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                                                                EXHIBIT 99(b)(1)

[NATIONAL BANK FINANCIAL LOGO]

Montreal, April 9, 2003

AXCAN PHARMA INC.
597 Laurier Blvd
Mont Saint-Hilaire, Quebec
J3H 6C4

Attention: Jean Vezina
           Vice-President Finance

Dear Sirs:

Re:  US$150,000,000 Credit Facilities
- -------------------------------------

                               ARRANGEMENT LETTER

You have informed us of your proposed direct or indirect acquisition of all
outstanding shares of SALIX Pharmaceuticals Ltd. ("Target") through a public
offer for a price payable in cash. You have advised us that the offer will be
conditional upon the tendering of sufficient shares to permit Axcan Pharma Inc.
("Axcan") or one of its Canadian or U.S. wholly-owned subsidiary to become owner
of all remaining shares of Target by way of a merger with Target under terms
whereby the resulting entity will be a wholly-owned subsidiary of Axcan. The
proposed acquisition is referred to herein as the "Transaction".

In connection with the Transaction, you have requested US$150,000,000 in credit
facilities to be made available to Axcan in order to provide a portion of the
financing for the Transaction and to repay and replace Axcan's existing credit
facilities.

National Bank of Canada is pleased to confirm to Axcan its commitment to
underwrite (the "Underwriter") the Credit Facilities described in the attached
term sheet (the "Term Sheet"), subject to the terms and conditions provided in
this letter and the Term Sheet and to act as administrative agent (the "Agent")
for the Lenders with respect to the Credit Facilities. National Bank Financial
Inc. is also pleased to confirm its willingness to act as Lead Arranger (the
"Arranger") and Sole Bookrunner in connection with the Credit Facilities. This
letter is referred to herein and in the Term Sheet, at times, as the
"Arrangement Letter" or, when referred to collectively with the Term Sheet, as
the "Commitment".

As consideration for the Commitment and the agreement of the Agent and the
Arranger to perform the services described herein with respect to the Credit
Facilities, you agree to pay the fees contemplated in the Fee Letter delivered
to you concurrently herewith and abide by the terms of such Fee Letter.

You agree that no other agent or arranger will be appointed, no other titles
will be awarded and no compensation other than contemplated by the Term Sheet or
the Arrangement Letter will be paid in connection with the Credit Facilities
unless you and the Arranger agree.

                          The Exchange Tower
                          130 King Street West, Suite 3200, P.O. Box 21
                          Toronto, Ontario M5X 1J9
                          (416) 869-3707

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                                       -2-

The Arranger intends to solicit commitments for the Credit Facilities from other
financial institutions in amounts sufficient to allow the Underwriter to achieve
its desired hold level of US $40,000,000 in the Credit Facilities. The Arranger
intends to commence such syndication efforts promptly upon the Transaction being
publicly announced. You agree to assist the Arranger in its efforts to syndicate
the Credit Facilities. Such assistance will include (i) provision of all
financial and other information reasonably deemed necessary by the Arranger to
successfully complete the syndication efforts, (ii) assistance in the
preparation of a syndication memorandum and all other marketing materials to be
used in connection with the syndication, and (iii) as requested by the Arranger,
meetings and other direct contacts between the prospective lenders and senior
management and advisors of Axcan and, to the extent possible, Target.

The Commitment is also subject to: (i) there being no facts, events or
circumstances, now existing or hereafter arising, which come to the Arranger's
attention and which, in the Arranger's good faith determination, materially
adversely affect the business, assets, financial condition, operations or
prospects of Axcan or your ability to consummate the Transaction; (ii) there not
having occurred a material disruption of or material adverse change in
financial, banking or capital market conditions that, in the Arranger's
judgment, could materially impair the syndication of the Credit Facilities; and
(iii) the Arranger's satisfaction that prior to and during the syndication of
the Credit Facilities, there shall be no competing offering, placement or
arrangement of any debt securities or bank financing by you or on your behalf.
Upon the occurrence of any of such events, the Arranger and the Underwriter may
terminate the Commitment and will have no further obligation hereunder or in
connection with the Credit Facilities.

