimus
                                           Tel:   302-894-6034                     Tel:   302-894-6034
                                           Fax:  302-894-6120                      Fax:  302-894-6120
--------------------------------------------------------------------------------------------------------------------
COMMERZBANK AG, NEW YORK AND GRAND         Commerzbank AG, Grand Cayman Branch     Commerzbank AG, Grand Cayman Branch
CAYMAN BRANCHES                            c/o New York Branch                     c/o New York Branch
                                           Two World Financial Center              Two World Financial Center
                                           New York, NY 10281-1050                 New York, NY 10281-1050
                                           Attn:  Mr. Al Caputo                    Attn:  Mr. Al Caputo
                                           Tel:  212-266-7694                      Tel:  212-266-7694
                                           Fax:  212-266-7772                      Fax:  212-266-7772
--------------------------------------------------------------------------------------------------------------------
CREDIT AGRICOLE INDOSUEZ                   Credit Agricole Indosuez                Credit Agricole Indosuez
                                           55 E. Monroe Street                     55 E. Monroe Street
                                           Chicago, IL 60603                       Chicago, IL 60603
                                           Attn:  Theodore Tice                    Attn:  Theodore Tice
                                           T:  312-917-7463                        T:  312-917-7463
                                           F:  312-372-3455                        F:  312-372-3455
--------------------------------------------------------------------------------------------------------------------
FLEET NATIONAL BANK                        Fleet National Bank                     Fleet National Bank
                                           100 Federal Street MADE 10010A          100 Federal Street MADE 10010A
                                           Boston, MA 02110                        Boston, MA 02110
                                           Attn:  Lisa Gelfand - Abrams            Attn:  Lisa Gelfand - Abrams
                                           Tel:  617-434-7118                      Tel:  617-434-7118
                                           Fax:  617-434-0601                      Fax:  617-434-0601
--------------------------------------------------------------------------------------------------------------------
KBC BANK N.V.                              KBC Bank N.V.                           KBC Bank N.V.
                                           New York Branch                         New York Branch
                                           125 West 55th Street                    125 West 55th Street
                                           New York, NY 10019                      New York, NY 10019
                                           Attn:  Loan Administration              Attn:  Loan Administration
                                           T:  212-541-0657                        T:  212-541-0657
                                           F:  212-956-5581                        F:  212-956-5581
--------------------------------------------------------------------------------------------------------------------
THE NORTHERN TRUST COMPANY                 The Northern Trust Company              The Northern Trust Company
                                           50 S. LaSalle                           50 S. LaSalle
                                           Chicago, IL 60675                       Chicago, IL 60675
                                           Attn:  Ms. Linda Honda                  Attn:  Ms. Linda Honda
                                           Tel:  312-444-4715                      Tel:  312-444-4715
                                           Fax:  312-630-1566                      Fax:  312-630-1566
--------------------------------------------------------------------------------------------------------------------
SOCIETE GENERALE                           Societe Generale                        Societe Generale
                                           2001 Ross Ave. Suite 4800               2001 Ross Ave. Suite 4800
                                           Dallas, TX 75201                        Dallas, TX 75201
                                           Attn:  Deanna Farhat                    Attn:  Deanna Farhat
                                           Tel:  214-979-2736                      Tel:  214-979-2736
                                           Fax:  214-754-0171                      Fax:  214-754-0171
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                     <C>
WACHOVIA BANK, N.A.                    Wachovia Bank, N.A.                     Wachovia Bank, N.A.
                                       191 Peachtree Street, N.E.              191 Peachtree Street, N.E.
                                       Atlanta, GA 30303                       Atlanta, GA 30303
                                       Attn:  Walt Gillikin                    Attn:  Walt Gillikin
                                       Tel:  404-332-5747                      Tel:  404-332-5747
                                       Fax:  404-332-4136                      Fax:  404-332-4136
--------------------------------------------------------------------------------------------------------------------
WESTPAC BANKING CORPORATION            Westpac Banking Corporation             Westpac Banking Corporation
                                       575 Fifth Avenue                        575 Fifth Avenue
                                       New York, NY                            New York, NY
                                       Attn:  Susan Wildstein                  Attn:  Susan Wildstein
                                       Tel:  212-551-1960                      Tel:  212-551-1960
                                       Fax:  212-551-1998                      Fax:  212-551-1998
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                                           EXHIBIT A-1 - FORM OF
                                                REVOLVING CREDIT PROMISSORY NOTE

U.S.$_______________                    Dated:  _______________, 2000

          FOR VALUE RECEIVED, the undersigned, ____________________, a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
                  --------
____________________ (the "Lender") for the account of its Applicable Lending
                           ------
Office on the Termination Date (each as defined in the Credit Agreement referred
to below) the principal sum of U.S.$[amount of the Lender's Commitment in
figures] or, if less, the aggregate principal amount of the Revolving Credit
Advances made by the Lender to the Borrower pursuant to the Five Year Credit
Agreement dated as of August 8, 2000 among the Borrower, the Lender and certain
other lenders parties thereto, Citibank, N.A., as Agent for the Lender and such
other lenders, Salomon Smith Barney Inc. and Chase Securities Inc., as co-lead
arrangers and co-book managers, The Chase Manhattan Bank, as syndication agent,
and Commerzbank AG New York and Grand Cayman Branches and Bank One, NA, as co-
documentation agents (as amended or modified from time to time, the "Credit
                                                                     ------
Agreement"; the terms defined therein being used herein as therein defined),
---------
outstanding on the Termination Date.

          The Borrower promises to pay interest on the unpaid principal amount
of each Revolving Credit Advance from the date of such Revolving Credit Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.

          Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, New
York 10043, in same day funds.  Each Revolving Credit Advance owing to the
Lender by the Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.

          This Promissory Note is one of the Revolving Credit Notes referred to
in, and is entitled to the benefits of, the Credit Agreement.  The Credit
Agreement, among other things, (i) provides for the making of Revolving Credit
Advances by the Lender to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving
Credit Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.

                                    [NAME OF BORROWER]

                                    By____________________________
                                      Title:
<PAGE>

                      ADVANCES AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                               Amount of
Date                       Amount of           Principal Paid       Unpaid Principal          Notation
                           Advance             or Prepaid           Balance                   Made By
------------------------------------------------------------------------------------------------------------
<S>                      <C>                  <C>                 <C>                        <C>
------------------------------------------------------------------------------------------------------------

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</TABLE>
<PAGE>

                                                           EXHIBIT A-2 - FORM OF
                                                                 COMPETITIVE BID
                                                                 PROMISSORY NOTE

U.S.$_______________                         Dated:  _______________, 2000

          FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
                  --------
_________________________ (the "Lender") for the account of its Applicable
                                ------
Lending Office (as defined in the Five Year Credit Agreement dated as of August
8, 2000 among the Borrower, the Lender and certain other lenders parties
thereto, Citibank, N.A., as Agent for the Lender and such other lenders, Salomon
Smith Barney Inc. and Chase Securities Inc., as co-lead arrangers and co-book
managers, The Chase Manhattan Bank, as syndication agent, and Commerzbank AG New
York and Grand Cayman Branches and Bank One, NA, as co-documentation agents (as
amended or modified from time to time, the "Credit Agreement"; the terms defined
                                            ----------------
therein being used herein as therein defined)), on _______________, 200_, the
principal amount of U.S.$_______________.

          The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:

     Interest Rate: _____% per annum (calculated on the basis of a year of _____
     days for the actual number of days elapsed).

          Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, for the account of the Lender at
the office of Citibank, N.A., at 399 Park Avenue, New York, New York 10043 in
same day funds.

          This Promissory Note is one of the Competitive Bid Notes referred to
in, and is entitled to the benefits of, the Credit Agreement.  The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.

          The Borrower hereby waives presentment, demand, protest and notice of
any kind.  No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.

          This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.

                                      [NAME OF BORROWER]

                                      By__________________
                                                                        Title:
<PAGE>

                                                            EXHIBIT B-1- FORM OF
                                            NOTICE OF REVOLVING CREDIT BORROWING

Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720                         [Date]

Attention:  Bank Loans Syndications Department

Ladies and Gentlemen:

          The undersigned, [Name of Borrower], refers to the Five Year Credit
Agreement, dated as of August 8, 2000 (as amended or modified from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
     ----------------
defined), among the undersigned, certain Lenders parties thereto, Citibank,
N.A., as Agent for said Lenders, Salomon Smith Barney Inc. and Chase Securities
Inc., as co-lead arrangers and co-book managers, The Chase Manhattan Bank, as
syndication agent, and Commerzbank AG New York and Grand Cayman Branches and
Bank One, NA, as co-documentation agents, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
                                      -----------------------------------
required by Section 2.02(a) of the Credit Agreement:

        (i)    The Business Day of the Proposed Revolving Credit Borrowing is
               _______________, 2000.

        (ii)   The Type of Advances comprising the Proposed Revolving Credit
     Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

        (iii)  The aggregate amount of the Proposed Revolving Credit Borrowing
is $_______________.

        [(iv   The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Revolving Credit Borrowing is __________ month[s].]

        The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:

        (A)    the representations and warranties contained in Section 4.01
of the Credit Agreement (except the representations set forth in the last
sentence of subsection (e) thereof and in subsection (f)(i) thereof) are
correct, before and after giving effect to the Proposed Revolving Credit
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date; and
<PAGE>

          (B) no event has occurred and is continuing, or would result from such
     Proposed Borrowing Revolving Credit or from the application of the proceeds
     therefrom, that constitutes a Default.

                                    Very truly yours,

                                    [NAME OF BORROWER]

                                    By_____________________________
                                      Title:
<PAGE>

                                                 EXHIBIT B-2 - FORM OF NOTICE OF
                                                       COMPETITIVE BID BORROWING

Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720
                                                            [Date]

Attention:  Bank Loan Syndications Department

Ladies and Gentlemen:

          The undersigned, [Name of Borrower], refers to the Five Year Credit
Agreement, dated as of August 8, 2000 (as amended or modified from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
     ----------------
defined), among the undersigned, certain Lenders parties thereto, Citibank,
N.A., as Agent for the Lender and such other lenders, Salomon Smith Barney Inc.
and Chase Securities Inc., as co-lead arrangers and co-book managers, The Chase
Manhattan Bank, as syndication agent, and Commerzbank AG New York and Grand
Cayman Branches and Bank One, NA, as co-documentation agents, and hereby gives
you notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that
the undersigned hereby requests a Competitive Bid Borrowing under the Credit
Agreement, and in that connection sets forth the terms on which such Competitive
Bid Borrowing (the "Proposed Competitive Bid Borrowing") is requested to be
                    ----------------------------------
made:

          (A)     Date of Competitive Bid Borrowing   ______________________
          (B)     Amount of Competitive Bid Borrowing ______________________
          (C)     [Maturity Date] [Interest Period]   ______________________
          (D)     Interest Rate Basis                 ______________________
          (E)     Interest Payment Date(s)            ______________________
          (F)     ___________________                 ______________________
          (G)     ___________________                 ______________________
          (H)     ___________________                 ______________________

          The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:

          (a)  the representations and warranties contained in Section 4.01 of
     the Credit Agreement (except the representations set forth in the last
     sentence of subsection (e) thereof and in subsection (f)(i) thereof) are
     correct, before and after giving effect to the Proposed Competitive Bid
     Borrowing and to the application of the proceeds therefrom, as though made
     on and as of such date;

         (b)   no event has occurred and is continuing, or would result from the
     Proposed Competitive Bid Borrowing or from the application of the proceeds
     therefrom, that constitutes a Default;

         (c)   no event has occurred and no circumstance exists as a result of
     which the information concerning the undersigned that has been provided to
     the Agent and each Lender by the undersigned in connection with the Credit
     Agreement would include an untrue statement of a material fact or omit to
     state any material fact or any fact necessary to make the statements
     contained therein, in the light of the circumstances under which they were
     made, not misleading; and

         (d)  the aggregate amount of the Proposed Competitive Bid Borrowing and
     all other Borrowings to be made on the same day under the Credit Agreement
     is within the aggregate amount of the unused Commitments of the Lenders.
<PAGE>

         The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.03(a)(v) of
the Credit Agreement.

