Document:

AMENDED AND RESTATED LOAN AGREEMENT

     THIS  AMENDED AND  RESTATED  LOAN  AGREEMENT  (this  "Agreement"),  is made
effective and entered into as of the 27th day of December  1999 (the  "Agreement
Date"),  by and between GREYSTONE FUNDING  CORPORATION,  a Virginia  corporation
(the  "Lender"),  and SCHICK  TECHNOLOGIES,  INC., a Delaware  corporation  (the
"Company") and SCHICK  TECHNOLOGIES,  INC., a New York corporation  ("Schick New
York"). The Company and Schick New York are hereinafter individually referred to
herein as a "Borrower" and collectively as the "Borrowers."

                              W I T N E S S E T H :

     WHEREAS, the Borrowers are engaged in the business of designing, developing
and manufacturing, marketing, selling and servicing digital radiographic imaging
systems and devices for the dental and medical  markets and other related fields
(collectively, the "Business Operations"); and

     WHEREAS, the Borrowers have requested the Lender to extend to the Borrowers
a loan and line of credit in the principal amount of up to $7,500,000, which the
Borrowers  will  utilize  in  connection  with the  Business  Operations  and as
contemplated by this Agreement; and

     WHEREAS,  the Lender is ready, willing and able to make such line of credit
available  to the  Borrowers  upon the terms and subject to the  conditions  set
forth in this Agreement;

     WHEREAS, on December 27, 1999 the Lender purchased from the Company certain
stock of Photobit  Corporation for $1,000,000 in cash together with a promissory
note (the "Stock  Purchase")  which Stock Purchase is being  rescinded as of its
purchase date pursuant to an Agreement to Rescind Stock Purchase  between Lender
and Company of even date herewith; and

     WHEREAS,  on December 27, 1999,  in order to induce  Lender to enter into a
Loan  Agreement  between  the  parties,  the  Company  issued to Lender  and its
designees warrants to purchase three million (3,000,000) shares of the Company's
Common Stock and, in connection with the Stock Purchase, the Company also issued
to  Lender  and its  designees  additional  warrants  to  purchase  two  million
(2,000,000) shares of the Company's Common Stock; and

     WHEREAS,  Lender has  agreed  that the cash  portion of the Stock  Purchase
shall be retained  by  Borrower  and deemed to  constitute  the initial  Advance
hereunder if Company  agrees that Lender shall retain the Warrants  issued to it
by Borrower in  connection  with the Stock  Purchase,  and that Lender be issued
additional Warrants pursuant to the terms hereof; and

     WHEREAS,  the  Company has agreed that  Lender  shall  retain the  Warrants
previously  issued to it by Borrower and that it will issue to Lender additional
Warrants, effective as of December 27, 1999, pursuant to the terms hereof; and

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     WHEREAS,  the  Borrowers  and Lender  desire to amend and  restate the Loan
Agreement among them dated December 27, 1999 to reflect the foregoing;

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:

ARTICLE I. DEFINITIONS

     Section  1.01.  Defined  Terms.  In  addition  to the other  terms  defined
elsewhere in this  Agreement,  as usederein,  the following terms shall have the
following meanings:

     "Advances"  shall mean funds advanced under the Line of Credit from time to
time  by the  Lender  to  either  or  both  of the  Borrowers  pursuant  to this
Agreement; each of which Advances shall be subject at all times to the terms and
conditions set forth herein.

     "Advance  Period" shall mean the period from the  Agreement  Date to a date
which shall be two (2) years following the Agreement Date.

     "Advance  Requests" shall mean a Borrower's written request made during the
Advance  Period to the  Lender  for any one or more  Advances  under the Line of
Credit provided for herein.

     "Affiliate"  shall mean,  with  respect to any Person,  any other Person in
control of,  controlled by, or under common  control with the first Person,  and
any other Person who has a  substantial  interest,  direct or  indirect,  in the
first  Person  or any of its  Affiliates,  including,  without  limitation,  any
officer  or  director  of the  first  Person or any of its  Affiliates;  for the
purpose of this  definition,  a "substantial  interest" shall mean the direct or
indirect  legal or  beneficial  ownership  of more than five (5%) percent of any
class of stock or similar interest.

     "Agreement"  shall mean this Loan  Agreement as it may from time to time be
amended and/or supplemented.

     "Agreement Date" shall mean December 27, 1999.

     "Applicable   Law"  shall  mean  all  applicable   provisions  of  all  (a)
constitutions,  statutes,  ordinances,  rules,  regulations  and  orders  of all
governmental and/or quasi-governmental bodies, (b) Government Approvals, and (c)
orders, judgments and decrees of all courts and arbitrators.

     "Business Day" shall mean a day other than (a) a Saturday, (b) a Sunday, or
(c) in the case of a day on which  any  payment  hereunder  is to be made in the
State of New York, a day on which  commercial banks in the State of New York are
authorized or required by law to close.

     "Capital  Base" shall mean,  for any fiscal period in question,  the sum of
(a) the  consolidated  stockholders'  equity of the Company and its consolidated
Subsidiaries,  as calculated in accordance  with GAAP, and (b) all  Subordinated
Debt outstanding at the end of such fiscal period.

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     "Capital   Expenditures"  shall  mean  with  respect  to  any  Person,  all
expenditures of such Person for tangible assets which are  capitalized,  and the
fair value of any  tangible  assets  leased by such Person under any lease which
would be a Capitalized Lease,  determined in accordance with GAAP, including all
amounts paid or accrued by such Person in connection with the purchase  (whether
on a cash or  deferred  payment  basis) or lease  (including  Capitalized  Lease
Obligations) of any machinery,  equipment, tooling, real property,  improvements
to real property (including leasehold improvements), or any other tangible asset
of the Borrowers which is required,  in accordance with GAAP, to be treated as a
fixed asset on the consolidated balance sheet of such Person.

     "Capitalized  Lease" shall mean any lease which is or should be capitalized
on the balance sheet of the lessee thereunder in accordance with GAAP.

     "Capitalized  Lease Obligation" shall mean with respect to any Person,  the
amount of the liability  which reflects the amount of future  payments under all
Capitalized Leases of such Person as at any date,  determined in accordance with
GAAP.

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended,  and the
rules and regulations promulgated thereunder, as in effect from time to time.

     "Collateral" shall mean all now-owned and  hereafter-acquired  tangible and
intangible  personal property of the Borrowers,  including,  without limitation,
all cash,  marketable  securities,  accounts receivable,  inventories,  Contract
rights,   patents,   trademarks,   copyrights  and  other  general  intangibles,
machinery,  equipment  and interests in real estate of the  Borrowers,  together
with all products and proceeds thereof.

     "Common  Stock" shall mean the common stock,  $.01 par value per share,  of
the Company;  being the only issued class or series of voting  securities of the
Company.

     "Contract" shall mean any indenture, agreement (other than this Agreement),
other  contractual  restriction,  lease in which  either of the  Borrowers  is a
lessor or lessee, license,  instrument,  or certificates of incorporation of the
Borrowers.

     "Current  Assets" shall mean, at a particular date, all assets which would,
in  conformity  with GAAP,  be  properly  classified  as  current  assets on the
consolidated balance sheet of the Company and its Subsidiaries as at such date.

     "Current  Liabilities"  shall mean, at a particular  date, all  liabilities
which  would,  in  conformity  with  GAAP,  be  properly  classified  as current
liabilities  on  the   consolidated   balance  sheet  of  the  Company  and  its
Subsidiaries  as at such  date,  including  all  Line of  Credit  Advances  then
outstanding under the Line of Credit Note.

     "Current  Ratio" shall mean, on any given date, the ratio of Current Assets
to Current Liabilities.

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     "Default"  shall mean any of the events  specified  in Article  VII hereof,
whether or not any requirement  for the giving of notice,  the lapse of time, or
both, or any other condition, has been satisfied.

     "EBITDA"  shall mean earnings  before  interest,  taxes,  depreciation  and
amortization.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
in effect from time to time.

     "ERISA Affiliate" shall mean, with respect to any Person,  any other Person
which is under  common  control  with the first  Person  within  the  meaning of
Section 414(b) or 414(c) of the Code.

     "Event of Default"  shall mean any of the events  specified  in Article VII
hereof,  provided that any  requirement  for the giving of notice,  the lapse of
time, or both, or any other condition, has been satisfied.

     "Excess  Available  Cash" shall mean for any  particular  fiscal quarter in
question,  100% of the  positive  amount,  if any,  by which the  Company's  and
Subsidiaries  cash and cash equivalents on the last Business Day of the quarter,
as set forth in its  statement of cash flows for such quarter,  collectively  on
the final day of such fiscal quarter, exceed (i) the total of (x) Net Cash to be
Used in Operating  Activities,  (y) Net Cash to be Used in Investing  Activities
and (z) any required principal payments to DVI, for the coming fiscal quarter as
set  forth in the  Company's  budget or (ii) an  amount  equal to the  Company's
average monthly cash expenditures during the fiscal quarter in question.

     "Existing  Indebtedness"  shall  mean  any  Indebtedness  of the  Borrowers
incurred  prior to the  Agreement  Date.  Existing  Indebtedness  shall  include
obligations to DVI.

     "Existing Liens" shall mean any Lien or other encumbrance that was incurred
as a result of any Existing Indebtedness.

     "Fiscal  Year"  shall mean the fiscal year of the  Borrowers  which ends on
March 31 of each year.  In the event that such  Fiscal  Year is so changed  from
March 31 to another  date with the  consent of the  Lender,  then the  quarterly
periods and annual periods referred to in Article V hereof shall also be amended
to coincide with such Fiscal Year, as so changed.

     "GAAP" shall mean generally  accepted  accounting  principles in the United
States of America,  consistently applied, unless the context otherwise requires,
with respect to any financial terms,  ratios or covenants  contained  herein, as
then  in  effect  with  respect  to the  preparation  of  financial  statements;
provided,  however,  that  if any  change  in  GAAP  enacted  subsequent  to the
Agreement  Date shall affect the  financial  covenants  referred to herein,  the
parties shall, in good faith, appropriately amend such covenants to reflect such
changes in GAAP.

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     "Government  Approval" shall mean an  authorization,  consent,  non-action,
approval,  license or exemption of,  registration  or filing with, or report to,
any governmental or quasi-governmental department, agency, body or other unit.

     "Guaranty",  "Guaranteed" or to "Guarantee", as applied to any Indebtedness
or Liability,  shall mean and include the following,  unless entered into in the
ordinary  course of business:  (a) a guaranty,  directly or  indirectly,  in any
manner,  including by way of endorsement  (other than endorsements of negotiable
instruments for collection),  of any part or all of such obligation,  and (b) an
agreement,  contingent or otherwise, and whether or not constituting a guaranty,
assuring, or intended or the practical effect of which is to assure, the payment
or performance  (or payment of damages in the event of  non-performance)  of any
part or all of such  obligation  whether by (i) the  purchase of  securities  or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property,
or the purchase or sale of services,  primarily  for the purpose of enabling the
obligor with respect to such  obligation to make any payment or performance  (or
payment of damages in the event of non-performance) of or on account of any part
or all of such  obligation,  or to assure the owner of such  obligation  against
loss,  (iii) the  supplying of funds to or in any other manner  investing in the
obligor with respect to such  obligation,  (iv) the  repayment of amounts  drawn
down by  beneficiaries  of letters of credit  not  arising  out of the import of
goods,  (v) the supplying of funds to or investing in a Person on account of all
or any part of such Person's  obligation under a Guaranty of any such obligation
or indemnifying or holding harmless, in any way, such Person against any part or
all of such obligation, or (vi) otherwise.

     "Indebtedness"  of any Person  shall  mean,  without  duplication,  (i) all
indebtedness  of such Person for  borrowed  money or for the  deferred  purchase
price of property or services, (ii) all indebtedness of such Person evidenced by
a note, bond,  debenture or similar  instrument,  (iii) the outstanding  undrawn
amount of all  letters of credit  issued for the  account  of such  Person  and,
without  duplication,  all  un-reimbursed  amounts  drawn  thereunder,  (iv) all
indebtedness  of any other person or entity  secured by any Lien on any property
owned by such Person, whether or not such indebtedness has been assumed, (v) all
contingent  obligations of such Person, (vi) all unfunded benefit liabilities of
such  Person,  (vii) all payment  obligations  of such Person under any interest
rate protection  agreement  (including,  without  limitation,  any interest rate
swaps,  caps,  floors,  collars and similar  agreements)  and currency swaps and
similar  agreements,  (viii) all  indebtedness  and  liabilities  of such Person
secured by any Lien or mortgage on any property of such  Person,  whether or not
the same  would be  classified  as a  liability  on a  balance  sheet,  (ix) the
liability of such Person in respect of banker's  acceptances  and the  estimated
liability  under any  participating  mortgage,  convertible  mortgage or similar
arrangement,   (x)  the   aggregate   principal   amount  of  rentals  or  other
consideration  payable by such Person in accordance with GAAP over the remaining
unexpired term of all Capitalized  Leases of such Person,  (xi) all judgments or
decrees by a court or courts or  competent  jurisdiction  entered  against  such
Person,  (xii) all indebtedness,  payment obligations,  contingent  obligations,
etc.  of any  partnership  in which  such  Person  holds a  general  partnership
interest,  provided that if such indebtedness is non-recourse,  only the portion
of such indebtedness  equal to such Person's  percentage  ownership  interest in
such partnership  shall be included in this  definition,  (xiii) all convertible
debt and subordinated debt owed by such Person, (xiv) all preferred stock issued
by such Person that,  in either  case,  are

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<PAGE>

redeemable for cash on a mandatory basis, a cash  equivalent,  a note receivable
or similar instrument or are convertible on a mandatory basis to Indebtedness as
defined herein (other than Indebtedness  described in clauses (iii),  (vi), (x),
(xi) or  (xiv) of this  definition),  and  (xv)  all  obligations,  liabilities,
reserves and any other items which are listed as a liability on a balance  sheet
of such Person  determined on a consolidated  basis in accordance with GAAP, but
excluding (A) all general contingency  reserves and reserves for deferred income
taxes and  investment  credit and (B) all customary  trade  payables and accrued
expenses not more than sixty (60) days past due and (C) any indebtedness of such
Person  evidenced by a note or notes that is secured by a pledge of cash or cash
equivalents  with a value  equal to or greater  than the  amount of the  related
indebtedness  and which  generates  cash flow  sufficient to pay all sums due on
such indebtedness when the same are due and payable.

     "Interest   Coverage   Ratio"  shall  mean,  as  to  the  Company  and  its
Subsidiaries on a consolidated  basis for any given fiscal period,  the ratio of
EBITDA  earned in such fiscal  period to the total  amount of  Interest  Expense
incurred in such fiscal period.

     "Interest  Expense"  shall mean,  with respect to any Person for any fiscal
period, all interest on, or the interest component of, all Indebtedness.

     "Investment",  as applied to any  Borrower,  shall mean:  (a) any shares of
capital stock, assets,  evidence of Indebtedness or other security issued by any
other Person to a Borrower or any Subsidiary, (b) any loan, advance or extension
of credit to, or  contribution  to the capital of, any other Person,  other than
credit terms extended to customers in the ordinary  course of business,  (c) any
Guaranty  of  any  indebtedness  or  liability  of any  other  Person,  (d)  any
obligation  owed to a  Borrower  secured  by a Lien on,  or  payable  out of the
proceeds of production  from,  any property of any other Person,  whether or not
such obligation shall have been assumed by such Person, (e) any other investment
by a Borrower or any Subsidiary thereof in any assets or securities of any other
Person, and (f) any commitment to make any Investment.

