Document:

Exhibit 10.12

This Exhibit contains  Confidential  Information that has been omitted and filed
separately   with  the  Securities  and  Exchange   Commission   pursuant  to  a
Confidential  Treatment Request under Rule 24b-2 of the Securities  Exchange Act
of 1934 as  amended.  The  Confidential  Information  on pages 2, 5, and 11, and
ExhibitS 1.1(a)-(e) and 1.4 has been replaced with a *.

                            ASSET PURCHASE AGREEMENT

                                 by and between

                            WM. WRIGLEY JR. COMPANY

                                       and

                          GUM TECH INTERNATIONAL, INC.

                           Dated as of March 14, 2001

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                                TABLE OF CONTENTS

ARTICLE I
   PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES...................   1
   1.1   Certain Definitions ...............................................   1
   1.2   Purchase and Sale of Assets .......................................   6
   1.3   Allocation of Purchase Price ......................................   7
   1.4   Assumed Liabilities ...............................................   7

ARTICLE II
   CLOSING .................................................................   8
   2.1   Closing ...........................................................   8
   2.2   BUYER's Conditions to Closing .....................................   9
   2.3   SELLER's Conditions to Closing ....................................  11
   2.4   Payment of Remaining Purchase Price Amount ........................  12

ARTICLE III
   REPRESENTATIONS AND WARRANTIES OF SELLER ................................  13
   3.1   SELLER's Authority; No Conflicts ..................................  13
   3.2   Title to Tangible Assets ..........................................  14
   3.3   Financial Statements ..............................................  14
   3.4   No Undisclosed Liabilities ........................................  15
   3.5   Inventory .........................................................  15
   3.6   Real Property .....................................................  15
   3.7   Leases ............................................................  16
   3.8   Plant and Equipment ...............................................  16
   3.9   Employee Benefit Plans; ERISA .....................................  17
   3.10  Environmental Matters .............................................  18
   3.11  Customers and Suppliers ...........................................  20
   3.12  Insurance .........................................................  20
   3.13  Casualties ........................................................  20
   3.14  Intellectual Property .............................................  20
   3.15  Litigation; Proceedings ...........................................  21
   3.16  Contracts .........................................................  22
   3.17  Taxes .............................................................  22
   3.18  Compliance with Applicable Laws ...................................  23
   3.19  Brokers ...........................................................  24
   3.20  Books and Records .................................................  24
   3.21  Absence of Certain Changes ........................................  24
   3.22  Full Disclosure ...................................................  25

                                        i

<PAGE>
ARTICLE IV
   REPRESENTATIONS AND WARRANTIES OF BUYER .................................  25
   4.1   Authority; No Conflicts; Governmental Consents ....................  25
   4.2   Actions and Proceedings ...........................................  26
   4.3   Availability of Funds .............................................  27
   4.4   Brokers ...........................................................  27

ARTICLE V
   COVENANTS OF SELLER .....................................................  27
   5.1   Access ............................................................  27
   5.2   Ordinary Conduct of the Business ..................................  27
   5.3   Confidential Information ..........................................  28
   5.4   Notification of Certain Matters ...................................  29
   5.5   Shareholders' Meeting..............................................  29
   5.6   No Solicitation of Competing Transaction ..........................  30
   5.7   Subsequent Actions ................................................  32
   5.8   Taxes .............................................................  32
   5.9   Procter & Gamble Equipment ........................................  32

ARTICLE VI
   COVENANTS OF BUYER ......................................................  33
   6.1   Accounts Receivable ...............................................  33
   6.2   Hiring by BUYER ...................................................  33
   6.3   Tax Treatment of Listed Employees .................................  34
   6.4   Warehouse Support .................................................  34

ARTICLE VII
   MUTUAL COVENANTS OF THE PARTIES .........................................  35
   7.1   Cooperation .......................................................  35
   7.2   Publicity .........................................................  35
   7.3   Taxes .............................................................  36
   7.4   Access to Information .............................................  36
   7.5   Tax Cooperation ...................................................  36
   7.6   Bulk Sales Waiver .................................................  36
   7.7   Expenses ..........................................................  37
   7.8   Rent ..............................................................  37

                                       ii

<PAGE>
ARTICLE VIII
   INDEMNIFICATION .........................................................  37
   8.1   Survival ..........................................................  37
   8.2   Indemnification by SELLER .........................................  37
   8.3   Indemnification by BUYER ..........................................  38
   8.4   Environmental Matters .............................................  38
   8.5   Procedures Relating to Indemnification ............................  39

ARTICLE IX
   TERMINATION .............................................................  41
   9.1   Bases for Termination .............................................  41
   9.2   Notice of Termination .............................................  41
   9.3   Effect of Termination .............................................  41

ARTICLE X
   GENERAL PROVISIONS ......................................................  43
   10.1  Assignment ........................................................  43
   10.2  No Third-Party Beneficiaries ......................................  43
   10.3  Amendments; Waiver ................................................  43
   10.4  Waiver of Compliance ..............................................  43
   10.5  Notices ...........................................................  43
   10.6  Interpretation ....................................................  44
   10.7  Counterparts ......................................................  44
   10.8  Severability ......................................................  45
   10.9  Governing Law .....................................................  45
   10.10 Entire Agreement ..................................................  45

                                       iii

<PAGE>

     ASSET PURCHASE AGREEMENT (the "AGREEMENT"),  dated as of March 14, 2001, by
and between WM. WRIGLEY JR. COMPANY,  a Delaware  corporation  ("BUYER") and GUM
TECH INTERNATIONAL, INC., a Utah corporation ("SELLER").

                                   WITNESSETH:

     WHEREAS,  SELLER wishes to sell, and BUYER wishes to buy, all of the assets
of SELLER  relating  to chewing  gum or other  confectionery  related  products,
excluding  the  Excluded  Assets (as defined in Section 1.1 of this  Agreement),
upon the terms and subject to the conditions set forth herein.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants  and  agreements  contained  herein  and for other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:

                                    ARTICLE I

             PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

     1.1  Certain  Definitions.  For all  purposes of this  Agreement  except as
expressly  provided herein,  capitalized terms used in this Agreement shall have
the meanings assigned to them in this Section 1.1:

     "ACQUISITION  PROPOSAL" shall mean any proposal or offer made by any Person
other than BUYER to acquire all or a substantial part of the Business or Assets,
whether by  merger,  tender  offer,  exchange  offer,  sale of assets or similar
transactions  involving  SELLER,  but shall not  include a proposal  or offer to
acquire  (i) all or  substantially  all of the stock of SELLER on terms which do
not interfere with the  consummation  of the  transactions  contemplated by this
Agreement or (ii) any of the Excluded Assets.

     "AFFILIATE"  shall have the meaning set forth in Rule 12b-2 of the Exchange
Act.

     "ASSETS" shall mean all of the property, assets, goodwill and business as a
going concern of every kind,  nature and description,  real,  personal or mixed,
tangible  or  intangible,  that is owned or leased by SELLER for the  purpose of
conducting the Business including, without limitation, the Intellectual Property
<PAGE>
and specific  assets set forth on Exhibit 1.1(a)  hereto,  but not including the
Excluded Assets.

     "ASSUMED  LIABILITIES"  shall have the meaning  assigned thereto in Section
1.4.

     "BALANCE  SHEET" shall mean the audited balance sheet of SELLER dated as of
December  31,  2000,  which  balance  sheet shall be  included in the  Financial
Statements at Closing.

     "BALANCE SHEET DATE" shall mean December 31, 2000.

     "BASKET" shall have the meaning assigned thereto in Section 8.2.

     "BUSINESS"  shall mean all of the business of SELLER  conducted  heretofore
related to  chewing  gum or other  confectionery  related  functional  products,
except any of the rights and obligations related to SELLER's joint ventures with
Swedish Match AB and Iensano, Inc. (formerly BioDelivery Technologies,  Inc.) or
any other operations related to [*].

     "BUYER BASKET" shall have the meaning assigned thereto in Section 8.3.

     "CLEANUP" shall mean all actions required to: (1) cleanup, remove, treat or
remediate Hazardous Materials in the indoor or outdoor environment;  (2) prevent
the Release of  Hazardous  Materials  so that they do not  migrate,  endanger or
threaten  to  endanger  public  health  or  welfare  or the  indoor  or  outdoor
environment;   (3)  perform   pre-remedial   studies  and   investigations   and
post-remedial  monitoring  and  care  required  by  Environmental  Laws  or  any
Governmental  Entity; or (4) respond to any government  requests for information
or documents in any way relating to cleanup,  removal,  treatment or remediation
or potential cleanup,  removal,  treatment or remediation of Hazardous Materials
in the indoor or outdoor  environment  to the extent  required by  Environmental
Laws or any Governmental Entity.

     "CLOSING" shall have the meaning assigned thereto in Section 2.1.

     "CLOSING DATE" shall have the meaning assigned thereto in Section 2.1.

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[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.

                                       2
<PAGE>
     "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     "CONFIDENTIAL  INFORMATION"  shall  have the  meaning  assigned  thereto in
Section 5.3.

     "CONTRACTS" shall mean all of the material contracts and agreements related
to the Business or the Assets,  which  contracts and agreements are set forth on
Schedule 3.16 hereto (each a "CONTRACT").

     "DEFECT" shall mean a material  defect or impurity of any kind,  whether in
design, manufacture, processing, or otherwise.

     "DISCLOSURE  SCHEDULE"  shall  mean the  disclosure  schedule  of even date
herewith prepared and signed by the SELLER and delivered to BUYER simultaneously
with the execution hereof.

     "ENCUMBRANCES" shall mean any and all liens,  charges,  security interests,
options,  claims,  mortgages,  pledges,  proxies,  voting trusts or  agreements,
obligations,  understandings  or arrangements or other  restrictions on title or
transfer of any nature whatsoever.

     "ENVIRONMENTAL  CLAIM"  shall  mean any  claim,  action,  cause of  action,
investigation  or notice  (written  or oral) by any  Person  or entity  alleging
potential  liability  (including,  without  limitation,  potential liability for
investigatory  costs,  Cleanup  costs,   governmental  response  costs,  natural
resources damages,  property damages,  personal injuries,  or penalties) arising
out of,  based on or  resulting  from (a) the  presence,  Release or  threatened
Release of any Hazardous  Materials at any location,  whether or not operated by
the Seller, or (b) circumstances forming the basis of any violation,  or alleged
violation, of any Environmental Law.

     "ENVIRONMENTAL  LAWS"  shall  mean all  federal,  state and local  laws and
regulations  applicable  during  SELLER's  operation of the Business and for one
year  thereafter  relating to  pollution  or  protection  of human health or the
environment,   including  without  limitation,  laws  relating  to  Releases  or
threatened  Releases  of  Hazardous  Materials  or  otherwise  relating  to  the
manufacture,   processing,   distribution,  use,  treatment,  storage,  Release,
transport or handling of Hazardous  Materials and all laws and regulations  with
regard to  recordkeeping,  notification,  disclosure and reporting  requirements
respecting Hazardous Materials,

                                       3
<PAGE>
     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

     "EXCLUDED  ASSETS"  shall mean the  assets  identified  on  Exhibit  1.1(b)
hereto.

     "EXPIRATION DATE" shall have the meaning assigned thereto in Section 8.1.

     "FINANCIAL  STATEMENTS"  shall mean the  consolidated  balance sheet of the
SELLER as at December 31 in each of the years 1998  through 2000  together  with
consolidated statements of income,  shareholders' equity and cash flows for each
of the years then  ended,  all  certified  prior to Closing by Angell & Deering,
independent public accountants, whose reports thereon are included therein.

     "GAAP" shall mean generally  accepted  accounting  principles in the United
States.

     "GOVERNMENTAL ENTITY" shall mean a court, arbitral tribunal, administrative
agency or  commission or other  governmental  or other  regulatory  authority or
agency.

     "HAZARDOUS  MATERIALS"  shall  mean all  substances  defined  as  Hazardous
Substances,  Oils,  Pollutants or Contaminants in the National Oil and Hazardous
Substances  Pollution  Contingency Plan, 40 C.F.R. ss. 300.5, or defined as such
by, or regulated as such under, any Environmental Law.

     "INTELLECTUAL  PROPERTY"  means any and all United States and foreign:  (a)
patents  (including design patents,  industrial  designs and utility models) and
patent  applications  (including  docketed patent  disclosures  awaiting filing,
reissues,  divisions,  continuous-in-part  and extensions),  patent  disclosures
awaiting filing  determination,  inventions and  improvements  thereto  relating
primarily  to  the  Business;   (b)  the  registered  trademarks  and  trademark
applications relating primarily to the Business; (c) service marks, trade names,
trade dress, logos, business and product names,  slogans,  Internet domain names
and registrations and applications for registration  thereof relating  primarily
to the  Business;  (d)  trade  secrets,  know-how,  confidential  and  technical
information, manufacturing,  engineering and technical drawings and confidential
business  information  relating  primarily to the Business;  (e)  copyrights and
copyrightable  works  relating  primarily  to the  Business  and (f)  copies and
tangible  embodiments thereof (in whatever form or medium,  including electronic

                                       4
<PAGE>
media)  and  any  registrations  or  applications  for  any  of  the  foregoing.
Notwithstanding the foregoing,  "Intellectual  Property" will not include any of
the items listed on Exhibit 1.1(c).

     "LEASE"  shall mean each lease  pursuant  to which  SELLER  (for the use or
benefit of the Business) leases any real or personal property  (excluding leases
relating  solely to personal  property  calling  for rental or similar  periodic
payments not exceeding $10,000 per annum).

     "LETTER OF INTENT" shall mean that certain  Letter of Intent between SELLER
and BUYER dated as of January 17, 2001.

     "LOSS" shall have the meaning assigned thereto in Section 8.2.

     "PERMITTED LIENS" shall have the meaning assigned thereto in Section 3.2.

     "PERSON" shall mean a natural  person,  partnership,  corporation,  limited
liability company,  business trust, joint stock company,  trust,  unincorporated
association, joint venture, Governmental Entity or other entity or organization.

     "PROCTER & GAMBLE  PRODUCTS"  shall mean [*] product or products  that have
been developed by SELLER  pursuant to that certain Joint  Development  Agreement
between SELLER and Procter & Gamble,  dated as of November 22, 1999, as amended,
which is more fully described on Exhibit 1.1(d) attached hereto.

     "PURCHASE PRICE" shall have the meaning assigned thereto in Section 1.2.

     "REAL PROPERTY" shall mean all real property that is owned,  leased or used
by SELLER primarily for the Business.

     "RELEASE"  shall mean any release,  spill,  emission,  discharge,  leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration into the
indoor or outdoor  environment  (including,  without  limitation,  ambient  air,
surface water,  groundwater and surface or subsurface  strata) or into or out of
any property,  including the movement of Hazardous  Materials  through or in the
air, soil, surface water, groundwater or property.

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[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.

                                        5
<PAGE>
     "SEC" shall mean the United States Securities and Exchange Commission.

     "SELLER'S  KNOWLEDGE"  or "KNOWLEDGE OF SELLER" shall mean to the knowledge
of SELLER's Board of Directors and executive  officers engaged  primarily in the
management of the Business, after due inquiry.

     "TAX" or "TAXES" shall mean all taxes, assessments,  charges, duties, fees,
levies,  imposts or other governmental charges,  including,  without limitation,
all federal,  state,  local  foreign and other  income,  environmental,  add-on,
minimum,  franchise,  profits,  capital gains, capital stock, capital structure,
transfer,  sales, gross receipt, use, ad valorem,  service,  service use, lease,
recording,  customs,  occupation,  property,  excise, gift, severance,  windfall
profits,  premium,  stamp,  license,   payroll,  social  security,   employment,
unemployment,   disability,   value-added,   withholding,   and   other   taxes,
assessments,  charges,  duties,  fees,  levies,  imposts  or other  governmental
charges of any kind whatsoever  (whether  payable directly or by withholding and
whether  or not  requiring  the  filing of a return)  and all  estimated  taxes,
deficiency  assessments,  additions  to tax,  additional  amounts  imposed by an
governmental authority (domestic or foreign), penalties, fines and interest, and
shall  include  any  liability  for such  amounts as a result  either of being a
member  of a  combined,  consolidated,  unitary  or  affiliated  group  or  of a
contractual obligation to indemnify any person, regardless of whether disputed.

     "TAX  RETURN"  shall  mean any  return,  report,  declaration,  information
return, filing or other document (including,  without limitation, any amendments
thereto or related or supporting information) filed or required to be filed with
respect to Taxes.

     "THIRD-PARTY  CLAIM"  shall have the  meaning  assigned  thereto in Section
8.5(a).

     "URBCA" shall mean the Utah Revised Business Corporation Act.

     "WAREHOUSE  SUPPORT"  shall  mean the  support  items set forth on  Exhibit
1.1(e) hereto.

     1.2  Purchase  and Sale of  Assets.  Upon the  terms,  and  subject  to the
conditions of this  Agreement,  on the Closing Date,  SELLER will sell,  convey,
transfer and assign, or cause to be sold, conveyed,  transferred and assigned to
BUYER, and BUYER will purchase,  the Assets, free and clear of all Encumbrances,
for an  aggregate  cash  purchase  price of Twenty Five  Million  United  States

                                       6
<PAGE>
Dollars  ($25,000,000) (the "PURCHASE  PRICE"),  payable as set forth in Article
II.