It is understood and agreed that the Underwriter shall be entitled, after
consultation with the Borrower at any time before, on or after execution of the
definitive documentation in respect of the Credit Facilities to change the
pricing and structure of the Credit Facilities if the Underwriter determines
that such changes are necessary to ensure a successful syndication of the Credit
Facilities as determined by the Underwriter in a timely manner (provided that
the aggregate amount of the Credit Facilities remains unchanged from that
outlined in this Arrangement Letter).

You hereby represent and covenant that:

(a)  all information provided to the Arranger and the Underwriter (the
     "Information") that has been or will be made available by you or any of
     your representatives is or will be, when furnished, complete and correct in
     all material respects (provided that the information concerning Target is
     limited to publicly available information) and does not or will not, when
     furnished, contain any untrue statement of a material fact or omit to state
     a material fact necessary in order to make the statements contained therein
     not materially misleading in light of the circumstances under which such
     statements are made; and

(b)  all financial projections that have been or will be submitted will be
     prepared in good faith based upon reasonable assumptions. You understand
     that in arranging and syndicating the Credit Facilities, we may use and
     rely on the Information and all such financial projections without
     independent verification thereof.

You agree to reimburse and indemnify the Arranger, the Agent and the Lenders
committing to participate in the Credit Facilities in respect of their
reasonable expenses as set forth in the Term Sheet, whether or not definitive
credit documentation (collectively, the "Credit Documentation") is executed and
delivered or the Transaction is consummated.

                          The Exchange Tower
                          130 King Street West, Suite 3200, P.O. Box 21
                          Toronto, Ontario M5X 1J9
                          (416) 869-3707

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                                       -3-

This Commitment is delivered to you with the understanding that neither this
letter or the Term Sheet not their substance shall be disclosed to any third
party without our prior written consent, except those in confidential
relationship to you, such as legal counsel or accountants, or as required by law
or any court or governmental agency (and in each such event of permitted
disclosure you agree promptly to inform us).

If you agree with the contents of this letter and the Term Sheet, please sign
and return to us the enclosed copy of this letter no later than 5:00 p.m.
Eastern Time on April 10, 2003. Our Commitment will terminate at such time
unless: (i) an executed copy of this letter signed by you has been delivered to
us, and (ii) you have made payment of the portions of the Commitment Fee to be
paid on delivery and acceptance of our Commitment. Moreover, our Commitment will
also terminate at 5:00 p.m. on the earlier of (y) the date you confirm your
intention not to proceed with the Credit Facilities or the Transaction, and (z)
July 9, 2003 if the Credit Documentation has not been executed and the
conditions precedent to the initial drawdown have not been fulfilled prior to
such date, or such later date as may be agreed on between the Borrower and the
Arranger as a result of an extension of the initial expiry date of the
Transaction bid.

We look forward to working with you.

Sincerely,

NATIONAL BANK FINANCIAL INC.,           NATIONAL BANK OF CANADA,
as Arranger                             as Underwriter and Agent


By:     /s/ Laura Dottori                 By:     /s/ Laura Dottori
     ----------------------------            ----------------------------


By:     /s/ Brian Smith                   By:     /s/ Brian Smith
     ----------------------------            ----------------------------


AGREED TO AND ACCEPTED THIS 9TH DAY OF APRIL 2003.


  AXCAN PHARMA INC.

  By:     /s/ Jean Vezina
        -------------------------

  Name:   Jean Vezina
        -------------------------

  Title:  V.P. Fin. & CFO
        -------------------------

                          The Exchange Tower
                          130 King Street West, Suite 3200, P.O. Box 21
                          Toronto, Ontario M5X 1J9
                          (416) 869-3707

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                         SUMMARY OF TERMS AND CONDITIONS
                       (All dollar amounts in US dollars)

THIS SUMMARY OF TERMS AND CONDITIONS IS NOT MEANT TO BE, NOR SHOULD IT BE
CONSTRUED AS, AN ATTEMPT TO DEFINE ALL OF THE TERMS AND CONDITIONS OF THE
TRANSACTION CONTEMPLATED HEREIN, NOR IS IT INTENDED TO REFLECT SPECIFIC DOCUMENT
PHRASING THAT COULD EXIST IN A FINAL CREDIT AGREEMENT. IT IS INTENDED ONLY TO
OUTLINE THE BASIC BUSINESS POINTS AGREED TO BY THE PARTIES BASED UPON WHICH
LEGAL DOCUMENTATION MIGHT BE STRUCTURED.