                                            Very truly yours,

                                            [NAME OF BORROWER]

                                            By__________________
                                              Title:
<PAGE>

                                                  EXHIBIT C - FORM OF ASSIGNMENT
                                                                  AND ACCEPTANCE

          Reference is made to the Five Year Credit Agreement dated as of August
8, 2000 (as amended or modified from time to time, the "Credit Agreement") among
                                                        ----------------
Monsanto Company, a Delaware corporation ("Monsanto") Pharmacia Corporation, a
                                           --------
Delaware corporation ("Pharmacia" and together with Monsanto, the "Borrowers"),
                       ---------                                   ---------
the Lenders (as defined in the Credit Agreement), Citibank, N.A., as agent for
the Lenders (the "Agent), Salomon Smith Barney Inc. and Chase Securities Inc.,
                  -----
as co-lead arrangers and co-book managers, The Chase Manhattan Bank, as
syndication agent, and Commerzbank AG New York and Grand Cayman Branches and
Bank One, NA, as co-documentation agents.  Terms defined in the Credit Agreement
are used herein with the same meaning.

          The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:

          1.   The Assignor hereby sells and assigns to the Assignee, without
recourse, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement as of the date hereof (other than in respect of Competitive Bid
Advances and Competitive Bid Notes) equal to the percentage interest specified
on Schedule 1 hereto of all outstanding rights and obligations under the Credit
Agreement (other than in respect of Competitive Bid Advances and Competitive Bid
Notes). After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Advances owing to the Assignee will be as set
forth on Schedule 1 hereto.

          2.   The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Note, if any, held by the Assignor [and
requests that the Agent exchange such Revolving Credit Note for a new Revolving
Credit Note payable to the order of the Assignor in an amount equal to the
Commitment retained by the Assignor under the Credit Agreement, as specified on
Schedule 1 hereto].

          3.   The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; (vi) attaches
any U.S. Internal Revenue Service forms required under Section 2.14 of the
Credit Agreement; and (vii) makes the representation and warranty set forth in
Section 4.02 of the Credit Agreement.

          4.   Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
                                                        --------------
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
<PAGE>

        5.   Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

        6.   Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Credit Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee.  The Assignor and Assignee shall
make all appropriate adjustments in payments under the Credit Agreement and the
Revolving Credit Notes for periods prior to the Effective Date directly between
themselves.

        7.   This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.

        8.   This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.  Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.

        IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
<PAGE>

                                  Schedule 1
                                      to
                           Assignment and Acceptance

<TABLE>
<CAPTION>
<S>                                                                                   <C>
   Percentage interest assigned:                                                        _____%
   Amount of Commitment assigned:                                                       $_______________
   Assignee's Commitment:                                                               $_______________
   Aggregate outstanding principal amount of Revolving Credit Advances assigned:        $_______________
   Effective Date*:           _______________, 200_

                                                    [NAME OF ASSIGNOR], as Assignor

                                                    By__________________________________________________
                                                       Title:

                                                    Dated:  _______________, 200_

                                                    [NAME OF ASSIGNEE], as Assignee

                                                    By__________________________________________________
                                                       Title:

                                                    Domestic Lending Office:
                                                       [Address]

                                                    Eurodollar Lending Office:
                                                       [Address]

</TABLE>

Accepted [and Approved]** this
__________ day of _______________, 200_

CITIBANK, N.A., as Agent

By_____________________________________
  Title:

[Approved this __________ day
of _______________, 200_

___________________________
*  This date should be no earlier than five Business Days after the delivery of
   this Assignment and Acceptance to the Agent.

**  Required if the Assignee is an Eligible Assignee solely by reason of clause
   (iii) of the definition of "Eligible Assignee".
<PAGE>

MONSANTO COMPANY

By______________________________]*
  Title:

PHARMACIA CORPORATION

By______________________________]*
  Title:

__________________________
*  Required if the Assignee is an Eligible Assignee solely by reason of clause
   (iii) of the definition of  "Eligible Assignee".
<PAGE>

                                                              EXHIBIT D- FORM OF
                                                            ASSUMPTION AGREEMENT

                                         Dated:

Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
   Attention:  Chief Financial Officer

Citibank, N.A.,
  as Agent
399 Park Avenue
New York, New York 10043
   Attention:  __________________

Ladies and Gentlemen:

          Reference is made to the Five Year Credit Agreement dated as of August
8, 2000 (as amended or modified from time to time, the "Credit Agreement") among
                                                        ----------------
Monsanto Company, a Delaware corporation ("Monsanto") Pharmacia Corporation, a
                                           --------
Delaware corporation ("Pharmacia" and together with Monsanto, the "Borrowers"),
                       ---------                                   ---------
the Lenders (as defined in the Credit Agreement), Citibank, N.A., as agent for
the Lenders (the "Agent), Salomon Smith Barney Inc. and Chase Securities Inc.,
                  -----
as co-lead arrangers and co-book managers, The Chase Manhattan Bank, as
syndication agent, and Commerzbank AG New York and Grand Cayman Branches and
Bank One, NA, as co-documentation agents.  Terms defined in the Credit Agreement
are used herein with the same meaning.

          The undersigned proposes to become an Assuming Bank pursuant to
Section 2.17 of the Credit Agreement and, in that connection, hereby agrees that
it shall become a Lender for purposes of the Credit Agreement on [applicable
Termination Date] and that its Commitment shall as of such date be $_________.

          The undersigned (the "Assuming Bank") (i) confirms that it has
                                -------------
received a copy of the Credit Agreement, together with copies of the financial
statements referred to in Section  5.01(f) thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assumption Agreement; (ii) agrees that it will,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; (v) confirms
that it is an Eligible Assignee; [and] (vi) specifies as its Domestic Lending
Office (and address for notices) and Eurodollar Lending Office the offices set
forth beneath its name on the signature pages hereof; [and (vii) attaches any
U.S. Internal Revenue Service forms required under Section 2.14] of the Credit
Agreement]/1/ and [(vii)] [(viii)] makes the representation and warranty set
forth in Section 4.02 of the Credit Agreement.

          The effective date for this Assumption Agreement shall be [applicable
Termination Date].  Upon delivery of this Assumption Agreement to the Borrower
and the Agent and acceptance and recording of this Assumption Agreement by the
Agent, as of [date specified above], the Assuming Bank shall be a party to the
Credit Agreement and have the rights and obligations of a Lender thereunder.  As
of [date specified above], the Agent shall make all payments under the Credit
Agreement in respect of the interest assumed hereby (including, without
limitation, all payments of principal, interest and  facility fees) to the
Assuming Bank.

___________________
/1/   If the Assuming Bank is organized under the laws of a jurisdiction outside
      the United States.
<PAGE>

          This Assumption Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.  Delivery of an executed
counterpart of this Assumption Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Assumption Agreement.

          This Assumption Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

                                      Very truly yours,

                                      [NAME OF ASSUMING BANK]

                                      By____________________________
                                        Name:
                                        Title:

                                      Domestic Lending Office
                                       (and address for notices):
                                      [Address]

                                      Eurodollar Lending Office:
                                      [Address]:

Above Acknowledged and Agreed to:

MONSANTO COMPANY

By_______________________________
  Name:
  Title:

[PHARMACIA CORPORATION]

By_______________________________
  Name:
  Title:
<PAGE>

Accepted this ____ day of
_________, _________

CITIBANK, N.A.,
as Agent

By______________________________
  Name:
  Title:
<PAGE>

                                                    EXHIBIT E- FORM OF NOTICE OF
                                                   EXTENSION OF TERMINATION DATE

                                        [Date]

Citibank, N.A.,
 as Agent
399 Park Avenue
New York, New York 10043
    Attention:  __________________

Monsanto Company
----------------

Ladies and Gentlemen:

          Reference is made to the Five Year Credit Agreement dated as of August
8, 2000 (as amended or modified from time to time, the "Credit Agreement") among
                                                        ----------------
Monsanto Company, a Delaware corporation ("Monsanto") Pharmacia Corporation, a
                                           --------
Delaware corporation ("Pharmacia" and together with Monsanto, the "Borrowers"),
                       ---------                                   ---------
the Lenders (as defined in the Credit Agreement), Citibank, N.A., as agent for
the Lenders (the "Agent), Salomon Smith Barney Inc. and Chase Securities Inc.,
                  -----
as co-lead arrangers and co-book managers, The Chase Manhattan Bank, as
syndication agent, and Commerzbank AG New York and Grand Cayman Branches and
Bank One, NA, as co-documentation agents.  Terms defined in the Credit Agreement
are used herein with the same meaning.

          Pursuant to Section 2.17 of the Credit Agreement, the Lender named
below hereby notifies the Agent as follows:

          [The Lender named below desires to extend the Termination Date with
          respect to [all] [$______] of its Commitment for a period of one
          year.]

          [The Lender named below desires to extend the Termination Date with
          respect to all of its Commitment for a period of one year and offers
          to increase its Commitment commencing [______________] to
          $__________.]

          [The Lender named below does NOT desire to extend the Termination Date
          with respect to any of its Commitment for a period of one year.]
<PAGE>

          This notice is subject in all respects to the terms of the Credit
Agreement, is irrevocable and shall be effective only if received by the Agent
no later than [______________]./1/

                                    Very truly yours,

                                    [NAME OF LENDER]

                                    By:_____________________________
                                     Name:
                                     Title:

___________________________________
/1/ This date shall be no later than 20 days prior to the then scheduled
    Termination Date in the case of an Extending Lender's notice to extend its
    Commitment and no later than 15 days prior to the then scheduled Termination
    Date in the case of an Extending Lender's offer to increase its Commitment.<PAGE>

                                                                     EXHIBIT 4.3

                            STOCKHOLDERS' AGREEMENT
                            -----------------------

THIS STOCKHOLDERS' AGREEMENT, dated this 30th day of March 1999, is entered into
by and among STC TECHNOLOGIES, INC., a Delaware corporation (the "Corporation"),
and those stockholders of the Corporation listed on Schedule 1 hereto
(hereinafter referred to collectively as the "Investors").

                              W I T N E S S E T H:
                              -------------------

          WHEREAS, the Corporation and the Investors are entering into a
Convertible Preferred Stock Purchase Agreement dated the date hereof (the "Stock
Purchase Agreement") in connection with which the Corporation has agreed to sell
shares of its Series A Convertible Preferred Stock, par value $.000001 per share
("Series A Preferred Stock"), and the Corporation desires to grant to the
Investors certain registration and other rights with respect to such shares.

          NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and undertakings of the Corporation and the Investors
hereunder and under the Stock Purchase Agreement, the parties hereto do hereby
agree as follows:

     SECTION 1.  Definitions.   As used herein, the following terms shall have
the following respective meanings:

               Authorized Issuance shall mean the sale by the Corporation to
current capital stockholders of the Corporation on or before June 30, 1999 of
Series A Preferred Stock that number of shares with an aggregate consideration
(at a price per share equal to the purchase price per share under the Stock
Purchase Agreement) not to exceed the lesser of (A) $3,000,000, or (B)
$9,500,000 less the aggregate purchase price under the Stock Purchase Agreement
in accordance with definitive written agreements approved by HCV V.

               Board shall mean the Board of Directors of the Corporation.

               Budget shall have the meaning set forth in Section 2.8 hereof.

               Certificate shall mean the Certificate of Designation of Series A
Convertible Preferred Stock of the Corporation.

               Commission shall mean the U.S. Securities and Exchange
Commission.

               Common Stock shall mean the Common Stock, par value $.000001 per
share, of the Corporation, including both Class A Common Stock and Class B
Common Stock.
<PAGE>

               Environment shall mean soil, land surface or subsurface strata,
surface waters, groundwaters, drinking water supply, ambient air (including
indoor air), plant and non-human animal life and any natural resource.

