CARRINGTON LABORATORIES INC /TX/
AMENDMENT TO DISTRIBUTOR AND LICENSE AGREEMENT AND SUPPLY AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>exh10-1.txt
<DESCRIPTION>AMENDMENT TO DISTRIBUTOR AND LICENSE AGREEMENT AND SUPPLY AGREEMENT
<TEXT>

                                                                 Exhibit 10.1

                AMENDMENT TO DISTRIBUTOR AND LICENSE AGREEMENT
                             AND SUPPLY AGREEMENT

           This Amendment amends that certain Distributor and License
 Agreement, dated as of November 3, 2000, between Carrington Laboratories,
 Inc. ("Carrington") and Medline Industries, Inc. ("Medline") (the
 "Distributor Agreement") and that certain Supply Agreement, dated as of
 November 3, 2003, between Carrington and Medline (the "Supply Agreement").
 This Amendment is effective as of April 9, 2004.

           WHEREAS, the parties desire to extend the Term of the Distributor
 Agreement and the Supply Agreement and to make other amendments to such
 agreements as specified herein.

           NOW, THEREFORE, the parties agree as follows:

           1. Limited Amendment; Interpretation.  The Distributor Agreement
 and the Supply Agreement are not amended except as specified in this
 Amendment.  Capitalized terms in this Amendment shall have the same meanings
 as in the Distributor Agreement or the Supply Agreement, as the context may
 require.

           2. Extended Term.  Specifically amending Section 9 of the
 Distributor Agreement and Section 7 of the Supply Agreement, the Term of
 each such Agreement shall be extended from November 30, 2005 through and
 including November 30, 2008 (the "Extended Term").

           3. Base Royalty Payment.  Specifically amending Section 8 of
 the Distributor Agreement, in consideration of the Extended Term of the
 Distributor Agreement and the continued rights of Medline to distribute the
 Products and to use the Trademarks granted herein, Medline (a) shall pay
 Carrington the sum of $1,250,000 (the "Advance Payment") on the date hereof
 and (b) agrees to the Extended Term of the Supply Agreement.  In the event
 the Distributor Agreement is terminated between the effective date of this
 Amendment and November 30, 2005 (a) by Carrington, for any reason, or (b) by
 Medline pursuant to Section 10.1 thereof, then Carrington shall refund to
 Medline the entire $1,250,000 payment not later than 10 days after the
 effective date of termination.  After November 30, 2005, in the event that
 the Distributor Agreement is terminated by Medline pursuant to Section 10.1
 thereof, Carrington shall refund to Medline, not later than 10 days after
 the effective date of termination, the amount by which $1,250,000 exceeds
 the number obtained by multiplying $34,722.22 by the number of months from
 the commencement of the Extended Term to the effective date of such
 termination, rounded to the nearest whole month (the "Refund Amount").

           4. Security for Base Royalty Payment.  In addition to the security
 provided pursuant to the Trademark Security Agreement, dated as of November
 3, 2000, between Carrington and Medline, Carrington agrees to the following
 additional security for Carrington's  payment obligations regarding the
 Advance Payment and the Refund Amount, as stated in Section 3, above.  As
 of the effective date of this Amendment and in addition to all of the rights
 and remedies afforded under the Distributor Agreement and the Trademark
 Security Agreement, Carrington grants to Medline a exclusive license under
 Carrington's trade secret formulae, to make and have made the Products,
 provided that Medline shall not have access to such formulae and shall not
 exercise the foregoing manufacturing rights unless and until (a) Carrington
 files for or is petitioned into bankruptcy, insolvency, liquidation or
 dissolution of assets or fails generally to pay its debts and obligations in
 accordance with their terms, and (b) as a result thereof, Carrington ceases
 to sell Products to Medline or is unable to provide Products to Medline in
 accordance with the Distributor Agreement.  As such time as the foregoing
 right is exercised, the parties shall negotiate a commercially reasonably
 license fee or royalty for such license, and any disagreement on such fee
 or royalty payable to Carrington shall be resolved by binding arbitration
 conducted by the American Arbitration Association under its commercial
 arbitration rules in Chicago, Illinois with  the resolution thereof  to be
 retroactive. The Advance Payment or the Refund Amount, as the case may be,
 may be applied against the royalties first due under such license.

           5. Retail Sales.  For avoidance of doubt, the parties acknowledge
 that nothing in the Distributor Agreement restricts Carrington from
 manufacturing or selling any product (whether or not a Product) to markets
 other than the Markets as defined in Section 1.1 of the Distributor
 Agreement, namely the hospital, nursing home and home health care markets,
 and that Carrington is therefore permitted to sell any product (whether or
 not a Product) to other markets, including without limitation to pharmacies,
 pharmacy chains and other retail outlets.

           6. Contract Manufacturing.  For avoidance of doubt, the parties
 acknowledge that nothing in the Distributor Agreement restricts Carrington
 from manufacturing any product (which is not a Product (as defined in
 Section 1.1 of the Distributor Agreement) for customers having their own
 formula and regulatory approval for such product, provided, however, that
 Carrington agrees that it will not so manufacture any product that competes
 with the Products in the Markets and Territory, as defined in Section 1.1 of
 the Distributor Agreement, or with any product Carrington manufactures for
 Medline at the time under the Supply Agreement.

           7. Supply of New Medline Products.  With respect to the
 obligations of the parties under the Supply Agreement, it is agreed that
 if Carrington at its own expense develops a monographed product for sale to
 Medline under the Supply Agreement and Medline agrees to an initial price
 for such product, Medline shall purchase such product exclusively from
 Carrington at such price for a period of two years from the date of
 Medline's first order unless Medline has reimbursed Carrington for the cost
 of stability studies and analytical method development of such product.

           8. Recovery of Products.  Carrington and Medline will discuss in
 good faith at their regular meetings either removing certain  Products from
 the list of Products as defined in the Distributor Agreement or permitting
 Carrington to market them to purchasers who are not current customers of
 Medline, and the terms and conditions of such recovery.

           9. No Breaches; Release.  The parties agree and acknowledge that
 there are no uncured material breaches under the Distributor Agreement or
 the Supply Agreement as of the effective date of this Amendment.  The
 parties hereby release each other from any and all liabilities and claims
 of any kind, other than liabilities under outstanding or unpaid for
 orders, whether known or unknown, that may have arisen or accrued from the
 relationship between the parties as described in the Distributor Agreement
 or the Supply Agreement, from the effective date of the Distributor
 Agreement and the Supply Agreement to the effective date of this Amendment.
 Except as specifically set forth in this Section 8, the parties agree that
 no modification or amendment of the Distributor Agreement or the Supply
 Agreement shall be deemed to have occurred by act, failure to act or waiver
 of any right by Carrington or Medline, other than set forth in a writing
 executed by both parties.

           IN WITNESS WHEREOF, the parties hereto have caused this Amendment
 to be executed by their duly authorized representatives.

                                    CARRINGTON LABORATORIES, INC.


                                    By:   /s/ Carlton E. Turner
                                          ---------------------
                                    Name:  Carlton E. Turner
                                          ---------------------
                                    Title: Pres/CEO
                                          ---------------------


                                    MEDLINE INDUSTRIES, INC.


                                    By:   /s/ Andrew Mills
                                          ---------------------
                                    Name:  Andrew Mills
                                          ---------------------
                                    Title: President
                                          ---------------------

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