Document:

<Page>

                                                                  EXHIBIT 10(dd)

                                CARSEN GROUP INC.

                                   as Borrower

                                       and

                             NATIONAL BANK OF CANADA

                                    as Lender

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

                       AMENDED AND RESTATED LOAN AGREEMENT

                                 AUGUST 1, 2003

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

                              STIKEMAN ELLIOTT LLP

<Page>

                                TABLE OF CONTENTS

<Table>
<S>                                                                                                         <C>
                                                   ARTICLE 1
                                                 INTERPRETATION

Section 1.1         Defined Terms............................................................................1
Section 1.2         Gender and Number.......................................................................21
Section 1.3         Headings, etc...........................................................................21
Section 1.4         Currency................................................................................21
Section 1.5         Certain Phrases, etc....................................................................21
Section 1.6         Accounting Terms........................................................................21
Section 1.7         Calculations with respect to Permitted Acquisitions.....................................21
Section 1.8         Incorporation of Schedules..............................................................22
Section 1.9         Conflict................................................................................22
Section 1.10        Certificates............................................................................22

                                                   ARTICLE 2
                                                 LOAN FACILITY

Section 2.1         Availability............................................................................22
Section 2.2         Commitments and Facility Limits.........................................................22
Section 2.3         Use of Proceeds.........................................................................23
Section 2.4         Mandatory Repayments and Reductions of Commitments......................................23
Section 2.5         Mandatory Prepayment Where Borrowing Base Deficiency....................................23
Section 2.6         Optional Prepayments and Reductions of Commitments......................................24
Section 2.7         Changes to Applicable Margins...........................................................25
Section 2.8         Fees....................................................................................25
Section 2.9         Payments under this Agreement...........................................................26
Section 2.10        Application of Payments and Prepayments.................................................26
Section 2.11        Computations of Interest and Fees.......................................................27

                                                   ARTICLE 3
                                                    ADVANCES

Section 3.1         Advances................................................................................28
Section 3.2         Procedure for Borrowing.................................................................28
Section 3.3         Conversions and Elections Regarding Advances............................................28
Section 3.4         Circumstances Requiring Prime Rate Pricing..............................................29
Section 3.5         Interest on Advances....................................................................31

                                                   ARTICLE 4
                                              BANKERS' ACCEPTANCES

Section 4.1         Acceptances and Drafts..................................................................31
Section 4.2         Form of Drafts..........................................................................32
</Table>

                                       (i)
<Page>

<Table>
<S>                                                                                                         <C>
Section 4.3         Procedure for Drawing...................................................................32
Section 4.4         Presigned Draft Forms...................................................................32
Section 4.5         Payment, Conversion or Renewal of BA Instruments........................................33
Section 4.6         Circumstances Making Bankers' Acceptances Unavailable...................................34

                                                   ARTICLE 5
                                              DOCUMENTARY CREDITS

Section 5.1         Documentary Credits.....................................................................34
Section 5.2         Reimbursements of Amounts Drawn.........................................................34
Section 5.3         Fees....................................................................................34
Section 5.4         Documentary Credits Outstanding Upon Default............................................35

                                                   ARTICLE 6
                                           FOREIGN EXCHANGE CONTRACTS

Section 6.1         Foreign Exchange Hedging Contracts......................................................35
Section 6.2         Notice of Hedging Arrangements..........................................................35
Section 6.3         Indemnification.........................................................................36
Section 6.4         Obligations Absolute....................................................................36
Section 6.5         Deemed Advances.........................................................................36
Section 6.6         Repayments..............................................................................37

                                                   ARTICLE 7
                                             CONDITIONS OF LENDING

Section 7.1         Restatement.............................................................................38
Section 7.2         Conditions Precedent to Accommodations and Conversions..................................40
Section 7.3         No Waiver...............................................................................41

                                                   ARTICLE 8
                                         REPRESENTATIONS AND WARRANTIES

Section 8.1         Representations and Warranties..........................................................41
Section 8.2         Survival of Representations and Warranties..............................................48

                                                   ARTICLE 9
                                           COVENANTS OF THE BORROWER

Section 9.1         Affirmative Covenants...................................................................48
Section 9.2         Negative Covenants......................................................................53
Section 9.3         Financial Covenants.....................................................................58
Section 9.4         Security Covenants......................................................................59
</Table>

                                      (ii)
<Page>

<Table>
<S>                                                                                                         <C>
                                                   ARTICLE 10
                                               EVENTS OF DEFAULT

Section 10.1        Events of Default.......................................................................60
Section 10.2        Remedies Upon Default...................................................................63

                                                   ARTICLE 11
                                                 MISCELLANEOUS

Section 11.1        Review of Agreement.....................................................................63
Section 11.2        Amendments, etc.........................................................................63
Section 11.3        Waiver..................................................................................63
Section 11.4        Evidence of Debt and Accommodation Notices..............................................64
Section 11.5        Notices, etc............................................................................64
Section 11.6        Costs, Expenses and Indemnity...........................................................65
Section 11.7        Taxes and Other Taxes...................................................................67
Section 11.8        Successors and Assigns..................................................................69
Section 11.9        Right of Set-off........................................................................69
Section 11.10       Judgment Currency.......................................................................70
Section 11.11       Interest on Amounts.....................................................................70
Section 11.12       Governing Law...........................................................................71
Section 11.13       Counterparts............................................................................71
Section 11.14       Facsimile Signatures....................................................................71
Section 11.15       Consent to Jurisdiction.................................................................71
</Table>

                                     ADDENDA

SCHEDULE "A"               BORROWING BASE CERTIFICATE
SCHEDULE "B"               FORM OF COMPLIANCE CERTIFICATE
APPENDIX 2(a)
APPENDIX 2(b)
APPENDIX 2(c)
APPENDIX 3(a)
SCHEDULE 3.2(1)            FORM OF BORROWING NOTICE
SCHEDULE 3.3(3)            FORM OF ELECTION NOTICE
SCHEDULE 4.1(2)            NOTICE PERIODS AND AMOUNTS
SCHEDULE 4.3(1)            FORM OF DRAWING NOTICE
SCHEDULE 6.2(1)            FORM OF HEDGING ARRANGEMENT NOTICE
SCHEDULE 7.1(d)(iii)       LOAN DOCUMENTS
SCHEDULE 8.1(a)            PROPERTIES
SCHEDULE 8.1(n)            ENVIRONMENTAL MATTERS
SCHEDULE 8.1(p)            CORPORATE STRUCTURE
SCHEDULE 8.1(x)(i)         LOCATION OF ASSETS AND BUSINESS
SCHEDULE 8.1(x)(ii)        MATERIAL AUTHORIZATIONS

                                      (iii)
<Page>

SCHEDULE 8.1(x)(iii)       INTELLECTUAL PROPERTY
SCHEDULE 8.1(x)(iv)        LITIGATION
SCHEDULE 8.1(x)(v)         PENSION PLANS
SCHEDULE 8.1(x)(vi)        MATERIAL AGREEMENTS
SCHEDULE 9.2(a)            PERMITTED DEBT
SCHEDULE 9.2(b)            PERMITTED LIENS
SCHEDULE 9.2(i)            EMPLOYEE LOANS

                                      (iv)
<Page>

                       AMENDED AND RESTATED LOAN AGREEMENT

     Amended and Restated Loan Agreement dated August 1, 2003, between Carsen
Group Inc. as Borrower and National Bank of Canada as Lender.

RECITALS:

     (a)  The Borrower and the Lender are party to a loan agreement dated
          September 7, 2001, pursuant to which the Lender made an operating
          facility available to the Borrower.

     (b)  The Borrower is desirous of acquiring Biolab Equipment Ltd., Biolab
          Equipment Canada Ltd. and Biolab Equipment Quebec Ltd. and has
          requested that the Lender (i) consent to such acquisition and (ii)
          increase the Operating Commitment to fund a portion of the purchase
          price of the Biolab Acquisition.

     (c)  The Lender has agreed to consent to the Biolab Acquisition and the
          increase to the Operating Commitment on the terms and conditions set
          out herein.

     (d)  The parties wish to amend and restate in its entirety the Existing
          Loan Agreement.

     In consideration of the foregoing and other good and valuable consideration
(the receipt and adequacy of which are hereby acknowledged), the parties agree
as follows:

                                    ARTICLE 1
                                 INTERPRETATION

SECTION 1.1    DEFINED TERMS.

     As used in this Agreement, the following terms have the following meanings:

     "ACCOMMODATION" means (i) an Advance made by the Lender on the occasion of
     any Borrowing, (ii) the creation and purchase of Bankers' Acceptances or
     the purchase of completed Drafts by the Lender on the occasion of any
     Drawing, (iii) the issue of a Documentary Credit by the Lender on the
     occasion of any Issue and (iv) the provision of any Foreign Exchange
     Hedging Arrangement by the Lender (each of which is a "TYPE" of
     Accommodation).

<Page>

                                        2

     "ACCOMMODATION NOTICE" means a Borrowing Notice, a Drawing Notice, an Issue
     Notice, an Election Notice or a Notice of Foreign Exchange Hedging
     Arrangement, as the case may be.

     "ACCOMMODATIONS OUTSTANDING" means an amount equal to the sum of (i) the
     aggregate principal amount of all outstanding Advances made by the Lender,
     (ii) the aggregate Face Amount of all outstanding Bankers' Acceptances and
     completed Drafts which the Lender has purchased, and (iii) the aggregate
     Face Amount of all Documentary Credits for which the Lender is contingently
     liable. In determining Accommodations Outstanding, the foregoing amounts
     shall be expressed in Canadian dollars and each relevant U.S. Dollar amount
     shall be converted, for purposes of such calculation, into its Equivalent
     Cdn. $ Amount, as of the relevant day.

     "ADVANCES" means any advances made by the Lender under Article 3 and
     "ADVANCE" means any one of such advances. Advances are denominated in
     Canadian Dollars (a "CANADIAN DOLLAR ADVANCE") or in U.S. Dollars (a "U.S.
     DOLLAR ADVANCE"). A Canadian Dollar Advance is designated a "CANADIAN PRIME
     RATE ADVANCE" and a U.S. Dollar Advance may be designated a "EURODOLLAR
     RATE ADVANCE" or a "BASE RATE (CANADA) ADVANCE". Canadian Prime Rate
     Advances and Base Rate (Canada) Advances are referred to, collectively, as
     "FLOATING RATE ADVANCES". Each of a Eurodollar Rate Advance, a Canadian
     Prime Rate Advance and a Base Rate (Canada) Advance is a "TYPE" of Advance.

     "AFFILIATE" has the meaning specified in the BUSINESS CORPORATIONS ACT
     (Ontario) on the date of this Agreement.

     "AGREEMENT" means this amended and restated loan agreement and all
     schedules and instruments in amendment or confirmation of it; and the
     expressions "ARTICLE" and "SECTION" followed by a number mean and refer to
     the specified Article or Section of this Agreement.

     "ANNUAL BUSINESS PLAN" means, in respect of the Borrower or Cantel, as the
     case may be, for any Fiscal Year, (i) quarterly detailed pro-forma
     consolidated balance sheets, statements of earnings and statements of cash
     flows of the Borrower and the Restricted Subsidiaries, or Cantel, as the
     case may be, prepared in accordance with GAAP, as approved by the board of
     directors of the Borrower or Cantel, as the case may be, and (ii) a capital
     expenditure program setting forth Capital Expenditures proposed to be made
     in the Fiscal Year.

<Page>

                                        3

     "APPLICABLE MARGIN" means, at any time and from time to time, a percentage
     per annum determined by reference to the table set forth below and on the
     basis of Cantel's Consolidated Debt to EBITDA at such time:

<Table>
<Caption>
                                                        APPLICABLE MARGIN FOR ACCOMMODATIONS

                                                  CANADIAN      EURODOLLAR   BASE RATE     DRAWING
      RATIO OF CANTEL'S CONSOLIDATED              PRIME RATE    RATE         (CANADA)       PRICE
      DEBT TO EBITDA                              MARGIN        MARGIN       MARGIN        MARGIN
      <S>                                           <C>           <C>         <C>           <C>
      Greater than 2.0 to 1.0                       1.375%        3.00%       1.625%        3.00%

      Greater than 1.75 to 1.0 but less than or     1.125%        2.75%       1.375%        2.75%
      equal to 2.0 to 1.0

      Greater than 1.50 to 1.0 but less than or     0.875%        2.50%       1.125%        2.50%
      equal to 1.75 to 1.0

      Greater than 1.00 to 1.00 but less than       0.625%        2.25%       0.875%        2.25%
      or equal to 1.5 to 1.0

      Equal to or less than 1.0 to 1.0              0.125%        1.75%       0.375%        1.75%
</Table>

     The ratio of Cantel's Consolidated Debt to EBITDA shall be determined three
     Business Days after the date on which the Lender receives financial
     statements for each Fiscal Quarter of the Borrower pursuant to Section
     9.1(b) and a Compliance Certificate. If the Borrower has not submitted to
     the Lender the Compliance Certificate as and when required under Section
     9.1(b) as the case may be, the Applicable Margin shall be, irrespective of
     the actual ratio of Cantel's Consolidated Debt to EBITDA, the highest rate
     set forth above for the applicable Type of Advance and for so long as such
     information has not been received by the Lender. The Applicable Margin
     shall be adjusted, if applicable, as of the first day of the month
     following the date of receipt of the Compliance Certificate, or the
     determination described in the preceding sentence, in the manner provided
     in Section 2.7.

     "ASSIGNEE" has the meaning specified in Section 11.8(3).

     "BANKERS' ACCEPTANCE" means either (i) a bill of exchange within the
     meaning of the BILLS OF EXCHANGE ACT (Canada) or (ii) a depository note
     within the meaning of the DBNA, in each case issued by a Borrower and
     denominated in Canadian Dollars, which are accepted and purchased by the
     Lender at the request of a Borrower pursuant to Article 4.

     "BA INSTRUMENTS" means, collectively, Bankers' Acceptances and Drafts, and,
     in the singular, any one of them.

<Page>

                                        4

     "BASE RATE (CANADA)" means, at any time, the rate of interest per annum
     equal to the greater of (i) the rate which the principal office of the
     National Bank of Canada in Toronto, Ontario announces from time to time as
     the reference rate of interest for loans in U.S. Dollars to Canadian
     borrowers, and (ii) the Federal Funds Rate plus 0.50 of 1%, adjusted
     automatically with each change in such rates all without the necessity of
     any notice to the Borrower or any other Person.

     "BENEFICIARY" means, in respect of any Documentary Credit, the beneficiary
     named in the Documentary Credit.

     "BIOLAB ACQUISITION" means the acquisition by the Borrower or a subsidiary
     of the Borrower of all of the shares in the capital of the Biolab Group of
     Companies.

     "BIOLAB GROUP OF COMPANIES" means Biolab Equipment Ltd., Biolab Equipment
     Canada Ltd. and Biolab Equipment Quebec Ltd.

     "BORROWER" means, at any time, Carsen Group Inc. and its successors and
     permitted assigns.

     "BORROWER'S ACCOUNTS" means the Borrower's Canadian Dollar and U.S. Dollar
     accounts maintained by the Lender at its principal office, the particulars
     of which shall have been notified by the Lender to the Borrower, and a
     reference to a "BORROWER'S CANADIAN DOLLAR ACCOUNT" and "BORROWER'S U.S.
     DOLLAR ACCOUNT" means a reference to either one of them, as the context so
     requires.

     "BORROWING" means a borrowing consisting of one or more Advances.

     "BORROWING BASE" means, subject to the next following sentence, at any
     time, the sum of (i) 85% of Eligible Accounts Receivable of the Borrower
     and each Designated Restricted Subsidiary, plus (ii) 50% of the aggregate
     value (computed at the lower of cost (in accordance with the Borrower's
     past practices) and current market value) of Eligible Inventory of the
     Borrower and each Designated Restricted Subsidiary, less (iii) Priority
     Accounts Payable, at such time. The contribution to the Borrowing Base of a
     Designated Restricted Subsidiary which is incorporated or created under the
     laws of the United States of America will be the lesser of (i) its
     Borrowing Base as calculated pursuant to the foregoing sentence, and (ii)
     the sum of (y) the outstanding principal amount of all loans by the
     Borrower to the Designated Restricted Subsidiary at the time of calculation
     which have been made with the proceeds of Accommodations from the Lender,
     and (z) the

<Page>

                                        5

     tangible net worth of the Designated Restricted Subsidiary at the time of
     calculation.

     "BORROWING BASE CERTIFICATE" means a certificate of the Borrower,
     substantially in the form of Schedule ERROR! REFERENCE SOURCE NOT FOUND.,
     mathematically computing the Borrowing Base and signed on behalf of the
     Borrower by its chief financial officer or any other officer acceptable to
     the Lender.

     "BORROWING NOTICE" has the meaning specified in Section 3.2.

     "BUSINESS" means the business of the Borrower consisting of the marketing,
     distribution and servicing of medical equipment (including flexible and
     rigid endoscopes and infection prevention and control products), precision
     instruments (including microscopes and high performance image analysis
     hardware and software) and industrial equipment.

     "BUSINESS DAY" means any day of the year, other than a Saturday, Sunday or
     other day on which banks are required or authorized to close in Toronto,
     Ontario and, where used in the context of (i) a Eurodollar Rate Advance,
     also a day on which banks are not required or authorized to close in New
     York City and dealings are carried on in the London interbank market, and
     (ii) a Base Rate (Canada) Advance, also a day on which banks are not
     required or authorized to close in New York City.

     "CANADIAN DOLLARS", and "CDN.$" each means lawful money of Canada.

     "CANADIAN PRIME RATE" means, at any time, the greater of (i) the per annum
     rate of interest quoted, published and commonly known as the "PRIME RATE"
     of the Lender which the Lender establishes at its main office in Toronto,
     Ontario as the reference rate of interest in order to determine interest
     rates for loans in Canadian Dollars to Canadian borrowers, adjusted
     automatically with each quoted or published change in such rate, all
     without the necessity of any notice to the Borrower or any other Person,
     and (ii) the sum of (y) the average of the rates per annum for Canadian
     Dollar bankers' acceptances having a term of 30 days that appears on the
     Reuters Screen CDOR Page as of 10:00 a.m. (Toronto time) on the date of
     determination, as reported by the Lender (and if such screen is not
     available, any successor or similar service as may be selected by the
     Lender), and (z) 0.75%.

     "CANTEL" means Cantel Medical Corp.

     "CANTEL ACKNOWLEDGEMENT" means, collectively, the letters from Cantel to
     the Lender dated September 7, 2001 and [AUGUST 1, 2003] acknowledging the

<Page>

                                        6

     Borrower's obligation to make certain deliveries in connection with
     financial matters relating to Cantel pursuant to this Agreement.

     "CANTEL'S CONSOLIDATED DEBT TO EBITDA" means, at any time, the ratio
     determined by reference to and in the manner provided for in the Parent
     Facility of Consolidated Debt (as defined in the Parent Facility) to EBITDA
     (as defined in the Parent Facility).

     "CAPITAL EXPENDITURES" means expenditures by a Person made for the
     purchase, lease or acquisition of assets (other than current assets)
     required to be capitalized and related to plant, property, equipment,
     intellectual property and other long term capitalized assets in accordance
     with GAAP.

     "CASH EQUIVALENTS" has the meaning specified in Section 9.2(i).

     "CASHFLOW" means, for any period, Net Income increased, to the extent
     deducted in calculating Net Income, by the sum of (i) Interest Charges,
     (ii) all deferred expenses of the Borrower and its Restricted Subsidiaries,
     (iii) Depreciation Expense, (iv) any other non-cash expenses and (v)
     unusual or non-recurring non-cash charges which require an accrual of, or a
     reserve for, cash charges for any future period and decreased by (vi) all
     cash payments during such period relating to non-cash charges of the type
     described in (i) through (v) above which were added back in any prior
     period, (vii) dividends, (viii) inter-company advances made by the Borrower
     to Cantel and (ix) Capital Expenditures which are not funded from
     incurrence of Debt, all as determined on a consolidated basis in accordance
     with GAAP.

     "CHANGE OF CONTROL" means Cantel ceases to own 100% of the outstanding
     share capital of the Borrower.

     "COLLATERAL" means any and all property and assets in respect of which the
     Lender has or will have a Lien pursuant to a Security Document.

     "COMMITMENT" means, at any time, in respect of (i) the Operating Facility,
     the Operating Commitment; and (ii) the Foreign Exchange Hedging Facility,
     the Foreign Exchange Commitment.

     "COMPLIANCE CERTIFICATE" means a certificate of the Borrower substantially
     in the form of Schedule ERROR! REFERENCE SOURCE NOT FOUND. signed on its
     behalf by its chief financial officer or any other officer acceptable to
     the Lender.

     "CURRENT ASSETS" means, at any time, all current assets of the Borrower and
     its Restricted Subsidiaries, excluding any intercompany advances, the
     current portion of deferred costs, or any other assets of doubtful or
     intangible nature, determined on a consolidated basis as of such time in
     accordance with GAAP.

<Page>

                                        7

     "CURRENT LIABILITIES" of any Person means (a) Debt of such Person, except
     Funded Debt, that by its terms is payable on demand or matures within one
     year after the date of determination (excluding any Debt renewable or
     extendible, at the option of such Person, to a date more than one year from
     such date or arising under a revolving credit or similar agreement that
     obligates the lender or lenders to extend credit during a period of more
     than one year from such date), (b) all amounts of Funded Debt of such
     Person required to be paid or prepaid within one year after such date, and
     (c) all other items (including taxes accrued as estimated and excluding
     Funded Debt) that in accordance with GAAP would be classified as current
     liabilities of such Person.

     "DBNA" means the DEPOSITORY BILLS AND NOTES ACT (Canada).

     "DEBT" of any Person means (i) all indebtedness of such Person for borrowed
     money, including borrowings of commodities, bankers' acceptances, letters
     of credit or letters of guarantee, (ii) all indebtedness of such Person for
     the deferred purchase price of property or services represented by a note,
     bond, debenture or other evidence of Debt, (iii) all indebtedness created
     or arising under any conditional sale or other title retention agreement
     with respect to property acquired by such Person (even though the rights
     and remedies of the seller or lender under such agreement in the event of
     default are limited to repossession or sale of such property), (iv) all
     current liabilities of such Person represented by a note, bond, debenture
     or other instruments evidencing Debt, and (v) all obligations under leases
     which have been or should be, in accordance with GAAP, recorded as capital
     leases in respect of which such Person is liable as lessee but for greater
     certainty, excludes operating leases.

     "DEBT SERVICE" means, for any period, the aggregate of (i) all Interest
     Charges, and (ii) all regularly scheduled principal, capital lease or other
     payments on account of Debt, in each case for such period.

     "DEFAULT" means an event which, with the giving of notice or passage of
     time, or both, would constitute an Event of Default.

     "DEPRECIATION EXPENSE" means, for any period, depreciation, amortization
     and other non-cash expenses of the Borrower and its Restricted Subsidiaries
     which reduce Net Income for such period, determined on a consolidated basis
     in accordance with GAAP.

     "DESIGNATED RESTRICTED SUBSIDIARY" has the meaning specified in Section
     2.5(2) and includes each of the Biolab Group of Companies.

<Page>

                                        8

     "DISTRIBUTION" has the meaning specified in Section 9.2(h).

     "DOCUMENTARY CREDIT" means a commercial letter of credit, standby letter of
     credit or letter of guarantee (each of which is a "TYPE" of Documentary
     Credit) issued or to be issued by the Lender for the account of the
     Borrower pursuant to Article 5.

     "DOCUMENTARY CREDIT DEPOSIT AMOUNT" has the meaning specified in Section
     5.4.

     "DRAFT" means, at any time, a bill of exchange, within the meaning of the
     BILLS OF EXCHANGE ACT (Canada) or a depository note within the meaning of
     the DBNA, drawn by the Borrower on the Lender and bearing such
     distinguishing letters and numbers as the Lender may determine, but which
     at such time has not been completed as the payee or accepted by the Lender.

     "DRAWING" means the creation and purchase of Bankers' Acceptances by the
     Lender pursuant to Article 4.

     "DRAWING DATE" means any Business Day fixed for a Drawing pursuant to
     Section 4.3.

     "DRAWING NOTICE" has the meaning specified in Section 4.3(1).

     "DRAWING PRICE" means, in respect of Bankers' Acceptances or Drafts to be
     purchased by the Lender, the difference between (i) the result (rounded to
     the nearest whole cent with one-half of one cent being rounded up) obtained
     by dividing the aggregate Face Amount of the Bankers' Acceptances or Drafts
     by the sum of one plus the product of (x) the Reference Discount Rate
     multiplied by (y) a fraction the numerator of which is the number of days
     in the term of maturity of the Bankers' Acceptances and the denominator of
     which is 365, and (ii) the Applicable Margin.

     "EBITDA" means, for any period Net Income increased, to the extent deducted
     in calculating Net Income, by the sum of (i) Interest Charges, (ii) all
     income taxes of the Borrower and its Restricted Subsidiaries paid or
     accrued in accordance with GAAP for such period (other than income taxes
     attributable to extraordinary, unusual or nonrecurring gains or losses or
     taxes attributable to sales or dispositions outside the normal course of
     business), (iii) Depreciation Expense, and (iv) minority interest in
     earnings of subsidiaries or any equity loss, and decreased by (v) any
     non-cash items increasing Net Income for such period, (vi) all cash
     payments during such period relating to non-cash charges which were added
     back in determining EBITDA in any prior period, and (vii) unusual or
     non-recurring non-cash charges which require an accrual of, or a reserve
     for, cash charges for any

<Page>

                                        9

     future period, all as determined on a consolidated basis in accordance with
     GAAP.

     "ELECTION NOTICE" has the meaning specified in Section 3.3(3).

     "ELIGIBLE ACCOUNTS RECEIVABLE" means amounts owing by account debtors to
     the Borrower or any Designated Restricted Subsidiary by reason of sales of
     inventory, servicing and maintaining products and rental of equipment, in
     either case, in the ordinary course of business other than accounts
     receivable which are: (i) due or unpaid more than 90 days after their due
     date and in no case longer than 120 days from the date of the original
     invoice issued by the Borrower with respect to the sale giving rise
     thereto; (ii) derived from a sale by the Borrower or such Designated
     Restricted Subsidiary not made in the ordinary course of the business or to
     a person, firm or corporation which is an Affiliate of the Borrower or any
     Designated Restricted Subsidiary; (iii) in dispute to the extent of the
     amount in dispute; (iv) subject to any right of set-off by the account
     debtor, and that account debtor has not entered into an agreement with the
     Lender with respect to set-offs; or the account debtor has disputed
     liability, or made any claim with respect to any other receivable due from
     such account debtor to the Borrower or such Designated Restricted
     Subsidiary, in which case, the receivable shall be ineligible to the extent
     of such dispute, claim, and/or set-off; (v) owed by an account debtor who
     has filed a petition for bankruptcy or any other petition for relief under
     bankruptcy, insolvency, or arrangement legislation, made an assignment for
     the benefit of creditors, or against whom any petition or other application
     for relief under bankruptcy, insolvency or arrangement legislation has been
     filed or who has failed, suspended its business operations, become
     insolvent, or suffered a receiver or a trustee in bankruptcy to be
     appointed for any of its assets or affairs; (vi) owed by an account debtor
     who is resident outside of Canada, unless (x) the sale is on Letter of
     Credit or acceptance terms acceptable to the Lender, (y) the receivables
     have been guaranteed by Export Development Corporation or otherwise covered
     by insurance on terms satisfactory to the Lender; or (z) the Lender, has a
     perfected security interest in such accounts receivable where the account
     debtor resides; (vii) arising out of a sale which is on a bill-and-hold,
     sale-and-return, sale-on-approval, consignment, or any other re-purchase or
     return basis (excluding the Borrower's policy of accepting the return of
     defective products); (viii) one which the Lender believes acting reasonably
     may not be paid by reason of the account debtor's financial inability to
     pay; (ix) owed by an account debtor who has exceeded a credit limit
     determined by the Lender acting reasonably on the basis of the credit
     policy and credit information of the Borrower or such Designated Restricted
     Subsidiary in respect of such account debtor, at any time or times
     hereafter to the extent that such receivable exceeds such

<Page>

                                       10

     limit; or (x) not subject to a duly perfected security interest in favour
     of the Lender ranking in priority to all other security interests except
     Permitted Liens;

     "ELIGIBLE INVENTORY" means at any time, the value of all of the Borrower's
     Inventory (determined on a consolidated basis, with reference to Designated
     Restricted Subsidiaries, if applicable), valued on a first-in first-out
     basis in accordance with GAAP at the lower of the Borrower's cost thereof
     or the net realizable value thereof, including inventory which has not been
     delivered to the Borrower or Designated Restricted Subsidiary, as the case
     may be, within the preceding 30 days but in respect of which payment has
     been made or the supplier has waived or lost its rights to repossession
     under the BANKRUPTCY AND INSOLVENCY ACT (Canada); provided, however, that
     none of the following categories of inventory shall be taken into account
     in determining Eligible Inventory: (i) any inventory which is not subject
     to a duly perfected security interest in favour of the Lender ranking in
     priority to all security interests, except Permitted Liens; (ii) any
     inventory which is subject to a title retention agreement in favour of the
     vendor thereof; (iii) any inventory situated outside of Canada other than
     inventory in transit to Canada; (iv) any inventory which the Lender
     believes, acting reasonably, may not have material value to the Lender if
     the Lender is required to realize thereon pursuant to the Security
     Documents; (v) inventory in the possession of sales people or customers for
     the purpose of demonstration or on loan to such Person in connection with
     the Borrower's standard sale process; (vi) inventory in the possession of
     other Persons on a consignment basis; and (vii) any inventory that is work
     in process.

