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                                                                   EXHIBIT 10.70


                      RIGHT OF FIRST NEGOTIATION AGREEMENT

     This Right of First Negotiation Agreement (the "Agreement") is dated as of
March 29, 2000 (the "Effective Date"), between Watson Pharmaceuticals, Inc., a
Nevada corporation, ("Watson") and Halsey Drug Co., Inc., a New York
corporation, ("Halsey").

                                    RECITALS

     A.   Halsey owns proprietary know-how and other intellectual property
pertaining to certain existing pharmaceutical compounds, and/or the finished
goods form thereof and has or is pursuing regulatory approval of these compounds
or finished goods.

     B.   Halsey may develop new pharmaceutical compounds and/or the finished
goods form thereof for eventual regulatory approval and commercialization.

     C.   Watson desires the first right to negotiate to purchase such compounds
and/or the finished goods form thereof on terms similar to those set forth in
the Form of Active Ingredient Supply Agreement (attached hereto as Exhibit A) or
Finished Goods Supply Agreement (attached hereto as Exhibit B).

     In consideration of the foregoing premises and of the mutual covenants and
obligations set forth herein, the parties hereto agree as follows:

                                   ARTICLE 1

                                   DEFINITIONS

     1.1  "AFFILIATES" shall mean, 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.

     1.2  "CONFIDENTIAL INFORMATION" shall mean, with respect to a party, all
information of any kind whatsoever (including without limitation, data,
compilations, formulae, models, patent disclosures, procedures, processes,
projections, protocols, results of experimentation and testing, specifications,
strategies and techniques), and all tangible and intangible embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records and reports), which
is disclosed by such party to the other party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure to the other
party. Notwithstanding the foregoing, Confidential Information of a party shall
not include information which the other party can establish by written
documentation (a) to have been publicly known prior to disclosure of such
information by the disclosing party to the other party, (b) to have become
publicly known, without fault on the part of the other party, subsequent to
disclosure of such information by the disclosing party to the other party, (c)
to have been received by the other party at any time from a source, other than
the disclosing party, rightfully having possession of and the right to disclose
such information, (d) to have been otherwise known by the other party prior to
disclosure of such information by the disclosing party to the other party, or
(e) to have been


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independently developed by employees or agents of the other party without use of
such information disclosed by the disclosing party to the other party.

     1.3  "ACTIVE INGREDIENTS" shall mean the pharmaceutical compounds listed on
Schedule 1.

     1.4  "DMF" shall mean Halsey's Drug Master File for manufacturing the
Active Ingredient filed with the FDA.

     1.5  "FINISHED GOODS" shall mean a pharmaceutical products listed on
Schedule 2 packaged, labeled and finished for pharmaceutical use to meet the
certain specifications set forth is the regulatory approvals by all requisite
governmental authorities to market and sell such product.

     1.6  "FDA" shall mean the United States Food and Drug and any successor
agency thereto.

     1.7  "REGULATORY APPROVAL" shall mean the approvals by all requisite
governmental authorities to market and sell Finished Goods in the United States.

     1.8  "REGULATORY DOSSIER" shall mean all registrations, permits, licenses,
authorizations, approvals, presentations, notifications or filings (together
with all applications therefor), which are filed with or granted by the FDA or
other governing health authority of any country, and which are required to
develop, make, use, sell, import or export the Active Ingredients or the
Finished Goods.

                                   ARTICLE 2

                           RIGHTS OF FIRST NEGOTIATION

     2.1  NOTICE. Within fifteen (15) days of (i) receiving Regulatory Approval
(including FDA approval of validation batches) for a Finished Good, or (ii)
filing a DMF for a Active Ingredient after the Effective Date, Halsey shall
notify Watson in writing, identifying the Finished Good or Active Ingredient,
the estimated costs thereof, and providing to Watson the Regulatory Dossier for
such Finished Good or Active Ingredient (the "Halsey Notice").

