Sample Business Contracts


Indemnity Agreement - Showa Denko America Inc. and Schiff Products Inc.


RESTATED STANDARD INDEMNITY AGREEMENT                               CONFIDENTIAL


                                   AGREEMENT


         THIS AGREEMENT, dated January 26, 1993, by and between Showa Denko
America, Inc. ("SDA"), and Schiff Products, Inc., a Utah Corporation (which,
together with the subsidiaries listed on Attachment 1 hereto, are referred to
collectively as the "Company").

                                   WITNESSETH

         WHEREAS, the Company has manufactured, sold, and/or distributed
products containing L-tryptophan ("LTCPs"), some or all of which may have
contained L-tryptophan ("LT") sold by SDA; and

         WHEREAS, claims have been asserted and lawsuits have been instituted
against SDA, the Company, and/or direct or indirect customers of the Company for
whom the Company is or may become responsible to provide a defense (individually
a "Secured Customer" and collectively the "Secured Customers"), alleging that
one or more of them is liable for personal injuries arising from ingestion of
LTCPs manufactured, sold, or distributed by the Company; and

         WHEREAS, in partial settlement of the Company's claim for
indemnification against SDA arising from SDA's sale of LT, to the
<PAGE>   2

Company, or to an entity from which the Company may have purchased, without any
admission of liability by SDA or by the Company with respect to the claims
between them or against them, SDA and the Company wish to provide for their
respective responsibilities for the defense of such claims and for the payment
of judgments and settlements in respect of such claims as provided in this
Agreement; and

         WHEREAS, the Company is unwilling to enter into this Agreement unless
Showa Denko K.K., a Japanese company ("SDK"), enters into a Guaranty Agreement
with the Company substantially in the form annexed to this Agreement as
Attachment 2;

         NOW, THEREFORE:

         1. This Agreement shall apply to all claims, whether in litigation or
not, alleging liability for personal injuries arising from the ingestion of
LTCPs manufactured, sold, or distributed by the Company asserted against SDA,
the Company, and/or Secured Customers, or against any one or more of them,
whether on, before, or after the date hereof (except as specifically provided
herein). Each such claim is hereinafter referred to individually as a "Claim,"
and all such claims are hereinafter referred to collectively as the "Claims."
Each person asserting a Claim is hereinafter referred to individually

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<PAGE>   3
as a "Claimant" and all such persons are hereinafter referred to
collectively as the "Claimants."

         2. SDA agrees to indemnify and to hold harmless the Company from and
against any obligation (whether direct or by virtue of any obligation to a
Secured Customer or any cross-claim, third-party claim, claim for contribution
or indemnification, or otherwise) to make payment of any settlement or judgment
for damages in favor of any person in respect of a Claim where the LTCPs
allegedly ingested by the Claimant or Claimants making such Claim contained LT
sold by SDA, as follows:

         (a) If a proximate cause of the personal injuries giving rise to
         liability, as determined on the basis of a preponderance of the
         evidence, including but not limited to epidemiological, chemical, and
         medical evidence, was a constituent of the LT product sold by SDA or
         was a factor for which SDK, SDA or any other company or other entity
         controlling, controlled by or under common control with SDA (SDK and
         each such other company or other entity, an "SDA Affiliate") was
         responsible, then, subject to subparagraph (b) below, SDA shall be
         solely responsible for the Company's payment obligations, whether
         direct or indirect as noted above, in respect of such settlement or
         judgment;

         (b) If a proximate cause of the personal injuries giving rise to
         liability, as determined on the basis of a preponderance of the
         evidence, including but not limited to

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<PAGE>   4

         epidemiological, chemical, and medical evidence, was (i) the sale of
         LT, or of an LTCP for which the recommended daily dosage contained more
         than 100 mg. of LT, by the Company or by any Secured Customer
         subsequent to March 17, 1990, or (ii) the sale of an LTCP for which the
         recommended daily dosage contained 100 mg. or less of LT by the Company
         or by any Secured Customer subsequent to May 23, 1990, or (iii) the
         addition of any substance to, or tampering with, any LT or an LTCP
         while that LT or LTCP was in the possession, custody or control of the
         Company or any Secured Customer (each such sale, addition or tampering,
         an "Exclusion Event"), then SDA and the Company shall seek to reach
         agreement regarding the Company's responsibility, if any, for payment
         in respect of said settlement or such judgment as is fair under all the
         circumstances;

         (c) If SDA and the Company are unable to agree on the matters which are
         the subject of the provisions of subparagraphs (a) or (b) above, then
         SDA and the Company shall submit the matter to binding arbitration as
         specified in paragraph 15 hereof;

         (d) Either SDA or the Company may make any payment contemplated under
         this paragraph 2 Without prejudice to its right to seek reimbursement
         from the other under the procedures set forth in paragraph 15;

         (e) Each of the Company and SDA agrees that it will provide prompt
         notice to the other if it learns of the existence of


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<PAGE>   5
                                   


         any Exclusion Event (each such notice, an "Notice of Exclusion"), it
         being agreed, however, that a failure by SDA or the Company to provide
         such notice shall not (i) be deemed to constitute a material breach of
         this Agreement or (ii) result in any change in the rights or
         obligations of SDA or the Company pursuant to this Agreement, including
         without limitation their respective rights and obligations under or
         arising by virtue of subparagraph (b) above. A Notice of Exclusion of
         any Claim shall be null and void and of no effect unless provided prior
         to the earlier to occur of (i) sixty (60) days prior to the date of the
         commencement of the earliest to occur of the trial, arbitration or
         mediation of such Claim and (ii) thirty (30) days prior to any
         settlement of such Claim.

         (f) Any Notice of Exclusion pursuant to this paragraph shall be made in
         the manner provided in paragraph 19 (which paragraph specifies the
         party to whom and the place notice is to be delivered).

         3. SDA agrees (i) to designate Citibank, N.A., or another bank mutually
acceptable to the parties as the disbursement agent (the "Disbursement Agent")
pursuant to a Disbursement Agent Agreement substantially in the form annexed to
this Agreement as Attachment 3 (such agreement, or any replacement thereof
substantially in such form, the "Disbursement Agent Agreement") and (ii) to
maintain the Disbursement Agent Agreement in effect


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<PAGE>   6
during the term of this Agreement. In support of its payment obligations
hereunder and under similar agreements with other customers of SDA, SDA has
delivered to the Disbursement Agent an irrevocable standby letter of credit in
favor of the Disbursement Agent pursuant to the terms of the Disbursement Agent
Agreement in the amount of Twenty Million US Dollars ($20,000,000) substantially
in the form of the letter of credit annexed as Exhibit B to the Disbursement
Agent Agreement. If amounts are drawn on the letter of credit, SDA during the
term of this Agreement will cause an amendment or supplement to the letter of
credit or a new letter of credit to be delivered to the Disbursement Agent
providing for a restored limit of Twenty Million US Dollars ($20,000,000) within
thirty (30) days after such drawing. During the term of this Agreement, no later
than thirty (30) days prior to the expiration date of any letter of credit (as
it may have been extended from time to time), SDA will deliver to the
Disbursement Agent a renewal of the letter of credit for a term of at least two
years or a substitute letter of credit for such term.