     "Lien",  as  applied  to the  property  or assets (or the income or profits
therefrom)  of any  Borrower,  shall  mean (in each  case,  whether  the same is
consensual  or  nonconsensual  or arises by contract,  operation  of law,  legal
process or otherwise): (a) any mortgage, lien, pledge,  attachment,  assignment,
deposit arrangement, encumbrance, charge, lease constituting a Capitalized Lease
Obligation,  conditional  sale or  other  title  retention  agreement,  or other
security  interest  or  encumbrance  of any  kind  in  respect  of any  property
(including,  without limitation, stock of any Subsidiary) of a Borrower, or upon
the income or profits therefrom, (b) any arrangement,  express or implied, under
which any  property  of a Borrower  is  transferred,  sequestered  or  otherwise
identified  for the purpose of subjecting  or making  available the same for the
payment of indebtedness or the performance of any other liability in priority to
the  payment  of  the  general,  unsecured  creditors  of a  Borrower,  (c)  any
Indebtedness  which  remains  unpaid more than five (5) calendar  days after the
same  shall have  become due and  payable  and  which,  if unpaid,  might by law
(including  but not limited to bankruptcy  or  insolvency  laws) or otherwise be
given  any  priority  whatsoever  over the  general,  unsecured  creditors  of a
Borrower,  (d) any agreement  (other than this Agreement) or other  arrangement,
express or implied,  which,  directly or  indirectly,  prohibits a Borrower from
creating  or  incurring  any Lien on any of its

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properties or assets or which  conditions  the ability to do so on the security,
on  a  pro  rata  or  other  basis,  of  indebtedness  other  than  indebtedness
outstanding under this Agreement,  and (e) any arrangement,  express or implied,
under which any right or claim of a Borrower is subject or  subordinated  in any
way to any right or claim of any other Person.

     "Line of  Credit"  shall mean the line of credit in the  maximum  principal
amount outstanding at any one time of $7,500,000 to be made by the Lender to the
Borrowers pursuant to this Agreement.

     "Maturity  Date"  shall mean the earlier of (a) the first date on which the
Company shall have received,  in the aggregate,  $12,500,000 or more from equity
and/or debt  financings  consummated  subsequent to the  Agreement  Date, or (b)
December 27, 2004.

     "Material  Adverse  Effect"  shall mean any event or condition  that has or
could reasonably be anticipated to have a material adverse effect on the Working
Capital,  condition  (financial or otherwise),  assets,  liabilities,  reserves,
business,  prospects,  management  or  Business  Operations  of  either  of  the
Borrowers, when taken individually or as a consolidated whole.

     "Net Income",  as applied to the  Borrowers,  shall mean the net income (or
loss)  of the  Company  and its  consolidated  Subsidiaries  for the  period  in
question,  after giving  effect to deduction of or provision  for all  operating
expenses, all taxes and reserves (including reserves for deferred taxes) and all
other proper deductions,  all determined in accordance with GAAP; provided that,
for purposes of  calculating  Net Income,  there shall be excluded and no effect
shall be given to:

     (a) any restoration of any contingency  reserve,  except to the extent that
provision for such reserve was made out of income for the subject period;

     (b) any net gains or losses  on the sale or other  disposition,  not in the
ordinary  course of  business,  of  Investments  and/or  other  capital  assets,
provided  that there  shall  also be  excluded  any  related  charges  for taxes
thereon; and

     (c) any net  gain  arising  from  the  collection  of the  proceeds  of any
insurance policy or policies.

     "Note" shall mean the Line of Credit  Promissory  Note, dated the Agreement
Date in the maximum  principal amount of $7,500,000  issued by the Borrowers and
payable  to  the  order  of the  Lender,  to  represent  the  aggregate  amounts
outstanding  from  time to time  under  the Line of  Credit,  all in the form of
Exhibit "A" annexed hereto and made a part hereof.

     "Obligations"  shall mean the collective  reference to all Indebtedness and
other  liabilities  and  obligations of every kind and  description  owed by the
Borrowers  to the  Lender  from  time to time,  however  evidenced,  created  or
incurred, whether direct or indirect, primary or secondary, fixed or contingent,
now or hereafter  existing,  due or to become due,  including but not limited to
obligations represented by or arising under this Agreement,  the Note and/or the
Security Documents.

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<PAGE>

     "Permitted  Liens"  shall mean those Liens  expressly  permitted to Section
6.02 below.

     "Person"  shall  mean any  individual,  partnership,  corporation,  limited
liability  company,  banking  association,  business trust, joint stock company,
trust,  unincorporated  association,  joint venture,  governmental  authority or
other entity of whatever nature.

     "Principal  Payment Date" shall mean the date which is forty-five (45) days
after  the  last  business  day of each  December,  March,  June  and  September
commencing on May 15, 2000.

     "Registration   Rights  Agreement"  shall  mean  the  Registration   Rights
Agreement  in the form of Exhibit "D" hereto,  dated the  Agreement  Date by and
between the Lender and the Company  pursuant to which the Company will  register
the shares of the Company's Common Stock underlying the Warrants.

     "SEC" shall mean the Securities and Exchange  Commission,  or any successor
to the functions of such agency.

     "Security  Agreement"  shall  mean the  Security  Agreement  in the form of
Exhibit "C" hereto,  dated the Agreement Date, by and between the Lender and the
Borrower,  as same  may be  amended  and/or  supplemented  from  time to time in
accordance  therewith,  pursuant to which the Lender has  received a  continuing
priority  lien  and  security   interest  in  and  to  all  of  the  Collateral,
subordinated only to the first priority Lien of the Senior Lender.

     "Security  Documents"  shall  mean the  collective  reference  to:  (a) the
Security Agreement, (b) any specific assignments executed and delivered pursuant
to the  Security  Agreement,  and (c) all UCC  Financing  Statements  and  other
documents  filed or recorded to evidence  and/or  perfect the  foregoing,  or to
further or collaterally  secure same, all as may be amended or supplemented from
time to time in accordance therewith.

     "Senior Lender" shall mean DVI Financial  Services,  Inc. ("DVI") which has
provided  the  Borrower  with  loans and  advances  up to  $6,222,415.63  in the
aggregate (the "Senior Indebtedness");  which is secured by first priority Liens
on the Collateral.

     "Subordinated  Debt" shall mean all  indebtedness  for money  borrowed  and
other liabilities of the Borrower, whether or not evidenced by promissory notes,
which is  subordinated  in right of  payment,  in a manner  satisfactory  to the
Lender  (as  evidenced  by its prior  written  approval  thereof),  to all other
Obligations of the Borrowers to the Lender.

     "Subsidiary"  or  "Subsidiaries"  shall mean the  individual  or collective
reference to any corporation of which 50% or more of the  outstanding  shares of
stock of each class having  ordinary  voting power (other than stock having such
power only by reason of the happening of a contingency)  is at the time owned by
the Company,  directly or  indirectly  through one or more  Subsidiaries  of the
Company. Schick New York is a Subsidiary of the Company.

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<PAGE>

     "UCC Financing Statements" shall mean the Uniform Commercial Code financing
statements on Form UCC-1 (or other  applicable  form) executed by the Borrowers,
in  form  for  filing  and  recording  in  the  appropriate   state  and  county
jurisdictions in which any of the Borrower  maintains any assets or conducts any
business.

     "Warrants" shall refer to the eighteen million (18,000,000) warrants issued
hereunder by Borrower to Lender,  which have an  agreed-upon  fair value of $.03
per Warrant.

     "Working  Capital"  shall mean, on any given date,  the amount by which the
Borrowers'  consolidated  Current Assets shall exceed their consolidated Current
Liabilities, as determined in accordance with GAAP.

     Section 1.02.  Use of Defined  Terms.  All terms defined in this  Agreement
shall have their defined meanings when used in the Note, the Security Documents,
and all certificates,  reports or other documents made or delivered  pursuant to
this Agreement,  unless otherwise defined therein or unless the specific context
shall otherwise require.

     Section 1.03.  Accounting  Terms.  All  accounting  terms not  specifically
defined herein shall be construed in accordance with GAAP.

ARTICLE II. GENERAL TERMS

     Section 2.01. The Line of Credit.

     (a) Advances;  Periodic Repayments of Advances. Subject at all times to all
of the terms and conditions of this Agreement,  including Section 2.02,  Section
2.03 and Article IV hereof,  during the Advance  Period the Lender hereby agrees
to provide to the  Borrowers a Line of Credit of up to a maximum of  $7,500,000.
The Lender shall have no  obligation  to provide any Advances and the  Borrowers
shall not  submit any  Advance  Request to the Lender at any time (i) in which a
Default or an Event of Default  hereunder shall have occurred and be continuing,
or (ii) following the Advance Period. Unless an Event of Default hereunder shall
have  occurred and be continuing or this  Agreement  shall be sooner  terminated
pursuant to the terms hereof, all outstanding Advances, together with all unpaid
accrued interest  thereon,  shall be due and payable in full by the Borrowers to
the Lender on the Maturity Date. Notwithstanding the foregoing, unless otherwise
agreed to in writing by the Lender in connection with the Restructuring  Plan or
otherwise, on each Principal Payment Date, the Company shall reduce all Advances
outstanding on such Principal Payment Date by making a cash payment against such
Advances to the Lender in an amount which shall be equal to the Excess Available
Cash, if any,  during the calendar  quarter  immediately  preceding the Interest
Payment Date in question.

     (b)  Interest.   The  Borrowers  shall  pay  the  Lender  interest  on  all
outstanding  Advances  under the Line of Credit at the rate of ten (10%) percent
per annum,  all in accordance with the Note. Such interest shall be payable on a
quarterly  basis on the last Business Day of each of December,  March,  June and
September,  commencing  December 30, 1999 (each an "Interest Payment Date"). The
amount of interest  payable on each Interest  Payment Date shall be based on the
average  outstanding amount of the Advances in the calendar quarter  immediately

                                       9
<PAGE>

preceding such Interest Payment Date (for the December 30, 1999 Interest Payment
Date,  calculated from the Agreement Date to December 30, 1999).  Interest shall
be based on a three hundred sixty (360) day year,  counting the actual number of
days in each month. Unless a Default or Event of Default exists at the beginning
of any calendar  quarter,  the interest  shall be calculated at the  non-default
rate set forth in the Note;  and in the event that a Default or Event of Default
shall  occur  during  any  calendar  quarter,   then  the  additional   interest
attributable  to the  increase in interest  rate  resulting  therefrom  shall be
payable on demand (or, in the absence of demand, on the next scheduled  Interest
Payment Date in conjunction with the quarterly interest payment).

     (c) Prepayment.  The Borrowers  shall have the right to prepay  outstanding
Advances in whole or in part,  without premium or penalty,  at any time and from
time to time.

     (d) Maturity Date. Unless an Event of Default hereunder shall have occurred
and  be  continuing,  hereof,  the  Borrowers  shall  pay  in  full  all  of the
Obligations  in respect of the Line of Credit on the Maturity  Date,  subject to
prior mandatory  prepayments or reductions of outstanding Advances out of Excess
Available Cash as provided in Section 2.01(a) hereof.

     (e) The  Note.  The Loan  shall be  evidenced  by the  Note,  the terms and
conditions of which are hereby  incorporated herein by reference and made a part
hereof.

     Section 2.02.  Procedure for Making Advances.  (a)  Simultaneous  with each
Advance  Request,  the  Company  will  deliver to the  Lender (i) a  certificate
executed by the President, Chief Executive Officer or Chief Financial Officer of
Borrower  attesting  in their  capacity as executive  officers of such  Borrower
that,  as at the date of each  Advance  Request,  no Default or Event of Default
hereunder shall have occurred and be continuing,  and (ii) a reasonably detailed
statement  of the intended  use of the  proceeds of such  Advance,  including if
applicable  the item or  items to be  purchased  and the  Indebtedness  or other
liabilities to be paid (the "Advance Analysis"); (b) The Lender shall notify the
Company,  in writing,  within five (5)  Business  Days of receipt of the Advance
Analysis whether or not the Lender will make the Advance.  The Lender may refuse
to make the Advance if: (i) it does not approve the use of the  proceeds of such
Advance  Request for the uses set forth in the Advance  Analysis  (the  "Written
Notification"),  which approval shall not be unreasonably withheld.  Among other
things,  it shall not be  unreasonable  for the Lender to disapprove the Advance
Request  because either of the Borrowers has suffered a Material  Adverse Effect
and such Material  Adverse Effect remains uncured.  In addition,  the Lender may
refuse  to make an  Advance  if,  in the  exercise  of its  sole  discretion  it
determines that it would be imprudent to make such Advance because of the status
of any litigation or investigation  respecting  either of the Borrowers or their
officers or directors;

     (c) If Lender does not approve  the  Advance  Request for any reason  other
than the status of any  litigation or  investigation,  the Written  Notification
shall provide a reasonably detailed explanation of the reason(s) therefor.  Upon
approval of the Advance  Request by the Lender it will  authorize  an  immediate
drawing of such  Advance  under the Line of Credit and fund the  Advance for the
purposes  specified in the Advance Analysis for any reason other than the status
of any  litigation  or  investigation.  In the event  that the  Lender  does not
approve the

                                       10
<PAGE>

Advance  Analysis,  the  parties  shall  promptly  undertake  in good  faith  to
expeditiously  resolve the  matter;  if the parties do not resolve the matter to
their mutual  satisfaction  by the earlier of (a) five (5)  business  days after
Borrower's  receipt of the Written  Notification,  or (b) ten (10) business days
after Lender's  receipt of the Advance  Analysis,  the parties shall submit this
matter to arbitration administered by the American Arbitration Association under
its Commercial  Arbitration  Rules, and jointly request that said arbitration be
conducted in an expedited manner, and the parties shall abide by and perform any
decision and/or award rendered by the arbitrator(s) and agree that a judgment of
any court having  jurisdiction  may be entered upon the award,  and that neither
party shall seek to challenge or overturn the decision  and/or award rendered by
the arbitrator(s). Any arbitration proceedings conducted hereunder shall be held
in New York, New York; and

     (d) If the actual use of  proceeds  differs  materially  from the  purposes
specified  in the Advance  Analysis,  the Company  shall  notify the Lender in a
writing which shall provide (i) a reasonably detailed explanation of the reasons
for the change;  and (ii) an updated  statement of the intended use of proceeds.
After receipt of such notice, the parties shall follow the procedures enumerated
in Sections 2.02(b) and 2.02(c) above.

     (e) The Lender and Borrowers agree that the $1,000,000 cash payment made by
Lender in connection  with the Stock  Purchase  shall be retained by the Company
and shall  constitute  the initial  Advance  hereunder  made as of the Agreement
Date.

     Section 2.03. Issuance of Warrants .

     (a) On the Agreement Date, the Company shall issue to the Lender a total of
eighteen  million  (18,000,000)  fully  vested  Warrants,  of which five million
(5,000,000)  Warrants are  immediately  exercisable as of the Agreement Date and
the  remaining  thirteen  million   (13,000,000)   Warrants  shall  each  become
exercisable once it is no longer subject to forfeiture,  as set forth in Section
2.03(b) hereinafter.

     (b)  Lender and  Borrowers  agree that with  respect to all  Advances  from
$1,000,001 to $7,500,000 in the aggregate, for each dollar which Lender does not
advance to Borrowers  hereunder prior to the expiration or surrender of the Line
of Credit,  Warrants to purchase two (2) shares of Company Common Stock shall be
forfeited and canceled.;

     (c) By way of  example  of the  application  of  Sections  2.03 (a) and (b)
above,  if the Borrowers  have  outstanding at any one time under this Agreement
Advances of $3,000,000,  then the Lender shall be entitled to exercise  Warrants
to purchase an aggregate of 9,000,000 shares of Company Common Stock. (d) By way
of further example,  based upon a maximum of $7,500,000 of Advances which may be
made by the  Borrowers  hereunder,  if at any time or from time to time prior to
the Maturity Date there shall be outstanding at any time the full  $7,500,000 of
Advances,  the Lender  shall be  entitled  to  exercise  Warrants to purchase an
aggregate of 18,000,000  shares of Company Common Stock,  at the exercise prices
described in the Warrants.

                                       11
<PAGE>

     (e) In all cases described in this Section 2.03, the number of shares
of Common  Stock and  exercise  prices per share are  subject to  adjustment  to
protect the holder against dilution, all as provided in the form of Warrants.

     Section  2.04.  Security  for the  Obligations.  The  Note  and  all  other
Obligations  shall at all times be secured by a security  interest in all of the
Collateral  which shall be  subordinated  only to the first priority Lien of the
Senior  Lender,  all  pursuant to the terms of the  Security  Agreement  and any
specific  assignments  executed and delivered pursuant thereto; all as evidenced
by UCC Financing  Statements  which the Lender and its counsel may require to be
executed and filed.

     Section 2.05.  Further  Obligations.  With respect to all  Obligations  for
which  the  interest  rate  is not  otherwise  specified  herein  (whether  such
Obligations  arise  hereunder,  pursuant  to the  Note  or  any of the  Security
Documents, or otherwise), such Obligations shall bear interest at the rate(s) in
effect from time to time pursuant to the Note.

