LUXTEC CORP /MA/
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>tenfour.txt
<TEXT>
                                                                    EXHIBIT 10.4








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



                               FIRST AMENDMENT TO
                      AMENDED AND RESTATED CREDIT AGREEMENT



                           Dated as of August 22, 2000



                                      Among


                           PRIMESOURCE SURGICAL, INC.,



                                  the Borrower,



                                  BIMECO, INC.



                                 the Guarantor,



                         CITIZENS BANK OF MASSACHUSETTS,



                                   the Lender

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


<PAGE>

                           FIRST AMENDMENT TO AMENDED
                          AND RESTATED CREDIT AGREEMENT
                          -----------------------------

     This FIRST  AMENDMENT TO AMENDED AND RESTATED  CREDIT  AGREEMENT is entered
into as of August 22, 2000 by and among PRIMESOURCE  SURGICAL,  INC., a Delaware
corporation  (the  "Borrower"),   as  borrower,  and  BIMECO,  INC.,  a  Florida
corporation  ("Bimeco  or  Guarantor"),  as  guarantor  (the  Borrower  and  the
Guarantor,  each a "Loan Party" and the Borrower and the Guarantor  collectively
the "Loan  Parties"),  and  CITIZENS  BANK OF  MASSACHUSETTS,  as  successor  in
interest to State Street Bank and Trust Company (the "Bank"), as lender.

                                    Recitals
                                    --------

     The Borrower,  Bimeco, Medical Companies Alliance,  Inc. (`MCA"),  Douglass
Medical,  Inc.  ("Douglass") and the Bank are parties to an Amended and Restated
Credit Agreement dated as of June 14, 1999 (as amended, the "Credit Agreement").
All  capitalized  terms used  herein and not  otherwise  defined  shall have the
meanings set forth in the Credit Agreement. The Loan Parties desire to amend the
Credit  Agreement  to  modify  certain  covenants  and to make  certain  changes
therein.  The Bank and the Borrower are willing to amend the Credit Agreement on
the terms and conditions set forth herein.

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby  acknowledged,  the Borrower,  the Guarantor and
the Bank hereby amend the Credit Agreement as follows:

     Section 1.     DEFINITIONS.

               (a)  Section  1.1 of the Credit  Agreement  is hereby  amended by
deleting the definitions "Credit Documents" and "Unlimited Guaranty  Agreements"
in their entirety and substituting therefor the following:

               "CREDIT  DOCUMENTS"  shall mean this  Agreement,  the Notes,  the
          Security Agreement,  the Guarantor Security Agreements,  the Unlimited
          Guaranty  Agreements,  the Pledge  Agreements,  the Subordination Side
          Letters,  the  Landlord's  Consent  and  Estoppel  Certificates,   the
          Collateral Assignment of Acquisitions Documents, Intellectual Property
          Security Agreements, the Warrant Agreement, the Warrant, and all other
          documents,  instruments  and agreements  now or hereafter  executed in
          connection with any of them.

               "UNLIMITED   GUARANTY   AGREEMENTS"   shall  mean  the  unlimited
          guaranties  of  Bimeco  and the  Internet  Subsidiary  (if any) of the
          obligations of the Borrower under the Credit Documents.

               (b) Section 1.1 of the Credit Agreement is hereby further amended
by adding the following definitions thereof in alphabetical order:

               "B-3  PRIVATE   PLACEMENT"  shall  mean  the  Borrower's  private
          placement of 530,321 shares of Series 13-3 Convertible Preferred Stock
          consummated on December 31, 1999.

                                        1
<PAGE>
               "C-2  PRIVATE   PLACEMENT"  shall  mean  the  Borrower's  private
          placement  of  up  to  4,000,000  shares  of  Series  C-2  Convertible
          Preferred Stock consummated on or about August 18, 2000.

               "CAPITAL EXPENDITURES" shall mean expenditures which are properly
          chargeable to capital  account in accordance  with generally  accepted
          accounting  principles  (including  leases which are  capitalized  and
          research and development expenses).

               "CURRENT ASSETS" shall mean all cash,  accounts  receivable,  and
          inventory  of the  Borrower and its  Subsidiaries,  on a  consolidated
          basis.

               "CURRENT  LIABILITIES"  shall  mean  all  accounts  payable,  all
          accruals and all amounts outstanding under the Revolving Credit of the
          Borrower and its Subsidiaries, on a consolidated basis.

