Document:

EXHIBIT 10.4
                        CONFIDENTIAL TREATMENT REQUESTED
                              SEC UNREDACTED COPY

        Confidential Portions Of This Agreement Which Have Been Redacted
        Are Marked With Brackets "[***]". The Omitted Material Has Been
          Filed Separtely With The Securities And Exchange Commission.

                                CREDIT AGREEMENT

                                      among

                    FIRST HORIZON PHARMACEUTICAL CORPORATION,

                                VARIOUS LENDERS,

                              BANK OF AMERICA, N.A.
                              as SYNDICATION AGENT,

                       LASALLE BANK NATIONAL ASSOCIATION,
                             as DOCUMENTATION AGENT

                                       and

                             BANKERS TRUST COMPANY,
                             as ADMINISTRATIVE AGENT

                        --------------------------------

                            Dated as of March 5, 2002
                        --------------------------------

                         DEUTSCHE BANC ALEX. BROWN INC.,
                        as LEAD ARRANGER and BOOK MANAGER

<PAGE>

     CREDIT  AGREEMENT,   dated  as  of  March  5,  2002,  among  FIRST  HORIZON
PHARMACEUTICAL CORPORATION, a Delaware corporation (the "Borrower"), the Lenders
party hereto from time to time, BANK OF AMERICA,  N.A., as Syndication Agent (in
such capacity the "Syndication Agent"),  LASALLE BANK NATIONAL  ASSOCIATION,  as
Documentation  Agent (in such  capacity the  "Documentation  Agent") and BANKERS
TRUST COMPANY,  as Administrative  Agent (in such capacity,  the "Administrative
Agent").  All  capitalized  terms used herein and defined in Section 11 are used
herein as therein defined.

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

                  WHEREAS, subject to and upon the terms and conditions set
forth herein, the Lenders are willing to make available to the Borrower the
respective credit facilities provided for herein;

                  NOW, THEREFORE, IT IS AGREED:

SECTION 1. Amount and Terms of Credit.

     1.01. The Commitments. (a) Subject to and upon the terms and conditions set
forth  herein,  each  Lender  with a Term  Loan  Commitment  severally,  but not
jointly,  agrees  to make a term loan or term  loans  (each a "Term  Loan"  and,
collectively,  the "Term Loans") to the Borrower,  which Term Loans (i) shall be
incurred  pursuant to a single drawing on the Initial Borrowing Date, (ii) shall
be denominated in Dollars,  (iii) except as hereinafter provided,  shall, at the
option of the Borrower,  be incurred and maintained as, and/or  converted  into,
Base Rate Loans or  Eurodollar  Loans,  provided  that (A)  except as  otherwise
specifically  provided in Section  1.10(b),  all Term Loans  comprising the same
Borrowing  shall at all times be of the same  Type,  and (B)  unless  either the
Administrative  Agent otherwise  agrees in its sole discretion or has determined
that the  Syndication  Date has occurred (at which time this clause (B) shall no
longer be  applicable),  Term Loans may only be incurred and  maintained as Base
Rate Loans,  and may not be converted into Eurodollar  Loans,  and (iv) shall be
made by each such  Lender in that  aggregate  principal  amount  which  does not
exceed the Term Loan  Commitment of such Lender on the Initial  Borrowing  Date.
Once repaid, Term Loans incurred hereunder may not be reborrowed.

     (b) Subject to and upon the terms and  conditions  set forth  herein,  each
Lender with a Revolving Loan Commitment  severally,  but not jointly,  agrees to
make, at any time and from time to time on or after the Initial  Borrowing  Date
and prior to the  Revolving  Loan Maturity  Date, a revolving  loan or revolving
loans (each a "Revolving Loan" and, collectively,  the "Revolving Loans") to the
Borrower, which Revolving Loans (i) shall be denominated in Dollars, (ii) shall,
at the option of the Borrower,  be incurred and maintained as, and/or  converted
into, Base Rate Loans or Eurodollar Loans, provided that (A) except as otherwise
specifically  provided in Section  1.10(b),  all Revolving Loans  comprising the
same Borrowing shall at all times be of the same Type, and (B) unless either the
Administrative  Agent otherwise  agrees in its sole discretion or has determined
that the  Syndication  Date has occurred (at which time this clause (B) shall no
longer be  applicable),  Revolving  Loans may only be incurred and maintained as

<PAGE>

Base Rate Loans,  and may not be converted into Eurodollar  Loans,  (iii) may be
repaid and reborrowed in accordance with the provisions  hereof,  and (iv) shall
not exceed for any such Lender at any time outstanding that aggregate  principal
amount which,  when added to the product of (x) such Lender's RL Percentage  and
(y) the sum of (I) the  aggregate  amount of all  Letter of Credit  Outstandings
(exclusive  of Unpaid  Drawings  which are  repaid  with the  proceeds  of,  and
simultaneously  with the incurrence  of, the respective  incurrence of Revolving
Loans) at such time and (II) the  aggregate  principal  amount of all  Swingline
Loans  (exclusive of Swingline  Loans which are repaid with the proceeds of, and
simultaneously  with the incurrence  of, the respective  incurrence of Revolving
Loans) then outstanding,  equals the Revolving Loan Commitment of such Lender at
such time.

     (c)  Subject to and upon the terms and  conditions  set forth  herein,  the
Swingline  Lender  agrees to make, at any time and from time to time on or after
the Initial  Borrowing Date and prior to the Swingline  Expiry Date, a revolving
loan or  revolving  loans  (each  a  "Swingline  Loan"  and,  collectively,  the
"Swingline Loans") to the Borrower,  which Swingline Loans (i) shall be incurred
and maintained as Base Rate Loans,  (ii) shall be denominated in Dollars,  (iii)
may be repaid and  reborrowed in accordance  with the  provisions  hereof,  (iv)
shall not exceed in aggregate  principal  amount at any time  outstanding,  when
combined  with the  aggregate  principal  amount  of all  Revolving  Loans  then
outstanding  and the aggregate  amount of all Letter of Credit  Outstandings  at
such time, an amount equal to the Total  Revolving Loan Commitment at such time,
and (v) shall not exceed in aggregate  principal  amount at any time outstanding
the Maximum Swingline Amount. Notwithstanding anything to the contrary contained
in this Section 1.01(c), (i) the Swingline Lender shall not be obligated to make
any Swingline Loans at a time when a Lender Default exists with respect to an RL
Lender unless the Swingline Lender has entered into arrangements satisfactory to
it and the Borrower to eliminate the Swingline Lender's risk with respect to the
Defaulting Lender's or Lenders' participation in such Swingline Loans, including
by cash  collateralizing  such Defaulting  Lender's or Lenders' RL Percentage of
the outstanding  Swingline  Loans,  and (ii) the Swingline Lender shall not make
any Swingline Loan after it has received  written notice from the Borrower,  any
other Credit Party or the Required Lenders stating that a Default or an Event of
Default exists and is continuing  until such time as the Swingline  Lender shall
have  received  written  notice (A) of  rescission  of all such notices from the
party or  parties  originally  delivering  such  notice or notices or (B) of the
waiver of such Default or Event of Default by the Required Lenders.

     (d) On any Business Day, the Swingline  Lender may, in its sole discretion,
give notice to the RL Lenders that the Swingline Lender's outstanding  Swingline
Loans shall be funded with one or more  Borrowings of Revolving  Loans (provided
that such  notice  shall be deemed to have  been  automatically  given  upon the
occurrence  of a Default or an Event of Default  under Section 10.05 or upon the
exercise of any of the remedies  provided in the last  paragraph of Section 10),
in which case one or more Borrowings of Revolving Loans  constituting  Base Rate
Loans  (each  such  Borrowing,  a  "Mandatory  Borrowing")  shall be made on the
immediately  succeeding  Business  Day by all RL Lenders  pro rata based on each
such  RL  Lender's  RL  Percentage  (determined  before  giving  effect  to  any
termination of the Revolving Loan Commitments  pursuant to the last paragraph of
Section 10) and the proceeds  thereof shall be applied directly by the Swingline
Lender to repay the Swingline Lender for such outstanding  Swingline Loans. Each
RL Lender hereby  irrevocably  agrees to make Revolving  Loans upon one Business
Day's  notice  pursuant  to each  Mandatory  Borrowing  in the amount and in the
manner specified in the preceding  sentence and on the date specified in writing
by the  Swingline  Lender  notwithstanding  (i)  the  amount  of  the  Mandatory

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<PAGE>

Borrowing may not comply with the Minimum  Borrowing Amount  otherwise  required
hereunder,  (ii)  whether  any  conditions  specified  in  Section  6  are  then
satisfied,  (iii) whether a Default or an Event of Default then exists, (iv) the
date of such Mandatory Borrowing, and (v) the amount of the Total Revolving Loan
Commitment at such time. In the event that any  Mandatory  Borrowing  cannot for
any reason be made on the date  otherwise  required  above  (including,  without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to the  Borrower),  then each RL Lender  hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have  occurred,  but adjusted for any payments  received from the Borrower on or
after  such date and prior to such  purchase)  from the  Swingline  Lender  such
participations in the outstanding Swingline Loans as shall be necessary to cause
the RL  Lenders  to share in such  Swingline  Loans  ratably  based  upon  their
respective RL Percentages (determined before giving effect to any termination of
the Revolving  Loan  Commitments  pursuant to the last paragraph of Section 10),
provided that (x) all interest  payable on the Swingline  Loans shall be for the
account  of the  Swingline  Lender  until  the date as of which  the  respective
participation is required to be purchased and, to the extent attributable to the
purchased participation, shall be payable to the participant from and after such
date  and (y) at the  time  any  purchase  of  participations  pursuant  to this
sentence is actually made, the purchasing RL Lender shall be required to pay the
Swingline Lender interest on the principal amount of participation purchased for
each day from and  including the day upon which the  Mandatory  Borrowing  would
otherwise  have  occurred  to  but  excluding  the  date  of  payment  for  such
participation,  at the overnight Federal Funds Rate for the first three days and
at the interest rate otherwise  applicable to Revolving Loans maintained as Base
Rate Loans hereunder for each day thereafter.

     1.02. Minimum Amount of Each Borrowing.  The aggregate  principal amount of
each  Borrowing of Loans under a respective  Tranche  shall not be less than the
Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding  more than (x)
three  Borrowings  of Term Loans  maintained  as  Eurodollar  Loans or (y) three
Borrowing of Revolving Loans maintained as Eurodollar Loans.

     1.03.  Notice of Borrowing.  (a) Whenever the Borrower desires to incur (x)
Eurodollar Loans hereunder, it shall give the Administrative Agent at the Notice
Office at least three Business Days' prior notice of each  Eurodollar Loan to be
incurred hereunder and (y) Base Rate Loans hereunder  (excluding Swingline Loans
and Revolving Loans made pursuant to a Mandatory  Borrowing),  it shall give the
Administrative  Agent at the Notice  Office at least one  Business  Day's  prior
notice of each Base Rate Loan to be incurred  hereunder,  provided that (in each
case) any such  notice  shall be deemed to have been given on a certain day only
if given before 12:00 Noon (New York time) on such day. Each such notice (each a
"Notice of Borrowing"),  except as otherwise expressly provided in Section 1.10,
shall be irrevocable and shall be in writing, or by telephone promptly confirmed
in writing, in the form of Exhibit A-1, appropriately  completed to specify: (i)
the  aggregate  principal  amount of the Loans to be  incurred  pursuant to such
Borrowing,  (ii) the date of such  Borrowing  (which  shall be a Business  Day),
(iii)  whether  the  Loans  being  incurred  pursuant  to such  Borrowing  shall
constitute  Term  Loans or  Revolving  Loans and (iv)  whether  the Loans  being
incurred pursuant to such Borrowing are to be initially  maintained as Base Rate
Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar
Loans, the initial Interest Period to be applicable thereto.  The Administrative

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<PAGE>

Agent shall  promptly  give each  Lender  which is required to make Loans of the
Tranche specified in the respective Notice of Borrowing, notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other matters
required by the immediately  preceding sentence to be specified in the Notice of
Borrowing.

     (b) (i) Whenever the Borrower  desires to incur Swingline Loans  hereunder,
the Borrower  shall give the Swingline  Lender no later than 1:00 P.M. (New York
time) on the date that a Swingline  Loan is to be  incurred,  written  notice or
telephonic  notice  promptly  confirmed in writing of each  Swingline Loan to be
incurred  hereunder.  Each such notice shall be irrevocable  and specify in each
case (A) the date of  Borrowing  (which  shall be a Business  Day),  and (B) the
aggregate  principal  amount of the Swingline  Loans to be incurred  pursuant to
such Borrowing.

     (ii)  Mandatory  Borrowings  shall be made  upon the  notice  specified  in
Section 1.01(d),  with the Borrower irrevocably  agreeing,  by its incurrence of
any Swingline  Loan,  to the making of the Mandatory  Borrowings as set forth in
Section 1.01(d).

     (c) Without in any way limiting the  obligation  of the Borrower to confirm
in writing any  telephonic  notice of any Borrowing or prepayment of Loans,  the
Administrative  Agent or the  Swingline  Lender,  as the  case  may be,  may act
without  liability  upon the basis of  telephonic  notice of such  Borrowing  or
prepayment,  as the case may be,  believed  by the  Administrative  Agent or the
Swingline  Lender,  as the case may be, in good faith to be from the  President,
the Vice  President-Finance,  the Chief Executive  Officer,  the Chief Financial
Officer,  the Treasurer or any Assistant Treasurer of the Borrower,  or from any
other authorized  officer of the Borrower  designated in writing by the Borrower
to the Administrative  Agent as being authorized to give such notices,  prior to
receipt of written  confirmation.  In each such case, the Borrower hereby waives
the right to dispute the Administrative  Agent's or Swingline Lender's record of
the terms of such telephonic notice of such Borrowing or prepayment of Loans, as
the case may be, absent manifest error.

     1.04. Disbursement of Funds. No later than 1:00 P.M. (New York time) on the
date  specified  in each Notice of  Borrowing  (or (x) in the case of  Swingline
Loans, no later than 4:00 P.M. (New York time) on the date specified pursuant to
Section  1.03(b)(i)  or (y) in the case of Mandatory  Borrowings,  no later than
1:00 P.M. (New York time) on the date specified in Section 1.01(d)), each Lender
with a Commitment  of the  respective  Tranche will make  available its pro rata
portion  (determined  in accordance  with Section  1.07) of each such  Borrowing
requested  to be made on such  date  (or in the  case of  Swingline  Loans,  the
Swingline Lender will make available the full amount thereof).  All such amounts
will be made  available  in Dollars and in  immediately  available  funds at the
Payment  Office,  and the  Administrative  Agent  will,  except  in the  case of
Revolving  Loans made pursuant to a Mandatory  Borrowing,  make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Lenders.  Unless the  Administrative  Agent shall have been  notified by any
Lender prior to the date of  Borrowing  that such Lender does not intend to make
available to the Administrative  Agent such Lender's portion of any Borrowing to
be made on such date, the  Administrative  Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date of Borrowing
and the  Administrative  Agent may (but shall not be obligated  to), in reliance
upon such assumption,  make available to the Borrower a corresponding amount. If
such  corresponding  amount is not in fact made available to the  Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
corresponding  amount on demand  from such  Lender.  If such Lender does not pay

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such  corresponding  amount  forthwith  upon the  Administrative  Agent's demand
therefor,  the  Administrative  Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such  corresponding  amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover on demand from
such Lender or the Borrower,  as the case may be, interest on such corresponding
amount in respect of each day from the date such  corresponding  amount was made
available  by the  Administrative  Agent to the  Borrower  until  the date  such
corresponding  amount is recovered by the  Administrative  Agent,  at a rate per
annum equal to (i) if recovered  from such Lender,  the overnight  Federal Funds
Rate for the first three days and at the interest rate  otherwise  applicable to
such Loans for each day thereafter and (ii) if recovered from the Borrower,  the
rate of interest applicable to the respective Borrowing,  as determined pursuant
to Section  1.08.  Nothing in this  Section  1.04 shall be deemed to relieve any
Lender from its  obligation  to make Loans  hereunder or to prejudice any rights
which the  Borrower  may have  against  any Lender as a result of any failure by
such Lender to make Loans hereunder.

     1.05.  Notes.  (a) The  Borrower's  obligation to pay the principal of, and
interest  on, the Loans made by each Lender  shall be  evidenced in the Register
maintained by the  Administrative  Agent pursuant to Section 13.15 and shall, if
requested by such Lender,  also be evidenced (i) in the case of Term Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-1, with blanks appropriately  completed in conformity herewith
(each a "Term Note" and,  collectively,  the "Term Notes"),  (ii) in the case of
Revolving  Loans,  by a  promissory  note duly  executed  and  delivered  by the
Borrower  substantially  in the form of Exhibit B-2,  with blanks  appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving  Notes"),  and (iii) in the case of Swingline  Loans, by a promissory
note duly  executed and delivered by the Borrower  substantially  in the form of
Exhibit B-3, with blanks  appropriately  completed in  conformity  herewith (the
"Swingline Note").

     (b) The Term Note issued to each Lender that has a Term Loan  Commitment or
outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable to
such Lender or its  registered  assigns and be dated the Initial  Borrowing Date
(or, if issued after the Initial  Borrowing  Date, be dated the date of issuance
thereof),  (iii) be in a stated principal amount equal to the Term Loans made by
such  Lender on the  Initial  Borrowing  Date (or,  if issued  after the Initial
Borrowing Date, be in a stated  principal  amount equal to the outstanding  Term
Loans of such Lender at such time) and be payable in the  outstanding  principal
amount of Term Loans  evidenced  thereby,  (iv) mature on the Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect  of the  Base  Rate  Loans  and  Eurodollar  Loans,  as the case may be,
evidenced  thereby,  (vi) be subject to  voluntary  prepayment  as  provided  in
Section 4.01, and mandatory  repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.

     (c) The  Revolving  Note issued to each  Lender  that has a Revolving  Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be  payable  to such  Lender  or its  registered  assigns  and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated
the date of the issuance  thereof),  (iii) be in a stated principal amount equal
to the  Revolving  Loan  Commitment  of such  Lender  (or,  if issued  after the
termination  thereof,  be in a stated  principal amount equal to the outstanding

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Revolving  Loans of such Lender at such time) and be payable in the  outstanding
principal  amount of the Revolving Loans evidenced  thereby,  (iv) mature on the
Revolving Loan Maturity  Date, (v) bear interest as provided in the  appropriate
clause of Section 1.08 in respect of the Base Rate Loans and  Eurodollar  Loans,
as the case may be, evidenced thereby,  (vi) be subject to voluntary  prepayment
as provided in Section  4.01,  and  mandatory  repayment  as provided in Section
4.02,  and (vii) be entitled to the  benefits  of this  Agreement  and the other
Credit Documents.

     (d) The Swingline Note issued to the Swingline Lender shall (i) be executed
by the  Borrower,  (ii) be payable  to the  Swingline  Lender or its  registered
assigns and be dated the Initial  Borrowing Date, (iii) be in a stated principal
amount equal to the Maximum  Swingline  Amount and be payable in the outstanding
principal  amount of the Swingline  Loans  evidenced  thereby from time to time,
(iv) mature on the Swingline  Expiry Date,  (v) bear interest as provided in the
appropriate  clause of Section 1.08 in respect of the Base Rate Loans  evidenced
thereby,  (vi) be subject to voluntary  prepayment  as provided in Section 4.01,
and mandatory  repayment as provided in Section  4.02,  and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.

     (e) Each Lender will note on its  internal  records the amount of each Loan
made by it and each payment in respect  thereof and prior to any transfer of any
of its Notes will endorse on the reverse side thereof the outstanding  principal
amount of Loans  evidenced  thereby.  Failure to make any such  notation  or any
error in such notation shall not affect the Borrower's obligations in respect of
such Loans.

     (f)  Notwithstanding  anything  to the  contrary  contained  above  in this
Section 1.05 or elsewhere  in this  Agreement,  Notes shall only be delivered to
Lenders which at any time  specifically  request the delivery of such Notes.  No
failure of any Lender to  request or obtain a Note  evidencing  its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower to
pay the Loans (and all related Obligations) incurred by the Borrower which would
otherwise be  evidenced  thereby in  accordance  with the  requirements  of this
Agreement,  and shall not in any way affect the security or guaranties  therefor
provided  pursuant to the various  Credit  Documents.  Any Lender which does not
have a Note  evidencing its  outstanding  Loans shall in no event be required to
make the notations otherwise described in preceding clause (e). At any time when
any Lender  requests the  delivery of a Note to evidence  any of its Loans,  the
Borrower  shall  promptly  execute  and  deliver  to the  respective  Lender the
requested Note in the appropriate amount or amounts to evidence such Loans.

     1.06.  Conversions.  The Borrower shall have the option to convert,  on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding  principal amount of Loans (other than Swingline Loans which may
not be  converted  pursuant to this Section  1.06) made  pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into a
Borrowing  (of the same  Tranche) of another Type of Loan,  provided  that,  (i)
except  as  otherwise  provided  in  Section  1.10(b),  Eurodollar  Loans may be
converted  into  Base  Rate  Loans  only on the last day of an  Interest  Period
applicable  to the Loans  being  converted  and no such  partial  conversion  of

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Eurodollar  Loans  shall  reduce  the  outstanding   principal  amount  of  such
Eurodollar  Loans made  pursuant to a single  Borrowing to less than the Minimum
Borrowing Amount applicable thereto,  (ii) unless the Required Lenders otherwise
agree, Base Rate Loans may only be converted into Eurodollar Loans if no Default
or Event of Default is in existence on the date of the conversion,  (iii) unless
the  Administrative  Agent  otherwise  agrees  in  its  sole  discretion  or has
determined  that the  Syndication  Date has  occurred (at which time this clause
(iii)  shall no longer be  applicable),  conversions  of Base  Rate  Loans  into
Eurodollar Loans shall be subject to the provisions of clause (B) of the proviso
in each  of  Sections  1.01(a)(iii)  and  1.01(b)(ii),  and  (iv) no  conversion
pursuant to this Section 1.06 shall result in a greater  number of Borrowings of
Eurodollar  Loans than is permitted  under  Section 1.02.  Each such  conversion
shall be effected  by the  Borrower  by giving the  Administrative  Agent at the
Notice Office prior to 12:00 Noon (New York time) at least three  Business Days'
prior notice (each a "Notice of Conversion/Continuation") in the form of Exhibit
A-2,  appropriately  completed  to  specify  the Loans to be so  converted,  the
Borrowing or Borrowings pursuant to which such Loans were incurred and, if to be
converted into Eurodollar Loans, the Interest Period to be initially  applicable
thereto.  The  Administrative  Agent shall give each Lender prompt notice of any
such proposed  conversion  affecting any of its Loans.  Upon any such conversion
the proceeds  thereof  will be deemed to be applied  directly on the day of such
conversion  to prepay  the  outstanding  principal  amount  of the  Loans  being
converted.

     1.07. Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans
under this Agreement shall be incurred from the Lenders pro rata on the basis of
their Term Loan Commitments or Revolving Loan  Commitments,  as the case may be.
It is  understood  that no Lender  shall be  responsible  for any default by any
other  Lender of its  obligation  to make Loans  hereunder  and that each Lender
shall  be  obligated  to make the  Loans  provided  to be made by it  hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.

     1.08.  Interest.  (a) The Borrower agrees to pay interest in respect of the
unpaid  principal  amount of each  Base  Rate  Loan  from the date of  Borrowing
thereof until the earlier of (i) the maturity  thereof  (whether by acceleration
or  otherwise)  and (ii) the  conversion  of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06 or 1.09, as applicable,  at a rate per annum which
shall be equal to the sum of the relevant  Applicable Margin plus the Base Rate,
each as in effect from time to time.

     (b) The Borrower agrees to pay interest in respect of the unpaid  principal
amount of each  Eurodollar  Loan from the date of  Borrowing  thereof  until the
earlier of (i) the maturity  thereof  (whether by acceleration or otherwise) and
(ii) the  conversion  of such  Eurodollar  Loan to a Base Rate Loan  pursuant to
Section  1.06,  1.09 or 1.10,  as  applicable,  at a rate per annum which shall,
during  each  Interest  Period  applicable  thereto,  be equal to the sum of the
relevant  Applicable  Margin as in effect from time to time during such Interest
Period plus the Eurodollar Rate for such Interest Period.

     (c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan shall,  in each case,  bear interest at a rate per annum
equal to the  greater  of (x) the rate  which is 2% in  excess  of the rate then
borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans of the  respective  Tranche from time to time, and
all other overdue amounts payable  hereunder and under any other Credit Document
shall bear  interest at a rate per annum equal to the rate which is 2% in excess
of the rate  applicable  to Revolving  Loans  maintained at Base Rate Loans from
time to time.  Interest that accrues under this Section 1.08(c) shall be payable
on demand.

                                       7
<PAGE>

     (d)  Accrued  (and  theretofore  unpaid)  interest  shall be payable (i) in
respect  of each Base Rate  Loan,  (x) in  arrears  on each  Scheduled  Interest
Payment  Date,  (y) on the date of any  repayment or  prepayment  in full of all
outstanding  Base Rate Loans of any  Tranche,  and (z) at  maturity  (whether by
acceleration  or otherwise)  and,  after such maturity,  on demand,  and (ii) in
respect of each  Eurodollar  Loan,  (x) on the last day of each Interest  Period
applicable  thereto  and, in the case of an  Interest  Period in excess of three
months,  on each date occurring at three month  intervals after the first day of
such Interest Period, and (y) on the date of any repayment or prepayment (on the
amount repaid or prepaid),  at maturity  (whether by  acceleration or otherwise)
and, after such maturity, on demand.

     (e) Upon each Interest  Determination Date, the Administrative  Agent shall
determine  the  Eurodollar  Rate  for each  Interest  Period  applicable  to the
respective  Eurodollar  Loans and shall  promptly  notify the  Borrower  and the
Lenders thereof.  Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.

     1.09.  Interest  Periods.  At the time the  Borrower  gives  any  Notice of
Borrowing or Notice of  Conversion/Continuation  in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or prior to 12:00 Noon (New York time) on the third Business
Day prior to the expiration of an Interest Period  applicable to such Eurodollar
Loan (in the case of any subsequent  Interest  Period),  the Borrower shall have
the right to elect the interest period (each an "Interest Period") applicable to
such Eurodollar Loan, which Interest Period shall, at the option of the Borrower
(but otherwise subject to the provisions of clause (B) of the proviso in each of
Sections  1.01(a)(iii)  and  1.01(b)(ii)),   be  (x)  prior  to  the  Term  Loan
Satisfaction  Date a one month period and (y)  thereafter,  a one, two, three or
six month period, provided that (in each case):

     (i) all Eurodollar Loans comprising a Borrowing shall at all times have the
same Interest Period;

     (ii) the initial  Interest Period for any Eurodollar Loan shall commence on
the  date of  Borrowing  of such  Eurodollar  Loan  (including  the  date of any
conversion  thereto from a Base Rate Loan) and each  Interest  Period  occurring
thereafter in respect of such Eurodollar Loan shall commence on the day on which
the next preceding Interest Period applicable thereto expires;

     (iii) if any  Interest  Period for a  Eurodollar  Loan  begins on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;

     (iv) if any Interest Period for a Eurodollar Loan would otherwise expire on
a day which is not a Business Day, such Interest Period shall expire on the next
succeeding  Business Day; provided,  however,  that if any Interest Period for a
Eurodollar Loan would otherwise  expire on a day which is not a Business Day but
is a day of the month after which no further  Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;

                                       8
<PAGE>

     (v) unless the Required Lenders  otherwise agree, no Interest Period may be
selected at any time when a Default or an Event of Default is then in existence;
and

     (vi) no Interest Period in respect of any Borrowing of any Tranche of Loans
shall be selected  which extends beyond the Revolving Loan Maturity Date (or, in
the case of Term Loans, beyond the Term Loan Maturity Date).

If upon the  expiration  of any  Interest  Period  applicable  to a Borrowing of
Eurodollar  Loans,  the  Borrower  has failed to elect,  or is not  permitted to
elect,  a new  Interest  Period to be  applicable  to such  Eurodollar  Loans as
provided  above,  the  Borrower  shall be deemed to have elected to convert such
Eurodollar  Loans into Base Rate Loans  effective as of the  expiration  date of
such current Interest Period.

     1.10.  Increased Costs,  Illegality,  etc. (a) In the event that any Lender
shall have  determined  (which  determination  shall,  absent manifest error, be
final and  conclusive  and binding upon all parties  hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):

     (i) on any  Interest  Determination  Date  that,  by reason of any  changes
arising after the date of this  Agreement  affecting  the  interbank  Eurodollar
market,  adequate and fair means do not exist for  ascertaining  the  applicable
interest rate on the basis provided for in the definition of Eurodollar Rate; or

     (ii)  at any  time,  that  such  Lender  shall  incur  increased  costs  or
reductions in the amounts  received or receivable  hereunder with respect to any
such  Lender's  agreement  to make or its  making,  funding or  maintaining  any
Eurodollar  Loan  because  of (x) any  change  since the  Effective  Date in any
applicable law or governmental  rule,  regulation,  order,  guideline or request
(whether  or  not  having  the  force  of  law)  or  in  the  interpretation  or
administration  thereof  and  including  the  introduction  of  any  new  law or
governmental rule,  regulation,  order,  guideline or request,  such as, but not
limited  to: (A) a change in the basis of  taxation  of payment to any Lender of
the  principal  of or  interest  on the Loans or the Notes or any other  amounts
payable  hereunder  (except for changes in the rate of tax on, or  determined by
reference to, the net income or net profits of such Lender  pursuant to the laws
of the jurisdiction in which it is organized or in which its principal office or
applicable  lending office is located or any subdivision  thereof or therein) or
(B) a change in official  reserve  requirements,  but, in all events,  excluding
reserves  required under  Regulation D to the extent included in the computation
of the  Eurodollar  Rate  and/or  (y)  other  circumstances  arising  since  the
Effective  Date affecting such Lender,  the interbank  Eurodollar  market or the
position of such Lender in such market; or

     (iii) at any time,  that the making or  continuance  by such  Lender or its
applicable  lending office of any Eurodollar  Loan has been made (x) unlawful by
any law or governmental rule,  regulation or order, (y) impossible by compliance
by any Lender in good faith with any governmental request (whether or not having
force of law) or (z) impracticable as a result of a contingency  occurring after
the  Effective  Date  which  materially  and  adversely  affects  the  interbank
Eurodollar market;

                                       9
<PAGE>

then, and in any such event,  such Lender (or the  Administrative  Agent, in the
case of clause (i) above)  shall  promptly  give notice (by  telephone  promptly
confirmed  in writing)  to the  Borrower  and,  except in the case of clause (i)
above,  to the  Administrative  Agent of such  determination  (which  notice the
Administrative  Agent shall  promptly  transmit  to each of the other  Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the  Administrative  Agent notifies the Borrower
and the  Lenders  that  the  circumstances  giving  rise to such  notice  by the
Administrative  Agent no longer exist,  and any Notice of Borrowing or Notice of
Conversion/Continuation  given by the Borrower with respect to Eurodollar  Loans
which  have not yet been  incurred  (including  by way of  conversion)  shall be
deemed  rescinded  by the  Borrower,  (y) in the case of clause (ii) above,  the
Borrower  agrees  to pay to such  Lender,  upon  such  Lender's  written  demand
therefor,  such  additional  amounts (in the form of an increased  rate of, or a
different  method of  calculating,  interest or  otherwise as such Lender in its
sole discretion  shall determine) as shall be required to compensate such Lender
for such  increased  costs or  reductions  in  amounts  received  or  receivable
hereunder (a written  notice as to the  additional  amounts owed to such Lender,
showing in reasonable detail the basis for the calculation thereof, submitted to
the  Borrower  by such  Lender  shall,  absent  manifest  error,  be  final  and
conclusive and binding on all the parties  hereto) and (z) in the case of clause
(iii)  above,  the Borrower  shall take one of the actions  specified in Section
1.10(b) as  promptly  as  possible  and,  in any event,  within the time  period
required by law.

     (b) At any time that any Eurodollar  Loan is affected by the  circumstances
described  in  Section  1.10(a)(ii),  the  Borrower  may,  and in the  case of a
Eurodollar Loan affected by the circumstances described in Section 1.10(a)(iii),
the Borrower  shall,  either (x) if the affected  Eurodollar  Loan is then being
made initially or pursuant to a conversion,  cancel such Borrowing by giving the
Administrative  Agent telephonic  notice (confirmed in writing) on the same date
that the  Borrower was  notified by the  affected  Lender or the  Administrative
Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar
Loan is then  outstanding,  upon at least three Business Days' written notice to
the Administrative Agent, require the affected Lender to convert such Eurodollar
Loan into a Base Rate Loan,  provided  that, if more than one Lender is affected
at any time, then all affected Lenders must be treated the same pursuant to this
Section 1.10(b).

     (c) If any Lender determines that after the Effective Date the introduction
of or any change in any applicable law or governmental rule, regulation,  order,
guideline,  directive  or  request  (whether  or not  having  the  force of law)
concerning  capital adequacy,  or any change in interpretation or administration
thereof by the NAIC or any  governmental  authority,  central bank or comparable
agency,  or  compliance  therewith  by such  Lender (or its  applicable  lending
office)  will have the effect of  increasing  the amount of capital  required or
expected to be maintained  by such Lender or any  corporation  controlling  such
Lender based on the  existence  of such  Lender's  Commitments  hereunder or its
obligations hereunder,  then the Borrower agrees to pay to such Lender, upon its
written  demand  therefor,  such  additional  amounts  as shall be  required  to
compensate such Lender or such other  corporation for the increased cost to such
Lender or such other  corporation or the reduction in the rate of return to such
Lender or such other  corporation  as a result of such  increase of capital.  In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use  averaging  and  attribution  methods  which are  reasonable,
provided  that such  Lender's  determination  of  compensation  owing under this

                                       10
<PAGE>

Section  1.10(c)  shall,  absent  manifest  error,  be final and  conclusive and
binding on all the  parties  hereto.  Each  Lender,  upon  determining  that any
additional  amounts will be payable pursuant to this Section 1.10(c),  will give
prompt  written  notice  thereof to the  Borrower,  which  notice  shall show in
reasonable detail the basis for calculation of such additional amounts.

     1.11. Compensation. The Borrower agrees to compensate each Lender, upon its
written  request (which  request shall set forth in reasonable  detail the basis
for requesting  such  compensation),  for all losses,  expenses and  liabilities
(including,  without  limitation,  any loss,  expense or  liability  incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such  Lender to fund its  Eurodollar  Loans but  excluding  loss of  anticipated
profits)  which such  Lender may  sustain:  (i) if for any reason  (other than a
default  by  such  Lender  or the  Administrative  Agent)  a  Borrowing  of,  or
conversion from or into, or continuance of, Eurodollar Loans does not occur on a
date or in the amount  specified  therefor in a Notice of Borrowing or Notice of
Conversion/Continuation  (whether  or not  withdrawn  by the  Borrower or deemed
withdrawn  pursuant to Section  1.10(a));  (ii) if any  prepayment  or repayment
(including any  prepayment or repayment  made pursuant to Section 4.01,  Section
4.02 or as a result of an  acceleration  of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect  thereto;  (iii) if any prepayment of any
of its Eurodollar  Loans is not made on any date or in the amount specified in a
notice of prepayment given by the Borrower;  or (iv) as a consequence of (x) any
other  default by the Borrower to repay  Eurodollar  Loans when  required by the
terms of this Agreement or any Note held by such Lender or (y) any election made
pursuant to Section 1.10(b).

     1.12.  Change of Lending Office.  Each Lender agrees that on the occurrence
of any event  giving  rise to the  operation  of Section  1.10(a)(ii)  or (iii),
Section  1.10(c),  Section 2.06 or Section 4.04 with respect to such Lender,  it
will, if requested by the Borrower,  use reasonable  efforts (subject to overall
policy  considerations  of such Lender) to designate  another lending office for
any Loans or  Letters  of Credit  affected  by such  event,  provided  that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory  disadvantage,  with the object of avoiding the
consequence  of the event giving rise to the operation of such Section.  Nothing
in this  Section 1.12 shall  affect or postpone  any of the  obligations  of the
Borrower or the right of any Lender provided in Sections 1.10, 2.06 and 4.04.

     1.13. Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender
or otherwise  defaults in its obligations to make Loans, (y) upon the occurrence
of an event  giving  rise to the  operation  of  Section  1.10(a)(ii)  or (iii),
Section  1.10(c),  Section 2.06 or Section 4.04 with respect to any Lender which
results in such Lender charging to the Borrower  increased  costs  materially in
excess of those being generally  charged by the other Lenders or (z) in the case
of a refusal  by a Lender to  consent  to  certain  proposed  changes,  waivers,
discharges  or  terminations  with  respect  to this  Agreement  which have been
approved  by the  Required  Lenders as (and to the  extent)  provided in Section
13.12(b),  the Borrower shall have the right,  if no Default or Event of Default
then exists (or, in the case of  preceding  clause (z),  will exist  immediately
after giving effect to such replacement),  to replace such Lender (the "Replaced
Lender")  with  one or more  other  Eligible  Transferees,  none  of whom  shall
constitute a Defaulting  Lender at the time of such  replacement  (collectively,
the  "Replacement  Lender") and each of whom shall be required to be  reasonably
acceptable  to the  Administrative  Agent,  provided that (i) at the time of any
replacement  pursuant to this Section 1.13, the  Replacement  Lender shall enter

                                       11
<PAGE>

into one or more  Assignment  and  Assumption  Agreements  pursuant  to  Section
13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid
by the  Replacement  Lender  and/or the Replaced  Lender (as may be agreed to at
such time by and among the  Borrower,  the  Replacement  Lender and the Replaced
Lender))  pursuant  to which the  Replacement  Lender  shall  acquire all of the
Commitments and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the  Replaced  Lender in respect  thereof  an amount  equal to the sum of (I) an
amount equal to the principal of, and all accrued  interest on, all  outstanding
Loans of the Replaced  Lender,  (II) an amount equal to all Unpaid Drawings that
have been funded by (and not reimbursed to) such Replaced Lender,  together with
all then unpaid  interest with respect thereto at such time, and (III) an amount
equal to all accrued,  but theretofore unpaid, Fees owing to the Replaced Lender
pursuant  to  Section  3.01,  (y) the  Issuing  Lender an  amount  equal to such
Replaced  Lender's  RL  Percentage  of any  Unpaid  Drawing  (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore  funded
by such Replaced  Lender to the Issuing  Lender and (z) the Swingline  Lender an
amount equal to such Replaced Lender's RL Percentage of any Mandatory  Borrowing
to the extent such amount was not theretofore  funded by such Replaced Lender to
the Swingline  Lender and (ii) all  obligations of the Borrower due and owing to
the  Replaced  Lender at such time (other than those  specifically  described in
clause (i) above in respect of which the assignment  purchase price has been, or
is  concurrently  being,  paid)  shall be paid in full to such  Replaced  Lender
concurrently  with  such  replacement.  Upon  the  execution  of the  respective
Assignment  and  Assumption  Agreement,  the  payment of amounts  referred to in
clauses  (i) and (ii) above and,  if so  requested  by the  Replacement  Lender,
delivery to the Replacement  Lender of the appropriate Note or Notes executed by
the Borrower,  the  Replacement  Lender shall become a Lender  hereunder and the
Replaced  Lender  shall  cease to  constitute  a Lender  hereunder,  except with
respect to indemnification  provisions under this Agreement (including,  without
limitation,  Sections 1.10,  1.11,  2.06,  4.04,  12.06 and 13.01),  which shall
survive as to such Replaced Lender.

SECTION 2. Letters of Credit.

     2.01.  Letters of Credit.  (a) Subject to and upon the terms and conditions
set forth herein, the Borrower may request that the Issuing Lender issue, at any
time and from time to time on and after the Initial  Borrowing Date and prior to
the 60th day prior to the Revolving  Loan Maturity  Date, for the account of the
Borrower and for the benefit of (x) any holder (or any  trustee,  agent or other
similar representative for any such holders) of L/C Supportable Obligations,  an
irrevocable  standby letter of credit, in a form customarily used by the Issuing
Lender or in such other form as is reasonably  acceptable to the Issuing Lender,
and  (y)  sellers  of  goods  to the  Borrower  or any of its  Subsidiaries,  an
irrevocable  trade letter of credit,  in a form  customarily used by the Issuing
Lender or in such other form as has been  approved by the Issuing  Lender  (each
such letter of credit, a "Letter of Credit" and,  collectively,  the "Letters of
Credit").  All Letters of Credit  shall be  denominated  in Dollars and shall be
issued on a sight basis only.