         The Company shall be a Beneficiary within the meaning of the
Disbursement Agent Agreement, but only so long as (i) this Agreement remains in
effect and to the extent provided in this Agreement or (ii) the Company
otherwise remains entitled to the benefits of the Disbursement Agent Agreement
under paragraph 16 of this Agreement. The Company acknowledges that other direct



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<PAGE>   7
and indirect customers of SDA will have equal rights as Beneficiaries under the
Disbursement Agent Agreement.

         The Company acknowledges (i) that any claim by it to the benefits of
the Disbursement Agent Agreement must be submitted and administered in strict
compliance with the following procedures, (ii) that the Company has no right to
receive, and the Disbursement Agent has no authority to make, payments by the
Disbursement Agent or draws under the letter of credit unless the claim has been
certified for payment to the Disbursement Agent by the Verification Agent
hereafter referred to, and (iii) that it may claim payment hereunder only as
long as this Agreement remains in effect or the Company otherwise remains
entitled to benefits under paragraph 16 hereof.

         The procedures for submission and review of any claim by the Company
shall be the following:

         (a) The Verification Agent shall be a mutually acceptable lawyer
         independent of the parties. If such Verification Agent or any successor
         shall die or resign or otherwise become unable or cease to continue to
         act as such, SDA, after consultation with the Company and the parties
         to any other similar agreements with SDA, shall appoint a successor
         Verification Agent, who shall be a lawyer independent of the parties.
         The Verification Agent will act independently and impartially on behalf
         of both parties in reviewing claims for payment and certifying amounts
         to the Disbursement Agent for payment and shall use professional care
         in the


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<PAGE>   8



performance of his function. The Verification Agent shall not be liable to
either party for determinations made by him in good faith and with due care even
though such determinations subsequently are held to be erroneous. The
Verification Agent shall have no duties except to SDA, the Company, and the
parties other than SDA to agreements similar to this Agreement (such parties
being referred to in the Disbursement Agent Agreement as Beneficiaries).
Persons asserting Claims, plaintiffs with judgments against any of SDA, the
Company, or Secured Customers, and Secured Customers shall have no right to
assert any third-party beneficiary relationship against the Verification Agent
or any claim to payment from the Disbursement Agent under this Agreement, except
that any Secured Customer that has entered into a separate indemnification
agreement between itself and SDA entitling it to do so may directly exercise its
rights as a Beneficiary under the Disbursement Agent Agreement pursuant to such
separate indemnification agreement. The Company shall have no responsibility for
any part of the fees and expenses of the Verification Agent or the Disbursement
Agent.

(b) If a judgment for money damages is entered against the Company or its
Secured Customer, or a settlement amount is reduced to a judgment enforceable
against the Company or its Secured Customer, as to which the Company contends
that SDA is required to make payment pursuant to paragraph 2 hereof,


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<PAGE>   9
the Company may give written notice thereof (the "Payment Request Notice") to
SDA and to the Verification Agent setting forth a brief statement of the basis
for its contention, accompanied by a certified copy of the judgment, together
with evidence that the judgment has become enforceable against the judgment
debtor under applicable law. If SDA does not respond in the terms permitted by
subparagraph (c) hereof within ten (10) business days of the receipt by it of
the Payment Request Notice, the Verification Agent, subject only to his review
of relevant documents and his verification of any pertinent additional
circumstances, shall certify the amount claimed to the Disbursement Agent for
payment pursuant to the provisions of the Disbursement Agent Agreement.

(c)  In response to a Payment Request Notice, SDA may

         (1) acknowledge to the Company and the Verification Agent its
obligation hereunder to pay part or all of the amount claimed, in which event
the Verification Agent shall forthwith certify the amount or such part thereof,
as the case may be, to the Disbursement Agent for payment pursuant to the
provisions of the Disbursement Agent Agreement, and any portion of such claim as
to which SDA does not acknowledge its obligation hereunder to pay shall be
governed by clause (3) of this subparagraph (c);

         (2) state that it proposes to take effective steps to stay or suspend
the enforcement of such judgment pending


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<PAGE>   10

post-trial applications or appeal, including the posting of any bond or other
security required for that purpose, in which event, provided that the
Verification Agent is satisfied that such stay or suspension has been effected
within five (5) business days after notice to SDA and the Verification Agent
from the Company of an attempted enforcement of such judgment against the
Company, further action by the Verification Agent in respect of such judgment
shall be deferred until such stay or suspension expires; or

         (3) object to payment of part or all of the amount requested, stating
briefly its grounds of objection and that it intends to submit its contentions
in arbitration pursuant to paragraph 15 hereof and SDA agrees to use its best
efforts to expedite any such arbitration, to select its arbitrator promptly
pursuant to the applicable procedures and to cause such person to select the
neutral arbitrator expeditiously, and to have the arbitration held no later than
180 days after submission of the matter to arbitration. If SDA submits the
matter to arbitration within thirty (30) days of its response, the liability of
SDA, if any, shall be determined by the decision of the arbitrators. If the
arbitrators award an amount to the Company, then the Verification Agent shall
certify the sum so awarded by the arbitrators to the Disbursement Agent for
payment pursuant to the provisions of the Disbursement Agent Agreement. If in
subsequent proceedings in conformity with the CPR Rules


                                       10
<PAGE>   11
(as defined in paragraph 15) and the U.S. Arbitration Act the award of the
arbitrators is overturned and it is determined that the amount awarded by the
arbitrators and paid by the Disbursement Agent to or on behalf of the Company
exceeds the amount that was properly owed by SDA, then the Company agrees to pay
promptly such excess amount plus interest at the legal rate. If the Company
shall commence judicial proceedings to review a decision of the arbitrators, the
Verification Agent shall certify to the Disbursement Agent for payment the
amount determined in such judicial proceedings to be due from SDA. If SDA shall
object to payment of less than all the amount claimed by the Company, then the
Verification Agent shall proceed, as to the balance claimed, pursuant to clause
(1) of this subparagraph (c).

