Document:

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                                                                 Exhibit 10.28

                                                                 Execution Copy

                          REGISTRATION RIGHTS AGREEMENT

            THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
February 14, 2000 by and among SEPRACOR INC., a Delaware corporation (the
"Company") and DEUTSCHE BANK SECURITIES INC. (the "Initial Purchaser") pursuant
to the Purchase Agreement, dated as of February 8, 2000 (the "Purchase
Agreement"), between the Company and the Initial Purchaser. In order to induce
the Initial Purchaser to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.

            The Company agrees with the Initial Purchaser, (i) for their benefit
as Initial Purchaser and (ii) for the benefit of the holders from time to time
of the Debentures (including the Initial Purchaser) and the holders from time to
time of the Common Stock issued upon conversion of the Debentures (each of the
foregoing a "Holder" and together the "Holders"), as follows:

      1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms have the following meanings:

            Affiliate: "Affiliate" means, with respect to any specified person,
(i) any other person directly or indirectly controlling or controlled by, or
under direct or indirect common control with, such specified person or (ii) any
officer or director of such other person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") of a person means the possession, direct or indirect, of
the power (whether or not exercised) to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.

            Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

            Common Stock: The shares of common stock, par value $.10 per share,
of the Company and any other shares of stock as may constitute "Common Stock"
for purposes of the Indenture, in each case, as issuable or issued upon
conversion of the Debentures.

            Damages Accrual Period: See Section 2(f) hereof.
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            Damages Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.

            Debentures: 5% Convertible Subordinated Debentures due 2007 of the
Company being issued and sold pursuant to the Purchase Agreement and the
Indenture.

            Deferral Period: See Section 2(e) hereof.

            Effectiveness Period: The period commencing with the date hereof and
ending on the date that all Registrable Securities (other than Registerable
Securities held by Affiliates of the Company) have ceased to be Registrable
Securities.

            Event: See Section 2(f) hereof.

            Event Date: See Section 2(f) hereof.

            Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

            Filing Date: See Section 2(a) hereof.

            Holder: See the second paragraph of this Agreement.

            Indenture: The Indenture, dated as of February 14, 2000, between the
Company and The Chase Manhattan Bank, as Trustee, pursuant to which the
Debentures are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.

            Initial Purchaser: Deutsche Bank Securities Inc.

            Initial Shelf Registration: See Section 2(a) hereof.

            Liquidated Damages: See Section 2(f) hereof.

            Losses: See Section 6 hereof.

            Managing Underwriters: The investment banking firm or firms that
shall manage or co-manage an Underwritten Offering.

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            Notice and Questionnaire: A written notice delivered to the Company
containing substantially the information called for by the Notice and
Questionnaire attached as Appendix B to the Offering Memorandum of the Company
relating to the Debentures.

            Notice Holder: See Section 2(d) hereof.

            Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by an amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.

            Purchase Agreement: See the first paragraph of this Agreement.

            Record Holder: (i) With respect to any Damages Payment Date relating
to any Debenture as to which any such Liquidated Damages have accrued, the
registered holder of such Debenture on the record date with respect to the
interest payment date under the Indenture on which such Damages Payment Date
shall occur and (ii) with respect to any Damages Payment Date relating to any
Common Stock as to which any such Liquidated Damages have accrued, the
registered holder of such Common Stock fifteen (15) days prior to the next
succeeding Damages Payment Date.

            Registrable Securities: (A) The Common Stock of the Company into
which the Debentures are convertible or converted, whether or not such
Debentures have been converted, and any Common Stock issued with respect thereto
upon any stock dividend, split or similar event until, in the case of any such
Common Stock, (i) it is effectively registered under the Securities Act and
resold in accordance with the Registration Statement covering it, (ii) it is
saleable by the holder thereof pursuant to Rule 144(k) (or any successor
provision) or (iii) it is sold to the public pursuant to Rule 144, and, as a
result of the event or circumstance described in any of the foregoing clauses
(i) through (iii), the legends with respect to transfer restrictions required
under the Indenture (other than any such legends required solely as the
consequence of the fact that such Common Stock (or the Debentures, upon the
conversion of which, such Common Stock was issued or is issuable) is owned by,
or was previously owned by, the Company or an Affiliate of the Company) are
removed or removable in accordance with the terms of the Indenture; (B) the
Debentures, until, in the case of such Debenture, (i) it is converted into
shares of Common Stock in accordance with the terms of the Indenture, (ii) it is
effectively registered under the Securities Act and resold in accordance with
the Registration Statement covering it, (iii) it is saleable by the holder
thereof pursuant to Rule 144(k) or (iv) it is sold to the public pursuant to
Rule 144, and, as a result

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of the event or circumstance described in any of the foregoing clauses (ii)
through (iv), the legends with respect to transfer restrictions required under
the Indenture (other than any such legends required solely as the consequence of
the fact that such Debenture is owned by, or was previously owned by, the
Company or an Affiliate of the Company) are removed or removable in accordance
with the terms of the Indenture.

            Registration Statement: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.

            Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

            Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

            SEC: The Securities and Exchange Commission.

            Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

            Shelf Registration: See Section 2(a) hereof.

            Special Counsel: Ropes & Gray, or such successor counsel as shall be
specified by the Holders of a majority of the Registrable Securities, the fees
and expenses of which will be paid by the Company pursuant to Section 5 hereof.

            Subsequent Shelf Registration: See Section 2(b) hereof.

            TIA: The Trust Indenture Act of 1939, as amended.

            Trustee: The Trustee under the Indenture.

            Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering to
the public.

      2. Shelf Registration.

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      (a) Shelf Registration. The Company shall prepare and file with the SEC,
as soon as practicable but in any event on or prior to the date ninety (90) days
following the Closing Date of the original issuance of the Debentures (the
"Filing Date"), a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration") registering the resale from time to time by Holders thereof of
all of the Registrable Securities (the "Initial Shelf Registration"). The
Initial Shelf Registration shall be on Form S-1, Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by the
Holders in the manner or manners designated by them. If the Holders of
Registrable Securities so elect, an offering of Registrable Securities pursuant
to the Shelf Registration may be effected in the form of an Underwritten
Offering; provided, however, that the Company shall not be obligated to arrange
for more than one (1) such Underwritten Offering. In any Underwritten Offering,
the Holders of a majority of the Registrable Securities requested to be sold
shall select the Managing Underwriter (subject to the consent of the Company,
which consent shall not be unreasonably withheld) of such Underwritten Offering.
The Company shall use reasonable best efforts to cause the Initial Shelf
Registration to be declared effective under the Securities Act as promptly as
practicable and to keep the Initial Shelf Registration continuously effective
under the Securities Act until the earlier of the expiration of the
Effectiveness Period or the date a Subsequent Shelf Registration, as defined
below, covering all of the Registrable Securities has been declared effective
under the Securities Act.

      (b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a stop order by the SEC at any time during the
Effectiveness Period, the Company shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional Shelf Registration covering all of the Registrable Securities (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
the Company shall use its reasonable best efforts to cause the Subsequent Shelf
Registration to be declared effective as soon as practicable after such filing
and to keep such Registration Statement continuously effective until the end of
the Effectiveness Period.

      (c) The Company shall supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration, if required
by the Securities Act, or if reasonably requested by the Initial Purchaser or by
the Trustee on behalf of a majority of the Holders of the Registrable Securities
covered by such Registration Statement or by any Managing Underwriter of such
Registrable Securities in the event of an Underwritten Offering of the
Registrable Securities.

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      (d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell its Registrable Securities pursuant to a Shelf Registration and
related Prospectus, it will do so only in accordance with this Section 2(d).
Each Holder of Registrable Securities agrees to deliver a Notice and
Questionnaire to the Company at least three (3) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration. As
soon as practicable after the date the Notice and Questionnaire is provided to
the Company, and in any event within ten (10) Business Days after such date (or,
if later, the filing of the Initial Shelf Registration), the Company shall (i)
if necessary, prepare and file with the SEC a post-effective amendment to the
Shelf Registration or a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide each Holder who has delivered
a completed Notice and Questionnaire in accordance with this Section 2(d) (each,
a "Notice Holder") copies of any documents filed pursuant to Section 2(d)(i);
and (iii) inform each Notice Holder that the Company has complied with its
obligation in Section 2(d)(i) (or that, if the Company has filed a
post-effective amendment to the Shelf Registration which has not yet been
declared effective, the Company will notify the Notice Holder to that effect,
will use its reasonable best efforts to secure the effectiveness of such
post-effective amendment and will immediately notify the Notice Holder when the
amendment has become effective). Each Notice Holder shall furnish such other
information with respect to such Holder and the intended method of distribution
as required to amend the Shelf Registration or supplement the related
Prospectus.

      (e) In the event, following the initial declaration of effectiveness of
the Initial Shelf Registration filed hereunder, (i) of the happening of any
event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi) hereof or (ii) that, in the judgment of the Company, it is advisable to
suspend use of the Prospectus for a discrete period of time due to pending
material corporate developments or similar material events that have not yet
been publicly disclosed and as to which the Company believes public disclosure
will be prejudicial to the Company, the Company shall deliver a certificate in
writing, signed by an authorized executive officer of the Company, to the Notice
Holders (including any Notice Holder providing a Notice and Questionnaire
subsequent to the delivery by the Company of the certificate referenced above),
the Special Counsel and the Managing Underwriters, if any, to the effect of the
foregoing and, upon receipt of such certificate, each such Notice Holder shall
not sell any Registrable Securities and shall not use the Prospectus until such
Notice Holder's receipt of copies of the supplemented or

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amended Prospectus provided for in Section 2(d)(i) hereof, or until it is
advised in writing by the Company that the Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. The Company will use its
reasonable best efforts to ensure that the use of the Prospectus may be resumed,
and sales of Registrable Securities can commence or resume, as soon as
practicable and, in the case of a pending development or event referred to in
Section 2(e)(ii) hereof, as soon as the earlier of (x) public disclosure of such
pending material corporate development or similar material event or (y) in the
judgment of the Company, public disclosure of such material corporate
development or similar material event would not be prejudicial to the Company.
Notwithstanding any other provision in this Agreement, the Company shall not
under any circumstances be entitled to exercise its rights under this Section
2(e) to defer sales of Registrable Securities except as follows: the Company may
defer sales of Registrable Securities in accordance with this Section 2(e) for a
period not to exceed an aggregate of sixty (60) days in any three hundred sixty
five (365) day period, and the period in which sales of Registrable Securities
are suspended shall not exceed fifteen (15) days unless the Company shall
deliver to such Notice Holders one or more subsequent notices to the effect set
forth above, each of which shall have the effect of extending the period during
which sales of Registrable Securities are deferred by up to an additional
fifteen (15) days, or such shorter period of time as is specified in such
subsequent notice (each such period of deferral, as may be extended, a "Deferral
Period").

      (f) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration had not
been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, or (iii) the aggregate number of days in the Deferral Periods in any three
hundred sixty five (365) day period exceeds the period permitted pursuant to
Section 2(e) hereof (each of the events of a type described in any of the
foregoing clauses (i) through (iii) are individually referred to herein as an
"Event," and the Filing Date in the case of clause (i), the date on which the
effectiveness of the Shelf Registration has been suspended or proceedings with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act have been commenced in the case of clause (ii), and the date on which the
duration of the Deferral Periods in any three hundred sixty five (365) day
period exceeds the period permitted by Section 2(e) hereof in the case of clause
(iii) being referred to herein as an "Event Date"). Events shall be deemed to
continue until the date of the termination of such Event, which shall be the
following dates with respect to the respective types of Events: the date the
Initial Registration Statement is filed in the case of an Event of the type
described in clause (i), the date that all stop orders suspending effectiveness
of the Shelf Registration have been removed and the

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proceedings initiated with respect to the Shelf Registration under Section 8(d)
or 8(e) of the Securities Act have terminated, as the case may be, in the case
of Events of the types described in clause (ii), and termination of the Deferral
Period which caused the aggregate number of days in the Deferral Periods in any
three hundred sixty five (365) day period to exceed the number permitted by
Section 2(e) to be exceeded in the case of Events of the type described in
clause (iii).

            Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (A)(i) to each holder of a
Debenture that is a Notice Holder, accruing at an annual rate equal to
one-quarter of one percent per annum (25 basis points) on the aggregate
principal amount of Debentures held by such Notice Holder and (ii) to each
holder of Common Stock that is a Notice Holder, accruing at an annual rate equal
to one-quarter of one percent per annum (25 basis points) calculated on an
amount equal to the product of (x) the then-applicable Conversion Price (as
defined in the Indenture) or, in the event that each Debenture has been
converted to Common Stock, the Conversion Price applicable to the Debenture last
converted, multiplied by (y) the number of shares of Common Stock held by such
holder; and (B) if the Damages Accrual Period continues for a period in excess
of thirty (30) days from the Event Date, from and after the end of such thirty
(30) days until such time as there are no Events which have occurred and are
continuing, (i) to each holder of a Debenture (whether or not a Notice Holder),
accruing at an annual rate equal to one-half of one percent per annum (50 basis
points) on the aggregate principal amount of Debentures held by such holder and
(ii) to each holder of Common Stock into which Debentures have been converted
(whether or not a Notice Holder), accruing at an annual rate equal to one-half
of one percent per annum (50 basis points) calculated on an amount equal to the
product of (x) the then applicable Conversion Price (as defined in the
Indenture) or, in the event that each Debenture has been converted to Common
Stock, the Conversion Price applicable to the Debenture last converted,
multiplied by (y) the number of shares of Common Stock held by such holder.
Notwithstanding the foregoing, no Liquidated Damages shall accrue under clause
(A) for the preceding sentence during any period for which Liquidated Damages
accrue under clause (B) of the preceding sentence or as to any Registrable
Securities from and after the expiration of the Effectiveness Period. The rate
of accrual of the Liquidated Damages with respect to any period shall not exceed
the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.

            The Company shall pay the Liquidated Damages due on any Debentures
or Common Stock by depositing with the Trustee under the Indenture, in trust,
for the benefit of the holders of Debentures or Common Stock or Notice Holders,
as the case may be, entitled thereto,

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at least one (1) Business Day prior to the applicable Damages Payment Date, sums
sufficient to pay the Liquidated Damages accrued or accruing since the last
preceding Damages Payment Date through such Damages Payment Date. The Liquidated
Damages shall be paid by the Trustee at the direction and on behalf of the
Company to the Record Holders on each Damages Payment Date by wire transfer of
immediately available funds to the accounts specified by them or by mailing
checks to their registered addresses as they appear in the Debenture register
(as defined in the Indenture), in the case of the Debentures, and in the
register of the Company for the Common Stock, in the case of the Common Stock,
if no such accounts have been specified on or before the Damages Payment Date;
provided, however, that any Liquidated Damages accrued with respect to any
Debenture or portion thereof called for redemption on a redemption date,
redeemed or repurchased in connection with a Fundamental Change (as defined in
the Indenture) on a repurchase date, or converted into Common Stock on a
conversion date prior to the Damages Payment Date, shall, in any such event, be
paid instead to the holder who submitted such Debenture or portion thereof for
redemption, repurchase or conversion on the applicable redemption date,
repurchase date or conversion date, as the case may be, on such date (or
promptly following the conversion date, in the case of conversion of a
Debenture). The Trustee shall be entitled, on behalf of the holders of
Debentures, holders of Common Stock and Notice Holders, to seek any available
remedy for the enforcement of this Agreement, including for the payment of such
Liquidated Damages. Notwithstanding the foregoing, the parties agree that the
sole damages payable for a violation of the terms of this Agreement with respect
to which Liquidated Damages are expressly provided shall be such Liquidated
Damages. Nothing shall preclude a Notice Holder or Holder of Registrable
Securities from pursuing or obtaining specific performance or other equitable
relief with respect to this Agreement, in addition to the payment of Liquidated
Damages.

            All of the Company's obligations set forth in this Section 2(f)
which are outstanding with respect to any Registrable Securities at the time
such security ceases to be a Registrable Security shall survive until such time
as all such obligations with respect to such security have been satisfied in
full (notwithstanding termination of the Agreement pursuant to Section 8(o)).

            The parties hereto agree that the Liquidated Damages provided for in
this Section 2(f) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities (other than the Initial Purchaser)
by reason of the failure of the Shelf Registration to be filed or declared
effective or unavailable (absolutely or as a practical matter) for effecting
resales of Registrable Securities, as the case may be, in accordance with the
provisions hereof.

      3. Registration Procedures. In connection with the Company's registration
obligations under Section 2 hereof, the Company shall effect such registrations
to permit the sale of the

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Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall:

      (a) Prepare and file with the SEC a Registration Statement or Registration
Statements on any appropriate form under the Securities Act available for the
sale of the Registrable Securities by the Holders thereof in accordance with the
intended method or methods of distribution thereof, and use its reasonable best
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein; provided that, before filing any such Registration
Statement or Prospectus or any amendments or supplements thereto (other than
documents that would be incorporated or deemed to be incorporated therein by
reference and that the Company is required by applicable securities laws or
stock exchange requirements to file), the Company shall furnish to the Initial
Purchaser, the Special Counsel and the Managing Underwriters of such offering,
if any, copies of all such documents proposed to be filed, which documents will
be subject to the review of the Initial Purchaser, the Special Counsel and such
Managing Underwriters, and the Company shall not file any such Registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(other than such documents which, upon filing, would be incorporated or deemed
to be incorporated by reference therein and that the Company is required by
applicable securities laws or stock exchange requirements to file) to which the
Holders of a majority of the Registrable Securities covered by such Registration
Statement, the Managing Underwriters, the Initial Purchaser or the Special
Counsel shall reasonably object in writing within five (5) full days after
receipt of such materials in the case of the Initial Shelf Registration
Statement and two (2) full Business Days in every other case.

      (b) Subject to Section 2(e), prepare and file with the SEC such amendments
and post-effective amendments to each Registration Statement as may be necessary
to keep such Registration Statement continuously effective for the Effectiveness
Period; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement and Prospectus during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or such
Prospectus as so supplemented.

      (c) Notify all Notice Holders, the Initial Purchaser, the Special Counsel
and the Managing Underwriters, if any, promptly, and (if requested by any such
person) confirm such notice in writing, (i) when a Prospectus, any Prospectus
supplement, a Registration Statement or a post-effective amendment to a
Registration Statement has been filed with the SEC, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC or any other federal or state
governmental authority for

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amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement or a supplement to a
Prospectus would be required. Notice of the filing and effectiveness of the
Initial Shelf Registration and any Subsequent Registration shall be made by the
Company by release made to Reuters Economic Services and Bloomberg Business
News.

      (d) Use its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.

      (e) If reasonably requested by the Initial Purchaser or the Managing
Underwriters, if any, or the Holders of a majority of the Registrable Securities
being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchaser, the Special Counsel, the Managing Underwriters, if any, or
such Holders, in connection with any offering of Registrable Securities, agree
should be included therein as required by applicable law and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as reasonably practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to take any
actions under this Section 3(e) that are not, in the reasonable opinion of
counsel for the Company, in compliance with applicable law.

      (f) Furnish to each Notice Holder, the Special Counsel, the Initial
Purchaser and each Managing Underwriter, if any, without charge, at least one
conformed copy of the Registration

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Statement or Statements and any amendment thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
by any such Notice Holder, Special Counsel, the Initial Purchaser or Managing
Underwriter).

      (g) Deliver to each Notice Holder, the Special Counsel, the Initial
Purchaser and each Managing Underwriter, if any, in connection with any offering
of Registrable Securities, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus or each amendment or supplement thereto by each of the Notice Holders
of Registrable Securities and the underwriters, if any, in connection with any
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto.

