<PAGE>   1
                                                                    Exhibit 10.7

                             REIMBURSEMENT AGREEMENT


         This Reimbursement Agreement (the "Agreement") is made and entered into
as of February ___, 2000 by and between SOLVAY AMERICA, INC., a Delaware
corporation ("Solvay"), and DURAMED PHARMACEUTICALS, INC., a Delaware
corporation ("Duramed").

         A. Duramed has requested that The Provident Bank ("Lender"), an Ohio
banking corporation, make a loan to Duramed in the original principal amount of
$20,000,000 (the "Loan");

         B. The Lender has agreed to make the Loan provided that Solvay
guarantees the repayment of the Loan;

         C. As a condition to Solvay guaranteeing to Lender the repayment of the
Loan by Duramed, Solvay is requiring that Duramed reimburse Solvay the full
amount of any payment made by Solvay to Lender pursuant to its guaranty of the
obligation of Duramed to repay the Loan to Lender;

         D. In consideration of Duramed's agreement to reimburse Solvay for any
payment made by Solvay to Lender pursuant to its guaranty of the obligation of
Duramed to repay the Loan to Lender, Solvay and Duramed desire to enter into
this Agreement.

         NOW, THEREFORE, in consideration of the premises, of the agreements of
Solvay and Duramed contained herein, and of the making of the Loan by Lender to
Duramed, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         Section 1.01. Definitions. The following terms, as used herein, have
the following meaning:

         "Agreement" means this Reimbursement Agreement, as the same may from
time to time be amended, supplemented, or extended, including all exhibits
hereto and any other documents executed and delivered as a part hereof.

         "Business Day" means a day of the year, other than (i) a Saturday,
Sunday or legal holiday on which banking institutions in the State of Ohio are
authorized or required by law to close or (ii) a day on which The New York Stock
Exchange is closed.

         "Default Rate of Interest" means a rate per annum equal to the sum of
the Prime Rate plus four (4) percentage points (computed on the basis of a year
of 360 days and the actual number of days elapsed).

         "Dollars" and the sign "$" mean freely transferable money of the United
States of America.

         "Event of Default" shall mean any of the events specified in Article VI
of this Agreement, provided that any requirement for the giving of notice or for
the lapse of time has been satisfied in connection with such event.

         "GAAP" shall mean generally accepted accounting principles consistently
applied.

         "Guaranty" shall mean a certain Guaranty Agreement executed by Solvay
in favor of Lender of even date herewith.

         "Guaranteed Documents" is defined in Section 2.01 of this Agreement.

         "Loan" is defined in paragraph A of the preamble hereof.

         "Obligations" is defined in Section 2.01 of this Agreement.

         "Person" means an individual, a corporation, a partnership, an
association, a trust or trustee thereof or any other entity, fiduciary or
organization, including a government or political subdivision thereof.
<PAGE>   2
         "Prime Rate" means such rate of interest as publicly announced from
time to time by Provident as its prime rate, which may not be Provident's lowest
rate of interest charged to borrowers, such rate changing automatically and
immediately from time to time effective as of the effective date of each such
announced change.

                                   ARTICLE II
                                    GUARANTY

         Section 2.01.  Guaranty.

         Solvay has executed in favor of Lender the Guaranty of even date
herewith pursuant to which Solvay guarantees the prompt and punctual payment and
performance, as the case may be, of the Obligations (as defined in the Guaranty)
of Duramed to Lender under the Guaranteed Documents (as defined in the Guaranty)
as more particularly provided in the Guaranty.

         Section 2.02.  Reimbursement and Other Payments.

