Document:

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                                                                   Exhibit 10.58

                        CONFIDENTIAL TREATMENT REQUESTED
                        --------------------------------

                             CO-PROMOTION AGREEMENT

This Agreement ("Agreement") is made and effective as of the 1st day of July,
1999, (hereinafter referred to as the "Effective Date"), by and between Bayer
Corporation, a corporation of the State of Indiana (hereinafter "Bayer") and
Schein Pharmaceutical, Inc. a corporation of the State of Delaware (hereinafter
"Schein").

                              W I T N E S S E T H:

     WHEREAS, Schein has an exclusive Sublicense, Co-Marketing and Supply
Agreement with Makoff R&D Laboratories Inc. covering a sodium ferric gluconate
complex in sucrose injection pharmaceutical product marketed by Schein under the
brand name Ferrlecit(R) (hereinafter "Product") indicated for treating iron
deficiency, and Schein desires to enhance market share of Product in the United
States pharmaceutical market place; and

     WHEREAS, Bayer has considerable knowledge in promoting, detailing and
marketing pharmaceutical products in the United States and has in place a large,
well-experienced detailing force; and

     WHEREAS, Bayer and Schein believe that a joint promotion and detailing
arrangement regarding Product would be desirable and fully compatible with each
party's business objectives.

     NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, Bayer and Schein hereby agree as follows:

1.   ARTICLE I: DEFINITIONS

     For the purposes of this Agreement, the following terms shall have the
     following meanings:

1.1. "Affiliate" shall mean:

     (a)  An organization which owns, directly or indirectly, a controlling
          interest in Bayer or Schein by stock ownership or otherwise; or

     (b)  An organization controlled by or having its majority ownership
          directly or indirectly common to the majority ownership of Bayer or
          Schein.

1.2. "Confidential Information" shall mean information which relates to the
     Product, including financial statements, costs and expense data,
     production data, trade secrets, secret processes and formulae, marketing
     and consumer data or any other information which is not generally
     ascertainable from public or published information, regardless of
     whether such information was provided pursuant to the terms of this
     Agreement, by request of the other party or in any other manner. Schein
     reserves the right to limit the disclosure to Bayer of any Confidential
     Information which, in the sole opinion of Schein, is not necessary to
     achieve the purposes of this Agreement.

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1.3. "Customer" shall mean hospitals, dialysis clinics affiliated with
     hospitals, clinical pharmacists, nephrology nurses, nephrologists including
     residents & fellows and pharmaceutical & therapeutic committee members.

1.4. "DDD" shall mean IMS America Ltd. Drug Distribution Data.

1.5. Joint Detailing Period" shall mean the period of time commencing on July 1,
     1999 and ending on February 28, 2000, subject to extension as provided in
     Article VI, below.

1.6. "Product" shall mean sodium ferric gluconate Ferrlecit(R).

1.7. "Territory" shall mean the United States of America
excluding its territories and possessions.

1.8. In the terms defined herein, the singular shall include the plural and VICE
     VERSA.

2.   ARTICLE II: GRANTS AND OBLIGATIONS

2.1. Grant of Rights. Schein hereby grants to Bayer during the Joint Detailing
     Period the right to promote and detail the Product to Customers in the
     Territory jointly with Schein in accordance with the provisions of this
     Agreement.

2.2. Obligations of Bayer.

     (a)  During the Joint Detailing Period, Bayer will be diligent in its
          efforts consistent with its customary business practices and legal
          requirements to deploy its sales force to promote and detail to
          Customers throughout the Territory the Product in such manner and with
          such expedition as Bayer itself would have adopted in promoting and
          detailing a pharmaceutical product of its own invention. During the
          Joint Detailing Period and for a period of one (1) year thereafter,
          Bayer will not promote or detail any pharmaceutical product with
          indications similar to those of the Product.

     (b)  The Product will be presented in a primary position in at least *
          percent (*) of Bayer's sales representative calls to dialysis
          centers and nephrologists and in no less than a secondary position
          in the remainder of such calls.

     (c)  Without limiting the generality of the foregoing, Bayer will assign
          no fewer than * biological sales representatives and managers to
          promote and detail the Product to Customers. Bayer shall also use
          its best efforts to insure a sufficient amount of selling time will
          be allotted to promote and detail the Product, but in all events
          not less than between *-* of such representatives sales time and *
          of a representative's bonus potential will be allocated to the
          Product.

2.3. Obligations of Schein

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*    Material omitted pursuant to a request for confidential treatment. The
     omitted material has been filed separately with the Securities and
     Exchange Commission.

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     (a)  During the Joint Detailing Period, Schein will be diligent in its
          efforts consistent with its customary business practice and legal
          requirements to deploy its sales force to promote and detail the
          Product throughout the Territory to prospective prescribers or users
          of the Product other than Customers.

     (b)  During the Joint Detailing Period, Schein will furnish to Bayer, at
          Schein's expense, all sales, training, marketing and promotional
          materials made available by Schein for use by its sales
          representatives, at such time or times as such materials are available
          for distribution to Schein's sales representatives and in such
          quantities as Bayer may reasonably request for use in detailing by its
          sales representatives.

