Document:

<PAGE>   1
                                                                    Exhibit 4(g)

                              DECLARATION OF TRUST

                                       OF

                               BANCWEST CAPITAL II

         This DECLARATION OF TRUST, dated as of October 20, 2000 (this
"Declaration"), is entered by and among BANCWEST CORPORATION, a Delaware
corporation, as sponsor (the "Sponsor"), BANK ONE DELAWARE, INC., a Delaware
corporation, as trustee (the "Delaware Trustee"), BANK ONE TRUST COMPANY, N.A.,
a national banking corporation, as trustee (the "Property Trustee"), and WILLIAM
B. JOHNSTONE, III, as trustee (the "Administrative Trustee" and collectively
with the Delaware Trustee and the Property Trustee, the "Trustees"). The Sponsor
and the Trustees hereby agree as follows:

         1. The trust created hereby (the "Trust") shall be known as "BancWest
Capital II," in which name the Trustees, or the Sponsor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.

         2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of ten dollars ($10.00), which amount shall constitute the initial
trust estate. It is the intention of the parties hereto that the Trust created
hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801, et seq. (the "Business Trust Act"), and that this
document constitutes the governing instrument of the Trust. The Trustees are
hereby authorized and directed to execute and file a certificate of trust with
the Delaware Secretary of State.

         3. The Sponsor and the Trustees will enter into an amended and restated
Declaration of Trust, satisfactory to each such party (and substantially in the
form included as an exhibit to the 1933 Act Registration Statement (as defined
below)), to provide for the contemplated operation of the Trust created hereby
and the issuance of preferred securities (the "Preferred Securities") and common
securities by the Trust as such securities will be described therein. Prior to
the execution and delivery of such amended and restated Declaration of Trust,
the Trustees shall not have any duty or obligation hereunder or with respect to
the trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery and licenses, consents
or approvals required by applicable law or otherwise.

         4. The Sponsor, as sponsor of the Trust, is hereby authorized and
directed (i) to prepare and file with the Securities and Exchange Commission
(the "Commission") (a) a Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Preferred Securities of the
Trust and possibly certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all pre-effective
and post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under the Securities Exchange Act of 1934, as
amended; (ii) to file with the New York Stock Exchange or any other national
<PAGE>   2
stock exchange or The Nasdaq National Market (each, an "Exchange") and execute
on behalf of the Trust one or more listing applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on any of the Exchanges; (iii) to negotiate and execute an underwriting
agreement among the Trust, the Sponsor and the underwriter(s) thereto relating
to the offer and sale of the Preferred Securities, substantially in the form
included or to be incorporated as an exhibit to the 1933 Act Registration
Statement, (iv) to execute and file such applications, reports, surety bonds,
irrevocable consents, appointments of attorneys for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (v) to execute and deliver letters or documents to, or instruments
for filing with, a depository relating to the Preferred Securities of the Trust.

         It is hereby acknowledged and agreed that in connection with any
document referred to in clauses (i), (ii) and (iv) above, Bank One Delaware,
Inc. and Bank One Trust Company, N.A., in their capacities as trustees of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchanges or state securities or blue sky laws, and in such case
only to the extent so required.

         5. This Declaration may be executed in one or more counterparts.

         6. The number of Trustees initially shall be three (3) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided that, to the extent required by the Business Trust
Act, one Trustee shall be an entity that has its principal place of business in
the State of Delaware. Subject to the foregoing, the Sponsor is entitled to
appoint or remove without cause any Trustee at any time. The Trustees may resign
upon thirty days prior notice to the Sponsor.

         7. Bank One Delaware, Inc., in its capacity as trustee, shall not have
the powers or the duties of the Trustee set forth herein (except as may be
required under the Business trust Act) and shall be a Trustee hereunder for the
sole and limited purpose of fulfilling the requirements ofSection3807(a) of the
Business Trust Act.

         8. The Trust may be dissolved and terminated before the issuance of the
Preferred Securities at the election of the Sponsor.

         9. The Sponsor hereby agrees to (i) reimburse the Trustees for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts) and (ii) indemnify, defend and hold harmless the Trustees and any of
the officers, directors, employees and agents of the Trustees (the "Indemnified
Persons") from and against any and all losses, damages, liabilities, claims,
actions, suits, costs, expenses, disbursements (including the reasonable fees
and expenses of counsel), taxes and penalties of any kind and nature whatsoever
(collectively, "Expenses"), to the extent that such Expenses arise out of, or
are imposed upon, or are asserted at any time against, such Indemnified Persons
with respect to the performance of this
<PAGE>   3
Declaration, the creation, operation or termination of the Trust or the
transactions contemplated hereby; provided, however, that the Sponsor shall not
be required to indemnify any Indemnified Person for any Expenses which are a
result of the willful misconduct, bad faith or gross negligence of such
Indemnified Person.

         10. This Declaration shall be governed by and construed in accordance
with the laws of the State of Delaware.

   [The rest of this page has been left blank intentionally; the signature page
follows.]

         IN WITNESS WHEREOF, the parties hereto have caused this Declaration to
be duly executed as of the day and year first above written.

                        BANCWEST CORPORATION,
                        as Sponsor

                        By: /s/ HOWARD H. KARR
                            ------------------------------------------
                             Name: HOWARD H. KARR
                             Title Executive Vice President and
                                   Chief Financial Officer

                        BANKONE DELAWARE, INC., as Delaware Trustee

                        By: /s/ SANDRA L. CARUBA
                            ------------------------------------------
                             Name: SANDRA L. CARUBA
                             Title VICE PRESIDENT

                        BANKONE TRUST COMPANY, N.A., as Property Trustee

                        By: /s/ SANDRA L. CARUBA
                            ------------------------------------------
                             Name: SANDRA L. CARUBA
                             Title VICE PRESIDENT

                            /s/ WILLIAM B. JOHNSTONE, III
                            ------------------------------------------
                        WILLIAM B. JOHNSTONE, III, as Administrative Trustee<PAGE>

                                                                    Exhibit 10.6

                               SECURITY AGREEMENT
 [Accounts, Contract Rights, Instruments, and Goods pertaining thereto] between

              PHOENIX LABORATORIES, INC. and GREAT EARTH DISTRIBUTION, INC.
         (each hereafter sometimes referred to individually as "Debtor"
                         and collectively as "Debtors")

                                       and
    FIDELCOR BUSINESS CREDIT CORPORATION (hereafter referred to as "Trefoil")

                                     TREFOIL AGREES:

      1. That it will from time to time make advances to Debtor upon the
security of accounts receivable, accounts, contract rights, general intangibles
and other choses in action (all of which, whether secured or unsecured and
whether or not evidenced by instruments or other writings, together with the
proceeds thereof and the merchandise pertaining thereto, are designated
collectively as "Collateral").*

      2. That it will advance to Phoenix Laboratories, Inc. up to 80%, and to
Great Earth Distribution, Inc. up to 40% of the net amounts of acceptable
Collateral, as Trefoil in its sole discretion may determine, and will pay the
remainder (less the compensation specified in paragraph 6, plus any overpayments
by account debtors, and less deductions by account debtors and any unpaid
compensation, charges or expenses), after actual receipt of payment upon such
Collateral and at such times as Trefoil may determine; however, no payment of
such remainder need be made by Trefoil if Debtor shall have breached any
provision hereof or shall be otherwise indebted to Trefoil, in either of which
events Trefoil may retain and apply such remainder upon any indebtedness then as
thereafter due from Debtor.

      3. That, subject to the provisions of paragraph 5, Debtor shall be
privileged to collect the proceeds of Collateral for Trefoil at Debtor's
expense, but such privilege may be terminated by Trefoil at any time in its
discretion, and shall automatically terminate upon the happening of an event of
default as hereinafter defined.

                     DEBTOR WARRANTS, COVENANTS AND AGREES:
      4. That all Collateral will arise from the bona fide sale and delivery of
goods or the due performance of services by Debtor, and will be for a liquidated
amount subject to no offset, deduction, counterclaim, discount, condition, or
conflicting security interest. Debtor shall deliver to Trefoil such invoices,
shipping or other receipts, and other papers and instruments as Trefoil may
require.

      5. That Debtor will receive in trust and deliver to Trefoil, in original
form and on the day of receipt, all checks, drafts, notes, acceptances, cash and
other evidences of payment, applicable to any Collateral. Trefoil shall not be
required to take any affirmative steps to collect Collateral or to preserve
rights against prior parties to any instruments or chattel paper.

      6. That Debtor will pay Trefoil for its advances made hereunder a charge
of ---3 1/2%--- per annum plus the prime rate announced by the Fidelity Bank,
Philadelphia, Pennsylvania, whether or not said rate is the best rate available
at said bank.

In the event of a change in the prime rate charged at the Fidelity Bank,
Philadelphia, Pennsylvania, adjustments hereunder shall be made on the day of
such change in the prime rate. The prime rate as of the date of this agreement
is 8 1/2% per annum. All charges shall be computed upon the average daily cash
balances outstanding and charged to Debtor's account or paid monthly.

      7. That with respect to all Collateral now existing or hereafter created,
Debtor will execute and deliver all papers and instruments, and do all things
necessary to effectuate Trefoil's prime security interest therein. Trefoil shall
be vested with all Debtor's rights, security interests, insurance, and
guarantees with respect to all Collateral, its proceeds, and the goods
represented thereby, including the rights of stoppage in transit, seller's lien,
and resale.

      8. That Debtor is solvent and will so remain and induces Trefoil to make
advances hereunder upon Debtor's written representations concerning its
financial condition, which it agrees to deliver to Trefoil upon reasonable
request from time to time. Debtor will make due and timely payment or deposit of
all Federal, State and local taxes, assessments or contributions required by
law, including employee FICA and withholding taxes, and will execute and deliver
to Trefoil, on demand, proof satisfactory to Trefoil of the payment or deposit
thereof, and in the event that the Debtor shall be in default in payment or
deposit above described, Trefoil shall have the right to make said payments or
contributions and to charge Debtor's account under this agreement or any other
agreement.

      9. That all Collateral, and any evidence of debt received thereon, will be
paid in full at maturity. If any Collateral should not be so paid in whole or in
part, Debtor will, upon demand, pay Trefoil the full amount remaining unpaid
thereon or, at Trefoil's option, such amount may be charged against and deducted
from any payment then or thereafter due from Trefoil to Debtor. Notwithstanding
such payment or deduction, Trefoil may retain the Collateral as security for the
obligations of Debtor to Trefoil.

      10. That if any account debtor shall reject or return any of the goods
represented by Collateral, Debtor will forthwith deliver the same to Trefoil, or
notify Trefoil and hold the same segregated in trust for and subject to the
order of Trefoil, and Trefoil may take and sell the same, Debtor to remain
liable for any difference between the original invoice price and the net
proceeds of re-sale, after expenses. At Trefoil's option, Debtor will pay to
Trefoil the original invoice price of such goods. In case any such goods should
be resold, the Collateral thereby created shall be Trefoil's property and shall
be deemed pledged hereunder.

      11. Until Trefoil shall have been paid in full for all loans, obligations,
debts or indebtedness owing to it by the Debtor, Trefoil shall have a continuing
Security Interest in all of Debtor's present and future Collateral, whether or
not specifically assigned or pledged to Trefoil, the proceeds thereof and all
books and records pertaining to the Collateral and equipment containing said
records; none thereof will be sold or subjected to any security interest in
favor of any person other than Trefoil, and Debtor's merchandise inventory shall
not be or become subject to any purchase money or other lien or security
interest except in favor of Trefoil.

      12. Any money now or hereafter due or owing from Trefoil to the Debtor
hereunder shall at all times be security for each and every debt, liability,
obligation or indebtedness of the Debtor to Trefoil due or owing under this or
any other agreement, arrangement or transaction of any kind, nature or
description, including, but not limited to, any bond, mortgage, chattel
mortgage, pledge, factor's lien, trust receipt, guarantee, sale, purchase note,
bill draft, loan, discount or credit. Trefoil shall have the right to apply any
sums otherwise due or owing to the Debtor hereunder, in whole or in part, to the
payment of any such debt, liability, obligation or indebtedness, at such times
and in such order of application as Trefoil, in its sole discretion, may
determine. Any money which may at any time be due or owing from Trefoil to the
Debtor by reason of any such other agreement, arrangement or transaction between
them, as aforesaid, shall be security for any and all sums at any time due or
owing from the Debtor to Trefoil hereunder and may be applied by Trefoil to the
payment of any such sums, at such times and in such order of application as
Trefoil in its sole discretion may determine.

    * Whenever the term "Collateral" appears in paragraphs 1 through 36 of this
Agreement, the term "Accounts Collateral" shall be substituted therefor.
<PAGE>

      13. That Trefoil's auditors shall have the right at any time during
business hours to inspect Debtor's premises and to audit, check and make
extracts from Debtor's books, accounts, records, order, correspondence and all
other papers.

      14. That Trefoil is authorized and empowered to compromise or extend the
time for payment of any Collateral, for such amounts and upon such terms as
Trefoil may determine, and to accept the return of goods represented by any
Collateral, all without notice to or consent by Debtor and without discharging
or affecting Debtor's obligations hereunder.

      15. That Debtor hereby constitutes Trefoil and each of Trefoil's officers
and agents as Debtor's attorney-in-fact, with power to receive, open and dispose
of all mail addressed to Debtor; to notify the Post Office authorities to change
the address for delivery of mail addressed to Debtor; to endorse the name of
Debtor upon any instruments or other media of payment or evidences of security
interest that may come into Trefoil's possession; to sign Debtor's name on any
invoice or bill of lading relating to Collateral, on drafts against account
debtors, assignments and verifications of Collateral, and notices to account
debtors; to send verification requests to any account debtor; to execute and
file financing statements and other instruments or documents; and to do all
other acts and things necessary to carry out this Agreement and to perfect and
protect Trefoil's security interest. All acts of said attorneys are hereby
satisfied and approved, and they shall not be liable for any acts of commission
or omission, nor for any error of judgment or mistake of fact or law. This
power, being coupled with an interest, is irrevocable while any Collateral shall
remain uncollected and Debtor shall remain indebted to Trefoil.

      16. If any representation or warranty made by the Debtor, either in
connection with this agreement or any assignment hereunder shall be false, or if
the debtor shall default in the performance of any term, covenant or condition
hereof; or if the Debtor shall suspend its business, or call any meeting of its
creditors, or make a general assignment for the benefit of its creditors; or if
any petition shall be filed by or against the Debtor under any provision of the
Bankruptcy Code, or if any receiver or trustee shall be appointed for the Debtor
or for its assets; or if any judgment shall be entered against the debtor which
shall not be paid or bonded on appeal within 5 days thereafter, then and in any
such event Trefoil shall have the right to retain counsel to represent it and
protect its rights and interest hereunder, and the Debtor shall and hereby
covenants that it will pay to Trefoil the fees of such counsel, the amount of
which fees is hereby expressly fixed at a sum which shall be equal to 15% of
Trefoil's cash advances to the Debtor, which may be outstanding at the time of
the first of the aforesaid events which may occur. The Debtor shall also pay any
and all disbursements incurred by Trefoil in connection with any of such events,
including, but not limited to, all court costs and expenses, stenographers
minutes, fees of public officers, printing expenses and premiums on bonds or
undertakings. The entire amount of such counsel fees and disbursements shall be
a lien upon and charge against and shall be deducted from any money which
otherwise become due to the Debtor hereunder. The foregoing counsel fees and
disbursements shall be exclusive of and in addition to the fees and expenses of
any attorney, Trefoil's collection department or collection agencies that are
employed in collection of any assigned Accounts not paid when due, which the
Debtor shall pay at the rate of 15% of the amount collected. All rights and
remedies of Trefoil hereunder are cumulative.

      17. That Debtor waives presentment, demand, protest and notice thereof as
to any instrument, as well as all other notices to which it might otherwise be
entitled. The foregoing waiver applies to notices which may be waived by
operation of law. Where Trefoil is required to give reasonable notice the
parties agree that the same shall be deemed to mean written notice by certified
mail, return receipt requested, addressed to the Debtor at the address below set
forth which notice shall be deemed effective upon posting two days prior to the
time of any act requiring such notice. No check, note, draft or other instrument
for the payment of money which may be received shall be considered to be payment
thereon for any purpose hereunder, unless and until the same has actually been
collected by Trefoil's bank and credited as collected to Trefoil's account. In
order to avoid the necessity for separate computation of the time of clearance
of each collection item, clearance time of five business days shall be allowed
upon every check and such note or draft or other instrument for the payment of
money before the same shall be deemed so collected.

      18. That Trefoil's express or implied waiver of a particular breach by
Debtor of any covenant or warranty herein contained, or Trefoil's failure at any
particular time to exercise a right or remedy available to it, shall not be or
constitute or be deemed to be a waiver of any subsequent breach or of such or
any other right or remedy.

      19. Debtor represents and covenants that its chief place of business, and
the office where its records concerning accounts and contract rights are kept,
is that below set forth and that Debtor has no other place of business except if
such other place of business exists, then as set forth below such chief place of
business and that Trefoil may rely upon the foregoing until it has received
written notice to the contrary. Debtor authorizes Trefoil to file a financing
statement or any other document or instrument that may be required by law in any
jurisdiction, and said financing statement shall not require the signature of
the Debtor.

      20. Debtor will provide Trefoil with: monthly ageings of its accounts
receivable not later than the 10th day of each month; financial statements
certified by an officer of the debtor not less frequently than quarter-annually;
financial statements certified by an independent certified public accountant not
less frequently than annually.

      21. Any documents, schedules, invoices or other paper delivered to Trefoil
by Debtor, may be destroyed or otherwise disposed of by Trefoil six (6) months
after they are delivered to or received by Trefoil, unless Debtor requests, in
writing, the return of said documents, schedules, invoices or other paper and
makes arrangements, at Debtor's expense, for their delivery or destruction.

      23. That Debtor's obligations to Trefoil hereunder shall be payable on
demand, and Trefoil's prior recourse to Collateral shall not constitute a
condition of such demand. All rights and remedies of Trefoil shall be cumulative
and may be exercised concurrently or seriatim.

                               BOTH PARTIES AGREE:
      24. That Trefoil will render Debtor monthly or other periodic statements,
each of which shall be binding upon Debtor unless written objection is given by
Debtor to Trefoil within 15 days after rendition.

      25. That no party hereto shall be bound by anything not expressed herein
or in other writings between them, nor shall this Agreement be modified orally.

      26. That this Agreement shall remain in effect for a period of two (2)
years from the date hereof, and shall be deemed automatically renewed for
successive periods of one year. Either party may terminate as of the end of the
contract term or any renewal year upon at least 60 days' written notice of
termination by certified mail, return receipt requested. Termination shall not
affect transactions having their inception prior to the effective date of
termination. Upon date of termination unpaid principal and interest shall be
paid to Trefoil.

      27. That inasmuch as the transactions hereunder will take place at
Trefoil's office in New York, this Agreement and all transactions, assignments
and transfers hereunder, and all rights of the parties, shall be governed as to
validity, construction, enforcement and in all other respects by the laws of the
State of New York.

      28. In addition to any other events of default herein specified, Trefoil
may, at its option declare the following to be events of default:

            a. Prospect of Debtor's payment or performance is unsecure, unsafe
               or at risk;
            b. The collateral is unsecure, unsafe or at risk;
            c. An adverse change has occurred in the financial condition of the
               debtor;
            d. Any guarantor has cancelled, revoked or terminated his guaranty
               agreement; or

      29. In the event of any default under this Security Agreement, or any
Amendment thereto, all actions or proceedings arising directly or indirectly
from this Security Agreement, including any Amendment or Supplement thereto,
shall be litigated only in Courts having situs within the State of New York and
the Debtor hereby consents to the jurisdiction of any Local, State or federal
Court located within the State of New York and waives personal service of any
and all process upon Debtor and consents that all such service of process shall
be made by certified mail, return receipt
<PAGE>

requested, directed to Debtor at the address listed above or at which Debtor
advises Trefoil, in writing, and service so made shall be deemed complete three
days after the same shall have been posted.

      30. Debtor may, on five days' notice, prior to the end of any calendar
month, prepay and terminate this Security Agreement by paying to Trefoil in cash
or certified check, the entire unpaid principal balance plus accrued charges,
together with a sum equal to 50% of the average monthly charges for the
immediately proceeding six months or from the date of the agreement whichever is
less, multiplied by the number of months of the unexpired balance of the term of
this agreement but in no event less than $150.00 per month for each month of the
unexpired term occurs during the second year of the term of this Agreement the
aforesaid percentage shall be 25%. In the event of a breach or default by the
debtor hereunder, the parties agree that damages sustained by Trefoil shall be
computed as provided in this paragraph. Prior to actual receipt of moneys due
under this paragraph, Trefoil may at its option exercise all of its rights under
the Security Agreement.

      31. In no event shall interest charges provided for in any agreement
between the parties hereto exceed the legal rate that may be charged
corporations in the State of New York.

      32. That in the event of logistics between the parties over any matter
connected with this Agreement or resulting from transactions hereunder, the
right to a trial by jury is hereby waived, and that Debtor, in any action or
proceeding which Trefoil may institute, will not impose any counterclaim of any
nature.

      33. That this Agreement shall inure to the benefit of and be binding upon
the parties and their successors and assigns.

      34. That this Agreement shall not become effective until accepted by
Trefoil at its office in New York.

      35. As used herein the term "Trefoil" shall mean Fidelcor Business Credit
Corporation, its parent and all of its subsidiaries, affiliates and
participants.

      36. See Rider attached hereto and made a part hereof for additional
provisions.

Dated:  February 17, 1988               PHOENIX LABORATORIES, INC., Debtor
                                        175 Lauman Lane
                                        Hicksville, New York  11801
                                                    and

ATTEST:                                 140 Lauman Lane
                                        Hicksville, New York  11801

By: /s/ MELVIN RICH                     By: /s/ SIDNEY RICH
-------------------------------            -------------------------------------
Melvin Rich, Secretary                     Sidney Rich, President

ATTEST:                                 GREAT EARTH DISTRIBUTION, INC., Debtor
                                        14211 Gannet Street
                                        La Mirada, California  90638

By: /s/ SIDNEY RICH                     By: /s/ MELVIN RICH
-------------------------------            -------------------------------------
Sidney Rich, Secretary                     Melvin Rich, President

ACCEPTED:

FIDELCOR BUSINESS CREDIT CORPORATION, Secured Party
810 Seventh Avenue
New York, New York  10019

By: /s/ [illegible]
    ---------------------------------------------
Title:  VP
      ---------------------------------------------
<PAGE>

                          RIDER TO SECURITY AGREEMENT

                    (Accounts, Contract Rights, Instruments
                         and Goods Pertaining Thereto)

                                     between

            Debtors: PHOENIX LABORATORIES, INC. ("Phoenix")
                     GREAT EARTH DISTRIBUTION, INC. ("GED")
              (each hereafter referred to individually as "Debtor"
                         and collectively as "Debtors")
                                      and

Secured Party: FIDELCOR BUSINESS CREDIT CORPORATION
               (hereafter referred to as "Trefoil")

         In addition to and not in limitation of any and all rights granted to
Trefoil and obligations incurred by Debtor in the printed portion of this
Agreement, Debtor further warrants, covenants and agrees as follows:

         A. Each of the Debtors shall be jointly and severally liable for the
Obligations (as hereafter defined) of all of the Debtors.

         B. The term "Financing Agreements" shall mean and include, without
limitation, this Agreement, the Security Agreement (Inventory), the Security
Agreement (Equipment), and any other agreements, documents and guaranties
granting collateral security or creating or evidencing indebtedness, each
executed by Debtor or related parties in favor of Trefoil and all other present
and future related agreements or instruments, as now existing or as hereafter
renewed, extended, amended, modified or supplemented.

         C. The term "Obligations" or obligations shall mean and include,
without limitation, any and all of Debtor's indebtedness and/or liabilities to
Trefoil of every kind, nature and description, direct or indirect, secured or
unsecured, joint and/or several, absolute or contingent, due or to become due,
now existing or hereafter arising, related or unrelated, regardless of how they
arise or by what agreement or instrument they may be evidenced or whether
evidenced by any agreement or instrument, including, but not limited to all
amounts owing by Debtor to Trefoil under this Agreement, the other Financing
Agreements, or any other security agreement, guaranty or note and all
obligations to perform acts or refrain from taking any action.

         D. The term "Collateral" or "collateral" shall mean and include,
without limitation, that which is set forth in Paragraph I of the printed
portion of this Agreement and any and all other items of real or personal
property in which
<PAGE>

Debtor has granted or may in the future grant a security interest to Trefoil
under the Financing Agreements, or any supplement or supplements thereto, and/or
under any other security agreement, or other agreement, all of Debtor's right,
title and interest in and to the goods of other property represented by or
securing any of the foregoing, all of Debtor's rights as an unpaid vendor or
lienor, including stoppage in transit, replevin or reclamation, all additional
amounts due to Debtor from any account debtor irrespective of whether such
additional amounts have been specifically assigned to Trefoil, all other
agreements on property securing or relating to any of the items referred to
above or acquired for the purposes of securing or enforcing any of such items,
all present and future chattel paper, motor vehicles, licenses patents,
trademarks, copyrights, license agreements, tax and duty claims and refunds,
computer software, goodwill, customer lists, all documents, monies, deposits,
securities, instruments, credits, and other property now or hereafter held by
Trefoil or any entity which at any time participates in Trefoil's financing
transactions with Debtor, and all products, proceeds and accessions of all of
the foregoing in whatever form. Debtor hereby grants Trefoil a continuing first
priority security interest in and general lien upon all of the Collateral to
secure payment and performance of all of the Obligations, except for prior
security interests set forth on Schedule A attached hereto.

         E. In addition to any other security interest granted in the Financing
Agreements and not in limitation of any of the foregoing, and to secure the
payment and performance of all of the Obligations, Debtor hereby pledges and
assigns to Trefoil and grants to Trefoil a continuing general security interest
in all of the Debtor's ledger sheets, files, records and documents relating to
the Collateral, which shall, until delivered to or removed by Trefoil, be kept
by Debtor in trust for Trefoil and without cost to Trefoil in appropriate
containers in safe places, bearing suitable legends disclosing Trefoil's
security interest. Each confirmatory assignment schedule or other form of
Assignment hereafter executed by Debtor, shall be deemed to include the
foregoing, whether or not same appears therein.

         F. The Debtor will pay all costs and expenses and all taxes, recording
and filing fees (including Uniform Commercial Code Financing Statements) in
connection with the preparation, execution, delivery, administration (including
wire transfer charges in amounts that Trefoil may from time to time establish if
Debtor requests wire transfers) and enforcement of this Agreement and all other
documents contemplated herein or related hereto, including any amendments,
supplements or consents which may be hereafter made or entered into in

                                       -2-
<PAGE>

respect hereof, including appraisal fees, and lien searches in connection
herewith and fees and disbursements of in-house and outside counsel to Trefoil.
Debtor will pay all out-of-pocket costs of field examinations to be conducted by
Trefoil as provided in Paragraph 13 of the printed portion of the Agreement plus
$450 per man per day. Trefoil is hereby authorized to charge any amounts payable
hereunder (including principal, interest, fees, charges and expenses) directly
to any account of the Debtor maintained with Trefoil.

         G. Trefoil agrees that in addition to the advances made with reference
to the formula set forth in Paragraph 2 of the printed portion of this agreement
("Accounts Advances"), Trefoil shall make additional advances to Debtor, in such
amounts from time to time determined by Trefoil in its sole discretion, of up to
twenty-five (25%) percent of the value of Phoenix's acceptable and eligible raw
material inventory and of up to twenty-five (25%) percent of the value of GED's
acceptable and eligible finished goods inventory (collectively the "Inventory
Advances"). As used herein, "value" shall mean the lower of cost or market, as
determined by Trefoil. Except in Trefoil's sole discretion, (1) the aggregate
principal amount of Accounts Advances to GED shall not exceed, at any time
outstanding, the lesser of (a) $500,000, or (b) an amount equal to (i)
twenty-five (25%) percent of the value of Phoenix's acceptable and eligible raw
material inventory, plus (ii) twenty-five (25%) percent of the value of GED's
acceptable and eligible finished good's inventory, and (2) the aggregate
principal amount of the Inventory Advances to Debtors shall not exceed
$1,000,000 at any time outstanding.

         H. Except in Trefoil's sole discretion the aggregate principal amount
of the advances made by Trefoil to Debtors under the Financing Agreements,
including the Accounts Advances and the Inventory Advances, shall not exceed the
principal amount of $3,000,000 at any time outstanding (the "Credit Line").

         I. In consideration of Trefoil entering into this Agreement and
allocating funds to have available to advance to Debtors, Debtor shall pay to
Trefoil, upon the execution of this Agreement, in immediately available funds, a
facility fee of $15,000 (1/2 of 1% of the Credit Line).

         J. In consideration of Trefoil entering into this Agreement and
incurring accounting, operating and management expenses, Debtors shall pay to
Trefoil each calendar month a minimum charge equal to the amount of interest
Debtors would pay Trefoil if they at all times had an aggregate average daily
cash balance outstanding of $500,000 bearing interest at the rate provided for
in Paragraph 6 of the printed portion of this Agreement. Trefoil shall reduce
such minimum charge by

                                       -3-
<PAGE>

the amounts actually paid by Debtors to Trefoil as interest pursuant to said
Paragraph 6, so that for each calendar month Debtors shall pay Trefoil Interest
as provided for in said Paragraph 6, plus the amount, if any, by which the
minimum charge provided for in this paragraph exceeds the amount of interest
payable pursuant to said Paragraph 6 for such month. If this Agreement shall be
terminated, such minimum charge shall continue and be paid by the Debtor for any
unexpired term of this Agreement, except if such termination is made pursuant to
Paragraph 26 or 30 of the printed portion of this Agreement or by mutual
agreement of Trefoil and the Debtor.

         K. All advances by Trefoil pursuant to this Agreement shall bear
interest at the variable rate provided for in Paragraph 6 of the printed portion
of this Agreement and shall be calculated on the basis of a 360-day year for
actual days elapsed.

         L. Should Trefoil commence a proceeding to take possession of any of
the Collateral under this Agreement or any of the Financing Agreements, Debtor
waives the requirement, if any, that Trefoil post a bond or any other type of
security.

         M. In addition to all of the covenants set forth in the Financing
Agreements and without limiting any of the terms or provisions thereof, Debtor
hereby covenants and agrees as follows:

            (1)   Debtor will pay all Obligations when due and will perform all
                  of the terms, conditions, covenants and agreements of Debtor
                  to be per-formed under the Financing Agreements, and will make
                  punctual payment of all monies and will perform all of the
                  terms, conditions, covenants and agreements on its part to be
                  paid, kept or performed under the terms of any lease or
                  mortgage of the premises where any of the Collateral is now or
                  hereafter located, wherein Debtor is lessee or mortgagor, and
                  will promptly notify Trefoil in the event of any default by
                  Debtor or receipt by Debtor of any notice or alleged default
                  under any such lease or mortgage.

            (2)   Debtor will pay and discharge at or before maturity, all
                  taxes, assessments, rents, claims, debts and charges except
                  where the same are being contested in good faith and Debtor is
                  maintaining, in accordance with generally accepted accounting
                  principles and practice, appropriate reserves for accrual
                  thereof.

                                       -4-
<PAGE>

            (3)   Debtor will promptly give notice in writing to Trefoil of the
                  occurrence of any event which constitutes or which with notice
                  or lapse of time, or both, would constitute a default under
                  any of the Financing Agreements. As used in the Paragraph (3),
                  the word "promptly" shall be determined in relation to the
                  point in time at which Debtor, exercising sound management
                  practices, has actual knowledge or should have discovered the
                  occurrence of such event.

            (4)   Debtor will provide Trefoil with such other information
                  concerning the financial or business affairs of Debtor as
                  Trefoil, in its sole discretion, requests from time to time.

            (5)   Debtor will not without the prior written consent of Trefoil,
                  declare or pay any dividend, return any capital to any of its
                  stockholders, loan any sum to any of its stockholders,
                  employees, officers or directors redeem, repurchase or
                  otherwise acquire any of its outstanding capital stock.

            (6)   Notwithstanding Paragraph 3 of the printed portion of this
                  Agreement, Debtor shall direct that all proceeds of accounts
                  receivable, letters of credit, banker's acceptances and other
                  proceeds of Collateral shall be payable to a post office box
                  or a lock box designated by and in control of Trefoil and in
                  connection therewith shall execute such agreements as Trefoil
                  in its sole discretion shall specify.

            (7)   Debtor will duly execute and deliver, or will cause to be
                  executed and delivered, such further instruments and
                  documents, including, without limitation, additional security
                  agreements, collateral assignments, Uniform Commercial Code
                  financing statements or amendments, or continuations thereof,
                  landlord's or mortgagee's waivers of liens, and consents to
                  the exercise by Trefoil of all of its rights and remedies
                  under the Financing Agreements with respect to the Collateral
                  and will do such further acts as may be necessary or proper in
                  Trefoil's opinion to effectuate the provisions or purposes of
                  the Financing Agreements.

            (8)   Debtor will not, without the prior written consent of Trefoil,
                  directly or indirectly

                                       -5-
<PAGE>

                  sell, lease, abandon or otherwise dispose of all or any
                  substantial portion of its property or assets or consolidate
                  with or merge with or into any other entity, or permit any
                  other entity to consolidate with or merge with or into it.

            (9)   Debtor will at all times preserve and keep in full force and
                  effect its corporate existence, licenses, permits, rights and
                  franchises.

            (10)  Debtor will comply with the requirements of all applicable
                  laws, rules, regulations, orders of any governmental
                  authority, and all agreements to which Debtor is a party, the
                  non-compliance with which laws, rules, regulations, orders and
                  agreements would materially adversely affect its business,
                  properties or credit.

         N. Any default by Debtor under the Financing Agreements or under any
other present or future agreements with Trefoil, or instruments hereunder or
thereunder (as this Agreement or any other such Agreements or instruments now
exist or may hereafter be supplemented or amended) or any default under any
material obligation for the payment of money to any person, firm or corporation
shall constitute and be deemed a default by the Debtor and shall be a default
under all such other agreements and instruments.

         0. Debtor hereby further represents and warrants to Trefoil the
following:

            (1)   Debtor has the corporate power to borrow and to execute,
                  deliver and carry out the terms and provisions of the
                  Financing Agreements, and all other instruments and documents
                  delivered by it pursuant hereto and thereto, and Debtor has
                  taken or caused to be taken all necessary corporate action to
                  authorize the execution, delivery and performance of the
                  Financing Agreements, and such other agreements, the
                  borrowings hereunder and the execution, delivery and
                  performance of the instruments and documents delivered and to
                  be delivered by it pursuant hereto and thereto, and the
                  Financing Agreements constitute and will constitute legal,
                  valid and binding obligations of Debtor, enforceable in
                  accordance with their respective terms.

            (2)   Debtor is not in default in any material respect under any
                  indenture, mortgage, deed of trust, lease agreement, or other
                  instrument to which

                                       -6-
<PAGE>

                  it is a party or by which it or its properties may be bound.
                  Neither the execution nor delivery of the Financing
                  Agreements, nor any of the instruments or documents to be
                  delivered pursuant hereto or thereto, nor the consummation of
                  the transactions herein or therein contemplated nor compliance
                  with the provisions hereof or thereof, will violate any law or
                  regulation, or any order or decree of any court or
                  governmental instrumentality in any respect, or will conflict
                  with, or result in the breach of, or constitute a default in
                  any material respect under, any mortgage, deed of trust,
                  agreement or other instrument to which Debtor is party or by
                  which it or its properties may be bound, or result in the
                  creation or imposition of any lien, charge or encumbrance upon
                  any of the property of Debtor (except as contemplated
                  hereunder or under any of the other Financing Agreements) or
                  violate any provision of Certificate of Incorporation or
                  By-Laws of Debtor.

            (3)   No action of, or filing with, any governmental or public body
                  or authority (other than the filing or recording of Uniform
                  Commercial Code financing statements) is required in
                  connection with the execution, delivery and performance of the
                  Financing Agreements or any of the instruments or documents to
                  be delivered pursuant hereto or thereto.

            (4)   Debtor has obtained all necessary licenses and approvals and
                  is in compliance in all material respects with all applicable
                  state and Federal laws and regulations relating to the conduct
                  of its business as presently conducted or contemplated.

            (5)   There are no strikes or other labor disputes against Debtor,
                  pending, or to Debtor's knowledge, threatened.

            (6)   None of the information contained in the representations and
                  warranties made by Debtor set forth in the Financing
                  Agreements, or in any other instruments, documents, lists,
                  certificate, statement, schedule or exhibit heretofore
                  delivered or to be delivered to Trefoil on the date hereof, as
                  contemplated in the Financing Agreements, contains or will
                  contain any untrue statement of a material fact or omit or
                  will

                                       -7-
<PAGE>

                  omit to state a fact necessary in order to make the statements
                  contained herein or therein not misleading.

         P. Trefoil shall have the right, in its discretion, to withhold and
reserve from the amount of its advances under this Agreement such amount as
Trefoil shall establish as a reasonable reserve upon the occurrence of any
breach of any warranty, covenant, or agreement under the Financing Agreements or
for any default under the Financing Agreements.

Dated:  February 17, 1988

ATTEST:                               PHOENIX LABORATORIES, INC.

/s/ Melvin Rich                       By: /s/ Sidney Rich,
---------------------------              ---------------------------------------
Melvin Rich, Secretary                   Sidney Rich, President

ATTEST:                               GREAT EARTH DISTRIBUTION, INC.

/s/ Sidney Rich                       By: /s/ Melvin Rich,
---------------------------              ---------------------------------------
Sidney Rich, Secretary                   Melvin Rich, President

ACCEPTED:

FIDELCOR BUSINESS CREDIT CORP.

By: [illegible]
   ------------------------
Title: VP
      ---------------------

                                       -8-
<PAGE>

<TABLE>
<CAPTION>
                                                           SCHEDULE A                                           Page 1 of 2

                                                  Unterminated Security Interests

----------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Amendments
                                                                                                              (Releases,
             Debtor               Secured Party      Jurisdiction   UCC # Filing Date       Collateral        Assignments, etc.)
----------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                    <C>             <C>   <C>         <C>                    <C>
Phoenix Laboratories, Inc.   Hoffman-La Roche, Inc.  N.Y. S/S      390298  12/24/88   All Equipment (now
P.O. Box 388                 340 Kingsland Street                                     owned, hereafter
809 Ibsen Street             Nutley, N.J.  07110                                      acquired)
Woodmere, New York  11598
----------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.   Long Island Trust Co.   N.Y. S/S      348550  11/10/86   2 Machines
175 Lauman Lane              Industrial Finance Dept.
Hicksville, New York  11801  11 Broadway                                              Debtor has no power
                             Hicksville, NY  11801                                    to sell or dispose of
                                                                                      collateral
----------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.   Hoffman-La Roche, Inc.  Nassau      87-001408  1/16/87   All equipment (now
P.O. Box 388                 340 Kingsland Street      County                         owned & hereafter
809 Ibsen Street             Nutley, N.J.  07110       Clerk                          acquired.)
Woodmere, New York  11598
----------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.   Hoffman-La Roche, Inc.  Nassau      87-027548 11/25/87   All equipment (now
P.O. Box 388                 340 Kingsland Street      County                         owned & hereafter
809 Ibsen Street             Nutley, N.J.  07110       Clerk                          acquired.)
Woodmere, New York  11598
----------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.   Equilease Corporation   Nassau      86-030440 12/19/86   Field for Info. Only.   Assigned to:
175 Lauman Lane              750 Third Avenue          County                         Property (not describ-  Textron Capitol Corp.
Hicksville, New York  11801  New York, NY  10017       Clerk                          ed) subject to Lease    1410 Hospital Trust
                                                                                                              Tower Providence,
                                                                                                              Rhode Island
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULE A
                                                                                                                      Page 2 of 2
                                        (Cont'd)

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Amendments
                                                                                                                 (Releases,
         Debtor                   Secured Party       Jurisdiction    UCC #  Filing Date         Collateral      Assignments, etc.)
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                      <C>         <C>                    <C>                     <C>
Phoenix Laboratories, Inc.   WASCO Funding Corp.        Nassau     86-021181  8/25/86    Machines (3) leased to   Assigned to:
175 Lauman Lane              150 E. 58th Street         County                           debtor who has no right   Tilden Financial
Hicksville, New York 11801   New York, New York 10155   Clerk                            to sell or dispose.       Corp.
                                                                                                                   2 Lambert Street
                                                                                                                   Roslyn Heights,
                                                                                                                    NY  11577
------------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.   L.I. Trust Co., N.A.       Nassau     86-027280 11/18/86    2 Machines
175 Lauman Lane              Industrial Finance Dept.   County
Hicksville, New York  11801  11 Broadway                Clerk
                             Hicksville, N.Y.  11801
------------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,    The Lease Factor, Inc.     S/S        87-128909  5/28/87    Equipment Lease
  Inc.                       The Beaumont Building      Calif.
14211 Ganett Street          P.O. Box 71
La Mirada, CA  90638         South Station
                             Framingham, Mass.  01701
------------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,    Pitney Bowes Credit        S/S        86-146811  6/11/86    Lease - re: Postal
  Corporation                  Corporation              Calif.                           Equipment
14211 Ganett Street          21515 Hawthorne Blvd.
La Mirada, CA  90638         Suite 690
                             Torrance, CA  90503
------------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,    Pitney Bowes Credit        S/S        86-146812  6/11/86    Lease - re: Postal
  Inc.                         Corporation              Calif.                           Equipment
14211 Ganett Street          21515 Hawthorne Blvd.
La Mirada, CA  90638         Suite 690
                             Torrance, CA  90503
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                                              [INVENTORY]

Fidelcor Business Credit Corporation                           February 17, 1988
810 Seventh Avenue
New York, NY  10019

Gentlemen:

      This Letter, when accepted by you, will become a security agreement
supplementing and forming part of the Security Agreement [Accounts, Contract
Rights, etc.] between us dated February 12, 1988:

      1.* We hereby grant a continuing Security Interest in your favor upon all
of our present and hereafter-acquired Inventory, and the products and proceeds
thereof. The term "Inventory" includes all our present raw materials,
components, work in process, finished merchandise, and packing and shipping
materials, wherever located; and all such chattels hereafter acquired by us by
way of substitution, replacement, return, repossession or otherwise: and all
additions and accessions thereto, and the resulting product or mass: and any
documents of title representing any thereof. Your Security Interest shall attach
to all of the foregoing without further act on your or our part. Upon your
request, we will from time to time at our expense pledge and deliver such
Inventory to you or to a third party as your bailee; or hold the same in trust
for your account; or store the same in warehouse in your name: or deliver to you
documents of title representing the same; or evidence your Security Interest in
some other acceptable manner. The advances made and to be made hereunder are
primarily to enable us to purchase raw materials and defray the cost of labor
and similar manufacturing expenses which add to the value and marketability of
the finished product manufactured, processed, or otherwise dealt in by us; and
since such advances will be used for the foregoing purposes, your Security
Interest shall be deemed to be a Purchase Money Security Interest.

