Exhibit 10.33

Private & Confidential

                             DATED 21 OCTOBER 2004

                    PENN PHARMACEUTICAL SERVICES LIMITED  (1)

                               PENN T LIMITED             (2)

                             CELGENE CORPORATION          (3)

                    PENN PHARMACEUTICALS HOLDINGS LIMITED (4)


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                          TECHNICAL SERVICES AGREEMENT
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                               ADDLESHAW GODDARD


<PAGE>

                                    CONTENTS

         CLAUSE                                                             PAGE

1        Interpretation........................................................2
2        Provision of Services.................................................8
3        Payment of the Fees and other payment matters........................11
4        Penn T Employees and the Premises....................................11
5        Order Process and Forecasting........................................12
6        Procurement and storage of Raw Materials, Consumables
           and Finished Products..............................................12
7        Manufacture, Testing and supply......................................13
8        Dispatch of Finished Products........................................14
9        Sub-contracting by PPSL..............................................16
10       Confidentiality and Data Protection..................................16
11       Publicity............................................................18
12       Provision of information and defects in Finished Product.............18
13       Records and reporting................................................19
14       Intellectual Property................................................20
15       Warranties and limitation of liability...............................21
16       Change Control.......................................................23
17       Insurance............................................................24
18       Step-In Rights.......................................................25
19       Duration.............................................................27
20       Termination..........................................................27
21       Supply after Termination and Termination Assistance..................29
22       Force majeure........................................................29
23       Assignment...........................................................30
24       Guarantee............................................................30
25       Notices..............................................................31
26       Waiver...............................................................31
27       Entire Agreement.....................................................31
28       Void provision.......................................................31
29       Variation............................................................31
30       Costs................................................................31
31       Third Party Rights...................................................32
32       Dispute Resolution Procedure.........................................32
33       Governing Law and Jurisdiction.......................................32
4        Quality Agreement
5        Part 1 -Trademarks
         Part 2 - Trademark Assignment

<PAGE>

THIS AGREEMENT is executed and delivered as a deed on 21 October 2004

BETWEEN

(1)      PENN PHARMACEUTICAL  SERVICES LIMITED (registered in England and Wales,
         Company  No.  1331447)  whose  registered  office  is  at  Units  23/24
         Tafarnaubach  Industrial  Estate,  Tredegar,  Gwent,  Wales,  NP22  3AA
         (PPSL);

(2)      PENN T LIMITED  (registered in England and Wales,  Company No. 4272045)
         whose  registered  office  is at Units  23/24  Tafarnaubach  Industrial
         Estate, Tredegar, Gwent, Wales, NP22 3AA (PENN T);

(3)      CELGENE  CORPORATION  (registered  in the  State  of  Delaware),  whose
         principal  place of business is at 7 Powder  Horn  Drive,  Warren,  New
         Jersey 07059 USA; and

(4)      PENN  PHARMACEUTICALS  HOLDINGS  LTD  (registered  in England and Wales
         Company  No.  04294120)  whose  registered  office  is at  Units  23/24
         Tafarnaubach  Industrial  Estate,  Tredegar,  Gwent,  Wales,  NP22  3AA
         (PPHL).

WHEREAS

(A)      PPSL has knowledge,  experience  and  regulatory  approval to perform a
         wide variety of services to companies in the  pharmaceutical  industry,
         including  but  not  limited  to  the  manufacture,   quality  control,
         packaging and distribution of medicinal  products and holds appropriate
         licences and authorisations to carry out such services;

(B)      Penn T has a  requirement,  in  relation  to certain  of its  medicinal
         products, for the provision of such services.

(C)      PPSL and Penn T have entered into this  Agreement  with the intent that
         PPSL shall provide  certain  services to Penn T upon and subject to the
         terms of this Agreement.

(D)      This Agreement sets out the general provisions relating to the Services
         and the  Technical  Documents  (as  defined  below)  set  out  specific
         technical  aspects of the Services  required to manufacture  particular
         formulations of Thalidomide.

IT IS AGREED as follows:

1        INTERPRETATION

1.1      In this Agreement the following  capitalised terms shall save where the
         context otherwise requires, have the following meanings:

         AFFILIATE means, with respect to any party, any person or entity which,
         directly or indirectly through one or more intermediaries, controls, is
         controlled by, or is under common control with, such party. A person or
         entity shall be deemed to control a  corporation  (or other  entity) if
         such person or entity possesses,  directly or indirectly,  the power to
         direct or cause the  direction of the  management  and policies of such
         corporation  (or other entity)  whether through the ownership of voting
         securities, by contract or otherwise

         API means the active pharmaceutical  ingredient required to manufacture
         a formulation of Thalidomide

         AUDIT REPRESENTATIVES  means Penn T's appointed independent  accounting
         firm  and  any  other   technical  and   manufacturing   inspectors  or
         consultants which Penn T appoints from time to time

         BATCH means one (1) production lot of Finished Products

         BATCH  RECORD  means the  document  created  as and after each Batch is
         manufactured that, if complete and accurate,  reflects and incorporates
         all aspects of the Master Batch Formula,  the  Certificate of Analysis,
         and any MD Reports issued, with respect to such Batch

<PAGE>

         BUDGETED FEES means the estimated annual costs to PPSL of providing the
         Services,  apportioned to reflect the agreed percentage to be recharged
         to Penn T. The table of  Budgeted  Fees for the first  Quarter  of this
         Agreement is set forth in Appendix 1 to schedule 2

         CALENDAR QUARTER means a period of three (3) calendar months commencing
         on 1st January,  1st April,  1st July or 1st October as applicable save
         that the Parties agree that the first  Calendar  Quarter shall commence
         on the Commencement Date and end on the 31 Decemboer 2004

         CELGENE  PHARMION  AGREEMENT  means  the  licence  agreement  dated  16
         November  2001 between  Celgene (1) Pharmion GmbH (2) and Pharmion Corp
         (3) (as amended and restated from time to time)

         CERTIFICATE OF ANALYSIS means a certificate issued by PPSL stating that
         a Batch has been  manufactured  in  accordance  with the  Master  Batch
         Formula and stating the Test results

         CGMPS means current Good  Manufacturing  Practices  promulgated  by any
         Relevant Authority

         CHANGE CONTROL means the change control  provisions set forth in clause
         16

         COMMENCEMENT DATE means the date of this Agreement

         CONSUMABLES  means all materials or products  required by PPSL in order
         for PPSL to provide the Services other than the Raw Materials

         CUSTOMER  means a customer of Penn T who contracts with Penn T directly
         for the supply of Finished Products

         DCF means the dedicated  containment  facility  provided by PPSL at the
         Premises for the manufacture of Finished Product

         DRUG MASTER FILE or DMF means the drug master file that  relates to the
         API

         EMPLOYMENT  REGULATIONS means the Transfer of Undertakings  (Protection
         of Employment) Regulations 1981;

         EXCLUDED SERVICES means

         (a)  any  services  (including   manufacture)  related  to  Thalidomide
         analogs, homologs or pro-drugs;

         (b) analytical development,  stability programs, any testing other than
         Testing, formulation development,  research, development and customised
         clinical packaging which is not carried out in the DCF whether any such
         services relate to Thalidomide or otherwise; and

         (c) any services which fall outside what PPSL reasonably  determine are
         PPSL's  core  capabilities   from  time  to  time  including,   without
         limitation  any  services  related to  parenterals;  sterile  products;
         transdermals or inhalation products.

         FDA means the United States Food and Drug Administration

         FEES means the Pass Through  Costs and Services  Costs  payable for the
         Services set forth in schedule 2, as amended from time to time

         FFDCA means the United States Federal Food Drug and Cosmetic Act

         FINISHED  PRODUCTS means any  formulation of Thalidomide  together with
         the required  Packaging  and  Labelling  as set forth in the  Technical
         Documents as relevant, manufactured in accordance with this Agreement

<PAGE>

         FORCE MAJEURE means any event beyond the reasonable  control of a Party
         which prevents such Party being able to perform its  obligations  under
         this Agreement  including  without  limitation act of God, fire, flood,
         storm,  revolution,  act of  terrorism,  riot or civil  commotion  (but
         excluding strikes or industrial  disputes of that Party's employees and
         excluding  any event  which  could have been  avoided if such Party had
         implemented  reasonable  risk  management  processes  which are  common
         industry practice)

         HAZARDOUS  WASTE  means all  waste  that is  defined  as  hazardous  by
         Relevant  Law,  to the  extent  that such  waste  arises  out of PPSL's
         Processing or Packaging of Finished  Products in  accordance  with this
         Agreement

         IN-PROCESS  MATERIALS means the API and the Materials with respect to a
         Batch  during  the  time  period  beginning  at the  time  PPSL  begins
         Processing  Finished  Products  in  accordance  with the  Master  Batch
         Formula and ending at the PPSL Approval Date

         INTELLECTUAL  PROPERTY means patents,  registered designs,  trade marks
         and service marks (whether registered or not and including applications
         for any of the foregoing),  copyright,  design right,  rights in and to
         software  including  source  codes,  rights  in and  to  the  technical
         information and other confidential information and know-how,  rights in
         and to databases and all other intellectual property rights and similar
         property rights of whatever nature subsisting in any part of the world

         INTELLECTUAL  PROPERTY RIGHTS means all rights existing anywhere in the
         world in and to Intellectual Property

         KNOW-HOW  means all designs,  specifications,  datasheets,  techniques,
         operating procedures and materials, processes, inventions, formulations
         and formulae,  performance data,  product and pre-clinical and clinical
         trial  data and  records,  calculations  and  other  manufacturing  and
         technical data and information

         LABEL or LABELLING means (1) written,  printed or graphic materials, as
         set forth in the Master  Packaging  Record or (2) the act of  supplying
         written,  printed  or  graphic  materials,  as set forth in the  Master
         Packaging Record,  including (i) upon the Finished  Product,  (ii) upon
         any container or wrapper utilized with the Finished  Product,  or (iii)
         accompanying  the  Finished  Product,  including,  without  limitation,
         package inserts

         LABORATORY means the laboratory determined pursuant to clause 8.4

         LICENCES means the licences,  authorisations and permits under Relevant
         Law  from  time to time  required  to be  held by PPSL to  perform  the
         Services including without limitation being:

         Wholesale Dealers Import - WI/4351/2
         Wholesale Dealers - WL/4351/1
         Manufacturer's Licence - ML/4351/1
         Manufacturer's Special Licence - ML/4351/1
         Manufacturer's Authorisation - IMP - MA (IMP) 4351

         LIFE OF THIS AGREEMENT means the period  commencing on the Commencement
         Date and continuing  until determined in accordance with clauses 19 and
         20, during which this Agreement is in full force and effect

         MASTER BATCH  FORMULA  means,  for any Finished  Product,  the document
         containing  the formulas for API and Materials and the  description  of
         the Process  required to manufacture such Finished Product as set forth
         in the Technical Documents relevant to such Finished Product

         MASTER BATCH RECORD  means,  for any Batch,  the Master Batch  Formula,
         Master Packaging Record

         MASTER PACKAGING RECORD means, for any Finished  Product,  the document
         containing the procedures and specification for Packaging and Labelling
         such Finished Product as set forth in the Technical  Documents relevant
         to such Finished Product

<PAGE>

         MATERIALS  means the  excipients  listed in the  Master  Batch  Formula
         required  for   incorporation   into  the  Finished   Products   during
         Processing,  including,  without  limitation,  capsules  and any  other
         packaging materials, but excluding API

         MD REPORT or MANUFACTURING  DEVIATION REPORT means a report  indicating
         any deviation from the Processing and/or Packaging procedures set forth
         in the Master Batch Record

         MSDS means the Material Safety Data Sheet for API

         NON-CONFORMING  BATCH  means any Batch  that does not  comply  with the
         applicable  Specification or Master Batch Record or any Batch processed
         in violation of cGMPs

         NON-HAZARDOUS  WASTE means all rejected  Finished Product or In-Process
         Materials  or  waste  arising  out  of  Processing   and/or  Packaging,
         including without  limitation,  rejected or unusable  Materials or API,
         disposable   manufacturing   equipment   (including   filters  used  in
         Processing and Packaging), wash rinse, and previously used or discarded
         protective clothing,  except to the extent that any of the foregoing is
         Hazardous Waste

         OFFICE  FACILITIES  means a lockable  office space on the Premises with
         secure  document  storage and all such office  equipment,  services and
         utilities (including,  for the avoidance of doubt electricity,  gas and
         water) as Penn T shall reasonably request. Such office space shall have
         all the amenities enjoyed generally by PPSL and its employees including
         access to such telephone lines and ISDN/broadband connections as Penn T
         may  reasonably  require  but  excluding  access to the PPSL local area
         network or PPSL data storage whether electronic or otherwise

         PACKAGE or PACKAGING  means the procedures used in packing the Finished
         Products into containers, bottles, cartons, shipping cases or any other
         like matter, or the materials  thereof,  as set forth in the applicable
         Master Packaging Record

         PASS  THROUGH  COSTS  means the costs  incurred  by PPSL as detailed in
         paragraph  1(c) of schedule 2 and any other costs  expressed  as a Pass
         Through  Cost  elsewhere  in this  Agreement  but shall not include any
         costs incurred in the name of Penn T and at no cost to PPSL

         PARTIES means PPSL and Penn T

         PAYMENT  TERMS means the payment  provisions  set forth in clause 3 and
         schedule 2

         PENN PHARMION  AGREEMENT means the agreement dated 7 March 2001 between
         Pharmion  GmbH (1) and Penn T (2) as amended and restated  from time to
         time  (including by a subsequent  agreement dated 16 November 2001) and
         any other amendments or related agreements

         PENN T  EMPLOYEES  means  the  Penn T  Personnel  who are  officers  or
         employees of Penn T

         PENN T INFORMATION  means all information  and data including,  without
         limitation,  proprietary  information  and  materials  (whether  or not
         patentable) regarding Penn T's or its Customers' technology,  products,
         business  information  or  objectives,  as well as  trade  secrets  and
         information  equivalent to them of Penn T and its Customers (including,
         but  not  limited  to,  formulae,  processes,  methods,  knowledge  and
         Know-how) in connection with the manufacture,  sale of or other dealing
         in the Finished Products or any other product  formulations  containing
         Thalidomide or Thalidomide analogs, homologs or prodrugs

         PENN T PERSONNEL means officers, employees, agents,  representatives or
         sub-contractors  of Penn T or a company within the Celgene group or the
         Customers, including without limitation the Audit Representatives

         PHARMION  THALIDOMIDE  means  any  formulation  or  product  containing
         thalidomide as the active  ingredient,  as distributed by Pharmion Corp
         or GmbH from  time to time and for the time  being  including,  without
         limitation,  that distributed under the Penn Pharmion Agreement and the
         Celgene Pharmion Agreement

<PAGE>

         PPSL  APPROVAL  DATE means the date on which PPSL's  quality  assurance
         department  approves  each Batch for  shipment in  compliance  with the
         Master Batch Record

         PPSL  INFORMATION  means all information  and data  including,  without
         limitation,  proprietary  information  and  materials  (whether  or not
         patentable)  regarding PPSL's or PPSL's customers' (excluding Penn T or
         Celgene) technology,  products,  business information or objectives, as
         well as trade secrets and  information  equivalent to them  (including,
         but  not  limited  to,  formulae,  processes,  methods,  knowledge  and
         Know-how) which is made known by PPSL to any Penn T Personnel.