     1.3  Allocation  of Purchase  Price.  BUYER and SELLER  shall  allocate the
Purchase Price and the amount of the Assumed Liabilities among the Assets in the
manner required by Section 1060 of the Code. In making such allocation, the fair
market values will be agreed to in good faith by BUYER and SELLER within 60 days
after the  Closing  Date.  If the  parties  are unable to resolve  any  material
differences  with  regard to the  allocation  of the  Purchase  Price  among the
Assets, then any disputed matters will be finally and conclusively determined by
an independent certified accounting firm or independent certified appraisal firm
(the "ALLOCATION ARBITER"), which Allocation Arbiter shall be mutually agreed by
BUYER  and  SELLER,  provided,   however,  that  such  agreement  shall  not  be
unreasonably withheld. Promptly, but not later than 15 days after its acceptance
of appointment  hereunder,  the Allocation  Arbiter will determine (based solely
upon  representations  of BUYER and SELLER and not by  independent  review) only
those  matters in dispute,  and will render a written  report as to the disputed
matters and the resulting  allocation of the Purchase Price,  which report shall
be conclusive and binding upon the parties.  Such Allocation  Arbiter's fees and
expenses shall be born equally by the parties.  If the Holdback is paid pursuant
to  Section  2.4,  the  allocations  described  in this  Section  1.3  shall  be
recomputed in accordance  with the  requirements of Section 1060 of the Code and
the  provisions of this Section 1.3,  except that the 60- and 15-day periods set
forth  herein  shall be  determined  with  reference to the date the Holdback is
paid.  SELLER will provide to BUYER copies of Form 8594  (including  any amended
Forms 8594) and any required exhibits  thereto,  consistent with the allocations
of this Section 1.3. The parties  agree that,  to the extent  required,  all Tax
Returns  or other Tax  information  they may file or cause to be filed  with any
governmental   entity  shall  be  prepared  and  filed  consistently  with  such
allocation.

     1.4 Assumed Liabilities. BUYER agrees to and will at the Closing assume and
agree  to  pay,   discharge  and  perform  when  required  all  of  the  Assumed
Liabilities.  For purposes of this Agreement,  "ASSUMED  LIABILITIES" shall mean
the liabilities of SELLER listed on Exhibit 1.4.

                                        7
<PAGE>
                                   ARTICLE II

                                     CLOSING

     2.1 Closing.  The closing (the  "CLOSING")  of the purchase and sale of the
Assets and of the  transactions  contemplated by this Agreement shall be held at
the offices of Snell & Wilmer  L.L.P.,  One  Arizona  Center,  Phoenix,  Arizona
85004,  at  10:00  a.m.  local  time on the  next  business  day  following  the
satisfaction  and/or  waiver of the  conditions to Closing set forth in Sections
2.2 and 2.3 (other than  conditions  which can only be satisfied by the delivery
of  certificates,  opinions or other  documents at the Closing),  unless another
date or place is agreed in writing by each of the  parties  hereto.  The date on
which the Closing shall occur is hereinafter referred to as the "CLOSING DATE."

          (a) At the Closing, BUYER shall deliver to SELLER (i) by wire transfer
to SELLER's bank account per the wire transfer instructions on Exhibit 2.1(a)(i)
hereto  immediately  available funds in an amount equal to $24,000,000;  (ii) an
assumption agreement substantially in the form of Exhibit 2.1(a)(ii) hereto (the
"ASSUMPTION  AGREEMENT"),  duly executed by BUYER,  (iii) two royalty agreements
substantially  in the form of Exhibit  2.1(a)(iii)  (the "ROYALTY  AGREEMENTS"),
duly executed by BUYER, (iv) a securities  purchase  agreement  substantially in
the form of Exhibit  2.1(a)(iv)  (the  "SECURITIES  PURCHASE  AGREEMENT"),  duly
executed by BUYER;  (v) a manufacturing  agreement  substantially in the form of
Exhibit 2.1(a)(v) (the "MANUFACTURING  AGREEMENT"),  duly executed by BUYER; and
(vi) such other documents as are specifically required by this Agreement.

          (b) At the Closing,  SELLER shall  deliver or cause to be delivered to
BUYER:

               (i)  duly  executed  bills  of sale  in  substantially  the  form
     attached  hereto as Exhibit  2.1(b)(i),  or other  documents of  conveyance
     relating to the Assets and the Intellectual Property, as applicable;

               (ii)  all  documents  of  title  and  instruments  of  conveyance
     necessary to transfer  record and/or  beneficial  ownership to BUYER of all
     automobiles, trucks, trailers (and any other property owned by SELLER which
     require  execution,  endorsement  and/or delivery of a document in order to
     vest record or beneficial ownership thereof in BUYER) which are included in
     the Assets;

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<PAGE>
               (iii) executed  copies of consents  referred to in Section 2.2(c)
     hereof;

               (iv) all of the books and records of SELLER relating primarily to
     the Business;

               (v) the  officers'  certificate  referred  to in  Section  2.2(a)
     hereof;

               (vi)  all  such  other   endorsements,   assignments   and  other
     instruments as, in the reasonable opinion of BUYER's counsel, are necessary
     to vest in  BUYER,  as the case may be,  good and  marketable  title to the
     Assets;

               (vii) the Royalty Agreements, duly executed by SELLER;

               (viii)  the  Securities  Purchase  Agreement,  duly  executed  by
     SELLER; and

               (ix) the Manufacturing Agreement, duly executed by SELLER.

          (c) SELLER and BUYER shall  cooperate with each other  regarding,  and
shall use their respective commercially reasonable efforts to cause, the sale to
BUYER of all the  Assets on the  Closing  Date on the terms and  conditions  set
forth in this Agreement.

     2.2 BUYER's  Conditions to Closing.  The  obligation of BUYER to consummate
the Closing shall be subject to the  satisfaction (or waiver by BUYER) as of the
Closing of the following conditions:

          (a) (i) The  representations  and  warranties  of SELLER  made in this
Agreement  shall  be true  and  correct  in all  respects  (in  the  case of any
representation or warranty  containing any materiality  qualification) or in all
material  respects (in the case of any  representation  or warranty  without any
materiality qualification), in each case as of the date of this Agreement

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<PAGE>
and on and as of the Closing  Date, as though made on and as of the Closing Date
(unless  and  to  the  extent  any  such   representation   or  warranty  speaks
specifically  as of an earlier date,  in which case,  as of such earlier  date);
(ii) SELLER shall have  performed or complied in all material  respects with all
obligations and covenants required by this Agreement to be performed or complied
with by SELLER by the time of the Closing; and (iii) SELLER shall have delivered
to BUYER a  certificate  dated the  Closing  Date and  signed  by an  authorized
officer of SELLER confirming the foregoing.

          (b) No injunction,  suit, action,  proceeding or order of any court or
administrative  agency of competent  jurisdiction shall be threatened or pending
(i) seeking to prohibit or impose any material  limitations on BUYER's ownership
or  operation  of all or a  material  portion  of the  Assets;  (ii)  seeking to
restrain or prohibit the consummation of the Closing; or (iii) seeking to impose
material limitations on the ability of BUYER effectively to exercise full rights
of ownership of the Assets.

          (c) All material consents and approvals of any Person necessary to the
consummation  of the Closing,  including  consents and approvals from parties to
loans,  contracts,  Leases or other  agreements  and consents and approvals from
governmental agencies, whether federal, state or local shall have been obtained,
and a copy of each such consent or approval shall have been provided to BUYER at
or prior to the Closing.

          (d) Since the date hereof,  there shall not have occurred any material
adverse change (or any development that,  insofar as reasonably can be foreseen,
is reasonably  likely to result in any material  adverse  change)  regarding the
Business or the Assets.

          (e) This Agreement and the transactions contemplated hereby shall have
been approved and adopted by a majority vote of SELLER's shareholders.

          (f)  SELLER  shall  have  delivered  to  BUYER  a  duly  executed  and
acknowledged  certificate,  in form and substance reasonably acceptable to BUYER
and in compliance with the Code and Treasury Regulations,  certifying such facts
as to establish that the transactions  contemplated by this Agreement are exempt
from  withholding  under  Section  1445 of the  Code.  Notwithstanding  anything
expressed or implied to the contrary  herein,  if SELLER fails to provide  BUYER
with such a certification, BUYER may, in its sole and absolute discretion, waive
the  condition  set forth in this  Section  2.2(f),  in which case  BUYER  shall
withhold  from  the  Purchase  Price  (and pay  over to the  appropriate  taxing
authorities) the requisite amounts in accordance with Section 1445 of the Code.

                                       10
<PAGE>
          (g) This Agreement  shall not have been  terminated in accordance with
Article IX hereof.

          (h) Section 12 of that certain Consulting Agreement dated June 2, 2000
by and between Gary Kehoe and SELLER shall be amended to remove any restrictions
on Mr. Kehoe with respect to [*].

          (i) Procter & Gamble  Company  shall consent to BUYER  performing  the
manufacturing  services of SELLER as set forth in that certain Joint Development
Agreement  between  SELLER and Procter & Gamble Company dated as of November 22,
1999.

     2.3 SELLER's Conditions to Closing.  The obligation of SELLER to consummate
the Closing shall be subject to the satisfaction (or waiver by SELLER) as of the
Closing of the following conditions:

          (a) (i) The  representations  and  warranties  of  BUYER  made in this
Agreement  shall  be true  and  correct  in all  respects  (in  the  case of any
representation or warranty  containing any materiality  qualification) or in all
material  respects (in the case of any  representation  or warranty  without any
materiality qualification), in each case as of the date of this Agreement and on
and as of the Closing Date, as though made on and as of the Closing Date (unless
and to the extent any such  representation or warranty speaks specifically as of
an earlier date, in which case, as of such earlier date);  (ii) BUYER shall have
performed  or  complied  in all  material  respects  with  the  obligations  and
covenants  required by this  Agreement to be performed or complied with by BUYER
by the time of the  Closing;  and (iii) BUYER shall have  delivered  to SELLER a
certificate  dated the Closing Date and signed by a duly  authorized  officer of
BUYER confirming the foregoing.

          (b) No injunction , suit, action,  proceeding or order of any court or
administrative  agency of competent  jurisdiction shall be threatened or pending
as of the Closing  that  restrains  or  prohibits  the  purchase and sale of the
Assets.

          (c) This Agreement and the transactions contemplated hereby shall have
been approved and adopted by a majority vote of the SELLER's shareholders.

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.

                                       11
<PAGE>
          (d) The landlords under the Leases relating to the Real Property shall
have agreed to release SELLER from all liability under such Leases arising after
the Closing Date.

          (e) All material consents and approvals of any Person necessary to the
consummation  of the Closing,  including  consents and approvals from parties to
loans,  contracts,  Leases or other  agreements  and consents and approvals from
governmental agencies, whether federal, state or local shall have been obtained.

          (f) Procter & Gamble  Company  shall consent to BUYER  performing  the
manufacturing  services of SELLER as set forth in that certain Joint Development
Agreement  between  SELLER and Procter & Gamble Company dated as of November 22,
1999.

     2.4 Payment of  Remaining  Purchase  Price  Amount.  Within sixty (60) days
after the Closing  Date,  BUYER shall pay SELLER  that  portion of the  Purchase
Price not paid pursuant to Section 2.1(a) (the "HOLDBACK") less any amounts (the
"FDA  EXPENSES")  paid by, or estimated to be paid by, BUYER as set forth below.
Neither  BUYER  nor  SELLER  shall  invite an  inspector  from the Food and Drug
Administration  (the "FDA") to inspect the Real  Property,  however,  if such an
inspection  occurs  within  sixty (60) days of the Closing and BUYER  receives a
ss.483 letter that identifies  deficiencies  (based on SELLER's current products
and  capacity),  BUYER and SELLER will work together to determine the manner and
extent to which the deficiencies will be rectified and the amount to be expended
(i.e.,  the FDA  Expenses).  If the parties  are unable to resolve any  material
differences  with regard to any FDA Expenses,  then any disputed matters will be
finally and conclusively  determined by an Allocation Arbiter,  which Allocation
Arbiter shall be mutually agreed by BUYER and SELLER,  provided,  however,  that
such agreement shall not be unreasonably withheld.  Promptly, but not later than
15 days after its acceptance of appointment  hereunder,  the Allocation  Arbiter
will  determine  (based  solely  upon  presentations  of BUYER,  SELLER  and, if
practicable,  an FDA inspector) only those matters in dispute, and will render a
written report as to the disputed matters,  which report shall be conclusive and
binding upon the parties.  Such Allocation  Arbiter's fees and expenses shall be
born  equally by the  parties.  If no such  inspection  occurs prior to the date
sixty (60) days after the Closing  Date,  SELLER shall be entitled to the entire
Holdback.

                                       12
<PAGE>
                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Except as specifically set forth in the Disclosure Schedule,  SELLER hereby
represents and warrants to BUYER as follows:

     3.1 SELLER's Authority; No Conflicts.

          (a) SELLER (i) is a corporation  duly organized,  validly existing and
in good standing  under the laws of the State of Utah;  (ii) has full  corporate
power and authority to carry on the Business as it is now being conducted and to
own the  Assets;  and (iii) is duly  qualified  or  licensed to do business as a
foreign  corporation in good standing in every jurisdiction in which the conduct
of the Business requires such qualification,  except where failure to be so duly
qualified or licensed  and in good  standing  would not have a material  adverse
effect on the Business or the Assets.  SELLER has all requisite  corporate power
and authority to enter into this Agreement, subject to shareholder approval, and
to consummate the transactions  contemplated  hereby.  The only corporate act or
other proceeding required to be taken by SELLER,  which has not been taken as of
the date of this Agreement, to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions  contemplated  hereby
is obtaining the consent of the  shareholders of SELLER.  The Board of Directors
of SELLER  has  authorized  the  execution,  delivery  and  performance  of this
Agreement  and the  consummation  of the  transactions  contemplated  hereby and
SELLER intends to hold a shareholders'  meeting to obtain their consent for this
Agreement.  This  Agreement  has been duly executed and delivered by SELLER and,
assuming the due execution hereof by BUYER, this Agreement constitutes the valid
and binding obligation of SELLER,  enforceable against SELLER in accordance with
its terms, except as enforcement hereof may be limited by applicable bankruptcy,
insolvency or other similar laws affecting  creditors'  rights  generally and by
general equitable principles.

          (b)  The  execution,  delivery  and  performance  by  SELLER  of  this
Agreement  will not (i) violate any  provision of SELLER's  Amended and Restated
Articles of  Incorporation  or Bylaws;  (ii) require any filing with, or permit,
authorization,  consent or approval of, any Governmental  Entity;  (iii) violate
any  provision  of,  or be an event  that is (or with the  passage  of time will
result in) a violation of, or result in the acceleration of or entitle any party
to accelerate  (whether after the giving of notice or lapse of time or both) any
obligation  under, or result in the imposition of any lien upon or the  creation

                                       13
<PAGE>
of a security  interest in any of the Assets  pursuant to, any  mortgage,  lien,
Lease, agreement,  instrument, order, arbitration award, judgment, injunction or
decree to which SELLER is a party or by which  SELLER is bound;  or (iv) violate
or conflict with any statute,  rule or regulation applicable to SELLER or any of
its  properties  or  assets  or any other  material  restriction  of any kind or
character  to which SELLER is subject  (other than in the case of clauses  (ii),
(iii) and (iv),  such filings,  permits,  authorizations,  consents,  approvals,
conflicts,  violations  or  breaches  which  could not,  individually  or in the
aggregate,  reasonably be expected to materially adversely affect the ability of
SELLER to  consummate  the  transactions  hereunder  or have a material  adverse
effect on the Assets or the Business).

     3.2 Title to Tangible Assets. The bills of sale, endorsements,  assignments
and other instruments to be executed and delivered by SELLER at the Closing will
be valid and binding obligations of SELLER, enforceable in accordance with their
respective  terms, and will effectively vest in BUYER good, valid and marketable
title to all  Assets,  free and clear of all  Encumbrances,  except  mechanics',
carriers', workmen's, repairmen's or other like liens arising or incurred in the
ordinary  course of business or liens for Taxes and other  governmental  charges
that are not due and  payable or that may  thereafter  be paid  without  penalty
(collectively  the "PERMITTED  LIENS"),  which  Permitted Liens are set forth on
Schedule 3.2.

     3.3  Financial  Statements.  As of the  date of this  Agreement,  true  and
complete copies of the Financial Statements,  together with the related auditors
reports (except for the auditors report as of December 31, 2000 and for the year
then ended (the "2000 AUDIT REPORT")),  are included in the Disclosure Schedule.
As of Closing,  the  Disclosure  Schedule  shall  contain the 2000 Audit  Report
together with consolidated  statements of income,  shareholders' equity and cash
flows for the year then ended,  which balance sheet and statements were included
in the Financial Statements as of the date of this Agreement. As of Closing, the
Financial  Statements  have  been  prepared  from,  are in  accordance  with and
accurately  reflect in all material  respects,  the books and records of SELLER,
comply in all material respects with applicable  accounting  requirements,  have
been prepared in accordance  with GAAP applied on a consistent  basis during the
periods  involved  (except  as may be stated in the notes  thereto)  and  fairly
present the financial position and the results of operations and cash flows (and
changes  in  financial  position,  if any) of SELLER as of the times and for the
periods referred to therein (subject,  in the case of unaudited  statements,  to
normally  recurring  year-end audit  adjustments  which are not material  either
individually or in the aggregate and to the fact that such unaudited  statements
do not contain all the footnotes required by GAAP).

                                       14
<PAGE>
     3.4 No  Undisclosed  Liabilities.  Except (a) as disclosed in the Financial
Statements  and (b) for  liabilities  and  obligations  incurred in the ordinary
course of business and  consistent  with past  practice  since the Balance Sheet
Date, SELLER has not incurred any liability or obligation of any nature, whether
or not accrued, contingent or otherwise, that has, or would be reasonably likely
to have, a material adverse effect on the Business.

