EXHIBIT 10.2


                        CONFIDENTIAL TREATMENT REQUESTED

Confidential Portions of this Agreement Which Have Been Redacted Are Marked with
Brackets  ([***]).  The Omitted  Material Has Been Filed With The Securities and
Exchange Commission.



                                SUPPLY AGREEMENT



                                     between



                           DURA PHARMACEUTICALS, INC.



                                       and



                    FIRST HORIZON PHARMACEUTICAL CORPORATION





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                                TABLE OF CONTENTS

                                                                            PAGE


Background....................................................................1

Article 1 - Definitions.......................................................1

Article 2 - Supply of Product.................................................2
         2.1      Supply Obligation...........................................2
         2.2      Technology Rights...........................................3
         2.3      Product for Sale Outside the Territory......................4
         2.4      Shipment of Finished Goods..................................5
         2.5      Labeling and Packaging of Supplied Products.................5
         2.6      Inspections.................................................6

Article 3 - Purchase of Product...............................................7
         3.1      Purchase Obligation.........................................7
         3.2      Production Scheduling.......................................7
         3.3      Testing and Certificate of Analysis.........................8
         3.4      Testing Upon Delivery.......................................8
         3.5      CGMP Violations.............................................9

Article 4 - Pricing and Payment Terms........................................10
         4.1      Pricing....................................................10
         4.2      Payment Terms..............................................10
         4.3      No Setoff..................................................10

Article 5 - Change Management................................................11
         5.1      Required Manufacturing Changes.............................11
         5.2      Discretionary Manufacturing Changes........................12
         5.3      Labeling Changes...........................................13
         5.4      Authorization..............................................13

Article 6 - Liabilities......................................................14
         6.1      Warranty and Disclaimer....................................14
         6.2      FHP Indemnity..............................................14
         6.3      DURA Indemnity.............................................15
         6.4      Notice and Opportunity to Defend...........................15

Article 7 - Term and Termination.............................................16
         7.1      Term.......................................................16
         7.2      Termination................................................17
         7.3      Effects of Termination.....................................18
         7.4      Transition.................................................18
         7.5      Survival...................................................19

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<PAGE>

Article 8 - General Provisions...............................................19
         8.1      Confidentiality............................................19
         8.2      Force Majeure..............................................20
         8.3      Entire Agreement...........................................20
         8.4      Headings...................................................20
         8.5      Relations Between the Parties..............................21
         8.6      Assignment.................................................21
         8.7      Notice.....................................................22
         8.8      Severability...............................................23
         8.9      Governing Law..............................................23
         8.10     Attachments................................................23
         8.11     Waiver.....................................................24
         8.12     Counterparts...............................................24


                                       -ii-
<PAGE>

                                SUPPLY AGREEMENT

     THIS SUPPLY AGREEMENT (the  "Agreement") is made this 21st day of December,
2001, by and between DURA PHARMACEUTICALS, INC. ("DURA"), a Delaware corporation
with a principal place of business at 7475 Lusk Boulevard, San Diego, California
92121,  and  FIRST  HORIZON  PHARMACEUTICAL   CORPORATION  ("FHP"),  a  Delaware
corporation  with a principal  place of business at 660 Hembree  Parkway,  Suite
106, Roswell, Georgia 30076. Background

     FHP has agreed to purchase from DURA trademarks, know-how and certain other
assets  relating to  FURADANTIN(R)  (nitrofurantoin)  oral  suspension  products
pursuant to the terms and conditions of an Asset Purchase Agreement (Furadantin)
dated as of the date hereof (the "Principal Agreement"). FHP wishes to have DURA
provide to FHP certain supply services relating to such products for a period of
time as is set forth herein.  DURA hereby agrees to perform such services on the
terms and conditions set forth herein. NOW,  THEREFORE,  in consideration of the
mutual covenants  contained herein,  FHP and DURA agree as follows:  Article 1 -
Definitions

     The  following  general  use terms  used in this  Agreement  shall have the
meanings set forth below. Other terms of less general  applicability are defined
where  appropriate.  Terms set  forth in  CAPITAL  LETTERS  are  defined  in the
Principal  Agreement and, unless  otherwise  noted in this  Agreement,  have the
meanings set forth therein.

     1.1  "Supplied  Product" or  "Supplied  Products"  means the PRODUCT in the
presentation  forms  listed  in  Schedule  1.1  of  the  Contract  Manufacturing
Agreement  dated May 7, 1996, by and between  Procter & Gamble  Pharmaceuticals,
Inc.  ("P&G")  and DURA  (the  "P&G  Manufacturing  Agreement"),  which has been

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<PAGE>
                                        [***] - CONFIDENTIAL TREATMENT REQUESTED

provided in its entirety to FHP and to which FHP  acknowledges  and agrees to be
bound by the definition contained therein.

     1.2  "Specifications"  mean  the  written  methods,  formulae,  procedures,
specifications  tests (and testing  protocols) and standards  pertaining to each
presentation  form of the Supplied Products set forth in Schedule 1.2 of the P&G
Manufacturing  Agreement,  as may have  been  changed  from time to time by DURA
since May 7, 1996,  and as may be changed  by FHP upon  written  notice to DURA,
provided that DURA agrees to such changes in writing.  Such Schedule 1.2 (as may
have  been  changed  from  time to  time)  set  forth  in the P&G  Manufacturing
Agreement has been provided in its entirety to FHP (and is attached  hereto) and
FHP  acknowledges  and agrees to be bound by the definition of  "Specifications"
contained  therein.

     1.3  "Supply  Term"  means the  period  starting  on the  CLOSING  DATE and
continuing for the initial term of this  Agreement and any subsequent  extension
period,  as set forth more  particularly  in Section 7.1 hereof,  subject to any
earlier termination of this Agreement pursuant to Section 7.2 hereof.

                          Article 2 - Supply of Product

     2.1 Supply Obligation.  Subject to the terms and conditions hereof, and for
consideration  to be paid on the  CLOSING  DATE by FHP to Dura in the  amount of
$[***], by wire transfer of immediately available funds to an account designated
by DURA, DURA shall,  and is responsible to, Supply (as defined herein) finished
packaged goods of the Supplied Products.