         PPSL KNOW-HOW  means  Know-How of PPSL or PPSL's  customers  (excluding
         Celgene and Penn T) utilised by PPSL prior to the Commencement Date and
         any  Know-How  developed  by PPSL during the  provision of the Services
         which is of general application to PPSL's business

         PREMISES means Units 23/24 Tafarnaubach  Industrial  Estate,  Tredegar,
         Gwent, Wales NP22 3AA and shall include the DCF

         PROCESS  or  PROCESSING  means  the  procedures,  or any part  thereof,
         involved  in  manufacturing  the  Finished  Product  from  the  API and
         Materials as set forth in the Master Batch Formula

         QUALITY  ASSURANCE  or QA means the sum of the  organised  arrangements
         made with the object of ensuring  Finished Products are of the required
         quality

         QUALIFIED PERSON or QP means any person eligible to act as a "Qualified
         Person" under EU Directive  2001/83/EC  and named as such on any of the
         Licences

         QUALITY  AGREEMENT means the quality  agreement between PPSL and Penn T
         setting out the quality control (being the organisation,  documentation
         and release  procedures  which ensure that the  necessary  and relevant
         tests are actually  carried out and that the materials are not released
         for use, nor products released for sale or supply,  until their quality
         has been judged to be satisfactory) and QA responsibilities of PPSL and
         Penn T as set forth in schedule 4

         RAW MATERIALS means API and Materials

         RECALL  means a recall,  field  correction,  market  withdrawal,  stock
         recovery or other similar action in relation to a Finished Product

         RELEVANT AUTHORITY means any regulatory authority or agency anywhere in
         the  world,  the  regulatory   requirements  stipulated  by  which  are
         applicable to the performance or receipt of Services  including without
         limitation the FDA and its equivalents in other jurisdictions

         RELEVANT LAW means all applicable statutory,  sub-ordinate legislation,
         rules or  regulations  to which a Party is  subject  from time to time,
         including  the rules,  regulatory  submissions,  regulatory  approvals,
         regulatory standards, codes of conduct, codes of practice, guidance and
         accreditation  terms stipulated by any Relevant  Authority to which any
         Party is subject from time to time  including  without  limitation  the
         FFDCA and its equivalents in other jurisdictions

         RESTRICTED SERVICE means to manufacture,  sell or otherwise deal in the
         Finished  Products  or  any  other  product   formulations   containing
         Thalidomide or Thalidomide  analogs,  homologs or prodrugs  thereof and
         RESTRICTED SERVICES shall be construed accordingly

         RESTRICTED  PRODUCTS means the thalidomide  drugs known as Thalomid(R),
         Sauramide and Pharmion Thalidomide

         SAA means the share acquisition agreement entered into on or around the
         date  hereof   between   Craig  Rennie  and  others  (1),   Celgene  UK
         Manufacturing Limited (2) and Celgene (3).

         SAURAMIDE means the formulation of Thalidomide  with the  specification
         set forth in the Technical Documents relevant to Sauramide

<PAGE>

         SAURAMIDE  DEDUCTION means the amount calculated  pursuant to paragraph
         1(d) of schedule 2

         SECONDARY   RESTRICTED   PRODUCTS  means  any  formulation   containing
         thalidomide  or  thalidomide  analogs,  homologs  or  prodrugs  thereof
         including,   without   limitation,   any   formulation   that  contains
         thalidomide  but  excluding  the  thalidomide  drugs known as Thalomid,
         Sauramide and Pharmion Thalidomide

         SERVICES  means the  services  to be carried out by PPSL as detailed in
         schedule 1 and the Technical Documents

         SERVICES  COSTS  means the  costs  incurred  by PPSL,  as  detailed  in
         paragraph 1(b) of schedule 2

         SPECIFICATION   means,  for  each  Finished  Product,  the  appropriate
         standards of identity,  strength, quality and purity for the Materials,
         API, In-Process  Materials and Finished Product, and the Tests thereof,
         as set forth in the Quality  Agreement and in the  Technical  Documents
         relevant to such Finished Product

         STEP-IN  means the right of Penn T to take  over the  provision  of the
         Services or any part thereof in accordance with clause 18

         TECHNICAL  DOCUMENTS  means any one of or  combination  of the  Quality
         Agreement the  Specification  for any Thalidomide  formulation,  Master
         Batch Formula, Master Packaging Record and any other technical protocol
         or technical details of how the Services are to be performed or how the
         Premises  are to be  maintained  each of which are  agreed,  amended or
         supplemented by the Parties from time to time

         TERRITORY  means  all  territories  covered  in any and all  agreements
         entered into by (or assigned or novated to) Penn T or Celgene and which
         relate to the formulation, storage, supply, sale or distribution of any
         Restricted Product or any Finished Product and any other agreement with
         any third party to do the same

         TESTS or QC TESTS means the  analytical  procedures  to be performed as
         applicable on the Raw Materials, Consumables, In-Progress Materials and
         Finished Products to determine whether such Raw Materials, Consumables,
         In-Progress  Materials and Finished Products are in accordance with the
         applicable Specification,  as such tests are set forth in the Technical
         Documents

         THALIDOMIDE  means  the drug  commonly  known as  thalidomide  which is
         represented   by   the   chemical   name   a-(N-phthalimido)glutarimide
         (+/-)2-(2,6-dioxo-3-piperidyl)isoindoline-1,3-dione.

         TRADEMARKS means the trademarks set forth in Part 1 of Schedule 5

         YEAR  means  a 12  month  period  ending  on  any  anniversary  of  the
         Commencement Date.

1.2      In addition:

         (a)      the recitals,  schedules and Technical  Documents form part of
                  this Agreement and  references to this  Agreement  include the
                  recitals, schedules and Technical Documents;

         (b)      references to recitals,  clauses and schedules are to recitals
                  and clauses of and schedules to this Agreement;  references in
                  a  schedule  to  paragraphs  are to  the  paragraphs  of  that
                  schedule;  and a reference to a clause or paragraph number is,
                  unless otherwise specified, a reference to all its sub-clauses
                  or sub-paragraphs;

         (c)      words  importing a gender  include every gender and references
                  to the singular include the plural and vice versa;

         (d)      words  denoting   persons   include   individuals  and  bodies
                  corporate, partnerships,  unincorporated associations, limited
                  liability company, trust, business trust,  association,  joint
                  stock  company,   joint   venture,   pool,   syndicate,   sole
                  proprietorship,   unincorporated  organization,   governmental
                  authority or any other form of entity not specifically  listed
                  herein;

<PAGE>

         (e)      references to this Agreement or any other document are to this
                  Agreement or that  document as in force for the time being and
                  as amended, supplemented, varied or replaced from time to time
                  in accordance with the  requirements of this Agreement or that
                  document (as the case may be);

         (f)      a reference to any body is:

                  (i)      if that body is  replaced  by  another  organisation,
                           deemed to refer to that replacement organisation; and

                  (ii)     if that body ceases to exist, deemed to refer to that
                           organisation which most substantially serves the same
                           purposes as the original body;

         (g)      a  reference  to a statute  or  statutory  provision  shall be
                  construed  as   including  a  reference  to  any   subordinate
                  legislation  (as defined by section 21(1)  Interpretation  Act
                  1978)  made from time to time under the  statute or  statutory
                  provision whether on, before or after the Commencement Date;

         (h)      a reference to a statute,  statutory  instrument  or any other
                  subordinate  legislation  shall  unless  otherwise  stated  be
                  construed as including a reference to that statute,  statutory
                  instrument  or  subordinate  legislation  as in  force  at the
                  Commencement  Date  and as  from  time  to  time  modified  or
                  consolidated,  superseded,  re-enacted  or replaced  after the
                  Commencement Date; and

         (i)      references  in this  Agreement to a party shall,  except where
                  the context  requires  otherwise,  include its  successors  in
                  title and permitted assignees.

1.3      The headings and contents table in this  Agreement are for  convenience
         only and do not affect its interpretation.

2        PROVISION OF SERVICES

2.1      In  consideration  of the  payment by Penn T of the Fees,  PPSL  hereby
         agrees  to  provide  the  Services  to Penn T in  accordance  with  the
         Technical  Documents and upon the terms and  conditions set out in this
         Agreement.

2.2      Except  pursuant to this  Agreement,  PPSL shall not, and shall procure
         that its Affiliates  shall not directly or indirectly  carry out any of
         the  Restricted  Services  for the  Life of this  Agreement  save  that
         neither PPSL nor its  Affiliates  shall be in breach of this  Agreement
         where any one of them provides any Restricted Service to Celgene or any
         of Celgene's Affiliates.

2.3      PPSL  shall  not,  and  shall  procure  that its  Affiliates  shall not
         directly or indirectly  carry out any of the Restricted  Services for a
         period of 2 years following  termination of this  Agreement,  save that
         neither PPSL nor its  Affiliates  shall be in breach of this  Agreement
         where any one of them provides any Restricted Service to Celgene or any
         of Celgene's Affiliates.

2.4      Except as otherwise  agreed between the Parties,  or in relation to the
         manufacture of Sauramide under the licence granted by Celgene in clause
         14.3(b),  PPSL shall use the DCF exclusively for the manufacture of the
         Finished  Products and not for any other  purpose  whatsoever,  for the
         Life of the Agreement.

2.5      At the  request  of Penn T, PPSL shall  assist  Penn T in  obtaining  a
         Wholesale  Dealers  licence  and any other  licences  for its  business
         carried on at the  Premises  considered  to be  necessary  by Penn T in
         order for Penn T to carry on its business,  meet its  obligations  with
         Customers  and/or to perform any of the Services itself and the cost of
         such assistance shall be at no cost to Penn T.

2.6      In the  performance  of the  Services,  PPSL shall make  available  the
         services of the QP and shall ensure that the QP shall carry out his/her
         duties in  accordance  with all  Relevant  Law and  within the "Code of
         Practice for Qualified  Persons"  produced  jointly by the professional
         and regulatory bodies for the pharmaceutical industry.

<PAGE>

2.7      If Penn T  requires  additional  or  alternative  work  from  PPSL  not
         specified  herein,  and such work is required or is  necessary  for the
         commercial or clinical  manufacture  of any  formulation of Thalidomide
         such work and the fees for such work shall be determined through Change
         Control. Any other services,  including without limitation the Excluded
         Services,  if accepted  by PPSL in its sole  discretion  shall,  unless
         otherwise  agreed  between the Parties,  be performed  under a separate
         agreement and is beyond the scope of this Agreement.

2.8      The Services shall be provided by the PPSL personnel approved by Penn T
         prior to the  Commencement  Date and PPSL shall  consult with Penn T in
         relation  to any  proposed  changes  to  such  personnel  and,  for the
         avoidance  of doubt,  Penn T's  approval  shall not be required for any
         such change.  PPSL  acknowledges  that certain of its  personnel and in
         particular Craig Rennie;  Keren Winmill;  Paul Thomas;  Steve Evans and
         Richard Barnett are key to the provision of the Services and PPSL shall
         use its best endeavours to retain and  incentivise  these key personnel
         in the normal  course of its  business,  provided  that nothing in this
         clause 2.8 shall fetter the rights and  discretion of the management of
         PPSL to make decisions relating to such employees which are in the best
         interests of PPSL and its business.  PPSL  acknowledges that Penn T may
         also wish to provide  additional  incentives to such personnel  through
         PPSL at Penn T's costs.

2.9      Notwithstanding  clauses 2.2 and 2.3 above, PPSL undertakes with Penn T
         that without the prior  consent in writing of Penn T, PPSL will not and
         will  procure that its  Affiliates  will not,  except  pursuant to this
         Agreement  and,  in  particular,   in  order  for  it  to  perform  its
         obligations to carry out the Service hereunder  directly or indirectly,
         whether by itself, its employees (whilst an employee of PPSL) or agents
         (whilst  acting as an agent for PPSL) and  whether on its own behalf or
         on behalf of any other person, firm or company,  during the Life of the
         Agreement :

         RESTRICTED PRODUCTS

         (a)      (subject to clause  2.12)  carry on, be employed or  otherwise
                  engaged,  concerned or  interested  in, any business  which is
                  engaged  in  (or  arranges  with  any  third  party  for)  the
                  manufacture, procurement of manufacture,  distribution or sale
                  of the Restricted  Products or any of them in the Territory (a
                  COMPETING BUSINESS);

         (b)      in relation to the  manufacture,  production,  distribution or
                  sale of Restricted  Products or any of them in the  Territory,
                  solicit or canvass,  accept orders from or otherwise deal with
                  any  person,  firm,  company or other  organisation  who was a
                  customer  of  Penn  T,  at any  time  during  the  Life of the
                  Agreement  and  with  whom  any  PPSL  employee  had  personal
                  dealings;

         (c)      solicit or entice away or  endeavour  to solicit or entice way
                  or hire from Penn T, any person employed or otherwise  engaged
                  by the same in the  manufacture,  procurement of  manufacture,
                  distribution or sale of the Restricted Products or any of them
                  in the Territory,  whether or not that person would commit any
                  breach of his contract of  employment by reason of his leaving
                  the service of the same;

         SECONDARY RESTRICTED PRODUCTS

         (d)      (subject to clause  2.12)  carry on, be employed or  otherwise
                  engaged,  concerned or  interested  in, any business  which is
                  engaged  in  (or  arranges  with  any  third  party  for)  the
                  manufacture, procurement of manufacture,  distribution or sale
                  of the  Secondary  Restricted  Products  or any of them in the
                  Territory (a SECONDARY COMPETING BUSINESS);

         (e)      in relation to the  manufacture,  production,  distribution or
                  sale of  Secondary  Restricted  Products or any of them in the
                  Territory, solicit or canvass, accept orders from or otherwise
                  deal with any person,  firm, company or other organisation who
                  was a customer  of Penn T, at any time  during the Life of the
                  Agreement  and with  whom any  employee  of PPSL had  personal
                  dealings;

<PAGE>

         (f)      solicit or entice away or  endeavour  to solicit or entice way
                  or hire from Penn T, any person employed or otherwise  engaged
                  by the same in the  manufacture,  procurement of  manufacture,
                  distribution or sale of the Secondary  Restricted  Products or
                  any of them in the Territory, whether or not that person would
                  commit any breach of his contract of  employment  by reason of
                  his leaving the service of the same.