(d) If SDA in response to a Payment Request Notice objects to payment of part or
all of the amount requested by the Company, so that the Verification Agent
cannot certify to the Disbursement Agent a payment to be made in full
satisfaction of the judgment, then the Company may elect to require such a full
payment by SDA notwithstanding its objection by (i) giving notice to the
Verification Agent of such election not later than ten (10) business days after
receipt of SDA's objection, including therewith evidence acceptable to the
Verification Agent demonstrating the Company's compliance with the Escrow
Requirement, and


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<PAGE>   12



(ii) satisfying the Escrow Requirement, as hereinafter defined, with respect to
all that part of the judgment as to which SDA made objection. Promptly upon
receipt of such timely notice with such evidence, the Verification Agent shall
certify the amount to which SDA objected to the Disbursement Agent for payment
pursuant to the provisions of the Disbursement Agent Agreement. To exercise this
election, the Company must deposit a sum of money in an amount equal to all that
part of the judgment to which SDA made objection in an interest-bearing escrow
account with a substantial mutually acceptable bank and execute an escrow
agreement in standard form (the "Escrow Agreement") with said bank for the
benefit of SDA (the "Escrow Requirement"). If the Company exercises this
election, then SDA will submit the dispute to arbitration within thirty (30)
days as provided in subparagraph 3(c)(3) above. The Escrow Agreement shall
provide that the deposited escrow funds, with interest earnings net after escrow
fees thereon, will be released by the escrow agent to the parties as their
interests may appear pursuant to and in accordance with the award of the
arbitrators on the dispute as to such amount to which SDA made objection, or as
otherwise directed in a writing signed by both SDA and the Company. If the award
is overturned in any subsequent proceedings (as above provided), and it is
determined that either SDA or the Company received an amount from the escrow
larger than that


                                       12
<PAGE>   13

to which it was entitled, then the party receiving such excess agrees to pay
promptly such excess amount, plus the attributable share of the net interest
earnings on the amount that it received, plus interest at the legal rate
accruing after the escrow distribution, to the party determined to be entitled
thereto.

(e) In any case in which the Verification Agent is required to verify the
appropriateness of payment of an amount claimed by the Company, the Verification
Agent shall promptly review the documents submitted and conduct such further
investigation, if any, of additional facts and circumstances as he determines to
be appropriate. SDA and the Company shall cooperate fully in any such
investigation and shall respond to inquiries from the Verification Agent and
provide explanations within two (2) business days of any such inquiry. The
Company shall use its best efforts to cause any Secured Customer to cooperate in
like manner. Whenever he deems it appropriate, the Verification Agent may seek
information by conference telephone calls with counsel for the parties, and the
parties agree to cause their respective counsel to cooperate fully with the
Verification Agent for that purpose, subject to the maintenance of any
privilege.

(f) At the request of either party, the Verification Agent may require that
procedures be followed to assure that a payment from the Disbursement Agent will
be applied solely


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<PAGE>   14

to payment of the judgment or arbitral award as to which claim has been made,
and for no other purpose. These procedures may include a direction to the
Disbursement Agent to issue a check directly to the order of a judgment
plaintiff against delivery of a satisfaction of the judgment and release of the
defendant or defendants against which the judgment or portion thereof being paid
was entered, satisfactory to counsel for the parties.

         4. SDA shall have no obligation to indemnify for or to make any
payments in respect of any judgment or part of a judgment (i) for damages caused
by the intentional tort of the Company or any Secured Customer, (ii) for
punitive damages attributable to conduct of the Company or any Secured Customer,
(iii) for civil or criminal penalties, or (iv) for any award of multiple damages
caused by the intentional misconduct or violations of law by the Company or by
any Secured Customer; but SDA's obligation to indemnify shall apply to the
extent that the Company's or any Secured Customer's liability for such damages
or penalties is attributable solely to the acts or the failure to act of SDA or
of any SDA Affiliate. However, nothing in the preceding sentence shall
constitute a waiver of any rights that the Company or a Secured Customer may
have under common law or statute to seek indemnification or contribution from
SDA or any affiliate thereof in respect of damages or penalties of a type
specifically described in the preceding sentence that are imposed


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upon the Company or the Secured Customer, subject to the provisions of
paragraphs 14 and 15. SDA shall not be obligated to make any payments in respect
of a default judgment on a Claim against the Company or any Secured Customer
unless SDA or counsel retained by SDA was responsible for defense of the Claim
in litigation at the time of default. SDA shall have no obligation under this
Agreement to pay for any settlement of any Claim entered into by the Company or
any Secured Customer prior to the date of this Agreement, but SDA may agree to
accept such obligation in a separate agreement in writing.

         5. The parties hereto agree that the Company shall use best efforts to
secure the compliance of its Secured Customers with the provisions of this
Agreement that pertain to them. Failure of such compliance on the part of a
Secured Customer that adversely affects the ability of SDA to conduct a defense
against any Claim shall be a basis for SDA to withhold the benefits of this
Agreement from such Secured Customer with respect to such Claim, but shall not
be a basis for SDA to withhold the benefits of this Agreement from the Company
except as expressly provided in the last sentence of paragraph 6(b), paragraph
9(d), or the third sentence of paragraph 14 of the Agreement.

         6. (a) SDA shall pay the legal fees and expenses as incurred in, and
         shall be entitled to supervise and


                                       15
<PAGE>   16
direct, the defense of any Claims which fall within the provisions of this
Agreement made against SDA, the Company, or any Secured Customer including,
without limitation, any Claim presented to any court, administrative body, other
tribunal, or otherwise and including the negotiation of settlement of any Claim
before or after such presentation.

(b) The Company hereby consents to be jointly represented with SDA by common
counsel selected by SDA (such common counsel, so selected, "Common Counsel") in
respect of any Claim where SDA, in its sole discretion, deems it advisable to
retain such Common Counsel. The Company will use best efforts to obtain the
consent of each Secured Customer involved in the Claim to such joint
representation. SDA shall be responsible for all fees and disbursements of such
Common Counsel as they are incurred. SDA and the Company agree promptly to enter
into a common representation agreement or agreements substantially in the form
annexed to this Agreement as Attachment 4 (and the Company will use best efforts
to cause any involved Secured Customers to become parties thereto) providing for
the retention of Common Counsel on a Claim-by-Claim basis, which agreements
shall provide for the waiver of any conflicts of interest that may exist. SDA
shall have no obligation to defend any Secured Customer who shall


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refuse to agree to a request for such common representation, and SDA shall have
no obligation to make payment hereunder to the extent that such payment
obligation is in respect of a Claim against a Secured Customer who refused to
participate in the common defense against such Claim.