          (a) Supply.  As used herein,  "Supply" or any variation  thereof means
performing  or causing to be  performed  all  operations  necessary  to produce,
manufacture,  package,  label, mark,  handle,  arrange for shipping and ship the
Supplied Products in accordance with the terms and conditions of this Agreement.
Without limiting the foregoing, the term "Supply" shall also include all storage


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<PAGE>

incident to such  operations.  "Supply" shall also include the performance of or
the causing to be  performed:  (i) all  "controls"  pertaining  to the  Supplied
Products which are required by applicable  regulations  on the date hereof,  and
(ii) any such  "controls"  which become required by such  regulations  after the
date hereof and which DURA has agreed in writing to perform.  DURA shall perform
or cause P&G to  perform  any such  "controls"  which  become  required  by such
regulations after the date hereof.  For purposes of this definition,  "controls"
shall have the same  general  meaning as in 21  C.F.R.ss.  211.  Notwithstanding
anything herein to the contrary, FHP shall be responsible for filing field alert
reports,  for conducting  product  recalls and for other duties and  obligations
imposed by law,  rule or  regulation  on the holder of the  Registrations.  DURA
shall use  commercially  reasonable  efforts to cooperate with and assist FHP in
the performance of such duties and obligations.

          (b)  Stability  Testing.  FHP  shall  bear the  cost of all  stability
testing  required  for the Supplied  Products.  DURA shall  provide  results and
supporting  data from that  portion  of the  stability  testing  as  relates  to
extension of expiration dating to FHP as and when available.

          (c) Continuous Supply.  DURA shall provide or cause P&G to provide FHP
with a continuous supply of FHP's  requirements for Supplied Products during the
Supply Term. Such obligation shall continue regardless of whether DURA's cost to
supply  Supplied  Product exceeds any agreed upon purchase price provided for in
this Agreement.

     2.2 Technology Rights. Subject to the terms and conditions hereof, DURA and
P&G shall have the right to use the  KNOW-HOW  and the  Information  (as defined
herein) to Supply the Supplied  Products for FHP or FHP's successors or assigns.
During the Supply Term,  DURA shall give FHP and its authorized  representatives
reasonable  access to the DURA Information (as defined  herein).  DURA shall, at
its own cost,  provide  FHP with copies of the DURA  Information,  to the extent


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<PAGE>

that Dura is allowed by law or by third  parties  to provide  such  information.
Upon  expiration or  termination of this  Agreement:  (i) all hard copies of the
KNOW-HOW  and the  Information  shall be  delivered to FHP (except that DURA may
retain one (1) copy of all the  KNOW-HOW  and the  Information  as a record copy
subject to the confidentiality  provisions of Section 8.1 hereof),  and (ii) all
DURA  Information  shall become the property of FHP.

          (a)  Information.  As used  herein,  "Information"  means  any and all
technical information,  know-how, formulae,  processes,  clinical studies, trade
secrets,   confidential  and/or  proprietary  information  and  other  know-how,
information,    documents   and/or    materials,    technology,    formulations,
specifications,  testing  data and  analytical  methods  and  other  information
relating to the Supplied Products:  (i) which is either supplied or disclosed to
DURA by FHP hereunder during the Supply Term or owned, developed or possessed by
DURA or DURA's  AFFILIATES  during the Supply  Term,  (ii) which is necessary or
useful to the Supply of the  Supplied  Products,  and (iii) to the  extent  such
Information  solely  relates to the Supplied  Products  and/or the Supply of the
Supplied  Products.  Information does not include any information which: (w) has
been either  published  or is otherwise  in the public  domain;  (x) is lawfully
acquired by DURA from a third party under no  obligation of  confidentiality  to
FHP;  (y)  is  obvious  from  information  that  is not  otherwise  confidential
hereunder,  to one of ordinary skill in the relevant art; or (z) is disclosed by
FHP to a third party on a non-confidential basis.

          (b)  DURA  Information.  As  used  herein,  "DURA  Information"  means
Information, which is owned, developed or possessed by DURA or DURA's AFFILIATES
during  the Supply  Term.



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<PAGE>

     2.3 Product for Sale Outside the Territory.  FHP acknowledges  that P&G may
intend  to  manufacture   nitrofurantoin   oral  suspension  and/or  its  active
ingredient in the TERRITORY for distribution and sale outside the TERRITORY.

     2.4 Shipment of Finished Goods. All Supplied Products  delivered  hereunder
to FHP shall have proper dating on the labels and/or  packaging and shall have a
shelf  life on  delivery  to FHP (or to FHP's  designee):  (i) of not less  than
twenty (20)  months;  or (ii) as agreed to between  the  parties.  All  Supplied
Products  delivered to FHP hereunder  shall be shipped FOB point of manufacture,
which is P&G's  manufacturing  facility,  by a carrier  approved and paid for by
FHP.  DURA  shall  ship or  shall  direct  P&G to ship  such  quantities  to the
destination(s)  and at the time(s)  specified in Releases (as defined in Section
3.2 hereof) by FHP or its  designee.

     2.5 Labeling and  Packaging of Supplied  Products.  Subject to the terms of
the Principal  Agreement,  FHP shall,  at its own cost and expense,  supply DURA
with the  mechanical  design of artwork  for all Printed  Matter,  and DURA will
supply such mechanical design on artwork for all Printed Matter to P&G. Each set
of such artwork,  and each partial set and/or  alteration or amendment  thereto,
for each piece of Printed  Matter shall be  identified  by a unique item control
number or code (the  "Code")  supplied by FHP,  which is  consistent  with P&G's
existing control  practices.  All physical  specifications of all Printed Matter
shall comply with P&G's control numbering system,  quality control  requirements
and  manufacturing  process  constraints  as  provided  by P&G to  DURA,  and as
provided  by DURA to FHP.  FHP shall  specify  the code for each item of Printed
Matter to be supplied with each order for Supplied Products hereunder. Such Code
shall be  specified  on the  purchase  order  therefor.  All  Supplied  Products
delivered to FHP hereunder  shall include the Printed Matter as specified in the
purchase order for such shipment.



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<PAGE>

          (a) Printed Matter. As used herein, "Printed Matter" means all printed
materials,  including  labeling,  required to be affixed to and/or packaged with
Supplied Products delivered to FHP hereunder.