     2.2  RIGHT OF NEGOTIATION. For a period of thirty (30) days following the
receipt of the Halsey Notice for any Finished Good or Active Ingredient (the
"Election Period"), Watson shall have the option to notify Halsey of its intent,
in writing, to enter into either an Active Ingredient Supply Agreement for such
Active Ingredient or a Finished Goods Supply Agreement for such Finished Good
(as the case may be), such supply agreement to be in the form attached hereto
respectively as Exhibit A or Exhibit B (the "Watson Election Notice"). For a
period of sixty (60) days following the receipt of the Watson Election Notice by
Halsey (the "Negotiation Period"), the parties will negotiate in good faith only
the following terms of either the Active Supply Agreement or the Finished Goods
Supply Agreement: price, exclusivity, territory (which in all events will
include the United States), minimum purchase requirements and term, in each case
taking into consideration actual costs, competitive factors, market conditions,
regulatory constraints, and other appropriate matters.

     2.3  SUPPLY TO THIRD PARTIES. If (i) prior to the expiration of the
Election Period Watson fails to deliver the Watson Election Notice, or (ii)
Watson advises Halsey in writing that it does not


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desire to enter into either an Active Ingredient Supply Agreement or a finished
Goods Supply Agreement for the Active Ingredient or the Finished Good specified
in the applicable Halsey Notice, or (iii) Halsey and Watson cannot agree to the
negotiable terms of an Active Ingredient Supply Agreement or a Finished Goods
Supply Agreement for the Active Ingredient, or Finished Good, by the end of the
Negotiation Period, then Halsey may enter into an active ingredient supply
agreement or a finished goods supply agreement with a third party, provided that
solely in the case of subsection (iii) of this Section 2.3, the terms of the
supply arrangement are no less favorable to Halsey, in any material respect
(individually or in the aggregate), than those last proposed by Watson to Halsey
pursuant to Section 2.2 above.

     2.4  TERMINATION OF RIGHT. If prior to the expiration of the Election
Period Watson fails to deliver the Watson Election Notice, or (ii) Watson
advises Halsey in writing that it does not desire to enter into either an Active
Ingredient Supply Agreement or a Finished Goods Supply Agreement for the Active
Ingredient or Finished Good specified in the applicable Halsey Notice, then
Watson's right of first negotiation relating to Active Ingredient or Finished
Good shall terminate.

                                   ARTICLE 3

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     3.1  HALSEY REPRESENTATIONS AND WARRANTIES. Halsey represents and warrants
as of the date hereof as follows:

          3.1.1 CORPORATE AUTHORITY. Halsey is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York.
Halsey has the power and authority to execute and deliver this Agreement, any
the instruments to be executed and delivered by it pursuant hereto and to
consummate the transactions contemplated hereby. All acts required to be taken
by or on the part of Halsey (corporate or otherwise) to authorize the execution,
delivery and performance of this Agreement have been duly and properly taken and
this Agreement has been duly and promptly executed and delivered by Halsey and
constitutes a legal, valid and binding obligation of Halsey, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
and moratorium laws and other laws of general application affecting enforcement
of creditors' rights generally.

          3.1.2 NO CONFLICT. The execution, delivery and performance of this
Agreement by Halsey will not violate, conflict with or result in a breach of or
constitute a default (or event with which the giving of notice, lapse of time or
both, would become a default), under any order or decree of any court,
administrative agency or governmental authority, the charter documents of Halsey
or any agreement, contract or any other instrument to which Halsey or any other
Affiliate is a party or to which its or their assets or property may be bound or
affected. No approval, authorization, consent or other order or action of or
filing with or providing notice to any court, administrative agency,
governmental authority or any other third party is required for the execution,
delivery or performance of Halsey under this Agreement. Halsey has delivered to
Watson an executed copy of the Asset Purchase Agreement with Barr Laboratories,
Inc., dated April 16, 1999, granting Barr Laboratories certain non-exclusive
rights to purchase the Finished Goods listed on Schedule 2 and in certain
circumstances, to reacquire the rights to the Finished Goods.


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          3.1.3 LITIGATION. There is no pending, or to Halsey's knowledge
threatened, litigation that would reasonably be expected to affect adversely its
right and ability to perform its obligations under this Agreement.