     3.5 Inventory.  All of the raw materials and work in process inventories of
the SELLER relating primarily to the Business,  whether reflected in the Balance
Sheet or otherwise, consist of a quality and quantity usable in the ordinary and
usual course of business as  conducted  by SELLER,  except for items of obsolete
materials and materials of below-standard  quality, all of which items have been
written  off or written  down on the Balance  Sheet to fair market  value or for
which adequate reserves have been provided therein.  As of the Closing,  Section
3.5 of the Disclosure  Schedule shall contain true and complete  Certificates of
Analysis for each item of raw materials included in the inventories. All work in
process included in the Assets is free of any Defect.

     3.6 Real Property.

          (a) The  Disclosure  Schedule  sets  forth  a  complete  list  and the
location of all Real Property leased by the SELLER.  To the Knowledge of SELLER,
there are no  proceedings,  claims,  disputes or  conditions  affecting any Real
Property  leased by the SELLER that might  curtail or interfere  with the use of
such property. To the Knowledge of SELLER,  neither the whole nor any portion of
the Real  Property  leased by the SELLER  nor any other  Asset is subject to any
governmental  decree or order to be sold or is being condemned,  expropriated or
otherwise taken by any public authority with or without  compensation  therefor,
nor, to the Knowledge of SELLER,  has any such  condemnation,  expropriation  or
taking been proposed.  SELLER is not a party to any lease, assignment or similar
arrangement  under  which  SELLER  is a  lessor,  assignor  or  otherwise  makes
available for use by any third party any portion of the Real Property.

          (b) SELLER has not received any notice of, or other writing  referring
to, any requirements or  recommendation by any insurance company that has issued
a policy  covering any part of the Real Property  leased by the SELLER or by any
board or fire underwriters or other body exercising similar functions, requiring
or

                                       15
<PAGE>
recommending  any  repairs  or work to be done on any part of the Real  Property
leased by the SELLER, which repair or work has not been completed.

          (c) SELLER (with respect to the Business) has all  approvals,  permits
and licenses (including any and all environmental permits and pharmacy licenses)
necessary  to  operate  the Real  Property  leased by the  SELLER  as  currently
operated,  and no such  approvals,  permits or licenses  will be required,  as a
result of the  transactions  contemplated by this Agreement,  to be issued after
the date hereof in order to permit BUYER,  following the Closing, to continue to
operate the Real Property leased by the SELLER in the same manner as heretofore,
other than any such  approvals,  permits and licenses  that are  ministerial  in
nature and are normally issued in due course upon application  therefore without
further  action  by  the  applicant.  True  and  complete  copies  of  all  such
certificates, permits and licenses have heretofore been furnished to BUYER.

          (d) SELLER  does not own and has never  owned any Real  Property.  All
Real Property used by SELLER is leased by SELLER.

     3.7 Leases.  The  Disclosure  Schedule  identifies  the Leases.  A true and
complete copy of each Lease has heretofore  been delivered to BUYER.  Each Lease
is valid,  and as to SELLER is binding and  enforceable  in accordance  with its
terms and is in full force and  effect.  The  leasehold  estate  created by each
Lease is free and clear of all Encumbrances  except for Permitted  Liens,  which
Permitted  Liens are set forth on Schedule 3.7.  There are no existing  material
defaults by SELLER under any of the Leases.  No event has occurred that (whether
with or without  notice,  lapse of time or the  happening or  occurrence  of any
other event) would constitute a default by SELLER under any Lease. SELLER has no
reason to believe that any lessor  under any Lease will not consent  (where such
consent is necessary) to the  consummation of the  transactions  contemplated by
this Agreement  without  requiring any modification of the rights or obligations
of the lessee thereunder.

     3.8 Plant and  Equipment.  The plants and  structures  owned or used by the
SELLER  with  respect  to the  Business  are  structurally  sound  with no known
defects,  are  adequate  for the uses to which  they are being  put,  and are in
material compliance with all applicable FDA requirements. To SELLER's Knowledge,
the  equipment  owned or used by the  SELLER  with  respect to the  Business  is
structurally  sound with no  defects,  is  adequate  for the uses to which it is
being put and is in material compliance with all applicable FDA requirements. To
SELLER's Knowledge,  the plants,  structures and equipment are in good operating
condition  and  none  of  such  plants,  structures   or  equipment  are in need

                                       16
<PAGE>
of maintenance or repairs except for ordinary,  routine  maintenance and repairs
which are not  material  in nature or cost.  The  SELLER  (with  respect  to the
Business)  has  not  received  notification  that  it is  in  violation  of  any
applicable  building,  zoning,  health or other law,  ordinance or regulation in
respect of its stores,  plants or  structures  or their  operations  or the Real
Property.

     3.9 Employee Benefit Plans; ERISA.

          (a) Schedule 3.9(a) contains a true and complete list of each material
pension, profit sharing,  retirement,  savings, employee stock ownership,  stock
option,  restricted  stock,  incentive,  severance,   termination,   employment,
consulting,  change in control, fringe benefit, welfare,  collective bargaining,
bonus, insurance,  medical or other employee benefit plan, program, agreement or
arrangement,  including each "employee  benefit plan" as defined in section 3(3)
of ERISA and including any multiemployer  plan (as defined in section 4001(a)(3)
of ERISA) (each a "PLAN"),  sponsored,  maintained or contributed to or required
to be  contributed  to by the  SELLER  for the  benefit  of  current  or  former
employees (the "BUSINESS  EMPLOYEES") of the Business (each a "BUSINESS  BENEFIT
PLAN").

          (b) True and complete  copies of the following  documents  relating to
each Business  Benefit Plan, where  applicable,  have been made available to the
BUYER:  (i) the Plan,  including all  amendments  thereto;  (ii) the most recent
summary plan  description,  summary of material  modifications  and all material
general employee  communications relating to such Plan; (iii) a copy of the most
recent annual report,  if required under ERISA,  with respect to each such Plan;
(iv) a copy of the most recent actuarial  report,  if required under ERISA, with
respect  to each such  Plan;  (v) if the Plan is  funded  through a trust or any
other funding vehicle, a copy of the trust or other funding agreement (including
all amendments thereto) and the latest financial  statements  thereof;  and (vi)
the most recent  determination letter received from the Internal Revenue Service
with respect to each Plan that is intended to be qualified  under section 401 of
the Code.

          (c) Except to the extent any of the following  either  individually or
in the  aggregate  would not  result in any  liability  to BUYER  following  the
Closing,  (i)  neither  SELLER  nor  any  trade  or  business,  whether  or  not
incorporated (an "ERISA AFFILIATE"),  which together with SELLER would be deemed
a "single employer" within the meaning of section 4001(b) of ERISA, has incurred
any unsatisfied  liability under title IV of ERISA and no condition  exists that
could  reasonably be expected to present a risk to SELLER or any ERISA Affiliate
of  incurring  any such  liability  (other than  liability  for  premiums to the

                                       17
<PAGE>
Pension Benefit Guaranty  Corporation arising in the ordinary course),  and (ii)
no "employee  benefit plan," maintained or contributed to by SELLER or any ERISA
Affiliate,  has incurred an "accumulated funding deficiency" (within the meaning
of section 302 of ERISA or section 412 of the Code), whether or not waived.

          (d) Except as expressly provided in this Agreement, or as set forth in
Schedule  3.9(d),  the  consummation  of the  transactions  contemplated by this
Agreement  will not,  either alone or in  combination  with another  event,  (i)
entitle any current or former  employee of SELLER to severance  pay or any other
payment,  or (ii)  accelerate  the time of payment or vesting,  or increase  the
compensation  or benefits  provided to such  employee,  in either case for which
BUYER would have any liability.

          (e) From and after the Closing, SELLER shall remain solely responsible
for any and all liabilities,  claims, and obligations  relating to or arising in
connection  with the  requirements  of  Section  4980B  of the  Code to  provide
continuation of health care coverage under any Business Benefit Plan, in respect
of (A) employees of SELLER, other than the Transferred  Employees (as defined in
Section 6.2(a)) and their covered dependents, and (B) to the extent related to a
qualifying event occurring on or before the Closing,  Transferred  Employees and
their covered dependents.

     3.10 Environmental Matters.

          (a)  Except  as set  forth in the  Disclosure  Schedule,  SELLER is in
compliance with all applicable  Environmental  Laws (which compliance  includes,
but is not  limited  to,  the  possession  by  SELLER of all  permits  and other
governmental  authorizations  required under applicable  Environmental Laws, and
compliance with the terms and conditions thereof), except where failure to be in
compliance would not have a material adverse effect on the Business.  SELLER has
not received any  communication  (written or oral),  whether from a governmental
authority, citizens group, employee or otherwise, alleging that SELLER is not in
such  compliance,  and there are no past or present (or to the best knowledge of
SELLER,  future)  actions,  activities,   circumstances  conditions,  events  or
incidents that may prevent or interfere with such compliance in the future.  All
permits and other governmental  authorizations currently held by SELLER pursuant
to applicable Environmental Laws are identified in the Disclosure Schedule.

          (b) Except as set forth in the  Disclosure  Schedule,  no transfers of
permits or other governmental  authorizations  under  Environmental Laws, and no
additional  permits or other  governmental  authorizations  under  Environmental

                                       18
<PAGE>
Laws, will be required to permit BUYER to conduct the business of SELLER in full
compliance  with all applicable  Environmental  Laws  immediately  following the
Closing Date, as conducted by SELLER  immediately  prior to the Closing Date. To
the extent that such  transfers  or  additional  permits and other  governmental
authorizations  are required,  SELLER  agrees to cooperate  with BUYER to effect
such  transfers  and obtain such permits and other  governmental  authorizations
prior to the Closing Date.

          (c)  Except  as set  forth  in the  Disclosure  Schedule,  there is no
Environmental Claim pending or threatened against SELLER or, to the Knowledge of
SELLER, against any person or entity whose liability for any Environmental Claim
SELLER has or may have retained or assumed either  contractually or by operation
of law which would have a material adverse effect on the Business.

          (d) Except as set forth in the Disclosure Schedule,  there are no past
or  present  (or  to the  Knowledge  of  SELLER,  future)  actions,  activities,
circumstances,  conditions, events or incidents,  including, without limitation,
the Release,  threatened  Release or presence of any  Hazardous  Material  which
could  form the  basis of any  Environmental  Claim  against  SELLER,  or to the
Knowledge  of SELLER,  against  any  person or entity  whose  liability  for any
Environmental   Claim  SELLER  has  or  may  have  retained  or  assumed  either
contractually  or by operation of law which would have a material adverse effect
on the Business.

          (e) Except as set forth in the  Disclosure  Schedule,  SELLER has not,
and to the Knowledge of SELLER,  no other person has placed  stored,  deposited,
discharged,  buried,  dumped or disposed  of  Hazardous  Materials  or any other
wastes  produced by, or resulting  from, any business,  commercial or industrial
activities,  operations  or processes,  on,  beneath or adjacent to any property
currently or formerly  operated or leased by SELLER,  except for  inventories of
such  substances to be used,  and wastes  generated  therefrom,  in the ordinary
course of business of SELLER (which inventories and wastes, if any, were and are
stored or disposed of in accordance with applicable  Environmental Laws and in a
manner  such that there has been no Release  or  threatened  Release of any such
substances).

          (f) SELLER has delivered or otherwise made available for inspection to
BUYER true,  complete and correct  copies and results of any  reports,  studies,
analyses,  tests or  monitoring  possessed or initiated by SELLER  pertaining to
Hazardous  Materials  in, on,  beneath or adjacent to any property  currently or
formerly operated or leased by SELLER, or regarding the SELLER's compliance with
applicable Environmental Laws.

                                       19
<PAGE>
          (g)  Without in any way  limiting  the  generality  of the  foregoing,
except as set forth in the Disclosure Schedule,  any properties owned,  operated
or leased by SELLER do not contain any:  underground  storage  tanks;  asbestos;
polychlorinated  biphenyls ("PCBs");  underground  injection wells;  radioactive
materials; or septic tanks or waste disposal pits in which process wastewater or
any Hazardous Materials have been discharged or disposed.

     3.11  Customers  and  Suppliers.  Schedule  3.11  sets  forth a list of all
customers who have purchased  product  related to the Business from SELLER in an
amount  greater than $ 50,000 in the calendar year 2000. To SELLER's  Knowledge,
there has not been any material adverse change in the business relationship with
any such  customer  during the prior year, or with any supplier from whom SELLER
purchased more than 5% of the goods and services  which it purchased  during the
same period.

     3.12 Insurance.  The Disclosure Schedule sets forth (a) a true and complete
list  and  description  of all  material  insurance  policies,  other  insurance
arrangements  and other contracts or arrangements for the transfer or sharing of
insurance  risks by  SELLER  in force on the date  hereof  with  respect  to the
Business,  together with a statement of the aggregate amount of claims paid out,
and  claims  pending,  under  each such  insurance  policy or other  arrangement
through the date hereof and (b) a  description  of such risks which SELLER (with
respect to the Business),  or the Board of Directors or officers  thereof,  have
designated  as being  self-insured.  SELLER (with  respect to the  Business) has
policies of insurance of the type and in amounts  customarily carried by Persons
conducting  businesses or owning assets similar to those  conducted and owned by
SELLER with  respect to the  Business.  All such  policies are in full force and
effect,  all  premiums due thereon have been paid and the SELLER is otherwise in
compliance  in all  material  respects  with the  terms and  provisions  of such
policies.

     3.13 Casualties. Since the Balance Sheet Date and through the Closing Date,
the  Business  has not been  affected  in any way as a result  of  flood,  fire,
explosion or other casualty  (whether or not material and whether or not covered
by  insurance).  SELLER is not aware of any  circumstance,  other  than  general
economic  conditions,  which is  likely  to cause the  Business  to  suffer  any
material adverse change in its business, operations or prospects.

                                       20
<PAGE>
     3.14 Intellectual Property.

          (a) Schedule  3.14 of the  Disclosure  Schedule  sets forth a true and
complete list of all patent, trademark  registrations,  copyright registrations,
and  applications  thereto used or held for use in connection with the Business,
together  with all  licenses  relating  to the  foregoing,  other than  computer
software  shrinkwrap  licenses,  whether  SELLER  is the  licensee  or  licensor
thereunder.  SELLER is the sole and exclusive owner of the Intellectual Property
and has good and marketable title to the Intellectual Property. The Intellectual
Property is free and clear of all Encumbrances,  whether by written agreement or
otherwise.  No person  other  than  SELLER  owns any  right in the  Intellectual
Property. All patents,  registrations and applications for Intellectual Property
are (i) to the  Knowledge of Seller,  valid and  subsisting,  in proper form and
enforceable,  and have been duly  maintained,  including  the  submission of all
necessary  filings  and fees in  accordance  with the legal  and  administrative
requirements of the appropriate  jurisdictions and (ii) have not lapsed, expired
or been abandoned,  and no patent,  registration or application  therefor is the
subject of any opposition, interference,  cancellation proceeding or other legal
or governmental  proceeding before any Governmental  Entity in any jurisdiction.
All trade secrets relating to the Products are protected against the use of such
trade  secrets by other  persons to an extent and in a manner  customary  in the
industry  in  which  SELLER  operates.  To  SELLER's  Knowledge  the  use of the
Intellectual  Property  in the  Business  and the  conduct  of the  Business  as
presently  conducted do not and have not infringed or violated the rights of any
other party.  SELLER has not received any written  claim or notice  alleging any
such  infringement  (including  any written  claim that  SELLER must  license or
refrain from using the Intellectual Property rights of any third party).

          (b)  There  is  no  claim,  suit,  action,  litigation  or  proceeding
(judicial or administrative) pending, or to the Knowledge of SELLER,  threatened
by  or  against  SELLER  challenging  the  registration,   grant,   validity  or
enforceability  of the  Intellectual  Property  or the  use of the  Intellectual
Property;  and no claim,  suit,  action,  litigation  or proceeding is otherwise
pending, or to the Knowledge of SELLER, threatened by or against SELLER alleging
infringement   with  respect  to  the  use,  or  challenging   the  validity  or
enforceability  of  any of the  Intellectual  Property  or  with  regard  to the
infringement  of any  rights  of third  parties.  No person  is  infringing  the
Intellectual  Property. No person has been granted any license or other right or
interest by SELLER to any of the Intellectual Property.

     3.15 Litigation;  Proceedings.  Except as set forth in Schedule 3.15, there
are no (a) outstanding judgments,  orders, writs,  injunctions or decrees of any

                                       21
<PAGE>
court,  governmental agency or arbitration  tribunal relating to the Business or
(b) actions,  suits, claims or legal,  administrative or arbitration proceedings
pending or, to SELLER's Knowledge,  threatened,  which relate to the Business or
which seek any  injunctive  relief that could  reasonably  be expected to have a
material  adverse effect on the ability of SELLER to consummate the transactions
contemplated  hereby;  and to SELLER's Knowledge there is no valid basis for any
such action,  suit,  claim or proceeding.  To SELLER's  Knowledge,  there are no
investigations pending which relate to the Business.