     Section 2.06. Obligations Unconditional. The payment and performance of all
Obligations shall constitute the absolute and  unconditional  obligations of the
Borrowers,  and shall be  independent  of any  defense  or  rights  of  set-off,
recoupment or  counterclaim  which the Borrower might otherwise have against the
Lender.  All  payments  required by this  Agreement  and/or the Note or Security
Documents shall be paid free of any deductions and without abatement, diminution
or set-off.

     Section  2.07.  Reversal  of  Payments.  To the extent  that any payment or
payments made to or received by the Lender pursuant to this Agreement,  the Note
or any of the Security  Documents are subsequently  invalidated,  declared to be
fraudulent or preferential,  set aside, or required to be repaid to any trustee,
receiver or other  person  under any state or federal  bankruptcy  or other such
law, then, to the extent  thereof,  such amounts shall be revived as Obligations
and continue in full force and effect  hereunder and be secured  pursuant to the
Security Documents,  as if such payment or payments had not been received by the
Lender.

     Section 2.08. Return of Warrants to the Company.

     (a) In the event that the Lender refuses to make Advances duly requested by
the Borrowers in accordance with Section 2.02 hereof AND such refusal is:

          (i) based on the Lender's  concern over  developments  relating to the
     pendency  of any  investigation  or  litigation  respecting  either  of the
     Borrowers  or their  officers or directors  at the sole  discretion  of the
     Lender, or

          (ii)  determined by arbitration to be an  unreasonable  refusal by the
     Lender to make Advances as provided in Section 2.02(c) hereof,

the Company  shall be entitled to receive from the Lender the number of Warrants
described in Section 2.08(b) hereof;

                                       12
<PAGE>

     (b) If prior to date of such  refusal  to make  Advances,  the  Lender  has
Advanced to the Borrowers pursuant to this Agreement:

          (i) up to a maximum level of Advances of $2,500,000,  the Lender shall
     return 2,000,000 Warrants to the Company;

          (ii) between a maximum level of Advances of $2,500,000 and $5,000,000,
     the Lender shall return 1,000,000 Warrants to the Company; and

          (iii) more than a maximum level of Advances of $5,000,000,  the Lender
     shall not be required to return any Warrants to the Company;

     Section 2.09.  Fair Value of Warrants.  The parties agree that the Warrants
have a fair value, as of the Agreement Date, of $.03 per Warrant.

ARTICLE III. REPRESENTATIONS AND WARRANTIES

     The   Borrowers   hereby   jointly  and   severally   make  the   following
representations  and warranties to the Lender, all of which  representations and
warranties  shall survive the Agreement  Date, the delivery of the Notes and the
making of Advances, and are as follows:

     Section 3.01. Financial Matters.

     (a) The Borrowers have  heretofore  furnished to the Lender (i) the audited
consolidated  financial  statements  (including   consolidated  balance  sheets,
consolidated  statements of income and consolidated statements of cash flows) of
the Company and its  consolidated  Subsidiaries as at March 31, 1996,  1997, and
1998 and for each of the three (3) consecutive Fiscal Years ended on such dates,
and (ii) the unaudited consolidated financial statements (including consolidated
balance sheets, consolidated statements of income and consolidated statements of
cash flows) of the Company and its consolidated Subsidiaries as of the March 31,
1999 (collectively, the "Financial Statements").

     (b) The Financial  Statements have been prepared in accordance with GAAP on
a  consistent  basis for all  periods,  are complete and correct in all material
respects, and fairly present the consolidated financial condition of the Company
and  its  consolidated  Subsidiaries  as at  said  dates,  and  the  results  of
operations  for the periods  stated.  The books of account  and other  financial
records of the  Company and each of the  Subsidiaries  have been  maintained  in
accordance with GAAP,  consistently  applied. The Borrowers acknowledge that the
financial  results set forth in its Financial  Statements for the first,  second
and  third  quarters  of the  Fiscal  Year  ended  March  31,1999  will  require
restatement and that the  representations  set forth in this Section 3.01(b) are
subject to, and qualified by, any such Restatement(s).

     (c) Neither the Company nor any of the  Subsidiaries  has any  liabilities,
Indebtedness,  obligations  or  commitments  of any kind or  nature  whatsoever,
whether  absolute,  accrued,  contingent  or  otherwise  above  $100,000  in the
aggregate   or   $25,000    individually    (collectively    "Liabilities    and
Contingencies"),  including,  without limitation,  Liabilities and Contingencies

                                       13
<PAGE>

under  employment  agreements  and  with  respect  to  any  "earn-outs",   stock
appreciation   rights,  or  related   compensation   obligations,   except:  (i)
Liabilities and Contingencies disclosed in the Financial Statements or footnotes
thereto,  or in the Pro Forma Balance Sheet,  (ii) Liabilities and Contingencies
not incurred in the ordinary  course of the  Business  Operations,  all of which
(and the amounts thereof, to the extent determinable) are disclosed on Schedules
to this  Agreement (to the extent  required to be so disclosed  hereunder) or in
public filings made with the SEC under the  Securities  Exchange Act of 1934, as
amended (true and complete  copies of which  filings have been  furnished to the
Lender),  (iii) Liabilities and Contingencies incurred in the ordinary course of
business and  consistent  with past  practice  since the date of the most recent
Financial  Statements,  which are not  required to be  disclosed on Schedules to
this Agreement, or (iv) those Liabilities which are not required to be disclosed
under GAAP. The reserves, if any, reflected on the consolidated balance sheet of
the  Company  and  the  Subsidiaries  included  in  the  most  recent  Financial
Statements are appropriate and reasonable. The Borrowers have not had and do not
presently  have any  contingent  obligations,  liabilities  for taxes or unusual
forward  or  long-term  commitments  except  as  specifically  set  forth in the
Financial Statements or in Schedule "3.01" annexed hereto.

     (d) Except as otherwise  reflected on Schedule  "3.01,"  Schedule "3.04" or
Schedule "3.05" to this Agreement,  since the date of the most recent  Financial
Statements,  no  Material  Adverse  Effect  shall  have  occurred  and  shall be
continuing, including, without limitation, the following:

          (i) there has been no change in any assumptions underlying,  or in any
     methods of calculating, any bad debt, contingency or other reserve relating
     to the Company or any of the Subsidiaries;

          (ii) there have been no  write-downs in the value of any inventory of,
     and there have been no write-offs as uncollectible  of any notes,  accounts
     receivable  or other  receivables  of, the  Company  and the  Subsidiaries,
     except for  write-downs  and write-offs in the ordinary  course of business
     and consistent with past practice, none of which shall be material (and all
     of  which  are  described  in the  Schedules  to this  Agreement  or in the
     Financial Statements);

          (iii) no  material  debts have been  canceled,  no claims or rights of
     substantial value have been waived and no significant  properties or assets
     (real,   personal  or  mixed,  tangible  or  intangible)  have  been  sold,
     transferred,  or  otherwise  disposed of by the Company or any  Subsidiary,
     except  in the  ordinary  course  of  business  and  consistent  with  past
     practice;

          (iv)  there  has  been  no  change  in any  method  of  accounting  or
     accounting practice utilized by the Company or any of the Subsidiaries;

          (v) no  material  casualty,  loss or damage has been  suffered  by the
     Company or any of the  Subsidiaries,  regardless of whether such  casualty,
     loss or damage is or was covered by insurance; and

                                       14
<PAGE>

          (vi) no action described in this Section 3.01(d) has been agreed to be
     taken by the Company or any of the Subsidiaries.

     Section 3.02. Organization; Corporate Existence. Each of the Borrowers: (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the States of  Delaware  or New York,  (b) has all  requisite  corporate
power and authority to own its  properties and to carry on its businesses as now
conducted and as proposed hereafter to be conducted, (c) is duly qualified to do
business  as a foreign  corporation  in each and every  jurisdiction  where such
qualification  is  necessary  and where the  failure to so qualify  would have a
material adverse effect on its financial condition, business, operations, assets
or  properties,  and (d) has all  requisite  corporate  power and  authority  to
execute and deliver,  and perform all of its  obligations  under this Agreement,
the Notes, the Warrants and the Security Documents.  True and complete copies of
the: (i) Certificates of Incorporation of each of the Borrowers,  as amended and
restated to date, and (ii) By-Laws of each of the  Borrowers,  together with all
amendments thereto, have been furnished to the Lender.

     Section 3.03.  Authorization.  The execution,  delivery and  performance by
each of the Borrowers of their respective obligations under this Agreement,  the
Notes,  the  Warrants,  the  Registration  Rights  Agreement  and  the  Security
Documents have been duly authorized by all requisite  corporate  action and will
not,  either  prior  to or as a  result  of the  consummation  of  the  Advances
contemplated by this Agreement: (a) violate any provision of Applicable Law, any
order  of any  court  or  other  agency  of  government,  any  provision  of the
Certificates  of  Incorporation  or By-Laws of the  Borrowers,  or any Contract,
indenture,  agreement  or other  instrument  to which any of the  Borrowers is a
party, or by which any of the Borrowers or any of their assets or properties are
bound,  other than in  agreements  between the  Company and DVI  relating to the
creating  of  Liens or (b) be in  conflict  with,  result  in a  breach  of,  or
constitute  (after  the  giving  of  notice  of lapse of time or both) a default
under,  or, except as may be provided in this Agreement,  result in the creation
or imposition of any Lien of any nature  whatsoever  upon any of the property or
assets  of any of the  Borrowers  pursuant  to,  any such  Contract,  indenture,
agreement  or other  instrument.  Except in respect of the filing of a Form 10-K
(including  amendments  thereto)  and/or  a Form  8-K or  Form  10-Q  under  the
Securities  Exchange Act of 1934, as amended,  the Borrowers are not required to
obtain any Government  Approval,  consent or authorization  from, or to file any
declaration or statement  with, any  governmental  instrumentality  or agency in
connection  with or as a condition to the execution,  delivery or performance of
any of this Agreement, the Notes, the Warrants or the Security Documents.

     Section 3.04.  Litigation.  Except as disclosed on Schedule  "3.04" annexed
hereto,  there is no  action,  suit or  proceeding  at law or in equity or by or
before any governmental  instrumentality  or other agency now pending or, to the
knowledge  of the  Borrowers,  threatened  against  or  directly  affecting  the
Borrowers or any of their  respective  assets,  which, if adversely  determined,
would have a Material  Adverse  Effect on any of such assets or on the business,
operations,  properties,  assets or condition,  financial or  otherwise,  of the
Borrowers.

     Section 3.05.  Material  Contracts.  Except as disclosed on Schedule "3.05"
annexed hereto,  none of the Borrowers is a party to any Contract,  agreement or
instrument or subject to

                                       15
<PAGE>

any charter or other corporate  restriction  that could have a Material  Adverse
Effect on the  Business  Operations,  properties,  assets or  operations  of the
Borrowers or is subject to any liability or obligation  under or relating to any
collective bargaining agreement, or in default in the performance, observance or
fulfillment of any of the obligations,  covenants or conditions contained in any
Contract,  agreement or instrument to which it is a party or by which any of its
assets or properties is bound, which default,  individually or in the aggregate,
could have a Material Adverse Effect on Borrower.

     Section 3.06.  Title to Properties.  The Borrowers have good and marketable
title to all of their  respective  properties and assets,  free and clear of all
mortgages, security interests, restrictions,  encumbrances or other Liens of any
kind, except for restrictions on the nature of use thereof imposed by Applicable
Law, and except for Existing Liens, none of which materially  interfere with the
use and  enjoyment  of such  properties  and assets in the normal  course of the
Business  Operations as presently  conducted,  or materially impair the value of
such properties and assets for the purpose of such business.

     Section  3.07.  Real  Properties.  Each of the  Borrowers is the record fee
owner or lessee of all of the Real Properties  owned or leased by such Borrower,
and:

     (a) All of the owned and leased real properties (other than real properties
under  Immaterial  Leases) will be owned or leased free and clear of any and all
mortgages,  liens,  charges,  easements and encumbrances binding upon any of the
Borrowers,  except for the Mortgages and the Lease  Assignments,  and except for
encumbrances or  imperfections of title listed in Schedule "3.07" annexed hereto
or other related immaterial  zoning,  easements or other restrictions of record,
none of which shall: (i) be material in amount; (ii) materially detract from the
value of any of the Real Properties;  (iii) materially  impair the use of any of
the Real Properties in connection with the Business  Operations;  or (iv) render
title to any of the Real Properties unmarketable or indefeasible;

     (b)  Except  as set  forth in  Schedule  "3.07"  annexed  hereto,  the Real
Properties  and  all  buildings  and  improvements  located  thereon  have  been
constructed to have access,  ingress,  egress,  water supply, storm and sanitary
sewage facilities,  telephone, gas, electricity,  fire protection,  and, without
limitation,  other required  public  utilities,  which are adequate for the uses
thereof in the Borrowers'  business;  and all access,  ingress and egress to and
from the Real Properties,  and all utility  connections  thereto,  are by public
streets and roads;

     (c) Except as set forth in Schedule  "3.07" annexed  hereto,  all buildings
and improvements located on the Real Properties (including,  without limitation,
the roofs, basements,  appliances,  the plumbing,  heating and electric systems,
the cesspools and septic systems, if any, and the elevators, if any) are in good
working order,  condition and repair (reasonable wear and tear excepted) for the
purposes currently used by the Borrowers,  and, to the Borrowers' knowledge, are
maintained in accordance with Applicable Law in all material  respects;  and, to
the Borrowers' knowledge, no condition exists pursuant to which any adjoining or
other  landowner  may claim  damage to such  landowner's  property  by reason of
drainage from or any other condition existing upon the Real Properties; and

                                       16
<PAGE>

     (d) Except as set forth in Schedule "3.07" annexed  hereto,  the use of the
Real  Properties  in and for the purposes of the Business  Operations is in full
compliance  with all building,  zoning and other  Applicable Law in all material
respects.

     Section 3.08.  Machinery and Equipment.  The machinery and equipment owned,
leased  and/or  otherwise  used by the  Borrowers is covered  under the Security
Agreement  and  is,  as to  each  individual  material  item  of  machinery  and
equipment,  and in the aggregate as to all such machinery and equipment, in good
and usable condition and in a state of good  maintenance and repair  (reasonable
wear and tear excepted), and adequate for its use in the Business Operations.

     Section  3.09.  Capitalization.  Except  as set  forth on  Schedule  "3.09"
annexed  hereto,  the  Company has no  Subsidiaries  other than Schick New York.
Neither the Company nor Schick New York owns any capital stock, equity or assets
of any other corporation, form or entity, except for the Company's investment in
Photobit  Corporation.  Schedule  "3.09"  annexed  hereto  fully  describes  the
capitalization  of  Photobit   Corporation  and  the  nature  of  the  Company's
investment therein.

     Section 3.10.  Solvency.  The Advances made and to be made by the Borrowers
under this Agreement, do not and will not render the Borrowers insolvent or with
unreasonably  small capital for their  business;  value of all of the assets and
properties of the  Borrowers do now, and will,  upon the funding of the Advances
contemplated  hereby,  exceed the aggregate  Liabilities and Indebtedness of the
Borrowers  (including  contingent   liabilities);   none  of  the  Borrowers  is
contemplating  either  the  filing of a  petition  under  any  state or  federal
bankruptcy  or  insolvency  law, or the  liquidation  of all or any  substantial
portion of its assets or property  and the  Borrowers  have no  knowledge of any
Person contemplating the filing of any such petition against the Borrowers.

     Section 3.11. Patents, Trademarks and Other Intellectual Property. Schedule
"3.11" annexed hereto correctly sets forth a list and brief description of:

     (a)  all  patents,   patent  applications,   copyright   registrations  and
applications,   registered   trade  names,  and  trademark   registrations   and
applications,  both domestic and foreign,  which are presently  owned,  filed or
held by any of the Company,  any Subsidiaries or any of their Affiliates (or any
of them), and/or any of the directors or officers of the Company,  and which are
used in the Business Operations;

     (b) all material  licenses,  both domestic and foreign,  which are owned or
controlled by any of the Company,  any  Subsidiaries or any of their  Affiliates
(or any of them),  and/or any of the  directors or officers of the Company,  and
which are used in the Business Operations; and

     (c) all material written franchises,  licenses and/or similar  arrangements
granted to any of the Company,  any  Subsidiaries or any of their Affiliates (or
any of them),  and/or any of the  directors  or  officers of the Company for the
benefit of the Business Operations,  or granted to others by the Company for the
benefit of the Business  Operations.  All letters patent,  patent  applications,
copyright  registrations  and  applications,  registered trade names,  trademark
registrations and applications,  franchises, licenses and other arrangements set
forth in

                                       17
<PAGE>

Schedule "3.11" are, except as otherwise provided by their terms and conditions,
assignable to the Lender, subject to the rights of the Senior Lender(s),  and do
not, to the knowledge of any Borrower,  infringe upon the rights of others,  and
are not subject to any pending challenge except as set forth in Schedule "3.11".
To the best of the Borrower's knowledge, no product, system or apparatus sold by
Borrower infringes on any patent owned by others.