(c) If the Company or SDA shall terminate this Agreement, and SDA is not then in
default of its obligations under the provisions of paragraph 3 above, then the
terminating party shall withdraw from representation by Common Counsel;
provided, however, that in the event SDA terminates this Agreement pursuant to
the second sentence of paragraph 16 of this Agreement, the Company will be
deemed to have withdrawn from all applicable common representation agreements
and to have consented to the continued representation by Common Counsel of SDA
and all other parties to any common representation agreement in respect of any
Claims. Except as set forth in the immediately preceding proviso, the Company
and SDA each hereby expressly agrees that the non-terminating party may continue
to be represented by Common Counsel. The Company and SDA each waives any
conflicts of interest that continued representation of the other party by Common
Counsel in accordance with this Agreement might otherwise entail. If SDA is in
default of its


                                       17
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obligations under the provisions of paragraph 3 above, and if the Company or SDA
shall terminate this Agreement, then at the Company's request SDA shall withdraw
from representation by Common Counsel, and each party hereby expressly agrees
that the Company and the Secured Customers may continue to be represented by
Common Counsel and waives any conflicts of interest that such representation
might otherwise entail. If the Company terminates this Agreement or if SDA
terminates this Agreement pursuant to the provisions of the second sentence of
paragraph 16, SDA shall have no further obligation to defend Secured Customers
under this Agreement.

(d) Nothing herein shall preclude SDA, the Company, or any Secured Customer from
retaining separate counsel in respect of any Claim, but the party retaining
separate counsel shall instruct such separate counsel to cooperate with SDA's
counsel unless it is prejudicial to do so, and a party retaining separate
counsel shall be responsible for payment of the fees and disbursements of its
separate counsel unless otherwise agreed by SDA.

(e) At the request of the Company, SDA will pay the reasonable fees, costs and
disbursements of one national coordinating counsel for the Company, who shall
also be responsible for contact with each of the


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    Company's Secured Customers. If the Company shall have retained national
    coordinating counsel, then SDA will use best efforts to consult with such
    counsel regarding the selection of counsel for particular cases and
    regarding important decisions in the litigation. SDA will instruct common
    Counsel (i) to provide such national coordinating counsel, on a timely
    basis, copies of all pleadings, discovery, and status reports and material
    correspondence so that such national coordinating counsel will be kept
    fairly apprised of the progression of the litigation; (ii) to consult with
    such national coordinating counsel regarding material Court filings made on
    behalf of the Company or a Secured Customer on a timely basis in advance of
    making such filings; and (iii) to keep such national coordinating counsel
    advised of settlement negotiations at least bimonthly. SDA and Common
    Counsel shall endeavor to contact the Company and the Secured Customers
    through the Company's national coordinating counsel. National coordinating
    counsel will be provided reasonable access to the files of Common Counsel
    for the review and copying of such files on all matters related to the joint
    defense.

         7. The Company will cooperate fully with SDA, and will use best efforts
to obtain the Secured Customers' cooperation with


                                       19
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SDA, in the investigation and defense of Claims, including but not limited to
making its or their records and personnel available to SDA and its attorneys and
providing witnesses to present testimony at any trial, arbitration, or
proceeding, if requested to do so, and consulting with SDA's attorneys prior to
providing any documents or information to any claimant or any person acting on
behalf of a claimant. SDA will also cooperate in the defense of Claims in cases
in which it is not a party. The Company agrees promptly to instruct all counsel
which, prior to the date of this Agreement, have represented the Company in
connection with any Claim (i) to provide counsel for SDA with copies of all
written communications, and to disclose to counsel for SDA the substance of all
oral communications, made prior to the date of this Agreement to counsel for any
plaintiff in any Claim (other than documents or oral statements either
previously provided to counsel for SDA or exclusively in respect of procedural
issues); and (ii) except with respect to a Withdrawn Claim (as defined in
paragraph 13 below) to refrain from oral or written communications with any such
plaintiff's counsel (x) without providing Common Counsel prior notice of the
opportunity to attend, or (y) as authorized by counsel for SDA, or (z) as
required by law.

         8. The Company represents and agrees that (a) no default judgment on
any Claim has been entered against it or to its knowledge any of its Secured
Customers as of the date of this


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Agreement, and it will not, and will use best efforts to cause its Secured
Customers not to, knowingly permit a default judgment to be taken against it or
them hereafter without SDA's express written consent; (b) neither it nor, to its
knowledge, any of its Secured Customers has knowingly made, and it will not, and
will use best efforts to cause its Secured Customers not to, knowingly make, any
admission of liability for any Claim; and (c) neither it nor, to its knowledge,
any of its Secured Customers has entered into any agreement for the compromise
or settlement of any Claim (except for any such agreements as have been
identified in writing to SDA prior to execution of this Agreement) or will
hereafter enter into any agreements for the compromise or settlement of any
Claim without SDA's consent (which consent shall not be unreasonably withheld),
and any such settlement payment made shall be subject to paragraph 2(d) above.


         9.       (a) In the event of any material breach by the Company or by
                  SDA of this Agreement, then the other party ("the
                  non-breaching party") may, at its sole option, waive the
                  breach or, in addition to any other remedies provided herein
                  (including without limitation arbitration pursuant to
                  paragraph 15), (i) terminate this Agreement or (ii) terminate
                  this Agreement with respect to any Claim the defense of which
                  has been materially adversely affected by such breach. If the
                  party alleged to be in material breach disputes the


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<PAGE>   22
grounds for termination of the Agreement, then such party must submit the matter
to arbitration within 30 days after the notice of termination or be deemed to
have accepted it.

(b) The failure of a Secured Customer to comply with the provisions of this
Agreement shall not be deemed a breach of this Agreement by the Company
entitling SDA to invoke the termination rights in subparagraph (a) above if and
so long as the company has exercised, and continues to exercise, its best
efforts to persuade the Secured Customer to comply.

(c) In the event of a material breach by the Company, and in addition to the
remedy in subparagraph (a) above, SDA may seek to reduce (in whole or in part)
the portion of any settlement or judgment it must pay under this Agreement to
the extent such amount was adversely affected by such breach. If the Company
disputes any such reduction in payment, then SDA must submit the matter to
arbitration pursuant to paragraph 15 hereof. Should SDA reduce its portion of
any settlement or judgment as provided herein, the Company shall not be
required to pay any part or all of said settlement or judgment by virtue of this
provision except by order of the arbitrators.

(d) SDA may also invoke the provisions of paragraph 9(c) above to seek to reduce
its obligation


                                       22
<PAGE>   23
         as to amounts attributable to a Secured Customer in a situation
         described in paragraph 9(b) above.