     (c)  Schein will reimburse Bayer for all out-of-pocket expenses incurred by
          Bayer in sponsoring, producing or participating in promotional,
          scientific or educational programs, conventions or forums undertaken
          at the request of or with the prior written approval of Schein.

     (d)  Subject to Bayer's obligation of confidentiality set forth herein,
          once per calender year during normal business hours and upon
          reasonable prior written notice, Schein agrees to make available to
          Bayer or its agent or representative (subject to such representative
          or agent being reasonably acceptable to Schein and subject further to
          such representative or agent signing a confidentiality undertaking)
          such information in its possession as may permit Bayer to confirm, for
          all proper purposes contemplated by this Agreement, sales, returns and
          market share, including without limitation production, quality
          assurance/quality control, inventory, orders, sales, deliveries and
          return records with respect to the Product.

3.   ARTICLE III: PAYMENTS

3.1. Service Fee. In consideration for Bayer's agreement to promote and
     detail the Product to Customers in the Territory during the Joint
     Detailing Period, Schein shall pay to Bayer a service fee at the rate of
     * for each three month period of the Joint Detailing Period, with the
     first three month period beginning on July 1, 1999; provided, however,
     that the service fee for the two month period ending February 28, 2000,
     will be a pro-rated share of the * per quarter or *. The service fee
     will be due thirty (30) days after the end of each three month period
     or, with respect to the service fee payment for the two month period
     ending February 28, 2000, thirty (30) days after expiration of the
     initial term of Joint Detailing Period, without regard to any extension
     thereof.

3.2. Sales Commissions. For the initial Joint Detailing Period ending February
     28, 2000, Schein shall pay to Bayer amounts equal to the following
     percentages of sales of Product to Customers in the Territory by Bayer as
     reported by DDD:

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*    Material omitted pursuant to a request for confidential treatment. The
     omitted material has been filed separately with the Securities and
     Exchange Commission.

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          DDD Reported Sales                      Commissions
          ------------------                      -----------

          Up to *                                       *

          Sales in excess of * but
           not in excess of *                           *

          Sales in excess of *                          *

     A sample calculation of sales commissions is contained in Exhibit A to this
     Agreement.

     In the event that Bayer has reason to believe that sales of Product to
     Customers in the Territory has been under-reported by DDD, Schein shall pay
     Bayer commission on such additional sales as if such sales had been
     reported by DDD provided, if in Schein's sole determination Bayer can
     substantiate such additional sales with a reasonable amount of independent
     proof.

3.3. All sums due to Bayer shall be payable to Bayer in U.S. dollars by Schein
     at the following address:

                    Bayer Inc.
                    Pharmaceutical Division
                    400 Morgan Lane
                    West Haven, Connecticut 06516

     or at such other address within the United States that Bayer may designate
     in writing to Schein.

3.4. EXTENSION OF JOINT DETAILING PERIOD. In the event the Joint Detailing
     Period is extended in accordance with Article VI, hereof, the parties agree
     to negotiate in good faith any appropriate adjustment to baseline sales
     figures and commission payout levels within thirty (30) days of the
     commencement of any extension period.

3.5. PAYMENT OF COMMISSIONS. Within ninety (90) days after the close of each
     quarter during the Joint Detailing Period, Schein shall remit to Bayer all
     commissions accruing under this Article during such quarter. The payment
     shall be accompanied by the DDD report for such Product sales both as to
     aggregate quantities and dollar amounts of such sales of the Product
     reported by DDD subject to payments hereunder for such quarter.

4.   ARTICLE IV: COOPERATION,  RIGHTS AND RESPONSIBILITIES

4.1. COOPERATION OF PARTIES. It is among the objectives of the parties to
     jointly promote and detail the Product to Customers in the Territory in the
     most effective and efficient fashion during the Joint Detailing Period. To
     achieve this objective, the parties agree, during the

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*    Material omitted pursuant to a request for confidential treatment. The
     omitted material has been filed separately with the Securities and
     Exchange Commission.

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     Joint Detailing Period, as follows:

     (a)  The parties shall each appoint an authorized representative
          ("Coordinator") between whom communications will be directed. Each
          party will notify the other as to the name of the individual so
          appointed. Each party may replace its Coordinator at any time, upon
          written notice to the other party.

     (b)  The Coordinators shall establish a team ("Team") directed by the
          Coordinators and consisting of representatives of each party which
          will meet from time to time, at mutually agreeable times and
          locations, to discuss and coordinate the joint promotion and
          detailing of the Product in the Territory and the strategies and
          programs that should be developed to maximize sales of the Product.
          Illustratively, the Team shall guide all continuing joint promotion
          and detailing efforts with respect to the Product in the Territory.
          Notwithstanding the foregoing, Schein will have the final authority
          and responsibility, with the cooperation and assistance of Bayer,
          for developing detailing, marketing and promotional strategies and
          other matters with respect to the Product, and Schein shall have
          the final right of approval for all such strategies and other
          matters.