     2.6  Inspections.  Upon reasonable  notice and upon  reasonable  frequency,
during P&G's regular business hours, and subject to P&G's normal confidentiality
and safety regulations governing visitors,  FHP's representatives shall have the
right to request that DURA's  representatives enter and inspect the P&G facility
at which the Supplied  Products are  manufactured  and to request samples of the
Supplied  Products being Supplied.  DURA shall  maintain,  or shall cause P&G to
maintain,  in compliance  with  applicable  laws,  true and accurate  records of
chemical,  physical  and  other  tests  of the raw  materials  for the  Supplied
Products. All information gained by DURA (other than information relating to the
Supplied  Products)  as a result of any  inspection  conducted  pursuant to this
provision shall be kept confidential and not disclosed to FHP or any other third
parties without the consent of P&G. DURA's  obligation to keep said  information
confidential  shall not apply with respect to  information  which:  (i) has been
published  or is otherwise in the public  domain;  (ii) is lawfully  acquired by
DURA from a third party under no obligation of  confidentiality to P&G or (iii)
is reasonably  obvious to one skilled in the relevant art. DURA shall notify FHP
of the results of any FDA inspections of P&G's  facilities of which Dura is made
aware, as and to the extent relating to the Supplied Products.



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                        Article 3 - Purchase of Product

     3.1 Purchase Obligation. FHP shall purchase and receive from DURA, and DURA
shall sell and deliver to FHP or its designated agent, Supplied Products ordered
pursuant to the terms  hereof in the  quantities  set forth in the  Releases (as
defined  herein).  Notwithstanding  anything herein to the contrary,  DURA shall
have no obligation to sell or deliver to FHP or its  designated  agent  Supplied
Products in other than full batch  quantities  except for  purchases of existing
DURA inventories pursuant to Section 4.02 of the Principal  Agreement.  The cost
of  shipping  all such  Supplied  Products  shall be borne by FHP.  Title to all
Supplied  Products shipped by P&G on behalf of DURA in accordance with the terms
and  conditions of this  Agreement  shall pass to FHP upon  acceptance by common
carrier specified by FHP or any other carrier agreed between the parties hereto.

     3.2 Production Scheduling.  At least thirty (30) business days prior to the
start of each calendar  quarter  during the Supply Term,  FHP or its  designated
agent shall, by written notice hereunder,  deliver to DURA: (i) written releases
(the  "Releases")  setting forth the Supplied  Products and  presentation  forms
thereof to be purchased  during the next succeeding  calendar quarter (the "Next
Quarter") and the quantity and the desired delivery date(s) (which date(s) shall
be no more than once each  month  during the Next  Quarter  on or about,  to the
extent possible,  the fifteenth of such month) for each quantity so ordered; and
(ii) a written  forecast (the  "Forecast")  of FHP's  expected  requirements  of
Supplied  Products  and the  presentation  forms  thereof for the next three (3)
calendar  quarters after the Next Quarter,  together with the expected  quantity
and  delivery  date(s) for each  quantity so forecast to be ordered  during such
quarters.

          (a) Release Procedure.  All Releases shall be against blanket purchase
orders  established from time to time during the Supply Term by agreement of the
parties.


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          (b)  Limitations.  FHP shall use  commercially  reasonable  efforts to
ensure that FHP's Releases  comply as closely as possible with the Forecasts for
each  calendar  quarter  during  the  term  hereof.  In no event  shall  DURA be
obligated to deliver to FHP in any calendar  quarter during the term hereof more
than one hundred  twenty-five  percent (l25%) of the total quantity set forth in
the most recent  Forecast for such quarter.  In no event shall FHP's Releases in
any calendar  quarter during the term hereof be less than  seventy-five  percent
(75%) of the total  quantity  set  forth in the most  recent  Forecast  for such
quarter.

     3.3 Testing and  Certificate of Analysis.  DURA shall provide to FHP or its
designated   agent  the  certificate  of  analysis   provided  to  DURA  by  P&G
("Certificate  of  Analysis"),  with each  shipment  of  Supplied  Product  made
hereunder.  Such  Certificate  of Analysis  shall  certify  with respect to each
shipment  and lot  (identified  by batch or lot number) (i) the  quantity of the
shipment,  (ii) the Supplied Product flavor, and (iii) that the Supplied Product
delivered was manufactured in accordance with the  Specifications and the Master
Batch Records and documented  according to  requirements  of CGMP and Production
SOPs.  FHP shall be under no  obligation  to accept  any  shipment  of  Supplied
Product  without an  accompanying  Certificate  of  Analysis.

     3.4 Testing Upon  Delivery.  Upon  receipt of the Supplied  Products in any
shipment,  FHP shall check the compliance of such batch with the Specifications.
Such compliance check shall be performed by FHP's Quality  Assurance  department
and shall be certified  by the head of such  department  (or his/her  designee).
Copies of the certificate of analysis  incorporating such certification shall be
retained and made available to Dura within twenty (20) days of written  request.
If FHP deems that any  Supplied  Products  delivered  to FHP  hereunder  fail to
conform to the  Specifications  upon delivery to FHP, then FHP shall notify DURA
thereof in writing (such notice to include test results) within twenty (20) days

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from  delivery  of  such  Supplied   Products  to  FHP.  FHP  shall  retain  the
non-conforming  Supplied  Products and DURA shall have the right to inspect such
Supplied Products.

          (a) Undisputed Claims.  DURA shall, if it agrees with FHP's complaint,
replace any such Supplied  Products with an equal quantity of Supplied  Products
complying with the Specifications at no cost to FHP and without undue delay. FHP
shall  dispose of any Supplied  Products  which are not in  compliance  with the
Specifications  at DURA's  cost,  except  that FHP shall  follow any  reasonable
instructions  from DURA to return such  Supplied  Products to DURA or  otherwise
dispose of such Supplied Products in another manner at DURA's cost.

          (b) Disputed Claims. If DURA does not agree with FHP's complaint, then
DURA  shall  notify  FHP of such  disagreement  within  forty-five  (45) days of
receipt of notice of deficiency.  If the parties cannot themselves  resolve such
disagreement  within  twenty  (20) days of FHP's  receipt  of  DURA's  notice of
disagreement,  then the matter  shall be submitted  (without  undue delay) to an
independent laboratory agreed by the parties in order to resolve the discrepancy
in the  analysis of the  rejected  Supplied  Products.  The  assessment  of such
laboratory  shall be binding upon the parties and any related  expense  shall be
borne by the party whose analysis was in error.