               "EBITDA"  shall  mean  for  any  period  the  total  of  (a)  the
          consolidated  net  income  of  the  Borrower  and  subsidiaries,  on a
          consolidated  basis,  plus (b) amounts  paid by the  Borrower  and its
          Subsidiaries  in respect of taxes,  plus (c) to the extent deducted in
          calculating net income,  the consolidated  interest,  depreciation and
          amortization expense oldie Borrower and its Subsidiaries.

               "ELIGIBLE ACCOUNT  RECEIVABLE"  shall mean an account  receivable
          which meets all of the following requirements:

     (i) such account  receivable is subject to a perfected security interest in
favor of the Bank and is subject to no other lien  whatsoever  other than a lien
permitted under Section 5.12 hereof;

     (ii)  such  account  receivable  is owned by the  Borrower  or a  Qualified
Guarantor and  represents a complete  bona fide  transaction  which  requires no
further  act  under  any  circumstances  on the  part  of the  Borrower  or such
Qualified  Guarantor  to make such  account  receivable  payable by the  account
debtor;

     (iii) such account receivable is no more than 90 days past due from invoice
date;

     (iv) the amount owing on the invoice  evidencing such account receivable is
a valid,  legally  enforceable  obligation  of the account  debtor with  respect
thereto  and is not  subject  to any  material  present  or  contingent  offset,
deduction or counterclaim,  dispute or other defense on the part of such account
debtor,  and no facts  exist  which are the basis for any future  such action or
claim;

     (v)  such  account  receivable  is not  evidenced  by  chattel  paper or an
instrument  of any  kind  unless  such  chattel  paper  or  instrument  has been
delivered to the Bank;

     (vi) the goods giving rise to such account receivable were not, at the time
of the sale  thereof,  subject to any lien,  other than a lien  permitted  under
Section 5.1.2 hereof;

                                       2
<PAGE>

     (vii) the account  debtor with  respect to such account  receivable  is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any kind
or of any other  proceeding  or  action,  pending,  or to the  knowledge  of the
Borrower or such Qualified Guarantor,  threatened, which might have a materially
adverse effect on such account debtor;

     (viii)  the  account  debtor  with  respect  thereto  is not an  Affiliate,
employee or Subsidiary of the Borrower or such Qualified Guarantor;

     (ix) if the account debtor with respect  thereto is located  outside of the
United States of America,  the goods which gave rise to such account  receivable
were  shipped  after  receipt by the Borrower or  Qualified  Guarantor  from the
account  debtor of an  irrevocable  letter of credit  issued or  confirmed  by a
financial  institution  reasonably  acceptable  to  the  Bank  and in  form  and
substance  reasonably  acceptable to the Bank, payable in the amount of the face
value of the Account in dollars at a place of payment  located within the United
States;

     (x) the account debtor with respect  thereto is not a  governmental  agency
(except  where the  Borrower or  Qualified  Guarantor  and  account  debtor have
complied with the Federal Assignment of Claims Act to the Bank's  satisfaction);
and

     (xi) such account receivable is not determined by the Bank to be ineligible
for any other reason based upon such credit and collateral considerations as the
Bank may reasonably deem appropriate.

               "ELIGIBLE  INVENTORY" shall mean inventory which meets all of the
          following requirements:

          (i) such Inventory is owned by the Borrower or a Qualified  Guarantor,
          is subject to a perfected  security  interest in favor of the Bank and
          is  subject to no other lien  whatsoever  other than a lien  permitted
          under Section 5.12 hereof;

          (ii) If such  Inventory  is located  within a  premises  leased by the
          Borrower  or a  Qualified  Guarantor,  the:  landlord  has  executed a
          Landlord Consent and Estoppel Certificate for such premises;

          (iii) such Inventory is located within the United States at one of the
          Borrower's  or  Qualified  Guarantor's  Locations  or  (subject to (i)
          above) in the  possession of the  Borrower's or Qualified  Guarantor's
          sales representatives; and

          (iv) such Inventory is not determined by the Bank to be ineligible for
          any other reason as the Bank may reasonably deem appropriate.