     (b)  Subject to and upon the terms and  conditions  set forth  herein,  the
Issuing  Lender  agrees  that it will,  at any time and from time to time on and
after  the  Initial  Borrowing  Date and  prior  to the  60th  day  prior to the
Revolving Loan Maturity Date,  following its receipt of the respective Letter of
Credit Request, issue for account of the Borrower, one or more Letters of Credit
as are  permitted  to remain  outstanding  hereunder  without  giving  rise to a
Default or an Event of Default,  provided  that the Issuing  Lender shall not be
under any obligation to issue any Letter of Credit of the types  described above
if at the time of such issuance:

                                       12
<PAGE>

     (i)  any  order,  judgment  or  decree  of any  governmental  authority  or
arbitrator  shall purport by its terms to enjoin or restrain the Issuing  Lender
from issuing such Letter of Credit or any  requirement  of law applicable to the
Issuing  Lender or any request or directive  (whether or not having the force of
law) from any governmental  authority with  jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit  generally  or such  Letter of Credit in  particular  or shall
impose  upon the  Issuing  Lender  with  respect  to such  Letter of Credit  any
restriction or reserve or capital  requirement  (for which the Issuing Lender is
not otherwise  compensated  hereunder) not in effect with respect to the Issuing
Lender on the date hereof,  or any unreimbursed  loss, cost or expense which was
not  applicable  or in effect with respect to the Issuing  Lender as of the date
hereof and which the Issuing Lender  reasonably and in good faith deems material
to it; or

     (ii) the Issuing  Lender shall have received  from the Borrower,  any other
Credit  Party or the  Required  Lenders  prior to the issuance of such Letter of
Credit notice of the type described in the second sentence of Section 2.03(b).

     2.02.   Maximum   Letter  of   Credit   Outstandings;   Final   Maturities.
Notwithstanding  anything to the contrary  contained in this  Agreement,  (i) no
Letter of Credit shall be issued the Stated  Amount of which,  when added to the
Letter of Credit Outstandings  (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the  respective  Letter of Credit) at
such time would exceed either (x) $5,000,000 or (y) when added to the sum of (I)
the aggregate  principal amount of all Revolving Loans then outstanding and (II)
the aggregate  principal  amount of all  Swingline  Loans then  outstanding,  an
amount equal to the Total  Revolving Loan Commitment at such time, and (ii) each
Letter of Credit shall by its terms terminate (x) in the case of standby Letters
of Credit, on or before the earlier of (A) the date which occurs 12 months after
the date of the issuance  thereof  (although  any such standby  Letter of Credit
shall be  extendible  for  successive  periods of up to 12 months,  but, in each
case,  not beyond the tenth  Business Day prior to the  Revolving  Loan Maturity
Date, on terms acceptable to the Issuing Lender) and (B) ten Business Days prior
to the  Revolving  Loan Maturity  Date,  and (y) in the case of trade Letters of
Credit, on or before the earlier of (A) the date which occurs 180 days after the
date of issuance  thereof and (B) 30 days prior to the  Revolving  Loan Maturity
Date  provided,  however,  that  maturities  for any  Letters  of Credit  issued
hereunder while any Term Loans are outstanding shall not extend beyond the tenth
Business Day prior to the Term Loan Maturity Date.

     2.03.  Letter of Credit Requests;  Minimum Stated Amount.  (a) Whenever the
Borrower desires that a Letter of Credit be issued for its account, the Borrower
shall  give the  Administrative  Agent  and the  Issuing  Lender  at least  five
Business  Days' (or such  shorter  period  as is  reasonably  acceptable  to the
Issuing  Lender)  written notice thereof  (including by way of facsimile).  Each
notice  shall be in the  form of  Exhibit  C,  appropriately  completed  (each a
"Letter of Credit Request").

     (b) The  making of each  Letter of Credit  Request  shall be deemed to be a
representation  and  warranty by the Borrower to the Lenders that such Letter of
Credit may be issued in accordance  with, and will not violate the  requirements
of,  Section  2.02.  Unless the  Issuing  Lender has  received  notice  from the
Borrower,  any other  Credit Party or the  Required  Lenders  before it issues a
Letter of Credit that one or more of the conditions  specified in Section 5 or 6
are not then  satisfied,  or that the  issuance of such  Letter of Credit  would

                                       13
<PAGE>

violate  Section 2.02,  then the Issuing Lender shall,  subject to the terms and
conditions  of this  Agreement,  issue the  requested  Letter of Credit  for the
account of the  Borrower  in  accordance  with the  Issuing  Lender's  usual and
customary  practices.  Upon the issuance of or  modification or amendment to any
standby Letter of Credit,  the Issuing Lender shall promptly notify the Borrower
and the  Administrative  Agent,  in writing of such  issuance,  modification  or
amendment  and such  notice  shall be  accompanied  by a copy of such  Letter of
Credit or the respective  modification or amendment thereto, as the case may be.
Promptly after receipt of such notice the Administrative  Agent shall notify the
Participants,  in writing, of such issuance,  modification or amendment.  On the
first  Business  Day  of  each  week,  the  Issuing  Lender  shall  furnish  the
Administrative  Agent with a written  (including  via  facsimile)  report of the
daily  aggregate  outstandings  of trade  letters of credit for the  immediately
preceding  week.  Notwithstanding  anything to the  contrary  contained  in this
Agreement,  in the event  that a Lender  Default  exists  with  respect to an RL
Lender,  the Issuing  Lender shall not be required to issue any Letter of Credit
unless the Issuing Lender has entered into  arrangements  satisfactory to it and
the  Borrower  to  eliminate  the  Issuing  Lender's  risk with  respect  to the
participation  in  Letters  of  Credit  by the  Defaulting  Lender  or  Lenders,
including  by cash  collateralizing  such  Defaulting  Lender's  or  Lenders' RL
Percentage of the Letter of Credit Outstandings.

     (c) The initial  Stated  Amount of each Letter of Credit  shall not be less
than $100,000 or such lesser amount as is acceptable to the Issuing Lender.

     2.04. Letter of Credit Participations. (a) Immediately upon the issuance by
the Issuing  Lender of any Letter of Credit,  the Issuing Lender shall be deemed
to have sold and transferred to each RL Lender,  and each such RL Lender (in its
capacity under this Section 2.04, a "Participant")  shall be deemed  irrevocably
and  unconditionally  to have  purchased and received  from the Issuing  Lender,
without recourse or warranty,  an undivided interest and  participation,  to the
extent of such  Participant's  RL  Percentage,  in such  Letter of Credit,  each
drawing or payment made  thereunder  and the  obligations  of the Borrower under
this  Agreement  with respect  thereto,  and any  security  therefor or guaranty
pertaining  thereto.  Upon any change in the Revolving  Loan  Commitments  or RL
Percentages  of the Lenders  pursuant to Section 1.13 or 13.04(b),  it is hereby
agreed  that,  with  respect  to all  outstanding  Letters  of Credit and Unpaid
Drawings  relating  thereto,  there  shall  be an  automatic  adjustment  to the
participations  pursuant to this Section 2.04 to reflect the new RL  Percentages
of the assignor and assignee Lender, as the case may be.

     (b) In determining  whether to pay under any Letter of Credit,  the Issuing
Lender shall not have any obligation relative to the other Lenders other than to
confirm that any documents  required to be delivered under such Letter of Credit
appear to have been  delivered and that they appear to  substantially  comply on
their face with the  requirements of such Letter of Credit.  Any action taken or
omitted to be taken by the Issuing Lender under or in connection with any Letter
of Credit  issued by it shall not create for the  Issuing  Lender any  resulting
liability  to the  Borrower,  any other  Credit  Party,  any Lender or any other
Person unless such action is taken or omitted to be taken with gross  negligence
or willful  misconduct  on the part of the Issuing  Lender (as  determined  by a
court of competent jurisdiction in a final and non-appealable decision).

                                       14
<PAGE>

     (c) In the event that the Issuing Lender makes any payment under any Letter
of Credit issued by it and the Borrower shall not have reimbursed such amount in
full to the Issuing Lender pursuant to Section 2.05(a), the Issuing Lender shall
promptly  notify the  Administrative  Agent,  which shall  promptly  notify each
Participant  of  such  failure,   and  each   Participant   shall  promptly  and
unconditionally  pay to the Issuing Lender the amount of such  Participant's  RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative  Agent so  notifies,  prior to 12:00  Noon (New York time) on any
Business  Day,  any  Participant  required  to fund a payment  under a Letter of
Credit,  such Participant  shall make available to the Issuing Lender in Dollars
such  Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such  Participant  shall not have so
made its RL  Percentage  of the amount of such payment  available to the Issuing
Lender,  such  Participant  agrees to pay to the Issuing  Lender,  forthwith  on
demand such amount,  together with interest thereon, for each day from such date
until  the date  such  amount is paid to the  Issuing  Lender  at the  overnight
Federal Funds Rate for the first three days and at the interest rate  applicable
to  Revolving  Loans  that  are  maintained  as Base  Rate  Loans  for  each day
thereafter.  The failure of any  Participant  to make  available  to the Issuing
Lender its RL  Percentage  of any payment  under any Letter of Credit  shall not
relieve any other  Participant of its obligation  hereunder to make available to
the Issuing  Lender its RL  Percentage of any payment under any Letter of Credit
on  the  date  required,  as  specified  above,  but  no  Participant  shall  be
responsible  for the failure of any other  Participant  to make available to the
Issuing Lender such other Participant's RL Percentage of any such payment.

     (d)  Whenever  the  Issuing  Lender  receives a payment of a  reimbursement
obligation  as to which  it has  received  any  payments  from the  Participants
pursuant  to  clause  (c)  above,  the  Issuing  Lender  shall  pay to each such
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount  originally  funded by such Participant to the aggregate amount
funded  by all  Participants)  of the  principal  amount  of such  reimbursement
obligation  and interest  thereon  accruing after the purchase of the respective
participations.

     (e) Upon the request of any  Participant,  the  Administrative  Agent shall
furnish to such Participant  copies of any standby Letter of Credit issued by it
and such other documentation as may reasonably be requested by such Participant.

     (f) The  obligations  of the  Participants  to make payments to the Issuing
Lender with respect to Letters of Credit shall be irrevocable and not subject to
any  qualification or exception  whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all  circumstances,  including,
without limitation, any of the following circumstances:

     (i) any lack of validity or  enforceability of this Agreement or any of the
other Credit Documents;

     (ii) the existence of any claim,  setoff,  defense or other right which the
Borrower or any of its  Subsidiaries  may have at any time against a beneficiary
named in a Letter of  Credit,  any  transferee  of any  Letter of Credit (or any
Person for whom any such transferee may be acting),  the  Administrative  Agent,

                                       15
<PAGE>

any Participant, or any other Person, whether in connection with this Agreement,
any Letter of Credit,  the  transactions  contemplated  herein or any  unrelated
transactions  (including any underlying  transaction between the Borrower or any
Subsidiary  of the  Borrower  and the  beneficiary  named in any such  Letter of
Credit);

     (iii) any draft,  certificate  or any other  document  presented  under any
Letter of Credit proving to be forged,  fraudulent,  invalid or  insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;

     (iv) the  surrender or impairment  of any security for the  performance  or
observance of any of the terms of any of the Credit Documents; or

     (v) the occurrence of any Default or Event of Default.

     2.05. Agreement to Repay Letter of Credit Drawings. (a) The Borrower agrees
to reimburse the Issuing Lender, by making payment to the  Administrative  Agent
in  immediately  available  funds at the  Payment  Office,  for any  payment  or
disbursement  made by the Issuing Lender under any Letter of Credit issued by it
(each such amount, so paid until  reimbursed,  an "Unpaid  Drawing"),  not later
than one  Business  Day  following  receipt  by the  Borrower  of notice of such
payment or  disbursement  (provided  that no such notice shall be required to be
given if a  Default  or an Event of  Default  under  Section  10.05  shall  have
occurred and be  continuing,  in which case the Unpaid  Drawing shall be due and
payable immediately without presentment,  demand,  protest or notice of any kind
(all of which are hereby waived by the  Borrower)),  with interest on the amount
so paid or disbursed by the Issuing Lender,  to the extent not reimbursed  prior
to 12:00 Noon (New York time) on the date of such payment or disbursement,  from
and  including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by the Borrower  therefor at a rate per annum equal to the
Base Rate in effect  from time to time plus the  Applicable  Margin as in effect
from time to time for  Revolving  Loans that are  maintained as Base Rate Loans;
provided,  however, to the extent such amounts are not reimbursed prior to 12:00
Noon (New York time) on the third  Business  Day  following  the  receipt by the
Borrower of notice of such payment or  disbursement  or following the occurrence
of a  Default  or an  Event of  Default  under  Section  10.05,  interest  shall
thereafter accrue on the amounts so paid or disbursed by the Issuing Lender (and
until  reimbursed by the Borrower) at a rate per annum equal to the Base Rate in
effect from time to time plus the Applicable Margin for Revolving Loans that are
maintained  as Base Rate Loans as in effect from time to time plus 2%, with such
interest to be payable on demand.  The Issuing  Lender  shall give the  Borrower
prompt  written  notice of each Drawing under any Letter of Credit issued by it,
provided that the failure to give any such notice shall in no way affect, impair
or diminish the Borrower's obligations hereunder.

     (b) The  obligations  of the Borrower  under this Section 2.05 to reimburse
the Issuing Lender with respect to drafts,  demands and other  presentations for
payment under Letters of Credit issued by it (each a "Drawing")  (including,  in
each case,  interest thereon) shall be absolute and unconditional  under any and
all  circumstances  and  irrespective of any setoff,  counterclaim or defense to
payment  which the Borrower or any  Subsidiary  of the Borrower may have or have
had against any Lender  (including in its capacity as the Issuing Lender or as a
Participant),  including, without limitation, any defense based upon the failure

                                       16
<PAGE>

of any drawing under a Letter of Credit to conform to the terms of the Letter of
Credit  or  any  nonapplication  or  misapplication  by the  beneficiary  of the
proceeds of such  Drawing;  provided,  however,  that the Borrower  shall not be
obligated to reimburse the Issuing  Lender for any wrongful  payment made by the
Issuing  Lender  under a Letter  of  Credit  issued by it as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Issuing  Lender (as determined by a court of competent  jurisdiction  in a final
and non-appealable decision).

     2.06.  Increased  Costs.  If at any time  after  the  Effective  Date,  the
introduction  of or any change in any applicable law, rule,  regulation,  order,
guideline or request or in the  interpretation or administration  thereof by the
NAIC  or  any  governmental   authority  charged  with  the   interpretation  or
administration  thereof,  or compliance by the Issuing Lender or any Participant
with any request or directive by the NAIC or by any such governmental  authority
(whether or not having the force of law),  shall  either (i)  impose,  modify or
make applicable any reserve,  deposit,  capital adequacy or similar  requirement
against letters of credit issued by the Issuing Lender or participated in by any
Participant,  or (ii) impose on the Issuing Lender or any  Participant any other
conditions relating,  directly or indirectly, to this Agreement or any Letter of
Credit;  and the result of any of the  foregoing  is to increase the cost to the
Issuing Lender or any Participant of issuing,  maintaining or  participating  in
any Letter of Credit,  or reduce the amount of any sum received or receivable by
the Issuing Lender or any Participant  hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or  determined by reference to, the net income or profits of the Issuing
Lender or such Participant  pursuant to the laws of the jurisdiction in which it
is organized or in which its principal  office or applicable  lending  office is
located or any subdivision  thereof or therein),  then, upon the delivery of the
certificate  referred  to below to the  Borrower  by the  Issuing  Lender or any
Participant (a copy of which  certificate shall be sent by the Issuing Lender or
such Participant to the Administrative Agent), the Borrower agrees to pay to the
Issuing Lender or such  Participant  such  additional  amount or amounts as will
compensate  the Issuing  Lender or such  Participant  for such increased cost or
reduction  in the amount  receivable  or  reduction on the rate of return on its
capital.  The  Issuing  Lender or any  Participant,  upon  determining  that any
additional  amounts  will be payable  pursuant to this Section  2.06,  will give
prompt  written  notice  thereof to the  Borrower,  which notice shall include a
certificate  submitted to the Borrower by the Issuing Lender or such Participant
(a copy of  which  certificate  shall  be sent  by the  Issuing  Lender  or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the  calculation  of such  additional  amount or amounts  necessary to
compensate the Issuing Lender or such Participant.  The certificate  required to
be delivered  pursuant to this Section 2.06 shall,  absent  manifest  error,  be
final and conclusive and binding on the Borrower.

SECTION 3. Commitment Commission; Fees; Reductions of Commitment.

     3.01. Fees. (a) The Borrower agrees to pay to the Administrative  Agent for
distribution  to each  Non-Defaulting  RL Lender a  commitment  commission  (the
"Commitment Commission") for the period from and including the Effective Date to
and including  the  Revolving  Loan Maturity Date (or such earlier date on which
the Total Revolving Loan Commitment has been terminated)  computed at a rate per
annum  equal to the  Applicable  Commitment  Fee  Percentage  of the  Unutilized
Revolving  Loan  Commitment of such  Non-Defaulting  RL Lender as in effect from
time to time. Accrued  Commitment  Commission shall be due and payable quarterly
in arrears on each  Scheduled  Interest  Payment Date and on the date upon which
the Total Revolving Loan Commitment is terminated.

                                       17
<PAGE>

     (b) The Borrower agrees to pay to the Administrative Agent for distribution
to each RL Lender (based on each such RL Lender's  respective  RL  Percentage) a
fee in respect of each  Letter of Credit  (the  "Letter of Credit  Fee") for the
period from and  including  the date of issuance of such Letter of Credit to and
including  the date of  termination  or  expiration  of such  Letter of  Credit,
computed at a rate per annum equal to the Applicable  Margin then in effect with
respect to Revolving Loans that are maintained as Eurodollar  Loans on the daily
Stated Amount of each such Letter of Credit. Accrued Letter of Credit Fees shall
be due and payable quarterly in arrears on each Scheduled  Interest Payment Date
and on the first day on or after the  termination  of the Total  Revolving  Loan
Commitment upon which no Letters of Credit remain outstanding.

     (c) The Borrower agrees to pay to the Issuing Lender,  for its own account,
a facing fee in respect of each Letter of Credit issued by it (the "Facing Fee")
for the period from and  including the date of issuance of such Letter of Credit
to and including the date of termination or expiration of such Letter of Credit,
computed  at a rate per annum equal to 1/4 of 1% on the daily  Stated  Amount of
such Letter of Credit,  provided that in any event the minimum  amount of Facing
Fees payable in any  twelve-month  period for each Letter of Credit shall be not
less than $500,  it being agreed  that,  on the day of issuance of any Letter of
Credit and on each anniversary thereof prior to the termination or expiration of
such  Letter of Credit,  if $500 will exceed the amount of Facing Fees that will
accrue  with  respect to such  Letter of Credit for the  immediately  succeeding
twelve-month  period,  the full $500 shall be payable on the date of issuance of
such Letter of Credit and on each such anniversary thereof.  Except as otherwise
provided in the proviso to the immediately  preceding  sentence,  accrued Facing
Fees shall be due and payable  quarterly in arrears on each  Scheduled  Interest
Payment  Date and upon the first day on or after  the  termination  of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.

     (d) The Borrower agrees to pay to the Issuing Lender,  for its own account,
upon each payment  under,  issuance  of, or  amendment  to, any Letter of Credit
issued  by  it,  such  amount  as  shall  at  the  time  of  such  event  be the
administrative  charge and the  reasonable  expenses which the Issuing Lender is
generally imposing in connection with such occurrence with respect to letters of
credit.

     (e)  The  Borrower  agrees  to pay  to the  Administrative  Agent  and  its
affiliates  such fees as have been or may be agreed to in  writing  from time to
time by the Borrower or any of its  Subsidiaries  and the  Administrative  Agent
and/or its respective affiliates.

     3.02. Voluntary  Termination of Unutilized Revolving Loan Commitments.  (a)
Upon at least three Business  Day's prior written  notice to the  Administrative
Agent at the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders), the Borrower shall have the right, at any time
or from  time to time,  without  premium  or  penalty  to  terminate  the  Total
Unutilized Revolving Loan Commitment in whole, or reduce it in part, pursuant to
this Section 3.02(a), in an integral multiple of $500,000 in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment, provided that each
such reduction shall apply  proportionately  to permanently reduce the Revolving
Loan Commitment of each RL Lender.

                                       18
<PAGE>

     (b) In the event of a refusal by a Lender to  consent  to certain  proposed
changes,  waivers,  discharges or  terminations  with respect to this  Agreement
which have been approved by the Required Lenders as (and to the extent) provided
in Section  13.12(b),  the  Borrower  may,  subject to its  compliance  with the
requirements of Section 13.12(b),  upon five Business Days' prior written notice
to such Lender and the  Administrative  Agent at the Notice Office (which notice
the  Administrative  Agent  shall  promptly  transmit  to each  of the  Lenders)
terminate all of the Commitments of such Lender, so long as all Loans,  together
with  accrued and unpaid  interest,  Fees and all other  amounts,  owing to such
Lender  are  repaid  concurrently  with the  effectiveness  of such  termination
pursuant to Section  4.01(b) (at which time Schedule I shall be deemed  modified
to  reflect  such  changed  amounts)  and such  Lender's  RL  Percentage  of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory to
the  Administrative  Agent and the Issuing Lender, and at such time, such Lender
shall no longer  constitute a "Lender" for  purposes of this  Agreement,  except
with  respect to  indemnifications  under  this  Agreement  (including,  without
limitation,  Sections 1.10,  1.11,  2.06,  4.04,  12.06 and 13.01),  which shall
survive as to such repaid Lender.

     3.03. Mandatory Reduction of Commitments. (a) The Total Commitment (and the
Commitments of each Lender) shall  terminate in its entirety on (x) February 28,
2002 unless on or prior to such date the Acquisition  Agreement has been entered
into,  (y) the date  which  occurs 45 days  after the date of  execution  of the
Acquisition Agreement, unless the Initial Borrowing Date shall have occurred and
(z) any time after the execution of the  Acquisition  Agreement and prior to the
consummation of the transaction,  the Acquisition Agreement is terminated (other
than with respect to ongoing indemnities, confidentiality provisions and similar
provisions).

     (b) In addition to any other mandatory  commitment  reductions  pursuant to
this Section 3.03, the Total Term Loan  Commitment (and the Term Loan Commitment
of each Lender) shall  terminate in its entirety on the Initial  Borrowing  Date
(after giving effect to the incurrence of Term Loans on such date).

     (c) In addition to any  mandatory  commitment  reductions  pursuant to this
Section 3.03, the Total Term Loan Commitment shall be permanently reduced by the
amount, if any, of net cash proceeds received by the Borrower in connection with
any equity issuances,  capital  contribution and/or other junior financing after
January 28, 2002 and on or before the Initial Borrowing Date;  provided that the
Total Term Loan  Commitment  (and the Term Loan Commitment of each Lender) shall
terminate in its entirety on the first date, if any, occurring after January 28,
2002 and on or prior to the Initial  Borrowing Date upon which the aggregate net
cash  proceeds  received  by the  Borrower  from one or more  equity  issuances,
capital contributions and/or other junior financing during such period equals or
exceeds $127,000,000.

     (d) In addition to any other mandatory  commitment  reductions  pursuant to
this Section 3.03, the Total  Revolving Loan  Commitment  shall terminate in its
entirety  upon the  earlier of (i) the  Revolving  Loan  Maturity  Date and (ii)
unless the  Required  Lenders  otherwise  agree in writing,  the date on which a
Change of Control occurs.

     (e) Each  reduction  to,  or  termination  of,  the  Total  Revolving  Loan
Commitment shall be applied to proportionately reduce or terminate,  as the case
may be, the  Revolving  Loan  Commitment  of each Lender  with a Revolving  Loan
Commitment.

                                       19
<PAGE>

     (f) Each  reduction to, or termination  of, the Total Term Loan  Commitment
shall be applied to proportionately reduce or terminate, as the case may be, the
Term Loan Commitment of each Lender with a Term Loan Commitment.

SECTION 4. Prepayments; Payments; Taxes.

     4.01.  Voluntary  Prepayments.  (a) The  Borrower  shall  have the right to
prepay the Loans,  without  premium or penalty,  in whole or in part at any time
and from time to time on the following  terms and  conditions:  (i) the Borrower
shall give the  Administrative  Agent prior to 12:00 Noon (New York time) at the
Notice  Office  (x) at  least  one  Business  Day's  prior  written  notice  (or
telephonic  notice  promptly  confirmed in writing) of its intent to prepay Base
Rate Loans (or same day notice in the case of a prepayment  of Swingline  Loans)
and (y) at least three Business Days' prior written notice (or telephonic notice
promptly  confirmed in writing) of its intent to prepay Eurodollar Loans,  which
notice (in each case)  shall  specify  whether  Term Loans,  Revolving  Loans or
Swingline Loans shall be prepaid, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing
or  Borrowings  pursuant  to which such  Eurodollar  Loans were made,  and which
notice the  Administrative  Agent shall,  except in the case of a prepayment  of
Swingline Loans, promptly transmit to each of the Lenders; (ii) (x) each partial
prepayment  of Term  Loans  pursuant  to this  Section  4.01(a)  shall  be in an
aggregate  principal  amount of at least $1,000,000 (or such lesser amount as is
acceptable  to  the  Administrative  Agent),  (y)  each  partial  prepayment  of
Revolving  Loans  pursuant  to this  Section  4.01(a)  shall be in an  aggregate
principal amount of at least $500,000 (or such lesser amount as is acceptable to
the  Administrative  Agent) and (z) each partial  prepayment of Swingline  Loans
pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at
least  $500,000 (or such lesser amount as is  acceptable  to the  Administrative
Agent),  provided  that if any  partial  prepayment  of  Eurodollar  Loans  made
pursuant to any  Borrowing  shall  reduce the  outstanding  principal  amount of
Eurodollar  Loans made  pursuant  to such  Borrowing  to an amount less than the
Minimum  Borrowing  Amount  applicable  thereto,  then such Borrowing may not be
continued as a Borrowing of Eurodollar  Loans (and same shall  automatically  be
converted  into a Borrowing  of Base Rate Loans) and any election of an Interest
Period with respect thereto given by the Borrower shall have no force or effect;
(iii) at the time of  prepayment of  Eurodollar  Loans  pursuant to this Section
4.01 on any date  other  than the last  day of the  Interest  Period  applicable
thereto,  the Borrower shall pay the amounts required  pursuant to Section 1.11;
and (iv) each  prepayment  pursuant  to this  Section  4.01(a) in respect of any
Loans made  pursuant to a Borrowing  shall be applied pro rata among such Loans,
provided that at the  Borrower's  election in connection  with any prepayment of
Revolving Loans pursuant to this Section 4.01(a),  such prepayment shall not, so
long as no Default or Event of Default then exists,  be applied to any Revolving
Loan of a Defaulting Lender.

     (b) In the event of a refusal by a Lender to  consent  to certain  proposed
changes,  waivers,  discharges or  terminations  with respect to this  Agreement
which have been approved by the Required Lenders as (and to the extent) provided
in Section  13.12(b),  the Borrower may, upon five Business  Days' prior written
notice to the  Administrative  Agent at the  Notice  Office  (which  notice  the
Administrative  Agent shall promptly  transmit to each of the Lenders) repay all

                                       20
<PAGE>

Loans, together with accrued and unpaid interest,  Fees, and other amounts owing
to such Lender in  accordance  with,  and subject to the  requirements  of, said
Section  13.12(b) so long as (I) all  Commitments  of such Lender are terminated
concurrently  with such  repayment  pursuant  to Section  3.02(b) (at which time
Schedule I shall be deemed  modified to reflect the changed  Commitments),  (II)
such  Lender's  RL  Percentage  of all  outstanding  Letters  of  Credit is cash
collateralized  in a manner  satisfactory  to the  Administrative  Agent and the
Issuing Lender and (III) the consents,  if any,  required under Section 13.12(b)
in connection with the repayment pursuant to this clause (b) have been obtained.

     4.02.  Mandatory  Repayments.  (a) On any day on  which  the sum of (I) the
aggregate  outstanding  principal  amount of all  Revolving  Loans (after giving
effect  to all  other  repayments  thereof  on such  date),  (II) the  aggregate
outstanding  principal amount of all Swingline Loans (after giving effect to all
other  repayments  thereof on such date) and (III) the  aggregate  amount of all
Letter of Credit  Outstandings  exceeds the Total  Revolving Loan  Commitment at
such time,  the  Borrower  shall  prepay on such day the  principal of Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are  outstanding,  Revolving Loans in an amount equal to such excess.  If,
after giving effect to the  prepayment of all  outstanding  Swingline  Loans and
Revolving  Loans,  the  aggregate  amount of the  Letter of Credit  Outstandings
exceeds the Total Revolving Loan Commitment at such time, the Borrower shall pay
to the Administrative  Agent at the Payment Office on such day an amount of cash
and/or  Cash  Equivalents  equal to the  amount of such  excess (up to a maximum
amount  equal to the  Letter of Credit  Outstandings  at such  time),  such cash
and/or  Cash  Equivalents  to be held as  security  for all  obligations  of the
Borrower to the Issuing  Lender and the Lenders  hereunder in a cash  collateral
account to be established by the Administrative Agent.

     (b) In addition to any other mandatory  repayments pursuant to this Section
4.02, on the date on which the Borrower receives the Excess Inventory Refund, an
amount  equal to 100% of such Excess  Inventory  Refund shall be applied on such
date as a mandatory  prepayment of the principal of Swingline  Loans and,  after
all  Swingline  Loans  have  been  repaid in full or if no  Swingline  Loans are
outstanding,  Revolving  Loans in an amount equal to such excess.  If the Excess
Refund Amount  exceeds the amount of outstanding  Swingline  Loans and Revolving
Loans, the Borrower shall pay to the Administrative  Agent at the Payment Office
on such day an amount of cash  and/or  Cash  Equivalents  equal to the amount of
such excess (up to a maximum  amount equal to the Letter of Credit  Outstandings
at such time),  such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Lender and the Lenders hereunder in a
cash collateral  account to be established by and under the dominion and control
of the  Administrative  Agent.  To the extent that the Excess  Inventory  Refund
exceeds the sum of (i) the  aggregate  principal  amount of Swingline  Loans and
Revolving  Loans  then   outstanding  and  (ii)  the  amount  required  to  cash
collateralize  the  then  outstanding  Letters  of  Credit  as  provided  in the
immediately  preceding  sentence,  such  excess  shall be applied as a mandatory
repayment of Term Loans in accordance with the  requirements of Sections 4.02(h)
and (i).

     (c) In addition to the mandatory  repayments pursuant to this Section 4.02,
if on the  Term  Loan  Satisfaction  Date  the  aggregate  principal  amount  of
outstanding Revolving Loans and Swingline Loans exceeds $5,000,000, the Borrower
shall make a mandatory repayment of outstanding Revolving Loans and/or Swingline
Loans in an amount equal to such excess in accordance  with the  requirements of
Section 4.02(h) and (i).

                                       21
<PAGE>

     (d) In addition to any other mandatory  repayments pursuant to this Section
4.02,  on each  date on or after  the  Initial  Borrowing  Date  upon  which the
Borrower or any of its Subsidiaries  receives any cash proceeds from any capital
contribution  or any sale or issuance of its equity,  an amount equal to 100% of
the Net Equity  Proceeds  of such  capital  contribution  or sale or issuance of
equity  shall be applied on such date as a mandatory  repayment  of principal of
outstanding  Loans in accordance with the  requirements of Sections  4.02(h) and
(i).

     (e) In addition to any other mandatory  repayments pursuant to this Section
4.02,  on each  date on or after  the  Initial  Borrowing  Date  upon  which the
Borrower or any of its Subsidiaries receives any cash proceeds from any issuance
or incurrence by the Borrower or any of its  Subsidiaries  of  Indebtedness  for
borrowed  money  (other than  Indebtedness  for borrowed  money  permitted to be
incurred pursuant to Section 9.04 as in effect on the Effective Date), an amount
equal  to  100%  of the  Net  Debt  Proceeds  of the  respective  incurrence  of
Indebtedness shall be applied on such date as a mandatory repayment of principal
of outstanding Loans in accordance with the requirements of Sections 4.02(h) and
(i).

     (f) In addition to any other mandatory  repayments pursuant to this Section
4.02,  on each  date on or after  the  Initial  Borrowing  Date  upon  which the
Borrower or any of its  Subsidiaries  receives any cash  proceeds from any Asset
Sale,  an  amount  equal to 100% of the Net  Sale  Proceeds  therefrom  shall be
applied on such date as a mandatory  repayment of principal of outstanding Loans
in  accordance  with the  requirements  of Sections  4.02(h) and (i);  provided,
however,  that with respect to no more than  $1,000,000 in the aggregate of cash
proceeds  from Asset  Sales in any  fiscal  year of the  Borrower,  the Net Sale
Proceeds  therefrom  shall not be required to be so applied on such date so long
as no Default  and no Event of Default  then  exists and such Net Sale  Proceeds
shall be used to purchase assets (other than working capital) used or to be used
in the  businesses  permitted  pursuant to Section 9.14 within 90 days following
the date of such Asset Sale, and provided further, that if all or any portion of
such Net Sale  Proceeds not required to be so applied as provided  above in this
Section 4.02(e) are not so reinvested within such 90-day period (or such earlier
date,  if any, as the  Borrower or the  relevant  Subsidiary  determines  not to
reinvest the Net Sale Proceeds  from such Asset Sale as set forth  above),  such
remaining  portion  shall be  applied  on the last day of such  period  (or such
earlier  date,  as the case may be) as provided  above in this  Section  4.02(f)
without regard to the preceding proviso.

     (g) In addition to any other mandatory  repayments pursuant to this Section
4.02,  within 10 days following each date on or after the Initial Borrowing Date
upon which the Borrower or any of its  Subsidiaries  receives any cash  proceeds
from any Recovery Event (other than Recovery Events where the Net Recovery Event
Proceeds therefrom do not exceed $1,000,000), an amount equal to 100% of the Net
Recovery  Event  Proceeds from such Recovery  Event shall be applied within such
ten-day  period as a mandatory  repayment of principal of  outstanding  Loans in
accordance with the requirements of Sections 4.02(h) and (i); provided, however,
that so long as no Default or Event of Default then exists and such Net Recovery
Event Proceeds do not exceed $1,000,000,  such Net Recovery Event Proceeds shall
not be required to be so applied  within such ten-day  period to the extent that
the Borrower has delivered a certificate to the Administrative Agent within such
ten-day  period  stating that such Net Recovery  Event Proceeds shall be used to
replace  or  restore  any  properties  or assets in  respect  of which  such Net

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<PAGE>

Recovery  Event  Proceeds  were paid within 180 days  following  the date of the
receipt of such Net Recovery Event Proceeds (which  certificate  shall set forth
the  estimates  of the Net  Recovery  Event  Proceeds  to be so  expended);  and
provided further, that if all or any portion of such Net Recovery Event Proceeds
not required to be so applied pursuant to the preceding  proviso are not so used
within  180 days  after  the date of the  receipt  of such  Net  Recovery  Event
Proceeds  (or  such  earlier  date,  if any,  as the  Borrower  or the  relevant
Subsidiary  determines not to reinvest the Net Recovery Event Proceeds  relating
to such Recovery  Event as set forth  above),  such  remaining  portion shall be
applied on the last day of such period (or such  earlier  date,  as the case may
be) as provided  above in this Section  4.02(g)  without regard to the preceding
proviso.

     (h) All repayments of Loans pursuant to Section  4.02(d),  (e), (f) and (g)
shall be applied first to the  prepayment of Term Loans and after all Term Loans
shall have been paid in full to the prepayment of Swingline  Loans and after all
Swingline  Loans shall have been repaid in full to the  prepayment  of Revolving
Loans. All prepayments of Loans of a Tranche pursuant to this Section 4.02 shall
be applied pro rata to the Loans in such Tranche.

     (i) With respect to each  repayment of Loans required by this Section 4.02,
the Borrower may  designate the Types of Loans of the  respective  Tranche which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings of the respective  Tranche  pursuant to which such  Eurodollar  Loans
were made,  provided that:  (i) repayments of Eurodollar  Loans pursuant to this
Section 4.02 may only be made on the last day of an Interest  Period  applicable
thereto  unless all  Eurodollar  Loans of the  respective  Tranche with Interest
Periods ending on such date of required repayment and all Base Rate Loans of the
respective  Tranche have been paid in full;  (ii) if any repayment of Eurodollar
Loans  made  pursuant  to  a  single  Borrowing  shall  reduce  the  outstanding
Eurodollar  Loans made  pursuant  to such  Borrowing  to an amount less than the
Minimum   Borrowing  Amount   applicable   thereto,   such  Borrowing  shall  be
automatically  converted  into a Borrowing  of Base Rate  Loans;  and (iii) each
repayment  of any Loans made  pursuant to a Borrowing  shall be applied pro rata
among such Loans.  In the absence of a designation  by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.

     (j) In addition to any other mandatory  repayments pursuant to this Section
4.02,  (i) all then  outstanding  Term Loans shall be repaid in full on the Term
Loan Maturity Date, (ii) all then outstanding Revolving Loans shall be repaid in
full on the Revolving Loan Maturity Date, (iii) all then  outstanding  Swingline
Loans shall be repaid in full on the  Swingline  Expiry Date and (iv) unless the
Required Lenders otherwise agree in writing, all then outstanding Loans shall be
repaid in full on the date on which a Change of Control occurs.

     4.03.  Method  and  Place of  Payment.  Except  as  otherwise  specifically
provided  herein,  all payments under this Agreement and under any Note shall be
made to the  Administrative  Agent for the  account  of the  Lender  or  Lenders
entitled  thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in  Dollars  in  immediately  available  funds at the  Payment
Office.  Whenever  any payment to be made  hereunder  or under any Note shall be
stated  to be due on a day which is not a  Business  Day,  the due date  thereof
shall be extended  to the next  succeeding  Business  Day and,  with  respect to
payments of principal,  interest shall be payable at the applicable  rate during
such extension.

     4.04.  Net Payments.  (a) All payments  made by the Borrower  hereunder and
under any Note  will be made  without  setoff,  counterclaim  or other  defense.
Except as provided in Section  4.04(b),  all such payments will be made free and

                                       23
<PAGE>

clear of, and without deduction or withholding for, any present or future taxes,
levies,  imposts,  duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political  subdivision or
taxing  authority  thereof  or  therein  with  respect  to  such  payments  (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Lender pursuant to the laws
of the  jurisdiction  in which it is organized or the  jurisdiction in which the
principal  office or applicable  lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties, expenses or similar
liabilities with respect to such non-excluded taxes,  levies,  imposts,  duties,
fees,  assessments  or other  charges  (all  such  non-excluded  taxes,  levies,
imposts,   duties,  fees,   assessments  or  other  charges  being  referred  to
collectively  as "Taxes").  If any Taxes are so levied or imposed,  the Borrower
agrees to pay the full amount of such Taxes, and such additional  amounts as may
be  necessary so that every  payment of all amounts due under this  Agreement or
under any Note,  after  withholding or deduction for or on account of any Taxes,
will not be less than the amount  provided  for  herein or in such Note.  If any
amounts are payable in respect of Taxes pursuant to the preceding sentence,  the
Borrower  agrees to  reimburse  each  Lender,  upon the written  request of such
Lender,  for taxes  imposed on or  measured  by the net income or net profits of
such  Lender  pursuant to the laws of the  jurisdiction  in which such Lender is
organized or in which the principal office or applicable  lending office of such
Lender is  located  or under  the laws of any  political  subdivision  or taxing
authority of any such jurisdiction in which such Lender is organized or in which
the principal office or applicable  lending office of such Lender is located and
for any  withholding of taxes as such Lender shall  determine are payable by, or
withheld from,  such Lender,  in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding  sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to  applicable  law  certified  copies of tax receipts
evidencing  such payment by the Borrower.  The Borrower  agrees to indemnify and
hold harmless each Lender,  and reimburse  such Lender upon its written  request
(within  10 days of such  request),  for the  amount  of any  Taxes so levied or
imposed  and paid by such  Lender  whether or not such Taxes were  correctly  or
legally imposed or asserted by the relevant governmental authority.