      2. Your said Security Interest shall secure (a) any advances which you may
make hereunder, and (b) any other indebtedness which we may from time to time
owe to you, fixed or contingent, whether arising under the aforesaid Security
Agreement or after the termination thereof, or otherwise arising or acquired by
you, and (c) all interest, charges, commissions, expenses (including attorneys'
fees and legal expenses) and other items chargeable against us by reason of any
of the foregoing. The term "advances" means moneys paid to us or to others for
our account, or obligations to third parties incurred by you at our request.

      3. We agree that the making of Inventory advances is always wholly
discretionary on your part, and that you shall be the sole judge of the amount
of such advances and of the total of such advances to be outstanding at any
particular time. All such advances shall be repayable on demand, and shall bear
interest at the same rate as specified in the aforesaid Security Agreement.

      4. We warrant, covenant, and agree that:

         (a) All Inventory is and shall remain free from all purchase-money or
other liens or encumbrances except such as are held by you.

         (b) You shall have the right at all times to immediate possession of
all Inventory and its products and proceeds, and to inspect the Inventory and
our records pertaining thereto.

         (c) We shall insure and keep insured all Inventory for full value, with
such coverage and in such companies as you may approve, at our expense, and the
policies shall be duly endorsed in your favor and delivered to you. If we
default in this regard, you shall have the right to insure and charge the cost
to us. You assume no risk or responsibility in connection with the payment or
non-payment of losses, your only responsibility being to credit us with any
insurance payments received on account of losses.

         (d) All excise, floor, sales and any other taxes that may be assessed
upon or paid by you with respect to any of the Inventory shall be charged to and
paid by us, and we agree to indemnify you against loss by reason of any such
taxes. We will make due and timely payment or deposit of all Federal, State, and
local taxes, assessments or contributions required of us by law, and will
execute and deliver to you, on demand, appropriate Certificates attesting to the
payment or deposit thereof.

         (e) None of the Inventory shall be removed or disposed of without your
written consent, except to bona fide purchasers thereof in the ordinary course
of our business and on orders approved by you in writing. All our sales shall be
promptly reported to you, and the accounts or other proceeds thereof shall be
subject to you security interest in accordance with the aforesaid Security
Agreement.

         (f) You shall not be liable or responsible in any way for the
safekeeping of any of the Inventory, or for any loss or damage thereto, or for
any diminution in the value thereof, or for any act or default of warehousemen
or of any carrier, forwarding agency, or other person whomsoever, of for the
collection of any process, but the same shall be at our sole risk at all times.

         (g) You shall have the right (but shall not be obliged) to pay and to
charge as an advance to us hereunder any dyeing, finishing, processing, or
warehousing charges, landlord's bills, or other claims against or liens upon the
Inventory.

      5. Our default in the payment or performance of any obligation or
undertaking on our part hereunder, or the happening of any even specified as an
event of default in the aforesaid Security Agreement, shall be an event of
default hereunder. Upon the happening of such or any other event of default, you
shall have, in addition to all rights and remedies of a Secured Party under the
Uniform Commercial Code or other applicable statute or rule, the following
rights and remedies:

         (a) You may peaceably by your own means or with judicial assistance
enter our or any other premises and take possession of the Inventory, and remove
or dispose of it on our premises, and we will not resist or interfere with such
action.

         (b) You may require us to assemble all or any part of the Inventory and
make it available to you at any place designated by you and reasonably
convenient to both parties.

         (c) We agree that a notice sent to us at least 5 days before the date
of any intended public sale or the date after which any private sale or other
intended disposition of the Inventory is to be made, shall be deemed to be
reasonable notice of such sale or other disposition. All notice is waived if the
Inventory is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market.

         (d) In the event of any such public or private sale or other
disposition, we will pay to you on demand any deficiency remaining after
crediting the net proceeds of sale, less all expenses of taking, handling, and
sale including reasonable counsel fee. All rights of redemption are waived. You
shall account to us for any surplus.

      6. Until we shall notify you in writing to the contrary, you shall be
justified in assuming that our Inventory is and will continue to be principally
kept at our address specified in the aforesaid Security Agreement.

ATTEST:                                     PHOENIX LABORATORIES, INC.

By:                                         By: /s/ SIDNEY RICH
   ------------------------------              ---------------------------------
   Melvin Rich, Secretary                      Sidney Rich, President

ATTEST:                                     GREAT EARTH DISTRIBUTION, INC.

By: /s/ SIDNEY RICH                         By:
   ------------------------------              ---------------------------------
   Sidney Rich, Secretary                      Melvin Rich, President

ACCEPTED:

FIDELCOR BUSINESS CREDIT CORPORATION
  Secured Party

By:
   ---------------------------------------
Title:
      ------------------------------------
<PAGE>

PHOENIX LABORATORIES, INC. AND GREAT EARTH
 DISTRIBUTION, INC. were individually called
                             and             "Debtor and collectively "Debtors")
FIDELCORE BUSINESS CREDIT CORPORATION        herein called "Secured

Party" hereby agrees as follows:

         1. Debtor grants to Secured Party a security interest in the following
         Equipment (herein called "Collateral"):

              A. All of Debtor's present machinery, equipment furniture, tools,
         dies, figs and attachments (including, but not limited to, the items
         listed and described on the Schedule of Equipment annexed); and

              B. All of the Debtor's additional Equipment, of like or unlike
         nature, to be acquired hereafter pursuant to this Security Agreement or
         otherwise, and all replacements, accessions, and improvements to any of
         the foregoing.

         2. Said security interest shall secure the Obligations of Debtor as
         defined in the Security Agreement (Accounts, etc.) between Debtor and
         Secured Party of even date herewith.

(2) a other existing debts and liabilities of Debtor to Secured Party; (3) all
future advances made by Secured Party to or for the account of Debtor, including
advances for insurance, repairs to and maintenance of the Collateral, taxes and
discharge of any other lien, security interest or encumbrance; (4) other
indebtedness, however created, arising or acquired by Secured Party which debtor
may now or hereafter owe to a Secured Party; and (5)all costs and expenses
incurred in the collection of any of the foregoing, including reasonable
attorney's fees.

         3. Until default hereunder, Debtor shall be entitled to possession of
the Collateral, which shall be kept only at Debtor's address specified in said
Security Agreement (Accounts, etc.)

         4. Debtor warrants, covenants and agrees that: (1) Debtor is the sole
owner of the Collateral free from any lien, security interest or encumberance,
has the right to grant Secured Party a security interest therein, and will
defend the Collateral against the claims and demands of all persons; (2) Debtor
shall not sell, lease, encumber, remove, conceal or grant or permit any further
security interest in the Collateral, nor part with possession of any thereof,
not permit the same to be used for hire nor in violation of any law or
ordinance; (3) Debtor shall maintain the Collateral in good condition and repair
at Debtor's sole expense; Debtor will pay all taxes levied on the Collateral,
and will make due and timely payment or deposit of all Federal, State and local
assessments or contributions required by law and will execute and deliver to
Secured Party, on demand, appropriate _____________ attesting to the payment
or deposit thereof; (5) No financing statement covering the collateral, or any
part thereof, on file in any public office, and Debtor's present or hereafter-
acquired Collateral is and shall not be or become subject to any purchase -money
or other lien or security interest except in favor of Secured Party; (6) Debtor
shall procure and maintain insurance on the Collateral for the full term of this
security agreement, against the risks of fire, theft and such other risks as
Secured Party may require (including the risk of collision in case any part of
the Collateral is a motor vehicle) by insurers satisfactory to Secured Party,
and shall deliver to secured Party a fully paid policy or policies of insurance
property endorsed in favor of Secured Party; (7) Debtor will permit Secured
Party to inspect the Collateral at any time: (8) Loss, theft, damage,
destruction or seizure of the Collateral shall not relieve the Debtor for the
payment of any indebtedness secured hereby: (9) The collateral is not now and
will not hereafter be affixed to realty as to become a part thereof or a
fixture; (10) The execution and delivery hereof, if Debtor is a corporation, has
been duly authorized by all necessary action of Debtor's directors and
shareholders; (11) Secured Party is authorized to execute and file, at Debtor's
cost, such financing statements and other instruments or documents as may be
necessary to perfect and protect Secured Party's security interest; and (12) In
case of Debtor's default in performing any warranty covenant, or undertaking
hereunder, Secured Party may (but shall not be obliged to) procure the
performance thereof and add the cost thereof, with interest, to the indebtedness
secured hereby.

         5. The occurrence of any of the following events or conditions shall,
at the option of Secured Party and without notices or demand, constitute an
event of default hereunder: (1) Default in the due payment of any indebtedness
secured hereby: or (2) Failure of Debtor to perform any covenant or undertaking
on Debtor's part herein; or (3) Breach of any warranty or falsity of any
representation made by Debtor to Secured Party; or (4) Attachment or seizure of
or levy upon the Collateral; (5) Institution of any proceeding by or against
Debtor or Debtor's business under any bankruptcy or insolvency statute, or
Debtors's assignment for benefit of creditors, or the appointment of a receiver
for Debtor or the Collateral or the filing of a tax lien notice against Debtor
by any taxing authority; or (6) Reasonable insecurity of Secured Party: or (7)
Loss, theft, substantial damage, destruction, sale, encumbrance, concealment
removal, or forfeiture of the Collateral or any material portion thereof.

         6. Upon the occurrence of any event of default, Secured Party may
declare all Debtor's indebtedness secured hereby immediately due and payable,
and thereupon Secured Party shall have the right to take possession of the
Collateral and shall have all other rights and remedies of a Secured Party under
the Uniform Commercial Code. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Secured party shall give or threatens to decline speedily in value or is
of a type customarily sold on a recognized market, Secured Party shall give
Debtor reasonable notice of the time and place of any public sale thereof or of
the time after which any private sale or other intended disposition thereof is
to be made. Debtor agrees that the requirements of reasonable notice shall be
met if notice is mailed to Debtor at the address of the Debtor shown below not
less than (5) days prior to the sale or other disposition. Expenses or retaking,
holding, preparing for sale, selling, or the like shall include Secured Party's
reasonable attorneys' fees and legal expenses. Secured Party may require Debtor
to assemble the Collateral and make it available to Secured Party at a place to
be designated by Secured Party which is reasonably convenient to both parties.
Secured Party is authorized to maintain, sell or dispose of the Collateral on
the premises of the Debtor. Secured Party's rights and remedies shall be
cumulative and alternative.

         7. This Security Agreement shall be constructed and enforced according
to the laws of the State of New York. Waiver of any default shall not constitute
waiver of any subsequent or other default. All rights of Secured Party shall
inure to the benefit of its successors and assigns, and all obligations of
Debtor shall bind his or its heirs, executors, personal representatives,
successors and assigns.

ATTEST:                                     PHOENIX LABORATORIES, INC.

By:                                         By: /s/ SIDNEY RICH
   ------------------------------              ---------------------------------
   Melvin Rich, Secretary                      Sidney Rich, President

ATTEST:                                     GREAT EARTH DISTRIBUTION, INC.

By: /s/ SIDNEY RICH                         By:
   ------------------------------              ---------------------------------
   Sidney Rich, Secretary                      Melvin Rich, President

ACCEPTED:

FIDELCOR BUSINESS CREDIT CORPORATION

By:
   ---------------------------------------
Title:
      ------------------------------------
<PAGE>

                                 PROMISSORY NOTE

$800,000.00                                     February 17, 1988
                                                New York, New York

            For Value Received, PHOENIX LABORATORIES, INC. and GREAT EARTH
DISTRIBUTION, INC. (individually and collectively, the "Maker") jointly and
severally promise to pay to the order of FIDELCOR BUSINESS CREDIT CORPORATION
("Fidelcor") the principal sum of EIGHT HUNDRED THOUSAND ($800,000.00) DOLLARS
payable in eighteen (18) consecutive monthly installments as follows: seventeen
(17) installments in the amount of $13,333.33 each commencing September 1, 1988
and continuing on the first day of each month thereafter, through and including
January 1, 1990 and a final eighteenth (18th) installment in the amount of
$573,333.39 being due and payable on February l7, 1990. Interest on the
outstanding principal balance shall be paid by Maker at the rate of three and
one-half (3 1/2%) percent per annum plus the prime rate so announced from time
to time (effective as of the date of each change, so announced) by Fidelity
Bank, N.A., Philadelphia, Pennsylvania, whether or not said rate is the best
rate available by said bank, payable monthly on the first day of every month
commencing March 1, 1988 and at maturity of this Note, whether by acceleration
or otherwise. Interest shall be calculated on the basis of a 360-day year and
actual days elapsed. In no event shall the interest charged hereunder exceed the
maximum permitted by law.

            Payments shall be made to the office of Fidelcor 810 Seventh Avenue,
New York, New York 10019, or at such other place as the holder of this Note may
designate. At the option of Fidelcor, principal and interest may be charged to
the Maker's account with Fidelcor. This Note may not be prepaid in whole or in
part without the prior written consent of Fidelcor or any holder, except upon
full compliance with the provisions of the Security Agreement (Accounts,
Contract Rights, Instruments and Goods pertaining thereto) referred to below
governing termination of all, but not less than all, financing arrangements
between Maker and Fidelcor.

             Reference is made to the Security Agreement (Accounts, Contract
Rights, Instruments and Goods pertaining thereto), the Security Agreement
(Inventory) and Security Agreement (Equipment), and other agreements, guaranties
and mortgages granting collateral security and creating or evidencing
indebtedness, all of even date herewith between Maker or related parties and
Fidelcor and to all present and future supplements and amendments relating
thereto ("Collateral
<PAGE>

Agreements"). As security for payment of this Note and any other present or
future obligations or liability of the Maker to Fidelcor of any kind, nature of
description, the Maker has granted Fidelcor a security interest in the
collateral described in the Collateral Agreements.

            Upon the occurrence of one or more of the following events:

            A.   Maker's failure to pay when due any amounts required to be paid
                 hereunder; or

            B.   Any other event of default under the terms and provisions of
                 the Collateral Agreements; or

            C.   The termination or non-renewal of the Security Agreement
                 (Accounts, Contract Rights, Instruments and Goods pertaining
                 thereto);

then, and in any such event, it is agreed that the entire unpaid principal
balance of this Note shall, without notice or demand, at Fidelcor's or any
holder's option, become immediately due and payable, together with interest
accrued and accruing at the rate set forth above until this Note is fully paid,
plus all costs and expenses of the collection and enforcement of this Note
including reasonable attorneys' fees, all of which shall be added to the amount
due under this Note.

            In addition to the foregoing, upon the occurrence of any of the
events set forth above, Fidelcor or any holder shall have the right, immediately
and without notice or further action by it, to set off against this Note and/or
all other obligations of the Maker, all money owed to Maker by Fidelcor (or any
person or entity which may participate with Fidelcor in the advances to the
Maker pursuant to the Collateral Agreements) or such holder whether or not due,
and Fidelcor or such holder shall be deemed to have exercised such right of
set-off and to have made a charge against any such money immediately upon the
occurrence of any of the foregoing events even though such charge is made or
entered on the books of Fidelcor or such holder subsequent thereto. Further,
Fidelcor or such holder may proceed to enforce payment of all obligations of the
Maker and exercise any of or all of the rights and remedies afforded to Fidelcor
or such holder by the Uniform Commercial Code or the Collateral Agreements. All
rights and remedies afforded to Fidelcor or such holder pursuant to the terms
hereof, the Collateral Agreements or by law shall be cumulative and may be
exercised in any manner Fidelcor or such holder may determine without limiting
or restricting Fidelcor's or such holder's rights to subsequently exercise any
of its other rights or remedies.

                                      -2-
<PAGE>

            The Maker hereby agrees not to deduct, set off or seek to
counterclaim for or recoup any amounts which are or may be owed to Maker by
Fidelcor (or any person or entity which may participate with Fidelcor in the
advances to Maker pursuant to the Collateral Agreements) or any holder. The
books and records of Fidelcor or any holder showing the account between Maker
and Fidelcor or any holder shall be admissible in evidence in any action or
proceeding as PRIMA FACIE proof of the items therein set forth.

            The provisions of this Note shall be construed and interpreted, and
all rights and obligations hereunder determined, in accordance with the laws of
the State of New York. The Maker hereby irrevocably consents to the jurisdiction
of the Supreme Court of New York, County of New York, and of the United States
District Court for the Southern District of New York in any actions or
proceedings with respect to this Note. Maker hereby waives trial by jury in any
action and/or proceeding arising on, out of or by reason of this Note.

            No modification or waiver of any of the provisions of this Note
shall be effective unless in writing, signed by Fidelcor or other holder hereof
and only to the extent set forth in said writing, nor shall any such waiver be
applicable except in the specific instance for which it is given. The Maker of
this Note hereby waives presentment for payment, demand, notice of non-payment
and dishonor, protest and notice of protest.

ATTEST:                         PHOENIX LABORATORIES, INC.

By: /s/                         By: /s/
   ---------------------------     -----------------------------
   Melvin Rich, Secretary          Sidney Rich, President

ATTEST:                         GREAT EARTH DISTRIBUTION, INC.

By: /s/                         By: /s/
   ---------------------------     -----------------------------
   Sidney Rich, Secretary          Melvin Rich, President

                                       -3-
<PAGE>

                                    GUARANTY

         In order to induce to now or hereafter make advances, loans, extend its
credit to or enter into security agreement with EVERGOOD PRODUCTS CORPORATION,
PHOENIX LABORATORIES, INC. and GREAT EARTH DISTRIBUTION INC. (individually and
collectively "Debtor") and knowing that Trefoil will rely upon this guaranty,
the undersigned and each of them jointly and severally guarantee the due payment
and performance by said Debtor described in said financing agreement, or in any
supplement thereto, or any other transaction or agreement, as well as the due
payment of all other obligations which said Debtor may at any time owe to
Trefoil, however created; and the undersigned hereby indemnify Trefoil, and
covenant to hold it harmless against all obligations, demands, losses or
liabilities, by whomsoever asserted, suffered, incurred or paid by Trefoil as a
result of, or in any way arising out of, or following, or consequential to
transactions under the aforesaid security agreement or any other agreement. This
guaranty shall be absolute, continuing, unconditional, and unlimited. Trefoil
shall be under no obligation to proceed first against the Debtor, or against any
collateral security which Trefoil may hold, before proceeding against the
undersigned hereunder. The undersigned agree that any collateral held as
security by Trefoil, whether under an agreement with the Debtor, or pursuant to
this guaranty, may be sold at public or private sale, and the undersigned
further agree that Trefoil shall have the right to bid at such sale. The
undersigned agree to indemnify and save Trefoil harmless for any costs and
expenses that Trefoil shall have the right to bid at such sale. The undersigned
agree to indemnify and save Trefoil whether under agreement with the Debtor or
the undersigned, and they further agree to pay all attorneys fees agreed to by
the Debtor, and the reasonable attorneys fees incurred in connection with
enforcement of this guaranty agreement, which the parties shall be a sum equal
to 15% of the moneys due Trefoil upon placement of the claim with such attorney.

         The undersigned agree: that this guaranty shall not be impaired by any
modification to which the parties to said security agreement may hereafter
agree, nor by any modification, release or other alteration of any of the
obligations hereby guaranteed, or of any security therefor, or failure to
perfect and security interest, to all of which the undersigned hereby consent;
that their liability hereunder is direct and unconditional and may be enforced
without requiring Trefoil first to any other right, remedy or security; and that
this guaranty shall continue in force until Secured Party shall receive 30 days
prior written notice by registered mail revoking it only as to future
transactions.

         The undersigned waive: notice of acceptance hereof, notice of adverse
change in Debtor's financial condition; the right to a jury trial in any action
hereunder; presentment and protest of any instrument and notice thereof; notice
of default; and all other notices to which they might otherwise be entitled. As
security, they hereby assign to Trefoil all claims of any nature which they, or
any of them, may now or hereafter have against Debtor.

         All actions or proceedings arising directly or indirectly on account of
this guaranty agreement shall be litigated only in courts having situs within
the State of New York and each guarantor for himself hereby consents to the
jurisdiction of any Local, State or Federal Court located within the State of
New York and each guarantor for himself waives personal service of any and all
process upon him and consents that all such service of process be made by
certified mail, return receipt requested directed to such guarantor at the
address set forth below or the home address of such guarantor, if different, and
service so made shall be deemed complete three days after the same shall be
posted.

         This guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto, shall be governed, construed and interpreted
according to the laws of the State of New York. This guaranty cannot be changed
or discharged orally, nor shall the same be terminated by death of any
guarantor, in which event deceased guarantor's estate shall be bound by the
obligations hereunder. Release of any guarantor, or the Debtor herein, shall not
affect the obligations hereunder of the remaining guarantors.

         IN WITNESS WHEREOF, we have signed and sealed these presents this 17th
day of February 1988.

ATTEST:  SEE RIDER ATTACHED HERETO AND          EVERGOOD PRODUCTS CORPORATION
         MADE A PART HEREOF

By: /s/ SEYMOUR JEFFRIES                        By: /s/ SIDNEY RICH
   ----------------------------                    -----------------------------
   Seymour Jeffries, Secretary                     Sidney Rich, President

ATTEST:                                         PHOENIX LABORATORIES

By: /s/ MELVIN RICH                             By: /s/ SIDNEY RICH
  -------------------------------                  ----------------------------
  Melvin Rich, Secretary                           Sidney Rich, President

ATTEST:                                         GREAT EARTH DISTRIBUTION, INC.

By: /s/ SIDNEY RICH                             By: /s/ MELVIN RICH
  -------------------------------                  ----------------------------
   Sidney Rich, Secretary                          Melvin Rich, President
<PAGE>

                                RIDER TO GUARANTY
                                       by
                         EVERGOOD PRODUCTS CORPORATION,
                         PHOENIX LABORATORIES, INC. and
                         GREAT EARTH DISTRIBUTION, INC.
                                       of
                  THE OBLIGATIONS OF EACH OF THE OTHER OF THEM
                                       to
                      FIDELCOR BUSINESS CREDIT CORPORATION

To secure all of its obligations to Trefoil under this guaranty, Evergood
Products Corporation hereby grants to Trefoil a continuing security interest in
the following property:

(i) all present and future accounts, contract rights, chattel paper and general
intangibles (including, but not limited to all of Debtor's now existing or
hereafter arising tax and duty claims and refunds, franchises, permits, customer
lists, goodwill and artwork, all now owned or hereafter acquired patents,
trademarks, copyrights, tradestyles, licenses or license agreements relative to
the rendering of services of the manufacture of goods and all Debtor's now
existing or hereafter arising interest in real and personal property),
documents, instruments, monies, deposits, securities, credits and letters of
credit, whether now owned or hereafter acquired by Debtor; Debtor's interest in
the goods represented by all accounts and all returned, reclaimed or repossessed
goods with respect thereto; all rights and remedies of Debtor under or in
connection with such collateral;

(ii) all present and future goods, including, without limitation:

         (a) all inventory, wherever located, whether now owned or hereafter
acquired by Debtor, including, without limitation, raw materials, materials used
or consumed in the Debtor's business, work in process and finished goods of
whatever kind, nature and description and whether in the possession of Control
of a third party and all right, title and interest of Debtor therein and
thereto, all Debtor's rights as a seller of goods, and all inventory which may
be returned to Debtor by its customers, stopped in transit by Debtor or
repossessed by Debtor;

         (b) all machinery, equipment, tools, furniture, fixtures and all
accessions and attachments thereto, wherever located whether now owned or
hereafter acquired by Debtor, all Debtor's rights to acquire any of the
foregoing, whether by exercise of purchase options or otherwise;

(iii) all Debtor's books and records, equipment and computer software relating
to any of the above; and

                                     1 of 2
<PAGE>

(iv) any and all products and proceeds of the foregoing in any form, including,
without limitation, any claims by Debtor, against third parties for loss of or
damage to or destruction of any or all of the foregoing, and all insurance
proceeds relating to all of the above.

All terms used above which are defined in the Uniform Commercial Code shall have
the meanings therein stated.

                                   EVERGOOD PRODUCTS CORPORATION

                                   By: /s/ Sidney Rich
                                      ------------------------------------------
                                      Sidney Rich, President

                                     2 of 2
<PAGE>

                    Resolutions of the Board of Directors of
                          EVERGOOD PRODUCTS CORPORATION
                             Dated February 8, 1988

            The undersigned being the members of the Board of Directors of
Evergood Products Corporation (the "Company") hereby consent to the following
actions to be taken in lieu of a special meeting of its Board of Directors.

            WHEREAS, Evergood Products Corporation ("Company") is parent of
Phoenix Laboratories, Inc. and Great Earth Distribution, Inc. (collectively the
"Debtors") and it is in the business interest of the Company that Debtors obtain
financing; and

            WHEREAS, said Debtors are desirous of obtaining funds, credit or
other financial assistance from Fidelcor Business Credit Corporation (herein
referred to as "Trefoil") and Trefoil is unwilling to extend credit or to render
such assistance to the Debtors unless the Company shall enter into a guaranty
agreement with Trefoil substantially in the form of the draft of said agreement
submitted to the undersigned and attached to this consent; and

            WHEREAS, in view of the premises aforesaid and because of the
inter-corporate relations between this Company and said Debtors it is deemed to
be to the direct
<PAGE>

interests and advantage of this Company that it enter into said agreement with
Trefoil. NOW, THEREFORE, be it

                         RESOLVED, that the President, any Vice
             President, Secretary, Treasurer or other officer or any
             agent of this corporation, or any one or more of them, be
             and they are hereby authorized, empowered and directed to
             enter into and execute on behalf of the Company an
             agreement with Trefoil substantially in the form of a
             draft of said agreement submitted to the undersigned and
             attached to this consent, and to do and perform all such
             acts and things deemed by any such officer or agent
             necessary, convenient or proper to carry out or modify
             any such agreement, hereby ratifying, approving and
             confirming all that any said officers or agents have done
             or may do or cause to be done in the premises and said
             agreement may contain such terms, conditions, provisions
             and undertakings as the officer executing the same deems
             necessary and proper.

                                             /s/ SIDNEY RICH
                                             -----------------------------------
                                             Sidney Rich

                                             -----------------------------------
                                             Keith Jampolis

                                             /s/ SEYMOUR B. JEFFRIES
                                             -----------------------------------
                                             Seymour B. Jeffries

                                             /s/ CHARLOTTE RICH
                                             -----------------------------------
                                             Charlotte Rich

                                             -----------------------------------
                                             Melvin Rich

                                             -----------------------------------
                                             Irving Zimmerman

                                             /s/ Marjorie Goldner
                                             -----------------------------------
                                             Marjorie Goldner

                                   2
<PAGE>

interests and advantage of this Company that it enter into said
agreement with Trefoil. NOW, THEREFORE, be it

                         RESOLVED, that the President, any Vice
             President, Secretary, Treasurer or other officer or any
             agent of this corporation, or any one or more of them, be
             and they are hereby authorized, empowered and directed to
             enter into and execute on behalf of the Company an
             agreement with Trefoil substantially in the form of a
             draft of said agreement submitted to the undersigned and
             attached to this consent, and to do and perform all such
             acts and things deemed by any such officer or agent
             necessary, convenient or proper to carry out or modify
             any such agreement, hereby ratifying, approving and
             confirming all that any said officers or agents have done
             or may do or cause to be done in the premises and said
             agreement may contain such terms, conditions, provisions
             and undertakings as the officer executing the same deems
             necessary and proper.

                                             -----------------------------------
                                             Sidney Rich

                                             /s/ KEITH JAMPOLIS
                                             -----------------------------------
                                             Keith Jampolis

                                             /s/ SEYMOUR B. JEFFRIES
                                             -----------------------------------
                                             Seymour B. Jeffries

                                             -----------------------------------
                                             Charlotte Rich

                                             -----------------------------------
                                             Melvin Rich

                                             -----------------------------------
                                             Irving Zimmerman

                                             -----------------------------------
                                             Marjorie Goldner

                                   2
<PAGE>

interests and advantage of this Company that it enter into said
agreement with Trefoil. NOW, THEREFORE, be it

                         RESOLVED, that the President, any Vice
             President, Secretary, Treasurer or other officer or any
             agent of this corporation, or any one or more of them, be
             and they are hereby authorized, empowered and directed to
             enter into and execute on behalf of the Company an
             agreement with Trefoil substantially in the form of a
             draft of said agreement submitted to the undersigned and
             attached to this consent, and to do and perform all such
             acts and things deemed by any such officer or agent
             necessary, convenient or proper to carry out or modify
             any such agreement, hereby ratifying, approving and
             confirming all that any said officers or agents have done
             or may do or cause to be done in the premises and said
             agreement may contain such terms, conditions, provisions
             and undertakings as the officer executing the same deems
             necessary and proper.

                                             -----------------------------------
                                             Sidney Rich

                                             -----------------------------------
                                             Keith Jampolis

                                             /s/ SEYMOUR B. JEFFRIES
                                             -----------------------------------
                                             Seymour B. Jeffries

                                             -----------------------------------
                                             Charlotte Rich

                                             -----------------------------------
                                             Melvin Rich

                                             /s/ IRVING ZIMMERMAN
                                             -----------------------------------
                                             Irving Zimmerman

                                             -----------------------------------
                                             Marjorie Goldner

                                   2
<PAGE>

                               GUARANTY

      In order to induce FIDELCOR BUSINESS CREDIT CORPORATION (hereinafter
referred to as "Trefoil") to now or hereafter make advances, loans, extend its
credit to, or enter into security agreements with EVERGOOD PRODUCTS CORPORATION,
PHOENIX LABORATORIES, INC. and GREAT EARTH DISTRIBUTION INC. (individually and
collectively "Debtor") and knowing that Trefoil will rely upon this guaranty,
the undersigned and each of them jointly and severally guarantee the due payment
and performance by said Debtor described in said financing agreement of all
moneys to be paid, and all things to be done, pursuant to each and every
condition and covenant contained in said agreement, or in any supplement
thereto, or any other transaction or agreement, as well as the due payment of
all other obligations which said Debtor may at any time owe to Trefoil, however
created; and the undersigned hereby indemnify Trefoil, and covenant to hold it
harmless against all obligations, demands, losses or liabilities, by whomsoever
asserted, suffered, incurred or paid by Trefoil as a result of, or in any way
arising out of, or following, or consequential to transactions under the
aforesaid security agreement or any other agreement. This guaranty shall be
absolute, continuing, unconditional and unlimited. Trefoil shall be under no
obligation to proceed first against the Debtor, or against any collateral
security which Trefoil may hold, before proceeding against the undersigned
hereunder. The undersigned agree that any collateral held as security by
Trefoil, whether under an agreement with the Debtor, or pursuant to this
guaranty, may be sold at public or private sale, and the undersigned further
agree that Trefoil shall have the right to bid at such sale. The undersigned
agree to indemnify and save Trefoil harmless for any costs and expenses that
Trefoil may incur in connection with the liquidation of collateral held by
Trefoil whether under agreement with the Debtor or the undersigned, and they
further agree to pay all attorneys fees agreed to by the Debtor, and the
reasonable attorneys fees incurred in connection with enforcement of this
guaranty agreement, which the parties agree shall be a sum equal to 15% of the
moneys due Trefoil upon placement of the claim with such attorney.

      The undersigned agree: that this guaranty shall not be impaired by any
modification to which the parties to said security agreement may hereafter
agree, nor by any modification, release or other alteration of any of the
obligations hereby guaranteed, or of any security therefor or failure to perfect
any security interest, to all of which the undersigned hereby consent; that
their liability hereunder is direct and unconditional and may be enforced
without requiring Trefoil first to resort to any other right, remedy or
security; and that this guaranty shall continue in force until Secured Party
shall receive 30 days prior written notice by registered mail revoking it only
as to future transactions.

      The undersigned waive: notice of acceptance hereof, notice of adverse
change in Debtor's financial condition; the right to a jury trial in any action
hereunder; presentment and protest of any instrument and notice thereof; notice
of default; and all other notices to which they might otherwise be entitled. As
security, they hereby assign to Trefoil all claims of any nature which they, or
any of them, may now or hereafter have against Debtor.

      All actions or proceedings arising directly or indirectly on account of
this guaranty agreement shall be litigated only in courts having situs within
the State of New York and each guarantor for himself hereby consents to the
jurisdiction of any Local State or Federal Court located within the State of New
York and each guarantor for himself waives personal service of any and all
process upon him and consents that all such service of process be made by
certified mail, return receipt requested directed to such guarantor at the
address set forth below or the home address of such guarantor, if different, and
service so made shall be deemed complete three days after the same shall be
posted.

      This guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto, shall be governed, construed and interpreted
according to the laws of the State of New York. This guaranty cannot be changed
or discharged orally, nor shall the same be terminated by death of any
guarantor, in which event deceased guarantor's estate shall be bound by the
obligations hereunder. Release of any guarantor, or the Debtor herein, shall not
affect the obligations hereunder of the remaining guarantors.

      IN WITNESS WHEREOF, we have signed and sealed these presents this
__________ day of ____________ 1988.

ATTEST:     SEE RIDER ATTACHED             EVERGOOD PRODUCTS CORPORATION
            HERETO AND MADE A
            PART HEREOF

By: /s/ SEYMOUR JEFFRIES                    By:
    ------------------------------             ---------------------------------
    Seymour Jeffries, Secretary                Sidney Rich, President

ATTEST:                                   PHOENIX LABORATORIES, INC.

By:
    ------------------------------             ---------------------------------
    Melvin Rich, Secretary                     Sidney Rich, President

ATTEST:                                   GREAT EARTH DISTRIBUTION, INC.

By:                                       By:
    ------------------------------             ---------------------------------
    Sidney Rich, Secretary                     Melvin Rich, President
<PAGE>

                           RIDER TO GUARANTY
                                  by
                    EVERGOOD PRODUCTS CORPORATION,
                    PHOENIX LABORATORIES, INC. and
                    GREAT EARTH DISTRIBUTION, INC.
                                  of
             THE OBLIGATIONS OF EACH OF THE OTHER OF THEM
                                  to
                 FIDELCOR BUSINESS CREDIT CORPORATION

To secure all of its obligations to Trefoil under this guaranty, Evergood
Products Corporation hereby grants to Trefoil a continuing security interest in
the following property:

(i) all present and future accounts, contract rights, chattel paper and general
intangibles (including, but not limited to, all of Debtor's now existing or
hereafter arising tax and duty claims and refunds, franchises, permits, customer
lists, goodwill and artwork, all now owned or hereafter acquired patents,
trademarks, copyrights, tradestyles, licenses or license agreements relative to
the rendering of services of the manufacture of goods and all Debtor's now
existing or hereafter arising interest in real and personal property),
documents, instruments, monies, deposits, securities, credits and letters of
credit, whether now owned or hereafter acquired by Debtor; Debtor's interest in
the goods represented by all accounts and all returned, reclaimed or repossessed
goods with respect thereto; all rights and remedies of Debtor under or in
connection with such collateral;

(ii)  all present and future goods, including without limitation:

      (a) all inventory, wherever located, whether now owned or hereafter
acquired by Debtor, including, without limitation, raw materials, materials used
or consumed in the Debtor's business, work in process and finished goods of
whatever kind, nature and description and whether in the possession or control
of a third party and all right, title and interest of Debtor therein and
thereto, all Debtor's rights as a seller of goods, and all inventory which may
be returned to Debtor by its customers, stopped in transit by Debtor or
repossessed by Debtor;

      (b) all machinery, equipment, tools, furniture, fixtures and all
accessions and attachments thereto, wherever located whether now owned or
hereafter acquired by Debtor, all Debtor's rights to acquire any of the
foregoing, whether by exercise of purchase options or otherwise;

(iii) all Debtor's books and records, equipment and computer software relating
to any of the above; and

(iv) any and all products and proceeds of the foregoing in any form, including,
without limitation, any claims by Debtor against third parties for loss of or
damage to or destruction of any or all of the foregoing, and all insurance
proceeds relating to all of the above.

All terms used above which are defined in the Uniform Commercial Code shall have
the meanings therein stated.
<PAGE>

                                   RESOLUTION

      WHEREAS PHOENIX LABORATORIES, INC. and GREAT EARTH DISTRIBUTION, INC.
(individually "Debtor") is engaged (a) in business as a corporate affiliate of
this corporation or (b) in the business of selling, marketing, using or
otherwise dealing in merchandise, supplies, equipment, products or other
articles sold to it or bought from it by that corporation or it is in the
businesses interest of this corporation that "Debtor" obtain financing.

      WHEREAS, said Debtor is desirous of obtaining funds, credit or other
financial assistance from FIDELCOR BUSINESS CREDIT CORPORATION herein referred
to as Trefoil and Trefoil is unwilling to extend credit or to render such
assistance to the Debtor unless this corporation shall enter into a guaranty
agreement with Trefoil substantially in the form of the draft of said agreement
submitted to this meeting; and

      WHEREAS, in view of the provisions aforesaid and because of the inter-
corporate or business relations between this corporation and said Debtor it is
deemed to be to the direct interests and advantage of this corporation that it
enter into said agreement with Trefoil.

      RESOLVED, that the President, any Vice-President, Secretary, Treasurer or
other officer or any agent of this corporation, or any one or more of them, be
and they are hereby authorized, empowered and directed to enter into and execute
on behalf of the corporation an agreement with Trefoil substantially in the form
of a draft of said agreement submitted to the meeting, and to do and perform all
such acts and things deemed by any such officer or agent necessary, convenient
or proper to carry out or modify any such agreement, hereby ratifying, approving
and confirming all that any said officers or agents have done or may do or cause
to be done is the premises and said agreement may contain such terms,
conditions, provisions and undertakings as the officer executing the same deems
necessary and proper.

      The undersigned does hereby certify that I am Secretary and the keeper of
the corporate records and the seal of each of the corporation listed below that
the foregoing is a true and correct copy of resolutions duly and unanimously
adopted and ratified at a special meeting of the Board of Directors of said
corporation duly convened and held in accordance with its by-laws at the office
of said corporations on the date hereof as taken and transcribed by me from the
minutes of said meeting and compared by me with the original of said resolutions
recorded in said minutes and that the same has not in any way been modified,
repealed or rescinded but is in full force and effect; that the within and
foregoing agreement was duly executed pursuant thereto.

      Witness any hand and seal of said corporation this 8th day of February,
1988.

                                          PHOENIX LABORATORIES, INC.