               "FORMULA   AMOUNT"  shall  mean  as  to  the  Borrower  and  each
          respective  Qualified  Guarantor,  the sum of the Individual  Accounts
          Receivable Formula Amount plus Individual  Inventory Formula Amount of
          the Borrower or such Qualified Guarantor.
                                       3
<PAGE>
               "GUARANTOR   SECURITY   AGREEMENTS"   shall  mean  the   security
          agreements  between  the  Bank  and each of  Bimeco  and the  Internet
          Subsidiary (if any) securing the obligations of the Borrower under the
          Credit Documents.

               "INDIVIDUAL ACCOUNTS RECEIVABLE FORMULA AMOUNT" shall mean at the
          date of determination  thereof,  with respect to the Borrower and each
          Qualified  Guarantor an amount  equal to 80% of the Eligible  Accounts
          Receivable of such Borrower or such Qualified Guarantor.

               "INDIVIDUAL  INVENTORY  FORMULA AMOUNT" shall mean at the date of
          determination thereof, with respect to the Borrower and each Qualified
          Guarantor  an amount  equal to 45% of the  Eligible  Inventory of such
          Borrower or Qualified Guarantor.

               "INTELLECTUAL   PROPERTY  SECURITY  AGREEMENTS"  shall  mean  the
          intellectual property security agreements between the Bank and each of
          Bimeco and the Internet  Subsidiary (if any) securing the  obligations
          of the Borrower under the Credit Documents.

               "NET WORTH"  shall mean the  consolidated  assets of Borrower and
          its Subsidiaries less the consolidated liabilities of the Borrower and
          its Subsidiaries.

               "PLEDGE  AGREEMENTS" shall mean the pledge agreements between the
          Bank and each of the Borrower and Bimeco  securing the  obligations of
          the Borrower under the Credit Documents.

               "QUALIFIED  GUARANTOR"  shall mean a Subsidiary that has executed
          all  documents  that the Bank may  reasonably  require  to  maintain a
          first-priority security interest in all assets of the Borrower and its
          Subsidiaries  including,  but  not  limited  to a  form  of  Guarantor
          Security Agreement, Unlimited Guaranty, Intellectual Property Security
          Agreement, Pledge Amendment and inter-company note.

               "TOTAL  LIABILITIES" shall mean the sum of all liabilities of the
          Borrower and its Subsidiaries,  on a consolidated basis, determined in
          accordance with generally accepted accounting principles.

          Section 2. WAIVER OF DEFAULTS. The Borrower has informed the Bank that
Events of Default have occurred  under the Credit  Agreements as a result of the
failure of the Company to observe the certain  covenants  set forth on Exhibit A
hereto (the "Designated Events of Default").

          The Bank hereby waives the  Designated  Events of Default solely as of
the dates of such defaults.  This waiver is limited as to the Designated  Events
of  Default  and  shall  not  (other  than as set  forth  herein)  constitute  a
modification, amendment or waiver of any other provision of the Credit Agreement
or constitute a course of dealing between the parties.

          Section 3. AMENDMENTS OF CREDIT AGREEMENT.

          (a) Article II of the Credit  Agreement is hereby  amended by deleting
Section 2.03(c) and the definitions of Eligible Accounts Receivable and Eligible
Inventory therein in their entirety and substituting therefor the following:

                                       4
<PAGE>
          "(c) BORROWING BASE.  Subject to the limitations set forth below,  the
"Borrowing  Base"  shall  consist  of (i)  the  Borrower's  and  each  Qualified
Guarantor's   Individual   Accounts  Receivable  Formula  Amount  and  (ii)  the
Borrower's and each Qualified Guarantor's Individual Inventory Formula Amount."

Notwithstanding the foregoing, no advances under the Revolving Credit shall be
made with respect to any inventory of the borrower or Qualified Guarantor held
by sales representatives who have nor executed in form land substance
satisfactory to the Bank a "Memo on Stock" or similar instrument. Inventory
immediately loses the status of Eligible Inventory if and when the Borrower or
such Qualified Guarantor sells it, otherwise passes title thereto or consumes it
or the Bank releases its security interest therein."

          (b) Article II of the Credit  Agreement is hereby  further  amended by
deleting Section 2.10 in its entirety and substituting therefor the following:


               "The  Borrower  shall  pay the  Bank  on  demand  all  reasonable
          out-of-pocket  fees and expenses up to a maximum amount of $35,000 per
          year incurred by the Bank in connection with examinations of the books
          and records of the Borrower,  appraisals of the assets of the Borrower
          and visits to the  Borrower by officers,  employees  and agents of the
          Bank. The Borrower shall cooperate with the Bank's officers, employees
          and agents in  connection  with each audit or appraisal  performed and
          comply with all reasonable requests in connection therewith."