     Section  3.12.  Full  Disclosure.  Except as set forth on  Schedule  "3.12"
annexed  hereto,  no  statement  of  fact  made  by or on  behalf  of any of the
Borrowers in this  Agreement,  in any Security  Document,  or in any  agreement,
certificate  or schedule  furnished to the Lender  pursuant  hereto  (including,
without limitation, all registration statements, proxy materials and Forms 10-K,
10-Q, 8-K, and amendments thereto,  for the fiscal period from July 1997 through
September  30, 1999,  as filed with the SEC) contains or will contain any untrue
statement of a material  fact,  or omits or will omit to state any material fact
necessary to make any  statements  contained  herein or therein not  misleading.
Except for matters of a general economic or political nature which do not affect
the Borrower  uniquely,  there is no fact presently  known to the Borrower which
has not been disclosed to the Lender,  which materially adversely affects, or so
far as the  Borrower  can  foresee,  will  materially  adversely  affect,  their
property, business, operations or condition (financial or otherwise).

     Section  3.13.  No  Investment  Company.   None  of  the  Borrowers  is  an
"investment  company",  or a company "controlled" by an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended.

     Section 3.14.  Margin  Securities.  None of the  Borrowers  owns or has any
present  intention  of  acquiring  any "margin  security"  within the meaning of
Regulation  G (12 CFR Part 207),  or any  "margin  stock"  within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve
System  (herein  called  "margin  security"  and  "margin  stock").  None of the
proceeds of the Line of Credit will be used,  directly  or  indirectly,  for the
purpose of  purchasing  or carrying,  or for the purpose of reducing or retiring
any Indebtedness which was originally  incurred to purchase or carry, any margin
security or margin stock or for any other  purpose  which might  constitute  the
transactions  contemplated  hereby a "purpose credit" within the meaning of said
Regulation  G or  Regulation  U, or cause this  Agreement  to violate  any other
regulation  of the  Board of  Governors  of the  Federal  Reserve  System or the
Securities  Exchange  Act of 1934,  as  amended,  or any  rules  or  regulations
promulgated under such statutes.

     Section  3.15.  Tax Returns.  Except as otherwise set forth in footnotes to
the consolidated balance sheet of Borrowers as at September 30, 1999, and except
for any  non-material  misstatement of income tax obligations and except for any
returns  currently  on  extension  pursuant to  properly  filed  extension,  the
Borrowers  have filed all  federal,  state and local tax returns  required to be
filed by any of them and have paid or made  adequate  provision (as reflected in
the balance  sheets  described  in Section  3.01  hereof) for the payment of all
federal, state and local taxes, charges and assessments.

                                       18
<PAGE>

     Section 3.16. ERISA. Except as set forth in Schedule "3.16" annexed hereto,
none of the Borrowers nor any ERISA Affiliate of any of the Borrowers  maintains
or has any obligation to make any  contributions to any pension,  profit sharing
or other similar plan providing for deferred compensation to any employee.  With
respect to any such plan(s) as may now exist or may hereafter be  established by
the  Borrowers  or any  ERISA  Affiliate  of any of  the  Borrowers,  and  which
constitutes  an "employee  pension  benefit  plan" within the meaning of Section
3(2) of ERISA,  except as set forth on Schedule "3.16": (a) the Borrowers or the
subject  ERISA  Affiliate  have  paid and  shall  cause to be paid  when due all
amounts  necessary to fund such plan(s) in accordance with its terms, (b) except
for normal  premiums  payable by the Borrowers to the Pension  Benefit  Guaranty
Corporation  ("PBGC"),  the  Borrowers or the subject ERISA  Affiliate  have not
taken and shall not take any action which could  result in any  Liability to the
PBGC, or any of its  successors or assigns,  (c) the present value of all vested
accrued benefits thereunder shall not at any time exceed the value of the assets
of such plan(s)  allocable to such vested accrued  benefits,  (d) there have not
been and there shall not be any transactions  such as would cause the imposition
of any tax or penalty  under  Section  4975 of the Code or under  Section 502 of
ERISA,  which would  adversely  affect the funded  benefits  attributable to the
Borrowers or the subject ERISA Affiliate, (e) there has not been and there shall
not be any  termination  or partial  termination  thereof  (other than a partial
termination  resulting solely from a reduction in the number of employees of the
Borrowers  or an  ERISA  Affiliate  of the  Borrowers,  which  reduction  is not
anticipated by the Borrowers), and there has not been and there shall not be any
"reportable  event" (as such term is defined in Section  4043(b) of ERISA) on or
after the  effective  date of Section  4043(b) of ERISA with respect to any such
plan(s) subject to Title IV of ERISA,  (f) no "accumulated  funding  deficiency"
(as  defined in  Section  412 of the Code) has been or shall be  incurred  on or
after the  effective  date of Section 412 of the Code,  (g) except as  otherwise
reflected on Schedule "3.16" annexed hereto, such plan(s) have been and shall be
determined to be  "qualified"  within the meaning of Section 401(a) of the Code,
and have been and shall be duly  administered  in compliance  with ERISA and the
Code, and (h) the Borrowers are not aware of any fact, event, condition or cause
which might  adversely  affect the  qualified  status  thereof.  As respects any
"multiemployer  plan" (as such term is  defined  in  Section  3(37) of ERISA) to
which any of the Borrowers or any ERISA Affiliate  thereof has heretofore  been,
is now, or may hereafter be required to make  contributions,  such  Borrowers or
such ERISA Affiliate has made and shall make all required contributions thereto,
and there has not been and shall not be any  "complete  withdrawal"  or "partial
withdrawal" (as such terms are respectively defined in Sections 4203 and 4205 of
ERISA) therefrom on the part of the Borrowers or such ERISA Affiliate.

     Section 3.17.  Compliance with Laws. The Borrowers are in compliance in all
material  respects  with  all  occupational  safety,   health,  wage  and  hour,
employment  discrimination,  environmental,  flammability,  labeling  and  other
Applicable  Law  which  are  material  to their  respective  businesses  and the
Business  Operations,  and the  Borrowers  are not  aware of any state of facts,
events,  conditions  or  occurrences  which may now or hereafter  constitute  or
result in a violation of any of such  Applicable  Law, or which may give rise to
the assertion of any such  violation,  the effect of which could have a material
adverse effect on any Borrowers.

                                       19
<PAGE>

     Section 3.18. Licenses and Permits. Each of the Borrowers have all federal,
state and local  licenses and permits  required to be  maintained  in connection
with  and  material  to the  Business  Operations  (including  all Food and Drug
Administration ("FDA") permits and licenses),  and all such licenses and permits
are valid and in full force and effect.

     Section 3.19. Environmental Laws.

     (a)  Except  as  disclosed  on  Schedule  "3.19"  annexed  hereto:  (i) the
Borrowers  have complied in all material  respects with all  Environmental  Laws
relating to their respective businesses and properties, and (ii) there exists no
Hazardous  Substances in or under any Existing Real Properties or storage tanks,
except those that are stored and used in compliance with Applicable Laws.

     (b) Except as disclosed in Schedule "3.19" annexed  hereto,  to the best of
the  Borrowers'  knowledge,  there  exist  no  past  or  present  violations  of
Environmental  Laws  which  will  result  in a  material  adverse  effect on the
business,  operations,  prospects,  assets,  property or condition (financial or
otherwise) of the Borrowers.

     (c) During the term of this Agreement,  and for so long as any Loans remain
outstanding,  the  Borrower  shall  comply  in all  material  respects  with all
applicable  Environmental  Laws,  and shall,  in addition,  promptly  notify the
Lender  of  any  and  all  claims,   demands  or  Notices   received  under  any
Environmental Laws and the Borrowers' response thereto.

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

     "Environmental  Laws" include all federal,  state,  and local laws,  rules,
regulations,  ordinances,  permits, orders, and consent decrees agreed to by the
Borrowers,  relating to health,  safety, and environmental matters applicable to
the business and property of the Borrowers.  Such laws and  regulations  include
but are not limited to the Resource  Conservation and Recovery Act ("RCRA"),  42
U.S.C.ss.6901  et seq.,  as amended;  the New Jersey  Environmental  Cleanup and
Recovery Act ("ECRA"); the Comprehensive  Environmental  Response,  Compensation
and Liability Act ("CERCLA"),  42 U.S.C.ss.9601  et seq., as amended;  the Toxic
Substances Control Act ("TSCA"),  15 U.S.C.ss.2601 et seq., as amended;  and the
Clean Water Act, 33 U.S.C.ss.1331 et seq., as amended.

     "Hazardous Substances",  "Release", "Respond" and "Response" shall have the
meanings assigned to them in CERCLA, 42 U.S.C. ss.9601, as amended.

     "Notice"  means any  summons,  citation,  directive,  information  request,
notice of potential  responsibility,  notice of violation or deficiency,  order,
claim,  complaint,   investigation,   proceeding,  judgment,  letter,  or  other
communication,  written or oral,  actual or  threatened,  from the United States
Environmental  Protection  Agency or other  federal,  state,  or local agency or
authority, or any other entity or individual,  public or private, concerning any
intentional  or  unintentional  act or omission  which  involves  management  of
Hazardous  Substances on or off any real properties;  the imposition of any lien
on any  real  properties,  including  but  not  limited  to  liens  asserted  by
government  entities in connection with any Borrower's  response to the presence

                                       20
<PAGE>

or  Release  of  Hazardous   Substances;   and  any  alleged   violation  of  or
responsibility under any Environmental Laws.

     Section  3.20.  Reaffirmation.  Each and every  request by a  Borrower  for
Advances   under  Section  2.01  or  Section  2.02  above  shall   constitute  a
reaffirmation  of the  truth  and  accuracy  in  all  material  respects  of the
Borrowers'  representations  and  warranties  hereunder  and under the  Security
Documents on and as of the date of such request.

     Section 3.21. Labor Relations;  Compliance.  None of the Borrowers has been
or is a party to any collective  bargaining or other labor  Contract.  Except as
disclosed in Schedule  "3.21" annexed hereto,  there has not been,  there is not
presently  pending or  existing,  and there is not  Threatened,  (a) any strike,
slowdown,  picketing,  work stoppage,  or employee  grievance  process,  (b) any
Proceeding  against or affecting any Borrower  relating to the alleged violation
of any  Applicable  Law  pertaining to labor  relations or  employment  matters,
including  any  charge  or  complaint  filed by an  employee  or union  with the
National Labor Relations Board, the Equal Employment Opportunity Commission,  or
any comparable  Governmental Body,  organizational  activity,  or other labor or
employment  dispute against or affecting any of the Borrowers or their premises,
or (c) any application for  certification of a collective  bargaining  agent. No
event has occurred or  circumstance  exists that could provide the basis for any
work stoppage or other labor  dispute.  There is no lock-out of any employees by
any Borrower, and no such action is contemplated by any Borrower.  Each Borrower
has complied in all respects  with all  Applicable  Law relating to  employment,
equal employment  opportunity,  nondiscrimination,  immigration,  wages,  hours,
benefits,  collective  bargaining,  the payment of social  security  and similar
taxes,  occupational safety and health, and plant closing. No Borrower is liable
for the payment of any compensation,  damages, taxes, fines, penalties, or other
amounts,  however  designated,  for failure to comply with any of the  foregoing
Applicable Law.

     3.22. Insurance.

     (a) All polices to which any Borrower is a party or that  provide  coverage
to any Borrower, or any director or officer of a Borrower:

          (i) are valid, outstanding, and enforceable;

          (ii) are issued by an insurer that is reasonably believed by Borrowers
     to be financially sound and reputable;

          (iii) taken  together,  provide  adequate  insurance  coverage for the
     assets  and the  operations  of the  Borrowers  for all  risks to which the
     Borrowers are normally exposed;

          (iv)  are  sufficient  for  compliance  with  all  Applicable  Law and
     Contracts  to which  any  Borrower  is a party  or by which  any of them is
     bound;

          (v) will continue in full force and effect  following the consummation
     of the execution, delivery of this Agreement, the warrants and the Security
     Documents; and

                                       21
<PAGE>

          (vi) do not provide for any retrospective  premium adjustment or other
     experienced-based liability on the part of any Borrower.

     (b) Except as disclosed in Schedule "3.22" annexed hereto,  no Borrower has
received  (A) any  refusal  of  coverage  or any notice  that a defense  will be
afforded with  reservation of rights,  or (B) any notice of  cancellation or any
other  indication that any insurance policy is no longer in full force or effect
or will not be renewed  or that the issuer of any policy is not  willing or able
to perform its obligations thereunder.

     (c) The Borrowers have paid all premiums due, and have otherwise  performed
all of their respective obligations,  under each policy to which any Borrower is
a party or that provides coverage to any Borrower or director thereof.

     (d) The Borrowers  have given notice to the insurer of all material  claims
that may be insured thereby.

ARTICLE IV. CONDITIONS OF MAKING THE ADVANCES

     The  effectiveness of this Agreement,  and the obligations of the Lender to
make any Advance hereunder, are subject to the following conditions precedent:

     Section 4.01.  Representations  and  Warranties.  The  representations  and
warranties  set forth in  Article  III hereof  shall be true and  correct in all
material  respects on and as of the Agreement  Date, and on each subsequent date
that an  Advance  is to be made,  provided,  however,  that for the  purpose  of
determining  whether the  representations and warranties are true and correct as
of the date that an Advance  may be made,  the  Company  shall have the right to
amend its disclosure  schedules attached to this Agreement,  provided,  that the
Lender  receives  such amended  disclosure  schedules at least five (5) business
days  prior  to  such  Advance  Analysis  and is  provided  with  the  necessary
documentation  and  access  to the  Company  to  determine  the  effect  of such
amendment.

     Section 4.02.  Loan  Documents.  The Borrowers shall have duly executed and
delivered  to the  Lender  upon  the  execution  of this  Agreement,  all of the
following:

     (a) All UCC Financing Statements,  stock certificates and stock powers, and
other certificates and documents required thereunder;

     (b) The Note;

     (c) A certificate of the Secretary or an Assistant Secretary of each of the
Borrowers certifying the votes of the Boards of Directors of the Borrowers, each
authorizing  and directing the  execution  and delivery of this  Agreement,  the
Notes,  the  Warrants,  the  Security  Agreement,  and all  further  agreements,
instruments, certificates and other documents pursuant hereto and thereto;

                                       22
<PAGE>

     (d) A certificate of the Secretary or an Assistant Secretary of each of the
Borrowers  certifying the names of the officers of each of the Borrowers who are
authorized to execute and deliver this Agreement,  the Notes, the Warrants,  the
Security  Agreement,  and all other  agreements,  instruments,  certificates and
other documents to be delivered  pursuant hereto and thereto,  together with the
true  signatures  of such  officers.  The Lender may  conclusively  rely on such
certificate  until they shall receive any further such certificate  canceling or
amending the prior  certificate  and  submitting  the signatures of the officers
named in such further certificate;

     (e)  Certificates  of the Secretary of State of Delaware and New York,  all
dated  reasonably  prior  to the  Agreement  Date  or the  date  of the  Advance
Analysis, as applicable, stating that each Borrowers is duly incorporated and in
good standing in such  jurisdiction  and that Schick is qualified to do business
in New York;

     (f) The Shareholders Agreement;

     (g) The Security Agreement;

     (h) The Registration Rights Agreement.

