Document:

Exhibit 10.17

                       FIRST AMENDMENT TO ACCOUNT TRANSFER
                             AND PURCHASE AGREEMENT

     THIS FIRST  AMENDMENT  TO ACCOUNT  TRANSFER AND  PURCHASE  AGREEMENT  (this
"Amendment") is entered into by and between H.E.R.C.  PRODUCTS  INCORPORATED,  a
Delaware  corporation,   and  H.E.R.C.   CONSUMER  PRODUCTS,  INC.,  an  Arizona
corporation  (collectively  the "Seller"),  S. Steven Carl (the "Guarantor") and
KBK FINANCIAL, INC., a Delaware corporation ("KBK").

     WHEREAS,  Seller and KBK entered  into that  certain  Account  Transfer and
Purchase  Agreement dated as of September 22, 1997, as amended from time to time
(collectively, the "Purchase Agreement"); and

     WHEREAS,  pursuant to the Purchase  Agreement the parties have provided for
the terms and conditions  under which KBK may from time to time purchase certain
of Seller's accounts; and

     WHEREAS,   the  Purchase  Agreement  and  all  other  documents   securing,
governing,   guaranteeing  and/or  pertaining  to  the  Purchase  Agreement  are
hereinafter referred to collectively as the "Purchase Documents"; and

     WHEREAS,  the parties hereto now desire to modify the Purchase Agreement as
hereinafter provided;

     NOW, THEREFORE, in consideration of the mutual covenants,  representations,
warranties,   and   agreements   contained   herein,   and  for  other  valuable
consideration,   the  receipt  and  legal   sufficiency   of  which  are  hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

Section  1.01 The terms  used in this  Amendment  to the  extent  not  otherwise
defined herein shall have the same meanings as in the Purchase Agreement.

                                   ARTICLE II
                                   AMENDMENTS

Section  2.01  Effective  as of the  date  hereof,  Section  1 of  the  Purchase
Agreement is hereby amended in its entirety to read as follows:

     "1. OFFER OF ACCOUNTS. At its election from time to time during the term of
     this  Agreement,  Seller  agrees  to offer for sale to KBK  certain  of its
     accounts  arising out of sales of goods, or services  rendered,  by Seller,
     and to sell to KBK on the  terms set  forth in this  Agreement  such of the
     offered  accounts as KBK may accept for purchase in the State of Texas. KBK
     shall have the absolute  right in its sole  discretion to reject any or all
     offered accounts,  whether or not KBK has previously  purchased accounts of
     any particular  account debtor hereunder.  The parties agree that,  without
     the prior  consent of KBK, the maximum  Gross Amount (as defined  below) of
     accounts  that KBK may purchase  hereunder at any time,  together  with the
     Gross Amount of accounts previously  purchased by KBK from Seller hereunder
     which then  remain  outstanding,  will not exceed  One  Million  and No/100
     Dollars ($1,000,000.00) (the "Facility Amount").  KBK's consent to purchase
     accounts in excess of such amount may be evidenced by KBK's  acceptance for
     purchase of such offered accounts."

Section 2.02  Effective as of the date  hereof,  "Initial  Payment" set forth in
Section 4 of the Purchase Agreement is hereby amended to be eighty-five (85%) of
the Gross Amount of an account.

Section  2.03  Effective  as of the  date  hereof,  Section  5 of  the  Purchase
Agreement is hereby amended in its entirety to read as follows:

     "5.  FIXED AND VARIABLE  DISCOUNTS.  "Fixed  Discount"  means a discount of
     seventy-five hundredths percent (.75%) of the Gross Amount of such account.
     "Variable  Discount"  means a discount  computed on the Initial Payment and
     accruing  on the  basis of actual  days  elapsed  from the date of  Initial
     Payment  until and  including  three  business  days after KBK receives and
     deposits  the  proceeds of  collection  of such account at a per annum rate
     equal to KBK's Base Rate (as hereinafter  defined) in effect on the date of
     purchase of such account plus one and  one-half  percent  (1.5%) per annum;
     provided,  however, in no event shall the Variable Discount with respect to
     any  account  purchased  hereunder  be less than seven  percent  (7.0%) per
     annum.  "Base Rate" means that per annum variable rate  (expressed as a per
     annum  percentage  based on a year consisting of 360 days)  determined from
     time to time by KBK  without  notice  to  Seller  as  KBK's  Base  Rate for
     purposes of calculating  variable  discounts  under KBK's account  transfer
     agreements.   The  Fixed  Discount  and  the  Variable  Discount  shall  be
     collectively  referred to herein as the "KBK Discounts".  The KBK Discounts

                                       1
<PAGE>
     may be subject to one or more adjustments during the term of this Agreement
     if  a  Performance   Based  Pricing  Addendum  is  attached  hereto.  If  a
     Performance  Based Pricing Addendum is attached  hereto,  it is then made a
     part hereof as though fully written herein."

Section 2.04 Effective as of the date hereof, the first sentence of Section 7 of
the Purchase Agreement is hereby amended in its entirety to read as follows:

     "For the purpose of securing  KBK (a) in the payment of any and all sums of
     money  that may  become  due and  owing  KBK from  Seller by reason of this
     Agreement,  (b)  in the  performance  by  Seller  of  Seller's  obligations
     hereunder, and under any other agreement, contract, document, note or other
     instrument in favor of KBK or its assignees and (c) in the  performance  of
     all the obligations of all Affiliates (as  hereinafter  defined) under each
     Affiliate's agreements, contracts, documents, notes or other instruments in
     favor  of  KBK or its  assigns,  Seller  hereby  grants  to KBK a  security
     interest in (i) all of Seller's  present and future  accounts,  account and
     contract rights,  proceeds of inventory,  contracts,  drafts,  acceptances,
     documents,   instruments,   chattel  paper,   deposit   accounts,   general
     intangibles and all products and proceeds therefrom, including all returned
     or repossessed goods, as well as all books and records pertaining to all of
     the foregoing, (ii) all amounts due as Residual Payments or withheld by KBK
     as the  Reserve  pursuant to Section 6 hereof and (iii) all money and other
     funds of Seller now or hereafter in the  possession,  custody or control of
     KBK, from whatever source."

Section 2.05 Effective as of the date hereof, the second paragraph of Section 12
of the Purchase Agreement is hereby amended in its entirety to read as follows:

     "Seller hereby agrees to pay to KBK a termination  fee equal to two percent
     (2.0%) of the Facility Amount (the "Termination Fee") and the payment shall
     be an obligation of Seller secured under Section 7 hereof. This Termination
     Fee is payable upon  termination of this Agreement by Seller for any reason
     or upon termination by KBK at its election for the reasons set forth in the
     second  sentence  of Section 13 below.  However,  if this  Agreement  is so
     terminated after April 12, 2003, but before April 12, 2004, one-half of the
     Termination Fee shall be waived. If the Agreement is terminated after April
     12, 2004, all of the Termination Fee shall be waived."

                                   ARTICLE III
           REPRESENTATIONS, WARRANTIES, RATIFICATION AND REAFFIRMATION

Section 3.01 Seller hereby represents and warrants that: (i) the representations
and warranties  contained in the Purchase  Agreement are true and correct on and
as of the date hereof as though made on and as of the date  hereof,  and (ii) no
event has occurred and is  continuing  that  constitutes  an Event of Default or
would  constitute an Event of Default but for the requirement of notice or lapse
of time or both.

Section 3.02 The terms and provisions  set forth in this Amendment  shall modify
and supersede all  inconsistent  terms and  provisions set forth in the Purchase
Agreement,  but except as expressly  modified and superseded by this  Amendment,
the terms and  provisions  of the Purchase  Agreement are ratified and confirmed
and shall  continue in full force and effect,  Seller  hereby  agreeing that the
Purchase Agreement and the other Purchase Documents are and shall continue to be
outstanding,   validly   existing  and  enforceable  in  accordance  with  their
respective terms.

Section 3.03 Guarantor  previously  executed that certain Limited  Guaranty (the
"Guaranty  Agreement")  dated  September  22,  1997,  for the  benefit of KBK to
unconditionally  guarantee the payment by Seller of certain  losses  incurred by
KBK under the Purchase Agreement, as more fully described therein. Guarantor, by
executing  this  Amendment,  hereby  consents to this Amendment and agrees that,
notwithstanding the execution of this Amendment,  the Guaranty Agreement remains
in full force and effect and the obligations thereunder remain valid and binding
against Guarantor. Guarantor acknowledges and agrees that there are no claims or
offsets against,  or defenses or  counterclaims  to, the terms and provisions of
the Guaranty Agreement or the obligations created or evidenced thereby.

                                   ARTICLE IV
                                  MISCELLANEOUS

Section  4.01  Each of the  Purchase  Documents  is hereby  amended  so that any
reference in the  Purchase  Documents  to the  Purchase  Agreement  shall mean a
reference to the Purchase Agreement as amended hereby.

Section  4.02  This  Amendment  may be  executed  simultaneously  in one or more
counterparts,  each of shall be deemed an  original,  but all of which  together
shall  constitute  one  and  the  same  instrument.   Delivery  of  an  executed
counterpart  of this  Amendment  by telecopy  shall be equally as  effective  as
delivery  of a  manually  executed  counterpart  of this  Amendment.  Any  party
delivering  an executed  counterpart  of this  Amendment by telecopy  also shall
deliver a manually  executed  counterpart  of this  Amendment but the failure to
deliver  a  manually  executed   counterpart  shall  not  affect  the  validity,
enforceability, and binding effect of this Amendment.

Section 4.03 The Agreement and this  Amendment have been entered into in Tarrant
County,  Texas and shall be  performable  for all purposes in,  Tarrant  County,
Texas. THE AGREEMENT,  AS AMENDED HEREBY,  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. Courts within the State of Texas

                                       2
<PAGE>
shall have jurisdiction over any and all disputes arising under or pertaining to
the  Agreement,  as amended  hereby,  and venue in any such dispute shall be the
courts located in Tarrant County, Texas.

Section 4.04 This Amendment shall not become effective until executed by KBK.

Section  4.05  SELLER AND  GUARANTOR  EACH  HEREBY  ACKNOWLEDGES  THAT IT HAS NO
DEFENSE, COUNTERCLAIM,  OFFSET, CROSS-COMPLAINT,  CLAIM OR DEMAND OF ANY KIND OR
NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF
ITS LIABILITY TO REPAY THE  INDEBTEDNESS  AND OBLIGATIONS NOW OR HEREAFTER OWING
BY SELLER AND  GUARANOR TO KBK OR TO SEEK  AFFIRMATIVE  RELIEF OR DAMAGES OF ANY
KIND OR NATURE  FROM KBK.  SELLER AND  GUARANTOR  EACH  HEREBY  VOLUNTARILY  AND
KNOWINGLY  RELEASES  AND  FOREVER  DISCHARGES  KBK,  ITS  PREDECESSORS,  AGENTS,
EMPLOYEES,  SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS,  ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN,  ANTICIPATED  OR  UNANTICIPATED,   SUSPECTED  OR  UNSUSPECTED,   FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH SELLER AND GUARANTOR MAY
NOW  OR  HEREAFTER  HAVE  AGAINST  KBK,  ITS  PREDECESSORS,  AGENTS,  EMPLOYEES,
SUCCESSORS  AND  ASSIGNS,  IF ANY, AND  IRRESPECTIVE  OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT,  TORT,  VIOLATION OF LAW OR  REGULATIONS,  OR  OTHERWISE,
INCLUDING WITHOUT LIMITATION,  ANY SUCH CLAIMS ARISING FROM THE CONTRACTING FOR,
CHARGING,  TAKING, RESERVING,  COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE
HIGHEST  LAWFUL RATE  APPLICABLE,  THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER
THE PURCHASE AGREEMENT OR OTHER PURCHASE DOCUMENTS,  AND THE NEGOTIATION FOR AND
EXECUTION OF THIS AMENDMENT.

Section 4.06 Seller agrees to pay KBK a fee equal to $2,500.00 contemporaneously
with the  effectiveness  of this  Amendment in  consideration  of the  financial
accommodations provided by KBK to Seller contained herein.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>
     EXECUTED as of 2/12/02

                                        SELLER:

                                        H.E.R.C. PRODUCTS INCORPORATED

                                        By:
                                            ------------------------------------
                                        Name: S. Steven Carl
                                              ----------------------------------
                                        Title: Chief Executive Officer
                                               ---------------------------------

                                        H.E.R.C. CONSUMER PRODUCTS, INC.

                                        By:
                                            ------------------------------------
                                        Name: S. Steven Carl
                                              ----------------------------------
                                        Title: Chief Executive Officer
                                               ---------------------------------

                                        GUARANTORS:

                                        ----------------------------------------
                                        S. STEVEN CARL

                                        KBK:

                                        KBK FINANCIAL, INC.

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

STATE OF
         ---------------------------

COUNTY OF
          --------------------------

     The  foregoing  instrument  was  acknowledged  before  me this  ____ day of
2/12/02,  by S. Steven  Carl as Chief  Executive  Officer of  H.E.R.C.  PRODUCTS
INCORPORATED and H.E.R.C. CONSUMER PRODUCTS, INC.

Witness my hand and official seal.

My Commission expires:
                       -----------     -----------------------------------------
                                                  (Notary Public)

STATE OF
         ----------------------------

COUNTY OF
          ---------------------------

     The  foregoing  instrument  was  acknowledged  before  me this  ____ day of
2/12/02, by S. Steven Carl.

Witness my hand and official seal.