     (b) Each Lender that is not a United States person (as such term is defined
in Section  7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees
to  deliver  to the  Borrower  and the  Administrative  Agent on or prior to the
Effective  Date or, in the case of a Lender that is an assignee or transferee of
an interest  under this Agreement  pursuant to Section 1.13 or 13.04(b)  (unless
the respective  Lender was already a Lender hereunder  immediately prior to such
assignment  or  transfer),  on the date of such  assignment  or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete  exemption  under
an  income  tax  treaty)  (or  successor  forms)  certifying  to  such  Lender's
entitlement  as  of  such  date  to a  complete  exemption  from  United  States
withholding  tax with  respect to payments to be made under this  Agreement  and
under any Note,  or (ii) if the  Lender is not a "bank"  within  the  meaning of
Section  881(c)(3)(A)  of the Code and cannot  deliver either  Internal  Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete  exemption  under
an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x)
a certificate  substantially in the form of Exhibit D (any such  certificate,  a
"Section  4.04(b)(ii)  Certificate")  and (y) two accurate and complete original
signed  copies of Internal  Revenue  Service  Form W-8BEN  (with  respect to the

                                       24
<PAGE>

portfolio  interest  exemption) (or successor form)  certifying to such Lender's
entitlement  as  of  such  date  to a  complete  exemption  from  United  States
withholding  tax with  respect to  payments  of  interest  to be made under this
Agreement and under any Note. In addition,  each Lender agrees that from time to
time after the Effective Date,  when a lapse in time or change in  circumstances
renders the  previous  certification  obsolete  or  inaccurate  in any  material
respect,  such Lender will deliver to the Borrower and the Administrative  Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form  W-8ECI,  Form  W-8BEN  (with  respect  to the  benefits  of any income tax
treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued  exemption  from or reduction in United  States  withholding  tax with
respect to payments  under this  Agreement  and any Note,  or such Lender  shall
immediately notify the Borrower and the Administrative Agent of its inability to
deliver any such Form or  Certificate,  in which case such  Lender  shall not be
required  to  deliver  any such Form or  Certificate  pursuant  to this  Section
4.04(b).  Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower  shall be  entitled,  to the extent it is  required to do so by law, to
deduct or withhold  income or similar taxes imposed by the United States (or any
political  subdivision  or taxing  authority  thereof or therein) from interest,
Fees or other amounts  payable  hereunder for the account of any Lender which is
not a United  States person (as such term is defined in Section  7701(a)(30)  of
the Code) for U.S.  Federal  income tax  purposes to the extent that such Lender
has not  provided to the  Borrower  U.S.  Internal  Revenue  Service  Forms that
establish a complete  exemption from such  deduction or withholding  and (y) the
Borrower shall not be obligated pursuant to Section 4.04(a) to gross-up payments
to be made to a Lender in  respect  of income or  similar  taxes  imposed by the
United  States if (I) such Lender has not  provided to the Borrower the Internal
Revenue  Service Forms required to be provided to the Borrower  pursuant to this
Section  4.04(b) or (II) in the case of a payment,  other  than  interest,  to a
Lender  described  in clause  (ii)  above,  to the extent that such Forms do not
establish a complete  exemption from withholding of such taxes.  Notwithstanding
anything to the  contrary  contained in the  preceding  sentence or elsewhere in
this  Section  4.04 and except as set forth in Section  13.04(b),  the  Borrower
agrees to pay any additional  amounts and to indemnify each Lender in the manner
set forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or  withholding)  in respect of any amounts  deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes that are effective  after the Effective Date in any applicable  law,
treaty,   governmental  rule,   regulation,   guideline  or  order,  or  in  the
interpretation thereof, relating to the deducting or withholding of such Taxes.

     SECTION 5. Conditions  Precedent to Credit Events on the Initial  Borrowing
Date.  The  obligation of each Lender to make Loans,  and the  obligation of the
Issuing  Lender to issue Letters of Credit,  on the Initial  Borrowing  Date, is
subject at the time of the making of such Loans or the  issuance of such Letters
of Credit to the satisfaction of the following conditions:

     5.01. Effective Date; Notes. On or prior to the Initial Borrowing Date, (i)
the Effective  Date shall have occurred and (ii) there shall have been delivered
to the  Administrative  Agent for the  account of each of the  Lenders  that has
requested same the appropriate  Term Note and/or  Revolving Note executed by the

                                       25
<PAGE>

Borrower and, if requested by the Swingline Lender,  the Swingline Note executed
by the Borrower, in each case in the amount,  maturity and as otherwise provided
herein.

     5.02.   Officer's   Certificate.   On  the  Initial   Borrowing  Date,  the
Administrative  Agent  shall have  received  a  certificate,  dated the  Initial
Borrowing  Date and  signed on behalf of the  Borrower  by the  Chairman  of the
Board, the Chief Executive  Officer,  the President or any Vice President of the
Borrower,  certifying  on behalf of the Borrower  that all of the  conditions in
Sections 5.05,  5.06,  5.07,  5.08,  5.09,  5.10,  5.11, 5.12 and 6.01 have been
satisfied on such date.

     5.03.   Opinions  of  Counsel.   On  the  Initial   Borrowing   Date,   the
Administrative  Agent  shall  have  received  from  Burke,   Warren,   MacKay  &
Serritella, P.C., special counsel to the Credit Parties, an opinion addressed to
the Administrative Agent, the Collateral Agent and each of the Lenders and dated
the Initial  Borrowing Date covering the matters set forth in Exhibit E and such
other  matters  incident  to  the  transactions   contemplated   herein  as  the
Administrative Agent may reasonably request.

     5.04. Corporate Documents;  Proceedings;  etc. (a) On the Initial Borrowing
Date,  the  Administrative  Agent shall have  received a  certificate  from each
Credit Party,  dated the Initial  Borrowing Date,  signed by the Chairman of the
Board, the Chief Executive Officer,  the President or any Vice President of such
Credit Party,  and attested to by the  Secretary or any  Assistant  Secretary of
such  Credit  Party,  in the  form of  Exhibit  F with  appropriate  insertions,
together with copies of the certificate or articles of incorporation and by-laws
(or equivalent  organizational  documents),  as applicable, of such Credit Party
and the  resolutions of such Credit Party referred to in such  certificate,  and
each of the foregoing  shall be in form and substance  reasonably  acceptable to
the Administrative Agent.

     (b) On the Initial  Borrowing Date, all corporate and legal proceedings and
all instruments and agreements in connection with the transactions  contemplated
by this Agreement and the other  Documents  shall be reasonably  satisfactory in
form and substance to the  Administrative  Agent, and the  Administrative  Agent
shall have  received all  information  and copies of all  documents  and papers,
including  records  of  corporate  proceedings,   governmental  approvals,  good
standing certificates and bring-down telegrams or facsimiles,  if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents  and papers where  appropriate  to be  certified by proper  corporate,
limited liability company or governmental authorities.

     5.05.  Employee  Benefit  Plans;   Shareholders'   Agreements;   Management
Agreements; Employment Agreements; Non-Compete Agreements; Collective Bargaining
Agreements;  Tax Sharing Agreements;  Existing  Indebtedness  Agreements.  On or
prior to the Initial  Borrowing  Date,  there shall have been  delivered  to the
Administrative Agent true and correct copies of the following documents:

     (i) all Plans (and for each Plan that is required to file an annual  report
on Internal  Revenue  Service Form  5500-series,  a copy of the most recent such
report (including,  to the extent required,  the related financial and actuarial
statements  and  opinions  and  other  supporting  statements,   certifications,
schedules and information),  and for each Plan that is a "single-employer plan,"
as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial
valuation  therefor) and a summary or description of any other "employee benefit

                                       26
<PAGE>

plans," as defined in Section 3(3) of ERISA, and a summary or description of any
other material  agreements,  plans or  arrangements,  with or for the benefit of
current or former  employees of the Borrower or any of its Subsidiaries or ERISA
Affiliates  (provided  that  the  foregoing  shall  apply  in  the  case  of any
multiemployer  plan,  as  defined in Section  4001(a)(3)  of ERISA,  only to the
extent that any document described therein is in the possession of the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate,  or reasonably  available
thereto  from the  sponsor  or  trustee  of any such  Plan)  (collectively,  the
"Employee Benefits Plans");

     (ii) all agreements entered into by the Borrower or any of its Subsidiaries
governing  the  terms  and  relative  rights  of its  equity  interests  and any
agreements  entered  into by its  shareholders  relating to any such entity with
respect to its equity interests (collectively, the "Shareholders' Agreements");

     (iii) all agreements with members of, or with respect to, the management of
the Borrower or any of its Subsidiaries which the Borrower  reasonably  believes
to be  material  to  its or any of  its  Subsidiaries'  business  or  operations
(collectively, the "Management Agreements");

     (iv) all employment  agreements  entered into by the Borrower or any of its
Subsidiaries which the Borrower reasonably believes to be material to its or any
of its  Subsidiaries'  business or  operations  (collectively,  the  "Employment
Agreements");

     (v) all non-compete  agreements  entered into by the Borrower or any of its
Subsidiaries  which  restrict  the  activities  of  the  Borrower  or any of its
Subsidiaries       (collectively,       the      "Non-Compete      Agreements");

     (vi) all  collective  bargaining  agreements  applying  or  relating to any
employee of the Borrower or any of any of its  Subsidiaries  (collectively,  the
"Collective Bargaining Agreements");

     (vii) all tax sharing,  tax allocation and other similar agreements entered
into by the Borrower or any of its Subsidiaries (collectively,  the "Tax Sharing
Agreements"); and

     (viii)  all  agreements  evidencing  or  relating  to  Indebtedness  of the
Borrower or any of its Subsidiaries  which is to remain outstanding after giving
effect to the Transaction (the "Existing Indebtedness Agreements");

all of  which  Employee  Benefit  Plans,  Shareholders'  Agreements,  Management
Agreements, Employment Agreements, Non-Compete Agreements, Collective Bargaining
Agreements, Tax Sharing Agreements and Existing Indebtedness Agreements shall be
in form and substance  reasonably  satisfactory to the Administrative  Agent and
shall be in full force and effect on the Initial Borrowing Date.

     5.06.  Consummation  of the  Acquisition.  (a) On or prior  to the  Initial
Borrowing Date, there shall have been delivered to the Administrative Agent true
and correct copies of the Acquisition Agreement,  certified as true and complete
by an officer of the Borrower, and all other Acquisition Documents, all of which

                                       27
<PAGE>

shall be in form and substance  reasonably  satisfactory  to the  Administrative
Agent.  The  Acquisition  Agreement shall be in full force and effect and all of
the conditions  precedent to the consummation of the Acquisition as set forth in
the Acquisition Agreement shall have been satisfied (and not waived, except with
consent of the Administrative  Agent and the Required Lenders) to the reasonable
satisfaction  of the  Administrative  Agent.  The  Acquisition  shall  have been
consummated  in  accordance  with the terms and  conditions  of the  Acquisition
Agreement and all applicable laws.

     (b) On or prior to the  Initial  Borrowing  Date,  there  shall  have  been
delivered  to  the   Administrative   Agent  true  and  correct  copies  of  the
Distributorship  Agreement,  certified as true and complete by an officer of the
Borrower,  which  Distributorship  Agreement  shall  be in  form  and  substance
reasonably   satisfactory  to  the  Administrative  Agent.  The  Distributorship
Agreement shall be in full force and effect and all of the conditions  precedent
to the effectiveness of the Distributorship  Agreement shall have been satisfied
(and not  waived,  except  with  consent  of the  Administrative  Agent  and the
Required Lenders) to the reasonable satisfaction of the Administrative Agent.

     (c) On or prior to the  Initial  Borrowing  Date,  there  shall  have  been
delivered to the  Administrative  Agent true and correct copies of the Trademark
Purchase and  Assignment  Agreement  which shall be in the form delivered to the
Administrative  Agent  prior to the  Initial  Borrowing  Date,  with any changes
thereto or waivers of the terms thereof to be in form and  substance  reasonably
satisfactory to the Administrative  Agent. The Trademark Purchase and Assignment
Agreement shall be in full force and effect, and all of the conditions precedent
to the  effectiveness of the Trademark  Purchase and Assignment  Agreement shall
have been satisfied (and not waived,  except with consent of the  Administrative
Agent  and  the  Required  Lenders)  to  the  reasonable   satisfaction  of  the
Administrative Agent..

     5.07. Adverse Change,  Approvals.  (a) On or prior to the Initial Borrowing
Date, nothing shall have occurred (and neither the Administrative  Agent nor any
Lender shall have become aware of any facts or conditions not previously  known)
which the Administrative  Agent or the Required Lenders shall determine has had,
or could reasonably be expected to have, (i) a Material Adverse Effect or (ii) a
material adverse effect on the Transaction.

     (b) On or prior to the Initial  Borrowing Date, all necessary  governmental
(domestic and foreign) and third party  approvals  and/or consents in connection
with  the  Transaction,  the  other  transactions  contemplated  hereby  and the
granting of Liens under the Credit Documents shall have been obtained and remain
in effect,  and all applicable  waiting  periods with respect thereto shall have
expired  without  any  action  being  taken  by any  competent  authority  which
restrains,   prevents  or  imposes   materially   adverse  conditions  upon  the
consummation  of the Transaction or the other  transactions  contemplated by the
Documents or otherwise  referred to herein or therein.  On the Initial Borrowing
Date, there shall not exist any judgment,  order,  injunction or other restraint
issued  or filed or a  hearing  seeking  injunctive  relief  or other  restraint
pending or notified  prohibiting or imposing  materially adverse conditions upon
the  Transaction  or the other  transactions  contemplated  by the  Documents or
otherwise  referred  to herein or  therein.

     5.08.  Litigation.  On the Initial  Borrowing  Date,  no  litigation by any
entity (private or governmental)  shall be pending or threatened with respect to
(i)  the  Transaction,   this  Agreement,   any  other  Document  or  any  other

                                       28
<PAGE>

documentation  executed in connection herewith and therewith or the transactions
contemplated hereby and thereby, or (ii) which any Agent or the Required Lenders
shall  reasonably  determine has had, or could reasonably be expected to have, a
Material Adverse Effect.

     5.09. Subsidiaries Guaranty. On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly  authorized,  executed and delivered the  Subsidiaries
Guaranty  in  the  form  of  Exhibit  L  (as  amended,  modified,   restated  or
supplemented from time to time the "Subsidiaries Guaranty"),  guarantying all of
the  obligations  of the  Borrower  as  more  fully  provided  therein,  and the
Subsidiaries Guaranty shall be in full force and effect.

     5.10.  Pledge  Agreement.  On the Initial Borrowing Date, each Credit Party
shall have duly  authorized,  executed and delivered the Pledge Agreement in the
form of Exhibit G (as amended,  modified or supplemented  from time to time, the
"Pledge Agreement") and shall have delivered to the Collateral Agent, as Pledgee
thereunder,  all of the Pledge Agreement Collateral, if any, referred to therein
and then  owned  by such  Credit  Party,  (x)  endorsed  in blank in the case of
promissory notes constituting Pledge Agreement  Collateral and (y) together with
executed and undated  endorsements  for transfer in the case of equity interests
constituting certificated Pledge Agreement Collateral,  along with evidence that
all other actions  necessary  or, in the  reasonable  opinion of the  Collateral
Agent,  desirable,  to perfect the security interests purported to be created by
the Pledge  Agreement have been taken and the Pledge  Agreement shall be in full
force and effect.

     5.11. Security Agreement.  On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Security Agreement in the
form of Exhibit H (as amended,  modified or supplemented  from time to time, the
"Security  Agreement")  covering all of such Credit Party's  Security  Agreement
Collateral, together with:

     (i)  proper  financing  statements  (Form  UCC-1 or the  equivalent)  fully
executed for filing under the UCC or other  appropriate  filing  offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the Collateral
Agent,  desirable,  to perfect the security interests purported to be created by
the Security Agreement;

     (ii) certified  copies of requests for information or copies (Form UCC-11),
or  equivalent  reports as of a recent  date,  listing all  effective  financing
statements that name the Borrower or any of its  Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (i) above and in such other
jurisdictions  in which  Collateral  is located on the Initial  Borrowing  Date,
together with copies of such other  financing  statements that name the Borrower
or any of its  Subsidiaries  as  debtor  (none of which  shall  cover any of the
Collateral except (x) to the extent  evidencing  Permitted Liens or (y) those in
respect of which the Collateral Agent shall have received termination statements
(Form UCC-3) or such other termination  statements as shall be required by local
law fully executed for filing); and

     (iii)  evidence  that all other  actions  necessary  or, in the  reasonable
opinion of the Collateral  Agent,  desirable to perfect and protect the security
interests purported to be created by the Security Agreement have been taken, and
the Security Agreement shall be in full force and effect.

                                       29
<PAGE>

     5.12.  Existing Credit Agreement.  On the Initial Borrowing Date, the total
commitments  in  respect  of the  Existing  Credit  Agreement  shall  have  been
terminated,  and all loans and  notes  (together  with  interest  thereon)  with
respect  thereto  shall have been repaid in full,  all letters of credit  issued
thereunder shall have been terminated and all other amounts (including premiums)
owing pursuant to the Existing  Credit  Agreement shall have been repaid in full
and all documents in respect of the Existing Credit Agreement and all guarantees
with respect  thereto shall have been terminated  (except as to  indemnification
and similar provisions, which may survive to the extent provided therein) and be
of no further force and effect. In addition, all security interests in and Liens
on the assets of the  Borrower  and its  Subsidiaries  created  pursuant  to any
security documentation relating to the Existing Credit Agreement shall have been
terminated  and  released,  and all such assets shall have been  returned to the
Borrower  or such  Subsidiary.  The  Administrative  Agent  shall have  received
evidence that the matters set forth in this Section 5.12 have been  satisfied on
such date.

     5.13. Financial Statements; Pro Forma Balance Sheet; Projections. (a) On or
prior to the  Initial  Borrowing  Date,  the  Administrative  Agent  shall  have
received true and correct copies of the historical financial statements, the Pro
Forma  Financials and the Projections  referred to in Sections  7.05(a) and (d),
which  historical  financial  statements,  pro forma  financial  statements  and
Projections  shall be in form and substance  satisfactory to the  Administrative
Agent and the Required Lenders.

     (b) No later than five Business Days prior to the Initial  Borrowing  Date,
the  Administrative  Agent shall have  received  true and correct  copies of the
audited,  unaudited  and pro  forma  consolidated  financial  statements  of the
Borrower and its  Subsidiaries  (giving effect to the  Acquisition and any other
significant  transactions  in the case of said pro forma  financial  statements)
meeting the  requirements of Regulation S-X for  registration  statements (as if
such a  registration  statement  for a debt  issuance  of  the  Borrower  became
effective  on  the  Initial   Borrowing  Date)  on  Form  S-1  (the  "Pro  Forma
Financials") as at and for the twelve months ended December 31, 2001,  which pro
forma financial  statements shall  demonstrate,  to the  Administrative  Agent's
reasonable  satisfaction,  that (x) the pro forma  Consolidated  EBITDA  for the
Borrower and its  Subsidiaries  the twelve months ended  December 31, 2001 is at
least $52  million,  and (y) the other  covenants  described  herein  shall been
satisfied  on the Initial  Borrowing  Date and will be  satisfied on a pro forma
basis after giving effect to the Transaction.

     (c) No later than five Business Days before the Initial Borrowing Date, and
without   duplication  of  the   requirements  of  preceding   clause  (b),  the
Administrative Agent shall have received the Pro Forma Financials (giving effect
to the Acquisition and any other significant  transactions  occurring during the
three-year period hereinafter referenced) for the three consecutive fiscal years
ended  immediately  prior  to  the  Initial  Borrowing  Date,  which  Pro  Forma
Financials  shall  be  reported  on  to  the  reasonable   satisfaction  of  the
Administrative  Agent by  Arthur  Andersen  and  shall be in form and  substance
satisfactory to the Administrative Agent and the Required Lenders.

     (d)  The  Administrative   Agent  shall  have  received  interim  financial
statements for each month ended after the date of the last  available  quarterly
financial statements and prior to Initial Borrowing Date.

                                       30
<PAGE>

     5.14.  Updated  Information for Sular and Furandantin.  The  Administrative
Agent  shall  have  received  and  be  satisfied  with  the  updated   financial
information relating to Sular and Furandantin including, without limitation, net
revenues and prescription information.

     5.15. Business.  During the period from the date hereof through the Initial
Borrowing  Date,  the Borrower and its  Subsidiaries'  business  shall have been
operated in the ordinary  course and there shall not have been sold any material
assets of such business other than in the ordinary  course and  consistent  with
past practice.

     5.16.  Corporate and Capital Structure.  On the Initial Borrowing Date, all
agreements relating to, and the corporate and capital structure of, the Borrower
and its Subsidiaries,  and all organizational  documents of the Borrower and its
Subsidiaries,  in each case as the same will exist  after  giving  effect to the
consummation  of  the  Transaction,  shall  be  reasonably  satisfactory  to the
Administrative Agent and the Required Lenders.

     5.17.  Solvency  Certificate;   Insurance  Certificates.   On  the  Initial
Borrowing    Date,    the    Administrative    Agent   shall   have    received:

     (i) a solvency certificate from the chief financial officer of the Borrower
in the form of Exhibit I; and

     (ii)  certificates of insurance  complying with the requirements of Section
8.03 for the business and  properties of the Borrower and its  Subsidiaries,  in
form and  substance  reasonably  satisfactory  to the  Administrative  Agent and
naming the Collateral  Agent as an additional  insured and/or as loss payee, and
stating  that such  insurance  shall not be  canceled  or the amount of coverage
thereunder  materially reduced without at least 30 days' prior written notice by
the insurer to the Collateral Agent.

     5.18.  Fees,  etc. On the Initial  Borrowing  Date, the Borrower shall have
paid to the  Administrative  Agent and each Lender all costs,  fees and expenses
(including,  without  limitation,  reasonable legal fees and expenses) and other
compensation  contemplated  hereby payable to the  Administrative  Agent or such
Lender to the extent then due.

     SECTION 6.  Conditions  Precedent to All Credit  Events.  The obligation of
each Lender to make Loans (including Loans made on the Initial  Borrowing Date),
and the obligation of the Issuing  Lender to issue Letters of Credit  (including
Letters of Credit issued on the Initial Borrowing Date), is subject, at the time
of each such Credit Event (except as hereinafter indicated), to the satisfaction
of the following conditions:

     6.01.  Default;  Representations  and Warranties.  At the time of each such
Credit  Event and also after  giving  effect  thereto  (i) there  shall exist no
Default  or  Event  of  Default  and (ii)  all  representations  and  warranties
contained  herein and in the other Credit Documents shall be true and correct in
all material  respects with the same effect as though such  representations  and
warranties  had been made on the date of such Credit Event (it being  understood
and agreed that any  representation or warranty which by its terms is made as of
a  specified  date shall be  required  to be true and  correct  in all  material
respects only as of such specified date).

     6.02.  Notice of  Borrowing;  Letter of  Credit  Request.  (a) Prior to the
making  of each Loan  (other  than a  Swingline  Loan or a  Revolving  Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received

                                       31
<PAGE>

a Notice of Borrowing meeting the requirements of Section 1.03(a).  Prior to the
making of each  Swingline  Loan,  the  Swingline  Lender shall have received the
notice referred to in Section 1.03(b)(i).

     (b) Prior to the  issuance  of each  Letter of Credit,  the  Administrative
Agent and the  Issuing  Lender  shall have  received a Letter of Credit  Request
meeting the requirements of Section 2.03(a).

     6.03. No Excess Cash.  The  obligation of each Lender with a Revolving Loan
Commitment to make Revolving  Loans shall be subject to the  satisfaction of the
condition  that  at the  time  of each  such  making  of a  Revolving  Loan  and
immediately after giving effect thereto the Borrower and its Subsidiaries  shall
not hold cash and Cash  Equivalents in an aggregate  amount (after giving effect
to the incurrence of such Credit Event and the application of proceeds therefrom
and any other  cash or Cash  Equivalents  on hand (to the extent  such  proceeds
and/or  other cash or Cash  Equivalents  are  actually  utilized by the Borrower
and/or any other Subsidiary of the Borrower on the respective date of incurrence
of the respective  Credit Event for a permitted purpose other than an investment
in Cash Equivalents)) in excess of $5,000,000.

     The  acceptance  of the  benefits of each Credit  Event shall  constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Lenders that all the  conditions  specified in Section 5 (with respect to
Credit Events on the Initial Borrowing Date) and in this Section 6 (with respect
to Credit Events on or after the Initial  Borrowing Date) and applicable to such
Credit  Event are  satisfied  as of that time.  All of the Notes,  certificates,
legal  opinions and other  documents and papers  referred to in Section 5 and in
this  Section  6,  unless  otherwise  specified,   shall  be  delivered  to  the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Notes, in sufficient  counterparts or copies for each of the
Lenders  and  shall  be in form and  substance  reasonably  satisfactory  to the
Administrative Agent and the Required Lenders.

     SECTION 7. Representations,  Warranties and Agreements.  In order to induce
the Lenders to enter into this  Agreement  and to make the Loans,  and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes the
following representations,  warranties and agreements, in each case after giving
effect to the Transaction, all of which shall survive the execution and delivery
of this  Agreement and the Notes and the making of the Loans and the issuance of
the Letters of Credit,  with the occurrence of each Credit Event on or after the
Initial Borrowing Date being deemed to constitute a representation  and warranty
that the  matters  specified  in this  Section  7 are true  and  correct  in all
material  respects  on and as of the Initial  Borrowing  Date and on the date of
each  such  other  Credit  Event  (it  being  understood  and  agreed  that  any
representation  or warranty  which by its terms is made as of a  specified  date
shall be  required to be true and correct in all  material  respects  only as of
such specified date).

     7.01.  Organizational  Status.  Each  of  the  Borrower  and  each  of  its
Subsidiaries  (i)  is  a  duly  organized  and  validly  existing   corporation,
partnership or limited liability  company,  as the case may be, in good standing
under the laws of the jurisdiction of its organization,  (ii) has the corporate,
partnership or limited  liability  company power and authority,  as the case may
be, to own its  property  and assets and to transact the business in which it is

                                       32
<PAGE>

engaged  and  presently  proposes to engage and (iii) is duly  qualified  and is
authorized to do business and is in good standing in each jurisdiction where the
ownership,  leasing or  operation of its property or the conduct of its business
requires  such  qualifications  except for  failures to be so  qualified  which,
either  individually  or in the  aggregate,  could not reasonably be expected to
have a Material Adverse Effect.

     7.02. Power and Authority. Each Credit Party has the corporate, partnership
or  limited  liability  company  power  and  authority,  as the case may be,  to
execute,  deliver and perform the terms and  provisions of each of the Documents
to which it is party and has  taken  all  necessary  corporate,  partnership  or
limited  liability  company  action,  as the  case  may  be,  to  authorize  the
execution, delivery and performance by it of each of such Documents. Each Credit
Party has duly  executed  and  delivered  each of the  Documents  to which it is
party,  and each of such  Documents  constitutes  its legal,  valid and  binding
obligation  enforceable in accordance with its terms,  except to the extent that
the enforceability thereof may be limited by applicable bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws generally affecting creditors'
rights and by equitable principles  (regardless of whether enforcement is sought
in equity or at law).

     7.03. No Violation.  Neither the execution,  delivery or performance by any
Credit Party of the Documents to which it is a party,  nor compliance by it with
the terms and provisions thereof,  (i) will contravene any provision of any law,
statute,  rule or  regulation  or any order,  writ,  injunction or decree of any
court or governmental instrumentality,  (ii) will conflict with or result in any
breach  of any  of  the  terms,  covenants,  conditions  or  provisions  of,  or
constitute a default  under,  or result in the creation or imposition of (or the
obligation  to create or  impose)  any Lien  (except  pursuant  to the  Security
Documents)  upon any of the property or assets of any Credit Party or any of its
Subsidiaries  pursuant to the terms of any indenture,  mortgage,  deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which any Credit Party or any of its Subsidiaries is
a party or by which it or any its property or assets is bound or to which it may
be subject,  or (iii) will violate any provision of the  certificate or articles
of incorporation,  certificate of formation, limited liability company agreement
or by-laws (or  equivalent  organizational  documents),  as  applicable,  of any
Credit Party or any of its Subsidiaries.

     7.04. Approvals.  No order, consent,  approval,  license,  authorization or
validation of, or filing,  recording or registration  with (except for (x) those
that have otherwise  been obtained or made on or prior to the Initial  Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date and
(y) filings which are necessary to perfect the security  interests created under
the Security Documents, which filings will be made within ten days following the
Initial  Borrowing  Date),  or exemption by, any  governmental or public body or
authority, or any subdivision thereof, is required to be obtained or made by, or
on behalf of, any Credit  Party to  authorize,  or is required to be obtained or
made by,  or on  behalf  of,  any  Credit  Party  in  connection  with,  (i) the
execution,  delivery  and  performance  of any  Document  or (ii) the  legality,
validity, binding effect or enforceability of any such Document.

     7.05. Financial Statements;  Financial Condition;  Undisclosed Liabilities;
Projections.  (a)(i) The audited consolidated balance sheets of the Borrower and
its Subsidiaries  for its fiscal years ended on December 31, 1999,  December 31,
2000 and December 31, 2001,  respectively,  and the related audited consolidated
statements of income,  cash flows and  shareholders'  equity of the Borrower and
its Subsidiaries for its fiscal years ended on such dates,  copies of which have

                                       33
<PAGE>

been  furnished  to the Lenders  prior to the Initial  Borrowing  Date,  present
fairly in all  material  respects  the  consolidated  financial  position of the
Borrower  and its  Subsidiaries  at the  dates of such  balance  sheets  and the
consolidated  results of the operations of the Borrower and its Subsidiaries for
the periods covered thereby.  All interim monthly financial statements furnished
prior to the Initial  Borrowing Date pursuant to Section  5.13(d) present fairly
the consolidated  results of the operations of the Borrower and its Subsidiaries
for the periods  covered  thereby.  All of the  foregoing  historical  financial
statements have been prepared in accordance with generally  accepted  accounting
principles  consistently  applied  (except,  in the  case of the  aforementioned
interim  financial  statements,  for normal  year-end  audit  adjustment and the
absence of footnotes).

     (ii) The Pro Forma Financials of the Borrower for its fiscal years ended on
December 31, 1999,  December 31, 2000 and December 31, 2001, a copy of which has
been furnished to the Lenders prior to the Effective  Date,  presents  fairly in
all material respects the pro forma consolidated  financial position and results
of  operations  of the  Borrower  for such  twelve-month  period  and have  been
prepared in accordance with Regulation S-X of the Securities Act.

     (b) On and as of the Initial  Borrowing Date and after giving effect to the
Transaction  and to all  Indebtedness  (including  the Loans) being  incurred or
assumed and Liens created by the Credit Parties in connection  therewith (i) the
sum of the assets,  at a fair valuation,  of the Borrower on a stand-alone basis
and of the  Borrower  and its  Subsidiaries  taken as a whole will exceed  their
respective  debts,  (ii) each of the  Borrower  on a stand  alone  basis and the
Borrower  and its  Subsidiaries  taken as a whole have not  incurred  and do not
intend to incur,  and do not believe  that they will incur,  debts  beyond their
respective  ability  to pay such  debts as such  debts  mature,  and  (iii)  the
Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a
whole  will have  sufficient  capital  with which to  conduct  their  respective
businesses.  For purposes of this Section 7.05(b), "debt" means any liability on
a claim, and "claim" means (a) right to payment,  whether or not such a right is
reduced to  judgment,  liquidated,  unliquidated,  fixed,  contingent,  matured,
unmatured,  disputed, undisputed, legal, equitable, secured, or unsecured or (b)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment,  whether or not such  right to an  equitable  remedy is reduced to
judgment, fixed, contingent,  matured, unmatured,  disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances  existing at
such time,  represents  the amount that can  reasonably be expected to become an
actual or matured liability.

     (c) Except as fully disclosed in the December 31, 2001 financial statements
delivered  pursuant to Section 7.05(a),  there were as of the Initial  Borrowing
Date no liabilities  or  obligations  with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute,  accrued, contingent or
otherwise and whether or not due) which either individually or in the aggregate,
could  reasonably  be  expected  to be  material  to the  Borrower or any of its
Subsidiaries.  As of the  Initial  Borrowing  Date,  the  Borrower  knows  of no
reasonable basis for the assertion  against it or any of its Subsidiaries of any
liability or obligation of any nature  whatsoever that is not fully disclosed in
the December 31, 2001 financial statements delivered pursuant to Section 7.05(a)
or referred to in the immediately  preceding sentence which, either individually
or in the aggregate, could reasonably be expected to be material to the Borrower
or any of its Subsidiaries.

                                       34
<PAGE>

     (d) The Projections  delivered to the Administrative  Agent and the Lenders
prior to the  Initial  Borrowing  Date have been  prepared in good faith and are
based on reasonable  assumptions,  and there are no statements or conclusions in
the  Projections  which  are  based  upon or  include  information  known to the
Borrower to be  misleading  in any  material  respect or which fail to take into
account  material  information  known  to the  Borrower  regarding  the  matters
reported therein.  On the Initial Borrowing Date, the Borrower believes that the
Projections are reasonable and attainable,  it being  recognized by the Lenders,
however,  that projections as to future events are not to be viewed as facts and
that the actual results during the period or periods  covered by the Projections
may differ from the projected results.

     (e) After giving effect to the Transaction  (but for this purpose  assuming
that the  Transaction  and the related  financing had occurred prior to December
31, 2001), since December 31, 2001, there has been no Material Adverse Effect.

     7.06. Litigation. There are no actions, suits or proceedings pending or, to
the  best  knowledge  of  the  Borrower,  threatened  (i)  with  respect  to the
Transaction  or any Document or (ii) that could  reasonably be expected,  either
individually or in the aggregate, to have a Material Adverse Effect.

     7.07. True and Complete  Disclosure.  All factual  information  (taken as a
whole)   furnished   by  or  on  behalf  of  the  Borrower  in  writing  to  the
Administrative  Agent  or  any  Lender  (including,   without  limitation,   all
information  contained in the Documents)  for purposes of or in connection  with
this  Agreement,  the other  Credit  Documents or any  transaction  contemplated
herein or therein is, and all other such factual  information (taken as a whole)
hereafter  furnished  by  or on  behalf  of  the  Borrower  in  writing  to  the
Administrative  Agent or any Lender will be, true and  accurate in all  material
respects on the date as of which such  information is dated or certified and not
incomplete  by omitting  to state any fact  necessary  to make such  information
(taken as a whole) not misleading in any material  respect at such time in light
of the circumstances under which such information was provided.

     7.08.  Use of Proceeds;  Margin  Regulations.  (a) All proceeds of the Term
Loans  will be used by the  Borrower  to  finance  the  Acquisition  and to make
payments owing under the  Distributorship  Agreement and the Trademark  Purchase
and Assignment Agreement.

     (b) All proceeds of the  Revolving  Loans and the  Swingline  Loans will be
used for the working capital and general corporate  purposes of the Borrower and
its  Subsidiaries;  provided  that  up to,  but no  more  than,  $10,000,000  of
Revolving  Loans and Swingline  Loans in the aggregate may be used to effect the
Acquisition,  to make payments owing under the Distributorship Agreement and the
Trademark  Purchase and  Assignment  Agreement  and to pay the fees and expenses
related to the Transaction.

     (c) No part of any Credit Event (or the proceeds  thereof)  will be used to
purchase  or carry any  Margin  Stock or to extend  credit  for the  purpose  of
purchasing or carrying any Margin Stock.  Neither the making of any Loan nor the
use of the proceeds  thereof nor the  occurrence  of any other Credit Event will
violate or be  inconsistent  with the  provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.

     7.09.  Tax  Returns  and  Payments.  Each of the  Borrower  and each of its
Subsidiaries  has timely filed or caused to be timely filed (taking into account
applicable extensions of time to file) with the appropriate taxing authority all
federal  and state  income  tax  returns  and all other  material  tax  returns,

                                       35
<PAGE>

domestic and foreign (the "Returns") required to be filed by, or with respect to
the  income,  properties  or  operations  of,  the  Borrower  and/or  any of its
Subsidiaries.  The  Returns  accurately  reflect in all  material  respects  all
liability for taxes of the Borrower and its Subsidiaries for the periods covered
thereby.  Each of the Borrower and each of its  Subsidiaries  has paid all taxes
and  assessments  payable by it which have become due, other than those that are
being contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries in accordance with
generally accepted  accounting  principles.  There is no material action,  suit,
proceeding,  investigation, audit or claim now pending or, to the best knowledge
of the Borrower, threatened by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries.  As of the Initial Borrowing Date,  neither
the Borrower nor any of its Subsidiaries has entered into an agreement or waiver
or been requested to enter into an agreement or waiver  extending any statute of
limitations  relating to the payment or  collection  of taxes of the Borrower or
any of its Subsidiaries,  or is aware of any circumstances  that would cause the
taxable  years  or  other  taxable  periods  of  the  Borrower  or  any  of  its
Subsidiaries  not  to  be  subject  to  the  normally   applicable   statute  of
limitations. Neither the Borrower nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code.  Neither the Borrower nor any of its  Subsidiaries  has incurred,  nor
will any of them incur,  any  material  tax  liability  in  connection  with the
Transaction or any other transactions  contemplated  hereby (it being understood
that the representation contained in this sentence does not cover any future tax
liabilities  of the Borrower or any of its  Subsidiaries  arising as a result of
the operation of their businesses in the ordinary course of business).

     7.10.  Compliance  with ERISA.  Schedule  IV sets forth,  as of the Initial
Borrowing  Date,  the name of each  Plan.  Each Plan (and  each  related  trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws,  including,  without  limitation,  ERISA and the Code; each
Plan (and each related  trust,  if any) which is intended to be qualified  under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the  requirements of Sections 401(a)
and 501(a) of the Code; neither the Borrower nor any of its ERISA Affiliates has
ever  maintained or  contributed  to, or had any obligation to contribute to (or
borne any liability with respect to) any "employee pension benefit plan," within
the meaning of Section 3(2) of ERISA, that is a "multiemployer plan," within the
meaning of Section  3(37) of ERISA,  or that is subject to the  minimum  funding
standards of Section 412 of the Code or Section 302 of ERISA or subject to Title
IV of ERISA;  neither  the  Borrower  nor any of its ERISA  Affiliates  has ever
maintained or  contributed  to, or had any obligation to contribute to (or borne
any  liability  with respect to) any Foreign  Pension  Plan;  all  contributions
required to be made with  respect to a Plan have been timely  made;  neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred
any  material  liability  (including  any  indirect,   contingent  or  secondary
liability) to or on account of a Plan pursuant to Section 409,  502(i),  502(l),
515,  4204 or 4212 of ERISA or Section  4975 of the Code or expects to incur any
such material  liability under any of the foregoing sections with respect to any
Plan; no condition  exists which presents a material risk to the Borrower or any
Subsidiary  of the  Borrower  or any ERISA  Affiliate  of  incurring  a material
liability to or on account of a Plan  pursuant to the  foregoing  provisions  of
ERISA and the Code; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan  (other  than  routine  claims  for  benefits)  is  pending,   expected  or
threatened;  each group  health plan (as  defined in Section  607(1) of ERISA or

                                       36
<PAGE>

Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees  of the  Borrower,  any  Subsidiary  of  the  Borrower,  or any  ERISA
Affiliate has at all times been operated in  compliance  with the  provisions of
Part 6 of subtitle B of Title I of ERISA and Section  4980B of the Code,  except
for any failure to so comply which could not,  individually or in the aggregate,
reasonably be expected to result in a material  liability of the Borrower or any
Subsidiary  of the  Borrower;  no lien  imposed  under  the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA  Affiliate
exists or is likely to arise on account of any Plan;  and the  Borrower  and its
Subsidiaries  may cease  contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.