               Environmental Laws shall mean all applicable federal, state and
local laws, ordinances, rules and regulations that regulate, fix liability for,
or otherwise relate to, the handling, use (including use in industrial
processes, in construction, as building materials, or otherwise), storage and
disposal of hazardous and toxic wastes and substances, and to the discharge,
leakage, presence, migration, threatened Release or Release (whether by
disposal, a discharge into any water source or system or into the air, or
otherwise) of any pollutant or effluent. Without limiting the preceding
sentence, the term "Environmental Laws" shall specifically mean the following
federal laws, as amended: Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. 9601 et. seq.; Resource Conservation and
Recovery Act of 1976, 42 U.S.C. 6901 et. seq.; Federal Water Pollution Control
Act, 33 U.S.C. 1251 et. seq.; and Clean Air Act, 42 U.S.C. 7401 et. seq.; and
any other federal, state, local, municipal, foreign, international,
multinational or other administrative order, constitution, law, ordinance,
principle of common law, regulation, statute or treaty, regulating the following
activities:

                    (i) advising governmental authorities, employees or the
public of threatened or actual releases of pollutants or hazardous substances or
Hazardous Materials, violations of environmental discharge limits and of the
commencements of activities, such as resource extraction or construction, that
could have significant impact on the Environment;

                    (ii) preventing or reducing the releases of pollutants or
hazardous substances or Hazardous Materials into the Environment;

                    (iii) reducing the quantities, preventing the release or
minimizing the hazardous characteristics of wastes that are generated;

                    (iv) assuring that products are designed, formulated and
packaged so that they do not present unreasonable risks or to the Environment
when used or disposed of or to human health when disposed of;

                    (v) protecting natural resources or species;

                    (vi) reducing to acceptable levels the risks of the
transportation of hazardous substances, pollutants, oil or other potentially
harmful substances; or

                    (vii) cleaning up pollutants that have been released or
preventing the threat of such release.

               Equity Percentage shall mean, as to any Investor, that percentage
figure which expresses the ratio that (a) the number of shares of issued and
outstanding Common Stock then owned by such Investor bears to (b) the aggregate
number of shares of issued and

                                       2
<PAGE>

outstanding Common Stock then owned by all stockholders on a fully diluted
basis. For purposes solely of the computation set forth in clauses (a) and (b)
above, all issued and outstanding securities held by the Investors that are
convertible into or exercisable or exchangeable for shares of Common Stock
(including any issued and issuable shares of Preferred Stock) or for any such
convertible, exercisable or exchangeable securities, shall be treated as having
been so converted, exercised or exchanged at the rate or price at which such
securities are convertible, exercisable or exchangeable for shares of Common
Stock in effect at the time in question (which, for purposes of Section 2.3 of
this Agreement, shall be at the time of delivery by the Corporation of the
notice of the Offer contemplated by Section 2.3(b)), whether or not such
securities are at such time immediately convertible, exercisable or
exchangeable.

               Exchange Act shall mean the Securities Exchange Act of 1934, as
amended.

               Exchange Act Registration Statement shall have the meaning set
forth in Section 2.5 hereof.

               Excess Securities shall have the meaning set forth in Section
2.3(d) hereof.

               Excess Securities Notice shall have the meaning set forth in
Section 2.3(d) hereof.

               Excess Securities Period shall have the meaning set forth in
Section 2.3(d) hereof.

               Excluded Forms shall have the meaning given such term in Section
3.5 hereof.

               Excluded Securities shall mean, collectively:

                    (i) the Reserved Shares;

                    (ii) Common Stock issued or issuable to officers, directors
     or employees of or consultants or independent contractors to the
     Corporation, pursuant to any written agreement, plan or arrangement to
     purchase, or rights to subscribe for, such Common Stock, including Common
     Stock issued pursuant to any options granted under the Corporation's 1996
     Employee Incentive and Non-Qualified Stock Option Plan of the Corporation
     to purchase, or rights to subscribe for, such Class B Common Stock, that
     has been approved by the holders of Common Stock then outstanding or that
     may be approved by the holders of a majority of the combined voting power
     of the Investors holding Series A Preferred Shares, calculated in
     accordance with Section 6(a) of the Certificate (including, in such
     calculation, any outstanding Restricted Shares held by such holders), and
     which, as a condition precedent to the issuance of such shares, provides
     for the vesting of such shares and subjects such shares to restrictions on
     transfers and rights of first offer in favor of the Corporation; provided,
     however, that the maximum number

                                       3
<PAGE>

     of shares of Class B Common Stock heretofore or hereafter issuable pursuant
     to the Corporation's 1996 Employee Incentive and Non-Qualified Stock Option
     Plan and all such agreements, plans and arrangements shall not exceed
     327,281 shares (subject to adjustment as required to comply with any anti-
     dilution rights set forth in any such agreement, plan or arrangement);

                    (iii) Common Stock issued as a stock dividend payable in
     shares of Common Stock, or capital stock of any class issuable upon any
     subdivision, recombination, split-up or reverse stock split of all the
     outstanding shares of such class of capital stock of the Corporation;

                    (iv) any securities issued pursuant to the acquisition by
     the Corporation of any other corporation, partnership, joint venture, trust
     or other entity by any merger, stock acquisition, reorganization, purchase
     of substantially all assets or otherwise in which the Corporation, or its
     stockholders of record immediately prior to the effective date of such
     transaction, directly or indirectly, own at least a majority of the voting
     power of the acquired entity or the resulting entity after such
     transaction.

               Group shall mean: (i) as to an Investor that is a limited
partnership: (A) any and all of the venture capital limited partnerships now
existing or hereafter formed that are affiliated with or under common control
with one or more of the general partners or one or more general partners of the
general partner of such Investor and any predecessor or successor thereto, (B)
any limited partner of such Investor, and (C) in the case of HCV V, the HCV
Group; (ii) in the case of any investment trust, any grantor or beneficiary
thereof, or any other trust, corporate entity or partnership under common
control with such investment trust for which Rho Management Company, Inc. or
Summit Asset Management acts as investment adviser; and (iii) as to any
Investor, any other Investor.

               Hazardous Materials shall include without limitation, any
flammable explosives, petroleum products, petroleum byproducts, radioactive
materials, hazardous wastes, hazardous substances, toxic substances or other
similar materials regulated by Environmental Laws.

               HCV Group shall mean, collectively, (i) HCV I, (ii) HCV II, (iii)
HCV III, (iv) HCV IV, (v) HCV V, (vi) any venture capital limited partnership
now existing or hereafter formed which is affiliated with or under common
control with one or more general partners of any general partner of HCV V (an
"HCV Fund"); (vii) any limited partners or affiliates of HCV I, HCV II, HCV III,
HCV IV, HCV V, or any other HCV Fund; and (viii) any successors or assigns of
any of the foregoing persons.

               HCV I shall mean HealthCare Ventures I, L.P., a Delaware limited
partnership, including any successor thereto or any assignee of the interest, in
whole or in part, of HCV I under this Agreement.

                                       4
<PAGE>

               HCV II shall mean HealthCare Ventures II, L.P., a Delaware
limited partnership, including any successor thereto or any assignee of the
interest, in whole or in part, of HCV II under this Agreement.

               HCV III shall mean HealthCare Ventures III, L.P., a Delaware
limited partnership, including any successor thereto or any assignee of the
interest, in whole or in part, of HCV III under this Agreement.

               HCV IV shall mean HealthCare Ventures IV, L.P., a Delaware
limited partnership, including any successor thereto or any assignee of the
interest, in whole or in part, of HCV IV under this Agreement.

               HCV V shall mean HealthCare Ventures V, L.P., a Delaware limited
partnership, including any successor thereto or any assignee of the interest, in
whole or in part, of HCV V under this Agreement.

               Investors shall mean each of the persons listed on Schedule 1
hereto, severally, but not jointly and severally.

               Notice of Acceptance shall have the meaning set forth in Section
2.3(c) hereof.

               Offer shall have the meaning set forth in Section 2.3(b) hereof.

               Offered Securities shall mean, except for Excluded Securities,
(i) any shares of Common Stock, Preferred Stock or any other equity security of
the Corporation, (ii) any debt security or capitalized lease with any equity
feature with respect to the Corporation, or (iii) any option, warrant or other
right to subscribe for, purchase or otherwise acquire any such equity security,
debt security or capitalized lease.

               Option Shares shall have the meaning set forth in Section
5.2(a)(iii) of the Stock Purchase Agreement.

               Other Shares shall have the meaning set forth in Section 3.5(e)
hereof.

               Preferred Directors shall mean the two (2) members of the Board
of Directors of the Corporation appointed by the holders of a majority in voting
power of the Series A Preferred Stock, voting as a separate class, as described
in Section 6(b)(i) of the Certificate.

               Preferred Stock shall mean the Preferred Stock, par value
$.000001 per share, of the Corporation.

               Preferred Stockholders shall mean, collectively, all holders of
shares of Preferred Stock of the Corporation.

                                       5
<PAGE>

               Property shall include, without limitation, land, buildings and
laboratory facilities owned or leased by the Corporation or as to which the
Corporation now has any duties, responsibilities (for clean-up, remedy or
otherwise) or liabilities under any Environmental Laws, or as to which the
Corporation or any subsidiary of the Corporation may have such duties,
responsibilities or liabilities because of past acts or omissions of the
Corporation or any such subsidiary or their predecessors, or because the
Corporation or any such subsidiary or their predecessors in the past was such an
owner or operator of, or bore some other relationship with, such land, buildings
and/or laboratory facilities.

               Qualified IPO shall have the meaning given it in Section 5.5.

               Refused Securities shall have the meaning set forth in Section
2.3(f) hereof.

               Reserved Shares shall mean shares of Class A Common Stock
reserved by the Corporation for issuance upon the conversion of the Series A
Preferred Shares.

               Restricted Securities shall mean any of the Series A Preferred
Shares and the Class A Common Stock issued or issuable upon the conversion of
the Series A Preferred Shares, all shares of Common Stock issued or issuable in
respect thereof by way of stock splits, stock dividends, stock combinations,
recapitalizations or like occurrences, and any other shares of Common Stock or
other securities of the Corporation which may be issued hereafter to any of the
Investors or any member of their Group which are convertible into or exercisable
for shares of Common Stock (including, without limitation, other classes or
series of Convertible Preferred Stock, warrants, options or other rights to
purchase Common Stock or convertible debentures or other convertible debt
securities) and the Common Stock issued or issuable upon such conversion or
exercise of such other securities, which have not been sold (a) in connection
with an effective registration statement filed pursuant to the Securities Act,
or (b) pursuant to Rule 144 or Rule 144A promulgated by the Commission under the
Securities Act.

               Restricted Shares shall mean the shares of Common Stock issued or
issuable upon the conversion or exchange of the Restricted Securities or
otherwise constituting a portion of the Restricted Securities.

               Securities Act shall mean the Securities Act of 1933, as amended.

               Series A Preferred Shares shall mean shares of Series A Preferred
Stock issued or issuable pursuant to the Stock Purchase Agreement.

               Series A Preferred Stock shall mean Series A Convertible
Preferred Stock, par value $.000001 per share, of the Corporation.

                                       6
<PAGE>

               Stock Purchase Agreement shall mean the Convertible Preferred
Stock Purchase Agreement, dated as of the date hereof, among the Corporation and
the Investors listed on Schedule 1 thereto.

               Stockholders shall mean all holders of capital stock of the
Corporation.

               Target Month shall have the meaning set forth in Section 2.7(a)
hereof.

               30-Day Period shall have the meaning set forth in Section 2.3(b)
hereof.

               Transfer shall include any disposition of any Restricted
Securities or of any interest therein which would constitute a sale thereof
within the meaning of the Securities Act.

     SECTION 2.  Certain Covenants of the Corporation.

          2.1  Meetings of the Board of Directors.  The Corporation shall call,
and use its best efforts to have, regular meetings of the Board not less often
than quarterly.  The Corporation shall pay all reasonable and appropriately
documented travel expenses and other out-of-pocket expenses incurred by
directors who are not employed by the Corporation in connection with attendance
at meetings to transact the business of the Corporation or attendance at
meetings of the Board or any committee thereof.

          2.2  Reservation of Shares of Common Stock and Preferred Stock, Etc.
The Corporation shall at all times have authorized and reserved out of its
authorized but unissued shares of Class A Common Stock, a sufficient number of
shares of Class A Common Stock to provide for the conversion of the Series A
Preferred Shares.  Neither the issuance of the Series A Preferred Shares nor the
shares of Class A Common Stock issuable upon the conversion of the Series A
Preferred Shares shall be subject to a preemptive right of any other
Stockholder.