2.10     Notwithstanding  clauses 2.2 and 2.3 above, PPSL undertakes with Penn T
         that without the prior  consent in writing of Penn T, PPSL will not and
         will  procure that its  Affiliates  will not,  directly or  indirectly,
         whether by itself, its employees (whilst an employee of PPSL) or agents
         (whilst  acting as an agent for PPSL) and  whether on its own behalf or
         on behalf of any other person, firm or company, for a period of 2 years
         following termination of this Agreement:

         RESTRICTED PRODUCTS

         (a)      (subject to clause  2.12)  carry on, be employed or  otherwise
                  engaged,  concerned or  interested  in, any business  which is
                  engaged  in  (or  arranges  with  any  third  party  for)  the
                  manufacture, procurement of manufacture,  distribution or sale
                  of the Restricted  Products or any of them in the Territory (a
                  COMPETING BUSINESS);

         (b)      in relation to the  manufacture,  production,  distribution or
                  sale of Restricted  Products or any of them in the  Territory,
                  solicit or canvass,  accept orders from or otherwise deal with
                  any  person,  firm,  company or other  organisation  who was a
                  customer  of  Penn  T,  at any  time  during  the  Life of the
                  Agreement  and  with  whom  any  PPSL  employee  had  personal
                  dealings;

         (c)      solicit or entice away or  endeavour  to solicit or entice way
                  or hire from Penn T, any person employed or otherwise  engaged
                  by the same in the  manufacture,  procurement of  manufacture,
                  distribution or sale of the Restricted Products or any of them
                  in the Territory,  whether or not that person would commit any
                  breach of his contract of  employment by reason of his leaving
                  the service of the same;

         SECONDARY RESTRICTED PRODUCTS

         (d)      (subject to clause  2.12)  carry on, be employed or  otherwise
                  engaged,  concerned or  interested  in, any business  which is
                  engaged  in  (or  arranges  with  any  third  party  for)  the
                  manufacture, procurement of manufacture,  distribution or sale
                  of the  Secondary  Restricted  Products  or any of them in the
                  Territory (a SECONDARY COMPETING BUSINESS);

         (e)      in relation to the  manufacture,  production,  distribution or
                  sale of  Secondary  Restricted  Products or any of them in the
                  Territory, solicit or canvass, accept orders from or otherwise
                  deal with any person,  firm, company or other organisation who
                  was a customer  of Penn T, at any time  during the Life of the
                  Agreement  and with  whom any  employee  of PPSL had  personal
                  dealings;

         (f)      solicit or entice away or  endeavour  to solicit or entice way
                  or hire from Penn T, any person employed or otherwise  engaged
                  by the same in the  manufacture,  procurement of  manufacture,
                  distribution or sale of the Secondary  Restricted  Products or
                  any of them in the Territory, whether or not that person would
                  commit any breach of his contract of  employment  by reason of
                  his leaving the service of the same.

2.11     Subject to clauses  2.12 and 11,  PPSL  undertakes  with Penn T that it
         will  not at any time  during  the Life of the  Agreement  directly  or
         indirectly,  whether by itself, its employees (whilst employed by PPSL)
         or agents (whilst agents of PPSL) or otherwise  howsoever in the course
         of carrying on any trade or  business,  claim,  represent  or otherwise
         indicate any present association with Penn T.

2.12     The  restrictions  in clause  2.9,  2.11 and 2.10 shall not  operate to
         prohibit  PPSL or any of its  directors,  officers or  employees,  from
         holding  in  aggregate  up to 3 per cent of the  shares of any  company
         operating a Competing  Business or a Secondary  Competing  Business (as
         the case may be),  the  shares  of which  are  listed  or dealt in on a
         recognised stock exchange.

<PAGE>

2.13     If a covenant is held to be illegal, invalid or unenforceable but would
         be legal,  valid or enforceable if some part were deleted or the period
         or area of  application  were  reduced or  modified,  then the covenant
         shall  apply  with such  modification  as may be  necessary  to make it
         legal, valid and enforceable.

3        PAYMENT OF THE FEES AND OTHER PAYMENT MATTERS

3.1      In  consideration  of the  matters  set forth in clause 2 Penn T agrees
         during the Life of this  Agreement to pay the Fees in  accordance  with
         the Payment Terms.

3.2      The Services Costs are exclusive of value added tax and value added tax
         shall be added to the Fees where  appropriate.  Any further tax or duty
         (other than  corporation  tax or other tax on profits)  which  directly
         affect  PPSL's  operating  costs to provide the  Services  and which it
         would not have  incurred  except by reason of providing  the  Services,
         shall be recharged to Penn T as Pass Through Costs.

3.3      Penn T shall  be  entitled  to set  off and  withhold  any  payment  in
         satisfaction or part  satisfaction of any bone fide claim for breach of
         this Agreement.

3.4      In the event of late payment of any sum due to either Party, such Party
         may without prejudice to its other rights and remedies hereunder charge
         interest at the rate of 2% per annum above the base  lending  rate from
         time to time of The Royal Bank of Scotland.  Such  interest will accrue
         from the date upon which  payment was due until  payment in full.  Such
         interest shall continue both before and after judgment.

3.5      If PPSL  fails  to  deliver  Finished  Product  by the  agreed  date or
         otherwise breaches the Agreement and such breach causes Penn T to incur
         liability  to its  Customers,  PPSL shall,  subject to clauses 15.6 and
         15.10 and provided  that Penn T complies with 15.11,  indemnify  Penn T
         against such liability.

3.6      If Penn T fails to make any payment that is due under this Agreement or
         Celgene fails to make any payment under its parent company guarantee to
         PPSL,  such that the monies  owing would give PPSL a right to terminate
         this Agreement  pursuant to clause 20.3, PPSL may, without prejudice to
         its other rights and remedies  suspend all Services until such payments
         with interest thereon have been paid.

4        PENN T EMPLOYEES AND THE PREMISES

4.1      Penn T shall have the right to locate up to three (3) Penn T  Employees
         at the  Premises  in order to perform  any  function  relating  to this
         Agreement  or its  business  with  Customers  from time to time and the
         identity of such  individuals  shall,  subject to clause 4.4, be at the
         sole  discretion  of  Penn  T.  Penn  T may  locate  additional  Penn T
         Personnel in the Premises with the consent of PPSL, such consent not to
         be unreasonably  withheld or delayed. Penn T shall give PPSL reasonable
         advance notice in writing of the identity of all Penn T Personnel to be
         located at the Premises from time to time.

4.2      PPSL shall make the Office Facilities available at the Premises to Penn
         T Personnel in accordance with the terms of this Agreement.  PPSL shall
         allow Penn T Personnel  full access to and from the  Premises so far as
         the same is reasonably  required by Penn T, subject to compliance  with
         clauses 4.4 and 4.5 below.

4.3      PPSL shall be responsible for the  maintenance,  repair,  servicing and
         upkeep of the Office Facilities. PPSL will give notice to Penn T of any
         scheduled or emergency maintenance,  repairs, shutdowns and alterations
         which may affect Penn T's use of the Office  Facilities.  PPSL will use
         reasonable  efforts to accommodate  the  requirements of Penn T in this
         respect, except in the case of genuine emergencies.

4.4      PPSL shall have the right to refuse access to the Premises to:

         (a)      any Penn T  Personnel  who does not comply  with the  standard
                  policies,  safety procedures and regulations applicable to the
                  Premises and  notified to Penn T Personnel  from time to time;
                  and

<PAGE>

         (b)      any  Penn  T  Personnel  who is a  competitor  of or who is an
                  officer or employee  of a  competitor  of PPSL (but  excluding
                  Penn T Employees).

4.5      Penn T shall and shall ensure the Penn T Personnel shall use the Office
         Facilities and Premises in accordance  with PPSL's  standard  policies,
         safety procedures and regulations  applicable to PPSL personnel,  which
         are notified to Penn T from time to time.

4.6      PPSL shall be responsible  for  identifying,  obtaining and maintaining
         all consents, licences and permits (including any consents which may be
         required from PPSL's bankers or holders of security over PPSL's assets)
         which may be required to allow Penn T to locate the Penn T Personnel at
         the Premises as envisaged by this clause 4 and in the event that Penn T
         exercises its Step-In Rights pursuant to clause 18.

5        ORDER PROCESS AND FORECASTING

5.1      Not less  than  forty-five  (45)  days  prior to the  first day of each
         Calendar Quarter,  Penn T shall prepare and provide PPSL with a written
         forecast of its estimated Finished Product requirements for each of the
         following  four (4) Calendar  Quarters.  Subject in all cases to clause
         5.2,  Penn T shall not  without  the  prior  written  consent  of PPSL,
         increase the quantity  estimated for the first Calendar Quarter of each
         forecast  by more than  twenty-five  percent  (25%)  from the  quantity
         estimated for the second Calendar Quarter of the previous forecast.

5.2      Penn T shall not  provide  to PPSL any  forecast,  estimating  Penn T's
         Finished Product  requirement,  if such requirement is in excess of the
         manufacturing  capacity of the DCF and PPSL shall  provide  Penn T with
         details of such capacity on request.

5.3      If Penn T places any order for Finished Product,  the delivery time for
         which would require PPSL to manufacture  Finished  Product in excess of
         the  manufacturing  capacity  of the DCF,  the  delivery  time shall be
         adjusted only to the extent  necessary to allow for such  manufacturing
         capacity  restraint  and PPSL  shall  fully  co-operate  with Penn T in
         relation  to  any  expansion  of  the  DCF  or  other  increase  in the
         manufacturing  capacity of PPSL in relation to Finished  Products,  the
         process and capital costs of which shall be determined  through  Change
         Control.

5.4      Penn T shall purchase  manufacturing  services  hereunder by submitting
         firm purchase  orders to PPSL.  Each purchase order shall be in writing
         in a form reasonably acceptable to PPSL, and shall specify the Finished
         Products  ordered,  the quantity  ordered,  the required  delivery date
         (which  shall not be a date  sooner than 90 days after the date of such
         purchase order) and delivery terms.

5.5      The minimum size of any order for Finished  Products  shall be a single
         Batch with larger orders being in whole number multiples of a Batch. In
         the  event of a  conflict  between  the  terms  and  conditions  of any
         purchase  order and this  Agreement,  the terms and  conditions of this
         Agreement shall prevail.

5.6      Each Calendar Quarter,  PPSL shall  manufacture,  supply and deliver to
         Penn T such  quantities  of Finished  Products  as Penn T orders  under
         clause  5.4  above.  PPSL  shall,   subject  to  clause  5.2,  use  its
         commercially reasonable efforts to manufacture and supply to Penn T any
         quantities of Finished Products in excess of one hundred percent (100%)
         of the  quantity  ordered for such  Calendar  Quarter  under clause 5.4
         above,  provided  that Penn T has  furnished  PPSL  with the  necessary
         amount of Raw Materials.

5.7      If PPSL  becomes  aware of any  circumstances  that may  cause  PPSL to
         default  in  its  obligation   above  to  deliver  such  quantities  of
         conforming  Finished  Products as Penn T  forecasted  for any  Calendar
         Quarter,  PPSL shall give Penn T prompt written notice  describing such
         circumstances, together with a proposed course of action to remedy such
         failure.

6        PROCUREMENT  AND STORAGE OF RAW  MATERIALS,  CONSUMABLES  AND  FINISHED
         PRODUCTS

6.1      As required by Penn T, PPSL shall procure on behalf of Penn T, such Raw
         Materials  as are required for the  provision of the  Services.  Penn T
         shall notify PPSL of the quantity of any Raw  Materials to be purchased
         and the identity of the supplier with which the order should be placed.
         Penn T  hereby  authorises  PPSL to  execute  purchase  orders  for Raw
         Materials on Penn T's behalf and Penn T shall be directly liable to any
         third party supplier for payment for such Raw Materials.

<PAGE>

6.2      PPSL shall  purchase all  Consumables as are required for the provision
         of the Services and shall recharge such Consumables to Penn T at cost.

6.3      Unless otherwise agreed in writing,  PPSL will arrange as necessary for
         clearance through customs of all Raw Materials shipped to PPSL.

6.4      PPSL shall use  reasonable  endeavours  to ensure any goods or services
         which PPSL  procures for or purchases  and recharges to Penn T shall be
         at the best price available and, subject to clause 9.4, Penn T shall be
         entitled  to  require  PPSL to use  alternative  suppliers  or  service
         providers.

6.5      Title to all Raw Materials, In-progress Materials and Finished Products
         shall remain with Penn T at all times.

6.6      PPSL shall hold Raw Materials,  Consumables,  In-Process  Materials and
         Finished  Products in a safe,  secure and suitable  environment  at the
         Premises and in accordance with recognised  industry  standards and all
         Relevant Laws.

6.7      PPSL shall keep all API  segregated  from  other  materials  within its
         ownership or reasonable  control so as to maintain the integrity of the
         substance  and shall not allow any samples of the  substance to be used
         or Tested by any party not under its direct supervisory control for any
         purposes.

7        MANUFACTURE, TESTING AND SUPPLY

7.1      PPSL shall  verify the quantity and quality of all API received by PPSL
         according to the methods and procedures set forth in the  Specification
         within sixty (60) days of receipt by PPSL of the API. Within such sixty
         (60)  day  period  and  promptly   following  any  determination  of  a
         discrepancy by PPSL, PPSL shall inform Penn T in writing of and provide
         supporting  documents in relation to any  discrepancies in the quantity
         and/or quality of the API received and the documents  accompanying each
         shipment of the API.