         (e) Nothing contained in this paragraph 9 shall limit the right of a
         party to terminate this Agreement pursuant to paragraph 16 of this
         Agreement.

         10. SDA shall be solely responsible for retaining and supervising
claims adjusters for Claims, except for any Claims asserted before the date
hereof for which the Company has engaged an adjuster who has already contacted
the claimant or the claimant's lawyer or representative (the "Contacted
Claimants"), and the Company agrees not to retain claims adjusters for any other
Claims. The Company has, concurrently with the execution of this Agreement,
provided SDA with a list of all such Contacted Claimants, specifying the
responsible adjuster and the status of the Claims. SDA will pay all costs of the
adjusters retained by it and, beginning with the date of this Agreement, all
reasonable costs of adjusters previously retained by the Company for purposes of
adjusting Claims of Contacted Claimants. Notwithstanding the foregoing, if SDA
shall fail to retain and supervise such claims adjusters in a timely manner, as
a result of which the Company or the Secured Customers may be adversely
prejudiced, the Company shall have the right to retain and supervise such
adjusters at SDA's expense.





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<PAGE>   24

         11. Adjusters retained by SDA will keep the Company's national
coordinating counsel (if any) and/or its insurer fully apprised of the status of
all Claims not in litigation on at least a bimonthly basis. Adjusters retained
by the Company in respect of Contacted Claimants shall keep SDA apprised of the
status of such Claims as reasonably requested by SDA, and such adjusters shall
be available to pursue settlement as requested by SDA.

         12.      (a) SDA may settle any Claim without prior approval of or
                  prior notice to the Company or any Secured Customer if such
                  settlement makes no admissions, acknowledges no liabilities,
                  includes an unconditional release of the Company and any
                  involved Secured Customers and either (i) the amount of the
                  settlement is $5,000 or less, or (ii) the Company or any
                  Secured Customer will have no responsibility for payment of
                  such settlement pursuant to paragraph 2 hereof. If SDA shall
                  settle a Claim without prior notice to the Company or any
                  Secured Customer, SDA shall provide prompt notice of the
                  settlement thereafter.

                  (b) SDA may settle any Claim with prior notice to the Company
                  or any Secured Customer for an amount in excess of $5,000 if
                  the Company or any of its Secured Customers may have some
                  responsibility for payment of such settlement pursuant to
                  paragraph 2, but only if


                                       24
<PAGE>   25

SDA has given the Company a timely Notice of Exclusion with respect to such
Claim as required by paragraph 2(e) hereof. Any such settlement shall make no
admissions, acknowledge no liabilities, and include an unconditional release of
the Company and any involved Secured Customers. If SDA intends to assert any
claim against the Company for contribution pursuant to paragraph 2(b) relating
to the settlement, such prior notice of the settlement will also contain notice
of such intent, stating the portion of the settlement amount expected to be so
claimed by SDA and an explanation in reasonable detail of SDA's basis for such
claim. SDA shall have no obligation to delay settlement to await a response from
the Company or any Secured Customer, but SDA will endeavor to give the Company
or any Secured Customer such reasonable period to respond as will not jeopardize
the opportunity to settle. It is agreed that neither party is the agent or the
attorney in fact of the other party and cannot bind the other party to any
settlement agreement in any Claim or suit.

(c) Whether the provisions of paragraphs 2(a) or 2(b) of this Agreement apply to
the settlement of any Claim, unless the parties hereto have agreed otherwise all
amounts payable to the plaintiff or claimant in such settlement shall be
advanced by SDA, without prejudice


                                       25
<PAGE>   26
         to SDA's rights to seek reimbursement pursuant to the provisions of
         paragraph 2(b) and, in the event of disagreement, to arbitrate the
         dispute pursuant to the provisions of paragraph 15, and in any such
         arbitration the Company may raise any disagreement it may have had
         regarding the amount of settlement. If SDA settles any Claim against
         itself in an action in which a Claim is also asserted against the
         Company, such settlement will also extend to and cover the Company. SDA
         shall expressly extend releases achieved by such settlement to cover
         the Company's Secured Customer(s); provided, however, that the
         Company's Secured Customer(s) have participated with SDA in the common
         defense and have executed a waiver of conflicts satisfactory to SDA.



         13. Notwithstanding any other provision of this Agreement to the
contrary, the Company may elect not to be represented by Common Counsel, or to
terminate its representation by Common Counsel, in respect of any particular
Claim (each such election by the Company, an "Election") in the event that the
Company determines in its sole discretion that representation of the Company by
Common Counsel in respect of such Claim is not or may not be in the best
interest of the Company (each Claim in respect of which the Company makes an
Election, a "Withdrawn Claim"). Any Election (i) shall be made in writing and
shall expressly refer to this paragraph 13, and (ii) shall be effective when


                                       26
<PAGE>   27
delivered to SDA and, in the event that Common Counsel has represented the
Company in defending the Claim to which such Election relates, to Common
Counsel. It is agreed that SDA's obligations under paragraphs 1, 2, 3 and 6 of
this Agreement shall be inapplicable with respect to any Withdrawn Claim, and,
without limiting the generality of the foregoing, that SDA shall have no
obligation (i) to make any indemnification or other payment to the Company
pursuant to this Agreement in respect of any Withdrawn Claim, or (ii) to provide
or pay for any national coordinating counsel for the Company in respect of any
Withdrawn Claim; provided, however, that nothing in the foregoing sentence shall
affect the obligation of SDA to pay any fees or disbursements of Common Counsel
incurred in defending the Company in a Claim prior to the date of an Election by
the Company with respect to that Claim. In addition, the Company irrevocably
waives any right it may have (whether under this Agreement, at common law or
otherwise) to recover from SDA or any SDA Affiliate any fees or disbursements of
any counsel (other than Common Counsel) incurred by the Company in connection
with any Withdrawn Claim or the defense thereof.