My Commission expires:
                       -----------     -----------------------------------------
                                                  (Notary Public)

                                       4EXHIBIT 10.02

                                CREDIT AGREEMENT

                                 by and between

             GEL TECH, L.L.C., an Arizona limited liability company
                GUM TECH INTERNATIONAL, INC., a Utah corporation

                                       and

                COMERICA BANK-CALIFORNIA, successory by merger to
                 Imperial Bank, a California banking corporation

                                   Dated as of

                                  May 29, 2002
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

ARTICLE 1.    DEFINITION OF TERMS..............................................1

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

     1.2      References.......................................................8

     1.3      Accounting Terms.................................................9

ARTICLE 2.    THE RLC..........................................................9

     2.1      RLC Commitment...................................................9

     2.2      Revolving Line of Credit.........................................9

     2.3      RLC Payments.....................................................9

     2.4      Excess Balance Payment..........................................10

     2.5      Conditions......................................................10

     2.6      Other RLC Advances by Lender....................................10

     2.7      Assignment......................................................11

     2.8      Issuance of Letters of Credit...................................11

     2.9      Issuance Procedure for Letter of Credit.........................12

     2.10     Letter of Credit Fees...........................................12

     2.11     Disbursements...................................................12

     2.12     Reimbursement Obligations of Borrower...........................12

     2.13     Nature of Reimbursement Obligations.............................13

     2.14     Certain Requirements............................................13

     2.15     Drawings and Reimbursements.....................................14

     2.16     Role of Lender..................................................14

ARTICLE 3.    PAYMENTS AND FEES PROVISIONS....................................14

     3.1      Payments........................................................14

     3.2      Commitment Fee..................................................15

     3.3      Letter of Credit Fees...........................................15

     3.4      Computations....................................................15

     3.5      Maintenance of Accounts.........................................16

ARTICLE 4.    SECURITY........................................................16

     4.1      Security........................................................16

     4.2      Outstanding LC Balance..........................................16

     4.3      Security Documents..............................................16

     4.4      Zensano Lien....................................................16

                                       -i-
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

ARTICLE 5.    CONDITIONS PRECEDENT............................................17

     5.1      Initial Advance.................................................17

     5.2      No Event of Default.............................................18

     5.3      No Material Adverse Effect......................................18

     5.4      Representations and Warranties..................................18

ARTICLE 6.    REPRESENTATIONS AND WARRANTIES..................................19

     6.1      Recitals........................................................19

     6.2      Organization and Good Standing..................................19

     6.3      Authorization and Power.........................................19

     6.4      Security Documents..............................................19

     6.5      No Conflicts or Consents........................................19

     6.6      No Litigation...................................................19

     6.7      Financial Condition.............................................20

     6.8      Taxes...........................................................20

     6.9      No Stock Purchase...............................................20

     6.10     Advances........................................................20

     6.11     Enforceable Obligations.........................................20

     6.12     No Default......................................................20

     6.13     Significant Debt Agreements.....................................21

     6.14     ERISA...........................................................21

     6.15     Compliance with Law.............................................21

     6.16     Solvent.........................................................21

     6.17     Investment Company Act..........................................21

     6.18     Title...........................................................21

     6.19     Survival of Representations, Etc................................21

     6.20     Environmental Matters...........................................21

     6.21     Licenses, Tradenames............................................21

     6.22     Permits.........................................................22

     6.23     Prior Revolving Line of Credit..................................22

ARTICLE 7.    AFFIRMATIVE COVENANTS...........................................22

     7.1      Financial Statements, Reports and Documents.....................22

     7.2      Maintenance of Existence and Rights; Conduct of
                Business; Management..........................................23

                                      -ii-
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

     7.3      Operations and Properties.......................................23

     7.4      Authorizations and Approvals....................................23

     7.5      Compliance with Law.............................................23

     7.6      Payment of Taxes and Other Indebtedness.........................23

     7.7      Compliance with Significant Debt Agreements and
                Other Agreements..............................................24

     7.8      Compliance with Credit Documents................................24

     7.9      Notice of Default...............................................24

     7.10     Other Notices...................................................24

     7.11     Books and Records; Access; Audits...............................24

     7.12     ERISA Compliance................................................24

     7.13     Further Assurances..............................................25

     7.14     Insurance.......................................................25

     7.15     Deposit Accounts................................................25

ARTICLE 8.    NEGATIVE COVENANTS..............................................26

     8.1      Existence.......................................................26

     8.2      Amendments to Organizational Documents..........................26

     8.3      Margin Stock....................................................26

     8.4      Distributions...................................................26

     8.5      Liens...........................................................27

     8.6      Transfer Collateral.............................................27

     8.7      Merger; Sale of Assets..........................................27

     8.8      Indebtedness....................................................27

     8.9      Financial Covenants.............................................27

ARTICLE 9.    EVENTS OF DEFAULT...............................................27

     9.1      Events of Default...............................................27

     9.2      Remedies Upon Event of Default..................................30

     9.3      Performance by Lender...........................................31

ARTICLE 10.   MISCELLANEOUS...................................................31

     10.1     Modification....................................................31

     10.2     Waiver..........................................................31

     10.3     Payment of Expenses.............................................31

     10.4     Notices.........................................................32

                                     -iii-
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

     10.5     Governing Law; Jurisdiction, Venue; Waiver of Jury Trial........33

     10.6     Invalid Provisions..............................................33

     10.7     Binding Effect..................................................33

     10.8     Entirety........................................................33

     10.9     Headings........................................................33

     10.10    Survival........................................................33

     10.11    No Third Party Beneficiary......................................33

     10.12    Time............................................................34

     10.13    Termination.....................................................34

     10.14    Schedules and Exhibits Incorporated.............................34

     10.15    Counterparts....................................................34

     10.16    Participations..................................................34

EXHIBIT "A"   Form of Advance Notice

EXHIBIT "B"   Form of Compliance Certificate

EXHIBIT "C"   Form of Borrowing Base Certificate

EXHIBIT "D"   Forms of Waiver/Release of Lien Rights
         D-1  Landlord
         D-2  Warehouse

EXHIBIT "E"   Forms of Assignment of Time Certificate of Deposit

                                      -iv-
<PAGE>
                                CREDIT AGREEMENT

     BY THIS CREDIT  AGREEMENT  (together with any amendments or  modifications,
the "Credit  Agreement"),  entered into as of this 29th day of May,  2002 by and
between GEL TECH, L.L.C., an Arizona limited liability company ("Gel Tech"), and
GUM TECH INTERNATIONAL,  INC., a Utah corporation ("Gum Tech" and,  collectively
with Gel Tech,  the  "Borrower"),  and  COMERICA  BANK-CALIFORNIA,  successor by
merger to Imperial Bank, a California  banking  corporation  (the "Lender"),  in
consideration  of the mutual  promises  herein  contained and for other valuable
consideration, the parties hereto do hereby agree as follows:

                                    RECITALS

          A.   Borrower  has  requested  that  Lender  establish  the  following
financial accommodations:

               (1)  A  revolving  line of  credit  facility  (the  "RLC") in the
principal  amount of FOUR  MILLION AND NO/100  DOLLARS  ($4,000,000.00)  for the
purpose of funding Borrower's short-term working capital.

          B.   As a  condition  for  extending  such  financial  accommodations,
Lender has required that Borrower enter into this Credit Agreement, establishing
the terms and conditions thereof.

                                   ARTICLE 1.

                               DEFINITION OF TERMS

     1.1  DEFINITIONS.  For the  purposes of this Credit  Agreement,  unless the
context  otherwise  requires,  the  following  terms  shall have the  respective
meanings assigned to them in this Article 1 or in the Section hereof referred to
below:

          "ADVANCE" means an RLC Advance.

          "AFFILIATE"  of  any  Person  means  any  Person  which,  directly  or
indirectly, Controls or is Controlled by such Person.

          "ASSIGNED  ACCOUNT  AMOUNT" means the aggregate  balance of those time
certificate  of deposit  accounts  of  Borrower  held by Lender and  assigned to
Lender by an  Assignment of Time  Certificate  of Deposit in the form of Exhibit
"E" hereto.

          "AUTHORIZED PERSON" means one or more managers or officers of Borrower
duly  authorized  (and so  certified  to Lender by the members or  directors  of
Borrower  pursuant to a borrowing  authorization or resolution from time to time
satisfactory  to Lender in the  exercise  of  Lender's  reasonable  discretion),
acting alone, to request  Advances under the provisions of this Credit Agreement
and execute and deliver documents, instruments,  agreements, reports, statements
and certificates in connection herewith.
<PAGE>
          "BANKING  DAY" means a day of the year on which banks are not required
or authorized to close in Phoenix, Arizona.

          "BORROWER": See the Preamble hereto.

          "BORROWING  BASE" means the sum of (i) the Eligible  Accounts  Amount,
plus (ii) the Eligible Inventory Amount.

          "BORROWING BASE CERTIFICATE" means a certificate  substantially in the
form attached hereto as Exhibit C.

          "CHANGE OF CONTROL"  means,  with respect to Gum Tech or Gel Tech, the
direct or indirect  acquisition  by any Person  (other than an  Affiliate of Gum
Tech) of Control of either such party.

          "CHANGE OF CONTROL  TRANSACTION" means any transaction in which either
Gum Tech or Gel Tech is merged or consolidated with any other entity that is not
an Affiliate and such other entity is the surviving entity.

          "CLOSING DATE" means the date of delivery of this Credit Agreement.

          "CODE" means the Internal Revenue Code of 1986, as amended.

          "COLLATERAL" means all property subject to the Security Documents.

          "COMMITMENT FEE": See Section 3.2 hereof.

          "CONTROL"  when used  with  respect  to any  Person  means the  power,
directly or indirectly, to vote or control the voting of more than fifty percent
(50%) of the  outstanding  voting  securities  of such  Person,  or to otherwise
direct the management policies of such Person by contract or otherwise;  and the
terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.

          "CONTROLLED GROUP" means,  severally and collectively,  the members of
the group  controlling,  controlled  by and/or in common  control  of  Borrower,
within the meaning of Section 4001(b) of ERISA.

          "CREDIT AGREEMENT": See the Preamble hereto.

          "CREDIT  DOCUMENTS" means this Credit  Agreement,  the Note (including
any renewals,  extensions and refundings thereof),  the Security Documents,  and
any written  agreements,  certificates  or  documents  (and with respect to this
Credit Agreement and such other written agreements and documents, any amendments
or supplements thereto or modifications  thereof) executed or delivered pursuant
to the terms of this Credit Agreement.

          "DEFAULT  RATE" means at any time five percent (5%) per annum over the
then applicable interest rate.

                                      -2-
<PAGE>
          "DISBURSEMENT": See Section 2.11.

          "DISBURSEMENT DATE": See Section 2.11.

          "DOLLARS"  and the sign "$" mean lawful  currency of the United States
of America.

          "ELIGIBLE  ACCOUNTS"  means those  accounts  receivable  of  Borrower,
except that Eligible Accounts shall not include any of the following:

               (a) Account balances over sixty (60) calendar days from
          the due date.

               (b) Accounts  with respect to which the account  debtor
          is an officer, director,  shareholder,  employee, subsidiary
          or affiliate of Borrower.

               (c)  Accounts  with respect to which 25% or more of the
          account  debtor's total accounts or obligations  outstanding
          to Borrower are more than sixty (60)  calendar days from due
          date.

               (d) As to accounts  representing  more than the Maximum
          Concentration   Percentage  of  Borrower's   total  accounts
          receivable outstanding at any time, the balance in excess of
          Maximum  Concentration  Percentage  plus balances over sixty
          (60) calendar days from the due date are not eligible, where
          the  "Maximum  Concentration  Percentage"  means  30%  as to
          Borrower's accounts with each of Walgreens, CVS, Walmart and
          Costco, and 20% as to all other accounts of Borrower.

               (e) Accounts with respect to international transactions
          unless insured by an insurance company  acceptable to Lender
          in its sole  discretion  or  covered  by  letters  of credit
          issued  or  confirmed  by a bank  acceptable  to  Lender  or
          otherwise  specifically  approved by Lender, in its sole and
          absolute discretion.

               (f) Credit  balances  greater than ninety (90) calendar
          days from invoice date.

               (g)  Accounts  where the account  debtor is a seller to
          Borrower, whereby a potential offset (contra) exists, to the
          extent of the offset.

               (h) Accounts of any department or agency of the federal
          government of the United States of America.

               (i) Consignment or guaranteed sales.

               (j) Bill and hold accounts.

                                      -3-
<PAGE>
               (k) Contracts receivable.

               (l) Progress  billings,  CODs,  container  receivables,
          non-trade receivables, Chapter 11 receivables.

          "ELIGIBLE  ACCOUNTS  AMOUNT"  means an amount  equal to sixty  percent
(60%) of the Eligible Accounts.

          "ELIGIBLE INVENTORY" means inventory held by Borrower that is finished
products.

          "ELIGIBLE  INVENTORY  AMOUNT"  means  thirty-three  percent  (33%)  of
Eligible  Inventory  from  April 1 to July 31 of each year and from  November  1
through December 31 of each year, and 0% of Eligible Inventory from January 1 to
March 31 of each year and from July 31 to October 31 of each year,  which amount
may not exceed Five Hundred Thousand Dollars ($500,000.00).

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
amended,  together  with all final and  permanent  regulations  issued  pursuant
thereto.  References  herein to sections and  subsections of ERISA are deemed to
refer to any successor or substitute provisions therefor.

          "EVENT OF DEFAULT": See Section 9.1 hereof.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934.

          "FINANCIAL COVENANTS": See Section 8.9 hereof.

          "GAAP"  means  those  generally  accepted  accounting  principles  and
practices  which are  recognized as such by the American  Institute of Certified
Public  Accountants  acting  through its Accounting  Principles  Board or by the
Financial  Accounting  Standards  Board or through other  appropriate  boards or
committees thereof and which are consistently  applied for all periods after the
date hereof so as to properly reflect the financial  condition,  and the results
of operations  and changes in the financial  position,  of Borrower,  subject to
Section 1.3 hereof.

          "GOVERNMENTAL  AUTHORITY"  means  any  government  (or  any  political
subdivision  or  jurisdiction   thereof),   court,   bureau,   agency  or  other
governmental authority having jurisdiction over Borrower or any of its business,
operations or properties.

          "HONOR DATE": See Section 2.15(a).

          "ISSUANCE  DATE"  means  the  date on  which a  Letter  of  Credit  is
delivered to the beneficiary thereof.

          "ISSUANCE  REQUEST"  means a  request  for a  Letter  of  Credit  duly
executed by Borrower in a form satisfactory to Lender.

          "ISSUE" means,  with respect to any Letter of Credit,  to issue or, by
amendment  or  otherwise,  to extend the expirey of, or to renew or decrease the
amount  of,  such  Letter of  Credit,  and the  terms  "ISSUE,"  "ISSUING,"  and
"ISSUANCE" have corresponding meanings.