     Section  4.03.  Restructuring  Plan.  The Borrowers  shall have  developed,
completed and commenced to implement a written plan (the "Restructuring  Plan"),
the content of which shall be  satisfactory  to and approved and  authorized  by
both the Board of  Directors  of the Company and the Lender  (which shall not be
unreasonably withheld or delayed). The Restructuring Plan shall include, without
limitation,  matters involving (a) the consent and renegotiating of the existing
loan with the Borrowers' Senior Lender,  (b) the hiring and retaining of outside
consultants,  (c) procedures for dealing with significant vendors and payment of
any  significant  outstanding  payables,  (d)  procedures  for dealing  with the
collection of accounts  receivable,  (e) the hiring of any new  executive  level
employees and (f) a detailed  annual  operating and capital  budget  approved by
Lender (which approval shall not be unreasonably withheld).

     Section 4.04.  Board of Directors.  The  Greystone  Designees  shall (i) be
elected to the Boards of  Directors  of the  Company and Schick New York and the
Company's Audit Committee and Compensation Committee, (ii) not have been removed
from such positions and (iii) if they resign from such positions  shall promptly
be replaced by other  individuals  designated by the Lender as  contemplated  by
Section 5.14.

     Section 4.05. RESERVED.

     Section 4.06. The Warrants. The Company shall have issued to the Lender the
Warrants.

     Section 4.07. RESERVED.

     Section  4.08.  Further  Matters.  All  legal  matters,  and the  form  and
substance of all documents,  incident to the  transactions  contemplated  hereby
shall be satisfactory to counsel for the Lender.

                                       23
<PAGE>

     Section  4.09.  No  Default.  No  Default  or Event of  Default  shall have
occurred and continues to occur without being remedied.

ARTICLE V. AFFIRMATIVE COVENANTS

     The Borrowers  hereby jointly and severally  covenant and agree that,  from
the date hereof and until all  Obligations  (whether  now  existing or hereafter
arising)  have  been paid in full and the  Borrowers  have no  further  right to
extension or funding under this Agreement, each of the Borrowers shall:

     Section 5.01.  Corporate and  Insurance.  Do or cause to be done all things
necessary  to at all  times (a)  other  than  mergers  solely  among  Borrowers,
preserve,  renew and keep in full  force and  effect  its  corporate  existence,
rights,  licenses,  permits and  franchises,  (b) comply with this Agreement and
maintain and preserve the Lender's Liens and the priority thereof, (c) maintain,
preserve  and  protect all of its  franchises  and  material  trade  names,  and
preserve  all of its  material  property  used or useful in the  conduct  of its
business  and  keep  the  same in  good  repair,  working  order  and  condition
(reasonable wear and tear excepted),  and from time to time make, or cause to be
made, all needed and proper  repairs,  renewals,  replacements,  betterments and
improvements  thereto,  so that the Business Operations carried on in connection
therewith may be properly and  advantageously  conducted at all times, (d) keep,
under the coverage of an "umbrella" policy or other form of coverage  reasonably
acceptable to the Lender,  its insurable  properties  adequately  insured at all
times, by financially sound and reputable insurers reasonably  acceptable to the
Lender,  to such extent and against such risks,  including  fire and other risks
and casualty insured against by extended coverage, and maintain, as part of such
coverage,  liability and such other insurance,  as is customarily  maintained by
companies engaged in similar businesses (including, without limitation, products
liability insurance),  in amounts reasonably satisfactory to the Lender and each
Lender, all of which insurance policies shall name the Lender and each Lender as
loss payee and an additional  insured as its interests appear, and shall provide
for the Lender and each Lender to receive written notice thereof at least twenty
(20) days prior to any cancellation,  modification or non-renewal of the subject
policy,  and (e)  comply  with  all  Applicable  Law  material  to its  Business
Operations, whether now in effect or hereafter enacted, promulgated or issued.

     Section 5.02.  Payment of Taxes.  File, pay and  discharge,  or cause to be
paid and discharged,  all taxes,  assessments and governmental charges or levies
imposed upon the Borrowers or upon their income and profits or upon any of their
property  (real,  personal or mixed) or upon any part  thereof,  before the same
shall  become in  default,  as well as all lawful  claims for labor,  materials,
supplies and otherwise, which, if unpaid when due, might become a Lien or charge
upon such property or any part thereof;  provided,  however,  that the Borrowers
shall not be required to pay and  discharge  or cause to be paid and  discharged
any such  tax,  assessment,  charge,  levy or claim  (other  than  taxes  and/or
assessments  relating to real  property  or the use  thereof) so long as (a) the
validity thereof shall be contested in good faith by appropriate proceedings and
the Borrowers shall have set aside on their books adequate reserves with respect
to any such tax, assessment, charge, levy or claim so contested, and (b) payment
with respect to

                                       24
<PAGE>

any such tax, assessment,  charge, levy or claim shall be made before any of the
Borrowers' property shall be seized or sold in satisfaction thereof.

     Section 5.03.  Notice of  Proceedings.  Give prompt  written  notice to the
Lender of:

     (a) Any proceedings  instituted against any of the Borrowers in any federal
or state  court or before  any  commission  or other  regulatory  body,  whether
federal,  state or local, which, if adversely determined,  could have a material
adverse effect upon such Borrower's business, operations,  properties, assets or
condition, financial or otherwise;

     (b) Changes in location of material assets; and

     (c)  Material  Adverse  Effects  or  defaults  to the  Lender or the Senior
Lender.

     Section 5.04. Periodic Reports. Furnish to the Lender:

     (a) Within ninety (90) calendar days after the end of each Fiscal Year: (i)
consolidated balance sheets,  statements of income,  statements of stockholders'
equity,  and statements of cash flows of the Borrowers,  together with footnotes
and supporting schedules thereto, all certified by independent  certified public
accountants  selected by the Borrowers and  reasonably  acceptable to the Lender
(and  commencing  with  Fiscal  Year 2002 with the form of  certification  to be
without material qualification or otherwise satisfactory to the Lender), showing
the  financial  condition of the  Borrowers at the close of such Fiscal Year and
the results of  operations  of the  Borrowers  during such Fiscal Year;  (ii) an
unaudited  consolidating  balance  sheet and  statement of income of each of the
Borrowers,  together with appropriate adjustments and eliminations;  and (iii) a
schedule of all Contracts,  capital  contributions and loan transactions between
any Borrowers (on the one hand) and any other  Borrowers or any  Subsidiary  (on
the other hand),  including therein a schedule of all cash capital contributions
made by any  Borrower and all  Indebtedness  (including  Indebtedness  for Money
borrowed)  owed  to  any  Borrower  by any  other  Borrower  or  any  Subsidiary
(hereinafter  collectively referred to as "Intercompany  Investment(s)"),  as at
the end of such Fiscal Year;

     (b) Within  forty-five  (45)  calendar  days  after the end of each  fiscal
quarter:  (i)  unaudited  consolidated  and  consolidating  balance  sheets  and
statements  of income  of the  Borrowers,  together  with  supporting  schedules
thereto,  prepared by the Borrowers  and  certified by the  Company's  Chairman,
President or Chief Financial Officer,  such balance sheets to be as of the close
of such fiscal  quarter and such  statements of income to be for the period from
the beginning of the then-current Fiscal Year to the end of such fiscal quarter,
together  with  comparative  statements of income for the  corresponding  fiscal
quarter in the immediately preceding Fiscal Year, in each case subject to normal
audit and year-end  adjustments which shall not be material;  (ii) a schedule of
all Intercompany  Investments  (specifying  therein, the respective obligors and
obligees) as at the end of such fiscal quarter;  and (iii) a written calculation
of Excess Available Cash.

     (c)  Concurrently  with the  delivery of each of the  financial  statements
required by Sections  5.04(a) and 5.04(b) above, a certificate  (the "Compliance
Certificate")  on  behalf  of  the

                                       25
<PAGE>

Borrowers  (signed by the Chairman,  Chief  Executive  Officer,  Chief Financial
Officer or  President  of the  Company,  in  substantially  the form  annexed as
Exhibit "F" to this Agreement, (i) calculating, setting forth, and certifying as
to the accuracy of the  calculations  required  under Sections 5.08 through 5.11
hereof,  and  (ii)  certifying  that  he has  examined  the  provisions  of this
Agreement and that no Event of Default has occurred and/or is continuing;

     (d)  Such  other  supplemental  financial  information  pertaining  to  the
Borrowers as the Lender may from time to time reasonably request (provided, that
as to items listed in clauses  (iii) and (iv) below,  not more  frequently  than
annually) including: (i) aging schedules of all accounts receivable and accounts
payable  of the  Borrowers  as of the  end of any one or  more  months,  (ii) an
analysis of the Borrowers'  inventory as at the end of any one or more months in
a form  reasonably  satisfactory to the requesting  Lender,  (iii) within thirty
(30) days after the  commencement  of each Fiscal Year, a  consolidated  Capital
Expenditure  budget  and  a  separate   consolidated  research  and  development
expenditure  budget of the Borrowers for such Fiscal Year showing the nature and
amount  of  the  proposed  Capital   Expenditures  and  proposed   research  and
development  expenditures;  and  within  ninety  (90) days after the end of each
Fiscal Year, updated reports showing the actual Capital  Expenditures and actual
research and development  expenditures  for such  immediately  preceding  Fiscal
Year;  and (iv) within  thirty (30) days after the  commencement  of each Fiscal
Year, a consolidated  cash flow and profit and loss  projection of the Borrowers
for such Fiscal Year;

     (e) Within  ten (10) days  after  filing  with the SEC,  true and  complete
copies of all  registration  statements,  proxy  materials  and  other  periodic
reports  (including  Forms 10-K,  10-Q,  8-K and other  related  forms) filed on
behalf of any or all of the Borrowers or any  Subsidiary  with the SEC under the
Securities Act of 1933, as amended,  and/or the Securities Exchange Act of 1934,
as amended; and

     (f)  Promptly,  from time to time,  such other  information  regarding  the
Borrowers' operations, assets, business, affairs and financial condition, as the
Lender may reasonably request.

     Section  5.05.  Books and Records;  Inspection.  Maintain at its  corporate
headquarters books and records respecting all of the Business  Operations at the
Borrowers'  principal places of business,  and permit Lenders or representatives
of the  Lender to  inspect,  at any time  during  normal  business  hours,  upon
reasonable notice, and without undue disruption of the Business Operations,  all
of the  Borrowers'  various  books and records,  and to make  copies,  abstracts
and/or reproductions thereof.

     Section 5.06. Notice of Default or Material Adverse Effect. Promptly advise
the Lender in writing of: (a) any Material Adverse Effect;  or (b) the existence
or occurrence of any Default or Event of Default.

     Section 5.07. Accounting. Maintain a standard system of accounting in order
to permit the  preparation of  consolidated  financial  statements in accordance
with GAAP.

                                       26
<PAGE>

     Section 5.08. Current Ratio. Beginning in March 2001, as at the end of each
Fiscal Year, maintain a Current Ratio of not less than 1 to 1.

     Section 5.09.  Interest Coverage Ratio.  Beginning in March 2002, as at the
end of each Fiscal Year,  maintain an Interest  Coverage  Ratio of not less than
1.50 to 1.

     Section 5.10. EBITDA. As at the end of each Fiscal Year, maintain an EBITDA
at not less than the minimum amount set forth below for such date:

         Fiscal Year Ending                        Minimum EBITDA
         ------------------                        --------------
         March 31, 2001                                    0
         March 31, 2002                               $2,500,000
         March 31, 2003                               $5,000,000
         March 31, 2004                               $7,500,000
         Section 5.11.  RESERVED.

     Section 5.12.  Reports on Application of the Net Proceeds of Advances.  The
Borrowers shall furnish to the Lender at (a) each regularly scheduled meeting of
the Board of  Directors  of the  Company,  and (b) on a quarterly  basis on each
Interest  Payment  Date,  a  written  report  as to the  application  of the net
proceeds of all Advances,  if any, made in the  immediately  preceding  calendar
quarter.

     Section  5.13.  Further  Deliveries.  Exert its best  efforts to obtain and
deliver to the Lender any and all further consents,  including landlord's and/or
lessee's consents and estoppel certificates in respect of the Lease Assignments,
certificates of occupancy,  and other relevant  matters,  to the extent that the
same have not previously been delivered,  are not available for delivery, or are
not delivered to the Lender in accordance  with this  Agreement and the Security
Documents, and which subsequent deliveries are expressly consented to in writing
by Lender.

     Section 5.14. Board of Directors of the Company and Subsidiaries.

     (a) Take all requisite  corporate  actions to cause the Boards of Directors
of each of the  Borrowers  to elect two  additional  persons  designated  by the
Lender  (collectively,  the  "Initial  Greystone  Designees")  to the  Board  of
Directors of the Company and each of its subsidiaries.

     (b) Take all  requisite  corporate  actions to cause an  additional  person
designated by the Lender ("Subsequent  Greystone Designee" and together with the
Initial  Greystone  Designees the  "Greystone  Designees")  to be elected to the
Boards of Directors of the Borrowers in accordance with the following formula:

     Greystone Designees = Schick Seats / (1-Greystone %) - Schick Seats

                                       27
<PAGE>

provided,  that,  unless the Lender has Advanced to  Borrowers  pursuant to this
Agreement  more than a maximum  level of advances of  $6,000,000,  the number of
Greystone  Designees shall not equal less than two directors or more than 50% of
each Board of Directors and provided that the number  Greystone  Designees shall
be rounded to the closest  integer.  If the Lender  Advances more than a maximum
level of Advances of  $6,000,000 to the  Borrowers  pursuant to this  Agreement,
Greystone  Designees  shall  equal the Schick  Seats  plus one.  As used in this
Section,  "Schick  Seats" shall mean the total  number of seats  occupied on the
Board of Directors  excluding those seats occupied by Greystone  Designees;  and
"Greystone %" shall mean the number of Warrants then exercisable by Greystone or
any  designee of Greystone  under this  Agreement,  together  with the number of
shares held by  Greystone or any designee of Greystone as the result of properly
exercising  its Warrants  hereunder  divided by the number of Borrowers'  shares
which are issued and  outstanding,  plus the number of Warrants  issued and then
exercisable by Greystone or any designee of Greystone  under this Agreement plus
the number of shares  held by  Greystone  or any  designee of  Greystone  as the
result of properly  exercising  its Warrants.  Schedule 5.14 annexed hereto sets
forth a tabular application of the formula contained in this Section.

     (c) From and after the Agreement Date,  fill vacancies  created by death or
inability of any of the Greystone Designees to continue to serve on the Board of
Directors of the Company and its  Subsidiaries,  by another person designated by
the Lender.

     (d) Take all requisite  corporate actions to cause one person designated by
the Lender to serve on both the Company's Audit  Committee and its  Compensation
Committee.

     Section 5.15. Environmental Response. In the event of any discharge, spill,
injection,  escape,  emission,  disposal,  leak or other  Release  of  Hazardous
Substances on any Real Property owned or leased by any of the  Borrowers,  which
is not  authorized  by a permit  or other  approval  issued  by the  appropriate
governmental  agencies,  and which requires notification to or the filing of any
report  with any  federal or state  governmental  agency,  the  Borrowers  shall
promptly: (i) notify the Lender; and (ii) comply with the notice requirements of
the Environmental  Protection Agency and applicable state agencies, and take all
steps necessary to promptly clean up such discharge,  spill, injection,  escape,
emission,  disposal,  leak or other  Release in accordance  with all  applicable
Environmental Laws and the Federal National  Contingency Plan, and, if required,
receive a certification  from all applicable state agencies or the Environmental
Protection  Agency,  that  such  Real  Property  has  been  cleaned  up  to  the
satisfaction of such agency(ies). In addition, if applicable, the Borrower shall
promptly register with the New Jersey Department of Environmental Protection any
underground  storage tanks  installed  after the Agreement  Date pursuant to the
applicable regulations contained in the New Jersey Underground Storage Tank Act,
N.J.S.A. 58: 10A-21, et seq.

     Section 5.16. Management. Cause David Schick, to continue to be employed as
Chief Executive Officer of the Company at the pleasure of the Board of Directors
pursuant to the terms of an  employment  agreement to be executed by and between
Borrowers  and David  Schick,  as  attached  hereto as Exhibit "E" except in the
event of death or disability.