ALL CAPITALIZED TERMS AND EXPRESSIONS USED HEREIN SHALL BE DEFINED IN THE CREDIT
AGREEMENT, IF NOT OTHERWISE DEFINED HEREIN.

1    BORROWER

     Axcan Pharma Inc. (THE "BORROWER").

2    GUARANTORS

     The Borrower's Material Subsidiaries (collectively, the "GUARANTORS").

3    AMOUNT

     Credit facilities totaling up to an aggregate of $150,000,000 (The
     "COMMITMENTS" or the "CREDIT FACILITIES").

4    LEAD ARRANGER & SOLE BOOKRUNNER

     National Bank Financial Inc. ("NBF").

5    UNDERWRITER AND ADMINISTRATIVE AGENT

     National Bank of Canada ("NBC").

6    LENDERS

     NBC and a group of Lenders to be determined in consultation with the
     Borrower.

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7    CREDIT FACILITIES

     FACILITY 1:    Up to $75,000,000 Revolving Credit Facility.

     FACILITY 2:    Up to $75,000,000 Non-Revolving Term Facility.

8    PURPOSE

     The Credit Facilities can be utilized by the Borrower as follows:

     FACILITY 1:    To finance a portion of the purchase price to be paid for
                    the Shares in connection with the Acquisition, the
                    refinancing of existing credit facilities, to pay fees and
                    expenses associated therewith and for general corporate
                    purposes.

     FACILITY 2:    To finance a portion of the purchase price to be paid for
                    the Shares in connection with the Acquisition, the
                    refinancing of existing credit facilities, to pay fees and
                    expenses associated therewith.

9    CLOSING DATE

     The date when Phase I is completed and the initial drawdown under the
     Credit Facilities is made, which shall be no later than July 9, 2003 or
     such later date as may be agreed on between the Borrower and the Arranger
     as a result of an extension of the initial expiry date of the Bid (the
     "Closing Date").

10   TERM

     FACILITY 1:    Initially, three (3) years from the Closing Date. Available
                    as follows:

                    364-DAY REVOLVING PERIOD
                    Available on a fully revolving basis (the "REVOLVING
                    PERIOD"). The Borrower may, prior to the end of the
                    Revolving Period, request an extension of the Revolving
                    Period for an additional 364 days.

                    2-YEAR TERM PERIOD
                    In the event the Lenders elect not to extend the Revolving
                    Period, the Borrower shall have the option of converting the
                    amounts then outstanding under the Revolving Term Facility
                    to a non-revolving credit with a final maturity date (the
                    "TERM PERIOD MATURITY DATE") which is two

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                    (2) years from the then current Revolving Period Maturity
                    Date (the "TERM PERIOD").

     FACILITY 2:    Three (3) years from the Closing Date.

11   DRAW DOWN AVAILABILITY

     Upon completion of all documentation and satisfaction of Conditions
     Precedent to initial drawdown, availability will be as follows:

     Subsequent to the Borrower having utilized its cash and cash equivalents,
     for up to an aggregate amount satisfactory to the Arranger, drawdowns under
     the Credit Facilities will occur firstly under Facility 2, and then under
     Facility 1.

     One drawing may be made under the Credit Facilities on the Closing Date to
     purchase Shares in connection with the Bid and permit completion of Phase
     I. In addition, additional drawings may be made after the date of initial
     drawing for the purpose of funding the take up of Shares tendered during
     Phase II. A final drawing may be made on the date of completion of Phase II
     (which shall occur no later than 90 days after the Closing Date) to pay
     that portion of the consideration for the Shares and related fees and
     expenses that become due and payable upon completion of Phase II. No
     additional drawings may be made under Facility 2 after the completion of
     Phase II.

     Following completion of Phase I, drawdowns may be made under Facility 1 at
     the Borrower's option, on a revolving basis.

12   CAPITAL REPAYMENTS

     FACILITY 1:    During the Term Period, quarterly repayments with a maximum
                    bullet payment not to exceed 50% of the loan amount.