                                      -4-
<PAGE>
          "INDEBTEDNESS"  of a  Person  means  each  of the  following  (without
duplication):  (a) obligations of that Person to any other Person for payment of
borrowed  money,  (b) capital lease  obligations,  (c) notes and drafts drawn or
accepted by that Person payable to any other Person, whether or not representing
obligations  for borrowed  money (but without  duplication of  indebtedness  for
borrowed  money),  (d) any  obligation  for the  purchase  price of property the
payment of which is deferred  for more than one year or  evidenced  by a note or
equivalent instrument,  (e) guarantees of Indebtedness of third parties, and (f)
a recourse or nonrecourse payment obligation of any other Person that is secured
by a Lien on any  property  of the first  Person,  whether or not assumed by the
first  Person,  up to the fair market value (from time to time) of such property
(absent  manifest  evidence  to the  contrary,  the  fair  market  value of such
property  shall be the  amount  determined  under GAAP for  financial  reporting
purposes).

          "INTEREST   COVERAGE  RATIO"  means  net  income  plus   depreciation,
amortization and interest expense,  all divided by interest expense,  calculated
in accordance with GAAP at each fiscal quarter end of the Borrower for the prior
four fiscal quarters.

          "IP SECURITY AGREEMENT": See Section 4.1(b) hereof.

          "LC DRAW FEE": See Section 3.3(b).

          "LC ISSUANCE FEE": See Section 3.3(a).

          "LENDER": See the Preamble hereto.

          "LETTER OF CREDIT"  means a letter of credit  issued by Lender for the
account of Borrower pursuant to Article 2.

          "LIEN" means any lien, mortgage,  security interest, tax lien, pledge,
encumbrance,  conditional  sale or title  retention  arrangement,  or any  other
interest in property  designed to secure the repayment of  Indebtedness  whether
arising by agreement or under any statute or law, or otherwise.

          "LIQUIDITY"  means total cash held by Borrower less the amount thereof
that is restricted  cash,  plus the value of all marketable  securities  held by
Borrower, measured at the end of each fiscal quarter of Borrower.

          "LOAN" or "LOANS" means the RLC.

          "MATERIAL  ADVERSE  EFFECT" means any  circumstance or event which (i)
has any  material  adverse  effect upon the  validity or  enforceability  of any
Credit Document,  (ii) materially impairs the ability of Borrower to fulfill its
obligations under the Credit  Documents,  or (iii) causes an Event of Default or
any event which,  with notice or lapse of time or both, would become an Event of
Default.

          "MATURITY DATE" means the RLC Maturity Date.

          "MAXIMUM LC  COMMITMENT"  means One Million Five Hundred  Thousand And
No/100 Dollars ($1,500,000.00).

                                      -5-
<PAGE>
          "MAXIMUM RLC LOAN AMOUNT": See Section 2.1 hereof.

          "NET  INCOME"  means,  for any period,  the net income of Borrower for
such period, determined in accordance with GAAP.

          "NOTE" or "NOTES" means the RLC Note.

          "OBLIGATION"  means all present and future  indebtedness,  obligations
and liabilities of Borrower to Lender, and all renewals and extensions  thereof,
or any part thereof, arising pursuant to this Credit Agreement or represented by
the  Note,  including  without  limitation  the Loan and all  interest  accruing
thereon,  and attorneys' fees incurred in the enforcement or collection thereof,
regardless of whether such indebtedness, obligations and liabilities are direct,
indirect, fixed, contingent,  joint, several or joint and several; together with
all indebtedness,  obligations and liabilities of Borrower  evidenced or arising
pursuant to any of the other Credit  Documents,  and all renewals and extensions
thereof, or part thereof.

          "OUTSTANDING  LC  BALANCE"  in  effect at any time  means the  maximum
aggregate  amount  available  to be drawn at such  time  under  all  outstanding
Letters of Credit, the determination of such maximum amount to assume compliance
with all conditions for a Disbursement.

          "PAYMENT DATE" means the first day of each month, provided that if any
such  day is not a  Banking  Day,  then  such  Payment  Date  shall  be the next
successive Banking Day.

          "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation,  and  any
successor  to  all  or  substantially   all  of  the  Pension  Benefit  Guaranty
Corporation's functions under ERISA.

          "PERMITTED LIENS" means:

          (a) Liens in Lender's favor.

          (b) Liens for taxes not delinquent.

          (c) Liens  resulting  from  purchase  money  financing  as to the
     personal property so financed and any sales proceeds therefrom.

          (d) Liens arising under that certain  Security  Agreement made as
     of December 5, 2001 by and between Gum Tech and Zensano, Inc.

          (e) The intellectual  property rights of Zensano, Inc. under that
     certain Intellectual  Property Development and License Agreement dated
     effective  May 21,  1999  among  Gum Tech,  Gel Tech and  Bio-Delivery
     Technologies,  Inc. (of which Zensano,  Inc. is the lawful successor),
     as  amended  by  that  certain   Confidentiality  and  Non-Competition
     Agreement  dated as of December 5, 2001 among Zengen,  Inc.,  Zensano,
     Inc., Gum Tech, Gel Tech and certain individuals.

                                      -6-
<PAGE>
          "PERSON"  includes an individual,  a corporation,  a joint venture,  a
partnership,   a  trust,  a  limited   liability   company,   an  unincorporated
organization or a government or any agency or political subdivision thereof.

          "PLAN" means an employee defined benefit plan or other plan maintained
by  Borrower  for  employees  of Borrower  and covered by Title IV of ERISA,  or
subject to the minimum funding standards under Section 412 of the Code.

          "PRIME RATE" means the interest rate per annum  publicly  announced by
Lender,  or its successors,  as its "prime rate" as in effect from time to time.
Borrower  acknowledges that the Prime Rate is not necessarily the best or lowest
rate  offered by Lender and Lender may lend to its  customers  at rates that are
at, above or below its Prime Rate.

          "QUICK  RATIO"  means  total  cash  held  by  Borrower  plus  Eligible
Accounts, all divided by total current liabilities of Borrower,  measured at the
end of each fiscal quarter of Borrower.

          "REGULATION  U"  means  Regulation  U  promulgated  by  the  Board  of
Governors  of the  Federal  Reserve  System,  12 C.F.R.  Part 221,  or any other
regulation hereafter promulgated by said Board to replace the prior Regulation U
and having substantially the same function.

          "REPORTABLE  EVENT"  means  any  "reportable  event" as  described  in
Section  4043(b)  of ERISA  with  respect  to which the  thirty  (30) day notice
requirement has not been waived by the PBGC.

          "RLC": See Recital A hereof.

          "RLC ADVANCE" means a disbursement of the proceeds of the RLC.

          "RLC  BALANCE"  means (i) with  respect  to the RLC on any  date,  the
aggregate  outstanding  principal  amount  thereof  after  giving  effect to any
borrowings and prepayments or repayments of RLC Advances occurring on such date;
plus (ii) with respect to any Outstanding LC Obligations on any date, the amount
of such LC  Obligations  on such date after  giving  effect to any  Issuances of
Letters of Credit  occurring on such date and any other changes in the aggregate
amount of the  Outstanding  LC Obligations  as of such date,  including  changes
occurring as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any  reductions  in the maximum  amount  available  for
drawing under Letters of Credit taking effect on such date.

          "RLC    COMMITMENT"    means   Four   Million   And   No/100   Dollars
($4,000,000.00).

          "RLC MATURITY DATE" means May 15, 2003.

          "RLC NOTE" means that Revolving  Promissory Note of even date herewith
in the amount of the RLC Commitment, executed by Borrower and delivered pursuant
to the terms of this Credit Agreement,  together with any renewals,  extensions,
modifications or replacements thereof.

                                      -7-
<PAGE>
          "SECURITY AGREEMENT": See Section 4.1(a) hereof.

          "SECURITY DOCUMENTS": See Section 4.2 hereof.

          "SIGNIFICANT  DEBT  AGREEMENT"  means all documents,  instruments  and
agreements   executed  by  Borrower,   evidencing,   securing  or  ensuring  any
Indebtedness of Borrower or any guaranty in excess of $100,000.00 in outstanding
principal (or principal equivalent) amount.

          "STATED  AMOUNT" of a Letter of Credit  means the amount of the Letter
of Credit as stated in the Letter of Credit.

          "STATED  EXPIRY  DATE" of a Letter of Credit  means the stated  expiry
date or expiration date as stated in the Letter of Credit.

          "SUBORDINATED DEBT" means Indebtedness of Borrower subordinated to the
payment of the Obligation pursuant to written agreements acceptable to Lender.

          "SUBSIDIARY"  means  any  corporation  of which  more  than 50% of the
outstanding  shares of capital stock having  general voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation,
irrespective  of whether or not at the time stock of any other  class or classes
shall  have or  might  have  voting  power by  reason  of the  happening  of any
contingency, is at the time directly or indirectly owned by the Borrower, by the
Borrower  and  one  or  more  other  Subsidiaries,  or  by  one  or  more  other
Subsidiaries.

          "TANGIBLE  NET  WORTH"  means  the sum of the total  shareholders'  or
members'  equity  (including  capital  stock,  additional  paid in  capital  and
retained  earnings after  deducting  treasury  stock or the equivalent  thereof)
which would appear on a balance sheet of Borrower  prepared in  accordance  with
GAAP as of the end of each  fiscal  quarter  of  Borrower,  less  the sum of the
aggregate  book value of  "Intangible  Assets" (as defined  below) shown on such
balance sheet and any amounts due from stockholders,  officers and Affiliates of
Borrower.  "Intangible  Assets" means those assets that are (i) deferred assets,
other than prepaid  taxes;  (ii) patents,  copyrights,  trademarks,  tradenames,
franchises,  goodwill,  experimental  expenses,  organization  expense and other
similar assets which would be classified as intangible assets on a balance sheet
prepared in  accordance  with GAAP;  and (iii)  unamortized  debt  discount  and
expense, all measured as of each fiscal quarter end.

          "VARIABLE  RATE"  means the rate per annum equal to the sum of one and
one-half  percent  (1.5%) and the Prime Rate per annum as in effect from time to
time. The Variable Rate will change on each day that the "Prime Rate" changes.

          "VARIABLE  RATE ADVANCE"  means an Advance that bears  interest at the
Variable Rate.

     1.2  REFERENCES.  Capitalized terms shall be equally applicable to both the
singular  and the  plural  forms of the terms  therein  defined.  References  to
"Credit Agreement," "this Agreement," "herein," "hereof,"  "hereunder," or other
like words mean this  Credit  Agreement  as amended,  supplemented,  restated or
otherwise modified and in effect from time to time.

                                      -8-
<PAGE>
     1.3  ACCOUNTING TERMS. Except as expressly provided to the contrary herein,
all  accounting  terms shall be interpreted  and all  accounting  determinations
shall be made in accordance with GAAP, except as otherwise specifically provided
for  herein.  To the  extent  any  change in GAAP  affects  any  computation  or
determination  required  to be made  pursuant  to this  Credit  Agreement,  such
computation  or  determination  shall be made as if such  change in GAAP had not
occurred  unless  Borrower and Lender agree in writing on an  adjustment to such
computation or determination to account for such change in GAAP.

                                   ARTICLE 2.

                                     THE RLC

     2.1  RLC  COMMITMENT.  Subject to the conditions  herein set forth,  Lender
agrees to make the RLC available to or for the benefit of Borrower, and Borrower
agrees to draw upon the RLC,  in the  manner  and upon the terms and  conditions
herein expressed, amounts that, in the aggregate, shall not exceed the lesser of
the following (the "Maximum RLC Loan Amount"):

          (a) The RLC Commitment, less the Outstanding LC Balance.

          (b) The Borrowing Base.

     2.2  REVOLVING LINE OF CREDIT.

          (a) Subject to the terms and  conditions set forth in this Credit
     Agreement,  the RLC shall be a revolving line of credit, against which
     RLC Advances  may be made to Borrower,  repaid by Borrower and new RLC
     Advances made to Borrower, as Borrower may request,  provided that (i)
     no RLC  Advance  shall  be  made  if an  Event  of  Default  shall  be
     continuing,  (ii) no RLC  Advance  shall be made that would  cause the
     outstanding  principal  balance of the RLC to exceed the  Maximum  RLC
     Loan  Amount,  and (iii) no RLC Advance  shall be made on or after the
     RLC Maturity Date.

          (b) The RLC shall be evidenced by the RLC Note.

     2.3  RLC  PAYMENTS.  The RLC shall bear  interest  and be payable to Lender
upon the following terms and conditions:

          (a)  Interest  shall  accrue on the  unpaid  principal  of an RLC
     Advance at the Variable Rate.

          (b) All interest shall be computed on the basis of a 360-day year
     and accrue on a daily basis for the actual number of days elapsed. All
     accrued and unpaid  interest  through the end of the  preceding  month
     shall be due and payable on each Payment Date.

          (c) The entire unpaid principal  balance,  all accrued and unpaid
     interest,  and all other  amounts  payable under the RLC Note shall be
     due and payable in full on the RLC Maturity Date.

                                      -9-
<PAGE>
          (d) Each request for an RLC Advance shall be substantially in the
     form  attached  hereto as Exhibit "A" from an  Authorized  Officer and
     shall,  in addition to complying with the other  requirements  in this
     Credit  Agreement,  specify the date and amount of the  requested  RLC
     Advance.  Each  request for an RLC Advance  shall be  irrevocable  and
     binding  on the  Borrower  once the  request  is  received  by Lender.
     Borrower  shall  indemnify  Lender  against any cost,  loss or expense
     incurred by Lender as a result of Borrower's failure to fulfill, on or
     before the date specified for an RLC Advance in any request for an RLC
     Advance,  the  conditions  to  such  RLC  Advance  set  forth  herein,
     including  any  cost,  loss  or  expense  incurred  by  reason  of the
     liquidation  or  reemployment  of deposits or other funds  acquired by
     Lender to fund such RLC Advance when such RLC Advance,  as a result of
     such failure, is not made on the date so specified.