     3.5 CGMP Violations.  Each party shall notify the other of any violation of
any  requirements  of CGMP alleged by a third party with respect to the Supplied
Product  immediately  upon such party's  awareness of such  allegation.  As used


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                                        [***] - CONFIDENTIAL TREATMENT REQUESTED

herein, "CGMP" means the current good manufacturing  practices for manufacturing
of or  finished  pharmaceuticals  set  forth  in  21  CFR  Parts  210  and  211,
respectively,  as may be amended from time to time,  and any other  current good
manufacturing  practices  which may be set forth in any federal,  state or local
laws,  rules or regulations  applicable to the Supply of the Supplied  Products.
Article 4 - Pricing and Payment Terms

     4.1  Pricing.  The  price  (the  "Price")  for  Supplied  Product  Supplied
hereunder shall be: as US$[***] per 60 ml bottle,  and (ii) US$ [***] per 470 ml
bottle. All pricing and shipment terms FOB point of manufacture,  which is P&G's
manufacturing facility.  Effective each July 1 during the Supply Term, DURA may,
upon twenty (20) days advance  written notice to FHP,  adjust the Purchase Price
by a  percentage  adjustment  equal to the percent  change in the United  States
Product Price Index for Drugs and  Pharmaceuticals  Code 06-35  published by the
United States  Government  (currently  the  Department of Labor) over the twelve
(12) month period ending March 31  immediately  preceding such July 1 adjustment
date.

     4.2 Payment Terms. The Price for all Supplied  Product  Supplied  hereunder
shall be due and owing to DURA net  twenty  (20) days after  shipment.  DURA may
withhold subsequent deliveries of Supplied Product or take other action it deems
appropriate  should FHP fail to pay within the stated terms.  DURA shall have no
further obligation to give notice hereunder of any such action.

     4.3 No Setoff. All payments to DURA by FHP hereunder shall be made free and
clear of, and without deduction for, any withholding,  discount, offset or other
deduction  of any kind,  except as  expressly  authorized  in advance by DURA in
writing;  provided,  however,  FHP may  withhold  payment  with  respect  to any
deliveries  of Supplied  Product which have been rejected or which are otherwise




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subject to good faith dispute, without breach of this Agreement.


                         Article 5 - Change Management

     5.1  Required  Manufacturing  Changes.  With  respect  to  changes  to  the
Specifications  or  manufacturing  process which are required by applicable law,
rule  or  regulation  or by  action  (or  inaction)  of  any  legally  competent
government  or other  regulatory  body or authority or by medical or  scientific
concerns as to the  toxicity,  safety and/or  efficacy of the Supplied  Products
(collectively, "Required Manufacturing Changes"), DURA shall promptly notify FHP
of the nature and likely cost of any such Required Manufacturing Changes. Within
twenty (20) days of such  notice,  FHP shall  notify DURA  whether FHP wishes to
proceed with such Required  Manufacturing Changes under the terms and conditions
of this  Section  5.1.  If FHP does not elect to so  proceed  with  making  such
Required   Manufacturing   Changes,  then  DURA  may  terminate  this  Agreement
immediately,  such  termination  being subject in addition to the  provisions of
Section 7.3 hereof.  If FHP does elect to so proceed  with making such  Required
Manufacturing  Changes,  then the parties shall co-operate in making such agreed
changes promptly and FHP shall pay all the costs of all remaining obsolete stock
of Supplied Products,  all inventory of affected raw materials (at DURA's actual
acquisition  cost)  and all  remaining  obsolete  work in  process  of  Supplied
Products resulting from any such changes.  For the avoidance of doubt,  Required
Manufacturing Changes: (i) do not include any changes or other concerns relating
to the extension of expiration  dating for the Supplied Products ongoing by DURA
at CLOSING,  (ii) do not include  changes to the labeling  only (which are dealt
with in Section 5.3  hereof),  and (iii) do include  changes  resulting  from or
arising  out of changes  to or  withdrawal  of third  party raw  materials.


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          (a) Capital  Expenditures.  All costs (including  installation  costs)
required to implement  agreed Required  Manufacturing  Changes shall be borne by
FHP and any  capital  equipment  or  improvements  which are paid for by FHP and
which are not fixtures for P&G's  premises  where  installed  and which  pertain
solely  and  exclusively  to the  Supply  of the  Supplied  Products  (the  "FHP
Equipment") shall be titled in the name of FHP. Within five (5) business days of
any  termination or expiration of this  Agreement,  FHP may, at its  discretion,
offer to DURA for  purchase  hereunder  any FHP  Equipment.  Within  twenty (20)
business days of receipt of such notice, DURA may, at its discretion,  elect (by
notice hereunder to FHP) to purchase any such FHP Equipment  offered for sale by
FHP. Any such  purchase  and sale shall be at fair market  value (not  including
installation costs) as determined by the parties or, if the parties cannot agree
to a price within twenty (20) days of DURA's election,  by an independent  third
party appraiser chosen by the parties, with the purchase price to be paid to FHP
within  fifteen (15) business  days of such  appraiser's  determination  of fair
market value. Unless otherwise agreed by the parties, within thirty (30) days of
any termination or expiration of this Agreement,  FHP shall, at its own expense,
remove  or cause  to be  removed  from  P&G's  premises  any FHP  Equipment  not
purchased by DURA pursuant to this section.

     5.2  Discretionary  Manufacturing  Changes.  With respect to changes to the
Specifications or the manufacturing  process for Supplied Products which are not
required by applicable law, rule or regulation or by action (or inaction) of any
legally competent government or other regulatory body or authority or by medical
or  scientific  concerns  as to the  toxicity,  safety  and/or  efficacy  of the
Supplied Products (collectively,  "Discretionary  Manufacturing  Changes");  the
parties shall, to the extent  commercially  reasonable under the  circumstances,
cooperate in making such changes and the party  initiating  such change(s) shall

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bear all the costs associated with and resulting from any such changes. Any such
proposed  changes will be evaluated  using P&G' change control  process.  If the
proposed  change is judged to require a  prospective  validation  or  regulatory
submission,  then the costs of such  validations or submission and the resources
to implement such validation or submission  shall be the  responsibility  of the
initiating party.

     5.3 Labeling  Changes.  With respect to changes to the Printed Matter,  the
parties shall  cooperate in making such changes  promptly and FHP shall,  unless
otherwise  agreed,  reimburse DURA for all remaining  obsolete stock of Supplied
Products,  all inventory of Printed Matter (at DURA's actual  acquisition  cost)
and all remaining  obsolete work in process of Supplied Products  resulting from
any such change or amendment to the Printed Matter.  FHP may, at any time during
the Supply Term,  change or amend any item of the labeling by notice  hereunder,
such change or amendment  to be  effective  after  appropriate  advance  written
notice thereof.