     FACILITY 2:    No repayments during the first year following the Closing
                    Date. Quarterly repayments of 12.5% of the loan amount
                    during year 2 and 3.

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13   MANDATORY PREPAYMENTS

     FACILITY 2:    (A)  ASSET TRANSACTIONS: Prepayments in the amount of all of
                         the net after-tax cash proceeds of the sale or other
                         disposition of, or insurance on account of any loss of,
                         any property or assets of the Borrower or any Guarantor
                         (including, after completion of Phase II, Target and
                         its subsidiaries), payable no later than thirty (30)
                         days following the date of receipt, other than (i) net
                         cash proceeds of sales or other dispositions of
                         accounts receivable and inventory in the ordinary
                         course of business and (ii) disposition of property in
                         an aggregate net amount (i.e. net of property purchased
                         in replacement) not exceeding in any fiscal year 5% of
                         the Borrower's consolidated assets as at the end of the
                         previous fiscal year.

                    (B)  EQUITY OFFERINGS: Prepayments in an amount equal to
                         100% of the net cash proceeds received from the
                         issuance of any equity (other than through the exercise
                         of options), hybrid equity, income trust or similar
                         securities of the Borrower and its Material
                         Subsidiaries, payable no later than the first Business
                         Day following the date of receipt, unless the Lenders
                         have consented to such net proceeds being reserved for
                         an acquisition to take place within 12 months from the
                         receipt of such proceeds.

                    (C)  INCURRENCE OF INDEBTEDNESS: Prepayments in an amount
                         equal to 100% of the net cash proceeds received from
                         the incurrence of Debt by the Borrower and its Material
                         Subsidiaries other than Permitted Debt.

                    (D)  CASH FLOW SWEEP: Prepayments in an amount equal to 50%
                         of the Excess Cash Flow.

     FACILITY 1:    During Term Period, items (A), (B) and (C) of the above will
                    also apply.

     Any Mandatory Prepayments will be applied in inverse order of maturity.

14   VOLUNTARY PREPAYMENTS

     The Credit Facilities may be prepaid, in whole or in part, without premium
     or penalty, subject to customary breakage costs.

15   TYPE OF ADVANCES

     Drawings under the Credit Facilities may be done by way of:

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     FACILITY 1:    Canadian Prime Rate Loans, U.S. Base Rate Loans, Banker's
                    Acceptances ("BA"), Libor loans, Letters of Credit ("LC") or
                    Letters of Guarantee ("LG") or any combination thereof. LC's
                    and LG's will be limited to $7,500,000.

     FACILITY 2:    U.S Base Rate Loans or Libor loans or any combination
                    thereof.

16   INTEREST RATES AND FEES

     Refer to Schedule A.

17   SECURITY

     The Credit Facilities and each Guaranty will be secured by fully perfected
     first priority security interests in all assets, including without
     limitation, all personal, real and mixed property of the Borrower and the
     Guarantors, subject to exceptions to be agreed on based on constraints
     resulting from applicable law (except for Permitted Liens).

     For greater certainty, the Security will include a pledge of the stock of
     each Material Subsidiary and a security interest in all inter-company debt
     owed to the Borrower or a Guarantor.

     It is understood that, at the time of and after completion of the Bid but
     prior to the completion of Phase II, the pledge with respect to the Shares
     will be limited to the Shares acquired pursuant to the Bid and shall charge
     such Shares as and when they are acquired.

     As the foregoing Security relating to Target and its subsidiaries will not
     be available until Target is 100% owned by the Borrower, the Borrower will
     undertake to cause Target and its Material Subsidiaries to provide the same
     Security as outlined above upon completion of Phase II.

     (collectively, the "SECURITY DOCUMENTS").