     3.2  WATSON REPRESENTATIONS AND WARRANTIES. Watson represents and warrants
as of the date hereof as follows:

          3.2.1 CORPORATE AUTHORITY. Watson is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Watson has the power and authority to execute and deliver this Agreement, any
the instruments to be executed and delivered by it pursuant hereto and to
consummate the transactions contemplated hereby. All acts required to be taken
by or on the part of Watson (corporate or otherwise) to authorize the execution,
delivery and performance of this Agreement have been duly and properly taken and
this Agreement has been duly and promptly executed and delivered by Watson and
constitutes a legal, valid and binding obligation of Watson, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
and moratorium laws and other laws of general application affecting enforcement
of creditors' rights generally.

          3.2.2 NO CONFLICT. The execution, delivery and performance of this
Agreement by Watson will not violate, conflict with or result in a breach of or
constitute a default (or event with which the giving of notice, lapse of time or
both, would become a default), under any order or decree of any court,
administrative agency or governmental authority, the charter documents of Watson
or any agreement, contract or any other instrument to which Watson or any other
Affiliate is a party or to which its or their assets or property may be bound or
affected. No approval, authorization, consent or other order or action of or
filing with or providing notice to any court, administrative agency,
governmental authority or any other third party is required for the execution,
delivery or performance of Watson under this Agreement.

          3.2.3 LITIGATION. There is no pending, or to Watson's knowledge
threatened, litigation that would reasonably be expected to affect adversely its
right and ability to perform its obligations under this Agreement.

                                   ARTICLE 4

                                 CONFIDENTIALITY

     4.1  PROTECTION OF CONFIDENTIAL INFORMATION. Watson and Halsey shall:

          (a)  not disclose any Confidential Information of the other to third
parties except to: (i) government authorities; or (ii) such party's Affiliates,
consultants or actual or potential contract manufacturers, licensees,
distributors, purchasers, joint ventures, clinical investigators or other
persons having bona fide business relations with such party, in each case
pursuant to a non-disclosure commitment; and

          (b)  take such precautions as it normally takes with its own
confidential and proprietary information to prevent disclosure to third parties
of any Confidential Information (except as contemplated above).


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                                   ARTICLE 5

                              TERM AND TERMINATION

     5.1  TERM OF AGREEMENT. Unless terminated earlier pursuant to Section 5.2
below, the initial term of this Agreement shall expire on the date ten (10)
years after the date hereof; provide however, that the term of this Agreement
shall be automatically extended for up to two (2) successive additional terms of
five (5) years each thereafter unless either party gives to the other not less
than one (1) year's written notice of termination prior to the expiration of the
of the initial term, or any additional term, of this Agreement.

     5.2  TERMINATION BY MUTUAL AGREEMENT. This Agreement may be terminated by
mutual agreement of the parties as evidenced by a writing executed by each party
hereto.

     5.3  TERMINATION BY HALSEY. If Watson commits a material breach of any term
or condition of that certain Product Purchase Agreement dated of even date
herewith between Watson and Halsey (the "Product Purchase Agreement"),
including, without limitation, Watson's payment obligations under Section 3.1
thereof, and Watson fails to cure such breach within forty-five (45) days after
receiving written notice of the breach from Halsey, Halsey shall have the right
to terminate this Agreement upon written notice to Watson at the end of such
forty-five (45) day period for Watson's uncured breach.

     5.4  EFFECT OF EXPIRATION AND TERMINATION. Expiration or termination of
this Agreement shall not relieve the parties of any obligations accruing prior
to such expiration or termination. The provisions of Article 4 shall survive any
expiration or termination of this Agreement. The expiration or termination of
this Agreement in accordance with the provisions of this Article 5 shall
immediately terminate Halsey's obligations hereunder, including, without
limitation, the obligations of Article 2 hereof regardless of whether the
parties are then in negotiations relating to any product described in a Halsey
Notice. However, in no event shall any such expiration or termination affect or
impair any Active Ingredient Supply Agreement or Finished Goods Supply Agreement
which the parties may have entered into as a result of this Agreement. Upon
termination or expiration, each party shall immediately deliver to the other
(and cause any of its employees, agents or representatives to so deliver), at
such parties expense, all Confidential Information of the other party,
including, without limitation, any and all copies, duplications, summaries
and/or notes thereof or derived therefrom, regardless of the format, except to
the extent such Confidential Information relates to any Active Ingredient Supply
Agreement or Finished Goods Supply Agreement which the parties may have entered
into as a result of this Agreement.