     "ENVIRONMENTAL LAWS" means all applicable laws, regulations, orders,
     judgments, decisions of and agreements with a Governmental Entity and all
     other statutory requirements relating to public health or the protection of
     the environment and all authorizations, permits, consents, registrations
     and approvals issued pursuant to such laws, agreements or statutory
     requirements.

     "ENVIRONMENTAL LIABILITIES" means all liabilities imposed by, under or
     pursuant to Environmental Laws or which relate to the existence of
     contaminants on, under or about the Properties and which, in accordance
     with GAAP, must be disclosed in the consolidated financial statements of
     the Borrower.

     "EQUIVALENT CDN. $ AMOUNT" means, on any day with respect to any amount of
     U.S. Dollars, the amount of Canadian Dollars which would be required to buy
     such amount of U.S. Dollars using the wholesale rate quoted by the

<Page>

                                       11

     Lender in accordance with its normal banking practice at approximately
     12:00 noon (Toronto time) on the day.

     "EQUIVALENT U.S. $ AMOUNT" means, on any day with respect to any amount of
     Canadian Dollars, the amount of U.S. Dollars which would be required to buy
     such amount of Canadian Dollars using the wholesale rate quoted by the
     Lender in accordance with its normal banking practice at approximately
     12:00 noon (Toronto time) on the day.

     "EURODOLLAR INTEREST PERIOD" means, for each Eurodollar Rate Advance, a
     period which commences (i) in the case of the initial Eurodollar Interest
     Period, on the date the Advance is made or converted from another Type of
     Accommodation, and (ii) in the case of any subsequent Eurodollar Interest
     Period, on the last day of the immediately preceding Eurodollar Interest
     Period, and which ends, in either case, on the day selected by the Borrower
     in the applicable Borrowing Notice or Election Notice. The duration of each
     Eurodollar Interest Period shall be 1, 2, 3, 6 or 12 months (or such
     shorter or longer period as may be approved by the Lender), unless the last
     day of a Eurodollar Interest Period would otherwise occur on a day other
     than a Business Day, in which case the last day of such Eurodollar Interest
     Period shall be extended to occur on the next Business Day, or if such
     extension would cause the last day of such Eurodollar Interest Period to
     occur in the next calendar month, the last day of such Eurodollar Interest
     Period shall occur on the preceding Business Day.

     "EURODOLLAR RATE" means, for each Eurodollar Interest Period for each
     Eurodollar Rate Advance comprising part of the same Borrowing, an interest
     rate per annum equal to the average (rounded upward to the nearest whole
     multiple of 1/16 of 1% per annum) of the rates per annum which leading
     banks in the London interbank markets shall quote and offer to the Lender
     for placing deposits with the Lender in U.S. Dollars, at approximately
     10:00 a.m. (London time), two Business Days before the first day of such
     Eurodollar Interest Period, for a period comparable to the Eurodollar
     Interest Period and in an amount approximately equal to the amount of the
     Eurodollar Rate Advance.

     "EVENT OF DEFAULT" has the meaning specified in Section 10.1.

     "EXISTING LOAN AGREEMENT" means the loan agreement dated September 7, 2001
     between the Borrower and the Lender.

     "FACE AMOUNT" means (i) in respect of a BA Instrument, the amount payable
     to the holder on its maturity, and (ii) in respect of a Documentary Credit,
     the

<Page>

                                       12

     maximum amount which the issuing Person is contingently liable to pay to
     the Beneficiary.

     "FEDERAL FUNDS RATE" means, for any day, a fluctuating interest rate per
     annum equal to the weighted average of the rates on overnight United States
     Federal funds transactions with members of the Federal Reserve System
     arranged by United States Federal funds brokers, as published for the day
     (or, if the day is not a Business Day, for the preceding Business Day) by
     the Federal Reserve Bank of New York, or, if such rate is not so published
     for any day which is a Business Day, the average of the quotations for the
     day on such transactions received by the Lender from three United States
     Federal funds brokers of recognized standing selected by it.

     "FEES" means the fees payable by the Borrower under this Agreement.

     "FINANCIAL ASSISTANCE" has the meaning specified in Section 9.2(i).

     "FISCAL QUARTER" means a period of three consecutive months in each Fiscal
     Year ending on October 31, January 31, April 30 and July 31, as the case
     may be, of such year.

     "FISCAL YEAR" means, in relation to the Borrower, its financial year
     commencing on August 1 of each calendar year and ending on July 31 of the
     immediately following calendar year.

     "FOREIGN EXCHANGE COMMITMENT" means an amount not to exceed a Hedging Risk
     Exposure of US$2,500,000 or the Equivalent Cdn. $ Amount.

     "FOREIGN EXCHANGE HEDGING ARRANGEMENT" means any agreement under which the
     Lender provides foreign exchange rate protection in respect of any currency
     (other than Canadian Dollars) to the Borrower.

     "FOREIGN EXCHANGE HEDGING FACILITY" means the foreign exchange hedging
     facility to be made available to the Borrower under this Agreement for the
     purpose specified in Section 2.3(2).

     "FUNDED DEBT" means, with respect to the Borrower, the Accommodations
     Outstanding, and with respect to the Borrower and the Restricted
     Subsidiaries, all other Debt of such Persons that by its terms matures more
     than one year after the date of determination or matures within one year
     from such date but is renewable or extendible, at the option of such
     Person, to a date more than one year after such date or arises under a
     revolving credit or similar agreement that obligates the lender or lenders
     to extend credit during a period of more than one year after such date,
     including the current portion of all such Debt.

<Page>

                                       13

     "GAAP" means, at any time, with respect to the Borrower, accounting
     principles generally accepted in Canada as recommended in the Handbook of
     the Canadian Institute of Chartered Accountants at the relevant time
     applied on a consistent basis (except for changes made with the prior
     written consent of the Lender and approved by the Borrower's independent
     auditors in accordance with promulgations of the Canadian Institute of
     Chartered Accountants), and with respect to Cantel, accounting principles
     generally accepted in the United States.

     "GOODS" means tangible personal property but excluding chattel paper,
     documents of title, instruments, money and securities (as these terms are
     defined in the PERSONAL PROPERTY SECURITY ACT (Ontario) from time to time).

     "GOVERNMENTAL ENTITY" means any (i) multinational, federal, provincial,
     state, municipal, local or other government, governmental or public
     department, central bank, court, commission, board, bureau, agency or
     instrumentality, domestic or foreign, (ii) any subdivision or authority of
     any of the foregoing, or (iii) any quasi-governmental or private body
     exercising any regulatory, expropriation or taxing authority under or for
     the account of any of the above.

     "HEDGING RISK EXPOSURE" means, at any time, the greater of (i) 10% of the
     Notional Amount of any Foreign Exchange Hedging Arrangement in respect of
     any currency and (ii) any lump sum required to be paid by the Borrower as a
     deposit or as collateral pursuant to the terms of any Foreign Exchange
     Hedging Agreement.

     "INDEMNIFIED PERSON" has the meaning specified in Section 11.6(1).

     "INTEREST CHARGES" means, for any period, for the Borrower and its
     Restricted Subsidiaries, the sum of (i) the aggregate amount of interest
     expense (including imputed interest with respect to capitalized lease
     obligations) incurred during such period on a consolidated basis in
     accordance with GAAP, (ii) all capitalized interests during such period,
     (iii) all deferred charges representing capitalized interest during such
     period, (iv) the net amount payable (or less the net amount receivable) by
     the Borrower and the Restricted Subsidiaries under any interest rate cap or
     collar arrangements or similar arrangements during such period, and (v) the
     aggregate of all purchase discounts relating to the sale of accounts
     receivable in connection with any asset securitization program, all as
     adjusted to reflect the impact of proceeds received from discontinued
     operations, but excluding to the extent included in the foregoing all
     amortized costs attributable to fees and closing costs paid by the Borrower
     to the Lender in connection with the Loan Documents.

<Page>

                                       14

     "INVENTORY" means all inventory now owned or hereafter acquired by the
     Borrower or a Restricted Subsidiary, including (i) finished Goods, raw
     materials, new and unused production, packaging and shipping supplies, (ii)
     work in progress, (iii) all new and unused maintenance items, and (iv) all
     other materials and supplies on hand to be used or consumed or which might
     be used or consumed in the manufacture, packing, shipping, advertising,
     selling, or furnishing of Goods.

     "ISSUE" means an issue of a Documentary Credit by the Lender pursuant to
     Article 5.

     "LEASES" means the leases, subleases, rights to occupy and licences of real
     property to which the Borrower or any of the Restricted Subsidiaries are a
     party (i) at the date of this Agreement, as listed and described in
     Schedule ERROR! REFERENCE SOURCE NOT FOUND., or (ii) after the date of this
     Agreement as notified to the Lender pursuant to each Compliance
     Certificate, but shall exclude (iii) leases, rights and licences terminated
     in accordance with their terms (and not as the result of a default) or
     assigned or otherwise disposed of after the date of this Agreement as
     permitted by this Agreement.

     "LENDER" means National Bank of Canada, its successors and assigns.

     "LENDING LIMIT" has the meaning specified in Section 2.2(1).

     "LIBOR ADVANCES" means Eurodollar Rate Advances.

     "LIEN" means any mortgage, charge, pledge, hypothecation, security
     interest, assignment, encumbrance, lien (statutory or otherwise), title
     retention agreement or arrangement, restrictive covenant or other
     encumbrance of any nature or any other arrangement or condition that in
     substance secures payment or performance of an obligation.

     "LOAN DOCUMENTS" means this Agreement, the BA Instruments, the Security
     Documents, the Cantel Acknowledgement, the Foreign Exchange Hedging
     Arrangements entered into between the Borrower and the Lender and all other
     documents to be executed and delivered to the Lender by the Borrower and
     the Restricted Subsidiaries.

     "LOAN FACILITIES" means collectively, the Operating Facility and the
     Foreign Exchange Hedging Facility, and, in the singular, either one of
     them.

     "MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
     operations, results of operations, prospects, assets, liabilities or
     financial condition of the Borrower or any of the Restricted Subsidiaries.

<Page>

                                       15

     "MATERIAL AGREEMENTS" means the agreements listed in Schedule ERROR!
     REFERENCE SOURCE NOT FOUND. and any agreement, contract or similar
     instrument to which the Borrower or any of the Restricted Subsidiaries is a
     party or to which any of their property or assets may be subject for which
     breach, non-performance, cancellation or failure to renew could reasonably
     be expected to have a Material Adverse Effect.

     "NET INCOME" means, for any period, the net income (loss) of the Borrower
     and its Restricted Subsidiaries determined on a consolidated basis in
     accordance with GAAP.

     "NOTICE OF FOREIGN EXCHANGE HEDGING ARRANGEMENT" has the meaning specified
     in Section 6.2(1).

     "NOTIONAL AMOUNT" means the U.S. Dollar amount (or the Equivalent Cdn. $
     Amount) under any Foreign Exchange Hedging Arrangement by reference to
     which the obligations of the Borrower thereunder are determined.

     "OPERATING COMMITMENT" means, at any time, in respect of the Operating
     Facility, (i) for the period beginning on the Restatement Date and ending
     on the first anniversary of the Restatement Date (the "FIRST ANNIVERSARY"),
     up to U.S. $7,000,000;(ii) for the period beginning on the first day
     following the First Anniversary and ending on the second anniversary of the
     Restatement Date (the "SECOND ANNIVERSARY"), up to U.S.$6,000,000; (iii)
     for the period beginning on the first day following the Second Anniversary
     and ending on the Repayment Date, up to U.S.$5,000,000; in each case, as
     reduced pursuant to Article 2;

     "OPERATING FACILITY" means the operating revolving credit facility to be
     made available to the Borrower under this Agreement for the purposes
     specified in Section 2.3(1).

     "ORIGINAL CURRENCY" has the meaning specified in Section 11.10(1).

     "OTHER CURRENCY" has the meaning specified in Section 11.10(1).

     "OTHER TAXES" has the meaning specified in Section 11.7(2).

     "PARENT EVENT OF DEFAULT" means the occurrence of an Event of Default (as
     defined in the Parent Facility) pursuant to the Parent Facility.

     "PARENT FACILITY" means, collectively, the credit facilities provided to
     Cantel by a syndicate of U.S. banks pursuant to a loan agreement dated as
     of September 7, 2001 among Cantel, the Lenders named therein, Fleet
     National Bank, as Administrative Agent and PNC Bank, National Association,
     as

<Page>

                                       16

     Documentation Agent, as amended by the first amendment dated as of the date
     hereof, as such agreement is further amended, supplemented, restated or
     replaced from time to time.

     "PAYMENT ACCOUNT" means an account maintained by the Borrower with the
     Lender.

     "PERMITTED ACQUISITION" means (i) the Biolab Acquisition, and (ii) an
     acquisition by the Borrower or any Restricted Subsidiary of (a) the assets
     constituting a business, division or product line of any Person engaging in
     a business relating to the Business who is not a Related Party, or (b) 100%
     of the issued and outstanding shares or ownership interests in the capital
     of such Person, and which satisfies the following conditions:

     (a)  No Default or Event of Default exists at the time of the acquisition
          or would exist after giving effect to it;

     (b)  The total cash and non-cash consideration to be paid in connection
          with the acquisition (including assumed liabilities) is not in excess
          of U.S. $1,000,000;

     (c)  The Borrower establishes to the satisfaction of the Lender pro-forma
          compliance with the covenants contained in Article 9 after giving
          effect to the acquisition;

     (d)  The acquisition could not reasonably be expected to cause or result in
          a Material Adverse Effect or result in or create any material
          contingent liabilities which are not in the ordinary course of
          business (including contingent environmental, tax or other contingent
          obligations).

     "PERMITTED LIENS" means:

     (a)  Liens for taxes, assessments and governmental charges due and being
          contested in good faith (and for the payment of which adequate
          provision has been made) by appropriate proceedings;

     (b)  landlord Liens, construction Liens, and mechanics', workers',
          repairers' or other like possessory Liens, arising in the ordinary
          course of business for amounts the payment of which is either not
          delinquent or is being contested in good faith (and for the payment of
          which adequate provision has been made) by appropriate proceedings;

     (c)  Liens arising out of judgments or awards with respect to which at the
          time an appeal or proceedings for review is being prosecuted in good
          faith (and for the payment of which adequate provision has been

<Page>

                                       17

          made) by appropriate proceedings and with respect to which there shall
          have been secured a stay of execution pending such appeal or
          proceeding for review;

     (d)  servitudes, easements, restrictions, rights-of-way and other similar
          rights in real or immovable property or any interest therein, provided
          the same are not of such nature as to materially adversely affect the
          use of the property subject thereto by the Borrower;

     (e)  Liens for taxes due but for which notice of assessment has not been
          given;

     (f)  Liens granted pursuant to the Loan Documents;

     (g)  Purchase Money Mortgages provided that the indebtedness secured
          pursuant to such Purchase Money Mortgages shall not, in the aggregate,
          exceed at any time Cdn. $150,000, and the renewal, extension or
          refinancing of any such Purchase Money Mortgages provided that the
          indebtedness secured thereby and the security therefor are not
          increased thereby in excess of 110%;

     (h)  Liens granted pursuant to operating leases provided that such
          operating leases are permitted pursuant to Section 9.2(m);

     (i)  leases on property pursuant to arrangements made with any Person
          whereby property is sold or transferred to such Person and a lease is
          entered into with respect to the property so sold or transferred or
          other property substantially the same as such property so sold or
          transferred provided that the indebtedness secured thereby shall not,
          in the aggregate, exceed Cdn$150,000; and

     (j)  Liens, the existence of which have been consented to by the Lender and
          which Liens are set out in Schedule ERROR! REFERENCE SOURCE NOT FOUND.
          and inchoate Liens for amounts not yet due.

     "PERSON" means a natural person, partnership, corporation, joint stock
     company, trust, unincorporated association, joint venture or other entity
     or Governmental Entity, and pronouns have a similarly extended meaning.

     "PRIORITY ACCOUNTS PAYABLE" means, at any time, the amount owed by the
     Borrower or any of the Restricted Subsidiaries or which they have an
     obligation to remit to a Governmental Entity pursuant to any applicable
     law, rule or regulation in respect of pension fund obligations,
     unemployment insurance, goods and services taxes, sales taxes and other
     taxes payable or to be remitted or withheld, workers' compensation and
     other like charges and

<Page>

                                       18

     demands, in respect of which any Governmental Entity may claim a security
     interest, trust claim or other claim ranking or capable of ranking in
     priority to the Security.

     "PROPERTIES" means, collectively, the real properties forming the subject
     matter of the Leases.

     "PURCHASE MONEY MORTGAGE" means any security interest charging property
     (other than accounts receivable or Inventory) acquired by the Borrower or a
     Restricted Subsidiary, which is granted or assumed by the Borrower or a
     Restricted Subsidiary or which arises by operation of law in favour of the
     transferor concurrently with and for the purpose of the acquisition or
     lease of such property, in each case where (i) in the case of an
     acquisition of property, the principal amount secured by the security
     interest is not in excess of 100% of the purchase price (after any
     post-closing adjustment) of the property acquired, and (ii) in the case of
     a lease of property, the amount secured by the security interest is not in
     excess of the value of the asset leased, and (iii) such security interest
     extends only to the property acquired or leased and its proceeds.

     "REFERENCE DISCOUNT RATE" means, in respect of any Bankers' Acceptances or
     Drafts to be purchased by the Lender pursuant to Article 4, the arithmetic
     average of the discount rates (calculated on an annual basis and rounded to
     the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded
     up) quoted by the Lender at 9:30 a.m. (Toronto time) as the discount rate
     at which the Lender would purchase, on the relevant Drawing Date, its own
     Bankers' Acceptances or Drafts having an aggregate Face Amount equal to and
     with a term to maturity the same as the Bankers' Acceptances or Drafts to
     be acquired by the Lender on the Drawing Date. If the discount rates cannot
     be calculated on any Business Day on which they are required to be
     calculated the applicable discount rate shall be the CDOR rate in effect on
     such day for bankers' acceptances having a term to maturity the same as the
     applicable Bankers' Acceptances.

     "RELATED PARTY" means in respect of the Borrower or any Restricted
     Subsidiary (i) a Person which alone or in combination with others holds a
     sufficient number of securities or has contractual rights sufficient to
     affect materially the control of the Borrower or Restricted Subsidiary,
     (ii) a Person in respect of which a Person referred to in Section (i) alone
     or in combination with others holds a sufficient number of securities or
     has contractual rights sufficient to affect materially its control, (iii) a
     Person in respect of which the Borrower or Restricted Subsidiary alone or
     in combination with others holds a sufficient number of securities or has
     contractual rights sufficient to affect materially its control, (iv) a
     Person who beneficially owns, directly or

<Page>

                                       19

     indirectly, voting securities of the Borrower or Restricted Subsidiary or
     who exercises control or direction over voting securities of the Borrower
     or Restricted Subsidiary or a combination of both carrying more than 10% of
     the voting rights attached to all voting securities of the Borrower or
     Restricted Subsidiary for the time being outstanding, (v) a director or
     senior officer of the Borrower, Restricted Subsidiary or related party of
     the Borrower or Restricted Subsidiary, or (vi) an Affiliate of any of the
     foregoing.

     "REPAYMENT DATE" means, in respect of the repayment of all Accommodations
     made under each of the Operating Facility and the Foreign Exchange Hedging
     Facility, September 7, 2006.

     "RESTATEMENT DATE" means the date of execution of this Agreement.

     "RESTRICTED SUBSIDIARIES" means any subsidiary, including any subsidiary
     acquired pursuant to, or incorporated for the purposes of, a Permitted
     Acquisition, which may from time to time become a guarantor of the
     obligations of the Borrower under this Agreement and the other Loan
     Documents provided that it has delivered to the Lender a guarantee and
     security over all of its property and assets together with a favourable
     opinion of counsel, all in form and substance satisfactory to the Lender.

     "SECURITY" means, at any time, the encumbrances in favour of the Lender, in
     the assets and properties of the Borrower or the Restricted Subsidiaries
     securing their obligations under this Agreement and the other Loan
     Documents.

     "SECURITY DOCUMENTS" means the agreements described as such in Schedule
     ERROR! REFERENCE SOURCE NOT FOUND. and any other security granted to the
     Lender as security for the obligations of the Borrower and the Restricted
     Subsidiaries under this Agreement and the other Loan Documents.

     "SUBSIDIARY" has the meaning specified in the BUSINESS CORPORATIONS ACT
     (Ontario) on the date of this Agreement.

     "SUBSIDIARIES" means the subsidiaries of the Borrower including, without
     limitation, those identified as such in Schedule ERROR! REFERENCE SOURCE
     NOT FOUND..

     "TANGIBLE NET WORTH" means, at any time, with respect to the Borrower and
     its Restricted Subsidiaries, (i) the total shareholders' equity (including
     stated capital or equivalent account in respect of issued and outstanding
     shares, retained earnings and contributed surplus, but excluding any
     foreign exchange adjustment, treasury shares and any subscribed but
     unissued shares) determined as of such time on a consolidated basis in
     accordance with

<Page>

                                       20

     GAAP, increased by (ii) deferred taxes, and decreased by (iii) amounts
     attributable to that portion of any outstanding shares which, by their
     terms (or by the terms of any security into which they are convertible or
     for which they are exchangeable), or upon the happening of any event,
     mature or are redeemable pursuant to a sinking fund obligation or
     otherwise, or are redeemable for cash or debt at the sole option of the
     holder on or prior to the Repayment Date, (iv) deferred charges; (v) loans
     to officers, directors or shareholders; (vi) intercompany advances; (vii)
     goodwill and (viii) any other assets of intangible value.

     "TAXES" has the meaning specified in Section 11.7(1).

     "TOTAL LIABILITIES" means at any time in respect of the Borrower and its
     Restricted Subsidiaries the aggregate of all indebtedness, liabilities and
     obligations of the Borrower and its Restricted Subsidiaries on a
     consolidated basis which, in accordance with GAAP would be included in
     determining total liabilities as shown in the liability section of the
     balance sheet of the Borrower and its Restricted Subsidiaries, including,
     without limitation, (i) all indebtedness for borrowed money including
     borrowings of commodities, bankers' acceptances, letters of credit or
     letters of guarantee, (ii) all indebtedness for the deferred purchase price
     of property or services other than for goods and services purchased in the
     ordinary course of business paid for and in accordance with customary
     practice, (iii) indebtedness created or arising under any conditional sale
     or other title retention agreement with respect to property acquired by the
     Person (even though the rights and remedies of the seller or lender under
     such agreement in the event of default are limited to repossession or sale
     of such property), (iv) all current liabilities of such Person represented
     by a note, bond, debenture or other evidence of debt, (v) all obligations
     under leases which have been or should be, in accordance with GAAP,
     recorded as capital leases, (vi) the aggregate amount at which any shares
     in the capital of the Person which are retractable at the option of the
     holder may be retracted provided all conditions precedent for such
     retraction have been satisfied, and (vii) the maximum amount of all Total
     Liabilities of the kind referred to in (i) to (v) of this definition which
     is directly or indirectly guaranteed by the Borrower or a Restricted
     Subsidiary or which the Borrower has agreed (contingently or otherwise) to
     purchase or otherwise acquire, or in respect of which the Borrower or a
     Restricted Subsidiary has otherwise assured a creditor or other Person
     against loss (eliminating from such calculation where it is duplicative of
     another Person's debt, any guarantee by a Restricted Subsidiary of the
     Borrower's or another Restricted Subsidiary's obligations or any guarantee
     by the Borrower of the obligation of a Restricted Subsidiary), provided
     that there shall be subtracted therefrom (viii) deferred income taxes.

<Page>

                                       21

     "UNRESTRICTED SUBSIDIARIES" has the meaning specified in Section 9.2(k).

     "UNUSED OPERATING COMMITMENT" means, as of any date, the Operating
     Commitment less the Accommodations Outstanding at such time.

     "U.S. DOLLARS" AND "U.S. $" means lawful money of the United States of
     America.

     "UTILIZATION" has the meaning specified in Section 3.2(2).

SECTION 1.2    GENDER AND NUMBER.

     Any reference in the Loan Documents to gender includes all genders and
words importing the singular number only include the plural and vice versa.

SECTION 1.3    HEADINGS, ETC.

     The provision of a Table of Contents, the division of this Agreement into
Articles and Sections and the insertion of headings are for convenient reference
only and are not to affect the interpretation of this Agreement.

SECTION 1.4    CURRENCY.

     All references in the Loan Documents to dollars, unless otherwise
specifically indicated, are expressed in Canadian currency.

SECTION 1.5    CERTAIN PHRASES, ETC.

     In any Loan Document (i) (y) the words "including" and "includes" mean
"including (or includes) without limitation" and (z) the phrase "the aggregate
of", "the total of", "the sum of", or a phrase of similar meaning means "the
aggregate (or total or sum), without duplication, of", and (ii) in the
computation of periods of time from a specified date to a later specified date,
unless otherwise expressly stated, the word "from" means "from and including"
and the words "to" and "until" each mean "to but excluding".

SECTION 1.6    ACCOUNTING TERMS.

     All accounting terms not specifically defined in this Agreement shall be
interpreted in accordance with GAAP.

SECTION 1.7    CALCULATIONS WITH RESPECT TO PERMITTED ACQUISITIONS.

     If the Borrower or any Restricted Subsidiary has made a Permitted
Acquisition during a period relevant to the determination of EBITDA or Interest
Charges then:

     (a)  EBITDA and Interest Charges shall be calculated on a consolidated
          basis from the date of the Permitted Acquisition; and

<Page>

                                       22

     (b)  Any indebtedness of any description incurred or assumed by the
          Borrower or any Restricted Subsidiary in connection with the Permitted
          Acquisition, or any indebtedness of any Person acquired, shall be
          deemed to have been so incurred, assumed or acquired on the date of
          the Permitted Acquisition.

SECTION 1.8    INCORPORATION OF SCHEDULES.

     The schedules attached to this Agreement shall, for all purposes of this
Agreement, form an integral part of it.

SECTION 1.9    CONFLICT.

     The provisions of this Agreement prevail in the event of any conflict or
inconsistency between its provisions and the provisions of any of the other Loan
Documents.

SECTION 1.10   CERTIFICATES.

     Any certificate required by the terms of this Agreement or any other Loan
Document to be given by an officer of the Borrower for and on behalf of the
Borrower or any Restricted Subsidiary shall be given without any personal
liability on the part of the officer giving the certificate.

                                    ARTICLE 2
                                  LOAN FACILITY

SECTION 2.1    AVAILABILITY.

     The Lender agrees, on the terms and conditions of this Agreement, to make
Accommodations to the Borrower in accordance with the Operating Commitment and
the Foreign Exchange Commitment. Accommodations shall be made available as (i)
Advances pursuant to Article 3, (ii) Bankers' Acceptances pursuant to Article 4,
(iii) Documentary Credits pursuant to Article 5 and (iv) as Foreign Exchange
Hedging Arrangements pursuant to Article 6.

SECTION 2.2    COMMITMENTS AND FACILITY LIMITS.

(1)  The Accommodations Outstanding to the Lender under the Operating Facility
     shall not at any time exceed the lesser of (i) the Operating Commitment,
     and (ii) the Borrowing Base (the "LENDING LIMIT"). The Foreign Exchange
     Commitment limit is specified in Section 6.1(2).

(2)  The Operating Facility shall revolve and no payment under the Operating
     Facility shall reduce the Operating Commitment.

<Page>

                                       23

(3)  A conversion from one Type of Accommodation or Advance to another Type of
     Accommodation or Advance shall not constitute a repayment or prepayment.

SECTION 2.3    USE OF PROCEEDS.