          (c) Article II of the Credit  Agreement is hereby  further  amended by
deleting Section 2.13 in its entirety and substituting therefor the following;

               "The proceeds of the Term Credit shall be used by the Borrower to
          finance the  Acquisitions.  The proceeds of the Revolving Credit shall
          be used by the  Borrower:  (a) to  finance  the  Acquisitions,  (b) to
          refinance  existing  indebtedness  to the  Bank,  (c) to pay costs and
          expenses   incurred  in  connection  with  the  Acquisitions  and  the
          establishment of the Credit, (d) to provide intercompany loans to each
          Qualified  Guarantor  not to exceed  the  Formula  Amount of each such
          Qualified  Guarantor;  and (e) the balance, if any, solely for general
          working  capital  purposes,   Permitted  Acquisitions,   repayment  of
          indebtedness  of entities  acquired  in  Permitted  Acquisitions,  and
          Permitted Stock Payments."

          (d) Article V of the credit  Agreement is hereby amended by adding the
following subparagraphs (h) and (i) at the end of Section 5.06:

               "(h)  at the  end of  each  fiscal  quarter  of the  Borrower,  a
          quarterly  management  narrative  report  explaining  all  significant
          variances from forecasts and all significant  current  developments in
          staffing, marketing, sales and operations.

               "(i) no later  than  thirty  (30) days prior to the start of each
          fiscal year,  consolidated capital and operating expense budgets, cash
          flow  projections and income and loss  projections for the Company and

                                       5
<PAGE>
          its  Subsidiaries  in respect of such  fiscal  year,  all  itemized in
          reasonable  detail and prepared on a monthly basis, and promptly after
          preparation, any revisions to any of the foregoing."

          (e)  Article  V of the  Credit  Agreement  is hereby  amended  further
amended by deleting the "and" at the end of  subparagraph  (b) of Section  5.14,
deleting the period at the end of subparagraph (c) of such section and replacing
it with;  "and" and adding  the  following  subparagraph  (d) at the end of such
section:

               "(d) inter-company loans to Qualified Guarantors not to exceed in
          the  aggregate  at any time the amount of such  Qualified  Guarantor's
          Formula Amount."

          (f) Article V of the Credit  Agreement  is hereby  further  amended by
deleting  Sections  5.24,  5.25,  5.26,  5.27  and 5.28 in  their  entirety  and
substituting therefor the following:

               "Section 5.24. Ratio of Total Liabilities to Net Worth.
               --------------  ----------------------------------------

               The  ratio of (a) the  Borrower's  Total  Liabilities  to (b) Net
Worth,  for the  three  month  period  ending  on the last  day of each  quarter
indicated below, shall not exceed the ratio set forth opposite such period:

         Three Month Period
         ------------------
Ending the Following Quarter Ends                             Ratio
---------------------------------                             -----

June 30, 2000, September 30, 2000,                             1.4:1
December 31, 2000, March 31, 2001 and
June 30, 2001

September 30, 2001, December 31, 2001,                        1.35:1
March 31, 2002 and June 30, 2002

Each Quarter End Thereafter                                   1.25:1

               "Section 5.25 Minimum EBITDA.
               -------------  ---------------

               (a)  The  EBITDA  of  the  Borrower  and  its  Subsidiaries  on a
consolidated  basis for the three  month  period  ending on the last day of each
quarter  indicated  below,  shall equal or exceed the amount set forth  opposite
such period:

         Three Month Period
         ------------------
Ending on the Following Quarter Ends                 Minimum EBITDA
------------------------------------                 --------------

September 30, 2000                                   $300,000

December 31, 2000                                    $600,000

March 3l, 2001                                       $700,000

                                       6
<PAGE>

June 30, 2001

September 30, 2001 and thereafter                    $750,000

               "Section 5.26. Maximum Capital Expenditures.
                ------------   ----------------------------

               Capital  Expenditures  made or incurred by the  Borrower  and its
Subsidiaries on a consolidated  basis, shall not exceed $700,000 for each of the
Borrower's  fiscal years  ending June 30, 2000 and June 30, 200j,  respectively.
Thereafter,  Capital  Expenditures shall not exceed $725,000 for any fiscal tear
of the Borrower beginning with the fiscal year ending June 30, 2002.