                                   ARTICLE 6

                                  MISCELLANEOUS

     6.1  INDEPENDENT CONTRACTORS. This Agreement does not constitute Watson as
the agent or legal representative of Halsey, nor does it constitute Halsey as
the agent or legal representative of Watson. Neither Watson nor Halsey shall
have any right or authority to assume or create any obligation or responsibility
or vicarious liability, express or implied, on behalf of or in the name of the
other, or to bind the other in any manner.


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     6.2  NOTICES. All notices or other communications given pursuant hereto by
one party hereto to the other party shall be in writing and deemed given (a)
when delivered by messenger, (b) when sent by telecopier, (with receipt
confirmed), (c) when received by the addressee, if sent by Express Mail, Federal
Express or other express delivery service (receipt requested), or (d) five days
after being mailed in the U.S., first-class postage prepaid, registered or
certified, in each case to the appropriate addresses and telecopier numbers set
forth below (or to such other addresses and telecopier numbers as a party may
designate as to itself by notice to the other party):

     If to Watson, to it at:


     Watson Pharmaceuticals, Inc.
     311 Bonnie Circle
     Corona, CA  92880
     Attention: Chief Operating Officer
     Telecopier No.: (909) 270-1429


     with a copy to:


     Watson Pharmaceuticals, Inc.
     311 Bonnie Circle
     Corona, CA  92880
     Attention: General Counsel
     Telecopier No.: (909) 279-8094


     If to Halsey, to it at:


     Halsey Drug Company, Inc.
     695 N. Perryville Road
     Rockford, Illinois 61107
     Attention: Chief Executive Officer
     Telecopier No.:  (805) 399-9710


     6.3  FORCE MAJEURE. Neither party shall be responsible or liable to the
other hereunder for failure or delay in performance of this Agreement due to any
war, fire, accident or other casualty, or any labor disturbance, or act of God
or the public enemy, or governmental action or any other contingency beyond such
party's reasonable control. In the event of the applicability of this Section,
the party affected by such force majeure shall use reasonable efforts,
consistent with good business judgment, to eliminate, cure and overcome any of
such causes and resume performance of its obligations.

     6.4  SUCCESSORS AND ASSIGNS. Neither party shall, without the prior written
consent (not to be unreasonably withheld or delayed) of the other party having
been obtained, assign or transfer this Agreement to any person or entity, in
whole or in part, provided that, each party may assign or transfer this
Agreement to any Affiliate or to any successor by merger of such party or its
pharmaceutical business, or upon a sale of all or substantially all of such
parties assets, or the assets of its pharmaceutical business, without the prior
written consent of the other party hereto. All of the


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terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns.

     6.5  AMENDMENT. This Agreement may be amended only by written agreement of
the parties hereto.

     6.6  WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of that
or any other term hereof or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement. Any
waiver must be in writing and be signed by the party against whom the waiver is
asserted.

     6.7  FURTHER ACTIONS. Each party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be reasonably
necessary or appropriate in order to carry out the purpose and intent of this
Agreement.

     6.8  GOVERNING LAW, DISPUTE RESOLUTION, ARBITRATION. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of
California and the United States, as though made and to be fully performed
therein without regard to conflicts of laws principles thereof.

     The parties shall initially attempt in good faith to resolve any
significant controversy, claim, allegation of breach or dispute arising out of
or relating to this Agreement (hereinafter collectively referred to as a
"Dispute") through negotiations between senior executives of Watson and Halsey.
If the Dispute is not resolved within thirty (30) days (or such other period of
time mutually agreed upon by the parties) of notice of the Dispute (the
"Executive Resolution Period"), then the parties agree to submit the Dispute to
arbitration as provided herein. Unless otherwise mutually agreed by the parties,
only if the Dispute is not resolved through negotiations as set forth herein,
may a party resort to arbitration.