      (h) Prior to any public offering of Registrable Securities, to register or
qualify or cooperate with the Notice Holders, the Managing Underwriters, if any,
and the Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Notice Holder or Managing
Underwriter reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, however, that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it is not then
so qualified or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then so
subject.

      (i) If required, cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States, except as
may be required solely as a consequence of the nature of such Notice Holder, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals, as may be
necessary to enable the Notice Holder or Holders thereof or the Managing
Underwriters, if any, to consummate the disposition of such Registrable
Securities.

      (j) Other than during a Deferral Period, immediately upon the existence of
any fact or the occurrence of any event as a result of which a Registration
Statement shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or a Prospectus shall contain any untrue

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statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, promptly prepare and
file (subject to the proviso in Section 3(a)) a post-effective amendment to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required document (such as a
Current Report on Form 8-K) that would be incorporated by reference into the
Registration Statement so that the Registration Statement shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and so that the Prospectus will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, and, in the case
of a post-effective amendment to a Registration Statement, use its reasonable
best efforts to cause it to become effective as soon as practicable.

      (k) Enter into such agreements (including, in the event of an Underwritten
Offering, an underwriting agreement in form, scope and substance as is customary
in Underwritten Offerings) and take all such other actions in connection
therewith (including, in the event of an Underwritten Offering, those reasonably
requested by the Managing Underwriters, if any, or the Holders of a majority of
the Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, whether or
not an underwriting agreement is entered into, and if the registration is an
underwritten registration, (i) make such representations and warranties, subject
to the Company's ability to do so, to the Holders of such Registrable Securities
and the underwriters with respect to the business of the Company and its
subsidiaries, the Registration Statement, Prospectus and documents incorporated
by reference or deemed incorporated by reference, if any, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings (provided that the scope and substance shall not be
materially different than those contained in the Purchase Agreement) and confirm
the same if and when requested; (ii) use its reasonable best efforts to obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any, and Special Counsel) addressed to each of the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings; (iii) use its reasonable best efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any business acquired or to be acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the Managing Underwriters, if
any, such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort"

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letters in connection with underwritten offerings; and (iv) deliver such
documents and certificates as may be reasonably requested by the Special Counsel
and the Managing Underwriters, if any, to evidence the continued validity of the
representations and warranties of the Company and its subsidiaries made pursuant
to clause (i) above and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. The above shall be done at each closing under such underwriting or
similar agreement as and to the extent required thereunder.

      (l) If requested in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make available for inspection
by a representative of the Holders of Registrable Securities being sold, any
Managing Underwriter participating in any disposition of Registrable Securities,
if any, and any attorney or accountant retained by such Notice Holders or
underwriter, financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the executive
officers, directors and employees of the Company and its subsidiaries, to supply
all information reasonably requested by any such representative, Managing
Underwriter, attorney or accountant in connection with such disposition, subject
to reasonable assurances by each such person that such information will only be
used in connection with matters relating to such Registration Statement;
provided, however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law, (iii) such information becomes generally
available to the public other than as a result of a disclosure or failure to
safeguard by any such person or (iv) such information becomes available to any
such person from a source other than the Company and such source is not bound by
a confidentiality agreement.

      (m) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than forty-five (45) days after the end of any twelve (12) month period
(or ninety (90) days after the end of any twelve (12) month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall cover said twelve (12) month period.

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      (n) Cooperate with the Notice Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and registered in
such names as such Holders may request.

      (o) Provide the Trustee under the Indenture and the transfer agent for the
Common Stock with printed certificates for the Registrable Securities which are
in a form eligible for deposit with The Depositary Trust Company.

      (p) Cause the Common Stock covered by the Registration Statement to be
listed on each securities exchange (or quoted on each automated quotation system
on which any of the Company's "Common Stock," as that term is defined in the
Indenture, is then listed or quoted) no later than the date the Registration
Statement is declared effective and, in connection therewith, to the extent
applicable, to make such filings under the Exchange Act (e.g., the filing of a
Registration Statement on Form 8-A) and to have such filings declared effective
thereunder.

      (q) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

      4. Holder's Obligations. Each Holder agrees, by acquisition of the
Debentures and Registrable Securities, that no Holder of Registrable Securities
shall be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with the Notice and Questionnaire required
pursuant to Section 2(d) hereof and such other information regarding such Holder
and the distribution of such Registrable Securities as may be required to be
included in the Registration Statement or the Prospectus or as the Company may
from time to time reasonably request. The Company may exclude from such
registration the Registrable Securities of any Holder who does not furnish such
information provided above for so long as such information is not so furnished.
Each Holder of Registrable Securities as to which any Registration Statement is
being effected agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not misleading. Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution
is as set forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to such Holder or its
plan of distribution and that such Prospectus does not as of the time of such
sale omit to state any material fact relating to such Holder or its plan of
distribution necessary to make the statements in such Prospectus, in light of
the circumstances under which they were made, not misleading.

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      5. Registration Expenses. All fees and expenses incident to the Company's
performance of or compliance with this Agreement shall be borne by the Company
whether or not any of the Registration Statements become effective. Such fees
and expenses shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the SEC or the National Association of
Securities Dealers, Inc. and (y) relating to compliance with federal securities
or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of Special Counsel in connection with Blue Sky qualifications of
the Registrable Securities under the laws of such jurisdictions as the Managing
Underwriters, if any, or Holders of a majority of the Registrable Securities
being sold may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the Special Counsel
or the Holders of a majority of the Registrable Securities included in any
Registration Statement), (iii) the reasonable fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent for the Common
Stock, (iv) reasonable fees and disbursements of counsel for the Company and the
Special Counsel in connection with the Shelf Registration (provided that the
Company shall not be liable for the fees and expenses of more than one separate
firm, in addition to counsel for the Company, for all parties participating in
any transaction hereunder), (v) fees and disbursements of all independent
certified public accountants referred to in Section 3(k)(iii) hereof (including
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance) and (vi) Securities Act liability insurance, to
the extent obtained by the Company in its sole discretion. In addition, the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange on which similar securities issued by the Company are
then listed and the fees and expenses of any person, including special experts,
retained by the Company. Notwithstanding the provisions of this Section 5, each
seller of Registrable Securities shall pay all underwriting discounts, selling
commissions and stock transfer taxes applicable to the Registrable Securities,
all selling expenses and all registration expenses to the extent that the
Company is prohibited by applicable Blue Sky laws from paying such expenses for
or on behalf of such seller of Registrable Securities.

      6. Indemnification.

      (a) Indemnification by the Company. The Company shall indemnify and hold
harmless the Initial Purchaser, each Holder and each person, if any, who
controls the Initial Purchaser or any Holder (within the meaning of either
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) from and
against all losses, liabilities, damages and expenses (including,

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without limitation, any reasonable legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim)
(collectively, "Losses"), arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
Losses arise out of or are based upon the information relating to the Initial
Purchaser or any Holder furnished to the Company in writing by the Initial
Purchaser or such Holder expressly for use therein (including, without
limitation, any information relating to the plan of distribution of Registrable
Securities furnished by such person); provided that the Company shall not be
liable to any Holder of Registrable Securities (or any person controlling such
Holder) to the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if either (A)(i) such Holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such Holder to the person asserting the claims from
which such Losses arise and (ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission, or
(B)(x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which Losses arise. The Company shall also
indemnify each underwriter and each person who controls such person (within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent and with the same limitations as provided above with
respect to the indemnification of the Initial Purchaser or the Holders of
Registrable Securities.

      (b) Indemnification by Holder of Registrable Securities. Each Holder
agrees, and such agreement shall be evidenced by the Holder delivering the
Notice and Questionnaire described in Section 2(d) hereof, severally and not
jointly to indemnify and hold harmless the Initial Purchaser, the other Holders,
the Company, its directors, its officers who sign a Registration Statement, and
each person, if any, who controls the Company, the Initial Purchaser and any
other Holder (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act), from and against all losses arising out of or
based upon any untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or arising out of or based upon
any omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
relating to such Holder so furnished in writing by such

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Holder to the Company expressly for use in such Registration Statement or
Prospectus. In no event shall the liability of any Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

      (c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, shall have the right to assume
the defense of such proceeding and to retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate because there may be one or
more legal defenses available to the indemnified party that conflicts with those
available to the indemnifying party. It is understood that the indemnifying
party shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Initial Purchaser and all persons, if
any, who control the Initial Purchaser within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Holders and all persons, if any, who control any Holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (c) the fees and expenses of more than one separate firm (in addition to any
local counsel) for the Company, its directors, its officers who sign a
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Company, and such directors, officers and the control persons of the Company,
such firm shall be designated in writing by the Company. In such case involving
the Initial Purchaser and persons who control the Initial Purchaser, such firm
shall be designated in writing by Deutsche Bank Securities Inc. In such case
involving the Holders and such persons who control Holders, such firm shall be
designated in writing by the Holders of the majority of Registrable Securities
sold pursuant to the Registration Statement. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled

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with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability or claims
that are the subject matter of such proceeding.

      (d) Contribution. If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under Section 6(a) or 6(b) hereof in respect
of any Losses or is insufficient to hold such indemnified party harmless, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such Losses, (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party or parties on the other hand or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the indemnifying
party or parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the initial placement (before deducting expenses) of the Debentures
pursuant to the Purchase Agreement. Benefits received by the Initial Purchaser
shall be deemed to be equal to the total purchase discounts and commissions
received by them pursuant to the Purchase Agreement and benefits received by any
other Holders shall be deemed to be equal to the value of receiving Debentures
registered under the Securities Act. Benefits received by any underwriter shall
be deemed to be equal to the total discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the Registration Statement
which resulted in such Losses. The relative fault of the Holders on the one hand
and the Company on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Holders or by the Company and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Holders' respective obligations to contribute
pursuant to this paragraph are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement, and
not joint.

            The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately

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preceding paragraph. The amount paid or payable by an indemnified party as a
result of the Losses referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding this
Section 6(d), an indemnifying party that is a Holder of Registrable Securities
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Registrable Securities sold by such indemnifying
party and distributed to the public were offered to the public exceeds the
amount of any damages which such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

            The indemnity, contribution and expense reimbursement obligations of
the Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Purchase Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any Holder or any termination of this Agreement.

            The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchaser, any Holder or any person controlling any Initial
Purchaser or any Holder and (iii) the sale of any Registrable Securities by any
Holder.

      7. Information Requirements.

      (a) The Company shall file the reports required to be filed by it under
the Securities Act and the Exchange Act, and if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (including, without
limitation, making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act. Upon the request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such filing

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requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities under any such
section of the Exchange Act.

      (b) The Company shall file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3 in order to allow the Company to be eligible to file
registration statements on Form S-3.

      8. Miscellaneous.

      (a) Remedies. In the event of a breach by the Company of its obligations
under this Agreement, each Holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement, provided that the sole damages payable for a violation of the terms
of this Agreement for which Liquidated Damages are expressly provided pursuant
to Section 2(e) hereof shall be such Liquidated Damages. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.

      (b) No Conflicting Agreements. The Company has not, as of the date hereof,
and shall not, on or after the date of this Agreement, enter into any agreement
with respect to its securities which conflicts with the rights granted to the
Holders of Registrable Securities in this Agreement. The Company represents and
warrants that the rights granted to the Holders or Registrable Securities
hereunder do not in any way conflict with the rights granted to the holders of
the Company's securities under any other agreements.

      (c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Common Stock constituting Registrable
Securities (with Holders of Debentures deemed to be the Holders, for purposes of
this Section, of the number of outstanding shares of Common Stock into which
such Debentures are convertible as of such date of determination).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders;
provided that the provisions of this statement may not be

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amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence.

      (d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and shall be deemed given (i) when
made, if made by hand delivery, (ii) upon confirmation, if made by telecopier or
(ii) one (1) business day after being deposited with a reputable next-day
courier, postage prepaid, to the parties as follows:

            (i) if to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company in accordance with the provisions of
Sections 8(e):

            (ii) if to the Company, to:

                                    Sepracor Inc.
                                    111 Locke Drive
                                    Marlborough, MA 01752
                                    Attention: Chief Financial Officer
                                    Telecopy No: (508) 481-6700

                                    with a copy to:

                                    Hale and Dorr LLP
                                    60 State Street
                                    Boston, MA  02109
                                    Attention: Mark G. Borden
                                    Telecopy No: (617) 526-5000

                                    and

            (iii) if to the Initial Purchaser or Special Counsel to:

                                    Ropes & Gray
                                    One International Place
                                    Boston, MA  02110
                                    Attention: Keith F. Higgins, Esq.
                                    Telecopy No: (617) 951-7050

or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.

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      (e) Owner of Registrable Securities. The Company will maintain, or will
cause its registrar and transfer agent to maintain, a register with respect to
the Registrable Securities in which all transfers of Registrable Securities of
which the Company has received notice will be recorded. The Company may deem and
treat the person in whose name Registrable Securities are registered in such
register of the Company as the owner thereof for all purposes, including without
limitation, the giving of notices under this Agreement.

      (f) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder, (i)
Holders of Debentures shall be deemed to be Holders, for such purposes, of the
number of outstanding shares of Common Stock into which such Debentures are
convertible and (ii) Registrable Securities held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act) (other
than the Initial Purchaser or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.

      (g) Successors and Assigns. Any person who purchases any Registrable
Securities from an Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of such Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.

      (h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

      (i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.

      (k) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants

                                      -23-
<PAGE>

                                                                  Execution Copy

and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be in the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, illegal, void or unenforceable.

      (l) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights.

      (m) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.

      (n) Further Assurances. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.

      (o) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for Liquidated Damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.

                                      -24-
<PAGE>

                                                                  Execution Copy

                                                   Registration Rights Agreement

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                  SEPRACOR INC.

                                  By: /s/ Robert F. Scumaci
                                      -----------------------
                                      Name: Robert F. Scumaci
                                      Title: Senior Vice President Finance and
                                             Administration

Accepted as of the date first above written:

DEUTSCHE BANK SECURITIES INC.

By:     /s/ Michael J. Ott
        ----------------------
        Name: Michael J. Ott
        Title: Managing Director

By:     /s/ Brent B. Milner
        ----------------------
        Name: Brent B. Milner
        Title: Director<PAGE>

                                                                 Exhibit 10.29

================================================================================

                           SECOND AMENDED AND RESTATED

                           REVOLVING CREDIT AGREEMENT

                                      AMONG

                              FLEET NATIONAL BANK,

                                  SEPRACOR INC.

                                       AND

                             BIOSPHERE MEDICAL, INC.

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

                          Dated as of December 22, 1999

================================================================================
<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

SECTION 1      DEFINITIONS...................................................1

      1.1   Definitions......................................................1

      1.2   Accounting Terms................................................10

      1.3   Multiple Borrowers..............................................10

SECTION 2      DESCRIPTION OF CREDIT........................................10

      2.1   The Revolving Loans.............................................10

      2.2   Fees............................................................11

      2.3   Reduction of Revolving Commitment Amount/Biosphere Sublimit.....12

      2.4   The Notes.......................................................12

      2.5   Letters of Credit...............................................12

      2.6   Capital Requirements............................................12

      2.7   Payments and Prepayments of the Revolving Loans.................13

      2.8   Method of Payment...............................................13

      2.9   Overdue Payments................................................13

      2.10  Holidays........................................................14

      2.11  Interest........................................................14

      2.12  Certain LIBOR Provisions........................................14

      2.13  Conditions for Basing Interest on the LIBOR Rate................16

      2.14  Indemnification for Funding and Other Losses....................17

      2.15  Change in Applicable Laws, Regulations, etc.....................17

      2.16  Taxes...........................................................17

SECTION 3      CONDITIONS OF LOANS..........................................18

      3.1   Conditions Precedent to Initial Revolving Loan..................18

      3.2   Conditions Precedent to all Revolving Loans.....................20

SECTION 4      REPRESENTATIONS AND WARRANTIES...............................20

      4.1   Organization and Qualification..................................20

      4.2   Corporate Authority.............................................20

      4.3   Valid Obligations...............................................21

      4.4   Consents or Approvals...........................................21

      4.5   Title to Properties; Absence of Encumbrances....................21

                                       -i-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                           Page

      4.6   Financial Statements............................................21

      4.7   Changes.........................................................21

      4.8   Defaults........................................................22

      4.9   Taxes...........................................................22

      4.10  Material Agreements.............................................22

      4.11  Material Licenses...............................................22

      4.12  Litigation......................................................22

      4.13  Use of Proceeds.................................................22

      4.14  Existing Indebtedness...........................................22

      4.15  Existing Investments............................................22

      4.16  Subsidiaries....................................................23

      4.17  Investment Company Act..........................................23

      4.18  Compliance with ERISA...........................................23

      4.19  FDA Compliance, Etc.............................................23

      4.20  Environmental Matters...........................................23

SECTION 5      AFFIRMATIVE COVENANTS........................................24

      5.1   Financial Statements and other Reporting Requirements...........25

      5.2   Conduct of Business.............................................26

      5.3   Maintenance and Insurance.......................................27

      5.4   Taxes...........................................................27

      5.5   Inspection by the Bank..........................................27

      5.6   Maintenance of Books and Records................................27

      5.7   Maintenance of Accounts.........................................27

      5.9   Minimum Liquidity Ratio.........................................28

      5.10  Minimum Tangible Capital Base...................................28

      5.11  Minimum Cash or Equivalents/Fixed Charge Coverage Ratio.........28

      5.12  Further Assurances..............................................28

SECTION 6      NEGATIVE COVENANTS...........................................28

      6.1   Indebtedness....................................................28

      6.2   Contingent Liabilities..........................................29

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                           Page

      6.3   Sale and Leaseback..............................................29

      6.4   Encumbrances....................................................29

      6.5   Lines of Business...............................................30

      6.6   Merger; Consolidation; Sale or Lease of Assets..................30

      6.7   Additional Stock Issuance.......................................30

      6.8   Restricted Payments.............................................30

      6.9   Transactions with Affiliates....................................31

      6.10  Investments.....................................................31

      6.11  ERISA...........................................................31

      6.12  Observance of Subordination Provisions, etc.....................31

      6.13  Restrictive Agreements..........................................32

SECTION 7      DEFAULTS.....................................................32

      7.1   Events of Default...............................................32

      7.2   Remedies........................................................34

SECTION 8      MISCELLANEOUS................................................35

      8.1   Notices.........................................................35

      8.2   Expenses........................................................36

      8.3   Set-Off.........................................................36

      8.4   Term of Agreement...............................................36

      8.5   No Waivers......................................................36

      8.6   Governing Law; Jurisdiction.....................................36

      8.7   Amendments......................................................37

      8.8   Binding Effect of Agreement; Assignments; Participations........37

      8.9   Currency Conversion.............................................38

      8.10  Counterparts....................................................38

      8.11  Partial Invalidity..............................................38

      8.12  Captions........................................................38

      8.13  WAIVER OF JURY TRIAL............................................38

      8.14  Entire Agreement................................................38

                                      -iii-
<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

                             EXHIBITS AND SCHEDULES

      Exhibit A-1       Sepracor Promissory Note
      Exhibit A-2       Biosphere Promissory Note
      Exhibit B         Compliance Certificate
      Exhibit C         Guaranty Agreement

      Schedule 4.10     Material Agreements
      Schedule 4.11     Material Licenses
      Schedule 4.12     Litigation
      Schedule 4.15     Investments
      Schedule 4.16     Subsidiaries
      Schedule 6.1      Indebtedness
      Schedule 6.2      Guaranties
      Schedule 6.4      Encumbrances

                                       -i-
<PAGE>

                           SECOND AMENDED AND RESTATED
                           REVOLVING CREDIT AGREEMENT

                          Dated as of December 22, 1999

      THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
December 22, 1999, by and among SEPRACOR INC., a Delaware corporation having its
chief executive office at 111 Locke Drive, Marlborough, Massachusetts 01752 (the
"Borrower"), BIOSPHERE MEDICAL, INC., a Delaware corporation having its chief
executive office at 111 Locke Drive, Marlborough, Massachusetts 01752
("Biosphere, collectively with the Borrower, the "Credit Parties") and FLEET
NATIONAL BANK (the "Bank"), having its office at One Federal Street, Boston,
Massachusetts 02110.