     (c)  From time to time, but in no event less than once a year, the Team
          shall develop and formulate joint marketing plans for specified
          periods (collectively the "Marketing Plan") which shall set forth
          detailing, promotion and marketing strategies relating to the Product.
          The marketing planning process shall be a joint effort under the
          leadership and authority of Schein. The provisions of the Marketing
          Plan shall be agreed to by the Coordinators, and if the Coordinators
          cannot agree, then the matters in dispute shall be referred to the
          President of Bayer Pharmaceutical Division and the Chairman of Schein.
          Schein, however, shall have the final responsibility for, and control
          over, and the final right of approval for, the development and content
          of the Marketing Plan. Schein retains the right to determine in its
          discretion the appropriate manner and timing of execution of all
          marketing and promotional plans and strategies, including without
          limitation the selection of ad agencies, the development and
          production of promotional materials.

     (d)  A party shall have the right to comment upon and make recommendations
          to the other party regarding the other party's activities under this
          Agreement, which recommendations the other party shall thoroughly
          evaluate and consider.

     (e)  Each party shall bear its own costs associated with its participation
          in the Team and associated with its detailing, marketing, promotional
          and training/launch activities under this Agreement, except as
          otherwise provided herein.

4.2. During the Joint Detailing Period and subject to any other provision of
     this Agreement, each party will provide the other with all information
     which the disclosing party deems significant and relevant to the
     detailing and promotion of the Product within a reasonable

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     time after such information becomes known to the party, provided such
     information is not received under a secrecy obligation. Within thirty
     (30) days after the close of each quarter during the Joint Detailing
     Period, Bayer will provide to Schein a report of Bayer Product detail
     call activity by medical specialty for the quarter then ended, along
     with a summary of feedback from Bayer sales representatives concerning
     their detailing efforts for that quarter.

4.3. During the Joint Detailing Period, each party shall promptly notify the
     other party of all information coming into its possession concerning
     unexpected side effects, injury, toxicity or sensitivity reactions as
     provided in Appendix I hereto.

4.4. Schein shall retain all proprietary and property interests in the Product
     until the point of sale and in all supporting sales and promotional
     material. Bayer will not have nor represent that it has any control or
     proprietary or property interests in the Product or in any sales or
     promotional material. Nothing contained herein shall be deemed to grant
     Bayer, either expressly or impliedly, a license or other right or interest
     in any patent, trademark or other similar property of Schein or its
     Affiliates except as may be necessary for Bayer to promote and detail the
     Product as provided in this Agreement. Bayer acknowledges that Schein shall
     retain all copyrights in and to all sales, promotional and training
     materials created or used in connection with the promotion of the Product.

4.5. Bayer shall not be required to distribute any sales and promotional
     material which:

     (a)  does not mention the Product; or

     (b)  includes reference to another Schein pharmaceutical in addition to the
          Product. At Schein's request and at Bayer's sole option, Bayer may
          distribute sales and promotion material of the type identified in this
          subsection. Should Bayer elect to distribute such material, it shall
          be supplied to Bayer by Schein free of all charge.

4.6. Schein shall not be required to distribute any sales and promotion material
     which contains a reference:

     (a)  to Bayer (other than in connection with the joint detailing and
          promotion of the Product in accordance with this Agreement); or

     (b)  any Bayer pharmaceutical.

4.7  During the Joint Detailing Period, Schein shall also provide Bayer, at
     Schein's cost, with reasonable quantities of training materials which have
     been created and developed by Schein relating to the Product. Bayer shall
     have the responsibility for, and control over, the manner in which it
     trains its sales force with guidance from Schein that the training is
     consistent with Schein's sales force training with respect to the Product.

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4.8  In implementing the obligations contained in Article II, each party shall
     have sole discretion as to the manner (which shall not be inconsistent with
     the Marketing Plan, and provided that Bayer will not utilize any
     promotional materials not created by Schein) in which it promotes and
     details (including any expenditure of funds in connection therewith) the
     Product in the Territory. Each party shall bear its own costs incurred in
     the performance of any obligations hereunder, subject to the provisions of
     Article III. Neither party shall have any responsibility for the hiring,
     firing or compensation of the other party's employees or for any
     employee benefits. No employee or representative of a party shall have
     any authority to bind or obligate the other party to this Agreement for
     any sum or in any manner whatsoever, or to create or impose any
     contractual or other liability on the other party without said party's
     authorized written approval. For all purposes, and notwithstanding any
     other provisions of this Agreement to the contrary Bayer's legal
     relationship under this Agreement to Schein shall be that of independent
     contractor. Each party shall be responsible for ensuring that its
     promotional activities under this Agreement are in full compliance with
     all applicable laws, rules, regulations and orders, including without
     limitation applicable FDA regulations, and are consistent with the
     Product approval and package insert. Notwithstanding the foregoing,
     Schein shall be solely responsible for ensuring that all sales,
     training, marketing and promotional materials furnished by Schein to
     Bayer are in such full compliance.

4.9  Schein shall use commercially reasonable efforts consistent with Schein's
     overall business strategy, as determined by Schein, to insure that
     sufficient stock of the Product will be available in its inventory to
     promptly fill orders procured by Bayer from Customers during the Joint
     Detailing Period for sales of the Product in the Territory. In the event
     that there is an insufficient stock of Product available to fill all orders
     so procured by Bayer, Schein will use commercially reasonable efforts to
     equitably allocate available Product stock among all orders received by
     Schein, whether such orders originated from Bayer Customers or from
     customers of Schein. Notwithstanding the foregoing, all orders for Products
     are subject to acceptance by Schein, in whole or in part.