         (a) Demand for Payment. If (i) Solvay makes any payment to Lender
pursuant to the Guaranty in order to satisfy an Obligation of Duramed to Lender
then due and unpaid or (ii) Solvay pays any third party in order to cause the
performance of any Obligation of Duramed to Lender then due and unperformed,
Solvay shall, unless prohibited by any law, regulation or judicial or
administrative order, notify Duramed, and in the case of payments to third
parties, shall provide to Duramed reasonable evidence of the payment of such
expense and the purpose of the expenditure. Within five (5) days following the
receipt of such notice, Duramed shall pay, and unconditionally promises to pay,
without offset, statement, withholding or other reduction whatsoever, Solvay the
amount of such payment, together with interest on such amount at the Default
Rate of Interest accruing from and after the date of receipt of such notice.

         Section 2.03. Payment on Non-Business Days. Whenever any payment to be
made hereunder by Duramed shall be stated to be due on a day which is not a
Business Day, such payment shall be made on or before the preceding Business
Day.

                                   ARTICLE III
                             CONDITIONS OF ISSUANCE

         Section 3.01. Conditions Precedent to this Agreement. The obligation of
Solvay to enter into this Agreement is subject to the condition precedent that
Solvay shall have received on or before the date hereof the following addressed
to Solvay, in form and substance reasonably satisfactory to Solvay:

         (a) A certificate of the Secretary or Assistant Secretary of Duramed,
certifying the accuracy and completeness of copies of the resolutions or actions
by unanimous written consent of the board of directors of Duramed authorizing or
ratifying the execution, delivery and performance of this Agreement and the
Other Loan Documents.

         (b) A certificate of the Secretary or Assistant Secretary of Duramed
certifying the names and true signatures of the officers or other
representatives of Duramed authorized to sign this Agreement and the Other Loan
Documents.

         (c) Opinion of counsel for Duramed, addressed to Solvay, in
substantially the form of Exhibit A hereto.

         (d) Executed copies of this Agreement.


                                      - 2 -
<PAGE>   3
                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         Section 4.01. Representations and Warranties of Duramed. Duramed hereby
represents and warrants to Solvay as follows:

         (a) Except as previously disclosed to Solvay in writing, Duramed has
filed all Federal, state and local tax returns required to be filed and has paid
all taxes shown to be due on such returns, and has made provision for all
liabilities not so paid or accrued under returns not yet due. Except as
previously disclosed to Solvay in writing, Duramed has no knowledge of any
pending assessments or adjustments to its taxes payable with respect to any
year.

         (b) Duramed's obligations under this Agreement are not subordinate in
any manner to any other obligation of Duramed.

         (c) There is no claim, action, temporary restraining order, injunction,
suit, proceeding, inquiry or investigation, at law or in equity, before or by
any judicial or administrative court, governmental agency, public board or body,
pending or, to the best of Duramed's knowledge, threatened against or affecting,
or involving the properties or businesses, or any securities of, Duramed nor, to
the best of Duramed's knowledge, is there any basis therefor, (i) contesting the
existence or powers of Duramed or the authority of its directors, officers, or
partners, as the case may be, or (ii) wherein an unfavorable decision, ruling or
finding would in any way adversely affect Duramed's ability to carry out its
obligations under this Agreement.

         (d) The transactions contemplated by this Agreement have not been
entered into by Duramed in contemplation of Duramed's insolvency and neither
have such transactions been entered into with the intent of Duramed to hinder,
delay or defraud the equityholders or the creditors of Duramed.

         (e) Duramed is not regularly engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).