                                          By: /s/ MELVIN RICH
                                             -----------------------------------
                                             Melvin Rich, Secretary

GREAT EARTH DISTRIBUTION, INC.

By: /s/ SIDNEY RICH
    --------------------------
    Sidney Rich, Secretary

      We consent to the above resolution and the guaranty executed pursuant
thereto and represent that we are the holders of all of the outstanding shares
of stock of PHOENIX LABORATORIES INC. and GREAT EARTH DISTRIBUTION, INC.

                                    EVERGOOD PRODUCTS CORPORATION

                                    By: /s/ SEYMOUR B. JEFFRIES
                                       -----------------------------------------
                                        Seymour B. Jeffries, Secretary
<PAGE>

                                    GUARANTY

      In order to induce FIDELCOR BUSINESS CREDIT CORPORATION (hereafter
"Trefoil") to now or hereafter make advances, loans, extend its credit to, or
enter into security agreements with PHOENIX LABORATORIES, INC. and GREAT EARTH
DISTRIBUTION, INC. (hereafter individually and collectively, "Debtor") and
knowing that Trefoil will rely upon this guaranty, the undersigned and each of
them jointly and severally guarantee the due payment and performance by said
Debtor described in said financing agreement of all moneys to be paid, and all
things to be done, pursuant to each and every condition and covenant contained
in said agreement, or in any supplement thereto, or any other transaction or
agreement, as well as the due payment of all other obligations which said Debtor
may at any time owe to Trefoil, however created; and the undersigned hereby
indemnify Trefoil, and covenant to hold it harmless against all obligations,
demands, losses or liabilities, by whomsoever asserted, suffered, incurred or
paid by Trefoil as a result of, or in any way arising out of, or following, or
consequential to transactions under the aforesaid security agreement or any
other agreement. This guaranty shall be absolute, continuing, unconditional and
unlimited. Trefoil shall be under no obligation to proceed first against the
Debtor, or against any collateral security which Trefoil may hold, before
proceeding against the undersigned hereunder. The undersigned agree that any
collateral held as security by Trefoil, whether under an agreement with the
Debtor, or pursuant to this guaranty, may be sold at public or private sale, and
the undersigned further agree that Trefoil shall have the right to bid at such
sale. The undersigned agree to indemnify and save Trefoil harmless for any costs
and expenses that Trefoil may incur in connection with the liquidation of
collateral held by Trefoil whether under agreement with the Debtor or the
undersigned, and they further agree to pay all attorneys fees agreed to by the
Debtor, and the reasonable attorneys fees incurred in connection with
enforcement of this guaranty agreement, which the parties agree shall be a sum
equal to 15% of the moneys due Trefoil upon placement of the claim with such
attorney.

      The undersigned agree: that this guaranty shall not be impaired by any
modification to which the parties to said security agreement may hereafter
agree, nor by any modification, release or other alteration of any of the
obligations hereby guaranteed, or of any security therefor or failure to perfect
any security interest, to all of which the undersigned hereby consent; that
their liability hereunder is direct and unconditional and may be enforced
without requiring Trefoil first to resort to any other right, remedy or
security; and that this guaranty shall continue in force until Secured Party
shall receive 30 days prior written notice by registered mail revoking it only
as to future transactions.

      The undersigned waive: notice of acceptance hereof, notice of adverse
change in Debtor's financial condition; the right to a jury trial in any action
hereunder; presentment and protest of any instrument and notice thereof; notice
of default; and all other notices to which they might otherwise be entitled. As
security, they hereby assign to Trefoil all claims of any nature which they, or
any of them, may now or hereafter have against Debtor.

      All actions or proceedings arising directly or indirectly on account of
this guaranty agreement shall be litigated only in courts having situs within
the State of New York and each guarantor for himself hereby consents to the
jurisdiction of any Local State or Federal Court located within the State of New
York and each guarantor for himself waives personal service of any and all
process upon him and consents that all such service of process be made by
certified mail, return receipt requested directed to such guarantor at the
address set forth below or the home address of such guarantor, if different, and
service so made shall be deemed complete three days after the same shall be
posted.

      This guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto, shall be governed, construed and interpreted
according to the laws of the State of New York. This guaranty cannot be changed
or discharged orally, nor shall the same be terminated by death of any
guarantor, in which event deceased guarantor's estate shall be bound by the
obligations hereunder. Release of any guarantor, or the Debtor herein, shall not
affect the obligations hereunder of the remaining guarantors.

      Notwithstanding anything to the contrary contained in this guaranty, (1)
the joint and several liability of the guarantors hereunder shall in no event
exceed $150,000, plus the costs and expenses of collection, including attorneys
fees, as provided for herein. Such limitation on the liability of the guarantors
shall not be deemed to be a limitation on the amount of credit which may be
extended to the Debtor and (2) Trefoil shall not commence any action against any
guarantor to enforce this guaranty until six months after Trefoil makes demand
upon such guarantor for payment under this guaranty.

      IN WITNESS WHEREOF, we have signed and sealed these presents this 19th day
of February 1988.

 /s/ CHARLES RAICH                        /s/ SIDNEY RICH
----------------------------------        --------------------------------------
       Witness                            SIDNEY RICH
                                          70 Redwood Drive
                                          Roslyn, New York  11576
                                          --------------------------------------
                                                        Address

/s/ CHARLES RAICH                         /s/ MELVIN RICH
----------------------------------        --------------------------------------
       Witness                            MELVIN RICH
                                          15 Tuxedo Drive
                                          Melville, New York  11747
                                          --------------------------------------
                                                        Address
<PAGE>

                      FIDELCOR BUSINESS CREDIT CORPORATION
                               810 Seventh Avenue
                            New York, New York 10019

                                                 February 16, 1988

Hoffman - La Roche, Inc.
340 Kingsland Street
Nutley, New Jersey  07110

                  Re:  PHOENIX LABORATORIES, INC.  ("Borrower")

Gentlemen:

            Reference is made to certain agreements entered into between
Borrower and Hoffman - La Roche, Inc. ("Roche") pursuant to which Borrower has
granted to Roche a security interest in all of Borrower's now owned and
hereafter acquired Equipment and the Proceeds thereof as collateral security for
certain obligations of Borrower to Roche (said agreements, together with all
agreements and instruments related thereto or delivered in connection therewith,
as the same may now exist or hereafter be amended or supplemented, are
hereinafter collectively referred to as the "Roche Agreements" and all
obligations of Borrower to Roche arising under or in connection with the Roche
Agreements are hereinafter collectively referred to as the "Roche Obligations").

            Reference is also made to certain financing agreements entered or
about to be entered into between Borrower and Fidelcor Business Credit
Corporation ("Fidelcor"), including, without limitation, the Security Agreement
[Accounts, Contract Rights, Instruments and Goods pertaining thereto], the
Inventory Security Agreement, the Equipment Security Agreement, and all other
agreements creating or evidencing indebtedness or granting collateral security
or guarantees with respect thereto (all of the foregoing, together with all
agreements and instruments related thereto or delivered in connection therewith,
as the same may now exist or hereafter be amended or supplemented, are
hereinafter collectively referred to as the "Fidelcor Agreements").

            This letter sets forth our agreement concerning the respective
interests of Roche and Fidelcor notwithstanding the terms and provisions of any
agreements or arrangements heretofore, now or hereafter entered into with
Borrower and irrespective of any rule of law.
<PAGE>

            1.    FIDELCOR SECURITY INTEREST.

            (a) Roche hereby acknowledges that Fidelcor, pursuant to the
Fidelcor Agreements, has been or is about to be granted by Borrower a security
interest in and lien upon, among other things, all of Borrower's Equipment and
the Proceeds thereof (collectively, the "Collateral") to secure all present and
future obligations of Borrower to Fidelcor (hereinafter, the "Fidelcor
Obligations").

            (b) Fidelcor hereby acknowledges that Roche, pursuant to the Roche
Agreements, has been granted by Borrower a security interest in a lien upon the
Collateral to secure the Roche Obligations.

      2.    PRIORITIES

            Notwithstanding any provision to the contrary contained in the Roche
Agreements or the Fidelcor Agreements or any other agreement granting a security
interest to Roche or Fidelcor, and notwithstanding the time, date, order or
method of attachment or perfection of the security interests granted thereby,
and notwithstanding anything contained in any filing or agreement to which Roche
or Fidelcor may now or hereafter be a party and notwithstanding any provisions
of the Uniform Commercial Code or other applicable law, all perfected security
interests and liens of Fidelcor in and upon the Collateral, are and shall be
prior in right and interest to the security interests and liens of Roche in and
upon the Collateral and the security interests and liens of Roche in and upon
the Collateral are and shall be, in all respects, subject and subordinate to the
security interests and liens of Fidelcor in and upon the Collateral to the full
extent of the Fidelcor Obligations outstanding at any time and from time to
time.

      3.    STANDSTILL AND RELEASE.

            Roche agrees that unless and until all of the Fidelcor Obligations
have been fully and indefeasibly paid and satisfied, Roche shall not, without
the prior written consent of Fidelcor, exercise any rights or assert any claims
with respect to any Collateral, nor seek to foreclose on its security interest
therein, nor take any action, directly or indirectly, that would interfere with
the rights of Fidelcor with respect to the Collateral. Roche agrees to release
or otherwise terminate its security interest in and lien upon the Collateral,
but not the Proceeds thereof, which may be sole or otherwise disposed of either
by Fidelcor, its agents, or Borrower with Fidelcor's consent, whether in the
ordinary course of business or after the declaration of any event of default
pursuant to the Fidelcor Agreements, immediately upon

                                       -2-
<PAGE>

Fidelcor's request, and to immediately deliver Uniform Commercial Code financing
or termination statements and such other documents as Fidelcor may reasonably
require in connection therewith. In connection with any such sale or
disposition, Fidelcor shall proceed in a commercially reasonable manner and
shall give Roche written notice of any such sale or disposition (ATTN:
Treasurer) at the same time Fidelcor gives Borrower such notice.

      4.    FURTHER ASSURANCES.

            The parties hereto shall execute and deliver such additional
documents and take such additional action as shall be reasonably necessary to
effectuate the provisions and purposes of this Agreement.

      5.    SUCCESSORS AND ASSIGNS.

            All terms covenants and conditions herein contained shall inure to
the benefit of, and be binding upon, the parties hereto, their successor and
assigns.

      6.    ENTIRE AGREEMENT.

            This Agreement sets forth the entire agreement of the parties hereto
with respect to the subject matter hereof, neither this Agreement nor any term
hereof may be modified, altered, waived, discharged or terminated orally, but
only by an instrument in writing executed by the parties hereto.

      7.    UNIFORM COMMERCIAL CODE DEFINITIONS.

            All capitalized terms used herein which are defined in the Uniform
Commercial Code in effect in the State of New York shall have the meanings set
forth therein unless otherwise defined herein.

      8.    GOVERNING LAW.

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

                                       -3-
<PAGE>

            If the foregoing correctly states our understanding and agreement,
kindly sign the counterpart of this letter in the space provided below.

                                          Very truly your,

                                          FIDELCOR BUSINESS CREDIT
                                          CORPORATION

                                          By:   /s/ STUART NECTOW
                                                --------------------------------
                                                Stuart Nectow

                                          Title:  VP
                                                --------------------------------

Approved As To Form
____ DEPT.

By:  RAG

READ AND ACCEPTED:

HOFFMAN-LA ROCHE INC.

By: /s/ WILLIAM L. HENNRICH
   -------------------------------
      William L. Hennrich
Title:  Treasurer
      ----------------------------

                                       -4-
<PAGE>

[LOGO]
FIDELCOR BUSINESS                                          810 Seventh Avenue
CREDIT CORPORATION                                         New York, NY  10019
                                                           (212) 333-7445
--------------------------------------------------------------------------------

                                     June 29, 1988

Phoenix Laboratories, Inc.
175 Lauman Lane
Hicksville, New York 11801

Great Earth Distribution, Inc.
14211 Gannet Street
La Mirada, California 90638

                     RE:  Security Agreement (Accounts, etc.) executed
                          February 17, 1988, by and between Phoenix
                          Laboratories, Inc., and Great Earth Distribution,
                          Inc. (collectively, "Debtors"), on the one hand, and
                          Fidelcor Business Credit Corporation, on the other
                          hand (the "Agreement")
                          ------------------------------------------------------

Gentlemen:

            We have agreed to temporarily increase our outstanding advances to
you under the Agreement to an amount which is Three Hundred Thousand Dollars
($300,000.00) in excess of the maximum amount allowable pursuant to the formulas
set forth in paragraph 2 of the Agreement and paragraph G of the rider thereto.

            In consideration of the foregoing, you hereby agree to pay us a fee
in the amount of Three Thousand Dollars ($3,000.00).

            All other terms and conditions of the Agreement shall remain in full
force and effect.
<PAGE>

            Please evidence your agreement to the terms of this letter by
signing in the space provided below and returning this letter to us at the above
address. A Copy of this letter is enclosed for your records.

                                          Very truly yours,

                                          FIDELCOR BUSINESS CREDIT
                                          CORPORATION

                                          By: /s/ NANCY A. KAGAN
                                              ----------------------------------
                                              Nancy A. Kagan

                                              Its: VP
                                                  ------------------------------

Read and Agreed to:

PHOENIX LABORATORIES, INC.

By: /s/ SEYMOUR RICH
   -------------------------------
      Its  President
         -------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/ MEL RICH
   -------------------------------
      Its   President
         -------------------------
<PAGE>

[LOGO]
FIDELCOR BUSINESS                                          810 Seventh Avenue
CREDIT CORPORATION                                         New York, NY  10019
                                                           (212) 333-7445
--------------------------------------------------------------------------------

                                          October 4, 1989

Phoenix Laboratories, Inc.
175 Lauman Lane
Hicksville, New York 11801

Great Earth Distribution, Inc.
14211 Gannet Street
La Mirada, California 90638

                     RE:   Security Agreement (Accounts, etc.) executed
                           February 17, 1988, by and between Phoenix
                           Laboratories, Inc. and Great Earth Distribution,
                           Inc. on the one hand, and Fidelcor Business Credit
                           Corporation, on the other hand (the "Agreement")
                           -----------------------------------------------------

Gentlemen:

            This will confirm the following amendments to the referenced
agreement:

            1.     Effective on February 17, 1990, the interest rate will be
                   reduced from 3 1/2% plus the announced Fidelity Bank, N.A.
                   prime rate to 3 1/4% plus the announced Fidelity Bank, N.A.
                   prime rate.  Accordingly, the first sentence of paragraph 6
                   of the printed portion of the Agreement is amended to read:

                   "That Debtor will pay Trefoil for its advances made hereunder
                   a charge 3 1/4% per annum plus the prime rate announced by
                   Fidelity Bank, N.A., Philadelphia, Pennsylvania, whether or
                   not said rate is the best rate available at said bank."

            2.     Effective as of the date hereof, the initial contract term is
                   extended to February 17, 1991. Accordingly, the first
                   sentence of Paragraph 26 of the printed portion of the
                   Agreement is amended to read:

                   "That this Agreement shall remain in effect until February
                   17, 1991 and shall be deemed automatically renewed for
                   successive periods of one year."

            3.     Effective as of the date hereof the prepayment premium set
                   forth in Paragraph 30 of the printed portion of the Agreement
                   is amended so that the first sentence of said paragraph shall
                   read:
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
October 4, 1989
Page Two

                   "Debtor may on five days notice, prior to the end of any
                   calendar month, prepay and terminate this Security Agreement
                   by paying to Trefoil in cash or certified check, the entire
                   unpaid principal balance plus accrued charges, together with
                   a sum equal to 25% of the average monthly charges for the
                   immediately preceding six months or from the date of the
                   agreement whichever is less, multiplied by the number of
                   months of the unexpired balance of the term of this agreement
                   (the "prepayment premium"). However, if the prepayment occurs
                   between February 17, 1990 and August 17, 1990, then the
                   prepayment premium shall be the lesser of the amount computed
                   in the preceding sentence or the fixed sum of $62,500,000.00,
                   and if the prepayment occurs between August 18, 1990 and
                   February 17, 1991, then the prepayment premium shall be the
                   lesser of the amount computed in the preceding sentence or
                   the fixed sum of $37,000.00."

            4.     Effective as of the date hereof the inventory advance rate
                   for the Phoenix Laboratories, Inc. inventory shall be
                   increased to 30% and the sublimit on Accounts Advances to
                   Great Earth Distribution, Inc. shall be increased to
                   $600,000.00.  Accordingly, paragraph G of the Rider to the
                   Agreement shall be amended to read:

                   "G.   Trefoil agrees that in addition to the advances made
                         with reference to the formula set forth in Paragraph 2
                         of the printed portion of this agreement ("Accounts
                         Advances"), Trefoil shall make additional advances to
                         Debtor, in such amounts from time to time determined by
                         Trefoil in it sole discretion, of up to thirty percent
                         (30%) of the value of Phoenix's acceptable and eligible
                         raw material inventory and of up to twenty-five percent
                         (25%) of the value of GED's acceptable and eligible
                         finished goods inventory (collectively the "Inventory
                         Advances"). As used herein, "value" shall mean the
                         lower of cost or market, as determined by Trefoil.
                         Except in Trefoil's sole discretion, (1) the aggregate
                         principal amount of Accounts Advances to GED shall not
                         exceed, at any time outstanding, the lesser of (a)
                         $600,000, or (b) an amount equal to (i) thirty percent
                         (30%) of the value of Phoenix's acceptable and eligible
                         raw material inventory, plus (ii) twenty-five percent
                         (25%) of the value of GED's
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
October 4, 1989
Page Three

                         acceptable finished goods inventory, and (2) the
                         aggregate principal amount of the Inventory Advances to
                         Debtors shall not exceed $1,000,000 at any time
                         outstanding."

            All other terms and conditions of the Agreement shall remain in full
force and effect. Please evidence your agreement to the foregoing by signing in
the space provided below and returning this letter to us. A copy is enclosed for
your records.

                                          Very truly yours,

                                          FIDELCOR BUSINESS CREDIT
                                          CORPORATION

                                          By:   /s/ John [illegible]
                                                --------------------------------
                                          Its:    AVP
                                                --------------------------------

Read and Agreed to:

PHOENIX LABORATORIES, INC.

By: /s/ MEL RICH
   -------------------------------
Its:  Vice President
    ------------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/ MEL RICH
   -------------------------------
Its:  President
    ------------------------------
<PAGE>

THE CIT GROUP/CREDIT FINANCE
810 Seventh Avenue
New York, NY  10019
212 974-7400
FAX:  212 974-7688

THE
CIT
GROUP

                                              August 13, 1991

Phoenix Laboratories, Inc.
175 Lauman Lane
Hicksville, New York 11801

Great Earth Distribution, Inc.
14211 Gannet Street
La Mirada, California 90638

                     RE:  Security Agreement (Accounts, etc.) executed
                          February 17, 1988, by and between Phoenix
                          Laboratories, Inc. ("Phoenix") and Great Earth
                          Distribution, Inc. ("GED") on the one hand, and The
                          CIT Group/Credit Finance, Inc., assignee of Fidelcor
                          Business Credit Corporation, on the other hand (the
                          "Accounts Agreement") Promissory Note in the
                          original principal balance of $800,000.00 and all
                          related agreements, documents, and instruments
                          (collectively the "Financing  Agreements")
                          ------------------------------------------------------

Gentlemen:

            As you are aware, The CIT Group/Credit Finance, Inc. ("CIT")
purchased substantially all of the assets of Fidelcor Business Credit
Corporation on February 4, 1991, including its loans to Phoenix and GED. In
connection therewith, you consent to the assignment to CIT and agree that all
rights and privileges under the Financing Agreements have been transferred and
assigned to CIT.

            As additional collateral to secure your Obligations to CIT, as that
term is defined in the Rider to the Accounts Agreement, we have been granted a
security interest in among other things, all of the personal property, including
but not limited to service marks and trademarks of Great Earth International,
Inc., Great Earth International Franchising Corp., Great Earth Stores, Inc., and
Great Earth International Licensing Corp. (the "Great Earth Companies"). The
Great Earth Companies are presently wholly owned subsidiaries of Evergood
Products Corporation ("Evergood"), the sole shareholder of Phoenix and GED, and
a guarantor of CIT's loans to GED and Phoenix. You have requested that we
consent to the sale by Evergood of the stock of the Great Earth Companies to
Great Earth Vitamins, Ltd. ("GEV") release our
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
August 13, 1991
Page 2

liens on the assets of the Great Earth Companies and grant you a three month
moratorium on payments due on your term loan from CIT. As partial consideration
for the sale of the stock of the Great Earth Companies to GEV, Evergood will
receive two notes in the aggregate amount of $1,200,000.00. The obligations
under the GEV notes will be secured by a grant of a security interest in and
pledge of the stock of the Great Earth Companies, a security interest in all of
the general intangibles, including but not limited to service marks and
trademarks of the Great Earth Companies and GEV, and a security interest and
assignment of all royalty payments due to any of the Great Earth Companies or
GEV from any stores operating under the Great Earth franchise system. CIT has
agreed to release its liens on the assets of the Great Earth Companies, provided
that: (a) it receives an assignment from Evergood of the foregoing security
interests it obtains from GEV and/or any of the Great Earth Companies which will
further secure Evergood's guaranty of the obligations of Phoenix and GED to CIT,
(b) CIT's accounts receivable advance to GED decreases at the rate of $25,000.00
per mouth until the entire advance is zero, (c) GEV and the Great Earth
Companies agree that CIT shall have the right to use any of the trademarks or
service marks of the Great Earth Companies to sell any of the GED or Phoenix
inventory as provided in the Financing Agreements and letter dated even date
herewith between GEV and the Great Earth Companies and (d) the other amendments
set forth below are implemented:

            Accordingly, this will confirm our agreement to amend the Financing
Agreements as follows:

            (1)    All references to Fidelcor Business Credit Corporation or
                   Trefoil shall mean The CIT Group/Credit Finance, Inc.

            (2)    Paragraph 6 of the printed portion of the accounts Agreement
                   is hereby deleted in its entirety and the following is
                   substituted therefor:

                   "6. That Debtor will pay Trefoil for its advances made
                   hereunder a charge of three and one-quarter percent (3 1/4%)
                   plus the rate of interest publicly announced by Manufacturers
                   Hanover Trust Company in New York, New York or its successors
                   from time to time as its reference rate (the reference rate
                   is not intended to be the lowest rate of interest charged by
                   Manufacturers Hanover Trust Company to its borrowers),
                   computed on a 360 day year. In the event of a change in the
                   reference rate charged at the Manufacturers Hanover Trust
                   Company, adjustment hereunder shall be made on the day of
                   such change in the reference rate. All charges shall be
                   computed upon the average daily balances outstanding and
                   charged to Debtor's account or paid monthly."
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
August 13, 1991
Page 3

            (3)    Paragraph G. of the Rider to the Accounts Agreement is
                    amended to read:

                   "G.    Trefoil agrees that in addition to the advances made
                          with reference to the formula set forth in Paragraph
                          of the printed portion of this agreement ("Accounts
                          Advances"), Trefoil shall make additional advances to
                          Debtor, in such amounts from time to time determined
                          by Trefoil in its sole discretion, of up to thirty
                          percent (30%) of the value of Phoenix's acceptable and
                          eligible raw material inventory and of up to
                          twenty-five percent (25%) of the value of GED's
                          acceptable and eligible finished goods inventory
                          (collectively, the "Inventory Advances"). As used
                          herein, "value" shall mean the lower of cost or
                          market, as determined by Trefoil. Except in Trefoil's
                          sole discretion, (1) the aggregate principal amount of
                          Accounts Advances to GED shall not exceed, at any time
                          outstanding, the lesser of (a) $465,000.00 (the "GED
                          Accounts Sublimit"), or (b) an amount equal to (i)
                          thirty percent (30%) of the value of Phoenix's
                          acceptable and eligible raw material inventory, plus
                          (ii) twenty-five percent (25%) of the value of GED's
                          acceptable and eligible finished foods inventory, and
                          (2) the aggregate principal amount of the Inventory
                          Advances to Debtors shall not exceed $1,000,000.00 at
                          any time outstanding. The GED Accounts Sublimit shall
                          decrease by the amount of $25,000.00 on the first day
                          of each month, commencing on September 1, 1991 until
                          the GED Accounts Sublimit is zero."

            (4)    On February 17, 1988, you executed a Promissory Note (the
                   "Note") in the original principal balance of $800,000.00 to
                   evidence a term loan advance against your machinery and
                   equipment. This will confirm that the Note is amended to
                   provide that interest will be paid at the rate of 3 1/4% plus
                   the announced reference rate of Manufacturers Hanover Trust
                   Company, or its successors, that the consecutive monthly
                   installments of principal shall be in the amount of
                   $14,166.66, that there will be a three month moratorium on
                   the principal amortization of the Note commencing September
                   1, 1991 (for the principal payments due on September 1, 1991,
                   October 1, 1991 and November 1, 1991) with the next principal
                   payment due on December 1, 1991, and that the entire
                   outstanding balance of the Note will be due and payable on
                   February 17, 1992.

            (5)    In consideration of our agreement to release our liens
                   against the Great Earth Companies, you have agreed to
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
August 13, 1991
Page 4

                   pay us a facility fee equal to $5,000.00, which shall be
                   charged into your loan on the date hereof.

            All other terms and conditions of the Financing Agreements shall
remain in full force and effect.

            Please evidence your agreement to the foregoing by signing below and
returning this letter to us.

                                          Very truly your,

                                          CIT GROUP/CREDIT FINANCE, INC.

                                          By:   /s/
                                                --------------------------------
                                          Title: VP
                                                --------------------------------

Agreed and Acknowledged:

PHOENIX LABORATORIES, INC.               GREAT EARTH DISTRIBUTION, INC.

By:   /s/  MEL RICH                      By:    /s/ MEL RICH
      ----------------------------              --------------------------------
Title:  Vice President                   Title:  President
      ----------------------------              --------------------------------

      Each of the undersigned acknowledges the above amendments and the
assignment to CIT and confirms and agrees that all rights and privileges under
the guaranty dated February 17, 1998 executed by each will inure to the benefit
of CIT.

                                                     Confirmed
/s/ SIDNEY RICH             /s/ MEL RICH         /s/ SIDNEY RICH
------------------------    ------------------   ---------------------
SIDNEY RICH                 MELVIN RICH          SIDNEY RICH 10/7/

by Mel Rich as attorney-in-fact

      The undersigned acknowledges the above amendments and the assignment to
CIT and confirms and agrees that all rights and privileges under its guaranty
dated February 17, 1988, of the obligations of Phoenix Laboratories, Inc. and
Great Earth Distribution, Inc. executed by the undersigned and its grant of a
security interest to secure the guaranty will inure to the benefit of CIT. As
further security to secure the undersigned's obligations to CIT under its
guaranty, the undersigned specifically grants a security interest to CIT in all
of the security interests granted to the undersigned by Great Earth
International, Inc., Great Earth International Franchising Corp., Great Earth
Stores, Inc. and Great Earth International Licensing Corp. (the "Great Earth
Vitamins Subsidiaries") and assigns to CIT all of the notes due to the
undersigned from Great Earth Vitamins, Ltd. in connection with that certain
Stock Purchase Agreement dated June 8, 1991 and all collateral which secures
said notes including the stock of the Great Earth Vitamins Subsidiaries.

EVERGOOD PRODUCTS CORPORATION

By: /s/  MEL RICH
    ----------------------------
Title:      V.P.
      ----------------------------
<PAGE>

THE CIT GROUP/CREDIT FINANCE
810 Seventh Avenue
New York, NY  10019
212 974-7400
FAX:  212 974-7668

THE
CIT
GROUP

                                                December 16, 1991

Phoenix Laboratories, Inc.
175 Lauman Lane
Hicksville, New York 11801

Great Earth Distribution, Inc.
14211 Gannet Street
La Mirada, California 90638

                     RE:  Security Agreement (Accounts, etc.) executed
                          February 17, 1988, by and between Phoenix
                          Laboratories, Inc., ("Phoenix") and Great Earth
                          Distribution, Inc. ("GED") and The CIT Group/Credit
                          Finance, Inc., ("CIT"), assignee of Fidelcor
                          Business Credit Corporation (the "Account
                          Agreement") Promissory Note in the original
                          principal balance of $800,000.00 (the "Note") and
                          all related agreements, documents, and instruments
                          (collectively the "Financing  Agreements")
                          ------------------------------------------------------

Gentlemen:

            The present term of your Financing Agreements with CIT expires on
February 17, 1992. We have now agreed to an extension of the Financing
Agreements and modifications of the Note as reflected by the Amended and
Restated Promissory Note to be executed on the date hereof in the form annexed
hereto under the terms and conditions set forth below.

            Accordingly, this will confirm our agreement to amend the Financing
Agreements as follows:

            (1)    Paragraph 6 of the printed portion of the Accounts Agreement
                   is hereby deleted in its entirety and the following is
                   substituted therefor:

                   "6. That Debtor will pay Trefoil for its advances made
                   hereunder a charge of three and one-half percent (3 1/2%) per
                   annum plus the rate of interest publicly announced by
                   Manufacturers Hanover Trust Company in New York, New York, or
                   its successor, from time to time as its reference rate (the
                   reference rate is not intended to be the lowest rate of
                   interest charged by

A company of
Dai-ichi Kangyo Bank and
Manufacturer's Hanover
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
December 16, 1991
Page 2

                   Manufacturers Hanover Trust Company to its borrowers),
                   computed on a 360 day year. In the event of a change in the
                   reference rate charged at the Manufacturers Hanover Trust
                   Company, or its successor, adjustment hereunder shall be made
                   on the day of such change in the reference rate. All charges
                   shall be computed upon the average daily balances outstanding
                   and charged to Debtor's account or paid monthly."

            (2)    Paragraph G.  of the Rider to the Accounts Agreement is
                   amended to read:

                   "G.   Trefoil agrees that in addition to the advances made
                         with reference to the formula  set forth in Paragraph
                         2 of the printed portion of this agreement ("Accounts
                         Advances"), Trefoil shall make additional advances to
                         Debtor, in such amounts from time to time determined
                         by Trefoil in its sole discretion, of up to thirty
                         percent (30%) of the value of Phoenix's acceptable
                         and eligible raw material inventory and of up to
                         twenty-five percent (25%) of the value of GED's
                         acceptable and eligible unfinished goods inventory
                         (collectively, the "Inventory Advances").  As used
                         herein, "value" shall mean the lower of cost or
                         market price, as determined by Trefoil.  Except in
                         Trefoil's sole discretion, (1) the aggregate
                         principal amount of Accounts Advances to GED shall
                         not exceed, at any time outstanding, the lesser of
                         (a) $365,000.00 (the "GED Accounts Sublimit"), or (b)
                         an amount equal to (i) thirty percent (30%) of the
                         value of Phoenix's acceptable and eligible raw
                         material inventory, plus (ii) twenty-five percent
                         (25%) of the value of GED's acceptable and eligible
                         finished goods inventory, and (2) the aggregate
                         principal amount of the Inventory Advances to Debtors
                         shall not exceed $500,000.00 at any time
                         outstanding.  The GED Accounts Sublimit shall
                         decrease by the amount of $25,000.00 on the first day
                         of each month, commencing on January 1, 1992 until
                         the GED Accounts Sublimit is zero."

            (3)    The second sentence of paragraph F. of the Rider to the
                   Accounts Agreement is amended to read:

                   "Debtor will pay all out-of-pocket costs of field
                   examinations to be conducted by Trefoil as provided in
                   paragraph 13 of the printed portion of the agreement plus
                   $550.00 per person per day."

            (4)    Paragraph H. of the Rider to the Accounts Agreement is
                   amended to read:
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
December 16, 1991
Page 3

                   "Except in Trefoil's sole discretion, the aggregate principal
                   amount of the advances made by Trefoil to Debtors under the
                   Financing Agreements, including the Accounts Advances and the
                   Inventory Advances shall not exceed the principal amount of
                   $2,500,000.00 at any time outstanding (the "Credit Line")."

            (5)    The first sentence of paragraph 26 of the printed portion of
                   the Accounts Agreement is amended to read:

                   "That this Agreement shall remain in effect until February
                   17, 1994 and shall be deemed automatically renewed for
                   successive periods of one year."

            In addition to all other fees at any time payable by Debtors to CIT,
Debtors shall pay CIT on the date hereof and subsequently on each anniversary
date of the Accounts Agreement, commencing with the February 17, 1993
anniversary date, a Facility Fee in the amount of $18,750.00, which fee is fully
earned as of the date hereof and may be charged by CIT to any account of the
Debtors maintained by CIT.

            All other terms and conditions of the Financing Agreements shall
remain in full force and effect.

            Please evidence your agreement to the foregoing by signing below and
returning this letter to us.

                                          Very truly your,

                                          THE CIT GROUP/CREDIT
                                          FINANCE, INC.

                                          By:   /s/
                                                --------------------------------
                                          Title:   VP
                                                --------------------------------

Agreed and Acknowledged:

PHOENIX LABORATORIES, INC.               GREAT EARTH DISTRIBUTION, INC.

By:   /s/                                By:         /s/ MEL RICH
      ----------------------------              --------------------------------
Title:  Pres                                 Title:         President
      ----------------------------              --------------------------------

Confirmed:

----------------------------------       /s/ MELVIN RICH
Sidney Rich                              ---------------------------------------
                                         Melvin Rich

EVERGOOD PRODUCTS CORPORATION

By:   /s/
      ----------------------------
     Title:  Pres
<PAGE>

THE CIT GROUP/CREDIT FINANCE
810 Seventh Avenue
New York, NY  10019
212 974-7400
FAX:  212 974-7668

THE
CIT
GROUP

                                                June 19, 1992

Phoenix Laboratories, Inc.
175 Lauman Lane
Hicksville, New York 11801

Great Earth Distribution, Inc.
14211 Gannet Street
La Mirada, California 90638

                     RE:  Security Agreement (Accounts, etc.) executed
                          February 17, 1988, by and between Phoenix
                          Laboratories, Inc. ("Phoenix") and Great Earth
                          Distribution, Inc. ("GED") and The CIT Group/Credit
                          Finance, Inc., ("CIT"), assignee of Fidelcor
                          Business Credit Corporation, (the "Accounts
                          Agreement") Second Amended and Restated Promissory
                          Note in the original principal balance of
                          $740,000.00 (the "Note") and all related agreements,
                          documents, and instruments (collectively the
                          "Financing  Agreements")
                          ------------------------------------------------------

Gentlemen:

            You have requested that we grant you a $250,000.00 advance in excess
of the contractual formulas set forth in the Financing Agreements. We have
agreed to do so based on the amended terms and conditions set forth below and in
the Second Amended and Restated Promissory Note which you have executed even
date herewith:

            (1)    Paragraph G. of the Rider to the Accounts Agreement is
                   amended to read:

                   "G.    Trefoil agrees that in addition to the advances made
                          with reference to the formula set forth in Paragraph
                          2 of the printed portion of this agreement
                          ("Accounts Advances"), Trefoil shall make additional
                          advances to Debtor, in such amounts from time to
                          time determined by Trefoil in its sole discretion,
                          of up to thirty percent (30%) of the value of
                          Phoenix's acceptable and eligible raw material
                          inventory and of up to twenty-five percent (25%) of
                          the value GED's acceptable and eligible finished
                          goods inventory (collectively,
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
June 19, 1992
Page 2

                          the "Inventory Advances"). As used herein, "value"
                          shall mean the lower of cost or market price, as
                          determined by Trefoil. Except in Trefoil's sole
                          discretion, (1) the aggregate principal amount of
                          Accounts Advances to GED shall not exceed, at any time
                          outstanding, the lesser of (a) $365,000.00 (the "GED
                          Accounts Sublimit"), or (b) an amount equal to (i)
                          thirty percent (30%) of the value of Phoenix's
                          acceptable and eligible raw material inventory, plus
                          (ii) twenty-five percent (25%) of the value of GED's
                          acceptable and eligible finished goods inventory, and
                          (2) the aggregate principal amount of the Inventory
                          Advances to Debtors shall not exceed $500,000.00 at
                          any time outstanding."

            In addition to all other fees at any time payable by you to CIT, you
shall pay CIT on the date hereof a facility fee in the amount of $2,000.00 which
fee is fully earned as of the date hereof and may be charged by CIT to any
account of yours maintained by CIT.

            All other terms and conditions of the Financing Agreements shall
remain in full force and effect.

            Please evidence your agreement to the foregoing by signing below and
returning this letter to us.

                                          Very truly your,

                                          THE CIT GROUP/CREDIT
                                          FINANCE, INC.

                                          By:   /s/
                                                --------------------------------
                                          Title:   VP
                                                --------------------------------

Agreed and Acknowledged:

PHOENIX LABORATORIES, INC.               GREAT EARTH DISTRIBUTION, INC.

By: /s/ SIDNEY RICH                      By: /s/ MEL RICH
    ----------------------------              --------------------------------
Title:  President                        Title:  President
      --------------------------               -------------------------------

EVERGOOD PRODUCTS CORPORATION

By: /s/
    ------------------------------
Title: President
      ----------------------------
<PAGE>

                                       -1-

                  SECOND AMENDED AND RESTATED PROMISSORY NOTE

$740,000.00                                                 New York, New York
                                                            June ___, 1992

      FOR VALUE RECEIVED, PHOENIX LABORATORIES, INC. and GREAT EARTH
DISTRIBUTION, INC. (individually and collectively the "Payor"), jointly and
severally hereby promise to pay to the order of THE CIT GROUP/CREDIT FINANCE,
INC., a Delaware corporation ("Payee"), at its offices located at 810 Seventh
Avenue, New York, New York 10019, or at such other place as Payee or any holder
hereof may from time to time designate, the principal sum of SEVEN HUNDRED FORTY
THOUSAND DOLLARS ($740,000.00) in lawful money of the United States, in twenty
one (21) installments, with the first three monthly installments in the amount
of SIX THOUSAND ONE HUNDRED SIXTY SIX AND SIXTY SEVEN ONE HUNDREDTHS DOLLARS
($6,166.67) and thereafter the next seventeen consecutive monthly installments
in the amount of TWELVE THOUSAND THREE HUNDRED THIRTY THREE AND THIRTY FOUR ONE
HUNDREDTHS DOLLARS ($12,333.34) each payable on the first (1st) day of each
consecutive month, commencing July 1, 1992, and one (1) final installment in the
amount of the entire unpaid principal balance of this Note, payable February 17,
1994. Payor hereby further promises to pay interest to Payee in like money at
said office or place on the unpaid principal balance hereof, computed at the
rate of three and one-half percent (3 1/2%) per annum plus the reference rate as
announced by Manufacturers Hanover Trust Company or its successor, in New York,
New York from time to time as its reference rate (the reference rate is not
intended to be the lowest rate of interest charged by Manufacturers Hanover
Trust Company to its borrowers) and such interest shall be payable monthly on
the first (1st) day of each month, commencing July 1, 1992. Interest shall be
calculated on the basis of a 360-day year and actual days elapsed. In no
<PAGE>

                                       -2-

event shall the interest charged hereunder exceed the maximum permitted under
the laws of the State of New York.

      This Note is secured by (i) the collateral described in the Security
Agreement (Accounts, Contract Rights, Instruments and Goods pertaining thereto),
the Inventory Security Agreement and the Equipment Security Agreement, each
executed February 17, 1988 by and between Payor and Fidelcor Business Credit
Corporation ("Fidelcor"), assignor of Payee, and all related agreements,
instruments (including but not limited to this Note) and documents granting
collateral security to Payee or evidencing or creating indebtedness of Payor to
Payee, all guaranties executed by third parties guaranteeing Payor's obligations
to Payee, including those executed by: Sidney Rich, Melvin Rich and Evergood
Products Corporation (the "Guarantors") (the foregoing, as the same may now
exist and have been and may hereafter be amended, modified, replaced or
supplemented, are hereafter collectively referred to as the "Financing
Agreements").

      This Note supercedes and replaces but does not extinguish any of the
unpaid liabilities and obligations under the Amended and Restated Promissory
Note dated December 16, 1991, as amended, in the original principal amount of
$740,000.00 by Payor in favor of Payee (the "Existing Note"). The indebtedness
of Payor to Payee evidenced hereby shall be deemed to include the unpaid balance
of the indebtedness including unpaid interest heretofore evidenced by the
Existing Note and shall be repayable together with interest accrued and accruing
and other sums in accordance with the terms hereof. Payor hereby acknowledges
that Payor is as of the date hereof indebted to Payee, in the principal amount
hereof, together with interest accrued and accruing through and after the date
hereof, without offset, defense or counterclaim of any kind, nature or
description whatsoever. The amendment and restatement contained herein shall
not, in any manner be construed to constitute payment of, or impair, limit,
cancel or extinguish the indebtedness evidenced by the Existing Note and the
liens and security interests securing such indebtedness shall not in any manner
be impaired, limited, terminated, waived or released hereby.