7.2      If PPSL notifies Penn T of a discrepancy  in the quantity or quality of
         the API within the sixty (60) day period described in clause 7.1 above,
         Penn T shall use its best efforts to either ship to PPSL,  or authorise
         PPSL to purchase pursuant to clause 6.1 above additional API within the
         time  period  necessary  for PPSL to  manufacture  Finished  Product in
         accordance  with the completion  date for delivery of Finished  Product
         pursuant to the applicable purchase order.

7.3      If PPSL fails to inform Penn T of any  discrepancy  in the  quantity or
         quality of the API within the sixty (60) day period described in clause
         7.1 above or if there is damage to the API within the  foregoing  sixty
         (60) day period and PPSL cannot  demonstrate  that such damage occurred
         prior to delivery to PPSL or if any such damage is the result of PPSL's
         failure  to  handle  the  API in  accordance  with  the  terms  of this
         Agreement,  then PPSL shall (a) at PPSL's option return the API to Penn
         T or dispose of the same according to Penn T's  instructions and (b) at
         Penn T's option,  either (i) purchase from Penn T replacement API for a
         value equal to Penn T's then current API cost for the API that is lost,
         damaged or destroyed, or (ii) credit Penn T on it's next invoice for an
         amount equal to Penn T's then-current cost for such API.

7.4      In respect of any Raw Materials, Consumables, In-Progress Materials and
         Finished  Products  PPSL shall  perform  such Tests and analysis as are
         necessary  for  this  Agreement  or as are  requested  by Penn  T,  but
         excluding any Excluded Services, and shall maintain the confidentiality
         of such Test results in accordance with clause 10.

7.5      PPSL shall Process, Test (unless PPSL is requested by Penn T to conduct
         a full analysis), Package and Label the Finished Products in conformity
         with the Master Batch  Record.  Unless  otherwise  required by Relevant
         Law,  PPSL shall not make any  changes to the  Master  Batch  Record or
         Tests without  prior  written  consent from Penn T, which consent shall
         not be  unreasonably  withheld.  Penn T shall notify PPSL in writing of
         any proposed  changes to the Master  Batch Record or Tests.  PPSL shall
         use  reasonable   commercial  efforts  to  promptly  implement  changes
         directed by Penn T to the Master Batch Record or Tests  including,  but
         not

<PAGE>

         limited to, any required  capital  equipment  expenditures.  PPSL shall
         notify Penn T and obtain prior written  approval  (such  approval shall
         not be unreasonably  withheld) for any proposed  changes related to the
         Finished  Product  outside  the Master  Batch  Record or Tests prior to
         their implementation by PPSL.

7.6      PPSL shall  manufacture the Finished  Products in accordance with cGMPs
         and all Relevant Law.

7.7      PPSL  shall  provide  all  Labelling  and  Packaging  for the  Finished
         Products and such Labelling and Packaging  shall be in accordance  with
         the Master Packaging  Record.  PPSL shall afford Penn T the opportunity
         to approve,  on a sample basis, and Penn T shall review and approve the
         Labels for the Finished  Products.  Should Penn T desire or be required
         to make any change to any such  Labels,  Penn T shall revise and update
         all artwork  and text  associated  with such  change and  provide  such
         changes  to PPSL.  PPSL  shall  make all  commercially  reasonable  and
         necessary  arrangements  to print such changed Labels and shall provide
         printer's  proofs  to  Penn T for  review  and  approval.  Penn T shall
         promptly provide PPSL with any necessary  corrections thereto or notify
         PPSL of its approval of such proofs.

7.8      PPSL  shall  keep  accurate  and  complete  records of all stock of Raw
         Materials  and Finished  Products  and shall  furnish to Penn T a stock
         report on an annual basis on request by Penn T.

8        DISPATCH OF FINISHED PRODUCTS

8.1      Upon production of Finished Products  pursuant to this Agreement,  PPSL
         shall pack,  dispatch and deliver  Finished  Products to the Customer's
         delivery  destination  as detailed on the  relevant  purchase  order or
         otherwise as instructed by Penn T.

8.2      Unless  otherwise  agreed in writing,  risk in the Raw Materials  shall
         pass to PPSL when the Raw  Materials  are delivered at the Premises and
         risk in the Raw Materials,  In-Progress Materials and Finished Products
         shall remain with PPSL until the Finished Products are delivered to the
         Customer's  delivery  destination as detailed on the relevant  purchase
         order or otherwise as instructed by Penn T, whereupon risk will pass to
         the Customer and/or Penn T as appropriate.

8.3      The Batch  Records  shall be accepted as complete and  accurate  unless
         Penn T notifies PPSL in writing within forty-five (45) days of delivery
         of Finished  Products that Penn T Customer has  determined  that either
         the Finished  Products do not conform to the  Specification or that the
         Batch  Records  are not  complete,  provided,  however,  in the case of
         Finished Product having latent defects, which upon diligent examination
         in accordance with all quality  control  Testing  procedures set out in
         the  Specifications  and Quality  Agreement upon receipt could not have
         been  discovered,  Penn T must give notice to PPSL  within  twenty (20)
         days after discovery of such latent defect,  setting forth the specific
         basis for such  rejection.  Upon  written  notification  by Penn T of a
         deficient Batch Record or  Non-Conforming  Batch, PPSL shall review the
         specific  basis  for  such  rejection  and  upon   acceptance  of  such
         rejection,  PPSL shall  correct the  deficiency  to the Batch Record or
         undertake  additional,   approved,  manufacturing  activity,  including
         recovery  of  materials  by  weight,   sorting  or   de-Labelling   and
         re-Labelling  (but  excluding any  reworking)  within  forty-five  (45)
         business days of such  notification  with no additional  cost to Penn T
         (subject to clause 8.4 below).

8.4      If prior to either Penn T's acceptance of the Batch Record, or Penn T's
         notification to PPSL of latent defects, the Parties disagree concerning
         whether the Finished  Product meets  Specification or whether the Batch
         Records are complete, Penn T may ask PPSL's Qualified Person to provide
         details  and  test  data  about  the  quality  and  the   manufacturing
         procedures relating to the Finished Goods in question.  If, contrary to
         the  determination  of PPSL's QP, Penn T  determines  that the Finished
         Products  do not meet the  Specification  or that the  Batch  Record is
         incomplete,  either Party may request, in writing, at any time, that an
         independent  laboratory  be  used to  determine  whether  the  Finished
         Product  meets  the  Specification  and  whether  the  Batch  Record is
         complete.  Thereafter,  the Parties shall promptly name a reputable and
         mutually acceptable  independent laboratory that has been qualified for
         the  appropriate   testing   method(s)  set  forth  in  the  applicable
         regulatory  licence  application and in the absence of agreement by the
         Parties within fourteen (14) days, the dispute shall be referred to the
         laboratory used by the Home Office  Forensic  Science Service from time
         to time (or if this laboratory cannot undertake the Service in a timely
         fashion  by an  alternative

<PAGE>

         laboratory nominated by the Home Office Forensic Science Service).  The
         Laboratory  shall Test the  Finished  Product for  compliance  with the
         Specification,  and such Test results  obtained by the Laboratory shall
         be final and binding.

8.5      If  the  Laboratory   determines   that  the  Finished   Product  meets
         Specification, Penn T shall:

         (a)      pay to PPSL the amount invoiced for such Finished Product, and
                  all other expenses  reasonably  attributable or resulting from
                  the Laboratory referral; and

         (b)      pay to the  Laboratory  the amount of the fees  charged by the
                  Laboratory for such Testing.

8.6      If the Laboratory  determines  that such sample fails to conform to the
         applicable Specification, then PPSL shall:

         (a)      undertake additional,  approved  manufacturing as described in
                  clause 8.3 above as soon as reasonably  practicable and in any
                  event within  forty-five  (45)  business days after receipt of
                  the Laboratory findings;

         (b)      pay to the  Laboratory  the amount of the fees  charged by the
                  Laboratory for such Testing and all other expenses  reasonably
                  attributable or resulting from the Laboratory referral;

         (c)      purchase at PPSL's cost the required  additional  Raw Material
                  and Consumables  necessary to manufacture  conforming Finished
                  Product;

         (d)      explain  to Penn T in  writing  the  reason  for the  failure,
                  provide  copies of all Test data and  reports  and  produce an
                  investigation report in accordance with the Quality Agreement;
                  and

         (e)      within 30 days offer the  occurrence of the problem  report to
                  Penn T the steps to be taken to prevent a re-occurrence of the
                  problem.

8.7      If PPSL fails to deliver to Penn T the quantity of conforming  Finished
         Products  that Penn T orders  under any  purchase  order on the  agreed
         delivery  date or if none stated within ninety (90) days of the date of
         the purchase  order,  after  providing  written notice to PPSL,  Penn T
         shall  where the  circumstances  described  in clause 8.8 do not apply,
         have the right to purchase  substitute  Finished  Products from a third
         party in substitution for the quantity of conforming  Finished Products
         which PPSL failed to deliver  hereunder.  PPSL shall  reimburse  Penn T
         within 14 days for the  difference  between the cost of obtaining  such
         substitute Finished Products (plus any commercially reasonable charges,
         expenses or commissions incurred by Penn T in connection with effecting
         cover,  and any other  reasonable  expenses  incident to such failure),
         less the price which would have been due to PPSL for the manufacture of
         the like  quantity of Finished  Products if supplied by PPSL  hereunder
         provided always that Penn T shall use commercially  reasonable  efforts
         to  purchase  the  substitute  Finished  Products  at  the  best  price
         available  in  the  open  market  and  on  the  best  commercial  terms
         available.

8.8      PPSL shall not be liable for delays in delivery of Finished  Product or
         any other  breach of this  Agreement  to the extent  that such delay in
         delivery or other  default is directly  caused by an act or omission of
         Penn T  (including  without  limitation  Penn T  Personnel)  or Celgene
         provided such act or omission:

         (a)      was  notified  and  detailed  to  Penn T as soon as the act or
                  omission occurred; and

         (b)      was not  thereafter  rectified by Penn T as soon as reasonably
                  practicable.

8.9      Neither  Party shall be required to comply with any  provision  of this
         Agreement or with the  instructions of the other or the instructions of
         Celgene or a Customer if such  compliance  would cause that Party to be
         in violation of any Relevant Law.

<PAGE>

8.10     PPSL shall,  on  reasonable  written  notice and at Penn T's sole cost,
         dispatch any remaining Raw Materials, In-Progress Materials or Finished
         Products to Penn T or arrange  for the  destruction  of Raw  Materials,
         In-Progress Materials or Finished Products so requested by Penn T to be
         so  destroyed  whether  upon the expiry  date of the Raw  Materials  or
         otherwise. PPSL shall ensure destruction of Raw Materials,  In-Progress
         Materials or Finished  Products in accordance with all Relevant Law and
         shall upon written  request  furnish Penn T promptly with a certificate
         of such destruction.

9        SUB-CONTRACTING BY PPSL

9.1      PPSL  may  not  sub-contract  any  part  of the  Services  except  to a
         sub-contractor  approved  in  writing  in  advance  by  Penn  T and  on
         condition  that the  sub-contractor  enters  into a contract  with PPSL
         which:

         (a)      incorporates all the applicable terms of this Agreement; and

         (b)      the  right to visit  the site and  audit  the  records  of the
                  sub-contractor  to the extent necessary for Penn T to exercise
                  its rights of audit under this Agreement.

         provided that this clause shall not apply to PPSL's sub-contractors who
         supply  PPSL with  services or goods which do not impact on the quality
         of Finished  Products or affect either  Party's  ability to comply with
         Relevant Law and which fall into the following  categories:  the supply
         of Consumables,  calibration services, specialist maintenance services,
         qualification  services  relating to air  cleanliness in  manufacturing
         rooms,   treatment   services  for  portable  water,  waste  management
         services,  freight services,  pest control services,  security services
         and IT services.

9.2      Where the Services or part  thereof are  sub-contracted  by PPSL,  PPSL
         shall  carry  out  such  reconciliations,  checks  and  testing  as are
         reasonable  to verify the  integrity  of the work  carried  out by such
         sub-contractor  and to verify that all unused  materials  including but
         not limited to Raw  Materials  provided by PPSL to such  sub-contractor
         are duly returned to PPSL.

9.3      PPSL  shall be  responsible  for the  delivery  of its  sub-contractors
         service and PPSL shall,  subject to clauses 15.6 and 15.10 and provided
         that Penn T complies  with clause 15.11,  indemnify  Penn T against any
         liability, costs expenses incurred or losses suffered by Penn T arising
         from any act or omission of its sub-contractors.

9.4      Penn T shall have the right to require PPSL to sub-contract any part of
         the Service,  which is already  sub-contracted,  to a sub-contractor of
         Penn T's choice provided:

         (a)      PPSL may veto any  required  subcontractor  that  cannot  meet
                  PPSL's standard technical requirements; and

         (b)      PPSL shall have the right to terminate  its contract  with any
                  required  subcontractor  if the  subcontractor is in breach of
                  its  contract  with  PPSL  and as a direct  result  PPSL is in
                  breach of this Agreement.

10       CONFIDENTIALITY AND DATA PROTECTION

10.1     Subject  to  clause  10.2,  PPSL  shall  keep  the  Penn T  Information
         confidential  and Penn T shall keep the PPSL  Information  confidential
         and  both  Penn T and PPSL  shall  keep  the  terms  of this  Agreement
         confidential   and  in  respect  of  the  other   Party's   information
         (INFORMATION) neither PPSL or Penn T shall :

         (a)      make use of the  Information,  except in  connection  with the
                  provision of the Services; or

         (b)      disclose the Information to any third party for a period of 10
                  years from the date of receipt of such Information.

10.2     The provisions of clause 10.1 shall not prevent either Party from using
         any Information to the extent that such Information:

         (a)      has come into the public domain  otherwise than by reason of a
                  breach  by  the  receiving  party,  its  directors,  officers,
                  employees or agents of the terms of this clause;

<PAGE>

         (b)      has been obtained by the receiving party from any other source
                  having a right of further disclosure or;

         (c)      in the case of Penn T only, was already known to Penn T at the
                  time of such disclosure to it;

         (d)      is required to be disclosed by the receiving party by Relevant
                  Law  including but not limited to  disclosure  for  regulatory
                  purposes,  provided  however that the receiving party shall so
                  notify the  disclosing  party of its intent and cooperate with
                  the  disclosing  party on  reasonable  measures to protect the
                  confidentiality of the Information;

         (e)      in the case of Penn T only,  is  required to be  disclosed  by
                  Penn T to its Customers; or

         (f)      in the case of PPSL only,  is  required  for the  manufacture,
                  distribution,  sale and export of  Sauramide  pursuant  to the
                  licence provided by Celgene in clause 14.3(b).