     3.16  Contracts.  SELLER has delivered  current and complete copies of each
Contract  listed  on  Schedule  3.16 of the  Disclosure  Schedule.  The  list of
Contracts on Schedule 3.16 of the Disclosure Schedule is a complete and accurate
list of all material  contracts and agreements of SELLER related to the Business
or the Assets, including all (a) contracts,  commitments or agreements involving
annual payments in excess of $25,000, (b) purchase contracts or commitments with
a term in excess of one year or are in excess of the normal,  ordinary and usual
requirements  of  business  or at an  excessive  price,  (c)  outstanding  sales
contracts,  commitments or proposals that continue for a period of more than one
year or  that  will  result  in any  loss to the  Business  upon  completion  or
performance thereof, (d) outstanding contracts with officers, employees, agents,
consultants, advisors, salesmen, sales representatives,  distributors or dealers
that are not  cancelable  by it on notice of not longer than 30 days and without
liability,   penalty  or  premium,  (e)  employment  agreements,  or  any  other
agreement,  that  contains  any  severance or  termination  pay  liabilities  or
obligations  and (f)  commitments  or  obligations  to  continue  to utilize the
services of, or otherwise to do business with, any licensor, vendor, supplier or
licensee of the  Business.  Each  Contract is a valid and binding  obligation of
SELLER (except as otherwise specified on Schedule
3.16)  and,  to  SELLER's  Knowledge,  is in full force and  effect.  SELLER has
performed all material  obligations required to be performed by it to date under
the  Contracts  and is not (with or  without  the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder.

     3.17 Taxes.

          (a) (i) SELLER has duly and  timely  filed,  or will so file when due,
with the  appropriate  governmental  authorities  (or there have been or will be
duly and timely filed on its behalf) all Tax Returns  required to be filed by it
in connection with the Business,  and all such Tax Returns are true, correct and
complete,  and (ii) except as specified in Schedule 3.17, all Taxes,  which have
become or are due with respect to the Business and any assessments  with respect

                                       22
<PAGE>
to the Business received by SELLER regarding any period ended on or prior to the
Closing Date, have been or will be timely paid;

          (b) there are no Tax liens (other than liens for Taxes not yet due and
payable) on any of the Assets;

          (c)  SELLER has duly and timely  withheld,  collected  and paid to the
proper  governmental  authority all Taxes required to be withheld,  collected or
paid with respect to the Business;

          (d) no claim  has ever  been made by an  authority  in a  jurisdiction
where  SELLER has not filed Tax Returns that it is or may be subject to taxation
by that jurisdiction with respect to the Business;

          (e) SELLER has not waived  any  statute of  limitations  in respect of
Taxes  relating to the Business or agreed to any  extension of time with respect
to a Tax assessment or deficiency relating to the Business;

          (f) there is no contract,  plan or arrangement  (written or otherwise)
covering any current or former  employee or independent  contractor of SELLER in
connection with the Business that, individually or in the aggregate,  could give
rise to the payment of any amount that will not be deductible under Section 280G
of Code;

          (g) SELLER has never been a member of an  affiliated  group as defined
under  Section  1504 of the Code and has no  liability  for Taxes of any  Person
under Treas. Reg. Section 1.1502-6 (or any similar provision of state,  local or
foreign law), as a transferee or successor, by contract or otherwise;

          (h) no power of attorney  that is  currently in force has been granted
by SELLER  with  respect to any matters  relating  to Taxes with  respect to the
Business;

          (i) there are no Tax sharing agreements or other similar  arrangements
with respect to or involving SELLER relating to the Business; and

          (j) SELLER is not a  "foreign  person"  within the  meaning of Section
1445(b) of the Code.

                                       23
<PAGE>
     3.18 Compliance  with  Applicable  Laws. The Business is being conducted in
all material respects with all applicable  statutes,  laws,  ordinances,  rules,
orders and regulations of any  Governmental  Entity that affects the Business or
the Assets and no notice,  charge,  claim, action or assertion has been received
by  SELLER  or has  been  filed,  commenced  or,  to the  Knowledge  of  SELLER,
threatened  against SELLER (with respect to the Business) alleging any violation
of any of the foregoing.

     3.19 Brokers.  Except as set forth on Schedule 3.19,  SELLER has not agreed
or become  obligated  to pay, or has taken any action  that might  result in any
Person claiming to be entitled to receive,  any brokerage  commission,  finder's
fee or  similar  commission  or fee in  connection  with this  Agreement  or the
transactions contemplated hereby as a result of any agreement,  understanding or
action by SELLER.  SELLER shall be solely  responsible for all fees and expenses
of any broker, finder or other Person engaged by or on behalf of it or otherwise
claiming  through it in connection  with the  transactions  contemplated by this
Agreement.

     3.20 Books and  Records.  The books of account and other  records of SELLER
relating to the Business  are complete and correct in all material  respects and
have been maintained in accordance with sound business practices,  including the
maintenance of an adequate system of internal controls.

     3.21 Absence of Certain  Changes.  Since  December 31, 2000, the SELLER has
conducted  the Business  only in the ordinary and usual course  consistent  with
past practice, and the SELLER (with respect to the Business) has not:

          (a) permitted or allowed any of its properties or assets  (tangible or
intangible) to be subjected to any mortgage,  pledge,  lien,  security interest,
encumbrance,  restriction  or charge  of any  kind,  other  than as  existed  on
December 31, 2000, and except for Permitted Liens, which Permitted Liens are set
forth on Schedule 3.21;

          (b) sold, transferred,  or otherwise disposed of any of its properties
or assets  (tangible or  intangible),  except in the ordinary course of business
and consistent with past practice;

          (c)  disposed  of or  permitted  to lapse any rights to the use of any
Intellectual  Property,  or disposed of or  disclosed  to any person  other than
representatives of BUYER any trade secret, formula,  process,  know-how or other
Intellectual Property not theretofore a matter of public knowledge;

                                       24
<PAGE>
          (d) suffered any material  adverse change in its financial  condition,
results of operation,  assets,  liabilities  (absolute,  accrued,  contingent or
otherwise), reserves, business, operations or prospects;

          (e) waived any claims or rights of substantial value;

          (f) except for  capital  expenditures  and  commitments  not to exceed
$1,627,438 in the aggregate  for equipment to  manufacture  the Procter & Gamble
Products as detailed on Schedule 5.9,  made any single  capital  expenditure  or
commitment  for additions to property,  plant,  equipment or intangible  capital
assets;

          (g)  made  any  change  in any  method  of  accounting  or  accounting
practice; or

          (h) made any express or deemed  election for Tax purposes or any offer
to settle or  compromise or any  settlement or compromise of any liability  with
respect to Taxes;

          (i)  agreed,  whether  in  writing  or  otherwise,  to take any action
described in this section.

     3.22 Full Disclosure.  No representation or warranty by SELLER contained in
this Agreement  contains any untrue statement of fact or omits to state any fact
necessary  to  make  any  of  SELLER's  representations,   warranties  or  other
statements  or  information  contained  therein  not  misleading.   All  of  the
information  set forth in the  Disclosure  Schedule,  and all other  information
regarding SELLER, the Business,  and the Assets that has been furnished to BUYER
by SELLER is accurate and complete in all material respects.

                                   ARTICLE IV

                     REPRESENTATIONS AND WARRANTIES OF BUYER

     BUYER hereby represents and warrants to SELLER as follows:

     4.1 Authority; No Conflicts; Governmental Consents.

                                       25
<PAGE>
          (a) BUYER is a corporation  duly  organized,  validly  existing and in
good standing  under the laws of the State of Delaware.  BUYER has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions  contemplated  hereby and  thereby.  All  corporate  acts and other
proceedings  required to be taken by BUYER to authorize the execution,  delivery
and  performance  of this  Agreement and the  consummation  of the  transactions
contemplated  hereby  and  thereby  have  been  duly and  properly  taken.  This
Agreement has been duly  executed and  delivered by BUYER and,  assuming the due
execution  hereof by SELLER,  this Agreement  constitutes  the valid and binding
obligation of BUYER,  enforceable  against  BUYER in accordance  with its terms,
except as enforcement hereof may be limited by applicable bankruptcy, insolvency
or other  similar laws  affecting  creditors'  rights  generally  and by general
equitable principles.

          (b) The execution, delivery and performance of this Agreement will not
(i) violate  any  provision  of the charter or bylaws or similar  organizational
instrument  of BUYER;  (ii)  require any filing with,  or permit,  authorization
consent or approval of, any Governmental Entity; (iii) violate any provision of,
or be an event that is (or with the  passage of time will result in) a violation
of, or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any  obligation  under,  or
result in the imposition of any lien upon or the creation of a security interest
in any of BUYER's assets or properties  pursuant to, any mortgage,  lien, lease,
agreement,  instrument, order, arbitration award, judgment, injunction or decree
to which  BUYER  is a party or by which  BUYER  is  bound;  or (iv)  violate  or
conflict with any statute,  rule or regulation applicable to BUYER or any of its
properties or assets or any other material  restriction of any kind or character
to which BUYER is subject  (other than, in the case of clauses  (ii),  (iii) and
(iv), such filings, permits,  authorizations,  consents,  approvals,  conflicts,
violations  or  breaches  which  could not,  individually  or in the  aggregate,
reasonably  be expected to adversely  affect the ability of BUYER to  consummate
the transactions hereunder).

     4.2  Actions  and  Proceedings.  There  are no (a)  outstanding  judgments,
orders,  writs,  injunctions  or decrees of any  court,  governmental  agency or
arbitration  tribunal  against BUYER that would or could  prevent,  or otherwise
materially adversely affect the ability of BUYER to consummate, the transactions
contemplated hereby; or (b) actions,  suits, claims or legal,  administrative or
arbitration  proceedings or investigations  pending or, to the best knowledge of
BUYER,  threatened  against  BUYER that  would or could  prevent,  or  otherwise
materially adversely affect the ability of BUYER to consummate, the transactions
contemplated  hereby. To the knowledge of BUYER, there is no valid basis for any
such action, suit, claim or proceeding.

                                       26
<PAGE>
     4.3 Availability of Funds.  BUYER has cash available or existing  borrowing
facilities or commitments which, together with available cash, are sufficient to
enable it to consummate the transactions contemplated by this Agreement.

     4.4  Brokers.  BUYER has not agreed to or become  obligated to pay, nor has
taken any action  that might  result in any Person  claiming  to be  entitled to
receive, any brokerage commission,  finder's fee or similar commission or fee in
connection with the transactions contemplated by this Agreement.

                                    ARTICLE V

                               COVENANTS OF SELLER

     SELLER covenants and agrees as follows:

     5.1 Access. Prior to the Closing, SELLER will grant to BUYER or cause to be
granted to BUYER and its representatives, employees, counsel and accountants (i)
reasonable  access,  during normal business hours and upon reasonable notice, to
the personnel, properties, books and records of SELLER relating to the Business,
(ii) during normal  business hours permit BUYER to make such  inspections and to
make copies of such books and records as it may  reasonably  require,  and (iii)
furnish  BUYER with such  financial  and  operating  data and other  information
concerning  the  Business  as BUYER  may from time to time  reasonably  request;
provided  that such  access  does not  unreasonably  interfere  with the  normal
operations of SELLER or the Business, and provided further that all requests for
access  shall be directed to Bill  Hemelt,  or such other person as SELLER shall
designate from time to time.

     5.2 Ordinary  Conduct of the Business.  Except as permitted by the terms of
this  Agreement,  from the date  hereof to the  Closing,  SELLER  will cause the
Business to be conducted in the ordinary  course  consistent with past practice.
Except as  provided  in this  Agreement,  SELLER  shall not,  without  the prior
written consent of BUYER:

          (a) sell or otherwise  dispose of or abandon any of the Assets,  other
than de minimis sales, dispositions and abandonments;

          (b) mortgage, lease, license, pledge or grant any security interest in
any of the Assets in connection with the borrowing of money or for the deferred

                                       27
<PAGE>
purchase of any property; or otherwise permit the imposition of a lien on any of
the Assets other than Permitted Liens;

          (c) modify,  amend or terminate any of the Contracts or waive, release
or assign any material rights or claims with respect to the Business,  except in
the ordinary course of business and consistent with past practice;

          (d) take,  or agree to or commit to take,  any action that would or is
reasonably likely to result in any of the conditions to the Closing set forth in
Article II not being satisfied,  or would make any representation or warranty of
SELLER  contained  herein  inaccurate in any respect  (subject to any applicable
materiality qualifier) at, or as of any time prior to, the Closing Date, or that
would materially impair the ability of SELLER or BUYER to consummate the Closing
in accordance with the terms hereof or materially delay such consummation;

          (e) engage in any transaction  with respect to the Business other than
in the ordinary course of business;

          (f) enter into any contract or transaction relating to the purchase of
the Assets other than in the ordinary  course of business  consistent  with past
practice;

          (g)  fail  to  file,  on  a  timely  basis,  with  appropriate  taxing
authorities all Tax Returns  required to be filed prior to the Closing Date with
respect to, or on behalf of, operations of the Business;

          (h) permit any insurance policy identified in the Disclosure  Schedule
to be cancelled;

          (i) make any express or deemed  election for Tax purposes or any offer
to settle or  compromise or any  settlement or compromise of any liability  with
respect to Taxes; or

          (j) enter into any agreement,  contract,  commitment or arrangement to
do any of the  foregoing,  or  authorize,  recommend,  propose  or  announce  an
intention to do, any of the foregoing.

     5.3 Confidential  Information.  Except as otherwise provided herein,  after
the Closing Date,  SELLER shall keep secret and retain in strictest  confidence,
and  shall  not use for the  benefit  of  itself  or  others,  all  confidential

                                       28
<PAGE>
information primarily relating to the Business (the "CONFIDENTIAL INFORMATION"),
including,  without  limitation,  "know-how,"  trade  secrets,  customer  lists,
details of client or consultant contracts,  pricing policies, marketing plans or
strategies, product development techniques or plans, business acquisition plans,
designs and design projects, inventions and research projects primarily relating
to the  Business  and the  Assets  and  shall  not  disclose  such  Confidential
Information  to anyone  outside of BUYER  except with  BUYER's  express  written
consent.

     5.4 Notification of Certain Matters.

          (a) From time to time  prior to the  Closing,  SELLER  shall  promptly
supplement or amend the  Disclosure  Schedule with respect to any matter arising
after the delivery  thereof  pursuant  hereto that, if existing at, or occurring
on,  the date of this  Agreement,  would have been  required  to be set forth or
described  in  the  Disclosure  Schedule.  No  supplement  or  amendment  of the
Disclosure  Schedule made after the execution  hereof by BUYER  pursuant to this
section or otherwise shall be deemed to cure any breach of any representation of
or warranty made pursuant to this Agreement.

          (b) SELLER shall give notice to BUYER promptly after becoming aware of
(i)  the  occurrence  or   non-occurrence  of  any  event  whose  occurrence  or
non-occurrence  would  be  likely  to cause  either  (A) any  representation  or
warranty  contained in this Agreement to be untrue or inaccurate in any material
respect  at any  time  from  the  date  hereof  to the  Closing  Date or (B) any
condition set forth in Article II to be unsatisfied  in any material  respect at
any time from the date hereof to the Closing Date and (ii) any failure of SELLER
or any officer,  director,  employee or agent thereof, to comply with or satisfy
any  covenant,  condition or  agreement  to be complied  with or satisfied by it
hereunder;  provided,  however,  that (x) the delivery of any notice pursuant to
this  section  shall  not  limit or  otherwise  affect  the  remedies  available
hereunder  to the party  receiving  such notice and (y) the failure to give such
notice  shall  not be  required  from and  after the time the party to whom such
notice is to be given has actual  knowledge  of the  information  required to be
included in such notice.

     5.5 Shareholders' Meeting.

          (a) In order  to  consummate  the  transactions  contemplated  by this
Agreement,  SELLER, acting through its Board of Directors,  shall, in accordance
with applicable law:

                                       29
<PAGE>
               (i) duly call, give notice of, convene and hold a special meeting
     of its  shareholders  as  promptly  as  practicable  after the date of this
     Agreement  for the purpose of voting on the  approval  and adoption of this
     Agreement and the transactions contemplated hereby;

               (ii) prepare and file with the SEC a preliminary  proxy statement
     relating to this Agreement and the  transactions  contemplated  hereby (the
     "PROXY  Statement")  and use its best  efforts  to obtain and  furnish  the
     information  required to be included by the SEC in the Proxy  Statement and
     to respond  promptly to any  comments  made by the SEC with  respect to the
     preliminary  Proxy  Statement and cause a definitive  Proxy Statement to be
     mailed to its  shareholders  at the earliest  practicable  time,  provided,
     however,  prior to filing or mailing of the Proxy  Statement,  SELLER shall
     allow BUYER to review and make reasonable comments on the Proxy Statement;

               (iii) include in the Proxy  Statement the  recommendation  of the
     Board that  shareholders  of SELLER  vote in favor of the  approval of this
     Agreement and the transactions contemplated hereby; and

               (iv) use commercially  reasonable efforts to solicit from holders
     of shares of its common stock proxies in favor of the SELLER and shall take
     all  other  action  necessary  or, in the  reasonable  opinion  of  SELLER,
     advisable  to obtain  approval  of the  transactions  contemplated  by this
     Agreement  from  shareholders  holding  at least a  majority  of the shares
     entitled to vote.

     5.6 No Solicitation of Competing Transaction.

          (a) SELLER shall not (and SELLER shall cause the officers,  directors,
employees,  representatives  and agents of SELLER and each  Affiliate  of SELLER
including  investment bankers,  attorneys and accountants,  not to), directly or
indirectly,  encourage,  solicit,  participate  in or  initiate  discussions  or
negotiations  with,  or provide any  information  to, any Person or group (other
than BUYER, any of its Affiliates or representatives) concerning any Acquisition
Proposal.  SELLER  shall not  approve  or  recommend,  or  propose to approve or
recommend any Acquisition  Proposal, or enter into any agreement with respect to
any Acquisition Proposal.