      At the time any payment is due hereunder, Payee may, at its option, charge
the amount thereof to any account of Payor maintained by Payee.

      If an event of default shall occur for any reason under any of the
Financing Agreements, or if any of the Financing Agreements shall be terminated
or not be renewed for any reason whatsoever, then and in any such event, in
addition to all rights and remedies of Payee under the Financing Agreements,
applicable law or otherwise (all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and concurrently) Payee
may, at its option, declare any or all of Payor's obligations under the
Financing Agreements, including, but not limited to, all amounts owing under
this Note, to be due
<PAGE>

                                       -3-

and payable, whereupon the then unpaid balance hereof together with all interest
accrued thereon, shall forthwith become due and payable, together with costs and
expenses of collection, including reasonable attorney's fees.

         Payee shall not be required to resort to any of the aforementioned
collateral for payment, but may proceed against Payor and/or the Guarantors in
such order and manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise thereof. Payor
hereby waives diligence, demand, presentment, protest and notice of any kind and
assents to extensions of time of payment, release, surrender or substitution of
collateral security, or forbearance or other indulgence, without notice.

         In the event of any litigation with respect to any of the Financing
Agreements, Payor waives the right to a trial by jury, all rights of set-off,
and any right to interpose permissive counterclaims and cross-claims, and Payor
consents to the jurisdiction of the courts of the State of New York and of any
federal court locate din such State. Payor further waives personal service of
any and all process upon Payor and consents that all such service of process may
be made by certified mail, return receipt requested, directed to Payor at the
address listed above or of which Payor advises Payee, in writing, and service so
made shall be deemed complete three days after the same shall have been posted.
This Note shall be governed by and construed, and all rights and obligations
hereunder determined, in accordance with the laws of the State of New York, and
shall be binding upon the successors and assigns of Payor and inure to the
benefit of Payee, its successors, endorsees and assigns.

         If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.

         The execution and delivery of this Note has been authorized by the
board of directors of Payor.

                                             PHOENIX LABORATORIES, INC.

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

                                             GREAT EARTH DISTRIBUTION, INC.

                                        By:
                                            ------------------------------------
                                     Title:
                                            ------------------------------------
<PAGE>

                          EVERGOOD PRODUCTS CORPORATION
                                 175 LAUMAN LANE
                           HICKSVILLE, NEW YORK 11801

                                              June _, 1992

Great Earth Vitamins, Ltd.
c/o Mitchell Feinglas
44 Old Aspetang Road
Katonah, New York  10536

      Re:   $675,000.00 Secured Promissory Note dated July 12, 1991
            $500,000.00 Secured Promissory Note Dated July 12, 1991
            -------------------------------------------------------

Gentlemen:

         We have assigned all of our rights under the above notes to The CIT
Group/Credit Finance, Inc. ("CIT"). Accordingly, until you receive written
notice from CIT directing you otherwise, all payments due on the above notes
shall be made directly to CIT at its office at 810 Seventh Avenue, New York, New
York 10019, attention 19th floor.

                                         Very truly yours,

                                         EVERGOOD PRODUCTS CORPORATION

                                       By:
                                            ------------------------------------
                                    Title:
                                            ------------------------------------
<PAGE>

The CIT Group/Credit Finance
810 Seventh Avenue
New York, NY 10019 212-974-7400 FAX: 212-974-7688

THE
CIT
GROUP
                                          June 19, 1992

Phoenix Laboratories, Inc.
175 Lauman Lane
Hicksville, New York  11801

      Re:   $50,000.00 Merchandise Guaranty (in the form annexed hereto) in
            Favor of Hoffman LaRoche, Inc. (the "Merchandise Guaranty")
            -----------------------------------------------------------

Gentlemen:

You have requested that we open the Merchandise Guaranty and we have agreed to
do so. In consideration of our opening the Merchandise Guaranty it is agreed
that:

      1.  You shall pay us a charge equal to three and one-half percent (3 1/2%)
          of the face amount of the Merchandise Guaranty from the date of
          issuance thereof to the date we are released from any obligation
          therefor.

      2.  We shall have the right to charge your account, maintained with us,
          for any amount that we are called upon to pay under the Merchandise
          Guaranty.

      3.  We shall have the right to reserve from your accounts receivable
          availability an amount which we may determine, in our sole discretion,
          to be sufficient to pay for' the Merchandise Guaranty.

      4.  We shall not be responsible to you for the accuracy or propriety of
          any claim made or any payment made by us and our sole responsibility
          to you shall be for willful misconduct.

      5.  In order to induce us to open the Merchandise Guaranty now or in the
          future, you hereby agree to indemnify us and hold us harmless against

<PAGE>

          all claims, actions, demands, loss, damages and expenses (including
          attorney's fees), which may be made against us or which we may incur
          in connection with the Merchandise Guaranty.

      6.  We shall be entitled to make payment under the Merchandise Guaranty to
          your supplier upon its demand, and all such payments shall be
          conclusive upon you according to the terms of the Merchandise
          Guaranty. Your sole recourse, in the event that we make payment under
          the Merchandise Guaranty, shall be against your supplier to whom the
          Merchandise Guaranty was extended.

      7.  We shall have no responsibility to you for the quality or quantity of
          merchandise you have ordered and/or received, and your sole recourse
          with respect thereto shall be against your supplier.

      8.  Our opening of the Merchandise Guaranty shall be secured by the
          security interest you have heretofore granted to us in your accounts
          receivable, inventory, equipment, real estate and any other
          collateral, as evidenced by the financing agreements executed between
          us on February 17, 1988 and any and all amendments thereto
          (collectively, the "Agreements").

All other terms and conditions of the Agreements shall continue in full force
and effect.

                                                Very truly yours,

                                                THE CIT GROUP/CREDIT
                                                FINANCE, INC.

                                        By:  /s/
                                            ------------------------------------
                                     Title:  VP
                                            ------------------------------------
Agreed to:

PHOENIX LABORATORIES, INC.

   By:
       ------------------------------------
Title:
       ------------------------------------
<PAGE>

                            CASH COLLATERAL AGREEMENT

                                             June 24, 1992

The CIT Group/Credit Finance, Inc.
810 Seventh Avenue
New York, New York  10019

Gentlemen:

         Reference is made to certain financing agreements between you and
Phoenix Laboratories, Inc. and Great Earth Distribution, Inc. (individually and
collectively the "Debtor"), including, but not limited to, that certain Security
Agreement (Accounts, Contract Rights, Instruments and Goods pertaining thereto)
dated February 17, 1988 as amended (the foregoing, together with all other
related agreements, documents or instruments, as the same may now exist or may
hereafter be created, amended or supplemented, are collectively referred to
herein as the "Financing Agreements").

         Reference is also made to the undersigned's guaranty of the obligations
of the Debtor under the Financing Agreements (the "Guaranty").

         As an inducement for and in consideration of your extending financial
accommodations to the Debtor and to secure the undersigned's guaranty, the
undersigned hereby agrees as follows:

        (1)  The undersigned hereby pledges to you, as cash collateral securing
             the Guaranty, the sum of $100,000.00 (the "Cash Collateral");

        (2)  Your rights to the Cash Collateral shall be governed by the
             Guaranty and you shall have all rights and remedies afforded by
             law, including, but not limited to, all rights of a secured party
             under the Uniform Commercial Code.
<PAGE>

Page Two

         CIT agrees that provided that no event of default has occurred under
the Financing Agreements or the Guaranty, CIT shall pay interest on the first
day of each month (commencing July 1, 1992) to the undersigned based on the rate
of interest paid for thirty day certificates of deposit by Chemical Bank, in New
York, New York on the last day of the preceding month.

         This Agreement shall be governed and construed by the laws of the State
of New York and shall be binding upon and inure to the benefit of the successors
and assigns of CIT and the undersigned.

                                                   Very  truly yours,

                                                  /s/ MELVIN RICH
                                                  ------------------------------
                                                      MELVIN RICH
Agreed and accepted:

THE CIT GROUP/CREDIT
FINANCE, INC.

   By: /s/
       --------------------------------
Title: Vice President
       --------------------------------
<PAGE>

The CIT Group/Credit Finance
810 Seventh Avenue
New York, NY 10019 212-974-7400 FAX: 212-974-7688

THE
CIT
GROUP

                                                August  27, 1993

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville, New York  l180l

      Re: Security Agreement (Accounts, etc.) executed February 17,1988, by and
          between Phoenix Laboratories, Inc. ("Phoenix") and Great Earth
          Distribution, Inc. ("GED") and The CIT Group/Credit Finance, Inc.
          ("CIT'"), assignee of Fidelcor Business Credit Corporation (the
          "Accounts Agreement"), Second Amended and Restated Promissory Note in
          the original principal balance of $740,000 (the "Note"), as amended,
          and all related agreements, amendments, documents and instruments
          collectively, the "Financing Agreements")
          ---------------------------------------------------------------------

Gentlemen:

         The present term of your Financing Agreements with CIT expires February
17, 1994. We have now agreed to an extension of the Financing Agreements and
modifications of the Note as reflected by the Third Amended and Restated
Promissory Note to be executed on the date hereof in the form annexed hereto
under the terms and conditions set forth below.

         Accordingly, this will confirm our agreement to amend the Financing
Agreements as follows:

1.       Paragraph 6 of the printed portion of the Accounts Agreement is hereby
         deleted in its- entirety and the following is substituted therefor:

         "6. That Debtor will pay Trefoil for its advances made hereunder a
         charge of three and one-half percent (3 1/2%) per annum plus the rate
         of interest publicly announced by Chemical Bank, New York, New York
         from time to time as it prime rate (the prime rate is not intended to
         be the lowest rate of interest charged by Chemical Bank to its
         borrowers), computed on a 360 day year. In the event of a change in the
         prime rate charged at Chemical Bank, adjustment hereunder
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
August 27, 1993
Page 2

         shall be made on the day of such change in the prime rate. All charges
         shall be computed upon the average daily balances outstanding and
         charged to Debtor' s account or paid monthly."

2.       Paragraph G. of the Rider to the Accounts Agreement is amended to read:

         "G. Trefoil agrees that in addition to the advances made with reference
         to the formula set forth in Paragraph 2 of the printed portion of this
         agreement ("Accounts Advances"), Trefoil shall make additional advances
         to Debtor, in such its sole discretion, of up to thirty percent (30%)
         of the value of Phoenix's acceptable and eligible raw material
         inventory and of up to thirty-five percent (35%) of the value of GED's
         acceptable and eligible finished goods inventory (collectively, the
         "Inventory Advances"). As used herein, "value" shall mean the lower of
         cost or market price, as determined by Trefoil. Except in Trefoil's
         sole discretion,(1) the aggregate principal amount of Accounts Advances
         to GED shall not exceed, at any time outstanding, the lesser of (a)
         $365,000 the "GED Accounts Sublimit"), or (b) an amount equal to (i)
         thirty percent (30%) of the value of Phoenix's acceptable and eligible
         raw material inventory, plus (ii) thirty-five percent (35%) of the
         value of GED's acceptable and eligible finished goods inventory, and
         (2) the aggregate principal amount of the Inventory Advances to Debtors
         shall not exceed $750,000 at any time outstanding with a further
         sublimit at any time outstanding of $460,000 against the GED acceptable
         and eligible finished goods inventory. The GED Accounts sublimit shall
         reduce by $10,000 per month commencing December 1, 1993."

3.       Paragraph H. of the Rider to the Accounts Agreement is amended to read:

         "Except in Trefoil's sole discretion, the aggregate principal amount of
         the advances made by Trefoil to Debtors under the Financing Agreements,
         including the Accounts Advances and the Inventory Advances shall not
         exceed the principal amount of $3,500,000 at any time outstanding (the
         "Credit Line")."

4.       The first sentence of paragraph J. of the Rider to the Accounts
         Agreement is amended to read:

         "In consideration of Trefoil entering into this Agreement and incurring
         accounting, operating and management expenses. Debtors shall pay to
         Trefoil each calendar month a minimum charge equal to the amount of
         interest Debtors would pay
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
August 27, 1993
Page 3

           Trefoil if they at all times had an aggregate average daily cash
           balance outstanding of $1,500,000 bearing interest at the rate
           provided for in Paragraph 6 of the printed portion of this
           Agreement."

5.         The first sentence of paragraph 26 of the printed portion of the
           Accounts Agreement is amended to read:

           "That this Agreement shall remain in effect until February 17, 1995
           and shall be deemed automatically renewed for successive terms of one
           year."

6.         After the first sentence of paragraph P. of the Rider to the Accounts
           Agreement the following sentence is hereby added:

           "Without in any way limiting Trefoil's rights to withhold and set up
           reserves, in its sole discretion, Trefoil shall have the right to
           establish a reserve from Debtor's availability upon a default by GED
           pursuant to its lease agreement with Livingston Pharmaceutical
           Distribution, Inc. for any amount in excess of $100,000 at any time
           outstanding."

7.         Paragraph Q. is hereby added after Paragraph P. of the Rider to the
           Accounts Agreement:

           "Q. Trefoil agrees that in addition to the Accounts Advances and
           Inventory Advances, Trefoil shall make additional advances to Debtor
           of up to 100% against any cash collateral pledged by any guarantor of
           the obligations to secure his guaranty. Such advances shall not
           exceed $200,000 in the aggregate at any time outstanding."

8.         You agree to execute a cash collateral agreement on the date hereof
           in the form annexed hereto, in connection with monies pledged by
           Melvin Rich to CIT in the amount of $200,000 which monies are and
           shall continue to be placed in certificates of deposit in the name of
           CIT.

9.         Phoenix and GED agree to execute on or about the date hereof a Letter
           of Credit Agreement (the "L/C Agreement") in the form annexed hereto
           by which Phoenix and GED can open letters of credit, banker's
           acceptances and/or merchandise guaranties in accordance with the
           terms of said L/C Agreement in the aggregate amount of $150,000.

10.        Phoenix and GED to direct Livingston Pharmaceutical Distribution,
           Inc. ("LPD") to execute a warehouse agreement, including but not
           limited to a provision, in which LPD agrees
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
August 27, 1993
Page 4

           to give CIT a monthly report of all distribution service charges and
           other fees which are owed by GED (the "LPD charges") and LPD's
           agreement that it shall subordinate all of its rights in and to GED's
           inventory, located at LPD's warehouse until all advances against the
           GED inventory have been repaid. After CIT's advances against the GED
           inventory are repaid in full, LPD's claim (including any statutory
           lien) against the GED inventory shall be limited to $100,000.

           In addition to all other fees at any time payable by Debtors to CIT,
Debtors shall pay CIT on each anniversary date of the Accounts Agreement,
commencing with the February 17, 1994 anniversary date, a Facility Fee in the
amount of $35,000, which fee is fully earned as of the date hereof and may be
charged by CIT to any account of the Debtors maintained by CIT.

           All other terms and conditions of the Financing Agreements shall
remain in full force and effect.

           Please evidence your agreement to the foregoing by signing in the
space provided below and returning this letter to us.

                                          Very truly yours,

                                          THE CIT GROUP/CREDIT
                                          FINANCE, INC.

                                          By: /s/
                                             -----------------------------------
                                          Title:  VP
                                                --------------------------------

Agreed to:

PHOENIX LABORATORIES, INC.                GREAT EARTH DISTRIBUTION, INC.

   By: /s/                                   By: /s/
       --------------------------------         --------------------------------
Title: Pres                               Title: V. Pres.
       --------------------------------         --------------------------------

Confirmed:

/s/ SIDNEY RICH
---------------------------------         ------------------------------------
SIDNEY RICH                               MELVIN RICH

EVERGOOD PRODUCTS CORPORATION

By: /s/
    -----------------------------
Title: Pres
      ---------------------------
<PAGE>

The CIT Group/Credit Finance
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

                           LETTER OF CREDIT AGREEMENT

                                                August __, 1993

THE
CIT
GROUP

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville, NY 11801

Gentlemen:

      This Agreement shall supplement the Security Agreement (Accounts, etc.)
dated February 17, 1988 (the "Loan Agreement") and the other security and/or
financing agreements, each executed by you and/or related parties in our favor
(all of the foregoing, including, but not limited to, this Agreement, together
with all related documents, instruments, notes, guaranties and agreements as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed or replaced, are collectively referred to herein as the "Agreements").

      We may, from time to time, in our sole discretion, at your request and for
your account: (i) issue or open letters of credit and/or merchandise purchase
guaranties for the purchase of goods and services in the ordinary course of your
business or for any other purpose approved by us, (ii) assist you in
establishing or opening letters of credit for such purposes by indemnifying the
issuer thereof or guaranteeing your payment and performance to such issuer in
connection therewith, and/or (iii) issue or guarantee drafts and acceptances
relating to the foregoing or otherwise. All such letters of credit, merchandise
purchase or other guaranties and other such financial accommodations are
referred to herein individually as a "Credit" and collectively as "Credits".
These arrangements shall be handled by us subject to the following terms and
conditions:

      1.    The opening or issuance of any Credit shall at all times and in all
            respects be in our sole discretion. The amount and extent of any
            Credits and the terms and conditions thereof, shall in all respects
            be determined solely by us and shall be subject to change,
            modification and revision by us, at any time and from time to time.

      2.    Any indebtedness, liability or obligation of any sort whatsoever
            however arising, whether present or future,
<PAGE>

            fixed or contingent, secured or unsecured, due or to become due,
            paid or incurred, arising or incurred in connection with any Credit,
            or otherwise (herein the "Obligations") shall be incurred solely as
            an accommodation to you and for your account. Obligations shall
            include, without limitation, (a) all amounts due or which may become
            due under any Credit: (b) all amounts charged or chargeable to you
            or to us by any bank, other financial institution or correspondent
            bank which opens, issues or is involved with such Credits; (c) any
            other charges of an issuer of any Credit; (d) our fees and
            commissions and all fees and commissions of an issuer of any Credit;
            (e) duties, freight, taxes, costs, insurance and all such other
            charges and expenses which may pertain directly or indirectly to any
            Obligations or Credits or to the goods or documents relating
            thereto: and (f) our charges as herein provided. We shall have the
            right, at any time and without notice to you, to charge your account
            on our books with the amount of any and all such Obligations. All
            Obligations are to be repaid to us solely in United States currency.

      3.    As additional security for the prompt and indefeasible payment in
            full of all of your present and future obligations, liabilities and
            indebtedness, whether under the Agreements, any other agreement
            between us or otherwise, as well as to secure the payment in full of
            all of the Obligations, you hereby pledge and grant to us a
            continuing security interest in and general lien upon the following
            property acquired by you in connection with any Credits, whether now
            owned or hereafter acquired by you, wherever located, whether in
            transit or not (collectively, the "Collateral"): (a) all raw
            materials, work-in-process, finished goods and all other inventory
            and goods of whatsoever kind or nature, wherever located, including
            inventory or goods in transit; (b) documents of payment, transport
            and title or the equivalents thereof, including, without limitation,
            all warehouse receipts, bills of lading, shipping documents, chattel
            paper and instruments, all whether negotiable or not; and (c) all
            cash and non-cash proceeds thereof of whatever sort and however
            arising. All collateral granted to us under the Agreements shall
            also secure all Obligations hereunder.

      4.    You warrant and represent that we have and shall have at all times a
            valid and effective first and paramount lien on and security
            interest in all said Collateral and that your title to said
            Collateral is unencumbered by any other liens except as permitted
            under the Agreements. You also warrant and represent that all sales
            of any goods or inventory covered hereby shall be made by you in the
            ordinary course of business and the
<PAGE>

Page 3

            accounts arising from such sales and proceeds thereof shall be
            transferred and assigned to us pursuant to the Agreements; and you
            confirm that our lien and security interest extends and attaches to
            those accounts and proceeds. Further, you warrant and represent
            that, except as you otherwise advise us in writing at the time of
            your request for such accommodations, all Credits are being opened
            to cover actual purchase of goods and inventory solely for your
            account, and said goods will not be sold or transferred, other than
            as herein provided without our specific, prior written consent. You
            agree to comply with the requirements of any and all laws in order
            to grant to us and maintain in our favor, a valid first lien upon
            and security interest in the Collateral and to do whatever we may
            request from time to time in order to effect the purposes of this
            Agreement, including, but without limitation, filing financing
            statements, keeping records and making reports on the Collateral to
            us, advising us of the location of all Collateral, marking,
            labeling, and segregating such Collateral and obtaining any
            necessary agreements or waivers with regard to the Collateral.

      5.    You unconditionally agree to indemnify us and hold us harmless from
            any and all loss, claim or liability arising from any transactions
            or occurrences relating to any Credit established or opened for your
            account, the Collateral relating thereto and any drafts or
            acceptances thereunder, and all Obligations hereunder, including any
            such loss or claim due to any action taken by an issuer of any
            Credit. You further agree to hold us harmless for any errors or
            omissions, whether caused by us, by the issuer of a Credit or
            otherwise. Your unconditional obligation to us hereunder shall not
            be modified or diminished for any reason or in any manner
            whatsoever. You agree that any charges made to us for your account
            by an issuer of any Credit shall be conclusive on us and may be
            charged to your account.

      6.    We shall not be responsible for: the existence, character, quality,
            condition, packing, value or delivery of the goods purporting to be
            represented by any documents; any difference or variation in the
            character, quality, quantity, condition, packing, value or delivery
            of the goods from that expressed in the documents; the validity,
            sufficiency or genuineness of any documents or of any endorsements
            thereon, even if such documents should in fact prove to be in any or
            all respects invalid, insufficient, fraudulent or forged; the time,
            place, manner or order in which shipment is made; partial or
            incomplete shipment, or failure or omission to ship any or all of
            the goods referred to in the Credits or documents; any deviation
            from
<PAGE>

Page 4

            instructions; delay, default, or fraud by the shipper and/or anyone
            else in connection with the Collateral or the shipping thereof; or
            any breach of contract between the shipper or vendors and
            yourselves. Furthermore, without being limited by the foregoing, we
            shall not be responsible for any act or omission with respect to or
            in connection with any Collateral.

      7.    You agree that any action taken by us, if taken in good faith, or
            any action taken by an issuer of any Credit, under or in connection
            with any Credit or the Collateral, shall be binding on you and shall
            not create any resulting liability to us. In furtherance thereof, we
            shall have the full right and authority to clear and resolve any
            questions of non-compliance of documents; to give any instructions
            as to acceptance or rejection of any documents or goods; to execute
            any and all applications for steamship or airways guarantees,
            indemnities or delivery orders: to grant any extensions of the
            maturity of, time of payment for, or time of presentation of, any
            drafts, acceptances, or documents; and to agree to any amendments,
            renewals, extensions, modifications, changes or cancellations of any
            of the terms or conditions of any of the applications or Credits; or
            all in our sole name, and the issuer thereof shall be entitled to
            comply with and honor any and all such documents or instruments
            executed by or received solely from us, all without any notice to or
            any consent from you.

      8.    Without our express consent and endorsement in writing, you agree
            not to clear and resolve any questions of non-compliance of
            documents; to give any instructions as to acceptance or rejection of
            any documents or goods; to execute any and all applications for
            steamship or airways guarantees, indemnities or delivery orders; to
            grant any extensions of the maturity of, time of payment for, or
            time of presentation of, any drafts, acceptances or documents; or to
            agree to any amendments, renewals, extensions, modifications,
            changes or cancellations of any of the terms or conditions of any of
            the applications or Credits.

      9.    You warrant and represent that all shipments made under any Credit
            are in accordance with the governmental laws and regulations of the
            countries in which the shipments originate and terminate, and are
            not prohibited by any such laws and regulations. You assume all
            risk, liability and responsibility for, and agree to pay and
            discharge, all present and future local, state, federal or foreign
            taxes, duties, or levies. Any embargo, restriction, laws, customs or
            regulations of any country, state, city, or other political
            subdivision,
<PAGE>

Page 5

            where the Collateral is or may be located, or wherein payments are
            to be made, or wherein drafts may be drawn, negotiated, accepted, or
            paid, shall be solely your risk, liability and responsibility.

      10.   Any rights, remedies, duties or obligations granted or undertaken by
            you to any issuer of a Credit in any application for a Credit, or
            any standing agreement relating to the Credits or otherwise, shall
            be deemed to have been granted to us and apply in all respects to us
            and shall be in addition to any rights, remedies, duties or
            obligations contained herein.

      11.   You hereby agree that prior to your repayment of the Obligations, we
            may be deemed to be the absolute owner of, with unqualified rights
            to possession and disposition of, all Collateral, all of which may
            be held by us as security as herein provided. Should possession of
            any such Collateral be transferred to you, it shall continue to
            serve as security as herein provided, and any goods or inventory
            covered hereby may be sold, transferred or disposed of only as
            herein above provided.

      12.   You agree to maintain insurance on the Collateral and we shall have
            rights with respect thereto as provided in the Loan Agreement.

      13.   On breach by you of any of the terms or provisions of this
            Agreement, or the occurrence of an event of default under the other
            Agreements or any other agreement now or hereafter entered into
            between us, or on the nonpayment when due of any Obligations or
            other indebtedness owing to us, whether or not the Agreements shall
            continue, or upon your calling a meeting of your creditors, making a
            general assignment for the benefit of creditors or if there is filed
            by or against you a petition in bankruptcy or for the appointment of
            a receiver or there is commenced under any bankruptcy or insolvency
            law proceedings for your relief or for the composition, extension,
            arrangement or adjustment of any of your obligations, or your
            business is discontinued as a going concern, we shall have the
            right, with or without notice to you, to foreclose the lien and
            security interest created herein by any available judicial
            procedure, or to take possession of the Collateral without judicial
            process, and to enter any premises where the Collateral may be
            located for the purpose of taking possession of or removing the
            Collateral. In the event we or any issuer of a Credit institute an
            action to recover any of the Collateral or seek recovery of the
            Collateral by way of prejudgment remedy, you hereby waive the
            posting of any bond which might otherwise by required. We shall have
            the right
<PAGE>

Page 6

            to sell, lease. or otherwise dispose of all or any part of the
            Collateral, whether the goods have arrived or are to arrive, in its
            then condition or after further preparation or processing, in your
            name or in ours, or in the name of such party as we may designate,
            either at public or private sale or at any broker's board, in lots
            or in bulk, for cash or for credit, with or without warranties or
            representations, and upon such other terms and conditions as we in
            our sole discretion may deem advisable, and we shall have the right
            to purchase at any such sale. You agree, at our request, to assemble
            the Collateral and to make it available to us at places which we
            shall select, whether your premises or elsewhere, and to make it
            available to us all of your premises and facilities for the purpose
            of our taking possession of, removing or putting the Collateral in
            saleable form. The proceeds of any such sale, lease or other
            disposition of the Collateral shall be applied first to the expenses
            of retaking, holding, storing, processing and preparing for sale,
            selling, and the like, and then to the satisfaction of the
            Obligations or other indebtedness to us, application as to
            particular Obligations or as to principal or interest to be in our
            absolute and sole discretion. You shall be liable to us for, and
            shall pay to us on demand, any deficiency which may remain after
            such sale, lease or other disposition, and we in turn agree to remit
            to you any surplus resulting therefrom. We shall have all rights of
            a secured party under the Uniform Commercial Code. The enumeration
            of the foregoing rights is not intended to be exhaustive and the
            exercise of any right shall not preclude the exercise of any other
            rights, all of which shall be cumulative.

      14.   In addition to any charges, fees or expenses charged to us for your
            account by an issuer of any Credit in connection with these
            transactions (all of which will be charged to your account and when
            made by the issuer shall be conclusive on us) we shall be entitled
            to charge your account monthly with the following commissions for
            our services hereunder: (a) a charge of three and one-half percent
            (3 1/2%) per annum on all amounts available under any Credits
            (except the fee shall be four percent (4%) per annum for any standby
            letters of credit). The principal amount of Credits outstanding at
            any time shall not exceed $150,000 subject to your availability
            under the Loan Agreement.

      15.   This Agreement, which is subject to modification only in writing, is
            supplementary to, and is to be considered as a part of the
            Agreements and shall take effect when dated, accepted and signed in
            the State of New York by one of our officers.
<PAGE>

Page 7

      If the foregoing is in accordance with your understanding, please so
indicate by signing and returning the enclosed copies of this letter, after
which we will return a fully executed copy to you for your files.

                                          Very truly yours,

                                          THE CIT GROUP/CREDIT
                                          FINANCE, INC.

                                     By: /s/
                                         ---------------------------------------
                                   Title: VP
                                         ---------------------------------------

Read and Agreed to:

PHOENIX LABORATORIES, INC.

By: /s/
   ----------------------------------
Title: Pres.
      -------------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
   ----------------------------------
Title: V. Pres.
      -------------------------------
<PAGE>

                   THIRD AMENDED AND RESTATED PROMISSORY NOTE

$740,000                                                    New York, New York
                                                            August __, 1993

       FOR VALUE RECEIVED, PHOENIX LABORATORIES, INC. and GREAT EARTH
DISTRIBUTION, INC. (individually and collectively the "Payor"), jointly and
severally hereby promise to pay to the order of THE CIT GROUP/CREDIT FINANCE,
INC., a Delaware corporation ("Payee"), at its offices located at 135 West 50th
Street, New York, New York 10020, or at such other place as Payee or any holder
hereof may from time to time designate, the principal sum of SEVEN HUNDRED FORTY
THOUSAND DOLLARS ($740,000.00) in lawful money of the United States, in nineteen
(19) installments, with the first six monthly installments in the amount of SIX
THOUSAND ONE HUNDRED SIXTY SIX AND SIXTY SEVEN ONE HUNDREDTHS DOLLARS
($6,166.67) and thereafter the next twelve consecutive monthly installments in
the amount of TWELVE THOUSAND THREE HUNDRED THIRTY THREE AND THIRTY FOUR ONE
HUNDREDTHS DOLLARS ($12,333.34) each payable on the first (1st) day of each
consecutive month, commencing September 1, 1993, and one (1) final installment
in the amount of the entire unpaid principal balance of this Note, payable
February 17, 1995. Payor hereby further promises to pay interest to Payee in
like money at said office or place on the unpaid principal balance hereof,
computed at the rate of three and one-half percent (3 1/2%) per annum plus the
prime rate as announced by Chemical Bank or its successor, in New York, New York
from time to time as its prime rate (the prime rate is not intended to be the
lowest rate of interest charged by Chemical Bank to its borrowers) and such
interest shall be payable monthly on the first (1st) day of each month,
commencing September 1, 1993. Interest shall be calculated on the basis of a
360-day year and actual days elapsed. In no event shall the interest charged
hereunder exceed the maximum permitted under the laws of the State of New York.

      This Note is secured by (i) the collateral described in the Security
Agreement (Accounts, Contract Rights, Instruments and Goods pertaining thereto),
the Inventory Security Agreement and the Equipment Security Agreement, each
executed February 17, 1988 by and between Payor and Fidelcor Business Credit
Corporation ("Fidelcor"), assignor of payee, and all related agreements,
<PAGE>

instruments (including but not limited to this Note) and documents granting
collateral security to Payee or evidencing or creating indebtedness of Payor to
Payee, all guaranties executed by third parties guaranteeing Payor's obligations
to Payee, including those executed by: Sidney Rich, Melvin Rich and Evergood
Products Corporation (the "Guarantors") (the foregoing, as the same may now
exist and have been and may hereafter be amended, modified, replaced or
supplemented, are hereafter collectively referred to as the "Financing
Agreements").

      This Note supercedes and replaces but does not extinguish any of the
unpaid liabilities and obligations under the Second Amended and Restated
Promissory Note dated June 19, 1992, in the original principal. amount of
$740,000.00 by Payor in favor of Payee (the "Existing Note"). The indebtedness
of Payor to Payee evidenced hereby shall be deemed to include the unpaid balance
of the indebtedness including unpaid interest heretofore evidenced by the
Existing Note and shall be repayable together with interest accrued and accruing
and other sums in accordance with the terms hereof. Payor hereby acknowledges
that Payor is as of the date hereof indebted to Payee, in the principal amount
hereof, together with interest accrued and accruing through and after the date
hereof, without offset, defense or counterclaim of any kind, nature or
description whatsoever. The amendment and restatement contained herein shall
not, in any manner be construed to constitute payment of, or impair, limit,
cancel or extinguish the indebtedness evidenced by the Existing Note and the
liens and security interests securing such indebtedness shall not in any manner
be impaired, limited, terminated, waived or released hereby.

      At the time any payment is due hereunder, Payee may, at its option, charge
the amount thereof to any account of Payor maintained by Payee.

      If an event of default shall occur for any reason under any of the
Financing Agreements, or if any of the Financing Agreements shall be terminated
or not be renewed for any reason whatsoever, then and in any such event, in
addition to all rights and remedies of Payee under the Financing Agreements,
applicable law or otherwise (all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and concurrently) Payee
may, at its option, declare any or all of Payor's obligations under the
Financing Agreements, including, but not limited to, all amounts owing under
this Note, to be due and payable, whereupon the then unpaid balance hereof
together with all interest accrued thereon, shall forthwith become due and
payable, together with costs and expenses of collection, including reasonable
attorney's fees.

      Payee shall not be required to resort to any of the aforementioned
collateral for payment, but may proceed against Payor and/or the Guarantors in
such order and manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise thereof. Payor
hereby
<PAGE>

waives diligence, demand, presentment, protest and notice of any kind and
assents to extensions of time of payment, release, surrender or substitution of
collateral security, or forbearance or other indulgence, without notice.

      In the event of any litigation with respect to any of the Financing
Agreements, Payor waives the right to a trial by jury, all rights of set-off,
and any right to interpose permissive counterclaims and cross-claims, and Payor
consents to the jurisdiction of the courts of the State of New York and of any
federal court located in such State. Payor further waives personal service of
any and all process upon Payor and consents that all such service of process may
be made by certified mail, return receipt requested, directed to Payor at the
address listed above or of which Payor advises Payee, in writing, and service so
made shall be deemed complete three days after the same shall have been posted.
This Note shall be governed by and construed, and all rights and obligations
hereunder determined, in accordance with the laws of the State of New York, and
shall be binding upon the successors and assigns of Payor and inure to the
benefit of Payee, its successors, endorsees and assigns.

      If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.

      The execution and delivery of this Note has been authorized by the board
of directors of Payor.

PHOENIX LABORATORIES, INC.

By: /s/
    -----------------------------
Title: Pres.
      ---------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
    -----------------------------
Title:   V. Pres.
      ---------------------------
<PAGE>

                           CASH COLLATERAL AGREEMENT

                                          August __, 1993

The CIT Group/Credit Finance, Inc.
135 West 50th Street
New York, New York 10020

Gentlemen:

      Reference is made to certain financing agreements between you and Phoenix
Laboratories, Inc. and Great Earth Distribution, Inc. (individually and
collectively the "Debtor"), including, but not limited to, that certain Security
Agreement (Accounts, Contract Rights, Instruments and Goods pertaining thereto)
dated February 17, 1988 as amended (the foregoing, together with all other
related agreements, documents or instruments, as the same may now exist or may
hereafter be created, amended or supplemented, are collectively referred to
herein as the "Financing Agreements").

      Reference is also made to the undersigned's replacement guaranty of the
obligations of the Debtor under the Financing Agreements executed on or about
June 1992 (the "Guaranty").

      As an inducement for and in consideration of your extending financial
accommodations to the Debtor and to secure the undersigned's guaranty, the
undersigned hereby agrees as follows:

      1.    The undersigned has pledged to you, as cash collateral securing the
            Guaranty, the sum of $200,000 (the "Cash Collateral");

      2.    Your rights to the Cash Collateral shall be governed by the Guaranty
            and you shall have all rights and remedies afforded by law,
            including, but not limited to, all rights of a secured party under
            the Uniform Commercial Code.

      3.    The Cash Collateral shall be invested in a thirty day certificate of
            deposit in CIT's name at Chemical Bank, New York, New York.
<PAGE>

The CIT Group/Credit Finance, Inc.,
August __, 1993

Page Two

      CIT agrees that provided that no event of default has occurred under the
Financing Agreements or the Guaranty, CIT shall pay interest on the first day of
each month (commencing September 1, 1993) to the undersigned based on the rate
of interest paid for thirty day certificates of deposit by Chemical Bank, in New
York, New York on the last day of the preceding month.

      This Agreement shall be governed and construed by the laws of the State of
New York and shall be binding upon and inure to the benefit of the successors
and assigns of CIT and the undersigned

                                                Very truly yours,

                                                /s/ MELVIN RICH
                                                --------------------------------
                                                    MELVIN RICH

Agreed and Accepted:

THE CIT GROUP/CREDIT
FINANCE, INC.

By: /s/
   ------------------------------
Title: VP
      ---------------------------
<PAGE>

[LETTERHEAD OF RAICH ENDE MALTER LERNER & CO.
   CERTIFIED PUBLIC ACCOUNTANTS

                                                          MEMORANDUM

TO:         MARK BARNES

From:       CHARLES D. RAICH

Date:       SEPTEMBER 9, 1993

Re:         AGREEMENT WITH CIT

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

  I would suggest that you add the following language at the bottom of page two
  (2) of the CIT agreement entitled Notification of security Interest:

        It is mutually agreed that all charges due LFDI from the date of
        notification of LFDI by CIT of default by the borrower will be paid to
        LPDI by CIT in accordance with the terms of the contract then in effect
        between GED and LPDI.

  If this language is satisfactory please have it added to the copy of the CIT
  agreement you now have and fax the same to me at (516) 228-9122 so that we can
  expedite our closing at which time CIT will wire to you on GED's behalf,
  $100,000.

  BY FAX
  /jam
<PAGE>

THE CIT GROUP/CREDIT FINANCE
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

                                      August __, 1993

Livingston Pharmaceutical Distribution, Inc.
111 Continental Drive, Ste. 211
Newark, Delaware 19713

      Re:   NOTIFICATION OF SECURITY INTEREST

Gentlemen:

Please be advised that Great Earth Distribution, Inc. ("GED") has granted to us
a security interest in all of its inventory and goods stored at any time at your
warehouse, as part of our secured financing arrangements.

You are to abide solely by our written instructions regarding the release of any
of said goods and inventory.

For the present, we instruct you to continue to release cases of inventory and
goods daily, pursuant to directions given to you by GED. The foregoing shall
remain subject to our right to change such instructions at any time by giving
you written notice of any such change.

You hereby acknowledge receipt of the foregoing notice and agree to abide by all
written instructions that The CIT Group/Credit Finance, Inc. ("CIT") may from
time to time hereafter give to the undersigned with respect to goods and
inventory which are at any time stored by GED in the undersigned's warehouse.
The undersigned certifies: that it does not now know of any security interest or
claim with respect to said goods other than the security interest which is the
subject of this agreement; that no negotiable warehouse receipts have been or
will be issued by the undersigned with respect to said goods; and that no
non-negotiable warehouse receipts have been or will be issued by the undersigned
with respect to such goods, except non-negotiable warehouse receipts in the name
of GED or in the name of CIT.

You subordinate your warehouseman's lien in favor of CIT. You have agreed that
you will not assert any claim (including any

A company of
Dai-Ichi Kangyo Bank and
Chemical Banking Corporation
<PAGE>

warehouseman's lien) against the inventory until the advance by CIT to GED
against the GED inventory (in a maximum amount of $460,000) has been repaid in
full. You agree on a monthly basis to provide CIT with an accounting of all
charges owed to you by GED.

After the QED inventory loan has been repaid in full, you may assert a claim
against any inventory remaining in your warehouse for up to $100,000. Any
inventory remaining after satisfaction of your $100, 000 claim shall be subject
to CIT's first priority security interest and any further claims you have shall
be subordinate to CIT.

Please sign your agreement to all of the terms of this letter in the space
provided below and return this letter to us at the address set forth above. A
copy is enclosed for your records.

                                          Very truly yours,

                                          THE CIT GROUP CREDIT
                                          FINANCE, INC.

                                          By: /s/
                                             -----------------------------------
                                          Title: VP
                                                --------------------------------

Agreed to and accepted:

LIVINGSTON PHARMACEUTICAL                 GREAT EARTH DISTRIBUTION, INC.
DISTRIBUTION, INC.

   By:                                      By:
      ------------------------------           ---------------------------------
Title:                                   Title:
      ------------------------------           ---------------------------------
<PAGE>

warehouseman's lien) against the inventory until the advance by CIT to GED
against the GED inventory (in a maximum amount of $460,000) has been repaid in
full. You agree on a monthly basis to provide CIT with an accounting of all
charges owed to you by GED.

After the GED inventory loan has been repaid in full, you may assert a claim
against any inventory remaining in your warehouse for up to $1000,000. Any
inventory remaining after satisfaction of your $100,000 claim shall be subject
to CIT's first priority security interest and any further claims you have shall
be subordinate to CIT.