10.3     PPSL shall  ensure that none of Penn T's  Information  shall be used by
         the directors, officers, agents, employees,  consultants or contractors
         of PPSL, except on like terms of confidentiality as aforesaid, and that
         the  Penn T  Information  and the Raw  Materials  shall  be kept  fully
         private and confidential by them.  Further PPSL, prior to disclosure of
         Penn T's  Information to any directors,  officers,  agents,  employees,
         consultants or contractors of PPSL,  shall ensure that each such person
         is bound in  writing to observe  confidentiality  provisions  which are
         substantially the same as this clause.

10.4     Penn T shall ensure that none of the PPSL Information  shall be used by
         the directors, officers, agents, employees,  consultants or contractors
         of Penn T or  Celgene,  except  on like  terms  of  confidentiality  as
         aforesaid,  and that the PPSL  Information  shall be kept fully private
         and confidential by them. Further Penn T, prior to disclosure of PPSL's
         Information to any directors, officers, agents, employees,  consultants
         or contractors of Penn T or Celgene, shall ensure that each such person
         is bound in  writing to observe  confidentiality  provisions  which are
         substantially the same as this clause.

10.5     For the purposes of this clause 10 "Data Controller", "Data Processor",
         "Data  Subject",  "Personal  Data"  and  "processing"  shall  have  the
         meanings ascribed to them in the Data Protection Act 1998.

10.6     The  Parties  acknowledge  that PPSL will act in the  capacity  of Data
         Processor  on behalf of Penn T (as Data  Controller)  in respect of any
         Personal  Data that PPSL receives from Penn T and which is processed by
         PPSL in the course of providing the Services.

10.7     PPSL agrees that it shall:

         (a)      only  process  such  Personal  Data  in  accordance  with  the
                  instructions of Penn T from time to time;

         (b)      implement appropriate technical and organisational measures to
                  protect   Personal  Data  against   unauthorised  or  unlawful
                  processing and accidental destruction or loss;

         (c)      at all times  process  Personal  Data in  connection  with the
                  Services in accordance with the Data Protection Act 1998;

         (d)      not  transfer  its data  processing  function  outside  of the
                  European  Economic  Area  or  outsource  it to a  third  party
                  without the prior written consent of Penn T;

         (e)      permit Penn T on reasonable  notice to audit the procedures of
                  PPSL for the purpose of ensuring  compliance  with this clause
                  10 and to take any  reasonable  steps to satisfy  itself  that
                  PPSL is so complying;

         (f)      promptly notify Penn T of any queries from Data Subjects,  the
                  Information  Commissioner  or any  other  law  enforcement  or
                  regulatory authority;

<PAGE>

         (g)      promptly and without  further charge provide such  information
                  and assistance to Penn T as Penn T may  reasonably  require to
                  enable  it to  act in  accordance  with  the  rights  of  Data
                  Subjects.

10.8     The  provisions  of this  clause 10 shall  survive  termination  of the
         Agreement.

11       PUBLICITY

11.1     Subject  to the  provisions  of clause 10 and clause  11.2,  Penn T and
         Celgene  each hereby  agrees to permit PPSL to use the name of or refer
         to Penn T and/or  Celgene and the fact that PPSL  provides  Services to
         Penn T,  whether  verbally  or in writing,  in any of PPSL's  publicity
         material, including but not limited to PPSL's submissions to secure new
         business or in  promoting or marketing  itself,  provided  that in each
         case no details of any individual  project  undertaken for Penn T shall
         be disclosed.

11.2     Prior to any  disclosure  or publicity  under  clause 11.1,  Penn T and
         Celgene  shall be  entitled  to review  the form and  substance  of the
         material and Penn T and Celgene shall have the right to require PPSL to
         amend  the  materials  for  reason  of  accuracy,  use of  Intellectual
         Property or confidentiality.

12       PROVISION OF INFORMATION AND DEFECTS IN FINISHED PRODUCT

12.1     Each Party  acknowledges that it has an obligation to furnish the other
         Party promptly with any information in its possession which is relevant
         to the  provision  of the  Services.  If  PPSL  becomes  aware  that it
         requires  any further  information  in order to allow it to perform the
         Services it shall  notify  Penn T in a timely  fashion and Penn T shall
         furnish  the  additional  information  to PPSL  as  soon as  reasonably
         practicable.

12.2     PPSL and Penn T shall make available (or cause to be made available) to
         each other as soon as practicable (but in any event within one (1) day)
         of receipt of regulatory  correspondence  regarding regulatory letters,
         recalls,  adverse  experiences and all other regulatory  correspondence
         bearing on the safety and efficacy of the Finished  Products  which may
         concern chemistry, manufacturing or control issues.

12.3     Penn T will  promptly  submit to PPSL all Finished  Product  safety and
         efficacy  enquiries,  Finished  Product quality  complaints and adverse
         drug  event  reports  received  by  it  which  may  concern  chemistry,
         manufacturing or control issues,  together with all available  evidence
         and other information relating thereto. Except as otherwise required by
         Relevant  Law,  Penn  T  will  be  responsible  for  investigating  and
         responding  to  all  such  enquiries,  complaints  and  adverse  events
         regarding Finished Product. It shall be the responsibility of Penn T to
         comply with all  applicable  Relevant Law  including but not limited to
         legal and  regulatory  reporting  requirements  regarding  adverse drug
         events and Finished Product quality  matters,  except where such events
         or  matters  are  caused  by  acts  or  omissions  of  PPSL  or  PPSL's
         Affiliates,  in  which  case  Penn T may,  consistent  with  applicable
         Relevant Law, require PPSL's assistance in such compliance. Penn T will
         forward  a copy of all  applicable  legal  and  regulatory  submissions
         required  under  Relevant Law relating to the provision of the Services
         within ten (10)  business  days of receipt of the  submission  from its
         Customers.  PPSL  shall  promptly  notify  Penn T  where  any  Relevant
         Authority  contacts  PPSL or any  member  of the  Penn  Group  directly
         concerning the Services or the Finished Products.

12.4     In the event Penn T or any of its Customers believe it may be necessary
         to conduct a Recall with  respect to any Finished  Products  which were
         manufactured  by PPSL for Penn T pursuant to this  Agreement,  PPSL and
         Penn T shall  consult  with each  other as to how best to  proceed,  it
         being understood and agreed that the final decision as to any Recall of
         any  Finished  Product  shall  be  made  by  Penn T or  its  Customers,
         provided,  however,  that PPSL shall not be prohibited  hereunder  from
         taking any action that it is required to take by Relevant  Law.  Penn T
         and its  Customers  shall  bear all costs in  connection  with any such
         Recall;  provided,  however,  that  PPSL  shall  reimburse  Penn  T for
         reasonable out-of-pocket expenses incurred by Penn T in connection with
         any such Recall to the extent attributable to any negligence, breach of
         this  Agreement  or breach of Relevant Law or error on the part of PPSL
         or as a result of a latent  defect to the extent such latent  defect is
         attributable to PPSL.

<PAGE>

12.5     Pursuant to any reported  complaint  and/or adverse drug event,  if the
         nature of the reported  complaint  and/or  adverse drug event  requires
         Testing, PPSL will, at Penn T's reasonable request and expense, perform
         analytical  Testing  according to the  Specification  of  corresponding
         retention  samples and provide the results thereto to Penn T as soon as
         reasonably  practicable  and in any  event  within  28 days or the time
         period  specified  by the  Relevant  Authority,  whichever  is shorter,
         provided however PPSL shall be responsible for the cost of such Testing
         and  reporting  to the  Relevant  Authority to the extent that if it is
         determined  that such reported  complaint  and/or adverse drug event is
         attributable to any  negligence,  breach of this Agreement or breach of
         Relevant Law or error on the part of PPSL.

12.6     PPSL shall  assist Penn T or its  Customer in reporting to any Relevant
         Authority the results of the Testing referred to in clause 12.5.

13       RECORDS AND REPORTING

13.1     Penn T acknowledges  that PPSL must retain  originals  and/or copies of
         certain documents  generated by it in relation to the Services in order
         to comply with  Relevant Law and PPSL agrees to provide Penn T promptly
         upon reasonable written request and at Penn T's cost with copies of the
         same.

13.2     During  the Life of this  Agreement,  and for a  period  of at least 36
         months or such longer period thereafter  required by Relevant Law, PPSL
         will maintain a complete  audit trail of all data created in the normal
         course of business  relating to this Agreement and all data referred to
         in the  Quality  Agreement  which  is  required  by such  Relevant  Law
         including  financial and non-financial  transactions,  Test results and
         scientific and technical data relating to the Services.

13.3     Penn T (and its Audit  Representatives)  will have the right to perform
         audits and inspections of PPSL during normal business hours:

         (a)      on an annual basis (with  effect from the date falling  twelve
                  (12)  months from the  Commencement  Date),  for stock  taking
                  purposes   in  respect  of   Finished   Products,   In-Process
                  Materials, Raw Materials and Consumables;

         (b)      on an annual basis (with  effect from the date falling  twelve
                  (12) months from the Commencement  Date) in order to carry out
                  verification of the accuracy of all Fees, accounting practices
                  and invoices relating to this Agreement;

         (c)      on an annual basis (with  effect from the date falling  twelve
                  (12) months from the  Commencement  Date) for  examination  of
                  PPSL's   performance   of  the  Services,   including   PPSL's
                  manufacturing   and  Testing   practices  and   procedures  in
                  accordance  with the  Quality  Agreement  and any other  audit
                  activity to the extent required pursuant to any Relevant Law;

         (d)      On a quarterly  basis (with effect from the date falling three
                  (3) months from the Commencement Date), for inspection of Penn
                  T's books of accounts; and

         (e)      at any time  where  Penn T has  reasonable  grounds to suspect
                  that circumstances exist which merit investigation,  including
                  without limitation reasonable suspicion by Penn T that PPSL is
                  not  complying   with  its   accounting   and  record  keeping
                  obligations  or is  otherwise  in breach of this  Agreement or
                  "FOR  CAUSE"  as   described  in  clause  19  of  the  Quality
                  Agreement.

13.4     Penn T shall use its  reasonable  endeavours  to ensure  that its Audit
         Representatives perform any audit or inspection of PPSL in a reasonable
         manner so as not to have a material  adverse effect on the  performance
         of the Services or other business of PPSL.

13.5     PPSL  will  provide  full   co-operation   to  Penn  T  and  its  Audit
         Representatives  for the purposes of any audit or inspection  including
         providing access to the Premises, any PPSL personnel, data, records and
         systems (excluding PPSL's IT system and local area network) relating to
         the Services to the extent  necessary for Penn T to carry out the audit
         as set out in this clause 13.5.

<PAGE>

13.6     On  completion  of an audit,  the Audit  Representative  will prepare a
         written audit report detailing its findings. If any audit or inspection
         reveals  any  error,   incorrect  cost  allocation  or  calculation  or
         overcharging,  PPSL shall, within thirty (30) days of the audit report,
         reimburse Penn T for the amount overpaid by Penn T.

13.7     If any  audit or  inspection  reveals  any  sub-standard  or  defective
         accounting   practices,   manufacturing  process  or  environmental  or
         technical  conditions  relating to the Services and the Premises,  PPSL
         shall  at its  cost,  and in  consultation  with  Penn T and the  Audit
         Representative,  promptly  implement  such  changes  as  Penn  T  shall
         reasonably require.

13.8     The fees and expenses of the Audit Representative shall be paid by Penn
         T provided however that if the audit reveals an error or miscalculation
         in excess of the lesser of  (pound)3,000  or 3% of the Fees paid in the
         month to which the error relates,  then PPSL shall pay Penn T's and the
         Audit  Representatives'  fees and  expenses.  PPSL shall  provide  such
         assistance as Penn T and its Audit  Representatives  reasonably require
         at no cost to Penn T  provided  that  Penn T shall  reimburse  PPSL its
         costs in accordance with the Payment Terms:

         (a)      for  any  audits  required  by  Penn T in  addition  to  those
                  described in clause 13.3 above; or

         (b)      for any audit carried out pursuant to clause 13.3(e) above the
                  results of which show PPSL in compliance  with its  accounting
                  and record  keeping  obligations  and/or is not  otherwise  in
                  breach of this Agreement.

13.9     If there is a dispute in relation to any audit findings or report, then
         the Parties will resolve such dispute in accordance with the provisions
         of clause 32.

14       INTELLECTUAL PROPERTY

14.1     Provision  of the  Services by PPSL to Penn T will not entitle  PPSL to
         acquire any Intellectual Property Rights in the Finished Products or in
         their use or any licence to use such Intellectual Property Rights other
         than as required to perform its obligations under this Agreement.

14.2     The ownership of all  Intellectual  Property Rights and Know-How in the
         Finished  Products  and  the  manufacture   thereof  pursuant  to  this
         Agreement shall at all times remain with Celgene.

14.3     Celgene hereby grants to PPSL and its  sub-contractors  a non-exclusive
         licence to use Celgene Intellectual Property Rights:

         (a)      for the life of this Agreement and to the extent  necessary to
                  perform the Services in accordance with this Agreement; and

         (b)      to manufacture,  distribute,  sell and export Sauramide on the
                  terms of this  Agreement  making the  necessary  amendments to
                  take account that PPSL will manufacture  Sauramide for its own
                  account  and PPSL shall  indemnify  Penn T and  Celgene on the
                  terms of clause 14.6.

14.4     The  licence  granted by Celgene  under  14.3(b) may be  terminated  by
         Celgene at any time on 30 days written notice and following termination
         PPSL shall  assign all PPSL's  Intellectual  Property  relating  to the
         manufacture  and sale of Sauramide  including  without  limitation  the
         Trademarks, on the terms set forth in Part 2 of Schedule 5.