         14. Each of SDA and the Company hereby covenant during the term of this
Agreement not to sue or to assert any cross-claim, third-party claim, or other
claim against the other or against any SDA Affiliate or against any parent,
subsidiary, or affiliate of the Company in respect of any Claim, but the
foregoing shall


                                       27
<PAGE>   28
not preclude a judicial action to compel arbitration or to enforce an award
resulting from an arbitration pursuant to the provisions of paragraph 15. The
Company covenants to use its best efforts to cause its Secured Customers to
covenant during the term of this Agreement not to sue or to assert any
cross-claim, third-party claim, or other claim against SDA or any SDA Affili-
ate, in which event SDA will agree not to assert any such claims against such
Secured Customers or their parents, subsidiaries, or affiliates in respect of
any Claim. If the Company or any Secured Customer (whether or not such Secured
Customer shall have agreed not to do so) shall bring any claim against SDA or
any SDA Affiliate in respect of a Claim, SDA shall have available the remedies
provided in the last sentence of paragraph 6(b) and paragraph 9(d) hereof. The
provisions of this paragraph only apply for so long as this Agreement is in
effect. After termination by any party, cross-claims, third-party claims or
other claims may be brought without restriction. Each party hereto waives any
statute of limitations, any defense of laches, and any procedural rules of court
which apply to the assertion of cross-claims, third-party claims, or other
claims against each other relating to any Claim for the period from the date
hereof through the date that is one year from and after the latest of (i) the
date a settlement is entered into with the claimant/plaintiff relating to such
Claim, (ii) the date a non-appealable, final judgment relating to such Claim is
entered as to any party hereto; and (iii) the date of termination of this


                                       28
<PAGE>   29
Agreement. Each party also agrees that no pleading, discovery response, order,
verdict, judgment, or court decision in any lawsuit asserting a Claim shall have
collateral-estoppel or similarly preclusive effect with respect to any
litigation or other proceedings between the parties.

         15. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the Center for Public Resources Rules for Non-Administered Arbitration of
Business Disputes (the "CPR Rules"), by three arbitrators, of whom each party
shall appoint one and the third shall be the Chairman. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. ch. 1, and judgment upon
the award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. Arbitration shall take place in a city to be agreed upon
by the parties or, in the absence of agreement, in New York City, Chicago,
Atlanta, Los Angeles, or San Francisco (whichever city is geographically closest
to the venue of the Claim out of which the matter is to be arbitrated), subject
to the power of the arbitrators to hold hearings or meetings wherever they deem
it appropriate. The arbitrators shall apply the substantive law of the State of
New York. Arbitration of disputes concerning the parties' payment obligations in
respect of a judgment rendered on a Claim shall be based on the trial record
with respect to such Claim and such further evidence as either party may present
to


                                       29
<PAGE>   30
the arbitrators. Arbitration of disputes concerning the parties' payment
obligations in respect of a settlement of a Claim shall be based on the pretrial
record developed with respect to such Claim and such further evidence as either
party may present to the arbitrators. No pleading, discovery response, order,
verdict, judgment or court decision in any lawsuit asserting a Claim shall have
a collateral-estoppel or similarly preclusive effect with respect to an
arbitration to determine the proximate cause of the personal injuries or the
cause of damages giving rise to the liability (the responsibility for which is
being disputed in the arbitration). The parties agree that discovery authorized
by the arbitrators can be pursued anywhere in the world and that each will
cooperate to accomplish same. Any party obstructing orderly discovery can be
sanctioned at the discretion of the Chairman. As provided in the CPR Rules,
attorneys fees and costs may be awarded to a prevailing party as part of the
arbitral award.

         16. Either party may terminate this Agreement at any time in the event
the terminating party is entitled to do so under Paragraph 9(a). In addition,
SDA may terminate this Agreement in the event that (i) the Company has made an
Election in respect of one or more Claims and (ii) SDA determines in its sole
discretion that the exercise of the right by the Company to make such Election
is or may be prejudicial to SDA. Paragraphs 2, 4, 13 and 15 (with respect only
to all settlements and judgments


                                       30
<PAGE>   31
entered into or awarded prior to termination), paragraph 6(c) (except in respect
of any Withdrawn Claim), this paragraph 16 and paragraph 17 shall survive
termination of this Agreement. In addition, SDA will have the right to terminate
this Agreement with respect to a Claim, and promptly retender the defense of a
Claim back to the Company, in the event it is determined (and SDA shall have the
burden of proof to establish) that such Claim arises solely out of LTCPs and is
based upon LT contained therein acquired from some person or entity other than
SDA (directly or indirectly), or that the LTCPs sold by the Company to the
claimant contained no LT sold by SDA; provided, however, that the right of
termination granted to SDA in this sentence may be exercised no later than sixty
(60) days prior to the date of commencement of the trial, arbitration or
mediation of such Claim.

         Notwithstanding termination, SDA shall be responsible for adjustment
costs for services rendered pursuant to paragraph 10 and the Company's national
coordinating counsels' fees and costs pursuant to paragraph 6 (except as
otherwise provided in paragraph 13), incurred prior to termination. Once
terminated, this Agreement will not survive or affect the rights of the parties
except as specifically set forth in this paragraph.

         17. Communications concerning and/or the exchange of information or
materials of any kind between or among the parties hereto or their counsel,
Secured Customers, insurers, or


                                       31
<PAGE>   32
adjusters concerning the Claims are and shall be made in furtherance of the
common defense of such Claims (whether pursued through common or separate
counsel) and are intended to be, and shall remain, confidential and privileged
to the full extent permitted under the attorney-client privilege, work-product
doctrine, trade secret privilege, and any other applicable privilege or
protective doctrine. Neither participation in this Agreement nor the sharing of
information pursuant to it is intended to reduce or diminish the confidentiality
of such information or to waive any privilege or protection which may apply in
the absence of such participation or sharing of information. The obligations
under this paragraph shall survive termination of this Agreement.

         This Agreement in no way restricts the rights of any party hereto to
use evidence against each other in any arbitration under this Agreement or
litigation between the parties hereto following termination of this Agreement.

         18. This Agreement contains the entire agreement between the parties,
and replaces all prior agreements, if any, between or among the parties, with
respect to the settlement of Claims and to the allocation of responsibility
between the parties for the payment of settlements of or judgments on Claims. No
modifications of this Agreement shall be effective unless in a written agreement
properly executed by authorized representatives of each of the parties hereto.
Nothing in this Agreement shall


                                       32
<PAGE>   33
amend or modify any agreement or understanding between the parties hereto, or
preclude any action, relating to reimbursement of costs and expenses of the
Company, and any other damages associated therewith, incurred in connection with
the product recall of LTCPs, nor shall this paragraph preclude any party to
argue the pertinence to proceedings between the parties of purchase orders,
invoices or other agreements between the parties relating to the purchase and
sale of LT.