          (e) If any payment of interest  and/or  principal is not received
     by Lender  within ten (10) days of when such  payment is due,  then in
     addition  to the  remedies  conferred  upon  Lender  under the  Credit
     Documents,  a late  charge of five  percent  (5%) of the amount of the
     installment  due and unpaid will be added to the delinquent  amount to
     compensate  Lender for the expense of handling the delinquency for any
     payment past due in excess of ten (10) days,  regardless of any notice
     and cure period.

          (f)  Upon  the  occurrence  of an  Event  of  Default  and  after
     maturity,  including maturity upon acceleration,  the unpaid principal
     balance, all accrued and unpaid interest and all other amounts payable
     hereunder shall bear interest at the Default Rate.

     2.4  EXCESS BALANCE  PAYMENT.  There shall be due and payable from Borrower
to Lender,  and Borrower shall repay to Lender,  within five (5) days of written
demand  from  Lender,  from time to time,  any  amount by which the  outstanding
principal balance of the RLC exceeds the Maximum RLC Loan Amount.

     2.5  CONDITIONS.  Lender shall have no  obligation  to make any RLC Advance
unless and until all of the conditions and requirements of this Credit Agreement
are fully  satisfied.  However,  Lender in its sole and absolute  discretion may
elect to make one or more RLC Advances prior to full satisfaction of one or more
such conditions and/or requirements. Notwithstanding that such an RLC Advance or
RLC Advances are made, such unsatisfied conditions and/or requirements shall not
be waived or released thereby. Borrower shall be and continue to be obligated to
fully satisfy such  conditions  and  requirements,  and Lender,  at any time, in
Lender's sole and absolute  discretion,  may stop making RLC Advances  until all
conditions and requirements are fully satisfied.

     2.6  OTHER RLC ADVANCES BY LENDER.  Lender,  after giving fifteen (15) days
prior written  notice to Borrower to allow for corrective  action,  from time to
time,  may make RLC  Advances in any amount in payment of accrued and unpaid (i)
insurance premiums, taxes,  assessments,  liens or encumbrances existing against
property  encumbered  by the Security  Documents,  (ii) any charges and expenses
that are the obligation of Borrower under this Credit  Agreement or any Security

                                      -10-
<PAGE>
Document,  and (iii) any charges or matters  necessary  to preserve the property
encumbered  by the  Security  Documents or to cure any still  existing  Event of
Default.

     2.7  ASSIGNMENT. Borrower shall have no right to any RLC Advance other than
to have the  same  disbursed  by  Lender  in  accordance  with the  disbursement
provisions  contained  in this Credit  Agreement.  Any  assignment  or transfer,
voluntary or involuntary,  of this Credit Agreement or any right hereunder shall
not be binding  upon or in any way affect  Lender  without its written  consent;
Lender  may  make  RLC  Advances  under  the  disbursement   provisions  herein,
notwithstanding any such assignment or transfer.

     2.8  ISSUANCE OF LETTERS OF CREDIT.

          (a) Subject to the terms and conditions of this Credit Agreement,
     (i) Lender  agrees from time to time before the RLC  Maturity  Date to
     issue  Letters  of  Credit  for  the  account  of the  Borrower.  Each
     reference  in this Credit  Agreement to the "Issue" or  "Issuance"  or
     other forms of such words in  relation  to Letters of Credit  shall be
     deemed to include any extension or renewal of a Letter of Credit.

          (b) Each  Letter of Credit  shall (i) by its terms be issued in a
     Stated  Amount;  (ii) have a Stated  Expiry Date no later than the RLC
     Maturity  Date;  (iii)  expire  or be  terminated  by the  beneficiary
     thereunder on or before its Stated Expiry Date; (iv) not cause the RLC
     Balance  after the issuance of said Letter of Credit to exceed the RLC
     Commitment;  and (v) not cause the  Outstanding  LC Balance  after the
     issuance  of said  Letter of Credit  to exceed  the  lesser of (1) the
     Maximum LC Commitment or (2) the Assigned Account Amount.

          (c) In addition to the  conditions  otherwise  specified  in this
     Section, the obligation of Lender to issue a Letter of Credit shall be
     subject  to  the  further  condition   precedent  that  the  following
     statements  shall be  correct,  and each of the  application  for such
     Letter of  Credit  and the  issuance  of such  Letter of Credit  shall
     constitute a representation  and warranty by Borrower that on the date
     of the issuance of such Letter of Credit such statements are correct:

               (i) The representations and warranties in Article 6 are
          correct on and as of the date of the issuance of such Letter
          of Credit,  before and after giving effect to such issuance,
          as though made on and as of such date;

               (ii)  No  Event  of  Default   has   occurred   and  is
          continuing; and

               (iii) The  conditions in Section  2.2(a) and 2.8(b) are
          satisfied  as of the  date  of  issuance  of the  Letter  of
          Credit, before and after giving effect to such issuance.

                                      -11-
<PAGE>
     2.9  ISSUANCE PROCEDURE FOR LETTER OF CREDIT.

          (a) By  delivery  to Lender of an  Issuance  Request on or before
     9:00 a.m. (Phoenix,  Arizona time) three (3) Banking Days prior to the
     requested  Issuance Date, and the execution of such  applications  and
     agreements as Lender may reasonably request,  Borrower may request the
     issuance of a Letter of Credit in such form as Borrower may reasonably
     request. Each Issuance Request shall include the form of the Letter of
     Credit,  the amount and other terms thereof.  Subject to the terms and
     conditions of this Credit Agreement,  Lender will issue such Letter of
     Credit  on  the  Issuance  Date  specified  in  the  Issuance  Request
     submitted in connection therewith.  Lender and Borrower agree that all
     Letters of Credit  issued  pursuant to the terms of this Article shall
     be subject to the terms and conditions,  and entitled to the benefits,
     of this Credit Agreement and the other Credit Documents.

          (b) At the time of  delivery by Borrower to Lender of an Issuance
     Request,  in the event  that  after  giving  effect  to such  Issuance
     Request the  Outstanding LC Balance would exceed the Assigned  Account
     Amount, Borrower shall deliver to Lender one or more time certificates
     of deposit  accounts  together  with an  executed  Assignment  of Time
     Certificate of Deposit in the form of Exhibit "E" hereto for each such
     Time Certificate of Deposit Account.

     2.10 LETTER OF CREDIT FEES.  Upon  issuance of a Letter of Credit  Borrower
agrees to pay to Lender a non-refundable LC Issuance Fee. Borrower agrees to pay
the LC Draw Fee upon each draw  against a Letter  of  Credit.  Borrower  further
agrees  to pay to  Lender a charge  for all  reasonable  expenses  of  Lender in
connection  with the issuance,  amendment,  modification  or  negotiation of the
Letter of Credit.

     2.11 DISBURSEMENTS.  Lender will notify  Borrower  of the  presentment  for
payment of a Letter of Credit by any beneficiary  thereto,  together with notice
of the date (the "Disbursement Date") such payment shall be made. Subject to the
terms and provisions of the Letter of Credit,  Lender shall make such payment (a
"Disbursement")  to  the  beneficiary  of  the  Letter  of  Credit.   Each  such
Disbursement shall be deemed to be an RLC Advance hereunder.

     2.12 REIMBURSEMENT  OBLIGATIONS  OF  BORROWER.   Borrower's  obligation  to
reimburse  the Lender  with  respect to each  Disbursement  (including  interest
thereon) in respect of any Letter of Credit shall be absolute and  unconditional
under any and all circumstances and irrespective of any setoff, counterclaim, or
defense to payment  which  Borrower  may have or have had against  Lender or the
beneficiary  thereof,  including  any defense  based upon the  occurrence of any
Event of Default,  any draft,  demand or certificate or other document presented
under  the  Letter  of Credit  proving  to be  forged,  fraudulent,  invalid  or
insufficient,  the  failure of any  Disbursement  to conform to the terms of the
Letter of Credit (if, in  Lender's  good faith  opinion,  such  Disbursement  is
determined to be appropriate) or any  non-application  or  misapplication by the
beneficiary  of the proceeds of such  Disbursement,  or the legality,  validity,
form, regularity or enforceability of the Letter of Credit;  PROVIDED,  HOWEVER,
that nothing herein shall adversely affect the right of Borrower to commence any
proceeding against Lender for any wrongful Disbursement made by Lender under the

                                      -12-
<PAGE>
Letter of Credit as a result of acts or omissions  constituting gross negligence
or willful misconduct on the part of Lender.

     2.13 NATURE OF REIMBURSEMENT  OBLIGATIONS.  Borrower shall assume all risks
of the acts,  omissions  or misuse  of any  Letter of Credit by the  beneficiary
thereof.  Lender  (except to the extent of its own gross  negligence  or willful
misconduct) shall not be responsible for:

          (a) the form,  validity,  sufficiency,  accuracy,  genuineness or
     legal effect of any Letter of Credit or any document  submitted by any
     party in connection with the issuance of any Letter of Credit, even if
     such  document  should  in  fact  prove  to be in any or all  respects
     invalid, insufficient, inaccurate, fraudulent or forged;

          (b) the form,  validity,  sufficiency,  accuracy,  genuineness or
     legal effect of any instrument transferring or assigning or purporting
     to transfer or assign any Letter of Credit;

          (c) failure of any  beneficiary of any Letter of Credit to comply
     fully with  conditions  required  in order to demand  payment  under a
     Letter of Credit;

          (d) errors, omissions,  interruption or delays in transmission or
     delivery  of  any  messages,  by  mail,  cable,  telegraph,  telex  or
     otherwise; or

          (e) any loss or delay in the  transmission  or  otherwise  of any
     document  or draft  required by or from a  beneficiary  of a Letter of
     Credit in order to make a Disbursement  under a Letter of Credit or of
     the proceeds thereof.

None of the foregoing shall affect,  impair or prevent the vesting of any of the
rights or powers granted Lender hereunder. In furtherance and extension, and not
in limitation or derogation of any of the foregoing, any action taken or omitted
to be taken by Lender in good faith shall be binding upon the Borrower and shall
not put Lender under any resulting liability to Borrower.

     2.14 CERTAIN REQUIREMENTS. Lender shall be under no obligation to Issue any
Letter of Credit if:

          (a) any order,  judgment or decree of any Governmental  Authority
     or arbitrator  shall by its terms purport to enjoin or restrain Lender
     from  Issuing  such  Letter  of  Credit,  or  any  requirement  of law
     applicable  to Lender or any  request or  directive  (with which it is
     customary for banks in the relevant  jurisdiction to comply whether or
     not  having  the force of law) from any  Governmental  Authority  with
     jurisdiction  over  Lender  shall  prohibit,  or request  that  Lender
     refrain  from,  the  Issuance of letters of credit  generally  or such
     Letter  of Credit in  particular  or shall  impose  upon  Lender  with
     respect to such Letter of Credit any restriction,  reserve, or capital
     requirement (for which Lender is not otherwise compensated  hereunder)
     not in effect on the  Closing  Date,  or shall  impose upon Lender any
     unreimbursed  loss,  cost, or expense which was not  applicable on the
     Closing Date and which Lender in good faith deems material to it;

                                      -13-
<PAGE>
          (b) Lender has  received  written  notice that one or more of the
     applicable conditions contained in Article 5 is not then satisfied;

          (c) the Stated Expiry Date of any  requested  Letter of Credit is
     not in accord with the requirements of Section 2.8(b)(ii);

          (d) any  requested  Letter of Credit does not provide for drafts,
     or is not otherwise in form and substance acceptable to Lender, or the
     Issuance of a Letter of Credit shall violate any  applicable  policies
     of Lender; or

          (e) such  Letter  of Credit is to be  denominated  in a  currency
     other than Dollars.

     2.15 DRAWINGS AND REIMBURSEMENTS.

          (a) In the event of any request for a drawing under a Letter of Credit
     by the beneficiary or transferee  thereof,  Lender will promptly notify the
     Borrower.  Lender shall honor any Disbursement  request under any Letter of
     Credit only if (i) such request is  delivered to Lender by the  beneficiary
     of such  Letter of  Credit,  and (ii) such  request is  accompanied  by the
     original  documents  required by the Letter of Credit for any Disbursement.
     Except as otherwise  provided  herein,  the Borrower shall reimburse Lender
     prior to 11:00 a.m.  (Phoenix,  Arizona  local  time) on each date that any
     amount is paid by Lender  under any Letter of Credit  (each  such date,  an
     "Honor Date"), in an amount equal to the amount so paid by Lender.

          (b) In the event that the  Borrower is required but fails to reimburse
     Lender  for the full  amount of any  drawing  under any Letter of Credit by
     11:00 a.m.  (Phoenix,  Arizona local time) on the Honor Date,  Lender shall
     (subject  to  paragraph  (d)) be deemed to have made an RLC  Advance to the
     Borrower in that amount.

     2.16 ROLE OF LENDER.  Borrower  agrees that,  in paying any drawing under a
Letter of  Credit,  Lender  shall  not have any  responsibility  to  obtain  any
document (other than any sight draft and certificates  expressly required by the
Letter of Credit) or to  ascertain  or inquire as to the validity or accuracy of
any such  document or the authority of the Person  executing or  delivering  any
such document.

                                   ARTICLE 3.

                          PAYMENTS AND FEES PROVISIONS

     3.1  PAYMENTS.

          (a) All payments and  prepayments by the Borrower of principal of
     and  interest  on the  Note  and all  fees,  expenses  and  any  other
     Obligation  payable to Lender in  connection  with the Loans  shall be
     nonrefundable  and made in Dollars or immediately  available  funds to
     Lender not later than 2:00 p.m.  (Phoenix,  Arizona local time) on the

                                      -14-
<PAGE>
     dates called for under this Credit Agreement,  at the office of Lender
     in Phoenix, Arizona. Funds received after such hour shall be deemed to
     have been received by Lender on the next Banking Day.

          (b) Unless otherwise required by applicable law, payments will be
     applied first to accrued, unpaid interest, then to principal,  and any
     remaining  amount to any unpaid  collection  costs,  late  charges and
     other charges;  provided,  however, upon delinquency or other default,
     Lender reserve the right to apply payments among principal,  interest,
     late charges, collection costs and other charges at its discretion.