14.5     Notwithstanding   any  other  provision  of  this  Agreement,   Celgene
         acknowledges  that  it has  full  responsibility  for  the  safety  and
         efficacy  of the  In-Progress  Materials,  API  and  Finished  Products
         manufactured  in accordance  with this Agreement and provided that PPSL
         complies with clause 15.11 Celgene shall  indemnify  PPSL and keep PPSL
         indemnified against all costs, losses,  liabilities,  claims,  actions,
         proceedings,   damages  and  expenses   (including  without  limitation
         reasonable legal fees and expenses) incurred by PPSL (LOSSES) or claims
         (including but not limited to any claims, actions or litigation brought
         by third parties relating to the use of Intellectual Property Rights in
         the Finished  Products) or proceedings of whatsoever  nature  involving
         PPSL (CLAIMS) in  connection  with or arising out of the use of the API
         or Finished  Products by PPSL,  Celgene or any third party (which third
         parties  shall include but not be limited to  sub-contractors,  assigns
         and agents in addition to Customers,  consumers

<PAGE>

         and end users)  provided that this  indemnity  shall not operate to the
         extent  that such Losses or Claims have arisen out of a failure by PPSL
         to comply  with the terms of this  Agreement  or to the extent PPSL has
         acted  negligently  or with wilful  misconduct  or has failed to comply
         with Relevant Law.

14.6     Subject  always to clauses 15.6 and 15.10 and provided  that Penn T and
         Celgene each comply with clause 15.11,  PPSL shall indemnify Penn T and
         Celgene and keep Penn T and Celgene  indemnified against all Losses and
         Claims in  connection  with or arising out of use by any third party of
         Sauramide which has been manufactured,  supplied or distributed by PPSL
         save that this  indemnity  shall not apply to any  Sauramide  which has
         been manufactured for Penn T.

15       WARRANTIES AND LIMITATION OF LIABILITY

15.1     During the term of this Agreement,  Penn T hereby  acknowledges that it
         shall at all times be  responsible  for the safety and  efficacy of the
         API, and Finished Products and warrants as follows:

         (a)      the API shall, at the time it is shipped to PPSL:

                  (i)      not be adulterated  or misbranded  within the meaning
                           of any Relevant Law;

                  (ii)     not be articles that may not, under any Relevant Law,
                           including Section 505 of the FFDCA be introduced into
                           interstate commerce;

                  (iii)    have  been  manufactured,  processed,  and  packed in
                           compliance with all  requirements  under all Relevant
                           Law; and

                  (iv)     conform   to  the   Specification   for  the  API  as
                           documented on the  certificate  of analysis  included
                           with each delivery of API.

15.2     PPSL warrants:

         (a)      that the Services  will be carried out with  reasonable  skill
                  and care and will conform to the Technical Documents; and

         (b)      that it shall  manufacture,  Process,  Test, Package and Label
                  the Finished Products in accordance with the Specification and
                  the Technical Documents and with any Relevant Law.

15.3     PPSL hereby further warrants as follows:

         (a)      The Finished  Product shall, at the time it is shipped to Penn
                  T or the Customer:

                  (i)      not be adulterated  or misbranded  within the meaning
                           of any Relevant Law including the FFDCA;

                  (ii)     not be articles that may not, under any Relevant Law,
                           including  Section  505 of the FFDCA,  be  introduced
                           into interstate commerce;

                  (iii)    have  been  manufactured,  processed,  and  packed in
                           compliance with all  requirements  under all Relevant
                           Law including the FFDCA and cGMP; and

                  (iv)     conform  to  the   Specification   for  the  Finished
                           Products

         (b)      PPSL shall comply in all material  respects  with any Relevant
                  Law applicable to the manufacture of the Finished Product, the
                  handling of the Hazardous  Waste prior to pick-up by the waste
                  contractor, and the handling and disposal of the Non-Hazardous
                  Waste and the provision of the Services;

<PAGE>

         (c)      that  PPSL  shall  maintain  in  effect  and  comply  with the
                  Licences and all permits, licenses,  orders,  applications and
                  approvals required by any Relevant Authority and necessary for
                  the manufacture,  Processing, Testing, Packaging and Labelling
                  and  PPSL  shall  manufacture,  Process,  Test  and  Label  in
                  accordance   with  all   such   permits,   Licenses,   orders,
                  applications and approvals;

         (d)      that without  limiting the other provisions of this Agreement,
                  PPSL  shall use its  commercially  reasonable  efforts  at all
                  times to minimize Finished Product delivery time.

15.4     PPSL will promptly, at its own cost and at Penn T's option,  re-perform
         Services as soon as practicable or credit Penn T with the relevant Fees
         for any  Services or part  thereof  provided  that Penn T can show,  to
         PPSL's reasonable  satisfaction,  that the Services have been performed
         defectively and not in accordance with Technical Documents.

15.5     Except as  provided  for in this  Agreement  any  warranties,  (whether
         express or  implied  by  statute or common law or a previous  course of
         dealing or trade custom or usage or otherwise  howsoever) including but
         without  limitation  those of satisfactory  quality or of fitness for a
         particular  purpose (even if that purpose is made known expressly or by
         implication  to PPSL)  are  (insofar  as is  permitted  by law)  hereby
         excluded.

15.6     Subject to clauses 14.5, 15.7 and 15.8 under no circumstances shall any
         Party be liable for any indirect, special or consequential loss or loss
         of business  opportunity  or reputation  howsoever  arising  whether in
         contract,  tort  (including  negligence) or breach of statutory duty or
         otherwise.

15.7     The Parties,  PPHL and Celgene each acknowledges  that  notwithstanding
         any other provision of this Agreement, none of PPSL, Penn T, Celgene or
         PPHL seeks to exclude or limit liability for loss arising from death or
         personal  injury caused by negligence or for fraud or in respect of any
         other  liability  arising out of or in connection  with this  Agreement
         which cannot be excluded or restricted by law.

15.8     The Parties,  PPHL and Celgene each acknowledges  that  notwithstanding
         any other provision of this Agreement, none of PPSL, Penn T, Celgene or
         PPHL seek to exclude  liability  for,  and each of PPSL and PPHL on the
         one hand and Penn T and Celgene on the other  hereby  indemnifies  each
         other  for  losses  arising  out of any act,  omission,  breach  of its
         obligations, negligence or wilful misconduct of the indemnifying party,
         which  relate to or arise  from a claim by a third  party  against  the
         indemnified party :

         (a)      in relation to a death or personal  injury  claim  asserted by
                  such third party;

         (b)      in relation to any other claims  (excluding claims relating to
                  Intellectual  Property)  but  subject to the limits set out in
                  clauses 15.6 and 15.9.

15.9     Subject to clauses 14.5, 15.7 and 15.8 the aggregate  liability of each
         of Penn T,  Celgene and PPHL  (whether  in  contract,  tort  (including
         negligence) or breach of statutory duty or otherwise) to each other for
         any loss or damage of whatever  nature and  howsoever  caused  shall be
         limited to and in no  circumstances  shall exceed  (pound)600,000  (six
         hundred thousand pounds) in aggregate for the Life of this Agreement

15.10    Subject  to  clauses  15.7  and 15.8 the  aggregate  liability  of PPSL
         (whether  in  contract,   tort  (including  negligence)  or  breach  of
         statutory  duty or  otherwise)  to Penn T or  Celgene  for any  loss or
         damage of whatever nature and howsoever  caused shall be limited to and
         in no circumstances shall exceed the greater of:

         (a)      (pound)600,000  (six hundred thousand pounds) in aggregate for
                  the Life of this Agreement; or

         (b)      in  relation  to a bona fide claim  brought  against  PPSL for
                  which PPSL has  insurance,  monies  recovered by PPSL from its
                  insurer; or

         (c)      in  relation  to a bona fide claim  brought  against  PPSL for
                  which  PPSL  has  insurance,  monies  which  would  have  been
                  recovered  by  PPSL  from  its  insurer  had  PPSL  taken  all
                  appropriate steps in a timely manner to make a claim under any
                  relevant insurance policy;

<PAGE>

         (d)      in  relation  to a bona fide claim  brought  against  PPSL for
                  which PPSL has insurance (other than any claim to which clause
                  15.10(e)  relates),  monies which would have been recovered by
                  PPSL from its  insurer  had PPSL's  actions or  omissions  not
                  voided such policy; or

         (e)      in  relation  to a bona fide claim  brought  against  PPSL for
                  which PPSL has  insurance,  the lesser of,  monies which would
                  have  been  recovered  by PPSL  from its  insurer  had  PPSL's
                  innocent  actions or  omissions  not voided  such  policy,  or
                  (pound)1,000,000 (one million pounds).

15.11    The party (INDEMNITEE) that intends to claim indemnification under this
         Agreement shall notify the other party (INDEMNITOR) promptly in writing
         of any action,  claim or liability  in respect of which the  indemnitee
         believes  it is entitled to claim  indemnification,  provided  that the
         failure to give timely notice to the  indemnitor  shall not release the
         indemnitor from any liability to the indemnitee.  The indemnitor  shall
         have the right, by notice to the  indemnitee,  to assume the defence of
         any such action or claim  within the fifteen  (15) day period after the
         indemnitor's  receipt of notice of any action or claim with  counsel of
         the indemnitor's choice and at the sole cost of the indemnitor.  If the
         indemnitor  so assumes such defence,  the  indemnitee  may  participate
         therein  through  counsel  of its  choice,  but at the sole cost of the
         indemnitee.  The party not assuming the defence of any such claim shall
         render all  reasonable  assistance to the party  assuming such defence,
         and all reasonable  out-of-pocket costs of such assistance shall be for
         the account of the  indemnitor.  No such claim  shall be settled  other
         than by the party defending the same, and then only with the consent of
         the other party which  shall not be  unreasonably  withheld or delayed;
         provided that the indemnitee shall have no obligation to consent to any
         settlement of any such action or claim which imposes on the  indemnitee
         any  liability or  obligation  which cannot be assumed and performed in
         full by the  indemnitor,  and the  indemnitee  shall  have no  right to
         withhold its consent to any  settlement  of any such action or claim if
         the settlement  involves only the payment of money by the indemnitor or
         its  insurer  and  the  indemnitor   established  to  the  indemnitee's
         reasonable  satisfaction  that funds are, or have been made,  available
         for such purpose.

15.12    All  recommendations and advice given by or on behalf of PPSL to Penn T
         as to methods of storing,  using or applying Raw  Materials or Finished
         Products, the purposes for which Raw Materials or Finished Products may
         be applied  and the  suitability  of using Raw  Materials  or  Finished
         Products in any process or in connection  with any other materials are,
         subject to such  recommendations and advice being expressly detailed in
         the  Technical  Documents  as  part  of  the  Services,  given  without
         liability on the part of PPSL.

15.13    The  provisions  of this  clause 15 shall  survive  termination  of the
         Agreement.

16       CHANGE CONTROL

16.1     If  either  Penn  T  or  PPSL  wishes  to  propose  any   amendment  or
         modification  to this  Agreement (a  "Change")  then it will notify the
         other  of  that  fact  by  sending  a  written  notification   ("Change
         Request"), specifying in reasonable detail the nature of the Change.

16.2     As soon as  reasonably  practicable  (but in any event  within 14 days)
         after sending or receipt of a Change Request), PPSL will provide Penn T
         with a brief  written  proposal in relation to the  relevant  Change (a
         "Change Proposal") including, but not limited to:

         (a)      summary of the scope of the Change;

         (b)      brief  details of the  likely  impact,  if any,  of the Change
                  Request on the existing  Services or PPSL's  obligations under
                  this Agreement; and

         (c)      an  estimate  of the  likely  cost  of  implementation  and/or
                  on-going operation of the relevant Change.

<PAGE>

16.3     Where the Change is  required  by  Relevant  Law or where the Change is
         required or is necessary for the commercial or clinical  manufacture of
         any  formulation of  Thalidomide,  PPSL shall,  as soon as practicable,
         provide to Penn T a Change  Control  Notice as set forth in clause 16.4
         below.  Where the Change relates to any other service including without
         limitation  Excluded Services it shall be at PPSL's discretion  whether
         to proceed under this Agreement or negotiate with Penn T the terms of a
         separate agreement.

16.4     If, following receipt of the Change Proposal,  Penn T wishes to proceed
         with the  proposed  Change,  it will  notify  PPSL in  writing  of such
         intention  (assuming that all requisite details are not already set out
         in the Change Proposal).  Within 30 days after receiving written notice
         from Penn T to proceed with the  proposed  Change,  PPSL shall  provide
         Penn T with a detailed  written  proposal (a "CHANGE  CONTROL  NOTICE")
         including, but not limited to the following matters:

         (a)      full  details  of the  proposed  subject  matter of the Change
                  Request including any outline specifications, requirements for
                  equipment,   special   conditions,   deliverables   or   other
                  variations of this Agreement required;

         (b)      details of the impact,  if any,  of the Change  Request on any
                  existing Services or PPSL's obligations under this Agreement;

         (c)      an itemised  statement  of the  estimated  charges made on the
                  basis  of  the  Fees   calculation   in  Schedule  2  for  the
                  implementation   and/or  ongoing  operation  of  the  relevant
                  Change; and

         (d)      a  timetable  for  the   implementation,   together  with  any
                  proposals for acceptance, of the Change Request.

16.5     Penn T will  review  the  proposed  Change  Control  Notice  as soon as
         reasonably  possible  after its receipt and in any event within 15 days
         will either accept or reject the proposed  Change  Control Note. If the
         Change Control Notice has not been formally rejected within such 15 day
         period,  it shall be  deemed  accepted.  If Penn T rejects  the  Change
         Control Notice,  the Parties shall negotiate in good faith to agree the
         provisions  of the  Change  Control  Notice and where no  agreement  is
         reached  within  thirty  (30) days of  receipt  by Penn T of the Change
         Control  Notice,  the issue shall be resolved in accordance with clause
         32.

16.6     If Penn T accepts the proposed  Change Control  Notice,  PPSL will make
         the  Change in  accordance  with that  Change  Control  Notice  and the
         provisions of this Agreement.  A Change Control Notice shall be treated
         as accepted when it is signed by Penn T and PPSL and will constitute an
         amendment to this Agreement.

16.7     Neither Penn T or PPSL shall have any obligation to effect any proposed
         Change until the relevant Change Control Notice is agreed by Penn T and
         pursuant to clause 16.6.

16.8     Changes agreed in accordance with the procedure above shall  constitute
         a variation of this Agreement in satisfaction of clause 29.