         19. Notices by either party to the other with respect to the subject
matter of this Agreement shall be provided by facsimile with confirming copy by
mail, addressed as follows:

             If to SDA:                       
            
             Showa Denko America, Inc.
             280 Park Avenue
             27th Floor, West Building
             New York, New York  10017
             tel: (212) 687-0773
             fax: (212) 573-9007
             Attention: President
            
             with a copy to:
            
             Christopher H. Lunding, Esq.
             Cleary, Gottlieb, Steen & Hamilton
             One Liberty Plaza
             New York, New York 10006
             tel: (212) 225-2000
             fax: (212) 225-3999
            
             If to the Company:
            
             Mr. Richard Bizzaro
             Weider Food Companies
             1911 South 3850 West
             Salt Lake City, Utah  84104
             tel:  (801) 975-1166
             fax:  (801)
                                             


                                       33
<PAGE>   34
                 with a copy to:         
                
                 Kenneth R. Campbell, Esq.
                 Campbell & Miller
                 427 C Street, Suite 410
                 San Diego, California
                 Tel: (619) 232-0086
                 Fax: (619) 232-0089

The Company and SDA each reserves the right to change its address and/or
facsimile number for the purposes set forth above by giving fifteen (15) days'
prior written notice of such change to the other party either at its address for
the giving of notices set forth above in this paragraph or to such other address
as the party giving such notice shall have specified to the other party in the
manner set forth above.

         20. The signatures of the representatives of SDA and the Company at the
end of this Agreement constitute the representation by each that it is the duly
authorized representative of SDA and the Company, respectively, and that they
are authorized to enter into this Agreement.

         21. This Agreement shall be governed by the law of the State of New
York; provided, however, that if applying Federal law would result in upholding
a claim of the attorney-client privilege, the work product-doctrine, the trade
secret privilege, or any other applicable privilege or protective doctrine which
otherwise would be lost or waived if New York law were to be



                                       34
<PAGE>   35
applied, then Federal law shall govern this Agreement insofar as such privilege
or doctrine is concerned.

         22. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.

         23. The Company represents, covenants, and agrees that (i) it will
cause its subsidiaries listed on Attachment 1 to fulfill each of the
obligations, representations, and warranties required of or made by the Company
in this Agreement; (ii) each of the obligations, representations, and warranties
required of or made by the Company will be deemed to have been made by or
required of the Company and each of its subsidiaries listed on Attachment 1;
(iii) a breach of such obligations, representations, or warranties by any one or
more of the subsidiaries listed on Attachment 1 that is not timely performed by
the Company deemed to be a breach by the Company; and (iv) the Company has full
authority to act for and bind its said subsidiaries, and can act for them, in
all matters covered by this Agreement. It is further agreed that each subsidiary
listed on Attachment 1 shall be considered to be part of the Company and shall
be entitled to benefits under this Agreement only so long as it remains a
wholly-owned subsidiary (direct or indirect) of the Company, and the Company
shall no longer be responsible under this paragraph 23 for conduct of any such
subsidiary after the date the




                                       35
<PAGE>   36
subsidiary ceases to be a wholly-owned subsidiary of the Company.

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




                                                    SHOWA DENKO AMERICA, INC.  
                                                   
                                                   
                                                    By /s/Norio Masubuchi
                                                       -------------------------
                                                       Norio Masubuchi
                                                       President
                                                   
                                                   
                                                   
                                                    SCHIFF PRODUCTS INC., A UTAH
                                                    CORPORATION
                                                   
                                                    By /s/Richard Bizzaro
                                                       -------------------------
                                                       Richard Bizzaro
                                                       President
                      








                                       36
<PAGE>   37
                                  Attachment 1

                   to Agreement Dated as of January __, 1993
                    By and Between Showa Denko America, Inc.
                 and Schiff Products, Inc., a Utah Corporation



                              List of Subsidiaries
<PAGE>   38
SDK Guaranty Agreement                                 CONFIDENTIAL


                               GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT, dated as of January __, 1993, by and between SHOWA
DENKO K.K. (the "Guarantor"), a corporation organized and existing under the
laws of Japan, and Schiff Products, Inc., A Utah Corporation (the
"Beneficiary"), a corporation organized and existing under the laws of Utah.

                                   WITNESSETH

WHEREAS the Beneficiary and SHOWA DENKO AMERICA, INC. ("SDA") have entered into
a written agreement dated as of the date of this Guaranty Agreement providing
(among other things) that SDA agrees to indemnify the Beneficiary from and
against certain obligations in respect of Claims relating to L-tryptophan
manufactured by the Guarantor, all to the extent specified and pursuant to the
terms and conditions contained in that agreement (that agreement, as the same
may be amended, modified or supplemented from time to time, referred to herein
as the "Agreement"), and

WHEREAS it is a requirement of the Agreement that SDA deliver the guaranty of
SDA's obligations under the Agreement to the Beneficiary contained in this
Guaranty Agreement;

NOW, THEREFORE, the Guarantor and the Beneficiary agree as follows :

1. Guaranty. (a) The Guarantor unconditionally and irrevocably guarantees (as
primary obligor and not merely as surety) payment in full as provided in the
Agreement of all amounts payable by SDA under the Agreement, as and when those
amounts become payable by SDA pursuant to the terms and conditions contained in
the Agreement. The Guarantor further unconditionally and irrevocably guarantees
the performance by SDA, as and when required pursuant to the terms and
conditions of the Agreement, of all obligations of SDA under the Agreement. The
Guaranty contained herein is made subject to all of the terms and conditions
contained in the Agreement evidencing the obligations of SDA guaranteed hereby,
and nothing contained herein shall be deemed to amend or modify any of such
terms or conditions in any way.

(b) This is a continuing Guaranty and a guaranty of payment (not merely of
collection) and performance, and it shall remain in full force and effect until
the later to occur of (i) termination of the Agreement in accordance with its
terms and (ii) such time as all amounts payable by SDA under
<PAGE>   39
the Agreement have been validly, finally and irrevocably paid in full. This
Guaranty shall not be affected in any way by the absence of any action to obtain
those amounts from SDA. With respect to this Guaranty, the Guarantor waives all
requirements as to presentment, demand for payment, demand for performance,
notice of default, protest or notice of any kind regarding SDA or the breach by
SDA of its obligations under the Agreement.

(c) This Guaranty shall not be affected by the occurrence of any circumstance
(other than complete, irrevocable payment) that might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor. If SDA merges
or consolidates with or into another entity, loses its separate legal identity
or ceases to exist, or files any petition for bankruptcy or any other insolvency
proceeding, the Guarantor shall nonetheless continue to be liable for the
payment of all amounts payable by SDA under the Agreement and for the
performance of all obligations of SDA under the Agreement.

(d) This Guaranty shall remain in full force and effect or shall be reinstated
(as the case may be) if at any time any payment by SDA made pursuant to the
Agreement, in whole or in part, is rescinded or must otherwise be returned by
the Beneficiary upon the insolvency, bankruptcy or reorganization of SDA or
otherwise, all to the same extent as if that payment had not been made.