          2.3  Right of First Refusal.

               (a) The Corporation shall not issue, sell or exchange, agree to
issue, sell or exchange, or reserve or set aside for issuance, sale or exchange,
any Offered Securities unless in each case the Corporation shall have first
offered to sell to each Investor an amount of such Offered Securities equal to
that amount of Offered Securities which the Investor would be entitled to
purchase based on each Investor's Equity Percentage, on the terms set forth
herein. Each Investor may delegate its rights and obligations with respect to
such Offer to one or more members of its Group, which members shall thereafter
be deemed to be "Investors" for the purpose of applying this Section 2.3 to such
Offer.

               (b) The Corporation shall deliver to each Investor written notice
of the offer to sell the Offered Securities, specifying the price and terms and
conditions of the offer (the "Offer"). The Offer by its terms shall remain open
and irrevocable for a period of twenty (20

                                       7
<PAGE>

days from the date of its delivery to such Investor (the "20-Day Period"),
subject to extension to include the Excess Securities Period (as such term is
hereinafter defined).

               (c) Each Investor shall evidence its intention to accept the
Offer by delivering a written notice signed by the Investor setting forth the
number of shares that the Investor elects to purchase (the "Notice of
Acceptance"). The Notice of Acceptance must be delivered to the Corporation
prior to the end of the 20-Day Period.

               (d) If any Investor fails to exercise its right hereunder to
purchase its Equity Percentage of the Offered Securities, the Corporation shall
so notify the other Investors in a written notice (the "Excess Securities
Notice"). The Excess Securities Notice shall be given by the Corporation
promptly after it learns of any Investor's intention not to purchase all of its
Equity Percentage of the Offered Securities, but in no event later than ten (10)
days after the expiration of the 20-Day Period. The Investors who or which have
agreed to purchase their Equity Percentage of the Offered Securities shall have
the right to purchase the portion not purchased by such Investor (the "Excess
Securities"), on a pro rata basis, by giving notice within ten (10) days after
receipt of the Excess Securities Notice from the Corporation. The twenty (20)
day period during which (i) the Corporation must give the Excess Securities
Notice to the other Investors, and (ii) each of the other Investors must give
the Corporation notice of its intention to purchase all or any portion of its
pro rata share of the its Excess Securities, is hereinafter referred to as the
"Excess Securities Period."

               (e) If the Investors tender their Notice of Acceptance prior to
the end of the 20-Day Period indicating their intention to purchase all of the
Offered Securities or, if prior to the termination of the Excess Securities
Period, the Investors tender Excess Securities Notices to purchase all of the
Excess Securities, the Corporation shall schedule a closing of the sale of all
such Offered Securities.  Upon the closing of the sale of the Offered Securities
to be purchased by the Investors, each Investor shall (i) purchase from the
Corporation that portion of the Offered Securities (including the Excess
Securities) for which it tendered a Notice of Acceptance and an Excess
Securities Notice, if applicable, upon the terms specified in the Offer, and
(ii) execute and deliver an agreement further restricting transfer of such
Offered Securities substantially as set forth in Section 3.1, 3.2 and 3.3 of
this Agreement.  In addition, with respect to the Offered Securities being
purchased by the Investors, the Corporation shall provide each such Investor
with the rights and benefits set forth in this Agreement.  The obligation of the
Investors to purchase such Offered Securities is further conditioned upon the
preparation of a purchase agreement embodying the terms of the Offer, which
shall be reasonably satisfactory in form and substance to such Investor and the
Investor's counsel.

               (f) The Corporation shall have one hundred twenty (120) days from
the expiration of the 20-Day Period, or the Excess Securities Period, if
applicable, to sell the Offered Securities (including the Excess Securities)
refused by the Investors (the "Refused Securities") to any other person or
persons, but only upon terms and conditions which are in all material respects
(including, without limitation, price and interest rate) no more favorable to
such other person or persons, and no less favorable to the Corporation, than
those set forth in the Offer. Upon and subject to the closing of the sale of all
of the Refused Securities (which shall

                                       8
<PAGE>

include full payment to the Corporation), each Investor shall (i) purchase from
the Corporation those Offered Securities (including the Excess Securities) for
which it tendered a Notice of Acceptance and an Excess Securities Notice, if
applicable, upon the terms specified in the Offer, and (ii) execute and deliver
an agreement restricting transfer of such Offered Securities (including the
Excess Securities) substantially as set forth in Sections 3.1, 3.2 and 3.3 of
this Agreement. In addition, with respect to the Offered Securities being
purchased by the Investors, the Corporation shall provide each such Investor
with the rights and benefits set forth in this Agreement. The Corporation
agrees, as a condition precedent to accepting payment for and making delivery of
any Refused Securities to any executive officer, employee, consultant or
independent contractor of or to the Corporation, or to any other person, to have
each and every such person execute and deliver a Registration Rights Agreement
substantially in the form attached hereto as Exhibit A, or as may be modified or
amended from time to time with the prior approval of the holders of a majority
of the combined voting power of the Investors holding Series A Preferred Shares,
calculated in accordance with Section 6(a) of the Certificate (including in such
calculation, any outstanding Restricted Shares held by such holders), to the
extent such purchaser has not already executed such Agreement. The obligation of
the Investor to purchase such Offered Securities (including the Excess
Securities) is further conditioned upon the preparation of a purchase agreement
embodying the terms of the Offer, which shall be reasonably satisfactory in form
and substance to such Investor and the Investor's counsel.

               (g) In each case, any Offered Securities not purchased either by
the Investors or by any other person in accordance with this Section 2.3 may not
be sold or otherwise disposed of until they are again offered to the Investors
under the procedures specified in Paragraphs (a), (b), (c), (d), (e) and (f)
hereof.

               (h) Each Investor may, by prior written consent, waive its rights
under this Section 2.3.  Such a waiver shall be deemed a limited waiver and
shall only apply to the extent specifically set forth in the written consent of
such Investor.

               (i) Notwithstanding the foregoing, the Corporation may issue
shares in connection with the Authorized Issuance without being subject to the
right of first refusal set forth in this Section 2.3.

          2.4  Negative Covenants.

               (a) Majority Investor Approvals.  Except in connection with the
Authorized Issuance, the Corporation shall not, directly or indirectly, take any
of the actions specified in subsections 2.4(a)(i) through (xxiii) below, without
the prior written consent of the Investors holding a majority of the then
outstanding Series A Preferred Stock held by all Investors (determined in
accordance with Section 6(a) of the Certificate), voting separately from the
holders of Common Stock or any other securities of the Corporation.  Such
consent shall be given by written consent in lieu of a meeting or by vote at a
meeting called for such purpose, for which timely and specific notice shall have
been given to each Investor.  Written consent in lieu of a meeting must be
signed by not less than that number of Investors having the minimum number of
votes which would be necessary to authorize such action at a meeting.

                                       9
<PAGE>

                    (i) Sell, abandon, transfer, lease or otherwise dispose of
all or substantially all of the Corporation's (or any of the its subsidiaries')
properties or assets other than in the ordinary course of its business.

                    (ii) Purchase, lease or otherwise acquire all or
substantially all of the assets of another entity.

                    (iii) Except as otherwise required by the Certificate,
declare or pay any dividend or make any distribution with respect to shares of
its capital stock (whether in cash, shares of capital stock or other securities
or property) other than to the Series A Preferred Stock.

                    (iv) Except as otherwise required by the Certificate or in
any agreement approved by the Board of Directors with a director, officer,
employee, consultant or independent contractor of or to the Corporation
providing for the repurchase of any of its capital stock owned by such director,
officer, employee, consultant or independent contractor at the option of the
Corporation, provided that any such agreement is either: (A) set forth on
Schedule 5.2 of the Stock Purchase Agreement, or (B) entered into pursuant to
the Corporation's 1996 Employee Incentive and Non-Qualified Stock Option Plan,
make any payment on account of the purchase, redemption or other retirement of
any share of capital stock of the Corporation.

                    (v) Merge or consolidate with or into, or permit any
subsidiary to merge or consolidate with or into, any other corporation,
corporations or other entity or entities.

                    (vi) Voluntarily dissolve, liquidate or wind-up or carry out
any partial liquidation or distribution or transaction in the nature of a
partial liquidation or distribution.

                    (vii) In any manner alter or change the designations,
powers, preferences, rights, qualifications, limitations or restrictions of the
Series A Preferred Stock.

                    (viii) Take any action to cause any amendment, alteration or
repeal of any of the provisions of the Certificate, the Certificate of
Incorporation of the Corporation, or any of its subsidiaries with the exception
of ministerial amendments which would not have any adverse affect on the Series
A Preferred Stock.

                    (ix) Except for the issuance of capital stock or other
securities constituting Excluded Securities, authorize, designate, create,
reclassify, issue or agree to issue any equity or debt security of the
Corporation (or any of its subsidiaries) or any security, right, option or
warrant convertible into, or exercisable or exchangeable for, shares of the
capital stock of the Corporation (or any of its subsidiaries) or any capitalized
lease with an equity feature with respect to the capital stock of the
Corporation (or any of its subsidiaries).

                                       10
<PAGE>

                    (x) Adopt, approve, amend or modify any stock option plan of
the Corporation or adopt, approve, amend or modify the form of any stock option
agreement or restricted stock purchase agreement, or amend or modify any stock
option agreement or restricted stock purchase agreement entered into between the
Corporation and its employees, directors or consultants, except for immaterial
changes made thereto from time to time by officers of the Corporation.

                    (xi) Accelerate the vesting schedule or exercise date or
dates of any such options or in any stock option agreement or restricted stock
purchase agreement entered into between the Corporation and its directors,
officers, employees, consultants or independent contractors, or waive or modify
the Corporation's repurchase rights with respect to any shares of the
Corporation's stock issuable pursuant to any restricted stock purchase agreement
entered into between the Corporation and its directors, officers, employees,
consultants or independent contractors.

                    (xii) Grant any stock options with an exercise price per
share of less than the fair market value of such share on the date of such grant
(as determined by the Board of Directors of the Corporation) or issue or sell
capital stock of the Corporation pursuant to restricted stock awards or
restricted stock purchase agreements at a price per share less than the fair
market value of such share on the date of such issuance or sale (as determined
by the Board of Directors of the Corporation).

                    (xiii) Increase the number of directors of which the Board
of Directors consists.

                    (xiv) Enter into any financing arrangement in excess of
$300,000 ("Financing Limitation") including, without limitation, loan
agreements, credit lines, letters of credit or capitalized leases, other than to
refinance the amounts identified under the "Present Balance" column on Schedule
2.4(a)(xiv) or to finance the amounts identified under the "Requested Amount"
column on Schedule 2.4(a)(xiv).

                    (xv) Except as specifically described in a budget previously
approved by the Investors, enter into any contract, agreement or license or
series of related contracts, agreements or licenses in excess of $500,000
whether in a single disbursement or a series of related disbursements.

                    (xvi) Except for the sale of shares included in the
Authorized Issuance, enter into any transaction or agreement with any officer or
director of the Corporation or with any corporation, partnership or other
organization (an "Outside Entity") in which one or more of the officers or
directors of the Corporation is an officer or director of, or has a financial
interest in, such Outside Entity.

                    (xvii) Initiate, enter into or amend any agreement or
arrangement pertaining to employment with or engagement by the Corporation where
such agreement or arrangement provides for either the employment of any officer
of the Corporation regardless of

                                       11
<PAGE>

compensation, or compensation for any single individual greater than or equal to
$150,000 in the aggregate, on an annual or annualized basis.

                    (xviii) Enter into or become subject to any agreement which
restricts or purports to restrict the Corporation from engaging or otherwise
competing in any material aspect of its business other than pursuant to a duly
authorized license agreement of the Corporation's intellectual property.

                    (xix) Take any action or enter into any other transaction
outside the ordinary course of business or effect any material change in the
conduct or operation of the Corporation's business.

                    (xx) Establish or approve of any Corporation policies
delegating or delineating the authority of any officer or employee to act on
behalf of the Corporation outside of the ordinary course of business.