17       INSURANCE

17.1     Subject to clause 17.2 below,  PPSL shall  effect and  maintain for the
         Life of this  Agreement  and for a period  of three  (3)  years or such
         shorter period as directed by Penn T following the  termination of this
         Agreement, the following annual policies of insurance:

         (a)      product  liability  cover for not less than ten million pounds
                  ((pound)10,000,000) per event and in the aggregate;

         (b)      employers  liability insurance with cover of not less than ten
                  million pounds ((pound)10,000,000) per occurrence or series of
                  occurrences arising out of any one cause;

         (c)      public  liability  cover for not less than two million  pounds
                  ((pound)2,000,000) per event; and

         (d)      commercial combined insurance cover for not less than:

                  (i)      five million pounds  ((pound)5,000,000)  in aggregate
                           for the Premises buildings;


<PAGE>

                  (ii)     five million pounds  ((pound)5,000,000)  in aggregate
                           for machinery, plant and all other contents;

                  (iii)    five  hundred  thousand  pounds  ((pound)500,000)  in
                           aggregate for stock and materials in trade;

                  (iv)     two   million    five   hundred    thousand    pounds
                           ((pound)2,500,000)  in aggregate  for customer  goods
                           held at the Premises,

         and PPSL  shall  ensure  Penn  T's  interest  is noted on the  relevant
         policies.

17.2     If Penn T, at its own cost,  effects and  maintains  during the Life of
         this  Agreement  insurance  in its own name which  provides  equivalent
         cover for PPSL's liabilities  relating to the provision of the Services
         then for so long as such cover is in place Penn T may  require  PPSL to
         cancel such equivalent parts of its insurance policies and the Services
         Costs shall be reduced accordingly.

17.3     PPSL shall,  when  requested by Penn T, promptly  provide copies of the
         policies and  certificates of insurance  evidencing that such insurance
         cover meets or exceeds the levels set out in clause 17.1 above and that
         the premiums in respect of such insurance are fully paid.  Where Penn T
         is not  satisfied  that  PPSL has  adequate  or  appropriate  levels of
         insurance in place so as to satisfy its  obligations  under this clause
         17,  Penn T shall be  entitled  to  effect,  on  behalf  of PPSL,  such
         insurance  cover as it believes is reasonably  necessary so as to allow
         for  adequate  or  appropriate  levels  of  insurance.  Penn T shall be
         entitled to recover the costs and expense of effecting  such  insurance
         (including  but not limited to any premiums paid) by way of a reduction
         to the Fees.

17.4     Without  prejudice to clause 15.10,  the Parties  shall,  not less than
         once every six (6) months,  jointly review PPSL's  compliance  with the
         requirements of the insurance policies detailed in clause 17.1 and PPSL
         shall  implement  such  recommendations  agreed  between the Parties in
         connection with the  requirements  of any insurance  policy and/or best
         practice in the provision of the Services.

18       STEP-IN RIGHTS

18.1     During  the  Life of this  Agreement,  Penn T may  exercise  a right of
         Step-In in respect of the Services or any part of them where:

         (a)      it is otherwise entitled to terminate this Agreement in any of
                  the circumstances in clause 20.2 (termination for cause);

         (b)      for reasons which  resulted in Penn T being unable to meet its
                  sales orders from Customers and its Customers could not supply
                  Finished  Products to end users  without  depleting  stocks of
                  Finished  Products  held in reserve for Force Majeure or other
                  disaster   recover   purposes   and,   as  a  result  of  such
                  circumstance,  the  continued  performance  of the Services or
                  part  thereof  by PPSL  would  in its  reasonable  opinion  be
                  seriously  prejudiced,  provided that such depletion of stocks
                  was caused by a breach of the Agreement by PPSL.

18.2     If Penn T wishes to  Step-In,  it must  notify  PPSL in  writing of the
         following matters (and shall use reasonable  endeavours to provide such
         notification  not less than  fourteen  (14) days  prior to the date the
         action will commence):

         (a)      the  action it intends to take which will be limited as Penn T
                  reasonably  requires  to allow  Penn T to remedy  the  problem
                  and/or  to ensure  continued  supply of  Finished  Product  in
                  circumstances  where Penn T reasonably  believes  that PPSL is
                  unable  to  resume  and  ensure  such   continued   supply  as
                  contemplated under this Agreement;

         (b)      the reason for taking such action;

         (c)      the date from which such action shall commence;

<PAGE>

         (d)      the time  period that it  believes  to be  necessary  for such
                  action  which  shall be no longer  than the  period of Step-In
                  determined pursuant to clause 18.11 below; and

         (e)      to the extent practicable,  the anticipated effect on PPSL and
                  its obligations to provide the Services during the period such
                  action  is being  taken  and the  process  for PPSL to  resume
                  provision of the Services.

18.3     In  exercising  the right of  Step-In,  Penn T shall  have the right to
         enter  the  DCF and  such of the  Premises  as is  necessary  for it to
         exercise its rights of Step-In.

18.4     Without  prejudice to the  generality  of clause 4.6, PPSL shall obtain
         and maintain for the Life of this Agreement,  all necessary third party
         consents to allow Penn T to exercise its rights of Step-In.

18.5     PPSL shall give all  reasonable  assistance  to Penn T whilst Penn T is
         exercising its right of Step-In including providing the services of the
         Qualified Person and any other person named on the Licences.  Once Penn
         T ceases to exercise  its right of Step-In,  Penn T shall allow PPSL to
         re-assume the provision of the Services  within a reasonable  period of
         time thereafter.

18.6     In respect of the  Services in respect of which the right of Step-In is
         exercised:

         (a)      PPSL shall be relieved  from its  obligations  to provide such
                  Services  and  from  any  liability  for  not  providing  such
                  Services and/or for any  consequences of such  non-performance
                  to the extent required as a result of the Step-In; and

         (b)      the  charges  from Penn T to PPSL shall  equal the amount PPSL
                  would receive if it were  satisfying all its  obligations  and
                  providing  the Services  affected by the exercise of the right
                  of  Step-In  in  full,  less an  amount  equal to all Penn T's
                  reasonable costs of operation in taking the action.

18.7     Where  Penn T is  exercising  its  right of  Step-In,  it shall  act in
         accordance  with all Relevant Law and cGMP and good  industry  practice
         and in accordance with any pre-notified internal policies and standards
         of PPSL whilst at the Premises.

18.8     PPSL  shall  grant  to Penn T a  non-exclusive  licence  to use  PPSL's
         Intellectual  Property as may be necessary to enable Penn T to exercise
         its  right  of  Step-In  and  Penn T shall  not use  such  Intellectual
         Property for any other purpose whatsoever.

18.9     Penn T shall:

         (a)      take  reasonable  care of any  assets of PPSL used  during the
                  period of Step-In;

         (b)      be  responsible  for any  deterioration  assets used by Penn T
                  during  the  period  of  Step-In,  save for any  deterioration
                  resulting from their normal and proper use;

         (c)      use all reasonable endeavours not to disturb others who affect
                  the provision of the Services or any other PPSL personnel more
                  than is required for the purposes of  exercising  its right of
                  Step-In; and

         (d)      use all reasonable  endeavours not to disrupt other aspects of
                  PPSL's  business  not related to the  Services or  obligations
                  assumed by PPSL under this Agreement.

18.10    Penn T may engage the  services  of an  Affiliate  or a third  party to
         assist in the  performance  of  Step-In,  provided  such third party is
         given prior written  approval in advance by PPSL (such  approval not to
         be unreasonably withheld or delayed).

18.11    Penn T shall be entitled to exercise its right of Step-In for such time
         as is  required  to rectify  the breach or breaches in respect of which
         its right of Step-In was exercised  provided that the Step-In shall not
         continue beyond a period of twenty-four  (24) months from  commencement
         of the Step-In.

<PAGE>

18.12    Where  Penn T has  exercised  its  right of  Step-In,  it shall  not be
         entitled to cease and re-commence a specific Step-In in order to extend
         the time periods in clause 18.11.

19       DURATION

         This  Agreement  shall come into  effect on the  Commencement  Date and
         shall subject to the provisions of clause 20 below remain in full force
         and effect for a period of ten (10) years.

20       TERMINATION

20.1     Penn T shall have the right to terminate this Agreement for convenience
         by giving  PPSL not less than 12 months'  notice in  writing,  provided
         that such notice shall not expire prior to the fifth (5th)  anniversary
         of the Commencement Date.

20.2     Without  prejudice to clause 22.5, Penn T may without  prejudice to its
         other rights or remedies hereunder  forthwith  terminate this Agreement
         and/or the provision of all or any Services  pursuant to this Agreement
         by notice in writing to PPSL if PPSL:

         (a)      commits  a  material   breach  (which  shall  include  without
                  limitation  any  persistent  breach  which by its  persistence
                  becomes material) of any of its obligations hereunder and does
                  not remedy such  breach  within  twenty-eight  (28) days after
                  written  notice has been  given to it by Penn T  (specifically
                  referring to this clause 20) requiring such remedy; or

         (b)      breaches any of its obligations hereunder and its liability as
                  a result of such breach would exceed the caps on its liability
                  referred to in clause 15.10; or

         (c)      becomes  insolvent or enters into  liquidation or receivership
                  or is the  subject  of an  application  for an  administration
                  order or suffers an administrative receiver to be appointed in
                  relation  to the  whole or any part of its  assets  or makes a
                  composition or  arrangement  with its creditors or suffers any
                  judgement to be executed in relation to any of its property or
                  assets.

20.3     Without  prejudice to clause 22.5, PPSL may,  without  prejudice to its
         other rights or remedies hereunder,  forthwith terminate this Agreement
         by notice in writing to Penn T if:

         (a)      Penn T:

                  (i)      fails to pay all undisputed  sums due and owing under
                           this  Agreement in accordance  with the Payment Terms
                           and does not remedy such breach  within  twenty-eight
                           (28) days after  written  notice has been given to it
                           by PPSL; or

                  (ii)     is in breach of clause 23.4 below.

20.4 PPSL shall forthwith notify Penn T in the event that:

         (a)      there  is in  contemplated  a  Relevant  Transaction  (as that
                  phrase is defined in the schedules to the SAA); or

         (b)      there is a material adverse change in its financial  condition
                  such that it  becomes  likely  that it will not be able to pay
                  its debts as and when they fall due for payment or perform its
                  obligations under this Agreement.

20.5     Any  termination  of this  Agreement  (whether  under  this  clause  or
         otherwise)  shall  not  relieve  any  Party,  PPHL  or  Celgene  of the
         obligations  under this Agreement which are expressed to continue after
         termination.

20.6     Upon  termination of this Agreement,  Penn T agrees to pay PPSL for the
         Services which have been performed by PPSL prior to termination of this
         Agreement.

20.7     If Penn T terminates  this Agreement for cause under 20.2(a) or if PPSL
         terminates  this  Agreement  for cause  under  clause 20.3 the Party in
         breach   shall,   subject  to  clause   15.10(a),   pay  to  the  other
         (pound)600,000 by way of liquidated  damages which the Parties agree is
         a fair estimate of the actual damages which Party each will suffer.

<PAGE>

20.8     Subject to clause 20.9 where this  Agreement is terminated  pursuant to
         clause 20.1 or 20.3 Penn T shall pay PPSL's  reasonable  costs  arising
         from the cessation of the Services  including without  limitation staff
         redundancy  costs and  decommissioning  the DCF, subject to PPSL taking
         steps to mitigate  such costs fully,  and Penn T shall  indemnify  PPSL
         against all and any costs,  expenses (including reasonable legal fees),
         liabilities,  damages and losses  arising  out of any claim,  action or
         proceeding  which arises or is alleged to arise or is made against PPSL
         or its  Affiliates  by  virtue  of the  termination  of this  Agreement
         pursuant to clause 20.1 or 20.3.

20.9     On termination  of this Agreement for whatever  reason Penn T shall pay
         to PPSL such  amount as is required  for PPSL to  maintain  its product
         liability insurance post termination in accordance with clause 17.1.

20.10    The Parties believe that neither the exercise of Step-In rights by Penn
         T or any  other  use by Penn T of the  services  of any  PPSL  employee
         either before or after the  termination of this Agreement  shall amount
         to a relevant  transfer for the purposes of the Employment  Regulations
         (a  "TRANSFER")  and  accordingly  they agree that no  employee of PPSL
         shall  transfer from the employment of PPSL into the employment of Penn
         T by virtue of such Transfer.

20.11    Notwithstanding clause 20.10 and subject to clauses 15.11 and 20.8, if,
         as a  result  of  any  event  mentioned  in  clause  20.10  and/or  the
         application of the Employment Regulations, any past or present employee
         of PPSL is transferred or claims to have  transferred to the employment
         of Penn T:

         (a)      Penn T may within  one month of the  Transfer  give  notice to
                  such person to terminate such employment; and,

         (b)      in the event that Penn T exercises such entitlement PPSL shall
                  indemnify  Penn T against all claims and losses arising out of
                  any such termination or the transfer of liabilities and duties
                  or the alleged  transfer of liabilities and duties in relation
                  to such  employee or in relation to any claim  brought by such
                  employee  against  Penn T which  claim  and/or  liability  has
                  arisen by virtue of any act or  omission  of PPSL prior to the
                  Transfer of such employee, provided that Penn T shall;

                  (i)      prior to giving notice to terminate any such person's
                           employment,  notify PPSL of the person's transfer and
                           its intention to dismiss; and

                  (ii)     allow  PPSL 30 days to  re-engage  such  person  (and
                           shall not  during any such  period  take any steps to
                           terminate the employment of any such person); and

                  (iii)    in circumstances where it is not possible for PPSL to
                           re-engage  such person  within the  prescribed 30 day
                           period, Penn T shall use its reasonable endeavours to
                           agree the method and procedure for  termination  with
                           PPSL with a view to mitigating  any liability of PPSL
                           arising out of this clause.