4.10 Prior to or upon the signing of this Agreement and at least thirty (30)
     days prior to each calendar quarter during the Joint Detailing Period and
     any extension thereof, Bayer and Schein will confer to establish a forecast
     of anticipated sales of Product by month for the succeeding twelve (12)
     month period. Such forecasts shall be made to assist Schein in planning its
     Product production and shall be non-binding.

4.11 Neither party shall distribute or have distributed any such information
     which bears the name of the other without the prior written approval of the
     other, which approval shall not be unreasonably withheld. Nothing herein
     contained shall require the Bayer name or logo to appear on the Product's
     label, container label or package insert.

4.12 Each party, at its option, may issue press releases or other public
     announcements relating to the Product or the arrangement contemplated by
     this Agreement, provided, however, that:

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     (a)  neither party shall issue a press release or public announcement which
          has, as a major focus, either the joint detailing and promotion of the
          Product in the Territory or such arrangement, without the prior
          written approval of the other party, which approval shall not be
          unreasonably withheld; and

     (b)  all other press releases and public announcements will describe the
          Product and the arrangement contemplated by this Agreement in a manner
          consistent with those releases and announcements previously approved
          by the other party.

4.13 Subject to Bayer's indemnification obligations confirmed in Section 5.5
     hereof, Schein shall have the sole right and responsibility for, and shall
     bear all costs related to, obtaining and maintaining the authorization
     and/or ability to market a pharmaceutical product in the Territory in
     accordance with the terms of its Agreement with Makoff R&D Laboratories
     Inc. and applicable laws and regulations including, without limitation, the
     following:

     (a)  RESPONSE TO PRODUCT COMPLAINTS AND/OR ADVERSE EVENTS THAT ARE REPORTED
          WITH RESPECT TO THE PRODUCT. Bayer agrees that it shall refer any such
          complaints which it receives to Schein in accordance with Appendix I
          hereto;

     (b)  ALL PRODUCT RETURNS MUST BE AUTHORIZED BY SCHEIN. Bayer shall not
          solicit or accept any returns of Product and shall advise the customer
          that Product is to be returned to Schein. If despite the foregoing any
          Product is returned to Bayer, then it shall be shipped to Schein's
          nearest distribution facility or, at Schein's option, may be handled
          through the One Box return system.

     (c)  HANDLING ALL RECALLS OF THE PRODUCT. At Schein's request and Bayer's
          option, Bayer will assist Schein in receiving the recalled Product and
          any direct documented costs incurred by Bayer with respect to
          participating in such recall shall be reimbursed by Schein.

4.14 Each party shall respond to medical questions or inquiries relating to the
     Product directed to such party. Within a reasonable time from the date of
     this Agreement, Schein shall provide Bayer with all reasonably necessary
     information which would enable Bayer to respond properly and promptly to
     any such questions or inquiries. Schein shall use its best efforts to keep
     such information current. Schein and Bayer shall coordinate responses to
     anticipated inquiries and questions. Each party shall be responsible for
     ensuring that its responses are in full compliance with all applicable
     laws, rules, regulations and orders, including without limitation
     applicable FDA regulations, and are consistent with the Product approval
     and package insert.

4.15 Bayer shall furnish Schein with a bi-weekly report highlighting medical
     information inquiries and responses that will provide detail on:

          Customer Name
          Customer Title
          Customer Address

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          Customer Phone #
          Inquiry/Reason for Call
          Response submitted
          Date of Inquiry
          Date of Response

     This report shall be forwarded to the Director of Professional Affairs at
     Schein, or designee.

4.16 Notwithstanding the Marketing Plan or any other provision herein to the
     contrary, Schein will have the right and responsibility for establishing
     and modifying the terms and conditions with respect to the sale of the
     Product, including the price at which the Product will be sold, any
     discount attributable to payments on receivables, distribution of the
     Product and the like.

4.17 At the end of the Joint Detailing Period (or any extension thereof or upon
     termination under any circumstance) Bayer shall have no further obligations
     to promote and detail the Product and, upon request by Schein, shall return
     to Schein all sales, marketing, training and other materials which it has
     in its possession relating to Product. Schein shall have the right to
     continue to distribute materials bearing the Bayer name, until the
     inventories of such materials are depleted.

5.   ARTICLE V: WARRANTIES AND INDEMNIFICATION

5.1. Each party warrants and represents to the other that it has the full right
     and authority to enter into this Agreement, and that it is not aware of any
     impediment that would inhibit its ability to perform its obligations under
     this Agreement. Without limiting the foregoing, Schein warrants and
     represents to Bayer that neither the entry into this Agreement nor the
     performance hereof by Schein and Bayer shall violate or create a default
     under Schein's Sublicence, Co-Marketing and Supply Agreement with Makeoff R
     & D Laboratories Inc.

5.2. Schein warrants and represents that, to the best of its knowledge, the
     Product package insert adequately describes the toxicity and sensitivity
     reactions associated with the Product when administered in accordance with
     the package insert.