                    (xxi) Appoint, terminate or remove the Chief Executive
Officer or President or the Chief Financial Officer, Treasurer or Vice
President-Finance without the approval of the Board of Directors.

                    (xxii) Adopt and amend the budgets of the Corporation and
authorize budget variances for expenditures in excess of ten percent (10%)
without the approval of the Board of Directors.

                    (xxiii) Adopt and materially amend the strategic or business
plan of the Corporation without the approval of the Board of Directors.

                    (xxiv) Take any action to cause any amendment, alteration or
repeal of any of the provisions of the By-laws of the Corporation, or any of its
subsidiaries with the exception of ministerial amendments which would not have
any adverse affect on the Series A Preferred Stock.

               (b) Stock and Option Agreements. Without the prior written
consent of the Investors holding a majority of the outstanding Series A
Preferred Stock held by all Investors, determined in accordance with Section
6(a) of the Certificate (including, in such calculation, any outstanding
Restricted Shares held by such holders), the Corporation shall not issue any
shares of Common Stock or options, warrants or other rights to acquire Common
Stock or other securities of the Corporation to any employee, officer, director,
consultant, independent contractor or other person or entity except for Excluded
Securities.

               (c) Registration Rights. The Corporation shall not hereafter
grant to any persons any rights to register or qualify stock of the Corporation
under federal or state securities laws, unless it shall have first obtained the
written consent of the Investors holding a majority of the outstanding Series A
Preferred Stock held by all Investors, determined in

                                       12
<PAGE>

accordance with Section 6(a) of the Certificate (including, in such calculation,
any outstanding Restricted Shares held by such holders).

          2.5  Filing of Reports Under the Exchange Act.

               (a) The Corporation shall give prompt notice to the holders of
Series A Preferred Stock of (i) the filing of any registration statement (an
"Exchange Act Registration Statement") pursuant to the Exchange Act, relating to
any class of equity securities of the Corporation, (ii) the effectiveness of
such Exchange Act Registration Statement, and (iii) the number of shares of such
class of equity securities outstanding, as reported in such Exchange Act
Registration Statement, in order to enable the Investors to comply with any
reporting requirements under the Exchange Act or the Securities Act. Upon the
written request of the Investors holding a majority in interest of the Series A
Preferred Shares held by all Investors, the Corporation shall, at any time after
the Corporation has registered any shares of Common Stock under the Securities
Act, file an Exchange Act Registration Statement relating to any class of equity
securities of the Corporation then held by the holders of Series A Preferred
Shares or issuable upon conversion or exercise of any class of debt or equity
securities or warrants or options of the Corporation then held by the Investors,
whether or not the class of equity securities with respect to which such request
is made shall be held by the number of persons which would require the filing of
a registration statement under Section 12(g)(1) of the Exchange Act.

               (b) If the Corporation shall have filed an Exchange Act
Registration Statement or a registration statement (including an offering
circular under Regulation A promulgated under the Securities Act) pursuant to
the requirements of the Securities Act, which shall have become effective (and
in any event, at all times following the initial public offering of any of the
securities of the Corporation), then the Corporation shall comply with all of
the reporting requirements of the Exchange Act (whether or not it shall be
required to do so) and shall comply with all other public information reporting
requirements of the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any of the Restricted
Securities by any holder of Restricted Securities (including any such exemption
pursuant to Rule 144 or Rule 144A thereof, as amended from time to time, or any
successor rule thereto or otherwise). The Corporation shall cooperate with each
holder of Restricted Securities in supplying such information as may be
necessary for such holder of Restricted Securities to complete and file any
information reporting forms presently or hereafter required by the Commission as
a condition to the availability of an exemption from the Securities Act (under
Rule 144 or Rule 144A thereunder or otherwise) for the sale of any of the
Restricted Securities by any holder of Restricted Securities.

          2.6  Access to Records.  The Corporation shall afford to each of the
Investors and such Investor's employees, counsel and other authorized
representatives, free and full access, at all reasonable times and for
reasonable periods of time, to all of the books, records and properties of the
Corporation and to all officers and employees of the Corporation.

          2.7  Financial Reports.  Until such time that the Corporation has a
class of its equity securities registered under the Exchange Act and is required
to file reports thereunder

                                       13
<PAGE>

pursuant to Sections 13 or 15(d) of the Exchange Act, except with respect to the
obligation set forth in Section 2.7(e)(i) hereunder which shall survive such
time, the Corporation shall furnish each of the Investors with the financial
information described below:

               (a) Within 20 days after the last day of each month (the "Target
Month") (or such other calendar period as is approved by the Board), financial
statements, including a balance sheet as of the last date of such Target Month,
a statement of income (or monthly operating expenses) for such month, together
with a cumulative statement of income from the first day of the current year to
the last day of such month, which statements shall be prepared from the books
and records of the Corporation, a cash flow analysis, together with cumulative
cash flow analyses from the first day of the current year to the last day of
such month, and a comparison between the actual monthly operating expenses and
the projected figures for such month and the comparable figures for the prior
year, subject to the provisions of Section 2.9 hereof.

               (b) Upon receipt of a request from any of the Investors prior to
the end of a quarterly accounting period, the Corporation shall deliver to each
of the Investors, within 45 days after the end of such quarterly accounting
period, unaudited financial statements for such quarterly accounting period,
certified by the Chief Financial Officer or the Treasurer of the Corporation, as
presenting fairly the financial condition and results of operations of the
Corporation and as having been prepared on a basis consistent with the
accounting principles reflected in the Corporation's annual audited financial
statements, accompanied by a report, signed by the Chief Financial Officer or
the Treasurer of the Corporation, summarizing the operating and financial
highlights of the Corporation for such quarterly accounting period, which report
shall include (a) a comparison between the actual quarterly operating and
financial results, the Budget (as defined in Section 2.8 hereof) and the results
of the similar quarterly accounting period for the prior fiscal year of the
Corporation, together with an explanation of material variances from the Budget
and such similar quarterly accounting period, as the case may be, and (b) a
narrative analysis of operations and trends in the business of the Corporation
during such quarterly accounting period.

               (c) Within 90 days after the end of each fiscal year of the
Corporation, audited financial statements of the Corporation, which shall
include an income statement and a statement of cash flow for such fiscal year
and a balance sheet as of the last day thereof, each prepared in accordance with
generally accepted accounting principles consistently applied, and accompanied
by the report of such independent certified public accountants as shall have
been approved by the Board.

               (d) If for any period the Corporation shall have any subsidiary
or subsidiaries whose accounts are consolidated with those of the Corporation,
then the financial statements delivered for such period pursuant to paragraphs
(a), (b) and (c) of this Section 2.7 shall be the consolidated and consolidating
financial statements of the Corporation for all such consolidated subsidiaries.

               (e) Promptly upon becoming available:

                                       14
<PAGE>

                    (i) copies of all financial statements, reports, press
releases, notices, proxy statements and other documents sent by the Corporation
to its Stockholders or released to the public and copies of all regular and
periodic reports, if any, filed by the Corporation with the Commission or any
securities exchange or self-regulatory organization; and

                    (ii) any other financial or other information available to
management of the Corporation that any of the Investors shall have reasonably
requested on a timely basis.

          2.8  Budget and Operating Forecast.  The Corporation shall prepare and
submit to the Board and each of the Investors an operating plan with monthly and
quarterly breakdowns (the "Budget") for each fiscal year by January 15th of each
fiscal year of the Corporation.  The Budget shall be deemed accepted as the
Budget for such fiscal year only when it has been approved by the Board.  The
Budget shall be reviewed by the Corporation periodically and all changes
therein, and all material deviations therefrom, shall be reviewed by the Board
on at least a quarterly basis.

          2.9  System of Accounting.  The Corporation shall maintain, and cause
each of its subsidiaries, when and if any shall exist, to maintain, its books of
accounts, related records and system of accounting in accordance with good
business practices and generally accepted accounting principles, and shall cause
the matters contained therein to be appropriately and accurately reflected in
the financial reports (which shall be prepared in accordance with generally
accepted accounting principles) furnished pursuant to this Agreement.

          2.10  Restriction on Transfer Rights; Confidentiality.  The rights
granted to each of the Investors pursuant to Sections 2.6 through 2.8 hereof
shall not be transferred or assigned by any Investor to, and shall not inure to
the benefit of, any successor, transferee or assignee of any Investor, which is
engaged in any live business directly competitive with the Corporation.  Each
Investor agrees to use, and to use its best efforts to insure that its
authorized representatives use, the same degree of care as such Investor uses to
protect its own confidential information to keep confidential any information
furnished to it (so long as such information is not in the public domain),
except that such Investor may disclose such proprietary or confidential
information to its Group or to any partner, subsidiary or parent of such
Investor for the purpose of evaluation its investment in the Company as long as
such Group member, partner, subsidiary or parent is advised of the
confidentiality provisions of this Section 2.10.

          2.11  Confidentiality and Non-Competition Agreements for Key
Employees. The Corporation shall cause each person who is presently an employee
of or a consultant or independent contractor to the Corporation or who becomes
an employee of or a consultant to the Corporation subsequent to the date hereof
and who shall have or be proposed to have access to confidential or proprietary
information of the Corporation, who has not already done so, to execute a
confidentiality and non-competition agreement in form and substance attached
hereto or otherwise approved by the Board prior to the commencement of such
person's employment by the Corporation in such capacity.

                                       15
<PAGE>

          2.12  Marketing and Promotional Material.  Each of the Investors will
have the right to review and approve, in advance of publication, distribution or
dissemination, any reference to such Investor or any entity affiliated with such
Investor (other than the Corporation), contained in any document, instrument,
report or filing or in any advertising, marketing, promotional and similar
materials other than those reports or filings required by law.  Nevertheless, to
the extent that any such report or filing is made, the Corporation will provide
a copy thereof to the Investor prior to the filing, release or dissemination
thereof.

          2.13  Environmental Matters.  The Corporation shall promptly advise
the Investors in writing of any pending or threatened claim, demand or action by
any governmental authority or third party relating to any Hazardous Materials
affecting the Property of which it has knowledge.  The Corporation shall not
discharge, place, release, spill or dispose of any Hazardous Materials or any
other pollutants or effluents upon the Property or elsewhere (including, but not
limited to, underground injection of such substances), and the Corporation shall
not discharge into the air any emission which would require a permit under the
Clean Air Act or its state counterparts or any other Environmental Laws, except
in compliance with the Environmental Laws.  The Stockholders of the Corporation
shall have no control over, or authority with respect to, the waste disposal
operations of the Corporation.  The Corporation hereby indemnifies, defends and
holds harmless the Investors from and against any and all manner of actions,
causes of action, suits, debts, accounts, controversies, judgments, claims,
demands, losses or liabilities of any nature (including reasonable attorneys'
fees) directly or indirectly arising out of or attributable to (a) any
misrepresentation or breach of the representations and covenants set forth in
Section 5.18 of the Stock Purchase Agreement, or (b) the use, generation,
storage, release, threatened release, discharge, disposal or presence of
Hazardous Materials on, under or about the Property by any person during the
period that the Corporation was the legal or equitable owner of the Property or
which occurred prior to such time and was otherwise actually known by, or should
have been known by, the Corporation.  The obligation of the Corporation to
indemnify the Investors shall specifically cover and include, without
limitation, all fines and penalties imposed by federal, state or local
authorities, costs of removing or neutralizing the Hazardous Materials, injury
to the property adjoining the Property, injury to persons living or working on
or about the Property or adjoining or otherwise affecting property, and all
other indirect or consequential damages incurred by the Investors.

          2.14  Board of Directors Observer.  For as long as the Preferred
Directors serve on the Board of Directors, Pennsylvania Early Stage Partners may
designate an observer acceptable to the Corporation (the "Observer").  Such
Observer shall be compensated in the same manner as all other non-employee
Directors, shall have no voting rights, and shall be reimbursed for all travel
expenses and other out-of-pocket expenses incurred in attending meetings of the
Board of Directors.  The Observer shall be indemnified by the Corporation
against any claims arising out of his participation at Board meetings.  The
Investors consent to the grant of a right by the Corporation to Allstate Venture
Capital to appoint an Observer if such right is in connection with an Authorized
Issuance.