Please sign your agreement to all of the terms of this letter in the space
provided below and return this letter to us at the address set forth above. A
copy is enclosed for your records.

                                          Very truly yours,

                                          THE CIT GROUP CREDIT
                                          FINANCE, INC.

                                       By: /s/
                                          -----------------------------------
                                       Title: VP
                                             --------------------------------

Agreed to and accepted:

LIVINGSTON PHARMACEUTICAL                 GREAT EARTH DISTRIBUTION, INC.
DISTRIBUTION, INC.

By: /s/                                   By:
   ----------------------------              --------------------------------
Title: President                       Title:
      -------------------------              --------------------------------

B9EVERGOOD

It is mutually agreed that all charges which arise after the date of
notification of LPDI by CIT of default by the borrower will be paid to LPDI by
CIT in accordance with the terms of the contract then in effect between GED and
LPDI.

THE CIT GROUP CREDIT                      GREAT EARTH DISTRIBUTION, INC.
FINANCE, INC.

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

LIVINGSTON PHARMACEUTICAL DISTRIBUTION, INC.

   By: /s/
      -------------------------
Title:  President
      -------------------------
<PAGE>

THE CIT GROUP/CREDIT FINANCE
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

                                    December 23, 1994

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville, New York 11801

Re:   Security Agreement (Accounts, etc.) executed February 17, 1988, by and
      between Phoenix Laboratories, Inc. ("Phoenix") and Great Earth
      Distribution, Inc. ( "GED") and The CIT Group/Credit Finance, Inc. ("CIT),
      assignee of Fidelcor Business Credit Corporation (the "Accounts
      Agreement"), Second Amended and Restated Promissory Note in the original
      principal balance of $740,000 (the "Note"), as amended, and all related
      agreements, amendments, documents and instruments collectively, the
      "Financing Agreements")
      --------------------------------------------------------------------------

Gentlemen:

      As you are aware, your present contract term expires on February 17, 1995.
Pursuant to paragraph 26 of the Accounts Agreement and our December 15, 1994
letter agreement, in order to give you notice of termination of the contract
effective February 17, 1995, CIT must notify you on or before December 28, 1994.
We are discussing an amendment and extension to the financing agreements. Please
confirm our agreement to extend the time period in which we have to give you
notice of termination to January 6, 1995. This will give us time to finalize the
amendment to the financing agreements and avoid our having to send you notice of
termination today.

      Please evidence your agreement to the foregoing by signing in the space
provided below and returning this letter to us.

                                    Very truly yours,

                                    THE CIT GROUP/CREDIT FINANCE, INC.

                                    By: /s/ Angela Santi
                                       -----------------------------------------
                                    Title: AVP
                                          --------------------------------------
Agreed to and accepted:

PHOENIX LABORATORIES, INC.                GREAT EARTH DISTRIBUTION, INC.

By: /s/                             By: /s/ MEL RICH
   ----------------------------        -----------------------------------------
Title:  Pres.                       Title: Pres.
      -------------------------           --------------------------------------

A company of
Dai-Ichi Kangyo Bank and
Chemical Banking Corporation
<PAGE>

THE CIT GROUP/CREDIT FINANCE
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

                                             January 4, 1995

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville, New York 11801

Re:   Security Agreement (Accounts, etc.) executed February 17, 1988, by and
      between Phoenix Laboratories, Inc. ("Phoenix") and Great Earth
      Distribution, Inc. ("GED") and The CIT Group/Credit Finance, Inc. ("CIT),
      assignee of Fidelcor Business Credit Corporation (the "Accounts
      Agreement"), Third Amended and Restated Promissory Note in the original
      principal balance of $740,000 (the "Note"), as amended, and all related
      agreements, amendments, documents and instruments, collectively, the
      "Financing Agreements") GED and Phoenix may be hereinafter referred to as
      the "Debtors"
      --------------------------------------------------------------------------

Gentlemen:

      The present term of your Financing Agreements with CIT expires February
17, 1995. We have now agreed to an extension of the Financing Agreements and
modifications of the Note as reflected by the Fourth Amended and Restated
Promissory Note to be executed on the date hereof in the form annexed hereto
under the terms and conditions set forth below.

      Accordingly, this will confirm our agreement to amend the Financing
Agreements as follows:

1.    The second sentence of paragraph F. of the rider to the Accounts Agreement
      is amended to read:

      "Debtor will pay all out-of-pocket costs of field examinations to be
      conducted by Trefoil as provided in paragraph 13 of the printed portion of
      the agreement plus $650.00 per person per day."

2.    Paragraph G. of the Rider to the Accounts Agreement is amended to read:

A company of
Dai-Ichi Kangyo Bank and
Chemical Banking Corporation
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
January 4, 1995
Page 2

      "G. Trefoil agrees that in addition to the advances made with reference to
      the formula set forth in Paragraph 2 of the printed portion of this
      agreement ("Accounts Advances"), Trefoil shall make additional advances to
      Debtor, in its sole discretion, of up to thirty percent (30%) of the value
      of Phoenix's acceptable and eligible raw material inventory and of up to
      thirty-five percent (35%) of the value of GED's acceptable and eligible
      finished goods inventory (collectively, the "Inventory Advances"). As used
      herein, "value" shall mean the lower of cost or market price, as
      determined by Trefoil. Except in Trefoils sole discretion, (1) the
      aggregate principal amount of Accounts Advances to GED shall not exceed,
      at any time outstanding, the lesser of (a) $450,000 (the "GED Accounts
      Sublimit"), or (b) an amount equal to (i) thirty percent (30%) of the
      value of Phoenix's acceptable and eligible raw material inventory, plus
      (ii) thirty-five percent (35%) of the value of GED's acceptable and
      eligible finished goods inventory, and (2) the aggregate principal amount
      of the Inventory Advances to Debtors shall not exceed $750,000 at any time
      outstanding with a further sublimit at any time outstanding of $460,000
      against the GED acceptable and eligible finished goods inventory. In the
      event that Borrower has negative Cash Flow (defined below) in excess of
      $25,000 for any quarter of its fiscal year calculated commencing with the
      quarter ending December 31, 1994, then the GED Accounts Sublimit shall be
      reduced by $100,000, with subsequent reductions of $100,000 for each
      subsequent quarter in which there is negative Cash Flow in excess of
      $25,000. Cash Flow is defined as: Net income plus depreciation and
      amortization less capital expenditures and debt service."

3.    The first sentence of paragraph J. of the Rider to the Accounts Agreement
      is amended to read:

      "In consideration of Trefoil entering into this Agreement and incurring
      accounting, operating and management expenses, Debtors shall pay to
      Trefoil each calendar month a minimum charge equal to the amount of
      interest Debtors would pay Trefoil if they at all times had an aggregate
      average daily cash balance outstanding of $2,000,000 bearing interest at
      the rate provided for in Paragraph 6 of the printed portion of this
      Agreement."

4.     Paragraph 20 of the printed portion of the Accounts Agreement is amended
       to provide that you will provide CIT with quarterly financial statements
       compiled by an independent certified public accountant and annual
       financial statements reviewed by
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
January 4, 1995
Page 3

      a certified public accountant and accompanied by a certified opinion on
      the fiscal year end accounts receivable and inventory balances.

5.    The first sentence of paragraph 26 of the printed portion of the Accounts
      Agreement is amended to read:

      "That this Agreement shall remain in effect until February 17, 1997 and
      shall be deemed automatically renewed for successive terms of one year."

6.    [DELETED AND INITIALED BY /s/ SR; MR and AS

7.    Within 30 days of the date hereof, GED to obtain a termination of the UCC
      financing statements filed by Pharmachem Laboratories, Inc. ("Pharmachem")
      in March, 1992 in New York State, Nassau County and California or a
      subordination agreement executed by Pharmachem in which it acknowledges
      that its security interest in any property of GED is subordinate to the
      security interest of CIT and that it will not enforce its rights against
      the property until all of GED's obligations to CIT are repaid in full.

      This will confirm that in addition to all other fees at any time payable
by Debtors to CIT, Debtors shall pay CIT on each anniversary date of the
Accounts Agreement, a Facility Fee in the amount of $35,000, which Facility Fees
that are due to be paid on February 17, 1995 and February 17, 1996 (aggregating
$70,000) are fully earned as of the date hereof and shall become immediately
payable upon termination of the Financing Agreements. Each Facility Fee may be
charged by CIT to any account of the Debtors maintained by CIT.

      All other terms and conditions of the Financing Agreements shall remain in
full force and effect.
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
January 4, 1995
Page 4

      Please evidence your agreement to the foregoing by signing in the space
provided below and returning this letter to us.

                                       Very truly yours,

                                       THE CIT GROUP./CREDIT
                                       FINANCE, INC.

                                    By: /s/ Angela Santi
                                       -----------------------------------------
                                    Title: AVP
                                          --------------------------------------
Agreed to and accepted:

PHOENIX LABORATORIES, INC.                GREAT EARTH DISTRIBUTION, INC.

By: /s/ SIDNEY RICH                 By: /s/ MEL RICH
   ----------------------------        -----------------------------------------
Title:  Pres.                       Title: Pres.
      -------------------------           --------------------------------------

Confirmed:

/s/ SIDNEY RICH                        /s/ MELVIN RICH
--------------------------------       -----------------------------------------
SIDNEY RICH                               MELVIN RICH

EVERGOOD PRODUCTS CORPORATION

By: /s/ SIDNEY RICH
   ----------------------------
Title: President
      -------------------------
<PAGE>

The CIT Group/Credit Finance
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

                                    January 6, 1995

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville, NY  11801

      Re:   Security Agreement (Accounts, etc.) executed February 17, 1988,
            by and between Phoenix Laboratories, Inc. ("Phoenix") and Great
            Earth Distribution, Inc. ("GED") and The CIT Group/Credit Finance,
            Inc. ("CIT"), assignee of Fidelcor Business Credit Corporation
            (the "Accounts Agreement"), Second Amended and Restated Promissory
            Note in the original principal balance of $740,000 (the "Note"),
            as amended, and all related agreements, amendments, documents and
            instruments collectively, the "Financing Agreements")
            -----------------------------------------------------------------

Gentlemen:

      As you are aware, your present contract term expires on February 17, 1995.
Pursuant to paragraph 26 of the Accounts Agreement and our December 15, 1994 and
December 23, 1994 letter agreement, in order to give you notice of termination
of the contract effective February 17, 1995, CIT must notify you on or before
January 6, 1995. We are discussing an amendment and extension to the financing
agreements. Please confirm our agreement to extend the time period in which we
have to give you notice of termination to January 11, 1995. This will give us
time to finalize the amendment to the financing agreements and avoid our having
to send you notice of termination today.

      Please evidence your agreement to the foregoing by signing in the space
provided below and returning this letter to us.

                                        Very truly yours,

                                        THE CIT GROUP/CREDIT FINANCE, INC.

                                        By: /s/ ANGELA SANTI
                                            ---------------------------------
                                        Title:  AVP
                                              -------------------------------

Agreed to:

PHOENIX LABORATORIES, INC.              GREAT EARTH DISTRIBUTION, INC.

By: /s/                                 By: /s/ Mel Rich
    ---------------------------------       ---------------------------------
Title: PRES.                            Title: PRES.
      -------------------------------         -------------------------------
<PAGE>

The CIT Group/Credit Finance
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

June 21, 1996

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville NY  11801

RE:  Security Agreement (Accounts, Etc.) dated February 17, 1988 (the "Accounts
     Agreement"), between Phoenix Laboratories, Inc. ("Phoenix") and Great Earth
     Distribution, Inc. ("GED"), and The CIT Group/Credit Finance, Inc. ("CIT"),
     assignee of Fidelcor Business Credit Corporation, and all related
     agreements, amendments, documents and instruments (collectively, the
     "Financing Agreements")

Gentlemen:

You have requested and we have agreed to grant you a $314,000 "reload" to the
machinery term loan, which advance of $314,000 shall be repayable in accordance
with the terms of the Fifth Amended and Restated Promissory Note, in the
original principal amount of $945,000 (the "New Note"), which shall be executed
by both Phoenix and GED.

The principal balance of the New Note shall be made up of a $314,000 advance to
repay the amount presently outstanding to you in excess of the contractual
formulas in your Financing Agreements and the sum of approximately $631,000,
representing the currently unpaid principal balance of the Fourth Amended and
Restated Promissory Note, in the original principal amount of $825,000, dated
January 11, 1995 (the "Old Note") on which both of you are liable as co-makers.

As an inducement to us to make the advance set forth above, you agree to pay to
us a facility fee in the amount of $3,000, which shall be charged to your
account on the date hereof.

Except as hereinabove set forth, the Financing Agreements shall remain
unmodified and in full force and effect.
<PAGE>

Please indicate your agreement with the foregoing by signing and returning to us
the enclosed copy of this letter.

Very truly yours,

THE CIT GROUP/CREDIT FINANCE, INC.

By: /s/
    ---------------------------------
Title: VICE PRESIDENT
       ------------------------------

AGREED:

PHOENIX LABORATORIES, INC.

By: /s/ Mel Rich
    ---------------------------------
Title:  VP
       ------------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/ Mel Rich
    ---------------------------------
Title:  PRES.
       ------------------------------

CONFIRMED:

/s/ Sidney Rich
-------------------------------------
Sidney Rich

/s/ Melvin Rich
-------------------------------------
Melvin Rich

EVERGOOD PRODUCTS CORPORATION

By: /s/ Mel Rich
    ---------------------------------
Title:  VP
       ------------------------------
<PAGE>

                  FIFTH AMENDED AND RESTATED PROMISSORY NOTE

$945,000                                                      New York, New York
                                                              June ____, 1996

      FOR VALUE RECEIVED, PHOENIX LABORATORIES, INC. and GREAT EARTH
DISTRIBUTION, INC. (individually and collectively the "Payor"), jointly and
severally hereby promise to pay to the order of THE CIT GROUP/CREDIT FINANCE,
INC., a Delaware corporation ("Payee"), at its offices located at 135 West 50th
Street, New York, New York 10020, or at such other place as Payee or any holder
hereof may from time to time designate, the principal sum of NINE HUNDRED AND
FORTY-FIVE THOUSAND DOLLARS ($945,000.00) in lawful money of the United States,
in eight installments of FIFTEEN THOUSAND DOLLARS ($15,000) each payable on the
first (1st) day of each consecutive month, commencing July 1, 1996, and one (1)
final installment in the amount of the entire unpaid principal balance of this
Note, payable February 17, 1997. Payor hereby further promises to pay interest
to Payee in like money at said office or place on the unpaid principal balance
hereof, computed at the rate of three and one-half percent (3 1/2%) per annum
plus the prime rate as announced by Chemical Bank or its successor, in New York,
New York from time to time as its prime rate (the prime rate is not intended to
be the lowest rate of interest charged by Chemical Bank to its borrowers) and
such interest shall be payable monthly on the first (1st) day of each month,
commencing July 1, 1996. Interest shall be calculated on the basis of a 360-day
year and actual days elapsed. In no event shall the interest charged hereunder
exceed the maximum permitted under the laws of the State of New York.

      This Note is secured by (i) the collateral described in the Security
Agreement (Accounts, Contract Rights, Instruments and Goods pertaining thereto),
the Inventory Security Agreement and the Equipment Security Agreement, each
executed February 17, 1988 by and between Payor and Fidelcor Business Credit
Corporation ("Fidelcor"), assignor of Payee, and all related agreements,
instruments (including but not limited to this Note) and documents granting
collateral security to Payee or evidencing or creating indebtedness of Payor to
Payee, all guaranties executed by third parties guaranteeing Payor's obligations
to Payee, including those executed by: Sidney Rich, Melvin Rich and Evergood
Products
<PAGE>

Corporation (the "Guarantors") (the foregoing, as the same may now
exist and have been and may hereafter be amended, modified, replaced or
supplemented, are hereafter collectively referred to as the "Financing
Agreements").

      This Note supersedes and replaces but does not extinguish any of the
unpaid liabilities and obligations under the Fourth Amended and Restated
Promissory Note dated January 11, 1995, in the original principal amount of
$825,000.00 by Payor in favor of Payee (the "Existing Note"). The indebtedness
of Payor to Payee evidenced hereby includes (i) the unpaid balance of the
indebtedness including unpaid interest heretofore evidenced by the Existing
Note; and (ii) an indebtedness of $314,000 representing an advance made by Payee
to Payor on the date hereof, all of which shall be repayable together with
interest accrued and accruing and other sums in accordance with the terms
hereof. Payor hereby acknowledges that Payor is as of the date hereof indebted
to Payee, in the principal amount hereof, together with interest accrued and
accruing through and after the date hereof, without offset, defense or
counterclaim of any kind, nature or description whatsoever. The amendment and
restatement contained herein shall not, in any manner be construed to constitute
payment of, or impair, limit, cancel or extinguish the indebtedness evidenced by
the Existing Note and the liens and security interests securing such
indebtedness shall not in any manner be impaired, limited, terminated, waived or
released hereby.

      At the time any payment is due hereunder, Payee may, at its option, charge
the amount thereof to any account of Payor maintained by Payee.

      If an event of default shall occur for any reason under any of the
Financing Agreements, or if any of the Financing Agreements shall be terminated
or not be renewed for any reason whatsoever, then and in any such event, in
addition to all rights and remedies of Payee under the Financing Agreements,
applicable law or otherwise (all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and concurrently) Payee
may, at its option, declare any or all of Payor's obligations under the
Financing Agreements, including, but not limited to, all amounts owing under
this Note, to be due and payable, whereupon the then unpaid balance hereof
together with all interest accrued thereon, shall forthwith become due and
payable, together with costs and expenses of collection, including reasonable
attorney's fees.

      Payee shall not be required to resort to any of the aforementioned
collateral for payment, but may proceed against Payor and/or the Guarantors in
such order and manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise thereof. Payor
hereby waives diligence, demand, presentment, protest and notice of any kind and
assents to extensions of time of payment, release, surrender or substitution of
collateral security, or forbearance or
<PAGE>

other indulgence, without notice.

      In the event of any litigation with respect to any of the Financing
Agreements, Payor waives the right to a trial by jury, all rights of set-off,
and any right to interpose permissive counterclaims and cross-claims, and Payor
consents to the jurisdiction of the courts of the State of New York and of any
federal court located in such State. Payor further waives personal service of
any and all process upon Payor and consents that all such service of process may
be made by certified mail, return receipt requested, directed to Payor at the
address listed above or of which Payor advises Payee, in writing, and. service
so made shall be deemed complete three days after the same shall have been
posted. This Note shall be governed by and construed, and all rights and
obligations hereunder determined, in accordance with the laws of the State of
New York, and shall be binding upon the successors and assigns of Payor and
inure to the benefit of Payee, its successors, endorsees and assigns.

      If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.

      The execution and delivery of this Note has been authorized by the board
of directors of Payor.

PHOENIX LABORATORIES, INC.

   By: /s/ Mel Rich
       ----------------------------
Title: Vice Pres.
       ----------------------------

GREAT EARTH DISTRIBUTION, INC.

   By: /s/ Mel Rich
       ----------------------------
Title: Pres.
       ----------------------------
<PAGE>

The CIT Group/Credit Finance
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

November 18, 1996

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
175 Lauman Lane
Hicksville NY  11801

RE:   Security Agreement (Accounts, Etc.) dated February 17, 1988 (the "Accounts
      Agreement"), between Phoenix Laboratories, Inc. ("Phoenix") and Great
      Earth Distribution, Inc. ("GED"), and The CIT Group/Credit Finance, Inc.
      ("CIT"), assignee of Fidelcor Business Credit Corporation, and all related
      agreements, amendments, documents and instruments (collectively, the
      "Financing Agreements").

Gentlemen:

The Financing Agreements are hereby amended as follows, effective as of the date
hereof, unless a different effective date is specified below. Capitalized terms
appearing below shall have the meanings given in the Accounts Agreement, and the
Rider thereto, unless otherwise defined in this letter.

1.    Bodyonics, Ltd., a Delaware corporation, with an office at 140 Lauman
      Lane, Hicksville, New York 11801 ("Bodyonics") shall be (a) added as a
      Debtor to the Accounts Agreement as fully as if Bodyonics had executed the
      Accounts Agreement on the date hereof, and shall be jointly and severally
      liable with Phoenix and GED for all Obligations arising thereunder; and
      (b) shall be deemed a party, as Debtor, borrower or grantor, as the case
      may be, to the other Financing Agreements executed by Phoenix and GED in
      our favor, as fully as if such other Financing Agreements had been
      executed by Bodyonics.

      Accordingly, Bodyonics hereby grants to us all security interests in its
      assets that Phoenix and GED have granted to us under the Financing
      Agreements, including but not limited to a security interest in all of its
      accounts, instruments, documents, chattel paper and general intangibles
      and all inventory and equipment, wherever located and whenever acquired or
      arising to secure all of its obligations to CIT.

2.    The undersigned Evergood Products Corporation and Melvin Rich and Sidney
      Rich, as well as Phoenix and GED, hereby affirm that Bodyonics shall be
      deemed a guaranteed entity under the guaranties heretofore executed by
      them in our favor and accordingly their liabilities under
<PAGE>

      such guaranties shall include liability for the Obligations of Bodyonics
      to CIT.

3.    Bodyonics  hereby  guaranties  and  agrees  to be fully  liable  for all
      Obligations of GED and Phoenix to us, whenever and however arising.

4.    We may in our discretion make advances to Bodyonics under the Financing
      Agreements but in no event shall any advance be made if an event of
      default has occurred under the Financing Agreements or if, after the
      making of any such advance, the aggregate outstanding Obligations of
      Bodyonics to us exceeds the lesser of (a) 80% of the net amount
      of outstanding acceptable and eligible accounts receivable of Bodyonics;
      or (b) $1,250,000.

5.    Section H of the Rider to the Accounts Agreement shall be amended so as to
      increase the Line of Credit from $3,500,000 to $5,000,000.

6.    This will  confirm that CIT will not charge an  additional  facility fee
      in consideration of this amendment.

Except as hereinabove set forth, the Financing Agreements shall remain
unmodified and in full force and effect.

Please indicate your agreement with the foregoing by signing and returning to us
the enclosed copy of this letter.

Very truly yours,

THE CIT GROUP/CREDIT FINANCE, INC.

By: /s/
    ----------------------------------
Title:  Assistant Secretary
        ------------------------------

AGREED:

BODYONICS, LTD.

By: /s/ Mel Rich
    ----------------------------------
Title:  Pres.
        ------------------------------

PHOENIX LABORATORIES, INC.

By: /s/ Mel Rich
    ----------------------------------
Title:  Pres.
        ------------------------------
<PAGE>

GREAT EARTH DISTRIBUTION, INC.

By: /s/ Mel Rich
    ----------------------------------
Title:  Pres.
        ------------------------------

EVERGOOD PRODUCTS CORPORATION

By: /s/ Mel Rich
    ----------------------------------
Title:  Pres.
        ------------------------------

/s/ Melvin Rich
--------------------------------------
Melvin Rich

/s/ Sidney Rich
--------------------------------------
Sidney Rich
<PAGE>

The CIT Group/Credit Finance
135 West 50th Street
New York, NY  10020
Tel:  212-408-6000
Fax:  212-408-6100

THE
CIT
GROUP

February 11, 1997

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
140 Lauman Lane
Hicksville, New York 11801

      Re:   Security Agreement (Accounts, etc.) executed February 17, 1988, by
            and between Phoenix Laboratories, Inc. ("Phoenix") and Great Earth
            Distribution, Inc. ("GED") and The CIT Group/Credit Finance, Inc.
            ("CIT"), assignee of Fidelcor Business Credit Corporation (the
            "Accounts Agreement") to which Bodyonics, Ltd. became a party, as
            Debtor, borrower or grantor, as the case may be by letter agreement
            dated November 18, 1996, the Fifth Amended and Restated Promissory
            Note in the original principal balance of $945,000 (the "Note"), as
            amended, and all related agreements, amendments, documents and
            instruments (collectively, the "Financing Agreements"). GED, Phoenix
            and Bodyonics may be hereinafter referred to as the "Debtors".

Gentlemen:

      The present term of the Financing Agreements expires February 17, 1997. We
have agreed to an extension of the Financing Agreements and modifications of the
Note as reflected by the Sixth Amended and Restated Promissory Note to be
executed on the date hereof in the form annexed hereto under the terms and
conditions set forth below.

      Accordingly, this will confirm our agreement to amend the
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
February 11, 1997

Page 2

Financing Agreements as follows:

1.    In each place in the Financing Agreements where the word "Trefoil"
      appears, the word "CIT" is substituted therefor.

2.    Paragraph 6 of the printed portion of the Accounts Agreement is hereby
      deleted, in its entirety and the following is substituted therefor:

      "6. That Debtor will pay CIT for its advances made hereunder a charge of
      two and one-half percent (2 1/2%) per annum plus the rate of interest
      publicly announced by The Chase Manhattan Bank, New York, New York from
      time to time as its prime rate (the prime rate is not intended to be the
      lowest rate of interest charged by The Chase Manhattan Bank to its
      borrowers), computed on a 360-day year. In the event of a change in the
      prime rate charged at The Chase Manhattan Bank, adjustment hereunder shall
      be made on the day of such change in the prime rate. All charges shall be
      computed upon the average daily balances outstanding and charged to
      Debtor's account or paid monthly."

3.    Paragraph 2 of the printed portion of the Accounts Agreement is amended to
      read:

      "2.   That it will advance to Phoenix Laboratories, Inc. and Bodyonics,
            Ltd. up to 80%, and to Great Earth Distribution, Inc. up to 67.50%
            of the net amounts of acceptable Collateral, as CIT in its sole
            discretion may determine, and will pay the remainder (less the
            compensation specified in paragraph 6, plus any overpayments by
            account debtors, and less deductions by account debtors and any
            unpaid compensation, charges or expenses), after actual receipt of
            payment upon such Collateral and at such times as CIT may
            determine; however, no payment of such remainder need be made by CIT
            if Debtor shall have breached any provision hereof or
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
February 11, 1997

Page 3

            shall be otherwise indebted to CIT, in either of which events CIT
            may retain and apply such remainder upon any indebtedness then or
            thereafter due from Debtor.

4.    The first sentence of Paragraph 30 of the printed portion of the Accounts
      Agreement is amended to read:

      "Debtor may, on thirty days prior written notice, prepay and terminate
      this Security Agreement by paying to CIT in cash or certified check, the
      entire then unpaid principal balance plus accrued charges, together with a
      sum equal to 25% of the average monthly charges for the immediately
      preceding six months or from the date of the agreement whichever is less,
      multiplied by the number of months of the unexpired balance of the term of
      this agreement (the "early termination fee"). However, in no event shall
      the early termination fee be less than $100,000."

5.    Paragraph G. of the Rider to the Accounts Agreement is amended to read:

      "G. CIT agrees that in addition to the advances made with reference to the
      formula set forth in Paragraph 2 of the printed portion of this agreement
      ("Accounts Advances"), CIT shall make additional advances to Debtor, in
      its sole discretion, of up to thirty percent (30%) of the value of
      Phoenix's acceptable and eligible raw material inventory and of up to
      thirty-five percent (35%) of the value of GED's and Bodyonics' acceptable
      and eligible finished goods inventory (collectively, the "Inventory
      Advances"). As used herein, "value" shall mean the lower of cost or market
      price, as determined by CIT. Except in CIT's sole discretion, (1) the
      aggregate principal amount of Accounts Advances to GED shall not exceed,
      at any time outstanding, the lesser of (a) $1,750,000 (the "GED Accounts
      Sublimit"), or (b) an amount equal to one hundred and twenty-five (125%)
      percent of the Phoenix Accounts Advances and (2) the aggregate principal
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
February 11, 1997

Page 4

      amount of the Inventory Advances to Debtors shall not exceed $1,250,000 at
      any time outstanding. In the event that Borrower has negative Cash Flow
      (defined below) to be calculated commencing with the six months ended June
      30, 1997 and semi-annually thereafter, then the GED Accounts sublimit
      shall be reduced to the lesser of $1,000,000 or 100% of Phoenix's eligible
      accounts receivable and the advance rate percentage for GED set forth in
      Paragraph 2 of the printed portion of the Accounts Agreement shall be
      reduced from 67.5% to 50%. Cash Flow is defined as: Net income plus
      depreciation and amortization less capital expenditures and principal
      repayments of term debt on a consolidated basis. Except in CIT's sole
      discretion, the aggregate principal amount of Accounts Advances to
      Bodyonics shall not exceed an amount equal to the sum of one hundred
      (100%) percent of the Phoenix Accounts Advances and one hundred (100%)
      percent of the GED Accounts Advances."

6.    The first sentence of paragraph J. of the Rider to the Accounts
      Agreement is amended to read:

      "In consideration of CIT entering into this Agreement and incurring
      accounting, operating and management expenses, Debtors shall pay to CIT
      each calendar month a minimum charge equal to the amount of interest
      Debtors would pay CIT if they at all times had an aggregate average daily
      loan balance outstanding of $2,500,000 bearing interest at the rate
      provided for in Paragraph 6 of the printed portion of this Agreement."

7.    The first sentence of paragraph 26 of the printed portion of the
      Accounts Agreement is amended to read:

      "That this Agreement shall remain in effect until February 17, 1999 and
      shall be deemed automatically renewed for successive terms of two years
      unless Debtor provides CIT with written notice of termination no later
      than sixty (60) days before the
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
February 11, 1997

Page 5

      end of any term."

8.    CIT has agreed to grant you an increase in the equipment term loan in the
      amount of $314,800 which shall be repayable in accordance with the terms
      of the Sixth Amended and Restated Promissory Note in the original
      principal amount of $1,150,000.

9.    In addition to the advance reflected by the Sixth Amended and Restated
      Promissory Note, CIT, shall make additional advances to Debtors of up to
      $200,000 per each year of each term for new purchases of equipment. The
      new advances shall be limited to eighty percent (80%) of the cost of the
      new equipment. All such advances shall amortize at an amortization
      schedule to be determined by CIT.

10.   Within 30 days of the date hereof, Debtors shall:

      a.    execute any assignment documents which are in addition to the
            beneficiary loss endorsement already executed by the Debtors in
            connection with a $750,000 credit insurance policy which was
            obtained by the Borrowers as a condition of this extension.

      b.    obtain a letter in form attached herein as Exhibit A or B from
            Bernie Bubman.

      c.    request Livingston Pharmaceutical Distribution, Inc. ("LPD") in
            Delaware to execute a warehouse agreement which shall include a
            provision in which LPD agrees (1) to give CIT a monthly report of
            all distribution service charges and other fees which are owed by
            GED (the "LPD charges") and (2) to advise CIT of any default or
            amendment to its agreement between GED and LPD. GED to supply CIT
            with a copy of its current agreement with LPD for storage of
            inventory. CIT to reserve against GED's loan availability for all
            amounts owed LPD.
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
February 11, 1997

Page 6

11.   Sidney Rich is released from his obligations under the Guaranty dated
      July 1, 1992.

12.   Melvin Rich, by his signature acknowledges the above amendments and the
      release of Sidney Rich under the Guaranty dated July 1, 1992. Melvin Rich,
      by his signature confirms and ratifies all of his obligations to The CIT
      Group/Credit Finance, Inc. under the Guaranty dated July 1, 1992 (the
      "Guaranty") which is a guaranty of all of the obligations of GED, Phoenix
      and Bodyonics to The CIT Group/Credit Finance, Inc. Melvin Rich further
      confirms that he has pledged $200,000 to CIT as cash collateral pursuant
      to a Cash Collateral Agreement dated August 31, 1993 to secure all of his
      obligations under the Guaranty.

13.   This will confirm that in addition to all other fees at any time payable
      by Debtors to CIT, Debtors shall pay CIT on each anniversary date of the
      Accounts Agreement, a Facility Fee in the amount of $35,000, which
      Facility Fee that is due to be paid on each of February 17, 1997 and
      February 17, 1998 (aggregating $70,000) is fully earned as of the date
      hereof and shall become immediately payable upon termination of the
      Financing Agreements. Facility Fees due during any renewal term shall be
      earned on the first day of such renewal term. Each Facility Fee may be
      charged by CIT to any account of the Debtors maintained by CIT.

      All other terms and conditions of the Financing Agreements shall remain in
full force and effect.
<PAGE>

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
February 11, 1997

Page 7

      Please evidence your agreement to the foregoing by signing in the space
provided below and returning this letter to us.

                                     Very truly yours,

                                     THE CIT GROUP/CREDIT FINANCE, INC.

                                     By: /s/
                                         ------------------------------
                                     Title: Vice President
                                            ---------------------------
Agreed to:

PHOENIX LABORATORIES, INC.                GREAT EARTH DISTRIBUTION, INC.

   By: /s/                                   By: /s/
       -------------------------                 -------------------------
Title:   Asst Secty                       Title:   Asst Secty
       -------------------------                 -------------------------

BODYONICS, LTD.

   By: /s/
       -------------------------
Title: VP
       -------------------------

Confirmed:

/s/ MELVIN RICH
--------------------------------
MELVIN RICH

EVERGOOD PRODUCTS CORPORATION

   By: /s/
       -------------------------
Title:   Asst Secty
       -------------------------
<PAGE>

                  SIXTH AMENDED AND RESTATED PROMISSORY NOTE

$1,150,000                                                    New York, New York
                                                              February 12, 1997

      FOR VALUE RECEIVED, PHOENIX LABORATORIES, INC., GREAT EARTH DISTRIBUTION,
INC. and BODYONICS, LTD. (individually and collectively the "Payor"), jointly
and severally hereby promise to pay to the order of THE CIT GROUP/CREDIT
FINANCE, INC., a Delaware corporation ("Payee"), at its offices located at 135
West 50th Street, New York, New York 10020, or at such other place as Payee or
any holder hereof may from time to time designate, the principal sum of ONE
MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS ($1,150,000.00) in lawful money of
the United States, in twenty-three installments of FIFTEEN THOUSAND DOLLARS
($15, 000) each payable on the first (1st) day of each consecutive month,
commencing March 1, 1997 and one (1) final installment in the amount of the
entire unpaid principal balance of this Note, payable February 17, 1999. Payor
hereby further promises to pay interest to Payee in like money at said off ice
or place on the unpaid principal balance hereof, computed at the rate of two and
one-half percent (2 1/2%) per annum plus the prime rate as announced by The
Chase Manhattan Bank or its successor, in New York, New York from time to time
as its prime rate (the prime rate is not intended to be the lowest rate of
interest charged by The Chase Manhattan Bank to its borrowers) and such interest
shall be payable monthly on the first (lst) day of each month, commencing March
1, 1997. Interest shall be calculated on the basis of a 360-day year and actual
days elapsed. In no event shall the interest charged hereunder exceed the
maximum permitted under the laws of the State of New York.
<PAGE>

      This Note is secured by the collateral described in the Security Agreement
(Accounts, Contract Rights, Instruments and Goods pertaining thereto), the
Inventory Security Agreement and the Equipment Security Agreement, each executed
February 17, 1988 by and between Payor and Fidelcor Business Credit Corporation
("Fidelcor"), assignor of Payee, and all related agreements, instruments
(including but not limited to this Note) and documents granting collateral
security to Payee or evidencing or creating indebtedness of Payor to Payee, all
guaranties executed by third parties guaranteeing Payor's obligations to Payee,
including those executed by: Melvin Rich and Evergood Products Corporation (the
"Guarantors") (the foregoing, as the same may now exist and have been and may
hereafter be amended, modified, replaced or supplemented, are hereafter
collectively referred to as the "Financing Agreements").

      This Note supersedes and replaces but does not extinguish any of the
unpaid liabilities and obligations under the Fifth Amended and Restated
Promissory Note dated January 11, 1995, in the original principal amount of
$945,000 executed by Payor in favor of Payee (the "Existing Note"). The
indebtedness of Payor to Payee evidenced hereby includes (i) the unpaid balance
of the indebtedness including unpaid interest heretofore evidenced by the
Existing Note; and (ii) an indebtedness of $835,200 representing an advance made
by Payee to Payor on the date hereof, all of which shall be repayable together
with interest accrued and accruing and other sums in accordance with the terms
hereof. Payor hereby acknowledges that Payor is as of the date hereof indebted
to Payee, in the principal amount hereof, together with interest accrued and
accruing through and after the date hereof, without offset, defense or
counterclaim of any kind, nature or description whatsoever. The amendment and
restatement contained herein shall not, in any manner be construed to constitute
payment of, or impair, limit, cancel or extinguish the indebtedness evidenced by
the Existing Note and the liens and security interests securing such
indebtedness shall not in any manner be impaired, limited, terminated, waived or
released hereby.

      At the time any payment is due hereunder, Payee may, at its option, charge
the amount thereof to any account of Payor maintained by Payee.

                                       2
<PAGE>

      If an event of default shall occur for any reason under any of the
Financing Agreements, or if any of the Financing Agreements shall be terminated
or not be renewed for any reason whatsoever, then and in any such event, in
addition to all rights and remedies of Payee under the Financing Agreements,
applicable law or otherwise (all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and concurrently) Payee
may, at its option, declare any or all of Payor's obligations under the
Financing Agreements, including, but not limited to, all amounts owing under
this Note, to be due and payable, whereupon the then unpaid balance hereof
together with all interest accrued thereon, shall, forthwith become due and
payable, together with costs and expenses of collection, including reasonable
attorney's fees.

      Payee shall not be required to resort to any of the aforementioned
collateral for payment, but may proceed against Payor and/or the Guarantors in
such order and manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise thereof. Payor
hereby waives diligence, demand, presentment, protest and notice of any kind and
assents to extensions of time of payment, release, surrender or substitution of
collateral security, or forbearance or other indulgence, without notice.

      In the event of any litigation with respect to any of the Financing
Agreements, Payor waives the right to a trial by jury, all rights of set-off,
and any right to interpose permissive counterclaims and cross-claims, and Payor
consents to the jurisdiction of the courts of the State of New York and of any
federal court located in either New York or Nassau County in such State. Payor
further waives personal service of any and all process upon Payor and consents
that all such service of process may be made by certified mail, return receipt
requested, directed to Payor at the address listed above or of which Payor
advises Payee, in writing, and service so made shall be deemed complete three
days after the same shall have been posted. This Note shall be governed by and
construed, and all rights and obligations hereunder determined, in accordance
with the laws of the State of New York, and shall be binding upon the successors
and assigns of Payor and inure to the benefit of Payee, its successors,
endorsees and assigns.

                                       3
<PAGE>

      If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.

      The execution and delivery of this Note has been authorized by the board
of directors of Payor.

PHOENIX LABORATORIES, INC.                     BODYONICS, LTD.

   By: /s/                                     By: /s/
       -----------------------------               -----------------------------
Title:   Asst Secty                         Title: VP
       -----------------------------               -----------------------------

GREAT EARTH DISTRIBUTION, INC.

   By: /s/
       -----------------------------
Title:   Asst Secty
       -----------------------------

                                       4
<PAGE>

                         GREAT EARTH DISTRIBUTION, INC.

Gentlemen:

      From time to time we at the Great Earth family review our various
relationships including our financing relationships. As a result of that review
we have determined it would benefit the System and the Companies to enter into a
modification of our existing relationship with the CIT Group ("CIT"). They have
advised that our files require updating and have asked us to obtain this
"no-offset" letter with regard to the security interest they are to be granted
with respect to certain of our assets.

      We have assigned our accounts to CIT and CIT shall make loans to us from
time to time on the security of the accounts. CIT will rely on this letter in
making loans.

      Your signature at the foot of this letter confirms that you will not
assert any offset, claim, counterclaim or deduction against any account
receivable including any claim that the payment of any invoice is contingent on
fulfillment of any contract or condition whatsoever.

      Nothing contained herein shall in any way limit your right to proceed
against us by independent action for any claim of any kind that you may now or
hereafter have.

      Therefore, this letter simply asks that you continue to honor all of your
G.E.D. invoices without offset or asserting any counterclaim.

      It is accordingly requested by CIT that this agreement be binding upon you
and your respective successors and assigns. So, please confirm your agreement to
the foregoing by signing below.

                                          Very truly yours,

                                          GREAT EARTH DISTRIBUTION, INC.

                                          By: _________________________________
                                                Its

The foregoing is accepted and agreed to this ____ day of _______, 1997.

By: __________________________________
<PAGE>

                   (GREAT EARTH DISTRIBUTION, INC. STATIONERY)

                                          __________________, 1997
_____________________________
_____________________________
_____________________________

Gentlemen:

      From time to time we at the Great Earth family review our various
relationships including our financing relationships. As a result of that review
we have determined it would benefit the System and the Companies to enter into a
modification of our existing relationship with the CIT Group ("CIT"). They have
advised that our files require updating and have asked us to obtain this letter
with regard to the security interest they are to be granted with respect to
certain of our assets.