(1)  The Borrower shall use the proceeds of Accommodations under the Operating
     Facility only for its operating requirements and for Permitted
     Acquisitions, provided that up to U.S.$7,000,000 of such proceeds may be
     used for the Biolab Acquisition.

(2)  The Borrower shall use the proceeds of Accommodations under the Foreign
     Exchange Hedging Facility for its foreign exchange trading requirements
     only.

SECTION 2.4    MANDATORY REPAYMENTS AND REDUCTIONS OF COMMITMENTS.

     The Borrower shall repay (subject to Section 10.1) the Accommodations
Outstanding under the Operating Facility, together with all accrued interest and
Fees and all other amounts payable in connection with the Operating Facility on
the Repayment Date. On each reduction of the Commitment, the Borrower will repay
the amount, if any, by which the Accommodations Outstanding under the relevant
Loan Facility exceed the Commitment, as reduced.

SECTION 2.5    MANDATORY PREPAYMENT WHERE BORROWING BASE DEFICIENCY.

(1)  If, on any day, the Accommodations Outstanding under the Operating Facility
     exceed the Lending Limit (based on the most recently delivered Borrowing
     Base Certificate and the Equivalent Cdn. $ Amount of the Accommodations
     Outstanding in U.S. Dollars on that day), the Borrower shall on that day
     (i) prepay Borrowings, or (ii) pay such amount to the Lender and
     irrevocably authorize and direct the Lender to apply such payment to
     Eurodollar Rate Advances or as a repayment of the Borrower's reimbursement
     obligation in respect of any Drawings or Issues on the next maturity date;
     such that the Accommodations Outstanding, after giving effect to the
     payment, do not exceed the Lending Limit, and thereafter (iii) deliver,
     upon request by the Lender, within two days of such disclosure or knowledge
     on a daily basis a Borrowing Base Certificate for the next week and,
     thereafter, on a weekly basis for the next month.

(2)  The Borrower may, upon receipt of written consent from the Lender,
     designate in writing from time to time a Restricted Subsidiary as a
     participant in the calculation of the Borrowing Base (a "DESIGNATED
     RESTRICTED SUBSIDIARY") with a view to increasing the amount of Eligible
     Accounts Receivable and Eligible Inventory supporting the availability of
     Accommodations under this Agreement. The Borrower shall cause each

<Page>

                                       24

     Designated Restricted Subsidiary to execute and deliver to the Lender in
     such form as may be acceptable to the Lender and its counsel, (i) an
     unconditional guarantee of the obligations of the Borrower to the Lender,
     (ii) Security (subject only to the Permitted Liens listed in Sections (i)
     through (vii) of the definition) supporting such guarantee and registered
     in those jurisdictions which the Lender and its counsel determine is
     appropriate, and (iii) a favourable legal opinion or opinions of counsel to
     the Borrower and the Designated Restricted Subsidiary as to the
     enforceability of the guarantee and Security and the registration thereof.

(3)  Upon receipt of a designation as provided for in Section 2.5(2) and the
     granting of the Security and delivery of the documents and opinions
     contemplated by Section 2.5(2), the Restricted Subsidiary will become a
     Designated Restricted Subsidiary for purposes of this Agreement.

(4)  The Borrower shall, from time to time until payment in full of the Loan
     Facilities and the termination of this Agreement, within ten days following
     the receipt by the Borrower of any payment in excess of $25,000 of proceeds
     of any insurance required to be maintained pursuant to Section 9.1(j) on
     account of each separate loss, damage or injury to any part of the
     Collateral (unless the Borrower shall have insurance on a replacement cost
     basis and substantially all of such proceeds or an amount not less than
     such proceeds shall have been expended or committed by the Borrower for the
     repair or replacement of such property and the Borrower shall have
     furnished to the Lender evidence satisfactory to the Lender of such
     expenditure or commitment or unless the Lender may otherwise agree with the
     Borrower upon the presentation of a replacement plan reasonably
     satisfactory to the Lender) apply the proceeds to the Loan Facilities in
     the case of business interruption insurance and insurance relating to
     Current Assets.

SECTION 2.6    OPTIONAL PREPAYMENTS AND REDUCTIONS OF COMMITMENTS.

     If the Borrower has, upon the number of Business Days' notice to the Lender
specified in Schedule ERROR! REFERENCE SOURCE NOT FOUND. delivered a notice to
the Lender stating the proposed date and aggregate principal amount of any
prepayment of Accommodations Outstanding or reduction of the Operating
Commitment, it shall, on that date, pay to the Lender the amount, if any, by
which the Accommodations Outstanding under the Operating Facility exceed the
proposed reduced Operating Commitment. Each partial prepayment or reduction
shall be in an aggregate principal amount of U.S. $50,000 or an integral
multiple of such amount in the case of Accommodations denominated in U.S.
Dollars, and in an aggregate principal amount of the equivalent or in an
integral multiple of such amount in the case of Accommodations denominated in
Canadian Dollars. The Borrower shall prepay (i) a Eurodollar Rate Advance only
on the last day of the

<Page>

                                       25

Eurodollar Interest Period applicable to it, and (ii) the amount of any Drawing
only on the maturity date for the relevant BA Instrument.

SECTION 2.7    CHANGES TO APPLICABLE MARGINS.

(1)  The changes in the interest rates contemplated in the definitions of
     Applicable Margin shall be effective on the first day of the month
     following the end of the Fiscal Quarter with respect to which the
     Compliance Certificate contemplated under Section 9.1 is required to be
     delivered.

(2)  Upon the occurrence and during the continuance of a Default or an Event of
     Default, each of the Applicable Margins shall revert to the highest rates
     provided for in this Agreement.

(3)  If the Lender believes, in good faith, that the financial condition of the
     Borrower or any Restricted Subsidiary has deteriorated so as to result in
     the most recently delivered Compliance Certificate being inaccurate in any
     material respect, then, at the request of the Lender, the Borrower shall
     promptly appoint a consultant from a nationally recognized accounting firm
     acceptable to the Lender at the Borrower's expense. The consultant will be
     given the full and complete cooperation of the Borrower including
     unrestricted access to the property, assets, documents and books and
     records of, or related to, the Borrower's and the Restricted Subsidiaries'
     respective businesses. The Lender may, on the basis of the consultant's
     report, adjust the Applicable Margins in accordance with the
     recommendations set forth in the report.

SECTION 2.8    FEES.

(1)  The Borrower shall pay to the Lender a transaction fee in the amount of
     U.S. $35,000 on the Restatement Date.

(2)  The Borrower shall pay to the Lender standby fees from the Restatement Date
     until the Repayment Date, payable monthly in arrears on the last Business
     Day of each month, commencing [DATE], and on the Repayment Date on the
     average daily Unused Operating Commitment at a rate per annum equal to the
     percentage per annum determined by reference to the table set forth below
     on the basis of the ratio of Cantel's Consolidated Debt to EBITDA:

<Table>
<Caption>
      CONSOLIDATED DEBT TO EBITDA RATIO                                STANDBY FEE
      <S>                                                                  <C>
      Greater than 2.0 to 1.0                                              0.50%

      Greater than 1.75 to 1.0                                             0.50%
      but less than or equal to 2.0 to 1.0

      Greater than 1.50 to 1.0                                             0.40%
</Table>

<Page>

                                       26

<Table>
<Caption>
      CONSOLIDATED DEBT TO EBITDA RATIO                                STANDBY FEE
      <S>                                                                  <C>
      but less than or equal to 1.75 to 1.0

      Greater than 1.00 to 1.0                                             0.35%
      but less than or equal to 1.50 to 1.0

      Equal to or Less than 1.0 to 1.0                                     0.30%
</Table>

     The ratio of Cantel's Consolidated Debt to EBITDA shall be determined and
     adjusted in the same manner as it is for purposes of the Applicable Margin.

SECTION 2.9    PAYMENTS UNDER THIS AGREEMENT.

(1)  Unless otherwise expressly provided in this Agreement, the Borrower shall
     (i) make any payment required to be made by it to the Lender by depositing
     the amount of the payment to the relevant Borrower's Account not later than
     10:00 a.m. (Toronto time) on the date the payment is due, and (ii) provide
     to the Lender, upon the number of Business Days' notice to the Lender
     specified in Schedule ERROR! REFERENCE SOURCE NOT FOUND. a notice of
     repayment which shall be irrevocable and binding on the Borrower and shall
     specify (x) the date of repayment, and (y) the Type and amount of
     Accommodation to be repaid. The Borrower shall make each such payment (iii)
     in Canadian Dollars, if the Accommodation was originally made in or has
     been converted to Canadian Dollars, and (iv) in U.S. Dollars, if the
     Accommodation was originally made in or has been converted to U.S. Dollars.

(2)  Unless otherwise expressly provided in this Agreement, the Lender shall
     make Accommodations and other payments to the Borrower under this Agreement
     by crediting the relevant Borrower's Account (or causing the Borrower's
     Account to be credited) with the amount of the payment not later than 1:00
     p.m. (Toronto time) on the date the payment is to be made.

(3)  The Borrower authorizes the Lender, if and to the extent payment owed to
     the Lender by the Borrower is not made when due, to charge from time to
     time any due amount against any or all of the Borrower's accounts with the
     Lender.

SECTION 2.10   APPLICATION OF PAYMENTS AND PREPAYMENTS.

(1)  All amounts received by the Lender from or on behalf of the Borrower and
     not previously applied pursuant to this Agreement shall be applied by the
     Lender as follows: (i) first, in reduction of the Borrower's obligation to
     pay any unpaid interest and any Fees which are due and owing, (ii) second,
     in reduction of the Borrower's obligation to pay any claims or losses
     referred to in Section 11.6, (iii) third, in reduction of the Borrower's
     obligation to pay any amounts due and owing on account of any unpaid
     principal amount of

<Page>

                                       27

     Advances which is due and owing, (iv) fourth, in reduction of the
     Borrower's obligation to pay any other unpaid Accommodations Outstanding
     which are due and owing, (v) fifth, in reduction of any other obligation of
     the Borrower under this Agreement and the other Loan Documents, and (vi)
     sixth, to the Borrower or such other Persons as may lawfully be entitled to
     or directed to receive the remainder.

(2)  Subject to the next following sentence, whenever any payment hereunder
     shall be stated to be due on a day other than a Business Day, such payment
     shall be made on the next succeeding Business Day, and such extension of
     time shall in such case be included in the computation of interest or Fees,
     as the case may be.

SECTION 2.11   COMPUTATIONS OF INTEREST AND FEES.

(1)  All computations of interest shall be made by the Lender taking into
     account the actual number of days occurring in the period for which such
     interest is payable and (i) if based on the Canadian Prime Rate or the Base
     Rate (Canada), on the basis of a year of 365 days, or (ii) if based on the
     Eurodollar Rate, on the basis of a year of 360 days.

(2)  All computations of Fees shall be made by the Lender on the basis of a year
     of 365 days taking into account the actual number of days (including the
     first day but excluding the last day) occurring in the period for which the
     fees are payable.

(3)  For purposes of the INTEREST ACT (Canada), (i) whenever any interest or Fee
     under this Agreement is calculated using a rate based on a year of 360 days
     or 365 days, as the case may be, the rate determined pursuant to such
     calculation, when expressed as an annual rate, is equivalent to (x) the
     applicable rate based on a year of 360 days or 365 days, as the case may
     be, (y) multiplied by the actual number of days in the calendar year in
     which the period for which such interest or fee is payable (or compounded)
     ends, and (z) divided by 360 or 365, as the case may be, (ii) the principle
     of deemed reinvestment of interest does not apply to any interest
     calculation under this Agreement, and (iii) the rates of interest
     stipulated in this Agreement are intended to be nominal rates and not
     effective rates or yields.

<Page>

                                       28

                                    ARTICLE 3
                                    ADVANCES

SECTION 3.1    ADVANCES.

     The Lender agrees, on the terms and conditions of this Agreement, to make
Advances to the Borrower under the Operating Facility from time to time on any
Business Day prior to the Repayment Date.

SECTION 3.2    PROCEDURE FOR BORROWING.

(1)  Except as provided in Section 3.2(2), each Borrowing shall be made on the
     number of days prior notice specified in Schedule ERROR! REFERENCE SOURCE
     NOT FOUND., given not later than 11:00 a.m. (Toronto time) by the Borrower
     to the Lender. Each notice of a Borrowing (a "BORROWING NOTICE") shall be
     in substantially the form of Schedule ERROR! REFERENCE SOURCE NOT FOUND.,
     shall be irrevocable and binding on the Borrower and shall specify (i) the
     requested date of the Borrowing, (ii) the Type of Advances comprising the
     Borrowing, (iii) the aggregate amount of the Borrowing, and (iv) in the
     case of a Eurodollar Rate Advance, the initial Eurodollar Interest Period.
     Each Canadian Dollar Advance Borrowing shall be in the minimum amount of
     Cdn.$50,000 and in integral multiples of the same and each U.S. Dollar
     Advance shall be in the minimum amount of U.S.$50,000 and in integral
     multiples of the same. Upon fulfilment of the applicable conditions set
     forth in Article 6, the Lender will make such funds available to the
     Borrower in accordance with Article 2.

(2)  Borrowings may be made as Canadian Prime Rate Advances or Base Rate
     (Canada) Advances on no advance notice to the Lender by utilizing or
     drawing upon (a "UTILIZATION") the Borrower's Canadian Dollar Account (in
     the case of Canadian Prime Rate Advances) or the Borrower's U.S. Dollar
     Account (in the case of Base Rate (Canada) Advances) up to a maximum
     principal amount available such that Accommodations Outstanding do not
     exceed the Lending Limit. Each Utilitization of the Borrower's Accounts in
     the principal amount utilized shall be deemed to be an Accommodation
     Outstanding as at the time such Utilization becomes outstanding.

SECTION 3.3    CONVERSIONS AND ELECTIONS REGARDING ADVANCES.

(1)  Each Advance shall initially be the Type of Advance specified in the
     applicable Borrowing Notice and shall bear interest at the rate applicable
     to that Type of Advance until (i) in the case of a Eurodollar Rate Advance,
     the end of the initial Eurodollar Interest Period specified in the
     Borrowing Notice, (ii) in the case of a Floating Rate Advance, the date on
     which the Advance is repaid in full or is changed to another Type of
     Advance pursuant to

<Page>

                                       29

     Section 3.3(2), or (iii) in the case of any Advance, it is converted to
     another Type of Accommodation pursuant to Section 3.3(2).

(2)  The Borrower may elect to (i) change any Advance to another type of Advance
     in accordance with Section 3.3(3) or convert an Advance to another type of
     Accommodation upon the number of days notice specified in Schedule ERROR!
     REFERENCE SOURCE NOT FOUND. (y) in the case of a Floating Rate Advance as
     of any Business Day, and (z) in the case of a Eurodollar Advance, as of the
     last day of the Eurodollar Interest Period applicable to the Eurodollar
     Rate Advance and in a principal amount equal to its equivalent currency
     amount (as determined by the Lender as of the date of the Accommodation
     Notice in accordance with the relevant definitions of Equivalent Cdn. $
     Amount and Equivalent U.S. $ Amount), or (ii) continue any Eurodollar Rate
     Advance for a further Eurodollar Interest Period beginning on the last day
     of the then current Eurodollar Interest Period in accordance with Section
     3.3(3).

(3)  Each election to change from one type of Advance to another type of Advance
     or to continue a Eurodollar Rate Advance for a further Eurodollar Interest
     Period shall be made on the number of days prior notice specified in
     Schedule ERROR! REFERENCE SOURCE NOT FOUND. given, in each case, not later
     than 10:30 a.m. (Toronto time) by the Borrower to the Lender. Each such
     notice (an "ELECTION NOTICE") shall be given substantially in the form of
     Schedule ERROR! REFERENCE SOURCE NOT FOUND. and shall be irrevocable and
     binding upon the Borrower. If the Borrower fails to deliver an Election
     Notice to the Lender for any Eurodollar Rate Advance as provided in this
     Section 3.3, the Eurodollar Rate Advance shall be converted (as of the last
     day of the applicable Eurodollar Interest Period) to and be outstanding as
     a Base Rate (Canada) Advance. The Borrower shall not select a Eurodollar
     Interest Period which conflicts with the definition of Eurodollar Interest
     Period in Section 1.1 or, in the opinion of the Lender, with the repayment
     schedule in Section 2.4.

SECTION 3.4    CIRCUMSTANCES REQUIRING PRIME RATE PRICING.

     If the Lender, acting reasonably, determines, which determination shall be
final, conclusive and binding upon the Borrower, and notifies the Borrower that
(i) by reason of circumstances affecting financial markets generally, deposits
of U.S. Dollars are unavailable to the Lender in Canada, (ii) adequate and fair
means do not exist for ascertaining the applicable interest rate on the basis
provided in the definition of Eurodollar Rate or Base Rate (Canada), as the case
may be, (iii) the making or continuation of any U.S. Dollar Advances has been
made impracticable or unlawful (y) by the occurrence of a contingency (other
than a mere increase in rates payable by the Lender to fund the Advances) which
materially adversely affects the funding of the Operating Facility at any
interest rate computed on the basis of the

<Page>

                                       30

Eurodollar Rate or the Base Rate (Canada), as the case may be, or (z) by reason
of a change since the date of this Agreement in any applicable law, order,
treaty or official direction, or in the interpretation thereof by any
Governmental Entity affecting the Lender, or financial markets or institutions
generally and which results in the Eurodollar Rate or the Base Rate (Canada), as
the case may be, no longer representing the effective cost to the Lender of
deposits in the market, then:

     (a)  The right of the Borrower to select any affected Type of Advance shall
          be suspended until the circumstances causing the suspension no longer
          exist and the Lender so notifies the Borrower;

     (b)  If any affected Type of Advance is not yet outstanding, any applicable
          Accommodation Notice shall be cancelled and the requested Advance
          shall not be made;

     (c)  If a Eurodollar Rate Advance is already outstanding at any time when
          the right of the Borrower to select Eurodollar Rate Advances is
          suspended, it and all other Eurodollar Rate Advances in the same
          Borrowing shall become Base Rate (Canada) Advances on the last day of
          the then current Interest Period (or on such earlier date as may be
          required to comply with any applicable law, rule, regulation, judgment
          or order) or, if the Borrower does not have the right to select Base
          Rate (Canada) Advances at such time, the Eurodollar Rate Advance shall
          become a Canadian Prime Rate Advance on the last day of the then
          current Eurodollar Interest Period applicable to it (or on such
          earlier date as may be required to comply with any applicable law,
          rule, regulation, judgment or order) in a principal amount equal to
          the Equivalent Cdn. $ Amount of the Eurodollar Rate Advance determined
          on the date on which the Advance becomes denominated in Canadian
          Dollars; and

     (d)  If any U.S. Dollar Advance is already outstanding at any time when the
          right of the Borrower to select U.S. Dollar Advances is suspended, it
          and all other U.S. Dollar Advances included in the same Borrowing
          shall become Canadian Prime Rate Advances (i) in the case of a
          Eurodollar Rate Advance, on the last day of the then current
          Eurodollar Interest Period (or on such earlier date as may be required
          to comply with any applicable law, rule or regulation), and (ii) in
          the case of a Base Rate (Canada) Advance, immediately, in a principal
          amount equal, in each case, to the Equivalent Cdn. $ Amount of the
          related U.S. Dollar Advance determined on the date on which the
          Advance becomes denominated in Canadian Dollars.

<Page>

                                       31

SECTION 3.5    INTEREST ON ADVANCES.

(1)  The Borrower shall pay interest on the unpaid principal amount of each
     Advance from the date of the Advance until the principal amount of the
     Advance is repaid in full, at the following rates per annum:

     (a)  If and so long as the Advance is a Canadian Prime Rate Advance, at a
          rate per annum equal at all times to the sum of the Canadian Prime
          Rate in effect from time to time plus the Applicable Margin;

     (b)  If and so long as the Advance is a Base Rate (Canada) Advance, at a
          rate per annum equal at all times to the Base Rate (Canada) in effect
          from time to time plus the Applicable Margin; and

     (c)  If and so long as the Advance is a Eurodollar Rate Advance, at a rate
          per annum equal, at all times during each Eurodollar Interest Period
          for such Eurodollar Rate Advance, to the sum of the Eurodollar Rate
          for such Eurodollar Interest Period plus the Applicable Margin.

(2)  Interest on Canadian Prime Rate Advances and Base Rate (Canada) Advances
     shall be calculated daily and payable in arrears (i) on the first Business
     Day of each month, and (ii) when the Advance becomes due and payable in
     full, is repaid, or is converted to another Type of Advance or
     Accommodation. Interest on Eurodollar Rate Advances shall be calculated and
     payable (iii) on the ninetieth day, if any, of the Eurodollar Interest
     Period, and (iv) on the last day of the Eurodollar Interest Period.

                                    ARTICLE 4
                              BANKERS' ACCEPTANCES

SECTION 4.1    ACCEPTANCES AND DRAFTS.

(1)  The Lender agrees, on the terms and conditions of this Agreement and from
     time to time on any Business Day prior to the Repayment Date to create
     Bankers' Acceptances by accepting Drafts and to purchase such Bankers'
     Acceptances in accordance with Section 4.3(2).

(2)  Each Drawing shall be in a minimum Face Amount and in integral multiples of
     the amount in Schedule ERROR! REFERENCE SOURCE NOT FOUND. and shall consist
     of the creation and purchase of Bankers' Acceptances or the purchase of
     Drafts on the same day, in each case for the Drawing Price, effected or
     arranged by the Lender in accordance with Section 4.3 and its Operating
     Commitment.

<Page>

                                       32

SECTION 4.2    FORM OF DRAFTS.

     Each Draft presented by the Borrower shall (i) be in a minimum amount of
Cdn $500,000 and in multiples of Cdn $100,000 thereafter, (ii) be dated the date
of the Drawing, and (iii) mature and be payable by the Borrower (in common with
all other Drafts presented in connection with such Drawing) on a Business Day
which occurs approximately 30, 60, 90, 120 or 180 days (or such shorter or
longer period as may be approved by the Lender) at the election of the Borrower
after the Drawing Date and on or prior to the Repayment Date and which would
not, in the opinion of the Lender, conflict with the repayment schedule set out
in Section 2.4.

SECTION 4.3    PROCEDURE FOR DRAWING.

(1)  Each Drawing shall be made on notice (a "DRAWING NOTICE") given by the
     Borrower to the Lender not later than 10:00 a.m. (Toronto time) on the
     number of days notice specified in Schedule ERROR! REFERENCE SOURCE NOT
     FOUND.. Each Drawing Notice shall be in substantially the form of Schedule
     ERROR! REFERENCE SOURCE NOT FOUND., shall be irrevocable and binding on the
     Borrower and shall specify (i) the Drawing Date, (ii) the aggregate Face
     Amount of Drafts to be accepted and purchased, and (iii) the contract
     maturity date for the Drafts.

(2)  Not later than 2:00 p.m. (Toronto time) on an applicable Drawing Date, the
     Lender shall complete one or more Drafts in accordance with the Drawing
     Notice and accept the Drafts and purchase the Bankers' Acceptances so
     created for the Drawing Price. Upon fulfilment of the applicable conditions
     set forth in ARTICLE 7, the Lender shall make funds available to the
     Borrower in accordance with Article 2.

(3)  Bankers' Acceptances purchased by the Lender may be held by it for its own
     account until the contract maturity date or sold by it at any time prior to
     that date in any relevant Canadian market in the Lender's sole discretion.

SECTION 4.4    PRESIGNED DRAFT FORMS.

(1)  To enable the Lender to create Bankers' Acceptances in the manner specified
     in this Article 4, the Borrower (i) shall supply the Lender with such
     number of Drafts as it may reasonably request, duly endorsed and executed
     on behalf of the Borrower and (ii) hereby appoints the Lender, as its
     attorney by any authorized signatory of the Lender:

     (a)  To execute, for and on behalf and in the name of the Borrower as
          drawer, and to endorse on its behalf, Drafts in a form in accordance
          with Section 4.2 and which constitute both bills of exchange for the
          purpose of the BILLS OF EXCHANGE ACT (Canada) and depository bills for
          the purpose of the DBNA;

<Page>

                                       33

     (b)  To complete the amount, date and maturity date of such Bankers'
          Acceptances; and

     (c)  To deposit such Bankers' Acceptances which have been accepted by the
          Lender with a clearing house (as defined in the DBNA);

     Provided that such acts in each case are to be undertaken by the Lender in
     accordance with instructions given to the Lender by the instructing
     Borrower as provided in Section 4.3(1).

(2)  The Lender will exercise such care in the custody and safekeeping of Drafts
     as it would exercise in the custody and safekeeping of similar property
     owned by it and will, upon request by the Borrower, promptly advise the
     Borrower of the number and designations, if any, of uncompleted Drafts held
     by it for the Borrower. The signature of any officer of the Borrower on a
     Draft may be mechanically reproduced and BA Instruments bearing facsimile
     signature shall be binding upon the Borrower as if they had been manually
     signed. Even if the individuals whose manual or facsimile signature appears
     on any BA Instrument no longer hold office at the date of signature, at the
     date of its acceptance by the Lender or at any time after such date, any BA
     Instrument so signed shall be valid and binding upon the Borrower.

SECTION 4.5    PAYMENT, CONVERSION OR RENEWAL OF BA INSTRUMENTS.

(1)  Upon the maturity of a BA Instrument, the Borrower may (i) elect to issue a
     replacement BA Instrument by giving a Drawing Notice in accordance with
     Section 4.3(1), (ii) elect to have all or a portion of the Face Amount of
     the BA Instrument converted to an Advance by giving a Borrowing Notice in
     accordance with Section 3.2, or (iii) pay, on or before 10:00 a.m. (Toronto
     time) on the maturity date for the BA Instrument, an amount in Canadian
     Dollars equal to the Face Amount of the BA Instrument (notwithstanding that
     the Lender may be the holder of it at maturity). Any such payment shall
     satisfy the Borrower's obligations under the BA Instrument to which it
     relates and the Lender shall then be solely responsible for the payment of
     the BA Instrument.

(2)  If the Borrower fails to pay any BA Instrument when due or issue a
     replacement in the Face Amount of such BA Instrument pursuant to Section
     4.5(1), the unpaid amount due and payable shall be converted to a Canadian
     Prime Rate Advance made by the Lender under the Operating Facility and
     shall bear interest calculated and payable as provided in Article 3. This
     conversion shall occur as of the due date and without any necessity for the
     Borrower to give a Borrowing Notice.

<Page>

                                       34

SECTION 4.6    CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE.

(1)  If the Lender determines in good faith, which determination shall be final,
     conclusive and binding upon the Borrower, and notifies the Borrower that,
     by reason of circumstances affecting the money market generally, there is
     no market for Bankers' Acceptances, (i) the right of the Borrower to
     request a Drawing shall be suspended until the circumstances causing a
     suspension no longer exist, and (ii) any Drawing Notice which is
     outstanding shall be cancelled and the requested Drawing shall not be made.

(2)  The Lender shall promptly notify the Borrower of the suspension of the
     Borrower's right to request a Drawing and of the termination of any
     suspension.

                                    ARTICLE 5
                               DOCUMENTARY CREDITS

SECTION 5.1    DOCUMENTARY CREDITS.

     The Lender agrees, on the terms and conditions of this Agreement, to issue
Documentary Credits under the Operating Facility only for the account of the
Borrower from time to time on any Business Day prior to the Repayment Date upon
execution of the Lender's prevailing standard form documentation in relation
thereto, including the applicable application and indemnity.

SECTION 5.2         REIMBURSEMENTS OF AMOUNTS DRAWN.

     If the Borrower fails to pay to the Lender the amount drawn under any
Documentary Credit, the unpaid amount due and payable shall be converted
automatically as of such date, and without the Borrower having to give any
Borrowing Notice pursuant to Section 3.2, to (i) a Canadian Prime Rate Advance,
in the case of a Documentary Credit denominated in Canadian Dollars, and (ii) a
Base Rate (Canada) Advance, in the case of a Documentary Credit denominated in
U.S. Dollars, in each case under the Operating Facility.

SECTION 5.3    FEES.

(1)  The Borrower shall pay to the Lender a Fee in respect of each Documentary
     Credit equal to 1.2% per annum of the Face Amount (and if outstanding in
     U.S. Dollars, on the the Equivalent Cdn. $ Amount of its Face Amount), in
     each case, for the period during which the Documentary Credit is
     outstanding. Such Fee shall be calculated on a per annum basis on the basis
     of the number of days that such Drawing Credit will be outstanding and
     payable on the date of issue of a Documentary Credit in the currency in
     which the Documentary Credit is payable and shall be non-refundable.

<Page>

                                       35

(2)  The Borrower shall pay to Lender upon the issuance, amendment or transfer
     of each Documentary Credit and each drawing made under it, the Lender's
     standard and prevailing documentary and administrative charges for issuing,
     amending, transferring or drawing under, as the case may be, Documentary
     Credits of similar amount, term and risk.