18   CONDITIONS PRECEDENT TO INITIAL DRAWDOWN

     Customary for this type of transaction including but not limited to the
     following which shall be, in form and substance, satisfactory to the
     Lenders and their counsel:

     1.   A credit agreement (the "Credit Agreement") articulating in greater
          detail the terms and conditions contained herein and all other such
          provisions as the parties hereto and their counsel consider
          appropriate;

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     2.   Execution and publication / perfection of registration of Security
          Documents;

     3.   The structure utilized to consummate the Acquisition, the terms
          thereof, the pro forma capitalization of the Borrower after giving
          effect to the Acquisition, the Bid and the definitive documentation
          relating thereto (the "Definitive Acquisition Documents") shall be in
          form and substance reasonably satisfactory to the Arranger (it being
          understood that the structure and terms of the documentation relating
          to the Bid in the form delivered to the Arranger prior to the date
          hereof is satisfactory to the Arranger). Without limiting the
          generality of the foregoing, (i) the Definitive Acquisition Documents
          (other than with respect to Phase II) shall be in full force and
          effect on the Closing Date, and no material provision thereof
          (including conditions to the Bid) shall have been amended,
          supplemented, or otherwise modified in any material respect (except as
          required by the SEC, but provided same does not materially adversely
          affect the credit risk of the Lenders) or waived, (other than to
          extend the Bid expiry date through a date no later than 120 days
          following the original commencement of the Bid) without the prior
          written consent of the Arranger and (ii) there shall have been validly
          deposited under the Bid and not withdrawn such Shares constituting the
          Minimum Shares.

     4.   Prior to the initial borrowing under the Credit Facilities or
          simultaneously therewith, (i) the Bid shall have been completed with
          respect to the Minimum Shares pursuant to the Definitive Acquisition
          Documents (and none of such Minimum Shares will have been withdrawn)
          and the Borrower or Acquisition Co shall be the owner of a number of
          Shares at least equal to the Minimum Shares and (ii) the cash or cash
          equivalent in the Borrower and the initial borrowing under the Credit
          Facilities on the Closing Date shall be sufficient to pay the purchase
          price for the Shares tendered pursuant to the Bid, to pay fees and
          expenses of the Borrower due and payable on the Closing Date and
          anticipated to become due and payable during the immediately
          succeeding 90 days;

     5.   A satisfactory opinion from counsel to the Lenders and counsel to the
          Borrower on all matters incident to the transactions contemplated
          herein, as the Lenders may reasonably require;

     6.   There shall not exist, in the judgment of the Arranger, any action,
          suit, investigation, litigation or proceeding pending or threatened in
          any court or before any regulatory or governmental authority that
          materially impairs the Bid, Phase II, or the financing thereof, or
          that would have a material adverse effect on the Borrower, its
          Material Subsidiaries, and on Target and its Subsidiaries, taken as a
          whole, the Bid, Phase II, the financing thereof or any of the
          transactions contemplated hereby;

     7.   Satisfactory evidence that all amounts due by the Borrower pursuant to
          the terms of the Existing Credit Facilities shall be repaid
          concurrently with the completion of Phase I and that such Existing
          Credit Facilities shall be cancelled and an undertaking to do so with
          respect to Target's existing credit facilities if same are not paid
          out as at the completion of Phase II;

     8.   Satisfactory evidence that the Existing Liens and all other Liens
          charging the property or assets of the Borrower and its subsidiaries
          have been released and discharged, to the exclusion, however, of any
          Permitted Liens;

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     9.   Delivery of all other documents, declarations, certificates,
          agreements and notices that the Lenders and their counsel may
          reasonably require and which shall be referred to in the Credit
          Agreement;

     10.  Satisfactory evidence that all necessary material regulatory and
          governmental approvals required in order to effect and complete the
          Acquisition have been obtained;

     11.  Payment of all fees (including reasonable legal fees of Lenders'
          counsel);

     12.  Absence of a Default or Event of Default.

19.  CONDITIONS PRECEDENT TO FINAL FUNDING AND PHASE II

     As of the date of completion of Phase II and as a condition precedent to
     the final funding under the Credit Facilities (if any), the following shall
     be satisfied (or the Arranger shall be reasonably satisfied that same will
     be satisfied immediately after such advance):

     1.   CONTINUED SATISFACTION OF CONDITIONS PRECEDENT TO INITIAL FUNDING.
          Each of the conditions precedent described under Conditions Precedent
          to Initial Draw down, above, shall be satisfied as of such date.

     2.   COMPLETION OF PHASE II. Phase II shall have been completed pursuant to
          the Definitive Acquisition Documents, no material provision of which
          shall have been amended, supplemented, waived or otherwise modified in
          any material respect without the prior written consent of the Arranger
          (except as contemplated above and including any extensions of the
          Bid).