                                       28
<PAGE>

     Section 5.17.  Right of First Refusal.  In the event and to the extent that
the Company shall elect to (i) raise any additional  capital  through any public
or  private  offer  and  sale  of any  of  its  equity  securities  (an  "Equity
Offering"),  or the Company  hereby  agrees to grant to the Lender the right and
option (the "Right of First Refusal"),  but not the obligation,  to purchase any
such equity securities of the Company (the "Equity  Securities").  Such Right of
First Refusal shall be implemented in accordance with the following procedures:

     (a) The Company  shall give the Lender not less than  twenty (20)  Business
Days prior  written  notice of any  intention by the Company to  consummate  any
Equity Offering. Within five (5) Business Days following receipt of such notice,
the Lender shall notify the Company, in writing, as to whether the Lender has an
interest in  purchasing  the Equity  Securities  being  offered for sale. If the
Lender  expresses  an  affirmative  interest,  the Company and the Lender  shall
thereafter  promptly  meet and attempt to  negotiate in good faith the terms and
conditions of the Lender's purchase of the Equity Securities.  In the event that
the  parties  are  unable  to  agree  upon  the  terms  and  conditions  of such
transaction  by the earlier to occur of (i) fifteen (15)  Business Days from the
Company's  notice,  or (ii) ten (10) Business Days from the initial meeting with
respect to such proposed transaction, then the Company shall be free to sell the
Equity  Securities to any third party,  subject,  however,  to the rights of the
Lender set forth in Section  5.17(b)  below.  Nothing  herein shall  prevent the
Company,  at any time,  from entering into  negotiations  with any third parties
concerning  or  relating  to the  sale  of  Equity  Securities  provided  that a
Greystone representative shall be permitted to attend any such negotiations.

     (b) In the event and to the extent that the Company shall receive a written
offer or proposal from any Person  (whether or not Affiliated  with the Company)
(a "Third Party") to purchase or sell any Equity Securities in a proposed Equity
Offering (the "Third Party Proposal"), the Company shall promptly furnish to the
Lender a true and complete copy of such Third Party  Proposal.  Such Third Party
Proposal for Equity Offerings must be in the form either (i) a letter of intent,
(ii) a Final  Term  Sheet  or  (iii) a  Registration  Statement  filed  with the
Securities and Exchange  Commission.  The Lender shall have a period of ten (10)
Business Days from receipt of such Third Party Proposal to notify the Company in
writing as to whether the Lender  intends to match the terms of such Third Party
Proposal.  If such Third Party Proposal is from a proposed  underwriter or agent
seeking to sell the Equity Securities, the Lender may, at its sole option, elect
to match the Third Party  Proposal by  purchasing  the Equity  Securities,  at a
price per share  which shall be net of all selling  commissions,  discounts  and
other  offering  expenses.  To the  extent  that  there  shall  be any  material
amendments  or  modifications  to such Third Party  Proposal,  the Company shall
promptly  forward to the Lender a complete copy of each such amended Third Party
Proposal,  and the twenty (20) Business Day period in which the Lender may match
such amended  Third Party  Proposal  shall again  commence  upon delivery to the
Lender of such amended Third Party Proposal(s).

     (c)  In  the  event  that  the  Lender  shall  notify  the  Company  of its
unwillingness  to match the terms of any final  Third Party  Proposal,  or shall
fail to timely  notify the Company of its intention to so match such final Third
Party  Proposal,  the Lender's Right of First Refusal with respect to such Third
Party Proposal shall expire.

                                       29
<PAGE>

     Section  5.18.  Employee  Options.  Take  all  requisite  corporate  action
reasonably  within its  control to cause the  shareholders  to vote at the first
annual  meeting  of  Shareholders  of the  Company  that takes  place  after the
Agreement  Date to either  increase  the  number of shares  available  under the
Company's  1996  Employee  Stock  Option Plan or to establish a new stock option
plan to  authorize  the  issuance of options to purchase an aggregate of 750,000
shares of Common Stock.

     Section  5.19.  Registration  Rights.  Shall  register the shares of Schick
Common  Stock  underlying  the Warrants as provided in the  Registration  Rights
Agreement and shall not be in breach of such Registration Rights Agreement.

     Section 5.20. Intellectual Property.

     (a) Borrower agrees to timely pay any and all maintenance, renewal, annuity
fees and the like to the appropriate governmental entity in order to keep all of
its intellectual property in full force and effect.

     (b)  Borrower  agrees  to  bring  any  action  or legal  proceeding  as may
reasonably  be necessary in order to defend its  intellectual  property  against
third party infringers thereof of which it has knowledge.

     Section 5.21.  Disclosure.  The Company will promptly  inform the Greystone
Designees of all developments  with regard to the pendency of any  investigation
or litigation  respecting  either the Borrowers or their  officers or directors.
The Greystone Designees will determine in their own business judgment whether to
relay such information to other Greystone employees.

     Section 5.22.  Restructuring Plan. The Borrowers shall update and amend the
Restructuring Plan including the detailed budgets contained therein,  once every
six months,  provided  that the content  thereof  shall be  satisfactory  to and
approved  and  authorized  by both the Board of Directors of the Company and the
Lender  (which  shall not be  unreasonably  withheld).  Upon such  approval  and
authorization the Borrowers shall diligently implement the Restructuring Plan.

ARTICLE VI. NEGATIVE COVENANTS

     The  Borrowers  jointly and  severally  covenant and agree that,  until all
Obligations  (whether now existing or hereafter  arising) have been paid in full
and the  Borrowers  have no further  right to  extension  or funding  under this
Agreement,  unless the Lender shall  otherwise  consent in writing,  none of the
Borrowers shall, directly or indirectly:

     Section 6.01.  Indebtedness and Liabilities.  Incur, create, assume, become
or be liable in any manner with respect to, or permit to exist, any Indebtedness
or Liability, other than:

     (a) Indebtedness to the Lender for Advances, or otherwise;

                                       30
<PAGE>

     (b)  Indebtedness  and  Liabilities  with  respect  to  trade  obligations,
accounts  payable and other normal  accruals  incurred in the ordinary course of
business,  or with respect to which any of the  Borrowers is  contesting in good
faith the amount or validity thereof by appropriate  proceedings,  and then only
to the extent that the Borrowers have set aside on their books adequate reserves
therefor;

     (c) Indebtedness under those Real Property Leases listed on Schedule "3.07"
annexed hereto;

     (d) Indebtedness  under Existing Operating Leases listed on Schedule "3.05"
annexed hereto;

     (e)  Existing  Indebtedness,  but only to the extent set forth on  Schedule
"6.01(e)" annexed hereto;

     (f) Purchase money Indebtedness or other  Indebtedness  incurred or assumed
in connection with Investments  (including the acquisition of additional  assets
or  businesses)  and Capital  Expenditures  made  following the Agreement  Date;
provided,  however,  that:  (i) the  Borrowers  shall,  in  connection  with the
incurrence  of  any  and  all  such  Indebtedness,  be in  compliance  with  the
provisions  of Section  6.06(c) and Section 6.09 hereof;  and (ii) to the extent
that the Borrowers shall elect to incur  Indebtedness  for money borrowed (other
than purchase money  Indebtedness) from any financial  institution in connection
with any permitted Investment contemplated by Section 6.06(c) hereof, they shall
afford the Lender a right of first  refusal to provide the  financing  therefor;
provided,  that the terms and conditions of any such financing  which the Lender
may (at their sole  discretion)  elect to offer shall be on terms and conditions
which, in the aggregate,  shall be no less favorable to the Borrowers than those
offered by any other financial institution;

     (g) Intercompany  Investments which are represented by instruments that are
promptly  delivered  (with all  necessary  endorsements  thereon)  to the Lender
pursuant to the Security Agreement; and

     (h) Subordinated Debt in such amounts and upon such terms and conditions as
shall be reasonably acceptable to the Lender.

     Section 6.02. Liens.  Create,  incur, assume or suffer to exist any Lien or
other  encumbrance  of any  nature  whatsoever  on any  of  its  assets,  now or
hereafter owned, other than:

     (a) Subject to Section  5.02  above,  Liens  securing  the payment of taxes
which are either not yet due or the validity of which is being contested in good
faith by appropriate  proceedings,  and as to which the Borrowers shall have set
aside on their books adequate reserves;

     (b) Deposits under workers' compensation, unemployment insurance and social
security laws, or to secure the performance of bids,  tenders,  contracts (other
than for the  repayment  of Money  Borrowed) or leases,  or to secure  statutory
obligations or surety or appeal

                                       31
<PAGE>

bonds,  or to  secure  indemnity,  performance  or  other  similar  bonds in the
ordinary course of business;

     (c) Liens imposed by law, such as carriers',  warehousemen's  or mechanics'
liens,  incurred  by the  Borrowers  in good  faith in the  ordinary  course  of
business and discharged promptly after same are incurred, and fully bonded Liens
arising out of a judgment or award against the  Borrowers  with respect to which
the Borrowers  shall  currently be  prosecuting  an appeal,  a stay of execution
pending such appeal having been secured;

     (d) Liens in favor of the Lender;

     (e) Existing  Liens which are to survive the  Agreement  Date and which are
expressly reflected and described as such in Schedule "6.02(e)" annexed hereto;

     (f)  Other  Liens  incurred  in  connection  with  Indebtedness   expressly
permitted pursuant to Section 6.01 above, but only to the extent that such Liens
secure  Indebtedness in amounts not in excess of those permitted by such Section
6.01;

     (g) Encumbrances consisting of easements,  rights-of-way, survey exceptions
and other similar  restrictions  on the use of real property  reflected on title
reports accepted by the Lender,  or minor  irregularities in title thereto which
do not  materially  impair  the use of such  property  in the  operation  of the
business of the Borrowers; and

     (h) Liens  arising out of  judgments  or awards  with  respect to which the
Borrowers shall be prosecuting an appeal in good faith and in respect of which a
stay of execution shall have been or is being sought.

     Section  6.03.  Guarantees.  Except  for  the  Guarantee  by any one of the
Borrowers of obligations  of any of the other  Borrower,  Guarantee,  endorse or
otherwise in any manner become or be  responsible  for  obligations of any other
Person, except:  Guarantees,  not to exceed $100,000 outstanding at any point in
time in the aggregate, in respect of the financing of automobiles or other items
for use by employees, consultants or agents of the Borrowers.

     Section 6.04. Sales of Assets and Management.  (a) Sell,  lease,  transfer,
encumber  or  otherwise  dispose of any of the  Borrowers'  properties,  assets,
rights,  licenses  or  franchises  other  than (i) sales of  inventories  in the
ordinary  course  of  business,  (ii)  licenses,   joint  ventures  and  related
transactions  entered into,  modified or  terminated  in the ordinary  course of
business,  including but not limited to the licensing of Borrowers' intellectual
property;  (iii) the disposition of obsolete personal properties in the ordinary
course of  business,  (iv) the  termination  of Excluded  Contracts,  or (v) the
subletting of any of the real property  leased by Borrowers or (b) turn over the
management  of,  or enter  into any  management  contract  with  respect  to the
Business Operations or such properties, assets, rights, licenses or franchises.

     Section  6.05.  Sale-Leaseback.  Enter into any  arrangement,  directly  or
indirectly,  with any Person whereby any of the Borrowers shall sell or transfer
any property (real, personal or

                                       32
<PAGE>

mixed) used in the Business Operations, whether now owned or hereafter acquired,
and thereafter rent or lease such property.

     Section  6.06.  Investments;  Acquisitions.  Make  any  Investment  in,  or
otherwise acquire or hold securities  (including,  without  limitation,  capital
stock and evidences of indebtedness)  of, or make loans or advances to, or enter
into any  arrangement for the purpose of providing funds or credit to, any other
Person (including any Affiliate), except:

     (a)  advances  to  employees  of any one or more of the  Borrower:  (i) for
business  expenses not to exceed at any time $50,000 in the aggregate,  and (ii)
for personal needs not to exceed at any time $100,000 in the aggregate as to all
employees of the Borrower;

     (b)  investments  in obligations  of the United States or  certificates  of
deposit of the Lender or other  commercial  banks, or other similar  investments
reasonably satisfactory to the Lender;

     (c) so  long  as no  Default  or  Event  of  Default  has  occurred  and is
continuing,  an  Investment  in or  acquisition  of the  securities,  assets  or
properties  of any  Person in which:  (i) the  aggregate  consideration  paid or
payable  by any or all of the  Borrowers  (whether  in the form of  cash,  notes
and/or  any  other  securities  obligating  any of the  Borrowers  to  mandatory
payments of dividends,  Interest Expense or other redemption  obligations)  does
not exceed Three Hundred Thousand ($300,000) Dollars in any one Fiscal Year; and
(ii) the aggregate  Indebtedness  for money borrowed  (including  purchase money
Indebtedness  incurred in connection with any such  Investment)  does not exceed
One Hundred Fifty Thousand ($150,000) Dollars in any one Fiscal Year; and

     (d)  intercompany  investments,  but only if and to the extent evidenced by
appropriate   instruments   (including,   without  limitation,   in  respect  of
Indebtedness,  negotiable  promissory notes in principal amount equal to any and
all such Intercompany  Investments so incurred),  all of which shall be promptly
delivered  (with all necessary  endorsements  thereon) to the Lender pursuant to
the Security Agreement.

     Section 6.07.  Corporate  Form;  Acquisitions.  Dissolve or  liquidate,  or
consolidate or merge with or into, sell all or  substantially  all of the assets
of any of the Borrowers to, or otherwise acquire all or substantially all of the
securities,  assets or properties of, any other Person;  provided, that any such
transaction  shall be permitted without the prior written consent of the Lender:
(a) if solely between or among Borrowers,  or (b) if constituting an acquisition
or  Investment  otherwise  permitted  and within the  dollar  consideration  and
Indebtedness limitations provided in Section 6.06(c) above.

     Section 6.08. Dividends and Redemptions. Except for a transaction otherwise
permitted  pursuant to Section  6.06(c) above,  or (subject to the provisions of
Section 6.16 below)  dividends  paid or declared by any one or more Borrowers to
any other Borrower(s):  (a) directly or indirectly declare or pay any dividends,
or make any  distribution  of cash or  property,  or both (other than  dividends
solely in the form of Common Stock of the Company),  to any Person in respect of
any of the shares of the capital stock of any of the Borrowers;  or (b) directly
or

                                       33
<PAGE>

indirectly   redeem,   purchase  or  otherwise  acquire  for  consideration  any
securities  or shares of the capital  stock of any of the  Borrower or any other
Person.

     Section   6.09.   Indebtedness   for  Capital   Expenditures.   Other  than
Indebtedness  to the  Lender,  as  contemplated  by this  Agreement:  (a)  incur
Indebtedness  (including purchase money Indebtedness) in connection with Capital
Expenditures in any Fiscal Year,  including direct purchases and/or  Capitalized
Lease  Obligations  (other  than  Existing   Capitalized  Lease  Obligations  or
substitutes  therefor at the same or lower annual rentals),  for fixed assets or
personal property,  where the aggregate  Indebtedness  (including purchase money
Indebtedness)  so incurred  shall exceed  $250,000 in such Fiscal  Year;  or (b)
enter into any Operating Leases which obligates the Borrowers to rental payments
in any Fiscal Year which shall be $150,000,  in the aggregate,  in excess of the
Borrowers'  aggregate  rental payments under Operating Leases in the immediately
preceding Fiscal Year, provided,  however,  that the Borrower shall be permitted
to  exercise  its  option to renew the  Company's  real  property  leases on its
facilities in Long Island City, New York.

     Section 6.10. Change of Business.  As to any of the Borrowers,  directly or
indirectly:  (a)  engage in a business  materially  different  from the  general
nature  of the  Business  Operations  as now  being  conducted  or as  same  may
hereafter be reasonably expanded from time to time in like areas of business, or
(b) wind up its Business  Operations  or cease  substantially  all of its normal
Business  Operations for a period in excess of thirty (30) consecutive  days, or
(c) suffer any material disruption, interruption or discontinuance of a material
portion of its normal Business  Operations for a period in excess of ninety (90)
consecutive days, or (d) materially amend or terminate any material agreement.

     Section 6.11. Receivables.  Sell, assign, discount or dispose in any way of
any accounts  receivable,  promissory notes or trade  acceptances held by any of
the  Borrowers  with or  without  recourse,  except  for any  sale,  assignment,
discounting  or disposal of any such accounts  receivable,  promissory  notes or
trade  acceptances  in  connection  with  efforts  to  collect  same  (including
endorsements) in the ordinary course of business.

     Section 6.12.  Corporate  Charter and By-Laws.  Agree,  consent,  permit or
otherwise  undertake to amend any of the terms or  provisions  of the  Company's
Certificate of Incorporation or By-Laws.