SECTION 5.4    DOCUMENTARY CREDITS OUTSTANDING UPON DEFAULT.

     If any Documentary Credits are outstanding upon the occurrence of an Event
of Default, the Borrower shall immediately pay to the Lender an amount (the
"DOCUMENTARY CREDIT DEPOSIT AMOUNT") equal to the undrawn principal amount of
the Documentary Credits. The Documentary Credit Deposit Amount shall be held by
the Lender in an interest bearing account to be applied on any Drawing by a
Beneficiary. If no Drawing is made in respect of a Documentary Credit prior to
its expiry date, the Documentary Credit Deposit Amount applicable thereto and
any accrued interest thereon, or such part thereof as has not been paid out,
shall be returned to the Borrower promptly following the expiry or cancellation
of the Documentary Credit.

                                    ARTICLE 6
                           FOREIGN EXCHANGE CONTRACTS

SECTION 6.1    FOREIGN EXCHANGE HEDGING CONTRACTS.

(1)  Subject to and on the terms and conditions of this Agreement, the Lender
     agrees to provide Foreign Exchange Hedging Arrangements on terms consistent
     with its practice from time to time.

(2)  The aggregate Notional Amount of all Foreign Exchange Hedging Arrangements
     outstanding at any time shall not exceed the Foreign Exchange Commitment.

(3)  For the purpose of determining the Lender's Accommodation in connection
     with Foreign Exchange Hedging Arrangements entered into by it, until the
     Lender is repaid all amounts due and payable to it under the Foreign
     Exchange Hedging Arrangement or makes an Advance pursuant to Section 6.5,
     the Lender shall be deemed to have made an Accommodation in an amount equal
     to the Hedging Risk Exposure in respect of any such Foreign Exchange
     Hedging Arrangements entered into by it.

SECTION 6.2    NOTICE OF HEDGING ARRANGEMENTS.

(1)  The provision of Foreign Exchange Hedging Arrangements shall be made on
     notice given to the Lender not later than 11:00 a.m. on the same day as
     issue (or such longer period as may be required by the Lender) which shall
     give the Lender notice of the proposed Foreign Exchange Hedging
     Arrangements to

<Page>

                                       36

     be entered into by the Borrower. Each such notice (a "NOTICE OF FOREIGN
     EXCHANGE HEDGING ARRANGEMENT") shall be given in substantially the form of
     Schedule ERROR! REFERENCE SOURCE NOT FOUND., and shall specify therein (i)
     the Notional Amount of each Foreign Exchange Hedging Arrangement; and (ii)
     the maturity or expiry date of the Foreign Exchange Hedging Arrangement.

(2)  The Borrower shall not request the provision of Foreign Exchange Hedging
     Arrangements the maturity date of which would be (i) more than 365 days
     after their issuance or (ii) subsequent to the Repayment Date.

SECTION 6.3    INDEMNIFICATION.

     The Borrower hereby agrees to indemnify and hold harmless the Lender from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable legal fees and expenses) which the
Lender may incur or be subject to as a consequence of the provision of any
Foreign Exchange Hedging Arrangements, other than for damages suffered or
incurred as a result of the gross negligence or wilful misconduct of the Lender.

SECTION 6.4    OBLIGATIONS ABSOLUTE.

     The obligation of the Borrower to reimburse the Lender for amounts payable
under the Foreign Exchange Hedging Arrangements entered into pursuant to this
Article 6 shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement and the Foreign Exchange Hedging
Arrangement in all circumstances, including, without limitation, (i) any lack of
validity or enforceability of any Foreign Exchange Hedging Arrangement; (ii) the
existence of any claim, set-off, defence or other right which the Borrower may
have at any time against the Lender or any other Person, whether in connection
with this Agreement, the Loan Documents, the transactions contemplated herein
and therein or any unrelated transaction; or (iii) the fact that a Default or
Event of Default shall have occurred and be continuing.

SECTION 6.5    DEEMED ADVANCES.

(1)  The Lender shall notify the Borrower on or before the date on which any
     Foreign Exchange Hedging Arrangement becomes due and the Borrower shall
     deposit in the Payment Account an amount, in same day funds, equal to the
     amount due and payable by the Borrower under such Foreign Exchange Hedging
     Arrangement.

(2)  Unless (i) prior to 11:00 a.m. on the Business Day immediately prior to the
     maturity date of any Foreign Exchange Hedging Arrangement the Borrower
     notifies the Lender that it intends to reimburse the Lender for the amount
     due and payable by the Borrower under such Foreign Exchange Hedging

<Page>

                                       37

     Arrangement and (ii) on such maturity date, the Borrower shall have made
     payment to the Lender for the amount due and payable under such Foreign
     Exchange Hedging Arrangement in same day funds equal to the amount due and
     payable under such Foreign Hedging Exchange Arrangement, then (iii) a
     request shall be deemed to have been given by the Borrower to the Lender
     requesting the Lender to make a Base Rate (Canada) Advance in respect of
     Foreign Exchange Hedging Arrangements on the date on which the amount under
     any Foreign Exchange Hedging Arrangement is due and payable by the Borrower
     thereunder, in an amount equal to the lesser of the Hedging Risk Exposure
     under such Foreign Exchange Hedging Arrangement and the amount due and
     payable under such Foreign Exchange Hedging Arrangement, and (iv) on the
     date such Foreign Exchange Hedging Arrangement is due and payable the
     Lender shall make such Base Rate (Canada) Advance (notwithstanding that the
     making of such Advance would cause the Lending Limit to be exceeded) and
     the Lender shall apply the proceeds thereof to the reimbursement of the
     Lender for the amount due and payable under such Foreign Exchange Hedging
     Arrangement.

(3)  The Borrower shall, notwithstanding the provisions of Section 6.5(2) and in
     addition to its obligations thereunder, pay to the Lender on the maturity
     date of any Foreign Exchange Hedging Arrangement all amounts owing to the
     Lender in excess of the amount in respect of the Hedging Risk Exposure paid
     to the Lender pursuant to Section 6.5(2).

SECTION 6.6    REPAYMENTS.

(1)  If the Borrower shall be required to repay the Accommodations Outstanding
     pursuant to Article 2, 4, 5 or 10 then the Borrower shall pay to the
     Lender, to the extent required pursuant thereto and in the amount provided
     therein, an amount equal to the Lender's contingent liability in respect of
     (i) any Foreign Exchange Hedging Arrangement outstanding hereunder; and
     (ii) any Foreign Exchange Hedging Arrangement which is the subject matter
     of any judicial order restricting payment by the Lender under and in
     accordance with such Foreign Exchange Hedging Arrangement or extending the
     Lender's liability under such Foreign Exchange Hedging Arrangement beyond
     the expiration date stated therein. Payment in respect of each such Foreign
     Exchange Hedging Arrangement shall be due in U.S. Dollars.

(2)  The Lender shall, with respect to any Foreign Exchange Hedging Arrangement,
     upon the later of: (a) the date on which any final and non-appealable
     order, judgment or other such determination has been rendered or issued
     either terminating the applicable judicial order or permanently enjoining
     such Lender, from paying under such Foreign Exchange Hedging Arrangement;
     and (b) the earlier of (i) the date on which either (x) the original

<Page>

                                       38

     counterpart of such Foreign Exchange Hedging Arrangement is returned to
     such Lender for cancellation, or (y) such Lender is released from any
     further obligations in respect thereof; and (ii) the expiry (to the extent
     permitted by any applicable law) of such Foreign Exchange Hedging
     Arrangement, pay to the Borrower an amount equal to the difference between
     the amount paid to such Lender pursuant to Section 6.6(1) and the amounts
     paid by the Lender under such Foreign Exchange Hedging Arrangement.

                                    ARTICLE 7
                              CONDITIONS OF LENDING

SECTION 7.1    RESTATEMENT.

     The execution of this Agreement is subject to and conditional upon the
following conditions precedent being satisfied to the satisfaction of the
Lender:

     (a)  No Default or Event of Default has occurred or is continuing or would
          arise immediately after giving effect to or as a result of the
          execution of this Agreement;

     (b)  The execution of this Agreement will not violate any applicable law,
          order or judgment;

     (c)  The representations and warranties of the Borrower contained in
          ARTICLE 8Article 8 are true and correct;

     (d)  The Lender has received, in form, substance, scope and dated a date
          satisfactory to it and its counsel:

          (i)     Certified copies of (i) the charter documents and extracts
                  from the by-laws of the Borrower relating to the execution of
                  documents, (ii) all resolutions of the board of directors or
                  shareholders, as the case may be, of the Borrower approving
                  the borrowing and other matters contemplated by this Agreement
                  and the other Loan Documents, and (iii) a list of the officers
                  and directors authorized to sign agreements together with
                  their specimen signatures;

          (ii)    A certificate of status, compliance or like certificate with
                  respect to the Borrower issued by the appropriate Governmental
                  Entity of the jurisdiction of its incorporation and of each
                  jurisdiction in which it owns any material assets or carries
                  on any material business;

<Page>

                                       39

          (iii)   The Loan Documents specified in Schedule ERROR! REFERENCE
                  SOURCE NOT FOUND.;

          (iv)    An interlender agreement in relation to and with the Lenders
                  under the Parent Facility;

          (v)     Evidence of registration of the Security Documents in such
                  jurisdictions as the Lender may require;

          (vi)    All discharges, subordination agreements, waivers and
                  confirmations as may be required to ensure that all
                  obligations under the Loan Documents are secured by first
                  priority Liens on the property and assets of the Borrower with
                  such exceptions as are permitted pursuant to this Agreement or
                  any of the other Loan Documents;

          (vii)   Certified copies of the insurance policies required pursuant
                  to Section 9.1(j) together with certificates of insurance
                  showing the Lender as loss payee and named insured;

          (viii)  Favourable opinion of counsel to the Borrower;

          (ix)    a Borrowing Base Certificate which indicates the Borrowing
                  Base is an amount that is at least $1,000,000 in excess of the
                  Accommodations Outstanding under the Operating Facility at
                  such time after giving effect to the Accommodations under the
                  Operating Facility contemplated in connection with the Biolab
                  Acquisition;

          (x)     Such other certificates and documentation as the Lender may
                  reasonably request;

     (e)  The Lender shall have completed, to its satisfaction, a due diligence
          review of the Borrower;

     (f)  The Lender shall have reviewed confirmation that Fleet National Bank
          or another financial institution acceptable to the Lender has
          committed to providing financing to Cantel for the acquisition of Mar
          Cor Medical Services, Inc. in a manner acceptable to the Lender;

     (g)  The Lender shall have entered into definitive binding agreements
          legally sufficient to complete the Biolab Acquisition; each such
          agreement shall be satisfactory in form and substance to the Lender;
          and all such agreements shall be in full force and effect. Prior to or
          contemporaneously with the closing of the transactions contemplated

<Page>

                                       40

          by this Agreement, the Biolab Acquisition shall have closed without
          the waiver of any of its conditions precedent which are for the
          benefit of the Borrower;

     (h)  All fees and other amounts then payable under the Loan Documents have
          been paid in full;

     (i)  There has not occurred, developed or come into effect or existence any
          event, action, state, condition or major financial occurrence of
          national or international consequence or any law, judgment, order,
          inquiry or other occurrence of any nature whatsoever which materially
          adversely affects, or may materially adversely affect, the financial,
          banking (including syndication markets) or capital markets in Canada
          or the United States of America; and

     (j)  All reports to be provided to the Lender under this Agreement,
          including those reports referred to in Section 9.1(b), have been
          received by the Lender.

SECTION 7.2    CONDITIONS PRECEDENT TO ACCOMMODATIONS AND CONVERSIONS.

(1)  The obligation of the Lender to make Accommodations or otherwise give
     effect to any Accommodation Notice is subject to fulfilment of the
     following conditions at the time of any Accommodation Notice or
     Accommodation, as the case may be:

     (a)  No Default or Event of Default has occurred or is continuing or would
          arise immediately after giving effect to or as a result of the
          Accommodation or Accommodation Notice;

     (b)  The Accommodation will not violate any applicable law, judgment or
          order; and

     (c)  The representations and warranties of the Borrower contained in
          Article 8 are true and correct on the date of the Accommodation or
          Accommodation Notice as if they were made on that date.

(2)  Each of the giving of any Accommodation Notice by the Borrower and the
     acceptance by the Borrower of any Accommodation (including by way of
     utilization of the Borrower's Accounts in the manner contemplated by
     Section 3.2(2) hereof) shall be deemed to constitute a representation and
     warranty by the Borrower that, on the date of such Accommodation Notice or
     Accommodation, as the case may be, and after giving effect to it and to the
     application of any proceeds from it, the statements set forth in Section
     7.2(1)(a), Section 7.2(1)(b) and Section 7.2(1)(c) are true and correct.

<Page>

                                       41

SECTION 7.3    NO WAIVER.

     The making of an Accommodation or otherwise giving effect to any
Accommodation Notice, without the fulfilment of one or more conditions set forth
in Section 7.1 or Section 7.2, shall not constitute a waiver of any condition
and the Lender reserves the right to require fulfilment of such condition in
connection with any subsequent Accommodation Notice or Accommodation.

                                    ARTICLE 8
                         REPRESENTATIONS AND WARRANTIES

SECTION 8.1    REPRESENTATIONS AND WARRANTIES.

     The Borrower represents and warrants to the Lender, acknowledging and
confirming that the Lender is relying on such representations and warranties
without independent inquiry in entering into this Agreement and providing
Accommodations that:

     (a)  INCORPORATION AND QUALIFICATION. The Borrower is a corporation duly
          incorporated, organized and validly existing under the laws of
          Ontario. Each of the Restricted Subsidiaries is a corporation duly
          incorporated, organized and validly existing under the laws of its
          jurisdiction of incorporation. Each of the Borrower and the Restricted
          Subsidiaries is qualified, licensed or registered to carry on business
          under the laws applicable to it in all jurisdictions in which such
          qualification, licensing or registration is necessary or where failure
          to be so qualified would have a Material Adverse Effect;

     (b)  CORPORATE POWER. Each of the Borrower and the Restricted Subsidiaries
          has all requisite corporate power and authority to (i) own, lease and
          operate its properties and assets and to carry on its business as now
          being conducted by it, and (ii) enter into and perform its obligations
          under the Loan Documents to which it is a party;

     (c)  CONFLICT WITH OTHER INSTRUMENTS. The execution and delivery by the
          Borrower and each Restricted Subsidiary and the performance by each of
          them of their respective obligations under, and compliance with the
          terms, conditions and provisions of, the Loan Documents to which they
          are a party will not (i) conflict with or result in a breach of any of
          the terms or conditions of (t) its constating documents or by-laws,
          (u) any applicable law, rule or regulation having the force of law,
          (v) any contractual restriction binding on or affecting it in any
          material way or its properties, or (w) any judgment, injunction,
          determination or award which is binding on it, or (ii) result in,
          require or permit (x) the imposition of any encumbrance in, on or with
          respect to any of

<Page>

                                       42

          its assets or property (except in favour of the Lender), (y) the
          acceleration of the maturity of any Debt binding on or affecting the
          Borrower or any Restricted Subsidiary in principal amount in excess of
          $50,000, or (z) any third party to terminate or acquire rights under
          any lease or any other contract or agreement of a material nature;

     (d)  CORPORATE ACTION, GOVERNMENTAL APPROVALS, ETC. The execution and
          delivery of each of the Loan Documents by the Borrower and each
          Restricted Subsidiary and the performance by the Borrower and each
          Restricted Subsidiary of their respective obligations under the Loan
          Documents have been duly authorized by all necessary corporate action
          including, without limitation, the obtaining of all necessary
          shareholder consents. No authorization, consent, approval,
          registration, qualification, designation, declaration or filing with
          any Governmental Entity or other Person, is or was necessary in
          connection with the execution, delivery and performance of obligations
          under the Loan Documents except as are in full force and effect,
          unamended, at the date of this Agreement;

     (e)  EXECUTION AND BINDING OBLIGATION. This Agreement and the other Loan
          Documents have been duly executed and delivered by the Borrower and
          each Restricted Subsidiary which is a party thereto and constitute
          legal, valid and binding obligations of the Borrower and each such
          Restricted Subsidiary enforceable against them in accordance with
          their respective terms, subject only to any limitation under
          applicable laws relating to (i) bankruptcy, insolvency, arrangement or
          creditors' rights generally, and (ii) the discretion that a court may
          exercise in the granting of equitable remedies;

     (f)  AUTHORIZATIONS, ETC. The Borrower and each of the Restricted
          Subsidiaries possess all material authorizations, licenses, permits,
          consents, registrations and approvals of Governmental Entities
          necessary to properly conduct their respective businesses;

     (g)  OWNERSHIP AND USE OF PROPERTY. Except for Permitted Liens, each of the
          Borrower and the Restricted Subsidiaries owns its properties and
          assets with good and marketable title thereto, free and clear of all
          Liens. The Borrower and each Restricted Subsidiary owns, leases or has
          the lawful right to use all of the assets necessary for the conduct of
          their respective businesses at full operating capacity;

     (h)  PROPERTIES. Neither Borrower nor any Restricted Subsidiary owns any
          real property and neither is bound under any agreement to own or lease
          any real property in connection with its business except for the

<Page>

                                       43

          Properties. Each lease in respect of the Properties, as it applies to
          the Borrower or any Restricted Subsidiary is in good standing in all
          material respects (except as disclosed in writing to the Lender) and
          all amounts owing thereunder have been paid by the Borrower. Each
          Lease, allows (at minimum) the assignment thereof by the lessee with
          the consent of the landlord, which consent may not be unreasonably
          withheld;

     (i)  TRADEMARKS, PATENTS, ETC. The Borrower and each of the Restricted
          Subsidiaries possesses all the trademarks, trade names, copyrights,
          patents and licences necessary for the conduct of their respective
          businesses. To the best knowledge of the Borrower, neither it nor any
          of the Restricted Subsidiaries is infringing or is alleged to be
          infringing on the rights of any Person with respect to any patent,
          trademark, trade name, copyright (or any application or registration
          in respect thereof), licence, discovery, improvement, process,
          formula, know-how, data, plan, specification, drawing or the like and
          the Borrower does not know of any facts which might result in the
          assertion against the Borrower or a Restricted Subsidiary of a claim
          for such infringement;

     (j)  USE OF LANDS. The uses to which the Properties have been put are not
          in material breach of any federal, provincial or local laws or any
          statutes, by-laws, ordinances, regulations, covenants, restrictions or
          official plans;

     (k)  WORK ORDERS. There are no outstanding work orders requiring, in
          aggregate, expenditures exceeding Cdn. $100,000 relating to the
          Properties from or required by any police or fire department,
          sanitation, health, environmental or factory authorities or from any
          other federal, provincial or municipal authority, nor are any matters
          relating to the Properties under discussion with any such departments
          or authorities relating to work orders;

     (l)  EXPROPRIATION. As at the date hereof, no part of the Properties or the
          buildings located thereon has been taken or expropriated by any
          federal, provincial, municipal or other competent authority nor has
          any notice or proceeding in respect thereof been given or commenced
          nor is the Borrower or any Restricted Subsidiary aware of any intent
          or proposal to give any such notice or commence any such proceedings;

     (m)  NO DEFAULT. Neither the Borrower nor any of its Restricted
          Subsidiaries has amended its constating documents or by-laws except
          for such amendments notified to and approved by the Lender and

<Page>

                                       44

          none of them is in violation of its constating documents, its by-laws
          or any shareholders' agreement applicable to it;

     (n)  ENVIRONMENTAL COMPLIANCE. To the best of the knowledge of the Borrower
          and its Restricted Subsidiaries, as tenants, except as set out in
          Schedule ERROR! REFERENCE SOURCE NOT FOUND.:

          (i)     None of the Properties or other property or assets under the
                  charge, management or control of the Borrower or any of the
                  Restricted Subsidiaries (i) has ever been used by any Person
                  as a waste disposal site or a landfill, or (ii) has ever had
                  any asbestos, asbestos-containing materials, PCBs, radioactive
                  substances or aboveground or underground storage systems,
                  active or abandoned, located on, at or under it at the date of
                  this Agreement;

          (ii)    To the best knowledge of the Borrower, no properties adjacent
                  to any of the Properties are contaminated;

          (iii)   No contaminants are, or have been, stored or located on, at or
                  under any of the Properties;

          (iv)    Neither the Borrower nor any of its Restricted Subsidiaries
                  has transported, removed or disposed of any waste to a
                  location outside of Canada as at the date of this Agreement;

          (v)     No order, approval, direction or other notice from a
                  Governmental Entity relating to the environment has been
                  threatened against, is pending or has been issued with respect
                  to any of the Properties or the operations of the business
                  being conducted at any of the Properties; and

          (vi)    Neither the Borrower nor any of its Restricted Subsidiaries is
                  aware of any pending or threatened action, suit or
                  proceedings, relating to any actual or alleged environmental
                  violation from or at the subject property;

     (o)  MATERIAL AGREEMENTS, ETC. Neither the Borrower nor any Restricted
          Subsidiary is in default in any material respect and no event has
          occurred which, with the giving of notice, lapse of time or both,
          would constitute a default in any material respect under, any material
          agreement, indenture, mortgage, deed of trust, agreement or other
          instrument to which it is a party or by which it or any of its
          property may be bound. There is no dispute regarding any Material
          Agreement;

<Page>

                                       45

     (p)  SUBSIDIARIES. Except as set forth in Schedule ERROR! REFERENCE SOURCE
          NOT FOUND. in respect of Restricted Subsidiaries incorporated or
          acquired after the date of this Agreement:

          (i)     The Borrower does not own or hold any shares of, or any other
                  interest in, any Person;

          (ii)    The Borrower is a wholly-owned subsidiary of Cantel;

          None of the Borrower or any of the Restricted Subsidiaries is an
          unlimited liability company;

     (q)  NO MATERIAL ADVERSE AGREEMENTS. Neither the Borrower nor any of the
          Restricted Subsidiaries is a party to any agreement or instrument or
          subject to any restriction (including any restriction set forth in its
          constating documents, by-laws or any shareholders' agreement
          applicable to it) which has or in the future may have a Material
          Adverse Effect;

     (r)  NO LITIGATION. There are no actions, suits or proceedings pending,
          taken or to the Borrower's knowledge, threatened, before or by any
          Governmental Entity or by or against any elected or appointed public
          official or private person in Canada or elsewhere, and, to the
          knowledge of the Borrower, no Law which affects the Borrower or any of
          its Restricted Subsidiaries has been enacted, promulgated or applied
          which (i) challenges, or to the knowledge of the Borrower, has been
          proposed which may challenge, the validity or propriety of the
          transactions contemplated under the Loan Documents or the documents,
          instruments and agreements executed or delivered in connection
          therewith or related thereto, or (ii) could be reasonably anticipated
          to have a Material Adverse Effect;

     (s)  COMPLIANCE WITH LAWS. Each of the Properties have been used, and the
          Borrower and each of the Restricted Subsidiaries are, in compliance
          with all applicable laws, judgments and orders and rulings, guidelines
          and decisions having force of law other than to the extent it would
          not have a Material Adverse Effect;

     (t)  TAX LIABILITY. The Borrower and each of the Restricted Subsidiaries
          have filed all tax and information returns which are required to be
          filed. The Borrower and each of the Restricted Subsidiaries have paid
          all taxes, interest and penalties, if any, which have become due
          pursuant to such returns or pursuant to any assessment received by any
          of them other than those in respect of which liability based on such

<Page>

                                       46

          returns is being contested in good faith and by appropriate
          proceedings where adequate reserves have been established in
          accordance with GAAP. Adequate provision for payment has been made for
          taxes not yet due. There are no tax disputes existing or pending
          involving the Borrower, any of the Restricted Subsidiaries or the
          Business which could reasonably be expected to have a Material Adverse
          Effect;

     (u)  AUTHORIZED AND ISSUED CAPITAL AND CORPORATE STRUCTURE. No person has
          any agreement, option, right or privilege, whether pre-emptive or
          contractual, capable of becoming an agreement or option for the
          purchase of any securities in the capital of the Borrower or any
          Restricted Subsidiary. The authorized and issued capital of the
          Borrower and each Restricted Subsidiary and the registered and
          beneficial holders of all the issued and outstanding shares in the
          capital of the Borrower are as set forth in Schedule ERROR! REFERENCE
          SOURCE NOT FOUND.;

     (v)  CAPITALIZATION. Each of the Borrower and each Restricted Subsidiary
          has capital sufficient to carry on its business and transactions and
          all business and transactions in which it is about to engage, is
          solvent and able to pay its debts as they mature and owns property
          having a value, both at fair valuation and at present fair realizable
          value, greater than the amount required to pay its debts;

     (w)  FINANCIAL STATEMENTS. The audited financial statements of the Borrower
          for the Fiscal Year ended July 31, 2002, copies of which have been
          furnished to the Lender, fairly present the consolidated financial
          position of the Borrower at such date and the consolidated results of
          the operations and changes in cash flows of the Borrower for such
          period, all in accordance with GAAP. Since July 31, 2002, there has
          been no change in the financial position or operations of the Borrower
          which could have a Material Adverse Effect;

     (x)  SCHEDULE DISCLOSURE.  At the date of this Agreement:

          (i)     Schedule ERROR! REFERENCE SOURCE NOT FOUND. is a list of all
                  jurisdictions (or registration districts within such
                  jurisdictions) in which the Borrower and each of its
                  Restricted Subsidiaries (i) have their respective chief
                  executive office, head office, registered office and chief
                  place of business, (ii) carry on business, (iii) have any
                  account debtors, or (iv) store any tangible personal property
                  (except for goods in transit in the ordinary course of
                  business);

<Page>

                                       47

          (ii)    Schedule ERROR! REFERENCE SOURCE NOT FOUND. is a list of all
                  authorizations, permits, consents, registrations and approvals
                  which are material to the Borrower or any Restricted
                  Subsidiary;

          (iii)   Schedule ERROR! REFERENCE SOURCE NOT FOUND. is a list of all
                  trademarks, tradenames, copyrights and patents (and the
                  registration particulars thereof) which are material to the
                  Borrower or any Restricted Subsidiary;

          (iv)    Schedule ERROR! REFERENCE SOURCE NOT FOUND. is a list of all
                  actions, suits, arbitrations or proceedings pending, taken or
                  to the Borrower's knowledge, threatened, before or by any
                  Governmental Entity or other Person affecting the Borrower or
                  any Restricted Subsidiary involving claims which individually
                  or in the aggregate exceed Cdn.$100,000;

          (v)     Schedule ERROR! REFERENCE SOURCE NOT FOUND. contains a list of
                  all pension plans of the Borrower and the Restricted
                  Subsidiaries;

          (vi)    Schedule ERROR! REFERENCE SOURCE NOT FOUND. contains a list of
                  all agreements, contracts or similar instruments to which the
                  Borrower or any of the Restricted Subsidiaries is a party or
                  to which any of their assets could be subject, for which
                  breach, non-performance, cancellation or failure to renew
                  could reasonably be expected to have a Material Adverse
                  Effect;

     (y)  DISCLOSURE. All (i) forecasts and projections supplied to the Lender
          were prepared in good faith, adequately disclosed all relevant
          assumptions and are reasonable, and (ii) other written information
          supplied to the Lender is true and accurate in all material respects.
          There is no fact known to the Borrower which could reasonably be
          expected to have a Material Adverse Effect and which has not been
          fully disclosed to the Lender;

     (z)  PENSION PLANS. All contributions required under applicable law have
          been made in respect of all pension plans of the Borrower and each of
          the Restricted Subsidiaries and each such pension plan is fully funded
          on an ongoing and termination basis;

     (aa) BOOKS AND RECORDS. All books and records of the Borrower and the
          Restricted Subsidiaries have been fully, properly and accurately kept
          and completed and there are no material inaccuracies or discrepancies

<Page>

                                       48

          of any kind contained or reflected therein. The Borrower's and its
          Restricted Subsidiaries' books and records and other data and
          information are available to the Borrower in the ordinary course of
          its business; and

     (bb) LABOUR MATTERS. Neither the Borrower nor any Restricted Subsidiary is
          a party to any collective bargaining agreement.

SECTION 8.2    SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

     The representations and warranties herein set forth or contained in any
certificates or documents delivered to the Lender pursuant hereto shall not
merge in or be prejudiced by and shall survive all Accommodations hereunder and
shall continue in full force and effect so long as any amounts are owing by the
Borrower to the Lender hereunder or under any of the Loan Documents. In case an
inaccuracy with respect to any of the representations and warranties herein set
forth becomes known to the Borrower or any Restricted Subsidiary or both of
them, the Borrower shall or shall cause the Restricted Subsidiary to immediately
give notice of the same to the Lender, and the Borrower shall or shall cause the
Restricted Subsidiary, within five Business Days from the date of giving such
notice to the Lender, to use its best efforts to cure said inaccuracy (to the
extent curable) to the satisfaction of the Lender.