     3.   SECURITY. The Arranger, for the benefit of the Lenders, shall have
          been granted perfected first priority security interests in all assets
          described above under the heading "Security," in each case to the
          extent such security interests shall not previously have been granted;
          together with such legal opinions, title insurance and other related
          documents and materials as the Arranger may reasonably request.
          However, it is understood that with respect to Target and its Material
          Subsidiaries, the Borrower shall have undertaken to cause Target and
          its Material Subsidiaries to provide such Security within 30 days of
          completion of Phase II.

20.  CONDITIONS PRECEDENT TO EACH SUBSEQUENT DRAWDOWN

     Customary for this type of transaction, including, but not limited to

     1.   All representations and warranties are true and accurate in all
          material respects as at each draw down date;

     2.   Absence of a Default or Event of Default; and

     3.   Delivery of required draw down notices.

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21.  REPRESENTATIONS AND WARRANTIES

     Those representations and warranties relating to the Borrower and the
     Guarantors (exceptions to be provided in some specified circumstances for
     non Material Subsidiaries) which are usual and customary for this type of
     financing, but not limited to: accuracy of financial statements, absence of
     undisclosed liabilities, corporate existence, no Material Adverse Change,
     enforceability of credit documentation, compliance with laws, payment of
     taxes, absence of material litigation, environmental compliance, insurance
     etc.

22.  COVENANTS

     The Credit Agreement shall contain all affirmative and negative covenants
     which are customary for financings of this nature and magnitude and all
     other affirmative and negative covenants that the Lenders may reasonably
     require, including but not limited to:

     1.   Completion of Phase II (which shall occur no later than 90 days after
          the Closing Date) Within 30 days of such completion, the Borrower will
          cause Security over Target assets and its subsidiaries to be delivered
          to the Lenders;

     2.   Restrictions on liens and indebtedness subject to (i) a threshold of
          $10,000,000; (ii) Permitted Liens; and (iii) Permitted Debt;

     3.   Restrictions on asset sales or economic equivalent thereof in an
          aggregate net amount (i.e. net of property purchased in replacement)
          in excess of 5% of total consolidated assets of the Borrower subject
          to exceptions (i) for cash sales at fair market value where proceeds
          pay down Lenders and (ii) for sales to which Lenders consent;

     4.   Restrictions on amalgamations and subsidiary formations;

     5.   Restrictions on capital expenditures to a maximum annual aggregate
          amount not to exceed $7,500,000;

     6.   No acquisitions and investments other than (i) the Acquisition; (ii)
          acquisitions and investments not exceeding in any fiscal year
          $10,000,000 in the aggregate; and (iii) acquisitions satisfying
          certain criteria as to the type of industry, the location of assets,
          capability of assets being subject to the Security, environmental
          liability as well as absence of Default and Material Adverse Change as
          a result of such acquisition;

     7.   No distribution if (i) the Total Debt to EBITDA ratio is greater than
          3.0x; and (ii) the aggregate amount of distributions in any fiscal
          year were to exceed 10% of the consolidated net income of the Borrower
          for the previous fiscal year;

     8.   If the Total Debt to EBITDA ratio is greater than 3.0x, the aggregate
          amount of research and development expenses in any fiscal year (other
          than those required to

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          be accounted for as a result of the Acquisition) shall not exceed 10%
          of the consolidated sales of the Borrower for such fiscal year;

     9.   Restrictions limiting related party transactions to fair market value
          transactions;

     10.  With respect to the property and business of the Borrower and its
          Material Subsidiaries, the Borrower and its Material Subsidiaries will
          maintain insurance for full insurable value, as well as satisfactory
          civil liability insurance and upon completion of Phase II the Borrower
          will do same for target and its Material Subsidiaries;

     11.  Financial information customary for this type of transaction.

23.  FINANCIAL COVENANTS

           Refer to Schedule B.

24.  EVENTS OF DEFAULT

     Customary for this type of transaction, including but not limited to:

     1.   Non-payment of principal, interest, fees and other amounts;
     2.   Violation of covenants;
     3.   Failure of any representations or warranties to be true;
     4.   Cross default to all debt and debt equivalents;
     5.   Material unsatisfied judgements;
     6.   Invalidity of credit documentation;
     7.   Insolvency events;
     8.   Material Adverse Change.