      Therefore, this letter simply asks that you continue to honor all of your
G.E.D. invoices without offset or asserting any counterclaim.

      In legal vernacular, your agreement not to assert any defense or claims
which you might have or which might accrue in the future against either of the
undersigned companies is needed as well as your agreement to honor all demands
for payment of your accounts owed to the Company without offset or counterclaim.

      It is accordingly requested by CIT that this agreement be binding upon you
and your respective successors and assigns. So, please confirm your agreement to
the foregoing by signing below.

                                          Very truly yours,

                                          GREAT EARTH DISTRIBUTION, INC.

                                          By: _________________________________
                                                Its

The foregoing is accepted
and agreed to this _____ day
of _______________ 1997.

By: _________________________
<PAGE>

                  SIXTH AMENDED AND RESTATED PROMISSORY NOTE

$1,150,000                                               New York, New York
                                                         February 12, 1997

      FOR VALUE RECEIVED, PHOENIX LABORATORIES, INC., GREAT EARTH DISTRIBUTION,
INC. and BODYONICS, LTD. (individually and collectively the "Payor"), jointly
and severally hereby promise to pay to the order of THE CIT GROUP/CREDIT
FINANCE, INC., a Delaware corporation ("Payee"), at its offices located at 135
West 50th Street, New York, New York 10020, or at such other place as Payee or
any holder hereof may from time to time designate, the principal sum of ONE
MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS ($1,150,000.00) in lawful money of
the United States, in twenty-three installments of FIFTEEN THOUSAND DOLLARS
($15,000) each payable on the first (1st) day of each consecutive month,
commencing March 1, 1997 and one (1) final installment in the amount of the
entire unpaid principal balance of this Note, payable February 17, 1999. Payor
hereby further promises to pay interest to Payee in like money at said office or
place on the unpaid principal balance hereof, computed at the rate of two and
one-half percent (2 1/2%) per annum plus the prime rate as announced by The
Chase Manhattan Bank or its successor, in New York, New York from time to time
as its prime rate (the prime rate is not intended to be the lowest rate of
interest charged by The Chase Manhattan Bank to its borrowers) and such interest
shall be payable monthly on the first (lst) day of each month, commencing March
1, 1997. Interest shall be calculated on the basis of a 360-day year and actual
days elapsed. In no event shall the interest charged hereunder exceed the
maximum permitted under the laws of the State of New York.
<PAGE>

      This Note is secured by the collateral described in the Security Agreement
(Accounts, Contract Rights, Instruments and Goods pertaining thereto), the
Inventory Security Agreement and the Equipment Security Agreement, each executed
February 17, 1988 by and between Payor and Fidelcor Business Credit Corporation
("Fidelcor"), assignor of Payee, and all related agreements, instruments
(including but not limited to this Note) and documents granting collateral
security to Payee or evidencing or creating indebtedness of Payor to Payee, all
guaranties executed by third parties guaranteeing Payor's obligations to Payee,
including those executed by: Melvin Rich and Evergood Products Corporation (the
"Guarantors") (the foregoing, as the same may now exist and have been and may
hereafter be amended, modified, replaced or supplemented, are hereafter
collectively referred to as the "Financing Agreements").

      This Note supersedes and replaces but does not extinguish any of the
unpaid liabilities and obligations under the Fifth Amended and Restated
Promissory Note dated January 11, 1995, in the original principal amount of
$945,000 executed by Payor in favor of Payee (the "Existing Note"). The
indebtedness of Payor to Payee evidenced hereby includes (i) the unpaid balance
of the indebtedness including unpaid interest heretofore evidenced by the
Existing Note; and (ii) an indebtedness of $835,200 representing an advance made
by Payee to Payor on the date hereof, all of which shall be repayable together
with interest accrued and accruing and other sums in accordance with the terms
hereof. Payor hereby acknowledges that Payor is as of the date hereof indebted
to Payee, in the principal amount hereof, together with interest accrued and
accruing through and after the date hereof, without offset, defense or
counterclaim of any kind, nature or description whatsoever. The amendment and
restatement contained herein shall not, in any manner be construed to constitute
payment of, or impair, limit, cancel or extinguish the indebtedness evidenced by
the Existing Note and the liens and security interests securing such
indebtedness shall not in any manner be impaired, limited, terminated, waived or
released hereby.

      At the time any payment is due hereunder, Payee may, at its option, charge
the amount thereof to any account of Payor maintained by Payee.

                                       2
<PAGE>

      If an event of default shall occur for any reason under any of the
Financing Agreements, or if any of the Financing Agreements shall be terminated
or not be renewed for any reason whatsoever then and in any such event, in
addition to all rights and remedies of Payee under the Financing Agreements,
applicable law or otherwise (all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and concurrently) Payee
may, at its option, declare any or all of Payor's obligations under the
Financing Agreements, including, but not limited to, all amounts owing under
this Note, to be due and payable, whereupon the then unpaid balance hereof
together with all interest accrued thereon, shall forthwith become due and
payable, together with costs and expenses of collection, including reasonable
attorney's fees.

      Payee shall not be required to resort to any of the aforementioned
collateral for payment, but may proceed against Payor and/or the Guarantors in
such order and manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise thereof. Payor
hereby waives diligence, demand, presentment, protest and notice of any kind and
assents to extensions of time of payment, release, surrender or substitution of
collateral security, or forbearance or other indulgence, without notice.

      In the event of any litigation with respect to any of the Financing
Agreements, Payor waives the right to a trial by jury, all rights of set-off,
and any right to interpose permissive counterclaims and cross-claims, and Payor
consents to the jurisdiction of the courts of the State of New York and of any
federal court located in either New York or Nassau County in such State. Payor
further waives personal service of any and all process upon Payor and consents
that all such service of process may be made by certified mail, return receipt
requested, directed to Payor at the address listed above or of which Payor
advises Payee, in writing, and service so made shall be deemed complete three
days after the same shall have been posted. This Note shall be governed by and
construed, and all rights and obligations hereunder determined, in accordance
with the laws of the State of New York, and shall be binding upon the successors
and assigns of Payor and inure to the benefit of Payee, its successors,
endorsees and assigns.

                                       3
<PAGE>

      If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.

      The execution and delivery of this Note has been authorized by the board
of directors of Payor.

PHOENIX LABORATORIES, INC.                  BODYONICS, LTD.

   By: /s/                                     By: /s/ Mel Rich
       -----------------------------               -----------------------------
Title:                                      Title: VP
       -----------------------------               -----------------------------

GREAT EARTH DISTRIBUTION, INC.

   By: /s/
       -----------------------------
Title:
       -----------------------------
<PAGE>

THE CIT GROUP
Credit Finance
1211 Avenue of the Americas
New York, NY  10036
Tel:  212-790-9100
Fax:  212-790-9123

THE
CIT
GROUP

January 21, 1998

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
140 Lauman Lane
Hicksville, New York 11801

      Re:  Security Agreement (Accounts, etc.) executed February 17, 1988 (the
           "Accounts Agreement), by and between Phoenix Laboratories, Inc.
           ("Phoenix") and Great Earth Distribution, Inc. ("GED") and The CIT
           Group/Credit Finance, Inc. ("CIT") assignee of Fidelcor Business
           Credit Corporation ("Fidelcor"), and the Security Agreement
           (Inventory) and Security Agreement (Equipment), executed February
           17, 1988 by Phoenix and GED in favor of Fidelcor, to which Security
           Agreements Bodyonics, Ltd. ("Bodyonics") became a party, as Debtor,
           by letter agreement dated November 18, 1996; the Sixth Amended and
           Restated Promissory Note in the original principal amount of
           $1,150,000, dated February 12, 1997 and made by Phoenix, GED and
           Bodyonics (the "Note"), and all related agreements, amendments,
           documents and instruments (collectively, the "Financing Agreements").
           ---------------------------------------------------------------------

Gentlemen:

      The present term of your Financing Agreements with CIT expires February
17, 1999. We propose to amend the Financing Agreements and the Note as set forth
below, effective as of December 1, 1997. Capitalized terms appearing below that
are not defined herein shall have the meanings given in the Rider to the
Accounts Agreement, as amended and restated as of the date hereof.

1.    Paragraph 6 of the printed  portion of the  Accounts  Agreement
      is  hereby  deleted  in  its  entirety  and  the  following  is
      substituted therefor:

      "6. That Debtor will pay CIT for its advances made hereunder a charge of
      two percent (2%) per annum plus the rate of interest publicly announced by
      The Chase Manhattan Bank, New York, New York from time to time as its
      prime rate (the prime rate is not intended to be the lowest rate of
      interest charged by The Chase Manhattan Bank to its borrowers),
<PAGE>

      computed on a 360-day year. In the event of a change in the prime rate
      charged at The Chase Manhattan Bank, adjustment hereunder shall be made on
      the day of such change in the prime rate. All charges shall be computed
      upon the average daily balances outstanding and charged to Debtor's
      account or paid monthly."

2.    The following is a restatement, in its entirety, of Paragraph
      30 of the printed portion of the Accounts Agreement, as
      heretofore amended:

      "Debtor may, on thirty days prior written notice, prepay and terminate
      this Security Agreement by paying to CIT, in cash, the entire unpaid
      principal balance plus accrued charges, together with a sum equal to 25%
      of the average monthly charges for the immediately preceding six months,
      multiplied by the number of months of the unexpired balance of the term of
      this agreement (the "early termination fee"). However, in no event shall
      the early termination fee be less than $100,000. In the event of a default
      or breach by Debtor hereunder, the parties agree that damages sustained by
      CIT shall be computed, as provided in this paragraph. Prior to actual
      receipt of moneys due under this paragraph, CIT may at its option exercise
      all of its rights under the Security Agreement."

3.    The last  sentence of  Paragraph  17 of the printed  portion of
      the Accounts Agreement is amended to read as follows:

           "In order to avoid the necessity for separate computation of the time
           of clearance of each collection item, clearance time of two business
           days shall be allowed upon every check and such note or draft or
           other instrument for the payment of money before the same shall be
           deemed so collected."

4.    The first  sentence of paragraph  26 of the printed  portion of
      the Accounts Agreement is amended to read as follows:

           "That this Agreement shall remain in effect until August 17, 2000 and
           shall be deemed automatically renewed for successive terms of two
           years."

5.    The  Debtors  affirm that the unpaid  principal  balance of the
      Note as of the date hereof is $1,000,000.

      The Note shall be amended to provide that (i) the final installment
      thereof in the amount of the entire unpaid principal balance shall be
      payable on August 17, 2000 rather than on February 17, 1999; and (ii)
      interest on the unpaid principal balance of the Note shall be payable at
      the rate per annum of two (2%) percent plus the prime rate announced by
      The Chase Manhattan Bank or its successor rather than two and one-half
      (2.5%) percent plus such prime rate.

6.    In consideration of the amendment of the Financing Agreements as provided
      herein, the Debtors shall pay to CIT a Transaction Fee in the amount of
      $10,000 which shall be payable on the date hereof and may be charged by
      CIT on the date hereof to any account of the
<PAGE>

      Debtors maintained with CIT. In consideration of the payment of such
      Transaction Fee, and notwithstanding the terms of Section F of the Rider
      to the Accounts Agreement, Debtors shall not be obligated to pay the fees
      of CIT's in-house or outside counsel incurred in connection with the
      preparation of this Agreement, the amended and restated Rider to the
      Accounts Agreement or the documents required pursuant to Paragraph 8 of
      this Agreement.

7.    This will confirm that in addition to all other fees at any time payable
      by Debtors to CIT, Debtors shall pay a Facility Fee to CIT on each
      anniversary date of the Accounts Agreement in the amounts hereinafter set
      forth. The Facility Fee payable during the term of the Financing
      Agreements ending on August 17, 2000 shall be fully earned on the date
      hereof and the Facility Fee payable during any renewal term shall be fully
      earned on the first day of such renewal term. The Facility Fee payable on
      February 17, 1998 shall be $35,000, the Facility Fee payable on February
      17, 1999 shall be $25,000 and the Facility Fee payable on February 17,
      2000 and on each subsequent anniversary of the date of the Accounts
      Agreement, commencing February 17, 2001, shall be $12,500. Upon the
      occurrence of a default under the Financing Agreements or upon the
      effective date of termination of the Financing Agreements for any reason
      prior to the end of the then current term, all Facility Fees payable at
      any time during such term shall become immediately due and payable in
      full. Each Facility Fee may be charged by CIT to any account of the
      Debtors maintained by CIT.

8.    Debtors agree and acknowledge that it is a material condition of the
      financing to be provided by CIT that CIT receive the following documents
      or instruments and that accordingly, the failure to provide such documents
      or instruments to CIT within 30 days of the date hereof (or, in the case
      of documents that have not yet been submitted to Debtors by CIT and whose
      form and content have not been approved by Debtors, as noted below, within
      30 days after the date that the form and content of such document is
      approved by Debtors) or the failure of Debtors and CIT to agree on the
      form and content of a document within 30 days after such document has been
      submitted to Debtors, shall constitute a default under the Financing
      Agreements (but nothing contained herein shall limit the generality of the
      terms of the Financing Agreements or constitute a waiver of any of the
      terms thereof):

      a.   Acknowledgment by Lightning Pack, Inc., Paterson, New Jersey, of
           CIT's security interest in inventory stored by Debtors with such
           entity (document has been approved by Debtors but Debtors shall have
           45 days from the date hereof to have such document executed by
           Lightning Pack, Inc. and delivered to CIT);

      b.   Guaranties by Great Earth Companies, Inc. and Great Earth
           International Franchising Corp. in favor of CIT of all indebtedness
           due to CIT from Phoenix, GED and Bodyonics, secured by a security
           interest in all assets of such entities, including a collateral
           assignment of such entities, trademarks and rights under franchise
           agreements (guaranties and/or security agreements identical to any
           such instruments already executed by any of Debtors in favor of CIT
           shall be deemed approved by Debtors; form of collateral assignment of
           trademarks and rights under franchise agreements has not yet been
           approved by Debtors);
<PAGE>

      c.   Collateral assignment by Phoenix, securing its obligations to CIT, of
           all patents, formulas and other trade secrets (document not yet
           approved by Debtors); and

      d.   Notification (signed by GED, Bodyonics and Phoenix) to General
           Nutritional Corp. ("GNC"), in the form attached, of CIT's security
           interest in accounts receivable due from GNC to GED, Bodyonics and
           Phoenix (document has been approved by Debtors); and

      e.   Evidence that Debtors have obtained a policy of credit insurance on
           their accounts receivable in an amount no less than $750,000,
           satisfactory to CIT as to form and issuer, with an endorsement naming
           CIT as beneficiary or loss payee (approval of form and content of
           documents by Debtors is not applicable to this subsection and is not
           required).

9.    In lieu of an agreement from the landlord of Debtors' premises at 140
      Lauman Lane, Hicksville, New York (the "Hicksville Premises"), agreeing
      that CIT may have access to such premises for the purpose of removing its
      collateral in the event of a default, it is agreed that:

      a.   CIT may hold a reserve from amounts otherwise due to the Debtors
           under the Financing Agreements, an amount equal to three (3) months
           rent payable under the lease of the Premises (the "Lease'). The
           monthly rent under the Lease is now $18,450; and

      b.   Debtors shall provide to CIT each month evidence of its payment of
           the monthly rent due under the Lease and shall provide to CIT copies
           of any amendments of the Lease changing the amount of such rent; and

      c.   Debtors' failure to pay any amount due under the Lease within 30 days
           of its due date shall constitute a default under the Financing
           Agreements.

By his execution below, Melvin Rich confirms that his Guaranty (which is limited
to $450,000 in principal indebtedness and under which the estate of Sidney Rich
shall no longer be liable) in favor of CIT, dated July 1, 1992, with respect to
the obligations of Phoenix, GED and Bodyonics, and the Cash Collateral
Agreement, dated August 31, 1993 executed by him in favor of CIT, securing such
Guaranty, remain in full force and effect.

The undersigned GED, Phoenix, Bodyonics and Evergood Products Corporation
confirm that the Guaranty, dated February 17, 1988, pursuant to which they have
each guaranteed each others obligations to CIT, remains in full force and
effect.

All other terms and conditions of the Financing Agreements shall remain in full
force and effect. The undersigned agree to execute such further documents and
instruments as shall be necessary to carry out the purposes of the amendment of
the Financing Agreements set forth above.
<PAGE>

Please sign and return this letter to us to evidence your agreement to the
amendments of the Financing Agreements set forth above.

The offer to amend the Financing Agreements as provided in this letter shall be
deemed revoked if this letter is not signed and returned by you on or before
January 30, 1998.

Very truly yours,

THE CIT GROUP/CREDIT FINANCE, INC.

By: /s/
   ----------------------------------
Title:  Vice President
      -------------------------------

Agreed to:

PHOENIX LABORATORIES, INC.

By: /s/
   ----------------------------------
Title:  Vice President
      -------------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
   ----------------------------------
Title:  Vice President
      -------------------------------

BODYONICS, LTD.

By: /s/
   ----------------------------------
Title:  Vice President
      -------------------------------

Confirmed:

/s/ MELVIN RICH
-------------------------------------
MELVIN RICH

EVERGOOD PRODUCTS CORPORATION

By: /s/
   ----------------------------------
Title:  Vice President
      -------------------------------
<PAGE>

                AMENDED AND RESTATED RIDER TO SECURITY AGREEMENT
                     (Accounts, Contract Rights, Instruments
                          and Goods Pertaining Thereto)

                                     between

                 Debtors: PHOENIX LABORATORIES, INC. ("Phoenix")
                     GREAT EARTH DISTRIBUTION, INC. ("GED")
                          BODYONICS, LTD. ("Bodyonics")
             (each hereafter refined to individually as "Debtor" and
                         collectively as "Debtors")
                                      and

Secured Party:   THE CIT GROUP/CREDIT FINANCE, INC.
                 (hereafter referred to as "CIT")

This is an Amendment and Restatement, effective as of December 1, 1997, of the
Rider to the Security Agreement (Accounts, Contract Rights, Instruments and
Goods Pertaining Thereto), dated February 17, 1988 (this "Agreement", between
Debtor and Fidelcor Business Credit Corporation ("Fidelcor"), to whose rights
CIT has succeeded, pursuant to which, in addition to and not in limitation of
any and all rights granted to CIT and obligations incurred by Debtor in the
printed portion of this Agreement, Debtor further warrants, covenants and agrees
as follows:

           A. Each of the Debtors shall be jointly and severally liable for the
Obligations (as hereafter defined) of all of the Debtors.

           B. The term "Financing Agreements" shall mean and include, without
limitation, this Agreement, the Security Agreement (Inventory), the Security
Agreement (Equipment), and the agreements, documents and instruments listed on
the attached Schedule A, as now existing or as hereafter renewed, extended,
amended, modified or supplemented and any agreements, documents and guaranties
that (i) are executed in the future; and (ii) are executed by any Debtors or
Affiliates of any Debtors in favor of CIT or are between CIT and any Debtors or
Affiliates of theirs or grant collateral security for or create or evidence
indebtedness of any Debtors or Affiliates of theirs to CIT; and (iii) do not by
their terms expressly recite that they shall not be deemed "Financing
Agreements" hereunder. Affiliate means any entity having common ownership with a
Debtor or controlled by or under common control with any Debtor.

           C. The term "Obligations" or obligations shall mean and include,
without limitation, any and all of Debtor's indebtedness and/or liabilities to
CIT of every kind, nature and description, direct or indirect, secured or
unsecured, joint and/or several, absolute or contingent, due or to become due,
now existing or hereafter arising, related or unrelated, regardless of how they
arise or by what agreement or instrument they may be evidenced or whether
evidenced by any agreement or instrument, including, but not limited to all
amounts owing by Debtor to CIT under this Agreement, the other Financing
Agreements, or any other security agreement, guaranty or note and all
obligations to perform acts or refrain from taking any action.
<PAGE>

           D. The term Collateral or collateral shall mean and include, without
limitation, that which is set forth in Paragraph I of the printed portion of
this Agreement and any and all other items of real or personal property in which
Debtor has granted or may in the future grant a security interest to CIT under
the Financing Agreements, or any supplement or supplements thereto, and/or under
any other security agreement, or other agreement, all of Debtor's right, title
and interest in and to the goods or other property represented by or securing
any of the foregoing, all of Debtors rights as an unpaid vendor or lien or,
including stoppage in transit, replevin or reclamation, all additional amounts
due to Debtor from any account debtor irrespective of whether such additional
amounts have been specifically assigned to CIT, all other agreements on property
securing or relating, to any of the items referred to above or acquired for the
purposes of securing or enforcing any of such items, 0 present and future
chattel paper, motor vehicles, licenses, patents, trademarks, copyrights,
license agreements, tax and duty claims and refunds, computer software,
goodwill, customer lists, all documents, monies, deposits, securities,
instruments, credits, and other property now or hereafter held by CIT or any
entity which at any time participates in CIT's financing transactions with
Debtor, and all products, proceeds and accessions of all of the foregoing in
whatever form. Debtor hereby grants CIT a continuing first priority security
interest in and general lien upon all of the Collateral to secure payment and
performance of all of the Obligations, except for prior security interests set
forth on Schedule B attached hereto.

           E. In addition to any other security interest granted in the
Financing Agreements and not in limitation of any of the foregoing, and to
secure the payment and performance of all of the Obligations. Debtor hereby
pledges and assigns to CIT and grants to CIT a continuing general security
interest in all of the Debtor's ledger sheets, files, records and documents
relating to the Collateral. which shall, until delivered to or removed by CIT,
be kept by Debtor in trust for CIT and without cost to CIT in appropriate
containers in safe places, bearing suitable legends disclosing CIT's security
interest. Each confirmatory assignment schedule or other form of Assignment
hereafter executed by Debtor, shall be deemed to include the foregoing, whether
or not same appears therein.

           F. The Debtor will pay all costs and expenses and all taxes,
recording and filing fees (including Uniform Commercial Code Financing
Statements) in connection with the preparation. execution, delivery,
administration (including wire transfer charges in amounts that CIT may from
time to time establish if Debtor requests wire transfers) and enforcement of
this Agreement and all other documents Contemplated herein or related hereto,
including any amendments, supplements or consents which may he hereafter made or
entered into in respect thereof, including appraisal fees, and lien searches in
connection herewith and fees and disbursements of in-house and outside counsel
to CIT. Debtor will pay all out-of-pocket costs of field examinations to be
conducted by CIT as provided in Paragraph 13 of the printed portion of the AP
cement plus $650.00 per person per day. CIT is hereby authorized to charge any
amounts payable hereunder (including principal, interest, fees, charges and
expenses) directly to any account of the Debtor maintained with CIT.

           G. CIT agrees that in addition to the advances made with reference to
the formula set forth in Paragraph 2 of the printed portion of this agreement
("Accounts Advances"),
<PAGE>

CIT shall make additional advances to Debtor, in its sole discretion, of thirty
percent (30%) of the value of Phoenix's acceptable and eligible raw material
inventory and of thirty-five (35%) percent of the value of GED's and Bodyonics'
acceptable and eligible finished goods inventory (collectively the "Inventory
Advances"). As used herein, "value" shall mean the lower of cost or market
price, as determined by CIT. Except in CIT's sole discretion, (1) the aggregate
principal amount of Accounts Advances to GED shall not exceed, at any time
outstanding, the lesser of (a) $1,750,000 (the "GED Accounts Sublimit") or (b)
an amount equal to one hundred and twenty-five (125%) percent of the Phoenix
Accounts Advances and (2) the aggregate principal amount of the Inventory
Advances to Debtors shall not exceed $2,000,000 at any time outstanding. Except
in CIT's sole discretion, the aggregate principal amount of Accounts Advances to
Bodyonics shall not exceed an amount equal to the sum of one hundred (100%)
percent of the Phoenix Accounts Advances and one hundred (I 00%) percent of the
GED Accounts Advances.

           H. Except in CIT's sole discretion the aggregate principal amount of
the advances made by CIT to Debtors under the Financing Agreements, including
the Accounts Advances and the Inventory Advances, shall not exceed the principal
amount of $6,500,000 at any time outstanding.

           I.    [Intentionally omitted]

           J. In consideration of CIT entering into this Agreement and incurring
accounting, operating and Management expenses, Debtors shall pay to CIT each
calendar month a minimum charge equal to the amount of interest Debtors would
pay CIT if they at all times had an aggregate average daily loan balance
outstanding of S2,500,000 bearing interest at the rate provided for in Paragraph
6 of the printed portion of this Agreement. CIT shall reduce such minimum charge
by the amounts actually paid by Debtors to CIT as interest pursuant to said
Paragraph 6, so that for each calendar month Debtors shall pay CIT interest as
provided for in said Paragraph 6, plus the amount, if any, by which the minimum
charge provided for in this paragraph exceeds the amount of interest payable
pursuant to said Paragraph 6 for such month. If this Amendment shall be
terminated. such minimum charge shall continue and be paid by the Debtor for any
unexpired term of this Agreement, except if such termination is made pursuant to
Paragraph 26 or 30 of the printed portion of this Agreement or by mutual
agreement of CIT and the Debtor.

           K. All advances by CIT pursuant to this Agreement shall bear interest
at the variable rate provided for in Paragraph 6 of the printed portion of this
Agreement and shall be calculated on the basis of a 360-day year for actual days
elapsed.

           L. Should CIT commence a proceeding to take possession of any of the
Collateral under this Agreement or any of the Financing Agreements, Debtor
waives the requirement, if any, that CIT post a bond or any other type of
security.

           M.   In addition to all of the covenants set forth in the
Financing Agreements and without limiting any of the terms or
provisions thereof, Debtor hereby covenants and agrees as follows:
<PAGE>

1.    Debtor will pay all obligations when due and will perform all of the
      terms, conditions, covenants and agreements of Debtor to be performed
      under the Financing Agreements, and will make punctual payment of all
      monies and will perform all of the terms, conditions, covenants and
      agreements on its part to be paid, kept or performed under the terms of
      any lease or mortgage of the premises where any of the Collateral is now
      or hereafter located, wherein Debtor is lessee or mortgagor, and will
      promptly notify CIT in the event of any default by Debtor or receipt by
      Debtor of any notice or alleged default under any such lease or mortgage.

2.    Debtor will pay and discharge at or before maturity, all taxes,
      assessments, rents, claims, debts and charges except where the same are
      being contested in good faith and Debtor is maintaining, in accordance
      with generally accepted accounting principles and practice, appropriate
      reserves for accrual thereof

3.    Debtor will promptly give notice in writing to CIT of the occurrence of
      any event which constitutes or which with notice or lapse of time, or
      both, would constitute a default under any of the Financing Agreements. As
      used in the Paragraph (3), the word "promptly" shall be determined in
      relation to the point in time at which Debtor, exercising sound management
      practices, has actual knowledge or should have discovered the occurrence
      of such event.

4.    Debtor will provide CIT with such other information concerning the
      financial or business affairs of Debtor as CIT, in its sole discretion,
      requests from time to time.

5.    Debtor will not, without the prior written consent of CIT, declare or pay
      any dividend, return any capital to any of its stockholders, loan any sum
      to any of its stockholders, employees, officers or directors, or redeem,
      repurchase or otherwise acquire any of its outstanding capital stock
      except that Debtor may continue to repay an indebtedness due to its
      shareholder, Charlotte Rich, in the outstanding principal amount of
      $378,623.08, provided that the amount of such repayment does not exceed
      $140,000 per year, inclusive of both principal and interest.

6.    Notwithstanding Paragraph 3 of the printed portion of this Agreement,
      Debtor shall direct that all proceeds of accounts receivable, letters of
      credit, banker's acceptances and other proceeds of Collateral shall be
      payable to a post office box or a lock box designated by and in control of
      CIT and in connection therewith shall execute such agreements as CIT in
      its sole discretion shall specify. So long as no default has occurred
      under the Financing Agreements, Debtor's deposit of all proceeds of
      Collateral
<PAGE>

      to an account at Chase Manhattan Bank which is blocked to CIT shall
      constitute compliance with this subsection.

7.    Debtor will duly execute and deliver, or will cause to be executed and
      delivered, such further instruments and documents, including, without
      limitation, additional security agreements, collateral assignments,
      Uniform Commercial Code financing statements or amendments, or
      continuations thereof, landlord's or mortgagee's waivers of liens, and
      consents to the exercise by CIT of 0 of its rights and remedies under the
      Financing Agreements with respect to the Collateral and will do such
      further acts as may be necessary or proper in CIT's opinion to effectuate
      the provisions or purposes of the Financing Agreements.

8.    Debtor will not, without the prior written consent of CIT, directly or
      indirectly sell, lease, abandon or otherwise dispose of all or any
      substantial portion of its property or assets or consolidate with or merge
      with or into any other entity, or permit any other entity to consolidate
      with or merge with or into it.

9.    Debtor will at all times preserve and keep in full force and effect its
      corporate existence, licenses, permits, rights and franchises.

10.   Debtor will comply with the requirements of all applicable laws, rules,
      regulations, orders of any governmental authority, and all agreements to
      which Debtor is a party. the noncompliance with which laws, rules,
      regulations, orders and agreements would materially adversely affect its
      business, properties or credit.

           N. Any default by Debtor under the Financing Agreements or any
default under any material obligation for the payment of money to any person,
firm or corporation shall constitute and be deemed a default by the Debtor and
shall be a default under all such other agreements and instruments.

           O.   Debtor hereby further represents and warrants to CIT
the following:

1.    Debtor has the corporate power to borrow and to execute, deliver and carry
      out the terms and provisions of the financing Agreements, and a other
      instruments and documents delivered by it pursuant hereto and thereto, and
      Debtor has taken or caused to be taken all necessary corporate action to
      authorize the execution, delivery and performance of the Financing
      Agreements. and such other agreements, the borrowings hereunder and the
      execution, delivery and performance of the instruments and documents
      delivered and to be delivered by it pursuant hereto and thereto, and the
      Financing Agreements constitute and will constitute legal, valid and
<PAGE>

      binding obligations of Debtor, enforceable in accordance with their
      respective terms.

2.    Debtor is not aware of, has knowledge of, or has received notice of, a
      default in any material respect under any indenture, mortgage, deed of
      trust, lease agreement, or other instrument to which it is a party or by
      which it or its properties may be bound. Neither the execution nor
      delivery of the Financing Agreements, nor any of the instruments
      or documents to be delivered pursuant hereto or thereto, nor the
      consummation of the transactions herein or therein contemplated nor
      compliance with the provisions hereof or thereof, will violate any law or
      regulation or any order or decree of any court or governmental
      instrumentality in any respect, or will conflict with, or result in the
      breach of, or constitute a default in any material respect under, any
      mortgage, deed of trust, agreement or other instrument to which Debtor is
      party or by which it or its properties may be bound, or result in the
      creation or imposition of any lien, charge or encumbrance upon any of the
      property of Debtor (except as contemplated hereunder or under any of the
      other Financing Agreements) or violate any provision of Certificate of
      Incorporation or By-Laws of Debtor.

3.    No action of, or filing with, any governmental or public body or
      authority (other than the filing or recording of Uniform Commercial Code
      financing statements) is required in connection with the execution,
      delivery and performance of the Financing Agreements or any of the
      instruments or documents to be delivered pursuant hereto or thereto.

4.    Debtor has obtained all necessary licenses and approvals and is in
      compliance in all material respects with all applicable state and Federal
      laws and regulations relating to the conduct of its business as presently
      conducted or contemplated.

5.    There are no strikes or other labor disputes against Debtor, pending, or
      to Debtor's knowledge, threatened.

6.    None of the information contained in the representations and warranties
      made by Debtor in the Financing Agreements, or contained in any
      certificate, statement, schedule or exhibit to or under any of the
      Financing Agreements, contains or will contain any untrue statement of a
      material fact or omit or will omit to state a fact necessary in order to
      make the statements contained herein or therein not misleading.
<PAGE>

PHOENIX LABORATORIES, INC.

By: /s/
   -----------------------------
Title:  VP
      --------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
   -----------------------------
Title:  VP
      --------------------------

BODYONICS, LTD.

By: /s/
   -----------------------------
Title:  VP
      --------------------------

THE CIT GROUP/CREDIT FINANCE, INC.

By: /s/
   -----------------------------
Title:  VP
      --------------------------
<PAGE>

                                   Schedule A

1.    Security Agreement (Accounts, etc.) between Phoenix Laboratories, Inc.
      ("Phoenix"), Great Earth Distribution, Inc. ("GED"), and Fidelcor Business
      Credit Corporation ("Fidelcor") dated February 17, 1988.

2.    Rider to Security Agreement (Accounts, etc.) between Phoenix, GED and
      Fidelcor.

3.    Amendments to Security Agreement

      a.   Amendment dated June 29. 1988 among GED, Phoenix and
           Fidelcor;
      b.   Amendment dated October 4, 1989 among GED, Phoenix and
           Fidelcor;
      c.   Amendment dated August 13, 1991 among GED, Phoenix and
           The CIT Group/Credit Finance, Inc. ("CIT");
      d.   Amendment dated August 13, 1991 among Great Earth
           International, Inc., Great Earth International Licensing
           Corp., Great Earth Stores, Inc., Great Earth
           International Franchising Corp., Great Earth Vitamins
           Ltd. and CIT;
      e.   Amendment dated December 16, 1991 among Phoenix, GED,
           Evergood Products Corporation ("Evergood") and CIT;
      f.   Amendment dated June 19, 1992 among Phoenix, GED, Evergood and CIT;
      g.   Amendment dated August 27, 1993 among Phoenix, GED,
           Evergood and CIT;
      h.   Amendment dated December 23, 1994 among Phoenix, GED and CIT;
      i.   Amendment dated January 4, 1995 among Phoenix, GED and
           CIT;
      j.   Amendment dated January 6,1995 among Phoenix, GED and CIT;
      k.   Amendment dated June 21, 19,96 among Phoenix. GED.
           Evergood and CIT;
      l.   Amendment dated November 18,1996 among Phoenix,
           Bodyonics, Ltd. ("Bodyonics') and CIT;
      m.   Amendment dated November 18, 1996 among Phoenix,
           Bodyonics and CIT;
      n.   Amendment dated February II, 1997 among Phoenix, GED,
           Bodyonics, Evergood and CIT.

4.    Security Agreement (Inventory) among Phoenix, GED and Fidelcor
      dated February 17,1988

5.    Security Agreement (Equipment) among Phoenix, GED and Fidelcor
      dated February 17,1988

6.    Sixth Amended and Restated Promissory Note in the original principal
      amount of $1,150,000.00 made by Phoenix, GED and Bodyonics and payable to
      CIT dated February12,1997.
<PAGE>

7.    Secretary's Certificates

      a.   Secretary's Certificate of Evergood dated February 9,
           1988;
      b.   Secretary's Certificate of Phoenix dated February 9, 1988;
      c.   Secretary's Certificate of GED dated February 9, 1988.

8.    Replacement Guaranty by Melvin Rich in favor of CIT with
      respect to Phoenix and GED dated July 1, 1992

9.    Cash  Collateral  Agreement  executed  by  Melvin  Rich,  dated
      August 31, 1993.

10.   Guaranty by Evergood, Phoenix and GED in favor of Fidelcor
      with respect to Evergood Products Corporation, Phoenix
      Laboratories, Inc. and Great Earth Distribution, Inc., dated
      February 17, 1988

11.   Intercreditor Agreement between Fidelcor and Hoffmann - La
      Roche Inc. dated February16, 1988

12.   Guaranty in favor of Fidelcor by Great Earth International,
      Inc. ("GED), dated April 26, 1988, with respect to Phoenix and
      GED.

13.   Trademark Collateral  Assignment and Security Agreement,  dated
      April 26, 1988,executed by GEI in favor of Fidelcor.
<PAGE>

<TABLE>
<CAPTION>
                                   Schedule B
                                                                     Page 1 of 2

                         Unterminated Security Interests
-------------------------------------------------------------------------------------------------------
                                                                                      Amendments
                                      Juris-           Filing                         (Releases,
       Debtor          Secured Party  diction  UCC #    Date      Collateral      Assignments, etc.)
-------------------------------------------------------------------------------------------------------
<S>                   <C>               <C>      <C>      <C>      <C>            <C>
Phoenix               Hoffman-La      N.Y.    390298  12/24/88  All Equipment
Laboratories, Inc.    Roche, Inc.     S/S                       (now owned,
P.O. Box 368          340 Kingsland                             hereafter
809 Ibsen Street      Street                                    acquired)
Woodmere, New York    Nutley, N.J.
11598                 07110
-------------------------------------------------------------------------------------------------------
Phoenix               Long Island     N.Y.    348550  11/10/86  2 Machines
Laboratories, Inc.    Trust Co.       S/S
175 Lauman Lane       Industrial                                Debtor has no
Hicksville, New York  Finance Dept.                             power to sell
11801                 11 Broadway                               or dispose of
                      Hicksville,                               collateral
                      NY  11801

-------------------------------------------------------------------------------------------------------
Phoenix               Hoffman-La      Nassau 87-001408 1/16/87  All equipment
Laboratories, Inc.    Roche, Inc.     County                    (now owned &
P.O. Box 388          340 Kingsland   Clerk                     hereafter
809 Ibsen Street      Street                                    acquired.)
Woodmere, New York    Nutley, N.J.
11598                 07110
-------------------------------------------------------------------------------------------------------
Phoenix               Hoffman-La      Nassau  87-027548 11/25/87 All equipment
Laboratories, Inc.    Roche, Inc.     County                     (now owned &
P.O. Box 388          340 Kingsland   Clerk                      hereafter
809 Ibsen Street      Street                                     acquired.)
Woodmere, New York    Nutley, N.J.
11598                 07110
-------------------------------------------------------------------------------------------------------
Phoenix               Equilease       Nassau  86-03044 12/19/86 Feild for Info. ASSIGNED TO:
Laboratories, Inc.    Corporation     County                    Only.           Textron Capital
175 Lauman Lane       750 Third       Clerk                     Property (not   Corporation
Hicksville, New York  Avenue                                    described)      1410 Hospital Trust Tower
11801                 New York, NY                              Subject to      Providence, Rhode Island
                      10017                                     LEASE
-------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------

                                             Schedule B
                                                                     Page 2 of 2

                                    (Cont'd)
-------------------------------------------------------------------------------------------------------
                                                                                    Amendments
                                         Juris-           Filing                    (Releases,
       Debtor          Secured Party    diction  UCC #    Date     Collateral      Assignments, etc.)
-------------------------------------------------------------------------------------------------------
<S>                   <C>               <C>      <C>      <C>      <C>            <C>
Phoenix               WASCO Funding      Nassau  86-021181 8/25/86 MACHINE (3)     ASSIGNED TO:
Laboratories, Inc.    Corporation        County                    leased to       Tilden
175 Lauman Lane       150 East 58th      Clerk                     debtor who has  Financial Corporation
Hicksville, New       Street                                       no right to     2 Lambert Street
York  11801           New York, New                                sell or         Roslyn Heights, NY  11577
                      York 10155                                   dispose.
--------------------------------------------------------------------------------------------------------
Phoenix               L.I. Trust Co.,    Nassau  86-027280 11/18/86 2 MACHINE
Laboratories, Inc.    N.A.               County
175 Lauman Lane       Industrial         Clerk
Hicksville, New       Finance Dept.
York  11801           11 Broadway
                      Hicksville, NY
                      11801

--------------------------------------------------------------------------------------------------------
Great Earth           The Lease Factor,  S/S     87-128909 5/28/87 Equipment Lease
Distribution, Inc.    Inc.               Calif.
14211 Gannett Street  The Beaumont
La Mirada, CA  90638  Building
                      P.O. Box 71
                      South Station
                      Framinghman,
                      Mass.  01701
--------------------------------------------------------------------------------------------------------
Great Earth           Pitney Bowes       S/S     86-146811 6/11/86 Lease - re:
Distribution, Inc.    Credit             Calif.                    Postal
14211 Gannett Street  Corporation                                  Equipment
La Mirada, CA  90638  21515 Hawthorne
                      Blvd.
                      Suite 690
                      Torrance, CA
                      90503

--------------------------------------------------------------------------------------------------------
Great Earth           Pitney Bowes       S/S     86146812 6/11/86 Lease - re:
Distribution, Inc.    Credit             Calif.                   Postal
14211 Gannett Street  Corporation                                 Equipment
La Mirada, CA  90638  21515 Hawthorne
                      Blvd.
                      Suite 690
                      Torrance, CA
                      90503
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

           P. CIT shall have the right, in its discretion, to withhold and
reserve from the amount of its advances under this Agreement such amount as CIT
shall establish as a reasonable reserve upon the occurrence of any breach of any
warranty, covenant, or agreement under the Financing Agreements or for any
default under the Financing Agreements. Without in any way limiting CIT's rights
to withhold and set up reserves, in its sole discretion, CIT shall have the
right to establish a reserve from Debtor's availability for amounts due from GED
to Livingston Healthcare Services, Inc.