     Section 6.13. Affiliate Transactions. Enter into any Contract, agreement or
transaction  with  any  Affiliate  of any of the  Borrowers  (other  than  among
Borrowers)  except after prior  written  notice to the Lender and then only upon
the prior written consent of the Lender.

     Section 6.14. Fiscal Year. Amend its Fiscal Year.

     Section  6.15.  Debt.  Issue,  prepay,  redeem or purchase any Senior Debt,
Subordinated Debt or redeemable  preferred stock,  except in accordance with the
terms of the  Restructuring  Plan.  Furthermore,  subject to the  provisions  of
Section 6.16 and Section 6.17 below, the Company or any Subsidiary may redeem or
purchase capital stock of any other  Subsidiary  which is a Borrower,  if and to
the extent wholly-owned by the Company or another Subsidiary.

                                       34
<PAGE>

     Section  6.16.  Sales of Capital  Stock.  Sell,  lease,  transfer,  assign,
encumber or otherwise  dispose of any shares of capital stock  (collectively,  a
"Stock Transfer") of the Company or any Subsidiary, except that stock options to
employees of the Company may be granted and exercised pursuant to existing stock
option plans of the Company.

     Section  6.17.   Compensation  of  Management.   Increase  compensation  to
executive  officers above the amount that has been agreed upon by Lender and the
Company's Compensation Committee.

     Section 6.18. Litigation Settlements.  Settle any material litigation which
involves  the loss of any rights or payment of any moneys or royalties in excess
of  $25,000  without  the  consent  of  Lender,   which  consent  shall  not  be
unreasonably withheld or delayed.

     Section  6.19.  Use of  Advances.  Draw any  Advances  for any  purpose not
otherwise approved by the Lender.

     Section  6.20.  Restructuring  Plan.  Fail  to  materially  adhere  to  the
Restructuring  Plan,  as amended  from time to time,  pursuant  to Section  5.22
hereof.

ARTICLE VII. DEFAULTS

     Section 7.01.  Events of Default.  Each of the following  events is herein,
and in the Note and the Security Documents, sometimes referred to as an Event of
Default:

     (a) if any representation or warranty made in this Agreement,  or in any of
the Security Documents,  or in any report,  certificate,  financial statement or
other  instrument  furnished in connection  with this Agreement or the borrowing
hereunder, shall be false, inaccurate or misleading in any material respect when
made or when deemed made hereunder;

     (b) any  failure to pay  principal  of or interest on the Note or any other
Obligations  of the  Borrowers  to the  Lender  when the  same  shall be due and
payable,  whether on a Principal  Payment Date, an Interest Payment Date, at the
Maturity Date thereof or at a date required for prepayment or by acceleration or
otherwise;

     (c)  any  default  in the  performance  of any of the  financial  covenants
contained  in Section  5.08  through  Section  5.10,  or any  default in the due
observance or performance of any covenant,  condition or agreement  contained in
any Section of Article VI hereof;

     (d) any  default in the due  observance  or  performance  of any  covenant,
condition or agreement  (other than in Section 5.08 through  Section 5.10) to be
observed or performed under Article V hereof, or otherwise pursuant to the terms
hereof,  and the  continuance of such default  unremedied for a period of twenty
(20) days after written notice thereof to the Borrowers;

     (e) if either of the Borrowers  have suffered any Material  Adverse  Effect
which shall  remain  unremedied  for a period of thirty (30) days after  written
notice thereof to the Borrowers;

                                       35
<PAGE>

     (f) any default with respect to any  Indebtedness for money borrowed of the
Borrowers  (other than to the Lender) in an amount in excess of $50,000,  if the
effect of such default is to permit the holder to accelerate the maturity of any
such  Indebtedness  for money borrowed or to cause such  Indebtedness  for money
borrowed to become due prior to the stated maturity thereof;

     (g) any  material  default  in the due  observance  or  performance  of any
covenant,  condition or agreement on the part of the Borrowers to be observed or
performed  under  the  Note,  the  Warrants  or any of the  Security  Documents,
including, without limitation, any event which subordinates or otherwise renders
invalid or  unenforceable  the Lender's first Liens,  encumbrances  and security
interests on the assets and  properties  of the  Borrowers  (subject only to the
Permitted  Liens) and the  continuation  of such default  beyond any  applicable
grace period provided therein;

     (h) if any Borrower shall: (i) apply for or consent to the appointment of a
receiver,  trustee, custodian or liquidator of it or any of its properties, (ii)
admit in writing its  inability  to pay its debts as they  mature,  (iii) make a
general assignment for the benefit of creditors,  (iv) be adjudicated a bankrupt
or  insolvent  or be the  subject of an order for relief  under  Title 11 of the
United  States  Code,  or (v) file a  voluntary  petition  in  bankruptcy,  or a
petition or an answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt,  dissolution or  liquidation  law or statute,  or an answer  admitting the
material  allegations  of a petition  filed against him or it in any  proceeding
under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;

     (i) if any  order,  judgment  or  decree  shall  be  entered,  without  the
application,  approval or consent of the  Borrowers,  by any court of  competent
jurisdiction,  approving a petition seeking reorganization of any Borrowers,  or
appointing a receiver,  trustee, custodian or liquidator of any Borrowers, or of
all or any substantial  part of its assets,  and such order,  judgment or decree
shall continue unstayed and in effect for any period of thirty (30) days;

     (j) if final  judgment(s)  for the  payment  of money in excess of  $25,000
individually  or  $100,000  in the  aggregate  shall  be  rendered  against  any
Borrowers, and the same shall remain undischarged,  unsatisfied and unbonded for
a period  of  thirty  (30)  consecutive  days  following  notice  of said  final
judgment(s) to such  Borrowers,  during which execution shall not be effectively
stayed;

     (k) the  occurrence  of any  levy  upon or  seizure  or  attachment  of any
property of any Borrowers  having an aggregate  fair value in excess of $100,000
individually  or $250,000 in the  aggregate,  which levy,  seizure or attachment
shall not be set aside,  bonded or discharged  within thirty (30) days after the
date thereof;

     (l) if the Greystone  Designees are removed  without good cause from or are
not elected or  reelected  to the Boards of  Directors  of the  Borrowers or the
people  designated  by the Lender to serve on the Company's  Audit  Committee or
Compensation  Committee have been

                                       36
<PAGE>

removed  without  good cause from such  committee  and no person  designated  by
Greystone has been elected to replace such director or committee member;

     Section 7.02. Remedies. Upon the occurrence of any Event of Default, and at
all times thereafter during the continuance  thereof:  (a) the Note, and any and
all other  Obligations  of the Borrowers to the Lender,  shall,  at the Lender's
option  (except  in the  case  of  Sections  7.01(g)  and  7.01(h)  hereof,  the
occurrence of which shall automatically effect  acceleration,  regardless of any
action or  forbearance  in respect  of any prior or ongoing  Default or Event of
Default which may be  inconsistent  with such  automatic  acceleration),  become
immediately due and payable,  both as to principal,  interest and other charges,
without  presentment,  demand,  or notice of any kind,  all of which are  hereby
expressly waived,  anything contained herein or in the Note or other evidence of
such   Obligations  to  the  contrary   notwithstanding,   (b)  all  outstanding
Obligations  under the Note, and all other outstanding  Obligations,  shall bear
interest at the default  rate of interest  provided in the Note,  (c) the Lender
may file suit against the Borrowers on the Note and/or seek specific performance
or  injunctive  relief  thereunder  (whether or not a remedy exists at law or is
adequate),  (d) the Lender shall not be obligated to make any further  Advances,
and (e) the Lender  shall have the right,  in  accordance  with the Note and the
Security  Documents,  to exercise any and all remedies in respect of such or all
of the  collateral  security for the  Obligations as the Lender may determine in
its discretion  (without any requirement of marshaling of assets,  or other such
requirement).

ARTICLE VIII. PARTICIPATING LENDERS; ASSIGNMENT.

     Section 8.01.  Participations.  Anything in this  Agreement to the contrary
notwithstanding,  the Lender may, at any time and from time to time, without the
requirement of any consent of the Borrowers, and without in any manner affecting
or  impairing  the  validity  of  any  Obligations  or any  collateral  security
therefor,  transfer,  assign or grant participating interests in the Loan as the
Lender  shall in its sole  discretion  determine,  to such  other  Persons  (the
"Participants")  as the Lender may  determine.  The  Lender  shall give  written
notice to the Borrowers of such Participations.  Notwithstanding the granting of
any such  participating  interests:  (a) the Borrowers  shall look solely to the
Lender for all  purposes of this  Agreement  and the  transactions  contemplated
hereby,  (b) the  Borrowers  shall at all times  have the right to rely upon any
waivers  or  consents  signed  by the  Lender as being  binding  upon all of the
Participants,  and (c) all  communications in respect of this Agreement and such
transactions shall remain solely between the Borrowers and the Lender hereunder.

     Section  8.02.  Transfer.  Anything  in  this  Agreement  to  the  contrary
notwithstanding,  the Lender may, at any time and from time to time, without the
requirement of any consent of the Borrowers, and without in any manner affecting
or  impairing  the  validity  of  any  Obligations  or any  collateral  security
therefor, transfer and assign all or any portion of its right to receive payment
or foreclose on its security interest  provided for in this Agreement,  the Note
and the Security  Documents  to any Person (an  "Assignee  Lender").  The Lender
shall give written notice to the Borrowers  prior to making any such transfer or
assignment.

                                       37
<PAGE>

ARTICLE IX. MISCELLANEOUS

     Section  9.01.  Survival.  This  Agreement and all  covenants,  agreements,
representations  and warranties  made herein and in the  certificates  delivered
pursuant hereto, shall survive the making by the Lender of the Advances, and the
execution  and  delivery to the Lender of the Note,  and shall  continue in full
force  and  effect  for so long  as the  Note or any  other  Obligations  of the
Borrowers to the Lender are outstanding  and unpaid.  Whenever in this Agreement
any of the parties  hereto is referred  to,  such  reference  shall be deemed to
include the successors and permitted  assigns of such party;  and all covenants,
promises and  agreements  in this  Agreement  contained,  by or on behalf of the
Borrowers,  shall  inure to the  benefit of the  successors  and  assigns of the
Lender.

     Section 9.02. Indemnification. The Borrowers shall indemnify the Lender and
its directors,  officers,  employees,  attorneys and lenders against,  and shall
hold the Lender and such  Persons  harmless  from,  any and all losses,  claims,
damages and liabilities and related expenses,  including reasonable counsel fees
and expenses,  incurred by the Lender or any such Person  arising out of, in any
way  connected  with,  or as a result of: (a) the  Borrowers'  use of any of the
proceeds of the Loan made by the Lender to the  Borrowers;  (b) this  Agreement,
the Borrowers'  ownership and operation of the Borrowers' assets,  including all
real  properties  and  improvements  or any  Contract,  the  performance  by the
Borrowers or any other Person of their respective  obligations  thereunder,  and
the consummation of the transactions contemplated by this Agreement;  and/or (c)
any  claim,  litigation,  investigation  or  proceeding  relating  to any of the
foregoing,  whether or not the  Lender or its  directors,  officers,  employees,
attorneys or Lenders are a party thereto; provided that the indemnity provisions
set forth in this  Section  9.02  shall not  apply to any such  losses,  claims,
damages,  liabilities or related  expenses arising from (i) any unexcused breach
by the Lender of any of its obligations  under this Agreement,  (ii) the willful
misconduct  or gross  negligence  of the  Lender,  provided  that any such loss,
claim, damage,  liability or expense has resulted from the willful misconduct or
gross  negligence  of  the  Lender  and  further  provided,  that  such  willful
misconduct or gross  negligence was the primary cause thereof  (i.e.,  more than
50% of the causation), or (iii) the breach of any commitment or legal obligation
of the Lender to any Person. The foregoing  indemnity shall remain operative and
in full  force  and  effect  regardless  of the  expiration  of the term of this
Agreement, the consummation of the transactions  contemplated by this Agreement,
the repayment of the Loan,  the  invalidity or  unenforceability  of any term or
provision  of  this  Agreement,   the  Security   Documents  or  the  Note,  any
investigation made by or on behalf of the Lender, and the content or accuracy of
any  representation  or warranty made by the Borrowers or their Affiliates under
this  Agreement.  All  amounts due under this  Section  9.02 shall be payable on
written demand therefor.

     Section 9.03. Governing Law. This Agreement, the Note, the Warrants and the
Security Documents shall (irrespective of where same are executed and delivered)
be governed by and  construed  in  accordance  with the laws of the State of New
York (without giving effect to principles of conflicts of laws).

     Section 9.04.  Waiver and Amendment.  Neither any modification or waiver of
any  provision  of this  Agreement,  the  Note,  the  Warrants  or the  Security
Documents, nor any consent to any departure by the Borrowers therefrom, shall in
any event be effective unless the same shall be set forth in writing duly signed
or acknowledged by the Lender and the Borrowers, and then

                                       38
<PAGE>

such waiver or consent shall be effective only in the specific instance, and for
the specific  purpose,  for which given. No notice to or demand on the Borrowers
in any instance  shall  entitle the  Borrowers to any other or future  notice or
demand in the same, similar or other circumstances.

     Section 9.05. Reservation of Remedies. Neither any failure nor any delay on
the  part of any of the  parties  hereto  in  exercising  any  right,  power  or
privilege  hereunder,  or under the Note, any of the Security Documents,  or any
other instrument given as security for any of the Obligations,  shall operate as
a waiver thereof,  nor shall a single or partial  exercise  thereof preclude any
other  or  future  exercise,  or the  exercise  of any  other  right,  power  or
privilege.

     Section  9.06.   Notices.   All  notices,   requests,   demands  and  other
communications  under  or in  respect  of  this  Agreement  or any  transactions
hereunder  shall be in writing  (which may  include  telegraphic  or  telecopied
communication)  and  shall  be  personally   delivered  or  mailed  (by  prepaid
registered  or  certified  mail,  return  receipt  requested),  sent by  prepaid
recognized  overnight courier service, or telegraphed or telecopied by facsimile
transmission  to the  applicable  party  at its  address  or  telecopier  number
indicated below.

          If to the Lender:

             c/o Greystone & Co., Inc.
             152 West 57th Street, 60th Floor
             New York, New York 10019
             Attn: Stephen Rosenberg
             Telecopier # (212) 649-9701

          with a copy to:

             Greenberg Traurig
             2005 Market Street
             Philadelphia, PA 19103
             Attn:  Michael Lehr
             Telecopier # (215) 988-7801

          If to the Borrowers:

             Schick Technologies, Inc.
             31-00 47th Avenue
             Long Island City, New York 11101
             Attn:  David Schick
             Telecopier # (718) 729-3469

                                       39
<PAGE>

          with a copy to:

             Schick Technologies, Inc.
             31-00 47th Avenue
             Long Island City, New York  11101
             Attn:  Zvi Raskin, Esq.
             Telecopier # (718) 937-5962

or, as to each party,  at such other  address or  telecopier  number as shall be
designated by such party in a written  notice to the other parties  delivered as
aforesaid. All such notices, requests, demands and other communications shall be
deemed  given when  personally  delivered  or when  deposited  in the mails with
postage prepaid (by registered or certified mail,  return receipt  requested) or
delivered to the telegraph  company or overnight  courier service,  addressed as
aforesaid,  or when submitted by facsimile  transmission to a telecopier  number
designated by such addressee.

     Section 9.07.  Binding  Effect.  This  Agreement  shall be binding upon and
inure to the  benefit  of the  Borrowers  and the  Lender  and their  respective
successors and permitted assigns, except that the Borrowers shall not assign any
of its rights or obligations  hereunder without the prior written consent of the
Lender.

     Section 9.08.  Consent to  Jurisdiction;  Waiver of Jury Trial. The parties
hereto hereby consent to the jurisdiction of all courts of the State of New York
and the United States  District Court for the Southern  District of New York, as
well as to the  jurisdiction  of all courts from which an appeal may be properly
taken from such courts,  for the purpose of any suit, action or other proceeding
arising out of or with respect to this  Agreement,  the Note, the Warrants,  the
Security  Documents,  any other agreements,  instruments,  certificates or other
documents  executed  in  connection  herewith  or  therewith,   or  any  of  the
transactions  contemplated hereby or thereby, or any of the parties' obligations
hereunder or thereunder.  The parties hereto hereby  expressly waive any and all
objections which they may have as to venue in any of such courts, and also waive
trial by jury in any such suit,  action or  proceeding.  The Lender or Borrowers
may file a copy of this  Agreement as evidence of the foregoing  waiver of right
to jury trial.