                                    ARTICLE V
                              COVENANTS OF DURAMED

         Section 5.01. Financial Statements. (a) Duramed shall furnish to Solvay
as soon as practical after the end of each calendar quarter, and in any event
within 30 days thereafter, (i) a balance sheet of Duramed as at the end of such
calendar quarter, (ii) an income statement and a reconciliation of retained
earnings for Duramed for such calendar quarter, and (iii) a statement of cash
flows for Duramed for such calendar quarter. All financial statements required
to be furnished to Solvay pursuant to this Section 5.01(a) shall be in
consolidated form, if applicable, and shall be in reasonable detail and
certified by the chief financial officer of Duramed as having been prepared in
accordance with GAAP, as being true, complete and correct in all material
respects, and as presenting fairly the financial position, of Duramed as of the
respective dates of such balance sheet and the results of its operations for the
respective periods covered. On each occasion on which Duramed is required to
furnish a financial statement to Solvay pursuant to this Section 5.01(a),
Duramed shall also furnish to Solvay a certificate of Duramed's chief executive
officer or chief financial officer that such officer has caused the provisions
of this Agreement to be reviewed and, after reasonable investigation, has no
knowledge of the occurrence of any event or condition which either constitutes
or with the lapse of time or giving of notice or both would constitute an Event
of Default, or if such officer has such knowledge, specifying such event or
condition and what action Duramed has taken, is taking or proposes to take with
respect thereto.

         (b) Within ninety (90) days after the last day of each fiscal year,
Duramed shall furnish to Solvay a copy of its financial statements, audited by
independent certified public accountants, including statements of financial
condition as of the end of such fiscal year, and related statements of income
and cash flows, a reconciliation of retained earnings and changes in financial
condition for the fiscal year then ended, setting forth in comparative form the
corresponding figures as of the end of or for the previous fiscal year, all in
reasonable detail and all in conformity with GAAP. Duramed shall also furnish
promptly to Solvay such other information respecting the business, properties,
condition or operations, financial or otherwise, of Duramed as Solvay may


                                      - 3 -
<PAGE>   4
reasonably request. If an Event of Default shall have occurred and be
continuing, Solvay may require any financial statements required by this
subsection to be audited and certified by independent certified public
accountants.

         Section 5.02. Deliver Notice. Forthwith upon learning of any of the
following, Duramed shall deliver written notice thereof to Solvay, describing
the same and the steps being taken by Duramed with respect thereto:

         (a) the occurrence of an Event of Default or an event or circumstance
which would constitute an Event of Default, but for the requirement that notice
be given or time elapse or both;

         (b) any action, suit or proceeding, by it or against it at law or in
equity, or before any governmental instrumentality or agency, or any of the same
which may be threatened, and which, if adversely determined, would materially
impair the right or ability of Duramed to carry on its business or would
materially impair the right or ability of Duramed to perform its obligations
under this Agreement, or would materially and adversely affect its business,
operations, properties, assets or condition;

         (c) any change in the name, address, identity or structure of Duramed;
or

         (d) any uninsured or partially uninsured loss through fire, theft,
liability or property damage which may have an adverse material effect on
Duramed's financial condition or operations.

         Section 5.03. Keep Books. Duramed shall keep true and proper books of
records and accounts in which full and correct entries are made of all business
transactions, and reflect in its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP.

         Section 5.04. Continued Existence. Duramed will remain in good standing
and qualified to do business under all applicable state and Federal laws.
Without the prior written consent of Solvay, Duramed will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
voluntarily consolidate with or merge into any other entity or permit one or
more entities to consolidate with or merge into it if the effect of such
consolidation or merger is that Duramed's net worth will be lower immediately
following such merger or consolidation than it was immediately prior to such
merger or consolidation.

         Section 5.05. Amendment of Other Documents. Without the prior written
consent of Solvay, Duramed shall not enter into or consent to any amendment or
modification of the Guaranteed Documents. Duramed shall not enter into any
agreement containing any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith.

         Section 5.06. Affirmative Covenants. Unless the prior written consent
of Solvay is first received, Duramed shall comply with all of the affirmative
covenants contained on Exhibit B hereto, which are hereby incorporated herein by
reference.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

         Section 6.01. Events of Default. The occurrence of any of the following
events shall be an "Event of Default" hereunder:

         (a) Duramed shall fail to pay when due any amount payable pursuant to
Section 2.02 hereof; or

         (b) Duramed shall fail to furnish any financial statements required by
Section 5.01 when required by Section 5.01 and such failure shall continue for
fifteen (15) days after notice thereof given as provided herein; or

         (c) Duramed shall fail to perform or observe any of the terms,
covenants or agreements to be performed or observed by Duramed as set forth in
this Agreement (other than the failures described in


                                      - 4 -
<PAGE>   5
subsections (a) and (b) of this Section 6.01), and any such failure shall
continue for thirty days after notice given as provided herein; or

         (d) Any representation or warranty made by Duramed herein or in any
other document delivered in connection with this Agreement or any representation
or warranty of any guarantor of the obligations of Duramed under this Agreement
shall prove to have been incorrect in any material respect when made.