      This Agreement amends, restates and supersedes the Amended and Restated
Revolving Credit Agreement dated as of December 31, 1996 as amended to date (the
"Prior Credit Agreement") by and among the Borrower, Sepracor Securities
Corporation and Fleet National Bank, pursuant to which the Bank agreed to
establish a Revolving Line of Credit and make Revolving Credit Loans (the "Prior
Loans") to the Borrower.

      NOW, THEREFORE, the parties hereby agree as follows:

                                    SECTION 1

                                   DEFINITIONS

      1.1 Definitions.

      All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:

      Account and Account Receivable. Include all rights to payment for goods
sold or leased or for services rendered, all sums of money or other proceeds due
or becoming due thereon, all instruments pertaining thereto, all guaranties and
security therefor, and all goods giving rise thereto and the rights pertaining
to such goods, including the right of stoppage in transit, and all related
insurance.

      Affiliate. As applied to any Person, a spouse or relative of such Person,
any member, director or officer of such Person, any corporation, association,
firm or other entity of which such Person is a member, director or officer, and
any other Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person.

      Agreement. This Second Amended and Restated Revolving Credit Agreement, as
the same may be supplemented, amended or restated from time to time.
<PAGE>

      Alternative Currency. The lawful currency of a foreign country which may
be established as an alternate currency by mutual agreement entered into between
the Bank and the Credit Parties hereafter as confirmed in writing, so long as
any such currency is freely transferable, convertible into Dollars and traded on
the inter-bank currency deposits market in which the Bank customarily funds
foreign currency loans.

      Alternative Currency Commitment. A commitment, to the extent mutually
agreed by the Bank and the Credit Parties, for (i) the exchange, for future
delivery, of an Alternative Currency into Dollars or Dollars into an Alternative
Currency or (ii) the purchase, for future delivery, of an Alternative Currency
with Dollars or Dollars with an Alternative Currency, in accordance with the
Bank's prevailing customs and practices.

      Alternative Currency Equivalent. The amount in Alternative Currency of
Dollars at the quoted spot rate at which the Bank's principal office in the
United States offers to exchange such Alternative Currency for Dollars at 11:00
a.m. (Boston time) two (2) Business Days prior to the date on which such
equivalent is determined.

      Authorized Officer. The president, chief financial officer or senior vice
president finance and administration of the Borrower.

      Available Aggregate Revolving Commitment. The excess, if any, of (1) the
Revolving Commitment Amount minus (2) the LC Exposure.

      Bank. See Preamble.

      Biosphere. See Preamble.

      Biosphere Loan Sublimit A sublimit of the Revolving Commitment Amount
equal to $2,000,000, as such amount may be reduced from time to time pursuant to
Section 2.3.

      Biosphere Loans. Revolving Loans made by the Bank to Biosphere.

      Biosphere Note. The Promissory Note dated the date hereof made by
Biosphere payable to the order of the Bank in the original principal amount of
$2,000,000.

      Borrower. See Preamble.

      Business Day. Any day other than a Saturday, Sunday or legal holiday on
which banks in Boston, Massachusetts are open for the conduct of a substantial
part of their commercial banking business.

      Canadian Indebtedness. The indebtedness of the Borrower's wholly-owned
Canadian subsidiary, Sepracor Canada Limited, to certain Canadian investors in
the maximum principal amount of 4,891,000 Canadian Dollars which is guaranteed
by the Borrower.

      Capital Expenditure. Any payment made directly or indirectly for the
purpose of acquiring or constructing fixed assets, real property or equipment
which in accordance with GAAP would be added as a debit to the fixed asset
account of the Person making such

                                       2
<PAGE>

expenditure, including, without limitation, amounts paid or payable under any
conditional sale or other title retention agreement or under any lease or other
periodic payment arrangement which is of a nature that payment obligations of
the lessee or obligor thereunder would be required by GAAP to be capitalized and
shown as liabilities on the balance sheet of such lessee or obligor.

      Capital Lease. Any lease of property (real, personal or mixed) which, in
accordance with GAAP, should be capitalized on the lessee's balance sheet or for
which the amount of the asset and liability thereunder as if so capitalized
should be disclosed in a note to such balance sheet.

      Cash Equivalent Amount. The sum of the following, without duplication,
none of which may be subject to any Encumbrances except for Encumbrances in
favor of the Bank or any of its Affiliates: (1) cash held by the Borrower in the
United States and at the Bank, plus (2) Qualified Investments of the Borrower
held in the United States and Canada, plus (3) Net Outstanding Amount of
Accounts of the Borrower.

      Closing Date. December 22, 1999

      Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.

      Controlled Group. All trades or businesses (whether or not incorporated)
under common control that, together with the Credit Parties, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section 4001 of
ERISA.

      Corporate Affiliate. As applied to any Person, any corporation,
association, firm or other entity directly or indirectly controlling, controlled
by or under direct or indirect common control with such Person.

      Corporate Services Agreement. The Corporate Services Agreement between the
Borrower and each of its Subsidiaries, each as originally executed and delivered
to the Bank.

      Credit Parties. See Preamble.

      Default. Any event or condition that, with the giving of notice or lapse
of time, or both, would constitute an Event of Default.

      Dollars or $. The lawful currency of the United States of America.

      Dollar Equivalent. The amount in Dollars of any Alternative Currency at
the quoted spot rate at which the Bank's principal office in the United States
offers to exchange Dollars for such Alternative Currency at 11:00 a.m. (Boston
time) two (2) Business Days prior to the date on which such equivalent is to be
determined.

      EBITDA. For any period, operating income for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for such period (calculated before taxes, Interest
Expense, depreciation, amortization, other non-cash income (other than
receivables arising in the ordinary course of business) or charges accrued for

                                       3
<PAGE>

such period) and (except to the extent received or paid in cash by the Borrower)
income or loss attributable to equity in Affiliates for such period, excluding
(i) any extraordinary and unusual gains or losses during such period, and (ii)
the proceeds of insurance and asset sales received by the Borrower or any of its
Subsidiaries during such period.

      Encumbrances. See Section 6.4.

      Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, rules,
ordinances, policies and rules or common law (whether now existing or hereafter
enacted or promulgated), of all governmental agencies, bureaus or departments
which may now or hereafter have jurisdiction over the Borrower or any of its
Subsidiaries and all applicable judicial and administrative and regulatory
decrees, judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal property or human
health or the environment, including, without limitation, all requirements
pertaining to reporting, licensing, permitting, investigation, remediation and
removal of emissions, discharges, releases or threatened releases of Hazardous
Materials, chemical substances, pollutants or contaminants whether solid, liquid
or gaseous in nature, into the environment or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of such Hazardous Materials, chemical substances, pollutants or
contaminants.

      ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remain in effect.

      Event of Default. Any event described in Section 8.1.

      FDA. See Section 4.19.

      Fixed Charge Coverage Ratio. As at any date, the ratio of (a) EBITDA for
the period of four fiscal quarters ending on or most recently ended prior to
such date to (b) the sum, for the Borrower and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP) of (i) all
regularly scheduled payments of principal of any Indebtedness (including the
principal component of any payments in respect of Capital Leases) for such
period plus, (ii) all Interest Expense for such period, plus (iii) the aggregate
amount of all Non-Financed Capital Expenditures made during such period
(excluding payment of Capital Leases to the extent included in principal
payments or Interest Expense for such period).

      GAAP. Generally accepted accounting principles as defined by the United
States Financial Accounting Standards Board, as from time to time in effect.

      Guaranties. As applied to the Credit Parties and their Subsidiaries, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on the consolidated balance
sheet of the Credit Parties and their Subsidiaries, including any obligation to
furnish funds, directly or indirectly (whether by virtue of partnership
arrangements, by agreement to keep-well or otherwise), through the purchase of
goods, supplies or services, or by way of stock purchase, capital contribution,
advance or loan, or

                                       4
<PAGE>

to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person or entity.

      Guaranty Agreement. The Guaranty Agreement executed and delivered by the
Borrower on the date hereof in favor of the Bank guarantying the Biosphere
Loans.

      Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) and any applicable local statutes and the regulations promulgated
thereunder; (iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of any foreign country, the United States, any state
of the United States, or any political subdivision thereof to the extent any of
the foregoing has or had jurisdiction over the Borrower; or (iv) without
limitation, which contains gasoline, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyls ("PCB's").

      Indebtedness. As applied to the Credit Parties and their Subsidiaries, (i)
any and all obligations for borrowed money or other extensions of credit whether
or not secured or unsecured, absolute or contingent, including, without
limitation, Capital Leases, unmatured reimbursement obligations with respect to
letters of credit or guarantees issued for the account of or on behalf of the
Credit Parties and their Subsidiaries and all obligations representing the
deferred purchase price of property, other than accounts payable arising in the
ordinary course of business, (ii) all obligations evidenced by bonds, notes,
debentures or other similar instruments, (iii) all obligations secured by any
mortgage, pledge, security interest or other lien on property owned or acquired
by the Credit Parties or any Subsidiary of a Credit Party whether or not the
obligations secured thereby shall have been assumed, (iv) that portion of all
obligations arising under Capital Leases that is required to be capitalized on
the consolidated balance sheet of the Credit Parties and their Subsidiaries, (v)
all Guaranties, and (vi) all obligations that are immediately due and payable
out of the proceeds of or production from property now or hereafter owned or
acquired by the Credit Parties or any Subsidiary of a Credit Party.

      Interest Expense. For any period, the sum for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest paid or payable during
such period by the Borrower and its Subsidiaries in respect of Indebtedness for
borrowed money plus (b) all fees, including Letter of Credit fees and expenses,
incurred hereunder during such period.

      Investment. As applied to the Borrower and its Subsidiaries, the purchase
or acquisition of any share of capital stock, partnership interest, evidence of
indebtedness or other equity security of any other Person or entity, any loan,
advance or extension of credit to, or contribution to the capital of, any other
Person or entity, any real estate held for sale or investment, any commodities
futures contracts held other than in connection with bona fide hedging
transactions,

                                       5
<PAGE>

any other investment in any other Person or entity, and the making of any
commitment or acquisition of any option to make an Investment.

      LC Exposure. At any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all payments made by the Bank pursuant to Letters of Credit which have not yet
been reimbursed by or on behalf of the Credit Parties.

      Letters of Credit. Letters of credit previously and hereafter issued by
the Bank for the account of a Credit Party in accordance with the provisions of
Section 2.5 hereof, or drafts accepted under any agreement for banker's
acceptances entered into by a Credit Party with the Bank.

      Loan Account. The account on the books of the Bank in which will be
recorded Revolving Loans made by the Bank to the Credit Parties pursuant to this
Agreement, payments made on such Revolving Loans and other appropriate debits
and credits as provided by this Agreement.

      Loan Documents. See Section 7.2.

      Material Licenses. See Section 4.11.

      Money Markets. See Section 8.10.

      Net Outstanding Amount of Accounts. As of any date, the net amount of
Accounts Receivable of the Borrower outstanding on such date after (a)
eliminating from the aggregate amount of outstanding Accounts (i) such Accounts
past due under the original terms of sale more than sixty (60) days, (ii) any
Account owed by any account debtor whose principal place of business or chief
executive office is not within the United States or the District of Columbia
("Foreign Account Debtors"), (iii) such Accounts due from Affiliates or
Subsidiaries of the Borrower, (iv) such Accounts for services not yet rendered
or goods not yet delivered, and (v) such Accounts representing obligations in
respect of any joint venture interest owned by the Borrower and in respect of
royalties and license fees payable to the Borrower by any such joint venture or
any joint venture therein, and (b) deducting from the aggregate face amount of
the remaining Accounts Receivable of the Borrower (i) net offsets from accounts
owing from account debtors, other than foreign account debtors, which maintain
both receivable and payable balances with the Borrower, (ii) the aggregate
amount of outstanding claims asserted by account debtors, other than foreign
account debtors, against the Borrower and (iii) all payments, adjustments, and
credits applicable thereto and all amounts due thereon considered by the Bank to
be difficult to collect or uncollectible by reason of return, rejection,
repossession, loss or damage of or to the merchandise giving rise thereto, a
merchandise or other dispute, insolvency of the account debtor or any other
reason, all as determined by the Bank in its sole and reasonable discretion,
which determination shall be final and binding upon the Borrower.

      Non-Financed Capital Expenditures. For any period, all Capital
Expenditures made by the Borrower and its Subsidiaries during such period that
have not been funded, directly or indirectly, with the proceeds of purchase
money financing (including, without limitations, Capital Leases) other than the
proceeds of Revolving Loans.

                                       6
<PAGE>

      Notes. Collectively, the Sepracor Note and the Biosphere Note.

      Notice of Borrowing. See Section 2.1(b).

      Obligations. Any and all obligations of the Credit Parties to the Bank of
every kind and description (i) hereunder and under the Notes and (ii) under
Alternative Currency Commitments and under any and all documents pertaining
thereto whether direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising, regardless
of how they arise or by what agreement or instrument, if any, and including
obligations to perform acts and refrain from taking action as well as
obligations to pay money.

      Original Currency. See Section 8.10.

      PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.

      Permitted Encumbrances. See Section 6.4.

      Person. A corporation, an association, a partnership, a limited liability
company or partnership, a joint venture, an organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency.

      Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Credit Parties or
any member of the Controlled Group for employees of the Credit Parties or any
member of the Controlled Group or (ii) if such Plan is established, maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which the Credit Parties
or any member of the Controlled Group is then making or accruing an obligation
to make contributions or has within the preceding five Plan years made
contributions.

      Prime Rate. The rate of interest announced from time to time by the Bank
at its office in Boston, Massachusetts as its prime rate.

      Prior Credit Agreement. See Preamble.

      Prior Loans. See Preamble.

      Qualified Investments. As applied to the Borrower, Investments in (i)
notes, bonds or other obligations of the United States of America or any agency
thereof that as to principal and interest constitute direct obligations of or
are guaranteed by the United States of America; (ii) certificates of deposit or
other deposit instruments or accounts of banks or trust companies organized
under the laws of the United States or any state thereof that have capital and
surplus of at least $100,000,000, (iii) commercial paper issued by companies
organized under the laws of the United States or any state thereof and that is
rated not less than prime-two or A-2 or their equivalents by Moody's Investors
Service, Inc. or Standard & Poor's Corporation, respectively, or their
successors, (iv) mutual or closed end funds that invest solely in Investments
described in

                                       7
<PAGE>

clauses (i) through (iii) of this definition and (v) any repurchase agreement
secured by any one or more of the foregoing.

      Restricted Payments. (a) Any dividend or other distribution, direct or
indirect, on or on account of any shares of any class of stock of any Credit
Party now or hereafter outstanding and (b) any redemption, purchase or other
acquisition, direct or indirect, of any shares of any class of stock of Credit
Party now or hereafter outstanding or of any warrants or rights to purchase any
such stock (including without limitation the repurchase of any such stock or
warrant or any refund of the purchase price thereof in connection with the
exercise by the holder thereof of any right of rescission or similar remedies
with respect thereto) and (c) any payment of principal of, premium, if any, or
interest on, or otherwise in respect of any Subordinated Indebtedness.

      Revolving Commitment Amount. Twenty-five Million Dollars ($25,000,000) or
any lesser amount, including zero, resulting from a termination or reduction of
such amount in accordance with Section 2.3 or Section 7.2.

      Revolving Credit Period. The period beginning on the date hereof and
extending through and including the Revolving Credit Termination Date.

      Revolving Credit Termination Date. December 31, 2001 or such earlier date
on which the commitment to make Revolving Loans is terminated or the Revolving
Commitment Amount is reduced to zero in accordance with the terms of this
Agreement.

      Revolving Loans. Loans made pursuant to Section 2.1(a) that utilize the
Revolving Commitment Amount including, without limitation, all Biosphere Loans.

      Second Currency. See Section 8.10.

      Sepracor Note. The Promissory Note dated the date hereof made by the
Borrower payable to the order of the Bank in the original principal amount of
$25,000,000.

      Subordinated Indebtedness. (a) the existing Indebtedness of the Credit
Parties which is designated as "Subordinated Indebtedness" in Schedule 6.1
attached hereto, and (b) any other Indebtedness of the Credit Parties consented
to in writing by the Bank which matures in its entirety later than the Notes and
by its terms (or by the terms of the instrument under which it is outstanding
and to which appropriate reference is made in the instrument evidencing such
Subordinated Indebtedness) is made subordinate and junior in right of payment to
the Notes and to the Credit Parties' other obligations to the Bank hereunder by
provisions reasonably satisfactory in form and substance to the Bank and its
counsel.

      Subordinated Notes. The Borrower's (i) $165,000,000 6 1/4% Convertible
Subordinated Debentures due 2005 issued by the Borrower pursuant to an Indenture
dated February 5, 1998 from the Borrower to Chase Manhattan Bank, and (ii)
$300,000,000 7.00% Convertible Subordinated Debentures due 2005 issued pursuant
to an Indenture dated December 15, 1998 by the Borrower to Chase Manhattan Bank.

      Subsidiary. Any corporation, association, limited liability company, joint
stock company, business trust or other similar organization of which 50% or more
of the ordinary

                                       8
<PAGE>

voting power for the election of a majority of the members of the board of
directors or other governing body of such entity is held or controlled by any
Credit Party or their Subsidiaries; or any other such organization the
management of which is directly or indirectly controlled by any Credit Party or
a Subsidiary of any Credit Party through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which any
Credit Party has, at least, a 50% ownership interest.

      Tangible Capital Base. At any date as of which the amount thereof shall be
determined, the stockholders' equity of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP plus the outstanding
principal amount of any Subordinated Indebtedness minus the sum of any amounts
attributable to (a) goodwill, (b) intangible items such as unamortized debt
discount and expense, patents, trade and service marks and names, copyrights and
research and development expenses except prepaid expenses, (c) all reserves not
already deducted from assets, (d) any write-up in the book value of assets
resulting from any revaluation thereof subsequent to the date of the financial
statements referred to in Section 4.6 and (e) any and all items included as
assets on the consolidated balance sheet of the Borrower and its Subsidiaries if
and to the extent such items consist of the equity in Subsidiaries or other
joint ventures holdings or similar Investments.

      Technology Transfer Agreements. The Technology Transfer and License
Agreements dated as of January 1, 1994 between the Borrower and each of its
Subsidiaries each as originally executed and delivered to the Bank.

      Total Liabilities. Any and all liabilities of the Credit Parties and their
Subsidiaries on a consolidated basis determined in accordance with GAAP.

      U.S. Subsidiary. With respect to any Person, each of such Person's
Subsidiaries organized, and having a principal place of business located in the
United States.

      Versicor. Versicor Inc., a Delaware corporation, a Subsidiary of the
Borrower and an Affiliate of Biosphere.

      1.2 Accounting Terms. All terms of an accounting character shall have the
meanings assigned thereto by GAAP applied on a basis consistent with the
financial statements referred to in Section 4.6 of this Agreement, modified to
the extent, but only to the extent, that such meanings are specifically modified
herein.