                                       30
<PAGE>
          (b) Notwithstanding  Section 5.6(a) above, SELLER's Board of Directors
shall  not  be  prohibited  from  furnishing  information  to or  entering  into
discussions or negotiations with, any Person that makes an unsolicited bona fide
Acquisition  Proposal which SELLER's Board of Directors determines in good faith
is more favorable from a financial point of view to SELLER's  shareholders  than
the transactions  contemplated by this Agreement (a "SUPERIOR PROPOSAL") so long
as: (i) prior to furnishing such information to, or entering into discussions or
negotiations  with,  such a Person,  SELLER  provides  three (3) business  days'
advance written notice to BUYER to the effect that it is furnishing  information
to, or entering into discussions or negotiations with, a Person from whom SELLER
shall have received an executed  confidentiality  agreement  prior to furnishing
such information, (ii) such unsolicited bona fide Superior Proposal is made by a
third party that  SELLER's  Board of Directors  determines in good faith has the
good-faith  intent to proceed with  negotiations to consider,  and the financial
capability to consummate,  such Superior  Proposal,  and (iii) SELLER's Board of
Directors, after duly considering the written advice of outside legal counsel to
SELLER, determines in good faith that such action is required for SELLER's Board
of  Directors to comply with its  fiduciary  duties to  shareholders  imposed by
applicable law.

          (c) Upon execution of this Agreement,  SELLER shall  immediately cease
any existing activities,  discussions or negotiations with any parties conducted
heretofore  with respect to any of the foregoing and SELLER shall request (or if
SELLER has the contractual  right to do so, demand) the return of all documents,
analyses,  financial  statements,  projections,   descriptions  and  other  data
previous  furnished to others in connection  with  SELLER's  efforts to sell the
Assets.  SELLER shall immediately  notify BUYER of the existence of any proposal
or inquiry received by SELLER, including any Superior Proposal, and SELLER shall
immediately  communicate  to BUYER the terms of any  proposal  or inquiry  which
SELLER may receive (and shall immediately provide to BUYER copies of any written
materials  received  by SELLER in  connection  with such  proposal,  discussion,
negotiation  or inquiry) and the  identity of the party making such  proposal or
inquiry.

          (d) Except  with  respect  to a  Superior  Proposal  or  otherwise  in
connection with SELLER's Board of Directors compliance with its fiduciary duties
to  shareholders  imposed by applicable  law (after  SELLER's Board of Directors
duly  considers the written  advice of outside  legal counsel and  determines in
good faith that any such action  described in clauses (i), (ii) or (iii) of this
paragraph  (d) is required for  SELLER's  Board of Directors to comply with such
fiduciary duties), neither SELLER's Board of Directors nor any committee thereof

                                       31
<PAGE>
shall (i)  withdraw or modify,  or propose to  withdraw  or modify,  in a manner
adverse to BUYER,  the approval by such Board of Directors or any such committee
of this Agreement or the transactions contemplated hereby, except as provided in
Article IX, (ii) approve or recommend  or propose to approve or  recommend,  any
Acquisition  Proposal or (iii) authorize SELLER to enter into any agreement with
respect to any Acquisition Proposal.

     5.7  Subsequent  Actions.  If at any time  after the  Closing,  BUYER  will
consider  or be  advised  that any  bills of sale,  instruments  of  conveyance,
assignments,  assurances or any other actions or things are reasonably necessary
to vest,  perfect or confirm  ownership (of record or  otherwise) in BUYER,  its
right,  title or interest  in, to or under any or all of the Assets or otherwise
to carry out this Agreement, SELLER shall execute and deliver all bills of sale,
instruments of conveyance,  powers of attorney,  assignments  and assurances and
take and do all such other actions and things as may be reasonably  requested by
BUYER in order to vest, perfect or confirm any and all right, title and interest
in, to and under such  rights,  properties  or Assets in BUYER or  otherwise  to
carry out this Agreement.

     5.8 Taxes.  SELLER shall pay any sales,  use,  transfer or  documentary  or
similar taxes imposed in connection with the sale and delivery of the Assets and
rights acquired by BUYER under this Agreement, provided, however, that if SELLER
shall  pay any  sales,  use,  transfer,  or  documentary  or  similar  Taxes  in
connection  with the  consummation  of the sale of SELLER's  Assets and notifies
BUYER of all facts  relating  thereto,  then to the  extent  that  BUYER (or any
affiliate of BUYER) shall realize or obtain any tax deduction,  credit or refund
allowance  attributable  to any such Tax payment  made by SELLER  (each,  a "TAX
BENEFIT"), BUYER shall remit to SELLER the amount of any such Tax Benefit within
60 days after the close of the taxable  year in which such Tax  Benefit  reduces
the amount of Taxes actually paid by the BUYER in such year. Notwithstanding the
previous  sentence,  (i) the  determination of the existence and amount of a Tax
Benefit shall be made in the sole and absolute discretion of the BUYER, and (ii)
BUYER shall under no  circumstances  be obligated  to disclose  any  information
relating to its Taxes to SELLER or any other Person.

     5.9 Procter & Gamble Equipment. Schedule 5.9 sets forth a list of equipment
SELLER  has  agreed,  as of the  date  of this  Agreement,  to  purchase  or has
determined  is necessary to produce the currently  expected  amount of Procter &
Gamble  Products.  SELLER shall pay for all such  equipment.  Any such equipment
received  from any  vendor  prior to  Closing  shall be paid by SELLER  prior to
Closing.  Any such  equipment  received by BUYER from any vendor  after  Closing

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shall be paid by SELLER upon receipt of an invoice. BUYER shall promptly forward
any invoices to SELLER for such equipment upon receipt.

                                   ARTICLE VI

                               COVENANTS OF BUYER

     6.1 Accounts  Receivable.  BUYER shall  promptly  forward (but in any event
within 10 days of receipt  thereof) or cause to be  forwarded  to SELLER any and
all proceeds from accounts  receivable relating to the products sold on or prior
to the Closing  Date that are  received by BUYER after the Closing Date and that
were outstanding as of the Closing Date.

     6.2 Hiring by BUYER.

          (a) Effective as of the Closing,  BUYER may offer  employment to those
employees of SELLER set forth on Schedule 6.2 (the "EMPLOYEE  SCHEDULE") who are
actively  employed at the Closing  (including those  employees,  if any, on sick
leave or short-term leave of absence as of the Closing), on terms and conditions
no less favorable in the aggregate  than such employees  enjoyed as employees of
SELLER, but shall not be obligated to hire any employees of SELLER. BUYER agrees
that it will  provide  SELLER with a list of those  employees  of SELLER to whom
BUYER may make  offers no later  than five (5) days prior to the  Closing.  Each
such  employee who accepts  BUYER's  offer of  employment  will  hereinafter  be
referred to as a "LISTED EMPLOYEE."

          (b) With  respect to employee  pension,  welfare  and fringe  benefits
provided  by  BUYER  to  Listed  Employees  as of the  Closing,  BUYER  will use
commercially  reasonable  efforts to cause its  benefit  providers  to waive all
waiting periods and  pre-existing  condition  requirements  under any plans that
have any such requirements or restrictions. It being understood that each Listed
Employee will accrue vacation days and earn sick days for service  following the
Closing in accordance  with the  applicable  vacation and sick leave policies of
BUYER, as applicable.

          (c) The obligation to pay all benefits, including, without limitation,
health,  dental,  life,  accidental death and disability,  and related benefits,
which are payable to current or former  employees  of SELLER  under the Business
Benefit Plans and, in the case of Listed Employees,  that arise, are incurred or
are based on events that occur on or prior to the Closing (whether or not claims

                                       33
<PAGE>
for such  benefits are  submitted  on or prior to the  Closing)  will remain the
responsibility  of SELLER.  BUYER will be responsible  for all benefits that are
payable to Listed  Employees  hired by BUYER under the terms of BUYER's  benefit
plans and that arise,  are  incurred or are based on events that occur after the
Closing.  For purposes of this Section 6.2(c),  the term "events" means the item
that is the  subject  matter  of the  claim  (i.e.,  medical  services,  layoff,
vacation,  etc.) but not the  condition  or injury  leading to the filing of the
claim.  BUYER will not assume or be responsible  for any liability in respect of
any  benefits  that are  payable  at any time to, or in respect  of,  current or
former  employees  of SELLER not  employed  by BUYER at any time on or after the
Closing.

          (d) From and after the Closing,  BUYER shall remain solely responsible
for any and all liabilities,  claims, and obligations  relating to or arising in
connection  with the  requirements  of  Section  4980B  of the  Code to  provide
continuation  of health  care  coverage in respect of the Listed  Employees  and
their covered  dependents  except to the extent related to a qualifying event on
or before the Closing.

          (e) After the Closing, BUYER and SELLER will each provide the other on
a continuing  basis at no cost to the other such  information  regarding  Listed
Employees who are employed by BUYER as the other reasonably requests in order to
permit  proper  administration  of benefit plans  applicable to such  employees;
provided, however, that (i) any consents or releases from such Listed Employees,
to the extent  required by  applicable  law, must have been  obtained,  and (ii)
provision of such information is not prohibited by applicable law.

     6.3 Tax Treatment of Listed Employees.  BUYER and SELLER agree to (i) treat
BUYER as a "successor employer" and SELLER as a "predecessor" within the meaning
of Sections  3121(a)(1) and  3306(b)(1) of the Code,  with respect to the Listed
Employees,  solely for purposes of taxes imposed under the United States Federal
Unemployment Tax or the United States Federal Insurance  Contributions  Act, and
(ii) cooperate with each other to avoid, to the extent reasonably possible,  the
filing of more than one IRS Form W-2 with  respect to each Listed  Employee  for
the calendar year in which the Closing Date occurs.

     6.4 Warehouse  Support.  For a period of up to six months after the Closing
at SELLER's  request,  BUYER shall provide SELLER Warehouse Support for SELLER's
Zicam product at no cost. In addition,  BUYER shall provide  SELLER office space
and office  furniture  for such period for up to nine (9) people who will remain
in the employ of SELLER after the Closing Date. Further,  BUYER and SELLER shall
cooperate in the use of any information  systems  purchased by BUYER pursuant to

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<PAGE>
this Agreement, it being specifically acknowledged that SELLER's employees being
provided office space by BUYER shall be entitled to use such information systems
in a reasonable manner.  SELLER shall pay BUYER an allocated portion of rent and
other  facilities  costs  based on the  percentage  of  square  footage  used by
SELLER's employees.

                                   ARTICLE VII

                         MUTUAL COVENANTS OF THE PARTIES

     Each of SELLER and BUYER covenants and agrees as follows:

     7.1  Cooperation.  Prior to the Closing,  upon the terms and subject to the
conditions  of this  Agreement,  BUYER and  SELLER  shall  use their  respective
reasonable best efforts to take, or cause to be taken,  all actions,  and to do,
or cause to be done and  cooperate  with each  other in order to do,  all things
necessary,  proper or advisable  (subject to any applicable  laws) to consummate
the  Closing  as  promptly  as  practicable  including,  but not  limited to the
preparation and filing of all forms,  registrations  and notices  required to be
filed to consummate  the Closing and the taking of such actions as are necessary
to obtain any requisite approvals,  authorizations,  consents, orders, licenses,
permits,   qualifications,   exemptions   or  waivers  by  any  third  party  or
Governmental  Entity.  In addition,  no party hereto shall take any action after
the date  hereof that could  reasonably  be  expected  to  materially  delay the
obtaining of, or result in not obtaining,  any  permission,  approval or consent
from any  Governmental  Entity or other Person  required to be obtained prior to
Closing.

     7.2 Publicity.  Other than as required by the rules and  regulations of the
SEC as  reasonably  interpreted  by  SELLER's  counsel  in  connection  with the
preparation  and  distribution  of the Proxy  Statement,  SELLER and BUYER agree
that,  from the date  hereof  through  the Closing  Date,  no public  release or
announcement concerning the transactions  contemplated hereby shall be issued by
a party without the prior consent of the other party (which consent shall not be
unreasonably  withheld),  except as such release or announcement may be required
by law or the rules or  regulations  of any United States or foreign  securities
exchange  and except such release on the  execution  of this  Agreement as to be
agreed  between the parties  hereto which  release may be made  available to the
public  generally  or the trade.  SELLER  and BUYER  agree for a period of three
years   following  the  Closing  Date  to  keep  the  terms  of  this  Agreement
confidential,  except to the extent  reasonably  required by  applicable  law as
reasonably  interpreted  by  SELLER's  counsel  and except  that the parties may
disclose such terms to their respective accountants and other representatives as

                                       35
<PAGE>
necessary in connection with the ordinary conduct of their respective businesses
(so  long  as  such  persons   agree  to  keep  the  terms  of  this   Agreement
confidential).

     7.3 Taxes. All personal  property Taxes and similar ad valorem  obligations
levied with respect to the Assets for a taxable  period that  includes (but does
not end on) the Closing Date shall be apportioned between SELLER and BUYER as of
the Closing Date based on the number of days of such taxable period  included in
the period  ending with and including the Closing Date (with respect to any such
taxable period,  the "PRE-CLOSING  TAX PERIOD"),  and the number of days of such
taxable  period  beginning  after the  Closing  Date  (with  respect to any such
taxable period,  the "POST-CLOSING TAX PERIOD").  SELLER shall be liable for the
propor tion-ate amount of such Taxes that is attributable to the Pre-Closing Tax
Period,  and BUYER shall be liable for the propor  tionate  amount of such Taxes
that is attributable to the Post-Closing Period.

     7.4 Access to Information. After the Closing, upon reasonable notice, BUYER
and SELLER  agree to furnish  or cause to be  furnished  to each other and their
representatives,  employees,  counsel  and  accountants  access,  during  normal
business  hours,  to  such  information  (including  records  pertinent  to  the
Business) and assistance  relating to the Business as are  reasonably  necessary
for financial  reporting and accounting  matters  relating to the Business,  the
preparation  and filing of any tax  returns,  reports or forms  relating  to the
Business or the defense of any tax claim or assessment relating to the Business,
provided,  however,  that such access and assistance do not unreasonably disrupt
the normal operations of BUYER or SELLER.

     7.5 Tax Cooperation.  Without  duplication of Section 7.4, BUYER and SELLER
agree to  furnish or cause to be  furnished  to each  other,  upon  request,  as
promptly  as  practicable,  such  information  and  assistance  relating  to the
Business and the Assets (including access to books and records) as is reasonably
necessary for the filing of all Tax Returns, the making of any election relating
to  Taxes,  the  preparation  for any  audit by any  taxing  authority,  and the
prosecution or defense of any claim, suit or proceeding relating to any Tax.

     7.6 Bulk Sales Waiver. Each party hereto hereby waives compliance by SELLER
with the provisions of the "bulk sales," "bulk  transfer" or similar laws of any
state or  political  subdivision.  SELLER  agrees to  indemnify  and hold  BUYER
harmless against any and all claims, losses, damages, liabilities (including Tax
liabilities), costs and expenses incurred by BUYER or any of its affiliates as a

                                       36
<PAGE>
result of any failure to comply with any such "bulk sales,"  "bulk  transfer" or
similar laws in connection with this Agreement or the transactions  contemplated
thereby.

     7.7  Expenses.  All costs and  expenses  incurred in  connection  with this
Agreement  and the  transactions  contemplated  hereby will be paid by the party
incurring such costs and expenses,  whether or not the transactions contemplated
hereby are consummated, except as otherwise expressly provided herein.

     7.8 Rent. All rents and other payments  required under the Leases and other
payments with respect to the leased Real Property (i.e., utilities) (the "RENT")
shall be  apportioned  between  BUYER and SELLER as of the Closing Date based on
the number of days in the month included in the period ending with and including
the Closing Date (with respect to any such month, the "PRE-CLOSING RENT PERIOD")
and the  number of days of such month  beginning  after the  Closing  Date (with
respect to any such month,  the  "POST-CLOSING  RENT  PERIOD").  SELLER shall be
liable  for the  proportionate  amount of the Rent that is  attributable  to the
Pre-Closing Rent Period and BUYER shall be liable for the  proportionate  amount
of  the  Rent  that  is  attributable  to the  Post-Closing  Rent  Period.  Rent
proportions shall be based on a 30-day month.

                                  ARTICLE VIII

                                 INDEMNIFICATION

     8.1 Survival. The representations,  warranties, covenants and agreements of
the parties  hereto shall  survive the  execution  and  delivery  hereof and the
delivery of all of the  documents  executed  in  connection  herewith  and shall
continue  in full force and effect  after the date  hereof and after the Closing
Date until  December  31,  2002 (the  "EXPIRATION  DATE"),  except  that (i) the
provisions of this Agreement relating to Taxes (including,  without  limitation,
Section 3.17) shall survive until 90 days after the expiration of all applicable
statutes of limitations,  and (ii) any covenants or agreements  contained herein
or made  pursuant  hereto  that by their  terms  are to be  performed  after the
Closing Date shall survive until fully  discharged.  No action or proceeding may
be brought  with respect to any of the  representations  and  warranties  unless
written  notice  thereof,   setting  forth  in  reasonable  detail  the  claimed
misrepresentation or breach of warranty,  shall have been delivered to the party
alleged to have breached such representation or warranty prior to the Expiration
Date.