         Section 6.02. Remedies Upon an Event of Default. If (i) any Event of
Default shall have occurred and be continuing and shall not have been
specifically waived pursuant to Section 7.03 hereof, (ii) Lender shall have
accelerated the maturity of the entire principal amount of the Obligations
together with all interest accrued and unpaid thereon and demanded that Solvay
pay the same and (iii) Solvay shall have paid the same, Solvay may declare the
principal of all amounts owing under the Guaranteed Documents, together with
interest thereon, to be forthwith due and payable to Solvay, regardless of any
other specified maturity or due date, without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character, and without the necessity of prior
recourse to any security.

         The rights and remedies of Solvay under the terms and provisions of
this Agreement and at law or in equity, shall be separate, distinct and
cumulative, none of them shall be exclusive of the others, and Solvay may
exercise all or any one of them successively or concurrently. No act of Solvay
shall be deemed to be an election to proceed under any one provision herein to
the exclusion of any other provision, anything herein or otherwise to the
contrary notwithstanding.

                                   ARTICLE VII
                                  MISCELLANEOUS

         Section 7.01. Amendments; Waivers. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by Duramed
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Solvay, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

         Section 7.02. Notices. Except as otherwise provided herein, whenever
notice is required to be given pursuant to the provisions hereof, such notice
shall be in writing (including facsimile transmission) and shall be given as
follows:

         (a) if to Duramed:  7155 Kemper Road
                             Cincinnati, Ohio 45249
                             Attention:  Chief Financial Officer

         (b) if to Solvay:   33 Richmond Avenue
                             Houston, Texas 77098
                             (713) 525-7818

         with copies to:     Attention:  Vice President and General Counsel


or to such other address as any Person listed in this Section may hereafter
specify for the purpose by written notice to each other Person listed in this
Section. Each such notice shall be effective and conclusively deemed received
(i) if given by certified or registered U.S. mail, when confirmation of delivery
is received or when notice of refusal to accept delivery is received, (ii) if
given by recognized overnight delivery service that in the ordinary course of
its business maintains a record of receipts of each of its deliveries, when
delivery is received or refused, or (iii) if hand delivered, when delivered at
the address specified in this Section.

         Section 7.03. No Waiver; Remedies. No failure on the part of Solvay to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, unless as permitted under Section 7.03 hereof; neither shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.


                                      - 5 -
<PAGE>   6
         Section 7.04. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.

         Section 7.05. Computations. Where the character or amount of any asset,
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP.

         Section 7.06. Further Assurances. Duramed shall do such further acts
and things and execute and deliver to Solvay such additional assignments,
agreements, powers and instruments, as Solvay may reasonably require or deem
advisable to carry into effect the purposes of this Agreement or to better
assure and confirm unto Solvay its rights, powers and remedies hereunder.

         Section 7.07. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

         Section 7.08. Binding Effect. This Agreement shall become effective
when it shall have been executed by Duramed and Solvay and thereafter shall be
binding upon and inure to the benefit of Duramed and Solvay and their respective
successors and assigns. Solvay may assign to any financial institution all or
any part of, or any interest (undivided or divided) in, its rights and benefits
under this Agreement, and to the extent of that assignment such assignee shall
have the same rights and benefits against Duramed hereunder as it would have had
if such assignee were Solvay.