25.  SYNDICATION AND OTHER PROVISIONS

     ASSIGNMENT: Lenders will have the right to assign all or a part of their
     Loans or Commitments in minimum amounts of $5,000,000 and self
     participations in all or part of their Loans or Commitments.

     MAJORITY LENDERS: Any amendments other than rate, repayments, amortization,
     term and security for which the unanimous consent of the Lenders is
     required shall require the consent of Lenders representing at least 51% of
     the total Commitment amount of the Credit Facilities.

     EXPENSES: All reasonable legal and out-of-pocket expenses incurred by the
     Lenders for the preparation, negotiation, execution and administration of
     the Arrangement Letter and the Credit Documents, are for the account of the
     Borrower whether or not the definitive credit documentation is executed or
     the Acquisition or Closing occurs.

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     LAW: The Credit Agreement, its interpretation and its enforcement shall be
     governed by the laws in force in the Province of Quebec.

     LEGAL COUNSEL TO NBC AND NBF: McCarthy Tefrault LLP

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D    DEFINITIONS

Acquisition                   The acquisition of all Shares, either directly or
                              through a wholly-owned Subsidiary of the Borrower
                              ("Acquisition Co"), by way of a public offer (the
                              "Bid") for a price payable in cash or in
                              securities or any combination thereof and a
                              subsequent merger whereby the shares not
                              previously acquired will be acquired for a price
                              in cash not less than the price payable pursuant
                              to the Bid.

Debt                          With respect to a person, and without duplication,
                              all obligations that under GAAP should be
                              classified on such person's balance sheet as
                              liabilities or to which reference should be made
                              by footnotes thereto, (i) including, whether or
                              not so classified, guarantees and liens granted in
                              respect of Debt of another person, but (ii)
                              excluding deferred taxes, trade accounts payable,
                              obligations under operating leases and other
                              accrued obligations incurred in the ordinary
                              course of business, but deducting cash and cash
                              equivalents.

EBITDA                        In respect of any person for any period, an amount
                              equal to net Income for such period, plus, without
                              duplication and to the extend reflected as a
                              charge in the calculation of net income; (i) any
                              provision for current or deferred income taxes;
                              (ii) Interest Expense; (iii) losses from
                              extraordinary, unusual or non-recurring items
                              approved by the Agent (which approval shall not be
                              unreasonably withheld); (iv) in process R&D write
                              offs; (v) any aggregate net loss arising from the
                              sale, exchange or other disposition of capital
                              assets by such person (including any fixed assets,
                              whether tangible or intangible, all inventory sold
                              in conjunction with the disposition of fixed
                              assets and all securities); (vi) net losses of
                              affiliates and any other losses in respect of
                              investments which are accounted for on an equity
                              basis; (vii) amount in respect of non-controlling
                              interest, if any; (viii) amortized debt discount;
                              (ix) depreciation and amortization expense; (x)
                              the amount of any deduction as a result of any
                              grant to members of management of the person of
                              any capital stock; and (xi) any other non-cash
                              losses approved by the Agent (which approval shall
                              not be unreasonably withheld) which have been
                              deducted in determining net

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                              income, LESS, without duplication and to the
                              extent reflected as a credit in the calculation of
                              net income; (a) income tax credits (other than R&D
                              tax credits) or reductions in deferred taxes; (b)
                              gains from extraordinary, unusual or non-recurring
                              items; (c) any aggregate net gain arising from the
                              sale, exchange or other disposition or capital
                              assets by such person (including any fixed assets,
                              whether tangible or intangible, all inventory sold
                              in conjunction with the disposition of fixed
                              assets and all securities); (d) net profits (other
                              than dividends received and retained) of
                              affiliates and any other profits in respect of
                              Investments which are accounted for on an equity
                              basis; (e) amounts in respect of non-controlling
                              interests, if any; and (f) any other non-cash
                              gains which have been added in determining net
                              income.

Excess Cash Flow              In respect of any period, EBITDA for such fiscal
                              year minus cash Interest Expense, cash taxes,
                              permitted cash dividends, principal repayments on
                              Debt and unfunded capital expenditures, in each
                              case for the said period.