     8.2 Indemnification by SELLER. SELLER shall indemnify BUYER, its Affiliates
and  each of their respective officers, directors, employees and agents and hold

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<PAGE>
them  harmless from any loss,  liability,  claim,  damage or expense  (including
reasonable legal fees and expenses) ("LOSS") suffered,  incurred or sustained by
any such indemnified  party or to which any of them becomes  subject,  resulting
from,  arising  out of or relating  to (i) any breach of any  representation  or
warranty of SELLER (other than a breach of Section 3.10, with any breach of such
section to be handled  pursuant to Section 8.4) contained in this Agreement that
survives  the Closing,  (ii) any breach of any  covenant of SELLER  contained in
this  Agreement  and (iii) any  failure  on the part of  SELLER to  perform  and
discharge its liabilities,  other than the Assumed Liabilities (the "NON-ASSUMED
LIABILITIES");  provided,  however,  that except with  respect to Taxes,  SELLER
shall  not have any  liability  under  clauses  (i) and (ii)  above  unless  the
aggregate of all losses,  liabilities,  costs and expenses  relating thereto for
which SELLER  would,  but for this  proviso,  be liable  exceeds on a cumulative
basis an amount  equal to $100,000  (the  "BASKET")  and then only to the extent
that the aggregate of all such losses, liabilities,  costs and expenses relating
thereto exceeds the Basket; provided further,  however, that except with respect
to Non-Assumed Liabilities, SELLER's aggregate liability under this Article VIII
shall in no event exceed the Purchase Price.

     8.3  Indemnification  by  BUYER.  BUYER  shall  indemnify  SELLER  and  its
respective  officers,  directors,  employees  and agents  against  and hold them
harmless from any Loss suffered,  incurred or sustained by any such  indemnified
party or to which any of them becomes subject, resulting from, arising out of or
relating to (i) any breach of any  representation or warranty of BUYER contained
in this Agreement that survives the Closing,  (ii) any breach of any covenant of
BUYER  contained in this Agreement and (iii) any failure on the part of BUYER to
perform  and  discharge  the  Assumed  Liabilities  and its  other  liabilities;
provided,  however, that, except with respect to the breach (if any) by BUYER of
the covenant set forth in the last sentence of Section 1.4, BUYER shall not have
any  liability  under  clauses (i) and (ii) above  unless the  aggregate  of all
losses, liabilities,  costs and expenses relating thereto for which BUYER would,
but for this proviso, be liable exceeds on a cumulative basis an amount equal to
$100,000 (the "BUYER  Basket") and then only to the extent that the aggregate of
all such  losses,  liabilities,  costs and  expenses  thereto  exceeds the BUYER
Basket;  and  provided  further,  however,  that except with  respect to Assumed
Liabilities and its other  liabilities,  BUYER's aggregate  liability under this
Article VIII shall in no event exceed the Purchase Price.

     8.4 Environmental Matters. SELLER shall defend, indemnify and hold harmless
BUYER,  its agents,  representatives  and employees  for,  from, and against all
demands,  claims,  actions or causes of action,  assessments,  losses,  damages,
liabilities,  costs  and  expenses  (including,  without  limitation,  interest,

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<PAGE>
penalties,   reasonable  attorneys'  fees,   disbursements  and  expenses,   and
reasonable  consultants'  fees,  disbursements  and expenses)  asserted against,
resulting  to,  imposed  on, or incurred by BUYER,  directly or  indirectly,  in
connection  with:  (i) any  misrepresentation  or  breach  of any  environmental
representation  or warranty  set forth in Section 3.10 of this  Agreement;  (ii)
each and every item listed in Section 3.10 of the Disclosure Schedule; (iii) the
Release or threatened Release of any Hazardous Materials (or allegation of same)
(A) prior to the  Closing  Date on or from any  property  currently  or formerly
operated or leased by SELLER or (B) on or from any other property  where,  prior
to the Closing Date,  Hazardous Materials are or were (or are or were alleged to
be) Released, threatened to be Released, discharged or disposed of in connection
with any  property  currently  or  formerly  operated or leased by SELLER or the
business  of  SELLER,  whether or not,  in any case,  such  Release,  threatened
Release,  discharge or disposal was in compliance with  Environmental  Law; (iv)
the violation of any  Environmental Law prior to the Closing Date (or allegation
of same),  by SELLER or any other  person in  connection  with the  business  of
SELLER, or any property  currently or formerly operated or leased by SELLER; (v)
the  installation  of any  pollution  control  equipment to the extent that such
equipment  is  required  to bring any  property  operated or leased by SELLER or
business of SELLER into compliance with requirements of any Environmental Law as
of the Closing Date; and (vi) any  Environmental  Claim against any person whose
liability  for such  Environmental  Claim  SELLER  has or may have  retained  or
assumed either contractually or by operation of law.

     8.5 Procedures Relating to Indemnification.

          (a)  In  order  for  an  indemnified  party  to  be  entitled  to  any
indemnification  provided for under this Article VIII in respect of, arising out
of or  involving  a claim  or  demand  made by any  Person,  firm,  governmental
authority or corporation against the indemnified party (a "THIRD-PARTY  Claim"),
such  indemnified  party must notify the indemnifying  party in writing,  and in
reasonable  detail, of the Third-Party Claim as promptly as reasonably  possible
after receipt by such  indemnified  party of written  notice of the  Third-Party
Claim;  provided,  however,  that  failure to give such  notification  shall not
affect  the  indemnification   provided  hereunder  except  to  the  extent  the
indemnifying  party  shall  have been  actually  prejudiced  as a result of such
failure. The indemnified party shall promptly deliver to the indemnifying party,
after  the  indemnified  party's  receipt  thereof,  copies of all  notices  and
documents (including court papers) received by the indemnified party relating to
the Third-Party Claim.

          (b) If a Third-Party  Claim is made against an indemnified  party, the
indemnifying  party will be entitled to participate in the defense  thereof and,

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<PAGE>
if it so chooses and  acknowledges  its obligation to indemnify the  indemnified
party  therefor,  to assume the defense  thereof  with  counsel  selected by the
indemnifying party and reasonably  satisfactory to the indemnified party. Should
the  indemnifying  party so elect to assume the defense of a Third-Party  Claim,
the  indemnifying  party will not be liable to the  indemnified  party for legal
expenses  subsequently  incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the indemnified
party shall have the right to participate  in the defense  thereof and to employ
counsel,  at  its  own  expense,  separate  from  the  counsel  employed  by the
indemnifying  party,  it being  understood  that the  indemnifying  party  shall
control such defense.  The indemnifying party shall be liable for the reasonable
fees and expenses of counsel  employed by the  indemnified  party for any period
during  which  the  indemnifying  party has not  assumed  the  defense  thereof,
provided that such counsel is reasonably  acceptable to the indemnifying  party.
If the  indemnifying  party  chooses to defend any  Third-Party  Claim,  all the
parties  hereto shall  cooperate  in the defense or  prosecution  thereof.  Such
cooperation  shall  include the  retention  and (upon the  indemnifying  party's
request) the provision to the indemnifying party of records and information that
are  reasonably  relevant  to  such  Third-Party  Claim,  and  making  employees
available on a mutually  convenient basis to provide additional  information and
explanation of any material provided hereunder.  Whether or not the indemnifying
party shall have assumed the defense of a  Third-Party  Claim,  the  indemnified
party shall not admit any  liability  with respect to, or settle,  compromise or
discharge, such Third-Party Claim without the indemnifying party's prior written
consent (which consent shall not be unreasonably withheld).

     8.6 Exclusive  Remedy.  BUYER and SELLER each  acknowledge  and agree that,
from and after the Closing, their sole and exclusive remedy, with respect to any
and all  claims  relating  to the  subject  matter  of this  Agreement  shall be
pursuant to the  indemnification  provisions  set forth in this Article VIII. In
furtherance of the foregoing,  BUYER and SELLER hereby waive, from and after the
Closing,  to the fullest  extent  permitted  under  applicable  law, any and all
rights,  claims and causes of action,  they may have against each other relating
to the subject matter of this Agreement arising under or based upon any federal,
state  or  local  statute,  law  (including  common  law),  ordinance,  rule  or
regulation or otherwise, except for claims arising from fraud.

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<PAGE>
                                   ARTICLE IX

                                   TERMINATION

     9.1 Bases  for  Termination.  Anything  contained  herein  to the  contrary
notwithstanding,   this  Agreement  may  be  terminated  and  the   transactions
contemplated hereby abandoned at any time prior to the Closing Date:

          (a) by mutual written consent of SELLER and BUYER;

          (b) by BUYER if any of the  conditions  set forth in Section 2.2 shall
have become incapable of fulfillment, and shall not have been waived by BUYER;

          (c) by SELLER if any of the  conditions set forth in Section 2.3 shall
have become incapable of fulfillment, and shall not have been waived by SELLER;

          (d) by BUYER or  SELLER if the  Closing  does not occur on or prior to
August 1, 2001; or

          (e) by BUYER if the SELLER's Board of Directors  shall have withdrawn,
modified or changed in a manner adverse to BUYER its approval or  recommendation
of this Agreement or the transactions contemplated hereby or shall have approved
or recommended  an  Acquisition  Proposal or shall have executed an agreement in
principle  or a  definitive  agreement  relating to an  Acquisition  Proposal or
similar  business  combination with a Person other than BUYER or its Affiliates.
provided,  however,  that the party seeking termination  pursuant to clause (b),
(c)  or  (d) is not  in  breach  of  any  of  its  representations,  warranties,
covenants, or agreements contained in this Agreement.

     9.2 Notice of  Termination.  In the event of termination by SELLER or BUYER
pursuant to this Article IX, written notice thereof shall  forthwith be given to
the other party and the  transactions  contemplated  by this Agreement  shall be
terminated, without further action by any party.

     9.3 Effect of  Termination.  (a) If this  Agreement is  terminated  and the
transactions  contemplated hereby are abandoned as described in this Article IX,
this Agreement shall become void and of no further force and effect,  except for
the provisions of (a) Section 7.7 relating to expenses, (b) Section 7.2 relating
to publicity,

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<PAGE>
          (c) Sections 3.19 and 4.4 relating to finders' fees and brokers' fees,
(d) Section 5.3 relating to  Confidential  Information and (e) this Section 9.3.
Nothing  in this  Article  IX shall be deemed  to  release  any  party  from any
liability  for any  breach by such  party of the terms  and  provisions  of this
Agreement or to impair the right of any party to compel specific  performance by
another party of its obligations under this Agreement.

          (b) If (i) BUYER exercises its right to terminate this Agreement under
Section  9.1(e) or (ii) SELLER  unilaterally  terminates  this Agreement for any
reason  other than  those  specifically  set forth in Section  9.1(c) or 9.1(d),
SELLER  shall pay BUYER  $500,000.  Such  payment  shall be payable in  same-day
funds,  as  liquidated  damages and not as a penalty to reimburse  BUYER for its
time,   expense  and  lost  opportunity   costs  of  pursuing  the  transactions
contemplated  by this  Agreement,  and,  in the case of clause (i) shall be made
upon consummation of the transaction  relating to such Acquisition  Proposal and
in the case of clause  (ii) shall be made the next  business  day after any such
termination.

          (c) If BUYER  unilaterally  terminates  this  Agreement for any reason
other than those  specifically  set forth in Section  9.1(b),  9.1(d) or 9.1(e),
BUYER shall pay to SELLER  $500,000.  Such payment  shall be payable in same-day
funds,  as liquidated  damages and not as a penalty to reimburse  SELLER for its
time,   expense  and  lost  opportunity   costs  of  pursuing  the  transactions
contemplated  by this  Agreement,  and shall be made the next business day after
any such termination.

          (d) BUYER and SELLER each acknowledge that the agreements contained in
Sections 9.3(b) and 9.3(c) are an integral part of the transactions contemplated
by this Agreement, and that, without these agreements, the other party would not
have entered into this  Agreement;  accordingly,  if BUYER fails to promptly pay
the amount due  pursuant to Section  9.3(c) or SELLER  fails to promptly pay the
amount due pursuant to Section  9.3(b),  and in either case,  in order to obtain
such  payment,  BUYER or  SELLER,  as the case may be,  commences  a suit  which
results in a judgment  against the other for the fee set forth in Section 9.3(b)
or 9.3(c), the party who must pay such fee shall also pay to the other its costs
and expenses (including  attorneys' fees) in connection with such suit, together
with interest from the date of  termination of this Agreement on the amount owed
at the prime rate of Bank of America,  N.A.,  in effect from time to time during
such period.

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<PAGE>
                                    ARTICLE X

                               GENERAL PROVISIONS

     10.1  Assignment.  This Agreement and the rights and obligations  hereunder
shall  not be  assignable  or  transferable  by BUYER or  SELLER  (including  by
operation of law in connection with a merger,  or sale of substantially  all the
assets,  of BUYER or SELLER)  without the prior  written  consent of each of the
other parties hereto.

     10.2  No  Third-Party   Beneficiaries.   Except  for  Persons  entitled  to
indemnification  under  Article  VIII  hereof,  this  Agreement  is for the sole
benefit of the parties hereto,  and nothing herein express or implied shall give
or be construed to give to any person or entity,  other than the parties hereto,
any legal or equitable rights hereunder.

     10.3 Amendments;  Waiver. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by each party hereto.

     10.4 Waiver of Compliance.  Except as otherwise provided in this Agreement,
any  failure of any of the  parties  to comply  with any  obligation,  covenant,
agreement  or  condition  herein  may be  waived by the  party  entitled  to the
benefits thereof only by a written instrument signed by the party, granting such
waiver,  but such waiver or failure to insist upon strict  compliance  with such
obligation,  covenant,  agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.

     10.5 Notices. All notices or other communications  required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent by
telecopy, or sent, postage prepaid, by registered, certified or express mail, or
reputable  overnight courier service and shall be deemed given when delivered by
hand or  telecopied,  three days after  mailing (one business day in the case of
guaranteed overnight express mail or guaranteed  overnight courier service),  as
follows:

                                       43
<PAGE>
     (i)  If to SELLER:

          Gum Tech International, Inc.
          246 East Watkins Street
          Phoenix, Arizona  85004
          Attention: President

          with a copy to:

          Snell & Wilmer L.L.P.
          One Arizona Center
          Phoenix, Arizona 85004
          Attention: Sam Cowley

     (ii) if to BUYER:

          Wm. Wrigley Jr. Company
          410 North Michigan Avenue
          Chicago, Illinois 60611
          Attention: Howard Malovany

          with a copy to:

          Skadden, Arps, Slate, Meagher & Flom (Illinois)
          333 West Wacker Drive, Suite 2100
          Chicago, Illinois 60606
          Attention: William R. Kunkel

     10.6  Interpretation.  The  headings  contained in this  Agreement,  in any
Exhibit or Schedule hereto and in the table of contents to this  Agreement,  are
for  reference  purposes  only and shall not  affect in any way the  meaning  or
interpretation  of this  Agreement.  This Agreement  shall be construed  without
regard to any  presumption  or rule  requiring  construction  or  interpretation
against the party drafting or causing any instrument to be drafted.

     10.7  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  all of which shall be considered one and the same agreement,  and
shall become  effective when one or more such  counterparts  have been signed by
each of the parties and delivered to the other party.

                                       44
<PAGE>
     10.8 Severability. If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held invalid,  illegal
or  unenforceable  in any  respect by a court of  competent  jurisdiction,  such
invalidity,  illegality or unenforceability shall not affect any other provision
hereof.

     10.9 Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of Delaware  applicable to agreements made
and to be performed entirely within such State,  without regard to the conflicts
of law principles of such State.

     10.10 Entire  Agreement.  This Agreement  contains the entire agreement and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof and, except to the extent  specifically set forth herein,  supersedes all
prior agreements and understandings relating to such subject matter.

                            [SIGNATURE PAGE FOLLOWS]

                                       45
<PAGE>
     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed as of the date first written above.

                                    GUM TECH INTERNATIONAL, INC.

                                    By:
                                           -------------------------------------
                                    Name:
                                    Title:

                                    WM. WRIGLEY JR. COMPANY

                                    By:    /s/ William Wrigley Jr.
                                           -------------------------------------
                                    Name:  William Wrigley Jr.
                                    Title: President & Chief Executive Officer
<PAGE>
                                                                  Exhibit 1.1(a)

ASSETS.

1)   All  furniture,  fixtures,  and  equipment  except  those  items  listed in
     Schedule  1.1(b)  for  the  following  locations:  246 E.  Watkins  Street,
     Phoenix, Arizona and 510 E. University Drive, Phoenix, Arizona.

2)   All rights and  interest  relating  to  manufacturing  Agreements  with the
     following parties:

     [*]

3)   *All rights and interest relating to manufacturing  agreements with private
     label customers on a non-contractual basis:

     [*]

     *    For all of the private-label  customers,  Seller manufactures  product
          for them on a non-contractual basis. When the customer requires gum to
          be produced, the customer calls Seller for a price quote. Seller faxes
          or e-mails a quote concerning the specific  production  request.  Each
          quote may be different  depending  upon quantity,  flavor,  additional
          criteria,  etc.,  associated  with  a  specific  request  There  is no
          standing  agreement  between  Seller and any of these  customers  that
          contains standard terms regarding pricing, assumptions, etc.

4)   1994 International Harvester Truck, [*].

5)   Intellectual  Property  listed on Schedule 3.14 and excluding  Intellectual
     Property listed on Schedule 1.2.

6)   Assignment of leases as listed in Schedule 3.7.

7)   Raw materials and packaging inventory related to the Business.

8)   Information  system software and equipment  except items listed in Schedule
     1.1(b).

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
<PAGE>
                                                                  Exhibit 1.1(b)

EXCLUDED ASSETS.