      1.3 Multiple Borrowers. All Obligations are several (and not joint)
between the Borrower and Biosphere except that the Borrower is guarantying the
Biosphere Loans. All representations and covenants shall apply and be applied to
the Borrower (and not Biosphere). The Credit Parties hereby designate the
Borrower to act on behalf of the Credit Parties for all purposes under this
Agreement, including, without limitation, reduction of the Revolving Commitment
Amount and the Biosphere Sublimit. Notice when given to the Borrower shall be
sufficient notice to the Credit Parties. Any document delivered to the Borrower
shall be considered delivered to each of the Borrower and Biosphere. Any Event
of Default by the Borrower shall be an Event of Default by the Credit Parties.

                                       9
<PAGE>

                                    SECTION 2

                              DESCRIPTION OF CREDIT

      2.1 The Revolving Loans.

            (a) Upon the terms and subject to the conditions of this Agreement,
and in reliance upon the representations, warranties and covenants of the Credit
Parties made herein, the Bank agrees to make Revolving Loans to the Borrower and
Biosphere Loans to Biosphere, in each case in Dollars, pursuant to Notices of
Borrowing as delivered by the Credit Parties to the Bank from time to time, from
and after the Closing Date and during the Revolving Credit Period; provided,
that (1) the aggregate principal amount of Revolving Loans outstanding at any
time shall not exceed the Available Aggregate Revolving Commitment at such time,
(2) the sum of the aggregate principal amount of Biosphere Loans outstanding at
such time plus Biosphere LC Exposure shall not exceed the Biosphere Sublimit at
such time and (3) at the time a Credit Party requests a Revolving Loan or a
Letter of Credit and after giving effect to the making thereof there has not
occurred and is not continuing any Default or Event of Default. The Credit
Parties agree that it shall be an Event of Default if at any time the debit
balance of the Loan Account shall exceed the Available Aggregate Revolving
Commitment or the aggregate principal amount of Biosphere Loans plus Biosphere
LC Exposure exceeds the Biosphere Sublimit unless, in each case, the Credit
Parties shall, upon demand by the Bank, pay, within two (2) Business Days, cash
to the Bank to be credited to the Loan Account in such amount as shall be
necessary to eliminate any such the excess.

            (b) Prior to 12:00 noon (Boston time) on the Revolving Loan request
date, (1) with respect to all Revolving Loans (except for Biosphere Loans), an
Authorized Officer and (2) with respect to Biosphere Loans, the Chief Financial
Officer of Biosphere and the Senior Vice President, Finance and Administration
of the Borrower, shall, subject to the notice requirements for LIBOR Loans as
set forth in Section 2.3(a), notify the Bank in writing or by telephone
confirmed by (i) telex, (ii) telecopy or (iii) other facsimile transmission, on
the same day as the telephonic request (the "Notice of Borrowing"), of the
proposed date of borrowing and the principal amount requested. No Notice of
Borrowing shall be revocable by any Credit Party. No Notice of Borrowing for a
Biosphere Loan shall be effective unless the Bank shall have received, on or
prior to the date of such Notice of Borrowing, a certificate of the secretary of
Biosphere with respect to resolutions of the Board of Directors authorizing such
Biosphere Loan or granting authority to certain officers of Biosphere to request
Biosphere Loans pursuant to the terms hereof.

            (c) The Bank shall enter the Revolving Loans as debits in the Loan
Account. The Bank shall also record in the Loan Account all payments made by the
Credit Parties on account of the Revolving Loans, and may also record therein,
in accordance with customary accounting practices, other debits and credits, and
all interest, fees, charges and expenses chargeable to the Credit Parties under
this Agreement. The debit balance of the Loan Account shall reflect the amount
of the Credit Parties' Obligations to the Bank from time to time by reason of
the Revolving Loans (including Biosphere Loans) and other appropriate charges
hereunder. Periodically, the Bank shall render a statement of account showing as
of its date the debit balance of the Loan Account which, unless within thirty
(30) days of such date notice to the

                                       10
<PAGE>

contrary is received by the Bank from the Credit Parties, absent manifest error,
shall be considered correct and accepted by each of the Credit Parties and
conclusively binding upon both Credit Parties.

            (d) Subject to the terms and conditions of this Agreement, the Bank
shall make each Revolving Loan on the effective date specified therefor by
crediting the amount of such Revolving Loan to the applicable Credit Party's
demand deposit account with the Bank.

      2.2 Fees. The Borrower shall pay to the Bank during the Revolving Credit
Period a commitment fee computed at the rate of one quarter of one percent
(0.25%) per annum on the average daily amount of the unborrowed portion of the
Revolving Commitment Amount during each quarter or portion thereof; provided,
that LC Exposure shall be deemed borrowed. Commitment fees shall be payable
quarterly in arrears, on the first day of January, April, July and October of
each year beginning on April 1, 2000, and on the last day of the Revolving
Credit Period.

      2.3 Reduction of Revolving Commitment Amount/Biosphere Sublimit. The
Borrower may from time to time by written notice delivered to the Bank by the
Borrower at least five Business Days prior to the date of the requested
reduction or termination, reduce by integral multiples of Five Hundred Thousand
Dollars ($500,000) any unborrowed portion of the Revolving Commitment Amount by
integral multiples of One Hundred Thousand Dollars ($100,000) any unborrowed
portion of the Biosphere Sublimit or, subject to the prior payment in full of
any Biosphere Loans, together with all interest and fees accrued thereon,
terminate the Biosphere Sublimit; provided that if the Borrower shall cease to
own directly at least 51% of the outstanding capital stock of Biosphere, then
the Biosphere Sublimit shall be terminated automatically, and all Biosphere
Loans, together with all interest and fees accrued thereon, shall be immediately
due and payable in full. No reduction of the Revolving Commitment Amount or the
Biosphere Sublimit shall be subject to reinstatement.

      2.4 The Notes.

            (a) The Revolving Loans (except the Biosphere Loans) shall be
evidenced by the Sepracor Note substantially in the form of Exhibit A-1 hereto
and the Biosphere Loans shall be evidenced by the Biosphere Note, substantially
in the form of Exhibit A-2 hereto, each of which is payable to the order of the
Bank and with a final maturity on the Revolving Credit Termination Date. The
Notes shall be dated on or before the date of the first Revolving Loan and shall
have the blanks therein appropriately completed.

            (b) The Bank shall, and is hereby irrevocably authorized (but not
required) by the Credit Parties to, enter on the schedule forming a part of each
Note or otherwise in its records appropriate notations evidencing the date and
the amount of each Revolving Loan, the interest rate applicable thereto and the
date and amount of each payment of principal made by the applicable Credit Party
with respect thereto; and in the absence of manifest error, such notations shall
constitute conclusive evidence thereof. The Bank is hereby irrevocably
authorized by the Credit Parties to attach to and make a part of each Note a
continuation of any such schedule as and when required. No failure on the part
of the Bank to make any notation as provided in this

                                       11
<PAGE>

subsection (b) shall in any way affect any Revolving Loan or Biosphere Loan or
the rights or obligations of the Bank or any Credit Party with respect thereto.

      2.5 Letters of Credit. Upon the request of a Credit Party (and if
Biosphere, subject to the requirements of Section 2.1(b)(2)), the Bank shall
issue such Letters of Credit as such Credit Party may request, provided that
such Letters of Credit shall not be issued unless and until such Credit Party
has completed and executed such application as the Bank may require from time to
time and such other agreements evidencing Letters of Credit as the Bank shall
request from time to time (consistent with the Bank's usual practice), and
provided further that, each Letter of Credit shall be subject to customary fees
relating to issuance, negotiation, settlement, amendment and other similar fees
and charges as agreed by the Bank and such Credit Party. All Letters of Credit
shall expire no later than five (5) Business Days prior to the Revolving Credit
Termination Date. Letters of Credit issued hereunder shall constitute
utilization of the Revolving Commitment Amount and the Biosphere Sublimit, as
applicable.

      2.6 Capital Requirements. If after the date hereof, the Bank shall have
determined that the adoption or implementation of any applicable law, rule or
regulation regarding capital requirements for banks or bank holding companies,
or any change therein (including, without limitation, any change according to a
prescribed schedule of increasing requirements, whether or not known on the date
hereof), or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with any
request or directive of such entity regarding capital adequacy (whether or not
having the force of law) has the effect of reducing the return on the Bank's
capital to a level below that which the Bank could have achieved (taking into
consideration the Bank's policies with respect to capital adequacy immediately
before such adoption, implementation, change or compliance and assuming that the
Bank's capital was fully utilized prior to such adoption, implementation, change
or compliance) but for such adoption, implementation, change or compliance as a
consequence of its Commitment to make Revolving Loans hereunder by any amount
deemed by the Bank to be material, the Credit Parties shall pay to the Bank as
an additional fee from time to time on demand such amount as the Bank shall have
determined to be necessary to compensate it for such reduction. The
determination by the Bank of such amount, if done on the basis of any reasonable
averaging and attribution methods, shall in the absence of manifest error be
conclusive, and at the Borrower's request, the Bank shall demonstrate the basis
of such determination.

      2.7 Payments and Prepayments of the Revolving Loans. On at least two (2)
Banking Days prior written notice to the Bank with respect to Revolving Loans
subject to an exercised LIBOR Option and on at least one (1) Banking Day prior
written notice to the Bank with respect to all other Revolving Loans, the Credit
Parties may, at their option, prepay the Notes in whole at any time or in part
from time to time without penalty or premium; provided, that any prepayment of
any LIBOR Portion shall be made together with the applicable LIBOR Premium. Any
interest accrued on the amounts so prepaid to the date of such payment must be
paid at the time of any such payment. No prepayment of the Revolving Loans shall
affect the Revolving Commitment Amount or the Biosphere Sublimit or impair any
Credit Party's right to borrow as set forth in Section 2.1. On the Revolving
Credit Termination Date, the Borrower shall repay all outstanding Revolving
Loans and the Sepracor Note, and Biosphere shall repay all outstanding

                                       12
<PAGE>

Biosphere Loans and the Biosphere Note together with all unpaid interest thereon
and all fees and other amounts due hereunder with respect to the Revolving
Loans.

      2.8 Method of Payment. All payments and prepayments of principal and all
payments of interest shall be made by the Credit Parties to the Bank at One
Federal Street, Boston, Massachusetts 02110 in immediately available funds, on
or before 11:00 a.m. on the due date thereof, free and clear of, and without any
deduction or withholding for, any taxes or other payments. The Bank may, and
each Credit Party hereby authorizes the Bank to, debit the amount of any payment
not made by such time to the demand deposit account of such Credit Party with
the Bank.

      2.9 Overdue Payments.

            (a) Upon the occurrence and during the continuance of an Event of
Default, interest on the outstanding principal amount of the Notes and (to the
extent permitted by law) on accrued but unpaid interest shall thereafter be
payable on demand at a rate per annum equal to two percent (2%) above the
interest rate otherwise in effect with respect to such Revolving Loans. Upon the
cure of an Event of Default and the payment of interest at the default rate
through the date of such cure, the interest rate shall revert to that provided
for in Section 2.10.

            (b) If a payment of principal or interest hereunder is not made in
full within 10 days of date when due, the applicable Credit Party will pay to
the Bank a late fee equal to three percent (3%) of the amount of such payment.
Nothing in the preceding sentence shall affect the Bank's right to exercise any
of its rights or remedies, including those provided in Section 7.2, if an Event
of Default has occurred.

      2.10 Holidays. If any payment required by this Agreement becomes due on a
day that is not a Business Day such payment may be made on the next succeeding
Business Day, and such extension shall be included in computing interest in
connection with such payment.

      2.11 Interest. Each Note shall bear interest on the unpaid principal
amount thereof until paid in full at the rate or rates per annum determined (on
the basis of the actual number of days elapsed over a 360-day year) and payable
as follows:

            (a) The rate of interest for any portion of the outstanding
principal amount of the Revolving Loans which is not then subject to an
exercised LIBOR Option under Section 2.12 of this Agreement shall be computed at
the Prime Rate.

            (b) The rate for any LIBOR Portion of the Revolving Loans shall be
computed at a rate equal to three-quarters percent (0.75%) above the applicable
LIBOR Rate.

            (c) Interest on each Note shall be payable monthly in arrears on the
first Business Day of each month, commencing on January 1, 2000 and, in
addition, interest on any LIBOR Portion of the Revolving Loans in respect of any
LIBOR Period shall also be payable on the last day of such LIBOR Period and on
the last day of the third month for each LIBOR Portion with a 180-day LIBOR
Period and at maturity (whether by acceleration or otherwise). The rate of
interest payable on any portion of the outstanding principal balance of any
Revolving

                                       13
<PAGE>

Loan which is not then subject to a LIBOR Option shall take effect
simultaneously with the corresponding change in the Prime Rate.

      2.12 Certain LIBOR Provisions.

            (a) LIBOR Option. Subject to the provisions of this Section 2, each
Credit Party shall have the right to have the interest on all or any portion of
the principal amount of any Revolving Loan based on a LIBOR Rate.

            (b) Certain Definitions. As used herein, the following terms have
the following respective meanings:

      Banking Day. (i) When used with respect to the LIBOR Option, a day on
which transactions may be effected in deposits of U.S. dollars in the London
interbank foreign currency deposits market and on which banks may conduct
business in London, England and Boston, Massachusetts and (ii) when used with
respect to the other provisions of this Agreement, any day excluding Saturday
and Sunday and excluding any other day which shall be in Boston, Massachusetts,
a legal holiday or a day on which banking institutions are authorized by law to
close.

      Board. The Board of Governors of the Federal Reserve System of the United
States.

      Legal Requirement. Any requirement imposed upon the Bank by any law of the
United States of America or the United Kingdom or by any regulation, order,
interpretation, ruling or official directive (whether or not having the force of
law) of the Board, the Bank of England or any other board, central bank or
governmental or administrative agency, institution or authority of the United
States of America, the United Kingdom or any political subdivision of either
thereof.

      LIBOR Option. The option granted pursuant to this Section 2 to have the
interest on all or a portion of the principal amount of the Revolving Loans
based on a LIBOR Rate.

      LIBOR Period. Any period, as provided below in this Section 2.12, of 30,
60, 90 or 180 days, commencing on any Banking Day; provided, however, that no
LIBOR Period with respect to any LIBOR Portion of any Revolving Loan shall
extend beyond the maturity date of the Notes. If any LIBOR Period so selected
would otherwise end on a date which is not a Banking Day, such LIBOR Period
shall instead end on the next preceding or succeeding Banking Day as determined
by the Bank in accordance with the then current banking practice in London. Each
determination by the Bank of any LIBOR Period shall, in the absence of manifest
error, be conclusive, and at any Credit Party's request the Bank shall
demonstrate the basis for such determination.

      LIBOR Portion. That portion of the Revolving Loans specified in a LIBOR
Request, (i) which is not less than Five Hundred Thousand Dollars ($500,000),
(ii) which is an integral multiple of Ten Thousand Dollars ($10,000), (iii)
which does not exceed the outstanding balance of the Revolving Loan not already
subject to an exercised LIBOR Option, (iv) which, as of the date of the LIBOR
Request specifying such LIBOR Portion, has met the conditions for basing

                                       14
<PAGE>

interest on the LIBOR Rate in Section 2.13 of this Agreement and (v) the LIBOR
Period of which has commenced and not terminated.

      LIBOR Premium. With respect to the prepayment of any LIBOR Portion of any
Revolving Loan, whether voluntary or as a result of acceleration, an amount
equal to the product of (i) the excess, if any, of the rate of interest on the
principal amount so prepaid over the rate of interest on debt securities issued
by the Treasury of the United States of America on a date approximating the date
of payment of such principal amount and having a maturity date approximating the
last Banking Day of the applicable LIBOR Period, multiplied by (ii) the
principal amount so prepaid, multiplied by (iii) a fraction, the numerator of
which is the number of days remaining in the related LIBOR Period and the
denominator of which is 360.

      LIBOR Rate. With respect to any LIBOR Portion for the related LIBOR
Period, an interest rate per annum (rounded upwards, if necessary, to the next
higher 1/8 of 1%) equal to the product of (a) the Base LIBOR Rate (as
hereinafter defined) and (b) Statutory Reserves. For purposes of this
definition, the term "Base LIBOR Rate" shall mean the rate (rounded to the
nearest 1/8 of 1% or, if there is no nearest 1/8 of 1%, the next higher 1/8 of
1%) at which deposits of U.S. dollars approximately equal in principal amount to
the LIBOR Portion and for a maturity equal to the applicable LIBOR Period are
offered to the Bank in the London interbank foreign currency deposits market at
approximately 11:00 a.m., London time, two (2) Banking Days prior to the
commencement of such LIBOR Period, for delivery on the first day of such LIBOR
Period. Each determination by the Bank of any LIBOR Rate shall, in the absence
of manifest error, be conclusive, and at any Credit Party's request, the Bank
shall demonstrate the basis for such determination.

      LIBOR Request. Notice in writing (or by telephonic communications
confirmed by telex, telecopy or other facsimile transmission on the same day as
the telephone request) from Biosphere with respect to Biosphere Loans or from
the Borrower with respect to all other Revolving Loans, to the Bank requesting
that interest on a LIBOR Portion be based on the LIBOR Rate, specifying: (i) the
first day of the LIBOR Period, (ii) the length of the LIBOR Period consistent
with the definition of that term and (iii) a dollar amount of the LIBOR Portion
consistent with the definition of that term.

      Statutory Reserves. A fraction, the numerator of which is the number one
and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including, without limitation, any marginal,
special, emergency or supplemental reserves), expressed as a decimal,
established by the Board and any other banking authority to which the Bank is
subject for Eurocurrency Liabilities (as defined in Regulation D of the Board).
Such reserve percentages shall include, without limitation, those imposed under
such Regulation D. LIBOR Portions of the Revolving Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets which may be available from time to time to the Bank under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

      Tax. In relation to any LIBOR Portion and the applicable LIBOR Rate, any
tax, levy, impost, duty, deduction, withholding or other charges of whatever
nature required by any Legal

                                       15
<PAGE>

Requirement (i) to be paid by the Bank and/or (ii) to be withheld or deducted
from any payment otherwise required hereby to be made by any Credit Party to the
Bank, provided that the term "Tax" shall not include any taxes imposed upon the
net income of the Bank by the United States of America or any political
subdivision thereof (including state and local governmental authorities).

      2.13 Conditions for Basing Interest on the LIBOR Rate. Upon the condition
that:

            (a) The Bank shall have received a LIBOR Request from the Borrower
or Biosphere, as applicable, prior to noon at least two (2) Banking Days prior
to the first day of the LIBOR Period requested;

            (b) There shall have occurred no change in applicable law which
would make it unlawful for the Bank to obtain deposits of U.S. dollars in the
London interbank foreign currency deposits market;

            (c) As of the date of the LIBOR Request and the first day of the
LIBOR Period, there shall exist no Event of Default, nor any Default, which has
not been waived by the Bank;

            (d) The Bank shall not have determined in good faith that it is
unable to determine the LIBOR Rate in respect of the requested LIBOR Period or
that it is unable to obtain deposits of U.S. dollars in the London interbank
foreign currency deposits market in the applicable amounts and for the requested
LIBOR Period; and

            (e) As of the first date of the LIBOR Period specified in such LIBOR
Request, and after having given effect thereto, there shall be no more than an
aggregate of four (4) LIBOR Portions outstanding;

then interest on the LIBOR Portion requested during the LIBOR Period requested
will be at the applicable LIBOR Rate.