          (c)  Interest  shall  be due and  payable  on the  Loans  on each
     Payment Date and on the Maturity Date.

          (d) Whenever any payment to be made hereunder  shall be stated to
     be due on a day which is not a Banking Day, such payment shall be made
     on the next  succeeding  Banking Day, and such extension of time shall
     in such case be included in the computation of interest, commission or
     fee, as the case may be.

          (e) Borrower  authorizes  Lender to collect all  interest,  fees,
     costs,  and/or  expenses  due under this Credit  Agreement by charging
     Borrower's  demand deposit account number  1891718866 with Lender,  or
     any other demand deposit  account  maintained by Borrower with Lender,
     for the full amount thereof. Should there be insufficient funds in any
     such demand  deposit  account to pay all such sums when due,  the full
     amount of such  deficiency  shall be  immediately  due and  payable by
     Borrower.

     3.2  COMMITMENT FEE. Borrower agrees to pay to Lender on the Closing Date a
fee (the  "Commitment  Fee") in the amount of Two  Thousand  And No/100  Dollars
($2,000.00).

     3.3  LETTER OF CREDIT FEES.

          (a) Borrower  agrees to pay Lender a fee (the "LC Issuance  Fee")
     equal to One and One-Quarter Percent (1.25%) of the face value of each
     Letter of Credit issued by Lender for the account of Borrower pursuant
     to Section 2.10 hereof.

          (b) Borrower agrees to pay Lender a fee (the "LC Draw Fee") equal
     to One Quarter of One Percent  (0.25%) of the amount of each draw on a
     Letter of Credit issued by Lender for the account of Borrower pursuant
     to Section 2.10 hereof.

          (c)  Borrower  agrees to pay Lender a charge  for all  reasonable
     expenses  of  Lender  in  connection  with  the  issuance,  amendment,
     modification or negotiation of each Letter of Credit.

     3.4  COMPUTATIONS.  All fees and  interest on the Note shall be computed on
the basis of a year of 360-days/year  and accrue on a daily basis for the actual
number of days elapsed.

                                      -15-
<PAGE>
     3.5  MAINTENANCE OF ACCOUNTS. Lender shall maintain, in accordance with its
usual  practice,  an account or  accounts  evidencing  the  indebtedness  of the
Borrower and the amounts  payable and paid from time to time  hereunder.  In any
legal action or proceeding in respect of this Credit Agreement, the entries made
in the ordinary course of business in such account or accounts shall be evidence
of the  existence  and  amounts  of the  obligations  of  the  Borrower  therein
recorded.  The failure to record any such amount  shall not,  however,  limit or
otherwise affect the obligations of the Borrower  hereunder to repay all amounts
owed  hereunder,  together with all interest  accrued thereon as provided in the
Note.

                                   ARTICLE 4.

                                    SECURITY

     4.1  SECURITY. So long as the Loan is outstanding, Borrower shall cause the
Loan and Borrower's obligations under this Credit Agreement to be secured at all
times by the following:

          (a) a valid  and  effective  security  agreement  (the  "Security
     Agreement"),  duly executed and delivered by or on behalf of Borrower,
     granting  Lender a valid and enforceable  security  interest in all of
     its personal property as described therein,  subject to no prior Liens
     except for Permitted Liens; and

          (b) by a  valid  and  effective  intellectual  property  security
     agreement (the "IP Security Agreement") duly executed and delivered by
     or on  behalf of  Borrower,  granting  Lender a valid and  enforceable
     security  interest  in  all  of its  intellectual  property  described
     therein, subject to no prior Liens except for Permitted Liens.

     4.2  OUTSTANDING LC BALANCE. So long as there is an Outstanding LC Balance,
the amount of such  Outstanding LC Balance shall be secured by time  certificate
of deposit  accounts such that the Assigned  Account Amount at all times exceeds
the Outstanding LC Balance.

     4.3  SECURITY  DOCUMENTS.  All of the documents  required by this Article 4
shall be in form satisfactory to Lender and Lender's counsel, and, together with
any  Financing  Statements  for filing  and/or  recording,  and any other  items
required  by Lender  to fully  perfect  and  effectuate  the liens and  security
interests  of Lender  contemplated  by the Security  Agreement,  and this Credit
Agreement,  may  heretofore  or  hereinafter  be  referred  to as the  "Security
Documents."

     4.4  ZENSANO LIEN.  Lender hereby agrees that the security interest granted
by Gum Tech pursuant to the Security Agreement shall be, as to the 40% ownership
interest  in Gel Tech  subject  to a  security  interest  granted by Gum Tech to
Zensano, Inc. (the "Zensano Lien"), subordinate to the Zensano Lien.

                                      -16-
<PAGE>
                                   ARTICLE 5.

                              CONDITIONS PRECEDENT

     The  obligation of Lender to make any Loan and to make each and any Advance
hereunder is subject to the full prior satisfaction at each such time of each of
the following conditions precedent:

     5.1  INITIAL  ADVANCE.  Prior to its  making  the  initial  Advance  unless
otherwise provided hereinbelow, Lender shall have received the following each in
form and substance satisfactory to Lender:

          (a) THIS CREDIT AGREEMENT.  This Credit Agreement,  duly executed
     and delivered to Lender by Borrower.

          (b) THE RLC NOTE. The RLC Note, duly executed, drawn to the order
     of Lender and otherwise as provided in Article 2 hereof.

          (c) ORGANIZATIONAL  DOCUMENTS. A copy of the current organization
     documents of Borrower,  including all amendments thereto, certified as
     current and  complete  by the  appropriate  authority  of the state of
     Borrower's  formation,  together with evidence of its good standing in
     the state of  formation  and in every other state in which it is doing
     business or the conduct of its business requires such standing for the
     enforcement of material contracts.

          (d) SECRETARY CERTIFICATE.  A certificate of the secretary of Gum
     Tech, signed by the duly appointed  secretary thereof and issued as of
     the Closing Date,  certifying that (i) attached  thereto is a true and
     complete copy of its organizational documents in effect on the date of
     passage of the authorizations  described  immediately below and at all
     subsequent  times to and including the date of the  certificate,  (ii)
     attached thereto is a true and complete copy of any of its resolutions
     or authorizations  authorizing the Loan, the execution,  delivery, and
     performance of this Credit Agreement,  the Note, the Credit Documents,
     and all advances of credit  hereunder,  and that such resolutions have
     not been  modified,  rescinded,  or amended  and are in full force and
     effect,  (iii) no change has been made to its charter  documents other
     than as reflected in the certified copies submitted in connection with
     the  delivery  of this Credit  Agreement  or as approved in writing by
     Lender,  and (iv) set forth therein and  appropriately  identified are
     the names,  current  official  titles,  and signatures of its officers
     authorized  to sign this Credit  Agreement  and other  documents to be
     delivered hereunder and/or to act as Authorized Person hereunder.

          (e) BORROWING  AUTHORIZATION.  A Borrowing Authorization executed
     by the  members  and  manager of Gel Tech,  authorizing  the RLC,  the
     execution,  delivery,  and performance of this Credit  Agreement,  the
     Note, the Credit Documents, and all advances of credit hereunder.

                                      -17-
<PAGE>
          (f) SECURITY AGREEMENT.  Security  Agreements,  duly executed and
     delivered to Lender by Borrower.

          (g) IP SECURITY AGREEMENT. IP Security Agreements,  duly executed
     and delivered to Lender by Borrower and, if required by Lender,  filed
     with the US Patent Office.

          (h)   COMPLIANCE    CERTIFICATE.    A   Compliance    Certificate
     substantially in the form of Exhibit "B" attached  hereto,  indicating
     that  Borrower is in  compliance  with the  Financial  Covenants as of
     March 31, 2002.

          (i) FEES AND COSTS.  Payment of the  Commitment  Fee and costs of
     the Lender.

          (j) FINANCING STATEMENTS. Financing Statements.

          (k)  ACCOUNTS  RECEIVABLE.  A listing  and aging of the  accounts
     receivable of Borrower as of March 31, 2002.

          (l) BORROWER'S  FINANCIAL  STATEMENTS.  Borrower's March 31, 2002
     financial   statements.   Lender   acknowledges  having  received  the
     financial statements.

          (m) LANDLORD AND  WAREHOUSE  WAIVERS.  To the extent  required by
     Lender,  (i) lien waivers  substantially  in the form of Exhibit "D-1"
     attached  hereto,  executed by the  landlord  of each leased  premises
     where   collateral  is  located,   if  any;  and,  (ii)  lien  waivers
     substantially in the form of Exhibit "D-2" attached  hereto,  executed
     by the owner of each warehouse where collateral is located.

          (n) ADDITIONAL INFORMATION.  Such other information and documents
     as may reasonably be required by Lender or Lender's counsel.

     5.2  NO EVENT OF DEFAULT.  No Event of Default known to Borrower shall have
occurred and be continuing, or result from Lender's making of any Loan.

     5.3  NO  MATERIAL  ADVERSE  EFFECT.  Since  the  date  of the  most  recent
financial  statements  provided  to Lender by  Borrower,  no change  shall  have
occurred in the  business or financial  condition of Borrower  that could have a
Material Adverse Effect.

     5.4  REPRESENTATIONS  AND WARRANTIES.  The  representations  and warranties
contained  in  Article  6  hereof  shall  be true and  correct  in all  material
respects, with the same force and effect as though made on and as of the Closing
Date  (other than those of such  representations  which by their  express  terms
speak to a date prior to that date, which representations shall, in all material
respects, be true and correct as of such respective date).

                                      -18-
<PAGE>
                                   ARTICLE 6.

                         REPRESENTATIONS AND WARRANTIES

     To induce  Lender to make the Loan,  Borrower  represents  and  warrants to
Lender that:

     6.1  RECITALS.  The recitals  and  statements  of intent  appearing in this
Credit Agreement are true and correct.

     6.2  ORGANIZATION AND GOOD STANDING. It is duly organized, validly existing
and in good standing in all states  and/or  countries in which the nature of its
business and property makes such qualifications necessary or appropriate. It has
the corporate or limited  liability  power and authority (as  applicable) to own
its  properties  and assets and to transact  the business in which it is engaged
and is or will be qualified in those states and/or countries  wherein the nature
of its proposed business and property will make such qualifications necessary or
appropriate in the future.

     6.3  AUTHORIZATION  AND POWER.  It has the  corporate or limited  liability
power and requisite  authority (as  applicable) to execute,  deliver and perform
this Credit Agreement, the Note and the other Credit Documents to be executed by
it; it is duly authorized to, and has taken all action,  corporate or otherwise,
necessary  to  authorize  it  to,  execute,  deliver  and  perform  this  Credit
Agreement,  the Note and such other Credit Documents and is and will continue to
be duly  authorized  to perform this Credit  Agreement,  the Note and such other
Credit Documents.

     6.4  SECURITY  DOCUMENTS.  The liens,  security  interests and  assignments
created by the Security  Documents will, when granted,  be valid,  effective and
enforceable liens, security interests and assignments,  except to the extent (if
any) otherwise agreed in writing by Lender.

     6.5  NO CONFLICTS OR CONSENTS.  Neither the  execution and delivery of this
Credit Agreement, the Note or the other Credit Documents to which it is a party,
nor the consummation of any of the transactions herein or therein  contemplated,
nor  compliance  with the  terms  and  provisions  hereof  or with the terms and
provisions  thereof,  (a) will  materially  contravene or conflict with: (i) any
provision  of law,  statute  or  regulation  to  which it is  subject,  (ii) any
judgment, license, order or permit applicable to it, (iii) any indenture, credit
agreement, mortgage, deed of trust, or other agreement or instrument to which it
is a party or by which it may be bound,  or to which it may be  subject,  or (b)
will  violate  any  provision  of  its  organizational  documents.  No  consent,
approval, authorization or order of any court or Governmental Authority or other
Person is required in  connection  with the  execution and delivery by it of the
Credit  Documents  or to  consummate  the  transactions  contemplated  hereby or
thereby, or if required,  such consent,  approval,  authorization or order shall
have been obtained.

     6.6  NO  LITIGATION.  Except as expressly  disclosed  in Gum Tech's  Annual
Report on Form  10-K for the year  ended  December  31,  2001 as filed  with the
Securities  and  Exchange  Commission  or as  otherwise  disclosed in writing to
Lender,  there  are no  actions,  suits  or  legal,  equitable,  arbitration  or
administrative  proceedings  pending,  or to Borrower's actual knowledge overtly

                                      -19-
<PAGE>
threatened,  against  Borrower  that  would,  if  adversely  determined,  have a
Material Adverse Effect.

     6.7  FINANCIAL  CONDITION.  It  has  delivered  to  Lender  copies  of  the
Borrower's most recent financial statements.  Such financial statements,  in all
material  respects,  fairly and  accurately  present the  financial  position of
Borrower as of such date, have been prepared in accordance with GAAP and neither
contain  any untrue  statement  of a material  fact nor fail to state a material
fact required in order to make such financial  statement not  misleading.  Since
the date thereof,  Borrower has not discovered any  obligations,  liabilities or
indebtedness  (including  contingent and indirect liabilities and obligations or
unusual  forward or long-term  commitments)  which in the aggregate are material
and adverse to the  financial  position or business of Borrower that should have
been but were not reflected in such  financial  statements.  No changes having a
Material Adverse Effect have occurred in the financial  condition or business of
Borrower since the date of such financial statements.

     6.8  TAXES.  It has filed or caused to be filed  all  returns  and  reports
which  are  required  to be  filed  by any  jurisdiction,  and has  paid or made
provision for the payment of all taxes, assessments,  fees or other governmental
charges  imposed  upon its  properties,  income or  franchises,  as to which the
failure  to file or pay  would  have a  Material  Adverse  Effect,  except  such
assessments  or  taxes,  if any,  which  are being  contested  in good  faith by
appropriate proceedings.

     6.9  NO  STOCK  PURCHASE.   No  part  of  the  proceeds  of  any  financial
accommodation  made by Lender in connection  with this Credit  Agreement will be
used to purchase or carry "margin  stock," as that term is defined in Regulation
U, or to extend  credit to others for the purpose of purchasing or carrying such
margin stock.