                                    ARTICLE 9
                            COVENANTS OF THE BORROWER

SECTION 9.1    AFFIRMATIVE COVENANTS.

     So long as any amount owing under this Agreement remains unpaid or the
Lender has any obligation under this Agreement, and unless consent is given in
accordance with Section 11.2, the Borrower shall:

     (a)  FINANCIAL REPORTING. Deliver to the Lender (i) within 60 days of the
          commencement of each Fiscal Year, the Borrower's Annual Business Plan
          for the Fiscal Year, together with the detailed budget for the Fiscal
          Year providing supplementary detailed schedules and information
          supplementary to and consistent with the Annual Business Plan, (ii) as
          soon as practicable and in any event within 45 days after the end of
          each of the first three Fiscal Quarters in each Fiscal Year, and
          within 60 days after the end of the fourth Fiscal Quarter, a
          consolidated balance sheet of the Borrower as of the end of the Fiscal
          Quarter, (y) consolidating balance sheets of the Borrower and each of
          the Restricted Subsidiaries, and (z) the related consolidated and
          consolidating statements of earnings and cashflows for the Fiscal
          Quarter (and year-to-date); in each case (except for the statement of

<Page>

                                       49

          cashflows) setting forth in comparative form the figures for the
          corresponding Fiscal Quarter and corresponding portion of the previous
          Fiscal Year, (iii) as soon as practicable and in any event within 105
          days after the end of each Fiscal Year, a copy of the audited
          financial statements of the Borrower for the Fiscal Year prepared on a
          consolidated basis and reported on by the Borrower's independent
          auditors and (iv) together with each delivery of financial statements,
          a Compliance Certificate;

     (b)  CANTEL. Deliver to the Lender (i) within 60 days of the commencement
          of each Fiscal Year, Cantel's Annual Business Plan for the Fiscal
          Year, together with the detailed budget for the Fiscal Year providing
          supplementary detailed schedules and information supplementary to and
          consistent with the Annual Business Plan, (ii) as soon as practicable
          and in any event within 45 days after the end of each of the first
          three Fiscal Quarters in each Fiscal Year, and within 60 days after
          the end of the fourth Fiscal Quarter, a consolidated balance sheet of
          Cantel as of the end of the Fiscal Quarter, and the related
          consolidated statements of earnings and cashflows for the Fiscal
          Quarter and for the period commencing at the end of the previous
          Fiscal Year and ending with the end of the Fiscal Quarter; (iii) as
          soon as practicable and in any event within 105 days after the end of
          each Fiscal Year, a copy of the audited financial statements of Cantel
          for the Fiscal Year prepared on a consolidated basis and reported on
          by Cantel's independent auditors together with unaudited consolidating
          financial statements and (iv) together with each delivery of financial
          statements, a copy of the compliance certificate delivered pursuant to
          the Parent Facility;

     (c)  ACCOUNTS RECEIVABLE AND INVENTORY REPORTING. Deliver to the Lender as
          soon as available, and in any event within 30 days of the end of each
          month in respect of the preceding month, (i) a detailed statement of
          accounts receivable and an aging of the accounts receivable reconciled
          to the general ledger of the Borrower and the Restricted Subsidiaries
          and such other details, including classification by nature, customer
          location and currency as Lender may reasonably require, (ii) a summary
          detailed statement of Inventory reconciled to the general ledger of
          the Borrower and the Restricted Subsidiaries classified by species
          thereof or on any other basis the Lender may reasonably require, (iii)
          a detailed statement of Priority Accounts Payable and (iv) a Borrowing
          Base Certificate, calculated as of the date of such certificate;

     (d)  ENVIRONMENTAL REPORTING. Promptly, and in any event within 10 days,
          deliver to the Lender a detailed statement describing any of the

<Page>

                                       50

          following occurrences (i) any order or judgment of any Governmental
          Entity requiring the Borrower or any of the Restricted Subsidiaries to
          incur Environmental Liabilities (w) in excess of Cdn.$50,000 in any
          one instance, (x) together with all other expenditures incurred in
          respect of Environmental Liabilities in any Fiscal Year, in excess of
          Cdn.$100,000 in the aggregate, (ii) any state of affairs on any of the
          Properties which could result in the incurrence of Environmental
          Liabilities in excess of Cdn.$50,000 in any one instance, or together
          with all other expenditures incurred in respect of Environmental
          Liabilities in any Fiscal Year, in excess of Cdn.$100,000 in the
          aggregate, and (iii) the action taken or proposed to be taken in
          connection with such occurrences;

     (e)  ADDITIONAL REPORTING REQUIREMENTS.  Deliver to the Lender:

          (i)     as soon as available, and in any event within 30 days after
                  the end of each calendar month a detailed statement of the
                  accounts payable of the Borrower and each Restricted
                  Subsidiary as the Lender may reasonably require;

          (ii)    promptly upon becoming aware thereof, notice of all actions,
                  suits and proceedings before any court or governmental
                  department, commission, board, bureau, agency or
                  instrumentality, domestic or foreign, or any other event,
                  materially adversely affecting the Borrower;

          (iii)   promptly upon becoming aware thereof, notice of any event that
                  may have a Material Adverse Effect;

          (iv)    within two Business Days of becoming aware thereof of any
                  default, or event, condition or occurrence which with notice
                  or lapse of time, or both, would constitute a default under
                  any agreement for Debt of the Borrower and under which the
                  Borrower or a Restricted Subsidiary owes at least
                  Cdn.$100,000;

          (v)     promptly notify the Lender of any changes to the corporate
                  structure and shareholdings as contemplated herein with
                  respect to the Borrower from that set forth in Schedule 8.1(s)
                  hereto;

          (vi)    as soon as practicable, and in any event within five days
                  after the occurrence of each Default or Event of Default, a
                  statement of the chief financial officer of the Borrower or
                  any other officer acceptable to the Lender setting forth the
                  details of the Default

<Page>

                                       51

                  or Event of Default and the action which the Borrower
                  proposes to take or has taken;

          (vii)   from time to time upon request of the Lender, evidence of the
                  maintenance of all insurance required to be maintained
                  pursuant to this Agreement, including originals or copies as
                  the Lender may request of policies, certificates of insurance,
                  riders, endorsements and proof of premium payments;

          (viii)  promptly upon their issuance, copies of all notices, reports,
                  press releases, circulars, offering documents and other
                  documents filed with, or delivered to, any stock exchange or
                  the Ontario Securities Commission or a similar Governmental
                  Entity in any other jurisdiction; and

          (ix)    such other information respecting the condition or operations,
                  financial or otherwise, of the Business or the Borrower or any
                  Restricted Subsidiary as the Lender may from time to time
                  reasonably request;

     (f)  USE OF PROCEEDS. Use the proceeds made available to it under the Loan
          Facilities only for the purposes specified in Section 2.3 hereof;

     (g)  BANK ACCOUNTS. Maintain bank accounts with the Lender into which all
          receipts of the Borrower shall be deposited;

     (h)  PAYMENT OF OBLIGATIONS TO LENDER. Duly and punctually pay to the
          Lender all amounts payable by it hereunder when due;

     (i)  PAYMENT OF TAXES, ETC. Pay and discharge and cause each of its
          Restricted Subsidiaries to pay and discharge, before the same shall
          become delinquent, (i) all taxes, assessments and governmental charges
          or levies imposed upon it, a Restricted Subsidiary or upon its income,
          sales, capital or profit or such of a Restricted Subsidiary over any
          other property belonging to it or a Restricted Subsidiary, and (ii)
          all claims which if unpaid, might by law become a Lien upon the
          assets, except any such tax, assessment, charge or claim which is
          being contested in good faith and by proper proceedings and for which
          adequate provision for payment has been made in accordance with GAAP
          or which are Permitted Liens;

     (j)  MAINTENANCE OF INSURANCE. Maintain insurance with responsible and
          reputable insurance companies or associations in such amounts and
          covering such risks as is usually carried by companies engaged in
          similar businesses and owning similar properties in the same general

<Page>

                                       52

          areas in which the Borrower operates, such policies to show the Lender
          as a loss payee thereof under a mortgage clause in a form approved by
          the Insurance Bureau of Canada and promptly furnish or cause to be
          furnished to the Lender, evidence of the maintenance of all such
          insurance satisfactory to the Lender;

     (k)  PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain its
          and cause its Restricted Subsidiaries to preserve and maintain their
          corporate existence and rights (charter and statutory);

     (l)  COMPLIANCE WITH LAWS, ETC. Comply and cause each of its Restricted
          Subsidiaries to comply, in all material respects, with all applicable
          laws, (including Environmental Laws) regulations, orders, decisions
          and awards and duly observe all valid requirements of Governmental
          Entities, and all statutes and regulations or which relate to
          Environmental Laws;

     (m)  VISITATION RIGHTS. At any reasonable time or times, on reasonable
          advance notice, (i) permit the Lender and its representatives access
          to the premises of the Borrower and its Restricted Subsidiaries and
          permit the Lender to discuss the affairs, finances and accounts of the
          Borrower with the officer appointed as (or performing the functions
          of) the chief financial officer of the Borrower or any person
          performing a similar function, and permit such representative to
          discuss the affairs, finances and accounts of the Borrower and its
          Restricted Subsidiaries with the Lender, and (ii) arrange for the
          chief financial officer of Cantel to discuss the affairs, finances and
          accounts of Cantel with the Lender;

     (n)  KEEPING OF BOOKS. Keep and cause each of its Restricted Subsidiaries
          to keep proper books of record and account, in which full and correct
          entries shall be made of all financial transactions, assets and
          business of the Borrower and its Restricted Subsidiaries in accordance
          with GAAP;

     (o)  MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve and cause each
          of its Restricted Subsidiaries to maintain and preserve all of its
          material properties in all material respects in good repair, working
          order and condition (reasonable wear and tear excepted) and, from time
          to time, make and cause each of its Restricted Subsidiaries to make
          all needful and proper repairs, renewals, replacements, additions and
          improvements thereto, so that the business carried on may be properly
          and advantageously conducted at all times in accordance with prudent
          business management;

<Page>

                                       53

     (p)  CURE DEFECTS. Promptly cure or cause to be cured any defects in the
          execution and delivery of any of the Loan Documents or any of the
          other agreements, instruments or documents contemplated thereby or
          executed pursuant thereto or any defects in the validity or
          enforceability of any of the Security and at the Borrower's expense,
          execute and deliver or cause to be executed and delivered, all such
          agreements, instruments and other documents as the Lender may consider
          necessary or desirable for the foregoing purposes and make all
          necessary filings and recordings for the foregoing purposes;

     (q)  TRADES PAYABLES. Make payments to creditors only in the ordinary
          course of business and in accordance with the customary practice of
          the Borrower with respect to the aging of such accounts payable prior
          to payment;

     (r)  CREDIT POLICY AND ACCOUNTS RECEIVABLE. Maintain, at all times, written
          credit policies consistent with good business practices, adhere to
          such policies and collect, and cause each of its Restricted
          Subsidiaries to collect, accounts receivable in the ordinary course of
          business;

     (s)  AUDITORS. Appoint as its auditors a firm of national standing; and

     (t)  FURTHER ASSURANCES. At its cost and expense, upon request of the
          Lender, execute and deliver or cause to be executed and delivered to
          the Lender such further instruments and do and cause to be done such
          further acts as may be necessary or proper in the reasonable opinion
          of the Lender to carry out more effectually the provisions and
          purposes of the Loan Documents.

SECTION 9.2    NEGATIVE COVENANTS.

     So long as any amount owing under the Loan Agreement remains unpaid or the
Lender has any obligation under this Agreement and, unless consent is given in
accordance with Section 11.2, the Borrower shall not:

     (a)  DEBT. Create, incur, assume or suffer to exist or permit any of the
          Restricted Subsidiaries to create, incur, assume or suffer to exist
          any Debt other than (i) Debt to the Lender under this Agreement, (ii)
          Debt incurred in respect of Purchase Money Mortgages up to an
          aggregate outstanding amount, at any time, of U.S.$150,000 (or the
          equivalent amount in any other currency), (iii) Debt described in
          Schedule ERROR! REFERENCE SOURCE NOT FOUND. or any refinancing,
          replacement or renewal of such Debt not exceeding (y) in principal
          amount, the amount outstanding on the date of the refinancing, renewal
          or replacement by more than 110%, and (z) in interest rate, a market

<Page>

                                       54

          competitive rate on the date of the refinancing, renewal or
          replacement, and otherwise on terms and conditions no more restrictive
          than the terms and conditions of the Debt to be refinanced, renewed or
          replaced, (iv) Debt of any Restricted Subsidiary to the Borrower or
          any other Restricted Subsidiary which shall not, in any event, exceed
          the limitations set forth in Section 9.2(i), (v) Debt of a Restricted
          Subsidiary that is subordinated to the Debt owing to the Lender
          pursuant to this Agreement, such subordination to be on terms
          satisfactory to the Lender prior to its incurrance or assumption, and
          (vi) additional unsecured Debt not otherwise permitted pursuant to
          Section (i) to (v) above;

     (b)  LIENS. Create, incur, assume or suffer to exist, or permit any of the
          Restricted Subsidiaries to create, incur, assume or suffer to exist,
          any Lien on any of their respective properties or assets other than
          (i) Permitted Liens, and (ii) Purchase Money Mortgages;

     (c)  MERGERS, ETC. Enter into, or permit any of the Restricted Subsidiaries
          to enter into, any reorganization, consolidation, amalgamation,
          arrangement, winding-up, merger or other similar transaction;

     (d)  DISPOSAL OF ASSETS GENERALLY. Sell, exchange, lease, release or
          abandon or otherwise dispose of, or permit any of the Restricted
          Subsidiaries to sell, exchange, lease, release or abandon or otherwise
          dispose of, any assets or properties (other than shares) to any Person
          other than (i) bona fide sales, exchanges, leases, abandonments or
          other dispositions in the ordinary course of business for the purpose
          of carrying on the Business or its business, as the case may be, and
          at fair market value, (ii) property or assets (other than shares)
          which have no material economic value in the Business or business or
          are obsolete, and (iii) dispositions pursuant to a transaction
          permitted in Section 9.2(e);

     (e)  TRANSACTIONS WITH RELATED PARTIES. Except as otherwise permitted in
          Section 9.2(c), Section 9.2(h), and Section 9.2(i), directly or
          indirectly, enter into or allow any Restricted Subsidiary to enter
          into, any agreement with, make any financial accommodation for, or
          otherwise enter into any transaction with, a Related Party except in
          the ordinary course of, and pursuant to the reasonable requirements
          of, business and at prices and on terms not less favourable to the
          Borrower or the Restricted Subsidiary, as the case may be, than could
          be obtained in a comparable arm's length transaction with another
          Person;

<Page>

                                       55

     (f)  CHANGE IN BUSINESS. Make any material change in the nature of the
          Business or permit any of the Restricted Subsidiaries to make any
          material change in the nature of its business;

     (g)  SHARE CAPITAL. (i) Issue or permit any of its Restricted Subsidiaries
          to issue shares, or any options, warrants or securities convertible
          into shares, except to the Borrower, Cantel, or another Restricted
          Subsidiary, provided in each case, the shares, option, warrants or
          securities issued by the Restricted Subsidiaries have been pledged to
          the Lender pursuant to the Security Documents, or (ii) permit any
          transaction which result in a Change of Control of the Borrower or any
          Restricted Subsidiary;

     (h)  DISTRIBUTIONS. Declare, make or pay or permit any Restricted
          Subsidiary to declare, make or pay any Distributions, except (provided
          that no Default or Event of Default has occurred and is continuing or
          could result therefrom) that (i) any subsidiary of the Borrower may
          declare and pay dividends to the Borrower or any Restricted
          Subsidiary; (ii) the Borrower may make Distributions to Cantel; and
          (iii) the Borrower may make payments on account of management fees up
          to a maximum amount of U.S.$750,000 in any Fiscal Year;

          For purposes of this Section 9.2(h), "DISTRIBUTION" means with respect
          to any Person the amount of (i) any dividend or other distribution on
          issued shares of the Person or any of its subsidiaries, (ii) the
          purchase, redemption or retirement amount of any issued shares,
          warrants or any other options or rights to acquire shares of the
          Person or any of its subsidiaries redeemed or purchased by the Person
          or any its subsidiaries, or (iii) any payments whether as consulting
          fees, management fees or otherwise to any Related Party of the Person
          or any of its subsidiaries.

     (i)  FINANCIAL ASSISTANCE. Give or permit any of the Restricted
          Subsidiaries to give, any Financial Assistance to any Person, except
          for (i) inter-company loans made by the Borrower to Cantel, (ii)
          Financial Assistance by the Borrower to a Restricted Subsidiary, by a
          Restricted Subsidiary to the Borrower or by a Restricted Subsidiary to
          another Restricted Subsidiary not exceeding $100,000 in the aggregate,
          provided that if it is an inter-company loan where the lender is a
          Restricted Subsidiary located in the United States, the inter-company
          loan is evidenced by a promissory note and security satisfactory to
          the Lender which have been assigned to the Lender as Security, (iii)
          investments in Cash Equivalents, (iv) Financial Assistance which
          constitutes a Permitted Acquisition, (v) Financial Assistance
          permitted

<Page>

                                       56

          under Section 9.2(h), (vi) financial accommodations made for employees
          (including any loans outstanding at the date hereof and listed on
          Schedule ERROR! REFERENCE SOURCE NOT FOUND.) not in excess of $200,000
          in the aggregate, and (vii) such other Financial Assistance as the
          Lender may approve in writing in the exercise of its sole discretion;

          For the purposes of this Section 9.2(i), "FINANCIAL ASSISTANCE" means
          any advances, loans or other extensions of credit, guarantees,
          indemnities or other contingent liabilities or capital contributions
          (other than prepaid expenses in the ordinary course of business) to
          (by means of transfers of property, money or assets), or any purchase
          of any shares, stocks, bonds, notes, debentures or other securities
          of, any Person or the acquisition of all or substantially all the
          assets of, any Person or of a business carried on by, or a division
          of, any Person. In determining the aggregate amount of Financial
          Assistance outstanding at any particular time, (i) take the amount of
          any Investment represented by a guarantee or similar contingent
          obligation at not less than the principal amount of the obligations
          guaranteed and outstanding, (ii) deduct in respect of any Financial
          Assistance any amount received by the Borrower or a Restricted
          Subsidiary as return of capital (but only by repurchase, redemption,
          retirement, repayment, liquidating dividend or liquidating
          distribution), (iii) do not deduct in respect of any Financial
          Assistance any amounts received as earnings on such Financial
          Assistance, whether as dividends, interest or otherwise, and (iv) do
          not deduct from the aggregate amount of Financial Assistance any
          decrease in its market value;

          For purposes of this Section 9.2(i), "CASH EQUIVALENTS" means any of
          the following, so long as the same are maintained in accounts in which
          the Lender has a perfected security interest: (i) securities issued,
          guaranteed or insured by the government of Canada or any province, or
          the United States of America or any state, and having terms to
          maturity of not more than one year, and (ii) certificates of deposit
          having maturities of not more than one year issued or guaranteed by a
          Canadian chartered bank and rated R-1 low (or the then equivalent
          grade) or better by Dominion Bond Rating Service;

     (j)  LEASE-BACKS. Enter into or permit any of its Restricted Subsidiaries
          to enter into any arrangements, directly or indirectly, with any
          Person, whereby the Borrower or such Restricted Subsidiary, as the
          case may be, shall sell or transfer any property, whether now owned or
          hereafter acquired, used or useful in the Business, in connection with
          the rental or lease of the property so sold or transferred or of other
          property for

<Page>

                                       57

          substantially the same purpose or purposes as the property so sold or
          transferred unless such arrangement constitutes a Permitted Lien;

     (k)  SUBSIDIARIES AND PARTNERSHIPS.

          (i)     Incorporate or acquire any subsidiaries or commence to carry
                  on the Business, otherwise than through the Borrower or become
                  a partner or participant in any partnership or joint venture
                  except for Unrestricted Subsidiaries or Permitted Acquisitions
                  where, in such latter case, the subsidiary (i) is a
                  wholly-owned subsidiary incorporated as a limited liability
                  company under the laws of Canada or one of its provinces or
                  territories, and (ii) has executed and delivered to the Lender
                  an unconditional and unlimited guarantee of all obligations of
                  the Borrower under this Agreement and the other Loan Documents
                  together with first-ranking Security over all of its property
                  and assets and accompanied by opinions satisfactory to the
                  Lender; and

          (ii)    Permit any Unrestricted Subsidiary to (i) carry on an active
                  business, (ii) have assets or revenues in excess of $50,000,
                  (iii) have any liabilities in excess of $50,000, or (iv) have
                  any Debt which cross-defaults or cross-accelerates to any Debt
                  of the Borrower or any of the Restricted Subsidiaries;

          For purposes of this Section 9.2(k), "UNRESTRICTED SUBSIDIARIES" means
          all Subsidiaries other than the Restricted Subsidiaries.

     (l)  CAPITAL EXPENDITURES. Make or commit to make, or permit any of its
          Restricted Subsidiaries to make or commit to make, in the Fiscal Year
          ending July 31, 2004, any Capital Expenditures or Permitted
          Acquisitions (to the extent such acquisition would not otherwise be
          included as a Capital Expenditure) exceeding, collectively with the
          cash and non-cash consideration to be paid in connection with a
          Permitted Acquisition, U.S. $1,000,000, exclusive of the Biolab
          Acquisition, and thereafter, in such amount as the Lender advises on
          an annual basis;

     (m)  OPERATING LEASES. Enter into any operating leases requiring payment on
          an annual basis in excess of Cdn. $500,000;

     (n)  COMPROMISE OF ACCOUNTS. Compromise or adjust or permit any of the
          Restricted Subsidiaries to compromise or adjust any of its accounts
          receivable (or extend the time for payment thereof) or grant any

<Page>

                                       58

          discounts, allowances or credits, in each case other than in the
          normal course of business;

     (o)  INVOICES. Redate any invoice or sale or provision of service or make
          sales or provide services on extended dating beyond that customary in
          the Business or the business of the Restricted Subsidiaries;

     (p)  FISCAL YEAR. Change its Fiscal Year;

     (q)  AMENDMENTS. Allow any amendments to any Material Agreement if such
          amendments could reasonably be expected to have a Material Adverse
          Effect;

     (r)  PAYMENTS IN ORDINARY COURSE OF BUSINESS, ETC. Make, or permit any
          Restricted Subsidiary to make, any payments outside the ordinary
          course of business, make any prepayments of professional fees or place
          any funds in excess of $100,000 on trust with third parties;

     (s)  CONTAMINANTS, ETC. Permit any asbestos, asbestos-containing materials,
          PCBs, radioactive substances or other contaminants which could be the
          subject of a clean-up order to be located on, at or under any of the
          Properties. Permit any underground storage vessels to be located or
          installed at any of the Properties; and

     (t)  MANAGEMENT FEES. Pay any annual management fees exceeding, in the
          aggregate, U.S.$750,000.

SECTION 9.3    FINANCIAL COVENANTS.

     So long as any amount owing under this Agreement remains unpaid or the
Lender has any obligation under this Agreement, and unless consent is given in
accordance with Section 11.2, the Borrower shall:

     (a)  TOTAL LIABILITY TO TANGIBLE NET WORTH RATIO. Maintain, at all times, a
          ratio of Total Liabilities to Tangible Net Worth of not more than (i)
          prior July 31, 2004, 1.50:1 (ii) and as of July 31, 2004 and
          thereafter, 1.25:1.

     (b)  MAINTENANCE OF DEBT SERVICE RATIO. Maintain, at all times, a ratio,
          calculated at the end of each Fiscal Quarter for the four Fiscal
          Quarters then ended of Cashflow to Debt Service of not less than 3:1;
          and

     (c)  MAINTENANCE OF CURRENT RATIO. Maintain, at all times, a ratio of
          Current Assets to Current Liabilities of not less than 2:1.

<Page>

                                       59

SECTION 9.4    SECURITY COVENANTS.

     So long as any amount owing under this Agreement remains unpaid or the
Lender has any obligation under this Agreement, and unless consent is given in
accordance with Section 11.2, the Borrower shall:

     (a)  STATUS OF ACCOUNTS COLLATERAL. With respect to the Collateral (i)
          maintain books and records pertaining to the Collateral in such
          detail, form and scope as the Lender reasonably requires, (ii) within
          two Business Days upon learning thereof, report to the Lender in
          respect of any reclamation, return or repossession of inventory (other
          than such inventory as is resorted and redelivered) in excess of
          Cdn.$100,000 for any single reclamation, return or repossession of
          inventory or in excess of Cdn.$500,000 for all such reclamations,
          returns or repossessions taken together in any Fiscal Year, or claims
          or disputes in any Fiscal Year in the aggregate in excess of
          Cdn.$500,000 asserted by customers or other obligors, any loss or
          destruction of, or substantial damage to, any of the Collateral and
          any other matters affecting the value, enforceability or
          collectability of any of the Collateral, (iii) if any amount payable
          under or in connection with any account in excess of Cdn. $25,000 is
          evidenced by a promissory note or other instrument, immediately
          pledge, endorse, assign and deliver to the Lender the promissory note
          or instrument, as additional Collateral, (iv) notify the Lender in
          writing of any agreement under which any terms of sale or service
          (written or oral) which are materially different from normal operating
          procedures may have been or will be granted, and (v) conduct a
          physical count of the Inventory at such intervals as the Lender may
          reasonably request and promptly supply the Lender with a copy of such
          counts accompanied by a report of the value (based on the lower of
          cost (on a first in, first out basis) or market value) of such
          inventory;

     (b)  BUSINESS OUTSIDE CERTAIN JURISDICTIONS. At least 30 days prior to any
          of the following changes becoming effective, notify the Lender in
          writing of (i) any proposed change in the locations of (w) any place
          of business of the Borrower or any Restricted Subsidiary, (x) the
          chief executive office or head office of the Borrower or any
          Restricted Subsidiary, (z) any place where tangible property of the
          Borrower or any Restricted Subsidiary is stored, and (ii) any proposed
          change in the name of the Borrower or any Restricted Subsidiary; and

     (c)  PERFECTION AND PROTECTION OF SECURITY INTEREST. Perform, execute and
          deliver and cause its Restricted Subsidiaries to perform, execute and
          deliver all acts, agreements and other documents as may be requested

<Page>

                                       60

          by the Lender at any time to register, file signify, publish, perfect,
          maintain, protect, and enforce the Security including, without
          limitation, (i) executing, recording and filing of the Loan Documents
          and financing or continuation statements in connection therewith, in
          form and substance satisfactory to the Lender, (ii) delivering to the
          Lender the originals of all instruments, documents and chattel paper
          and all other Collateral of which the Lender determines it should have
          physical possession in order to perfect and protect the Security, duly
          endorsed or assigned to the Lender, (iii) delivering to the Lender
          warehouse receipts covering any portion of the Collateral located in
          warehouses and for which warehouse receipts are listed, (iv) placing
          notations on its books of account to disclose the Security Interest,
          (v) delivering to the Lender all letters of credit on which the
          Borrower or any Restricted Subsidiary is named beneficiary, and (vi)
          taking such other steps as are deemed necessary by the Lender to
          maintain the Security.

                                   ARTICLE 10
                                EVENTS OF DEFAULT

SECTION 10.1   EVENTS OF DEFAULT.