     All Disputes relating in any way to this Agreement shall be resolved
exclusively through arbitration conducted in accordance with the Commercial
Arbitration Rule of the American Arbitration Association as then in effect. In
the event either party demands arbitration, it shall do so within thirty (30)
days after the expiration of the Executive Resolution Period (or any mutually
agreed extension) and shall include a request that such arbitration be held
within thirty (30) days of such demand. The arbitration hearing shall be held as
soon as practicable. The arbitration hearing shall be held in Orange County,
California and shall be before a single arbitrator selected by the parties in
accordance with the Commercial Arbitration Rule of the American Arbitration
Association pursuant to its rules on selection of arbitrators. The arbitrator
shall render a formal, binding non-appealable resolution and award on each issue
as expeditiously as possible but not more than ten (10) business days after the
hearing. In any arbitration, the prevailing party shall be entitled to
reimbursement of its reasonable attorneys fees and the parties shall use all
reasonable efforts to keep arbitration costs to a minimum.

     6.9  ATTORNEYS' FEES. Each party shall bear its own legal fees incurred in
connection with the transaction that is contemplated hereby, provided, however,
that if either party to this Agreement seeks to enforce its rights under this
Agreement by legal proceedings or otherwise, the non-prevailing party shall pay
all costs and expenses incurred by the prevailing party, including, without
limitation, reasonable attorneys' fees.


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    6.10  SEVERABILITY. To the extent permitted by applicable law, any term or
provision of this Agreement which is invalid or unenforceable will be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining rights of the Person intended
to be benefited by such term or provision or any other provisions of this
Agreement.

    6.11  ENTIRE AGREEMENT. This Agreement, and all other agreements,
certificates, documents and instruments contemplated hereby or thereby (in each
case including any Exhibits or Schedules attached hereto or thereto), contains
the sole and entire agreement and understanding of the parties hereto and their
respective Affiliates and representatives related to the subject matter hereof
and supersedes all oral or written agreements concerning the subject matter made
prior to the date of this Agreement. There are no agreements, covenants or
undertakings with respect to the subject matter of this Agreement or the other
agreements, documents, certificates or instruments referred to in this Section
6.11 other than those expressly set forth or referred to herein or therein and
no representations or warranties of any kind or nature whatsoever, express or
implied, are made or shall be deemed to be made herein by the parties hereto
except those expressly made in this Agreement and such other agreements,
documents, certificates and instruments.

    6.12  PUBLIC ANNOUNCEMENTS. Except to the extent disclosure may be required
by applicable law or the rules or regulations of any stock exchange on which
such party's stock is traded, neither party shall issue or make any public
announcement or press release, or otherwise make any public statement, with
respect to this Agreement without obtaining the other party's approval, which
approval shall not be unreasonably withheld or delayed. In the event a party
determines that applicable law or the rules or regulations of any stock exchange
on which such party's stock is listed requires such a disclosure, it shall
provide the other party a copy of the intended disclosure and provide such party
a reasonable opportunity to comment on such disclosure. Attached as Exhibit G to
the Product Purchase Agreement is a form of joint press release describing the
material terms of the transactions contemplated by the parties. Halsey and
Watson intend to release the form of such press release on or about the date of
execution of this Agreement.


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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first indicated
above.


                                                  WATSON PHARMACEUTICALS, INC.

                                                  By:/s/ Robert C. Funsten
                                                  Name:
                                                       -------------------------
                                                  Title: Senior Vice President


                                                  HALSEY DRUG CO., INC.


                                                  By:/s/ Michael Reicher
                                                  Name:
                                                       -------------------------
                                                  Title: Chief Executive Officer


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                                   SCHEDULE 1

                               ACTIVE INGREDIENTS

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                                        9

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                                   SCHEDULE 2

                                 FINISHED GOODS

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