     5.4  Authorization.  During the Supply Term, DURA shall obtain and maintain
or  shall  cause  P&G  to  obtain  and   maintain  in  force  all  licenses  and
authorizations necessary for DURA to Supply Supplied Products hereunder,  except
that FHP shall bear all costs  associated with maintenance of the NDA. Except as
may be required by Sections 5.1 or 5.2 hereof,  DURA shall bear,  or shall cause
P&G to bear,  the full cost and expense of so  obtaining  and  maintaining  such
licenses and authorizations.  FHP shall give DURA all help reasonably  necessary
to assist DURA in so obtaining and maintaining such licenses and  authorizations
and shall bear the full cost and expense of so  assisting  DURA.  Neither  party
shall make any Required  Manufacturing Changes to the Specifications unless such
changes  have been first  notified  in advance in writing to the other.  Neither
party shall make any  Discretionary  Changes to the  specifications  unless such
changes  have been  approved  in writing  in  advance by the other.



                                       13
<PAGE>

                             Article 6 - Liabilities

     6.1 Warranty and  Disclaimer.  DURA hereby  represents  and warrants to FHP
that the Supplied Products shall, on the date of delivery to FHP's carrier:  (i)
meet the  requirements  therefor  set forth in the  Specifications;  (ii) not be
adulterated  within the meaning of Section 501 of the United  States Food,  Drug
and  Cosmetics  Act and the  regulations  promulgated  thereunder as each may be
amended from time to time (collectively,  the "Act") ; and (iii) comply with all
federal,  state  and  local  laws,  rules  and  regulations  (including  without
limitation CGMP) applicable to the Supply of the Supplied  Products.  OTHER THAN
AS SET FORTH  HEREIN OR IN THE  PRINCIPAL  AGREEMENT,  DURA MAKES NO  WARRANTIES
OTHER THAN THOSE  SPECIFICALLY  SET FORTH IN THIS SECTION.  NO OTHER WARRANTY IS
EXPRESSED  OR IMPLIED BY DURA  INCLUDING  ANY  WARRANTY  OF  MERCHANTABILITY  OR
FITNESS FOR A PARTICULAR  PURPOSE AND NONE SHALL BE IMPLIED.  Subject to Section
8.14 of this  Agreement,  DURA  shall  not be liable  for  FHP's  consequential,
special or indirect damages  resulting from the use,  handling,  transportation,
storage or manufacture of the Supplied  Product.

     6.2 FHP Indemnity.  Subject to Article 11 of the Principal  Agreement,  FHP
shall  indemnify,  defend and hold harmless DURA,  DURA's  AFFILIATES and DURA's
past,  present and future  directors,  officers,  employees  and agents from and
against any and all DAMAGES, whether such DAMAGES are based in contract,  strict
liability,  negligence,  warranty,  statutes or regulations,  or any other legal
theory (other than the negligence or willful misconduct of DURA in the Supply of
the  Supplied  Products),  including  without  limitation  injury to or death of
persons  and/or  property  or  contamination  of or  adverse  effect on  humans,
animals,  aquatic  life  or  the  environment,  based  upon,  arising  out of or
otherwise  in respect  of: (i) the use,  sale or  distribution  of the  Supplied
Product  transferred  to FHP  hereunder;  or (ii)  FHP's  breach  of any term or


                                       14
<PAGE>

condition  of this  Agreement,  except  to the  extent  that  such  DAMAGES  are
indemnified against pursuant to Section 6.3 hereof.

     6.3  DURA  Indemnity.  Subject  to  Articles  11 and  12 of  the  Principal
Agreement, DURA shall indemnify,  defend and hold harmless FHP, FHP's AFFILIATES
and FHP's past,  present and future  directors,  officers,  employees and agents
from  and  against  any and all  DAMAGES,  whether  such  DAMAGES  are  based in
contract, strict liability,  negligence,  warranty,  statutes or regulations, or
any other legal theory (other than the negligence or willful misconduct of FHP),
including  without  limitation  injury to or death of persons and/or property or
contamination  of or adverse  effect on  humans,  animals,  aquatic  life or the
environment,  based  upon,  arising out of or  otherwise  in respect of: (i) the
failure  of the  Supplied  Products  transferred  to FHP  hereunder  to meet the
requirements  of Section 6.1 hereof,  (ii) any negligent act or omission of DURA
hereunder  relating  to the Supply of the  Supplied  Products;  or (iii)  DURA's
breach of any term or condition of this Agreement.

     6.4 Notice and  Opportunity  to Defend.  No party  against  whom a claim of
indemnity shall be made pursuant to Section 6.2 or 6.3 hereof (the "Indemnifying
Party")  shall be liable  thereunder  unless  the party  making  such claim (the
"Claiming  Party") shall notify the  Indemnifying  Party of such claim  promptly
upon  becoming  aware of the  existence  or  threatened  existence of any DAMAGE
giving rise to or which may give rise to a claim of indemnity  under Section 6.2
or 6.3 hereof,  but no later than within ten (10)  business  days of the service
(or discovery,  if later) of the claim against the Claiming Party giving rise to
or  potentially  giving  rise to any such  DAMAGE.  Upon  such  notice  becoming
effective hereunder,  the Indemnifying Party will handle and control the defense
of such DAMAGE.  If both parties  claim  indemnification  hereunder for the same
DAMAGE  or if the  Indemnifying  Party  in  good  faith  rejects  the  claim  of


                                       15
<PAGE>

indemnity,  then FHP will handle and control the defense of such DAMAGE  pending
final  resolution  of the  parties'  respective  claims  for or with  respect to
indemnity  hereunder.  (At the time of such  resolution,  defense costs incurred
pursuant to the preceding  sentence shall be apportioned  between the parties in
the same manner as the  parties  share  ultimate  liability  for the  underlying
DAMAGE  pursuant to Sections  6.2 and 6.3  hereof.) In all cases,  the party not
handling the  controlling  such defense shall cooperate in such defense and may,
at its own expense,  participate in such defense  through  counsel of its choice
reasonable acceptable to the defending party. The party handling and controlling
such defense  shall not settle or otherwise  voluntarily  dispose of or agree to
dispose of such matter  without prior  approval of the other party.

                        Article 7 - Term and Termination

     7.1 Term. Subject to the provisions of Section 7.2 hereof, the initial term
of this Agreement  shall commence on the CLOSING DATE and shall continue in full
force and effect, unless otherwise  terminated,  until the earlier of either (i)
May 3, 2003,  or any date to which the term of the P&G  Manufacturing  Agreement
shall be extended,  or (ii) the date on which  Seller  receives the P&G CONSENT.