     6.10 ADVANCES.  Each  request  for an Advance or for the  extension  of any
financial  accommodation  by Lender  whatsoever  shall constitute an affirmation
that the representations  and warranties  contained herein are, true and correct
as of the time of such request.  All  representations and warranties made herein
shall survive the execution of this Credit  Agreement,  all advances of proceeds
of the  Loans  and  the  execution  and  delivery  of all  other  documents  and
instruments in connection with the Loans and/or this Credit  Agreement,  so long
as Lender has any  commitment  to lend  hereunder  and until the Loans have been
paid in full and all of Borrower's obligations under this Credit Agreement,  the
Note and all Security Documents have been fully discharged.

     6.11 ENFORCEABLE OBLIGATIONS. This Credit Agreement, the Note and the other
Credit  Documents  are the legal,  valid and binding  obligations  of  Borrower,
enforceable  against Borrower in accordance with their respective terms,  except
as limited by  bankruptcy,  insolvency or other laws or equitable  principles of
general application relating to the enforcement of creditors' rights.

     6.12 NO DEFAULT.  No event or condition has occurred and is continuing that
constitutes an Event of Default.

                                      -20-
<PAGE>
     6.13 SIGNIFICANT  DEBT  AGREEMENTS.  It is not in default  in any  material
respect under any Significant Debt Agreement.

     6.14 ERISA.  (a) No Reportable  Event has occurred and is  continuing  with
respect to any Plan;  (b) PBGC has not  instituted  proceedings to terminate any
Plan;  (c) neither the Borrower,  any member of the  Controlled  Group,  nor any
duly-appointed  administrator  of a Plan (i) has incurred any  liability to PBGC
with  respect to any Plan other than for premiums not yet due or payable or (ii)
has  instituted or intends to institute  proceedings to terminate any Plan under
Section  4041 or  4041A  of  ERISA;  and (d)  each  Plan of  Borrower  has  been
maintained and funded in all material  respects in accordance with its terms and
in all material  respects in accordance with all provisions of ERISA  applicable
thereto. Neither the Borrower nor any of its Subsidiaries participates in, or is
required  to make  contributions  to, any  Multi-employer  Plan (as that term is
defined in Section 3(37) of ERISA).

     6.15 COMPLIANCE  WITH LAW. It is in substantial  compliance  with all laws,
rules,  regulations,  orders, writs, injunctions and decrees that are applicable
to it, or its properties, noncompliance with which would have a Material Adverse
Effect.

     6.16 SOLVENT.  It  (both  before  and  after  giving  effect  to  the  Loan
contemplated hereby) is solvent, has assets having a fair value in excess of the
amount  required to pay its probable  liabilities  on its existing debts as they
become absolute and matured,  and has, and will have, access to adequate capital
for the  conduct of its  business  and the ability to pay its debts from time to
time incurred in connection therewith as such debts mature.

     6.17 INVESTMENT  COMPANY ACT. It is not, and is not directly or  indirectly
controlled  by, or acting on behalf  of,  any  person  which is, an  "Investment
Company" within the meaning of the Investment Company Act of 1940, as amended.

     6.18 TITLE. It has good and marketable title to the Collateral,  subject to
the Permitted Liens.

     6.19 SURVIVAL OF  REPRESENTATIONS,  ETC. All representations and warranties
by Borrower  herein shall  survive the making of the Loan and the  execution and
delivery  of the  Note;  any  investigation  at any time made by or on behalf of
Lender  shall not diminish  Lender's  right to rely on the  representations  and
warranties herein.

     6.20 ENVIRONMENTAL  MATTERS.  Except as  previously  disclosed to Lender in
writing,  it,  to the  best of its  knowledge  after  due  investigation,  is in
compliance in all material  respects with all applicable  environmental,  health
and safety  statutes and  regulations  and  Borrower  does not have any material
contingent  liability in  connection  with any improper  treatment,  disposal or
release into the environment of any hazardous or toxic waste or substance.

     6.21 LICENSES,  TRADENAMES.  It,  as of  the  date  hereof,  possesses  all
necessary  trademarks,  tradenames,  copyrights,  patents,  patent  rights,  and
licenses to conduct its  business as now  operated,  without any known  conflict
with valid  trademarks,  tradenames,  copyright  patents and  license  rights of
others (other than routine  objections  that Borrower files from time to time in
connection with pending trademark applications of other Persons).

                                      -21-
<PAGE>
     6.22 PERMITS. Debtor has obtained and there remain in full force and effect
all material licenses, permits, consents, approvals and authorizations necessary
or appropriate for the management and operation of such  improvements  for their
intended purpose that are obtainable as of the date hereof.

     6.23 PRIOR  REVOLVING  LINE OF  CREDIT.  Borrower  confirms  that  Gel Tech
currently has no outstanding  loans from Lender as of the date hereof. If at the
Closing Date Gel Tech has any  outstanding  loans from Lender,  proceeds will be
disbursed  from the Loan to pay the  outstanding  balance  of such loans and any
obligation of Lender to advance proceeds under such loans shall be terminated.

                                   ARTICLE 7.

                              AFFIRMATIVE COVENANTS

     Until  payment  in full of the Loans and the  complete  performance  of the
Obligation,  and so long  as  Lender  has any  commitment  to make  any  Advance
hereuner, Borrower agrees that:

     7.1  FINANCIAL  STATEMENTS,  REPORTS AND DOCUMENTS.  It shall  deliver,  or
cause to be delivered, to Lender each of the following:

          (a) ANNUAL  STATEMENTS  OF GUM TECH.  As soon as available and in
     any event within  ninety (90) days after the close of each fiscal year
     of  Gum  Tech,   audited  financial   statements  of  Gum  Tech  on  a
     consolidating and consolidated  basis,  including its balance sheet as
     of the close of such fiscal year and  statements of income of Gum Tech
     for such fiscal year, in each case setting forth in  comparative  form
     the figures for the preceding  fiscal year,  all in reasonable  detail
     and  accompanied  by an  unqualified  opinion  thereon of  independent
     public  accountants of recognized  national  standing  selected by Gum
     Tech and  acceptable  to  Lender,  to the effect  that such  financial
     statements have been prepared in accordance with GAAP.

          (b) QUARTERLY  STATEMENTS OF GUM TECH. As soon as available,  and
     in any event  within  thirty  (30) days  after the end of each  fiscal
     quarter of Gum Tech, company-prepared financial statements of Gum Tech
     on a consolidating and consolidated basis, including its balance sheet
     as of the close of such fiscal quarter and statements of income of Gum
     Tech  for  such  fiscal  quarter,   in  each  case  setting  forth  in
     comparative form the figures for the preceding fiscal quarter,  all in
     reasonable detail and prepared in accordance with GAAP.

          (c) MONTHLY REPORT OF ACCOUNTS. As soon as available,  and in any
     event  within  thirty (30) days after the end of each month,  listings
     and agings of Borrower's accounts payable and accounts receivable, for
     the prior month,  all in reasonable  detail and prepared in accordance
     with GAAP.

          (d) COMPLIANCE CERTIFICATE OF BORROWER. As soon as available, and
     in any event  within  thirty  (30) days after the close of each fiscal
     quarter,  a  certificate  signed  by  the  Authorized  Person  of  the
     Borrower,  substantially  in the form of Exhibit "B"  attached  hereto

                                      -22-
<PAGE>
     certifying  that after a review of the  activities of Borrower  during
     such period,  Borrower has observed,  performed and fulfilled each and
     every obligation and covenant contained herein and no Event of Default
     exists  under any of the same or, if any Event of  Default  shall have
     occurred,  specifying the nature and status thereof,  and stating that
     all financial  statements of Gum Tech or Borrower  delivered to Lender
     during the respective  period pursuant to Sections 7.1(a),  7.1(b) and
     7.1(c) hereof,  to his/her  knowledge,  fairly present in all material
     respects the financial position of the Gum Tech and the results of its
     operations at the dates and for the periods  indicated,  and have been
     prepared in accordance  with GAAP,  together with a calculation of the
     Financial Covenants.

          (e) BORROWING BASE CERTIFICATE.  As soon as available, and in any
     event within thirty (30) days after the end of each month, a Borrowing
     Base Certificate  substantially in the form attached hereto as Exhibit
     "C".

          (f) OTHER  INFORMATION.  Such other  information  concerning  the
     business,  properties  or  financial  condition  of Borrower as Lender
     shall reasonably request.

     7.2  MAINTENANCE OF EXISTENCE AND RIGHTS; CONDUCT OF BUSINESS;  MANAGEMENT.
It will preserve and maintain its  existence and all of its rights,  privileges,
licenses,  permits,  franchises  and other rights  necessary or desirable in the
normal conduct of its business, conduct its business in an orderly and efficient
manner  consistent  with  good  business  practices  and  maintain  professional
management of its business.

     7.3  OPERATIONS  AND  PROPERTIES.  It will keep in good  working  order and
condition,  ordinary wear and tear  excepted,  all of its assets and  properties
which are necessary to the conduct of its business.

     7.4  AUTHORIZATIONS  AND APPROVALS.  It will maintain,  at its own expense,
all such governmental licenses, authorizations,  consents, permits and approvals
as may be  required to enable it to comply with its  obligations  hereunder  and
under the other Credit  Documents and to operate its  businesses as presently or
hereafter duly conducted.

     7.5  COMPLIANCE WITH LAW. It will comply with all applicable  laws,  rules,
regulations,  and all final,  nonappealable orders of any Governmental Authority
applicable to it or any of its property,  business  operations or  transactions,
including without limitation,  any environmental laws applicable to it, a breach
of which could result in a Material Adverse Effect.

     7.6  PAYMENT OF TAXES AND OTHER INDEBTEDNESS. It will pay and discharge (i)
all income taxes and payroll taxes, (ii) all taxes, assessments,  fees and other
governmental  charges imposed upon it or upon its income or profits, or upon any
property belonging to it, before delinquent, which become due and payable, (iii)
all lawful claims (including claims for labor,  materials and supplies),  which,
if unpaid,  might  become a Lien upon any of its  property,  and (iv) all of its
Indebtedness  as it becomes due and  payable,  except as  prohibited  hereunder;
provided,  however,  that  it  shall  not be  required  to  pay  any  such  tax,
assessment,  charge,  levy, claims or Indebtedness if and so long as the amount,
applicability  or validity thereof shall currently be contested in good faith by

                                      -23-
<PAGE>
appropriate  actions and  appropriate  accruals and reserves  therefor have been
established in accordance with GAAP.

     7.7  COMPLIANCE WITH SIGNIFICANT DEBT AGREEMENTS AND OTHER  AGREEMENTS.  It
will comply in all material  respects with (i) all Significant  Debt Agreements,
and (ii) all  agreements and contracts to which it is a party, a breach of which
could result in a Material Adverse Effect.

     7.8  COMPLIANCE  WITH  CREDIT  DOCUMENTS.  It will  comply with any and all
covenants and provisions of this Credit Agreement, the Note and all other Credit
Documents.

     7.9  NOTICE OF DEFAULT. It will furnish to Lender immediately upon becoming
actually  aware of the existence of any event or condition  that  constitutes an
Event of Default, a written notice specifying the nature and period of existence
thereof  and the  action  which it is taking or  proposes  to take with  respect
thereto.

     7.10 OTHER  NOTICES.  It will  promptly  notify  Lender of (a) any Material
Adverse Effect,  (b) any waiver,  release or default under any Significant  Debt
Agreement,  (c) any claim not covered by  insurance  against  Borrower or any of
Borrower's  properties  not covered by  insurance  which has, or which  Borrower
reasonably  believes  to have,  a  monetary  value of more than  Fifty  Thousand
Dollars  ($50,000.00),  and (d) the  commencement by or before any  Governmental
Authority of, and any material  determination  in, any litigation or proceeding,
except litigation or proceedings which, if adversely determined,  would not have
a Material Adverse Effect.

     7.11 BOOKS AND RECORDS;  ACCESS; AUDITS. Upon three (3) Banking Days notice
from Lender, it will give any authorized  representative of Lender access during
normal  business hours to, and permit such  representative  to examine,  copy or
make excerpts from,  any and all books,  records and documents in its possession
of and  relating  to the Loans,  and to inspect any of its  properties.  It will
maintain  complete  and  accurate  books  and  records  of its  transactions  in
accordance with good accounting  practices.  In addition, so long as no Event of
Default  has  occurred  and  is   continuing,   it  will  give  any   authorized
representative  of Lender  access  during  normal  business  hours to  conduct a
minimum of one (1)  collateral  audit per year and the costs of such audit shall
be for the account of the Borrower.

     7.12 ERISA COMPLIANCE. With respect to its Plans, it shall (a) at all times
comply with the minimum funding  standards set forth in Section 302 of ERISA and
Section  412 of the Code or shall  have duly  obtained  a formal  waiver of such
compliance from the proper  authority;  (b) at Lender's  request,  within thirty
(30) days after the filing  thereof,  furnish  to Lender  copies of each  annual
report/return  (Form 5500  Series),  as well as all  schedules  and  attachments
required to be filed with the  Department  of Labor and/or the Internal  Revenue
Service pursuant to ERISA, in connection with each of its Plans for each year of
the plan; (c) notify Lender within a reasonable time of any fact, including, but
not limited  to, any  Reportable  Event  arising in  connection  with any of its
Plans, which constitutes  grounds for termination thereof by the PBGC or for the
appointment  by the  appropriate  United States  District  Court of a trustee to
administer such Plan,  together with a statement,  if requested by Lender, as to
the reason  therefor and the action,  if any,  proposed to be taken with respect
thereto;  and (d) furnish to Lender  within a  reasonable  time,  upon  Lender's
request,  such  additional  information  concerning  any of its  Plans as may be
reasonably requested.

                                      -24-
<PAGE>
     7.13 FURTHER ASSURANCES.  It will make, execute or endorse, and acknowledge
and  deliver  or  file  or  cause  the  same  to  be  done,  all  such  notices,
certifications and additional agreements,  undertakings or other assurances, and
take any and all such  other  action,  as Lender  may,  from time to time,  deem
reasonably necessary or proper to fully evidence the Loan.