5.3  Schein warrants and represents that it has no knowledge of the existence of
     any patent which would prevent Schein from making, using or selling the
     Product in the Territory or would prevent Schein and Bayer from jointly
     promoting or detailing the Product in the Territory. Bayer acknowledges
     that neither Schein nor any of its Affiliates holds any patent covering the
     Product.

5.4  Schein shall indemnify, defend and hold Bayer harmless against any and all
     damages, costs, expenses, lawsuits and liabilities directly or indirectly
     resulting from claims, suits or judgments with respect to (i) the Product
     or components thereof; (ii) breach of

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     Schein's obligations hereunder; or (iii) breach of Schein's
     representations hereunder. Bayer shall promptly notify Schein of any
     claims or suits for which Bayer may assert contribution or
     indemnification from Schein hereunder and Bayer shall permit Schein, or
     its insurer, at Schein's expense, to assume the defense of any and all
     such claims or suits and Bayer shall reasonably cooperate with Schein or
     its insurer in such defense when requested to do so.

5.5  Bayer shall indemnify, defend and hold Schein harmless against any and all
     damages, costs, expenses, lawsuits, and liabilities directly or indirectly
     resulting from claims, suits or judgments with respect to (i) the
     detailing, promoting, marketing or sale of Product by Bayer hereunder;
     (ii) breach by Bayer of any of its obligations hereunder; or (iii)
     breach by Bayer of any of its representations hereunder. Schein shall
     promptly notify Bayer of any such claims or suits for which Schein may
     assert contribution or indemnification from Bayer and Schein shall
     permit Bayer or its insurer at Bayer's expense, to assume the defense of
     any and all such claims or suits and Schein shall reasonably cooperate
     with Bayer or its insurer in such defense when requested to do so.

5.6  Without limitation, as between Bayer and Schein, if an above described
     claim, suit or judgment (or any portion thereof) is based solely on:

     (a)  the failure of the Product to meet any specifications in both the
          exclusive Sublicense, Co-Marketing and Supply Agreement with Makoff
          R&D Laboratories Inc., and the Makoff R&D Laboratories New Drug
          Application approved by the U.S. Food and Drug Administration ("FDA")
          or supplements thereto; or

     (b)  misrepresentations or deficiencies in or omissions from the Product's
          package insert approved by the FDA or in or from Product sales,
          training, marketing and promotional materials supplied to Bayer by
          Schein;

     then Bayer shall not be deemed negligent with respect to such matters and
     shall be fully and completely indemnified by Schein under section 5.4 with
     respect to such claim, suit or judgment (or portion thereof) which solely
     involved such matters, and Schein shall be permitted, at its sole cost, to
     assume full control over the defense of any such claim or suit (or portion
     thereof).

5.7 This Article V shall survive the termination of this Agreement.

6.   ARTICLE VI: TERM AND TERMINATION

6.1  The joint promotion and detailing of the Product shall cease at the end
     of the initial Joint Detailing Period ending February 28, 2000;
     provided, however, Bayer, in its discretion, shall have the right but
     not the obligation to extend the term of the Joint Detailing Period and
     this Agreement on the condition that during the six (6) month period
     beginning July 1, 1999 and ending December 31, 1999, the percentage
     share of sales of Product by Bayer to Customers in the Territory to
     sales of all iron replacement therapies used by Customers

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     during such six (6) month term exceeds by more than ten percent (10%)
     the percentage share during such term of sales of the Product by Schein
     (exclusive of sales to Bayer Customers) to sales of all iron replacement
     therapies in use (exclusive of sales to Bayer Customers). Market share
     shall be measured using the market information available as of December
     31, 1999 such that Bayer may give written notice to Schein of its
     election prior to February 28, 2000. Upon the proper election by Bayer,
     the Joint Detailing Period and this Agreement shall be extended at
     Bayer's option for one or two consecutive but separate terms, with the
     first renewal term ending June 30, 2000 and the second renewal term
     ending December 31, 2000. In the event that Bayer fails to make such
     election, and Schein, in its discretion, desires to extend the term of
     the Joint Detailing Period and this Agreement, Schein shall advise Bayer
     of its desire as promptly as possible, so that the parties may timely
     negotiate the terms of such extension.

6.2  Either party may terminate this Agreement, and its performance hereunder,
     for cause upon thirty (30) days prior written notice in the event that the
     other party has breached or failed to perform any of its material
     obligations hereunder, however, if the party to whom such notice is
     directed cures the breach or non-performance described in the notice within
     said thirty (30) day notice period, such notice of termination shall be
     given no effect and this Agreement shall continue in full force in
     accordance with its terms.

6.3  This Agreement, and the Joint Detailing Period established hereunder, shall
     terminate automatically upon termination of Schein's Sub-license,
     Co-Marketing and Supply Agreement with Makoff R&D Laboratories Inc. Schein
     shall notify Bayer in writing of any such termination. Bayer's performance
     obligations under this Agreement, however, will terminate immediately upon
     a termination of said Sub-license Agreement, whether or not Schein has
     provided Bayer with the required notice. Schein will indemnify Bayer
     pursuant to Section 5.4 against any action Makoff R&D Laboratories Inc. may
     take against Bayer for activities by Bayer during the period following the
     termination of said Sub-license agreement and prior to Bayer's receipt of
     such notice from Schein.