          (a) Term  Extension.  If on or before May 3, 2002, FHP makes,  in good
faith,  application,  or  files,  for an  amendment  of the NDA  with the FDA to
conduct  or  have  conducted  quality  assurance  and  release  testing  and  to
manufacture or have  manufactured the Supplied Products at a facility other than
a P&G facility (an "FHP NDA Filing"), then, with respect to each of the Supplied
Products  covered  by such  FHP NDA  Filing,  Dura  shall  use all  commercially
reasonable  efforts to cause P&G to continue  the term of the P&G  Manufacturing
Agreement beyond the end of its initial term for an additional period of two (2)
years.



                                       16
<PAGE>

          (b) Alternative  Discussions.  Commencing on the fifth  anniversary of
the CLOSING DATE, the parties shall discuss  alternative  options for extending,
possibly extending or not extending the term of this Agreement.

     7.2 Termination.  This Agreement shall not be terminated at any time during
the term  hereof  except in  accordance  with the terms and  conditions  of this
Section 7.2.

          (a) Default.  This  Agreement may be  terminated by written  notice by
either  party  if the  other  party  breaches  any  material  provision  of this
Agreement and does not remedy such breach within forty-five (45) days of written
notice of breach  unless such breach cannot be remedied  within such  forty-five
(45)  day  period,  in  which  case  such  breach  must be  remedied  as soon as
reasonable  diligence will permit.  Notwithstanding  the above, should P&G be in
breach of the P&G Manufacturing Agreement, causing DURA to be in material breach
of this  Agreement,  FHP may terminate  this Agreement by written notice if DURA
does not remedy such breach within  seventy-five  (75) days of written notice of
such breach unless such breach cannot be remedied within such  seventy-five (75)
day period,  in which case such  breach  must be remedied as soon as  reasonable
diligence will permit.

          (b)  Termination  by  FHP.  FHP  may,  at any  time,  terminate  FHP's
obligation to purchase and DURA's  obligation  to Supply  Supplied  Product,  by
giving  written  notice to DURA at least seven (7) months prior to the effective
date of such termination.

     7.3  Effects  of  Termination.  If,  due to minimum  order  quantities  for
ordering raw  materials  and/or  packaging  materials for the Supply of Supplied
Product or to other commercially reasonable purchasing considerations,  DURA has
quantities  of such raw  materials  or  packaging  materials in excess of DURA's
requirements therefor after expiration of this Agreement pursuant to Section 5.1
or 7.1 hereof or after FHP's  termination of this Agreement  pursuant to Section



                                       17
<PAGE>

7.2(b)  hereof,  or if,  due to such  minimum  order  quantity  requirements  or
purchasing  considerations,  DURA is  required to order  quantities  of such raw
materials or packaging materials in excess of DURA's requirements therefor after
termination  of this  Agreement  pursuant to Section  7.2(b)  hereof,  FHP shall
purchase such raw materials or packaging  materials at DURA's out of pocket cost
upon such termination,  FOB point of manufacture,  which is P&G's  manufacturing
facility.

     7.4  Transition.  The  parties  acknowledge  that it is P&G's goal to cease
Manufacture (as such term is defined in the P&G Manufacturing  Agreement) of the
Supplied  Product for DURA after the  expiration of the Supply Term.  During the
Supply  Term,  DURA shall cause P&G to provide to DURA  reasonable  transitional
support, and DURA shall then provide FHP reasonable transitional support, to aid
certification  of FHP or FHP's designee as a U.S.  Manufacturer for the Supplied
Products  and to  manufacture  and  sell  Supplied  Products.  As  used  herein,
"transitional  support" means DURA's access to P&G's regulatory,  manufacturing,
purchasing  and  quality  assurance  personnel  and  access  to any P&G data and
information  pertaining  to the  Supplied  Products.  All  transitional  support
provided  hereunder  shall be  provided  subject  to the  availability  of P&G's
appropriate  personnel.  Such transitional  support shall be provided by Dura to
FHP without any additional  compensation from FHP (other than  reimbursement for
out of pocket expenses if any) but shall not exceed a cumulative total of eighty
(80) hours  effort  from DURA's  personnel.  DURA takes no  responsibility,  and
hereby  disclaims  any liability  whatsoever,  for,  arising from,  caused by or
otherwise  related  to  any  data,  information  or  services  relating  to  the
transitional  support services provided pursuant to this section.



                                       18
<PAGE>

     7.5  Survival.   Notwithstanding  anything  herein  to  the  contrary,  the
provisions of Article 6 and of Sections 2.3, 4.2, 4.3,  --------  5.1(a) and 7.3
shall  survive any  termination  or expiration  of this  Agreement.

                         Article 8 - General Provisions

     8.1  Confidentiality.  Subject to Section 13.01 of the Principal Agreement,
during the Supply Term,  DURA shall  maintain the  Information in confidence and
not  disclose  the  Information  to a  third  party  other  than  P&G or use the
Information  other than as expressly  permitted  pursuant in Section 2.2 of this
Agreement  provided  that DURA shall have no  obligation  to FHP with respect to
Information  which:  (i) has been either published or is otherwise in the public
domain; (ii) is lawfully acquired by DURA from a third party under no obligation
of  confidentiality to FHP; or (iii) is reasonably obvious to one skilled in the
relevant arts.  Notwithstanding anything herein to the contrary, DURA may, after
reasonable  notice to FHP,  disclose  any  Information  to U.S. FDA or any other
governmental   or  other  body  which  legally  may  request  such   disclosure.
Notwithstanding  anything  to the  contrary  contained  herein  or in any  other
agreement to which DURA and FHP are parties,  neither DURA nor FHP shall, except
as required by law or upon the prior written  consent of the other party hereto,
disclose  to any  PERSON  (other  than  those of  DURA's  and FHP's  (and  their
AFFILIATES')  respective  directors,  officers,  employees and advisors having a
need-to-know)  any of the  terms or  provisions  of this  Agreement.

     8.2 Force Majeure.  DURA shall not be subject to any liability for delay in
performance  or  nonperformance  hereunder as a result of fire,  flood,  natural
catastrophe,   strike,  labor  trouble  accident,   riot,  act  of  governmental
authority,  act of God or  other  contingencies  and  circumstances  beyond  its
reasonable   control   interfering   with  the  Supplied   Production,   supply,
transportation  or  receipt  of  Supplied  Product or with the supply of any raw
materials used in the Supply  thereof.  Quantities so affected may be eliminated


                                       19
<PAGE>

from this Agreement without liability,  but the Agreement shall otherwise remain
unaffected.