         Section 7.09. Severability. The parties hereto intend and believe that
each provision in this Agreement comports with all applicable local, state and
Federal laws and judicial decisions. However, if any provision or provisions, or
if any portion of any provision or provisions, in this Agreement are found by a
court of law to be in violation of any applicable local, state or Federal
ordinance, statute, law, administrative or judicial decision, or public policy,
and if such court should declare such portion, provision or provisions of this
Agreement to be illegal, invalid, unlawful, void or unenforceable as written,
then it is the intent of the parties hereto that such portion, provision or
provisions shall be given force and effect to the fullest possible extent, that
the remainder of this Agreement shall be construed as if such provision or
provisions were not contained herein and that the rights, obligations and
interests of the parties under the remainder of this Agreement shall continue in
full force and effect.

         Section 7.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio, except to the
extent that such laws would direct the application of the laws of a different
state.

         Section 7.11. Heading. Section headings and captions in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose and are not to be considered as
defining or limiting in any way the scope or intent of the provisions of this
Agreement.

         Section 17.12. Solvay's Attorney Fees. As of the date of this
Agreement, Duramed shall pay the reasonable fees of counsel hired by Solvay to
negotiate this Agreement in connection with such negotiation by wire transfer to
such counsel in accordance with wiring instructions furnished by such counsel.


                                      - 6 -
<PAGE>   7
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective representatives thereunto duly
authorized as of the date first above written.

Solvay:                              Duramed:

SOLVAY AMERICA, INC.                 DURAMED PHARMACEUTICALS, INC.


By /s/ Philip Uhrhan                 By /s/ Timothy J. Holt
  --------------------------------     ----------------------------------
Name   Philip Uhrhan                 Name   Timothy J. Holt
    ------------------------------       --------------------------------
Title Vice President Finance         Title
     -----------------------------        -------------------------------


                                      - 7 -
<PAGE>   8
                                    EXHIBIT A

                         FORM OF DURAMED COUNSEL OPINION



                                       A-1
<PAGE>   9
                                    EXHIBIT B
                              AFFIRMATIVE COVENANTS


                              Affirmative Covenants

         The following affirmative covenants are incorporated in the
Reimbursement Agreement as if fully set forth therein:

         INSURANCE. Duramed shall maintain insurance upon all of its assets and
         business properties subject to the Security Documents (the "Property")
         and product liability insurance with responsible and reputable insurers
         of such character and amounts as are usually maintained by companies
         engaged in like business. All insurance policies shall be written for
         the benefit of Duramed and Solvay as their interests may appear and
         shall contain a provision requiring the insurance company to provide
         Solvay not less than thirty days' written notice prior to cancellation
         of any such policy. All insurance policies or certificates evidencing
         the same shall be furnished to Solvay.

         PAYMENT OF TAXES AND CLAIMS. Duramed shall pay all taxes, assessments
         and other governmental charges imposed upon its properties or assets or
         in respect of any of its franchises, business, income or profits before
         any penalty or interest accrues thereon, and all claims (including,
         without limitation, claims for labor, services, materials and supplies)
         for sums which have become due and payable and which by law have or
         might become a lien or charge upon any of its properties or assets,
         provided that (unless any material item of property would be lost,
         forfeited or materially damaged as a result thereof) no such charge or
         claim need be paid if the amount, applicability or validity thereof is
         currently being contested in good faith and if such reserve or other
         appropriate provision, if any, as shall be required by GAAP shall have
         been made therefor.

         COMPLIANCE WITH LAWS. Duramed shall comply in all substantial respects
         with all applicable statutes, laws, ordinances and governmental rules,
         regulations and orders to which they are subject or which are
         applicable to its business, properties and assets if noncompliance
         therewith would materially adversely affect such businesses; provided
         that (unless such contest or noncompliance would materially adversely
         affect such businesses) Duramed need not so comply if any such statute,
         law, ordinance, or governmental rule, regulation or order is currently
         being contested in good faith.


                                       B-1