           Q.   CIT agrees that in addition to the Accounts Advances
and Inventory Advances, CIT shall make additional advances to
Debtor of up to

      (i)  whichever is less,

           (x) $200,000; or

           (y) 100% of the amount of any cash collateral pledged by
           any guarantor of the Obligations to secure his or her
           guaranty; and

      (ii) whichever is less,

           (x) S250,000; or

           (y) five (5%) of the sum of

                (a) the combined Accounts and Inventory Availability
                of the Debtors, as hereinafter defined. and

                (b) the unpaid principal balance from time to time of the Sixth
                Amended and Restated Promissory Note, in the original principal
                amount of $1,150,000, dated February 12, 1997, made by Phoenix,
                GED and Bodyonics.

      Accounts Availability means for each Debtor, the advance percentage
      applicable to accounts receivable of such Debtor as specified in Paragraph
      2 of the printed portion of this Agreement, multiplied by the amount of
      eligible and acceptable accounts receivable of such Debtor, but not
      exceeding any limitation on the amount of Accounts Advances to such Debtor
      specified in such Paragraph 2 or in Section G of this Rider.

      Inventory Availability means for each Debtor, the advance percentages
      applicable to raw material and finished goods inventory of such Debtor as
      specified in Section G of this Rider, multiplied by the lower of cost or
      market value of eligible and acceptable raw material and finished goods
      inventory of such Debtor, but not exceeding in the aggregate for all
      Debtors the limitation on the amount of Inventory Advances to all Debtors
      as specified in Section G of this Rider.
<PAGE>

THE CIT GROUP
Credit Finance
1211 Avenue of the Americas
New York, NY  10036

Tel:  212-790-9100
Fax:  212-790-9123

THE
CIT
GROUP

August 27, 1998

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
140 Lauman Lane
Hicksville, New York 11801

      Re:  Security Agreement (Accounts, etc.) executed February 17, 1988 (the
           "Accounts Agreement'), by and between Phoenix Laboratories, Inc.
           ("Phoenix") and Great Earth Distribution, Inc. ("GED") and The CIT
           Group/Credit Finance, Inc. ("CIT"), assignee of Fidelcor Business
           Credit Corporation (`Fidelcor'), and the Security Agreement
           (Inventory) and Security Agreement (Equipment), executed February17,
           1988 by Phoenix and GED in favor of Fidelcor, to which Security
           Agreements Bodyonics, Ltd. ("Bodyonics') became a party, as Debtor,
           by letter agreement dated November 18, 1996; the Sixth Amended and
           Restated Promissory Note in the original principal amount of
           $1,150,000, dated February 12, 1997 and made by Phoenix, GED and
           Bodyonics, as amended by letter agreement dated January21, 1998 (the
           "Note"), and all related agreements, amendments, documents and
           instruments (collectively, the "Financing Agreements"). GED, Phoenix
           and Bodyonics may be hereinafter referred to individually as "Debtor'
           and collectively as "Debtors".
           ---------------------------------------------------------------------

Gentlemen:

      The present term of your Financing Agreements with CIT expires August 17,
2000. We propose to amend the Financing Agreements as set forth below, effective
as of the date hereof. Capitalized terms appearing below that are not defined
herein shall have the meanings given in the Rider to the Accounts Agreement, as
amended and restated as of the date hereof.

1.          The first sentence of paragraph 26 of the printed portion of the
            Accounts Agreement is amended to read as follows:

            "That this Agreement shall remain in effect until August 17, 2001
            and shall be deemed automatically renewed for successive terms of
            two years."

2.    The Debtors affirm that the unpaid principal balance of the Note as of the
      date hereof is
<PAGE>

      $880,000 (the "Existing Term Debt") and that the unpaid balance of the
      loans made to the Debtors pursuant to paragraph 9 of the February 11, 1997
      amendment of the Financing Agreements for the purpose of allowing the
      Debtors to purchase new equipment, is $95,000 (the "Capital Expenditure
      Loans").

      Concurrently herewith, CIT is making an advance to the Debtors in the
      amount of$245,000, which together with the Existing Term Debt and the
      Capital Expenditure Loans shall be repayable in accordance with the terms
      of the Seventh Amended and Restated Promissory Note, in the original
      principal amount of $1,220,000, executed on the date hereof, which shall
      replace the Note but not extinguish the indebtedness evidenced by the Note
      or the indebtedness represented, by the Capital Expenditure Loans.

3.    This will confirm that in addition to all other fees at any time payable
      by Debtors to CIT, Debtors shall pay a Facility Fee to CIT on each
      anniversary date of the Accounts Agreement in the amounts hereinafter set
      forth. The Facility Fee payable during the term of the Financing
      Agreements ending on August 17, 2001 shall be fully earned on the date
      hereof and the Facility Fee payable during any renewal term shall be fully
      earned on the first day of such renewal term. The Facility Fee payable on
      February 17, 1999 shall be$25,000 and the Facility Fee payable on February
      17, 2000 and on each subsequent anniversary of the date of the Accounts
      Agreement, commencing February 17, 2001,shall be $17,500. Upon the
      occurrence of a default under the Financing Agreements or upon the
      effective date of termination of the Financing Agreements for any reason
      prior to the end of the then current term, all Facility Fees payable at
      any time during such term shall become immediately due and payable in
      full. Each Facility Fee may be charged by CIT to any account of the
      Debtors maintained by CIT. This paragraph supersedes the provisions of
      paragraph 7 of the amendment of the Financing Agreements dated January21,
      1998 except with respect to any Facility Fee already paid by Debtors
      pursuant to the terms of such paragraph.

All other terms and conditions of the Financing Agreements (including the Rider
to the Security Agreement (Accounts, etc.), as amended and restated effective as
of the date hereof) shall remain in full force and effect and nothing contained
herein is intended to modify or impair CIT's entitlement to the documentation
described in paragraph 8 of the January 21, 1998 amendment of the Financing
Agreements. The undersigned agree to execute such further documents and
instruments as shall be necessary to carry out the purposes of the amendment of
the Financing Agreements set forth above.
<PAGE>

Please sign and return this letter to us to evidence your agreement to the
amendments of the Financing Agreements set forth above.

The offer to amend the Financing Agreements as provided in this letter shall be
deemed revoked if this letter is not signed and returned by you on or before
August 31, 1998.

Very truly yours,

THE CIT GROUP/CREDIT FINANCE, INC.

By: /s/
   -----------------------------
Title:  VICE PRESIDENT
      --------------------------

PHOENIX LABORATORIES, INC.

By: /s/
   -----------------------------
Title:  ExVP
      --------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
   -----------------------------
Title:  EVP
      --------------------------

BODYONICS, LTD.

By: /s/
   -----------------------------
Title:  ExVP
      --------------------------

Confirmed:

/s/ MELVIN RICH
--------------------------------
MELVIN RICH, individually as guarantor

EVERGOOD PRODUCTS CORPORATION

By: /s/
   -----------------------------
Title:  ExVP
      --------------------------
<PAGE>

                AMENDED AND RESTATED RIDER TO SECURITY AGREEMENT
                     (Accounts, Contract Rights, Instruments
                          and Goods Pertaining Thereto)

                                     between

                 Debtors: PHOENIX LABORATORIES, INC. ("Phoenix")
                     GREAT EARTH DISTRIBUTION, INC. ("GED")
                          BODYONICS, LTD. ("Bodyonics")
            (each hereafter referred to individually as "Debtor" and
                     collectively as "Debtors")
                                       and

Secured Party: THE CIT GROUP/CREDIT FINANCE, INC.
                        (hereafter referred to as "CIT")

This is an Amendment and Restatement, effective as of August 27, 1998 of the
Rider to the Security Agreement (Accounts, Contract Rights, Instruments and
Goods Pertaining Thereto), dated February 17, 1988 (this "Agreement"), between
Debtor and Fidelcor Business Credit Corporation (`Fidelcor'), to whose rights
CIT has succeeded, pursuant to which, in addition to and not in limitation of
any and all rights granted to CIT and obligations incurred by Debtor in
the printed portion of this Agreement, Debtor further warrants, covenants and
agrees as follows:

           A. Each of the Debtors shall be jointly and severally liable for the
Obligations (as hereafter defined) of all of the Debtors.

           B. The term "Financing Agreements" shall mean and include, without
limitation, this Agreement, the Security Agreement (Inventory), the Security
Agreement (Equipment), and the agreements, documents and instruments listed on
the attached Schedule A, as now existing or as hereafter renewed, extended,
amended, modified or supplemented and any agreements, documents and guaranties
that (i) are executed in the future; and (ii) are executed by any Debtors or
Affiliates of any Debtors in favor of CIT or are between CIT and any Debtors or
Affiliates of theirs or grant collateral security for or create or evidence
indebtedness of any Debtors or Affiliates of theirs to CIT; and (iii) do not by
their terms expressly recite that they shall not be deemed "Financing
Agreements" hereunder. Affiliate means any entity having common ownership with a
Debtor or controlled by or under common control with any Debtor.

           C. The term "Obligations" or obligations shall mean and include,
without limitation, any and all of Debtor's indebtedness and/or liabilities to
CIT of every kind, nature and description, direct or indirect, secured or
unsecured, joint and/or several, absolute or contingent, due or to become due,
now existing or hereafter arising, related or unrelated, regardless of how they
arise or by what agreement or instrument they may be evidenced or whether
evidenced by any agreement or instrument, including, but not limited to all
amounts owing by Debtor to CIT under this Agreement, the other Financing
Agreements, or any other security agreement, guaranty or note and all
obligations to perform acts or refrain from taking any action.
<PAGE>

            D. The term Collateral or collateral shall mean and include, without
limitation, that which is set forth in Paragraph I of the printed portion of
this Agreement and any and all other items of real or personal property in which
Debtor has granted or may in the future grant a security interest to CIT under
the Financing Agreements, or any supplement or supplements thereto, and/or under
any other security agreement, or other agreement, all of Debtor's right, title
and interest in and to the goods or other property represented by or securing
any of the foregoing, all of Debtors rights as an unpaid vendor or lien or,
including stoppage in transit, replevin or reclamation, 0 additional amounts due
to Debtor from any account debtor irrespective of whether such additional
amounts have been specifically assigned to CIT, all other agreements on property
securing or relating to any of the items referred to above or acquired for the
purposes of securing or enforcing any of such items, all present and future
chattel paper, motor vehicles, licenses, patents, trademarks, copyrights,
license agreements, tax and duty claims and refunds, computer software,
goodwill, customer lists, all documents, monies, deposits, securities,
instruments, credits, and other property now or hereafter held by CIT or any
entity which at any time participates in CIT's financing transactions with
Debtor, and all products, proceeds and accessions of all of the foregoing in
whatever form. Debtor hereby grants CIT a continuing first priority security
interest in and general lien upon all of the Collateral to secure payment and
performance of 0 of the Obligations, except for prior security interests set
forth on Schedule E attached hereto.

            E. In addition to any other security interest granted in the
Financing Agreements and not in limitation of any of the foregoing, and to
secure the payment and performance of all of the Obligations, Debtor hereby
pledges and assigns to CIT and grants to CIT a continuing general security
interest in 0 of the Debtor's ledger sheets, files, records and documents
relating to the Collateral, which shall, until delivered to or removed by CIT,
be kept by Debtor in trust for CIT and without cost to CIT in appropriate
containers in safe places, bearing suitable legends disclosing CIT's security
interest. Each confirmatory assignment schedule or other form of Assignment
hereafter executed by Debtor, shall be deemed to include the foregoing, whether
or not same appears therein.

            F. The Debtor will pay all costs and expenses and all taxes,
recording and filing fees (including Uniform Commercial Code Financing
Statements) in connection with the preparation, execution, delivery,
administration (including wire transfer charges in amounts that CIT may from
time to time establish if Debtor requests wire transfers) and enforcement of
this Agreement and all other documents contemplated herein or related hereto,
including any amendments, supplements or consents which may he hereafter made or
entered into in respect thereof, including appraisal fees, and lien searches in
connection herewith and fees and disbursements of in-house and outside counsel
to CIT. Debtor will pay all out-of-pocket costs of field examinations to be
conducted by CIT as provided in Paragraph 13 of the printed portion of the
Agreement plus $650.00 per person per day. CIT is hereby authorized to charge
any amounts payable hereunder (including principal, interest, fees, charges and
expenses) directly to any account of the Debtor maintained with CIT.

            G. CIT agrees that in addition to the advances made with reference
to the formula set forth in Paragraph 2 of the printed portion of this Agreement
("Accounts Advances"),
<PAGE>

CIT shall make additional advances to Debtor, in its sole discretion, of thirty
percent (30%) of the value of Phoenix's acceptable and eligible raw material
inventory, forty percent (40%) of the value of GED's and Bodyonics' acceptable
and eligible furnished goods inventory located at the warehouses of Livingston
Healthcare Services, Inc. in Newark, Delaware and Rancho Cucamonga, California
(such percentage being hereinafter referred to as the `Livingston Inventory
Advance Rate') and thirty-five (35%) percent of the value of all other
acceptable and eligible finished goods inventory of GED and Bodyonics
(collectively the "Inventory Advances"). As used herein, "value" shall mean the
lower of cost or market price, as determined by CIT. Except in CIT's sole
discretion, (1) the aggregate principal amount of Accounts Advances to GED shall
not exceed, at any time outstanding, the lesser of (a) $1,750,000 (the "GED
Accounts Sublimit") or (b) an amount equal to one hundred and twenty-five
(125%)percent of the Phoenix Accounts Advances and (2) the aggregate principal
amount of the Inventory Advances to Debtors shall not exceed $2,500,000 at any
time outstanding. In the event that Debtor at any time has negative Cash Flow
(defined below) to be calculated commencing with the nine month period ending
September 3O, l998 and quarterly thereafter, then the Livingston Inventory
Advance Rate shall be reduced from 40% to 35%. Cash Flow is defined as: Net
income plus depreciation and amortization less capital expenditures and
principal repayments of term debt on a consolidated basis. Except in CIT's sole
discretion, the aggregate principal amount of Accounts Advances to Bodyonics
shall not exceed an amount equal to the sum of one hundred (I 000/o) percent of
the Phoenix Accounts Advances and one hundred (I 00%)percent of the GED Accounts
Advances.

            H. Except in CIT's sole discretion the aggregate principal amount of
the advances. made by CIT to Debtors under the Financing Agreements, including
the Accounts Advances and the Inventory Advances, shall not exceed the principal
amount of $7,500,000 at any time outstanding.

            I. [Intentionally omitted]

            J. In consideration of CIT entering into this Agreement and
incurring accounting, operating and management expenses, Debtors shall pay to
CIT each calendar month a minimum charge equal to the amount of interest Debtors
would pay CIT if they at all times had an aggregate average daily loan balance
outstanding of $2,500,000 bearing interest at the rate provided for in Paragraph
6 of the printed portion of this Agreement. CIT shall reduce such minimum charge
by the amounts actually paid by Debtors to CIT as interest pursuant to said
Paragraph 6, so that for each calendar month Debtors shall pay CIT interest as
provided for in said Paragraph 6, plus the amount, if any, by which the minimum
charge provided for in this paragraph exceeds the amount of interest payable
pursuant to said Paragraph 6 for such month. If this Agreement shall be
terminated, such minimum charge shall continue and be paid by the Debtor for any
unexpired term of this Agreement, except if such termination is made pursuant to
Paragraph 26 or 30 of the printed portion of this Agreement or by mutual
agreement of CIT and the Debtor.

            K. All advances by CIT pursuant to this Agreement shall bear
interest at the variable rate provided for in Paragraph 6 of the printed portion
of this Agreement and shall be
<PAGE>

calculated on the basis of a 360-day year for actual days elapsed.

            L. Should CIT commence a proceeding to take possession of any of the
Collateral under this Agreement or any of the Financing Agreements, Debtor
waives the requirement, if any, that CIT post a bond or any other type of
security.

            M. In addition to all of the covenants set forth in the Financing
Agreements and without limiting any of the terms or provisions thereof, Debtor
hereby covenants and agrees as follows:

            1.    Debtor will pay all obligations when due and will perform all
                  of the terms, conditions, covenants and agreements of Debtor
                  to be performed under the Financing Agreements, and will make
                  punctual payment of all monies and will perform all of the
                  terms, conditions, covenants and agreements on its part to be
                  paid, kept or performed under the terms of any lease or
                  mortgage of the premises where any of the Collateral is now or
                  hereafter located, wherein Debtor is lessee or mortgagor, and
                  will promptly notify CIT in the event of any default by Debtor
                  or receipt by Debtor of any notice or alleged default under
                  any such lease or mortgage.

            2.    Debtor will pay and discharge at or before maturity, all
                  taxes, assessments, rents, claims, debts and charges except
                  where the same are being contested in good faith and Debtor is
                  maintaining, in accordance with generally accepted accounting
                  principles and practice, appropriate reserves for accrual
                  thereof.

            3.    Debtor will promptly give notice in writing to CIT of the
                  occurrence of any event which constitutes or which with notice
                  or lapse of time, or both, would constitute a default under
                  any of the Financing Agreements. As used in the Paragraph (3),
                  the word "promptly' shall be determined in relation to the
                  point in time at which Debtor, exercising sound management
                  practices, has actual knowledge or should have discovered the
                  occurrence of such event.

            4.    Debtor will provide CIT with such other information concerning
                  the financial or business affairs of Debtor as CIT, in its
                  sole discretion, requests from time to time.

            5.    Debtor will not, without the prior written consent of CIT,
                  declare or pay any dividend, return any capital to any of its
                  stockholders, loan any sum to any of its stockholders,
                  employees, officers or directors, or redeem, repurchase or
                  otherwise acquire any of its outstanding capital stock except
                  that Debtor may continue to repay an indebtedness due to its
                  shareholder, Charlotte Rich, in the outstanding principal
                  amount of $378,623.08,provided that the amount of such
                  repayment does not exceed $140,000 per
<PAGE>

                  year, inclusive of both principal and interest.

            6.    Notwithstanding Paragraph 3 of the printed portion of this
                  Agreement, Debtor shall direct that all proceeds of accounts
                  receivable, letters of credit, banker s acceptances and other
                  proceeds of Collateral shall be payable to a post office box
                  or a lock box designated by and in control of CIT and in
                  connection therewith shall execute such agreements as CIT in
                  its sole discretion shall specify. So long as no default has
                  occurred under the Financing Agreements, Debtor's deposit of
                  all proceeds of Collateral to an account at Chase Manhattan
                  Bank which is blocked to CIT shall constitute compliance with
                  this subsection.

            7.    Debtor will duly execute and deliver, or will cause to be
                  executed and delivered, such further instruments and
                  documents, including, without limitation, additional security
                  agreements, collateral assignments, Uniform Commercial Code
                  financing statements or amendments, or continuations thereof,
                  landlords or mortgagee's waivers of liens, and consents to the
                  exercise by CIT of all of its rights and remedies under the
                  Financing Agreements with respect to the Collateral and will
                  do such further acts as may be necessary or proper in CIT's
                  opinion to effectuate the provisions or purposes of the
                  Financing Agreements.

            8.    Debtor will not, without the prior written consent of CIT,
                  directly or indirectly sell, lease, abandon or otherwise
                  dispose of all or any substantial portion of its property or
                  assets or consolidate with or merge with or into any other
                  entity, or permit any other entity to consolidate with or
                  merge with or into it.

            9.    Debtor will at all times preserve and keep in full force and
                  effect its corporate existence, licenses, permits, rights and
                  franchises.

            10.   Debtor will comply with the requirements of all applicable
                  laws, rules, regulations, orders of any governmental
                  authority, and all agreements to which Debtor is a party, the
                  noncompliance with which laws'. rules, regulations, orders and
                  agreements would materially adversely affect its business,
                  properties or credit.

            N. Any default by Debtor under the Financing Agreements or any
default under any material obligation for the payment of money to any person,
firm or corporation shall constitute and be deemed a default by the Debtor and
shall be a default under all such other agreements and instruments.

            O. Debtor hereby further represents and warrants to CIT the
following:

            1.    Debtor has the corporate power to borrow and to execute,
                  deliver and carryout the terms and provisions of the Financing
                  Agreements, and all other
<PAGE>

                  instruments and documents delivered by it pursuant hereto and
                  thereto, and Debtor has taken or caused to be taken 0
                  necessary corporate action to authorize the execution,
                  delivery and performance of the Financing Agreements, and such
                  other agreements, the borrowings hereunder and the execution,
                  delivery and performance of the instruments and documents
                  delivered and to be delivered by it pursuant hereto and
                  thereto, and the Financing Agreements constitute and will
                  constitute legal, valid and binding obligations of Debtor,
                  enforceable in accordance with the irrespective terms.

            2.    Debtor is not aware of, has knowledge of, or has received
                  notice of, a default in any material respect under any
                  indenture, mortgage, deed of trust, lease agreement, or other
                  instrument to which it is a party or by which it or its
                  properties may be bound. Neither the execution nor delivery of
                  the Financing Agreements, nor any of the instruments or
                  documents to be delivered pursuant hereto or thereto, nor the
                  consummation of the transactions herein or therein
                  contemplated nor compliance with the provisions hereof or
                  thereof, will violate any law or regulation, or any order or
                  decree of any court or governmental instrumentality in any
                  respect, or will conflict with, or result in the breach of, or
                  constitute a default in any material respect under, any
                  mortgage, deed of trust, agreement or other instrument to
                  which Debtor is party or by which it or its properties may be
                  bound, or result in the creation or imposition of any lien,
                  charge or encumbrance upon any of the property of Debtor
                  (except as contemplated hereunder or under any of the other
                  Financing Agreements) or violate any provision of Certificate
                  of Incorporation or By-Laws. of Debtor.

            3.    No action of, or filing with, any governmental or public body
                  or authority(other than the filing or recording of Uniform
                  Commercial Code financing statements) is required in
                  connection with the execution, delivery and performance of the
                  Financing Agreements or any of the instruments or documents to
                  be delivered pursuant hereto or thereto.

            4.    Debtor has obtained all necessary licenses and approvals and
                  is in compliance in all material respects with all applicable
                  state and Federal laws and regulations relating to the conduct
                  of its business as presently conducted or contemplated.

            5.    There are no strikes or other labor disputes against Debtor,
                  pending, or to Debtor's knowledge, threatened.

            6.    None of the information contained in the representations and
                  warranties made by Debtor in the Financing Agreements, or
                  contained in any certificate, statement, schedule or exhibit
                  to or under any of the Financing
<PAGE>

                  Agreements, contains or will contain any untrue statement of a
                  material fact or omit or will omit to state a fact necessary
                  in order to make the statements contained herein or therein
                  not misleading.

            P. CIT shall have the right, in its discretion, to withhold and
reserve from the amount of its advances under this Agreement such amount as CIT
shall establish as a reasonable reserve upon the occurrence of any breach of any
warranty, covenant, or agreement under the Financing Agreements or for any
default under the Financing Agreements. Without in any way limiting CIT's rights
to withhold and set up reserves, in its sole discretion, CIT shall have the
right to establish a reserve from Debtor's availability for amounts due from GED
to Livingston Healthcare Services, Inc.

            Q. CIT agrees that in addition to the Accounts Advances and
Inventory Advances, CIT shall make additional advances to Debtor of up to

      (i) whichever is less,

            (x) $200,000; or

            (y) I 00% of the amount of any cash collateral pledged by any
            guarantor of the Obligations to secure his or her guaranty; and

      (ii) whichever is less,

            (x) $250,000; or

            (y) five (5%) of the sum of

                  (a) the combined Accounts and Inventory Availability of the
                  Debtors, as hereinafter defined; and

                  (b) the unpaid principal balance from time to time of the
                  Seventh Amended and Restated Promissory Note, in the original
                  principal amount of $1,220,000, dated August 27, 1998, made by
                  Phoenix, GED and Bodyonics.

      Accounts Availability means for each Debtor, the advance percentage
      applicable to accounts receivable of such Debtor as specified in Paragraph
      2 of the printed portion of this Agreement, multiplied by the amount of
      eligible and acceptable accounts receivable of such Debtor, but not
      exceeding any limitation on the amount of Accounts Advances to such Debtor
      specified in such Paragraph 2 or in Section G of this Rider.

      Inventory Availability means for each Debtor, the advance percentages
      applicable to raw material and finished goods inventory of such Debtor as
      specified in Section G of this Rider, multiplied by the lower of cost or
      market value of eligible and acceptable raw
<PAGE>

      material and finished goods inventory of such Debtor, but not exceeding in
      the aggregate for all Debtors the limitation on the amount of Inventory
      Advances to all Debtors as specified in Section G of this Rider.

PHOENIX LABORATORIES, INC.

By: /s/
    ------------------------------
Title: ExVP
       ---------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
    ------------------------------
Title: ExVP
       ---------------------------

BODYONICS, LTD.

By: /s/
    ------------------------------
Title: ExVP
       ---------------------------

THE CIT GROUP/CREDIT FINANCE, INC.

By: /s/
    ------------------------------
Title: VICE PRESIDENT
       ---------------------------
<PAGE>

                                   Schedule A

1.    Security Agreement (Accounts, etc.) between Phoenix Laboratories, Inc.
      ("Phoenix"), Great Earth Distribution, Inc. ("GED"), and Fidelcor Business
      Credit Corporation ("Fidelcor") dated February 17, 1988.

2.    Rider to Security Agreement (Accounts, etc.) between Phoenix, GED and
      Fidelcor.

3.    Amendments to Security Agreement

      a.    Amendment dated June 29, 1988 among GED, Phoenix and Fidelcor;
      b.    Amendment dated October 4, 1989 among GED, Phoenix and Fidelcor;
      c.    Amendment dated August 13, 1991 among GED, Phoenix and The CIT
            Group/ Credit Finance, Inc. ("CIT");
      d.    Amendment dated August 13, 1991 among Great Earth International,
            Inc., Great Earth International Licensing Corp., Great Earth Stores,
            Inc., Great Earth International Franchising Corp., Great Earth
            Vitamins Ltd. and CIT;
      e.    Amendment dated December 16, 1991 among Phoenix, GED, Evergood
            Products Corporation ("Evergood") and CIT;
      f.    Amendment dated June 19, 1992 among Phoenix, GED, Evergood and CIT;
      g.    Amendment dated August 27, 1993 among Phoenix, GED, Evergood and
            CIT.
      h.    Amendment dated December 23, 1994 among Phoenix, GED and CIT;
      i.    Amendment dated January 4, 1995 among Phoenix, GED and CIT;
      j.    Amendment dated January 6, 1995 among Phoenix, GED and CIT;
      k.    Amendment dated June 21, 1996 among Phoenix, GED, Evergood and CIT;
      l.    Amendment dated November 18, 1996 among Phoenix, Bodyonics, Ltd.
            ("Bodyonics") and CIT;
      m.    Amendment dated November 18, 1996 among Phoenix, Bodyonics and CIT;
      n.    Amendment dated February 11, 1997 among Phoenix, GED, Bodyonics,
            Evergood and CIT.
      o.    Amendment dated January 21, 1998 among Phoenix, Bodyonics, GED,
            Melvin Rich and Evergood

4.    Security Agreement (Inventory) among Phoenix, GED and Fidelcor dated
      February 17,1988

5.    Security Agreement (Equipment) among Phoenix, GED and Fidelcor dated
      February 17,1988

6.    Seventh Amended and Restated Promissory Note in the original principal
      amount of$1,220,000 made by Phoenix, GED and Bodyonics and payable to CIT
      dated August 27,1998
<PAGE>

7.    Secretary's Certificates

      a.    Secretary's Certificate of Evergood dated February 9, 1988;
      b.    Secretary's Certificate of Phoenix dated February 9, 1988;
      c.    Secretary's Certificate of GED dated February 9, 1988.

8.    Replacement Guaranty by Melvin Rich in favor of CIT with respect to
      Phoenix and GED dated July 1, 1992

9.    Cash Collateral Agreement executed by Melvin Rich, dated August 31, 1993.

10.   Guaranty by Evergood, Phoenix and GED in favor of Fidelcor with respect to
      Evergood Products Corporation, Phoenix Laboratories, Inc. and Great Earth
      Distribution, Inc., dated February 17, 1988

11.   Intercreditor Agreement between Fidelcor and Hoffmann - La Roche Inc.
      dated February16, 1988

12.   Guaranty in favor of Fidelcor by Great Earth International, Inc. ("GED),
      dated April 26, 1988, with respect to Phoenix and GED.

13.   Trademark Collateral Assignment and Security Agreement, dated April 26,
      1988, executed by GED in favor of Fidelcor.
<PAGE>

                                   Schedule B
                                                                     Page 1 of 2

                         Unterminated Security Interests

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                   Juris-               Filing                                  Amendments
           Debtor               Secured Party      diction    UCC #      Date        Collateral       (Releases, Assignments, etc.)
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                    <C>      <C>        <C>      <C>                   <C>
Phoenix Laboratories, Inc.  Hoffman-La Roche,      N.Y. S/S  390298    12/24/88 All Equipment (now
P.O. Box 388                Inc.                                                owned, hereafter
809 Ibsen Street            340 Kingsland Street                                acquired)
Woodmere, New York  11598   Nutley, N.J.  07110
------------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.  Long Island Trust Co.  N.Y. S/S  348550    11/10/86 2 Machines
175 Lauman Lane             Industrial Finance
Hicksville, New York 11801  Dept.                                               Debtor has no power
                            11 Broadway                                         to sell or dispose
                            Hicksville, NY  11801                               of collateral
------------------------------------------------------------------------------------------------------------------------------------

Phoenix Laboratories, Inc.  Hoffman-La Roche,      Nassau   87-001408  1/16/87  All equipment (now
P.O. Box 388                Inc.                   County                       owned & hereafter
809 Ibsen Street            340 Kingsland Street   Clerk                        acquired.)
Woodmere, New York  11598   Nutley, N.J.  07110
------------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.  Hoffman-La Roche,      Nassau   87-027548  11/25/87 All equipment (now
P.O. Box 388                Inc.                   County                       owned & hereafter
809 Ibsen Street            340 Kingsland Street   Clerk                        acquired.)
Woodmere, New York  11598   Nutley, N.J.  07110
------------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.  Equilease Corporation  Nassau   86-030440  12/19/86 Feild for Info.       Assigned to:
175 Lauman Lane             750 Third Avenue       County                       Only.  Property       Textron Capital
Hicksville, New York 11801  New York, NY  10017    Clerk                        (not described)       Corporation
                                                                                Subject to Lease      1410 Hospital Trust Tower
                                                                                                      Providence, Rhode Island
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                   Schedule B
                                                                     Page 2 of 2

                                    (Cont'd)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                       Juris-              Filing                               Amendments
           Debtor                 Secured Party        diction    UCC #     Date        Collateral     (Releases, Assignments, etc.)
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                        <C>     <C>        <C>      <C>                 <C>
Phoenix Laboratories, Inc.  WASCO Funding Corporation  Nassau   86-021181  8/25/86 Machine (3) leased  Assigned To:
175 Lauman Lane             150 East 58th Street       County                      to debtor who has   Tilden Financial
Hicksville, New York  11801 New York, New York 10155   Clerk                       no right to sell or Corporation
                                                                                   dispose.            2 Lambert Street
                                                                                                       Roslyn Heights, NY 11577
------------------------------------------------------------------------------------------------------------------------------------
Phoenix Laboratories, Inc.  L.I. Trust Co., N.A.       Nassau   86-027280 11/18/86 2 Machines
175 Lauman Lane             Industrial Finance Dept.   County
Hicksville, New York  11801 11 Broadway                Clerk
                            Hicksville, NY  11801
------------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,   The Lease Factor, Inc.     S/S      87-128909  5/28/87 Equipment Lease
Inc.                        The Beaumont Building      Calif.
14211 Gannett Street        P.O. Box 71
La Mirada, CA  90638        South Station
                            Framingman, Mass.  01701
------------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,   Pitney Bowes Credit        S/S      86-146811  6/11/86 Lease - re:  Postal
14211 Gannett Corporation       Corporation            Calif.                      Equipment
La Mirada, CA  90638        21515 Hawthorne Blvd.
                            Suite 690
                            Torrance, CA  90503
------------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,   Pitney Bowes Credit        S/S       86146812  6/11/86 Lease - re:  Postal
Inc.                            Corporation            Calif.                      Equipment
14211 Gannett Street        21515 Hawthorne Blvd.
La Mirada, CA  90638        Suite 690
                            Torrance, CA  90503
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                    SEVENTH AMENDED AND RESTATED PROMISSORY NOTE

$1,220,000

                                                              New York, New York
                                                              August 27, 1998

      FOR VALUE, RECEIVED, PHOENIX LABORATORIES, INC., GREAT EARTH DISTRIBUTION,
INC. and BODYONICS, LTD. (individually and collectively the "Payor"), jointly
and severally hereby promise to pay to the order of THE CIT GROUP/CREDIT
FINANCE, INC., a Delaware corporation ("Payee"), at its offices located at 1211
Avenue of the Americas, New York, New York 10036, or at such other place as
Payee or any holder hereof may from time to time designate, the principal sum of
ONE NHLL16N TWO HUNDRED TWENTY THOUSAND DOLLARS ($1,220,000) in lawful money of
the United States, in thirty-five installments of TWENTY THOUSAND DOLLARS
($20,000) each payable on the first (1st) day of each consecutive month,
commencing October 1, 1998 and one (1) final installment in the amount of the
entire unpaid principal balance of this Note, payable August 17, 2001. Payor
hereby further promises to pay interest to Payee in like money at said office or
place on the unpaid principal balance hereof, computed at the rate of two
percent (2%) per annum plus the prime rate as announced by The Chase Manhattan
Bank or its successor, in New York, New York from time to time as its prime rate
(the prime rate is not intended to be the lowest rate of interest charged by The
Chase Manhattan Bank to its borrowers) and such interest shall be payable
monthly on the first (1st) day of each month, commencing September 1, 1998.
Interest shall be calculated on the basis of a 360-day year and actual days
elapsed. In no event shall the interest charged hereunder exceed the maximum
permitted under the laws of the State of New York.

This Note is secured by the collateral described in the Security Agreement
(Accounts, Contract Rights, Instruments and Goods pertaining thereto), the
Inventory Security Agreement and the Equipment Security Agreement, each executed
February 17, 1988 by and between Payor and Fidelcor Business Credit Corporation
("Fidelcor"), assignor of Payee, and all related agreements, instruments
(including but not limited to this Note) and documents granting collateral
security to Payee or evidencing or creating indebtedness of Payor to Payee, all
guaranties executed by third parties guaranteeing Payor's obligations to Payee,
including those executed by: Melvin Rich and Evergood Products Corporation (the
"Guarantors") (the foregoing, as the same may now exist and have been and may
hereafter be amended, modified, replaced or supplemented, are hereafter
collectively referred to as the "Financing Agreements").

This Note supersedes and replaces but does not extinguish any of the unpaid
liabilities and obligations under the Sixth Amended and Restated Promissory Note
dated February 12, 1997, in the original principal amount of $1,150,000 executed
by Payor in favor of Payee (the "`Existing Note"). The indebtedness of Payor to
Payee evidenced hereby includes (i) an indebtedness of$880,000 representing the
unpaid principal balance of the Existing Note; (ii) an indebtedness of$95,000
representing advances made by Payee to Payor for the purchase of new equipment;
and (iii) an indebtedness of $245,000 representing an advance made by Payee to
Payor on the date hereof, all of which shall be repayable together with interest
accrued and accruing and other sums in accordance with the terms hereof. Payor
hereby acknowledges that Payor is as of the
<PAGE>

date hereof indebted to Payee, in the principal amount hereof, together with
interest accrued and accruing through and after the date hereof, without offset,
defense or counterclaim of any kind, nature or description whatsoever. The
amendment and restatement contained herein shall not, in any manner be construed
to constitute payment of, or impair, limit, cancel or extinguish the
indebtedness evidenced by the Existing Note and the liens and security interests
securing such indebtedness shall not in any manner be impaired, limited,
terminated, waived or released hereby.

At the time any payment is due hereunder, Payee may, at its option, charge the
amount thereof to any account of Payor maintained by Payee.

If an event of default shall occur for any reason under any of the Financing
Agreements, or if any of the Financing Agreements shall be terminated or not be
renewed for any reason whatsoever, then and in any such event, in addition to
all rights and remedies of Payee under the Financing Agreements, applicable law
or otherwise (all such rights and remedies being cumulative, not exclusive and
enforceable alternatively, successively and concurrently) Payee may, at its
option, declare any or all of Payor's obligations under the Financing
Agreements, including, but not limited to, all amounts owing under this Note, to
be due and payable, whereupon the then unpaid balance hereof together with all
interest accrued thereon, shall forthwith become due and payable, together with
costs and expenses of collection, including reasonable attorney's fees.

Payee shall not be required to resort to any of the aforementioned collateral
for payment, but may proceed against Payor and/or the Guarantors in such order
and manner as Payee may choose.

None of the rights of Payee shall be waived or diminished by any failure or
delay in the exercise thereof. Payor hereby waives diligence, demand,
presentment, protest and notice of any kind and assents to extensions of time of
payment, release, surrender or substitution of collateral security, or
forbearance or other indulgence, without notice.

In the event of any litigation with respect to any of the Financing Agreements,
Payor waives the right to a trial by jury, 0 rights of set-off, and any right to
interpose permissive counterclaims and cross-claims, and Payor consents to the
jurisdiction of the courts of the State of New York and of any federal court
located in either New York or Nassau County in such State. Payor further waives
personal service of any and all process upon Payor and consents that all such
service of process may be made by certified mail, return receipt requested,
directed to Payor at the address listed above or of which Payor advises Payee,
in writing, and service so made shall be deemed complete three days after the
same shall have been posted. This Note shall be governed by and construed, and
all rights and obligations hereunder determined, in accordance with the laws of
the State of New York, and shall be binding upon the successors and assigns of
Payor and inure to the benefit of Payee, its successors, endorsees and assigns.

If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.

The execution and delivery of this Note has been authorized by the board of
directors of Payor.
<PAGE>

PHOENIX LABORATORIES, INC.

By: /s/
    ------------------------------
Title: ExVP
       ---------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/
    ------------------------------
Title: ExVP
       ---------------------------

BODYONICS, LTD.

By: /s/
    ------------------------------
Title: ExVP
       ---------------------------
<PAGE>

August 30, 2000

Phoenix Laboratories, Inc.
Great Earth Distribution, Inc.
Bodyonics, Ltd.
140 Lauman Lane
Hicksville, New York 11801

     Re:  Security Agreement (Accounts, etc.) executed February 17, 1988 (the
          "Accounts Agreement"), by and between Phoenix Laboratories, Inc.
          ("Phoenix") and Great Earth Distribution, Inc. ("GED") and The CIT
          Group/Business Credit, Inc. ("CIT"), successor by merger to The CIT
          Group/Credit Finance, Inc., assignee of Fidelcor Business Credit
          Corporation ("Fidelcor"), and the Security Agreement (Inventory) and
          Security Agreement (Equipment), executed February 17, 1988 by Phoenix
          and GED in favor of Fidelcor, to which Security Agreements Bodyonics,
          Ltd. ("Bodyonics") became a party, as Debtor, by letter agreement
          dated November 18, 1996; the Seventh Amended and Restated Promissory
          Note in the original principal amount of $1,220,000 dated August 27,
          1998 and made by Phoenix, GED and Bodyonics, (the "Note"), and all
          related agreements, amendments, documents and instruments
          (collectively, the "Financing Agreements"). GED, Phoenix and Bodyonics
          may be hereinafter referred to individually as "Debtor" and
          collectively as "Debtors".

Gentlemen:

     The present term of your Financing Agreements with CIT expires August 17,
2001. We propose to amend the Financing Agreements as set forth below, effective
as of the date hereof. Capitalized terms appearing below that are not defined
herein shall have the meanings given in the Rider to the Accounts Agreement, as
amended and restated as of the date hereof.

1.   The first sentence of paragraph 26 of the printed portion of the Accounts
     Agreement is amended to read as follows:

          "That this Agreement shall remain in effect until August 17, 2004 and
          shall be deemed automatically renewed for successive terms of two
          years."

2.   The Debtors affirm that the unpaid principal balance of the Note as of the
     date hereof is
<PAGE>

     $780,000 (the "Existing Term Debt").

     Concurrently herewith, CIT is making an advance to the Debtors in the
     amount of $775,500, which together with the Existing Term Debt shall be
     repayable in accordance with the terms of the Eighth Amended and Restated
     Promissory Note, in the original principal amount of $1,555,500, executed
     on the date hereof, which shall replace the Note but not extinguish the
     indebtedness evidenced by the Note.