     7.11. The Security Documents.  (a) The provisions of the Security Agreement
are effective to create in favor of the Collateral  Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the Credit  Parties in the Security  Agreement  Collateral
described  therein,  and the  Collateral  Agent,  for the benefit of the Secured
Creditors,  has (or within 10 days  following  the Initial  Borrowing  Date will
have) a fully perfected  security  interest in all right,  title and interest in
all of the Security Agreement Collateral described therein,  subject to no other
Liens other than Permitted  Liens.  The recordation of (x) the Grant of Security
Interest  in U.S.  Patents  and (y)  the  Grant  of  Security  Interest  in U.S.
Trademarks in the respective  form attached to the Security  Agreement,  in each
case in the United States Patent and Trademark Office,  together with filings on
Form UCC-1 made  pursuant to the  Security  Agreement,  will  create,  as may be
perfected by such filings and recordation,  a perfected security interest in the
United States trademarks and patents covered by the Security Agreement,  and the
recordation  of the Grant of Security  Interest in U.S.  Copyrights  in the form
attached to the Security  Agreement  with the United  States  Copyright  Office,
together  with filings on Form UCC-1 made  pursuant to the  Security  Agreement,
will create,  as may be perfected by such filings and  recordation,  a perfected
security  interest  in the United  States  copyrights  covered  by the  Security
Agreement.

     (b) The security  interests  created under the Pledge Agreement in favor of
the  Collateral  Agent,  as Pledgee,  for the benefit of the Secured  Creditors,
constitute  perfected  security  interests  in the Pledge  Agreement  Collateral
described in the Pledge Agreement, subject to no security interests of any other
Person.  No filings or recordings  are required in order to perfect (or maintain
the  perfection  or priority  of) the security  interests  created in the Pledge
Agreement  Collateral under the Pledge Agreement other than with respect to that
portion of the Pledge Agreement  Collateral  constituting a "general intangible"
under the UCC.

     7.12. Properties.  All Real Property owned or leased by the Borrower or any
of its  Subsidiaries  as of the Initial  Borrowing  Date,  and the nature of the
interest  therein,  is correctly set forth in Schedule III. Each of the Borrower
and each of its  Subsidiaries  has good and  indefeasible  title to all material
properties  owned by it, including all material  property  reflected in the most
recent historical  balance sheets referred to in Section 7.05(a) (except as sold
or otherwise  disposed of since the date of such  balance  sheet in the ordinary
course of business or as  permitted  by the terms of this  Agreement),  free and
clear of all Liens, other than Permitted Liens.

                                       37
<PAGE>

     7.13. Capitalization. On the Initial Borrowing Date, the authorized capital
stock of the Borrower consists of 40,000,000 shares of common stock,  $0.001 par
value, of which 27,626,002  shares are issued and  outstanding.  All outstanding
shares of capital  stock of the Borrower  have been duly and validly  issued and
are fully paid and  non-assessable.  The Borrower does not have  outstanding any
capital  stock or other  securities  convertible  into or  exchangeable  for its
capital stock or any rights to subscribe for or to purchase,  or any options for
the purchase of, or any  agreement  providing  for the issuance  (contingent  or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.

     7.14.  Subsidiaries.  As of the Initial Borrowing Date, the Borrower has no
Subsidiaries  other than those  Subsidiaries  listed on Schedule  V.  Schedule V
correctly sets forth as of the Initial Borrowing Date, the percentage  ownership
(direct or  indirect)  of the  Borrower in each class of capital  stock or other
equity of its Subsidiaries and also identifies the direct owner thereof.

     7.15.  Compliance with Statutes,  etc. Each of the Borrower and each of its
Subsidiaries  is in compliance  with all applicable  statutes,  regulations  and
orders of, and all applicable  restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of  its  property   (including,   without   limitation,   applicable   statutes,
regulations,  orders and restrictions  relating to  environmental  standards and
controls),  except such  noncompliances as could not, either  individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

     7.16.  Investment  Company  Act.  Neither  the  Borrower  nor  any  of  its
Subsidiaries  is  an  "investment  company"  or a  company  "controlled"  by  an
"investment  company," within the meaning of the Investment Company Act of 1940,
as amended.

     7.17.  Public Utility Holdings Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding company" within the meaning of the Public Utility Holdings Company
Act of 1935, as amended.

     7.18.  Environmental  Matters.  (a)  Each of the  Borrower  and each of its
Subsidiaries  is in compliance  with all applicable  Environmental  Laws and the
requirements of any permits issued under such  Environmental  Laws. There are no
pending or, to the knowledge of the Borrower,  threatened  Environmental  Claims
against the  Borrower or any of its  Subsidiaries  or any Real  Property  owned,
leased or operated by the  Borrower or any of its  Subsidiaries  (including  any
such claim arising out of the  ownership,  lease or operation by the Borrower or
any of its Subsidiaries of any Real Property formerly owned,  leased or operated
by the  Borrower  or any of its  Subsidiaries  but no  longer  owned,  leased or
operated  by the  Borrower  or any of its  Subsidiaries).  There  are no  facts,
circumstances,  conditions  or  occurrences  with  respect  to the  business  or
operations  of the  Borrower or any of its  Subsidiaries,  or any Real  Property
owned, leased or operated by the Borrower or any of its Subsidiaries  (including
any Real Property  formerly owned,  leased or operated by the Borrower or any of
its Subsidiaries but no longer owned,  leased or operated by the Borrower or any
of  its  Subsidiaries)  or,  to the  knowledge  of the  Borrower,  any  property
adjoining  or  adjacent  to any such  Real  Property  that  could be  reasonably
expected (i) to form the basis of an Environmental Claim against the Borrower or

                                       38
<PAGE>

any of its  Subsidiaries or any Real Property  owned,  leased or operated by the
Borrower or any of its  Subsidiaries  or (ii) to cause any Real Property  owned,
leased or operated by the Borrower or any of its  Subsidiaries  to be subject to
any restrictions on the ownership,  lease,  occupancy or transferability of such
Real Property by the Borrower or any of its  Subsidiaries  under any  applicable
Environmental Law.

     (b) Hazardous Materials have not at any time been generated,  used, treated
or stored  on, or  transported  to or from,  or  Released  on or from,  any Real
Property  owned,  leased or operated by the Borrower or any of its  Subsidiaries
or, to the knowledge of the Borrower,  any property adjoining or adjacent to any
Real Property, where such generation, use, treatment, storage, transportation or
Release has violated or could be reasonably  expected to violate any  applicable
Environmental Law or give rise to an Environmental Claim.

     (c)  Notwithstanding  anything to the  contrary in this Section  7.18,  the
representations and warranties made in this Section 7.18 shall be untrue only if
the effect of any or all conditions, violations, claims, restrictions,  failures
and noncompliances of the types described above could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

     7.19. Labor Relations.  Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that could  reasonably be expected,  either
individually or in the aggregate,  to have a Material  Adverse Effect.  There is
(i) no unfair labor practice  complaint  pending  against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding  arising out of or under any  collective  bargaining  agreement is so
pending against the Borrower or any of its  Subsidiaries or, to the knowledge of
the Borrower,  threatened  against any of them,  (ii) no strike,  labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the knowledge of the Borrower,  threatened against the Borrower or any of its
Subsidiaries and (iii) no union  representation  question exists with respect to
the employees of the Borrower or any of its  Subsidiaries,  except (with respect
to any matter specified in clause (i), (ii) or (iii) above,  either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.

     7.20.  Intellectual  Property,  etc.  Each of the  Borrower and each of its
Subsidiaries owns or has the right to use all the patents, trademarks,  permits,
domain names,  service marks,  trade names,  copyrights,  licenses,  franchises,
inventions,  trade secrets,  proprietary  information  and know-how of any type,
whether or not  written  (including,  but not  limited  to,  rights in  computer
programs and databases)  and formulas,  or rights with respect to the foregoing,
and has  obtained  assignments  of all  leases,  licenses  and  other  rights of
whatever nature, necessary for the present conduct of its business,  without any
known conflict with the rights of others which,  or the failure to obtain which,
as the case may be, could reasonably be expected,  either individually or in the
aggregate, to have a Material Adverse Effect.

     7.21. Indebtedness. Schedule VII sets forth a true and complete list of all
Indebtedness   (including  Contingent  Obligations)  of  the  Borrower  and  its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after  giving  effect to the  Transaction,  in each case  showing the  aggregate
principal amount thereof and the name of the respective  borrower and any Credit
Party or any of its  Subsidiaries  which directly or indirectly  guarantees such
debt.

                                       39
<PAGE>

     7.22.  Insurance.  Schedule VIII sets forth a true and complete  listing of
all insurance  maintained by the Borrower and its Subsidiaries as of the Initial
Borrowing  Date,  with the  amounts  insured  (and any  deductibles)  set  forth
therein.

     7.23.    Representations   and   Warranties   in   Other   Documents.   All
representations  and warranties  set forth in the other  Documents were true and
correct in all  material  respects at the time as of which such  representations
and  warranties  were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date as if such representations or
warranties were made on and as of such date (it being understood and agreed that
any such representation or warranty which by its terms is made as of a specified
date shall be true and correct in all  material  respects  as of such  specified
date).

     7.24.  Legal  Names;   Type  of  Organization  (and  Whether  a  Registered
Organization);  Jurisdiction of Organization;  etc.  Schedule VI attached hereto
contains the exact legal name of the Borrower and each Subsidiary Guarantor, the
type of organization of the Borrower and each Subsidiary  Guarantor,  whether or
not the Borrower and each Subsidiary Guarantor is a registered organization, the
jurisdiction of organization of the Borrower and each Subsidiary Guarantor,  and
the  organizational  identification  number  (if any) of the  Borrower  and each
Subsidiary  Guarantor.  To the  extent  that  the  Borrower  or  any  Subsidiary
Guarantor  does not have an  organizational  identification  number  on the date
hereof and later obtains one, the Borrower or such  Subsidiary  Guarantor  shall
promptly   thereafter  notify  the  Collateral  Agent  of  such   organizational
identification number and shall take all actions reasonably  satisfactory to the
Collateral  Agent to the extent  necessary to maintain the security  interest of
the  Collateral  Agent in the  Collateral  intended to be granted  hereby  fully
perfected and in full force and effect.

     SECTION 8. Affirmative Covenants.  The Borrower hereby covenants and agrees
that on and after the  Effective  Date and  until the Total  Commitment  and all
Letters of Credit have  terminated and the Loans,  Notes and Unpaid Drawings (in
each case together with interest thereon), Fees and all other Obligations (other
than indemnities  described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:

     8.01.  Information  Covenants.  The  Borrower  will furnish to each Lender:

     (a) Monthly  Reports.  Within 30 days after the end of each fiscal month of
the Borrower (commencing with its fiscal month ending on February 28, 2002), the
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal month and the related consolidated statement of income and statement
of cash flows for such fiscal  month and for the  elapsed  portion of the fiscal
year ended with the last day of such fiscal  month,  in each case setting  forth
comparative figures for the corresponding  fiscal month in the prior fiscal year
and  comparable  budgeted  figures  for such  fiscal  month as set  forth in the
respective budget delivered  pursuant to Section 8.01(e),  all of which shall be
certified by the chief financial  officer or the  vice-president  finance of the
Borrower that they fairly  present in all material  respects in accordance  with
generally accepted accounting principles the financial condition of the Borrower
and its  Subsidiaries  as of the  dates  indicated  and  the  results  of  their
operations  for  the  periods  indicated,   subject  to  normal  year-end  audit
adjustments and the absence of footnotes.

     (b) Quarterly Financial Statements.  Within 45 days after the close of each
of the first  three  quarterly  accounting  periods in each  fiscal  year of the
Borrower,   (i)  the  consolidated   balance  sheet  of  the  Borrower  and  its
Subsidiaries as at the end of such quarterly  accounting  period and the related

                                       40
<PAGE>

consolidated  statements  of income and retained  earnings and statement of cash
flows for such quarterly  accounting  period and for the elapsed  portion of the
fiscal year ended with the last day of such quarterly accounting period, in each
case  setting  forth  comparative   figures  for  the  corresponding   quarterly
accounting  period in the prior fiscal year and comparable  budgeted figures for
such quarterly accounting period as set forth in the respective budget delivered
pursuant  to  Section  8.01(e),  all of which  shall be  certified  by the chief
financial officer or the vice-president finance of the Borrower that they fairly
present  in  all  material  respects  in  accordance  with  generally   accepted
accounting   principles  the  financial   condition  of  the  Borrower  and  its
Subsidiaries as of the dates  indicated and the results of their  operations for
the periods  indicated,  subject to normal  year-end audit  adjustments  and the
absence of  footnotes,  and (ii)  management's  discussion  and  analysis of the
important   operational  and  financial   developments   during  such  quarterly
accounting period.

     (c)  Annual  Financial  Statements.  Within 90 days after the close of each
fiscal year of the Borrower,  (i) the consolidated balance sheet of the Borrower
and  its  Subsidiaries  as at the  end of  such  fiscal  year  and  the  related
consolidated  statements  of income and retained  earnings and statement of cash
flows for such fiscal year setting forth  comparative  figures for the preceding
fiscal year and  certified  without  qualification  or going  concern  issues by
Arthur Andersen or other independent  certified public accountants of recognized
national standing reasonably  acceptable to the Administrative  Agent,  together
with a report of such  accounting firm stating that in the course of its regular
audit of the financial  statements of the Borrower and its  Subsidiaries,  which
audit was conducted in accordance with generally  accepted  auditing  standards,
such accounting firm obtained no knowledge of any Default or an Event of Default
relating to financial or accounting matters which has occurred and is continuing
or, if in the  opinion  of such  accounting  firm such a Default  or an Event of
Default has occurred and is  continuing,  a statement as to the nature  thereof,
and (ii) management's  discussion and analysis of the important  operational and
financial developments during such fiscal year.

     (d)  Management  Letters.  Promptly  after  the  Borrower's  or  any of its
Subsidiaries'  receipt thereof, a copy of any "management  letter" received from
its certified public accountants and management's response thereto.

     (e) Budgets.  No later than 30 days  following the first day of each fiscal
year  of  the  Borrower,  a  budget  in  form  reasonably  satisfactory  to  the
Administrative Agent (including budgeted statements of income,  sources and uses
of  cash  and  balance  sheets  for  the  Borrower  and  its  Subsidiaries  on a
consolidated  basis)  (i) for each of the  twelve  months  of such  fiscal  year
prepared  in detail and (ii) for the two  immediately  succeeding  fiscal  years
prepared  in  summary  form,  in  each  case  setting  forth,  with  appropriate
discussion, the principal assumptions upon which such budget is based.

     (f)  Officer's  Certificates.  At the time of the delivery of the financial
statements  provided  for  in  Sections  8.01(a),  (b)  and  (c),  a  compliance
certificate from the chief financial  officer or the  vice-president  finance of
the Borrower in the form of Exhibit J certifying on behalf of the Borrower that,
(x) to such officer's best knowledge  after due inquiry,  no Default or Event of
Default has  occurred and is  continuing  or, if any Default or Event of Default
has occurred and is continuing,  specifying the nature and extent thereof, which
certificate  shall set forth in reasonable  detail the calculations  required to

                                       41
<PAGE>

establish  whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections 4.02, 9.01(x), 9.01(xii), 9.02(iv), 9.04(ii), 9.05(v) and
9.07 through 9.10, inclusive,  at the end of such fiscal month, quarter or year,
as the  case may be and (y) (i) no  changes  are  required  to be made to any of
Schedule VI hereto,  Annexes B, C, F, H, I, J and K of the Security Agreement or
Annexes  A  through F of the  Pledge  Agreement,  in each case so as to make the
information  set forth  therein  accurate  and  complete  as of the date of such
certificate,  or (ii) to the extent that such  information is no longer accurate
and  complete  as of  such  date,  list in  reasonable  detail  all  information
necessary to make such  Schedule and all such Annexes  accurate and complete (at
which time such Schedule  and/or all such Annexes,  as the case may be, shall be
deemed modifies to reflect such information) .

     (g) Notice of Default,  Litigation and Material  Adverse Effect.  Promptly,
and in any event within three Business Days after any officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof,  notice of (i) the occurrence
of any event  which  constitutes  a  Default  or an Event of  Default,  (ii) any
litigation  or  governmental  investigation  or proceeding  pending  against the
Borrower or any of its  Subsidiaries  (x) which,  either  individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or (y)
with  respect  to  any  Document,  (iii)  the  occurrence  of  any  event  which
constitutes a default under, or causes the termination of, any material contract
of the Borrower or any of its Subsidiaries,  including,  without  limitation the
Distributorship Agreement and the Acquisition Agreement or (iv) any other event,
change or circumstance  that has had, or could reasonably be expected to have, a
Material Adverse Effect.

     (h) Other  Reports  and  Filings.  Promptly  after the  filing or  delivery
thereof,  copies of all financial  information,  proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries  shall publicly file with the
Securities  and  Exchange  Commission  or any  successor  thereto (the "SEC") or
deliver to holders (or any trustee,  agent or other representative  therefor) of
its material Indebtedness  pursuant to the terms of the documentation  governing
0such Indebtedness.

     (i)  Environmental  Matters.  Promptly after any officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof,  notice of one or more of the
following  environmental matters to the extent that such environmental  matters,
either  individually  or when  aggregated  with  all  other  such  environmental
matters,  could  reasonably be expected to have a material adverse effect on the
business,  operations,  property,  assets,  liabilities,  condition (financed or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole:

          (i) any pending or threatened Environmental Claim against the Borrower
     or any of its  Subsidiaries or any Real Property owned,  leased or operated
     by the Borrower or any of its Subsidiaries;

          (ii) any  condition or occurrence on or arising from any Real Property
     owned,  leased or operated by the Borrower or any of its Subsidiaries  that
     (a) results in  noncompliance  by the  Borrower or any of its  Subsidiaries
     with any applicable  Environmental  Law or (b) could reasonably be expected
     to form the basis of an Environmental  Claim against the Borrower or any of
     its Subsidiaries or any such Real Property;

          (iii) any condition or occurrence on any Real Property  owned,  leased
     or  operated  by  the  Borrower  or  any of  its  Subsidiaries  that  could

                                       42
<PAGE>

     reasonably  be  expected  to cause such Real  Property to be subject to any
     restrictions on the ownership,  lease, occupancy, use or transferability by
     the Borrower or any of its  Subsidiaries  of such Real  Property  under any
     Environmental Law; and

          (iv) the taking of any removal or  remedial  action in response to the
     actual or alleged  presence of any Hazardous  Material on any Real Property
     owned,  leased or operated by the  Borrower or any of its  Subsidiaries  as
     required  by  any   Environmental   Law  or  any   governmental   or  other
     administrative  agency;  provided  that in any  event  the  Borrower  shall
     deliver to each Lender all notices  received by the  Borrower or any of its
     Subsidiaries from any government or governmental  agency under, or pursuant
     to,  CERCLA  which  identify  the  Borrower or any of its  Subsidiaries  as
     potentially  responsible  parties for remediation  costs or which otherwise
     notify the Borrower or any of its Subsidiaries of potential liability under
     CERCLA.

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.

     (j) Payments to either Bayer A.G. or AstraZeneca UK Limited.  No later than
five days prior to making any payments to either AstraZeneca UK Limited or Bayer
A.G.  pursuant to either  Section 4.01 of the  Acquisition  Agreement or Section
9.7.1 of the  Distributorship  Agreement,  the  Borrower  shall (i) give written
notice  to the  Administrative  Agent  that such  payment  will be made and (ii)
provide  the  Administrative  Agent  with a  certificate  from an officer of the
Borrower  certifying  that  after  giving  pro forma  effect  to the  contingent
payments to the Seller and/or Bayer, as the case may be, the Borrower will be in
compliance with Section 9.10.

     (k)  Other  Information.  From  time to time,  such  other  information  or
documents  (financial or  otherwise)  with respect to the Borrower or any of its
Subsidiaries   as  the   Administrative   Agent  or  any  Lender   (through  the
Administrative Agent) may reasonably request.

     8.02.  Books,  Records and Inspections;  Annual Meetings.  (a) The Borrower
will,  and will cause each of its  Subsidiaries  to, keep proper books of record
and  accounts  in which  full,  true and  correct  entries  in  conformity  with
generally  accepted  accounting  principles and all requirements of law shall be
made  of  all  dealings  and  transactions  in  relation  to  its  business  and
activities.  The  Borrower  will,  and will cause each of its  Subsidiaries  to,
permit officers and designated  representatives of the  Administrative  Agent or
any Lender to visit and inspect,  under  guidance of officers of the Borrower or
such Subsidiary,  any of the properties of the Borrower or such Subsidiary,  and
to examine the books of account of the Borrower or such  Subsidiary  and discuss
the affairs,  finances and accounts of the Borrower or such Subsidiary with, and
be  advised  as  to  the  same  by,  its  and  their  officers  and  independent
accountants,  all upon reasonable  prior notice and at such reasonable times and
intervals and to such reasonable extent as the Administrative  Agent or any such
Lender may reasonably  request. If a Default or an Event of Default has occurred
and is  continuing  or if  access  is  necessary  to  preserve  or  protect  the
Collateral as determined by the  Administrative  Agent,  the Borrower shall, and
shall  cause  each  of  its   Subsidiaries   to,  provide  such  access  to  the
Administrative  Agent at all times and without advance notice.  Furthermore,  so
long as any  Default or Event of Default has  occurred  and is  continuing,  the
Borrower and each of its  Subsidiaries  shall provide the  Administrative  Agent
with access to their suppliers and customers.

                                       43
<PAGE>

     (b) At a date to be mutually agreed upon between the  Administrative  Agent
and the Borrower  occurring on or prior to the 120th day after the close of each
fiscal  year  of  the  Borrower,  the  Borrower  will,  at  the  request  of the
Administrative  Agent,  hold a meeting with all of the Lenders at which  meeting
will be reviewed the financial  results of the Borrower and its Subsidiaries for
the previous  fiscal year and the budgets  presented for the current fiscal year
of the Borrower.

     8.03. Maintenance of Property;  Insurance.  (a) The Borrower will, and will
cause  each of its  Subsidiaries  to,  (i) keep all  property  necessary  to the
business  of the  Borrower  and its  Subsidiaries  in  good  working  order  and
condition, ordinary wear and tear excepted, (ii) maintain with financially sound
and reputable insurance companies insurance on all such property and against all
such  risks as is  consistent  and in  accordance  with  industry  practice  for
companies  similarly  situated owning similar  properties and engaged in similar
businesses  as the  Borrower  and its  Subsidiaries  and  (iii)  furnish  to the
Administrative  Agent,  upon its request  therefor,  full  information as to the
insurance carried. In addition to the requirements of the immediately  preceding
sentence,  the Borrower will at all times cause insurance of the types described
in  Schedule  VIII to be  maintained  (with the same scope of  coverage  as that
described in Schedule VIII) at levels which are consistent  with their practices
immediately  before the Initial  Borrowing  Date.  Such insurance  shall include
physical damage insurance on all real and personal  property  (whether now owned
or hereafter acquired) on an all risk basis and business interruption insurance.
The  provisions  of this Section 8.03 shall be deemed  supplemental  to, but not
duplicative  of, the  provisions  of any  Security  Documents  that  require the
maintenance  of  insurance.   In  addition  to  the   foregoing,   the  Borrower
acknowledges and agrees that (x) the  Administrative  Agent has the right, on an
annual basis, to review the insurance then being  maintained by the Borrower and
its  Subsidiaries  and to require the Borrower and its  Subsidiaries to increase
their  levels of  coverage  from that which then  exists to the extent  that the
Administrative  Agent has a reasonable  basis to require same and (y) they will,
within 30 days following such a request by the Administrative Agent, obtain such
increased insurance coverage.

     (b) The Borrower will, and will cause each of its  Subsidiaries  to, at all
times  keep its  property  insured  in favor of the  Collateral  Agent,  and all
policies or  certificates  (or  certified  copies  thereof) with respect to such
insurance  (and any other  insurance  maintained  by the  Borrower  and/or  such
Subsidiaries) (i) shall be endorsed to the Collateral  Agent's  satisfaction for
the benefit of the Collateral Agent (including,  without  limitation,  by naming
the Collateral Agent as loss payee and/or additional insured),  (ii) shall state
that such  insurance  policies  shall not be canceled  without at least 30 days'
prior written notice thereof by the respective  insurer to the Collateral Agent,
(iii) shall provide that the respective  insurers  irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the other Secured
Creditors, and (iv) shall be deposited with the Collateral Agent.

     (c) If the  Borrower  or any of its  Subsidiaries  shall  fail to  maintain
insurance in accordance with this Section 8.03, or if the Borrower or any of its
Subsidiaries  shall fail to so endorse and deposit all policies or  certificates
with respect thereto,  the Administrative  Agent shall have the right (but shall
be under no  obligation)  to procure such  insurance and the Borrower  agrees to
reimburse  the  Administrative  Agent for all  reasonable  costs and expenses of
procuring such insurance.

                                       44
<PAGE>

     8.04. Existence;  Franchises. The Borrower will, and will cause each of its
Subsidiaries  to, do or cause to be done,  all things  necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses, permits,  copyrights,  trademarks and patents; provided, however, that
nothing  in this  Section  8.04  shall  prevent  (i) sales of  assets  and other
transactions  by the  Borrower or any of its  Subsidiaries  in  accordance  with
Section 9.02 or (ii) the  withdrawal by the Borrower or any of its  Subsidiaries
of its qualification as a foreign corporation,  partnership or limited liability
company,  as the case may be, in any  jurisdiction if such withdrawal could not,
either  individually  or in the  aggregate,  reasonably  be  expected  to have a
Material Adverse Effect.

     8.05. Compliance with Statutes, etc. The Borrower will, and will cause each
of its  Subsidiaries  to, comply with all applicable  statutes,  regulations and
orders of, and all applicable  restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of  its  property  (including  applicable  statutes,   regulations,  orders  and
restrictions  relating to  environmental  standards and  controls),  except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

     8.06. Compliance with Environmental Laws. (a) The Borrower will comply, and
will cause each of its Subsidiaries to comply,  with all Environmental  Laws and
permits  applicable to, or required by, the ownership,  lease or use of its Real
Property  now or hereafter  owned,  leased or operated by the Borrower or any of
its Subsidiaries,  except such  noncompliances as could not, either individually
or in the aggregate,  reasonably be expected to have a Material  Adverse Effect,
and will  promptly  pay or cause to be paid all costs and  expenses  incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property  free and clear of any Liens  imposed  pursuant  to such  Environmental
Laws.  Neither the  Borrower nor any of its  Subsidiaries  will  generate,  use,
treat, store,  Release or dispose of, or permit the generation,  use, treatment,
storage,  Release or disposal of Hazardous Materials on any Real Property now or
hereafter owned,  leased or operated by the Borrower or any of its Subsidiaries,
or transport or permit the transportation of Hazardous  Materials to or from any
such Real Property,  except for Hazardous  Materials  generated,  used, treated,
stored, Released or disposed of at any such Real Properties in compliance in all
material  respects  with all  applicable  Environmental  Laws and as required in
connection  with the normal  operation,  use and  maintenance of the business or
operations of the Borrower or any of its Subsidiaries.

                                       45
<PAGE>

     (b) (i) After the receipt by the Administrative  Agent or any Lender of any
notice  of the type  described  in  Section  8.01(i),  (ii) at any time that the
Borrower or any of its  Subsidiaries  are not in compliance with Section 8.06(a)
or (iii) in the event that any Event of Default is in  existence,  the  Borrower
will  provide,  at the sole  expense of the  Borrower  and at the request of the
Administrative  Agent, an environmental  site assessment  report  concerning any
Real  Property  owned,  leased  or  operated  by  the  Borrower  or  any  of its
Subsidiaries,  prepared by an environmental  consulting firm reasonably approved
by the  Administrative  Agent,  indicating  the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with such Hazardous  Materials on such Real  Property.  If the Borrower fails to
provide the same within 30 days after such request was made, the  Administrative
Agent may order the same, the cost of which shall be borne by the Borrower,  and
the Borrower  shall grant and hereby grant to the  Administrative  Agent and the
Lenders  and  their   respective   agents  access  to  such  Real  Property  and
specifically  grant the  Administrative  Agent and the  Lenders  an  irrevocable
non-exclusive  license,  subject to the rights of tenants,  to undertake such an
assessment at any reasonable time upon reasonable notice to the Borrower, all at
the sole expense of the Borrower.

     8.07.  ERISA.  As soon as possible and, in any event,  within ten (10) days
after the Borrower,  any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the  occurrence of any of the  following,  the Borrower
will deliver to each of the Lenders a certificate of the chief financial officer
or the vice  president-finance of the Borrower setting forth the full details as
to such occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take,  together with any notices
required or proposed to be given or filed by the Borrower, such Subsidiary,  the
Plan  administrator  or such  ERISA  Affiliate  to or with the PBGC or any other
governmental  agency,  or a Plan  participant  and any  notices  received by the
Borrower,  such  Subsidiary or such ERISA  Affiliate  from the PBGC or any other
government agency, or a Plan participant with respect thereto: that a Reportable
Event has  occurred  (except  to the extent  that the  Borrower  has  previously
delivered  to the Lenders a  certificate  and notices (if any)  concerning  such
event  pursuant  to the next clause  hereof);  that a  contributing  sponsor (as
defined in Section  4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the  advance  reporting  requirement  of PBGC  Regulation  Section
4043.61 (without regard to subparagraph (b)(1) thereof),  and an event described
in subsection  .62, .63,  .64, .65, .66, .67 or .68 of PBGC  Regulation  Section
4043 is  reasonably  expected  to occur  with  respect  to such Plan  within the
following 30 days; that an accumulated funding deficiency, within the meaning of
Section  412 of the  Code or  Section  302 of  ERISA,  has been  incurred  or an
application  may be or has been made for a waiver or modification of the minimum
funding standard (including any required  installment  payments) or an extension
of any  amortization  period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution  required to be made with
respect to a Plan or Foreign  Pension Plan has not been timely made; that a Plan
has been or may be terminated,  reorganized,  partitioned or declared  insolvent
under Title IV of ERISA;  that a Plan has an Unfunded  Current  Liability;  that
proceedings  may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA;  that a proceeding  has
been  instituted  pursuant  to  Section  515 of ERISA to  collect  a  delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any
ERISA  Affiliate  will  or may  incur  any  material  liability  (including  any
indirect,   contingent,  or  secondary  liability)  to  or  on  account  of  the
termination of or withdrawal from a Plan under Section 4062,  4063,  4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section  401(a)(29),
4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2)  of the Code) under  Section 4980B of the Code; or that the Borrower
or any  Subsidiary of the Borrower may incur any material  liability for retiree
benefits  pursuant to any employee  welfare  benefit plan (as defined in Section
3(1) of ERISA) that  provides  benefits  to retired  employees  or other  former
employees  (other than as required by the severance pay Plans of the Borrower or
any of its  Subsidiaries  or  Section  601 of ERISA) or any Plan or any  Foreign
Pension  Plan.  The Borrower  will deliver to each of the Lenders  copies of any
records,  documents or other information that must be furnished to the PBGC with
respect to any Plan  pursuant  to Section  4010 of ERISA.  At the request of any
Lender,  the Borrower  will also  deliver to such Lender a complete  copy of the
annual  report (on  Internal  Revenue  Service  Form  5500-series)  of each Plan
(including,  to  the  extent  required,  the  related  financial  and  actuarial
statements  and  opinions  and  other  supporting  statements,   certifications,
schedules  and  information)  required  to be filed  with the  Internal  Revenue
Service.  In addition to any  certificates  or notices  delivered to the Lenders

                                       46
<PAGE>

pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other  information  required to be  furnished to the PBGC,  and any
material notices received by the Borrower, any Subsidiary of the Borrower or any
ERISA  Affiliate  with  respect to any Plan or Foreign  Pension Plan or received
from any  governmental  agency or plan  administrator or sponsor or trustee with
respect to any multiemployer  plan (as defined in Section  4001(a)(3) of ERISA),
shall be  delivered  to the  Lenders  no later than ten (10) days after the date
such records, documents and/or information has been furnished to the PBGC or any
other governmental agency or such notice has been received by the Borrower,  the
respective Subsidiary or the ERISA Affiliate,  as applicable.  The Borrower will
ensure,  and cause  each of its  applicable  Subsidiaries  to  ensure,  that all
Foreign Pension Plans administered by it or into which it makes payments obtains
or retains (as applicable) registered status under and as required by applicable
law and is  administered  in a timely manner in all respects in compliance  with
all  applicable  laws except where the failure to do any of the foregoing  could
not, either  individually or in the aggregate,  reasonably be expected to have a
Material Adverse Effect.

     8.08.  End of Fiscal Years;  Fiscal  Quarters.  The Borrower will cause (i)
each of its, and each of its  Subsidiaries',  fiscal years to end on December 31
of each  year  and  (ii)  each of its,  and  each of its  Subsidiaries',  fiscal
quarters  to end on  dates  which  are  consistent  with a  fiscal  year  end as
described above.

     8.09. Performance of Obligations. The Borrower will, and will cause each of
its  Subsidiaries  to,  perform all of its  obligations  under the terms of each
mortgage,  indenture, security agreement, loan agreement or credit agreement and
each other agreement,  contract or instrument by which it is bound,  except such
non-performances  as  could  not,  either  individually  or  in  the  aggregate,
reasonably be expected to have a Material Adverse Effect.

     8.10. Payment of Taxes. The Borrower will pay and discharge, and will cause
each of its  Subsidiaries  to pay and  discharge,  all  taxes,  assessments  and
governmental  charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, prior to the date on which penalties attach
thereto,  and all lawful claims which, if unpaid,  might become a Lien or charge
upon any  properties  of the Borrower or any of its  Subsidiaries  not otherwise
permitted under Section  9.01(i);  provided that neither the Borrower nor any of
its Subsidiaries shall be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by proper  proceedings if it
has  maintained  adequate  reserves  with  respect  thereto in  accordance  with
generally accepted accounting principles.

     8.11. Use of Proceeds. The Borrower will use the proceeds of the Loans only
as provided in Section 7.08.

     8.12. Additional Security; Further Assurances;  etc. (a) The Borrower will,
and will cause each of the other  Credit  Parties that are  Subsidiaries  of the
Borrower  to,  grant to the  Collateral  Agent for the  benefit  of the  Secured
Creditors  security interests and Mortgages in such assets and properties of the
Borrower and such other Credit Parties that are  Subsidiaries of the Borrower as
are not covered by the  original  Security  Documents  and as may be  reasonably
requested from time to time by the Administrative  Agent or the Required Lenders
(collectively, the "Additional Security Documents"). All such security interests
and Mortgages shall be granted pursuant to documentation reasonably satisfactory

                                       47
<PAGE>

in form and substance to the Administrative Agent and shall constitute valid and
enforceable  perfected security interests and Mortgages superior to and prior to
the  rights of all third  Persons  and  subject  to no other  Liens  except  for
Permitted  Liens.  The  Additional  Security  Documents or  instruments  related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish,  perfect, preserve and protect the Liens in
favor of the Collateral  Agent required to be granted pursuant to the Additional
Security  Documents and all taxes,  fees and other charges payable in connection
therewith shall have been paid in full.

     (b) The Borrower will, and will cause each of the other Credit Parties that
are  Subsidiaries  of the  Borrower  to, at the expense of the  Borrower,  make,
execute, endorse,  acknowledge, file and/or deliver to the Collateral Agent from
time to time  such  vouchers,  invoices,  schedules,  confirmatory  assignments,
conveyances,  financing statements,  transfer endorsements,  powers of attorney,
certificates,   real  property  surveys,   reports,   landlord  waivers,  bailee
agreements, control agreements and other assurances or instruments and take such
further  steps  relating  to the  Collateral  covered  by  any  of the  Security
Documents as the  Collateral  Agent may  reasonably  require.  Furthermore,  the
Borrower will, and will cause the other Credit Parties that are  Subsidiaries of
the Borrower to, deliver to the Collateral Agent such opinions of counsel, title
insurance  and other  related  documents as may be  reasonably  requested by the
Administrative  Agent to assure  itself that this Section 8.12 has been complied
with.

     (c)  If  the  Administrative  Agent  or  the  Required  Lenders  reasonably
determine  that  they  are  required  by law or  regulation  to have  appraisals
prepared in respect of any Real  Property of the Borrower  and its  Subsidiaries
constituting Collateral, the Borrower will, at their own expense, provide to the
Administrative Agent appraisals which satisfy the applicable requirements of the
Real Estate Appraisal  Reform  Amendments of the Financial  Institution  Reform,
Recovery and Enforcement  Act of 1989, as amended,  and which shall otherwise be
in form and substance reasonably satisfactory to the Administrative Agent.

     (d) The  Borrower  agrees that each action  required by clauses (a) through
(c) of this Section 8.12 shall be completed as soon as possible, but in no event
later  than  75  days  after  such  action  is  requested  to be  taken  by  the
Administrative  Agent or the Required  Lenders;  provided that, in no event will
the Borrower or any of its  Subsidiaries  be required to take any action,  other
than using its best efforts,  to obtain consents from third parties with respect
to its compliance with this Section 8.12.

     8.13.  Ownership of  Subsidiaries;  etc. The Borrower  will, and will cause
each of its  Subsidiaries  to, own 100% of the  capital  stock and other  equity
interests of each of their Subsidiaries (other than directors' qualifying shares
to the extent required by applicable law).

     8.14. Corporate  Separateness.  Each Credit Party will, and will cause each
of its Subsidiaries to, satisfy customary  corporate,  limited liability company
or partnership formalities, as the case may be, including the holding of regular
board of  directors'  and  shareholders'  meetings  or  action by  directors  or
shareholders  without  a  meeting  and the  maintenance  of  corporate,  limited
liability  company or  partnership,  as the case may be,  offices  and  records.
Finally,  neither the Borrower nor any of its Subsidiaries will take any action,
or conduct  its affairs in a manner  which is likely to result in the  corporate

                                       48
<PAGE>

limited liability  company or partnership,  as the case may be, existence of the
Borrower  or  any of its  Subsidiaries  being  ignored,  or in  the  assets  and
liabilities  of the  Borrower  or any of its  Subsidiaries  being  substantively
consolidated  with  those  of the  Borrower  and  its  other  Subsidiaries  in a
bankruptcy, reorganization or other insolvency proceeding.

     8.15.  Landlord  Waivers.  The Borrower will use its reasonable  commercial
efforts  to obtain  and  deliver  to the  Administrative  Agent  fully  executed
landlord waivers, as requested by the Administrative  Agent prior to the Initial
Borrowing Date, as promptly as possible after the Initial Borrowing Date.