                                       16
<PAGE>

          2.15  Elimination of Redemption Restrictions.  At such time as the
Corporation refinances its principal first-tier bank financing in existence as
of the date of this Agreement, it shall use its reasonable good faith efforts
under the circumstances to enter into new financing arrangement that would not
restrict, in any way, the Corporation's right to timely redeem the Series A
Preferred Stock in accordance with Section 5 of the Certificate.

          2.16  Duration of Section.  (a) Sections 2.3, 2.4 (a)(i)-(ix), 2.4
(xiv), 2.4 (xvi), 2.4 (xxiii), 2.6, 2.8, 2.11, 2.13, 2.14, 2.15 and 2.17 and the
rights and obligations of the parties thereunder shall automatically terminate
on the first to occur of: (a) the consummation of a firm commitment underwritten
public offering of Common Stock registered under the Securities Act pursuant to
which (X) Common Stock is offered to the public at a price of at least $17.00
per share of Common Stock (subject to adjustment for stock splits, stock
dividends, stock combinations, recapitalizations and like occurrences) and (Y)
the offering size is at least $20 million (a "Qualified IPO"), or (b) that date
on which eighty (80%) of the Series A Preferred Shares issued to the Investors,
subject to proportional adjustment for events described in Sections 7(d)(iii)
and 7(d)(iv), is no longer outstanding.   Prior to any such termination, the
rights and obligations of any Investor under such sections set forth above shall
terminate upon the date on which such Investor no longer owns any Series A
Preferred Stock, whereupon the obligations of the remaining Investors to vote in
favor of the designee of such Investor shall also terminate.

               (b) On the first to occur of: (a) the consummation of a Qualified
IPO, or (b) that date on which HCV V, an HCV Fund or any current or future
general partner of an HCV Fund shall no longer be in control of a majority of
the then outstanding series A Preferred Stock held by all Investors (determined
in accordance with Section 6(a) of the Certificate) or eighty (80%) of the
Series A Preferred Shares issued to the Investors, subject to proportional
adjustment for events described in Sections 7(d)(iii) and 7(d)(iv), is no longer
outstanding, then (X) Sections 2.4(a)(x)-(xxiv) (excluding 2.4(xiv), 2.4 (xvi),
and 2.4(xxiii)) and the rights and obligations of the parties thereunder shall
automatically terminate, and (Y) section 2.4 (xiv) shall be revised such that
the Financing Limitation shall increase to a number equal to the greater of (A)
$1,250,000 or (B) 20% of the existing indebtedness of the Company on the date
that condition (b) above is satisfied. Prior to any such termination, the rights
and obligations of any Investor under such sections set forth above shall
terminate upon the date on which such Investor no longer owns any Series A
Preferred Stock, whereupon the obligations of the remaining Investors to vote in
favor of the designee of such Investor shall also terminate.

          2.17  Board of Directors' Committees.  At least one of the Preferred
Directors designated by HCV V shall serve on each committee of the Board of
Directors.

     SECTION 3.  Transfer of Securities.

          3.1  Restriction on Transfer.  The Restricted Securities shall not be
transferable, except upon the conditions specified in this Section 3, which
conditions are intended solely to ensure compliance with the provisions of the
Securities Act in respect of the Transfer thereof.

                                       17
<PAGE>

          3.2  Restrictive Legend.  Each certificate evidencing any Restricted
Securities and each certificate evidencing any such securities issued to
subsequent transferees of any Restricted Securities shall (unless otherwise
permitted by the provisions of Section 3.3 or 3.10 hereof) be stamped or
otherwise imprinted with a legend in substantially the following form:

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
          INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, OR ANY STATE SECURITIES LAW.  THE SECURITIES MAY NOT
          BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
          EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
          SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAW OR AN
          EXEMPTION THEREFROM UNDER SUCH ACT OR LAW.  ADDITIONALLY, THE TRANSFER
          OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE
          STOCKHOLDERS' AGREEMENT DATED ______________, 1999, AMONG STC
          TECHNOLOGIES, INC. AND CERTAIN OTHER SIGNATORIES THERETO, AND NO
          TRANSFER OF SUCH SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH
          CONDITIONS HAVE BEEN FULFILLED.  COPIES OF SUCH AGREEMENT MAY BE
          OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
          THIS CERTIFICATE TO THE SECRETARY OF STC TECHNOLOGIES, INC.

          3.3  Notice of Transfer.  By acceptance of any Restricted Securities,
the holder thereof agrees to give prior written notice to the Corporation of
such holder's intention to effect any Transfer and to comply in all other
respects with the provisions of this Section 3.3.  Each such notice shall
describe the manner and circumstances of the proposed Transfer and shall be
accompanied by: (a) the written opinion of counsel for the holder of such
Restricted Securities, or, at such holder's option, a representation letter of
such holder, addressed to the Corporation (which opinion and counsel, or
representation letter, as the case may be, shall be reasonably acceptable to the
Corporation), as to whether, in the case of a written opinion, in the opinion of
such counsel, such proposed Transfer involves a transaction requiring
registration of such Restricted Securities under the Securities Act and
applicable state securities laws or an exemption thereunder is available, or, in
the case of a representation letter, such letter sets forth a factual basis for
concluding that such proposed transfer involves a transaction requiring
registration of such Restricted Securities under the Securities Act and
applicable State Securities laws or that an exemption thereunder is available,
or (b) if such registration is required and if the provisions of Section 3.4
hereof are applicable, a written request addressed to the Corporation by the
holder of such Restricted Securities, describing in detail the proposed method
of disposition and requesting the Corporation to effect the registration of such
Restricted Shares pursuant to the terms and provisions of Section 3.4 hereof;
provided, however, that (y) in the case of a Transfer by a holder to a member of
such holder's Group, no such opinion of counsel or representation letter of the
holder shall be necessary, provided that the transferee agrees in writing to be
subject to Sections 3.1, 3.2, 3.3 and 3.10 hereof to the same extent as if such
transferee were originally a

                                       18
<PAGE>

signatory to this Agreement, and (z) in the case of any holder of Restricted
Securities that is a partnership, no such opinion of counsel or representation
letter of the holder shall be necessary for a Transfer by such holder to a
partner of such holder, or a retired partner of such holder who retires after
the date hereof, or the estate of any such partner or retired partner if, with
respect to such Transfer by a partnership, (i) such Transfer is made in
accordance with the partnership agreement of such partnership, and (ii) the
transferee agrees in writing to be subject to the terms of Sections 3.1, 3.2,
3.3 and 3.10 hereof to the same extent as if such transferee were originally a
signatory to this Agreement. If in such opinion of counsel or as reasonably
concluded from the facts set forth in the representation letter of the holder
(which opinion and counsel, or representation letter, as the case may be, shall
be reasonably acceptable to the Corporation), the proposed Transfer may be
effected without registration under the Securities Act and any applicable state
securities laws or "blue sky" laws, then the holder of Restricted Securities
shall thereupon be entitled to effect such Transfer in accordance with the terms
of the notice delivered by it to the Corporation. Each certificate or other
instrument evidencing the securities issued upon such Transfer (and each
certificate or other instrument evidencing any such securities not Transferred)
shall bear the legend set forth in Section 3.2 hereof unless: (a) in such
opinion of such counsel or as can be concluded from the representation letter of
such holder (which opinion and counsel or representation letter shall be
reasonably acceptable to the Corporation) the registration of future Transfers
is not required by the applicable provisions of the Securities Act and state
securities laws, or (b) the Corporation shall have waived the requirement of
such legend; provided, however, that such legend shall not be required on any
certificate or other instrument evidencing the securities issued upon such
Transfer in the event such Transfer shall be made in compliance with the
requirements of Rule 144 (as amended from time to time or any similar or
successor rule) promulgated under the Securities Act. The holder of Restricted
Securities shall not effect any Transfer until such opinion of counsel or
representation letter of such holder has been given to and accepted by the
Corporation (unless waived by the Corporation) or until registration of the
Restricted Shares involved in the above-mentioned request has become effective
under the Securities Act. In the event that an opinion of counsel is required by
the registrar or transfer agent of the Corporation to effect a transfer of
Restricted Securities in the future, the Corporation shall seek and obtain such
opinion from its counsel, and the holder of such Restricted Securities shall
provide such reasonable assistance as is requested by the Corporation (other
than the furnishing of an opinion of counsel) to satisfy the requirements of the
registrar or transfer agent to effectuate such transfer.

          3.4  Required Registration.  After a Qualified IPO by the Corporation,
if the Corporation shall be requested (i) by holders of at least 50% of the
outstanding Restricted Securities (based on the underlying Class A Common Stock
for which the Restricted Securities are convertible or exercisable) to effect
the registration under the Securities Act of Restricted Shares, or (ii) after
the first registration pursuant to this Section 3.4, by one or more of the
holders of Restricted Securities to effect the registration under the Securities
Act of Restricted Shares having a proposed aggregate offering price equal to or
greater than $5,000,000, then the Corporation shall promptly give written notice
of such proposed registration to all holders of Restricted Securities, and
thereupon the Corporation shall promptly use its best efforts to effect the
registration under the Securities Act of the Restricted Shares that the
Corporation has been requested to register for disposition as described in the
request of such holders of Restricted

                                       19
<PAGE>

Securities and in any response received from any of the holders of Restricted
Securities within 30 days after the giving of the written notice by the
Corporation; provided, however, that the Corporation shall not be obligated to
effect any registration under the Securities Act except in accordance with the
following provisions and Section 3.7:

               (a) Subject to Section 3.6, the Corporation shall not be
obligated to file and cause to become effective more than two (2) registration
statements in which Restricted Shares are registered under the Securities Act
pursuant to this Section 3.4, if all of the Restricted Shares offered pursuant
to such registration statements are sold thereunder upon the price and terms
offered.

               (b) Notwithstanding the foregoing, the Corporation may include in
each such registration requested pursuant to this Section 3.4 any authorized but
unissued shares of Common Stock (or authorized treasury shares) for sale by the
Corporation or any issued and outstanding shares of Common Stock for sale by
others; provided, however, that, if the number of shares of Common Stock so
included pursuant to this clause (b) exceeds the number of Restricted Shares
requested by the holders of Restricted Shares requesting such registration, then
such registration shall be deemed to be a registration in accordance with and
pursuant to Section 3.5; and provided further, however, that the inclusion of
such previously authorized but unissued shares by the Corporation or issued and
outstanding shares of Common Stock by others in such registration does not
adversely affect, in the sole opinion of the holders of Restricted Securities
requesting such registration, the ability of the holders of Restricted
Securities requesting such registration to market the entire number of
Restricted Shares requested by them.

          3.5  Piggyback Registration.

               (a) Each time that the Corporation proposes for any reason to
register any of its securities under the Securities Act, other than pursuant to
(i) a registration statement on Form S-4 or Form S-8 or similar or successor
forms (collectively, "Excluded Forms") or (ii) in connection with a Qualified
IPO by the Corporation, the Corporation shall promptly give written notice of
such proposed registration to all holders of Restricted Securities, which shall
offer such holders the right to request inclusion of any Restricted Shares in
the proposed registration.

               (b) Each holder of Restricted Securities shall have 30 days from
the receipt of such notice to deliver to the Corporation a written request
specifying the number of Restricted Shares such holder intends to sell and the
holder's intended method of disposition.

               (c) In the event that the proposed registration by the
Corporation is, in whole or in part, an underwritten public offering of
securities of the Corporation, any request under Section 3.5(b) may specify that
the Restricted Shares be included in the underwriting (i) on the same terms and
conditions as the shares of Common Stock, if any, otherwise being sold through
underwriters under such registration, or (ii) on terms and conditions comparable
to those normally applicable to offerings of common stock in reasonably similar
circumstances in the event that no shares of Common Stock other than Restricted
Shares are being sold through underwriters under such registration.

                                       20
<PAGE>

               (d) Upon receipt of a written request pursuant to Section 3.5(b),
the Corporation shall promptly use its best efforts to cause all such Restricted
Shares to be registered under the Securities Act, to the extent required to
permit sale or disposition as set forth in the written request.