     Section  9.09.  Severability.  If any  provision of this  Agreement is held
invalid or  unenforceable,  either in its  entirety or by virtue of its scope or
application to given  circumstances,  such provision  shall  thereupon be deemed
modified only to the extent necessary to render same valid, or not applicable to
given  circumstances,  or excised  from this  Agreement,  as the  situation  may
require, and this Agreement shall be construed and enforced as if such provision
had been included herein as so modified in scope or application, or had not been
included herein, as the case may be.

     Section 9.10. Captions.  The Article and Section headings in this Agreement
are included  herein for convenience of reference only, and shall not affect the
construction or interpretation of any provision of this Agreement.

                                       40
<PAGE>

     Section 9.11.  Sole and Entire  Agreement.  This  Agreement,  the Note, the
Security  Documents,  and the other  agreements,  instruments,  certificates and
documents  referred to or described  herein and therein  constitute the sole and
entire agreement and understanding  between the parties hereto as to the subject
matter   hereof,   and  supersede   all  prior   discussions,   agreements   and
understandings  of every kind and nature  between the parties as to such subject
matter.

               [THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       41
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed by their duly authorized officers on the date set forth below, but
all as of the day and year first above written.

Effective Date: December 27, 1999

                               GREYSTONE FUNDING CORPORATION

                               By:/s/ Stephen Rosenberg
                                  -----------------------------------
                                      Stephen Rosenberg
                                      Chief Executive Officer

                               Date: March 17, 2000

                               SCHICK TECHNOLOGIES, INC., a Delaware corporation

                               By: /s/ David Schick
                                  -----------------------------------
                                      David  Schick
                                      Chief Executive Officer

                               Date: March 17, 2000

                               SCHICK TECHNOLOGIES, INC., a New York corporation

                               By: /s/ David Schick
                                  -----------------------------------
                                      David  Schick
                                      Chief Executive Officer

                             Date: March 17, 2000<PAGE>   1
                                                                   EXHIBIT 10.24

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.

                                     WARRANT
                      TO PURCHASE SHARES OF COMMON STOCK OF
                           CALIPER TECHNOLOGIES CORP.
                  DATED OCTOBER 11, 1996 (THE "EFFECTIVE DATE")

         WHEREAS, Caliper Technologies Corp., a Delaware corporation (the
"Company"), has entered into that certain Option Agreement dated as of August 3,
1995, as amended on August 25, 1995, with Michael R. Knapp (the
"Warrantholder"); and

         WHEREAS, the Company desires to grant to Warrantholder, pursuant to
such Option Agreement, the right to purchase shares of its Common Stock;

         NOW, THEREFORE, in consideration of the Warrantholder's performance
under the Option Agreement and in consideration of the mutual covenants and
agreements contained herein, the Company and Warrantholder agree as follows:

1.       GRANT OF THE RIGHT TO PURCHASE COMMON STOCK.

         The Company hereby grants to the Warrantholder, and the Warrantholder
is entitled, upon the terms and subject to the conditions hereinafter set forth,
to subscribe to and purchase from the Company, Thirty Thousand (30,000) fully
paid and non-assessable shares of the Company's Common Stock ("Common Stock") at
a purchase price of $0.7825135 per share (the "Exercise Price"). The type or
class, number and purchase price of such shares is each subject to adjustment as
provided herein.

2.       TERM OF THE WARRANT.

         Except as otherwise provided for herein, the term of this Warrant and
the right to purchase Common Stock as granted herein shall commence on the
Effective Date and shall be exercisable until October 11, 2006 (the "Expiration
Date").

3.       EXERCISE OF THE PURCHASE RIGHTS.

         (a) The purchase rights set forth in this Warrant are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit A (the "Notice of Exercise"), duly completed and executed. Promptly
upon receipt of the Notice of Exercise and the payment of the purchase price in
accordance with the terms set forth below, and in no event later than twenty-one
(21) days

<PAGE>   2

thereafter, the Company shall issue to the Warrantholder a certificate for the
number of shares of Common Stock purchased and shall execute an acknowledgment
of exercise in the form attached hereto as Exhibit B ("Acknowledgement of
Exercise") indicating the number of shares which remain subject to future
purchases, if any.

         (b) The Exercise Price may be paid at the Warrantholder's election
either (i) by cash or check, or (ii) by surrender of Warrants ("Net Issuance")
as determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Common Stock in accordance with the following formula:

                  X = Y(A-B)
                      -----
                        A

Where:            X = the number of shares of Common Stock to be issued to the
                      Warrantholder.

                  Y = the number of shares of Common Stock requested to be
                      exercised under this Warrant.

                  A = the fair market value of one (1) share of Common Stock
                      (at the date of such calculation).

                  B = the Exercise Price (as adjusted to the date of such
                      calculation).

For purposes of the above calculation, fair market value of one share of Common
Stock shall be determined by the Company's Board of Directors in good faith;
provided, however, that where there is a public market for the Company's Common
Stock, the fair market value per share shall be the average of the closing
prices of the Company's Common Stock quoted on the National Market System of The
Nasdaq Stock Market (or similar system) or on any exchange on which the Common
Stock is listed, whichever is applicable, over the twenty-one (21) day period
ending three (3) days before the day the current fair market value is being
determined.

         (c) Upon partial exercise by either cash or Net Issuance, the Company
shall promptly issue an amended Warrant representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant shall be identical to those contained herein, including, but not limited
to the Effective Date hereof.

4.       RESERVATION OF SHARES. During the term of this Warrant, the Company
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the rights to purchase Common
Stock as provided for herein.

5.       NO FRACTIONAL SHARES OR SCRIP.

         No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.

<PAGE>   3

6.       NO RIGHTS AS SHAREHOLDER.

         This Warrant does not entitle the Warrantholder to any voting rights or
other rights as a shareholder of the Company prior to the exercise of the
Warrant.

7.       WARRANTHOLDER OF RECORD.

         The Company shall maintain a record showing the name and address of the
registered holder of this Warrant.

8.       ADJUSTMENT RIGHTS.

         This purchase price per share and the number of shares of Common Stock
and the type or class of capital stock purchasable hereunder are subject to
adjustment, as follows:

         (a) MERGER AND SALE OF ASSETS. If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a
reclassification, subdivision or combination of shares otherwise provided for
below), or a merger or consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
shares of common stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would have
been issuable if Warrantholder had exercised this Warrant immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant with respect to the rights and interest of the
Warrantholder after the Merger Event to end that the provisions of this Warrant
(including adjustments of the Exercise Price and number of shares of Common
Stock purchasable) shall be applicable to the greatest extent possible.

         (b) RECLASSIFICATION OF SHARES. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, this Warrant shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities which were subject to the purchase
rights under this Warrant immediately prior to such combination,
reclassification, exchange, subdivision or other change.

         (c) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any time
shall subdivide or combine its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

         (d) STOCK DIVIDENDS. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's stock,
then the Exercise Price shall be adjusted, from and after the record date of
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator

<PAGE>   4

of which shall be the total number of all shares of the Company's stock
outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of all shares of the Company's
stock outstanding immediately after such dividend or distribution. The
Warrantholder shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Common Stock (calculated
to the nearest whole share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon the exercise hereof immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.

         (e) NOTICE TO WARRANTHOLDER. The Company shall provide notice to the
Warrantholder of the events specified in this Section 8 which notice shall be in
advance of the event where Warrantholder's rights hereunder would be prejudiced
without such advance notice.

9.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

         (a) RESERVATION OF COMMON STOCK. The Common Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant, will be validly
issued, fully paid and non-assessable, and will be free of any taxes, liens,
charges or encumbrances of any nature whatsoever; provided, however, that the
Common Stock issuable pursuant to this Warrant may be subject to restrictions on
transfer under state and/or Federal securities laws. The issuance of
certificates for shares of Common Stock upon exercise of the Warrant shall be
made without charge to the Warrantholder for any issuance tax in respect
thereof, or other cost incurred by the Company in connection with such exercise
and the related issuance of shares of Common Stock. The Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
and the issuance and delivery of any certificate in a name other than that of
the Warrantholder.

         (b) ARTICLES AND BYLAWS. The Company has made available to
Warrantholder true, complete and correct copies of its Restated Certificate of
Incorporation and Bylaws, as amended, through the Effective Date and shall
promptly provide the Warrantholder with any restatement, amendment,
modification, or waiver thereof.

         (c) DUE AUTHORITY. The execution and delivery by the Company of this
Warrant and the performance of all obligations of the Company hereunder,
including the issuance to Warrantholder of the right to acquire the shares of
Common Stock, have been duly authorized by all necessary corporate action on the
part of the Company, and, to the Company's knowledge, this Warrant is not
inconsistent with the Company's Restated Certificate of Incorporation or Bylaws,
does not contravene any law or governmental rule, regulation or order applicable
to it, does not and will not contravene any provision of, or constitute a
default under, any indenture, mortgage, contract or other instrument to which it
is a party or by which it is bound, and this Warrant constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.

         (d) CONSENTS AND APPROVALS. No consent or approval of, giving of notice
to, registration with, or taking of any other action in respect of any state,
Federal or other

<PAGE>   5

governmental authority or agency is required with respect to the execution,
delivery and performance by the Company of its obligations under this Warrant,
except for the filing of a notice pursuant to Section 25102(f) of the California
Corporate Securities Law, which filing will be effective by the time required
thereby.

         (e) ISSUED SECURITIES. All issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassessable. All outstanding shares of capital stock were issued in
full compliance with all Federal and state securities laws. In accordance with
the Company's Restated Certificate of Incorporation, no shareholder of the
Company has preemptive rights to purchase new issuances of the Company's capital
stock.

         (f) EXEMPT TRANSACTION. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Common Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, in reliance upon Section
4(2) thereof, and (ii) the qualification requirements of the applicable state
securities laws, including, but not limited to the California Corporate
Securities Law of 1968, in reliance upon Section 25102(f) thereof.

         (g) COMPLIANCE WITH RULE 144. At the written request of the
Warrantholder, who proposes to sell Common Stock issuable upon the exercise of
the Warrant in compliance with Rule 144 promulgated by the Securities and
Exchange Commission, the Company shall furnish to the Warrantholder, within ten
(10) days after receipt of such request, a written statement confirming the
Company's compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.

10.      REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.

         This Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Warrantholder:

         (a) INVESTMENT PURPOSE. The Warrant or the Common Stock issuable upon
exercise of the Warrant will be acquired for investment and not with a view to
the sale or distribution of any part thereof, and the Warrantholder has no
present intention of selling or engaging in any public distribution of the same
except pursuant to a registration or exemption.

         (b) PRIVATE ISSUE. The Warrantholder understands (i) that the Warrant
and the Common Stock issuable upon exercise of this Warrant is not registered
under the 1933 Act or qualified under applicable state securities laws on the
ground that the issuance contemplated by this Warrant will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.

         (c) DISPOSITION OF WARRANTHOLDER'S RIGHTS. In no event will the
Warrantholder make a disposition of the Warrant or the Common Stock issuable
upon exercise of the Warrant unless and until (i) it shall have notified the
Company of the proposed disposition, and (ii) if requested by the Company, it
shall have furnished the Company with an opinion of counsel

<PAGE>   6

(which counsel may either be inside or outside counsel to the Warrantholder)
satisfactory to the Company and its counsel to the effect that (A) appropriate
action necessary for compliance with the 1933 Act has been taken, or (B) an
exemption from the registration requirements of the 1933 Act is available.
Notwithstanding the foregoing, the restrictions imposed upon the transferability
of any of its rights to acquire Common Stock or Common Stock issuable on the
exercise of such rights do not apply to transfers from the beneficial owner of
any of the aforementioned securities to its nominee or from such nominee to its
beneficial owner, and shall terminate as to any particular share of Common Stock
when (1) such security shall have been effectively registered under the 1933 Act
and sold by the holder thereof in accordance with such registration or (2) such
security shall have been sold without registration in compliance with Rule 144
under the 1933 Act, or (3) a letter shall have been issued to the Warrantholder
at its request by the staff of the Securities and Exchange Commission or a
ruling shall have been issued to the Warrantholder at its request by such
Commission stating that no action shall be recommended by such staff or taken by
such Commission, as the case may be, if such security is transferred without
registration under the 1933 Act in accordance with the conditions set forth in
such letter or ruling and such letter or ruling specifies that no subsequent
restrictions on transfer are required. Whenever the restrictions imposed
hereunder shall terminate, as hereinabove provided, the Warrantholder or holder
of a share of Common Stock then outstanding as to which such restrictions have
terminated shall be entitled to receive from the Company, without expense to
such holder, one or more new certificates for the Warrant or for such shares of
Common Stock not bearing any restrictive legend.

         (d) FINANCIAL RISK. The Warrantholder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.

         (e) RISK OF NO REGISTRATION. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1933 Act, or file reports pursuant to Section 15(d), of the
Securities Exchange Act of 1934 (the "1934 Act"), or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires to
sell (i) the Warrant, or (ii) the Common Stock issuable upon exercise of the
Warrant, it may be required to hold such securities for an indefinite period.
The Warrantholder also understands that any sale of the Warrant or the Common
Stock issuable upon exercise of the Warrant which might be made by it in
reliance upon Rule 144 under the 1933 Act may be made only in accordance with
the terms and conditions of that Rule.

11.      TRANSFERS.

         Subject to the terms and conditions contained in Section 10 hereof and
the Company's Restated Certificate of Incorporation and Bylaws, this Warrant and
all rights hereunder are transferable in whole or in part by the Warrantholder
and any successor transferee, provided, however, in no event shall the number of
transfers of the rights and interests in all of the Warrants exceed three (3)
transfers. The transfer shall be recorded on the books of the Company upon
receipt by the Company of a notice of transfer in the form attached hereto as
Exhibit C (the "Transfer Notice"), at its principal offices and the payment to
the Company of all transfer taxes and other governmental charges imposed on such
transfer.

<PAGE>   7

12.      MISCELLANEOUS.

         (a) EFFECTIVE DATE. The provisions of this Warrant shall be construed
and shall be given effect in all respects as if it had been executed and
delivered by the parties on the date hereof. This Warrant shall be binding upon
any successors or assigns of the parties.

         (b) ATTORNEY'S FEES. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant.

         (c) GOVERNING LAW. This Warrant shall be governed by and construed for
all purposes under and in accordance with the laws of the State of California.

         (d) COUNTERPARTS. This Warrant may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         (e) NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
facsimile transmission (provided that the original is sent by personal delivery
or mail as hereinafter set forth) or seven (7) days after deposit in the United
States mail, by registered or certified mail, addressed (i) to the Warrantholder
at 622 Seacliff Drive, Aptos, California, 95003 (and/or, if by facsimile, (408)
689-9614) and (ii) to the Company at 3180 Porter Drive, Bldg B, Palo Alto, CA
94304, attention: Calvin Y. H. Chow (and/or if by facsimile, (415) 842-1970) or
at such other address as any such party may subsequently designate by written
notice to the other party.

         (f) REMEDIES. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Warrant requiring specific performance of any or
all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Warrant.

         (g) NO IMPAIRMENT OF RIGHTS. The Company will not, by amendment of its
Certificate or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.

         (h) SURVIVAL. The representations, warranties, covenants and conditions
of the respective parties contained herein or made pursuant to this Warrant
shall survive the execution and delivery of this Warrant.

         (i) SEVERABILITY. In the event any one or more of the provisions of
this Warrant shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Warrant shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a

<PAGE>   8

mutually acceptable valid, legal and enforceable provision, which comes closest
to the intention of the parties underlying the invalid, illegal or unenforceable
provision.

         (j) AMENDMENTS. Any provision of this Warrant may be amended by a
written instrument signed by the Company and by the Warrantholder.

<PAGE>   9

         IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
executed by its officers thereunto duly authorized as of the Effective Date.

                                  CALIPER TECHNOLOGIES CORP.

                                  By:  /s/ Lawrence A. Bock
                                     -------------------------------------------
                                           Lawrence A. Bock
                                           President and Chief Executive Officer

                                  By:   /s/ Michael R. Knapp
                                     -------------------------------------------
                                            Michael R. Knapp

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