      2.14 Indemnification for Funding and Other Losses. Each LIBOR Request
shall be irrevocable and binding on the applicable Credit Party. Without
limiting the generality of Section 2.15, the Credit Parties shall indemnify the
Bank against any loss or expense incurred by the Bank as a result of any failure
on the part of any Credit Party to fulfill, on or before the date specified in
any LIBOR Request, the applicable conditions set forth in this Agreement,
including, without limitation, any loss (including loss of anticipated profits)
or expense incurred by reason of the liquidation or redeployment of deposits or
other funds acquired by the Bank to fund or maintain the requested LIBOR Portion
when interest on such LIBOR Portion, as a result of such failure on the part of
the Credit Parties, is not based on the applicable LIBOR for the requested LIBOR
Period. The Bank shall determine the amount of such loss or expense incurred by
it, and absent manifest error such determination shall be conclusive, and at any
Credit Party's request the Bank shall demonstrate the basis for such
determination.

      2.15 Change in Applicable Laws, Regulations, etc. If any Legal Requirement
shall make it unlawful for the Bank to fund through the purchase of U.S. dollar
deposits any LIBOR Portion, or otherwise to give effect to its obligations as
contemplated hereby, or shall impose on

                                       16
<PAGE>

the Bank any costs based on or measured by the excess above a specified level of
the amount of a category of deposits or other liabilities of the Bank, which
includes deposits by reference to which the LIBOR Rate is determined as provided
herein or a category of extensions of credit or other assets of the Bank which
includes any LIBOR Portion, or shall impose on the Bank any restrictions on the
amount of such a category of liabilities or assets which the Bank may hold, (a)
the Bank may by notice thereof to the Credit Parties terminate the LIBOR Option,
(b) any LIBOR Portion subject thereto shall immediately bear interest thereafter
at the rate provided for in Section 2.10.(a), and (c) the Credit Parties shall
indemnify the Bank against any loss, penalty or expense incurred by the Bank by
reason of the liquidation or redeployment of deposits or other funds acquired by
the Bank to fund or maintain such LIBOR Portion, as provided in Section 2.14.

      2.16 Taxes. It is the understanding of the Credit Parties and the Bank
that the Bank shall receive payments of amounts of principal of and interest on
the Revolving Loans with respect to the LIBOR Portions from time to time subject
to a LIBOR Option free and clear of, and without deduction for, any Taxes. If
(a) the Bank shall be subject to any such Tax in respect of any such LIBOR
Portion or part thereof or (b) the Credit Parties shall be required to withhold
or deduct any such Tax from any such amount, and (c) such Tax shall not have
existed as of the date of the applicable LIBOR Request, the LIBOR applicable to
such LIBOR Portion shall be adjusted by the Bank to reflect all additional costs
incurred by the Bank in connection with the payment by the Bank or the
withholding by the Credit Parties of such Tax and the Credit Parties shall
provide the Bank with a statement detailing the amount of any such Tax actually
paid by the Credit Parties. Determination by the Bank of the amount of such
costs shall, in the absence of manifest error, be conclusive, and at any Credit
Party's request, the Bank shall demonstrate the basis of such determination. If
after any such adjustment, any part of any Tax paid by any Bank is subsequently
recovered by the Bank, the Bank shall reimburse the Credit Parties to the extent
of the amount so recovered. A certificate of an officer of the Bank setting
forth the amount of such recovery and the basis therefor shall, in the absence
of manifest error, be conclusive.

                                    SECTION 3

                               CONDITIONS OF LOANS

      3.1 Conditions Precedent to Initial Revolving Loan. The obligation of the
Bank to make its initial Revolving Loans, to issue Letters of Credit is subject
to the condition precedent that the Bank shall have received, in form and
substance satisfactory to the Bank and its counsel, the following:

            (a) this Agreement, duly executed by the Credit Parties;

            (b) the Sepracor Note, duly executed by the Borrower;

            (c) the Biosphere Note, duly executed by Biosphere;

            (d) the Guaranty Agreement duly executed by the Borrower;

                                       17
<PAGE>

            (e) a certificate of the Secretary or an Assistant Secretary of the
Borrower with respect to resolutions of its Board of Directors authorizing the
execution and delivery of this Agreement, the Notes, and identifying the
officer(s) authorized to execute, deliver and take all other actions required
under this Agreement, and providing specimen signatures of such officers;

            (f) a certificate signed by an Authorized Officer, certifying that
the conditions of Section 3.2.(b) have been fulfilled;

            (g) the certificate of incorporation of the Borrower and all
amendments and supplements thereto, filed in the office of the Secretary of
State of the State of Delaware, each certified by said Secretary of State as
being a true and correct copy thereof;

            (h) the bylaws of the Borrower and all amendments and supplements
thereto, certified by the Secretary or an Assistant Secretary as being a true
and correct copy thereof;

            (i) a certificate of the Secretary of State of the State of
Delaware, as to legal existence and good corporate standing of the Borrower in
such state and listing all documents on file in the office of said Secretary of
State;

            (j) a certificate of the Secretary or an Assistant Secretary of
Biosphere with respect to resolutions of the Board of Directors authorizing the
execution and delivery of this Agreement, the Biosphere Note, and identifying
the officer(s) authorized to execute, deliver and take all other actions
required under this Agreement, and providing specimen signatures of such
officers;

            (k) a certificate signed by a principal officer of Biosphere,
certifying that the conditions of Section 3.2.(b) have been fulfilled;

            (l) the certificate of incorporation of Biosphere and all amendments
and supplements thereto, filed in the office of the Secretary of State of the
State of Delaware, each certified by said Secretary of State as being a true and
correct copy thereof;

            (m) the bylaws of Biosphere and all amendments and supplements
thereto, certified by the Secretary or an Assistant Secretary as being a true
and correct copy thereof;

            (n) a certificate of the Secretary of State of the State of
Delaware, as to legal existence and good corporate standing of Biosphere in such
state and listing all documents on file in the office of said Secretary of
State;

            (o) Lien searches against each Credit Party in all appropriate state
filing offices and in the United States Patent and Trademark Office and the
United States Copyright Office;

            (p) if necessary, UCC-3 Termination Statements and other appropriate
lien discharge documentation terminating all liens except those consisting of
Permitted Encumbrances.

                                       18
<PAGE>

            (q) a certificate signed by an Authorized Officer, certifying that
there has been no material adverse change in the condition (financial or
otherwise), operations, properties, assets, liabilities or earnings of the
Credit Parties since the date of its most recent financial statement;

            (r) an opinion addressed to it from Hale and Dorr LLP, counsel to
the Credit Parties, in form and substance satisfactory to the Bank and its
counsel; and

            (s) such other documents, and completion of such other matters, as
counsel for the Bank may deem reasonably necessary or appropriate.

      Notwithstanding the foregoing, the obligations of the Bank to make
Revolving Loans or Biosphere Loans or issue Letters of Credit hereunder shall
not become effective unless each of the foregoing conditions is satisfied (or
waived) at or prior to 12:00 p.m. on January 7, 2000 (and in the event such
conditions are not so satisfied or waived, the Revolving Commitment Amount (and
the Biosphere Sublimit) shall terminate).

      3.2 Conditions Precedent to all Revolving Loans. The obligation of the
Bank to make each Revolving Loan, including the initial Revolving Loan, or
continue or convert the Revolving Loans to loans of another type, is further
subject to the following conditions:

            (a) timely receipt by the Bank of a Notice of Borrowing as provided
in Section 2.1;

            (b) the representations and warranties contained in Section 4 shall
be true and accurate in all material respects on and as of the date of such
Notice of Borrowing and on the effective date of the making, continuation or
conversion of each Revolving Loan as though made at and as of each such date
(except to the extent that such representations and warranties expressly relate
to an earlier date), and no Default or Event of Default shall have occurred and
be continuing, or would result from such Revolving Loan;

            (c) the resolutions referred to in Sections 3.1.(d) and 3.1(i) shall
remain in full force and effect; and

            (d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make Revolving Loans hereunder.

      The making of each Revolving Loan shall be deemed to be a representation
and warranty by the Credit Parties on the date of the making, continuation or
conversion of such Revolving Loan as to the accuracy of the facts referred to in
subsection (b) of this Section 3.2.

                                    SECTION 4

                         REPRESENTATIONS AND WARRANTIES

      In order to induce the Bank to enter into this Agreement and to make the
Revolving Loans hereunder, issue Letters of Credit, the Borrower represents and
warrants to the Bank that:

                                       19
<PAGE>

      4.1 Organization and Qualification. Each of the Credit Parties and their
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated and (c) is duly qualified and in good
standing as a foreign corporation and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the financial condition, operations, properties or
business.

      4.2 Corporate Authority. The execution, delivery and performance of this
Agreement, the Notes, and the transactions contemplated hereby are within the
corporate power and authority of the Credit Parties, as applicable, and the
execution, delivery and performance of the Notes are within the corporate power
and authority of the Credit Parties, as applicable, and have been authorized by
all necessary corporate proceedings, and do not and will not (a) require any
consent or approval of the stockholders of the Credit Parties, (b) contravene
any provision of the charter documents or by-laws of the Credit Parties or any
law, rule or regulation applicable to any Credit Party, (c) contravene any
provision of, or constitute an event of default or event that, but for the
requirement that time elapse or notice be given, or both, would constitute an
event of default under, any other agreement, instrument, order or undertaking
binding on any Credit Party, or (d) result in or require the imposition of any
Encumbrance on any of the properties, assets or rights of any Credit Party.

      4.3 Valid Obligations. This Agreement, the Notes, and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Credit Parties, as applicable, each enforceable in accordance with their
respective terms except as limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors' rights
generally, and except as the remedy of specific performance or of injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.

      4.4 Consents or Approvals. The execution, delivery and performance of this
Agreement, the Notes, and the transactions contemplated herein do not require
any approval or consent of, or filing or registration with, any governmental or
other agency or authority, or any other party.

      4.5 Title to Properties; Absence of Encumbrances. Each of the Credit
Parties and their Subsidiaries has good and marketable title to all of the
properties, assets and rights of every name and nature now purported to be owned
by it, including, without limitation, such properties, assets and rights as are
reflected in the financial statements referred to in Section 4.6 (except such
properties, assets or rights as have been disposed of in the ordinary course of
business since the date thereof), free from all Encumbrances except Permitted
Encumbrances hereto, and, except as so disclosed, free from all defects of title
that might materially adversely affect such properties, assets or rights, taken
as a whole.

      4.6 Financial Statements. The Borrower has furnished the Bank the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of December 31, 1998, and the related consolidated and
consolidating statements of income, changes in stockholders' equity and cash
flow for the fiscal year then ended, and related footnotes, audited and
certified by

                                       20
<PAGE>

PriceWaterhouseCoopers. The Borrower has also furnished the foregoing unaudited
financial statements to the Bank for the nine-month period ending September 30,
1999 and financial projections for the 1999 fiscal year prepared by the
Borrower. All such financial statements, except for such projections, were
prepared in accordance with GAAP applied on a consistent basis throughout the
periods specified and present fairly the financial position of the Borrower and
its Subsidiaries as of such date and the results of the operations of the
Borrower and its Subsidiaries for such period. The projections were prepared in
good faith and based on assumptions which were reasonable when made. There are
no liabilities, contingent or otherwise, not disclosed in such financial
statements that involve a material amount.

      4.7 Changes. Since the date of the financial statements for the
three-month period ending September 30, 1999 referred to in Section 4.6, there
have been no changes in the assets, liabilities, financial condition, business
or prospects of the Borrower or any of its Subsidiaries other than changes in
the ordinary course of business, the effect of which has not, in the aggregate,
been materially adverse.

      4.8 Defaults. As of the date hereof, no Default or Event of Default
exists.

      4.9 Taxes. The Borrower and each Subsidiary has filed all federal, state
and other tax returns required to be filed, and all taxes, assessments and other
governmental charges due from the Borrower and each Subsidiary have been fully
paid. The Borrower and each Subsidiary have established on their books reserves
adequate for the payment of all federal, state and other tax liabilities.

      4.10 Material Agreements. As of the Closing Date, Schedule 4.10 hereto
accurately and completely lists all material leases, management, stockholder,
partnership, joint venture, stock redemption or retirement, employment
(including severance), non-competition and related agreements, if any, which are
presently in effect in connection with the conduct of business of the Borrower
and its Subsidiaries.

      4.11 Material Licenses. As of the Closing Date, Schedule 4.11 hereto
accurately and completely lists all material licenses and related agreements, if
any, which are presently in effect in connection with the conduct of business of
the Borrower and its Subsidiaries (the "Material Licenses"), and all such
Material Licenses are in full force and effect.

      4.12 Litigation. Except as set forth in Schedule 4.12 hereto, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of any Credit Party's or any Credit Party's Subsidiary's officers,
threatened, against any Credit Party or any such Subsidiary that, if adversely
determined, could result in a material judgment not fully covered by insurance,
could result in a forfeiture of all or any substantial part of the property of
the Credit Parties or their Subsidiaries, or could otherwise have a material
adverse effect on the assets, business or prospects of the Credit Parties or any
Subsidiary.

      4.13 Use of Proceeds.

            (a) The Credit Parties will not, directly or indirectly, use any
part of the proceeds of any of the Revolving Loans (i) for the purpose of making
any Restricted Payment which is prohibited by Section 6.8 hereof, (ii) for the
purpose of purchasing or carrying any

                                       21
<PAGE>

margin stock within the meaning of Regulations U and X (12 C.F.R. Part 221 and
224) of the Board, or (iii) for any other purpose which would violate any
provision of any other applicable statute, regulation, order or restriction.

            (b) The proceeds of the Revolving Loans shall be used exclusively
for the working capital purposes of the Credit Parties and for acquisitions
permitted hereunder.

      4.14 Existing Indebtedness. Schedule 6.1 hereto accurately and completely
lists all existing Indebtedness of the Credit Parties and their Subsidiaries as
of the date hereof.

      4.15 Existing Investments. Schedule 4.15 hereto accurately and completely
lists the record owner, location and any relevant account numbers of all
depository and operating accounts and marketable securities owned by the Credit
Parties and their Subsidiaries as of the date hereof.

      4.16 Subsidiaries. As of the date hereof, all the Subsidiaries of the
Credit Parties are listed in Schedule 4.16 hereto. The Borrower or a Subsidiary
of the Borrower is the owner, free and clear of all liens and encumbrances,
except as expressly provided in such schedule, of all of the issued and
outstanding stock of each Subsidiary. All shares of such stock have been validly
issued and are fully paid and nonassessable, and no rights to subscribe to any
additional shares have been granted, and no options, warrants or similar rights
are outstanding.

      4.17 Investment Company Act. Neither Credit Party nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended.

      4.18 Compliance with ERISA. The Credit Parties and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan.

      4.19 FDA Compliance, Etc. Without limiting the scope of Section 4.2, the
Credit Parties and their Subsidiaries are in compliance in all material respects
with all applicable foreign and federal and state laws and regulations,
including all material rules, regulations and administrative orders of the
United States Food and Drug Administration (the "FDA") and of foreign
authorities with jurisdiction over the Credit Parties and their Subsidiaries.
The Credit Parties and their Subsidiaries are in compliance in all material
respects with all of the applicable provisions of the Food, Drug and Cosmetic
Act, as amended.

      4.20 Environmental Matters.

            (a) The Credit Parties and their Subsidiaries have obtained all
permits, licenses and other authorizations which are required under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a material adverse effect on the
business, financial condition or operations of the Credit Parties and their
Subsidiaries. The Credit Parties and their Subsidiaries are in compliance with
the terms and conditions of all such permits, licenses and authorizations, and
are also in compliance with all

                                       22
<PAGE>

other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the business, financial condition or operations of the Credit
Parties and their Subsidiaries.

            (b) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Credit Parties or any of its Subsidiaries, which could materially
adversely affect the properties, business, prospects, operating results or
condition (financial or otherwise) of the Credit Parties, to have any permit,
license or authorization required in connection with the conduct of its business
or with respect to any Environmental Laws, including, without limitation,
Environmental Laws relating to the generation, treatment, storage, recycling,
transportation, disposal or release of any Hazardous Materials.

            (c) To the best of each Credit Party's knowledge no oral or written
notification of a release of a Hazardous Material, which could materially
adversely affect the properties, business, prospects, operating results or
condition (financial or otherwise) of any Credit Party, has been filed by or on
behalf of any Credit Party or any Subsidiary of a Credit Party and no property
now or previously owned, leased or used by any Credit Party or any Subsidiary of
a Credit Party is listed or proposed for listing on the National Priorities List
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or on any similar state list of sites requiring
investigation or clean-up.

            (d) There are no liens or encumbrances arising under or pursuant to
any Environmental Laws on any of the real property or properties owned, leased
or used by any Credit Party or any Subsidiary of a Credit Party and no
governmental actions have been taken or are in process which could subject any
of such properties to such liens or encumbrances or, as a result of which any
Credit Party or any Subsidiary of a Credit Party would be required to place any
notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.

            (e) Neither any Credit Party nor any Subsidiary of a Credit Party
nor, to the best knowledge of any Credit Party, any previous owner, tenant,
occupant or user of any property owned, leased or used by any Credit Party or
any Subsidiary of a Credit Party (i) engaged in or permitted any operations or
activities upon or any use or occupancy of such property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal (whether legal or illegal, accidental or intentional) of any Hazardous
Materials on, under, in or about such property, except to the extent commonly
used in day-to-day operations of such property and in such case only in
compliance with all Environmental Laws, or (ii) transported any Hazardous
Materials to, from or across such property except to the extent commonly used in
day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws, except, in the case of both clause (i) and clause (ii)
above, where so doing would not have a material adverse affect on the business,
prospects, operating results or condition (financial or

                                       23
<PAGE>

otherwise) of any Credit Party; nor to the best knowledge of any Credit Party
have any Hazardous Materials migrated from other properties upon, about or
beneath such property, nor, to the best knowledge of any Credit Party, are any
Hazardous Materials presently constructed, deposited, stored or otherwise
located on, under, in or about such property except to the extent commonly used
in day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws.