     SECTION 9. Negative  Covenants.  The Borrower  hereby  covenants and agrees
that on and after the  Effective  Date and  until the Total  Commitment  and all
Letters of Credit have  terminated and the Loans,  Notes and Unpaid Drawings (in
each case,  together  with  interest  thereon),  Fees and all other  Obligations
(other than any  indemnities  described in Section  13.13 which are not then due
and payable) incurred hereunder and thereunder, are paid in full:

     9.01.  Liens.  The  Borrower  will  not,  and  will not  permit  any of its
Subsidiaries to, create,  incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal,  tangible or intangible) of
the  Borrower  or  any of its  Subsidiaries,  whether  now  owned  or  hereafter
acquired,  or sell any such property or assets  subject to an  understanding  or
agreement,  contingent  or  otherwise,  to  repurchase  such  property or assets
(including sales of accounts  receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing  statement under the UCC or any other similar notice of Lien under
any similar  recording or notice  statute;  provided that the provisions of this
Section 9.01 shall not prevent the creation, incurrence, assumption or existence
of the following  (Liens  described  below are herein  referred to as "Permitted
Liens"):

     (i) inchoate Liens for taxes, assessments or governmental charges or levies
not yet due or Liens for taxes,  assessments or  governmental  charges or levies
being contested in good faith and by appropriate  proceedings for which adequate
reserves have been established in accordance with generally accepted  accounting
principles;

     (ii) Liens in respect of property  or assets of the  Borrower or any of its
Subsidiaries  imposed by law,  which were  incurred  in the  ordinary  course of
business and do not secure  Indebtedness for borrowed money,  such as carriers',
warehousemen's,  materialmen's  and  mechanics'  liens and other  similar  Liens
arising  in the  ordinary  course  of  business,  and  (x)  which  do not in the
aggregate   materially  detract  from  the  value  of  the  Borrower's  or  such
Subsidiary's  property  or assets or  materially  impair the use  thereof in the
operation of the business of the  Borrower or such  Subsidiary  or (y) which are
being contested in good faith by appropriate proceedings, which proceedings have
the  effect of  preventing  the  forfeiture  or sale of the  property  or assets
subject to any such Lien;

     (iii) Liens in  existence on the Initial  Borrowing  Date which are listed,
and the  property  subject  thereto  described,  in  Schedule IX but only to the
respective  date,  if any,  set  forth  in  such  Schedule  IX for the  removal,
replacement and termination of any such Liens,  plus renewals,  replacements and
extensions of such Liens to the extent set forth on such  Schedule IX,  provided
that (x) the aggregate principal amount of the Indebtedness,  if any, secured by
such Liens does not  increase  from that amount  outstanding  at the time of any
such renewal,  replacement or extension and (y) any such renewal, replacement or
extension does not encumber any additional  assets or properties of the Borrower
or any of its Subsidiaries;

                                       49
<PAGE>

     (iv) Liens created pursuant to the Security Documents;

     (v) licenses, sublicenses, leases or subleases granted to other Persons not
materially  interfering  with the conduct of the business of the Borrower or any
of its Subsidiaries;

     (vi) Liens upon assets of the Borrower or any of its  Subsidiaries  subject
to  Capitalized   Lease   Obligations  to  the  extent  such  Capitalized  Lease
Obligations are permitted by Section 9.04(ii), provided that (x) such Liens only
serve to secure the payment of Indebtedness arising under such Capitalized Lease
Obligation and (y) the Lien encumbering the asset giving rise to the Capitalized
Lease  Obligation  does not  encumber  any other  asset of the  Borrower  or any
Subsidiary of the Borrower;

     (vii) Liens placed upon  equipment or machinery  acquired after the Initial
Borrowing  Date and used in the  ordinary  course of business of the Borrower or
any of its Subsidiaries and placed at the time of the acquisition thereof by the
Borrower or such Subsidiary or within 90 days thereafter to secure  Indebtedness
incurred  to pay all or a portion  of the  purchase  price  thereof or to secure
Indebtedness incurred solely for the purpose of financing the acquisition of any
such equipment or machinery or extensions,  renewals or  replacements  of any of
the  foregoing  for  the  same  or  a  lesser  amount,  provided  that  (x)  the
Indebtedness  secured by such Liens is permitted by Section  9.04(ii) and (y) in
all events, the Lien encumbering the equipment or machinery so acquired does not
encumber any other asset of the Borrower or such Subsidiary;

     (viii)  easements,  rights-of-way,  restrictions,  encroachments  and other
similar charges or encumbrances,  and minor title deficiencies, in each case not
securing  Indebtedness  and not materially  interfering  with the conduct of the
business of the Borrower or any of its Subsidiaries;

     (ix) Liens  arising from  precautionary  UCC  financing  statement  filings
regarding operating leases entered into in the ordinary course of business;

     (x) Liens arising out of the existence of judgments or awards in respect of
which the Borrower or any of its Subsidiaries shall in good faith be prosecuting
an appeal or  proceedings  for review and in respect of which  there  shall have
been secured a subsisting stay of execution  pending such appeal or proceedings,
provided that the aggregate  amount of all cash and the fair market value of all
other  property  subject to such Liens  does not exceed  $1,000,000  at any time
outstanding;

     (xi)  statutory and common law  landlords'  liens under leases to which the
Borrower or any of its Subsidiaries is a party;

     (xii) Liens (other than Liens imposed under ERISA) incurred in the ordinary
course of business in connection with workers compensation claims,  unemployment
insurance and social  security  benefits and Liens  securing the  performance of
bids,  tenders,  leases  and  contracts  in the  ordinary  course  of  business,
statutory obligations,  surety bonds, performance bonds and other obligations of
a like nature  incurred in the ordinary  course of business and consistent  with

                                       50
<PAGE>

past practice  (exclusive of  obligations in respect of the payment for borrowed
money), provided that the aggregate amount of all cash and the fair market value
of all other property  subject to all Liens permitted by this clause (xii) shall
not at any time exceed $1,000,000; and

     (xiii) Permitted Encumbrances.

In connection  with the granting of Liens of the type  described in clauses (vi)
and (vii) of this Section 9.01 by the Borrower of any of its  Subsidiaries,  the
Administrative  Agent and the  Collateral  Agent shall be authorized to take any
actions deemed reasonably  appropriate by it in connection therewith (including,
without limitation, by executing appropriate lien releases or lien subordination
agreements  in favor of the  holder or  holders of such  Liens,  in either  case
solely with respect to the item or items of equipment or other assets subject to
such Liens).

     9.02. Consolidation,  Merger, Purchase or Sale of Assets, etc. The Borrower
will not, and will not permit any of its  Subsidiaries to, wind up, liquidate or
dissolve  its  affairs  or  enter  into  any  partnership,   joint  venture,  or
transaction  of merger or  consolidation,  or convey,  sell,  lease or otherwise
dispose  of all or any  part of its  property  or  assets,  or  enter  into  any
sale-leaseback  transactions,  or  purchase  or  otherwise  acquire (in one or a
series of related  transactions)  any part of the property or assets (other than
purchases or other  acquisitions  of  inventory,  materials and equipment in the
ordinary  course of business) of any Person (or agree to do any of the foregoing
at any future time), except that:

     (i) Capital  Expenditures  by the  Borrower and its  Subsidiaries  shall be
permitted to the extent not in violation of Section 9.07;

     (ii) each of the Borrower and its  Subsidiaries may make sales of inventory
in the ordinary course of business;

     (iii) Investments may be made to the extent permitted by Section 9.05;

     (iv) the  Borrower  and its  Subsidiaries  may sell assets  (other than the
capital stock or other equity  interests of any  Subsidiary),  so long as (v) no
Default or Event of Default then exists or would result therefrom, (w) each such
sale is in an  arm's-length  transaction  and  the  Borrower  or the  respective
Subsidiary  receives at least fair market value (as  determined in good faith by
the  Borrower or such  Subsidiary,  as the case may be),  (x) the  consideration
received by the Borrower or such Subsidiary  consists solely of cash and is paid
at the time of the closing of such sale, (y) the Net Sale Proceeds therefrom are
applied and/or reinvested as (and to the extent) required by Section 4.02(f) and
(z) the aggregate amount of the proceeds  received from all assets sold pursuant
to this  clause  (iv) shall not  exceed  $1,000,000  in any  fiscal  year of the
Borrower;

     (v) each of the  Borrower  and its  Subsidiaries  may lease (as  lessee) or
license (as  licensee)  real or personal  property (so long as any such lease or
license  does not create a  Capitalized  Lease  Obligation  except to the extent
permitted by Section 9.04(iii));

     (vi) each of the Borrower  and its  Subsidiaries  may sell or discount,  in
each case without  recourse and in the ordinary  course of business and for cash
at fair market value (as  determined  by the  Borrower in good faith),  accounts
receivable  arising in the ordinary  course of business,  but only in connection

                                       51
<PAGE>

with the  compromise  or  collection  thereof  and not as part of any  financing
transaction,  provided that the aggregate  amount of such sales shall not exceed
$1,000,000 in any fiscal year of the Borrower;

     (vii)  each  of the  Borrower  and its  Subsidiaries  may  grant  licenses,
sublicenses,  leases or subleases to other  Persons not  materially  interfering
with the conduct of the business of the Borrower or any of its Subsidiaries,  in
each case so long as no such grant  otherwise  affects  the  Collateral  Agent's
security interest in the asset or property subject thereto; and

     (viii) the  Acquisition  shall be permitted in accordance with the terms of
the Acquisition Documents.

To the extent the Required  Lenders  waive the  provisions  of this Section 9.02
with  respect  to the  sale  of any  Collateral,  or any  Collateral  is sold as
permitted  by this  Section  9.02  (other than to the  Borrower or a  Subsidiary
thereof),  such Collateral  shall be sold free and clear of the Liens created by
the Security  Documents,  and the Administrative  Agent and the Collateral Agent
shall be authorized to take any actions  deemed  appropriate  in order to effect
the foregoing.

     9.03.  Dividends.  The  Borrower  will not,  and will not permit any of its
Subsidiaries  to,  authorize,  declare or pay any Dividends  with respect to the
Borrower or any of its Subsidiaries,  except that any Subsidiary of the Borrower
may pay cash Dividends to the Borrower or to any Wholly-Owned  Subsidiary of the
Borrower.

     9.04.  Indebtedness.  The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:

     (i) Indebtedness  incurred  pursuant to this Agreement and the other Credit
Documents; and

     (ii)  Indebtedness  of the  Borrower  and  its  Subsidiaries  evidenced  by
Capitalized Lease Obligations (to the extent permitted pursuant to Section 9.07)
and purchase money Indebtedness described in Section 9.01(vii), provided that in
no event  shall the sum of the  aggregate  outstanding  principal  amount of all
Capitalized Lease Obligations and purchase money Indebtedness  permitted by this
clause  (iii)  exceed (x) at any time prior to the Term Loan  Satisfaction  Date
$1,000,000  or (y) at any time on or  after  the Term  Loan  Satisfaction  Date,
$5,000,000.

     9.05. Advances,  Investments and Loans. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly,  lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities  of, or any other interest in, or make any capital  contribution  to,
any other  Person,  or purchase or own a futures  contract or  otherwise  become
liable for the  purchase or sale of currency  or other  commodities  at a future
date in the nature of a futures  contract,  or hold any cash or Cash Equivalents
(each of the foregoing an "Investment" and, collectively, "Investments"), except
that the following shall be permitted:

     (i) the  Borrower  and its  Subsidiaries  may  acquire  and  hold  accounts
receivable  owing to any of them, if created or acquired in the ordinary  course

                                       52
<PAGE>
                                          [***] Confidential Treatment Requested

of business and payable or  dischargeable  in accordance  with  customary  trade
terms of the Borrower or such Subsidiary;

     (ii) the Borrower and its  Subsidiaries  may acquire and hold cash and Cash
Equivalents,  provided that at any time Revolving  Loans or Swingline  Loans are
outstanding,  the aggregate amount of cash and Cash Equivalents  permitted to be
held by the Borrower and its  Subsidiaries  shall not exceed  $5,000,000 for any
period of five consecutive Business Days;

     (iii) the Borrower and its  Subsidiaries  may hold the Investments  held by
them on the Initial  Borrowing  Date and  described on Schedule X, provided that
any additional  Investments made with respect thereto shall be permitted only if
permitted under the other provisions of this Section 9.05;

     (iv) the  Borrower  and its  Subsidiaries  may acquire and own  investments
(including  debt  obligations)  received in  connection  with the  bankruptcy or
reorganization  of  suppliers  and  customers  and in good faith  settlement  of
delinquent  obligations  of, and other  disputes  with,  customers and suppliers
arising in the ordinary course of business;

     (v) the Borrower and its  Subsidiaries may make loans and advances to their
officers and  employees  for moving,  relocation  and travel  expenses and other
similar  expenditures,  in each case in the  ordinary  course of  business in an
aggregate amount not to exceed $1,000,000 at any time (determined without regard
to any write-downs or write-offs of such loans and advances); and

     (vi) the Borrower may make loans to [***],  and to the extent  required by,
the [***], so long as no Default or Event of Default exits both before and after
giving effect to such loans;  provided that prior to the Term Loan  Satisfaction
Date,  the aggregate  principal  amount of such loans shall not exceed $[***] at
any time outstanding and provided further that the aggregate principal amount of
such loans shall at no time exceed the amount required to be made by the [***].

     9.06.  Transactions  with Affiliates.  The Borrowers will not, and will not
permit  any of its  Subsidiaries  to,  enter into any  transaction  or series of
related  transactions  with  any  Affiliate  of  the  Borrower  or  any  of  its
Subsidiaries,  other than in the  ordinary  course of business  and on terms and
conditions  substantially  as favorable to the  Borrower or such  Subsidiary  as
would  reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable  arm's-length  transaction  with a Person other than an  Affiliate,
except that (i) Dividends may be paid to the extent provided in Section 9.03 and
(ii) customary fees may be paid to non-officer directors of the Borrower and its
Subsidiaries.

     9.07. Capital Expenditures.  (a) The Borrower will not, and will not permit
any of its  Subsidiaries to, make any Capital  Expenditures,  except that during
any fiscal year of the Borrower (taken as one accounting  period),  the Borrower
and its  Subsidiaries  may make Capital  Expenditures  so long as the  aggregate
amount of all such  Capital  Expenditures  does not exceed in any fiscal year of
the Borrower $500,000.

                                       53
<PAGE>

     (b) In addition to the  foregoing,  at any time and from time to time after
the Term Loan  Satisfaction  Date,  the Borrower and its  Subsidiaries  may make
additional  Capital  Expenditures,  so long as the  aggregate  amount of Capital
Expenditures made by the Borrower and the Subsidiary pursuant to this clause (b)
does not exceed $1,000,000.

     (c) In addition to the  foregoing,  the Borrower and its  Subsidiaries  may
make Capital  Expenditures  with the amount of Net Sale Proceeds received by the
Borrower or any of its Subsidiaries from any Asset Sale so long as such Net Sale
Proceeds are  reinvested  within 90 days  following the date of such Asset Sale,
but only to the extent that such Net Sale Proceeds are not otherwise required to
be applied to repay Loans pursuant to Section 4.02(f).

     (d) In addition to the foregoing,  the Borrower or any of its  Subsidiaries
may make Capital  Expenditures  with the amount of Net Recovery  Event  Proceeds
received by the Borrower or any of its  Subsidiaries  from any Recovery Event so
long as such Net  Recovery  Event  Proceeds  are used to replace or restore  any
properties or assets in respect of which such Net Recovery  Event  Proceeds were
paid within 180 days  following  the date of receipt of such Net Recovery  Event
Proceeds from such Recovery Event, but only to the extent that such Net Recovery
Event  Proceeds  are not  otherwise  required  to be applied to repay Term Loans
pursuant to Section 4.02(g).

     9.08.  Consolidated  Interest  Coverage Ratio. The Borrower will not permit
the Consolidated  Interest Coverage Ratio for any Test Period ending on or after
September 30, 2002 to be less than 5.00:1.00.

     9.09.  Minimum  Consolidated  EBITDA.  (a) The  Borrower  will  not  permit
Consolidated  EBITDA for any  Interim  Test  Period  ending on the last day of a
calendar  month set forth  below to be less than the amount  set forth  opposite
such fiscal month below:

Calendar Month Ended                               Amount
--------------------                               ------
     April 30, 2002                              $ 6,864,000
     May 31, 2002                                $10,096,000
     June 30, 2002                               $12,993,000
     July 31, 2002                               $16,050,000
     August 31, 2002                             $20,089,000

     (b) The Borrower  will not permit  Consolidated  EBITDA for any Test Period
ending on the last day of a fiscal quarter of the Borrower set forth below to be
less than the amount set forth opposite such fiscal quarter below:

                       Fiscal Quarter
                     Ending Closest To                                  Amount

                    September 30, 2002                              $23,566,000

                    December 31, 2002                               $39,386,000

                    March 31, 2003                                  $48,303,000

                                       54
<PAGE>
                                          [***] Confidential Treatment Requested

                    June 30, 2003                                   $50,959,000

                    September 30, 2003                              $54,435,000

                    December 31, 2003                               $53,616,000

                    March 31, 2004                                  $56,343,000

                    June 30, 2004                                   $58,994,000

                    September 30, 2004                              $62,170,000

                    December 31, 2004                               $66,505,000

     9.10.  Leverage  Ratio.  The Borrower will not permit the Leverage Ratio at
any time after September 30, 2002 to be greater than 1.00:1.00.

     9.11.  Modification  of Certificate of  Incorporation,  By-Laws and Certain
Other  Agreements,  etc. The  Borrower  will not, and will not permit any of its
Subsidiaries to:

     (i) amend,  modify or change its  certificate or articles of  incorporation
(including, without limitation, by the filing or modification of any certificate
or articles of designation), certificate of formation, limited liability company
agreement  or  by-laws  (or  the  equivalent   organizational   documents),   as
applicable,  or any  agreement  entered  into by it with  respect to its capital
stock or other equity  interests  (including any  Shareholders'  Agreement),  or
enter into any new  agreement  with respect to its capital stock or other equity
interests,  unless  such  amendment,   modification,   change  or  other  action
contemplated  by this clause (i) could not  reasonably be expected to be adverse
to the interests of the Lenders in any material respect;

     (ii)  amend,  modify or change  any term or  provision  of the  Acquisition
Agreement, the Distributorship  Agreement, the Trademark Purchase and Assignment
Agreement or any of the [***] unless such  amendment,  modification or change is
approved in advance by the Administrative Agent and same could not reasonably be
expected to be adverse to the interests of the Lenders in any material  respect;
or

     (iii) make any  voluntary,  optional or mandatory  payment or prepayment in
respect of any  Indebtedness  of the  Borrower  or its  Subsidiaries,  except as
otherwise permitted by this Agreement, or amend, modify, or permit the amendment
or  modification  of,  any  provision  of  any  agreement  evidencing  any  such
Indebtedness,  except  for such  amendments  or  modifications  that  could  not
reasonably  be  expected  to be adverse to the  interest  of the  Lenders in any
material respect.

     9.12. Limitation on Certain Restrictions on Subsidiaries. The Borrower will
not, and will not permit any of its  Subsidiaries  to,  directly or  indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or  restriction  on the ability of any such  Subsidiary  to (a) pay dividends or
make any other  distributions  on its  capital  stock or any other  interest  or
participation  in its profits owned by the Borrower or any of its  Subsidiaries,
or pay any  Indebtedness  owed to the Borrower or any of its  Subsidiaries,  (b)

                                       55
<PAGE>

make  loans  or  advances  to the  Borrower  or any of its  Subsidiaries  or (c)
transfer  any  of  its  properties  or  assets  to  the  Borrower  or any of its
Subsidiaries,  except for such encumbrances or restrictions existing under or by
reason  of (i)  applicable  law,  (ii)  this  Agreement  and  the  other  Credit
Documents,  (iii) customary provisions  restricting  subletting or assignment of
any  lease  governing  any  leasehold  interest  of the  Borrower  or any of its
Subsidiaries, (iv) except where the existence of such provision causes or may be
reasonably  believed to cause a Material  Adverse Effect,  customary  provisions
restricting  assignment of any licensing agreement (in which the Borrower or any
of its  Subsidiaries  is the  licensee)  or other  contract  entered into by the
Borrower or any of its  Subsidiaries  in the ordinary  course of  business,  (v)
restrictions  on the transfer of any asset pending the close of the sale of such
asset,  and (vi)  restrictions  on the  transfer of any asset  subject to a Lien
permitted by Section 9.01(iii), (vi) or (vii).

     9.13.  Limitation on Issuance of Capital  Stock.  (a) The Borrower will not
issue (i) any preferred stock or other preferred  equity  interests , other than
Qualified  Preferred  Stock,  or (ii)  any  redeemable  common  stock  or  other
redeemable common equity interests,  other than common stock or other redeemable
common equity interests that is redeemable at the sole option of the Borrower or
such Subsidiary, as the case may be.

     (b) The  Borrower  will not  permit  any of its  Subsidiaries  to issue any
capital stock or other equity  interests  (including by way of sales of treasury
stock) or any options or warrants to purchase,  or securities  convertible into,
capital  stock  or  other  equity  interests,   except  (i)  for  transfers  and
replacements  of then  outstanding  shares  of  capital  stock or  other  equity
interests,  (ii) for stock splits,  stock  dividends and issuances  which do not
decrease the percentage  ownership of the Borrower or any of its Subsidiaries in
any class of the capital  stock or other equity  interests  of such  Subsidiary,
(iii) to qualify  directors to the extent required by applicable law or (iv) for
any  issuance  of stock or  other  equity  interests  by any  Subsidiary  of the
Borrower to the Borrower or a Wholly-Owned Subsidiary of the Borrower.

     9.14. Business;  etc. The Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than the businesses  engaged in by
Borrower and its  Subsidiaries  as of the Initial  Borrowing Date and reasonable
extensions thereof.

     9.15.  Limitation on Creation of  Subsidiaries.  The Borrower will not, and
will not permit any of its Subsidiaries to,  establish,  create or acquire after
the Initial Borrowing Date any Subsidiary.  The Borrower hereby acknowledges and
agrees that, to the extent the Required Lenders amend or waive the provisions of
this Section 9.15 to permit the Borrower to establish, create or acquire any new
Subsidiary after the Initial Borrowing Date, the Borrower will (i) pledge all of
the capital stock of such new Subsidiary to the Collateral Agent pursuant to the
terms and conditions of the Pledge Agreement,  (ii) cause such new Subsidiary to
enter  into  the  Subsidiaries  Guaranty  and  to  execute  and  deliver  to the
Collateral Agent  counterparts of the Security  Agreement and Pledge  Agreement,
(iii) to the extent required by Section 8.12, cause such new Subsidiary to enter
into such  Additional  Security  Documents  as the  Administrative  Agent or the
Required  Lenders may require and (iv) cause such new  Subsidiary to execute and
deliver all other relevant documentation  (including opinions of counsel) of the
type described in Section 5 as such new Subsidiary  would have had to deliver if
it were a Credit Party on the Initial Borrowing Date.

     9.16. Change of Legal Names; Type of Organization (and Whether a Registered
Organization;  Jurisdiction  of Organization  etc.  Neither the Borrower nor any

                                       56
<PAGE>

Subsidiary Guarantor shall change its legal name, its type of organization,  its
status as a registered organization (in the case of a registered  organization),
its  jurisdiction  of  organization,   its  location,   or  its   organizational
identification  number (if any), except that any such changes shall be permitted
(so long as such changes are not in violation of the applicable  requirements of
the  Security  Documents  and so long as same do not  involve  (x) a  registered
organization  ceasing to constitute  same or (y) the Borrower or any  Subsidiary
Guarantor  changing its jurisdiction of organization or location from the United
States or a State thereof to a jurisdiction of organization or location,  as the
case may be,  outside the United States or a State thereof) if (i) it shall have
given to the  Collateral  Agent not less than 15 days' prior  written  notice of
each  change to the  information  listed on  Schedule  VI (as  adjusted  for any
subsequent  changes  thereto  previously made in accordance with this sentence),
together with a supplement  to Schedule VI which shall  correct all  information
contained therein for the Borrower or the respective Subsidiary  Guarantor,  and
(ii) in connection  with the  respective  such change or changes,  it shall have
taken all action  reasonably  requested by the Collateral  Agent to maintain the
security  interests of the  Collateral  Agent in the  Collateral  intended to be
granted hereby at all times fully perfected and in full force and effect.

     SECTION 10. Events of Default.  Upon the occurrence of any of the following
specified events (each an "Event of Default"):

     10.01.  Payments. The Borrower shall (i) default in the payment when due of
any  principal of any Loan or any Note or (ii)  default,  and such default shall
continue  unremedied for three or more Business Days, in the payment when due of
any  interest on any Loan or Note,  any Unpaid  Drawing or any Fees or any other
amounts owing hereunder or under any other Credit Document; or

     10.02. Representations, etc. Any representation, warranty or statement made
or deemed made by any Credit Party herein or in any other Credit  Document or in
any  certificate  delivered to the  Administrative  Agent or any Lender pursuant
hereto or thereto  shall prove to be untrue in any material  respect on the date
as of which made or deemed made; or

     10.03. Covenants. The Borrower or any of its Subsidiaries shall (i) default
in the due  performance  or observance by it of any term,  covenant or agreement
contained in Section 8.01(g), 8.08, 8.11 or Section 9 or (ii) default in the due
performance  or  observance  by it of any  other  term,  covenant  or  agreement
contained in this  Agreement or in any other Credit  Document  (other than those
set forth in Sections 10.01 and 10.02) and such default described in this clause
(ii) shall  continue  unremedied  for a period of 30 days after  written  notice
thereof to the  defaulting  party by the  Administrative  Agent or the  Required
Lenders; or

     10.04.  Default  Under  Other  Agreements.  (i) The  Borrower or any of its
Subsidiaries  shall (x) default in any payment of any  Indebtedness  (other than
the Obligations)  beyond the period of grace, if any,  provided in an instrument
or  agreement  under which such  Indebtedness  was created or (y) default in the
observance  or  performance  of  any  agreement  or  condition  relating  to any
Indebtedness  (other than the  Obligations)  or contained in any  instrument  or
agreement  evidencing,  securing or relating  thereto,  or any other event shall
occur or  condition  exist,  the  effect  of  which  default  or other  event or
condition is to cause,  or to permit the holder or holders of such  Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined

                                       57
<PAGE>

without  regard to whether any notice is  required),  any such  Indebtedness  to
become due prior to its stated maturity or (ii) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries  shall be declared to be
(or shall  become) due and  payable,  or required to be prepaid  other than by a
regularly scheduled required  prepayment,  prior to the stated maturity thereof,
provided  that it shall  not be a  Default  or an Event of  Default  under  this
Section  10.04 unless the  aggregate  principal  amount of all  Indebtedness  as
described in preceding clauses (i) and (ii) is at least $1,000,000; or

     10.05.  Bankruptcy,  etc.  The  Borrower or any of its  Subsidiaries  shall
commence a voluntary case  concerning  itself under Title11 of the United States
Code  entitled  "Bankruptcy,"  as now or hereafter in effect,  or any  successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
10 days, or is not dismissed within 60 days, after  commencement of the case; or
a  custodian  (as defined in the  Bankruptcy  Code) is  appointed  for, or takes
charge of, all or  substantially  all of the  property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization,  arrangement, adjustment of debt, relief of
debtors,   dissolution,   insolvency  or  liquidation  or  similar  law  of  any
jurisdiction  whether now or hereafter in effect relating to the Borrower or any
of its  Subsidiaries,  or there is commenced  against the Borrower or any of its
Subsidiaries  any such proceeding  which remains  undismissed for a period of 60
days, or the Borrower or any of its  Subsidiaries  is  adjudicated  insolvent or
bankrupt;  or any  order of  relief or other  order  approving  any such case or
proceeding is entered;  or the Borrower or any of its  Subsidiaries  suffers any
appointment of any custodian or the like for it or any  substantial  part of its
property to continue  undischarged  or unstayed for a period of 60 days;  or the
Borrower or any of its Subsidiaries  makes a general  assignment for the benefit
of creditors;  or any corporate,  limited liability company or similar action is
taken by the  Borrower or any of its  Subsidiaries  for the purpose of effecting
any of the foregoing; or the Borrower or any Subsidiary becomes unable or admits
in writing its inability or fails generally to pay its debts as they become due;
or

     10.06.  ERISA.  (a) Any Plan  shall  fail to satisfy  the  minimum  funding
standard  required  for any plan year or part thereof  under  Section 412 of the
Code or Section 302 of ERISA or a waiver of such  standard or  extension  of any
amortization  period is  sought  or  granted  under  Section  412 of the Code or
Section  303 or 304  of  ERISA,  a  Reportable  Event  shall  have  occurred,  a
contributing  sponsor  (as  defined in Section  4001(a)(13)  of ERISA) of a Plan
subject  to  Title  IV of  ERISA  shall  be  subject  to the  advance  reporting
requirement of PBGC Regulation  Section 4043.61  (without regard to subparagraph
(b)(1)  thereof) and an event  described in subsection  .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with  respect  to such Plan  within  the  following  30 days,  any Plan which is
subject  to Title IV of ERISA  shall  have had or is  likely  to have a  trustee
appointed  to  administer  such  Plan,  any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be  terminated or to be the subject of
termination  proceedings  under ERISA,  any Plan shall have an Unfunded  Current
Liability,  a  contribution  required  to be made  with  respect  to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the  Borrower  or any ERISA  Affiliate  has  incurred  or is likely to incur any
liability to or on account of a Plan under  Section 409,  502(i),  502(l),  515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),  4971
or 4975 of the Code or on account of a group  health plan (as defined in Section
607(1) of ERISA or Section  4980B(g)(2)  of the Code) under Section 4980B of the
Code,  or the  Borrower or any  Subsidiary  of the  Borrower  has incurred or is
likely to incur  liabilities  pursuant to one or more employee  welfare  benefit
plans (as  defined in Section  3(1) of ERISA) that  provide  benefits to retired
employees  or other former  employees  (other than as required by Section 601 of
ERISA) or Plans or Foreign  Pension  Plans,  a  "default"  within the meaning of

                                       58
<PAGE>

Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable
law,   rule  or  regulation  is  adopted,   changed  or   interpreted,   or  the
interpretation or administration thereof is changed, in each case after the date
hereof,  by any  governmental  authority or agency or by any court (a "Change of
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law,  with respect to or otherwise  affecting  any Plan;  (b) there shall result
from any such  event or events  the  imposition  of a lien,  the  granting  of a
security  interest,  or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, either individually and/or in
the aggregate,  has had, or could reasonably be expected to have, in the opinion
of the Required Lenders, a Material Adverse Effect; or

     10.07. Security Documents.  Any of the Security Documents shall cease to be
in full force and effect,  or shall cease to give the  Collateral  Agent for the
benefit of the  Secured  Creditors  the  Liens,  rights,  powers and  privileges
purported to be created  thereby  (including,  without  limitation,  a perfected
security  interest  in,  and Lien  on,  all of the  Collateral,  in favor of the
Collateral  Agent,  superior  to and prior to the  rights  of all third  Persons
(except as permitted by Section 9.01),  and subject to no other Liens (except as
permitted  by  Section  9.01),  or any  Credit  Party  shall  default in the due
performance  or observance of any term,  covenant or agreement on its part to be
performed or observed  pursuant to any such  Security  Document and such default
shall  continue  beyond the  period of grace,  if any,  specifically  applicable
thereto pursuant to the terms of such Security Document; or

     10.08. Guaranties.  Any Guaranty or any provision thereof shall cease to be
in full  force or effect as to any  Guarantor,  or any  Guarantor  or any Person
acting  for or on  behalf  of  such  Guarantor  shall  deny  or  disaffirm  such
Guarantor's  obligations  under  the  Guaranty  to  which  it is a party  or any
Guarantor  shall  default  in the due  performance  or  observance  of any term,
covenant or agreement  on its part to be  performed or observed  pursuant to the
Guaranty to which it is a party; or

     10.09. Judgments. One or more judgments or decrees shall be entered against
the Borrower or any  Subsidiary  of the Borrower  involving in the aggregate for
the Borrower and its  Subsidiaries  a liability  (not paid or fully covered by a
reputable and solvent  insurance  company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated,  discharged or stayed
or  bonded  pending  appeal  for any  period  of 30  consecutive  days,  and the
aggregate amount of all such judgments equals or exceeds $1,000,000; or

     10.10.   Change   of   Control.   A  Change   of   Control   shall   occur;

     10.11.  Equity  Financing.  The Borrower shall not have received Net Equity
Proceeds  in an  aggregate  amount  of at  least  $30,000,000  from  one or more
issuances of equity after the Initial  Borrowing  Date and on or before the date
which occurs three calendar months after the Initial Borrowing Date or shall not
have applied  same as a mandatory  repayment  of  outstanding  principal of Term
Loans; or

     10.12.  Distributorship  Agreement.  The  Distributorship  Agreement or any
provision  thereof  shall cease to be in full force or effect as to either Bayer
A.G. or the  Borrower,  or Bayer A.G. or the  Borrower  shall deny or  disaffirm
their  obligations  under the  Distributorship  Agreement  or Bayer A.G.  or the
Borrower  shall  default  in the due  performance  or  observance  of any  term,
covenant or agreement  on its part to be  performed or observed  pursuant to the
Distributorship Agreement;

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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be  continuing,  the  Administrative  Agent may,  or upon the written
request of the Required  Lenders shall, by written notice to the Borrower,  take
any or all of the  following  actions,  without  prejudice  to the rights of the
Administrative Agent, any Lender or the holder of any Note to enforce its claims
against any Credit Party  (provided  that,  if an Event of Default  specified in
Section 10.05 shall occur with respect to the  Borrower,  the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall  occur  automatically  without the giving of
any such notice):  (i) declare the Total  Commitment  terminated,  whereupon all
Commitments  of  each  Lender  shall  forthwith  terminate  immediately  and any
Commitment  Commission  shall forthwith become due and payable without any other
notice of any kind;  (ii) declare the  principal of and any accrued  interest in
respect  of all  Loans and the Notes and all  Obligations  owing  hereunder  and
thereunder to be,  whereupon  the same shall  become,  forthwith due and payable
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby  waived by each Credit  Party;  (iii)  terminate any Letter of Credit
which may be terminated in accordance  with its terms;  (iv) direct the Borrower
to pay (and the Borrower  agrees that upon  receipt of such notice,  or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower,  it will  pay) to the  Collateral  Agent at the  Payment  Office  such
additional  amount of cash or Cash  Equivalents,  to be held as  security by the
Collateral  Agent, as is equal to the aggregate  Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all of the Liens and security interests created pursuant to
the  Security  Documents;  and  (vi)  apply  any  cash  collateral  held  by the
Administrative   Agent  pursuant  to  Section  4.02  to  the  repayment  of  the
Obligations.

SECTION 11. Definitions and Accounting Terms.

     11.01. 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):  "Acquisition"  shall mean the
acquisition by the Borrower of AstraZeneca UK Limited's  rights in, and relating
to,  Sular  (including  without  limitation  all  assets and  licenses),  a drug
manufactured by Bayer A.G.

     "Acquisition  Agreement"  shall mean that certain Asset Purchase  Agreement
dated as of  February  12, 2002 by and  between  AstraZeneca  UK Limited and the
Borrower as amended,  modified or supplemented  from time to time, in accordance
with the terms hereof and thereof.

     "Acquisition  Documents" shall mean the Acquisition Agreement and all other
agreements and documents relating to the Acquisition.

     "Additional  Security Documents" shall have the meaning provided in Section
8.12.

     "Administrative  Agent" shall mean BTCo, in its capacity as  Administrative
Agent  for the  Lenders  hereunder,  and  shall  include  any  successor  to the
Administrative  Agent appointed pursuant to Section 12.09.  Without limiting the
foregoing,  it is  understood  and agreed  that,  for purposes of Section 12 and
13.01 of this Agreement,  the term  Administrative  Agent shall also include (x)

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<PAGE>

BTCo in its capacity as Collateral Agent pursuant to the Security  Documents and
(y)  Deutsche  Banc  Alex.  Brown  Inc.  as Lead  Arranger  and Book  Manager in
connection with this Agreement and the syndication hereof.

     "Affiliate"  shall  mean,  with  respect to any  Person,  any other  Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person),  controlled by, or under direct or indirect common
control with,  such Person.  For the purposes of Section 9.06, a Person shall be
deemed  to  control  another  Person  if  such  Person  possesses,  directly  or
indirectly,  the power (i) to vote 5% or more of the securities  having ordinary
voting power for the election of directors  (or  equivalent  governing  body) of
such  Person  or (ii) to direct or cause the  direction  of the  management  and
policies  of  such  other  Person,  whether  through  the  ownership  of  voting
securities,  by contract  or  otherwise;  provided,  however,  that  neither the
Administrative  Agent  nor any  Lender  (nor  any  Affiliate  thereof)  shall be
considered an Affiliate of the Borrower or any Subsidiary thereof.

     "Agreement"  shall mean this Credit Agreement,  as modified,  supplemented,
amended,  restated (including any amendment and restatement hereof), extended or
renewed from time to time.

     "Applicable  Commitment  Fee  Percentage"  shall mean (x) prior to the Term
Loan  Satisfaction  Date,  3/4  of 1%  and  (y)  on  and  after  the  Term  Loan
Satisfaction Date 1/2 of 1%.

     "Applicable  Margin"  initially shall mean a percentage per annum equal to,
in the case of (x) Term Loans (A) maintained as Eurodollar Loans,  3.75% and (B)
maintained  as Base Rate Loans,  2.75%;  and (y) in the case of Revolving  Loans
maintained as (A) Eurodollar Loans, 3.25% and (B) maintained as Base Rate Loans,
2.25%;  provided  that (x) each  Applicable  Margin  as set  forth  above  shall
increase by 0.50% on the three month  anniversary of the Initial  Borrowing Date
unless  all Term Loans have  theretofore  been  repaid in full and (y) after the
Term Loan Satisfaction  Date, from and after any Start Date to and including the
corresponding  End Date, the Applicable  Margin for Revolving Loans shall be the
respective  percentage  per annum set forth below under the  respective  Type of
Loans and opposite  the  respective  Level  (i.e.,  Level 1, Level 2, Level 3 or
Level 4, as the case may be) indicated to have been  achieved on the  applicable
Test Date of such Start Date (as shown in the respective  officer's  certificate
delivered pursuant to Section 8.01(f) or the first proviso below):

------- -------------------------------------------- ---------------- ----------
                                                       Revolving      Revolving
                                                         Loans          Loans
                                                     maintained as    maintained
                                                       Eurodollar      as Base
 Level                 Leverage Ratio                    Loans        Rate Loans
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
   1    Less than 1.75:1.00                                2.75%         1.75%
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
   2    Greater than or equal to 1.75:1.00 but             3.00%         2.00%
        less than 2.25:1.00
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
   3    Greater than or equal to 2.25:1.00 but             3.25%         2.25%
        less than 2.75:1.00
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
   4    Greater than or equal to 2.75:1.00                 3.50%         2.50%
------- -------------------------------------------- ---------------- ----------

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<PAGE>

;  provided,  however,  that if the  Borrower  fails to  deliver  the  financial
statements  required  to  be  delivered  pursuant  to  Section  8.01(b)  or  (c)
(accompanied by the officer's  certificate  required to be delivered pursuant to
Section 8.01(f) showing the applicable Leverage Ratio on the relevant Test Date)
on or prior to the  respective  date  required  by such  Sections,  then Level 4
pricing  shall  apply  until  such time,  if any,  as the  financial  statements
required as set forth above and the accompanying officer's certificate have been
delivered  showing the pricing for the respective  Margin Reduction Period is at
Level below Level 4 (it being  understood that, in the case of any late delivery
of the  financial  statements  and  officer's  certificate  as so required,  any
reduction in the  Applicable  Margin shall apply only from and after the date of
the delivery of the complying financial  statements and officer's  certificate);
provided further, that Level 4 pricing shall apply at all times when any Default
or Event of Default is in existence.

     "Asset  Sale"  shall mean any sale,  transfer or other  disposition  by the
Borrower  or  any  of  its  Subsidiaries  to  any  Person  (including  by way of
redemption  by such  Person),  other  than  to the  Borrower  or a  Wholly-Owned
Subsidiary of the Borrower,  of any asset (including,  without  limitation,  any
capital stock or other  securities of, or equity  interests in, another  Person)
other than sales of assets pursuant to Sections 9.02(ii) and 9.02(vi).

     "Assignment  and  Assumption   Agreement"  shall  mean  an  Assignment  and
Assumption  Agreement  substantially  in the form of  Exhibit  K  (appropriately
completed).

     "Bankruptcy Code" shall have the meaning provided in Section 10.05.

     "Base Rate" shall mean,  at any time,  the higher of (i) the Prime  Lending
Rate at such time and (ii) 1/2 of 1% in excess of the  overnight  Federal  Funds
Rate at such time.

     "Base Rate Loan" shall mean each Loan  designated  or deemed  designated as
such  by the  Borrower  at the  time of the  incurrence  thereof  or  conversion
thereto.

     "Borrower" shall mean First Horizon Pharmaceutical  Corporation, a Delaware
corporation.

     "Borrowing"  shall  mean  the  borrowing  of one  Type of Loan of a  single
Tranche from all the Lenders having  Commitments  of the respective  Tranche (or
from the  Swingline  Lender in the case of Swingline  Loans) on a given date (or
resulting  from a conversion or  conversions on such date) having in the case of
Eurodollar  Loans the same  Interest  Period,  provided  that  Base  Rate  Loans
incurred  pursuant to Section  1.10(b) shall be  considered  part of the related
Borrowing of Eurodollar Loans.

     "BTCo" shall mean Bankers Trust Company,  in its individual  capacity,  and
any successor corporation thereto by merger, consolidation or otherwise.

     "Business  Day"  shall mean (i) for all  purposes  other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York, New York, a legal holiday or a day on which banking  institutions  are
authorized or required by law or other government  action to close and (ii) with
respect to all notices and  determinations  in connection  with, and payments of

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<PAGE>

principal  and interest on,  Eurodollar  Loans,  any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.