     8.3 Entire Agreement.  This Agreement (and the Principal  Agreement and all
exhibits and  schedules  thereto and other  documents  delivered  in  connection
therewith)  supersedes all prior  discussions  and agreements  among the parties
with  respect to the  subject  matter  hereof and  contains  the sole and entire
agreement  among the parties  with  respect to the  subject  matter  hereof.  No
modification  hereof shall be effected by the  acknowledgement  or acceptance of
any purchase order or shipping instruction forms containing terms and conditions
at  variance  with or in  addition  to those  set forth in this  Agreement.

     8.4 Headings. Section and article headings as to the contents of particular
sections and articles are for convenience only and are in no way to be construed
as part of this  Agreement  or as a  limitation  of the scope of the  particular
sections or articles to which they refer.

     8.5 Relations Between the Parties. DURA shall act as independent contractor
of FHP in performing its obligations hereunder and shall (or shall cause P&G to)
(i)  furnish all labor,  supervision,  machinery  and  equipment  necessary  for
performance  hereunder  and (ii)  obtain and  maintain  all  building  and other
permits and licenses required by public authorities in connection therewith.

     8.6  Assignment.  Neither this Agreement nor any claim arising  directly or
indirectly  out  of or in  connection  with  the  performance  of  either  party
hereunder  shall be assignable by either party hereto  without the prior written
consent of the other party,  which consent shall not be  unreasonably  withheld.
Notwithstanding anything herein to the contrary,  either party hereto may assign
or  otherwise  transfer  all or part of this  Agreement  to any person or entity
controlling such party, controlled by such party, under common control with such
party, or otherwise an AFFILIATE of such party; provided,  however, that no such


                                       20
<PAGE>

assignment or transfer shall relieve or release the assignor or transferor  from
any of its  liabilities or  obligations  under this  Agreement.  Notwithstanding
anything herein to the contrary,  FHP  acknowledges  and agrees that pursuant to
the P&G Manufacturing Agreement, P&G may assign its rights and obligations under
the P&G  Manufacturing  Agreement  to any party or group of parties  which shall
purchase P&G's  production  facility located at Manati,  Puerto Rico;  provided,
however,  that:  (i) such party or parties shall agree in advance and in writing
to agree to the terms and conditions of the P&G  Agreement,  (ii) DURA agrees in
writing to such assignment, and (iii) if DURA does not so agree (as set forth in
clause (ii) of this Section 8.6), then P&G may either  subcontract the Supply of
Supplied  Products  to such  party or  parties or  continue  to Supply  Supplied
Products, either at the Manati facility or another P&G facility,  subject to the
terms and  conditions  of the P&G  Agreement.  The parties  agree to discuss and
implement  commercially  reasonable  procedures to implement any  transitions as
allowed in this Section 8.6.

     8.7 Notice. All communications under this Agreement shall be in writing and
shall be either faxed, sent by courier (Federal Express or equivalent) or mailed
by first class mail, postage prepaid, to the fax number and/or address specified
below.  If faxed,  such  communication  shall be deemed to be given  when  sent;
provided,  however,  that such fax shall be  confirmed by sending a hard copy by
courier or first  class mail (by the methods  specified  herein) the same day of
the  sending of such fax.  If sent by  courier or mailed by first  class mail as
specified below, such  communication  shall be deemed to be given either one (1)
business  days after  sending (for  communication  sent by courier) or three (3)
business days after mailing (for communication sent by mail). All communications
hereunder  shall be sent:


                                       21
<PAGE>

     (1) if to DURA,  at its address shown below or such other address as it may
give to

FHP by notice hereunder:
                                Dura  Pharmaceuticals,
                                Inc. c/o Elan  Pharmaceuticals,  Inc.
                                7475 Lusk  Boulevard
                                San Diego,  CA 92121
                                Attention: Vice President Commercial and
                                Legal Affairs Fax: (858) 657-0981

         with a copy to:
                                Brobeck, Phleger & Harrison
                                12390 El Camino Real
                                San Diego, CA 92130
                                Attention:       Faye Russell, Esq.
                                Fax: (858) 720-2555

     (2) if to FHP, at its address  shown below or such other  address as it may
give to DURA by notice hereunder:

                                First Horizon Pharmaceutical  Corporation 660
                                Hembree Parkway, Suite 106
                                Roswell, GA 30076
                                Attention: Vice President Corporate Development
                                Fax: (770) 442-9594

         with a copy to:

                                Burke, Warren, McKay & Serritella, P.C.
                                330 North Wabash, 22nd Floor
                                Chicago, IL 60611
                                Attention: Christopher R. Manning, Esq.
                                Fax: (312) 840-7900

     8.8  Severability.  If any provision of this Agreement is found or declared
to be invalid or unenforceable by any court or other competent  authority having
jurisdiction,  such  finding  or  declaration  will  not  invalidate  any  other
provision hereof and this Agreement shall thereafter  continue in full force and
effect, except that such invalid or unenforceable  provision, and (if necessary)
other provisions thereof, shall be reformed by a court of competent jurisdiction
so as to effect, insofar as is practicable,  the intention of the parties as set


                                       22
<PAGE>

forth in this  Agreement,  provided that if such court is unable or unwilling to
effect such reformation, the invalid or unenforceable provisions shall be deemed
deleted to the same extent as if it had never  existed.

     8.9 Governing Law. The  provisions of this  Agreement  shall be governed in
the internal  laws of the State of Ohio  without  regard to the conflict of laws
rules thereof.

     8.10 Attachments.  The attachments  referenced in this Agreement are hereby
incorporated  in and made a part of this  Agreement.  The parties may, by mutual
consent,  amend any  attachment  herein at any time  during  the term  hereof by
executing a version of such  attachments  dated after the then current  version.

     8.11 Waiver.  Any waiver by either party hereto of a breach or a default of
any provision of this Agreement by any other party hereto shall not be construed
as a waiver of any  succeeding  breach of the same or any other  provision,  nor
shall any delay or omission on the part of any party hereto to exercise or avail
itself  of any  right,  power or  privilege  that it has or may  have  hereunder
operate as a waiver of any such right,  power or privilege  by such party.

     8.12  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together shall  constitute  one and same  instrument.

     8.13  Conflict.  Except as otherwise  expressly  provided  herein or in the
Principal Agreement,  to the extent that any of the terms and conditions of this
Agreement  shall  conflict  with  the  terms  and  conditions  of the  Principal
Agreement, the terms and provisions of the Principal Agreement shall control. In
no event shall  Section 8.14 hereof be deemed to conflict  with any provision of
the Principal Agreement and, therefore, Section 8.14 shall be the sole governing
provision with respect to Special Indemnity Matters (as hereafter defined).