20.12    Subject  to  clauses  15.11  and  20.8,  if,  as a result  of any event
         mentioned  in clause  20.10 and/or the  application  of the  Employment
         Regulations,  any past or present  employee of PPSL is  transferred  or
         claims to have  transferred to the employment of Penn T and Penn T does
         not  terminate  the  employment  of such  employee  within one month of
         becoming aware of such transfer and Penn T gives notice to PPSL that it
         wishes to retain the transferred employee, then:

         (a)      The  indemnity  in clause  20.11 shall no longer apply to such
                  employee;

         (b)      PPSL  shall   indemnify  Penn  T  against  all  liability  for
                  emoluments  and outgoings in respect of the employment of such
                  employee prior to the Transfer (including all wages,  bonuses,
                  commissions,   PAYE,  national  insurance   contributions  and
                  pension  contributions)  and  against any claims and losses in
                  connection  with such  employee(s)  in respect of  redundancy,
                  unfair  dismissal  and any other claim  whatsoever  within the

<PAGE>

                  jurisdiction of an employment  tribunal,  wrongful  dismissal,
                  breach of contract, personal injury, industrial disease or any
                  other claim  whatsoever  which has arisen by virtue of any act
                  or omission of PPSL prior to the Transfer; and

         (c)      Penn  T  shall   indemnify  PPSL  against  all  liability  for
                  emoluments  and outgoings in respect of the employment of such
                  employee  after the Transfer  (including  all wages,  bonuses,
                  commissions,   PAYE,  national  insurance   contributions  and
                  pension  contributions)  and  against any claims and losses in
                  connection  with such  employee(s)  in respect of  redundancy,
                  unfair  dismissal  and any other claim  whatsoever  within the
                  jurisdiction of an employment  tribunal,  wrongful  dismissal,
                  breach of contract, personal injury, industrial disease or any
                  other claim  whatsoever  which has arisen by virtue of any act
                  or omission of Penn T after the Transfer.

21       SUPPLY AFTER TERMINATION AND TERMINATION ASSISTANCE

21.1     If PPSL continues to supply any Service to Penn T after the termination
         of this  Agreement  this  shall  not be  construed  as a waiver of such
         termination or as a renewal of this Agreement.

21.2     Upon termination or expiration of this Agreement PPSL shall:

         (a)      provide  Penn  T with  such  assistance  as it may  reasonably
                  require to allow the  Services  to continue so far as possible
                  without interruption and to facilitate the orderly transfer of
                  the Services to Penn T or to its nominated sub-contractor;

         (b)      deliver  to  such  location  as Penn T  shall  specify  PPSL's
                  inventory of Raw Materials,  packaging,  labelling, In-Process
                  Materials   and   Finished   Products   that  conform  to  the
                  Specification and the Technical Documents;

         (c)      Subject to the provisions of clause 10 provide for transfer of
                  Know-How   reasonably   required  for  the  provision  of  the
                  Services,  which  may,  as  appropriate  include  information,
                  records and documents.  To facilitate the transfer of Know-How
                  from PPSL to Penn T, PPSL shall  explain  the  procedures  and
                  operations in the Technical Documents, and other standards and
                  procedures to Penn T's, or Penn T's  contractor's,  operations
                  personnel; and

         (d)      assist Penn T in obtaining any required  licences in order for
                  Penn T to perform the Services  itself  including if required,
                  seconding  the  Qualified  Person  to work  for Penn T in such
                  reasonable location,  for such reasonable duration and at such
                  rates as the Parties shall agree.

21.3     The information which PPSL will provide to Penn T to further effect the
         obligations in clause 21.2(b) include:

         (a)      copies of procedures  and  operations  manuals,  including the
                  Technical Documents and the Specification;

         (b)      subject to confidentiality  obligations,  copies of agreements
                  with third party suppliers of goods and services provided such
                  agreements are to be wholly transferred to Penn T;

         (c)      key  support   contact   details  for  third  party   supplier
                  personnel.

21.4     For the purposes of this clause 21 (except where specifically stated to
         the contrary), the costs of the assistance to be provided by PPSL shall
         be borne by Penn T where  termination  is pursuant to clause 20.1 or as
         applicable by the Party whose breach gave rise to the termination.

22       FORCE MAJEURE

22.1     If Penn T or PPSL (the  "Affected  Party") is prevented or delayed from
         performing  any of its  obligations  under this  Agreement  (whether in
         whole  or in  part)  by  reason  of a Force  Majeure  event it shall as
         promptly as practicable  given the nature of the event notify the other
         Party  (the  "Unaffected   Party")  in  writing  of  the  circumstances
         constituting  the Force  Majeure  event and shall  keep the  Unaffected
         Party   regularly   informed  of  the  progress   until  resuming  full
         performance of its obligations.

<PAGE>

22.2     The  Affected  Party shall take all  reasonable  steps to minimise  the
         adverse effects of the event of Force Majeure on the performance of its
         obligations  under this Agreement and, in the case of PPSL,  shall,  to
         the extent feasible and practical,  provide  workarounds  which in Penn
         T's reasonable opinion are satisfactory.

22.3     Subject to clause  22.4,  the  Affected  Party  shall not be treated as
         being in breach of this Agreement if and to the extent that its failure
         to perform this Agreement results from Force Majeure.

22.4     Clause 22.3 shall only apply where the Affected Party complies with its
         obligations under clause 22.1 or 22.2 above.

22.5     If the  event  of  Force  Majeure  prevents  the  Affected  Party  from
         complying  with  this  Agreement  for a period of two  months  then the
         Unaffected  Party may at the expiry of such two month period,  provided
         the Affected Party is at such time still unable to comply,  give notice
         in writing to the Affected Party terminating  forthwith this Agreement.
         If  PPSL  is the  Affected  Party,  it  shall  be  under  a  continuing
         obligation  to  co-operate  with  Penn T in  transferring  the  work to
         another  supplier or otherwise  ensuring  that Penn T's business  needs
         continue to be met despite the event of Force Majeure at Penn T's cost,
         to the  extent  applicable  and only at the  rates  set  forth  for the
         Services in Schedule 2.

22.6     Where  following an event of Force Majeure to which this clause applies
         the Affected Party is able to resume  performance of its obligations it
         shall  notify  the  Unaffected   Party   accordingly  and  as  soon  as
         practicable resume performance of the affected obligations.

23       ASSIGNMENT

23.1     This  Agreement  shall  not be  assignable  by PPSL  without  the prior
         written consent of Penn T.

23.2     PPHL's  guarantee  shall not be  assignable  by PPSL  without the prior
         written consent of Penn T.

23.3     This  Agreement  may be  assigned  to a third  party by Penn T provided
         that:

         (a)      Penn T notifies PPSL of such assignment; and

         (b)      such third party agrees to perform fully Penn T's  obligations
                  under this Agreement; and

         (c)      such third party is not a direct competitor of PPSL.

23.4     If Penn T assigns this Agreement to a third party,  Celgene's Guarantee
         shall  terminate  provided  that  Penn T shall  ensure  that  Penn  T's
         assignee provides a replacement  guarantor who will give a guarantee on
         substantially  the same terms as Celgene's  guarantee and provided that
         such replacement  guarantor is of such financial  standing that PPSL in
         its  reasonable  opinion  considered  adequate  in  order to be able to
         perform under the guarantee.

24       GUARANTEE

24.1     Celgene  shall,  and Penn T shall  ensure that  Celgene  shall,  on the
         Commencement  Date,  give a  guarantee  as set out in schedule 3 part 1
         (Celgene's   guarantee)   and  shall  ensure  that  such  guarantee  is
         maintained  in place in full  force and effect in  accordance  with its
         terms.

24.2     PPHL shall,  and PPSL shall ensure that PPHL shall, on the Commencement
         Date,  give  a  guarantee  as  set  out in  schedule  3 part 2  (PPHL's
         guarantee)  and shall ensure that such guarantee is maintained in place
         in full force and effect in accordance with its terms.

24.3     PPHL shall procure that any company which gains control (as that phrase
         is  defined  in the  schedules  to the SAA) of PPHL as a result  to any
         management  buy-out of PPHL shall replace PPHL in PPHL's  guarantee and
         PPHL shall forthwith inform Penn T of such change of control.

<PAGE>

25       NOTICES

25.1     Any  notice to be served by  either  Party  hereunder  shall be sent by
         pre-recorded  delivery or registered post or by facsimile  transmission
         to the other at the address stated at the head of this Agreement or the
         facsimile  numbers  detailed  below  and  shall be  deemed to have been
         received by the other:

         (a)      if sent by pre-paid  recorded delivery or registered post, one
                  week after posting; or

         (b)      if sent by facsimile  transmission,  on the date sent provided
                  that  the  correct   answer  back  code  is  received   and  a
                  confirmatory  copy is sent by  pre-paid  recorded  delivery or
                  registered post on the date of transmission,

         PPSL fax number:    01495 713 613 (Attention:  Chief Executive Officer)

         PPHL fax number:    01495 713 613 (Attention:  Chief Executive Officer)

         Penn T fax number:  0207 071 9000 (Barlow   Lyde & Gilbert - Attention:
                             John Cadman)

         Celgene  fax number:  (732) 805 3931  (Attention:  President  and Chief
                                Operating Officer)

         with a copy to :    Proskauer Rose LLP, (Attention: Robert A. Cantone -
                             Fax No: 202 969 2900

25.2     A party may change the details recorded for it in this clause by notice
         to the other in accordance with this clause 11.

25.3     Notices  sent by email are not valid for the  purposes of this Deed but
         this clause shall not invalidate any other lawful mode of service.

26       WAIVER

         No waiver by either Party of any of the  requirements  hereof or of any
         of its rights  hereunder shall release the other from full  performance
         of its remaining obligations stated herein.

27       ENTIRE AGREEMENT

         This Agreement and the provisions of any Technical  Documents,  and any
         variation of this  Agreement in writing  signed by Penn T and PPSL, and
         any changes to this Agreement agreed through Change Control contain the
         entire understanding between PPSL, Penn T, Celgene and PPHL relating to
         the Services and supersedes all or any previous agreements between Penn
         T and PPSL.

28       VOID PROVISION

         Should  any  provision  of  this  Agreement  be void  or  voidable  the
         existence or avoidance  thereof shall not prejudice the  enforceability
         of the remaining provisions hereof.

29       VARIATION

         No variation or  modification  of this Agreement shall be binding until
         agreed to in writing by PPSL and Penn T.

30       COSTS

         The  Parties,  PPHL and  Celgene  shall  each  bear its own  costs  and
         expenses  incidental to the negotiation  hereof and the preparation and
         carrying into effect of this Agreement.

<PAGE>

31       THIRD PARTY RIGHTS

         A person who is not a party to this  Agreement  has no rights under the
         Agreements  (Rights of Third  Parties)  Act 1999 to enforce any term of
         this  Agreement  but this  does not  affect  any right or remedy of the
         third party which exists or is available apart from that Act.

32       DISPUTE RESOLUTION PROCEDURE

32.1     In this clause 32, the word Party shall be  interpreted  as meaning any
         of  PPSL,  Penn T,  PPHL or  Celgene  and the  word  Parties  shall  be
         interpreted as including PPSL, Penn T, PPHL and Celgene.

32.2     Except as mentioned in this clause 32 and except in relation to seeking
         an  interim   injunction   or  other  urgent  relief  or  except  where
         commencement of court  proceedings is required to prevent expiry of any
         limitation  period,  neither Party may commence  court  proceedings  in
         respect of a dispute under this  Agreement  unless that Party has first
         complied with this clause 32.

32.3     All  disputes  between the  Parties  arising out of or relating to this
         Agreement  shall,  in the first  instance,  be referred to the Parties'
         respective contract managers for resolution.

32.4     If any  dispute  has  not  been  resolved  by the  Parties'  respective
         contract  managers  within a maximum of fourteen (14) days after it has
         been  referred in accordance  with clause 32.3,  then the Parties shall
         each  refer the matter to their  respective  divisional  directors  (or
         equivalent) for determination.

32.5     If any  dispute  has  not  been  resolved  by the  Parties'  divisional
         directors (or equivalent)  within a maximum of fourteen (14) days after
         it has been referred in accordance  with clause 32.4,  then the Parties
         shall refer the matter to their respective Chief Executive Officers (or
         equivalent) ("CEOS") for resolution.

32.6     If any dispute has not been  resolved by the Parties'  respective  CEOs
         within a maximum of twenty  eight (28) days after it has been  referred
         in  accordance  with clause 32.5,  then,  in the event that the Parties
         mutually  agree to resolve the dispute by mediation  the  provisions of
         clause 32.7 shall apply.

32.7     Where the Parties  agree that it may be  beneficial,  they will seek to
         resolve a dispute  through  mediation  using the services of the Centre
         for Effective Dispute  Resolution to facilitate the mediation  process.
         If the dispute is not resolved  through  negotiation  or mediation  the
         Parties  agree  that  the  English   courts  will  have   non-exclusive
         jurisdiction in connection with the resolution of the dispute.

33       GOVERNING LAW AND JURISDICTION

33.1     This  Agreement,  regardless  of where  executed  shall be governed and
         interpreted in accordance with English Law.

33.2     Each Party, PPHL and Celgene,  submits to the exclusive jurisdiction of
         the Courts of England and Wales in  relation  to all claims,  disputes,
         differences or other matters  arising out of or in connection with this
         Agreement.

33.3     Each Party, PPHL and Celgene  irrevocably  waives any right that it may
         have:

         (a)      to object on any  ground to an  action  being  brought  in the
                  Courts of England and Wales,  to claim that the action brought
                  in the  Courts of  England  and Wales has been  brought  in an
                  inconvenient forum, or to claim that the Courts of England and
                  Wales do not have  jurisdiction.  The waiver contained in this
                  clause  33.3  includes  (without  limitation)  a waiver of all
                  formal and substantive requirements of any otherwise competent
                  jurisdiction in relation to this clause 33.3(a)

         (b)      to oppose  the  enforcement  of any  judgment  of any court of
                  England and Wales whether on any ground  referred to in clause
                  33.3(a) or otherwise.

EXECUTED AND  DELIVERED by PPSL,  Penn T, PPHL and Celgene as a deed on the date
first stated above.

<PAGE>


Executed and delivered as a deed by                     )
PENN PHARMACEUTICAL SERVICES LIMITED                    )   ....................
acting by

/s/ Craig Rennie
..........................................
(a director) and


/s/ David Henderson
..........................................

(a director/secretary)



Executed and delivered as a deed by                     )
PENN T LIMITED                                          )   ....................
acting by

/s/ Craig Rennie
..........................................
(a director) and


/s/ David Henderson
..........................................

(a director/secretary)




Executed and delivered as a deed by                     )
CELGENE CORPORATION                                     )   ....................
acting by

/s/ Robert J. Hugin
..........................................
(a director) and


/s/ Robert J. Hugin
..........................................

(a director/secretary)



Executed and delivered as a deed by                     )
PENN PHARMACEUTICALS HOLDINGS LIMITED                   )   ....................
acting by

/s/ Craig Rennie
..........................................
(a director) and


/s/ David Henderson
..........................................

(a director/secretary)