     "Capital  Expenditures"  shall  mean,  with  respect  to  any  Person,  all
expenditures  by such Person  which should be  capitalized  in  accordance  with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.

     "Capitalized Lease Obligations" shall mean, with respect to any Person, all
rental  obligations of such Person which,  under generally  accepted  accounting
principles,  are or will be  required  to be  capitalized  on the  books of such
Person,  in each case taken at the amount thereof  accounted for as indebtedness
in accordance with such principles.

     "Cash  Equivalents"  shall mean, as to any Person, (i) securities issued or
directly and fully  guaranteed  or insured by the United States or any agency or
instrumentality  thereof  (provided that the full faith and credit of the United
States is pledged in support  thereof)  having  maturities  of not more than six
months from the date of acquisition,  (ii) marketable direct  obligations issued
by any state of the United States or any political subdivision of any such state
or any public  instrumentality  thereof maturing within six months from the date
of acquisition  thereof and, at the time of  acquisition,  having one of the two
highest ratings obtainable from either S&P or Moody's,  (iii) Dollar denominated
time deposits,  certificates of deposit and bankers acceptances of any Lender or
any commercial bank having,  or which is the principal  banking  subsidiary of a
bank holding company having,  a long-term  unsecured debt rating of at least "A"
or the  equivalent  thereof  from  S&P or "A2" or the  equivalent  thereof  from
Moody's with maturities of not more than six months from the date of acquisition
by such Person,  (iv) repurchase  obligations with a term of not more than seven
days for  underlying  securities  of the types  described  in  clause  (i) above
entered into with any bank meeting the qualifications  specified in clause (iii)
above,  (v)  commercial  paper issued by any Person  incorporated  in the United
States  rated at least A-1 or the  equivalent  thereof by S&P or at least P-1 or
the  equivalent  thereof by Moody's and in each case  maturing not more than six
months after the date of  acquisition  by such Person,  and (vi)  investments in
money market funds substantially all of whose assets are comprised of securities
of the types described in clauses (i) through (v) above.

     "CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and  Liability  Act of 1980,  as the same has been amended and may  hereafter be
amended from time to time, 42 U.S.C. section 9601 et seq.

     "Change of Control"  shall mean (i) any  "person" or "group" (as such terms
are used in  Section  13(d)  and  14(d) of the  Exchange  Act)  (other  than the
Permitted  Holders)  is or shall  become the  "beneficial  owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act),  directly or  indirectly,  of
greater than 30% of the economic or voting  interests in the Borrower's  capital
stock,  (ii) the Board of Directors of the Borrower  shall cease to consist of a
majority of Continuing Directors or (iii) a "change of control" or similar event
shall  occur  as  provided  in any  Qualified  Preferred  Stock  or  outstanding
Indebtedness (or the documentation governing the same).

     "Change of Law" shall have the meaning provided in Section 10.06.

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<PAGE>

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended from time
to time, and the regulations promulgated and rulings issued thereunder.  Section
references  to the  Code  are to the  Code  as in  effect  at the  date  of this
Agreement  and  any  subsequent  provisions  of  the  Code  amendatory  thereof,
supplemental thereto or substituted therefor.

     "Collateral"  shall  mean all  property  (whether  real or  personal)  with
respect to which any security  interests  have been granted (or  purported to be
granted) pursuant to any Security Document,  including,  without limitation, all
Pledge Agreement Collateral,  all Security Agreement  Collateral,  all Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10.

     "Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.

     "Collective  Bargaining  Agreements"  shall have the  meaning  provided  in
Section 5.05.

     "Commitment" shall mean any of the commitments of any Lender,  i.e., either
a Term Loan Commitment or a Revolving Loan Commitment.

     "Commitment Commission" shall have the meaning provided in Section 3.01(a).

     "Consolidated EBIT" shall mean, for any period, Consolidated Net Income for
such period before deducting  therefrom  Consolidated  Interest Expense for such
period (to the extent that such  Consolidated  Interest  Expense was deducted in
arriving at  Consolidated  Net Income for such period) and  provision  for taxes
based on income that were  included in arriving at  Consolidated  Net Income for
such  period and without  giving  effect (x) to any  extraordinary  gains or any
extraordinary  non-cash losses (except to the extent that any such extraordinary
non-cash  losses will require a cash payment in a future  period) and (y) to any
gains or losses from sales of assets  other than from sales of  inventory in the
ordinary course of business.

     "Consolidated  EBITDA" shall mean,  for any period,  Consolidated  EBIT for
such  period,  adjusted  by adding  thereto  the amount of all  amortization  of
intangibles and depreciation  that were deducted in arriving at Consolidated Net
Income for such period.

     "Consolidated  Indebtedness"  shall mean, at any time, the principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such time determined
on a consolidated basis.

     "Consolidated  Interest  Coverage  Ratio" shall mean,  for any period,  the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.

     "Consolidated  Interest Expense" shall mean, for any period, the sum of the
total  consolidated  interest  expense of the Borrower and its  Subsidiaries for
such  period  (calculated  without  regard  to any  limitations  on the  payment
thereof)  plus,  without  duplication,  (x) that  portion of  Capitalized  Lease

                                       64
<PAGE>

Obligations  of the  Borrower  and its  Subsidiaries  representing  the interest
factor for such period and (y) the "deemed interest expense" (i.e., the interest
expense which would have been  applicable  if the  respective  obligations  were
structured  as  on-balance  sheet  financing  arrangements)  with respect to all
Indebtedness  of the  Borrower  and its  Subsidiaries  of the type  described in
clause  (viii) of the  definition  of  Indebtedness  contained  herein  for such
period.

     "Consolidated  Net Income" shall mean,  for any period,  the net income (or
loss) of the Borrower and its  Subsidiaries  for such  period,  determined  on a
consolidated basis (after any deduction for minority  interests),  provided that
(i) in determining  Consolidated Net Income,  the net income of any other Person
which is not a Subsidiary of the Borrower or is accounted for by the Borrower by
the equity  method of  accounting  shall be  included  only to the extent of the
payment of cash  dividends  or cash  distributions  by such other  Person to the
Borrower or a Subsidiary thereof during such period,  (ii) the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the  declaration
or payment of cash dividends or similar cash distributions by that Subsidiary of
that net income is not at the date of  determination  permitted  by operation of
its charter or any agreement,  instrument or law  applicable to such  Subsidiary
and (iii) the net income (or loss) of any other Person  acquired by the Borrower
or a Subsidiary  of the Borrower in a pooling of interests  transaction  for any
period prior to the date of such acquisition shall be excluded.

     "Contingent  Obligation"  shall mean, as to any Person,  any  obligation of
such  Person as a result of such  Person  being a general  partner  of any other
Person,  unless the underlying  obligation is expressly made  non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness,  leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly,  including,  without limitation,  any obligation of such
Person,  whether or not contingent,  (i) to purchase any such primary obligation
or any  property  constituting  direct or indirect  security  therefor,  (ii) to
advance or supply  funds (x) for the  purchase  or  payment of any such  primary
obligation or (y) to maintain  working  capital or equity capital of the primary
obligor or  otherwise  to  maintain  the net worth or  solvency  of the  primary
obligor,  (iii) to purchase  property,  securities or services primarily for the
purpose of assuring the owner of any such primary  obligation  of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof;  provided,  however,  that the term Contingent Obligation shall
not  include  endorsements  of  instruments  for  deposit or  collection  in the
ordinary course of business.  The amount of any Contingent  Obligation  shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation  in respect of which such  Contingent  Obligation  is made or, if not
stated or determinable,  the maximum reasonably anticipated liability in respect
thereof  (assuming such Person is required to perform  thereunder) as determined
by such Person in good faith.

     "Continuing  Directors"  shall mean the  directors  of the  Borrower on the
Effective  Date  and each  other  director  if such  director's  nomination  for
election to the Board of Directors of the Borrower is  recommended by a majority
of the then Continuing Directors.

     "Credit  Documents"  shall mean this Agreement and, after the execution and
delivery  thereof  pursuant  to the  terms of this  Agreement,  each  Note,  the
Subsidiaries Guaranty and each Security Document.

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<PAGE>

     "Credit  Event"  shall mean the making of any Loan or the  issuance  of any
Letter of Credit.

     "Credit Party" shall mean the Borrower and each Subsidiary Guarantor.

     "Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.

     "Defaulting  Lender"  shall mean any Lender with  respect to which a Lender
Default is in effect.

     "Distributorship  Agreement" shall mean the Distributorship Agreement dated
as of December 12, 2001,  by and between Bayer A.G. and the Borrower as amended,
modified or supplemented  from time to time, in accordance with the terms hereof
and thereof.

     "Dividend"  shall mean,  with  respect to any Person,  that such Person has
declared or paid a dividend,  distribution or returned any equity capital to its
stockholders,  partners or members or authorized or made any other distribution,
payment or  delivery of property  (other than common  equity of such  Person) or
cash to its  stockholders,  partners or members as such,  or redeemed,  retired,
purchased or otherwise acquired, directly or indirectly, for a consideration any
shares  of any  class of its  capital  stock or any  partnership  or  membership
interests outstanding on or after the Effective Date (or any options or warrants
issued  by such  Person  with  respect  to its  capital  stock or  other  equity
interests),  or set aside any funds for any of the foregoing purposes,  or shall
have permitted any of its  Subsidiaries  to purchase or otherwise  acquire for a
consideration any shares of any class of the capital stock or any partnership or
membership  interests of such Person  outstanding on or after the Effective Date
(or any  options or warrants  issued by such Person with  respect to its capital
stock or other equity  interests).  Without limiting the foregoing,  "Dividends"
with respect to any Person  shall also include all payments  made or required to
be made by such Person with  respect to any stock  appreciation  rights,  plans,
equity  incentive or achievement  plans or any similar plans or setting aside of
any funds for the foregoing purposes.

     "Documentation  Agent"  shall  have  the  meaning  provided  in  the  first
paragraph of this Agreement.

     "Documents" shall mean the Credit Documents, the Acquisition Documents, the
Distributorship Agreement and the Trademark Purchase and Assignment Agreement.

     "Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.

     "Drawing" shall have the meaning provided in Section 2.05(b).

     "Effective Date" shall have the meaning provided in Section 13.10.

     "Eligible  Transferee"  shall  mean  and  include  a  commercial  bank,  an
insurance  company, a finance company,  a financial  institution,  any fund that
invests in loans or any other "accredited  investor" (as defined in Regulation D
of the Securities Act).

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<PAGE>

     "Employee Benefit Plans" shall have the meaning provided in Section 5.05.

     "Employment Agreements" shall have the meaning provided in Section 5.05.

     "End Date" shall mean,  for any Margin  Reduction  Period,  the last day of
such Margin Reduction Period.

     "Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions,  suits, demands,  demand letters,  directives,  claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any  Environmental  Law or any permit issued,  or any approval given,
under any such  Environmental  Law  (hereafter,  "Claims"),  including,  without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement,  cleanup, removal,  response,  remedial or other actions or damages
pursuant to any applicable  Environmental Law, and (b) any and all Claims by any
third party  seeking  damages,  contribution,  indemnification,  cost  recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health,  safety or the  environment  due to the  presence of Hazardous
Materials.

     "Environmental  Law"  shall  mean  any  Federal,  state,  foreign  or local
statute, law, rule, regulation,  ordinance, code, guideline,  policy and rule of
common  law now or  hereafter  in effect  and in each case as  amended,  and any
judicial or  administrative  interpretation  thereof,  including any judicial or
administrative  order, consent decree or judgment,  relating to the environment,
employee  health  and  safety  or  Hazardous   Materials,   including,   without
limitation,  CERCLA;  the  Resource  Conservation  and  Recovery  Act, 42 U.S.C.
section 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. section
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.  section 2601 et seq.;
the Clean Air Act, 42 U.S.C.  section 7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. section 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. section
2701 et seq.;  the  Emergency  Planning and the Community  Right-to-Know  Act of
1986, 42 U.S.C.  section 11001 et seq.;  the Hazardous  Material  Transportation
Act, 49 U.S.C.  section 1801 et seq.; the Occupational Safety and Health Act, 29
U.S.C.  section 651 et seq.; and any state and local or foreign  counterparts or
equivalents, in each case as amended from time to time.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time, and the  regulations  promulgated  and rulings issued
thereunder.  Section  references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent  provisions of ERISA,  amendatory  thereof,
supplemental thereto or substituted therefor.

     "ERISA  Affiliate"  shall mean each person (as  defined in Section  3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b),  (c),
(m) or (o) of the Code or (ii) as a result of the  Borrower or a  Subsidiary  of
the Borrower being or having been a general partner of such person.

     "Eurodollar  Loan"  shall  mean each Loan  (other  than a  Swingline  Loan)
designated  as such by the  Borrower  at the time of the  incurrence  thereof or
conversion thereto.

     "Eurodollar Rate" shall mean (a) the offered quotation to first-class banks
in the New York  interbank  Eurodollar  market by BTCo for  Dollar  deposits  of
amounts in immediately  available funds comparable to the outstanding  principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period   applicable  to  such  Eurodollar  Loan  commencing  two  Business  Days
thereafter  as of  10:00  A.M.  (New  York  time)  on  the  applicable  Interest

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Determination  Date,  divided (and rounded  upward to the nearest 1/16 of 1%) by
(b) a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements   (including,   without   limitation,   any  marginal,   emergency,
supplemental,  special or other reserves  required by applicable law) applicable
to any member  bank of the  Federal  Reserve  System in respect of  Eurocurrency
funding or liabilities as defined in Regulation D (or any successor  category of
liabilities under Regulation D).

     "Event of Default" shall have the meaning provided in Section 10.

     "Excess Inventory Refund" shall mean the amount of the purchase price to be
paid  pursuant to the  Acquisition  Agreement  to be refunded to the Borrower by
AstraZeneca UK Limited pursuant to Section 4.02 of the Acquisition Agreement.

     "Exchange Act" shall mean the Securities  Exchange Act of 1934, as amended,
and the rules and  regulations  promulgated  thereunder  as from time to time in
effect.

     "Existing  Credit  Agreement"  shall mean the Amended and Restated Loan and
Security  Agreement  dated as of December 22, 1998,  as amended to the Effective
Date, between the Borrower and LaSalle Bank National  Association (f/k/a LaSalle
National Bank).

     "Existing  Indebtedness  Agreements"  shall have the  meaning  provided  in
Section 5.05.

     "Facing Fee" shall have the meaning provided in Section 3.01(c).

     "Federal  Funds Rate" shall mean,  for any period,  a fluctuating  interest
rate 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 which
is a  Business  Day,  the  average  of the  quotations  for  such  day  on  such
transactions  received  by the  Administrative  Agent from three  Federal  Funds
brokers of recognized standing selected by the Administrative Agent.

     "Fees" shall mean all amounts payable pursuant to or referred to in Section
3.01.

     "Foreign  Exchange  Hedging  Agreement"  shall  mean any  foreign  exchange
contracts,  currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.

     "Foreign Pension Plan" shall mean each employee  benefit plan,  employment,
bonus,  incentive,  stock purchase and stock option plan, program,  agreement or
arrangement;   and  each  severance,   termination  pay,  salary   continuation,
retention,  accrued  leave,  vacation,  sick  pay,  sick  leave,  medical,  life
insurance,  disability,  accident,  profit-sharing,   fringe  benefit,  pension,
deferred compensation or other retirement or superannuation plan, fund, program,
agreement,  commitment  or  arrangement  sponsored,  established,  maintained or
contributed  to, or required to be contributed  to, or with respect to which any
liability is borne, outside the fifty states of the United States of America, by

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the Borrower or any of its Subsidiaries, including, without limitation, any such
plan,  fund,  program,  agreement or  arrangement  sponsored by a government  or
governmental entity.

     "Guarantor" shall mean each Subsidiary Guarantor.

     "Guaranty" shall mean the Subsidiaries Guaranty.

     "Hazardous  Materials" shall mean (a) any petroleum or petroleum  products,
radioactive  materials,  asbestos in any form that is or could  become  friable,
urea  formaldehyde  foam  insulation,  dielectric  fluid  containing  levels  of
polychlorinated  biphenyls,  and radon  gas;  (b) any  chemicals,  materials  or
substances  defined as or included in the definition of "hazardous  substances,"
"hazardous  waste," "hazardous  materials,"  "extremely  hazardous  substances,"
"restricted   hazardous   waste,"  "toxic   substances,"   "toxic   pollutants,"
"contaminants,"  or  "pollutants,"  or  words  of  similar  import,   under  any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or Release of which is prohibited,  limited or regulated by any
governmental authority.

     "Indebtedness" shall mean, as to any Person,  without duplication,  (i) all
indebtedness  (including principal,  interest,  fees and charges) of such Person
for borrowed  money or for the deferred  purchase price of property or services,
(ii) the  maximum  amount  available  to be drawn  under all  letters of credit,
bankers'  acceptances  and  similar  obligations  issued for the account of such
Person and all unpaid  drawings in respect of such  letters of credit,  bankers'
acceptances  and  similar  obligations,  (iii)  all  Indebtedness  of the  types
described  in clause (i),  (ii),  (iv),  (v),  (vi) or (vii) of this  definition
secured by any Lien on any property  owned by such  Person,  whether or not such
Indebtedness  has been assumed by such Person  (provided that, if the Person has
not assumed or otherwise  become  liable in respect of such  Indebtedness,  such
Indebtedness  shall be deemed to be in an amount  equal to the fair market value
of the property to which such Lien relates as  determined  in good faith by such
Person),  (iv) the aggregate amount of all Capitalized Lease Obligations of such
Person, (v) all obligations of such Person to pay a specified purchase price for
goods or services,  whether or not delivered or accepted,  i.e., take-or-pay and
similar obligations,  (vi) all Contingent  Obligations of such Person, (vii) all
obligations  under any Interest  Rate  Protection  Agreement,  any Other Hedging
Agreement  or under any  similar  type of  agreement  and  (viii)  all  monetary
obligations of such Person under (x) a so-called synthetic, off-balance sheet or
tax retention  lease,  or (y) an agreement for the use or possession of property
creating  obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person,  would be characterized
as the  indebtedness of such Person  (without  regard to accounting  treatment).
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses  incurred by any Person in accordance with customary  practices
and in the ordinary course of business of such Person.

     "Initial  Borrowing  Date"  shall mean the date  occurring  on or after the
Effective Date on which the initial Borrowing of Loans occurs.

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<PAGE>

     "Interest  Determination  Date" shall mean,  with respect to any Eurodollar
Loan, the second  Business Day prior to the  commencement of any Interest Period
relating to such Eurodollar Loan.

     "Interest Period" shall have the meaning provided in Section 1.09.

     "Interest  Rate  Protection  Agreement"  shall mean any interest  rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.

     "Interim  Test  Period"  shall mean each  period  (taken as one  accounting
period)  beginning  on March 1, 2002 and  ending on the last day of April,  May,
June, July or August of 2002.

     "Investments" shall have the meaning provided in Section 9.05.

     "Issuing   Lender"   shall  mean  BTCo  or  any  Lender   approved  by  the
Administrative  Agent  which has agreed to issue  Letters  of Credit  under this
Agreement.

     "L/C Supportable Obligations" shall mean (i) obligations of the Borrower or
any of its Subsidiaries with respect to workers  compensation,  surety bonds and
other  similar  statutory  obligations  and (ii) such other  obligations  of the
Borrower or any of its Subsidiaries as are reasonably  acceptable to the Issuing
Lender and otherwise permitted to exist pursuant to the terms of this Agreement.

     "Leaseholds" of any Person shall mean all the right,  title and interest of
such Person as lessee or licensee  in, to and under  leases or licenses of land,
improvements and/or fixtures.

     "Lender"  shall mean each  financial  institution  listed on Schedule I, as
well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13 or
13.04(b).

     "Lender  Default" shall mean (i) the refusal (which has not been retracted)
or the  failure  of a Lender to make  available  its  portion  of any  Borrowing
(including  any Mandatory  Borrowing) in violation of the  requirements  of this
Agreement  or to fund its  portion of any  unreimbursed  payment  under  Section
2.04(c) or (ii) a Lender  having  notified  in writing the  Borrower  and/or the
Administrative  Agent  that such  Lender  does not  intend  to  comply  with its
obligations under Section 1.01(a), 1.01(b), 1.01(d) or 2.

     "Letter of Credit" shall have the meaning provided in Section 2.01(a).

     "Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).

     "Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount
of all Unpaid Drawings in respect of all Letters of Credit.

     "Letter of Credit  Request"  shall  have the  meaning  provided  in Section
2.03(a).

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<PAGE>

     "Leverage  Ratio"  shall  mean,  at any  time,  the  ratio of  Consolidated
Indebtedness at such time to  Consolidated  EBITDA for the Test Period then most
recently ended;  provided that if the Leverage Ratio is being  determined at any
time prior to March 31, 2003 (and,  as a result  thereof,  the  respective  Test
Period for determining  Consolidated  EBITDA is less than four fiscal quarters),
then for determining the Leverage Ratio, Consolidated EBITDA shall be annualized
by taking  Consolidated  EBITDA for the Test Period then most recently ended and
multiplying  same by (x) two, if the  respective  Test Period ended on September
30, 2002 or (y) 4/3, if the respective Test Period ended on December 31, 2002.

     "Lien" shall mean any mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance,  lien (statutory or other),  preference,  priority or
other security  agreement of any kind or nature whatsoever  (including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  or  similar  statement  or  notice  filed  under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).

     "Loan" shall mean each Term Loan,  each  Revolving  Loan and each Swingline
Loan.

     "Location" of any Person shall mean its location as determined  pursuant to
Section 9-307 of the UCC (or any successor section thereof).

     "Management Agreements" shall have the meaning provided in Section 5.05.

     "Mandatory Borrowing" shall have the meaning provided in Section 1.01(d).

     "Margin  Reduction  Period" shall mean each period which shall  commence on
the date upon which the respective  officer's  certificate is delivered pursuant
to Section 8.01(f) (together with the related financial  statements  pursuant to
Section  8.01(b) or (c),  as the case may be) and which shall end on the date of
actual  delivery of the next officer's  certificate  pursuant to Section 8.01(f)
with respect to quarterly or annual financial  statements  delivered pursuant to
Section 8.01(b) or (c) (and related financial  statements) or the latest date on
which such next  officer's  certificate  (and related  financial  statements) is
required to be so delivered; it being understood that the first Margin Reduction
Period shall commence with the first delivery of an officer's  certificate  (and
related financial  statements) as described above occurring on or after the Term
Loan Satisfaction Date.

     "Margin Stock" shall have the meaning provided in Regulation U.

     "Material  Adverse Effect" shall mean (i) a material  adverse effect on the
business,  operations,  property, assets,  liabilities,  condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or
(ii) a material  adverse  effect (x) on the rights or remedies of the Lenders or
the Administrative  Agent hereunder or under any other Credit Document or (y) on
the  ability of any Credit  Party to perform its  obligations  to the Lenders or
Administrative Agent hereunder or under any other Credit Document.

     "Maximum Swingline Amount" shall mean $2,500,000.

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<PAGE>

     "Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000,  (ii)
for Revolving Loans, $1,000,000, and (iii) for Swingline Loans, $500,000.

     "Moody's" shall mean Moody's Investors Service, Inc.

     "Mortgage"  shall  mean a  mortgage,  leasehold  mortgage,  deed of  trust,
leasehold deed of trust,  deed to secure debt,  leasehold deed to secure debt or
similar security instrument.

     "Mortgage Policy" shall mean a mortgage title insurance policy or a binding
commitment with respect thereto.

     "Mortgaged  Property"  shall mean any Real Property  owned or leased by the
Borrower  or any of its  Subsidiaries  which is  encumbered  (or  required to be
encumbered) by a Mortgage.

     "NAIC" shall mean the National Association of Insurance Commissioners.

     "Net  Debt  Proceeds"  shall  mean,  with  respect  to  any  incurrence  of
Indebtedness  for  borrowed  money,  the  cash  proceeds  (net  of  underwriting
discounts and  commissions  and other  reasonable  costs  associated  therewith)
received  by the  respective  Person  from  the  respective  incurrence  of such
Indebtedness for borrowed money.

     "Net Equity  Proceeds" shall mean, with respect to each issuance or sale of
any equity by any Person or any capital  contribution  to such Person,  the cash
proceeds (net of underwriting  discounts and  commissions  and other  reasonable
costs associated  therewith) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.

     "Net  Recovery  Event  Proceeds"  shall mean,  with respect to any Recovery
Event,  the cash  proceeds  (net of  reasonable  costs  and  taxes  incurred  in
connection  with such  Recovery  Event)  received  by the  respective  Person in
connection with such Recovery Event,  including without limitation any such cash
proceeds received pursuant to insurance  policies,  as condemnation  proceeds or
otherwise.

     "Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such
Asset Sale, net of the reasonable  costs of such Asset Sale  (including fees and
commissions,  payments of unassumed  liabilities relating to any assets sold and
required payments of any Indebtedness (other than Indebtedness  secured pursuant
to the Security  Documents)  which is secured by any assets sold pursuant to the
respective Asset Sale), and the incremental taxes paid or payable as a result of
such Asset Sale.

     "Non-Compete Agreements" shall have the meaning provided in Section 5.05.

     "Non-Defaulting  Lender"  and  "Non-Defaulting  RL  Lender"  shall mean and
include  each Lender or RL Lender,  as the case may be,  other than a Defaulting
Lender.

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                                          [***] Confidential Treatment Requested

     "Note" shall mean each Term Note,  each  Revolving  Note and the  Swingline
Note.

     "Notice of Borrowing" shall have the meaning provided in Section 1.03(a).

     "Notice of  Conversion/Continuation"  shall have the  meaning  provided  in
Section 1.06.

     "Notice Office" shall mean the office of the  Administrative  Agent located
at 90 Hudson Street,  Fifth Floor,  Jersey City, New Jersey,  07302,  Attention:
Adwin  Velez or such  other  office or person  as the  Administrative  Agent may
hereafter designate in writing as such to the other parties hereto.

     "Obligations" shall mean all amounts owing to the Administrative Agent, the
Collateral  Agent,  the  Issuing  Lender,  the  Swingline  Lender or any  Lender
pursuant to the terms of this Agreement or any other Credit Document.

     "Other  Hedging  Agreements"  shall mean any  foreign  exchange  contracts,
currency swap agreements,  commodity  agreements or other similar  agreements or
arrangements  designed to protect  against  fluctuations  in currency  values or
commodity prices.

     "Participant" shall have the meaning provided in Section 2.04(a).

     "Payment Office" shall mean the office of the Administrative  Agent located
at 90 Hudson Street,  Jersey City, New Jersey, 07302 or such other office as the
Administrative  Agent may  hereafter  designate  in writing as such to the other
parties hereto.

     "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation  established
pursuant to Section 4002 of ERISA, or any successor thereto.

     "[***]" shall mean one or more documents evidencing loans from the Borrower
to [***], all of which documents shall be in form and substance  satisfactory to
the Administrative Agent.

     "Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the Mortgage Policy  delivered with
respect   thereto,   all  of  which   exceptions   must  be  acceptable  to  the
Administrative Agent in its reasonable discretion.

     "Permitted  Holders"  shall mean John Kapoor,  his decedents and members of
their immediate families.

     "Permitted Liens" shall have the meaning provided in Section 9.01.

     "Person"  shall mean any  individual,  partnership,  joint  venture,  firm,
corporation,  association,  limited liability company, trust or other enterprise
or any  government  or  political  subdivision  or  any  agency,  department  or
instrumentality thereof.

     "Plan"  shall mean any  pension  plan as defined in Section  3(2) of ERISA,
which is maintained or  contributed to by (or to which there is an obligation to

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<PAGE>

contribute  of)  the  Borrower  or a  Subsidiary  of the  Borrower  or an  ERISA
Affiliate  on or after the Initial  Borrowing  Date,  and each such plan for the
five year period immediately  following the latest date (whether before or after
the Initial Borrowing Date) on which the Borrower,  a Subsidiary of the Borrower
or an  ERISA  Affiliate  maintained,  contributed  to or  had an  obligation  to
contribute to such plan.

     "Pledge Agreement" shall have the meaning provided in Section 5.10.

     "Pledge Agreement Collateral" shall mean all "Collateral" as defined in the
Pledge Agreement.

     "Pledgee" shall have the meaning provided in the Pledge Agreement.

     "Prime  Lending  Rate" shall mean the rate which the  Administrative  Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes.  The Prime Lending Rate is a
reference  rate and does not  necessarily  represent  the  lowest  or best  rate
actually  charged to any customer by the  Administrative  Agent,  which may make
commercial  loans or other  loans at rates of  interest  at,  above or below the
Prime Lending Rate.

     "Pro Forma Financials" shall have the meaning provided in Section 5.13(b).

     "Projections"  shall  mean  the  projections  that  are  contained  in  the
Confidential  Information  Memorandum dated February 2002 and that were prepared
by or on behalf of the Borrower in connection with the Transaction and delivered
to the Administrative Agent and the Lenders prior to the Initial Borrowing Date.

     "Qualified  Preferred Stock" shall mean any preferred stock of the Borrower
so long as the terms of such  preferred  stock (i) do not contain any  mandatory
put, redemption, repayment, sinking fund or other similar provision prior to the
sixth  anniversary  of the Initial  Borrowing  Date,  (ii) do not  require  cash
payments  (of  dividends  or  otherwise)  at a time when such  payment  would be
prohibited  or  not  permitted  under  this  Agreement  (as  amended,  modified,
supplemented,  refinanced or replaced  from time to time),  (iii) do not contain
any  covenants,  (iv) do not grant the holders  thereof any voting rights except
for (x) voting rights  required to be granted to such holders  under  applicable
law and (y) limited  customary  voting  rights on  fundamental  matters  such as
mergers,  consolidations,  sales  of  substantially  all  of the  assets  of the
Borrower,  or  liquidations  involving  the  Borrower,  and  (v)  are  otherwise
satisfactory to the Administrative Agent.

     "Real Property" of any Person shall mean all the right,  title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.

     "Recovery  Event"  shall  mean the  receipt by the  Borrower  or any of its
Subsidiaries of any cash insurance  proceeds or condemnation  awards payable (i)
by reason of theft,  loss,  physical  destruction,  damage,  taking or any other
similar  event with  respect to any property or assets of the Borrower or any of
its  Subsidiaries  and  (ii)  under  any  policy  of  insurance  required  to be
maintained under Section 8.03.

     "Register" shall have the meaning provided in Section 13.15.

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<PAGE>

     "Regulation  D" shall mean  Regulation  D of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.

     "Regulation  T" shall mean  Regulation  T of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Regulation  U" shall mean  Regulation  U of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Regulation  X" shall mean  Regulation  X of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Release"  shall  mean  actively  or  passively   disposing,   discharging,
injecting,  spilling, pumping, leaking, leaching,  dumping, emitting,  escaping,
emptying,  pouring,  seeping,  migrating  or the like,  into or upon any land or
water or air, or otherwise entering into the environment.

     "Replaced Lender" shall have the meaning provided in Section 1.13.

     "Replacement Lender" shall have the meaning provided in Section 1.13.

     "Reportable  Event"  shall mean an event  described  in Section  4043(c) of
ERISA with  respect  to a Plan that is  subject to Title IV of ERISA  other than
those events as to which the 30-day  notice  period is waived  under  subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.

     "Required  Lenders"  shall  mean  Non-Defaulting  Lenders  the sum of whose
outstanding  Term Loans and Revolving Loan Commitments (or after the termination
thereof,  outstanding  Revolving  Loans and RL  Percentages  of (x)  outstanding
Swingline Loans and (y) Letter of Credit Outstandings)  represent at least 50.1%
of the sum of (i) all outstanding Term Loans of Non-Defaulting  Lenders and (ii)
the Total Revolving Loan  Commitment less the Revolving Loan  Commitments of all
Defaulting  Lenders  (or after the  termination  thereof,  the sum of then total
outstanding  Revolving  Loans of  Non-Defaulting  Lenders and the  aggregate  RL
Percentages of all  Non-Defaulting  Lenders of the total  outstanding  Swingline
Loans and Letter of Credit Outstandings at such time).

     "Returns" shall have the meaning provided in Section 7.09.

     "Revolving Loan" shall have the meaning provided in Section 1.01(b).

     "Revolving  Loan  Commitment"  shall mean, for each Lender,  the amount set
forth  opposite  such  Lender's  name in  Schedule I  directly  below the column
entitled  "Revolving  Loan  Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time
as a result of  assignments  to or from such Lender  pursuant to Section 1.13 or
13.04(b).

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<PAGE>

     "Revolving  Loan  Maturity  Date" shall mean the Term Loan  Maturity  Date;
provided  that if , and only if,  all  principal  of all Term Loans is repaid in
full from the  proceeds  of one or more equity  issuances  and/or  other  junior
financings  (on terms  acceptable to the  Administrative  Agent and the Required
Lenders)  occurring  on or  prior  to the  Term  Loan  Maturity  Date,  then the
Revolving  Loan Maturity Date shall at such time be changed to be the date which
occurs on the third anniversary of the Initial Borrowing Date.

     "Revolving Note" shall have the meaning provided in Section 1.05(a).

     "RL Lender" shall mean each Lender with a Revolving Loan Commitment or with
outstanding Revolving Loans.

     "RL  Percentage"  of any  RL  Lender  at any  time  shall  mean a  fraction
(expressed  as a  percentage)  the  numerator  of  which is the  Revolving  Loan
Commitment  of such RL Lender at such time and the  denominator  of which is the
Total Revolving Loan Commitment at such time, provided that if the RL Percentage
of any RL Lender is to be determined  after the Total  Revolving Loan Commitment
has  been  terminated,  then  the RL  Percentages  of such RL  Lender  shall  be
determined immediately prior (and without giving effect) to such termination.

     "Scheduled  Interest  Payment Date" shall mean the last Business Day of (x)
each calendar month ended after the Initial Borrowing Date (beginning with March
2002) and on or before the Term Loan Satisfaction Date and (y) the last Business
Day of each of  September,  December,  March and June ending after the Term Loan
Satisfaction Date.

     "SEC" shall have the meaning provided in Section 8.01(h).

     "Section  4.04(b)(ii)  Certificate"  shall  have the  meaning  provided  in
Section 4.04(b)(ii).

     "Secured  Creditors"  shall  have the  meaning  assigned  that  term in the
respective Security Documents.

     "Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

     "Security Agreement" shall have the meaning provided in Section 5.11.

     "Security  Agreement  Collateral" shall mean all "Collateral" as defined in
the Security Agreement.

     "Security  Document" shall mean and include each of the Security Agreement,
the Pledge  Agreement,  each  Mortgage  and,  after the  execution  and delivery
thereof, each Additional Security Document.

     "Shareholders' Agreements" shall have the meaning provided in Section 5.05.

     "Start Date" shall mean, with respect to any Margin Reduction  Period,  the
first day of such Margin Reduction Period.

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     "Stated  Amount" of each  Letter of Credit  shall  mean,  at any time,  the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).

     "Subsidiaries Guaranty" shall have the meaning provided in Section 5.09.

     "Subsidiary"  shall mean, as to any Person,  (i) any corporation  more than
50% of whose stock of any class or classes having by the terms thereof  ordinary
voting  power  to  elect  a  majority  of  the  directors  of  such  corporation
(irrespective  of  whether  or not at the time  stock of any class or classes of
such  corporation  shall  have or  might  have  voting  power by  reason  of the
happening of any  contingency) is at the time owned by such Person and/or one or
more  Subsidiaries of such Person and (ii) any  partnership,  limited  liability
company, association,  joint venture or other entity in which such Person and/or
one or more  Subsidiaries  of such Person has more than a 50% equity interest at
the time.

     "Subsidiary  Guarantor" shall mean each Subsidiary of the Borrower existing
on the Initial  Borrowing  Date or  established,  created or acquired  after the
Initial Borrowing Date (unless the Required Banks, in their sole discretion have
waived in writing the requirement  that any such Subsidiary  become a Subsidiary
Guarantor).  "Swingline Expiry Date" shall mean that date which is five Business
Days prior to the Revolving Loan Maturity Date.

     "Swingline Lender" shall mean BTCo.

     "Swingline Loan" shall have the meaning provided in Section 1.01(c).

     "Swingline Note" shall have the meaning provided in Section 1.05(a).

     "Syndication  Agent"  shall  mean have the  meaning  provided  in the first
paragraph of this Agreement.

     "Syndication Date" shall mean that date upon which the Administrative Agent
determines in its sole  discretion  (and notifies the Borrower) that the primary
syndication of the credit facilities provided under the Agreement (and resultant
addition of Persons as Lenders pursuant to Section 13.04(b)) has been completed.

     "Tax Sharing Agreements" shall have the meaning provided in Section 5.05.

     "Taxes" shall have the meaning provided in Section 4.04(a).

     "Term Loan" shall have the meaning provided in Section 1.01(a).

     "Term Loan  Commitment"  shall mean, for each Lender,  the amount set forth
opposite  such Lender's  name in Schedule I directly  below the column  entitled
"Term Loan Commitment," as the same may be terminated  pursuant to Sections 3.03
and/or 10.

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     "Term  Loan  Maturity  Date"  shall mean the six month  anniversary  of the
Initial Borrowing Date.

     "Term  Loan  Satisfaction  Date"  shall mean the date on which (x) all Term
Loans shall have been paid in full or (y) the Total Term Loan  Commitment  shall
have been terminated pursuant to Section 3.03(c) prior to any incurrence of Term
Loans hereunder.

     "Term Note" shall have the meaning provided in Section 1.05(a).

     "Test Date" shall mean, with respect to any Start Date, the last day of the
most recent fiscal quarter of the Borrower ended immediately prior to such Start
Date.

     "Test Period" shall mean each period of four consecutive fiscal quarters of
the  Borrower  ended on the last day of any fiscal  quarter of the  Borrower (in
each case taken as one  accounting  period),  beginning  with its fiscal quarter
ended  closest to  September  30,  2002;  provided  that (x) with respect to the
Borrower's fiscal quarter ended closest to September 30, 2002, the "Test Period"
shall instead be the period of two  consecutive  fiscal quarters of the Borrower
then ended and (y) with respect to the  Borrower's  fiscal quarter ended closest
to December 31, 2002, the "Test Period" shall be the period of three consecutive
fiscal quarters of the Borrower then ended.

     "Total  Commitment"  shall mean, at any time, the sum of the Commitments of
each of the Lenders at such time.

     "Total Revolving Loan  Commitment"  shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders at such time.

     "Total Term Loan  Commitment"  shall mean, at any time, the sum of the Term
Loan Commitments of each of the Lenders at such time.

     "Total  Unutilized  Revolving Loan Commitment"  shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect less (y) the sum of the aggregate principal amount of all Revolving Loans
and Swingline Loans then  outstanding plus the aggregate amount of all Letter of
Credit Outstandings.

     "Trademark  Purchase and  Assignment  Agreement"  shall mean the  Trademark
Purchase and Assignment Agreement, dated as of December 13, 2001, by and between
Bayer A.G. and the Borrower as amended,  modified or  supplemented  from time to
time, in accordance with the terms hereof and thereof.

     "Tranche" shall mean the respective  facility and  commitments  utilized in
making Loans  hereunder,  with there being three separate  Tranches,  i.e., Term
Loans, Revolving Loans and Swingline Loans.

     "Transaction"  shall  mean,  collectively,  (i) the  Acquisition,  (ii) the
entering  into the  Trademark  Purchase  and  Assignment  Agreement,  (iii)  the
entering into the Distribution  Agreement,  (iv) the entering into of the Credit

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Documents and the incurrence of Loans on the Initial  Borrowing Date and (v) the
payment of all fees and expenses in connection with the foregoing.

     "Type" shall mean the type of Loan  determined  with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.

     "UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.

     "Unfunded Current  Liability" of any Plan shall mean the amount, if any, by
which the value of the accumulated  plan benefits under the Plan determined on a
plan  termination  basis in accordance  with actuarial  assumptions at such time
consistent  with those  prescribed  by the PBGC for  purposes of Section 4044 of
ERISA,  exceeds  the fair  market  value of all plan  assets  allocable  to such
liabilities   under  Title  IV  of  ERISA  (excluding  any  accrued  but  unpaid
contribution).

     "United States" and "U.S." shall each mean the United States of America.