6.4  Termination of this Agreement shall be without prejudice to either party's
     right to obtain performance of any obligations provided for in this
     Agreement which survive termination by their terms.

7.   ARTICLE VII: FORCE MAJEURE

7.1  The performance by either party of any covenants or obligations on its part
     to be performed hereunder (other than an obligation of either to pay money
     to the other) shall be excused by floods, strikes or other labor
     disturbances, riots, fires, accidents, wars, embargoes, delays of carriers,
     inability to obtain materials from sources of supply, acts, injunctions, or
     restraints of governments (whether or not now threatened), or any cause
     preventing such performance whether similar or dissimilar to the foregoing
     beyond the reasonable control of the party bound by such covenant or its
     obligation, provided, however, that the party affected shall exert its
     reasonable diligent efforts to eliminate or

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     cure or overcome any of such causes and to resume performance of its
     covenants with all possible speed.

8.   ARTICLE VIII: DISPUTE RESOLUTION

8.1  Both parties are obligated to undertake all reasonable efforts in order to
     solve in an amicable way any controversy arising in connection with this
     Agreement. However, in the event that disputes arise that cannot be
     resolved at the immediate level, the dispute shall be referred to the
     President of Bayer Pharmaceutical Division and the Chairman and CEO of
     Schein.

9.   ARTICLE IX: CONFIDENTIALITY; NON-SOLICITATION

9.1  For a period of ten (10) years from the Effective Date of this Agreement or
     five (5) years from the termination hereof, whichever occurs later:

     (a)  each party agrees not to use Confidential Information furnished by the
          other party for any purpose inconsistent with this Agreement; and

     (b)  each party will treat Confidential Information furnished by the other
          party as if it were its own proprietary information and will not
          disclose it to any third party other than its Affiliates or
          consultants without the prior written consent of the other party who
          furnished such information.

9.2  Bayer shall not have the right for a period of five (5) years from the
     termination of this Agreement to disclose, publish and/or use for its
     benefit or for the benefit of any third party any Confidential
     Information, sales, marketing, training or other information provided to
     Bayer by or on behalf of Schein or its Affiliates received under this
     Agreement to promote, achieve and/or maintain the sale and use of the
     Product or any other pharmaceutical specialty with indications similar
     to those of Product without the prior written consent of Schein.

9.3  A party shall be relieved of any and all of the obligations of Sections 9.1
     and 9.2 with respect to Confidential Information if:

     (a)  such Confidential Information was known to the party receiving the
          Confidential Information prior to receipt from the disclosing party;
          or

     (b)  such Confidential Information was at the time of disclosure to the
          party receiving the Confidential Information generally available to
          the public or which became generally available to the public through
          no fault attributable to the party receiving the Confidential
          Information; or

     (c)  such Confidential Information was made available to the party
          receiving the Confidential Information for its use or disclosure from
          any third person who was at the time of transmitting such Confidential
          Information not under a non-

                                        12

<PAGE>

          disclosure obligation to the other party.

9.4  Each of Schein and Bayer agrees that during the term of this Agreement and
     for a period of one year after the termination of this Agreement for any
     reason, neither it nor any of its Affiliates shall, except with the prior
     written consent of the other party, offer employment to or employ any
     person in the other party's sales force if such person was involved in
     promoting the Product under this Agreement.

10   ARTICLE X: MISCELLANEOUS PROVISIONS

10.1 This Agreement shall be governed by and interpreted under the laws of the
     United States and of the State of New Jersey.

10.2 This Agreement shall be binding upon, and shall inure to the benefit of
     successors to a party hereto, but shall not otherwise be assignable without
     the prior written consent of both parties.

10.3 Any notice required to be given hereunder shall be considered properly
     given and deemed received within four (4) business days of mailing if sent
     by certified mail, return receipt requested , or shall be deemed received
     upon receipt if sent by messenger or overnight delivery, or by telecopier
     (provided an additional copy is sent by certified mail, return receipt
     requested within two (2) business days) if sent to the respective address
     of each party as follows:

10.4 If to Bayer to:  Office of the President
                      Bayer Inc.
                      Pharmaceutical Division
                      400 Morgan Lane
                      West Haven, Connecticut 06516

     If to Schein to: Chairman of the Board
                      Schein Pharmaceutical, Inc.
                      100 Campus Drive
                      Florham Park, NJ 07932

     or to such other address as the addressee shall have last furnished in
     writing in accord with this provision to the addresser.

10.5 If any provision of this Agreement is held to be invalid, such invalidity
     shall not affect the validity of the remaining provisions.

10.6 All captions herein are for convenience only and shall not be interpreted
     as having any substantive meaning.

                                        13

<PAGE>

10.7 All covenants, agreements, representations and warranties made hereunder
     shall be deemed to have been relied upon notwithstanding any investigation
     heretofore or hereafter made and shall survive the execution of this
     Agreement.

10.8 This Agreement constitutes the entire agreement between the parties hereto
     with respect to the within subject matter and supersedes all previous
     agreements relating to the co-promotion of pharmaceutical products by
     Schein and Bayer, whether written or oral, including, without limitation,
     that certain Co-Promotion Agreement, dated August 1, 1994, as amended,
     which shall be deemed terminated as of the Effective Date in accordance
     with the provisions set forth therein. This Agreement may be changed only
     in writing signed by properly authorized representatives of Bayer and
     Schein.