SECTION 5

                              AFFIRMATIVE COVENANTS

      So long as the Bank has any commitment to lend hereunder, issue Letters of
Credit or any Revolving Loan or other Obligation hereunder remains outstanding,
the Borrower covenants as follows:

      5.1 Financial Statements and other Reporting Requirements. The Credit
Parties shall furnish to the Bank:

            (a) as soon as available to each Credit Party and its Subsidiaries,
but in any event within 90 days after the end of each of fiscal year, the
consolidated and consolidating balance sheet of each Credit Party and its
Subsidiaries as of the end of, and the related consolidated and consolidating
statement of income, changes in stockholders' equity and cash flow for, such
year, audited and certified by PriceWaterhouseCoopers (or other independent
nationally recognized certified public accountants reasonably acceptable to the
Bank) in the case of such consolidated statements, and certified by an
Authorized Officer in the case of such consolidating statements; and,
concurrently with such financial statements, a copy of said certified public
accountants' management report and a written statement by such accountants that,
in the making of the audit necessary for their report and opinion upon such
financial statements they have obtained no knowledge of any Default or Event of
Default or, if in the opinion of such accountants any such Default or Event of
Default exists, they shall disclose in such written statement the nature and
status thereof;

            (b) as soon as available to the Borrower, but in any event within 45
days after the end of each fiscal quarter, the consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as of the end of, and the
related consolidated and consolidating statements of income for, the period then
ended, certified by an Authorized Officer but subject, however, to normal,
recurring year-end adjustments;

            (c) as soon as available to the Borrower, but in any event
concurrently with the delivery of each financial statement of the Borrower
pursuant to subsection 5.1.(a), a copy of each so-called management letter
submitted to the Borrower or any of its Subsidiaries by independent certified
public accountants in connection with each annual audit of the books of the
Borrower and its Subsidiaries by such accountants or in connection with any
interim audit thereof pertaining to any phase of the business of the Borrower or
any such Subsidiary;

            (d) concurrently with the delivery of each financial statement of
the Borrower pursuant to subsections 5.1.(a) and 5.1.(b) and at any time
reasonably requested by the Bank, a

                                       24
<PAGE>

completed compliance certificate substantially in the form of Exhibit C hereto
signed on behalf of the Borrower by an Authorized Officer;

            (e) as soon as available to the Borrower and its Subsidiaries, but
in any event within 90 days after the end of each fiscal year, projections for
the Borrower and its consolidated Subsidiaries on a consolidating and
consolidated basis for the current fiscal year, including projected balance
sheets, income statements, cash flow statements and such other statements as the
Bank may reasonably request and in form and substance satisfactory to the Bank,
all prepared in good faith and based on assumptions which were reasonable when
made;

            (f) if and when the Borrower gives or is required to give notice to
the PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or the
plan administrator of any Plan has given or is required to give notice of any
such Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC;

            (g) immediately upon becoming aware of the existence of any
condition or event that constitutes a Default or Event of Default, written
notice thereof specifying the nature and duration thereof and the action being
or proposed to be taken with respect thereto;

            (h) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries of which it has
notice, the outcome of which would or might have a materially adverse effect on
the assets, business or prospects of the Borrower or the Borrower and its
Subsidiaries on a consolidated basis, written notice thereof and the action
being or proposed to be taken with respect thereto;

            (i) promptly upon becoming aware of any investigative proceedings by
a governmental agency or authority commenced or threatened against the Borrower
or any of its Subsidiaries regarding any potential violation of Environmental
Laws or any spill, release, discharge or disposal of any Hazardous Material,
written notice thereof and the action being or proposed to be taken with respect
thereto; and

            (j) promptly after the same become available, (i) copies of all
proxy statements and annual, quarterly and interim reports (excluding reports in
respect of the beneficial ownership of officers, directors and certain other
shareholders on Forms 3, 4 and 5 promulgated under the Securities Exchange Act
of 1934, as amended) as the Borrower shall send to shareholders or as the
Borrower may file with the Securities and Exchange Commission or any
governmental authority at any time having jurisdiction over the Borrower and
(ii) with respect to Biosphere, copies of all annual reports as Biosphere shall
send to shareholders; and

            (k) from time to time, such other financial data and information
about the Borrower or its Subsidiaries including, without limitation, a current
aging of Accounts, as the Bank may reasonably request.

      5.2 Conduct of Business. Each of the Borrower and its Subsidiaries shall:

                                       25
<PAGE>

            (a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets (including, without limitation, the
Food, Drug and Cosmetic Act, and all regulations promulgated by the FDA, all
Environmental Laws and ERISA), and shall maintain and keep in full force and
effect all licenses and permits necessary in any material respect to the proper
conduct of its business;

            (b) maintain its corporate existence; and

            (c) with respect to the Borrower, maintain its business in
developing and commercializing improved chemical entities and related products
and services and transacting related business; and with respect to Biosphere,
maintain its business in developing and commercializing its business related to
intracorporeal and "on-line" extracorporeal therapies.

      5.3 Maintenance and Insurance. Each of the Credit Parties and their
Subsidiaries shall maintain and keep its properties in good repair, working
order and condition, and from time to time make all needful improvements thereto
so that its business may be properly and advantageously conducted at all times.
The Credit Parties will maintain or cause to be maintained on all insurable
properties now or hereafter owned by the Credit Parties insurance against loss
or damage by fire or other casualty to the extent customary with respect to like
properties of companies conducting similar businesses and will maintain or cause
to be maintained, products liability, public liability and workmen's
compensation insurance insuring the Credit Parties to the extent customary with
respect to companies conducting similar businesses and, upon request, will
furnish to the Bank satisfactory evidence of the same.

      5.4 Taxes. The Credit Parties shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any Subsidiary of a
Credit Party or their properties on or prior to the time when they become due;
provided that this covenant shall not apply to any tax, assessment or charge
that is being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established and are being
maintained in accordance with GAAP.

      5.5 Inspection by the Bank. Each Credit Party shall permit the Bank or its
designees, at any reasonable time, and upon reasonable notice (or if a Default
or Event of Default shall have occurred and is continuing, at any time and
without prior notice), to (i) visit and inspect the properties of each Credit
Party and its Subsidiaries, (ii) examine and make copies of and take abstracts
from the books and records of each Credit Party and its Subsidiaries and (iii)
discuss the affairs, finances and accounts of each Credit Party and its
Subsidiaries with their appropriate officers, employees and accountants. In
handling such information the Bank shall exercise the same degree of care that
it exercises with respect to its own proprietary information of the same types
to maintain the confidentiality of any non-public information thereby received
or received pursuant to Section 5 except that disclosure of such information may
be made (i) to the subsidiaries or affiliates of the Bank in connection with
their present or prospective business relations with any Credit Party and its
Subsidiaries if such subsidiaries agree in advance to be bound by the same
confidentiality provisions of the Bank as set forth in this Section 5.5, (ii) to
prospective transferees or purchasers of an interest in the Revolving Loans if
they agree in advance to be bound by the same confidentiality obligations of the
Bank as set forth in this

                                       26
<PAGE>

Section 5.5, (iii) as required by law, regulation, rule or order, subpoena,
judicial order or similar order and (iv) as may be required in connection with
the examination, audit or similar investigation of the Bank.

      5.6 Maintenance of Books and Records. Each Credit Party and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with GAAP consistently
applied and applicable law.

      5.7 Maintenance of Accounts. The Credit Parties and each of their U.S.
Subsidiaries will maintain its principal depository and operating accounts with
the Bank at all times (except for Versicor which may maintain its principal
depository and operating accounts in California so long as its principal place
of business is located in California) and shall maintain in such accounts
sufficient funds to make all principal and interest payments when due.

      5.8 [Reserved].

      5.9 Minimum Liquidity Ratio. At the end of each fiscal quarter, the Cash
Equivalent Amount of the Borrower shall be equal to or greater than 150% of its
Total Liabilities.

      5.10 Minimum Tangible Capital Base. The Borrower shall maintain at all
times a Tangible Capital Base of not less than $50,000,000.

      5.11 Minimum Cash or Equivalents/Fixed Charge Coverage Ratio. The Borrower
shall maintain at all times (a) a Cash Equivalent Amount of not less than
$50,000,000 or (b) a Fixed Charge Coverage Ratio of not less than 1.50 to 1.00.

      5.12 Further Assurances. At any time and from time to time the Credit
Parties shall, and shall cause each of their Subsidiaries to, execute and
deliver such further instruments and take such further action as may reasonably
be requested by the Bank to effect the purposes of this Agreement and the Note.

                                    SECTION 6

                               NEGATIVE COVENANTS

      So long as the Bank has any commitment to lend hereunder, issue Letters of
Credit or any Revolving Loan or other Obligation hereunder remains outstanding,
the Borrower covenants as follows:

      6.1 Indebtedness. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, guarantee or be or remain liable with respect to any
Indebtedness other than the following:

            (a) Indebtedness of the Borrower or any of its Subsidiaries
(including Biosphere) to the Bank or any of its Affiliates;

                                       27
<PAGE>

            (b) Indebtedness existing as of the date hereof and disclosed in
Schedule 6.1 hereto and Guaranties disclosed on Schedule 6.2 hereto and any
refinancing of such Indebtedness in amounts not exceeding the principal amount
thereof and on terms (including without limitation any subordination terms
applicable thereto) which are substantially the same as the terms of the
refinanced Indebtedness;

            (c) Indebtedness of the Borrower to or from its Subsidiaries in the
aggregate principal amount outstanding at any time not in excess of $20,000,000;
provided that no Default shall exist and be continuing or caused thereby at the
time of incurrence of such Indebtedness;

            (d) Indebtedness secured by Permitted Encumbrances under Section
6.2(c);

            (e) Indebtedness not in excess of 4,891,000 Canadian Dollars in
respect of Sepracor Canada Limited's obligation with respect to the Canadian
Indebtedness and the Borrower's guaranty of the Canadian Indebtedness and any
refinancing of such Indebtedness in amounts not exceeding the principal amount
thereof and on terms which are substantially the same terms as the terms of the
refinanced indebtedness;

            (f) Indebtedness in respect of Capital Leases and purchase money
financing for tangible property used in the Borrower's business in the aggregate
principal amount outstanding at any time not in excess of $15,000,000 less, with
respect to Biosphere, any indebtedness in respect of Capital Leases and purchase
money financing for tangible property used in their businesses; and

      6.2 Contingent Liabilities. Neither the Borrower nor any of its
Subsidiaries shall create, incur, assume or remain liable with respect to any
Guaranties other than the following:

            (a) Guaranties in favor of the Bank or any of its Affiliates; and

            (b) Guaranties disclosed in Schedule 6.2 hereto or in the financial
statements referred to in Section 4.6.

      6.3 Sale and Leaseback. Neither the Borrower nor any of its Subsidiaries
shall enter into any arrangement, directly or indirectly, whereby it shall sell
or transfer any property owned by it in order to lease such property or lease
other property that the Borrower or any such Subsidiary intends to use for
substantially the same purpose as the property being sold or transferred.

      6.4 Encumbrances. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance, including the lien or retained
security title of a conditional vendor upon or with respect to any of its
property or assets ("Encumbrances"), or assign or otherwise convey any right to
receive income, including the sale or discount of accounts receivable with or
without recourse, except the following ("Permitted Encumbrances"):

            (a) Encumbrances in favor of the Bank or any of its Affiliates;

                                       28
<PAGE>

            (b) Encumbrances existing as of the date hereof and disclosed in
Schedule 6.4 hereto and securing any refinancing of Indebtedness provided that
such refinancing is permitted pursuant to Section 6.1(b);

            (c) Encumbrances for purchase money obligations or Capital Leases
permitted pursuant to Section 6.1(d); provided that such Encumbrances shall not
attach to property and assets of the Borrower or any Subsidiary not purchased
with the proceeds of such purchase money obligations;

            (d) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4; and

            (e) landlords' and lessors' liens in respect of rent not in default
or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business.

      6.5 Lines of Business. Neither the Borrower nor any Subsidiary will engage
in any line of business if as a result thereof the business of the Borrower and
its Subsidiaries taken as a whole would be materially different from what it was
on the date hereof.

      6.6 Merger; Consolidation; Sale or Lease of Assets. Neither the Borrower
nor any of its Subsidiaries shall, without the prior written consent of the
Bank, sell, lease or otherwise dispose of assets or properties, other than sales
or leases of inventory in the ordinary course of business; or liquidate, merge
or consolidate into or with any other Person or entity, provided that any
Subsidiary of a Credit Party may merge or consolidate into or with (i) the
Borrower if no Default or Event of Default has occurred and is continuing or
would result from such merger and if the Borrower is the surviving company or
(ii) any other wholly-owned Subsidiary of the Borrower.

      Notwithstanding the foregoing provisions of this section, the Borrower or
any Subsidiary may acquire (whether by way of purchase of assets or stock, by
merger or consolidation or otherwise) all or substantially all of the assets
located in or capital stock of any Person engaged primarily in the same line of
business as the Borrower or any Subsidiaries; provided that (a) no Default shall
exist at the time of such acquisition or shall be caused thereby in the
foreseeable future and (b) after giving effect to such acquisition the Borrower
shall be in compliance with all the provisions of Sections 5.9 through 5.11 and
the Borrower shall have delivered to the Bank a Compliance Certificate
demonstrating such compliance on a pro forma basis.

      Notwithstanding any provision of this Agreement to the contrary, the
Credit Parties may license and exploit any rights to their intellectual
property, including, without limitation, all

                                       29
<PAGE>

patents, patent applications, trademarks, service marks, and tradenames, in
arms-length transactions for fair market value, without the consent of the Bank.

      6.7 Additional Stock Issuance. The Borrower shall not permit any of its
Subsidiaries to issue any additional shares of such Subsidiary's capital stock
or other equity securities, any options therefor or any securities convertible
thereto other than to the Borrower; provided, that such Subsidiaries may issue
additional shares of its capital stock if after any such issuance the Borrower
or such Subsidiary has 50% or more of the ordinary voting power for the election
of a majority of the members of the board of directors or other governing body
of such entity or the Borrower or such Subsidiary has, at least, a 50% ownership
interest.

      6.8 Restricted Payments. Neither the Borrower nor its Subsidiaries will
directly or indirectly declare, order, pay or make any Restricted Payment or set
aside any sum or property therefore if at the time of such proposed action or
immediately after giving effect thereto, any condition or event shall exist
which constitutes a Default or an Event of Default and unless such Restricted
Payment is expressly permitted by this Section 6.8; provided that nothing herein
shall be deemed to prohibit the making of any dividend or distribution by any
Subsidiary to a Credit Party.

      Subject to the foregoing, the Borrower may (a) make any scheduled payment
of principal or interest on Subordinated Notes issued and outstanding on the
date of this Agreement in accordance with the subordination provisions for such
subordinated notes, (b) make payments under any Corporate Services Agreement,
(c) make distributions of shares of its capital stock as stock splits or stock
dividends, and (d) make any other Restricted Payment in addition to those
referred to in the previous clause; provided, that in the last event the
Borrower shall have received the prior written consent of the Bank to such
proposed Restricted Payment.

      The amount involved in any Restricted Payment declared, ordered, paid,
made or set apart in property shall be deemed to be the greater of the fair
market value thereof at the time of such distribution or payment (or the date of
such transaction, as the case may be), as determined in good faith by the
Borrower, or the net book value thereof on the books of the Borrower as at such
time.

      6.9 Transactions with Affiliates. Except for the Borrower's Subsidiaries
on the date hereof so long as they remain Subsidiaries of the Borrower, the
Credit Parties will not, and will not permit any Corporate Affiliate to,
directly or indirectly, enter into any lease or other transaction with any
shareholder or with any Affiliate of the Borrower or such shareholder, on terms
that are less favorable to the Borrower or such Subsidiary than those which
might be obtained at the time from Persons who are not a shareholder or an
Affiliate. Notwithstanding the preceding sentence, the Borrower may (1) sublease
its facilities to Biosphere, Versicor and Hemasure; (2) enter into and perform
the Corporate Services Agreements, the Technology Transfer Agreements and the
Cross License Agreement, (3) enter into an amended and restated cross license
agreement replacing the Cross License Agreement if such amended and restated
agreement is in form and substance acceptable to the Bank and its counsel and
(4) engage in transactions expressly permitted by Sections 6.1, 6.6 and 6.7.

                                       30
<PAGE>

      6.10 Investments. Neither the Credit Parties nor any of their Subsidiaries
shall make or maintain any Investments other than (i) existing and additional
Investments in Subsidiaries on the date hereof so long as they remain
Subsidiaries of Sepracor, (ii) Qualified Investments and (iii) acquisitions
permitted under Section 6.6 and (iv) Investments consisting of foreign deposit
accounts used for ordinary course working capital purposes of the Credit Parties
or their Subsidiaries; provided, that the aggregate balance of foreign deposit
accounts of the Borrower and its Subsidiaries shall not at any time exceed
$10,000,000.

      6.11 ERISA. Neither the Credit Parties nor any member of the Controlled
Group shall permit any Plan maintained by it to (i) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code, (ii) incur any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived, or (iii) terminate any Plan in a manner that could result in the
imposition of a lien or encumbrance on the assets of the Credit Parties or any
of their Subsidiaries pursuant to Section 4068 of ERISA.

      6.12 Observance of Subordination Provisions, etc. The Credit Parties will
not make, or cause or permit to be made, any payments in respect of any
Subordinated Indebtedness in contravention of the subordination and other
payment provisions contained in the evidence of such Subordinated Indebtedness
or in contravention of any written agreement pertaining thereto, nor will the
Credit Parties (a) amend, modify or change in any manner any of such
subordination or other payment provisions without the prior written consent of
the Bank or (b) amend, modify or change in any manner adverse to the interests
of the Bank any of the other provisions set forth in the agreements under which
such Subordinated Indebtedness is outstanding or contained in the evidence of
such Subordinated or other Indebtedness.

      6.13 Restrictive Agreements. No Credit Party will directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Credit
Party to create, incur or permit to exist any Lien upon any of its property or
assets; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement, (ii) the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (iii) the
foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.

                                    SECTION 7

                                    DEFAULTS

      7.1 Events of Default. There shall be an Event of Default hereunder if any
of the following events occurs:

            (a) the Credit Parties shall fail to pay when due (i) any amount of
principal of any Revolving Loans, or (ii) any amount of interest thereon; or

            (b) the Credit Parties shall fail to pay within three (3) days after
receipt of notice from the Bank any fees or expenses payable hereunder or under
any Note; or

                                       31
<PAGE>

            (c) the Credit Parties shall fail to perform any term, covenant or
agreement contained in Sections 5 (except Section 5.3) or 6; or

            (d) the Credit Parties shall fail to perform any term, covenant or
agreement (other than those referred to above in this Section 7.1) contained in
this Agreement and such default shall continue for twenty (20) days; or

            (e) any representation or warranty of any Credit Party made in this
Agreement or in the Notes, or any Credit Parties in any other documents or
agreements executed in connection with the transactions contemplated by this
Agreement or in any certificate delivered hereunder shall prove to have been
false in any material respect upon the date when made or deemed to have been
made; or

            (f) the failure to pay at maturity, or within any applicable period
of grace, any obligations of the Borrower in excess of One Million Dollars
($1,000,000) in the aggregate for borrowed monies or advances, or for the use of
real or personal property, or fail to observe or perform any term, covenant or
agreement evidencing or securing such obligations, the result of which failure
is to permit the holder or holders of such indebtedness to cause such
indebtedness to become due prior to its stated maturity upon delivery of
required notice, if any; or

            (g) the Borrower shall default in any payment due on any
Indebtedness in respect of borrowed money, any Capital Lease or the deferred
purchase price of property with an outstanding principal amount in excess of One
Million Dollars ($1,000,000) and such default shall continue for more than the
period of grace, if any, specified therein and shall not have been waived
pursuant thereto; or

            (h) the Borrower or any Subsidiary of the Borrower shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar official of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding, as debtor, under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, or any other
law providing for the relief of debtors, (vi) fail to contest in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Federal Bankruptcy Code or other law, (vii) take
any action under the laws of its jurisdiction of incorporation or organization
similar to any of the foregoing, or (viii) take any corporate action for the
purpose of effecting any of the foregoing; or

            (i) a proceeding or case shall be commenced, without the application
or consent of the Borrower or any Subsidiary of the Borrower in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 60 days; or an order

                                       32
<PAGE>

for relief shall be entered in an involuntary case under the Federal Bankruptcy
Code, against the Borrower or any Subsidiary of the Borrower; or action under
the laws of the jurisdiction of incorporation or organization of the Borrower or
any Subsidiary of the Borrower similar to any of the foregoing shall be taken
with respect to the Borrower or any Subsidiary of the Borrower and shall
continue unstayed and in effect for any period of 60 days; or

            (j) a judgment or order for the payment of money shall be entered
against the Borrower by any court, or a warrant of attachment or execution or
similar process shall be issued or levied against property of the Borrower, that
in the aggregate exceeds One Million Dollars ($1,000,000) in value and such
judgment, order, warrant or process shall continue undischarged or unstayed for
45 days; or

            (k) the Borrower or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of One Hundred Thousand
Dollars ($100,000) that it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans
shall be filed under Title IV of ERISA by the Borrower, any member of the
Controlled Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
the Borrower and such proceedings shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or

            (l) any Person or "group" (within the meaning of Section 13(d) and
14(d)(2) of the Securities and Exchange Act of 1934, as amended) shall
beneficially own or control in excess of 50% of the issued and outstanding
shares of the capital stock of the Borrower having ordinary voting power to
elect a majority of the board of directors of the Borrower; or

            (m) the termination, expiration or non-renewal of any license or
other Material Agreement which termination, expiration or non-renewal has a
material adverse effect on the existing business or prospects of the Borrower.