3.   This will confirm that in addition to all other fees at any time payable by
     Debtors to CIT, Debtors shall pay a Facility Fee to CIT on each anniversary
     date of the Accounts Agreement in the amounts hereinafter set forth. The
     Facility Fee payable during the term of the Financing Agreements ending on
     August 17, 2004 shall be fully earned on the date hereof but shall be
     payable in three equal installments, each in the amount of $31,667 and
     payable on August 17, 2001, August 17, 2002 and August 17, 2003. The
     Facility Fee payable during any renewal term shall be $31,667 for each year
     of such renewal term, payable on at the end of each such year but fully
     earned on the first day of the renewal term. Upon the occurrence of a
     default under the Financing Agreements or upon the effective date of
     termination of the Financing Agreements for any reason prior to the end of
     the then current term, all Facility Fees payable at any time during such
     term shall become immediately due and payable in full. Each Facility Fee
     may be charged by CIT to any account of the Debtors maintained by CIT. This
     paragraph supersedes the provisions of paragraph 3 of the amendment of the
     Financing Agreements dated August 27, 1998 except with respect to any
     Facility Fee already paid by Debtors pursuant to the terms of such
     paragraph.

4. Paragraph 6 of the printed portion of the Accounts Agreement is hereby
deleted in its entirety and the following is substituted therefor:

     "6.  That Debtor will pay CIT for its advances made hereunder a charge of
          one percent (1%) per annum plus the rate of interest publicly
          announced by The Chase Manhattan Bank, New York, New York from time to
          time as its prime rate (hereinafter, the "Chase Prime," which prime
          rate is not intended to be the lowest rate of interest charged by The
          Chase Manhattan Bank to its borrowers), computed on a 360-day year. In
          the event of a change in the prime rate charged at The Chase Manhattan
          Bank, adjustment hereunder shall be made on the day of such change in
          the prime rate. All charges shall be computed upon the average daily
          balances outstanding and charged to Debtor's account or paid monthly.
          If Debtor's net income exclusive of any extraordinary items, as
          calculated using generally accepted accounting principles, for any
          fiscal year, commencing with Debtor's fiscal year ending on December
          31, 2001, is at least $850,000 (hereinafter, a "Qualifying Fiscal
          Year,") then, effective as of the date that Debtor delivers to CIT its
          certified fiscal year-end financial statement for such period, the
          rate of interest payable by Debtor pursuant to the first sentence of
          this section shall be reduced by one-quarter percent (.25%) per annum
          if on such date no event of default under the financing agreements
          between Debtor and CIT has occurred

                                       2
<PAGE>

          and is continuing but in no event shall such interest rate be reduced
          to a rate per annum which is less than one-half of one percent (.5%)
          in excess of the Chase Prime. If Debtor has a net loss in any fiscal
          year following a Qualifying Fiscal Year, then, effective as of the
          date that Debtor delivers to CIT its certified fiscal year-end
          financial statement for such period, the interest rate payable by
          Debtor pursuant to this section shall be increased by one-quarter of
          one per cent (.25%) per annum."

5.   Paragraph 2 of the printed portion of the Accounts Agreement is amended to
     read in its entirety as follows:

          "2. That it will advance to Phoenix Laboratories, Inc. up to 85%, to
          Bodyonics, Ltd. up to 80%. and to Great Earth Distribution, Inc. up to
          67.50% of the net amounts of acceptable Accounts Collateral, as CIT in
          its sole discretion may determine, and will pay the remainder (less
          the compensation specified in paragraph 6, plus any overpayments by
          account debtors, and less deductions by account debtors and any unpaid
          compensation, charges or expenses), after actual receipt of payment
          upon such Collateral and at such times as CIT may determine; however,
          no payment of such remainder need be made by CIT if Debtor shall have
          breached any provision hereof or shall be otherwise indebted to CIT,
          in either of which events CIT may retain and apply such remainder upon
          any indebtedness then or thereafter due from Debtor.

6. Paragraph 20 of the printed portion of the Accounts Agreement shall be
amended so as to read in its entirety as follows:

          "Debtor will provide CIT with quarterly compiled financial statements
          no later than 45 days after the end of each fiscal quarter and, no
          later than 90 days after the end of each fiscal year, certified annual
          financial statements certified by certified public accountants
          acceptable to CIT."

All other terms and conditions of the Financing Agreements (including the Rider
to the Security Agreement (Accounts, etc.), as amended and restated effective as
of the date hereof) shall remain in full force and effect and nothing contained
herein is intended to modify or impair CIT's entitlement to the documentation
described in paragraph 8 of the January 21, 1998 amendment of the Financing
Agreements. The undersigned agree to execute such further documents and
instruments as shall be necessary to carry out the purposes of the amendment of
the Financing Agreements set forth above.

Please sign and return this letter to us to evidence your agreement to the
amendments of the Financing Agreements set forth above.

The offer to amend the Financing Agreements as provided in this letter shall be
deemed revoked if this letter is not signed and returned by you on or before
September 8, 2000.

                                       3
<PAGE>

Very truly yours,

THE CIT GROUP/BUSINESS CREDIT, INC.

By:   John Livore
   --------------------------------

Title:  Vice President
      -----------------------------

Agreed to:

PHOENIX LABORATORIES INC.

By: /s/ Stephen R. Stern
   --------------------------------

Title: Executive Vice President
      -----------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/ Stephen R. Stern
   --------------------------------

Title: Executive Vice President
      -----------------------------

BODYONICS, LTD.

By: /s/ Stephen R. Stern
   --------------------------------

Title: Executive Vice President
      -----------------------------

Confirmed: /s/ Mel Rich
           ------------------------
MELVIN RICH, individually as a limited guarantor

EVERGOOD PRODUCTS CORPORATION

By: /s/ Stephen R. Stern
   --------------------------------

Title:  Executive Vice President
      -----------------------------

                                       4
<PAGE>

                AMENDED AND RESTATED RIDER TO SECURITY AGREEMENT
                     (Accounts, Contract Rights, Instruments
                         and Goods Pertaining Thereto)

                                     between

                 Debtors: PHOENIX LABORATORIES, INC. ("Phoenix")
                     GREAT EARTH DISTRIBUTION, INC. ("GED")
                          BODYONICS, LTD. ("Bodyonics")
            (each hereafter referred to individually as "Debtor" and
                           collectively as "Debtors")
                                       and

Secured Party: THE CIT GROUP/BUSINESS CREDIT, INC., successor by merger to The
CIT Group/Credit Finance, Inc.
                        (hereafter referred to as "CIT")

This is an Amendment and Restatement, effective as of August 30, 2000 of the
Rider to the Security Agreement (Accounts, Contract Rights, Instruments and
Goods Pertaining Thereto), dated February 17, 1988 (this "Agreement"), between
Debtor and Fidelcor Business Credit Corporation ("Fidelcor"), to whose rights
CIT has succeeded, pursuant to which, in addition to and not in limitation of
any and all rights granted to CIT and obligations incurred by Debtor in the
printed portion of this Agreement, Debtor further warrants, covenants and agrees
as follows:

     A. Each of the Debtors shall be jointly and severally liable for the
Obligations (as hereafter defined) of all of the Debtors.

     B. The term "Financing Agreements" shall mean and include, without
limitation, this Agreement, the Security Agreement (Inventory), the Security
Agreement (Equipment), and the agreements, documents and instruments listed on
the attached Schedule A, as now existing or as hereafter renewed, extended,
amended, modified or supplemented and any agreements, documents and guaranties
that (i) are executed in the future; and (ii) are executed by any Debtors or
Affiliates of any Debtors in favor of CIT or are between CIT and any Debtors or
Affiliates of theirs or grant collateral security for or create or evidence
indebtedness of any Debtors or Affiliates of theirs to CIT; and (iii) do not by
their terms expressly recite that they shall not be deemed "Financing
Agreements" hereunder. Affiliate means any entity having common ownership with a
Debtor or controlled by or under common control with any Debtor.

     C. The term "Obligations" or obligations shall mean and include, without
limitation, any and all of Debtor's indebtedness and/or liabilities to CIT of
every kind, nature and description, direct or indirect, secured or unsecured,
joint and/or several, absolute or contingent, due or to become due, now existing
or hereafter arising, related or unrelated, regardless of how they arise or by
what agreement or instrument they may be evidenced or whether evidenced by any
agreement or instrument, including, but not limited to all amounts owing by
Debtor to CIT
<PAGE>

under this Agreement, the other Financing Agreements, or any other security
agreement, guaranty or note and all obligations to perform acts or refrain from
taking any action.

     D. The term Collateral or collateral shall mean and include, without
limitation, that which is set forth in Paragraph 1 of the printed portion of
this Agreement and any and all other items of real or personal property in which
Debtor has granted or may in the future grant a security interest to CIT under
the Financing Agreements, or any supplement or supplements thereto, and/or under
any other security agreement, or other agreement, all of Debtor's right, title
and interest in and to the goods or other property represented by or securing
any of the foregoing, all of Debtors rights as an unpaid vendor or lienor,
including stoppage in transit, replevin or reclamation, all additional amounts
due to Debtor from any account debtor irrespective of whether such additional
amounts have been specifically assigned to CIT, all other agreements on property
securing or relating to any of the items referred to above or acquired for the
purposes of securing or enforcing any of such items, all present and future
chattel paper, motor vehicles, licenses, patents, trademarks, copyrights,
license agreements, tax and duty claims and refunds, computer software,
goodwill, customer lists, all documents, monies, deposits, securities,
instruments, credits, and other property now or hereafter held by CIT or any
entity which at any time participates in CIT's financing transactions with
Debtor, and all products, proceeds and accessions of all of the foregoing in
whatever form. Debtor hereby grants CIT a continuing first priority security
interest in and general lien upon all of the Collateral to secure payment and
performance of all of the Obligations, except for prior security interests set
forth on Schedule B attached hereto.

     E. In addition to any other security interest granted in the Financing
Agreements and not in limitation of any of the foregoing, and to secure the
payment and performance of all of the Obligations, Debtor hereby pledges and
assigns to CIT and grants to CIT a continuing general security interest in all
of the Debtor's ledger sheets, files, records and documents relating to the
Collateral, which shall, until delivered to or removed by CIT, be kept by Debtor
in trust for CIT and without cost to CIT in appropriate containers in safe
places, bearing suitable legends disclosing CIT's security interest. Each
confirmatory assignment schedule or other form of Assignment hereafter executed
by Debtor, shall be deemed to include the foregoing, whether or not same appears
therein.

     F. The Debtor will pay all costs and expenses and all taxes, recording and
filing fees (including Uniform Commercial Code Financing Statements) in
connection with the preparation, execution, delivery, administration (including
wire transfer charges in amounts that CIT may from time to time establish if
Debtor requests wire transfers) and enforcement of this Agreement and all other
documents contemplated herein or related hereto, including any amendments,
supplements or consents which may he hereafter made or entered into in respect
hereof, including appraisal fees, and lien searches in connection herewith and
fees and disbursements of in-house and outside counsel to CIT. Debtor will pay
all out-of-pocket costs of field examinations to be conducted by CIT as provided
in Paragraph 13 of the printed portion of the Agreement plus a per them charge
of $650.00 per person per day but the aggregate per diem charges in any contract
year (August 17 to August 16 of each year) shall be limited to $25,000

                                       2
<PAGE>

unless an event of default under the Financing Agreements has occurred and is
continuing. CIT is hereby authorized to charge any amounts payable hereunder
(including principal, interest, fees, charges and expenses) directly to any
account of the Debtor maintained with CIT.

     G. CIT agrees that in addition to the advances made with reference to the
formula set forth in Paragraph 2 of the printed portion of this agreement
("Accounts Advances"), CIT shall make additional advances to Debtor, in its sole
discretion, of thirty percent (30%) of the value of Phoenix's acceptable and
eligible raw material inventory, forty percent (40%) of the value of GED's and
Bodyonics' acceptable and eligible finished goods inventory located at the
warehouses of Livingston Healthcare Services, Inc. in Newark, Delaware and
Rancho Cucamonga, California (such percentage being hereinafter referred to as
the "Livingston Inventory Advance Rate") and thirty-five (35%) percent of the
value of all other acceptable and eligible finished goods inventory of GED and
Bodyonics (collectively the "Inventory Advances"). As used herein, "value" shall
mean the lower of cost or market price, as determined by CIT. Except in CIT's
sole discretion, (1) the aggregate principal amount of Accounts Advances to GED
shall not exceed, at any time outstanding, the lesser of (a) $1,750,000 (the
"GED Accounts Sublimit") or (b) an amount equal to one hundred and twenty-five
(125%) percent of the Phoenix Accounts Advances and (2) the aggregate principal
amount of the Inventory Advances to Debtors shall not exceed $2,500,000 at any
time outstanding. In the event that Debtor at any time has negative Cash Flow
(defined below) to be calculated commencing with the nine month period ending
September 30, 1998 and quarterly thereafter, then the Livingston Inventory
Advance Rate shall be reduced from 40% to 35%. Cash Flow is defined as: Net
income plus depreciation and amortization less capital expenditures and
principal repayments of term debt on a consolidated basis. Except in CIT's sole
discretion, the aggregate principal amount of Accounts Advances to Bodyonics
shall not exceed an amount equal to the sum of one hundred (100%) percent of the
Phoenix Accounts Advances and one hundred (100%) percent of the GED Accounts
Advances.

     H. Except in CIT's sole discretion the aggregate principal amount of the
advances made by CIT to Debtors under the Financing Agreements, including the
Accounts Advances, the Inventory Advances, the unpaid balance of the Eighth
Amended and Restated Promissory Note, the Supplemental Advance and the CAPEX
Advances, shall not exceed the principal amount of $9,500,000 at any time
outstanding. Without limiting the generality of any other provisions of the
Financing Agreements, any overadvance, as hereinafter defined, shall be due and
payable on demand. Overadvance means the amount, if any, by which the
outstanding indebtedness due to CIT from the Debtors other than the Supplemental
Advance, the unpaid principal balance of the Eighth Amended and Restated
Promissory Note and the unpaid balance of the CAPEX Advances exceeds the
Accounts Availability and the Inventory Availability, as such terms are defined
herein; and the amount, if any, by which the unpaid principal balance of the
Eighth Amended and Restated Promissory Note and the CAPEX Advances exceeds 85%
of the auction sale value (as determined by appraisals conducted by CIT from
time to time at the Debtors' expense) of all of the equipment of the Debtors on
which CIT has a first priority perfected security interest and which are subject
to no other liens or encumbrances.

                                       3
<PAGE>

     I. [Intentionally omitted]

     J. In consideration of CIT entering into this Agreement and incurring
accounting, operating and management expenses, Debtors shall pay to CIT each
calendar month a minimum charge equal to the amount of interest Debtors would
pay CIT if they at all times had an aggregate average daily loan balance
outstanding of $4,000,000 bearing interest at the rate provided for in Paragraph
6 of the printed portion of this Agreement. CIT shall reduce such minimum charge
by the amounts actually paid by Debtors to CIT as interest pursuant to said
Paragraph 6, so that for each calendar month Debtors shall pay CIT interest as
provided for in said Paragraph 6, plus the amount, if any, by which the minimum
charge provided for in this paragraph exceeds the amount of interest payable
pursuant to said Paragraph 6 for such month. If this Agreement shall be
terminated, such minimum charge shall continue and be paid by the Debtor for any
unexpired term of this Agreement, except if such termination is made pursuant to
Paragraph 26 or 30 of the printed portion of this Agreement or by mutual
agreement of CIT and the Debtor.

     K. All advances by CIT pursuant to this Agreement shall bear interest at
the variable rate provided for in Paragraph 6 of the printed portion of this
Agreement and shall be calculated on the basis of a 360-day year for actual days
elapsed.

     L. Should CIT commence a proceeding to take possession of any of the
Collateral under this Agreement or any of the Financing Agreements, Debtor
waives the requirement, if any, that CIT post a bond or any other type of
security.

     M. In addition to all of the covenants set forth in the Financing
Agreements and without limiting any of the terms or provisions thereof, Debtor
hereby covenants and agrees as follows:

     1.   Debtor will pay all obligations when due and will perform all of the
          terms, conditions, covenants and agreements of Debtor to be performed
          under the Financing Agreements, and will make punctual payment of all
          monies and will perform all of the terms, conditions, covenants and
          agreements on its part to be paid, kept or performed under the terms
          of any lease or mortgage of the premises where any of the Collateral
          is now or hereafter located, wherein Debtor is lessee or mortgagor,
          and will promptly notify CIT in the event of any default by Debtor or
          receipt by Debtor of any notice or alleged default under any such
          lease or mortgage.

     2.   Debtor will pay and discharge at or before maturity, all taxes,
          assessments, rents, claims, debts and charges except where the same
          are being contested in good faith and Debtor is maintaining, in
          accordance with generally accepted accounting principles and practice,
          appropriate reserves for accrual thereof.

                                       4
<PAGE>

     3.   Debtor will promptly give notice in writing to CIT of the occurrence
          of any event which constitutes or which with notice or lapse of time,
          or both, would constitute a default under any of the Financing
          Agreements. As used in the Paragraph (3), the word "promptly" shall be
          determined in relation to the point in time at which Debtor,
          exercising sound management practices, has actual knowledge or should
          have discovered the occurrence of such event.

     4.   Debtor will provide CIT with such other information concerning the
          financial or business affairs of Debtor as CIT, in its sole
          discretion, requests from time to time.

     5.   Debtor will not, without the prior written consent of CIT, declare or
          pay any dividend, return any capital to any of its stockholders, loan
          any sum to any of its stockholders, employees, officers or directors,
          or redeem, repurchase or otherwise acquire any of its outstanding
          capital stock except that Debtor may continue to repay an indebtedness
          due to its shareholder, Charlotte Rich, in the outstanding principal
          amount of $94,453.

     6.   Notwithstanding Paragraph 3 of the printed portion of this Agreement,
          Debtor shall direct that all proceeds of accounts receivable, letters
          of credit, banker's acceptances and other proceeds of Collateral shall
          be payable to a post office box or a lock box designated by and in
          control of CIT and in connection therewith shall execute such
          agreements as CIT in its sole discretion shall specify. So long as no
          default has occurred under the Financing Agreements, Debtor's deposit
          of all proceeds of Collateral to an account at Chase Manhattan Bank
          which is blocked to CIT shall constitute compliance with this
          subsection.

     7.   Debtor will duly execute and deliver, or will cause to be executed and
          delivered, such further instruments and documents, including, without
          limitation, additional security agreements, collateral assignments,
          Uniform Commercial Code financing statements or amendments, or
          continuations thereof, landlord's or mortgagee's waivers of liens, and
          consents to the exercise by CIT of all of its rights and remedies
          under the Financing Agreements with respect to the Collateral and will
          do such further acts as may be necessary or proper in CIT's opinion to
          effectuate the provisions or purposes of the Financing Agreements.

     8.   Debtor will not, without the prior written consent of CIT, directly or
          indirectly sell, lease, abandon or otherwise dispose of all or any
          substantial portion of its property or assets or consolidate with or
          merge with or into any other entity, or permit any other entity to
          consolidate with or merge with or into it.

                                       5
<PAGE>

     9.   Debtor will at all times preserve and keep in full force and effect
          its corporate existence, licenses, permits, rights and franchises.

     10.  Debtor will comply with the requirements of all applicable laws,
          rules, regulations, orders of any governmental authority, and all
          agreements to which Debtor is a party, the noncompliance with which
          laws, rules, regulations, orders and agreements would materially
          adversely affect its business, properties or credit.

     N. Any default by Debtor under the Financing Agreements or any default
under any material obligation for the payment of money to any person, firm or
corporation shall constitute and be deemed a default by the Debtor and shall be
a default under all such other agreements and instruments.

     0.   Debtor hereby further represents and warrants to CIT the following:
     1.   Debtor has the corporate power to borrow and to execute, deliver and
          carry out the terms and provisions of the Financing Agreements, and
          all other instruments and documents delivered by it pursuant hereto
          and thereto, and Debtor has taken or caused to be taken all necessary
          corporate action to authorize the execution, delivery and performance
          of the Financing Agreements, and such other agreements, the borrowings
          hereunder and the execution, delivery and performance of the
          instruments and documents delivered and to be delivered by it pursuant
          hereto and thereto, and the Financing Agreements constitute and will
          constitute legal, valid and binding obligations of Debtor, enforceable
          in accordance with their respective terms.

     2.   Debtor is not aware of, has knowledge of, or has received notice of, a
          default in any material respect under any indenture, mortgage, deed of
          trust, lease agreement, or other instrument to which it is a party or
          by which it or its properties may be bound. Neither the execution nor
          delivery of the Financing Agreements, nor any of the instruments or
          documents to be delivered pursuant hereto or thereto, nor the
          consummation of the transactions herein or therein contemplated nor
          compliance with the provisions hereof or thereof, will violate any law
          or regulation, or any order or decree of any court or governmental
          instrumentality in any respect, or will conflict with, or result in
          the breach of, or constitute a default in any material respect under,
          any mortgage, deed of trust, agreement or other instrument to which
          Debtor is party or by which it or its properties may be bound, or
          result in the creation or imposition of any lien, charge or
          encumbrance upon any of the property of Debtor (except as contemplated
          hereunder or under any of the other Financing Agreements) or violate
          any provision of Certificate of

                                       6
<PAGE>

          Incorporation or By-Laws of Debtor.

     3.   No action of, or filing with, any governmental or public body or
          authority (other than the filing or recording of Uniform Commercial
          Code financing statements) is required in connection with the
          execution, delivery and performance of the Financing Agreements or any
          of the instruments or documents to be delivered pursuant hereto or
          thereto.

     4.   Debtor has obtained all necessary licenses and approvals and is in
          compliance in all material respects with all applicable state and
          Federal laws and regulations relating to the conduct of its business
          as presently conducted or contemplated.

     5.   There are no strikes or other labor disputes against Debtor, pending,
          or to Debtor's knowledge, threatened.

     6.   None of the information contained in the representations and
          warranties made by Debtor in the Financing Agreements, or contained in
          any certificate, statement, schedule or exhibit to or under any of the
          Financing Agreements, contains or will contain any untrue statement of
          a material fact or omit or will omit to state a fact necessary in
          order to make the statements contained herein or therein not
          misleading.

     P. CIT shall have the right, in its discretion, to withhold and reserve
from the amount of its advances under this Agreement such amount as CIT shall
establish as a reasonable reserve upon the occurrence of any breach of any
warranty, covenant, or agreement under the Financing Agreements or for any
default under the Financing Agreements. Without in any way limiting CIT's rights
to withhold and set up reserves, in its sole discretion, CIT shall have the
right to establish a reserve from Debtor's availability for amounts due from GED
to Livingston Healthcare Services, Inc.

     Q. CIT agrees that in addition to the Accounts Advances and Inventory
Advances, and the advances which are repayable in accordance with the terms of
the Eighth Amended and Restated Promissory Note, CIT shall make available to
Debtor a Supplemental Advance and CAPEX Advances, as hereinafter defined, The
CAPEX Advances shall replace the accommodations (the "Prior CAPEX
Accommodations") that were provided by CIT to the Debtors pursuant to Section 9
of the Letter Agreement amending the Financing Agreements, dated February 11,
1997

  (i) the Supplemental Advance means, whichever is less,

     (x) $250,000; or

                                       7
<PAGE>

     (y) five (5%) of the sum of

          (a) the combined Accounts and Inventory Availability of the Debtors,
          as hereinafter defined; and

          (b) the unpaid principal balance from time to time of the Eighth
          Amended and Restated Promissory Note, in the original principal amount
          of $1,555,500, dated August 2000, made by Phoenix, GED and Bodyonics.

(ii) CAPEX Advances means advances equal to 75% of the hard cost (as hereinafter
defined) of equipment purchased by any of the Debtors after March 31, 2000,
which advances shall not exceed, in the aggregate, $1,500,000 and which
advances, together with the sum of $170,000.36 representing the unpaid balance
of the advances made as part of the Prior CAPEX Accommodations, shall be
repayable in monthly installments of principal, payable on the first day of each
month commencing September 1, 2000, together with interest at the rate provided
in the Financing Agreements. Each monthly installment of principal shall be
equal to an amount calculated by dividing the then unpaid principal balance of
the CAPEX Advances (including the unpaid balance of the Prior CAPEX
Accommodations) by a number which shall be (i) 60 in the case of the principal
installment due on September 1, 2000 and (ii) in the case of all subsequent
monthly principal installments, 60 reduced by one for each principal installment
that was payable prior to the date such principal installment is being made. The
"hard cost" of an item of equipment means the gross amount paid by Debtor, less
shipping and installation charges and all taxes. Such advances shall only be
made if the equipment to be purchased meets CIT's eligibility standards then in
effect and only upon CIT receiving evidence, satisfactory to it, that (i) CIT
has or will obtain a first priority security interest in the equipment being
purchased, subject to no other liens or encumbrances; (ii) the Debtor has
received possession of the equipment; (iii) the entire purchase price of the
equipment has or will be paid to the vendor; and (iv) the Debtor has title to
the equipment. The CAPEX Advances are not intended to be a revolving facility
and accordingly no additional CAPEX Advances shall become available by reason of
repayment of the outstanding principal amount of such advances. The unpaid
balance of the CAPEX Advances shall be due and payable in full upon termination
of the Financing Agreements for any reason.

Accounts Availability means for each Debtor, the advance percentage applicable
to accounts receivable of such Debtor as specified in Paragraph 2 of the printed
portion of this Agreement, multiplied by the amount of eligible and acceptable
accounts receivable of such Debtor, but not exceeding any limitation on the
amount of Accounts Advances to such Debtor specified in such Paragraph 2 or in
Section G of this Rider.

Inventory Availability means for each Debtor, the advance percentages applicable
to raw material and finished goods inventory of such Debtor as specified in
Section G of this

                                       8
<PAGE>

     Rider, multiplied by the lower of cost or market value of eligible and
     acceptable raw material and finished goods inventory of such Debtor, but
     not exceeding in the aggregate for all Debtors the limitation on the amount
     of Inventory Advances to all Debtors as specified in Section G of this
     Rider.

PHOENIX LABORATORIES, INC.

By: /s/ Stephen R. Stern
   ------------------------------

Title: Executive VP
      ---------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/ Stephen R. Stern
   ------------------------------

Title: Executive VP
      ---------------------------

BODYONICS, LTD.

By: /s/ Stephen R. Stern
   ------------------------------

Title: Executive VP
      ---------------------------

THE CIT GROUP/BUSINESS CREDIT, INC.

By: John Livore
   ------------------------------

Title:  Vice President
      ---------------------------

                                       9
<PAGE>

                                   Schedule A

     1.   Security Agreement (Accounts, etc.) between Phoenix Laboratories, Inc.
          ("Phoenix"), Great Earth Distribution, Inc. ("GED"), and Fidelcor
          Business Credit Corporation ("Fidelcor") dated February 17, 1988.

     2.   Rider to Security Agreement (Accounts, etc.) between Phoenix, GED and
          Fidelcor.

     3.   Amendments to Security Agreement

          a.   Amendment dated June 29. 1988 among GED, Phoenix and Fidelcor;
          b.   Amendment dated October 4, 1989 among GED, Phoenix and Fidelcor;
          c.   Amendment dated August 13, 1991 among GED, Phoenix and The CIT
               Group/Credit Finance, Inc. ("CIT");
          d.   Amendment dated August 13, 1991 among Great Earth International,
               Inc., Great Earth International Licensing Corp., Great Earth
               Stores, Inc., Great Earth International Franchising Corp., Great
               Earth Vitamins Ltd. and CIT;
          e.   Amendment dated December 16, 1991 among Phoenix, GED, Evergood
               Products Corporation ("Evergood") and CIT;
          f.   Amendment dated June 19, 1992 among Phoenix, GED, Evergood and
               CIT;
          g.   Amendment dated August 27, 1993 among Phoenix, GED, Evergood and
               CIT;
          h.   Amendment dated December 23, 1994 among Phoenix, GED and CIT;
          i.   Amendment dated January 4, 1995 among Phoenix, GED and CIT;
          j.   Amendment dated January 6, 1995 among Phoenix, GED and CIT;
          k.   Amendment dated June 21, 1996 among Phoenix, GED, Evergood and
               CIT;
          1.   Amendment dated November 18, 1996 among Phoenix, Bodyonics, Ltd
               ("Bodyonics") and CIT;
          m.   Amendment dated November 18, 1996 among Phoenix, Bodyonics and
               CIT;
          n.   Amendment dated February 11, 1997 among Phoenix, GED, Bodyonics,
               Evergood and CIT.
          o.   Amendment dated January 21, 1998 among Phoenix, Bodyonics, GED,
               Melvin Rich and Evergood
          p.   Amendment dated August 27, 1998 among Phoenix, Bodyonics, GED,
               Melvin Rich and Evergood

4.   Security Agreement (Inventory) among Phoenix, GED and Fidelcor dated
     February 17, 1988

5.   Security Agreement (Equipment) among Phoenix, GED and Fidelcor dated
     February 17, 1988

6.   Eighth Amended and Restated Promissory Note in the original principal
     amount of $1,555,500 made by Phoenix, GED and Bodyonics and payable to CIT
     dated August ______, 2000
<PAGE>

7.   Secretary's Certificates

     a.   Secretary's Certificate of Evergood dated February 9, 1988;
     b.   Secretary's Certificate of Phoenix dated February 9, 1988;
     c.   Secretary's Certificate of GED dated February 9, 1988.

8.   Replacement Guaranty by Melvin Rich in favor of CIT with respect to Phoenix
     and GED dated July 1, 1992

9.   Guaranty by Evergood, Phoenix, GED and Bodyonics in favor of Fidelcor with
     respect to the obligations of each guarantor to Fidelcor, dated February
     17, 1988

10.  Intercreditor Agreement between Fidelcor and Hoffmann-La Roche Inc. dated
     February 16, 1988

11.  Guaranty in favor of Fidelcor by Great Earth International, Inc. ("GEI"),
     dated April 26, 1988, with respect to Phoenix and GED.

12.  Trademark Collateral Assignment and Security Agreement, dated April 26,
     1988, executed by GEI in favor of Fidelcor.
<PAGE>

                                  SCHEDULE B

                                                                     Page 1 of 2

                        Unterminated Security Interests
<TABLE>
<CAPTION>
                                                     Juris-               Filing                             Amendments
       Debtor                    Secured Party       diction     UCC #     Date       Collateral     (Releases, Assignments, etc.)
<S>                          <C>                     <C>      <C>        <C>       <C>                   <C>
Phoenix Laboratories, Inc.   Hoffmann-La Roche, Inc. N.Y. S/S    390298  12/24/88  All Equipment (now
P.O. Box 388                 340 Kingsland Street                                  owned, hereafter
809 Ibsen Street             Nutley, N.J.  07110                                   acquired)
Woodmere, New York 11598

Phoenix Laboratories, Inc.   Long Island Trust Co.   N.Y. S/S    348550  11/10/86  2 Machines
175 Lauman Lane              Industrial Finance Dept.
609 Ibsen Street             11 Broadway                                           Debtor has no power to
Hicksville, New York 11801   Hicksville, NY  11801                                 sell or dispose of
                                                                                   collateral

Phoenix Laboratories, Inc.   Hoffmann-La Roche, Inc. Nassau   87-001408   1/16/87  All equipment (now
P.O. Box 388                 340 Kingsland Street     County                           ---------
809 Ibsen Street             Nutley, N.J. 07110       Clerk                        owned & hereafter
Woodmere, New York 11598                                                           acquired.)

Phoenix Laboratories, Inc.   Hoffmann-La Roche, Inc. Nassau   87-027548  11/25/87  All equipment (now
P.O. Box 388                 340 Kingsland Street     County                           ---------
809 Ibsen Street             Nutley, N.J. 07110       Clerk                        owned & hereafter
Woodmere, New York 11598                                                           acquired.)

Phoenix Laboratories, Inc.   Equilease Corporation   Nassau   86-030440  12/19/86  Filed for Info. Only.   Assigned to:
175 Lauman Lane              750 Third Avenue         County                       Property (not describ-  -----------
Hicksville, New York 11801   New York, NY  10017      Clerk                        ed) subject to Lease     Textron Capitol Corp.
                                                                                                  -----     1410 Hospital Trust
                                                                                                            Tower Providence, Rhode
                                                                                                            Island
</TABLE>
<PAGE>

                                  SCHEDULE B                      Page 2 of 2
                                   (Cont'd)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                        Juris-               Filing                            Amendments
  Debtor                     Secured Party              diction    UCC #     Date       Collateral  (Releases, Assignments, etc.)
-----------------------      -------------------       --------    ------   -------    ------------ -----------------------------
<S>                           <C>                       <C>       <C>        <C>      <C>
                                                                                                              Assigned to:
Phoenix Laboratories, Inc.    WASCO Funding Corp.        Nassau   86-021181  8/25/86   Machines (3) leased    -----------
175 Lauman Lane -             150 E. 58th Street         County                        --------            Tilden Financial Corp.
Hicksville, New York 11801    New York, New York 10155   Clerk                       to debtor who has no  2 Lambert Street -
                                                                                     right to sell or      Roslyn Heights, NY 11577
                                                                                     dispose.
---------------------------------------------------------------------------------------------------------------------------------
Phoenix laboratories, Inc.    L.I. Trust Co., N.A.       Nassau   86-027280  11/18/86  2 Machines
175 Lauman Lane               Industrial Finance Dept.   County                          --------
Hicksville, New York 11801    11 Broadway                Clerk                         debtor has no power to
                              Hicksville, N.Y. 11801                                   sell or dispose.
----------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,     The Lease Factor, Inc.     S/S      87-128909  5/28/87   Equipment Lease
 Inc.                          The Beaumont Building     Calif.                        Lease # 73351
14211 Gannett Street          P.O. Box 71
La Mirada, CA 90638           South Station
                              Framingham, Mass. 01701
----------------------------------------------------------------------------------------------------------------------------------
Great Earth Distributions,    Pitney Bowes Credit        S/S      86-146811  6/11/86   Lease - re: Postal
Corporation                   Corporation                Calif.                        Equipment
14211 Gannett Street          21515 Hawthorne Blvd.
La Mirada, CA 90638           Suite 690
                              Torrance, CA 90503
-----------------------------------------------------------------------------------------------------------------------------------
Great Earth Distribution,     Pitney Bowes Credit        S/S      86146812   6/11/86   Lease - re: Postal
Inc.                          Corporation                Calif.                        Equipment
14211 Gannett Street          21515 Hawthorne Blvd.
La Mirada, CA 90638           Suite 690
                              Torrance, CA 90503
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                  EIGHTH AMENDED AND RESTATED PROMISSORY NOTE

$1,555,500                                                    New York, New York
                                                                 August 30, 2000

     FOR VALUE RECEIVED, PHOENIX LABORATORIES, INC., GREAT EARTH DISTRIBUTION,
INC. and BODYONICS, LTD. (individually and collectively the "Payor"), jointly
and severally hereby promise to pay to the order of THE CIT GROUP/BUSINESS
CREDIT, INC., a New York corporation, successor by merger to The CIT
Group/Credit Finance, Inc. ("Payee"), at its offices located at 1211 Avenue of
the Americas, New York, New York 10036, or at such other place as Payee or any
holder hereof may from time to time designate, the principal sum of ONE MILLION
FIVE HUNDRED FIFTY FIVE THOUSAND FIVE HUNDRED DOLLARS ($1,555,500) in lawful
money of the United States, in forty-seven installments of TWENTY THOUSAND
DOLLARS ($20,000) each payable on the first (1st) day of each consecutive month,
commencing October 1, 2000 and one (1) final installment in the amount of the
entire unpaid principal balance of this Note, payable August 17, 2004. Payor
hereby further promises to pay interest to Payee in like money at said office or
place on the unpaid principal balance hereof, computed at the rate of one
percent (1%) per annum plus the prime rate as announced by The Chase Manhattan
Bank or its successor, in New York, New York from time to time as its prime rate
(the prime rate is not intended to be the lowest rate of interest charged by The
Chase Manhattan Bank to its borrowers) and such interest shall be payable
monthly on the first (1st) day of each month, commencing September 1, 2000.
Interest shall be calculated on the basis of a 360-day year and actual days
elapsed. In no event shall the interest charged hereunder exceed the maximum
permitted under the laws of the State of New York.

This Note is secured by the collateral described in the Security Agreement
(Accounts, Contract Rights, Instruments and Goods pertaining thereto), the
Inventory Security Agreement and the Equipment Security Agreement, each executed
February 17, 1988 by and between Payor and Fidelcor Business Credit Corporation
("Fidelcor"), assignor of Payee, and all related agreements, instruments
(including but not limited to this Note) and documents granting collateral
security to Payee or evidencing or creating indebtedness of Payor to Payee, all
guaranties executed by third parties guaranteeing Payor's obligations to Payee,
including those executed by: Melvin Rich and Evergood Products Corporation (the
"Guarantors") (the foregoing, as the same may now exist and have been and may
hereafter be amended, modified, replaced or supplemented, are hereafter
collectively referred to as the "Financing Agreements").

This Note supersedes and replaces but does not extinguish any of the unpaid
liabilities and obligations under the Seventh Amended and Restated Promissory
Note dated August 27,1998, in the original principal amount of $1,220,000
executed by Payor in favor of Payee (the "Existing Note"). The indebtedness of
Payor to Payee evidenced hereby includes (i) an indebtedness of $780,000
representing the unpaid principal balance of the Existing Note; and (ii) an
indebtedness of $775,500 representing an advance made by Payee to Payor on the
date hereof, all of which shall be repayable together with interest accrued and
accruing and other sums in accordance with the terms hereof. Payor hereby
acknowledges that Payor is as of the date hereof indebted to

<PAGE>

Payee, in the principal amount hereof, together with interest accrued and
accruing through and after the date hereof, without offset defense or
counterclaim of any kind, nature or description whatsoever. The amendment and
restatement contained herein shall not, in any manner be construed to constitute
payment of, or impair, limit, cancel or extinguish the indebtedness evidenced by
the Existing Note and the liens and security interests securing such
indebtedness shall not in any manner be impaired, limited, terminated, waived or
released hereby.

At the time any payment is due hereunder, Payee may, at its option, charge the
amount thereof to any account of Payor maintained by Payee.

If an event of default shall occur for any reason under any of the Financing
Agreements, or if any of the Financing Agreements shall be terminated or not be
renewed for any reason whatsoever, then and in any such event, in addition to
all rights and remedies of Payee under the Financing Agreements, applicable law
or otherwise (all such rights and remedies being cumulative, not exclusive and
enforceable alternatively, successively and concurrently) Payee may, at its
option, declare any or all of Payor's obligations under the Financing
Agreements, including, but not limited to, all amounts owing under this Note, to
be due and payable, whereupon the then unpaid balance hereof together with all
interest accrued thereon, shall forthwith become due and payable, together with
costs and expenses of collection, including reasonable attorney's fees.

Payee shall not be required to resort to any of the aforementioned collateral
for payment, but may proceed against Payor and/or the Guarantors in such order
and manner as Payee may choose. None of the rights of Payee shall be waived or
diminished by any failure or delay in the exercise thereof. Payor hereby waives
diligence, demand, presentment, protest and notice of any kind and assents to
extensions of time of payment, release, surrender or substitution of collateral
security, or forbearance or other indulgence, without notice.

In the event of any litigation with respect to any of the Financing Agreements,
Payor waives the right to a trial by jury, all rights of set-off, and any right
to interpose permissive counterclaims and cross-claims, and Payor consents to
the jurisdiction of the courts of the State of New York and of any federal court
located in either New York or Nassau County in such State. Payor further waives
personal service of any and all process upon Payor and consents that all such
service of process may be made by certified mail, return receipt requested,
directed to Payor at the address listed above or of which Payor advises Payee,
in writing, and service so made shall be deemed complete three days after the
same shall have been posted. This Note shall be governed by and construed, and
all rights and obligations hereunder determined, in accordance with the laws of
the State of New York, and shall be binding upon the successors and assigns of
Payor and inure to the benefit of Payee, its successors, endorsees and assigns.

If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.
<PAGE>

The execution and delivery of this Note has been authorized by the board of
directors of Payor.

PHOENIX LABORATORIES, INC.

By: /s/ Stephen R. Stern
   -------------------------------

Title:  Executive Vice President
      ----------------------------

GREAT EARTH DISTRIBUTION, INC.

By: /s/ Stephen R. Stern
   -------------------------------

Title:  Executive Vice President
      ----------------------------

BODYONICS, LTD.

By: /s/ Stephen R. Stern
   -------------------------------

Title:  Executive Vice President
      ----------------------------

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