               "Section 5.27. Minimum Liquidity Ratio.
                ------------   -----------------------

               The ratio of the Borrower's Current Assets to Current Liabilities
shall at all times equal or exceed 1.0 to 1.0.

               "Section 5.28. Minimum Fixed Charge Coverage.
               ------------   -----------------------------

               The ratio of the (a) EBITDA of the Borrower and its  Subsidiaries
for the immediately  preceding three month period to (b) the sum of (i) fees and
principal  amortization on the Credit, plus (ii) consolidated  interest expense,
plus (iii) capital lease payments, plus (iv) Capital Expenditures, plus (v) cash
income taxes of the Borrower and its Subsidiaries for the immediately  preceding
three month period,  shall, as of the last day of each fiscal quarter,  equal or
exceed the ratio indicated:

                  Quarter Ended                               Ratio
                  -------------                               -----

                  September 30, 2000                          .40 to 1.0

                  December 31, 2000                           .75 to 1.0

                  March 31, 2001                              1.0 to 1.0

                  June 30, 2001                               1.0 to 1.0
                  through March 31, 2002

                  June 30, 2002 and Thereafter                1.05 to 1.00"

               (g)  Article  5 of the  Credit  Agreement  is hereby  amended  by
deleting 5.31 in its entirety and substituting the following therefor:

               "Section   5.31.   SUBSIDIARIES.   The  Borrower  shall  have  no
subsidiaries other than Bimeco and the Internet Subsidiary."
                                       7
<PAGE>
               (h) Article 5 of the credit Agreement is hereby amended by adding
the following Section 5.34 and 5.35 at the end thereof:

               "Section 5.34. THE INTERNET  DIVISION.  The Borrower  agrees that
until the  formation  of the  Internet  Subsidiary  (as  defined  below) (i) the
Borrower shall maintain  separate  financial  records for the division of assets
comprised primarily of its internet business (the "Internet Division"); (ii) the
Borrower shall provide to the Bank within thirty (30) days after the end of each
month  unaudited  financial  statements  of the  Internet  Division  prepared in
reasonable  detail  and  in  accordance  with  generally   accepted   accounting
principles  consistently applied,  certified by the President or Chief Financial
Officer of the Borrower,  which statement shall contain balance sheets as of the
end of such accounting  period,  statements of profit and loss and cash flow for
the period from the beginning of such fiscal year to the end of such  accounting
period;  and (iii)  proceeds of the Credit to the  Internet  Division  shall not
exceed  $500,000 in the  aggregate  from the date hereof  until the  Termination
Date.

               "Section 5.35. THE INTERNET SUBSIDIARY.  The Borrower may form an
internet subsidiary (the "Internet  Subsidiary")  provided that (i) the Borrower
provides  to the Bank at least  thirty  (30) days  prior  written  notice of the
formation  of the  Internet  Subsidiary;  (ii)  proceeds  of the  Credit  to the
Internet  subsidiary  shall not exceed  $500,000 in the aggregate  from the date
hereof  until the  Termination  Date;  (iii)  the  Borrower  maintains  separate
financial records for the Internet Subsidiary; (iv) the Borrower provides to the
Bank  within  thirty (30) days after the end of each month  unaudited  financial
statements  of the  Internet  Subsidiary  prepared in  reasonable  detail and in
accordance with generally accepted accounting  principles  consistently  applied
certified by the President or Chief  Financial  Officer Of the  Borrower,  which
statement shall contain balance sheets as of the end of such accounting  period,
statements of profit and loss and cash flow for the period from the beginning of
such fiscal year to the end of such accounting period; and (v) contemporaneously
with the formation of the Internet  Subsidiary,  the Internet  Subsidiary and/or
the Borrower  shall  execute or have  executed all  documents  that the Bank may
reasonably require to maintain a first-priority  security interest in all assets
of the Borrower and its Subsidiaries  including,  but not limited to a Guarantor
Security  Agreement,  an Unlimited Guaranty,  an Intellectual  Property Security
Agreement, a Pledge Amendment and a legal opinion of counsel to the Borrower and
its  Subsidiaries,   all  in  form  and  substance  satisfactory  to  the  Bank.
Notwithstanding  the  foregoing,   the  Borrower  may  capitalize  the  Internet
Subsidiary with proceeds from the B-3 Private Placement."