               (e) Notwithstanding the foregoing, if the managing underwriter of
any such proposed registration determines and advises in writing that the
inclusion of all Restricted Shares proposed to be included in the underwritten
public offering, together with any other issued and outstanding shares of Common
Stock proposed to be included therein by holders other than the holders of
Restricted Securities (such other shares hereinafter collectively referred to as
the "Other Shares"), would interfere with the successful marketing of the
Corporation's securities, then the total number of such securities proposed to
be included in such underwritten public offering shall be reduced, (i) first by
the shares requested to be included in such registration by the holders of Other
Shares, and (ii) second, if necessary, (A) one-half (1/2) by the securities
proposed to be issued by the Corporation, and (B) one-half (1/2) by the
Restricted Shares proposed to be included in such registration by the holders
thereof, on a pro rata basis, based upon the number of Restricted Shares sought
to be registered by each such holder. The shares of Common Stock that are
excluded from the underwritten public offering pursuant to the preceding
sentence shall be withheld from the market by the holders thereof for a period,
not to exceed 180 days from the closing of such underwritten public offering,
that the managing underwriter reasonably determines as necessary in order to
effect such underwritten public offering.

     3.6  Registrations on Form S-2 and S-3.  At such time as the Corporation
shall have qualified for the use of Form S-2 or Form S-3 (or any successor form
promulgated under the Securities Act), each holder of Restricted Securities
shall have the right to request in writing an unlimited number (but not more
than two (2) annually) of registrations on Form S-2 or Form S-3.  Each such
request by a holder shall: (a) specify the number of Restricted Shares which the
holder intends to sell or dispose of, (b) state the intended method by which the
holder intends to sell or dispose of such Restricted Shares, and (c) request
registration of Restricted Shares having a proposed aggregate offering price of
at least $5 Million (unless such request covers all remaining Restricted Shares
held by Investors in which event this restriction shall not apply).  Upon
receipt of a request pursuant to this Section 3.6, the Corporation shall use its
best efforts to effect such registration or registrations on Form S-2 or Form S-
3.  Notwithstanding the foregoing, the Corporation may delay filing a
registration statement on Form S-2 or Form S-3 and may withhold efforts to cause
the registration statement to become or remain effective, if the Corporation
determines in good faith that such registration might (i) interfere with or
affect the negotiation or completion of any transaction that is being
contemplated by the Corporation at the time the right to delay is exercised, or
(ii) involve initial or continuing disclosure obligations that might not be in
the best interest of the Corporation's shareholders.  Notwithstanding the
foregoing, the Corporation shall not be entitled to exercise its right to defer
filing or effectiveness of or to update a registration pursuant to a Form S-2 or
Form S-3 registration request for more than one hundred eighty (180) consecutive
days.

                                       21
<PAGE>

          3.7  Preparation and Filing.  If and whenever the Corporation is under
an obligation pursuant to the provision of this Section 3 to use its best
efforts to effect the registration of any Restricted Shares, the Corporation
shall, as expeditiously as practicable:

               (a) prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective in accordance with Section
3.7(b) hereof;

               (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until the earlier of (i) the sale of all Restricted Shares covered thereby or
(ii) nine months, and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all Restricted Shares covered by
such registration statement;

               (c) furnish to each holder whose Restricted Shares are being
registered pursuant to this Section 3 such number of copies of any summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such holder may reasonably request in order to facilitate the public sale or
other disposition of such Restricted Shares;

               (d) use its best efforts to register or qualify the Restricted
Shares covered by such registration statement under the securities or blue sky
laws of such jurisdictions as each holder whose Restricted Shares are being
registered pursuant to this Section 3 shall reasonably request and do any and
all other acts or things which may be necessary or advisable to enable such
holder to consummate the public sale or other disposition in such jurisdictions
of such Restricted Shares; provided, however, that the Corporation shall not be
required to consent to general service of process for all purposes in any
jurisdiction where it is not then subject to process, qualify to do business as
a foreign corporation where it would not be otherwise required to qualify or
submit to liability for state or local taxes where it is not otherwise liable
for such taxes;

               (e) at any time when a prospectus covered by such registration
statement and relating thereto is required to be delivered under the Securities
Act within the appropriate period mentioned in Section 3.7(b) hereof, notify
each holder whose Restricted Shares are being registered pursuant to this
Section 3 of the happening of any event as a result of which the prospectus
included in such registration, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing and, at the request of such holder, prepare,
file and furnish to such holder a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;

                                       22
<PAGE>

               (f) if the Corporation has delivered preliminary or final
prospectuses to the holders of Restricted Shares that are being registered
pursuant to this Section 3 and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Corporation shall
promptly notify such holders and, if requested, such holders shall immediately
cease making offers of Restricted Shares and return all prospectuses to the
Corporation. The Corporation shall promptly provide such holders with revised
prospectuses and, following receipt of the revised prospectuses, such holders
shall be free to resume making offers of the Restricted Shares; and

               (g) furnish, at the request of any holder whose Restricted Shares
are being registered pursuant to this Section 3, on the date that such
Restricted Shares are delivered to the underwriters for sale in connection with
a registration pursuant to this Section 3, if such securities are being sold
through underwriters, or, on the date that the registration statement with
respect to such securities becomes effective, if such securities are not being
sold through underwriters, (i) an opinion, dated such date, of the counsel
representing the Corporation for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the holder or holders
making such request, and (ii) a letter dated such date, from the independent
certified public accountants of the Corporation, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the holder or holders making such request.

          3.8  Expenses.  The Corporation shall pay all expenses incurred by the
Corporation in complying with this Section 3, including, without limitation, all
registration and filing fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), fees and expenses of
complying with the securities and blue sky laws of all such jurisdictions in
which the Restricted Shares are proposed to be offered and sold, printing
expenses and fees and disbursements of counsel (including with respect to each
registration effected pursuant to Sections 3.4, 3.5 and 3.6, the reasonable fees
and disbursements of one counsel for the holders of Restricted Shares that are
being registered pursuant to this Section 3); provided, however, that all
underwriting discounts and selling commissions applicable to the Restricted
Shares covered by registrations effected pursuant to Section 3.4, 3.5 or 3.6
hereof shall be borne by the seller or sellers thereof, in proportion to the
number of Restricted Shares sold by each such seller or sellers.

          3.9  Indemnification.

               (a) In the event of any registration of any Restricted Shares
under the Securities Act pursuant to this Section 3 or registration or
qualification of any Restricted Shares pursuant to Section 3.7(d) hereof, the
Corporation shall indemnify and hold harmless the seller of such shares, each
underwriter of such shares, if any, each broker or any other person acting on
behalf of such seller and each other person, if any, who controls any of the
foregoing persons, within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which any of the foregoing
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)

                                       23
<PAGE>

arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which such
Restricted Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or any document incident to registration or qualification of any
Restricted Shares pursuant to Section 3.7(d) hereof, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or, with respect to any prospectus, necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or any violation by the Corporation of the Securities Act or any
state securities or blue sky laws applicable to the Corporation and relating to
action or inaction required of the Corporation in connection with such
registration or qualification under the Securities Act or such state securities
or blue sky laws. The Corporation shall reimburse on demand such seller,
underwriter, broker or other person acting on behalf of such seller and each
such controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Corporation
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
registration statement, preliminary or final prospectus or amendment or
supplement thereto or any document incident to registration or qualification of
any Restricted Shares pursuant to Section 3.7(d) hereof, in reliance upon and in
conformity with written information furnished to the Corporation by such seller,
underwriter, broker, other person or controlling person specifically for use in
the preparation thereof.

               (b) Before Restricted Shares held by any prospective seller shall
be included in any registration pursuant to this Section 3, such prospective
seller and any underwriter acting on its behalf shall have agreed to indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a)) the Corporation, each director of the Corporation, each officer
of the Corporation who signs such registration statement and any person who
controls the Corporation within the meaning of the Securities Act, with respect
to any untrue statement or omission from such registration statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, if such untrue statement or omission was made in reliance
upon and in conformity with written information furnished to the Corporation
through an instrument duly executed by such seller or such underwriter
specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus or amendment or supplement; provided,
however, that the maximum amount of liability in respect of such indemnification
shall be limited, in the case of each prospective seller, to an amount equal to
the net proceeds actually received by such prospective seller from the sale of
Restricted Shares effected pursuant to such registration.

               (c) Promptly after receipt by an indemnified party of notice of
the commencement of any action involving a claim referred to in Section 3.9(a)
or (b) hereof, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 3.9, give written
notice to the latter of the commencement of such action. In case any such action
is brought against an indemnified party, the indemnifying party will be entitled
to participate in and to assume the defense thereof, jointly with any other
indemnifying

                                       24
<PAGE>

party similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and, after notice to such indemnified
party from the indemnifying party of its election to assume the defense thereof,
the indemnifying party shall be responsible for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof;
provided, however, that, if any indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to such
indemnified party which are different from or additional to those available to
the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 3.9, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, and such
indemnifying party shall reimburse such indemnified party and any person
controlling such indemnified party for the fees and expenses of counsel retained
by the indemnified party which are reasonably related to the matters covered by
the indemnity agreement provided in this Section 3.9. The indemnifying party
shall not make any settlement of any claims indemnified against hereunder
without the written consent of the indemnified party or parties, which consent
shall not be unreasonably withheld.

               (d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
holder of Restricted Shares exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 3.9, but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 3.9 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any such holder or any
such controlling person in circumstances for which indemnification is provided
under this Section 3.9; then, in each such case, the Corporation and such holder
will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject as is appropriate to reflect the relative fault of the
Corporation and such holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, it being understood
that the parties acknowledge that the overriding equitable consideration to be
given effect in connection with this provision is the ability of one party or
the other to correct the statement or omission which resulted in such losses,
claims, damages or liabilities, and that it would not be just and equitable if
contribution pursuant hereto were to be determined by pro rata allocation or by
any other method of allocation which does not take into consideration the
foregoing equitable considerations.  Notwithstanding the foregoing, (i) no such
holder will be required to contribute any amount in excess of the proceeds to it
of all Restricted Shares sold by it pursuant to such registration statement, and
(ii) no person or entity guilty of fraudulent misrepresentation, within the
meaning of Section 11(f) of the Securities Act, shall be entitled to
contribution from any person or entity who is not guilty of such fraudulent
misrepresentation.

               (e) Notwithstanding any of the foregoing, if, in connection with
an underwritten public offering of any Restricted Shares, the Corporation, the
holders of such Restricted Shares and the underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions covering indemnification among the parties, then the

                                       25
<PAGE>

indemnification provision of this Section 3.9 shall be deemed inoperative for
purposes of such offering.

          3.10  Removal of Legends, Etc.  Notwithstanding the foregoing
provisions of this Section 3, the restrictions imposed by this Section 3 upon
the transferability of any Restricted Securities shall cease and terminate when
(a) any such Restricted Securities are sold or otherwise disposed of in
accordance with the intended method of disposition by the seller or sellers
thereof set forth in a registration statement or such other method contemplated
by Section 3.3 hereof that does not require that the securities transferred bear
the legend set forth in Section 3.2 hereof, including a Transfer pursuant to
Rule 144 or a successor rule thereof (as amended from time to time), or (b) the
holder of Restricted Securities has met the requirements for transfer of such
Restricted Securities pursuant to subparagraph (k) of Rule 144 or a successor
rule thereof (as amended from time to time) promulgated by the Commission under
the Securities Act.  Whenever the restrictions imposed by this Section 3 have
terminated, a holder of a certificate for Restricted Securities as to which such
restrictions have terminated shall be entitled to receive from the Corporation,
without expense, a new certificate not bearing the restrictive legend set forth
in Section 3.2 hereof and not containing any other reference to the restrictions
imposed by this Section 3.