      7.2 Remedies. Upon the occurrence of an Event of Default described in
Sections 7.1.(h) and 7.1.(i), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's
declaration:

            (a) the Bank's commitment to make any further Revolving Loans
hereunder or to issue Letters of Credit, generally, shall terminate;

            (b) the unpaid principal amount of the Revolving Loans together with
accrued interest and all other Obligations hereunder shall become immediately
due and payable, including the unpaid principal amount of any Revolving Loan
subject to an exercised LIBOR Option together with accrued interest thereon and
the related LIBOR Premium in the same manner as though the Credit Parties had
exercised their right to prepayment pursuant to Section

                                       33
<PAGE>

2.7 of this Agreement, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived; and

            (c) the Bank may exercise any and all rights it has under this
Agreement, the Notes or any other documents or agreements executed in connection
herewith, or at law or in equity, and proceed to protect and enforce the Bank's
rights by any action at law, in equity or other appropriate proceeding.

            (d) Upon the occurrence of any Event of Default and at any time
thereafter (unless such Event of Default shall theretofore have been remedied),
at the Bank's option: (i) the Bank shall thereupon be relieved of all of its
obligations to make any Revolving Loans hereunder; (ii) the unpaid principal
amount of the Notes together with accrued interest thereon and all other
Obligations shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
and (iii) the Bank may exercise any and all rights it has under this Agreement,
the Notes, or any other documents or agreements executed in connection with the
transactions contemplated by this Agreement (the "Loan Documents"), or by law or
equity, and proceed to protect and enforce the Bank's rights by any action at
law, suit in equity or other appropriate proceeding, whether for specific
performance or for an injunction against a violation of any covenant contained
herein or in any Loan Document or in aid of the exercise of any power granted
hereby or thereby or by law.

                                    SECTION 8

                                  MISCELLANEOUS

      8.1 Notices. Unless otherwise specified herein, all notices hereunder to
any party hereto shall be in writing and shall be deemed to have been given when
delivered by hand, or three (3) days after being properly deposited in the mails
certified, return receipt requested, or when sent by electronic facsimile
transmission, or when delivered to the telegraph company or overnight courier,
the next business day following addressed to such party at its address indicated
below:

      If to the Credit Parties, at

            Sepracor Inc.
            111 Locke Drive
            Marlborough, Massachusetts 01752
            Attention: Robert F. Scumaci
            Senior Vice President Finance and Administration
            Tel. No.: 508-481-6700
            Fax No.: 508-357-7494

      If to the Bank, at

            Fleet National Bank
            100 Federal Street
            Boston, Massachusetts 02110

                                       34
<PAGE>

            Attention: Kimberly A. Martone
            Senior Vice President
            Tel. No.: 617-434-5316
            Fax No.: 617-434-2473

or at any other address specified by such party in writing.

      8.2 Expenses. The Credit Parties will pay on demand all expenses of the
Bank in connection with the preparation, waiver or amendment of this Agreement,
the Notes, or other documents executed in connection therewith, or the
administration, default or collection of the Revolving Loans or other
Obligations or in connection with the Bank's exercise, preservation or
enforcement of any of its rights, remedies or options thereunder, including,
without limitation, reasonable fees and disbursements of outside legal counsel
or accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with any travel or other costs
relating to any appraisals or examinations conducted in connection with the
Obligations and the amount of all such expenses shall, until paid, bear interest
at the rate applicable to principal hereunder for Revolving Loans not subject to
a LIBOR Option (including any default rate).

      8.3 Set-Off. Regardless of other means of obtaining repayment of the
Obligations, any deposits, balances or other sums credited by or due from the
head office of the Bank or any of its branch offices to the Credit Parties may,
at any time and from time to time after the occurrence of an Event of Default
hereunder, without notice to the Credit Parties or compliance with any other
condition precedent now or hereafter imposed by statute, rule of law, or
otherwise (all of which are hereby expressly waived) be set off, appropriated,
and applied by the Bank against any and all Obligations of the Credit Parties to
the Bank or any of its affiliates in such manner as the head office of the Bank
or any of its branch offices in their sole discretion may determine, and the
Credit Parties each hereby grant the Bank a continuing security interest in such
deposits, balances or other sums for the payment and performance of all such
obligations.

      8.4 Term of Agreement. This Agreement shall continue in force and effect
so long as the Bank has any commitment to make Revolving Loans hereunder or any
Revolving Loan or any Obligation hereunder shall be outstanding.

      8.5 No Waivers. No failure or delay by the Bank in exercising any right,
power or privilege hereunder or under the Note or under any other documents or
agreements executed in connection herewith shall operate as a waiver thereof;
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein and in the Notes provided are cumulative and not
exclusive of any rights or remedies otherwise provided by agreement or law.

      8.6 Governing Law; Jurisdiction. This Agreement and the Notes shall be
deemed to be contracts made under seal and shall be construed in accordance with
and governed by the laws of Massachusetts (without giving effect to any
conflicts of laws provisions contained therein). The Credit Parties, to the
extent that they may lawfully do so, hereby consent to the jurisdiction of the
courts of the Commonwealth of Massachusetts and the United States District Court
for the District of Massachusetts, as well as to the jurisdiction of all courts
to which an appeal may be

                                       35
<PAGE>

taken from such courts, for the purpose of any suit, action or other proceeding
arising out of any of its obligations hereunder or with respect to the
transactions contemplated hereby, and expressly waives any and all objections it
may have as to venue in any such courts. The Credit Parties further agree that a
summons and complaint commencing an action or proceeding in any of such courts
shall be properly served and shall confer personal jurisdiction if served
personally or by certified mail to it at its address provided in Section 8.1 of
this Agreement or as otherwise provided under the laws of the Commonwealth of
Massachusetts.

      8.7 Amendments. Neither this Agreement nor the Notes nor any provision of
this Agreement or thereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Bank and, in the case of
amendments, by the Credit Parties.

      8.8 Binding Effect of Agreement; Assignments; Participations.

            (a) This Agreement shall be binding upon and inure to the benefit of
the Credit Parties and the Bank and their respective successors and assigns;
provided that the Credit Parties may not assign or transfer their rights or
obligations hereunder.

            (b) Assignments by the Bank. From and after the date hereof, the
Bank may at any time assign all, or a proportionate part of all, of its rights,
interests and duties with respect to the Revolving Commitment Amount and the
Notes (1) to any one or more of its Affiliates without the consent or approval
of the Credit Parties or (2) to one or more banks or other financial
institutions with the consent of the Credit Parties which consent shall not be
unreasonably withheld (each assignee under clauses (1) and (2), an "Assignee"),
in each case on such terms, as between the Bank and each of its Assignees, as
the Bank may think fit, and such Assignee shall assume such rights, interests
and duties pursuant to an instrument executed by such Assignee and the Bank, and
for this purpose the Bank may make available to each of its potential Assignees
such information relating to the Credit Parties, this Agreement and the
transactions contemplated hereby as the Bank may think necessary or desirable,
which information shall be held by each potential Assignee strictly in
confidence. Upon execution and delivery of such an instrument and payment by
such Assignee to the Bank of an amount equal to the purchase price agreed
between the Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights, interests and duties of a Bank with a
Revolving Commitment Amount and Revolving Loan as set forth in such instrument
of assumption, and the Bank shall be released from its obligations hereunder to
a corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this paragraph
(b), the Bank and the Credit Parties shall make appropriate arrangements so
that, if required, a new Note or Notes are issued to the Assignee.

            (c) Participations by the Bank. From and after the date hereof, the
Bank shall be at liberty to offer the participations in the Revolving Commitment
Amount and the Notes to one or more banks or other financial institutions on
such terms as the Bank may think fit, and for this purpose the Bank may make
available to each of its potential participants such information relating to the
Credit Parties, this Agreement and the transactions contemplated hereby as the
Bank may think necessary or desirable, which information shall be held by each
potential participant strictly in confidence; provided, that the Bank shall not
offer any participations to foreign banks or financial institutions without the
prior written consent of the Credit Parties;

                                       36
<PAGE>

provided further, that the Bank shall retain the sole right to consent to
amendments to, or waivers of, the provisions of this Agreement and the Notes and
the sole right and responsibility to enforce the obligations of the Credit
Parties hereunder and under the Notes; provided further, that the Bank may agree
with each of its participants that the Bank will not agree, without the consent
of the participant, to any amendment or waiver of any provision of this
Agreement which would increase or otherwise change such Revolving Commitment
Amount or reduce the principal of or rate of interest on the Revolving Loans
subject to such participation, or postpone the date fixed for any payment of
principal or of interest on any Revolving Loans.

      8.9 Currency Conversion. If, for the purpose of obtaining or enforcing
judgment in any court or for any other purpose hereunder it is necessary to
convert an amount due hereunder in the currency in which it is due (the
"Original Currency") into another currency (the "Second Currency") the rate of
exchange applied shall be that at which, in accordance with normal banking
procedures, the Bank could purchase, in the United States money market or the
United States foreign exchange market (the "Money Markets"), as the case may be,
the Original Currency with the Second Currency on the Business Day on which
judgment is given or the amount is due. The Borrower agrees that its obligations
in respect of any amounts due from it to the Bank, in the Original Currency
hereunder shall, notwithstanding any judgment expressed or payment made in the
Second Currency, be discharged only to the extent that on the Business Day
following receipt of any sums so paid or adjudged to be due hereunder in the
Second Currency, the Bank may, in accordance with normal banking procedure
purchase, in the appropriate Money Market, the Original Currency with the amount
of the Second Currency so paid or so adjudged to be due; and if the amount of
the Original Currency so purchased is less than the amount originally due in the
Original Currency, the Borrower agrees as a separate obligation, and
notwithstanding any such payment or judgment to indemnify the Bank.

      8.10 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.

      8.11 Partial Invalidity. The invalidity or unenforceability of any one or
more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.

      8.12 Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.

      8.13 WAIVER OF JURY TRIAL. THE BANK AND THE CREDIT PARTIES AGREE THAT
NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT
OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE BANK AND THE
CREDIT PARTIES, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER
THE BANK NOR THE CREDIT

                                       37
<PAGE>

PARTIES HAVE AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

      8.14 Entire Agreement. This Agreement, the Notes and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.

                                       38
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.

                                   SEPRACOR INC.

                                   By: /s/ Robert F. Scumaci
                                       ---------------------------------------
                                       Name: Robert F. Scumaci
                                       Title: Senior Vice President Finance and
                                       Administration

                                   BIOSPHERE MEDICAL, INC.

                                   By: /s/ Robert M. Palladino
                                       --------------------------------------
                                       Name: Robert M. Palladino
                                       Title: Vice President and Chief Financial
                                       Officer

                                   FLEET NATIONAL BANK

                                   By: /s/ Kimberly A. Martone
                                       ---------------------------------------
                                       Name: Kimberly A. Martone
                                       Title: Senior Vice President

                                       39
<PAGE>

                                                                     EXHIBIT A-1

                                     FORM OF

                                  SEPRACOR INC.
                                 PROMISSORY NOTE

                                                               December 22, 1999
$25,000,000                                                Boston, Massachusetts

      For value received, the undersigned hereby promises to pay to FLEET
NATIONAL BANK (the "Bank"), or order, at the head office of the Bank at One
Federal Street, Boston, Massachusetts 02110, the principal amount of TWENTY-FIVE
MILLION DOLLARS ($25,000,000) or such lesser amount as shall equal the principal
amount outstanding hereunder on December 31, 2001 or such earlier date as
provided in the Agreement (as defined below) in lawful money of the United
States of America and in immediately available funds, and to pay interest on the
unpaid principal balance hereof from time to time outstanding, at said office
and in like money and funds, for the period commencing on the date hereof until
paid in full, at the rates per annum and on the dates provided in the Agreement.

      Upon the occurrence and during the continuance of an Event of Default,
interest on the unpaid principal amount hereof and (to the extent permitted by
law) on unpaid interest shall thereafter be payable on demand at a rate per
annum equal to two percent (2%) above the interest rate otherwise in effect with
respect to such Revolving Loans. Upon the cure of an Event of Default and the
payment of interest at the default rate through the date of such cure, the
interest rate shall revert to that provided for in the Agreement.

      If the entire amount of any required principal and/or interest is not paid
in full within ten (10) days after the same is due, the undersigned shall pay to
the Bank a late fee equal to three percent (3%) of the required payment. Nothing
in the preceding sentence shall affect the Bank's rights to exercise any of its
rights and remedies provided in the Agreement (as defined below) if an Event of
Default (as defined in the Agreement) has occurred.

      This Note is issued pursuant to, and entitled to the benefits of, and is
subject to, the provisions of a certain Second Amended and Restated Revolving
Credit Agreement dated as of December 22, 1999, by and among the undersigned,
Biosphere Medical, Inc. and the Bank (herein, as the same may from time to time
be amended or extended, referred to as the "Agreement"), but neither this
reference to the Agreement nor any provision thereof shall affect or impair the
absolute and unconditional obligation of the undersigned makers of this Note to
pay the principal of and interest on this Note as herein provided.

      In case an Event of Default (as defined in the Agreement) shall occur, the
aggregate unpaid principal of and accrued interest on this Note shall become or
may be declared to be due and payable in the manner and with the effect provided
in the Agreement.
<PAGE>

      The undersigned may at its option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Agreement, and this
Note is subject to mandatory prepayment in certain circumstances, which
repayment shall in certain cases require the payment of a premium and in certain
cases not require the payment of a premium.

      The undersigned makers hereby waive presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.

      This instrument shall have the effect of an instrument executed under seal
and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).

                                    SEPRACOR INC.

                                    By:_______________________________________
                                       Name: Robert F. Scumaci
                                       Title: Senior Vice President Finance and
                                       Administration

                                       2
<PAGE>

                          SCHEDULE I TO PROMISSORY NOTE

                    AMOUNT OF     INTEREST       AMOUNT          NOTATION
      DATE       REVOLVING LOAN     RATE          PAID           MADE BY

                                       3
<PAGE>

                                                                     EXHIBIT A-2

                                     FORM OF

                             BIOSPHERE MEDICAL, INC.
                                 PROMISSORY NOTE

                                                               December 22, 1999
$2,000,000                                                 Boston, Massachusetts

      For value received, the undersigned hereby promises to pay to FLEET
NATIONAL BANK (the "Bank"), or order, at the head office of the Bank at One
Federal Street, Boston, Massachusetts 02110, the principal amount of TWO MILLION
DOLLARS ($2,000,000) or such lesser amount as shall equal the principal amount
outstanding hereunder on December 31, 2001 or such earlier date as provided in
the Agreement (as defined below) in lawful money of the United States of America
and in immediately available funds, and to pay interest on the unpaid principal
balance hereof from time to time outstanding, at said office and in like money
and funds, for the period commencing on the date hereof until paid in full, at
the rates per annum and on the dates provided in the Agreement.

      Upon the occurrence and during the continuance of an Event of Default,
interest on the unpaid principal amount hereof and (to the extent permitted by
law) on unpaid interest shall thereafter be payable on demand at a rate per
annum equal to two percent (2%) above the interest rate otherwise in effect with
respect to such Revolving Loans. Upon the cure of an Event of Default and the
payment of interest at the default rate through the date of such cure, the
interest rate shall revert to that provided for in the Agreement.

      If the entire amount of any required principal and/or interest is not paid
in full within ten (10) days after the same is due, the undersigned shall pay to
the Bank a late fee equal to three percent (3%) of the required payment. Nothing
in the preceding sentence shall affect the Bank's rights to exercise any of its
rights and remedies provided in the Agreement (as defined below) if an Event of
Default (as defined in the Agreement) has occurred.

      This Note is issued pursuant to, and entitled to the benefits of, and is
subject to, the provisions of a certain Second Amended and Restated Revolving
Credit Agreement dated as of December 22, 1999, by and among Sepracor, the
undersigned and the Bank (herein, as the same may from time to time be amended
or extended, referred to as the "Agreement"), but neither this reference to the
Agreement nor any provision thereof shall affect or impair the absolute and
unconditional obligation of the undersigned makers of this Note to pay the
principal of and interest on this Note as herein provided.

      In case an Event of Default (as defined in the Agreement) shall occur, the
aggregate unpaid principal of and accrued interest on this Note shall become or
may be declared to be due and payable in the manner and with the effect provided
in the Agreement.
<PAGE>

      The undersigned may at its option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Agreement, and this
Note is subject to mandatory prepayment in certain circumstances, which
repayment shall in certain cases require the payment of a premium and in certain
cases not require the payment of a premium.

      The undersigned makers hereby waive presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.

      This instrument shall have the effect of an instrument executed under seal
and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).

                                    BIOSPHERE MEDICAL, INC.

                                    By:_______________________________________
                                       Name: Robert M. Palladino
                                       Title: Vice President and Chief Financial
                                       Officer

                                       2
<PAGE>

                          SCHEDULE I TO PROMISSORY NOTE

                    AMOUNT OF     INTEREST       AMOUNT        NOTATION
      DATE       REVOLVING LOAN     RATE          PAID         MADE BY

                                       3
<PAGE>

                                                                       EXHIBIT B

                             COMPLIANCE CERTIFICATE

Fleet National Bank
100 Federal Street
Boston, Massachusetts  02110

Attention:  Kimberly A. Martone
            Senior Vice President

Re:   Sepracor Inc. Obligations under Second Amended and Restated Revolving
      Credit Agreement dated as of December 22, 1999

Ladies and Gentlemen:

      As required by Section 5.1(c) of the Second Amended and Restated Revolving
Credit Agreement dated as of December 22, 1999 (the "Credit Agreement") by and
among Sepracor Inc. and Biosphere Medical, Inc. (collectively, the "Credit
Parties") and Fleet National Bank (the "Bank"), a review of the activities of
the Borrower for the fiscal year and/or fiscal quarter ending ___________, _____
(the "Fiscal Period") has been made under my supervision to determine whether
the Credit Parties have performed and/or maintained all of their respective
obligations under the Credit Agreement. Based upon such review, I hereby certify
to you, as an Authorized Officer of the Borrower, that the Credit Parties have
performed and maintained all such obligations under the Credit Agreement, the
Notes and the Loan Documents for the Fiscal Period and, to the best of my
knowledge, no event has occurred that constitutes a Default or an Even of
Default as defined in the Credit Agreement. Other capitalized terms used herein
without definition have the same meanings as in the Credit Agreement.

      As required by Section [5.1(a)][5.1(b)] of the Credit Agreement financial
statements of the Credit Parties (the "Financial Statements") for the Fiscal
Period and other information required by such sections accompany this
certificate. The Financial Statements present fairly the financial position of
the Credit Parties as of the date thereof and the statements of operation of the
Credit Parties for the Fiscal Period covered thereby.

      I further certify to you, as an Authorized Officer of the Borrower, that
the figures set forth below accurately represent amounts required to be
calculated under the various provisions or covenants of the Credit Agreement
indicated, each as of the last day of the Fiscal Period unless otherwise
indicated.