1)   Computer equipment for the following departments:

     a)   Sales: 1 desktop computer; 1 laptop;

     b)   Accounting:  5 desktop  computers;  2 desktop  printers;  1 dot-matrix
          printer; 1 Hewlett Packard LaserJet;

     c)   Purchasing/Planning: 1 desktop computer; 1 desktop printer;

     d)   Investor Relations: 1 desktop computer.

2)   Finished goods inventory.

3)   All rights and interest relating to the joint venture with Swedish Match AB
     ("Swedish Match Joint Venture") as reflected in the following documents:

     a)   Shareholders  Agreement between Swedish Match AB (or its designee) and
          Seller;

     b)   International  Manufacturing  Agreement  between Joint Venture Co. and
          Seller;

     c)   Research  and  Development  Agreement  between  Joint  Venture Co. and
          Seller;

     d)   Articles of Association of [*].

4)   All  rights  and  interest  relating  to  the  International  Manufacturing
     Agreement  between  Swedish Match North AB and Seller,  dated May 28, 2000,
     regarding [*].

5)   All rights and interest  relating to the  Operating  Agreement of Gel Tech,
     LLC,  effective  as of  January  27,  1999 and the First  Amendment  to the
     Operating Agreement of Gel Tech, LLC dated as of October 6, 2000.

6)   All rights and interest relating to the Intellectual  Property  Development
     and License  Agreement,  dated as of May 1999,  by and  between  Seller and
     Zensano,  Inc.  (the  successor in interest to  Bio-Delivery  Technologies,
     Inc.) and all amendments thereto.

7)   All Accounts  Receivable  for products  shipped  and/or  invoiced as of the
     Closing Date.

8)   All rights and interest related to [*].

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
<PAGE>
9)   All packaging and certain raw materials  specific to the  manufacturing  or
     distribution of [*].

10)  All cash, rights and benefits of Seller pursuant to the Purchase  Agreement
     and related transaction documents.

11)  Intellectual Property listed in Schedule 1.2.

12)  All rights and interest related to the Consulting Agreement with Gary Kehoe
     dated June 2, 2000.

13)  Cash in all accounts including the following:

     [*]

14)  All rights related to an approximate $249,000.00 claim against Breath Asure
     pending in chapter 11 Bankruptcy

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
<PAGE>
                                                                  Exhibit 1.1(c)

EXCLUDED INTELLECTUAL PROPERTY.

All Intellectual Property not related to the Business, including but not limited
to patents, trademarks, copyrights and trade secrets concerning the following:

1)   All intellectual property associated with the Gel Tech Joint Venture.

2)   All rights and interest relating to the Intellectual  Property  Development
     and License  Agreement,  dated as of May 1999,  by and  between  Seller and
     Zensano,  Inc.  (the  successor in interest to  Bio-Delivery  Technologies,
     Inc.) and all amendments thereto.

3)   All intellectual property associated with the Swedish Match Joint Venture

4)   All intellectual  property associated with the International  Manufacturing
     Agreement  regarding [*] between  Swedish Match North Europe AB and Seller,
     dated May 28, 2000.

5)   All intellectual  property  pertaining to ongoing  discussions for products
     other than chewing gum and confectionery products.

6)   Trademarks:

     a)   897-T-29 Globe Design
     b)   897-T-30 Science for Health & Fitness
     c)   897-T-31 Gumtech

7)   Web-site domain name: www.gum-tech.com

8)   The name Gum Tech International, Inc. and all derivations thereof.

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
<PAGE>
                                                                  Exhibit 1.1(d)

[*]

----------
[*]  Confidential Information on this page has been omitted and filed separately
     with  the  Securities  and  Exchange Commission  pursuant to a Confidential
     Treatment Request.
<PAGE>
                                                                  Exhibit 1.1(e)

[*]

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
<PAGE>
                                                                     Exhibit 1.4

ASSUMED LIABILITIES.

1)   Leases as described in Schedule 3.7.

2)   Miscellaneous service contracts including copier maintenance,  landscaping,
     laundry service and T1 network cable with local telephone company.

3)   Manufacturing Agreements listed on Exhibit 1.1(a).

4)   Lease Agreements  pertaining to the real property leases listed on Schedule
     3.7.

5)   Equipment Lease Agreements listed on Schedule 3.7.

6)   Perpetual,  non-exclusive  Letter  of  Understanding  with  Whitehill  Oral
     Technologies, Inc. dated September 9, 1997 for the use of Microdent.

7)   Sales Agency Agreements with multiple agencies.  These agreements are still
     ongoing and have not been terminated even though the agencies are no longer
     promoting Gum Tech branded gums. The agencies  included [*].

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
<PAGE>
                                                               Exhibit 2.1(a)(i)

[*]

----------
[*] Confidential  Information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.

<PAGE>
                                                              Exhibit 2.1(a)(ii)

                              ASSUMPTION AGREEMENT

     THIS ASSUMPTION  AGREEMENT made, executed and delivered as of the __ day of
_______,  2001 by Wm.  Wrigley  Jr.  Company,  a  Delaware  corporation  (herein
referred to as "Obligor"),  to Gum Tech International,  Inc., a Utah corporation
(herein  referred to as "GTI").  Capitalized  terms used but not defined  herein
shall have the  meanings as ascribed to them in the  Purchase  Agreement  by and
between GTI and Obligor, dated March __, 2001 (the "Purchase Agreement").

                                    RECITALS

     WHEREAS,  GTI and Obligor have agreed,  pursuant to the Purchase Agreement,
to the sale by GTI to Obligor of the properties and assets of GTI related to the
Business,   all  as  more  fully  described  in  the  Purchase  Agreement,   for
consideration in the amount and on the terms and conditions  provided for in the
Purchase Agreement.

     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  as of the date  hereof,  Obligor,  pursuant to Section 1.4 of the
Purchase  Agreement and subject to all of the terms thereof,  hereby assumes and
agrees to pay, perform and discharge when due the Assumed Liabilities.

     SECTION 1. Nothing in this instrument,  express or implied,  is intended or
shall be construed to confer upon, or give to, any person,  firm or corporation,
other than GTI and its successors  and assigns,  any remedy or claim under or by
reason of this instrument or any terms,  covenants or condition hereof,  and all
the terms, covenants and conditions,  promises and agreements in this instrument
shall  be for the sole  and  exclusive  benefit  of GTI and its  successors  and
assigns.

     SECTION 2. Notwithstanding  anything to the contrary contained herein or in
the Purchase Agreement,  the assumption by Obligor of the Assumed Liabilities as
set forth above shall not be construed to defeat, impair or limit in any way (i)
any rights or remedies  of Obligor to contest or dispute the  validity or amount
of any of such  Assumed  Liabilities  with any third  parties  or (ii) any other
rights or remedies of the Obligor under the Purchase Agreement.

     SECTION 3. This instrument shall be governed by and construed in accordance
with  the  laws  of  the  State  of  Delaware   without  giving  effect  to  the
conflicts-of-laws provisions thereof.

     SECTION 4. This  instrument  is  executed  by,  and shall be binding  upon,
Obligor,  its successors and assigns,  for the uses and purposes above set forth
and referred to, effective immediately upon its delivery to GTI.
<PAGE>
     IN WITNESS  WHEREOF,  this Assumption  Agreement has been duly executed and
delivered by Obligor as of the day and year date first written above.

                                      WM. WRIGLEY JR. COMPANY

                                      By:
                                          --------------------------------------
                                          Name:
                                          Title:
<PAGE>
                                                         Exhibit 2.1(a)(iii)-1/2

ROYALTY AGREEMENTS

     Pursuant to these  agreements,  Wrigley  will pay  royalties to the Company
equal to 5% of:

     *    gross  manufacturing  sales,  if any, of P&G  Products for a period of
          three  years  after the first  date on which any P&G  Product is first
          launched for  commercial  sale,  subject to a maximum of $1.2 million;
          and

     *    net sales to third parties, if any, of Future Products for a period of
          three  years  after the  first  date on which any  Future  Product  is
          launched  for  commercial  sale,  but  in no  event  after  the  fifth
          anniversary of the closing date of the Asset Sale.

     The Company will identify three potential  Future Products and Wrigley will
use its  reasonable  best  efforts to evaluate  the  viability  of those  Future
Products for development,  production and sale as Wrigley  Products.  If Wrigley
determines  that any Future Product is suitable for  development and production,
it will perform standard  qualitative and  quantitative  testing with respect to
that Future Product and, if satisfied with the results of such testing, will act
reasonably  and in good faith with a view to launching  that Future  Product for
commercial sale.
<PAGE>
                                                              Exhibit 2.1(a)(iv)

SECURITIES PURCHASE AGREEMENT

     In  connection  with the closing of the Asset  Sale,  Wrigley has agreed to
purchase for investment  purposes  200,000 shares of the Company's  common stock
for an aggregate  purchase price equal to $1,501,876 in cash, which represents a
price per share equal to  $7.50938,  the 10-day  average  closing  price for the
period from February 21, 2001 through  March 6, 2001.  Wrigley will agree not to
sell any of the  acquired  shares  prior  to the six  month  anniversary  of the
closing date,  subject to certain  extraordinary  corporate  transactions by the
Company, and, following the six month anniversary, not to sell during any 30-day
period more than the greater of 1% of the Company's outstanding shares of common
stock or the average weekly  trading  volume for the Company's  common stock for
the four week period prior to the proposed sale.
<PAGE>
                                                               Exhibit 2.1(a)(v)

MANUFACTURING AGREEMENT

     Wrigley  has  agreed  to  enter  into a  Manufacturing  Agreement  with the
Company,  dated  the  date of  closing  of the  Asset  Sale,  providing  for the
manufacturing and packaging of non-tobacco  nicotine products developed pursuant
to the Company's  joint venture with Swedish Match.  Pursuant to this agreement,
Wrigley has agreed to  manufacture  and package  non-tobacco  nicotine  products
according to  specifications  provided by the joint venture company at Wrigley's
cost.  Wrigley will be obligated under this agreement to manufacture and package
non-tobacco  nicotine products for a period of three years following the closing
date of the Asset Sale.Exhibit 10.1

                             COMPENSATION AGREEMENT

                                 BY AND BETWEEN

                                 THE TRANSFERORS

                                       AND

                             CLIFTON R. JESSUP, JR.
<PAGE>
                             COMPENSATION AGREEMENT

     This COMPENSATION  AGREEMENT  ("Agreement") is made and entered into by and
among  the  Debtors  and  the  Non-Debtor  Affiliates  who  are  parties  to the
Liquidating Trust Agreement, as transferors (the "Transferors"),  and Clifton R.
Jessup, Jr. (the "Liquidating  Trustee"),  as of the "Effective Date" as defined
in the Joint  Liquidating Plan of Reorganization of the Debtors under Chapter 11
of the  Bankruptcy  Code  filed by  Baptist  Foundation  of  Arizona  et al.  on
September 25, 2000 with the United States  Bankruptcy  Court for the District of
Arizona (such date, the "Effective Date").

                                    RECITALS

     A. On November 9, 1999,  Baptist  Foundation  of Arizona and certain of its
subsidiaries and affiliates (the "Debtors") filed voluntary petitions for relief
under Chapter 11 of Title 11 of the United States Code (the  "Bankruptcy  Code")
in the  United  States  Bankruptcy  Court  for  the  District  of  Arizona  (the
"Bankruptcy  Court").  The Chapter 11 cases are being jointly administered under
Case No. 99-13275-PHX-GBN (the "Chapter 11 Cases").

     B. On September 25, 2000, the Debtors and the standing committees filed the
Plan with the Bankruptcy  Court. The Plan provides for the creation of the Trust
which will (i) receive from the Debtors and  Non-Debtor  Affiliates all of their
respective Assets transferred  pursuant to the Plan, (ii) hold the Assets of the
Debtors and Non-Debtor Affiliates (except as may otherwise be provided under the
Plan) in trust for the benefit of all Beneficiaries and (iii) oversee and direct
the liquidation of the Trust Assets held by it and by the Platform  Subsidiaries
for the benefit of the Beneficiaries  pursuant to the terms of the Plan and that
certain Liquidating Trust Agreement,  dated as of the Effective Date (the "Trust
Agreement") by and among the Debtors, the Non-Debtor Affiliates,  the members of
the  Liquidating  Trust  Board and the  Liquidating  Trustee.  Unless  otherwise
expressly defined herein, all capitalized terms shall have the meanings ascribed
thereto in the Trust Agreement.

     C. The  primary  purpose  of the Trust is to (i)  oversee  and  direct  the
liquidation the Trust Assets for the benefit of the  Beneficiaries in accordance
with Treasury Regulation Section  301.7701-4(d) and (ii) distribute any proceeds
of the Trust Assets received by the Trust to the Beneficiaries.

     D. The  Bankruptcy  Court has approved the  retention of Clifton R. Jessup,
Jr. as the trustee for the Trust, and this Agreement sets forth the compensation
payable to Clifton R.  Jessup,  Jr. in his capacity as trustee for the Trust and
memorializes  Clifton R. Jessup  Jr.'s  acceptance  to serve as the  Liquidating
Trustee.
<PAGE>
                                    ARTICLE I
                                 DUTIES AND TERM

     1.1 DUTIES. The Liquidating  Trustee will be subject in all respects to the
provisions of the Liquidating Trust Agreement,  dated as of the date hereof (the
"Trust Agreement") by and among the Transferors, the Liquidating Trustee and the
members of the Liquidating  Trust Board.  The Liquidating  Trustee will have the
duties set forth in the Trust Agreement. Generally, the Liquidating Trustee will
be  responsible  for the  liquidation  of the Trust  Assets in a  cost-effective
manner in a reasonable  time,  with due regard for the risk that undue haste may
minimize the liquidation proceeds of a particular Trust Asset.

     1.2 TERM. Subject to the provisions of Section 4.01 of the Trust Agreement,
the authority of the  Liquidating  Trustee will be effective as of the Effective
Date and will  remain and  continue  in full  force and effect  until all of the
Assets are liquidated in accordance  with the Plan, the Net  Distributable  Cash
has been  completely  distributed in accordance with the provisions of the Plan,
all tax  returns  and any other  filings  or  reports  have been  filed with the
appropriate state or federal regulatory  authorities,  and the Order closing the
Chapter  11 Cases is a Final  Order.  The  Liquidating  Trustee  shall  serve as
trustee of the Trust  until  removed  (by  death,  resignation,  termination  or
otherwise) pursuant to the Trust Agreement.

                                   ARTICLE II
                                  COMPENSATION

     For all services rendered by Liquidating Trustee under this Agreement,  the
Trust shall compensate Liquidating Trustee as follows:

     2.1 COMPENSATION.  The Liquidating Trustee will be compensated at a minimum
hourly rate of Two Hundred  Ninety Five Dollars  ($295) per hour,  which will be
subject to periodic  upward  adjustment by the Board (the  "Compensation").  The
Liquidating  Trustee  will not be  compensated  for his travel  time to and from
Phoenix unless he is actually working on matters  pertaining to the Trust during
that travel  time.  The  Liquidating  Trustee  shall be paid by the Trust within
fifteen  (15) days of  providing  an  invoice  to the  Liquidating  Trust  Board
detailing  the number of hours for which the  Liquidating  Trustee has  provided
services for the Trust, if the  Liquidating  Trust Board has not objected to the
payment of such invoice  within 10 calendar  days after the  submission  of such
invoice by the Liquidating  Trustee.  If the Liquidating  Trust Board objects to
the  payment  of any  such  invoice,  the  portion  of  the  invoice  which  the
Liquidating  Trust  Board does not object to shall be paid within  fifteen  (15)
days of the date on which the Liquidating Trustee submitted such invoice.

     2.2 PERFORMANCE BONUS. The Liquidating Trustee shall be entitled to a bonus
(the "Bonus") based on the net recovery paid to the Creditors as follows: (i) if
Net Recoveries are between Zero Dollars ($0) and One Hundred Twenty Five Million
Dollars  ($125,000,000),  there  will be no bonus,  (ii) if Net  Recoveries  are
between One Hundred Twenty Five Million Dollars  ($125,000,000)  and Two Hundred
Fifty  Million  Dollars  ($250,000,000),  the bonus  will be one  quarter of one
percent  (.25%) of Net  Recoveries,  (iii) if Net  Recoveries  are  between  Two

                                       2
<PAGE>
Hundred Fifty Million  Dollars  ($250,000,000)  and Five Hundred Million Dollars
($500,000,000),  the  bonus  will be one half of one  percent  (.50%) of the Net
Recoveries,   (iv)  if  Net   Recoveries  are  Five  Hundred   Million   Dollars
($500,000,000) or greater, the bonus will be three fourths of one percent (.75%)
of the Net Recoveries. "Net Recoveries" means the aggregate of all distributions
by the Trust to the Holders of Claims in Class 3A, Class 3B and Class 5 from the
liquidation of Assets and the  prosecution  and/or  settlement of the Litigation
Claims.  The aggregate  amount of  Compensation  and Travel Expenses paid to the
Liquidating  Trustee  will be  deducted  from the Bonus  (such net  amount,  the
"Performance Bonus").

     2.3  EXPENSES.  All  reasonable  out of  pocket  expenses  incurred  by the
Liquidating Trustee for airfare between Dallas, Texas and Phoenix,  Arizona (the
"Travel  Expenses"),  will be  reimbursable  as an  expense  of the  Trust.  All
reasonable  out of pocket  expenses  incurred  by the  Liquidating  Trustee  and
relating to the Liquidating  Trustee's  performance of his duties  hereunder and
under the Trust Agreement and which are not Travel  Expenses (the  "Reimbursable
Expenses"), will be reimbursable as an expense of the Trust.