               (i)  Article  VI of the  Credit  Agreement  is hereby  amended by
          adding the following subparagraph (m):

          "(m)  any  violation  of  Section 5.14  of the  Convertible  Preferred
Stock Purchase  Agreement  among the Borrower and the  Purchasers  named therein
dated as of August 17, 2000."

          Section 4.  CONSENTS  BY THE BANK.  The Bank  hereby  consents  to the
following transactions:

                                       8
<PAGE>
          (a) The transactions  described in the Asset Purchase  Agreement among
the Borrower  Eclipse  Medical,  Inc.,  Tom O'Brien and Paul O'Brien dated as of
April 1, 2000;

          (b) The  Borrower's  repurchase  of shares of its  common  stock  from
Michael Wynne and Timothy Wynne pursuant to the Settlement  Agreement and Mutual
Release dated January 30, 2000 if an aggregate amount not to exceed $370,000;

          (c) The transactions described in the Stock Purchase Agreement between
the Borrower and Michael K.  Campbell  dated as of July 19, 2000 (the "MCA Stock
Purchase Agreement");

          (d) The B-3 Private Placement;

          (e) The C-2 Private Placement; and

          (f) The dissolution of Douglass.

     The Bank  hereby  waives any Events of Default  existing on the date hereof
and  previously  disclosed in writing to the Bank solely in connection  with the
specific transactions described in Sections 4(a)-4(f) hereof.

     Section 5.     EFFECTIVENESS;   CONDITIONS  TO  EFFECTIVENESS.  This  First
Amendment to Credit  Agreement shall become effective as of August 22, 2000 upon
satisfaction of the following conditions:

          (a) FIRST AMENDMENT. The Loan Parties shall have delivered to the Bank
an executed First Amendment to the Credit Agreement.

          (b)  INTER-COMPANY  NOTE.  Bimeco shall have executed an inter-company
note in favor of the Borrower  which shall have been  collaterally  assigned and
delivered to the Bank.

          (c)  CONSUMMATION  OF MCA STOCK PURCHASE  AGREEMENT.  The Loan Parties
shall have delivered to the Bank a confirmation of consummation of the MCA Stock
Purchase Agreement executed by Michael K. Campbell.

          (d) OFFICERS'  CERTIFICATE.  The Loan Parties shall have  delivered to
the Bank an Officers' Certificate in the form and substance  satisfactory to the
Bank.

          (e) OPINION OF COUNSEL.  The Loan Parties shall have  delivered to the
Bank an opinion of Skadden,  Arps, Slate, Meagher & Flom LLP counsel to the Loan
Parties,  issued  in  connection  with  the C-2  Private  Placement  in form and
substance satisfactory to the Bank.

          (f) BORROWING BASE CERTIFICATE.  The Loan Parties shall have delivered
to the Bank an executed  Borrowing Base  Certificate in the form attached hereto
as EXHIBIT 5.06(d) (the "Borrowing Base Certificate").
                                       9
<PAGE>
          (g) RESOLUTIONS.  Copies of the resolutions of the Boards of Directors
of the Loan Parties authorizing the execution,  delivery and performance of this
Amendment  certified by an officer of each Loan Party (which  certificate  shall
state that such resolutions are in full force and effect).

          (h)  INCUMBENCY.  Certificates  of an  officer  of the  Loan  Parties,
certifying  the name and  signatures of the officers of the Loan Parties to sign
this Amendment and the other Credit Documents to be delivered on the date hereof
to which the Loan Parties are a party.

          (i)   EXISTENCE;   QUALIFICATION   AND  GOOD  STANDING   CERTIFICATES.
Certificates of good standing and legal existence for the Loan Parties of recent
date issued by the  governmental  authority of each such Loan  Party's  state of
incorporation.

          (j)  ADDITIONAL  DOCUMENTATION.  Delivery  to the  Bank of such  other
documents as the Bank or its special counsel shall reasonably require.

     Section 6.     MISCELLANEOUS.

          (a)  The  Loan   Parties   hereby   confirm   to  the  Bank  that  the
representations  and  warranties of the Borrower set forth in Article III of the
Credit Agreement (as amended and supplemented hereby) are true and correct as of
the date hereof,  as if set forth herein in full;  provided,  however,  that the
Borrower does not confirm that such  representations and warranties are true and
correct on the date hereof as to MCA and Douglass.