     "Unpaid Drawing" shall have the meaning provided in Section 2.05(a).

     "Unutilized  Revolving  Loan  Commitment"  shall mean,  with respect to any
Lender at any time,  such Lender's  Revolving Loan  Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such  Lender at such time and (ii) such  Lender's RL  Percentage  of the
Letter of Credit Outstandings at such time.

     "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose  capital  stock is at the time owned by such Person  and/or one or
more  Wholly-Owned  Subsidiaries  of  such  Person  and  (ii)  any  partnership,
association,  joint  venture or other entity in which such Person  and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.

SECTION 12. The Administrative Agent.

     12.01  Appointment.  The Lenders hereby  irrevocably  designate and appoint
BTCo as Administrative Agent (for purposes of this Section 12 and Section 13.01,
the term  "Administrative  Agent" also shall include (x) BTCo in its capacity as
Collateral  Agent  pursuant to the  Security  Documents  and (y)  Deutsche  Banc
Alex.Brown Inc., an affiliate of BTCo, in its capacity as Lead Arranger and Book
Manager in connection with this Agreement in the financings contemplated hereby)
to act as specified herein and in the other Credit Documents. Each Lender hereby
irrevocably  authorizes,  and each holder of any Note by the  acceptance of such
Note shall be deemed irrevocably to authorize,  the Administrative Agent to take
such action on its behalf  under the  provisions  of this  Agreement,  the other
Credit Documents and any other instruments and agreements  referred to herein or
therein and to exercise  such powers and to perform  such duties  hereunder  and
thereunder as are  specifically  delegated to or required of the  Administrative
Agent by the terms  hereof and thereof and such other  powers as are  reasonably
incidental thereto.  The Administrative  Agent may perform any of its respective
duties  hereunder by or through its officers,  directors,  agents,  employees or
affiliates.

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     12.02. Nature of Duties. The Administrative Agent shall not have any duties
or  responsibilities  except those  expressly set forth in this Agreement and in
the other  Credit  Documents.  Neither the  Administrative  Agent nor any of its
officers,  directors,  agents,  employees or affiliates  shall be liable for any
action  taken or  omitted  by it or them  hereunder  or under any  other  Credit
Document or in connection  herewith or therewith,  unless caused by its or their
gross  negligence or willful  misconduct  (as determined by a court of competent
jurisdiction  in a  final  and  non-appealable  decision).  The  duties  of  the
Administrative  Agent shall be  mechanical  and  administrative  in nature;  the
Administrative  Agent  shall not have by reason of this  Agreement  or any other
Credit Document a fiduciary  relationship in respect of any Lender or the holder
of any Note;  and nothing in this  Agreement  or in any other  Credit  Document,
expressed or implied,  is intended to or shall be so construed as to impose upon
the  Administrative  Agent any  obligations  in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.

     12.03.  Lack of Reliance on the  Administrative  Agent.  Independently  and
without reliance upon the  Administrative  Agent,  each Lender and the holder of
each Note, to the extent it deems  appropriate,  has made and shall  continue to
make  (i) its own  independent  investigation  of the  financial  condition  and
affairs of the Borrower and its  Subsidiaries  in connection with the making and
the  continuance  of the Loans and the  taking  or not  taking of any  action in
connection  herewith and (ii) its own appraisal of the  creditworthiness  of the
Borrower  and  its  Subsidiaries  and,  except  as  expressly  provided  in this
Agreement,  the Administrative  Agent shall not have any duty or responsibility,
either  initially or on a continuing  basis, to provide any Lender or the holder
of any Note with any credit or other  information with respect thereto,  whether
coming  into its  possession  before  the  making of the Loans or at any time or
times  thereafter.  The  Administrative  Agent shall not be  responsible  to any
Lender or the  holder  of any Note for any  recitals,  statements,  information,
representations  or warranties  herein or in any document,  certificate or other
writing  delivered in connection  herewith or for the execution,  effectiveness,
genuineness, validity, enforceability,  perfection, collectibility,  priority or
sufficiency  of this  Agreement  or any other Credit  Document or the  financial
condition of the Borrower or any of its  Subsidiaries or be required to make any
inquiry  concerning  either the  performance  or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document,  or the
financial  condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.

     12.04.  Certain Rights of the  Administrative  Agent. If the Administrative
Agent requests instructions from the Required Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Credit Document, the Administrative Agent shall be entitled to refrain from such
act or taking such action unless and until the  Administrative  Agent shall have
received  instructions from the Required Lenders;  and the Administrative  Agent
shall not incur  liability  to any  Lender by reason of so  refraining.  Without
limiting the foregoing, neither any Lender nor the holder of any Note shall have
any right of action whatsoever against the  Administrative  Agent as a result of
the Administrative Agent acting or refraining from acting hereunder or under any
other  Credit  Document in  accordance  with the  instructions  of the  Required
Lenders.

     12.05.  Reliance.  The Administrative  Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement,  certificate,  telex,  teletype  or  telecopier  message,  cablegram,
radiogram,  order or other document or telephone message signed, sent or made by

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any Person that the Administrative  Agent believed to be the proper Person, and,
with respect to all legal  matters  pertaining  to this  Agreement and any other
Credit Document and its duties hereunder and thereunder,  upon advice of counsel
selected by the Administrative Agent.

     12.06.  Indemnification.  To the  extent the  Administrative  Agent (or any
affiliate  thereof) is not  reimbursed  and  indemnified  by the  Borrower,  the
Lenders will reimburse and indemnify the Administrative Agent (and any affiliate
thereof) in proportion to their  respective  "percentage" as used in determining
the Required Lenders (determined as if there were no Defaulting Lenders) for and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
claims, actions,  judgments, costs, expenses or disbursements of whatsoever kind
or  nature  which  may be  imposed  on,  asserted  against  or  incurred  by the
Administrative  Agent  (or any  affiliate  thereof)  in  performing  its  duties
hereunder  or under any  other  Credit  Document  or in any way  relating  to or
arising out of this  Agreement or any other Credit  Document or its  syndication
efforts in connection herewith;  provided that no Lender shall be liable for any
portion of such liabilities,  obligations,  losses, damages, penalties,  claims,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
Administrative  Agent's  (or  such  affiliate's)  gross  negligence  or  willful
misconduct  (as determined by a court of competent  jurisdiction  in a final and
non-appealable decision).

     12.07. The Administrative Agent in its Individual Capacity. With respect to
its  obligation  to make Loans,  or issue or  participate  in Letters of Credit,
under this Agreement,  the Administrative Agent shall have the rights and powers
specified  herein for a "Lender"  and may exercise the same rights and powers as
though  it were  not  performing  the  duties  specified  herein;  and the  term
"Lender,"  "Required  Lenders,"  "holders of Notes" or any similar  terms shall,
unless the context clearly indicates otherwise, include the Administrative Agent
in its  respective  individual  capacities.  The  Administrative  Agent  and its
affiliates may accept deposits from, lend money to, and generally  engage in any
kind of banking,  investment  banking,  trust or other business with, or provide
debt financing,  equity capital or other services (including  financial advisory
services)  to any Credit  Party or any  Affiliate  of any  Credit  Party (or any
Person  engaged in a similar  business  with any Credit  Party or any  Affiliate
thereof) as if they were not performing  the duties  specified  herein,  and may
accept fees and other  consideration  from any Credit Party or any  Affiliate of
any Credit Party for services in  connection  with this  Agreement and otherwise
without having to account for the same to the Lenders.

     12.08.  Holders.  The Administrative  Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment,  transfer or endorsement  thereof, as the case may be,
shall have been filed with the Administrative  Agent. Any request,  authority or
consent of any Person  who,  at the time of making  such  request or giving such
authority or consent,  is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee,  assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.

     12.09.  Resignation by the  Administrative  Agent.  (a) The  Administrative
Agent may resign from the performance of all its respective functions and duties
hereunder  and/or  under the  other  Credit  Documents  at any time by giving 15
Business Days' prior written  notice to the Lenders and,  unless a Default or an
Event of Default under Section 10.05 then exists, the Borrower. Such resignation
shall take  effect upon the  appointment  of a  successor  Administrative  Agent
pursuant to clauses (b) and (c) below or as otherwise provided below.

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     (b) Upon any such notice of resignation by the  Administrative  Agent,  the
Required  Lenders shall appoint a successor  Administrative  Agent  hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower,  which acceptance shall not be unreasonably withheld or delayed
(provided  that the  Borrower's  approval  shall not be  required if an Event of
Default then exists).

     (c) If a successor  Administrative  Agent shall not have been so  appointed
within such 15 Business Day period, the  Administrative  Agent, with the consent
of the Borrower  (which consent shall not be  unreasonably  withheld or delayed,
provided  that the  Borrower's  consent  shall  not be  required  if an Event of
Default then exists),  shall then appoint a successor  Administrative  Agent who
shall serve as Administrative  Agent hereunder or thereunder until such time, if
any,  as the  Required  Lenders  appoint  a  successor  Administrative  Agent as
provided above.

     (d) If no successor  Administrative  Agent has been  appointed  pursuant to
clause (b) or (c) above by the 20th  Business  Day after the date such notice of
resignation was given by the Administrative  Agent, the  Administrative  Agent's
resignation  shall become  effective and the Required  Lenders shall  thereafter
perform all the duties of the  Administrative  Agent hereunder  and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.

     (e) Upon a resignation of the Administrative Agent pursuant to this Section
12.09, the Administrative  Agent shall remain indemnified to the extent provided
in this  Agreement  and the other Credit  Documents  and the  provisions of this
Section 12 shall continue in effect for the benefit of the Administrative  Agent
for all of its actions and inactions while serving as the Administrative Agent.

     12.10. The Syndication Agent and the Documentation  Agent.  Notwithstanding
any other  provision  of this  Agreement  or any  provision  of any other Credit
Document,  the Syndication Agent and the  Documentation  Agent are named as such
for recognition purposes only, and in their respective  capacities as such shall
have no powers, rights, duties,  responsibilities or liabilities with respect to
this Agreement or the other Credit  Documents or the  transactions  contemplated
hereby and thereby. Without limitation of the foregoing, neither the Syndication
Agent nor the Documentation  Agent shall,  solely by reason of this Agreement or
any other Credit  Document,  have any fiduciary  relationship  in respect of any
Lender or any other Person.

SECTION 13. Miscellaneous.

     13.01. Payment of Expenses, etc. The Borrower hereby agrees to: (i) whether
or not the transactions herein contemplated are consummated,  pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation,  the reasonable fees and  disbursements  of White & Case LLP and the
Administrative  Agent's other counsel and  consultants)  in connection  with the
preparation,  execution,  delivery and  administration of this Agreement and the
other Credit Documents and the documents and instruments  referred to herein and
therein and any amendment,  waiver or consent relating hereto or thereto, of the
Administrative  Agent in connection with its syndication efforts with respect to
this Agreement and of the  Administrative  Agent and, after the occurrence of an
Event of Default, each of the Lenders in connection with the enforcement of this
Agreement  and the other Credit  Documents  and the  documents  and  instruments

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referred  to  herein  and  therein  or in  connection  with any  refinancing  or
restructuring  of the credit  arrangements  provided under this Agreement in the
nature of a "work-out" or pursuant to any  insolvency or bankruptcy  proceedings
(including,   in  each  case  without   limitation,   the  reasonable  fees  and
disbursements of counsel and consultants for the Administrative Agent and, after
the  occurrence of an Event of Default,  counsel for each of the Lenders);  (ii)
pay and hold the Administrative  Agent and each of the Lenders harmless from and
against any and all present and future  stamp,  court,  excise and other similar
documentary  taxes,  charges or similar  levies  with  respect to the  foregoing
matters  (collectively,  "Other Taxes"),  and save the Administrative  Agent and
each of the  Lenders  harmless  from and against  any and all  liabilities  with
respect to or  resulting  from any delay or  omission  (other than to the extent
attributable  to the  Administrative  Agent or such  Lender)  to pay such  Other
Taxes; (iii) indemnify the Administrative Agent and each Lender for (a) the full
amount of Other Taxes paid by the  Administrative  Agent and/or such Lender, and
(b) any liability (including penalties, interest and expenses) arising therefrom
or with  respect  thereto,  whether or not such Other  Taxes were  correctly  or
legally  imposed or asserted by the relevant  governmental  authority;  and (iv)
indemnify the Administrative Agent and each Lender, and each of their respective
officers, directors,  employees,  representatives,  agents, affiliates, trustees
and investment  advisors from and hold each of them harmless against any and all
liabilities,  obligations  (including  removal  or  remedial  actions),  losses,
damages,  penalties,  claims,  actions,  judgments,  suits, costs,  expenses and
disbursements   (including  reasonable  attorneys'  and  consultants'  fees  and
disbursements)  incurred  by,  imposed on or  assessed  against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
actual or  prospective  claim,  investigation,  litigation  or other  proceeding
(whether or not the  Administrative  Agent or any Lender is a party  thereto and
whether or not such investigation,  litigation or other proceeding is brought by
or on  behalf  of  any  Credit  Party)  related  to  the  entering  into  and/or
performance  of this  Agreement or any other  Credit  Document or the use of any
Letter of Credit or the proceeds of any Loans  hereunder or the  consummation of
the Transaction or any other  transactions  contemplated  herein or in any other
Credit  Document  or the  exercise of any of their  rights or remedies  provided
herein or in the other Credit  Documents,  or (b) the actual or alleged presence
of  Hazardous  Materials  in the air,  surface  water or  groundwater  or on the
surface or subsurface of any Real Property at any time owned, leased or operated
by  the  Borrower  or  any  of  its  Subsidiaries,   the  generation,   storage,
transportation,  handling or disposal of Hazardous  Materials by the Borrower or
any of its  Subsidiaries  at any  location,  whether  or not  owned,  leased  or
operated by the Borrower or any of its Subsidiaries,  the  non-compliance by the
Borrower  or any of its  Subsidiaries  with  any  Environmental  Law  (including
applicable  permits  thereunder)   applicable  to  any  Real  Property,  or  any
Environmental  Claim asserted  against the Borrower,  any of its Subsidiaries or
any Real  Property at any time owned,  leased or operated by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the reasonable
fees and disbursements of counsel and other  consultants  incurred in connection
with any such  investigation,  litigation or other proceeding (but excluding any
losses,  liabilities,  claims,  damages or  expenses  to the extent  incurred by
reason  of the  gross  negligence  or  willful  misconduct  of the  Person to be
indemnified  (as determined by a court of competent  jurisdiction in a final and
non-appealable  decision)). To the extent that the undertaking to indemnify, pay
or hold  harmless  the  Administrative  Agent  or any  Lender  set  forth in the

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preceding  sentence may be  unenforceable  because it is violative of any law or
public policy,  the Borrower shall make the maximum  contribution to the payment
and  satisfaction  of each of the indemnified  liabilities  which is permissible
under  applicable law. All amounts due under this Section 13.01 shall be payable
within ten days after demand therefor.

     13.02.  Right of Setoff. In addition to any rights now or hereafter granted
under  applicable  law or  otherwise,  and not by way of  limitation of any such
rights,  upon the occurrence and during the  continuance of an Event of Default,
the  Administrative  Agent and each Lender is hereby  authorized  at any time or
from time to time, without presentment,  demand,  protest or other notice of any
kind to any Credit  Party or to any other  Person,  any such notice being hereby
expressly  waived,  to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by the
Administrative Agent or such Lender (including,  without limitation, by branches
and  agencies  of such  Lender  wherever  located)  to or for the  credit or the
account of the Borrower or any of its Subsidiaries against and on account of the
Obligations and liabilities of the Credit Parties to the Administrative Agent or
such Lender under this  Agreement  or under any of the other  Credit  Documents,
including,  without limitation,  all interests in Obligations  purchased by such
Lender  pursuant  to  Section  13.06(b),  and all other  claims of any nature or
description  arising out of or connected with this Agreement or any other Credit
Document,  irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations,  liabilities or claims, or any of them,
shall be contingent or unmatured.

     13.03. Notices.  Except as otherwise expressly provided herein, all notices
and other  communications  provided for hereunder shall be in writing (including
telegraphic,  telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to any Credit Party, at the address
specified  opposite  its  signature  below  or  in  the  other  relevant  Credit
Documents;  if to any Lender, at its address specified on Schedule II; and if to
the  Administrative  Agent, at the Notice Office;  or, as to any Credit Party or
the  Administrative  Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each Lender, at
such other address as shall be designated by such Lender in a written  notice to
the Borrower and the  Administrative  Agent. All such notices and communications
shall,  when  mailed,  telegraphed,  telexed,  telecopied,  or cabled or sent by
overnight  courier,  be effective when deposited in the mails,  delivered to the
telegraph company,  cable company or overnight  courier,  as the case may be, or
sent by telex or  telecopier,  except  that  notices and  communications  to the
Administrative  Agent and the Borrower shall not be effective  until received by
the Administrative Agent or the Borrower, as the case may be.

     13.04.  Benefit  of  Agreement;  Assignments;   Participations.   (a)  This
Agreement  shall be binding upon and inure to the benefit of and be  enforceable
by the  respective  successors  and  assigns of the  parties  hereto;  provided,
however, the Borrower may not assign or transfer any of its rights,  obligations
or interest  hereunder  without the prior  written  consent of the Lenders  and,
provided  further,  that,  although  any Lender may from time to time  transfer,
assign or grant participations in its rights and/or obligations hereunder,  such

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Lender shall remain a "Lender" for all purposes  hereunder (and may not transfer
or assign all or any portion of its Commitments  hereunder except as provided in
Sections 1.13 and 13.04(b)) and the transferee,  assignee or participant, as the
case may be, shall not constitute a "Lender"  hereunder and,  provided  further,
that no  Lender  shall  transfer  or grant  any  participation  under  which the
participant  shall have  rights to approve  any  amendment  to or waiver of this
Agreement or any other Credit  Document  except to the extent such  amendment or
waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter
of Credit  (unless  such Letter of Credit is not extended  beyond the  Revolving
Loan Maturity Date) in which such  participant is  participating,  or reduce the
rate or extend  the time of  payment  of  interest  or Fees  thereon  (except in
connection  with a waiver  of  applicability  of any  post-Default  increase  in
interest rates) or reduce the principal amount thereof (it being understood that
any amendment or modification to the financial  definitions in this Agreement or
to Section  13.07(a) shall not constitute a reduction in the rate of interest or
Fees  payable   hereunder),   or  increase  the  amount  of  the   participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any  Default or Event of Default or of a  mandatory  reduction  in the
Total   Commitment   shall  not  constitute  a  change  in  the  terms  of  such
participation,  and that an increase in any Commitment (or the available portion
thereof) or Loan shall be permitted  without the consent of any  participant  if
the  participant's  participation  is not increased as a result  thereof),  (ii)
consent to the  assignment  or transfer by the Borrower of any of its rights and
obligations under this Agreement,  (iii) release all or substantially all of the
Collateral under all of the Security Documents (except (x) as expressly provided
in the Credit  Documents  and (y) any release  after the Term Loan  Satisfaction
Date as contemplated by Section 13.17) supporting the Loans or Letters of Credit
hereunder in which such participant is participating  or, (iv) at any time prior
to the Term Loan Satisfaction  Date,  release any Subsidiary  Guarantor from the
Subsidiaries Guaranty (except as expressly provided in the Credit Documents). In
the case of any such  participation,  the participant  shall not have any rights
under this  Agreement or any of the other Credit  Documents  (the  participant's
rights  against  such  Lender in respect of such  participation  to be those set
forth in the  agreement  executed  by such  Lender  in favor of the  participant
relating  thereto) and all amounts  payable by the Borrower  hereunder  shall be
determined as if such Lender had not sold such participation.

     (b) Notwithstanding the foregoing,  any Lender (or any Lender together with
one or more other  Lenders)  may (x) assign all or a portion of its  Commitments
and related outstanding  Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated,  outstanding  Obligations) hereunder to (i)(A)
its parent  company  and/or any  Affiliate  of such Lender or (B) to one or more
other Lenders or any Affiliate of any such other Lender  (provided that any fund
that invests in loans and is managed or advised by the same  investment  advisor
of  another  fund  which  is a Lender  (or by an  Affiliate  of such  investment
advisor)  shall be treated as an Affiliate of such other Lender for the purposes
of this sub-clause (x)(i)(B)),  or (ii) in the case of any Lender that is a fund
that  invests in loans,  any other fund that  invests in loans and is managed or
advised by the same investment  advisor of any Lender or by an Affiliate of such
investment advisor or (y) assign all, or if less than all, a portion equal to at
least $1,000,000 in the aggregate for the assigning Lender or assigning Lenders,
of such Commitments and related outstanding  Obligations (or, if the Commitments
with respect to the relevant Tranche have terminated,  outstanding  Obligations)
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that  invests in loans and is managed or advised by the
same  investment  advisor  of such fund or by an  Affiliate  of such  investment
advisor as a single Eligible Transferee), each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment and Assumption

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Agreement,  provided that (i) at such time,  Schedule I shall be deemed modified
to reflect the Commitments and/or outstanding Loans, as the case may be, of such
new Lender and of the existing Lenders,  (ii) upon the surrender of the relevant
Notes by the assigning Lender (or, upon such assigning Lender's indemnifying the
Borrower for any lost Note  pursuant to a customary  indemnification  agreement)
new Notes will be issued, at the Borrower's  expense,  to such new Lender and to
the  assigning  Lender upon the request of such new Lender or assigning  Lender,
such new Notes to be in conformity  with the  requirements of Section 1.05 (with
appropriate   modifications)  to  the  extent  needed  to  reflect  the  revised
Commitments  and/or  outstanding Loans, as the case may be, (iii) the consent of
the  Administrative  Agent  shall  be  required  in  connection  with  any  such
assignment pursuant to clause (y) above or any such assignment of Revolving Loan
Commitments   pursuant  to  clause  (x)  above  (which  consents  shall  not  be
unreasonably  withheld or delayed),  (iv) the consent of the Issuing  Lender and
the Swingline Lender shall be required in connection with any such assignment of
Revolving Loan Commitments (which consents shall not be unreasonably withheld or
delayed),  (v) the  Administrative  Agent shall receive at the time of each such
assignment,   from  the  assigning  or  assignee   Lender,   the  payment  of  a
non-refundable  assignment fee of $3,500 and (vi) no such transfer or assignment
will be effective  until  recorded by the  Administrative  Agent on the Register
pursuant  to Section  13.15.  To the extent of any  assignment  pursuant to this
Section  13.04(b),  the  assigning  Lender shall be relieved of its  obligations
hereunder with respect to its assigned Commitments and outstanding Loans. At the
time of each assignment  pursuant to this Section  13.04(b) to a Person which is
not already a Lender  hereunder and which is not a United States person (as such
term is defined  in  Section  7701(a)(30)  of the Code) for  Federal  income tax
purposes,  the respective  assignee Lender shall, to the extent legally entitled
to do so, provide to the Borrower the appropriate Internal Revenue Service Forms
(and, if applicable,  a Section  4.04(b)(ii)  Certificate)  described in Section
4.04(b).  To the extent that an  assignment  of all or any portion of a Lender's
Commitments and related outstanding Obligations pursuant to Section 1.13 or this
Section  13.04(b)  would,  at the time of such  assignment,  result in increased
costs  under  Section  1.10,  2.06 or  4.04  from  those  being  charged  by the
respective  assigning Lender prior to such  assignment,  then the Borrower shall
not be  obligated  to pay  such  increased  costs  (although  the  Borrower,  in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).

     (c) Nothing in this  Agreement  shall  prevent or prohibit  any Lender from
pledging its Loans and Notes  hereunder to a Federal  Reserve Bank in support of
borrowings  made by such Lender from such Federal  Reserve Bank and,  with prior
notification  to the  Administrative  Agent  (but  without  the  consent  of the
Administrative Agent or the Borrower), any Lender which is a fund may pledge all
or any  portion of its Loans and Notes to its trustee or to a  collateral  agent
providing  credit or credit support to such Lender in support of its obligations
to its trustee or such collateral  agent, as the case may be. No pledge pursuant
to  this  clause  (c)  shall  release  the  transferor  Lender  from  any of its
obligations hereunder.

     13.05. No Waiver;  Remedies Cumulative.  No failure or delay on the part of
the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
in exercising any right, power or privilege  hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the  Administrative  Agent, the Collateral  Agent, the Issuing Lender or any
Lender  shall  operate  as a waiver  thereof;  nor shall any  single or  partial
exercise of any right,  power or  privilege  hereunder or under any other Credit
Document  preclude any other or further  exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder.  The rights, powers and

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remedies  herein  or  in  any  other  Credit  Document  expressly  provided  are
cumulative  and not  exclusive  of any  rights,  powers  or  remedies  which the
Administrative  Agent,  the Collateral  Agent,  the Issuing Lender or any Lender
would  otherwise  have.  No notice to or demand on any Credit  Party in any case
shall  entitle  any  Credit  Party to any other or  further  notice or demand in
similar  or other  circumstances  or  constitute  a waiver of the  rights of the
Administrative  Agent, the Collateral Agent, the Issuing Lender or any Lender to
any other or further action in any circumstances without notice or demand.

     13.06.  Payments  Pro  Rata.  (a)  Except  as  otherwise  provided  in this
Agreement,  the  Administrative  Agent agrees that promptly after its receipt of
each  payment  from or on behalf of the  Borrower in respect of any  Obligations
hereunder, the Administrative Agent shall distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata share
of any such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.

     (b) Each of the  Lenders  agrees  that,  if it should  receive  any  amount
hereunder  (whether by voluntary payment,  by realization upon security,  by the
exercise  of the right of setoff or  banker's  lien,  by  counterclaim  or cross
action,  by  the  enforcement  of any  right  under  the  Credit  Documents,  or
otherwise),  which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings,  Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Lenders
is in a greater  proportion  than the total of such Obligation then owed and due
to such Lender bears to the total of such Obligation then owed and due to all of
the Lenders  immediately prior to such receipt,  then such Lender receiving such
excess  payment  shall  purchase for cash without  recourse or warranty from the
other Lenders an interest in the  Obligations of the respective  Credit Party to
such Lenders in such amount as shall result in a proportional  participation  by
all the  Lenders in such  amount;  provided  that if all or any  portion of such
excess amount is thereafter recovered from such Lenders,  such purchase shall be
rescinded and the purchase price  restored to the extent of such  recovery,  but
without interest.

     (c)  Notwithstanding   anything  to  the  contrary  contained  herein,  the
provisions  of the preceding  Sections  13.06(a) and (b) shall be subject to the
express  provisions  of this  Agreement  which  require,  or  permit,  differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

     13.07.  Calculations;  Computations.  (a) The  financial  statements  to be
furnished  to the  Lenders  pursuant  hereto  shall  be  made  and  prepared  in
accordance with generally  accepted  accounting  principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes  thereto or as  otherwise  disclosed  in writing  by the  Borrower  to the
Lenders);  provided that, except as otherwise  specifically provided herein, all
computations of the Applicable  Margin, and all computations and all definitions
(including  accounting terms) used in determining  compliance with Sections 9.07
through 9.10, inclusive,  shall utilize generally accepted accounting principles
and policies in conformity  with those used to prepare the historical  financial
statements of the Borrower referred to in Section 7.05(a).

     (b) All  computations  of interest,  Commitment  Commission  and other Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days  (including the first day but excluding the last day; except that in the
case of Letter of Credit Fees and Facing  Fees,  the last day shall be included)
occurring in the period for which such interest,  Commitment  Commission or Fees
are payable.

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     13.08.  GOVERNING LAW;  SUBMISSION TO JURISDICTION;  VENUE;  WAIVER OF JURY
TRIAL.  (a) THIS  AGREEMENT  AND THE OTHER CREDIT  DOCUMENTS  AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER  SHALL,  EXCEPT AS OTHERWISE
PROVIDED IN ANY  MORTGAGES,  BE CONSTRUED IN ACCORDANCE  WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT  DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK,  AND, BY EXECUTION AND
DELIVERY OF THIS  AGREEMENT OR ANY OTHER CREDIT  DOCUMENT,  THE BORROWER  HEREBY
IRREVOCABLY  ACCEPTS FOR ITSELF AND IN RESPECT OF ITS  PROPERTY,  GENERALLY  AND
UNCONDITIONALLY,  THE JURISDICTION OF THE AFORESAID COURTS.  THE BORROWER HEREBY
FURTHER  IRREVOCABLY  WAIVES  ANY  CLAIM  THAT ANY  SUCH  COURTS  LACK  PERSONAL
JURISDICTION  OVER THE BORROWER,  AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION  OR  PROCEEDING  WITH  RESPECT  TO THIS  AGREEMENT  OR ANY  OTHER  CREDIT
DOCUMENTS  BROUGHT IN ANY OF THE  AFOREMENTIONED  COURTS,  THAT SUCH COURTS LACK
PERSONAL  JURISDICTION  OVER THE  BORROWER.  THE  BORROWER  FURTHER  IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS  OUT OF ANY OF THE  AFOREMENTIONED  COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES  THEREOF BY REGISTERED OR
CERTIFIED  MAIL,  POSTAGE  PREPAID,  TO THE  BORROWER  AT ITS  ADDRESS SET FORTH
OPPOSITE ITS  SIGNATURE  BELOW,  SUCH SERVICE TO BECOME  EFFECTIVE 30 DAYS AFTER
SUCH  MAILING.  THE BORROWER  HEREBY  IRREVOCABLY  WAIVES ANY  OBJECTION TO SUCH
SERVICE OF PROCESS  AND  FURTHER  IRREVOCABLY  WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING  COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING
HEREIN SHALL  AFFECT THE RIGHT OF THE  ADMINISTRATIVE  AGENT,  ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE  PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR TO
COMMENCE  LEGAL  PROCEEDINGS  OR OTHERWISE  PROCEED  AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.

     (b) THE BORROWER HEREBY  IRREVOCABLY  WAIVES ANY OBJECTION WHICH IT MAY NOW
OR  HEREAFTER  HAVE TO THE  LAYING OF VENUE OF ANY OF THE  AFORESAID  ACTIONS OR
PROCEEDINGS  ARISING OUT OF OR IN  CONNECTION  WITH THIS  AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER  IRREVOCABLY  WAIVES  AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

     (c) EACH OF THE PARTIES TO THIS  AGREEMENT  HEREBY  IRREVOCABLY  WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

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<PAGE>

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

     13.10.  Effectiveness.  This Agreement  shall become  effective on the date
(the "Effective Date") on which the Borrower,  the Administrative Agent and each
of the  Lenders  shall have signed a  counterpart  hereof  (whether  the same or
different  counterparts) and shall have delivered the same to the Administrative
Agent at the Notice  Office or, in the case of the Lenders,  shall have given to
the  Administrative  Agent telephonic  (confirmed in writing),  written or telex
notice  (actually  received)  at such  office  that the same has been signed and
mailed to it. The  Administrative  Agent will give the  Borrower and each Lender
prompt written notice of the occurrence of the Effective Date.

     13.11.  Headings  Descriptive.  The  headings of the several  sections  and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

     13.12.  Amendment or Waiver;  etc. (a) Neither this Agreement nor any other
Credit  Document  nor any  terms  hereof  or  thereof  may be  changed,  waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the  respective  Credit Parties party hereto or thereto and
the  Required  Lenders,  provided  that no such  change,  waiver,  discharge  or
termination  shall,  without the consent of each Lender (other than a Defaulting
Lender)  (with  Obligations  being  directly  affected in the case of  following
clause  (i)),  (i) extend the final  scheduled  maturity  of any Loan or Note or
extend the stated  expiration  date of any Letter of Credit beyond the Revolving
Loan Maturity Date, or reduce the rate or extend the time of payment of interest
or Fees thereon  (except in connection with the waiver of  applicability  of any
post-default increase in interest rates), or reduce the principal amount thereof
(it  being  understood  that any  amendment  or  modification  to the  financial
definitions  in this  Agreement or to Section  13.07(a)  shall not  constitute a
reduction  in the rate of interest or Fees for the purposes of this clause (i)),
(ii) release all or substantially all of the Collateral (except (x) as expressly
provided  in the  Credit  Documents  and (y) any  release  after  the Term  Loan
Satisfaction  Date as  contemplated  by Section  13.17)  under all the  Security
Documents,  (iii) at any time prior to the Term Loan Satisfaction  Date, release
any Subsidiary  Guarantor (except as expressly provided in the Credit Documents)
from the  Subsidiaries  Guaranty,  (iv) amend,  modify or waive any provision of
this Section 13.12 (except for technical  amendments  with respect to additional
extensions of credit  pursuant to this Agreement which afford the protections to

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<PAGE>

such additional  extensions of credit of the type provided to the Term Loans and
the Revolving Loan Commitments on the Effective Date), (v) reduce the percentage
specified in the definition of Required  Lenders (it being understood that, with
the consent of the Required Lenders, additional extensions of credit pursuant to
this Agreement may be included in the  determination  of the Required Lenders on
substantially  the same basis as the extensions of Term Loans and Revolving Loan
Commitments  are  included  on  the  Effective  Date)  or  (vi)  consent  to the
assignment  or  transfer by the  Borrower  of any of its rights and  obligations
under this Agreement;  provided further, that no such change, waiver,  discharge
or termination  shall (1) increase the Commitments of any Lender over the amount
thereof then in effect  without the consent of such Lender (it being  understood
that waivers or modifications of conditions  precedent,  covenants,  Defaults or
Events of Default or of a mandatory  reduction in the Total Commitment shall not
constitute an increase of the Commitment of any Lender,  and that an increase in
the available  portion of any  Commitment of any Lender shall not  constitute an
increase  of the  Commitment  of such  Lender),  (2)  without the consent of the
Issuing Lender,  amend,  modify or waive any provision of Section 2 or alter its
rights or obligations with respect to Letters of Credit, (3) without the consent
of the Swingline Lender, alter the Swingline Lender's rights or obligations with
respect to Swingline Loans, (4) without the consent of Collateral Agent,  amend,
modify or waive any  provision  relating  to the  rights or  obligations  of the
Collateral Agent or (5) without the consent of the Administrative  Agent, amend,
modify or waive any  provision  of  Section  12 or any other  provision  as same
relates to the rights or obligations of the Administrative Agent.

     (b) If, in  connection  with any  proposed  change,  waiver,  discharge  or
termination  of any of the  provisions  of this  Agreement  as  contemplated  by
clauses (i) through (v),  inclusive,  of the first proviso to Section  13.12(a),
the consent of the  Required  Lenders is obtained but the consent of one or more
of such other  Lenders  whose  consent is  required  is not  obtained,  then the
Borrower  shall  have the right,  so long as all  non-consenting  Lenders  whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement  Lenders pursuant to Section 1.13 so long as at the time
of such  replacement,  each such  Replacement  Lender  consents to the  proposed
change,  waiver,  discharge or termination or (B) terminate such  non-consenting
Lender's  Commitments  and/or  repay each Tranche of  outstanding  Loans of such
Lender in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless
the  Commitments  that are terminated,  and Loans repaid,  pursuant to preceding
clause (B) are immediately replaced in full at such time through the addition of
new  Lenders or the  increase of the  Commitments  and/or  outstanding  Loans of
existing Lenders (who in each case must specifically  consent thereto),  then in
the case of any action  pursuant to preceding  clause (B) the  Required  Lenders
(determined  after giving  effect to the  proposed  action)  shall  specifically
consent thereto, provided further, that in any event the Borrower shall not have
the right to  replace a Lender,  terminate  its  Commitments  or repay its Loans
solely as a result of the exercise of such Lender's  rights (and the withholding
of any  required  consent by such  Lender)  pursuant  to the  second  proviso to
Section 13.12(a).

     13.13.  Survival.  All  indemnities  set forth  herein  including,  without
limitation,  in Sections 1.10,  1.11,  2.06, 4.04, 12.06 and 13.01 shall survive
the execution,  delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.

     13.14.  Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any office,  Subsidiary  or  Affiliate  of such Lender.
Notwithstanding  anything to the contrary contained herein, to the extent that a
transfer of Loans  pursuant to this  Section  13.14  would,  at the time of such
transfer,  result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective  Lender prior to such  transfer,  then the
Borrower  shall not be  obligated  to pay such  increased  costs  (although  the
Borrower  shall  be  obligated  to pay any  other  increased  costs  of the type
described  above  resulting  from  changes  after  the  date  of the  respective
transfer).

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     13.15. Register. The Borrower hereby designates the Administrative Agent to
serve as its agent,  solely for  purposes of this Section  13.15,  to maintain a
register (the  "Register") on which it will record the Commitments  from time to
time of each of the  Lenders,  the Loans  made by each of the  Lenders  and each
repayment  in  respect  of the  principal  amount of the  Loans of each  Lender.
Failure to make any such recordation,  or any error in such  recordation,  shall
not affect the Borrower's  obligations in respect of such Loans. With respect to
any Lender, the transfer of the Commitments of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments  shall
not be effective  until such transfer is recorded on the Register  maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such  recordation  all amounts owing to the transferor with respect
to such  Commitments  and  Loans  shall  remain  owing  to the  transferor.  The
registration  of  assignment or transfer of all or part of any  Commitments  and
Loans shall be recorded by the  Administrative  Agent on the Register  only upon
the acceptance by the Administrative  Agent of a properly executed and delivered
Assignment and Assumption  Agreement  pursuant to Section  13.04(b).  Coincident
with  the  delivery  of such  an  Assignment  and  Assumption  Agreement  to the
Administrative  Agent for acceptance and  registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor  Lender shall  surrender the Note (if any)  evidencing such Loan, and
thereupon one or more new Notes in the same aggregate  principal amount shall be
issued to the  assigning  or  transferor  Lender  and/or  the new  Lender at the
request of any such Lender.  The Borrower agrees to indemnify the Administrative
Agent from and against any and all losses,  claims,  damages and  liabilities of
whatsoever  nature which may be imposed on, asserted  against or incurred by the
Administrative Agent in performing its duties under this Section 13.15.

     13.16. Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Lender agrees that it will use its reasonable efforts not to
disclose  without  the  prior  consent  of  the  Borrower  (other  than  to  its
affiliates,  employees,  auditors,  advisors or counsel or to another  Lender if
such Lender or such Lender's  holding or parent  company in its sole  discretion
determines that any such party should have access to such information,  provided
such Persons  shall be subject to the  provisions  of this Section  13.16 to the
same extent as such Lender) any information  with respect to the Borrower or any
of its  Subsidiaries  which is now or in the future furnished by or on behalf of
the Borrower or any of its Subsidiaries  pursuant to this Agreement or any other
Credit   Document  which   information  is,  at  the  time  of  its  disclosure,
confidential  and/or  proprietary  and  clearly  identified  as such in writing,
provided  that any Lender may  disclose any such  information  (i) as has become
generally  available  to the  public  other  than by  virtue of a breach of this
Section  13.16(a)  by  the  respective  Lender,  (ii)  as  may  be  required  or
appropriate  in any report,  statement or testimony  submitted to any municipal,
state or Federal  regulatory body having or claiming to have  jurisdiction  over
such Lender or to the Federal  Reserve  Board or the Federal  Deposit  Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their  successors,  (iii) as may be required or appropriate in respect to any
summons or  subpoena  or in  connection  with any  litigation,  (iv) in order to
comply with any law, order,  regulation or ruling applicable to such Lender, (v)
to the  Administrative  Agent or the  Collateral  Agent,  (vi) to any  direct or
indirect contractual counterparty in any swap, hedge or similar agreement (or to
any  such  contractual  counterparty's  professional  advisor),  so long as such
contractual  counterparty (or such  professional  advisor) agrees to be bound by
the  provisions  of this Section  13.16 and (vii) to any  prospective  or actual
transferee  or  participant  in  connection  with any  contemplated  transfer or

                                       91
<PAGE>

participation of any of the Notes or Commitments or any interest therein by such
Lender,  provided  that such  prospective  transferee  agrees to be bound by the
confidentiality provisions contained in this Section 13.16.

     (b) The Borrower hereby  acknowledges and agrees that each Lender may share
with any of its affiliates,  and such affiliates may share with such Lender, any
information  related  to the  Borrower  or any of its  Subsidiaries  (including,
without   limitation,   any  non-public  customer   information   regarding  the
creditworthiness  of the Borrower and its  Subsidiaries),  provided such Persons
shall be subject to the  provisions  of this Section 13.16 to the same extent as
such Lender.