     SECTION 4.  Securities Act Registration Statements.  Except for securities
of the Corporation registered on Excluded Forms, the Corporation shall not file
any registration statement under the Securities Act covering any securities
unless it shall first have given each holder of Restricted Securities written
notice thereof.  The Corporation further covenants that each holder of
Restricted Securities shall have the right, at any time when it may be deemed to
be a controlling person of the Corporation, within the meaning of the Securities
Act, to participate in the preparation of such registration statement and to
request the insertion therein of material furnished to the Corporation in
writing which in such holder's judgment should be included.  In connection with
any registration statement referred to in this Section 4, the Corporation shall
indemnify, to the extent permitted by law, each holder of Restricted Securities,
its officers, partners and directors and each person, if any, who controls any
such holder within the meaning of the Securities Act in the same manner and to
the same extent as the Corporation is required to indemnify a seller of
Restricted Securities in Section 3.9 hereof.  If, in connection with any such
registration statement, any holder of Restricted Securities shall furnish
written information to the Corporation expressly for use in the registration
statement, then such holder shall indemnify the Corporation, each director of
the Corporation, each officer of the Corporation who signs such registration
statement and each person, if any, who controls the Corporation within the
meaning of the Securities Act to the same extent as a seller of Restricted
Securities is required to indemnify such persons in Section 3.9 hereof.

     SECTION 5.  Election of Directors.

          5.1  Voting for Directors.  At each annual meeting of the stockholders
of the Corporation and at each special meeting of the stockholders of the
Corporation called for the purposes of electing directors of the Corporation,
and at any time at which stockholders of the Corporation shall have the right
to, or shall, vote for or consent to the election of directors, then,

                                       26
<PAGE>

in each such event, each Investor shall vote all shares of Series A Preferred
Stock and any other shares of voting stock of the Corporation then owned (or
controlled as to voting rights) by it, whether by purchase, exercise of rights,
warrants or options, stock dividends or otherwise:

               (a) to fix and maintain the number of directors on the Board of
Directors of the Corporation at not more than eight (8);

               (b) pursuant to Section 6(b)(i) of the Certificate, to elect to
the Board two (2) directors designated by HCV V as the Preferred Directors;

               (c) to allow Pennsylvania Early Stage Partners to appoint an
Observer (as defined in Section 2.14 hereof) to attend all meetings of the Board
of Directors.

          5.2  Cooperation of the Corporation.  The Corporation shall use its
best efforts to effectuate the purposes of this Section 5, including promoting
the adoption of any necessary amendment of the By-laws and the Certificate of
Incorporation of the Corporation.

          5.3  Notices.  The Corporation shall provide the Investors with at
least twenty (20) days' prior notice in writing of any intended mailing of
notice to the Investors of the Corporation for a meeting at which directors are
to be elected, and such notice shall include the names of the persons designated
by the Corporation pursuant to this Section 5.  HCV V shall notify the
Corporation in writing at least three (3) days prior to such mailing of the
persons designated by it pursuant to Section 6(b)(i) of the Certificate and
Section 5.1 above as nominees for election to the Board.  In the absence of any
notice from HCV V, the director(s) then serving and previously designated by HCV
V shall be renominated.

          5.4  Removal.  Except as otherwise provided in this Section 5, no
Investor shall vote to remove any member of the Board designated in accordance
with the foregoing provisions of this Section 5 unless the party who designated
such director (the "Designating Party") shall so vote or otherwise consent, and,
if the Designating Party shall so vote or otherwise consent, then the non-
designating Investors shall likewise so vote.  Any vacancy on the Board created
by the resignation, removal, incapacity or death of any person designated under
the foregoing provisions of this Section 5 shall be filled by another person
designated by the original Designating Party.  Each Investor shall vote all
voting shares of Series A Preferred Stock of the Corporation and all other
shares of voting stock of the Corporation owned or controlled by such Investor
in accordance with each such new designation, and no such vacancy shall be
filled in the absence of a new designation by the original Designating Party.

          5.5  Duration of Section.  This Section 5 and the rights and
obligations of the parties hereunder shall automatically terminate on the first
to occur of: (a) the consummation of a firm commitment underwritten public
offering of Common Stock registered under the Securities Act pursuant to which
(X) Common Stock is offered to the public at a price of at least $17.00 per
share of Common Stock (subject to adjustment for stock splits, stock dividends,
stock combinations, recapitalizations and like occurrences) and (Y) the offering
size is at least $20 million (a "Qualified IPO"), or (b) that date on which
eighty percent (80%) of the Series A

                                       27
<PAGE>

Preferred Shares originally issued to the Investors, subject to proportional
adjustment for events described in Sections 7(d)(iii) and 7(d)(iv) of the
Certificate, is no longer outstanding. Prior to any such termination, the rights
and obligations of any Investor under this Section 5 shall terminate upon the
date on which such Investor no longer owns any Series A Preferred Stock,
whereupon the obligations of the remaining Investors to vote in favor of the
designee of such Investor shall also terminate.

     SECTION 6.  Remedies.  In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such covenants or
agreements may proceed to protect and enforce its or their rights, either by
suit in equity and/or action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Agreement.
Notwithstanding the generality of the foregoing, in the event that the
Corporation breaches any of its covenants and/or agreements set forth herein,
the Investors shall have the additional remedy, in their sole discretion,
provided that such breach has not been cured by the later to occur of 15 days
after receipt of notice of such breach by the Corporation or 30 days after the
occurrence of such breach, of electing to immediately exercise their right of
redemption set forth in Section 5 of the Certificate, as provided therein,
irrespective of whether such right of redemption otherwise is mature.  The
rights, powers and remedies of the parties under this Agreement are cumulative
and not exclusive of any other right, power or remedy which such parties may
have under any other agreement or law.  No single or partial assertion or
exercise of any right, power or remedy of a party hereunder shall preclude any
other or further assertion or exercise thereof.

     SECTION 7.  Successors and Assigns.  Except as otherwise expressly provided
herein, this Agreement shall bind and inure to the benefit of the Corporation
and each of the Investors and the respective successors and assigns of the
Corporation and each of the Investors.  Subject to the requirements of Section 3
hereof, this Agreement and the rights and duties of the Investors set forth
herein may be freely assigned, in whole or in part, by each Investor to any
member of such Investor's Group or to any other person or entity acquiring at
least $500,000 of Restricted Securities, such value to be determined pursuant to
the provisions set forth in Section 7 of the Certificate.  Any transferee (other
than an Investor) to whom rights under Section 3 are transferred shall, as a
condition to such transfer, deliver to the Corporation a written instrument by
which such transferee identifies itself, gives the Corporation notice of the
transfer of such rights, identifies the securities of the Corporation owned or
acquired by it and agrees to be bound by the obligations imposed hereunder to
the same extent as if such transferee were an Investor hereunder.  A transferee
to whom rights are transferred pursuant to this Section 7 will be thereafter
deemed to be an Investor for the purpose of the execution of such transferred
rights and may not again transfer such rights to any other person or entity,
other than as provided in this Section 7.  Neither this Agreement nor any of the
rights or duties of the Corporation set forth herein shall be assigned by the
Corporation, in whole or in part, without having first received the written
consent of the Investors holding a majority of the voting power of the
outstanding Series A Preferred Shares held by all Investors, with each such
holder entitled to the number of votes for each such share of Series A Preferred
Stock as equals the number of shares of Common Stock

                                       28
<PAGE>

(including fractional shares) into which each such share of Series A Preferred
Stock is then convertible, rounded up to the nearest one-tenth of a share.

     SECTION 8.  Duration of Agreement.  The rights and obligations of the
Corporation and each Investor set forth herein shall survive indefinitely,
unless and until, by their respective terms, they are no longer applicable.

     SECTION 9.  Entire Agreement.  This Agreement, together with the other
writings referred to herein or delivered pursuant hereto which form a part
hereof, contains the entire agreement among the parties with respect to the
subject matter hereof and  amends, restates and supersedes all prior and
contemporaneous arrangements or understandings with respect thereto.

     SECTION 10.  Notices.  All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or duly sent by first
class registered, certified or overnight mail, postage prepaid, or telecopied
with a confirmation copy by regular mail, addressed or telecopied, as the case
may be, to such party at the address or telecopier number, as the case may be,
set forth below or such other address or telecopier number, as the case may be,
as may hereafter be designated in writing by the addressee to the addressor
listing all parties:

                    (i)  If to the Corporation, to:

                         STC Technologies, Inc.
                         1745 Eaton Avenue
                         Bethlehem, Pennsylvania 18018
                         Attention: Mr. Michael J. Gausling, President
                         Telecopier: (610) 882-1830

                         with a copy to:

                         Pepper Hamilton LLP
                         1235 Westlakes Drive, Suite 400
                         Berwyn, PA 19312-2401
                         Attention: Jeffrey P. Libson, Esq.
                         Telecopier: (610) 640-7835

                    (ii) If to the Investors, as set forth on Schedule 1:

                         with a copy to:

                         Gibbons, Del Deo, Dolan, Griffinger & Vecchione
                         One Riverfront Plaza
                         Newark, New Jersey 07102
                         Attention: Jeffrey A. Baumel, Esq.
                         Telecopier: (973) 596-0545

                                       29
<PAGE>

All such notices, requests, consents and communications shall be deemed to have
been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of mailing, on the third business day following the
date of such mailing, (c) in the case of overnight mail, on the first business
day following the date of such mailing, and (d) in the case of facsimile
transmission, when confirmed by facsimile machine report.

     SECTION 11.  Changes.  The terms and provisions of this Agreement may not
be modified or amended, additional signatories added, or any of the provisions
hereof waived, temporarily or permanently, except pursuant to the written
consent of the Corporation and the Investors holders of a majority of the Series
A Preferred Shares held by all Investors, determined in accordance with Section
6(a) of the Certificate (including, in such calculation, any outstanding
Restricted Shares held by such holders).

     SECTION 12.  Counterparts.  This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

     SECTION 13.  Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.

     SECTION 14.  Nouns and Pronouns.  Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.

     SECTION 15.  Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     SECTION 16.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, excluding choice
of law rules thereof.

     SECTION 17.  Effectiveness.  Notwithstanding any other provision of this
Agreement, this Agreement shall not be effective until the Closing (as such term
is defined in the Stock Purchase Agreement).

                                       30
<PAGE>

     IN WITNESS WHEREOF the parties hereto have executed this Agreement on the
date first above written.

                                    STC TECHNOLOGIES, INC.

                                    By:  /s/ Michael J. Gausling
                                         -----------------------
                                    Name: Michael J. Gausling
                                    Title: President

                                    INVESTORS:

                                    HEALTHCARE VENTURES V, L.P.

                                    By: HealthCare Partners V,
                                    L.P., as General Partner

                                    By:  /s/ Harold Werner
                                         -----------------------
                                    Name: Harold Werner
                                    Title: General Partner

                                    RHO MANAGEMENT TRUST II

                                    By: Rho Management Company, Inc., as
                                    Investment Advisor

                                    By:  /s/ Joshua Ruch
                                         -----------------------
                                    Name: Joshua Ruch
                                    Title: President

                                    HUDSON TRUST

                                    By:  /s/ Scott M. Ciccone
                                         -----------------------
                                    Name: Scott M. Ciccone
                                    Title: Trustee

                                       31
<PAGE>

                                    PENNSYLVANIA EARLY STAGE
                                    PARTNERS, L.P.

                                    By: Pennsylvania Early Stage Partners GP,
                                    L.L.C, its General Partner

                                    By:  /s/ Michael G. Bolton
                                         ------------------------
                                    Name: Michael G. Bolton
                                    Title: Managing Director

                                       32
<PAGE>

                                   SCHEDULE 1

                                   INVESTORS
                                   ---------

<TABLE>
<CAPTION>
                                          AMOUNT OF           SHARES OF SERIES A
INVESTOR                                  INVESTMENT           PREFERRED STOCK
--------                                  ----------           ---------------
<S>                                      <C>                  <C>
HealthCare Ventures V, L.P.              $4,354,499.00             512,294
44 Nassau Street
Princeton, New Jersey 08542-4511

Rho Management Trust II                  $  483,998.50              56,941
c/o Rho Management Company, Inc.
767 Fifth Avenue
New York, NY  10153
Attn: Peter Kalkanis

Hudson Trust                             $  161,500.00              19,000
c/o Summit Asset Management
The Office Center
Suite 445
666 Plainsboro Road
Plainsboro, NJ  08536
Attn: Scott Ciccone

Pennsylvania Early Stage Partners, L.P.  $1,500,003.50             176,471
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA  19087

TOTAL                                    $6,500,001.00             764,706
</TABLE>

                                       33

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