                                       23
<PAGE>

     8.14 Special Indemnity

          (a) Special Indemnity by Seller.

               (i)  Special  Indemnity.  Subject  to Section  8.14(b),  from and
                    after the  CLOSING  until  the  first to occur  of:  (i) the
                    receipt  by FHP and  DURA of a P&G  MANUFACTURING  AGREEMENT
                    CONSENT,  (ii) the expiration or termination (other than for
                    DURA's breach) of this  Agreement,  and (iii) the payment by
                    DURA to FHP of an  aggregate  amount  equal  to the  Special
                    Indemnity Cap Amount (as  hereinafter  defined),  DURA shall
                    indemnify,   reimburse,   defend  and  hold  harmless  BUYER
                    INDEMNIFIED PARTIES from and against any and all DAMAGES and
                    consequential damages (collectively,  the "Special Indemnity
                    Damages"),  to the extent  directly  resulting  from (A) the
                    cessation  of the supply of PRODUCT to DURA as a result of a
                    repudiation by P&G of that certain Letter dated December 19,
                    2001 addressed to Elan Corporation from the Manager,  Global
                    Product Supply Business  Planning of P&G, (B) the failure of
                    DURA to perform in accordance  with Section 8.15 hereof,  or
                    (C) P&G's failure to use commercially  reasonable efforts to
                    supply DURA with a supply of Product  under the terms of the
                    P&G  Manufacturing  Agreement  (collectively,  the  "Special
                    Indemnity Matters").

               (ii) Acknowledgement.   Notwithstanding   any   other   terms  or
                    provisions  of this  Agreement  to the  contrary  (including
                    other   provisions   contained   herein   with   respect  to
                    indemnification)   or  any  terms  or  provisions  under  or
                    pursuant  to any other  agreement  to which FHP and DURA are
                    parties,  including the Principal Agreement, DURA shall have
                    no LIABILITY of any kind or nature  whatsoever  in the event
                    that after FHP's  filing of an FHP NDA Filing in  accordance
                    with Section  7.1(a) of this Agreement and DURA'S use of all
                    commercially reasonable efforts to cause P&G to continue the
                    term of the P&G  Manufacturing  Agreement  beyond the end of
                    its initial term for an additional  period of two years, P&G
                    breaches Section 7.1(a) of the P&G  Manufacturing  Agreement
                    or  otherwise   refuses  to  extend  the  term  of  the  P&G
                    Manufacturing  Agreement  pursuant to and in accordance with
                    Section 7.1(a) thereof.

               (iii)Procedures.  FHP shall give DURA  prompt  written  notice (a
                    "Special  Indemnification  Claim  Notice")  of  any  Special
                    Indemnity  Damages  or  discovery  of fact  upon  which  FHP




                                       24
<PAGE>

                    intends to base a request for indemnification  under Section
                    8.14(a)(i),  provided  that no  delay  on the part of FHP in
                    notifying  DURA  shall  relieve  DURA  from  any  obligation
                    hereunder;  unless DURA is  materially  prejudiced  thereby.
                    Each  Special  Indemnification  Claim  Notice must contain a
                    reasonable  description  of the  claim  and the  nature  and
                    amount of such Special Indemnity Damages (to the extent that
                    the nature and amount of such Special  Indemnity Damages are
                    known at such  time).  FHP shall  furnish  promptly  to DURA
                    copies of all  papers and  official  documents  received  in
                    respect   of   any   Special    Indemnity    Damages.    All
                    indemnification  claims under Section  8.14(a)(i) in respect
                    of a PARTY,  its AFFILIATES or their  respective  directors,
                    officers,  employees and agents shall be made solely by such
                    PARTY to this Agreement.

                                       25
<PAGE>



                                        [***] - CONFIDENTIAL TREATMENT REQUESTED

          (b) Limitations.

               (i)  In no event shall DURA be liable for any  Special  Indemnity
                    Damages  pursuant to Section  8.14(a)(i)  of this  Agreement
                    unless and until the  aggregate  amount of all such  Special
                    Indemnity Damages thereunder exceeds [***] Dollars ($[***]),
                    in which  case  DURA  shall be liable  for all such  Special
                    Indemnity Damages including the first [***] Dollars ($[***])
                    of Special Indemnity Damages.

               (ii) In no event shall the  aggregate  liability  of DURA for any
                    Special  Indemnity  Damages  pursuant to Section  8.14(a)(i)
                    exceed an aggregate  amount equal to [***]  Dollars  ($[***]
                    (the "Special Indemnity Cap Amount").

               (iii)The amount of any Special  Indemnity  Damages  under Section
                    8.14(a)(i)  shall be reduced by the amount of any  insurance
                    proceeds paid to FHP relating to such claim.

               (iv) Notwithstanding  any  other  terms  or  provisions  of  this
                    Agreement  (including other provisions contained herein with
                    respect to indemnification) or any terms or provisions under
                    or pursuant to any other agreement to which FHP and DURA are
                    parties,   including  under  Article  XI  of  the  Principal
                    Agreement,  the right of the BUYER  INDEMNIFIED  PARTIES  to
                    indemnification  under Section  8.14(a)(i) shall be the sole
                    and  exclusive  remedy,  without  duplication,  of the BUYER
                    INDEMNIFIED  PARTIES  with  respect to any and all claims of
                    any kind or nature whatsoever  incurred by FHP (or any other
                    BUYER INDEMNIFIED  PARTIES) with respect to, arising out of,
                    resulting  from or incident to any of the Special  Indemnity
                    Matters.

     8.15 Dura  Permformance.  Dura shall use its best  efforts to carry out its
duties and  responsibilities  under this Supply  Agreement other than where such
performance  is  prevented by force  majeure  events as described in Section 8.2
hereof or those  duties and  responsibilities  of Dura which cannot be performed
without  performance by P&G under the terms of the P&G Manufacturing  Agreement,
in which event Dura shall be required  to use only its  commercially  reasonable
efforts.

               [Remainder of this page intentionally left blank]



                                       26
<PAGE>

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

FIRST HORIZON PHARMACEUTICAL,            DURA PHARMACEUTICALS, INC.
CORPORATION


By: /s/ Balaji Venkataraman              By:
    ------------------------------           ----------------------------------

Title: EVP Corp. Dev./CFO                Title:
    ------------------------------           ----------------------------------




                                       27

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