IN WITNESS WHEREOF, Bayer and Schein have caused this Agreement to be duly
executed by their authorized representatives, in duplicate as of the date first
set forth above.

                           BAYER INC.

                           By: /s/ Gerald Rosenberg
                               ---------------------------------------
                               Gerald Rosenberg
                               Sr. Vice President & Gen. Mgr.
                               Pharma USA
                               Bayer Corporation

                           SCHEIN PHARMACEUTICAL, INC.

                           By: /s/ Adam A. Levitt
                               ---------------------------------------
                               Adam A. Levitt
                               Vice President
                               Brand Products Group

                                       14

<PAGE>

                                   APPENDIX I

                         COMPLAINT GUIDELINE PROCEDURES

The purpose of this appendix is to establish written procedures for the
communication and processing of Product complaints received by Bayer.

Acting in accord with this Agreement will facilitate compliance with Federal
Requirements as set forth in 21 CFR 211.198 (complaint files) and 21 CFR
310.305/21 CFR 314.80 (reporting of post-marketing adverse drug reactions).

A.  COMPLAINT REPORTING:

1.   Complaints reported directly to Bayer will be summarized, and forwarded
     immediately by fax to the Manager of Professional Affairs, or designee, at
     Schein. Bayer personnel will utilize and complete the Schein developed Drug
     Experience Report (DER) Form as per instructions when recording the adverse
     event/product complaint (Form attached.), or such other format as the
     parties may agree.

2.   All adverse drug experience complaints reported to Bayer will be
     communicated to Schein within 2 days of report receipt. Schein will be
     responsible for completion and submission to the Food and Drug
     Administration of Form FDA 3500A, and other, where appropriate.

3.   Complaint reports which may meet NDA-Field Alert Report Criteria [21 CFR
     314.81 (b) (1)] will be promptly communicated to Schein within 2 days,
     enabling FDA notification by Schein within 3 working days. Schein will
     advise Bayer of NDA Field Alert Report submission and forward a copy of any
     such report to the Complaint Coordinator of Bayer.

B. COMPLAINT INVESTIGATION:

1.   Schein will coordinate the investigations of all complaints, including
     complaints associated with Product's active or inactive ingredients,
     container/closure system, general Product quality, distribution or
     handling. At times, personnel from Bayer may be contacted to assist in
     identifying or locating the complainant in order to obtain additional
     information pertinent to the complaint.

C. COMMUNICATIONS WITH COMPLAINANT:

1.   Schein will be responsible for review of complaint evaluation information
     and preparation of a written response when appropriate.

2.   In situations requiring submission of adverse drug experience reports,
     Schein will be responsible for any follow-up communications which may be
     required in order to facilitate timely completion and submission of FDA
     Form-3500A, and other, as appropriate. (See Appendix 1, Part B for
     potential Bayer interaction.)

D. PRODUCT RECALL:

1.   In carrying out a recall, both parties will fully cooperate in notifying
     customers to follow instructions agreed upon by the parties.

                                       15
<PAGE>

                                    EXHIBIT A

                           CALCULATION OF COMMISSIONS

If total DDD Reported Sales of the Product by Bayer to Customers in the
Territory equal * Bayer's commissions would be calculated as follows:

     DDD Reported Sales       Commission Percentage        Commission

           *             x             *              =            *
           *             x             *              =            *
           *             x             *              =            *
         -----------------------------------------------------------
         Total Commission                                          *

----------
*    Material omitted pursuant to a request for confidential treatment. The
     omitted material has been filed separately with the Securities and
     Exchange Commission.

                                       16

<PAGE>

SCHEIN CONTROL NO.:

                           SCHEIN PHARMACEUTICAL, INC.
                           ---------------------------

                       DRUG EXPERIENCE REPORT (DER) FORM

INSTRUCTIONS:  A. USE THIS FORM TO REPORT ADVERSE EVENT TO BRAND PROFESSIONAL
AFFAIRS DEPARTMENT. AN ADVERSE EVENT IS ANY UNDESIRABLE EXPERIENCE WHICH
OCCURRED IN A HUMAN DURING OR SHORTLY AFTER THE USE OF A DRUG, REGARDLESS OF
WHETHER THE DRUG CAUSED THE EVENT. AN ADVERSE EVENT WHICH OCCURRED AS A
RESULT OF OVERDOSE (INTENTIONAL OR ACCIDENTAL), FAILURE OF PHARMACOLOGICAL
ACTION OR DRUG WITHDRAWAL; OR WHICH RESULTED IN DRUG ABUSE OR DRUG DEPENDENCY
SHOULD ALSO BE REPORTED TO PROFESSIONAL AFFAIRS.

B. If report is serious*, telephone Professional Affairs (888-397-1766)
IMMEDIATELY to report the event; then fax the completed DER form WITHIN 1
WORKING DAY to 973-693-5656. Original copies of all faxed and phoned reports
must be mailed to Brand Professional Affairs Dept. Schein Pharmaceutical,
Inc., 100 Campus Drive, Florham Park, NJ 07932. If report is non-serious, you
do not have to telephone; just fax then mail the original DER form to
Professional Affairs.