     If any of the following events (each an "EVENT OF DEFAULT") occurs and is
continuing:

     (a)  The Borrower fails to pay any amount of the Accommodations
          Outstanding, interest or Fees when such amount becomes due and
          payable;

     (b)  Any statement, representation or warranty or certification made or
          deemed to be made by the Borrower or a Restricted Subsidiary or any of
          their respective directors or officers in any Loan Document shall
          prove to have been incorrect in any material respect when made or
          deemed to be made; and, if the circumstances giving rise to the
          incorrect representation or warranty are capable of modification or
          rectification (such that, thereafter the representation or warranty
          would be correct), the representation or warranty remains uncorrected
          for a period of five days;

     (c)  The Borrower fails to perform, observe or comply with any of the
          covenants contained in Section 9.2 or Section 9.3;

<Page>

                                       61

     (d)  The Borrower fails to perform, observe or comply with any of the
          covenants contained in Section 9.1 or in any other Loan Document and
          such failure remains unremedied for five days;

     (e)  A Restricted Subsidiary or Cantel fails to perform or observe any
          term, covenant or agreement contained in any Loan Document to which it
          is a party and such failure remains unremedied for five days;

     (f)  There is a Parent Event of Default;

     (g)  The Borrower or any of its Restricted Subsidiaries fails to pay the
          principal of, or premium or interest on, any of its Debt (excluding
          Debt under this Agreement) which is outstanding in an aggregate
          principal amount exceeding Cdn.$50,000 (or the equivalent amount in
          any other currency) when such amount becomes due and payable (whether
          by scheduled maturity, required prepayment, acceleration, demand or
          otherwise) and such failure continues after the applicable grace
          period, if any, specified in the agreement or instrument relating to
          the Debt; or any other event occurs or condition exists and continues
          after the applicable grace period, if any, specified in any agreement
          or instrument relating to any such Debt, if its effect is to
          accelerate, or permit the acceleration of the Debt; or any such Debt
          shall be declared to be due and payable prior to its stated maturity;

     (h)  The Borrower or any Restricted Subsidiary fails to perform or observe
          any term, covenant or agreement contained in any Material Agreement on
          its part to be performed or observed where such failure could
          reasonably be expected to have a Material Adverse Effect; or any
          Material Agreement is terminated or revoked or permitted to lapse
          (other than in accordance with its terms and not as a result of
          default); or any party to any Material Agreement delivers a notice of
          termination or revocation (other than in accordance with its terms and
          not as a result of default) in respect of the Material Agreement;

     (i)  Any judgment or order for the payment of money in excess of Cdn.
          $100,000 (or the equivalent amount in any other currency) is rendered
          against the Borrower or any of its Restricted Subsidiaries and either
          (i) enforcement proceedings have been commenced by a creditor upon the
          judgment or order, or (ii) there is any period of 30 consecutive days
          during which a stay of enforcement of the judgment or order, by reason
          of a pending appeal or otherwise, is not in effect;

     (j)  The Accommodations Outstanding exceed the Lending Limit as disclosed
          in any Borrowing Base Certificate delivered on a weekly

<Page>

                                       62

          basis pursuant to Section 2.5(1) or if such Borrowing Base Certificate
          is not delivered within two days of the due date specified therefor in
          Section 9.1(c); or

     (k)  There is a Change of Control;

     (l)  The Borrower or any of its Restricted Subsidiaries (i) becomes
          insolvent or generally not able to pay its debts as they become due,
          (ii) admits in writing its inability to pay its debts generally or
          makes a general assignment for the benefit of creditors, (iii)
          institutes or has instituted against it any proceeding seeking (x) to
          adjudicate it a bankrupt or insolvent, (y) liquidation, winding-up,
          reorganization, arrangement, adjustment, protection, relief or
          composition of it or its debts under any law relating to bankruptcy,
          insolvency, reorganization or relief of debtors including any plan of
          compromise or arrangement or other corporate proceeding involving or
          affecting its creditors, or (z) the entry of an order for relief or
          the appointment of a receiver, trustee or other similar official for
          it or for any substantial part of its properties and assets, and in
          the case of any such proceeding instituted against it (but not
          instituted by it), either the proceeding remains undismissed or
          unstayed for a period of 30 days, or any of the actions sought in such
          proceeding (including the entry of an order for relief against it or
          the appointment of a receiver, trustee, custodian or other similar
          official for it or for any substantial part of its properties and
          assets) occurs, or (iv) takes any corporate action to authorize any of
          the above actions;

     (m)  The Lender shall determine in good faith, but otherwise in its sole
          opinion, that there has occurred an event or development likely to
          have a Material Adverse Effect which relates to the ability of the
          Borrower to perform its obligations under the Loan Documents or that
          materially adversely affects the Collateral; or

     (n)  The  audited  consolidated  financial  statements  of the  Borrower
          are qualified in any material respect by the Borrower's independent
          auditors;

then the obligation of the Lender to make further Accommodations shall
immediately terminate and the Lender may declare the Accommodations Outstanding,
all accrued interest and Fees and all other amounts payable under this Agreement
to be immediately due and payable, without presentment, demand, protest or
further notice of any kind, all of which are expressly waived by the Borrower.

<Page>

                                       63

SECTION 10.2   REMEDIES UPON DEFAULT.

(1)  Upon a declaration that the Accommodations Outstanding are immediately due
     and payable pursuant to Section 10.1, the Lender may commence such legal
     action or proceedings as it, in its sole discretion, deems expedient,
     including, the commencement of enforcement proceedings under the Loan
     Documents all without any additional notice, presentation, demand, protest,
     notice of dishonour, entering into of possession of any property or assets,
     or any other action or notice, all of which are expressly waived by the
     Borrower.

(2)  The rights and remedies of the Lender under the Loan Documents are
     cumulative and are in addition to, and not in substitution for, any other
     rights or remedies. Nothing contained in the Loan Documents with respect to
     the indebtedness or liability of the Borrower to the Lender, nor any act or
     omission of the Lender with respect to the Loan Documents or the Security
     shall in any way prejudice or affect the rights, remedies and powers of the
     Lender under the Loan Documents and the Security.

                                   ARTICLE 11
                                 MISCELLANEOUS

SECTION 11.1   REVIEW OF AGREEMENT.

     The Lender and the Borrower agree to review the terms of this Agreement and
the Loan Facilities provided hereunder by October 31, 2003 and at least annually
thereafter.

SECTION 11.2   AMENDMENTS, ETC.

     No amendment or waiver of any provision of any of the Loan Documents, nor
consent to any departure by the Borrower or any other Person from such
provisions, is effective unless in writing and approved by the Lender. Any
amendment, waiver or consent is effective only in the specific instance and for
the specific purpose for which it was given.

SECTION 11.3   WAIVER.

(1)  No failure on the part of the Lender to exercise, and no delay in
     exercising, any right under any of the Loan Documents shall operate as a
     waiver of such right; nor shall any single or partial exercise of any right
     under any of the Loan Documents preclude any other or further exercise of
     such right or the exercise of any other right.

(2)  Except as otherwise expressly provided in this Agreement, the covenants,
     representations and warranties shall not merge on and shall survive the
     initial Accommodation and, notwithstanding such initial Accommodation or

<Page>

                                       64

     any investigation made by or on behalf of any party, shall continue in full
     force and effect. The closing of this transaction shall not prejudice any
     right of one party against any other party in respect of anything done or
     omitted under this Agreement or in respect of any right to damages or other
     remedies.

SECTION 11.4   EVIDENCE OF DEBT AND ACCOMMODATION NOTICES.

(1)  The indebtedness of the Borrower resulting from Accommodations under the
     Loan Facilities shall be evidenced by the records of the Lender which shall
     constitute prima facie evidence of such indebtedness.

(2)  Prior to the receipt of any Accommodation Notice, the Lender may act on the
     basis of a notice by telephone (containing the same information as would be
     contained in the Accommodation Notice) believed by it to be from an
     authorized person representing the Borrower. In the event of a conflict
     between the Lender's record of any Accommodation and the Accommodation
     Notice, the Lender's record shall prevail, absent manifest error.

SECTION 11.5   NOTICES, ETC.

     Any notice, direction or other communication to be given under this
Agreement shall, except as otherwise permitted, be in writing and given by
delivering it or sending it by facsimile or other similar form of recorded
communication addressed:

     (a)  to the Borrower at:

          151 Telson Road
          Markham, Ontario
          L3R 1E7

          Attention:   Vice-President Finance
          Telephone:   800-387-0437
          Telecopier:  416-479-2595

<Page>

                                       65

          with a copy to:

          Cantel Medical Corp.
          150 Clove Road
          9th Floor
          Little Falls, New Jersey
          07424  U.S.A.

          Attention:   Vice-President and Controller
          Telephone:   973-890-7220
          Telecopier:  973-890-7270

     (b)  to the Lender at:

          3901 Highway #7 West
          Suite 301
          Vaughan, Ontario
          L4L 8L5

          Attention:   Senior Manager Commercial Banking
          Telephone:   905-856-5626
          Telecopier:  905-856-8474

Any such communication shall be deemed to have been validly and effectively
given if (i) personally delivered, on the date of such delivery if such date is
a Business Day and such delivery was made prior to 4:00 p.m. (Toronto time),
otherwise on the next Business Day, (ii) transmitted by facsimile or similar
means of recorded communication on the Business Day following the date of
transmission. Any party may change its address for service from time to time by
notice given in accordance with the foregoing and any subsequent notice shall be
sent to the party at its changed address.

SECTION 11.6   COSTS, EXPENSES AND INDEMNITY.

(1)  The Borrower shall, whether or not the transactions contemplated in this
     Agreement are completed, indemnify and hold the Lender (the "INDEMNIFIED
     PERSON") harmless from, and shall pay to such Indemnified Person on demand
     any amounts required to compensate the Indemnified Person for, any claim or
     loss suffered by, imposed on, or asserted against, the Indemnified Person
     as a result of, connected with or arising out of (i) the preparation,
     execution and delivery of, preservation of rights under, interpretation of,
     maintenance of, perfection of, enforcement of, or refinancing,
     renegotiation or restructuring of, the Loan Documents and any related
     amendment, waiver or consent, (ii) any advice of counsel as to the

<Page>

                                       66

     rights and duties of the Lender with respect to the administration of the
     Loan Facilities, the Loan Documents or any transaction contemplated under
     the Loan Documents, (iii) a default (whether or not constituting a Default
     or an Event of Default) by the Borrower, (iv) any proceedings brought
     against the Indemnified Person due to its entering into of any of the Loan
     Documents and performing its obligations under the Loan Documents except to
     the extent caused by the gross negligence or wilful misconduct of the
     Indemnified Person, and (v) the presence of contaminants at, on or under,
     or the discharge or likely discharge of contaminants from, any of the
     Properties or any of the properties now or previously used by the Borrower,
     any of the Restricted Subsidiaries, or the breach of or non-compliance with
     any Environmental Law by any mortgagor, owner or lessee of such properties.
     The Borrower authorizes the Lender to debit the Borrower's Accounts for any
     and all of the costs and expenses referred to in paragraphs (i) and (ii)
     and for all on-site inspections by the Lender or its representatives.

(2)  If, with respect to the Lender, (i) any change in any law, rule,
     regulation, judgment or order of general application, or any change in the
     interpretation or application of such law, rule, regulation, judgment or
     order, occurring or becoming effective after this date, or (ii) compliance
     by the Lender with any direction, request or requirement (whether or not
     having the force of law) of any Governmental Entity made or becoming
     effective after the date, has the effect of causing any loss to the Lender
     or reducing the Lender's rate of return by (w) increasing the cost to the
     Lender of performing its obligations under this Agreement or in respect of
     any Accommodations Outstanding (including the costs of maintaining any
     capital, reserve or special deposit requirements but other than a reduction
     resulting from a higher rate or from a change in the calculation of income
     or capital tax relating to the Lender's income or capital in general), (x)
     requiring the Lender to maintain or allocate any capital or additional
     capital or affecting its allocation of capital in respect of its
     obligations under this Agreement or in respect of any Accommodations
     Outstanding, (y) reducing any amount payable to the Lender under this
     Agreement or in respect of any Accommodations Outstanding by any material
     amount, (z) causing the Lender to make any payment or to forego any return
     on, or calculated by reference to, any amount received or receivable by the
     Lender under this Agreement or in respect of any Accommodations
     Outstanding, then the Lender may give notice to the Borrower specifying the
     nature of the event giving rise to the loss and the Borrower may either
     (iii) on demand, pay such amounts as the Lender specifies is necessary to
     compensate it for any such loss, or (iv) provided no loss has yet been
     suffered by the Lender or the Borrower has paid the compensating amount to
     the Lender, repay the Accommodations Outstanding and terminate the Lender's
     Commitments. A certificate as to the

<Page>

                                       67

     amount of any such loss submitted in good faith by the Lender to the
     Borrower shall be conclusive and binding for all purposes, absent manifest
     error.

(3)  The Borrower shall pay to the Lender on demand any amounts required to
     compensate the Lender for any loss suffered or incurred by it as a result
     of (i) any payment being made in respect of a BA Instrument, Documentary
     Credit or Advance, other than on the maturity or expiration or on the last
     day of an Eurodollar Interest Period applicable to it, (ii) the failure of
     the Borrower to give any notice in the manner and at the times required by
     this Agreement, (iii) the failure of the Borrower to effect an
     Accommodation in the manner and at the time specified in any Accommodation
     Notice, or (iv) the failure of the Borrower to make a payment or a
     mandatory repayment in the manner and at the time specified in this
     Agreement. A certificate as to the amount of any loss submitted in good
     faith by the Lender to the Borrower shall be conclusive and binding for all
     purposes, absent manifest error.

(4)  The provisions of this Section 11.6 shall survive the termination of this
     Agreement and the repayment of all Accommodations Outstanding. The Borrower
     acknowledges that neither its obligation to indemnify nor any actual
     indemnification by it of the Lender or any other Indemnified Person in
     respect of such Person's losses for the legal fees and expenses shall in
     any way affect the confidentiality or privilege relating to any information
     communicated by such Person to its counsel.

SECTION 11.7   TAXES AND OTHER TAXES.

(1)  All payments to the Lender by the Borrower under any of the Loan Documents
     shall be made free and clear of and without deduction or withholding for
     any and all taxes, levies, imposts, deductions, charges or withholdings and
     all related liabilities (all such taxes, levies, imposts, deductions,
     charges, withholdings and liabilities being referred to as "TAXES") imposed
     by Canada or the United States of America (or any political subdivision or
     taxing authority of it), unless such Taxes are required by applicable law
     to be deducted or withheld. If the Borrower shall be required by applicable
     law to deduct or withhold any such Taxes from or in respect of any amount
     payable under any of the Loan Documents except, as provided in the next
     sentence, (i) the amount payable shall be increased (and for greater
     certainty, in the case of interest, the amount of interest shall be
     increased) as may be necessary so that after making all required deductions
     or withholdings (including deductions or withholdings applicable to any
     additional amounts paid under this Section 11.7(1), the Lender receives an
     amount equal to the amount they would have received if no such deduction or
     withholding had been made, (ii) the Borrower shall make such deductions

<Page>

                                       68

     or withholdings, and (iii) the Borrower shall immediately pay the full
     amount deducted or withheld to the relevant Governmental Entity in
     accordance with applicable law.

(2)  The Borrower agrees to immediately pay any present or future stamp or
     documentary taxes or any other excise or property taxes, charges, financial
     institutions duties, debits taxes or similar levies (all such taxes,
     charges, duties and levies being referred to as "OTHER TAXES") which arise
     from any payment made by the Borrower under any of the Loan Documents or
     from the execution, delivery or registration of, or otherwise with respect
     to, any of the Loan Documents.

(3)  The Borrower shall indemnify the Lender for the full amount of Taxes or
     Other Taxes (including, without limitation, any Taxes or Other Taxes
     imposed by any jurisdiction on amounts payable by the Borrower under this
     Section 11.7 paid by the Lender and any liability (including penalties,
     interest and expenses) arising from or with respect to such Taxes or Other
     Taxes, whether or not they were correctly or legally asserted, excluding
     taxes imposed on the Lender's net income, capital taxes or receipts and
     franchise taxes. The Borrower will not be required to indemnify the Lender
     for any Taxes or Other Taxes imposed by reason of the Lender being
     connected with Canada otherwise than merely by lending money to the
     Borrower pursuant to this Agreement. Payment under this indemnification
     shall be made within 30 days from the date the Lender make written demand
     for it. A certificate as to the amount of such Taxes or Other Taxes
     submitted to the Borrower by the Lender shall be conclusive evidence,
     absent manifest error, of the amount due from the Borrower to Lender.

(4)  The Borrower shall furnish, at the request of the Lender, the original or a
     certified copy of a receipt evidencing payment of Taxes or Other Taxes made
     by the Borrower within 30 days after the date of any payment of Taxes or
     Other Taxes.

(5)  If the Lender is, in its sole opinion, entitled to claim a refund or able
     to apply for or otherwise take advantage of any tax credit, tax deduction
     or similar benefit by reason of any withholding or deduction made by the
     Borrower in respect of a payment made by it under this Agreement, which
     payment shall have been increased pursuant to Section 11.7(1), then the
     Lender will use reasonable effort to obtain the refund, credit, deduction
     or benefit and upon credit or receipt of it will pay to the Borrower, the
     amount (if any) not exceeding the increased amount paid by the Borrower, as
     equals the net after-tax value to the Lender of that part of the refund,
     credit, deduction or benefit as it considers is allocatable to such
     withholding or deduction having regard to all of its dealings giving rise
     to similar credits, deductions or benefits in

<Page>

                                       69

     relation to the same tax period and to the cost of obtaining the same.
     Nothing contained in this Section 11.7(5) shall interfere with the right of
     the Lender to arrange its tax affairs in whatever manner it deems fit and
     in particular, the Lender shall be under no obligation to claim relief from
     its corporate profits or similar tax liability in respect of any deduction
     or withholding in priority to any other relief, claims, credits or
     deductions available to it and the Lender shall not be obligated to
     disclose to the Borrower any information regarding its tax affairs, tax
     computations or otherwise.

(6)  The provisions of this Section 11.7 shall survive the termination of the
     Agreement and the repayment of all Accommodations Outstanding.

SECTION 11.8   SUCCESSORS AND ASSIGNS.

(1)  This Agreement shall become effective when executed by the Borrower and the
     Lender and after that time shall be binding upon and enure to the benefit
     of the Borrower and the Lender and their respective successors and
     permitted assigns.

(2)  The Borrower shall not have the right to assign its rights or obligations
     under this Agreement or any interest in this Agreement without the prior
     consent of the Lender, which consent may be arbitrarily withheld.

(3)  At any time prior to the occurrence of an Event of Default, the Lender may
     with the prior written consent of the Borrower (which consent, in the case
     of the Borrower, is not to be unreasonably withheld), assign all or any
     part of its interest in the Loan Facilities to one or more Persons (each an
     "ASSIGNEE") provided that such assignment is not made to a Person the
     identity of which would have the effect of imposing additional obligations
     upon the Borrower as a result of the application of Section 11.7 hereof. At
     any time after the occurrence of an Event of Default, the Lender may assign
     all or any part of its interest in the Loan Facilities to an Assignee
     without any requirement for notice to or consent of the Borrower or any
     other Person. In the case of an assignment, the Assignee shall have the
     same rights and benefits and be subject to the same limitations under the
     Loan Documents as it would have if it was a Lender.

SECTION 11.9   RIGHT OF SET-OFF.

     Following the occurrence, and during the continuance of an Event of
Default, the Lender is authorized at any time and from time to time, to the
fullest extent permitted by law (including general principles of common-law), to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by it to or for the credit or the account of the Borrower against any and all of
the obligations of the Borrower under

<Page>

                                       70

any of the Loan Documents. If an obligation is unascertained, the Lender may, in
good faith, estimate the obligation and exercise its right of set-off in respect
of the estimate, subject to providing the Borrower with an accounting when the
obligation is finally determined. The Lender shall promptly notify the Borrower
after any set-off and application is made by it, provided that the failure to
give notice shall not affect the validity of the set-off and application. The
rights of the Lender under this Section 11.9 are in addition to any other rights
and remedies (including all other rights of set-off) which the Lender may have.

SECTION 11.10  JUDGMENT CURRENCY.

(1)  If, for the purposes of obtaining judgment in any court, it is necessary to
     convert a sum due to the Lender in any currency (the "ORIGINAL CURRENCY")
     into another currency (the "OTHER CURRENCY"), the parties agree, to the
     fullest extent that they may effectively do so, that the rate of exchange
     used shall be that at which, in accordance with normal banking procedures,
     the Lender could purchase the Original Currency with the Other Currency on
     the Business Day preceding the day on which final judgment is given or, if
     permitted by applicable law, on the day on which the judgment is paid or
     satisfied.

(2)  The obligations of the Borrower in respect of any sum due in the Original
     Currency from it to the Lender under any of the Loan Documents shall,
     notwithstanding any judgment in any Other Currency, be discharged only to
     the extent that on the Business Day following receipt by the Lender of any
     sum adjudged to be so due in the Other Currency, the Lender may, in
     accordance with normal banking procedures, purchase the Original Currency
     with such Other Currency. If the amount of the Original Currency so
     purchased is less than the sum originally due to the Lender in the Original
     Currency, the Borrower agrees, as a separate obligation and notwithstanding
     the judgment, to indemnify the Lender, against any loss, and, if the amount
     of the Original Currency so purchased exceeds the sum originally due to the
     Lender in the Original Currency, the Lender shall remit such excess to the
     Borrower.

SECTION 11.11  INTEREST ON AMOUNTS.

     Except as may be expressly provided otherwise in this Agreement, all
amounts owed by the Borrower to the Lender which are not paid when due (whether
at stated maturity, on demand, by acceleration or otherwise) shall bear interest
(both before and after default and judgment), from the date on which such amount
is due until such amount is paid in full, payable on demand, at a rate per annum
equal at all times to (i) in the case of an amount payable in U.S. Dollars, the
sum of the Base Rate (Canada) in effect from time to time, the Applicable Margin

<Page>

                                       71

and 2%, and (ii) in the case of an amount payable in Canadian Dollars, the sum
of the Canadian Prime Rate in effect from time to time, the Applicable Margin
and 2%.

SECTION 11.12  GOVERNING LAW.

     This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.

SECTION 11.13  COUNTERPARTS.

     This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.

SECTION 11.14  FACSIMILE SIGNATURES.

     This Agreement may be executed by facsimile signature, in which case the
party executing by facsimile shall forward an original counterpart thereof to
the other party but failure to so deliver shall not invalidate this Agreement.

SECTION 11.15  CONSENT TO JURISDICTION.

     The Borrower hereby irrevocably submits to the jurisdiction of any Ontario
court sitting in Toronto in any action or proceeding arising out of or relating
to the Loan Documents and hereby irrevocably agrees that all claims in respect
of any such action or proceeding may be heard and determined in such Ontario
court. The Borrower and each Restricted Subsidiary hereby irrevocably waive, to
the fullest extent they may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The Borrower and each
Restricted Subsidiary agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Section 11.15 shall affect the right of the Lender to bring any action or
proceeding against the Borrower or each Restricted Subsidiary or their property
in the courts of other jurisdictions.

<Page>

     IN WITNESS WHEREOF the parties have executed this Agreement.

                                     CARSEN GROUP INC.

                                     By:  /s/ William J. Vella
                                        -----------------------------------
                                          Authorized Signing Officer

                                     NATIONAL BANK OF CANADA

                                     By:  /s/ Steven L. Matheson
                                        -----------------------------------
                                          Authorized Signing Officer

                                     By:  /s/ Jim Paterson
                                        -----------------------------------
                                          Authorized Signing OfficerEXHIBIT 10.1

                         PRIVATE EQUITY CREDIT AGREEMENT

                                 BY AND BETWEEN

                           HOMECOM COMUNICATIONS, INC.

                                       AND

                        BRITTANY CAPITAL MANAGEMENT LTD.

                                   Dated as of

                               September 30, 2003

<PAGE>

     THIS PRIVATE EQUITY CREDIT AGREEMENT is entered into as of the 12th day of
May, 2003 (this "AGREEMENT"), by and between BRITTANY CAPITAL MANAGEMENT LTD., a
limited liability company organized and existing under the laws of The Bahamas
("INVESTOR"), and HOMECOM COMUNICATIONS, INC., a corporation organized and
existing under the laws of the State of Delaware (the "COMPANY").

     WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to Investor, from
time to time as provided herein, and Investor shall purchase, up to Ten Million
Dollars ($10,000,000) of the Common Stock (as defined below); and

     WHEREAS, such investments will be made in reliance upon the provisions of
Section 4(2) ("SECTION 4(2)") of the Securities Act of 1933, Regulation D and
Regulation S, and the rules and regulations promulgated thereunder (the
"SECURITIES ACT"), and/or upon such other exemption from the registration
requirements of the Securities Act as may be available with respect to any or
all of the investments in Common Stock to be made hereunder.

     NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

     Section 1.1 DEFINED TERMS as used in this Agreement, the following terms
shall have the following meanings specified or indicated (such meanings to be
equally applicable to both the singular and plural forms of the terms defined)

          "ADDITIONAL CLOSING DATE" shall mean the date of the closing of the
purchase and sale of the Additional Common Stock, as the case may be.

          "AGREEMENT" shall have the meaning specified in the preamble hereof.

          "BID PRICE" shall mean the closing bid price of the Common Stock on
the Principal Market.

          "BLACKOUT NOTICE" shall have the meaning specified in the Registration
Rights Agreement.

          "BLACKOUT SHARES" shall have the meaning specified in Section 2.6

                                       2
<PAGE>

          "BY-LAWS" shall have the meaning specified in Section 4.8.

          "CERTIFICATE" shall have the meaning specified in Section 4.8

          "CLAIM NOTICE" shall have the meaning specified in Section 9.3(a).

          "CLOSING" shall mean one of the closings of a purchase and sale of
shares of Common Stock pursuant to Section 2.3.

          "CLOSING DATE" shall mean, with respect to a Closing, the twelfth
(12th) Trading Day following the Put Date related to such Closing, or such
earlier date as the Company and Investor shall agree, provided all conditions to
such Closing have been satisfied on or before such Trading Day.

          "COMMITMENT PERIOD" shall mean the period commencing on the Effective
Date, and ending on the earlier of (i) the date on which Investor shall have
purchased Put Shares pursuant to this Agreement for an aggregate Purchase Price
of the Maximum Commitment Amount, (ii) the date this Agreement is terminated
pursuant to Section 2.5, or (iii) the date occurring _thirty six (36) months
from the date of commencement of the Commitment Period.

          "COMMON STOCK" shall mean the Company's common stock, no par value per
share, and any shares of any other class of common stock whether now or
hereafter authorized, having the right to participate in the distribution of
dividends (as and when declared) and assets (upon liquidation of the Company).

          "COMMON STOCK EQUIVALENTS" shall mean any securities that are
convertible into or exchangeable for Common Stock or any options or other rights
to subscribe for or purchase Common Stock or any such convertible or
exchangeable securities.

          "COMPANY" shall have the meaning specified in the preamble to this
Agreement.

          "CONDITION SATISFACTION DATE" shall have the meaning specified in
Section 7.2.

          "DAMAGES" shall mean any loss, claim, damage, liability, costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements and costs and expenses of expert witnesses and investigation).

          "DISCOUNT" shall mean nine (9%) percent.

          "DISPUTE PERIOD" shall have the meaning specified in Section 9.3(a).

                                       3
<PAGE>

          "DTC" shall the meaning specified in Section 2.3.

          "DWAC" shall the meaning specified in Section 2.3.

          "EFFECTIVE DATE" shall mean the date on which the SEC first declares
effective a Registration Statement registering resale of the Registrable
Securities as set forth in Section 7.2(a).

          "ESCROW AGENT" shall mean Krieger & Prager, LLP.

          "EXCHANGE ACT" shall mean the Securities Exchange Act of1934 and the
rules and regulations promulgated thereunder.

          "FAST" shall the meaning specified in Section 2.3.

          "INDEMNIFIED PARTY" shall have the meaning specified in Section
9.3(a).

          "INDEMNIFYING PARTY" shall have the meaning specified in Section
9.3(a).

          "INDEMNITY NOTICE" shall have the meaning specified in Section 9.3(b).

          "INITIAL REGISTRABLE SECURITIES" shall have the meaning specified in
the Registration Rights Agreement.

          "INITIAL REGISTRATION STATEMENT" shall have the meaning specified in
the Registration Rights Agreement.

          "INVESTMENT AMOUNT" shall mean the dollar amount (within the range
specified in Section 2.2) to be invested by Investor to purchase Put Shares with
respect to any Put Date as notified by the Company to Investor in accordance
with Section 2.2.

          "INVESTOR" shall have the meaning specified in the preamble to this
Agreement.

          "LEGEND" shall have the meaning specified in Section 8.1.

          "MARKET PRICE" on any given date shall mean the average of the Bid
Prices (not necessarily consecutive) for any three (3) Trading Days during the
ten (10) trading day period immediately following the Put Date.

          "MINIMUM COMMITMENT AMOUNT" shall mean One Million Dollars
($1,000,000).

                                       4
<PAGE>

          "MAXIMUM COMMITMENT AMOUNT" shall mean Ten Million Dollars ($
10,000,000).

          "MATERIAL ADVERSE EFFECT" shall mean any effect on the business,
operations, properties, prospects or financial condition of the Company that is
material and adverse to the Company or to the Company and such other entities
controlling or controlled by the Company, taken as a whole, and/or any
condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to enter into and perform
its obligations under any of (a) this Agreement and (b) the Registration Rights
Agreement.

          "MAXIMUM PUT AMOUNT" shall mean, with respect to any Put, the lesser
of (a) Five Hundred Thousand Dollars ($500,000), or (b)Two Hundred Fifty (250%)
percent of the Weighted Daily Average Volume for the Twenty (20) trading days
immediately preceding the Put Date.