Dated:________________________      __________________________________________
                                    Title:
<PAGE>

--------------------------------------------------------------------------------
I.    Section 5.9 - Minimum Liquidity Ratio
--------------------------------------------------------------------------------
      A.    Total Liabilities
--------------------------------------------------------------------------------
            (1) Total Liabilities                       $
--------------------------------------------------------------------------------
B.    Minimum Cash or Equivalents
--------------------------------------------------------------------------------
      Qualified Investments held in the U.S.
--------------------------------------------------------------------------------
            (2) Obligations of the United States of
                America held in the U.S.                $
--------------------------------------------------------------------------------
            (3) Certificates of deposit, other deposit
                instruments, bank accounts held in
                the U.S.                                $
--------------------------------------------------------------------------------
            (4) Commercial Paper held in the U.S.
                (see definition of Qualified
                Investments)                            $
--------------------------------------------------------------------------------
            (5) Mutual/closed end funds that invest
                only in investments set forth in
                clauses (2) through (4)                 $
--------------------------------------------------------------------------------
            (6) Repurchase agreements secured by
                any one or more of the foregoing
                held in the U.S.                        $
--------------------------------------------------------------------------------
            (7) Qualified Investments: (sum of 2
                through 6)                              $
--------------------------------------------------------------------------------
      Net Outstanding Amount of Base Accounts
--------------------------------------------------------------------------------
            (8) Base Accounts                           $
--------------------------------------------------------------------------------
            (9) Ineligible as of ________________(1)
--------------------------------------------------------------------------------
                (i)   over 60 days from invoice date    $
--------------------------------------------------------------------------------
                (ii)  Accounts outside of US            $
--------------------------------------------------------------------------------

----------
(1)   Ineligible calculated monthly

                                       2
<PAGE>

--------------------------------------------------------------------------------
                (iii) Accounts due from Affiliates      $
--------------------------------------------------------------------------------
                (iv)  Prepayments                       $
--------------------------------------------------------------------------------
                (v)   Uninvoiced Accounts               $
--------------------------------------------------------------------------------
                (vi)  Joint venture accounts            $
--------------------------------------------------------------------------------
            (10) Ineligible Accounts (sum of 16(i)
                 through (v))                           $
--------------------------------------------------------------------------------
            (11) Contra Account offsets                 $
--------------------------------------------------------------------------------
            (12) Net Outstanding Amount of Base
                 Accounts (8 - 10 - 11)                 $
--------------------------------------------------------------------------------
            (13) Cash Equivalent Amount
--------------------------------------------------------------------------------
            (14) Unencumbered Cash held in the
                 United States                          $
--------------------------------------------------------------------------------
            (15) Qualified Investments (from (14))      $
--------------------------------------------------------------------------------
            (16) Net Outstanding Amount of Base
                 Accounts (from (19))                   $
--------------------------------------------------------------------------------
            (17) Actual Cash Equivalent Amount (13
                 + 14 + 15)                             $
--------------------------------------------------------------------------------
      C.    Liquidity Ratio
--------------------------------------------------------------------------------
            (14) Actual Liability Ratio (13/1)                                 %
--------------------------------------------------------------------------------
      Required Minimum Liquidity Ratio:                                     150%
--------------------------------------------------------------------------------
II.   Section 5.10 - Minimum Tangible Capital Base
--------------------------------------------------------------------------------
            (1) Stockholders' equity                    $
--------------------------------------------------------------------------------
            (2) Subordinated Indebtedness               $
--------------------------------------------------------------------------------
            (3) Goodwill                                $
--------------------------------------------------------------------------------
            (4) Intangible items                        $
--------------------------------------------------------------------------------
            (5) Reserves not already deducted from
                assets                                  $
--------------------------------------------------------------------------------

                                       3
<PAGE>

--------------------------------------------------------------------------------
            (6) Write-ups from revaluations             $
--------------------------------------------------------------------------------
            (7) Equity in Subsidiaries or joint
                ventures                                $
--------------------------------------------------------------------------------
            (8) Actual Tangible Capital Base
                (1 + 2) - (sum of 3 through 7)          $
--------------------------------------------------------------------------------
Required Minimum Tangible Capital Base:                 $ 50,000,000
--------------------------------------------------------------------------------
III.  A.    Minimum Cash or Equivalent (from I.B)       $
--------------------------------------------------------------------------------
            Required Minimum Cash Equivalent            $ 50,000,000
--------------------------------------------------------------------------------
      B.    Fixed Change Coverage Ratio
--------------------------------------------------------------------------------
            EBITDA
--------------------------------------------------------------------------------
            (1)   Operating Income                      $
--------------------------------------------------------------------------------
            (2)   Add Backs
--------------------------------------------------------------------------------
                  (i)   Taxes                           $
--------------------------------------------------------------------------------
                  (ii)  Interest Expense                $
--------------------------------------------------------------------------------
                  (iii) Depreciation/Amortization       $
--------------------------------------------------------------------------------
                  (iv)  Non-Cash Income                 $
--------------------------------------------------------------------------------
                  (v)   Losses from Equity in
                        Affiliates                      $
--------------------------------------------------------------------------------
                  (vi)  Extraordinary and Unusual
                        Losses                          $
--------------------------------------------------------------------------------
                  (vii) Total                           $
--------------------------------------------------------------------------------
            (3)   Exclusions                            $
--------------------------------------------------------------------------------
                  (i)   Income from Equity in
                        Affiliates                      $
--------------------------------------------------------------------------------
                  (ii)  Extraordinary and Unusual
                        Gains                           $
--------------------------------------------------------------------------------
                  (iii) Proceeds of Insurance and
                        asset sales                     $
--------------------------------------------------------------------------------

                                       4
<PAGE>

--------------------------------------------------------------------------------
                  (iv)  Total
--------------------------------------------------------------------------------
            (4)   EBITDA ((1) + (2) - (3))              $
--------------------------------------------------------------------------------
                  Fixed Charges
--------------------------------------------------------------------------------
                  (i)   Interest Expense                $
--------------------------------------------------------------------------------
                  (ii)  Non-Financed Capital
                        Expenditures                    $
--------------------------------------------------------------------------------
            (5)   Total Fixed Charges ((i) + (ii))      $
--------------------------------------------------------------------------------
            (6)   Actual Fixed Charge Coverage
                  Ratio (4 /5)                            ____:1
--------------------------------------------------------------------------------
            Required Fixed Charge Coverage Ratio          1.5 to 1
--------------------------------------------------------------------------------

Dated:_________________, _____      __________________________________________
                                    Title:

                                       5
<PAGE>

                                                                       EXHIBIT C

                               GUARANTY AGREEMENT

      THIS AGREEMENT, dated as of December __, 1999, by SEPRACOR, INC., a
Delaware corporation (the "Guarantor"), to FLEET NATIONAL BANK (the "Secured
Party").

                               W I T N E S S E T H

      WHEREAS, Biosphere Medical, Inc., a Delaware corporation (the "Company"),
the Guarantor and the Secured Party have entered into a Second Amended and
Restated Revolving Credit Agreement dated as of the date hereof (as amended from
time to time, the "Credit Agreement") pursuant to which the Secured Party has
agreed, subject to the terms and conditions set forth therein, to make certain
revolving loans to the Company (collectively, the "Biosphere Loans"), such
Biosphere Loans to be evidenced by the Company's Promissory note in the original
principal amount of $2,000,000 payable to the order of the Secured Party (as
amended or supplemented from time to time, the "Note"); and

      WHERES, the Guarantor owns a majority of the outstanding capital stock of
the Company and the making of the Biosphere Loans will therefore be beneficial
to the Guarantor; and

      WHEREAS, the obligation of the Secured Party to make the Biosphere Loans
is subject to the condition, among others, that the Guarantor shall execute and
deliver this Guaranty Agreement;

      NOW, THEREFORE, in consideration of the willingness of the Secured Party
to make the Biosphere Loans to the Company, and for other good and valuable
consideration, receipt of which is hereby acknowledged by the Guarantor, the
Guarantor hereby agrees as follows:
<PAGE>

      1. Guaranteed Obligations. The Guarantor does hereby irrevocably and
unconditionally guarantee the due and punctual payment and performance by the
Company of the following obligations to the Secured Party (individually, a
"Guaranteed Obligation" and collectively the "Guaranteed Obligations"):

            (a) Principal of and premium, if any, and interest on the Note; and

            (b) Any and all other obligations of the Company to the Secured
Party under the Credit Agreement or under any agreement or instrument relating
thereto, all as amended from time to time.

      2. Demand by Secured Party. Upon failure by the Company punctually to pay
or perform any Guaranteed Obligation when due, after the expiration of any
applicable grace period, the Secured Period may make demand upon the Guarantor
for the payment or performance of such Guaranteed Obligation and the Guarantor
binds and obliges itself to make such payment or performance forthwith upon such
demand.

      3. Waiver of Demands, Notices, Diligence, etc. The Guarantor hereby
assents to all of the terms and conditions of the Guaranteed Obligations and
waives: (a) demand for the payment of the principal of any Guaranteed Obligation
or of any claim for interest or any part of any thereof (other than the demand
provided for in Section 2 hereof); (b) notice of the occurrence of a default or
an event of default under any Guaranteed Obligation; (c) protest of the
nonpayment of the principal of any Guaranteed Obligation or of any claim for
interest or any part thereof: (d) notice of presentment, demand and protest; (e)
notice of acceptance of any guaranty herein provided for or of the terms and
provisions thereof or hereof by the Secured Party; (f) notice of any indulgences
or extensions granted to the Company or any successor to the Company or any
person or party which shall have assumed the obligations of the Company; (g) any
requirement of diligence or promptness on the part of the Secured Party in the
enforcement of any of its rights under the provisions of any Guaranteed
Obligation or this Guaranty Agreement; (h) any enforcement of any Guaranteed
Obligation; (i) any right which the Guarantor might have to require the Secured
Party to proceed against any other guarantor of the Guaranteed Obligations or to
realize on any collateral security therefor; and (j) any and all notices of
every kind and description which may be required to be given by an statute or
rule of law in any jurisdiction. The waivers set forth in this Section 3 shall
be effective notwithstanding the fact that the Company ceases to exist by reason
of its liquidation, merger, consolidation or otherwise.

      4. Obligations of Guarantor Unconditional. The obligations of the
Guarantor under this Guaranty Agreement shall be unconditional, irrespective of
the validity, regularity or enforceability of any Guaranteed Obligation, and
shall not be affected by any action taken under any Guaranteed Obligation in the
exercise of any right or remedy therein conferred, or by any failure or omission
on the part of the Secured Party to enforce any right given thereunder or
hereunder or any remedy conferred thereby or hereby, or by any waiver of any
term, covenant, agreement or condition of any Guaranteed Obligation or this
Guaranty Agreement, or by any release of any security or any other guaranty at
any time existing for the benefit of any Guaranteed Obligation, or by the merger
or consolidation of the Company, or by sale, lease or

                                       2
<PAGE>

transfer by the Company to any person of any or all of its properties, or by any
action of the Secured Party granting indulgence or extension to, or waiving or
acquiescing in any default, the Company or any successor to the Company or any
person or party which shall have assumed its obligations, or by reason of any
disability or other defense of the Company or any successor to the Company, or
by any modification, alteration, or by any circumstance whatsoever (with or
without notice to or knowledge of the Guarantor) which may or might in any
manner or to any extent vary the risk of the Guarantor hereunder, it being the
purpose and intent of the Guarantor that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances
and shall not be discharged except by payment or performance as herein provided,
and then only to the extent of such payment or performance.

      5. Subordination of Claims of Guarantor. Any claims against the Company to
which the Guarantor may be or become entitled (including, without limitation,
claims by subrogation or otherwise by reason of any payment or performance by
the Guarantor in satisfaction and discharge, in whole or in part, of its
obligations under this Guaranty Agreement) shall be and hereby are made subject
and subordinate to the prior payment or performance in full of the Guaranteed
Obligations.

      6. Reinstatement. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time any amount received by the
Secured Party in respect of the Guaranteed Obligations is rescinded or must
otherwise be restored by the Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or the Guarantor or
upon the appointment of an intervenor or conservator of, or trustee or similar
official for, the Company or the Guarantor or any substantial part of any of
their respective properties, or otherwise, all as though said payments had not
been made.

      7. Notices. Except as otherwise provided herein, all notices to the
Guarantor or the Secured Party shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes hereof if personally
delivered or mailed by certified mail, return receipt requested, as follows:

      (a)   if to the Guarantor:

            Sepracor Inc.
            111 Locke Drive
            Marlborough, Massachusetts 01752
            Attention:  Robert F. Scumaci
                        Senior Vice President

            with a copy to:

            John D. Sigel, Esquire
            Hale & Dorr
            60 State Street
            Boston, Massachusetts 02109

                                       3
<PAGE>

      (b)   if to the Secured Party:

            Fleet National Bank
            100 Federal Street
            Mail Stop: MA BOS 01-08-06
            Boston, Massachusetts 02110
            Attention:  Kimberly A. Martone
                        Senior Vice President

            with a copy to:

            George Ticknor, Esquire
            Palmer & Dodge LLP
            One Beacon Street
            Boston, Massachusetts 02108

or at such other address as the party to whom such notice or demand is directed
may have designated in writing to the other party hereto. A notice shall be
deemed to have been given upon the earlier to occur of (i) three (3) days after
the date on which it is deposited in the U.S. mails or (ii) receipt by the party
to whom such notice is directed.

      8. Miscellaneous. This Guaranty Agreement shall inure to the benefit of
and be binding upon the Secured Party and the Guarantor and their respective
successors and assigns, and the term "Secured Party" shall be deemed to include
any other holder or holders of any of the Guaranteed Obligations. In case any
provision in this Guaranty Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. This Guaranty Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. The Guarantor agrees, as principal
obligor and not as guarantor, to pay to the Secured Party, all reasonable costs
and expenses (including court costs and reasonable attorneys' fees and
disbursements) incurred or expended by the Secured Party in connection with the
enforcement of this Guaranty Agreement.

      9. Governing Law; Jurisdiction; Waiver of Jury Trial. This Guaranty
Agreement, including the validity hereof and the rights and obligations of the
parties hereunder, shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts. The Guarantor, to the extent that it
may lawfully do so, hereby consents to the jurisdiction of the courts of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts, as well as to the jurisdiction of all courts to which
an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the transactions contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts. The Guarantor further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served

                                       4
<PAGE>

personally or by certified mail to it at its address provided in Section 7 of
this Guaranty Agreement or as otherwise provided under the law of the
Commonwealth of Massachusetts. The Guarantor irrevocably waives all right to a
trial by jury in any suit, action or other proceeding instituted by or against
it in respect of its obligations hereunder or the transactions contemplated
hereby.

      IN WITNESS WHEREOF, the parties have executed this Guaranty Agreement as a
sealed instrument as of the date first above written.

                                    SEPRACOR INC.

                                    By ___________________________________
                                         Name: Robert F. Scumaci
                                         Title: Senior Vice President

                                    The foregoing Guaranty Agreement is hereby
                                    accepted:

                                    FLEET NATIONAL BANK

                                    By ___________________________________
                                         Name: Kimberly A. Martone
                                         Title: Senior Vice President

                                       5

<PAGE>

                                                 February 14, 2000

Sepracor Inc. (the "Company")
111 Locke Drive
Marlborough, Massachusetts 01752

      Re:   $400,000,000 5.00% Convertible Subordinated Debentures due 2007
            (including up to an additional $60,000,000 of 5.00% Convertible
            Subordinated Debentures due 2007 which may be issued at the option
            of the initial purchaser thereof, the "Debentures") issued pursuant
            to a certain Indenture dated as of February 11, 2000 (the
            "Indenture") by and between the Company and The Chase Manhattan
            bank, as trustee (the "Trustee")

                           AMENDMENT NO. 1 AND CONSENT

Ladies and Gentlemen:

      Reference is made to that certain Second Amended and Restated Revolving
Credit and Security Agreement dated as of December 22, 1999 (the "Credit
Agreement") among Fleet National Bank (the "Bank"), Sepracor Inc. (the
"Company") and BioSphere Medical, Inc. ("BioSphere").

      The Company plans to issue the Debentures on or after February 14, 2000,
which Debentures shall be subordinated in right of payment to the amounts
payable pursuant to the Credit Agreement and the promissory note issued
thereunder and any other Obligations and to the obligations of the Company to
the Bank under (a) the Guaranty Agreement dated as of September 15, 1998 with
respect to certain loans to Hemasure Inc., (b) the Guaranty Agreement dated as
of December 22, 1999 with respect to certain loans to BioSphere (collectively
with the Guaranty Agreement described in clause (a), the "Guaranty Agreements"),
and (c) the Put Agreement dated as of December 30, 1997 (the "Put Agreement") by
and between the Company and the Bank. Without the Bank's waiver pursuant to this
Consent and Amendment, Section 6.1 of the Credit Agreement would prohibit the
issuance by the Company of the Debentures and Section 6.8 would prohibit the
payment of principal or interest on the Debentures.

      The Company hereby covenants to the Bank that true and correct copies of
(i) the Confidential Offering Memorandum describing the issuance of the
Debentures and delivered to the purchasers thereof and (ii) the Indenture will
be promptly delivered to the Bank in the final and effective form.

      In reliance upon such representations and warranties and the subordination
provisions contained in the Indenture, and contingent thereon and upon receipt
by the Bank of a copy of this letter executed by the Company:
<PAGE>

      (i) the Bank, notwithstanding the provisions of Section 6.1 of the Credit
Agreement, the other Loan Documents, the Guaranty Agreements and the Put
Agreement, hereby consents to the issuance of the Debentures by the Company; and

      (ii) the Bank and the Company agree that the Credit Agreement is amended
as follows:

            (a) the definition of "Subordinated Notes" set forth in Section 1.1
      the Credit Agreement is hereby deleted and replaced by the following:

                  Subordinated Notes. The Borrower's (i) $93,048,000 6 1/4%
            Convertible Subordinated Debentures due 2005 issued by the Borrower
            pursuant to an Indenture dated February 5, 1998 from the Borrower to
            The Chase Manhattan Bank, (ii) $300,000,000 7.00% Convertible
            Subordinated Debentures due 2005 issued pursuant to an Indenture
            dated December 15, 1998 by the Borrower to The Chase Manhattan Bank
            and (iii) $400,000,000 5.00% Convertible Subordinated Debentures due
            2007 issued pursuant to an Indenture dated February 11, 2000 by the
            Borrower to The Chase Manhattan Bank (plus up to an additional
            $60,000,000 of such 5.00% Convertible Subordinated Debentures which
            may be issued at the option of the initial purchaser thereof).

            (b) The second paragraph of Section 6.8 of the Credit Agreement is
      amended by deleting the following phrase on the second line, "issued and
      outstanding on the date of this Agreement".

      The Company hereby confirms that: (a) the representations and warranties
of the Company contained in Section 4 of the Credit Agreement are true on and as
of the date hereof as if made on such date (except to the extent that such
representations and warranties expressly relate to an earlier date); (b) the
Company is in compliance in all material respects with all of the terms and
provisions set forth in the Credit Agreement on its part to be observed or
performed thereunder; and (c) after giving effect to this Consent and Amendment,
no Event of Default specified in Section 8 of the Credit Agreement, nor any
event which with the giving of notice or expiration of any applicable grace
period or both would constitute such an Event of Default, shall have occurred
and be continuing.

      Except as expressly stated herein, this letter (i) does not amend or
modify either of the Credit Agreement, any Loan Documents, the Guaranty
Agreements or the Put Agreement and (ii) does not constitute a consent to any
other actions or the issuance of any Indebtedness except for the Debentures. All
provisions of the Credit Agreement (as amended hereby), the Loan Documents, the
Guaranty Agreements and the Put Agreement shall remain in full force and effect
and, except as expressly stated herein, nothing herein shall constitute a waiver
of any such provision.

                                       2
<PAGE>

      Capitalized terms used herein which are defined in the Credit Agreement
have the same meanings herein as therein.

                                    Sincerely,

                                    FLEET NATIONAL BANK

                                    By: /s/ Thomas W. Davies
                                        --------------------
                                        Name:  Thomas W. Davies
                                        Title:  Senior Vice President

The foregoing is hereby
agreed to an accepted

SEPRACOR, INC.

By:  /s/ Robert F. Scumaci
     ------------------------
     Name:
     Title:

                                       3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]