(e) So long as any amount payable by SDA under the Agreement is overdue and
unpaid, the Guarantor shall not (i) exercise any right of subrogation or
indemnity, or similar right or remedy, against SDA or any of its assets or
property in respect of any amount paid by the Guarantor under this Guaranty or
(ii) file a proof of claim in competition with the Beneficiary for any amount
owing to the Guarantor by SDA on any account whatsoever in the event of the
bankruptcy, insolvency or liquidation of SDA.

2. Contractual Currency. All payments by the Guarantor under this Guaranty shall
be made in United States currency.

3. No Conflict With Law; Remedies Not Exclusive. (a) Neither the execution or
delivery of this Guaranty Agreement by the Guarantor, nor the performance by the
Guarantor of its obligations hereunder, conflicts with or will result in the
breach of any applicable Japanese law, regulation or statute.

(b) The rights and remedies set forth in the Agreement are in addition to and
not exclusive of any rights and remedies


                                       2
<PAGE>   40
available to the Beneficiary by law in respect of this Guaranty.

4. Amendments, Waivers. All amendments, waivers and modifications of or to any
provision of this Guaranty and any consent to departure by the Guarantor from
the terms hereof shall be in writing and signed and delivered by the Beneficiary
and, in the case of any such amendment or modification, by the Guarantor, and
shall not otherwise be effective. Any such waiver or consent shall be effective
only in the specific instance and for the purpose for which it is given.

5. Binding Effect. This Guaranty shall be binding on the Guarantor and its
successors and assigns. However, the Guarantor shall not transfer any of its
obligations hereunder without the prior written consent of the Beneficiary, and
any purported transfer without that consent shall be void. This Guaranty shall
inure to the benefit of the Beneficiary and its successors and assigns.

6. Governing Law: Jurisdiction; Waiver of Jury Trial. (a) This Guaranty shall be
governed by and construed. and interpreted in accordance with the law of the
State of New York.

(b) The Guarantor irrevocably submits to the non-exclusive jurisdiction of the
courts of the State of New York and of the United States sitting in the Borough
of Manhattan in connection with any action or proceeding by the Beneficiary to
enforce the Guarantor's obligations under this Guaranty (each, a "Proceeding")
and irrevocably appoints CT CORPORATION SYSTEM, 1633 Broadway, New York, New
York 10019 as its agent for the sole purpose of receiving service of process or
other legal summons in connection with any Proceeding brought in any such court.
So long as the Guarantor has any obligation under this Guaranty, it will
maintain a duly appointed agent in New York City for the service of such process
or summons and, if it fails to maintain such an agent, any such process or
summons may be served on it by mailing a copy thereof to the Guarantor at its
address set forth, and in the manner provided, in Paragraph 7 hereof, with such
service deemed effective on the fifteenth day after the date of such mailing.

(c) The Guarantor irrevocably waives, to the fullest extent permitted by
applicable law, any defense or objection it may now or hereafter have to the
laying of venue of any Proceeding brought in the courts of the State of New York
or of the United States sitting in the Borough of Manhattan (a Proceeding
brought in any such court, a "New York Proceeding") and any claim that any
Proceeding brought in

                                       3
<PAGE>   41
any such court has been brought in an inconvenient forum. Nothing herein
contained shall preclude the Beneficiary from bringing an action or proceeding
to enforce the Guarantor's obligations under this Guaranty in any other place
where jurisdiction over the Guarantor properly may be obtained.

(d) The Guarantor irrevocably agrees that it will not raise as a defense or
set-off in any New York Proceeding an allegation that the Beneficiary is
indebted to the Guarantor or SDA, or interpose a counter-claim in a New York
Proceeding seeking recovery of any such alleged indebtedness, unless that
indebtedness allegedly arose out of the same operative facts as form the basis
of the Beneficiary's claims in that New York Proceeding.

(e) The Guarantor and the Beneficiary each irrevocably waives trial by jury in
any New York Proceeding.

(f) The Guarantor and the Beneficiary each irrevocably agree that the party
prevailing in any New York Proceeding shall be entitled to be awarded therein an
amount equal to the reasonable fees and expenses of its attorneys incurred in
connection with that Proceeding.

7. Enforcement in Japan. The Guarantor solemnly covenants that in the event that
a final, non-appealable judgment is rendered against it in a New York Proceeding
(any such final, non-appealable judgment, a "Judgment"), the Guarantor (i) will
not raise any defense to the enforcement of such Judgment in Japan which would,
or seeks to, require relitigation of that New York Proceeding; and (ii) will do
everything within its power to assure that such Judgment becomes enforceable in
Japan as soon as is possible under Japanese law after the time enforcement of
such Judgment is sought in that country.

8. Notices. All notices, requests, demands and other communications to the
Guarantor or the Beneficiary which are required or permitted hereunder shall be
made in writing and shall be deemed properly given hereunder when provided by
confirmed facsimile transmission, with a separate confirming copy sent by United
States registered mail, return receipt requested, with sufficient postage
prepaid thereon to carry it to its addressed destination, as follows:

       SHOWA DENKO K.K.             
       13-9, Shiba Daimon 1-chome
       Minato-ku, Tokyo 105
       Japan
       Attention:  President
       Facsimile:  011-81-3-5470-3709


                                        4
<PAGE>   42
with a copy to:

            CLEARY, GOTTLIEB, STEEN & HAMILTON    
            One Liberty Plaza
            New York, New York 10006
            Attention: Christopher H. Lunding, Esq.
            Facsimile: 212-225-3999

If to the Beneficiary:

            Weider Food Companies
            1911 South 3850 West
            Salt Lake City, Utah  84104
            Attention:  Mr. Richard Bizzaro
            Confirmation: (801) 975-1166

with a copy to:

            Campbell & Miller
            427 C Street, Suite 410
            San Diego, California  92101
            Attention: Kenneth R. Campbell. Esq.
            Facsimile: (619) 232-0089

The Guarantor and the Beneficiary each reserves the right to change its address
and/or facsimile number for the purposes set forth above by giving fifteen days'
prior written notice of such change to the other either at its address for the
giving of notices set forth in the Agreement or to such other address as the
party giving such notice shall have specified to the other party in the manner
set forth above.

9. Headings. The section headings in this Guaranty are for convenience of
reference only and shall not affect the meaning or construction of any provision
hereof.

                                       5

<PAGE>   43
IN WITNESS WHEREOF the Guarantor and the Beneficiary each has duly executed this
Guaranty Agreement as of the date first written above.

SHOWA DENKO K.K.


By:  /s/Daiya Miyoshi
    ---------------------
     Daiya Miyoshi
     Representative Director
     and Executive Vice president



SCHIFF PRODUCTS, INC., A UTAH CORPORATION

By:  /s/Richard Bizzaro
    ---------------------
     Richard Bizzaro
     President


                                        6

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