     13.17.  Potential   Restructuring  of  Sular  Assets.  The  parties  hereto
acknowledge  that the Borrower has informed the Lenders that it may wish,  after
the occurrence of the Term Loan  Satisfaction  Date, to transfer all or portions
of the "Sular"-related assets to one or more newly created, foreign Wholly-Owned
Subsidiaries.  The  assets to be so  transferred  may  consist of (x) the rights
relating to Sular acquired pursuant to the Acquisition  Agreement and/or (y) the
rights and obligations  pursuant to the Distributorship  Agreement and Trademark
Purchase and  Assignment  Agreement.  The  Administrative  Agent and the Lenders
hereby  agree  that,  so long as the  Term  Loan  Satisfaction  Date has in fact
occurred,  and no Default or Event of Default exists  hereunder,  that they will
work in good faith with the Borrower to consent to transactions  described above
so long as such  transactions  are  structured  in a manner which is  reasonably
satisfactory to the Administrative Agent and the Required Lenders. In connection
with any  transaction so approved by the  Administrative  Agent and the Required
Lenders,  the parties hereto shall enter into such  modifications  to the Credit
Documents as the  Administrative  Agent and the Required  Lenders  determine are
reasonably  necessary  or  desirable  in  connection  with  the  transaction  so
approved,  it being  understood and agreed by all parties hereto that the nature
of such  modifications  may require the consent of the Required Lenders pursuant
to Section 13.12(a).

                                       92
<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have caused their duly  authorized
officers  to execute  and  deliver  this  Agreement  as of the date first  above
written.

Address

First Horizon Pharmaceutical           FIRST HORIZON PHARMACEUTICAL CORPORATION
  Corporation
660 Hembree Parkway, Suite 106
Roswell, GA 30076
                                        By: /s/ Mahendra G. Shah
                                            Title: Chief Executive Officer

                                       BANKERS TRUST COMPANY,
                                       Individually and as Administrative Agent

                                       By: /s/ Scottye D. Lindsey
                                            Title: Vice President

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

                                       By: /s/ Craig Murlless
                                            Title: Vice President

                                       LASALLE BANK NATIONAL ASSOCIATION,
                                       Individually and as Documentation Agent

                                       By: /s/ Patrick O'Toole
                                            Title: Assistant Vice President

                                       GENERAL ELECTRIC CAPITAL CORPORATION

                                       By: /s/ Brian S. Beckwith
                                            Title: Duly Authorized Signatory

<PAGE>

                                                                      SCHEDULE I

                                   COMMITMENTS

<TABLE>
<CAPTION>
<S>                                              <C>                <C>                   <C>

                                                  Term Loan         Revolving Loan        Total Commitment
        Lender                                    Commitment          Commitment
Bankers Trust Company                             $51,800,000         $10,200,000           $62,000,000
Bank of America, N.A.                             $37,600,000          $7,400,000           $45,000,000
LaSalle Bank National Association                 $29,240,000          $5,760,000           $35,000,000
General Electric Capital Corporation               $8,360,000          $1,640,000           $10,000,000
                                                 ------------         -----------          ------------
         TOTAL                                   $127,000,000         $25,000,000          $152,000,000

</TABLE>

<PAGE>

                                                                     SCHEDULE II

                                LENDER ADDRESSES

Lender                                            Address
Bankers Trust Company                             31 West 52nd Street
                                                  7th Floor
                                                  New York, NY 10019

                                                  Attention:   Scottye Lindsey
                                                  Telephone: 646-324-2197
                                                  Facsimile:  646-324-7460
Bank of America, N.A.                             100 North Tryon Street
                                                  Mailstop: NC1-007-17-11
                                                  Charlotte, NC 28255

                                                  Attention:   Craig Murlless
                                                  Telephone: 704-387-1296
                                                  Facsimile:  704-388-6002
LaSalle Bank National Association                 135 South LaSalle Street
                                                  Suite 828
                                                  Chicago, IL 60603

                                                  Attention:  Patrick J. O'Toole
                                                  Telephone: 312-904-0735
                                                  Facsimile:  312-904-0522
General Electric Capital Corporation              2325 Lakeview Parkway
                                                  Suite 700
                                                  Alpharetta, GA 30004

                                                  Attention:   Brian S. Beckwith
                                                  Telephone: 678-624-7900
                                                  Facsimile:  678-624-7904

<PAGE>

                                                                    SCHEDULE III

                          SCHEDULE III - REAL PROPERTY

Neither First Horizon nor its Subsidiary  owns any Real Property.  First Horizon
or its Subsidiary has entered into leases for Real Property as follows:

     o    Lease Agreement, dated June 28, 1998, with ASC North Fulton Associates
          Joint Venture, re: 660 Hembree Parkway,  Suite 106, Roswell, GA 30076,
          Fulton County.

     o    Lease,  dated July 19,  1999,  with EBC Park Forty  Plaza,  Inc.,  re:
          Office No. 13A, North Carolina, Durham County

     o    Executive   Service    Agreement,    dated   July   16,   1999,   with
          InterOffice/Paradise  Valley,  re:  office  space  @  11811  N.  Tatum
          Boulevard, Suite 3031, Phoenix, AZ 85028.

     o    Lease Agreement,  dated January 10, 2002 re: 6195 Shiloh Road, Forsyth
          County, Georgia.

<PAGE>

                                                                     SCHEDULE IV

                               SCHEDULE IV - PLANS

401(k) Profit Sharing Plan

<PAGE>

                                                                      SCHEDULE V

                            SCHEDULE V - SUBSIDIARIES

First Horizon Services, LLC, an Illinois limited liability company

<PAGE>

                                                                     SCHEDULE VI

                 SCHEDULE VI - LEGAL NAMES/TYPES OF ORGANIZATION

First Horizon Pharmaceutical Corporation, a Delaware corporation

First Horizon Services, LLC, an Illinois limited liability company

<PAGE>

                                                                    SCHEDULE VII

                      SCHEDULE VII - EXISTING INDEBTEDNESS

Below  sets  forth  the  Indebtedness  of  First  Horizon.  The  roman  numerals
correspond to the roman numerals set forth in the  definition of  "Indebtedness"
in the Credit Agreement.

(i)  None

(ii) None

(iii)See attached list for all Indebtedness secured by any Lien.

(iv) None

(v)  License  Agreement,  dated  January 29, 1999,  with  American Home Products
     Corporation

     Manufacturing and Supply Agreement, dated April 23, 1999 with Mikart, Inc.

     Manufacturing  and Supply  Agreement,  dated  January 31, 1999 with Mikart,
     Inc.

     Distribution Agreement with G. Pohl-Boskamp GmbH & Co., dated July 22, 1999

     Distributorship  Agreement  by and  between  First  Horizon  Pharmaceutical
     Corporation and Bayer, AG, dated December 12, 2001

     Manufacturing  and Supply  Agreement by and between Horizon  Pharmaceutical
     Corporation and Anabolic Laboratories, Inc., dated June 1, 1999

     Manufacturing and Supply Agreement between West-ward  Pharmaceutical  Corp.
     and Atlantic Research and Development, Inc., dated December 29, 1997

     Supply   Agreement   by   and   between   Banner    Pharmacaps   Inc.   and
     Sanofi-Synthelabo Inc.

(vi) None

(vii)None

(viii)None

<PAGE>

                                      Liens

1.   All Permitted Liens existing on the date of the Credit Agreement.

2.   See following list:

<TABLE>
<CAPTION>
<S>                             <C>             <C>                    <C>

------------------------------- --------------- ---------------------- -----------------------
Debtor                          Jurisdiction    Secured Party          Type of Filing
------------------------------- --------------- ---------------------- -----------------------
------------------------------- --------------- ---------------------- -----------------------
First Horizon Pharmaceutical    Fulton County   State of Georgia and   State FIFA for 2001
Corp.                                           Fulton County          Property Taxes
                                                                       GED Book 9633, Page 145
------------------------------- --------------- ---------------------- -----------------------

</TABLE>

<PAGE>

                                                                   SCHEDULE VIII

                            SCHEDULE VIII - INSURANCE

See attached list.

<PAGE>

                                                                     SCHEDULE IX

                          SCHEDULE IX - EXISTING LIENS

1.   All Permitted Liens existing on the date of the Credit Agreement.

2.   See following list:

<TABLE>
<CAPTION>
<S>                       <C>                    <C>                     <C>                    <C>

------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Debtor                    Jurisdiction           Secured Party           Type of Filing         Subject Property
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
First Horizon             Fulton County          State of Georgia and    State FIFA for 2001
Pharmaceutical Corp.                             Fulton County           Property Taxes
                                                                         GED Book 9633, Page
                                                                         145
------------------------- ---------------------- ----------------------- ---------------------- ----------------------

</TABLE>

<PAGE>

                                   SCHEDULE X

                              EXISTING INVESTMENTS

Cash                        6,549,892

Cash Equivalents           51,217,242

Total                      57,767,134

<PAGE>

SECTION 1.            Amount and Terms of Credit...............................1

         1.01.        The Commitments..........................................1
         1.02.        Minimum Amount of Each Borrowing.........................3
         1.03.        Notice of Borrowing......................................3
         1.04.        Disbursement of Funds....................................4
         1.05.        Notes....................................................5
         1.06.        Conversions..............................................6
         1.07.        Pro Rata Borrowings......................................7
         1.08.        Interest.................................................7
         1.09.        Interest Periods.........................................8
         1.10.        Increased Costs, Illegality, etc.........................9
         1.11.        Compensation............................................11
         1.12.        Change of Lending Office................................11
         1.13.        Replacement of Lenders..................................12

SECTION 2.            Letters of Credit.......................................13

         2.01.        Letters of Credit.......................................13
         2.02.        Maximum Letter of Credit Outstandings; Final
                         Maturities...........................................13
         2.03.        Letter of Credit Requests; Minimum Stated Amount........14
         2.04.        Letter of Credit Participations.........................15
         2.05.        Agreement to Repay Letter of Credit Drawings............16
         2.06.        Increased Costs.........................................17

SECTION 3.            Commitment Commission; Fees; Reductions of Commitment...18

         3.01.        Fees....................................................18
         3.02.        Voluntary Termination of Unutilized Revolving Loan
                         Commitments..........................................19
         3.03.        Mandatory Reduction of Commitments......................19

SECTION 4.            Prepayments; Payments; Taxes............................20

         4.01.        Voluntary Prepayments...................................20
         4.02.        Mandatory Repayments....................................21
         4.03.        Method and Place of Payment.............................24
         4.04.        Net Payments............................................24

SECTION 5.            Conditions Precedent to Credit Events on the
                         Initial Borrowing Date...............................26

         5.01.        Effective Date; Notes...................................26
         5.02.        Officer's Certificate...................................26
         5.03.        Opinions of Counsel.....................................27
         5.04.        Corporate Documents; Proceedings; etc...................27
         5.05.        Employee Benefit Plans; Shareholders' Agreements;
                         Management Agreements; Employment Agreements;
                         Non-Compete Agreements; Collective Bargaining
                         Agreements; Tax Sharing Agreements; Existing
                         Indebtedness Agreements..............................27
         5.06.        Consummation of the Acquisition.........................28

<PAGE>

         5.07.        Adverse Change, Approvals...............................29
         5.08.        Litigation..............................................29
         5.09.        Subsidiaries Guaranty...................................30
         5.10.        Pledge Agreement........................................30
         5.11.        Security Agreement......................................30
         5.12.        Existing Credit Agreement...............................31
         5.13.        Financial Statements; Pro Forma Balance Sheet;
                         Projections..........................................31
         5.14.        Updated Information for Sular and Furandantin...........32
         5.15.        Business................................................32
         5.16.        Corporate and Capital Structure.........................32
         5.17.        Solvency Certificate; Insurance Certificates............32
         5.18.        Fees, etc...............................................32

SECTION 6.            Conditions Precedent to All Credit Events...............33

         6.01.        Default; Representations and Warranties.................33
         6.02.        Notice of Borrowing; Letter of Credit Request...........33
         6.03.        No Excess Cash..........................................33

SECTION 7.            Representations, Warranties and Agreements..............34

         7.01.        Organizational Status...................................34
         7.02.        Power and Authority.....................................34
         7.03.        No Violation............................................34
         7.04.        Approvals...............................................35
         7.05.        Financial Statements; Financial Condition; Undisclosed
                         Liabilities; Projections.............................35
         7.06.        Litigation..............................................36
         7.07.        True and Complete Disclosure............................36
         7.08.        Use of Proceeds; Margin Regulations.....................37
         7.09.        Tax Returns and Payments................................37
         7.10.        Compliance with ERISA...................................38
         7.11.        The Security Documents..................................38
         7.12.        Properties..............................................39
         7.13.        Capitalization..........................................39
         7.14.        Subsidiaries............................................39
         7.15.        Compliance with Statutes, etc...........................40
         7.16.        Investment Company Act..................................40
         7.17.        Public Utility Holdings Company Act.....................40
         7.18.        Environmental Matters...................................40
         7.19.        Labor Relations.........................................41
         7.20.        Intellectual Property, etc..............................41
         7.21.        Indebtedness............................................41
         7.22.        Insurance...............................................41
         7.23.        Representations and Warranties in Other Documents.......42
         7.24.        Legal Names; Type of Organization (and Whether a
                         Registered Organization); Jurisdiction
                         of Organization; etc.................................42

<PAGE>

SECTION 8.            Affirmative Covenants...................................42

         8.01.        Information Covenants...................................42
         8.02.        Books, Records and Inspections; Annual Meetings.........46
         8.03.        Maintenance of Property; Insurance......................46
         8.04.        Existence; Franchises...................................47
         8.05.        Compliance with Statutes, etc...........................47
         8.06.        Compliance with Environmental Laws......................47
         8.07.        ERISA...................................................48
         8.08.        End of Fiscal Years; Fiscal Quarters....................50
         8.09.        Performance of Obligations..............................50
         8.10.        Payment of Taxes........................................50
         8.11.        Use of Proceeds.........................................50
         8.12.        Additional Security; Further Assurances; etc............50
         8.13.        Ownership of Subsidiaries; etc..........................51
         8.14.        Corporate Separateness..................................51
         8.15.        Landlord Waivers........................................51

SECTION 9.            Negative Covenants......................................52

         9.01.        Liens...................................................52
         9.02.        Consolidation, Merger, Purchase or Sale of Assets, etc..54
         9.03.        Dividends...............................................55
         9.04.        Indebtedness............................................55
         9.05.        Advances, Investments and Loans.........................55
         9.06.        Transactions with Affiliates............................56
         9.07.        Capital Expenditures....................................57
         9.08.        Consolidated Interest Coverage Ratio....................57
         9.09.        Minimum Consolidated EBITDA.............................57
         9.10.        Leverage Ratio..........................................58
         9.11.        Modification of Certificate of Incorporation,
                         By-Laws and Certain Other Agreements, etc............58
         9.12.        Limitation on Certain Restrictions on Subsidiaries......59
         9.13.        Limitation on Issuance of Capital Stock.................59
         9.14.        Business; etc...........................................59
         9.15.        Limitation on Creation of Subsidiaries..................60
         9.16.        Change of Legal Names; Type of Organization
                         (and Whether a Registered Organization;
                         Jurisdiction of Organization etc.....................60

SECTION 10.           Events of Default.......................................60

         10.01.       Payments................................................60
         10.02.       Representations, etc....................................61
         10.03.       Covenants...............................................61
         10.04.       Default Under Other Agreements..........................61
         10.05.       Bankruptcy, etc.........................................61
         10.06.       ERISA...................................................62
         10.07.       Security Documents......................................62

<PAGE>

         10.08.       Guaranties..............................................63
         10.09.       Judgments...............................................63
         10.10.       Change of Control.......................................63
         10.11.       Equity Financing........................................63
         10.12.       Distributorship Agreement...............................63

SECTION 11.           Definitions and Accounting Terms........................64

         11.01.       Defined Terms...........................................64

SECTION 12.           The Administrative Agent................................83

         12.01.       Appointment.............................................83
         12.02.       Nature of Duties........................................84
         12.03.       Lack of Reliance on the Administrative Agent............84
         12.04.       Certain Rights of the Administrative Agent..............84
         12.05.       Reliance................................................85
         12.06.       Indemnification.........................................85
         12.07.       The Administrative Agent in its Individual Capacity.....85
         12.08.       Holders.................................................85
         12.09.       Resignation by the Administrative Agent.................86
         12.10.       The Syndication Agent and the Documentation Agent.......86

SECTION 13.           Miscellaneous...........................................87

         13.01.       Payment of Expenses, etc................................87
         13.02.       Right of Setoff.........................................88
         13.03.       Notices.................................................88
         13.04.       Benefit of Agreement; Assignments; Participations.......89
         13.05.       No Waiver; Remedies Cumulative..........................91
         13.06.       Payments Pro Rata.......................................91
         13.07.       Calculations; Computations..............................92
         13.08.       GOVERNING LAW; SUBMISSION TO JURISDICTION;
                         VENUE; WAIVER OF JURY TRIAL..........................92
         13.09.       Counterparts............................................93
         13.10.       Effectiveness...........................................93
         13.11.       Headings Descriptive....................................94
         13.12.       Amendment or Waiver; etc................................94
         13.13.       Survival................................................95
         13.14.       Domicile of Loans.......................................95
         13.15.       Register................................................95
         13.16.       Confidentiality.........................................96
         13.17.       Potential Restructuring of Sular Assets.................97

SCHEDULE I                 Commitments
SCHEDULE II                Lender Addresses
SCHEDULE III               Real Property
SCHEDULE IV                Plans
SCHEDULE V                 Subsidiaries

<PAGE>

SCHEDULE VI                Legal Names/Types of Organization
SCHEDULE VII               Existing Indebtedness
SCHEDULE VIII              Insurance
SCHEDULE IX                Existing Liens
SCHEDULE X                 Existing Investments

EXHIBIT A-1                Notice of Borrowing
EXHIBIT A-2                Notice of Conversion/Continuation
EXHIBIT B-1                Term Note
EXHIBIT B-2                Revolving Note
EXHIBIT B-3                Swingline Note
EXHIBIT C                  Letter of Credit Request
EXHIBIT D                  Section 4.04(b)(ii) Certificate
EXHIBIT E                  Opinion of Burke, Warren, MacKay & Serritella, P.C.
EXHIBIT F                  Officers' Certificate
EXHIBIT G                  Pledge Agreement
EXHIBIT H                  Security Agreement
EXHIBIT I                  Solvency of Certificate
EXHIBIT J                  Compliance Certificate
EXHIBIT K                  Assignment and Assumption Agreement
EXHIBIT L                  Subsidiaries Guaranty
EXHIBIT M                  Joinder Agreement

1453997EXHIBIT 10.87
                                                         AS AMENDED THROUGH
                                                         NOVEMBER 15, 2001

                        CARRINGTON LABORATORIES, INC.
                        EMPLOYEE STOCK PURCHASE PLAN

      Section 1.   Purpose.  It  is the purpose  of the Plan  to promote  the
 interests of the Company and its shareholders by providing a method by which
 eligible employees may use voluntary  payroll deductions to purchase  shares
 of Common Stock  at a discount,  thereby affording them  the opportunity  to
 invest in the Company at a preferential price, and to acquire a  proprietary
 interest in the Company and an increased personal interest in its  continued
 success and progress.  The Plan is intended to qualify as an employee  stock
 purchase plan within the  meaning of Section  423 of the  Code and shall  be
 construed accordingly.

      Section 2.  Definitions.  As  used herein the following terms have  the
 following meanings:

           (a)   "Affiliate" means  any  corporation  that  is  a  subsidiary
      corporation of the Company within the meaning of Section 424(f) of  the
      Code and that has been designated by the Committee as an Affiliate  for
      purposes of the Plan.

           (b)   "Board of Directors"  means the  Board of  Directors of  the
      Company.

           (c)   "Code" means  the United  States  Internal Revenue  Code  of
      1986, as from time to time amended.

           (d)   "Committee" means  the  Committee  described  in  Section  4
      hereof.

           (e)   "Common Stock" means the $.01 par value Common Stock of  the
      Company.

           (f)   "Company" means Carrington Laboratories, Inc.

           (g)   "Compensation"  means  (i)  with   respect  to  a   salaried
      employee, the basic annual salary of such employee as of the first  day
      of the Plan  Year (except  with respect  to a  salaried employee  whose
      participation in  the Plan  begins on  an  Enrollment Date  other  than
      January 1, in which case, for the Plan Year in which such participation
      begins, "Compensation" means that portion of the basic annual salary of
      such employee, as of  the Enrollment Date  on which such  participation
      begins, that  is  payable for  the  period from  such  Enrollment  Date
      through the  remainder  of  that Plan  Year),  and  shall  not  include
      bonuses, overtime pay,  allowances, commissions, deferred  compensation
      payments or any other extraordinary compensation, and (ii) with respect
      to an hourly compensated employee, the straight-time hourly rate of pay
      of such employee as of  the first day of  the Plan Year, multiplied  by
      2,080 (except  with respect  to an  hourly compensated  employee  whose
      participation in the Plan begins  on April 1, July  1 or October 1,  in
      which case,  for the  Plan Year  in  which such  participation  begins,
      "Compensation" means  the  straight-time hourly  rate  of pay  of  such
      employee as of such April 1, July 1 or October 1, multiplied by  1,560,
      1,040 or 520,  respectively), and shall  not include bonuses,  overtime
      pay, premium pay or other irregular  payments.  The Compensation of  an
      employee who does not receive salary or wages computed in United States
      dollars shall be  determined by converting  such salary  or wages  into
      United States  dollars in  accordance  with the  Compensation  Exchange
      Rate.

           (h)   "Compensation Exchange  Rate"  means the  New  York  foreign
      currency exchange rate as reported in  The Wall Street Journal for  the
      last business day in  December immediately preceding  the first day  of
      the Plan Year.

           (i)   "Eligible Employee" means any employee of the Company or  an
      Affiliate who  is  eligible to  participate  in the  Plan  pursuant  to
      Section 5 hereof.

           (j)   "Enrollment Date" means any  January 1, April  1, July 1  or
      October 1 of any Plan Year.

           (k)   "Fair Market Value" means the closing sale price on the date
      in question (or, if  there was no  reported sale on  such date, on  the
      last preceding day on which any  reported sale occurred) of the  Common
      Stock on the Nasdaq National Market  or any national stock exchange  or
      other stock market on which the Common  Stock may from time to time  be
      traded.

           (l)   "Option" means any option to purchase shares of Common Stock
      granted by the Committee pursuant to the provisions of the Plan.

           (m)   "Participant" means  an  Eligible  Employee  who  elects  to
      participate in the Plan pursuant to Section 6 hereof.

           (n)   "Plan" means  this  Carrington Laboratories,  Inc.  Employee
      Stock Purchase Plan.

           (o)   "Plan Year"  means each  period beginning  on January 1  and
      ending on the following December 31, commencing January 1, 1993.

      Section 3. Number of Shares.  The aggregate number of shares of  Common
 Stock issued pursuant to Options granted  under the Plan shall not exceed  a
 total of 1,000,000  shares.  The  maximum number of  shares of Common  Stock
 available for sale under  the Plan is subject  to adjustment as provided  in
 Section 13.  The Common Stock to  be delivered upon exercise of Options  may
 consist of  authorized but  unissued shares  of Common  Stock or  shares  of
 Common Stock previously issued and reacquired by the Company.

      Section 4.  Administration of the Plan.  The Plan shall be administered
 by the Committee,  which shall  consist of three  or more  employees of  the
 Company.  Each member of the Committee shall be appointed by and shall serve
 at the pleasure of  the Board of  Directors.  The  Board of Directors  shall
 have the sole continuing authority to appoint members of the Committee  both
 in substitution  for  members previously  appointed  and to  fill  vacancies
 however caused.  The following provisions shall apply to the  administration
 of the Plan by the Committee:

           (a)   The Committee shall designate one of its members as Chairman
      and  shall hold  meetings at such times and places as it may determine.
      Each member of the Committee shall  be notified in writing of the  time
      and place of any meeting  of the Committee at  least two days prior  to
      such meeting, provided that  such notice may be  waived by a  Committee
      member.  A majority of the members of the Committee shall constitute  a
      quorum and  any  action taken  by  a majority  of  the members  of  the
      Committee present  at any  duly called  meeting at  which a  quorum  is
      present (or action  unanimously approved in  writing) shall  constitute
      action by the Committee.

           (b)   The Committee may  appoint a Secretary  (who need  not be  a
      member of the Committee) who shall  keep minutes of its meetings.   The
      Committee may make such  rules and regulations for  the conduct of  its
      business as it may determine.

           (c)   The Committee  shall  have  full authority  subject  to  the
      express provisions  of the  Plan to  interpret  the Plan,  to  provide,
      modify and rescind rules and regulations relating to it and to make all
      other determinations and  perform such actions  as the Committee  deems
      necessary or advisable to administer the Plan.

           (d)   No member of the  Committee shall be  liable for any  action
      taken or determination made in good  faith with respect to the Plan  or
      any Option granted hereunder.

      Section 5. Eligible  Employees.   Each employee  of the  Company or  an
 Affiliate shall be eligible to participate  in the Plan; provided,  however,
 that:

           (a)   An employee shall not be granted an Option if such  employee
      would, immediately after grant of the  Option, own stock possessing  5%
      or more of the total combined voting  power or value of all classes  of
      stock of the  Company or any  parent or subsidiary  corporation of  the
      Company (within  the meaning  of  Section 424(e) and  (f) of the Code).
      For purposes of determining stock  ownership under this paragraph,  the
      rules of Section 424(d)  of the Code shall  apply, and stock which  the
      employee may purchase under any outstanding options shall be treated as
      stock owned by the employee; and

           (b)   No employee shall be granted an Option under the Plan  which
      would permit such employee's rights to  purchase shares of stock  under
      all employee stock  purchase plans of  the Company and  its parent  and
      subsidiary corporations (within the meaning  of Section 424(e) and  (f)
      of the Code) to accrue (within the meaning of Section 423(b)(8) of  the
      Code) at a rate which exceeds U.S. $25,000 of fair market value of such
      stock (determined at the time such option is granted) for each calendar
      year  during  which  any  such  option  granted  to  such  employee  is
      outstanding at any time.

 For purposes of  this Section 5,  the term "employee"  shall not include  an
 employee whose customary employment is 20 hours  or less per week or is  for
 not more than five months in any calendar year.

      Section 6.   Method  of Participation.    Each person  who will  be  an
 Eligible Employee on  any Enrollment Date  may elect to  participate in  the
 Plan by  executing  and  delivering  to  the  Company,  on  or  before  such
 Enrollment Date, a payroll deduction authorization form as provided in  this
 Section.  Such Eligible Employee shall thereby become a Participant on  such
 Enrollment  Date  and  shall  remain  a  Participant  until  such   Eligible
 Employee's participation  is terminated  as provided  in  Section 10  or  11
 hereof; provided, however, that if the Company does not receive such payroll
 deduction authorization form in time to implement the authorized withholding
 for the payroll period  that includes such  Enrollment Date, no  withholding
 shall be made on behalf of such Participant pursuant to this Plan until  the
 next succeeding payroll period.

           The payroll deduction authorization form executed by a Participant
 shall  request  withholding,  by   means  of  substantially  equal   payroll
 deductions over the Plan Year, of an amount which shall be not more than 10%
 nor less than 1% of  such Participant's Compensation for  the Plan Year.   A
 Participant may change the withholding rate of his or her payroll  deduction
 authorization within  such  limits by  delivering  a new  payroll  deduction
 authorization form to the Company; provided, however, that a change pursuant
 to this sentence may be made by each Participant no more than three times in
 respect of any Plan Year; and provided further, that if the Company does not
 receive such new payroll deduction authorization  form in time to  implement
 the change for the  payroll period during which  it receives such form,  the
 change authorized  thereby  shall not  be  made until  the  next  succeeding
 payroll period.   All amounts withheld  in accordance  with a  Participant's
 payroll deduction authorization shall be  credited to a withholding  account
 for such Participant.  No interest shall be payable on withholding accounts.

      Section 7.  Grant of  Options.  Each   Participant shall be granted  an
 Option on the  first day  of each  Plan Year  to purchase  shares of  Common
 Stock; provided, however, that a Participant who begins participation on  an
 Enrollment Date other than January 1  in accordance with Section 6 shall  be
 granted an Option  on such  Enrollment Date  and on  the first  day of  each
 succeeding Plan Year.  Each Option  shall be exercisable in installments  on
 the last business day of each calendar month during the Plan Year, beginning
 with the month  in which  the Option  is granted,  for the  number of  whole
 shares of Common Stock to be determined  by dividing (a) the balance in  the
 Participant's withholding account on the last  business day of the month  by
 (b) the purchase  price per share  of the Common  Stock as determined  under
 Section 8.  In no event shall the number of shares with respect to which  an
 Option is granted  to a Participant  in a Plan  Year exceed  that number  of
 shares which has an aggregate Fair  Market Value (determined on the date  of
 grant) of U.S.  $25,000, and the  number of shares  actually purchased by  a
 Participant in a Plan Year  may not exceed this  number.  The Company  shall
 reduce, on  a substantially  proportionate basis,  the number  of shares  of
 Common Stock receivable by  each Participant upon exercise  of an Option  in
 any month in the event that the total number of shares then available  under
 the Plan is less than the total number  of shares with respect to which  all
 Participants exercise Options in such month.

      Section 8.  Option Price. The purchase price per share of Common  Stock
 under each installment of each Option shall  equal the lesser of (a) 85%  of
 the Fair Market Value per share of Common Stock on the date of grant of  the
 Option or (b) 85% of the Fair Market Value per share of Common Stock on  the
 date on which the installment is exercised.

      Section 9.  Exercise  of Options. An employee  who is a Participant  in
 the Plan on the last business day  of a month shall be deemed  automatically
 to have exercised the  current installment of the  Option granted to him  or
 her for that Plan  Year.  Upon  such exercise, the  Company shall apply  the
 entire balance of the Participant's withholding  account to the purchase  of
 the maximum  number of  whole shares  of Common  Stock as  determined  under
 Section 7.  For purposes of this  Section 9, the balance in the  withholding
 account of a Participant  whose salary or wages  are not computed in  United
 States dollars shall be converted into  United States dollars in  accordance
 with the New  York foreign currency  exchange rate as  reported in The  Wall
 Street Journal for the  last business day  of the month.   Shares of  Common
 Stock purchased for a  Participant under the Plan  shall be held in  custody
 for the account of such Participant  as provided in the following  paragraph
 unless he or  she has requested,  by written notice  to the  Company at  any
 time, with respect to any  installment of an Option  or with respect to  all
 installments, that certificates representing shares purchased for his or her
 account under the Plan not be held in custody.  The Company shall issue  and
 deliver to the Participant certificates representing shares for which such a
 request has  been  made  as  soon  as  practicable  after  such  shares  are
 purchased, subject to the limitations set forth in the following sentence of
 this Section 9.  Certificates representing  shares for which such a  request
 has not previously been made  and which are being  held in custody shall  be
 issued and delivered to the Participant as soon as practicable after the end
 of the month in which the Participant makes a written request to the Company
 therefor; provided, however, that the obligation  of the Company to  deliver
 shares of Common Stock shall be postponed for such period of time as may  be
 necessary to register or qualify the  purchased shares under the  Securities
 Act of  1933  and any  applicable  foreign  or state  securities  law;  and,
 provided further, that the  Participant shall not be  entitled to receive  a
 certificate representing the shares  in his or her  account under the  Plan,
 other than  at the  end of  a Plan  Year or  upon withdrawal  from the  Plan
 pursuant to Section 10 or 11,  unless there are ten  or more shares in  such
 account.

           The Company shall issue or cause  to be issued one or more  global
 certificates (collectively, the  "Global Certificate"),  in the  name of  an
 officer or officers of Company designated from time to time by the Committee
 to serve as Custodian for Participants in the Plan, representing all  shares
 purchased for Participants  under the  Plan that  the Company  has not  been
 requested  to  deliver  to the  Participants.  The  Company  shall  maintain
 complete and accurate records indicating the number of shares purchased  for
 each Participant under the Plan for which certificates have not been  issued
 and delivered to such Participant, and the Company shall, no less frequently
 than quarterly, deliver reports to such Participants indicating such  number
 of shares and  containing such  other information  as the  Company may  deem
 necessary or advisable.  A Participant  shall possess all of the rights  and
 privileges of a  stockholder of  the Company  with respect  to Common  Stock
 purchased under the  Plan upon the  issuance to or  for the  benefit of  the
 Participant  of  a  certificate   or  certificates  (including  the   Global
 Certificate) representing such shares.  The  Company shall deliver or  cause
 to be delivered  to each Participant  for whom shares  of Common Stock  have
 been purchased under the Plan and are represented by the Global  Certificate
 all dividends and distributions in respect  of such shares and all  notices,
 proxy statements and other communications  to the Company's shareholders  in
 accordance with  applicable  law  and  the  rules  and  regulations  of  the
 Securities and Exchange Commission.

           No  fractional  shares  shall  be  issued  upon  exercise  of  any
 installment  of  an  Option.   Any  balance  remaining  in  a  Participant's
 withholding account following exercise of  an installment shall be  returned
 to the Participant, except that any  such balance representing a  fractional
 share of  Common Stock  shall be  retained in  the withholding  account  and
 applied to the  purchase of shares  in the next  month.   The cash  proceeds
 received by the Company upon exercise of an Option shall constitute  general
 funds of  the Company.   To  the  extent any  installment  of an  Option  is
 exercised with  respect to  less than  all  of the  shares of  Common  Stock
 available for purchase  under such installment,  the unexercised portion  of
 the installment shall expire and become null and  void as of the end of  the
 month for which such installment was  exercisable.  Any unexercised  portion
 of an Option shall expire and become null and void as of the end of the Plan
 Year in which such Option was granted.

      Section 10.  Cancellation  of Option and Withdrawal  From the Plan.   A
 Participant who holds  an Option under  the Plan may  at any  time prior  to
 exercise of the final installment thereof  pursuant to Section 9 cancel  the
 remaining unexercised portion of such Option by written notice delivered  to
 the  Company.  Upon  such cancellation,  the  balance in  the  Participant's
 withholding account and any shares being  held in custody shall be  returned
 to such Participant and he or she shall cease to be a Participant.   Partial
 cancellation shall not be permitted.

           A  Participant  may  terminate   his  or  her  payroll   deduction
 authorization as of any date by written notice delivered to the Company  and
 shall  thereby  cease  to  be  a  Participant  as  of  such  date.   Partial
 termination of a  payroll deduction  authorization shall  not be  permitted,
 except to the  extent expressly permitted  by Section 6 of  this Plan.   Any
 Participant  who  voluntarily  terminates  his  or  her  payroll   deduction
 authorization prior to the last business day  of a month shall be deemed  to
 have cancelled  the remaining  unexercised portion  of  his or  her  Option,
 including the  installment that  would have  been  exercisable on  the  last
 business day of such month.

           A Participant who withdraws from the Plan pursuant to this Section
 10 may re-enroll as of any subsequent Enrollment Date on which he or she  is
 an Eligible Employee in accordance with the procedure set forth in Section 6
 of this Plan; provided, however, that  a Participant shall not be  permitted
 to re-enroll in  the Plan  until an  Enrollment Date  that is  at least  six
 months after the date of his or her withdrawal.

      Section 11.   Termination of  Employment.   Upon the  termination of  a
 Participant's employment with the  Company or an  Affiliate for any  reason,
 such person shall cease to be a Participant, the unexercised portion of  any
 Option held by such  Participant under the Plan  shall be deemed  cancelled,
 the balance of such Participant's withholding  account and any shares  being
 held in custody shall be returned to  such Participant (or, in the event  of
 the Participant's death,  to the  executor or  administrator of  his or  her
 estate) and he or she shall have no further rights under the Plan.

           All Participants shall have the  same rights and privileges  under
 the Plan.  Notwithstanding the foregoing,  nothing in the Plan shall  confer
 upon any Participant any right to continue  in the employ of the Company  or
 an Affiliate or in  any way interfere with  the right of  the Company or  an
 Affiliate to terminate the employment of  the Participant at any time,  with
 or  without  cause.  Transfers  of  employment  among the  Company  and  its
 Affiliates and approved leaves of absence not exceeding 90 days shall not be
 considered terminations of employment for purposes of this Plan.

      Section 12.  Transferability.  An  Option granted under the Plan  shall
 not be transferable by the Participant and shall be exercisable only by  the
 Participant.

      Section 13.  Adjustments  Upon Changes in Common  Stock.  In the  event
 the Company shall effect a split of  the Common Stock or declare a  dividend
 payable in Common Stock, or in the event the outstanding Common Stock  shall
 be combined into a smaller number of shares, the maximum number of shares as
 to which  Options  may be  granted  under the  Plan  shall be  increased  or
 decreased proportionately, and  the Fair Market  Value per  share of  Common
 Stock as of the date of grant of all outstanding Options shall be  adjusted,
 for purposes of making the determination required by Section 8 of this Plan,
 in a manner deemed appropriate by the Board of Directors.

           In the event of a reclassification of Common Stock not covered  by
 the foregoing, or  in the event  of a liquidation  or reorganization of  the
 Company, including a merger, consolidation or  sale of assets, the Board  of
 Directors shall make such adjustments, if any, as it may deem appropriate in
 the number, purchase price  and kind of shares  that are covered by  Options
 theretofore granted under  the Plan  or that  are otherwise  subject to  the
 Plan.  The provisions of this Section shall only be applicable if, and  only
 to the extent that, the application thereof does not conflict with any valid
 governmental statute, regulation or rule.

      Section 14.   Amendment and Termination  of the Plan.   Subject to  the
 right of the  Board of Directors  to terminate the  Plan prior thereto,  the
 Plan shall  terminate when  all or  substantially all  of the  Common  Stock
 reserved for purposes of  the Plan has  been purchased.   No Options may  be
 granted after termination of the  Plan.  The Board  of Directors may at  any
 time suspend, terminate,  amend or  modify the Plan,  in whole  or in  part;
 provided, however,  that no  amendment or  modification  of the  Plan  shall
 become effective without the approval of  such amendment or modification  by
 the shareholders of the  Company if the Company,  on the advice of  counsel,
 determines that such shareholder approval is necessary or desirable.

           No termination or amendment of the Plan shall adversely affect the
 rights of a Participant under an outstanding Option, except with the consent
 of such Participant.

      Section 15.   Requirements of  Law.  The  granting of  Options and  the
 issuance of Common Stock upon the exercise of an Option shall be subject  to
 all  applicable  laws,  rules  and  regulations  and  to  such  approval  by
 governmental agencies as may be required.

      Section 16.    Effective  Date  of  the  Plan.  The Plan  shall  become
 effective, as of the date of its adoption  by the Board of Directors, if  it
 is duly approved at the 1993 annual meeting of stockholders of the  Company.
 The  affirmative vote of the holders of at least a majority of the shares of
 stock of the Company present and voting on  the approval of the Plan at  the
 meeting, provided that the  total number of shares  voting for the  proposal
 represents more than 50% of the total number of shares of stock entitled  to
 vote at such annual meeting, shall be required to approve the Plan.  If  the
 Plan is not so approved, the Plan shall terminate, the unexercised  portions
 of all Options granted hereunder  shall be null and  void and all shares  of
 Common Stock theretofore issued upon the exercise of Options under the  Plan
 shall be  deemed  cancelled.   Certificates  representing shares  issued  to
 Participants  prior  to  shareholder  approval   of  the  Plan  shall   bear
 appropriate legends indicating that the  shares have been issued  contingent
 upon shareholder approval and are cancellable in the event such approval  is
 not obtained.  Upon such  cancellation, Participants shall promptly  deliver
 to the  Company  all  certificates representing  cancelled  shares  and  the
 Company shall promptly  return to  the Participants,  without interest,  all
 funds obtained from  such Participants through  payroll deductions and  used
 for the purchase of such shares.

      Section 17.  Rule 16b-3 Compliance.   Transactions under this Plan  are
 intended to  comply with  all applicable  conditions of  Rule 16b-3  or  its
 successors adopted under the Exchange Act,  some of which conditions are not
 set forth herein.  To the extent any provision of the Plan or action by  the
 Committee fails to  so comply,  it shall  be deemed  null and  void,  to the
 extent permitted by law and deemed advisable by the Committee.

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