     7.14 INSURANCE. It shall maintain in full force and effect at all times all
insurance coverages required under the terms of this Credit Agreement and/or the
Security  Documents to which it is a party.  In addition,  it shall  maintain in
full force and effect at all times:

          (a) Policies of all risk coverage insurance covering all tangible
     personality  in which  Lender has been  granted or obtained a security
     interest to secure the Obligation,  in coverage amounts not less than,
     from time to time, the fair market value thereof.

          (b)  Policies of  insurance  evidencing  personal  liability  and
     property  damage   liability   coverages  in  amounts  not  less  than
     $1,000,000.00  (combined  single limit for bodily  injury and property
     damage),  and an umbrella excess  liability  coverage in an amount not
     less than $2,000,000.00 shall be in effect with respect to Borrower.

          (c)  Policies of workers'  compensation  insurance in amounts and
     with coverages as legally required.

          (d) Such  other  insurance  as  Lender  may  require,  which  may
     include,  without  limitation,  earthquake  insurance,  rent abatement
     and/or business loss.

Without  limitation of the foregoing,  it shall at all times maintain  insurance
coverages in scope and amount not less than,  and not less  extensive  than, the
scope and amount of insurance coverages customary in the trades or businesses in
which it is from time to time engaged.  All of the aforesaid insurance coverages
shall be issued by insurers reasonably acceptable to Lender.

     Copies of all policies of  insurance  evidencing  such  coverages in effect
from time to time and  showing  Lender as an  additional  insured and loss payee
shall be  delivered to Lender  within  fifteen (15) days of the Closing Date and
upon reasonable  notice upon issuance of new policies  thereafter.  From time to
time, promptly upon Lender's request, it shall provide evidence  satisfactory to
Lender (i) that  required  coverage in required  amounts is in effect,  and (ii)
that Lender is shown as an additional insured and loss payee with respect to all
such coverages,  as Lender's interest may appear, by standard  (non-attribution)
loss payable endorsement,  additional insured endorsement, insurer's certificate
or other means  acceptable to Lender in its reasonable  discretion.  At Lender's
option,  it shall  deliver to Lender  certified  copies of all such  policies of
insurance  in effect  from  time to time,  to be  retained  by Lender so long as
Lender shall have any  commitment  to lend  hereunder  and/or any portion of the
Obligation  shall be outstanding  or  unsatisfied.  All such insurance  policies
shall  provide  for at least  thirty  (30)  days  prior  written  notice  of the
cancellation or modification thereof to Lender.

     7.15 DEPOSIT  ACCOUNTS.  Gel Tech shall  maintain its principal  depository
accounts with Lender.

                                      -25-
<PAGE>
                                   ARTICLE 8.

                               NEGATIVE COVENANTS

     Until payment in full of the Loan and the  performance  of the  Obligation,
Borrower  shall not,  without  receiving  the prior express  written  consent of
Lender:

     8.1  EXISTENCE. Dissolve or liquidate, or merge or consolidate with or into
any other  entity,  or turn over the  management  or operation of its  property,
assets or business  to any other  Person or make any  substantial  change in the
character  of its  business.  Notwithstanding  the  foregoing  sentence,  Lender
acknowledges that, subject to the receipt of requisite shareholder approval, Gum
Tech intends to  reincorporate  under the laws of the State of Delaware  and, in
connection therewith, change its name to "Matrixx Initiatives,  Inc." by merging
with  and  into  its  wholly-owned  Delaware  subsidiary  corporation,   Matrixx
Initiatives,   Inc.  (such  reincorporation  and  name  change,   including  the
effectuating  merger  transaction,  hereinafter  referred  to as  the  "Delaware
Reincorporation"  and such  merged  corporation  hereinafter  referred to as the
"Merged  Corporation").  Lender  agrees that the  Delaware  Reincorporation,  as
described herein,  shall not require Lender's consent provided that after giving
effect to the  Delaware  Reincorporation,  the  Merged  Corporation  shall be in
compliance with all Financial  Covenants;  Gum Tech however agrees (i) to notify
Lender of the Delaware  Reincorporation  within five (5) Banking  Days  thereof,
(ii) to provide  evidence to Lender of the Merged  Corporation  's assumption of
Gum Tech's  obligations  hereunder,  (iii) to provide  Lender with copies of the
Merged Corporation's organizational documents and good standing certificate, and
(iv) to cause the Merged  Corporation to execute a Security  Agreement and an IP
Security  Agreement and such other  documents as Lender may reasonably  request.
Lender further  acknowledges  that Gum Tech has provided to Lender copies of the
Certificate of Incorporation and Bylaws of Matrixx Initiatives,  Inc., which are
the  organizational  documents that will replace Gum Tech's existing Articles of
Incorporation and Bylaws at the effective time of the Delaware  Reincorporation,
and Lender accepts such documents.

     8.2  AMENDMENTS  TO  ORGANIZATIONAL  DOCUMENTS.  Amend  its  organizational
documents  if the result  thereof  could  result in the  occurrence  directly or
indirectly of a Material Adverse Effect.

     8.3  MARGIN  STOCK.  Use any  proceeds of the Loan,  or any proceeds of any
other or future  financial  accommodation  from Lender for the purpose,  whether
immediate,  incidental or ultimate, of purchasing or carrying any "margin stock"
as that term is defined in Regulation U or to reduce or retire any  indebtedness
undertaken for such purposes  within the meaning of said  Regulation U, and will
not use such proceeds in a manner that would involve  Borrower in a violation of
Regulation U or of any other Regulation of the Board of Governors of the Federal
Reserve System, nor use such proceeds for any purpose not permitted by Section 7
of the  Exchange  Act,  or  any  of the  rules  or  regulations  respecting  the
extensions of credit promulgated thereunder.

     8.4  DISTRIBUTIONS.  Declare or pay any dividends or make any distributions
of any kind.

                                      -26-
<PAGE>
     8.5  LIENS. On and after the date hereof,  create,  issue, assume or suffer
to exist Liens upon the Collateral, except Permitted Liens.

     8.6  TRANSFER  COLLATERAL.  Assign,  transfer  or convey  any of its right,
title and interest in the  Collateral,  other than (i) sales of inventory in the
ordinary course of business,  (ii) expenditures or dispositions of cash or other
Collateral to acquire  business assets at commercially  reasonable  prices,  and
(iii)  expenditures  of cash  or  other  Collateral  to pay  ordinary  operating
expenses as and when incurred.

     8.7  MERGER;  SALE OF  ASSETS.  Other  than with  respect  to the  Delaware
Reincorporation (as defined in Section 8.1 hereof), (i) sell, lease, transfer or
dispose of all or  substantially  all of the Collateral to another entity;  (ii)
cause,  solicit or promote the  consolidation or merger of Gum Tech with or into
another entity or the consolidation or merger of another entity with or into Gum
Tech;  or (iii)  permit any other entity to  consolidate  with or merge into Gel
Tech.

     8.8  INDEBTEDNESS.  Incur in any fiscal year, in the  aggregate,  more than
Five Hundred Thousand And No/100 Dollars  ($500,000.00) of indebtedness from any
Person other than an Affiliate or Lender.

     8.9  FINANCIAL  COVENANTS.  Permit the breach of any of the  covenants  set
forth in Schedule 8.9 hereto.

                                   ARTICLE 9.

                                EVENTS OF DEFAULT

     9.1  EVENTS OF  DEFAULT.  An "Event of  Default"  shall exist if any one or
more of the following  events (herein  collectively  called "Events of Default")
shall occur and be continuing:

                                      -27-
<PAGE>
          (a) Borrower  shall fail to pay any principal of, or interest on,
     the Note when the same shall  become due or payable  and such  failure
     continues for ten (10) Banking Days after notice thereof to Borrower.

          (b) Any  failure or  neglect  to  perform  or observe  any of the
     covenants, conditions,  provisions or agreements of Borrower contained
     herein,  or in any of the other Credit Documents (other than a failure
     or neglect  described in one or more of the other  provisions  of this
     Section 9.1) and such failure or neglect either cannot be remedied or,
     if it can be remedied,  it continues unremedied for a period of thirty
     (30) days after written notice thereof to Borrower.

          (c) Any warranty,  representation or statement  contained in this
     Credit  Agreement  or any of the other Credit  Documents,  or which is
     contained in any certificate or statement  furnished or made to Lender
     pursuant hereto or in connection  herewith or with the Loans, shall be
     or shall prove to have been false when made or furnished.

          (d)  The  occurrence  of  any  material  "event  of  default"  or
     "default" by Borrower under any Credit Document, or any agreement, now
     or hereafter existing,  to which Lender or an Affiliate of Lender, and
     Borrower or an Affiliate of Borrower are a party.

          (e) Borrower shall (i) fail to pay any  Indebtedness  of Borrower
     (other than the Note) due under any Significant Debt Agreement, or any
     interest or premium thereon,  when due (whether by scheduled maturity,
     required prepayment, acceleration, demand, or otherwise) or within any
     applicable  grace  period,  (ii) fail to perform or observe  any term,
     covenant,  or condition on its part to be performed or observed  under
     any agreement or instrument relating to such Indebtedness,  within any
     applicable grace period when required to be performed or observed,  if
     the effect of such failure to perform or observe is to accelerate  the
     maturity  of such  Indebtedness,  or any  such  Indebtedness  shall be
     declared to be due and payable,  or required to be prepaid (other than
     by a regularly  scheduled  prepayment),  prior to the stated  maturity
     thereof,  or (iii)  allow  the  occurrence  of any  material  event of
     default with respect to such Indebtedness.

          (f) Any  one or more of the  Credit  Documents  shall  have  been
     determined to be invalid or unenforceable  against Borrower  executing
     the same in accordance with the respective terms thereof,  or shall in
     any  way  be  terminated  or  become  or be  declared  ineffective  or
     inoperative,   so  as  to  deny   Lender  the   substantial   benefits
     contemplated by such Credit Document or Credit Documents.

          (g) Borrower shall (i) apply for or consent to the appointment of
     a receiver, trustee, custodian,  intervenor or liquidator of itself or
     of all or a  substantial  part of its  assets,  (ii) file a  voluntary
     petition in  bankruptcy  or admit in writing  that it is unable to pay
     its debts as they become due, (iii) make a general  assignment for the
     benefit  of  creditors,   (iv)  file  a  petition  or  answer  seeking
     reorganization  of an arrangement  with creditors or to take advantage

                                      -28-
<PAGE>
     of any bankruptcy or insolvency laws, (v) file an answer admitting the
     material  allegations  of, or consent to, or default in  answering,  a
     petition  filed  against  it  in  any  bankruptcy,  reorganization  or
     insolvency  proceeding,  or (vi) take corporate action for the purpose
     of effecting any of the foregoing

          (h) An involuntary  petition or complaint  shall be filed against
     Borrower,  seeking  bankruptcy or reorganization  of Borrower,  or the
     appointment  of  a  receiver,   custodian,   trustee,   intervenor  or
     liquidator of Borrower, or all or substantially all of its assets, and
     such petition or complaint shall not have been dismissed  within sixty
     (60)  days of the  filing  thereof;  or an order,  order  for  relief,
     judgment  or  decree  shall  be  entered  by any  court  of  competent
     jurisdiction  or other  competent  authority  approving  a petition or
     complaint seeking  reorganization of Borrower,  appointing a receiver,
     custodian,  trustee,  intervenor or liquidator of Borrower,  or all or
     substantially  all of its assets,  and such order,  judgment or decree
     shall continue unstayed and in effect for a period of sixty (60) days.

          (i) Any final  judgment(s)  (excluding  those the  enforcement of
     which is suspended  pending appeal) for the payment of money in excess
     of the sum of  $250,000  in the  aggregate  (other  than any  judgment
     covered by  insurance  where  coverage  has been  acknowledged  by the
     insurer)  shall be rendered  against  Borrower,  and such  judgment or
     judgments  shall not be  satisfied,  settled,  bonded or discharged at
     least ten (10) days prior to the date on which any of its assets could
     be lawfully sold to satisfy such judgment.

          (j)  Either  (i)  proceedings   shall  have  been  instituted  to
     terminate,  or a notice of  termination  shall  have been  filed  with
     respect to, any Plans  (other than a  Multi-Employer  Pension  Plan as
     that term is defined in Section 4001(a)(3) of ERISA) by Borrower,  any
     member of the  Controlled  Group,  PBGC or any  representative  of any
     thereof,  or any such Plan  shall be  terminated,  in each case  under
     Section 4041 or 4042 of ERISA, and such termination shall give rise to
     a liability of the Borrower or the Controlled Group to the PBGC or the
     Plan  under  ERISA  having an effect in excess of  $100,000  or (ii) a
     Reportable  Event,  the occurrence of which would cause the imposition
     of a lien in excess of $100,000  under  Section  4062 of ERISA,  shall
     have  occurred  with respect to any Plan (other than a  Multi-Employer
     Pension Plan as that term is defined in Section  4001(a)(3)  of ERISA)
     and be continuing for a period of sixty (60) days.

          (k) Any of the  following  events shall occur with respect to any
     Multi-Employer  Pension  Plan  (as that  term is  defined  in  Section
     4001(a)(3) of ERISA) to which  Borrower  contributes or contributed on
     behalf of its employees  and Lender  determines in good faith that the
     aggregate liability likely to be incurred by Borrower,  as a result of
     any of the events  specified in Subsections (i), (ii) and (iii) below,
     will  have an effect in excess  of  $100,000;  (i)  Borrower  incurs a
     withdrawal  liability under Section 4201 of ERISA;  (ii) any such plan
     is "in  reorganization"  as that term is defined  in  Section  4241 of
     ERISA;  or (iii) any such Plan is  terminated  under  Section 4041A of
     ERISA.

                                      -29-
<PAGE>
          (l) A Change  of  Control  of the  Borrower  unless  approved  by
     Lender, which approval will not be unreasonably withheld.

          (m) The dissolution,  liquidation, sale, transfer, lease or other
     disposal  of all or  substantially  all of the assets or  business  of
     Borrower.

          (n) Any failure to observe any of the Financial Covenants.

          (o) The  occurrence  of any  adverse  change  in  the,  business,
     operations,  assets or financial  condition  of  Borrower,  taken as a
     whole, that Lender in its reasonable  discretion deems material, or if
     Lender in good faith  shall  believe  that the  prospect of payment or
     performance of the Loans is impaired.