GAAP                          The generally accepted accounting principles which
                              are in effect from time to time and approved by
                              the American Institute of Certified Public
                              Accountants and included in its handbook
                              concerning accounting treatment or statement of
                              presentation.

Interest Coverage Ratio       In respect of the Borrower at any time, the amount
                              determined in accordance with the formula A/B
                              where:

                                   A   is EBITDA of the Borrower, and

                                   B   is Interest Expense.

Interest Expense              In respect of any person for any period, without
                              duplication, gross interest, as reflected in the
                              financial statements of such person (including
                              that attributable to the interest component of
                              payments under capital leases) including all
                              commissions, discounts and other fees paid or
                              accrued during such period and all charges paid or
                              accrued during such period with respect to letters
                              of credit and letters of guarantee, all as
                              determined in accordance with GAAP; provided that
                              Interest Expense shall exclude unrealized
                              translation gains and losses on foreign exchange
                              and non-cash expenses relative to financial
                              instruments required to be accounted for as
                              interest under GAAP.

Material Adverse Change       Any fact, event or circumstance which, in the
                              Arranger's

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                                              [NATIONAL BANK FINANCIAL LOGO]

                              good faith determination, would materially
                              adversely affect the financial condition,
                              business, assets, operations or prospects of the
                              Borrower and its Subsidiaries and, upon completion
                              of Phase II, Target and its subsidiaries (taken as
                              a whole).

Material Subsidiary           (i) any Subsidiary of the Borrower and Target
                              whose unconsolidated assets or revenues at the end
                              of any fiscal quarter are greater than 2.5% of the
                              consolidated assets or revenues, as applicable, of
                              the Borrower at such time (with revenues being
                              determined on the basis of the four-quarter period
                              ending at such time) provided that the combined
                              assets or revenues of all Non Material
                              Subsidiaries shall not in the aggregate exceed 5%
                              of the consolidated assets or revenues (as
                              applicable) of the Borrower; and (ii) any
                              Subsidiary of the Borrower which at the end of any
                              fiscal quarter owns a patent, trademark or other
                              intellectual property that is material to the
                              operations of the Borrower and its Subsidiaries
                              taken as a whole.

Minimum Shares                A number of Shares sufficient to permit Phase II
                              to occur, but greater than 50.0% of the
                              outstanding Shares of Target on a fully diluted
                              basis

Permitted Debt                (i) $125,000,000 Convertible Subordinated Notes
                              due in 2008, (ii) indebtedness secured by a
                              Permitted Lien, and (iii) Debt to which Lenders
                              consent.

Permitted Liens               (i) liens arising by operation of law, to the
                              extent they have not become enforceable, (ii)
                              liens securing obligations incurred to finance the
                              acquisition or use of assets, up to an aggregate
                              outstanding amount not exceeding $10,000,000 and
                              (iii) first ranking liens securing intercompany
                              loans provided such loans are fully and
                              effectively subject to the Security.

Phase I                       The acquisition by the Borrower or Acquisition Co
                              of the Minimum Shares

Phase II                      (i) the acquisition by the Borrower or Acquisition
                              Co of Shares during an extension period of the
                              initial expiry date of the Bid or a subsequent
                              offering period; and (ii) the acquisition of all
                              the remaining outstanding Shares of Target by way
                              of (a) a "short form" merger If Borrower or
                              Acquisition Co acquires at least 90% of Shares
                              pursuant to the Bid or (b) a "long form" merger of
                              the acquiror with Target.

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                                              [NATIONAL BANK FINANCIAL LOGO]

Senior Debt                   Debt excluding the $125,000,000 Convertible
                              Subordinated Notes due in 2008.

Shareholder's Equity          In respect of the Borrower at any time, the
                              aggregate amount of (i) the stated capital of all
                              of the outstanding shares of the Borrower, (ii)
                              accumulated retained earnings, and (iii) the
                              amount, without duplication, of any contributed
                              surplus.

Shares                        All outstanding Shares of Target together with the
                              associated rights to purchase junior participating
                              preferred shares.

Target                        SALIX Pharmaceuticals Ltd.

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