     2.4 INSURANCE.  The Trust shall provide coverage to the Liquidating Trustee
under a liability insurance policy, in form and substance  substantially similar
to a directors' and officers' liability insurance policy, which shall insure the
Liquidating  Trustee  against  any  liability  for any action or omission of the
Liquidating  Trustee  in the  performance  of his duties  hereunder,  except any
action or omission which is the result of willful  misconduct on the part of the
Liquidating Trustee.

                                   ARTICLE III
                          COMPENSATION UPON TERMINATION

     3.1  RESIGNATION,  REMOVAL FOR CAUSE,  DEATH. If the Liquidating  Trustee's
duties hereunder and under the Trust Agreement are terminated in accordance with
the Trust Agreement due to resignation,  removal for Cause or death, in addition
to any other  rights or benefits  specifically  provided  for herein,  the Trust
shall be  obligated  to provide  compensation  to the  Liquidating  Trustee,  as
follows:

          (a) ACCRUED COMPENSATION.  The Trust shall pay the Liquidating Trustee
(or his estate or beneficiaries) any Compensation which has accrued but not been
paid as of the termination date (the "ACCRUED COMPENSATION").

          (b) ACCRUED  PERFORMANCE  BONUS.  The Trust shall pay the  Liquidating
Trustee (or his estate or beneficiaries) any Performance Bonus which has accrued
but not been paid as of the termination date (the "ACCRUED  PERFORMANCE BONUS"),
which Accrued  Performance  Bonus shall be calculated  after taking into account
any  Accrued  Compensation  to be paid to the  Liquidating  Trustee  pursuant to
Section  3.1(a) and any Travel  Expenses to be paid to the  Liquidating  Trustee
pursuant to Section 3.1(c).

                                       3
<PAGE>
          (c)  ACCRUED  EXPENSES.  The Trust  shall  reimburse  the  Liquidating
Trustee (or his estate or  beneficiaries)  for Travel Expenses and  Reimbursable
Expenses incurred by him prior to the date of termination.

     3.2 REMOVAL.  If the Liquidating  Trustee's  duties hereunder and under the
Trust  Agreement are terminated in accordance  with the Trust Agreement due to a
decision by the Liquidating  Trust Board to remove the  Liquidating  Trustee for
any reason  other than for Cause,  in addition  to any other  rights or benefits
specifically  provided  for  herein,  the Trust  shall be  obligated  to provide
compensation to the Liquidating Trustee, as follows:

          (a) ACCRUED COMPENSATION.  The Trust shall pay the Liquidating Trustee
(or his estate or beneficiaries) any Accrued Compensation.

          (b) ACCRUED  PERFORMANCE  BONUS.  The Trust shall pay the  Liquidating
Trustee (or his estate or beneficiaries)  any Accrued  Performance  Bonus, which
Accrued  Performance  Bonus shall be  calculated  after  taking into account any
Accrued  Compensation to be paid to the Liquidating  Trustee pursuant to Section
3.2(a) and any Travel Expenses to be paid to the Liquidating Trustee pursuant to
Section 3.2(c).

          (c)  ACCRUED  REIMBURSABLE  EXPENSES.  The Trust shall  reimburse  the
Liquidating  Trustee  (or his  estate  or  beneficiaries)  for  Travel  Expenses
incurred by him prior to the date of termination (the "ACCRUED TRAVEL Expenses")
and for Reimbursable  Expenses  incurred by him prior to the date of termination
(the "ACCRUED REIMBURSABLE EXPENSES").

          (d) SEVERANCE PAYMENT.

               (i) NET RECOVERIES LESS THAN  $125,000,000.  If Net Recoveries as
of the date of termination are less than $125,000,000,  then the Trust shall (a)
pay the  Liquidating  Trustee  $250,000 and (b) pay the  Liquidating  Trustee an
amount  equal  to (1)  the  Performance  Bonus,  if  any,  calculated  as of the
Distribution Date immediately  subsequent to the Liquidating  Trustee's removal,
minus (2) the sum of the Accrued  Compensation  and the Accrued Travel  Expenses
paid to the Liquidating Trustee.

               (ii) NET RECOVERIES OF  $125,000,000 UP TO  $250,000,000.  If Net
Recoveries  as  of  the  date  of  termination  are  equal  to or  greater  than
$125,000,000  but less  than  $250,000,000,  then the  Trust  shall  (a) pay the
Liquidating Trustee $150,000 and (b) pay the Liquidating Trustee an amount equal
to (1) the Performance Bonus, calculated as of the Distribution Date immediately
subsequent  to the  Liquidating  Trustee's  removal,  minus  (2)  the sum of the
Accrued  Compensation,  the Accrued  Performance  Bonus and the  Accrued  Travel
Expenses paid to the Liquidating Trustee.

               (iii) NET RECOVERIES OF $250,000,000 UP TO  $500,000,000.  If Net
Recoveries  as  of  the  date  of  termination  are  equal  to or  greater  than
$250,000,000  but less  than  $500,000,000,  then the  Trust  shall  (a) pay the
Liquidating  Trustee $75,000 and (b) pay the Liquidating Trustee an amount equal
to (1) the Performance Bonus, calculated as of the Distribution Date immediately
subsequent  to the  Liquidating  Trustee's  removal,  minus  (2)  the sum of the
Accrued  Compensation,  the Accrued  Performance  Bonus and the  Accrued  Travel
Expenses paid to the Liquidating Trustee.

                                       4
<PAGE>
               (iv) NET RECOVERIES OF $500,000,000 OR MORE. If Net Recoveries as
of the date of termination are equal to or greater than  $500,000,000,  then the
Trust shall only pay the Liquidating Trustee the amounts set forth in paragraphs
(a), (b) and (c) of this Section 3.2.

                                   ARTICLE IV
                              RESTRICTIVE COVENANTS

     4.1 CONFIDENTIALITY.

          (a) Upon termination of this Agreement for any reason, the Liquidating
Trustee covenants and agrees to hold in strictest  confidence,  and not disclose
to any person without the express written  consent of the Trust,  any and all of
the Trust's Proprietary  Information,  except as such disclosure may be required
by law. This covenant and agreement shall survive this Agreement and continue to
be binding upon the  Liquidating  Trustee after the expiration or termination of
this  Agreement,  whether  by  passage  of  time or  otherwise,  so long as such
information and data shall remain Proprietary Information.

          (b) Upon termination of this Agreement for any reason, the Liquidating
Trustee shall immediately turn over to the Trust any "Proprietary  Information,"
as defined in  subparagraph  (c) below.  The  Liquidating  Trustee shall have no
right to retain any copies of any material qualifying as Proprietary Information
for any reason  whatsoever after termination of his duties hereunder without the
express written consent of the Trust.

          (c) For purposes of this Agreement,  "PROPRIETARY  INFORMATION"  means
and includes the  following:  the identity of the parties which have  transacted
business with the Trust or its affiliates;  any written, typed or printed lists,
or other materials  identifying the parties which have transacted  business with
the Trust or its  affiliates;  any financial or other  information  supplied the
parties which have conducted business with the Trust or its affiliates;  any and
all data or information involving the Trust, its affiliates,  programs, methods,
or  contacts  employed  by the Trust or its  affiliates;  any lists,  documents,
manuals,  records, forms, or other material used by the Trust or its affiliates;
and any other secret or confidential  information  concerning the Trust's or its
affiliates' affairs. The terms "list," "document" or other equivalents,  as used
in this paragraph, are not limited to a physical writing or compilation but also
include any and all information  whatsoever  regarding the subject matter of the
"list" or  "document,"  whether  or not such  compilation  has been  reduced  to
writing.  "Proprietary Information" shall not include any information which: (i)
is or becomes  publicly  available  through no act or failure of the Liquidating
Trustee;  (ii) was or is rightfully  learned by the  Liquidating  Trustee from a
source  other than the Trust  before  being  received  from the Trust;  or (iii)
becomes independently  available to the Liquidating Trustee as a matter of right
from a third  party.  If only a portion  of the  Proprietary  Information  is or
becomes  publicly  available,  then only that portion  shall not be  Proprietary
Information hereunder.

     4.2 REMEDIES.  The Liquidating Trustee  acknowledges that the remedy at law
for any breach or  threatened  breach of  Section  4.1 will be  inadequate  and,
accordingly,  that the Trust shall, in addition to all other available  remedies
(including  without  limitation,  seeking  such  damages  as it can  show it has

                                       5
<PAGE>
sustained  by  reason of such  breach),  be  entitled  to  injunctive  relief or
specific performance.

                                    ARTICLE V
                                  MISCELLANEOUS

     5.1  DEFINITIONS.  Any  capitalized  terms used herein,  but not  otherwise
defined  herein  shall have the meanings  set forth in the Trust  Agreement.  In
addition, the following terms shall have the following meanings:

          (a) "ACCRUED COMPENSATION" - as defined in Section 3.1(a).

          (b) "ACCRUED PERFORMANCE BONUS" - as defined in Section 3.1(b).

          (c) "ACCRUED REIMBURSABLE EXPENSES" - as defined in Section 3.2(c).

          (d) "ACCRUED TRAVEL EXPENSES" - as defined in Section 3.2(c).

          (e) "BONUS" - as defined in Section 2.2.

          (f)  "CAUSE"  shall  have the  meaning  assigned  thereto in the Trust
Agreement.

          (g) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

          (h) "COMPENSATION" - as defined in Section 2.1.

          (i) "PERFORMANCE BONUS" - as defined in Section 2.2.

          (j) "PROPRIETY INFORMATION" - as defined in Section 4.1.

          (k) "REIMBURSABLE EXPENSES" - as defined in Section 2.3.

          (l) "TRAVEL EXPENSES" - as defined in Section 2.3.

     5.2  INCORPORATION  OF TRUST  AGREEMENT.  The  Trust  Agreement  is  hereby
incorporated  into this  Agreement  and made a part  hereof  by this  reference;
PROVIDED,  HOWEVER,  that in the event of any conflict  between the terms of the
Trust  Agreement  and this  Agreement,  the  terms of the Trust  Agreement  will
control and govern.

     5.3 NO RECOURSE. Except as provided in the Plan and the Trust Agreement, no
recourse  shall ever be had,  directly or  indirectly,  against the  Liquidating
Trustee,  by legal or  equitable  proceedings,  or by virtue of any  statute  or
otherwise, nor upon any promise, contract, instrument, undertaking,  obligation,
covenant or agreement  whatsoever  executed by the Liquidating Trustee under the
Plan, the Trust  Agreement,  or by reason of the creation of any indebtedness by
the  Liquidating  Trustee under the Plan or the Trust  Agreement for any purpose
authorized by the Plan or the Trust Agreement, it being expressly understood and
agreed that all such liabilities,  covenants and agreements shall be enforceable
only against and be satisfied  only out of the Trust Assets or such part thereof

                                       6
<PAGE>
as shall under the terms of any such  agreement  be liable  therefor or shall be
evidence only of a right of payment out of the Trust Assets.

     5.4  INDEMNIFICATION.  From and after the  Effective  Date,  the Trust will
indemnify  and hold  harmless the  Liquidating  Trustee from against any and all
liabilities (fixed or contingent),  obligations, losses, claims, actions, suits,
costs,  damages,  expenses  (including legal fees and expenses),  disbursements,
amounts paid in settlement,  judgments,  fines of any kind and nature whatsoever
(each, an "Indemnity  Claim") which may at any time be made,  assessed,  imposed
on,  asserted  against  or  otherwise  incurred  by the  Liquidating  Trustee in
connection  with,  relating  to,  or  arising  out  of,  this  Agreement  or the
Liquidating  Trustee's  actions or omissions  while  performing his duties under
this  Agreement,   EXCEPT  FOR  the  Liquidating  Trustee's  acts  or  omissions
constituting  willful misconduct,  as finally determined by a court of competent
jurisdiction.  In each instance  where there is an Indemnity  Claim or potential
Indemnity Claim for which the Liquidating  Trustee is or may be entitled to seek
indemnification,  the  Liquidating  Trustee  must notify the Trust in writing of
such  Indemnity  Claim and shall  furnish  to the Trust  copies of all  notices,
service of process,  pleadings and other pertinent written  communications  from
the party asserting such Indemnity  Claim.  The Trust will promptly  advance any
legal fees and expenses  incurred by the  Liquidating  Trustee and reimburse any
Indemnity Claim. If the Liquidating  Trustee's actions or omissions are found to
constitute  willful  misconduct,  as finally  determined by a court of competent
jurisdiction,  any funds transferred by the Trust to the Liquidating  Trustee in
connection with the related  Indemnity Claim shall be promptly  reimbursed.  The
Liquidating  Trustee  may in his sole  discretion  retain  his  choice  of legal
counsel in connection with any Indemnity Claim.

     5.5 LIMITED LIABILITY.  The Liquidating Trustee shall not be liable for any
act he may do or omit to do while  acting in good faith and in the  exercise  of
its reasonable  judgment,  and the fact that such act or omission was advised by
an  authorized  attorney  for the  Liquidating  Trustee or the  Trust,  shall be
evidence of such good faith and reasonable  judgment;  nor shall the Liquidating
Trustee be liable in any event, except to the extent determined to be the result
of his own  gross  negligence  or  willful  fraud  or  willful  misconduct.  The
Liquidating  Trustee  shall  not  be  personally  liable  with  respect  to  any
liabilities  or  obligations  of the  Trust or any  liabilities  or  obligations
relating to the Trust Assets, including, without limitation, those arising under
the Trust Agreement or with respect to the Trust or the Trust Assets.

     5.6 SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding upon any
successor to the Trust and shall inure to the benefit of and be  enforceable  by
the  Liquidating  Trustee's  personal or legal  representatives,  beneficiaries,
designees,  executors,   administrators,   heirs,  distributees,   devisees  and
legatees.

     5.7 MODIFICATION;  NO WAIVER. This Agreement may not be modified or amended
except by an instrument in writing  signed by the  Liquidating  Trust Board,  on
behalf of the Trust, and the Liquidating  Trustee.  No term or condition of this
Agreement  shall be deemed to have been waived,  nor shall there be any estoppel
against the  enforcement of any provision of this  Agreement,  except by written
instrument  by the party  charged with such waiver or estoppel.  No such written
waiver shall be deemed a continuing waiver unless  specifically  stated therein,
and each such waiver shall  operate  only as to the  specific  term or condition
waived  and shall not  constitute  a waiver  of such term or  condition  for the
future or as to any other term or condition.

                                       7
<PAGE>
     5.8  SEVERABILITY.  The  covenants  and  agreements  contained  herein  are
separate and severable and the invalidity or unenforceability of any one or more
of such covenants or agreements,  if not material to the arrangement that is the
basis for this Agreement, shall not affect the validity or enforceability of any
other covenant or agreement contained herein. If, in any judicial proceedings, a
court  shall  refuse  to  enforce  one or more of the  covenants  or  agreements
contained  herein because the duration thereof is too long, or the scope thereof
is too broad,  it is  expressly  agreed  between  the  parties  hereto that such
duration or scope shall be deemed reduced to the extent  necessary to permit the
enforcement of such covenants or agreements.

     5.9  NOTICES.  All notices and other  communications  required or permitted
hereunder  shall be in  writing  and shall be  delivered  personally  or sent by
registered or certified mail, return receipt requested, to the parties hereto at
the following addresses:

                       If to the Transferors, to them at:

                       c/o BFA Liquidation Trust
                       1313 East Osborn Road, Suite 250
                       Phoenix, AZ 85014
                       Attn: Liquidating Trust Board

                       With a copy to:

                       BFA Liquidation Trust
                       1313 East Osborn Road, Suite 250
                       Phoenix, AZ 85014
                       Attn: Chairman of the Liquidating Trust Board

                       If to the Liquidating Trustee, to him at:

                       Clifton R. Jessup, Jr.
                       c/o Patton Boggs L.L.P.
                       2001 Ross Avenue, Suite 3000
                       Dallas, Texas  75201

     5.10  ASSIGNMENT.  This  Agreement  and any rights  hereunder  shall not be
assignable to either party without the prior written consent of the other party.

     5.11  ENTIRE   UNDERSTANDING.   This  Agreement   constitutes   the  entire
understanding  between  the  parties  hereto and no  agreement,  representation,
warranty or covenant has been made by either party except as expressly set forth
herein.

     5.12  LIQUIDATING  TRUSTEE'S   REPRESENTATIONS.   The  Liquidating  Trustee
represents  and  warrants  that  neither  the  execution  and  delivery  of this
Agreement nor the performance of his duties hereunder violates the provisions of
any other agreement to which he is a party or by which he is bound.

                                       8
<PAGE>
     5.13  SURVIVORSHIP.  Unless  specifically  stated to the  contrary  in this
Agreement,  the rights and obligations of the Liquidating  Trustee and the Trust
set forth herein shall continue  beyond the term of this  Agreement,  including,
but not by way of  limitation,  the Trust's  obligations  under Sections 5.4 and
5.5, and the Trust's rights under Article IV.

     5.14 GOVERNING LAW. This  Agreement  shall be construed in accordance  with
and governed for all purposes by the laws of the State of Arizona  applicable to
contracts executed and wholly performed within such state.

                                       9
<PAGE>
     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.

                                        TRANSFERORS

                                        By: The Restructuring Committee of
                                            Baptist Foundation of Arizona,
                                            on behalf of the Transferors

                                        By: /s/ Mark Roberts
                                            ------------------------------------
                                            Name: Mark Roberts
                                                  Member of Committee

                                        LIQUIDATING TRUSTEE

                                        /s/ Clifton R. Jessup, Jr.
                                        ----------------------------------------
                                        Name: Clifton R. Jessup, Jr.

                                       10

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