          "MINIMUM PUT AMOUNT" shall mean, with respect to any Put, Twenty-Five
Thousand Dollars ($25,000).

          "NASD" shall mean the National Association of Securities Dealers, Inc.

          "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

          "NEW BID PRICE" shall have the meaning specified in Section2.6.

          "OLD BID PRICE" shall have the meaning specified in Section2.6.

          "OUTSTANDING" shall mean, with respect to the Common Stock, at any
date as of which the number of shares of Common Stock is to be determined, all
issued and outstanding shares of Common Stock, including all shares of Common
Stock issuable in respect of outstanding convertible securities, scrip or any
certificates representing fractional interests in shares of Common Stock;
provided, however, that Outstanding shall not include any shares of Common Stock
then directly or indirectly owned or held by or for the account of the Company.

          "PERSON" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

          "PRINCIPAL MARKET" shall mean the Nasdaq National Market, the Nasdaq
SmallCap Market, the Over the Counter Bulletin Board, the American Stock
Exchange or the New York Stock Exchange, whichever is at the time the principal
trading exchange or market for the Common Stock.

                                       5
<PAGE>

          "PURCHASE PRICE" shall mean, with respect to a Put, the Market Price
on the applicable Put Date (or such other date on which the Purchase Price is
calculated in accordance with the terms and conditions of this Agreement) less
the product of the Discount and the Market Price.

          "PUT" shall mean each occasion that the Company elects to exercise its
right to tender a Put Notice requiring Investor to purchase shares of Common
Stock, subject to the terms and conditions of this Agreement.

          "PUT DATE" shall mean the Trading Day during the Commitment Period
that a Put Notice is deemed delivered pursuant to Section 2.2(b).

          "PUT NOTICE" shall mean a written notice, substantially in the form of
Exhibit B hereto, to Investor setting forth the Investment Amount with respect
to which the Company intends to require Investor to purchase shares of Common
Stock pursuant to the terms of this Agreement.

          "PUT SHARES" shall mean all shares of Common Stock issued or issuable
pursuant to a Put that has been exercised or may be exercised in accordance with
the terms and conditions of this Agreement.

          "REGISTRABLE SECURITIES" shall mean the (a) Put Shares, (b) the
Blackout Shares and (c) any securities issued or issuable with respect to any of
the foregoing by way of exchange, stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (i) a
Registration Statement has been declared effective by the SEC and such
Registrable Securities have been disposed of pursuant to a Registration
Statement, (ii) such Registrable Securities have been sold under circumstances
under which all of the applicable conditions of Rule 144 are met, (iii) such
time as such Registrable Securities have been otherwise transferred to holders
who may trade such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend or (iv) in the opinion of counsel to
the Company, which counsel shall be reasonably acceptable to Investor, such
Registrable Securities may be sold without registration under the Securities
Actor the need for an exemption from any such registration requirements and
without any time, volume or manner limitations pursuant to Rule 144(k) (or any
similar provision then in effect) under the Securities Act.

          "REGISTRATION RIGHTS AGREEMENT" shall mean the registration rights
agreement in the form of Exhibit A hereto.

          "REGISTRATION STATEMENT" shall mean a registration statement on Form S
(if use of such form is then available to the Company pursuant to the rules of
the SEC and, if not, on such other form promulgated by the SEC for which the

                                       6
<PAGE>

Company then qualifies and which counsel for the Company shall deem appropriate
and which form shall be available for the resale of the Registrable Securities
to be registered thereunder in accordance with the provisions of this Agreement
and the Registration Rights Agreement and in accordance with the intended method
of distribution of such securities), for the registration of the resale by
Investor of the Registrable Securities under the Securities Act.

          "REGULATION D" shall have the meaning specified in the recitals of
this Agreement.

          "REGULATION S" shall have the meaning specified in the recitals of
this Agreement.

          "REMAINING PUT SHARES" shall have the meaning specified in Section
2.6.

          "RULE 144" shall mean Rule 144 under the Securities Act or any similar
provision then in force under the Securities Act.

          "SEC" shall mean the Securities and Exchange Commission.

          "SECTION 4(2)" shall have the meaning specified in the recitals of
this Agreement.

          "SECURITIES ACT" shall have the meaning specified in the recitals of
this Agreement.

          "SEC DOCUMENTS" shall mean, as of a particular date, all reports and
other documents file by the Company pursuant to Section 13(a) or 15(d) of the
Exchange Act since the beginning of the Company's then most recently completed
fiscal year as of the time in question (provided that if the date in question is
within ninety days of the beginning of the Company's fiscal year, the term shall
include all documents filed since the beginning of the second preceding fiscal
year).

          "SUBSCRIPTION DATE" shall mean the date on which this Agreement is
executed and delivered by the Company and Investor.

          "THIRD PARTY CLAIM" shall have the meaning specified in Section
9.3(a).

          "TRADING CUSHION" shall mean, after the Initial Put Notice a minimum
of five (5) days between a Closing Date and the next Put Date.

          "TRADING DAY" shall mean any day during which the Principal Market
shall be open for business.

                                       7
<PAGE>

          "TRANSACTION DOCUMENTS" means the Private Equity Credit Agreement, the
Registration Rights Agreement, Closing Certificate, and the Transfer Agent
Instructions.

          "TRANSFER AGENT" shall mean the transfer agent for the Common Stock
(and to any substitute or replacement transfer agent for the Common Stock upon
the Company's appointment of any such substitute or replacement transfer agent).

          "UNDERWRITER" shall mean any underwriter participating in any
disposition of the Registrable Securities on behalf of Investor pursuant to a
Registration Statement.

          "VALUATION EVENT" shall mean an event in which the Company at any time
during a Valuation Period takes any of the following actions:

               (a)  subdivides or combines the Common Stock;

               (b)  pays a dividend in shares of Common Stock or makes any other
                    distribution of shares of Common Stock, except for dividends
                    paid with respect to the Preferred Stock;

               (c)  issues any options or other rights to subscribe for or
                    purchase shares of Common Stock and the price per share for
                    which shares of Common Stock may at any time thereafter be
                    issuable pursuant to such options or other rights shall be
                    less than the Bid Price in effect immediately prior to such
                    issuance;

               (d)  issues any securities convertible into or exchangeable for
                    shares of Common Stock and the consideration per share for
                    which shares of Common Stock may at any time thereafter be
                    issuable pursuant to the terms of such convertible or
                    exchangeable securities shall be less than the Bid Price in
                    effect immediately prior to such issuance;

               (e)  issues shares of Common Stock otherwise than as provided in
                    the foregoing subsections (a) through (d), at a price per
                    share less, or for other consideration lower, than the Bid
                    Price in effect immediately prior to such issuance, or
                    without consideration;

               (f)  makes a distribution of its assets or evidences of
                    indebtedness to the holders of Common Stock as a dividend in
                    liquidation or by way of return of capital or other than as
                    a dividend payable out of earnings or surplus legally
                    available for dividends under applicable law or any
                    distribution to such holders made in respect of the sale of
                    all or substantially all of the Company's assets (other than
                    under the circumstances provided for in the foregoing
                    subsections (a) through (e); or

                                       8
<PAGE>

               (g)  takes any action affecting the number of Outstanding Common
                    Stock, other than an action described in any of the
                    foregoing subsections (a) through (f) hereof, inclusive,
                    which in the opinion of the Company's Board of Directors,
                    determined in good faith, would have a materially adverse
                    effect upon the rights of Investor at the time of a Put.

          "VALUATION PERIOD" shall mean the period of ten (10) Trading Days
immediately following the date on which the applicable Put Notice is deemed to
be delivered and during which the Purchase Price of the Common Stock is valued;
provided, however, that if a Valuation Event occurs during any Valuation Period,
a new Valuation Period shall begin on the Trading Day immediately after the
occurrence of such Valuation Event and end on the tenth (10th) Trading Day
thereafter.

          "WEIGHTED AVERAGE VOLUME" shall mean the average of the Weighted
Volume for the relevant days.

          "WEIGHTED VOLUME" shall mean the product of (a) the Closing Bid Price
times (b) the volume on the Principal Market.

                                   ARTICLE II
                        PURCHASE AND SALE OF COMMON STOCK

     Section 2.1 INVESTMENTS.

          (a) PUTS. Upon the terms and conditions set forth herein (including,
without limitation, the provisions of Article VII), on any Put Date the Company
may exercise a Put by the delivery of a Put Notice. The number of Put Shares
that Investor shall receive pursuant to such Put shall be determined by dividing
the Investment Amount specified in the Put Notice by the Purchase Price with
respect to such Put Date.

          (b) MINIMUM AMOUNT OF PUTS. The Company shall, in accordance with
Section 2.2(a), deliver to Investor during the Commitment Period, Put Notices
with an aggregate Investment Amount at least equal to the Minimum Commitment
Amount. If the Company for any reason fails to issue and deliver such Put Shares
during the Commitment Period, on the first Trading Day after the expiration of
the Commitment Period, the Company shall wire to Investor a sum in immediately
available funds equal to the product of (i) the Minimum Commitment Amount minus
the aggregate Investment Amounts of the Put Notices delivered to Investor
hereunder, and (ii) the Discount.

          (c) MAXIMUM AMOUNT OF PUTS. If required by the Principal Market, until
the Company obtains the requisite approval of its shareholders in accordance
with the corporate laws of the State of Delaware and the applicable rules of the
Principal Market, no more than the specified shares of Common Stock
(representing approximately 19.9% of the Outstanding Common Stock on the date
hereof) may be issued and sold to Investor pursuant to this Agreement.

                                       9
<PAGE>

     Section 2.2 MECHANICS.

          (a) PUT NOTICE. At any time during the Commitment Period, the Company
may deliver a Put Notice to Investor, subject to the conditions set forth in
Section 7.2; provided, however, the Investment Amount for each Put as designated
by the Company in the applicable Put Notice shall be neither less than the
Minimum Put Amount nor more than the Maximum Put Amount.

          (b) DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed
delivered on (i) the Trading Day it is received by facsimile or otherwise by
Investor if such notice is received on or prior to 12:00 noon New York time, or
(ii) the immediately succeeding Trading Day if it is received by facsimile or
otherwise after 12:00 noon New York time on a Trading Day or at anytime on a day
which is not a Trading Day.

     Section 2.3 CLOSINGS. On or prior to each Closing Date for a Put, (a) the
Company shall deliver to Escrow Agent, one or more certificates, at Investor's
option, representing the Put Shares to be purchased by Investor pursuant to
Section 2.1 herein, registered in the name of Investor and (b) Investor shall
deliver to the Escrow Agent the Investment Amount specified in the Put Notice by
wire transfer of immediately available funds to an account designated by the
Escrow Agent on or before the Closing Date. In lieu of delivering physical
certificates representing the Common Stock issuable in accordance with clause
(a) of this Section 2.3, and provided that the Transfer Agent then is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, upon request of Investor, the Company shall use its
commercially reasonable efforts to cause the Transfer Agent to electronically
transmit, prior to the Closing Date, the Put Shares by crediting the account of
the holder's prime broker with DTC through its Deposit Withdrawal Agent
Commission ("DWAC") system, and provide proof satisfactory to the Escrow Agent
of such delivery. In addition, on or prior to such Closing Date, each of the
Company and Investor shall deliver to the Escrow Agent all documents,
instruments and writings required to be delivered or reasonably requested by
either of them pursuant to this Agreement in order to implement and effect the
transactions contemplated herein. On the Closing Date and provided all
conditions to Closing have been satisfied by the Company, the Escrow agent shall
wire transfer to the Company, the Investment Amount, less any applicable fees
and expenses.

     Section 2.4 [INTENTIONALLY OMITTED]

     Section 2.5 TERMINATION OF INVESTMENT OBLIGATION. The obligation of
Investor pursuant to this Agreement to purchase shares of Common Stock shall, at
Investor's option, terminate permanently (including with respect to a Closing
Date that has not yet occurred) in the event that (a) there shall occur any stop

                                       10
<PAGE>

order or suspension of the effectiveness of any Registration Statement for an
aggregate of thirty (30) Trading Days during the Commitment Period, for any
reason other than deferrals or suspension during a Blackout Period in accordance
with the Registration Rights Agreement, as a result of corporate developments
subsequent to the Subscription Date that would require such Registration
Statement to be amended to reflect such event in order to maintain its
compliance with the disclosure requirements of the Securities Act, (b) pursuant
to Section 2(b) of the Registration Rights Agreement, or (c) the Company shall
at any time fail to comply with the requirements of Section 6.3, 6.4, or 6.6 and
such failure shall continue for more than thirty (30) days.

     Section 2.6 BLACKOUT SHARES. In the event that, (a) within fifteen (15)
Trading Days following any Closing Date, the Company gives a Blackout Notice to
Investor of a Blackout Period in accordance with the Registration Rights
Agreement, and (b) the Bid Price on the Trading Day immediately preceding such
Blackout Period ("OLD BID PRICE") is greater than the Bid Price on the first
Trading Day following such Blackout Period that Investor may sell its
Registrable Securities pursuant to an effective Registration Statement ("NEW BID
PRICE"), then the Company shall issue to Investor the number of additional
shares of Registrable Securities (the "BLACKOUT SHARES") equal to the difference
between (i) the product of the number of Put Shares held by Investor immediately
prior to the Blackout Period that were issued on the most recent Closing
Date(the "REMAINING PUT SHARES") multiplied by the Old Bid Price, divided by the
New Bid Price, and (ii) the Remaining Put Shares.

     Section 2.7 [INTENTIONALLY LEFT BLANK]

     Section 2.8 LIQUIDATED DAMAGES. Each of the Company and Investor
acknowledge and agree that the requirement to issue Blackout Shares under
Section 2.6 shall give rise to liquidated damages and not penalties. Each of the
Company and Investor further acknowledge that (a) the amount of loss or damages
likely to be incurred is incapable or is difficult to precisely estimate, (b)
the amounts specified in such Sections bear a reasonable proportion and are not
plainly or grossly disproportionate to the probable loss likely to be incurred
by Investor in connection with the failure by the Company to make Puts with
aggregate Purchase Prices totaling at least the Minimum Commitment Amount or in
connection with a Blackout Period under the Registration Rights Agreement, and
(c) each of the Company and Investor are sophisticated business parties and have
been represented by sophisticated and able legal and financial counsel and
negotiated this Agreement at arm's length.

                                  ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

              Investor represents and warrants to the Company that:

                                       11
<PAGE>

     Section 3.1 INTENT. Investor is entering into this Agreement for its own
account and Investor has no present arrangement (whether or not legally binding)
at any time to sell the Common Stock to or through any person or entity;
provided, however, Investor reserves the right to dispose of the Common Stock at
any time in accordance with federal and state securities laws applicable to such
disposition.

     Section 3.2 SOPHISTICATED INVESTOR. Investor is a sophisticated investor
(as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor
(as defined in Rule 501 of Regulation D), and Investor has such experience in
business and financial matters that it is capable of evaluating the merits and
risks of an investment in the Common Stock. Investor acknowledges that an
investment in the Common Stock is speculative and involves a high degree of
risk.

     Section 3.3 AUTHORITY. (a) Investor has the requisite power and authority
to enter into and perform its obligations under this Agreement and the
transactions contemplated hereby in accordance with its terms; (b) the execution
and delivery of this Agreement and the Registration Rights Agreement, and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action and no further consent or authorization
of Investor or its partners is required; and (c) this Agreement has been duly
authorized and validly executed and delivered by Investor and is a valid and
binding agreement of Investor enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies or
by other equitable principles of general application.

     Section 3.4 NOT AN AFFILIATE. Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.

     Section 3.5 ORGANIZATION AND STANDING. Investor is a limited liability
company duly organized, validly existing and in good standing under the laws of
the Cayman Islands, and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Investor is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, other than
those in which the failure so to qualify would not have a material adverse
effect on Investor.

     Section 3.6 ABSENCE OF CONFLICTS. The execution and delivery of this
Agreement and any other document or instrument contemplated hereby, and the
consummation of the transactions contemplated hereby and thereby, and compliance
with the requirements hereof and thereof, will not (a) violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on
Investor, (b) violate any provision of any indenture, instrument or agreement to
which Investor is a party or is subject, or by which Investor or any of its

                                       12
<PAGE>

assets is bound, or conflict with or constitute a material default thereunder,
(c) result in the creation or imposition of any lien pursuant to the terms of
any such indenture, instrument or agreement, or constitute a breach of any
fiduciary duty owed by Investor to any third party, or (d) require the approval
of any third-party (that has not been obtained) pursuant to any material
contract, instrument, agreement, relationship or legal obligation to which
Investor is subject or to which any of its assets, operations or management may
be subject.

     Section 3.7 DISCLOSURE; ACCESS TO INFORMATION. Investor has received all
documents, records, books and other information pertaining to Investor's
investment in the Company that has been requested by Investor. Investor has
reviewed or received copies of the SEC Documents.

     Section 3.8 MANNER OF SALE. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.

     Section 3.9 FINANCIAL CAPABILITY. Investor presently has the financial
capacity and the necessary capital to perform its obligations hereunder and
shall and has provided to the Company such financial and other information that
the Company has requested to demonstrate such capacity.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to Investor that, except as disclosed
in the SEC Documents:

     Section 4.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware, and has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. The Company
is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, other than those in
which the failure so to qualify would not have a Material Adverse Effect.

     Section 4.2 AUTHORITY. (a) The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement and
the Registration Rights Agreement and to issue the Put Shares and the Blackout
Shares, if any; (b) the execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action and no further consent or authorization of the

                                       13
<PAGE>

Company or its Board of Directors or stockholders is required; and (c) each of
this Agreement and the Registration Rights Agreement has been duly executed and
delivered by the Company and constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.

     Section 4.3 CAPITALIZATION. As of March 30, 2003 , the authorized capital
stock of the Company consisted of the following:

     Common stock, $.0001 par value, 15,000,000 shares authorized, 14,999,156
shares issued and outstanding at March 31, 2003 and December 31, 2002

     Redeemable Preferred stock, Series B, $.01 par value, 125 shares
authorized, 125 shares issued at March 31, 2003 and December 31, 2002 and 17.8
shares outstanding at March 31, 2003 and December 31, 2002, convertible,
participating; $427,500 liquidation value as of March 31, 2003

     Preferred stock, Series C, $.01 par value, 175 shares issued and
authorized, 90.5 shares outstanding at March 31, 2003 and December 31, 2002,
convertible, participating; $2,208,765 liquidation value at March 31, 2003

     Preferred stock, Series D, $.01 par value, 75 shares issued and authorized,
1.3 shares outstanding at March 31, 2003 and December 31, 2002, convertible,
participating; $31,253 liquidation value at March 31, 2003

     Preferred stock, Series E, $.01 par value, 106.4 shares issued and
authorized, 106.4 shares outstanding at March 31, 2003 and December 31, 2002,
convertible, participating; $2,630,953 liquidation value at March 31, 2003

     All of the outstanding shares of Common Stock of the Company have been duly
and validly authorized and issued and are fully paid and nonassessable.

     Section 4.4 COMMON STOCK. The Company has registered the Common Stock
pursuant to Section 12(b) or 12(g) of the Exchange Act and is in full compliance
with all reporting requirements of the Exchange Act, and the Company has
maintained all requirements for the continued listing or quotation of the Common
Stock, and such Common Stock is currently listed or quoted on the Principal
Market. As of the date of this Agreement, the Principal Market is the OTC
Bulletin Board.

     Section 4.5 SEC DOCUMENTS. The Company has delivered or made available to
Investor true and complete copies of the SEC Documents (including, without
limitation, proxy information and solicitation materials). To the best of
Company's knowledge, the Company has not provided to Investor any information
that, according to applicable law, rule or regulation, should have been

                                       14
<PAGE>

disclosed publicly prior to the date hereof by the Company, but which has not
been so disclosed. As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and other federal, state and local laws, rules
and regulations applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents comply as to form and substance in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (a) as may be otherwise indicated in such financial statements or the
notes thereto or (b) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).

     Section 4.6 EXEMPTION FROM REGISTRATION; VALID ISSUANCES. To the best of
Company's knowledge, the sale and issuance of the Put Shares and the Blackout
Shares, if any, in accordance with the terms and on the bases of the
representations and warranties set forth in this Agreement, may and shall be
properly issued by the Company to Investor pursuant to Section 4(2), Regulation
D and/or any applicable state law. When issued and paid for as herein provided,
the Put Shares, and the Blackout Shares, if any, shall be duly and validly
issued, fully paid, and nonassessable. Neither the sales of the Put Shares or
the Blackout Shares, if any, pursuant to, nor the Company's performance of its
obligations under, this Agreement or the Registration Rights Agreement shall (a)
result in the creation or imposition of any liens, charges, claims or other
encumbrances upon the Put Shares or the Blackout Shares, if any, or any of the
assets of the Company, or (b) entitle the holders of Outstanding Common Stock to
preemptive or other rights to subscribe to or acquire the Common Stock or other
securities of the Company. The Put Shares and the Blackout Shares, if any, shall
not subject Investor to personal liability by reason of the ownership thereof.

     Section 4.7 NO GENERAL SOLICITATION OR ADVERTISING IN REGARD TO THIS
TRANSACTION. Neither the Company nor any of its affiliates nor any person acting
on its or their behalf (a) has conducted or will conduct any general
solicitation (as that term is used in Rule 502(c) of Regulation D) or general
advertising with respect to any of the Put Shares or the Blackout Shares, if
any, or (b) made any offers or sales of any security or solicited any offers to
buy any security under any circumstances that would require registration of the
Common Stock under the Securities Act.

     Section 4.8 CORPORATE DOCUMENTS. The Company has furnished or made
available to Investor true and correct copies of the Company's Certificate of
Incorporation, as amended and in effect on the date hereof (the "CERTIFICATE"),
and the Company's By-Laws, as amended and in effect on the date hereof (the
"BY-LAWS").

                                       15
<PAGE>

     Section 4.9 NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, including without limitation the issuance of the Put Shares
and the Blackout Shares, if any, do not and will not (a) result in a violation
of the Certificate or By-Laws or (b) conflict with, or constitute a material
default (or an event that with notice or lapse of time or both would become a
material default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture, instrument
or any "lock-up" or similar provision of any underwriting or similar agreement
to which the Company is a party, or (c) result in a violation of any federal,
state, local or foreign law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations)applicable to the
Company or by which any property or asset of the Company is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect) nor is the Company otherwise in violation of,
conflict with or in default under any of the foregoing; provided, however, that
for purposes of the Company's representations and warranties as to violations of
foreign law, rule or regulation referenced in clause (c), such representations
and warranties are made only to the best of the Company's knowledge insofar as
the execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby are or may
be affected by the status of Investor under or pursuant to any such foreign law,
rule or regulation. The business of the Company is not being conducted in
violation of any law, ordinance or regulation of any governmental entity, except
for possible violations that either singly or in the aggregate do not and will
not have a Material Adverse Effect. The Company is not required under federal,
state or local law, rule or regulation to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement or issue and sell the Common Stock in accordance with the
terms hereof(other than any SEC, NASD or state securities filings that may be
required to be made by the Company subsequent to any Closing, any registration
statement that may be filed pursuant hereto, and any shareholder approval
required by the rules applicable to companies whose common stock trades on the
Over The Counter Bulletin Board); provided that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of Investor herein.

     Section 4.10 NO MATERIAL ADVERSE CHANGE. Since January 1, 2003, no event
has occurred that would have a Material Adverse Effect on the Company, except as
disclosed in the SEC Documents.

     Section 4.11 NO UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations that are material, individually or in the aggregate, and that are
not disclosed in the SEC Documents or otherwise publicly announced, other than
those incurred in the ordinary course of the Company's businesses since March
27, 2003 and which, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company.

                                       16
<PAGE>

     Section 4.12 NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since March 27, 2003,
no event or circumstance has occurred or exists with respect to the Company or
its businesses, properties, prospects, operations or financial condition, that,
under applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been so
publicly announced or disclosed in the SEC Documents.

     Section 4.13 NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, other than pursuant to this Agreement, under circumstances
that would require registration of the Common Stock under the Securities Act.

     Section 4.14 LITIGATION AND OTHER PROCEEDINGS. Except as may beset forth in
the SEC Documents, there are no lawsuits or proceedings pending or to the best
knowledge of the Company threatened, against the Company, nor has the Company
received any written or oral notice of any such action, suit, proceeding or
investigation, which would have a Material Adverse Effect. Except as set forth
in the SEC Documents, no judgment, order, writ, injunction or decree or award
has been issued by or, so far as is known by the Company, requested of any
court, arbitrator or governmental agency which would have a Material Adverse
Effect.

     Section 4.15 NO MISLEADING OR UNTRUE COMMUNICATION. The Company, any Person
representing the Company, and, to the knowledge of the Company, any other Person
selling or offering to sell the Put Shares or the Blackout Shares, if any, in
connection with the transactions contemplated by this Agreement, have not made,
at any time, any oral communication in connection with the offer or sale of the
same which contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.

                                    ARTICLE V

                              COVENANTS OF INVESTOR

     Section 5.1 COMPLIANCE WITH LAW. Investor's trading activities with respect
to shares of the Common Stock will be in compliance with all applicable state
and federal securities laws, rules and regulations and the rules and regulations
of the NASD and the Principal Market on which the Common stock is listed.

                                       17
<PAGE>

                                   ARTICLE VI

                            COVENANTS OF THE COMPANY

     Section 6.1 REGISTRATION RIGHTS. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all respects with the terms thereof.

     Section 6.2 RESERVATION OF COMMON STOCK. Not later than March 31, 2004, the
Company shall have available and the Company shall reserve and keep available at
all times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Put Shares and the
Blackout Shares, if any; such amount of shares of Common Stock to be reserved
shall be calculated based upon a minimum Purchase Price of $.06 for the Put
Shares under the terms and conditions of this Agreement and a good faith
estimate by the Company in consultation with Investor of the number of Blackout
Shares, if any, that will need to be issued. The number of shares so reserved
from time to time, as theretofore increased or reduced as hereinafter provided,
may be reduced by the number of shares actually delivered hereunder.

     Section 6.3 LISTING OF COMMON STOCK. The Company shall maintain the listing
of the Common Stock on a Principal Market, and will cause the Put Shares and the
Blackout Shares, if any, to be listed on the Principal Market. The Company
further shall, if the Company applies to have the Common Stock traded on any
other Principal Market, include in such application the Put Shares and the
Blackout Shares, if any, and shall take such other action as is necessary or
desirable in the reasonable opinion of Investor to cause the Common Stock to be
listed on such other Principal Market as promptly as possible. The Company shall
use its commercially reasonable efforts to continue the listing and trading of
the Common Stock on the Principal Market (including, without limitation,
maintaining sufficient net tangible assets) and will comply in all respects with
the Company's reporting, filing and other obligations under the bylaws or rules
of the NASD and the Principal Market.

     Section 6.4 EXCHANGE ACT REGISTRATION. The Company shall take all
commercially reasonable steps to cause the Common Stock to continue to be
registered under Section 12(g) or 12(b) of the Exchange Act, will use its
commercially reasonable efforts to comply in all material respects with its
reporting and filing obligations under said Act, and will not take any action or
file any document (whether or not permitted by said Act or the rules
thereunder)to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under said Act.

     Section 6.5 LEGENDS. The certificates evidencing the Put Shares and the
Blackout Shares, if any, shall be free of legends, except as provided for in
Article VIII.

     Section 6.6 CORPORATE EXISTENCE. The Company shall take all commercially
reasonable steps necessary to preserve and continue the corporate existence of
the Company.

                                       18
<PAGE>

     Section 6.7 ADDITIONAL SEC DOCUMENTS. The Company shall deliver to
Investor, promptly after the originals thereof are submitted to the SEC for
filing, copies of all SEC Documents so furnished or submitted to the SEC.

     Section 6.8 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF
RIGHT TO MAKE A PUT. The Company shall promptly notify Investor upon the
occurrence of any of the following events in respect of a registration statement
or related prospectus in respect of an offering of Registrable Securities: (a)
receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the registration statement for amendments or supplements to the registration
statement or related prospectus; (b) the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of any Registration Statement or the initiation of any proceedings
for that purpose; (c) receipt of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (d) the happening of any event that makes any
statement made in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
registration statement, related prospectus or documents so that, in the case of
a Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the related prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (e) the Company's reasonable
determination that a post-effective amendment to the registration statement
would be appropriate, and the Company shall promptly make available to Investor
any such supplement or amendment to the related prospectus. The Company shall
not deliver to Investor any Put Notice during the continuation of any of the
foregoing events.