          (p) A  material  default  by  Borrower  under  any  lease of real
     property or under any  contract  which  would have a Material  Adverse
     Effect.

     9.2  REMEDIES  UPON EVENT OF  DEFAULT.  If an Event of  Default  shall have
occurred and be  continuing,  then Lender may, at its sole option,  exercise any
one or more of the  following  rights  and  remedies,  and  any  other  remedies
provided in any of the Credit  Documents,  as Lender in its sole  discretion may
deem necessary or appropriate, all of which remedies shall be deemed cumulative,
and not alternative:

               (i) Cease making  Advances or  extensions  of financial
          accommodations  in  any  form  to  or  for  the  benefit  of
          Borrower,

               (ii) Declare the  principal  of, and all interest  then
          accrued on, the Note and any other liabilities  hereunder to
          be  forthwith  due and  payable,  whereupon  the same  shall
          become  immediately  due and  payable  without  presentment,
          demand,  protest,  notice of default, notice of acceleration
          or of  intention to  accelerate  or other notice of any kind
          all of which  Borrower  hereby  expressly  waives,  anything
          contained   herein   or  in  the   Note   to  the   contrary
          notwithstanding,

               (iii) Reduce any claim to judgment, and/or

               (iv)  Without  notice of default or demand,  pursue and
          enforce any of Lender'  rights and remedies under the Credit
          Documents,  or otherwise  provided  under or pursuant to any
          applicable law or agreement;  provided, however, that if any
          Event of Default  specified  in  Sections  9.1(g) and 9.1(h)
          shall occur, the principal of, and all interest on, the Note
          and other  liabilities  hereunder shall thereupon become due
          and  payable  concurrently  therewith,  without  any further
          action by Lender and without presentment,  demand,  protest,
          notice of default, notice of acceleration or of intention to
          accelerate  or  other  notice  of any  kind,  all  of  which
          Borrower hereby expressly waives.

                                      -30-
<PAGE>
     Upon the  occurrence  and during the  continuance  of any Event of Default,
Lender is  hereby  authorized  at any time and from time to time,  with five (5)
Banking  Days  notice  to  Borrower,  to setoff  and  apply any and all  moneys,
securities  or other  property of Borrower  and the proceeds  therefrom,  now or
hereafter held or received by or in transit to Lender or its agents, from or for
the  account  of  Borrower,   whether  for  safe   keeping,   custody,   pledge,
transmission,  collection  or  otherwise,  and also  upon  any and all  deposits
(general or special) and credits of Borrower, and any and all claims of Borrower
against Lender at any time existing. The rights of Lender under this Section 9.2
are in addition to other rights and  remedies  (including,  without  limitation,
other rights of setoff) which Lender may have.

     9.3  PERFORMANCE BY LENDER.  Should  Borrower fail to perform any covenant,
duty or agreement  with respect to the payment of taxes,  obtaining  licenses or
permits,  or any other  requirement  contained  herein  or in any of the  Credit
Documents  within the period  provided  herein,  if any, for  correction of such
failure,  Lender may, with five (5) days prior notice, at its option, perform or
attempt to perform such  covenant,  duty or agreement on behalf of Borrower.  In
such event,  Borrower shall,  at the request of Lender,  promptly pay any amount
expended by Lender in such performance or attempted performance to Lender at its
office in Phoenix,  Arizona, together with interest thereon at the Default Rate,
from the date of such expenditure until paid.  Notwithstanding the foregoing, it
is  expressly   understood   that  Lender  does  not  assume  any  liability  or
responsibility  for the performance of any duties of Borrower hereunder or under
any of the Credit  Documents or other control over the management and affairs of
Borrower.

                                  ARTICLE 10.

                                  MISCELLANEOUS

     10.1 MODIFICATION.  All modifications,  consents,  amendments or waivers of
any  provision of any Credit  Document,  or consent to any departure by Borrower
therefrom,  shall be effective only if the same shall be in writing and accepted
by Lender.

     10.2 WAIVER.  No failure to exercise,  and no delay in  exercising,  on the
part of Lender, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial  exercise  thereof  preclude  any other  further  exercise
thereof or the exercise of any other right.  The rights of Lender  hereunder and
under the Credit  Documents shall be in addition to all other rights provided by
law. No  modification or waiver of any provision of this Credit  Agreement,  the
Note or any Credit  Documents,  nor  consent to  departure  therefrom,  shall be
effective  unless in writing and no such consent or waiver  shall extend  beyond
the particular case and purpose involved.  No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.

     10.3 PAYMENT OF  EXPENSES.  Borrower  shall pay all costs and  expenses  of
Lender  (including,  without  limitation,  the attorneys' fees of Lender's legal
counsel)  incurred by Lender in connection with the  documentation of the Loans,
and the  preservation  and  enforcement  of  Lender's  rights  under this Credit
Agreement, the Note, and/or the other Credit Documents;  provided, however, that
notwithstanding  the  aforesaid,  with respect to any legal  action  between the
parties  hereto that is pursued to judgment the  prevailing  party only shall be
reimbursed  by the other party for all costs and  expenses  (including,  without

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<PAGE>
limitation,  reasonable  attorneys'  fees and costs) incurred in connection with
the preservation and enforcement of its rights under this Credit Agreement,  the
Note and/or other Credit  Documents.  In addition,  Borrower shall pay all costs
and  expenses  of  Lender  in  connection  with  the  negotiation,  preparation,
execution and delivery of any and all amendments,  modifications and supplements
of or to this Credit Agreement, the Note or any other Credit Document.  Borrower
shall  receive a written  estimate of all legal fees and related legal costs and
will have an  opportunity  to review all such  estimates  prior to its approval,
which shall not be unreasonably withheld.

     10.4 NOTICES.  Except for telephonic  notices permitted herein, any notices
or other  communications  required  or  permitted  to be  given  by this  Credit
Agreement or any other documents and instruments  referred to herein must be (i)
given in writing and  personally  delivered  or mailed by prepaid  certified  or
registered  mail  or  sent  by  overnight  delivery  service,  or  (ii)  made by
telefacsimile  delivered  or  transmitted,  to the party to whom such  notice or
communication is directed, to the address of such party as follows:

          Borrower:                GUM TECH INTERNATIONAL, INC.
                                   GEL TECH, L.L.C.
                                   2375 East Camelback Road, Suite 500
                                   Phoenix, Arizona  85016
                                   Attention: William J. Hemelt
                                   Telecopier: (602) 387-4112

          Lender:                  Comerica Bank-California
                                   75 East Trimble Road
                                   San Jose, California  95131
                                   Attention: Lending Services
                                   Telecopier: (408) 556-5097

          With a copy to:          Comerica Bank-California
                                   400 East Van Buren
                                   Suite 900
                                   Phoenix, Arizona  85004
                                   Attention: Conrad Morin
                                   Telecopier: (602) 261-7881

Any notice to be personally  delivered may be delivered to the principal offices
(determined as of the date of such delivery) of the party to whom such notice is
directed.  Any such notice or other  communication  shall be deemed to have been
given (whether actually  received or not) on the day it is personally  delivered
as aforesaid;  or, if mailed,  on the third (3rd) Banking Day after it is mailed
as aforesaid;  or, if transmitted by telefacsimile,  on the day that such notice
is  transmitted  as  aforesaid,  provided that if such day is not a Banking Day,
then delivery  will be deemed to have occurred on the next ensuing  Banking Day.
Any party may change its address for purposes of this Credit Agreement by giving
notice of such change to the other parties pursuant to this Section 10.4.

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<PAGE>
     10.5 GOVERNING LAW;  JURISDICTION,  VENUE; WAIVER OF JURY TRIAL. The Credit
Documents  shall be governed by and construed in accordance with the substantive
laws (other than conflict laws) of the State of California, except to the extent
Lender has greater rights or remedies  under Federal law,  whether as a national
bank or  otherwise,  in which case such  choice of  California  law shall not be
deemed to deprive  Lender of any such rights and  remedies  as may be  available
under Federal law. Each party consents to the personal jurisdiction and venue of
the state courts located in Los Angeles,  State of California in connection with
any controversy related to this Agreement, waives any argument that venue in any
such forum is not convenient and agrees that any litigation  initiated by any of
them in connection  with this Agreement shall be venued in the Superior Court of
Los Angeles County,  California. The parties waive any right to trial by jury in
any action or proceeding  based on or pertaining to this Agreement or any of the
Credit Documents.

     10.6 INVALID PROVISIONS. If any provision of any Credit Document is held to
be illegal,  invalid or  unenforceable  under  present or future laws during the
term of this Credit  Agreement,  such provision shall be fully  severable;  such
Credit  Document shall be construed and enforced as if such illegal,  invalid or
unenforceable  provision had never comprised a part of such Credit Document; and
the remaining  provisions of such Credit Document shall remain in full force and
effect  and shall not be  affected  by the  illegal,  invalid  or  unenforceable
provision or by its severance from such Credit Document. Furthermore, in lieu of
each such illegal,  invalid or  unenforceable  provision there shall be added as
part of such Credit  Document a provision  mutually  agreeable  to Borrower  and
Lender as similar in terms to such illegal,  invalid or unenforceable  provision
as may be possible and be legal, valid and enforceable.

     10.7 BINDING EFFECT.  The Credit  Documents shall be binding upon and inure
to the benefit of Borrower and Lender and their respective  successors,  assigns
and legal representatives; provided, however, that Borrower may not, without the
prior  written  consent  of  Lender,  assign  any  rights,   powers,  duties  or
obligations thereunder.

     10.8 ENTIRETY. The Credit Documents embody the entire agreement between the
parties and supersede all prior agreements and understandings,  if any, relating
to the subject matter hereof and thereof.

     10.9 HEADINGS.  Section  headings are for convenience of reference only and
shall in no way affect the interpretation of this Credit Agreement.

     10.10 SURVIVAL. All  representations and warranties made by Borrower herein
shall survive delivery of the Note and the making of the Loans.

     10.11 NO THIRD PARTY BENEFICIARY. The parties do not intend the benefits of
this  Credit  Agreement  to inure to any  third  party,  nor shall  this  Credit
Agreement  be  construed  to make or render  Lender  liable to any  materialman,
supplier, contractor,  subcontractor,  purchaser or lessee of any property owned
by  Borrower,  or for  debts or  claims  accruing  to any such  persons  against
Borrower.  Notwithstanding  anything  contained herein or in the Note, or in any
other Credit Document,  or any conduct or course of conduct by any or all of the
parties  hereto,  before or after  signing  this Credit  Agreement or any of the
other  Credit  Documents,  neither  this Credit  Agreement  nor any other Credit
Document  shall be  construed  as creating  any right,  claim or cause of action

                                      -33-
<PAGE>
against Lender, or any of its officers, directors, agents or employees, in favor
of any materialman, supplier, contractor, subcontractor,  purchaser or lessee of
any  property  owned by  Borrower,  nor to any other person or entity other than
Borrower.

     10.12 TIME. Time is of the essence hereof.

     10.13 TERMINATION.

          (a) Notwithstanding any other provision of this Credit Agreement,
     Borrower may  terminate  this Credit  Agreement at any time before the
     RLC Maturity Date (or any extension  thereof  agreed to by the parties
     hereto) by providing at least thirty (30) days' prior  written  notice
     of  termination  to  Lender.  In the event  Borrower  delivers  such a
     termination  notice, this Credit Agreement will terminate and cease to
     be of any  further  force or effect on the  latest to occur of (i) the
     effective date of termination specified in Borrower's notice, (ii) the
     date on which all outstanding Obligations have been satisfied and paid
     by  Borrower,   and  (iii)  the   expiration  or  termination  of  all
     outstanding Letters of Credit.

          (b) Concurrent with the  effectiveness of any termination of this
     Credit Agreement,  each Security  Agreement and IP Security  Agreement
     executed by Borrower in favor of Lender pursuant hereto will terminate
     and be of no further  force or effect,  and Lender  shall at such time
     forthwith  file and  register  with  the  applicable  governmental  or
     administrative   authorities,   including  without   limitation,   the
     respective  Secretaries  of State  for  Arizona  and,  if  applicable,
     Delaware, and the United States Patent and Trademark Office,  complete
     discharges of any financing  statement or other document or instrument
     registered  by or on  behalf of Lender  in  respect  of such  Security
     Agreements and IP Security Agreements.

     10.14  SCHEDULES  AND EXHIBITS  INCORPORATED.  All  schedules  and exhibits
attached hereto,  if any, are hereby  incorporated into this Credit Agreement by
each reference thereto as if fully set forth at each such reference.

     10.15  COUNTERPARTS.  This  Credit  Agreement  may be  executed in multiple
counterparts,  each of which, when so executed,  shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.

     10.16  PARTICIPATIONS.  Lender,  at any time, shall have the right to sell,
assign, transfer, negotiate or grant participation interests in the Loans and in
any documents and instruments executed in connection  herewith.  Borrower hereby
acknowledges  and agrees that any such  disposition  shall give rise to a direct
obligation  of  Borrower  to  each  such  assignee  or  participant.  Lender  is
authorized  to  furnish  to  any  participant  or  prospective  participant  any
information  or  document  that Lender may have or obtain  regarding  the Loans,
Borrower or any guarantor of the Loans.

                                      -34-
<PAGE>
     IN WITNESS WHEREOF,  the undersigned have executed this Credit Agreement as
of the day and year first above written.

                                   GUM TECH INTERNATIONAL, INC., a Utah
                                   corporation

                                   By: /s/ William J. Hemelt
                                       -----------------------------------------
                                       William J. Hemelt
                                       Executive Vice President, Chief Financial
                                       Officer, Treasurer & Secretary

                                   GEL TECH, L.L.C., an Arizona limited
                                   liability company

                                   By: /s/ William J. Hemelt
                                       -----------------------------------------
                                       William J. Hemelt
                                       Manager

                                   COMERICA BANK-CALIFORNIA, successor by merger
                                   to Imperial Bank, a California banking
                                   corporation

                                   By: /s/ Conrad Morin
                                       -----------------------------------------
                                       Conrad Morin
                                       Corporate Banking Officer

                                      -35-

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