          (b) The Loan  Parties  have  reviewed  the  provisions  of this  First
Amendment and all documents executed in connection therewith or pursuant thereto
or incident or  collateral  hereto or thereto  from time to time and there is no
Event of Default thereunder, and no condition which, with the passage of time or
giving of notice or both, would constitute an Event of Default thereunder.

          (c) The Loan  Parties  agree that each of the Credit  Documents  shall
remain in full force and effect after giving effect to this First Amendment. The
granting of the liens and security  interests  under the Security  Agreement and
Guarantor  Security  Agreements  secure all the  obligations of the Loan Parties
under the Credit Documents, amended by this First Amendment.

          (d) This First  Amendment  represents the entire  agreement  among the
parties  hereto  relating  to this First  Amendment,  and  supersedes  all prior
understandings  and agreements  among the parties relating to the subject matter
of this First Amendment.  The Loan Parties waive and release any claims they may
have  against,  and forever  discharge,  the Bank and its  officers,  directors,
agents, attorneys,  employees, successors and assigns from any claims and causes
of action arising out of the transactions referred to or contemplated in any way
by the Credit Documents and this First Amendment.

          (e) The  Loan  Parties  represent  and  warrant  that  the  execution,
delivery or performance by the Loan Parties of any of the obligations  contained

                                       10
<PAGE>

in this First  Amendment  or in any Credit  Document do not require the consent,
approval or authorization of any person or governmental  authority or any action
by or on account of with respect to any person or governmental authority.

          (f) The Loan  Parties  agree,  jointly and  severally,  to pay all the
Bank's  reasonable  expenses in preparing,  executing and delivering  this First
Amendment  to Credit  Agreement,  and all  related  instruments  and  documents,
including,  without limitation,  payment upon the closing of the First Amendment
of all reasonable fees and out-of-pocket expenses of the Bank's special counsel,
Goodwin, Procter & Hoar LLP in the amount of $15,000.

          (g)  This  First  Amendment  to  Credit  Agreement  shall  be a Credit
Document and shall be governed by and construed  and enforced  under the laws of
The  Commonwealth  of  Massachusetts  without  regard to principles  relating to
choice of law.

          (h) The Loan Parties agree that by executing this First  Amendment (i)
MCA and Douglass  shall no longer be Guarantors  under the Credit  Agreement and
(ii) the  following  agreements  shall deemed to have  terminated as of the date
hereof:  (A) Unlimited  Guaranty  Agreement between the Bank and MCA dated as of
June 14, 1999; (B) Security  Agreement between the Bank and MCA dated as of June
14, 1999; (C) Intellectual  Property Security Agreement between the Bank and MCA
dated as of June 14, 1999; (D) Unlimited Guaranty Agreement between the Bank and
Douglass dated as of June 14, 1999; (E) Security  Agreement between the Bank and
Douglass  dated as of June 14,  1999;  and (F)  Intellectual  Property  Security
Agreement between the Bank and Douglass dated as of June 14, 1999.

          (i) The  Loan  Parties  agree  that  the  Borrowing  Base  Certificate
attached  hereto as EXHIBIT 5.06 shall  supersede and replace the Borrowing Base
Certificate referred to in the Credit Agreement.


                           [INTENTIONALLY LEFT BLANK]


                                       11
<PAGE>
     IN WITNESS WHEREOF,  the Borrowers,  the Guarantor and the Bank have caused
this First Amendment to the Credit  Agreement to be executed under seal by their
duly authorized officers as of the date first set forth above.

                                          PRIMESOURCE SURGICAL., INC.


                                          By: /s/ Michael K. Bayley
                                              ----------------------------------



                                          BIMECO, INC.


                                          By: /s/ Michael K. Bayley
                                              ----------------------------------



                                          CITIZENS BANK OF MASSACHUSETTS


                                          By: /s/ William L. Benning
                                              ----------------------------------
                                                Name:  William L. Benning
                                                Title:     Senior Vice President


                                       12
<PAGE>
                                                                       Exhibit A
                                                           to First Amendment to
                                                            Amended and Restated
                                                                Credit Agreement

                          Designated Events of Default
                          ----------------------------

Section  V.25 - Minimum  EBITDA:  required  level was  $850,000  for three month
period ending 6/30/00; Borrower failed to meet the minimum

Section V.28 - Minimum Fixed Charge Coverage: required level was 1.05 to 1.0 for
the three month period ending 6/30/00; Borrower failed to meet the minimum



</TEXT>
</DOCUMENT>