     Section 6.9 EXPECTATIONS REGARDING PUT NOTICES. Within fifteen (15)
business days after the commencement of each calendar quarter occurring
subsequent to the commencement of the Commitment Period, the Company undertakes
to notify Investor as to its reasonable expectations as to the dollar amount it
intends to raise during such calendar quarter, if any, through the issuance of
Put Notices. Such notification shall constitute only the Company's good faith
estimate with respect to such calendar quarter and shall in no way obligate the
Company to raise such amount during such calendar quarter or otherwise limit its
ability to deliver Put Notices during such calendar quarter. The failure by the
Company to comply with this provision can be cured by the Company's notifying
Investor at any time as to its reasonable expectations with respect to the
current calendar quarter.

                                       19
<PAGE>

     Section 6.10 CONSOLIDATION; MERGER. The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all of the assets of the Company to,
another entity unless the resulting successor or acquiring entity (if not the
Company) assumes by written instrument the obligation to deliver to Investor
such shares of Common Stock and/or securities as Investor is entitled to receive
pursuant to this Agreement.

     Section 6.11 ISSUANCE OF PUT SHARES AND BLACKOUT SHARES. The sale of the
Put Shares and the issuance of the Blackout Shares, if any, shall be made in
accordance with the provisions and requirements of Regulation D and any
applicable state law.

     Section 6.12 DILUTION. The number of shares of Common Stock issuable as Put
Shares may increase substantially in certain circumstances, including, but not
necessarily limited to, the circumstance wherein the trading price of the Common
Stock declines during the period between the Effective Date and the end of the
Commitment Period. The Company's executive officers and directors have studied
and fully understand the nature of the transactions contemplated by this
Agreement and recognize that they have a potential dilutive effect. The board of
directors of the Company has concluded, in its good faith business judgment,
that such issuance is in the best interests of the Company. The Company
specifically acknowledges that its obligation to issue the Put Shares is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Company.

                                   ARTICLE VII

                            CONDITIONS TO DELIVERY OF
                      PUT NOTICES AND CONDITIONS TO CLOSING

     Section 7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE
AND SELL COMMON STOCK. The obligation hereunder of the Company to issue and sell
the Put Shares to Investor incident to each Closing is subject to the
satisfaction, at or before each such Closing, of each of the conditions set
forth below.

          (a) ACCURACY OF INVESTOR'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Investor shall be true and correct in all
material respects as of the date of this Agreement and as of the date of each
such Closing as though made at each such time, except for changes which have not
had a Material Adverse Effect.

          (b) PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied
and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
Investor at or prior to such Closing.

                                       20
<PAGE>

     Section 7.2 CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A
PUT NOTICE AND THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The right of
the Company to deliver a Put Notice and the obligation of Investor hereunder to
acquire and pay for the Put Shares incident to a Closing is subject to the
satisfaction, on (a) the date of delivery of such Put Notice and (b) the
applicable Closing Date (each a "CONDITION SATISFACTION DATE"), of each of the
following conditions:

          (a) REGISTRATION OF REGISTRABLE SECURITIES WITH THE SEC. As set forth
in the Registration Rights Agreement, the Company shall have filed with the SEC
the Initial Registration Statement with respect to the resale of the Initial
Registrable Securities by Investor and such Registration Statement shall have
been declared effective by the SEC prior to the first Put Date. For the purposes
of any Put Notice with respect to the Registrable Securities other than the
Initial Registrable Securities, the Company shall have filed with the SEC a
Registration Statement with respect to the resale of such Registrable Securities
by Investor which shall have been declared effective by the SEC prior to the Put
Date therefore.

          (b) EFFECTIVE REGISTRATION STATEMENT. As set forth in the Registration
Rights Agreement, a Registration Statement shall have previously become
effective for the resale by Investor of the Registrable Securities subject to
such Put Notice and such Registration Statement shall remain effective on each
Condition Satisfaction Date and (i) neither the Company nor Investor shall have
received notice that the SEC has issued or intends to issue a stop order with
respect to such Registration Statement or that the SEC otherwise has suspended
or withdrawn the effectiveness of such Registration Statement, either
temporarily or permanently, or intends or has threatened to do so (unless the
SEC's concerns have been addressed and Investor is reasonably satisfied that the
SEC no longer is considering or intends to take such action),and (ii) no other
suspension of the use or withdrawal of the effectiveness of such Registration
Statement or related prospectus shall exist.

          (c) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company shall be true and correct in all
material respects as of each Condition Satisfaction Date as though made at each
such time (except for representations and warranties specifically made as of a
particular date) with respect to all periods, and as to all events and
circumstances occurring or existing to and including each Condition Satisfaction
Date, except for any conditions which have temporarily caused any
representations or warranties herein to be incorrect and which have been
corrected with no continuing impairment to the Company or Investor.

          (d) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement and the Registration Rights Agreement
to be performed, satisfied or complied with by the Company at or prior to each
Condition Satisfaction Date.

                                       21
<PAGE>

          (e) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
adopted by any court or governmental authority of competent jurisdiction that
prohibits or directly and materially adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have been commenced that
may have the effect of prohibiting or materially adversely affecting any of the
transactions contemplated by this Agreement.

          (f) ADVERSE CHANGES. Since the date of filing of the Company's most
recent SEC Document, no event that had or is reasonably likely to have a
Material Adverse Effect has occurred.

          (g) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The
trading of the Common Stock shall not have been suspended by the SEC, the
Principal Market or the NASD and the Common Stock shall have been approved for
listing or quotation on and shall not have been delisted from the Principal
Market.

          (h) LEGAL OPINION. The Company shall have caused to be delivered to
Investor, within five (5) Trading Days of the effective date of the Initial
Registration Statement and each subsequent Registration Statement, an opinion of
the Company's legal counsel in the form of Exhibit C hereto, addressed to
Investor.

          (i) [INTENTIONALLY OMITTED]

          (j) TEN PERCENT LIMITATION. On each Closing Date, the number of Put
Shares then to be purchased by Investor shall not exceed the number of such
shares that, when aggregated with all other shares of Registrable Securities
then owned by Investor beneficially or deemed beneficially owned by Investor,
would result in Investor owning no more than 9.9% of all of such Common Stock as
would be outstanding on such Closing Date, as determined in accordance with
Section 16 of the Exchange Act and the regulations promulgated thereunder. For
purposes of this Section 7.2(j), in the event that the amount of Common Stock
outstanding as determined in accordance with Section 16 of the Exchange Act and
the regulations promulgated thereunder is greater on a Closing Date than on the
date upon which the Put Notice associated with such Closing Date is given, the
amount of Common Stock outstanding on such Closing Date shall govern for
purposes of determining whether Investor, when aggregating all purchases of
Common Stock made pursuant to this Agreement and Blackout Shares, if any, would
own more than 9.9% of the Common Stock following such Closing Date.

          (k) NO KNOWLEDGE. The Company shall have no knowledge of any event
more likely than not to have the effect of causing such Registration Statement
to be suspended or otherwise ineffective (which event is more likely than not to
occur within the fifteen Trading Days following the Trading Day on which such
Notice is deemed delivered).

                                       22
<PAGE>

          (l) TRADING CUSHION. The Trading Cushion shall have elapsed since the
immediately preceding Put Date.

          (m) SHAREHOLDER VOTE. The issuance of shares of Common Stock with
respect to the applicable Closing, if any, shall not violate the shareholder
approval requirements of the Principal Market.

          (o) OTHER. On each Condition Satisfaction Date, Investor shall have
received and been reasonably satisfied with such other certificates and
documents as shall have been reasonably requested by Investor in order for
Investor to confirm the Company's satisfaction of the conditions set forth in
this Section 7.2., including, without limitation, a certificate in substantially
the form and substance of Exhibit D hereto, executed by an executive officer of
the Company and to the effect that all the conditions to such Closing shall have
been satisfied as at the date of each such certificate.

     Section 7.3 DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

          (a) The Company shall make available for inspection and review by
Investor, advisors to and representatives of Investor (who may or may not be
affiliated with Investor and who are reasonably acceptable to the Company), any
Underwriter, any Registration Statement or amendment or supplement thereto or
any blue sky, NASD or other filing, all financial and other records, all SEC
Documents and other filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such
review, and cause the Company's officers, directors and employees to supply all
such information reasonably requested by Investor or any such representative,
advisor or Underwriter in connection with such Registration Statement
(including, without limitation, in response to all questions and other inquiries
reasonably made or submitted by any of them), prior to and from time to time
after the filing and effectiveness of such Registration.

          (b) Each of the Company, its officers, directors, employees and agents
shall in no event disclose non-public information to Investor, advisors to or
representatives of Investor.

          (c) Nothing herein shall require the Company to disclose non-public
information to Investor or its advisors or representatives, and the Company
represents that it does not disseminate non-public information to any investors
who purchase stock in the Company in a public offering, to money managers or to
securities analysts; provided, however, that notwithstanding anything herein to
the contrary, the Company shall, as hereinabove provided, immediately notify the

                                       23
<PAGE>

advisors and representatives of Investor and any Underwriters of any event or
the existence of any circumstance(without any obligation to disclose the
specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company specifically or
generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in a Registration Statement
would cause such prospectus to include a material misstatement or to omit a
material fact required to be stated therein in order to make the statements
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 7.3 shall be construed to mean that such
persons or entities other than Investor (without the written consent of Investor
prior to disclosure of such information) may not obtain non-public information
in the course of conducting due diligence in accordance with the terms and
conditions of this Agreement and nothing herein shall prevent any such persons
or entities from notifying the Company of their opinion that based on such due
diligence by such persons or entities, any Registration Statement contains an
untrue statement of a material fact or omits a material fact required to be
stated in such Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.

                                  ARTICLE VIII

                                     LEGENDS

     Section 8.1 LEGENDS. (a) Except as otherwise provided below, each
certificate representing Registrable Securities will bear the following legend
(the "LEGEND"):

          The securities represented by this certificate have not been
          registered under the Securities Act of 1933 (the "Securities
          Act") or qualified under applicable state securities laws.
          These securities may not be offered, sold, pledged,
          hypothecated, transferred or otherwise disposed of except
          pursuant to (I) an effective registration statement and
          qualification in effect with respect thereto under the
          Securities Act and under any applicable state securities
          law, (ii) to the extent applicable, Rule 144 under the
          Securities Act, or (iii) an opinion of counsel reasonably
          acceptable to the Company that such registration and
          qualification is not required under applicable federal and
          state securities laws."

          (b) As soon as practicable after the execution and delivery hereof,
the Company shall issue to the Transfer Agent Instructions in substantially the
form of Exhibit E hereto. Such instructions shall be irrevocable by the Company
from and after the date thereof or from and after the issuance thereof except as
otherwise expressly provided in the Registration Rights Agreement. It is the
intent and purpose of such instructions, as provided therein, to require the

                                       24
<PAGE>

Transfer Agent to issue to Investor certificates evidencing shares of Common
Stock incident to a Closing, free of the Legend, without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the Transfer Agent by or from
the Company or its counsel or Investor; provided that (a) a Registration
Statement shall then be effective, (b) Investor confirms to the Transfer Agent
and the Company that it has or intends to sell such Common Stock to a third
party which is not an affiliate of Investor or the Company and Investor agrees
to redeliver the certificate representing such shares of Common Stock to the
Transfer Agent to add the Legend in the event the Common Stock is not sold, and
(c) if reasonably requested by the transfer agent or the Company, Investor
confirms to the transfer agent and the Company that Investor has complied with
the prospectus delivery requirement under the Securities Act. At any time after
the Effective Date, upon surrender of one or more certificates evidencing Common
Stock that bear the Legend, to the extent accompanied by a notice requesting the
issuance of new certificates free of the Legend to replace those surrendered.

     Section 8.2 NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend other
than the one specified in Section 8.1 has been or shall be placed on the share
certificates representing the Common Stock and no instructions or "stop
transfers orders," so called, "stock transfer restrictions," or other
restrictions have been or shall be given to the Company's transfer agent with
respect thereto other than as expressly set forth in this Article VIII.

     Section 8.3 COVER. If the Company fails for any reason to deliver the Put
Shares on such Closing Date and the holder of the Put Shares (a "Investor")
purchases, in an open market transaction or otherwise, shares of Common Stock
(the "Covering Shares") in order to make delivery in satisfaction of a sale of
Common Stock by such Investor (the "Sold Shares"), which delivery such Investor
anticipated to make using the Put Shares (a "Buy-In"), then the Company shall
pay to such Investor, in addition to all other amounts contemplated in other
provisions of the Transaction Documents, and not in lieu thereof, the Buy-In
Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is the
amount equal to the excess, if any, of (x) such Investor's total purchase price
(including brokerage commissions, if any) for the Covering Shares over (y) the
net proceeds (after brokerage commissions, if any) received by such Investor
from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment
Amount to such Investor in immediately available funds immediately upon demand
by such Investor. By way of illustration and not in limitation of the foregoing,
if such Investor purchases Covering Shares having a total purchase price
(including brokerage commissions) of $11,000 to cover a Buy-In with respect to
shares of Common Stock that it sold for net proceeds of $10,000, the Buy-In
Adjustment Amount that the Company will be required to pay to such Investor will
be $1,000.

     Section 8.4 INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall
affect in any way Investor's obligations under any agreement to comply with all
applicable securities laws upon resale of the Common Stock.

                                       25
<PAGE>

                                   ARTICLE IX

                            NOTICES; INDEMNIFICATION

     Section 9.1 NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (a) personally served,(b)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (c) delivered by reputable air courier service with charges
prepaid, or (d) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (ii) on the second business day
following the date of mailing by express courier service or on the fifth
business day after deposited in the mail, in each case, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:

     If to the Company:        HomeCom Comunications, Inc.
                               90 Grove Street, Suite 205
                               Ridgefield, CT 06877
                               Telephone No.: (203) 431-8120
                               Telecopier No.: (203) 431-8304

     if to Investor:           Brittany Capital Management Ltd.
                               Cumberland House
                               27 Cumberland Street
                               PO Box N-10818
                               Nassau, New Providence
                               Bahamas

     with a copy to:           Krieger & Prager, LLP
                               Suite 1440
                               39 Broadway
                               New York, New York 10006
                               Telephone:  (212) 363-2900
                               Facsimile:  (212) 363-2999

Either party hereto may from time to time change its address or facsimile number
for notices under this Section 9.1 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.

                                       26
<PAGE>

     Section 9.2 INDEMNIFICATION.

          The Company agrees to indemnify and hold harmless Investor and its
officers, directors, employees, and agents, and each Person or entity, if any,
who controls Investor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, together with the Controlling Persons (as
defined in the Registration Rights Agreement) from and against any Damages,
joint or several, and any action in respect thereof to which Investor, its
partners, affiliates, officers, directors, employees, and duly authorized
agents, and any such Controlling Person becomes subject to, resulting from,
arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are incurred, except to the
extent such Damages result primarily from Investor's failure to perform any
covenant or agreement contained in this Agreement or Investor's or its
officer's, director's, employee's, agent's or Controlling Person's negligence,
recklessness or bad faith in performing its obligations under this Agreement.

     Section 9.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for
indemnification by any Indemnified Party (as defined below) under Section 9.2
shall be asserted and resolved as follows:

          (a) In the event any claim or demand in respect of which any person
claiming indemnification under any provision of this Article (an "INDEMNIFIED
PARTY") might seek indemnity under this Article is asserted against or sought to
be collected from such Indemnified Party by a person other than a party hereto
or an affiliate thereof (a "THIRD PARTY CLAIM"), the Indemnified Party shall
deliver a written notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party's claim for indemnification that is being asserted under any
provision of this Article against any person (the "INDEMNIFYING PARTY"),
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim (a "CLAIM NOTICE")
with reasonable promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party shall not be obligated to indemnify the Indemnified Party with respect to
such Third Party Claim to the extent that the Indemnifying Party's ability to
defend has been prejudiced by such failure of the Indemnified Party. The
Indemnifying Party shall notify the Indemnified Party as soon as practicable
within the period ending thirty (30) calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined
below) (the "DISPUTE PERIOD") whether the Indemnifying Party disputes its
liability or the amount of its liability to the Indemnified Party under this
Article and whether the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Third Party Claim.(i)If

                                       27
<PAGE>

the Indemnifying Party notifies the Indemnified Party within the Dispute Period
that the Indemnifying Party desires to defend the Indemnified Party with respect
to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying
Party shall have the right to defend, with counsel reasonably satisfactory to
the Indemnified Party, at the sole cost and expense of the Indemnifying Party,
such Third Party Claim by all appropriate proceedings, which proceedings shall
be vigorously and diligently prosecuted by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying Party (but
only with the consent of the Indemnified Party in the case of any settlement
that provides for any relief other than the payment of monetary damages or that
provides for the payment of monetary damages as to which the Indemnified Party
shall not be indemnified in full pursuant to this Article). The Indemnifying
Party shall have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that the Indemnified Party
may, at the sole cost and expense of the Indemnified Party, at any time prior to
the Indemnifying Party's delivery of the notice referred to in the first
sentence of this clause (i), file any motion, answer or other pleadings or take
any other action that the Indemnified Party reasonably believes to be necessary
or appropriate to protect its interests; and provided further, that if requested
by the Indemnifying Party, the Indemnified Party will, at the sole cost and
expense of the Indemnifying Party, provide reasonable cooperation to the
Indemnifying Party in contesting any Third Party Claim that the Indemnifying
Party elects to contest. The Indemnified Party may participate in, but not
control, any defense or settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party shall bear its own costs and expenses
with respect to such participation. Notwithstanding the foregoing, the
Indemnified Party may takeover the control of the defense or settlement of a
Third Party Claim at any time if it irrevocably waives its right to indemnity
under this Article with respect to such Third Party Claim. (ii) If the
Indemnifying Party fails to notify the Indemnified Party within the Dispute
Period that the Indemnifying Party desires to defend the Third Party Claim
pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but
fails to prosecute vigorously and diligently or settle the Third Party Claim, or
if the Indemnifying Party fails to give any notice whatsoever within the Dispute
Period, then the Indemnified Party shall have the right to defend, at the sole
cost and expense of the Indemnifying Party, the Third Party Claim by all
appropriate proceedings, which proceedings shall be prosecuted by the
Indemnified Party in a reasonable manner and in good faith or will be settled at
the discretion of the Indemnified Party(with the consent of the Indemnifying
Party, which consent will not be unreasonably withheld). The Indemnified Party
will have full control of such defense and proceedings, including any compromise
or settlement thereof; provided, however, that if requested by the Indemnified
Party, the Indemnifying Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the Indemnified Party and
its counsel in contesting any Third Party Claim which the Indemnified Party is
contesting. Notwithstanding the foregoing provisions of this clause (ii), if the
Indemnifying Party has notified the Indemnified Party within the Dispute Period
that the Indemnifying Party disputes its liability or the amount of its
liability hereunder to the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the Indemnifying Party in the
manner provided in clause (iii) below, the Indemnifying Party will not be

                                       28
<PAGE>

required to bear the costs and expenses of the Indemnified Party's defense
pursuant to this clause (ii) or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the Indemnified Party shall
reimburse the Indemnifying Party in full for all reasonable costs and expenses
incurred by the Indemnifying Party in connection with such litigation. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this clause (ii), and
the Indemnifying Party shall bear its own costs and expenses with respect to
such participation. (iii) If the Indemnifying Party notifies the Indemnified
Party that it does not dispute its liability or the amount of its liability to
the Indemnified Party with respect to the Third Party Claim under this Article
or fails to notify the Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes its liability or the amount of its liability to the
Indemnified Party with respect to such Third Party Claim, the amount of Damages
specified in the Claim Notice shall be conclusively deemed a liability of the
Indemnifying Party under this Article and the Indemnifying Party shall pay the
amount of such Damages to the Indemnified Party on demand. If the Indemnifying
Party has timely disputed its liability or the amount of its liability with
respect to such claim, the Indemnifying Party and the Indemnified Party shall
proceed in good faith to negotiate a resolution of such dispute; provided,
however, that if the dispute is not resolved within thirty (30) days after the
Claim Notice, the Indemnifying Party shall be entitled to institute such legal
action as it deems appropriate.

          (b) In the event any Indemnified Party should have a claim under this
Article against the Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver a written notification of a claim for
indemnity under this Article specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such claim (an "INDEMNITY NOTICE") with
reasonable promptness to the Indemnifying Party. The failure by any Indemnified
Party to give the Indemnity Notice shall not impair such party's rights
hereunder except to the extent that the Indemnifying Party demonstrates that it
has been irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim or the amount of the claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim or
the amount of the claim described in such Indemnity Notice, the amount of
Damages specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under this Article and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified Party on demand.
If the Indemnifying Party has timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days
after the Claim Notice, the Indemnifying Party shall be entitled to institute
such legal action as it deems appropriate.

          (c) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar rights of the Indemnified Party against the
Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party
may be subject to.

                                       29
<PAGE>

     Section 9.4 REIMBURSEMENT. (i) any Investor, other than by reason of its
gross negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any stockholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Agreements, or if such Investor is impleaded in
any such action, proceeding or investigation by any Person, or (ii) any
Investor, other than by reason of its gross negligence or willful misconduct or
by reason of its trading of the Common Stock in a manner that is illegal under
the federal securities laws, becomes involved in any capacity in any action,
proceeding or investigation brought by the SEC against or involving the Company
or in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Agreements, or if such Investor is impleaded in
any such action, proceeding or investigation by any Person, then in any such
case, the Company will reimburse such Investor for its reasonable legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith, as such expenses are incurred. In addition,
other than with respect to any matter in which such Investor is a named party,
the Company will pay such Investor the charges, as reasonably determined by such
Investor, for the time of any officers or employees of such Investor devoted to
appearing and preparing to appear as witnesses, assisting in preparation for
hearings, trials or pretrial matters, or otherwise with respect to inquiries,
hearing, trials, and other proceedings relating to the subject matter of this
Agreement. The reimbursement obligations of the Company under this paragraph
shall be in addition to any liability which the Company may otherwise have,
shall extend upon the same terms and conditions to any Affiliates of the
Investor who are actually named in such action, proceeding or investigation, and
partners, directors, agents, employees and controlling persons (if any), as the
case may be, of the Investor and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Investor and any such Affiliate and any such
Person. The Company also agrees that neither any Investor nor any such
Affiliate, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any person asserting claims on behalf of or
in right of the Company in connection with or as a result of the consummation of
the Transaction Agreements except to the extent that any losses, claims,
damages, liabilities or expenses incurred by the Company result from the gross
negligence or willful misconduct of such Investor.

     Section 9.5 RELEASE. Effective upon the mutual execution hereof, the
Company, for itself and on behalf of all affiliated persons and entities,
representatives, and all predecessors in interest, successors and assigns
(collectively, the "Releasing Parties"), hereby releases and forever discharges
each of Investor, and Investor's direct and indirect partners, officers,
directors, employees, affiliates, representatives, agents, trustees,
beneficiaries, predecessors in interest, successors in interest and nominees, of
and from any and all claims, demands, actions and causes of action, whether
known or unknown, fixed or contingent, arising prior to the Closing Date, that
the Company may have had, may now have or may hereafter acquire with respect to
any matters whatsoever under, relating to or arising from any prior Purchase

                                       30
<PAGE>

Agreement, Registration Agreement, and the agreements entered into in connection
therewith (sometimes collectively referred to as the "Prior Agreements"). The
Company also fully waives (i) any defenses it may have with respect to honoring
the terms of the Prior Agreements, or any (ii) offsets it may have with respect
to the amounts owed under the Prior Agreements.

     The Company represents, warrants and covenants that it has not, and at the
time this release becomes effective will not have, sold, assigned, transferred
or otherwise conveyed to any other person or entity all or any portion of its
rights, claims, demands, actions or causes of action herein released.

                                    ARTICLE X

                                  MISCELLANEOUS

     Section 10.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by and interpreted in accordance with the laws of the State of New York without
regard to the principles of conflicts of law. Each of the Company and Investor
hereby submit to the exclusive jurisdiction of the United States Federal and
state courts located in New York with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby.

     Section 10.2 JURY TRIAL WAIVER. The Company and the Investor hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other in respect of any matter arising out of or in
connection with the Transaction Documents.

     Section 10.3 SPECIFIC ENFORCEMENT. The Company and the Investor acknowledge
and agree that irreparable damage would occur to the Investor in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the Investor shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity.

     Section 10.4 ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the Company and Investor and their respective successors and
permitted assigns. Neither this Agreement nor any rights of Investor or the
Company hereunder may be assigned by either party to any other person.
Notwithstanding the foregoing, (a) the provisions of this Agreement shall inure
to the benefit of, and be enforceable by, any transferee of any of the Common
Stock purchased or acquired by Investor hereunder with respect to the Common
Stock held by such person, and (b) Investor's interest in this Agreement may be
assigned at any time, in whole but not in part, to any affiliate of Investor.

                                       31
<PAGE>

     Section 10.5 THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the Company and Investor and their respective successors and
permitted assigns, and is not for the benefit of, nor may any provision hereof
be enforced by, any other person.

     Section 10.6 TERMINATION. This Agreement shall terminate at the end of the
Commitment Period or as otherwise provided herein(unless extended by the
agreement of the Company and Investor); provided, however, that the provisions
of Article VI, VIII, IX and Sections 10.2, 10.3 and 10.4 shall survive the
termination of this Agreement.

     Section 10.7 ENTIRE AGREEMENT, AMENDMENT; NO WAIVER. This Agreement and the
instruments referenced herein contain the entire understanding of the Company
and Investor with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor Investor
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.

     Section 10.8 FEES AND EXPENSES. Except as otherwise provided in this
Agreement or any of the Exhibits thereto, each of the Company and Investor
agrees to pay its own expenses in connection with the preparation of this
Agreement and performance of its obligations hereunder. The Company shall pay
all stamp or other similar taxes and duties levied in connection with issuance
of the Shares pursuant hereto.

     Section 10.9 NO BROKERS. Each of the Company and Investor represents that
it has had no dealings in connection with this transaction with any finder or
broker who will demand payment of any fee or commission from the other party,
except that the company agrees to pay the consultant, Greenfield Capital
Partners, LLC., a fee in the amount of 1% of any money funded pursuant to a Put
Notice. The Company on the one hand, and Investor, on the other hand, agree to
indemnify the other against and hold the other harmless from any and all
liabilities to any persons claiming brokerage commissions or finder's fees on
account of services purported to have been rendered on behalf of the
indemnifying party in connection with this Agreement or the transactions
contemplated hereby.

     Section 10.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the Company and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the parties so delivering this
Agreement.

     Section 10.11 SURVIVAL; SEVERABILITY. The representations, warranties,
covenants and agreements of the Company hereto shall survive each Closing
hereunder for a period of one (1) year thereafter. In the event that any

                                       32
<PAGE>

provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision; provided that such severability
shall be ineffective if it materially changes the economic benefit of this
Agreement to any party.

     Section 10.12 FURTHER ASSURANCES. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

     Section 10.13 NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

     Section 10.14 TITLE AND SUBTITLES. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.

     Section 10.15 REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity
relied upon for the determination of the trading price of the Common Stock on
any given Trading Day for the purposes of this Agreement shall be Bloomberg L.P.
or any successor thereto. The written mutual consent of Investor and the Company
shall be required to employ any other reporting entity.

     Section 10.16 PUBLICITY. The Company and Investor shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and no party shall issue any
such press release or otherwise make any such public statement without the prior
written consent of the other parties, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law, in which such case the disclosing party shall
provide the other parties with prior notice of such public statement.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of Investor without the prior written consent of such Investor, except to the
extent required by law. Investor acknowledges that this Agreement and all or
part of the Transaction Documents may be deemed to be "material contracts" as
that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company
may therefore be required to file such documents as exhibits to reports or
registration statements filed under the Securities Act or the Exchange Act.
Investor further agrees that the status of such documents and materials as
material contracts shall be determined solely by the Company, in consultation
with its counsel.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Private Equity
Credit Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.

                                          HOMECOM COMUNICATIONS, INC.

                                          By: /s/ Michael Sheppard
                                          ------------------------
                                          Name:   Michael Sheppard
                                          Title:  Vice President and Chief
                                                  Operating Officer, Licensing
                                                  Division

                                          BRITTANY CAPITAL MANAGEMENT LTD.

                                          By: /s/ Barry W. Herman
                                          -----------------------
                                          Name:   Barry W. Herman
                                          Title:  President

                                       34
<PAGE>

                                    EXHIBITS
                                    --------

     EXHIBIT A             Registration Rights Agreement

     EXHIBIT B             Put Notice

     EXHIBIT C             Opinion

     EXHIBIT D             Closing Certificate

     EXHIBIT E             Transfer Agent Instructions

     EXHIBIT F             Escrow Agreement

                                       35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]