C. DO NOT USE THIS FORM (1) TO REPORT AN ADVERSE EVENT WHICH OCCURRED IN A
PATIENT WHO WAS PARTICIPATING IN A STUDY INVOLVING THE DRUG IN QUESTION, (2)
TO PROCESS A REQUEST FOR MEDICAL INFORMATION, OR (3) TO RETURN GOODS. ALSO DO
NOT USE THIS FORM FOR MULTIPLE REPORTS; USE ONE FORM PER PATIENT. IF
NECESSARY, MAKE A PHOTOCOPY OF A BLANK DER FORM IF YOU DO NOT HAVE SUFFICIENT
BLANK DER FORMS TO ASSURE ONE PATIENT REPORT PER COPY.

--------------------------------------------------------------------------------
REPORTER'S FULL NAME          |_|MD     |_|DO     |_|PHARMD      |_|RPM    |_|RN

------------------------------
ADDRESS                       |_|PSD    |_|LPN    |_|MED ASST    |_|CONSUMER

------------------------------
                              |_|OTHER (Specify)________________________________
--------------------------------------------------------------------------------
CITY                          | STATE                   | ZIP
                              |                         |
--------------------------------------------------------------------------------
TEL. NO.                      | OTHER TEL. NO.          | FAX NO.
                              |                         |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SUSPECT DRUG NAME              DOSE          | DATES OF USE      | LOT NO
                                             |                   |
--------------------------------------------------------------------------------
DESCRIBE THE EVENT AS REPORTED TO YOU (INCLUDE PATIENT IDENTIFIERS SUCH AS
GENDER, INITIALS, AGE)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PHYSICIAN OR OTHER HEALTHCARE          | IF PATIENT WAS HOSPITALIZED, PROVIDE
PROFESSIONAL WHO PRESCRIBED THE        | NAME, ADDRESS AND TELEPHONE NUMBER OF
SUSPECT DRUG                           | HOSPITAL BELOW
SAME AS REPORTER ABOVE?                |
|_|YES   |_|NO   |_|UNKNOWN            |
--------------------------------------------------------------------------------
IF DIFFERENT FROM ABOVE, SPECIFY THE   | HOSPITAL NAME
PRESCRIBER BELOW:                      |
                                       |
--------------------------------------------------------------------------------
NAME                                   |
                                       |
--------------------------------------------------------------------------------
ADDRESS                                | HOSPITAL ADDRESS
                                       |
--------------------------------------------------------------------------------
                                       |
--------------------------------------------------------------------------------
                                       |
--------------------------------------------------------------------------------
TEL. NO                                | TEL. NO
                                       |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEIN REP. EMPLOYEE NAME     TEL. NO  | VOICEMAIL  DATE NOTIFIED | TODAY'S DATE
                                       |                          |
--------------------------------------------------------------------------------
================================================================================
*An adverse event is considered serious if any of the following occurred:

|_| death                               __ in-patient hospitalization or
                                           prolongation of in-patient
                                           hospitalization
|_| immediately life threatening        __ persistent or significant disability
                                           incapacity
|_| congenital anomaly or birth defect  __ medical or surgical intervention to
                                           prevent one of the outcomes above
|_| drug dependency or drug abuse       __ medically important in the opinion of
                                           the healthcare professional reporter

<PAGE>

                        CONFIDENTIAL TREATMENT REQUESTED

                  AMENDMENT NUMBER 1 TO CO-PROMOTION AGREEMENT

     This Amendment Number 1 to the Co-Promotion Agreement (the "Amendment") is
entered into as of 1st day of March 2000 between Bayer Corporation, a
corporation of the State of Indiana (hereinafter "Bayer") and Schein
Pharmaceutical, Inc., a corporation of the State of Delaware (hereinafter
"Schein").

                           WITNESSETH:

     WHEREAS, Bayer and Schein entered into a Co-Promotion Agreement dated July
1, 1999 (the "Agreement");

     WHEREAS, pursuant to the terms of the Agreement, Bayer and Schein agreed to
jointly promote and detail the Product (as defined in the Agreement);

     WHEREAS, the parties wish to amend the Agreement in accordance with the
terms of this Amendment.

     NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, and for other good and valuable consideration, it is agreed as
follows:

1.   DEFINITIONS IN THIS AMENDMENT AND INCORPORATION. Unless otherwise defined
     herein, all terms used herein shall have the meaning ascribed to them in
     the Agreement, and the terms and provisions of the Agreement are
     incorporated herein by reference as though set forth in full.

2.   TERM. Bayer and Schein hereby agree that the term of the Agreement shall
     terminate on September 30, 2000. The period commencing on March 1, 2000 to
     September 30, 2000 is hereinafter referred to as the "Extended Period."

3.   OBLIGATIONS. Unless otherwise provided herein, all obligations of the
     parties during the Joint Detailing Period shall apply to the Extended
     Period.

4.   PAYMENT. Section 3.1 and 3.2 shall be deleted in its entirety and replaced
     with the following:

     3.1  SERVICE FEE. Bayer and Schein acknowledge and agree that the service
          fee payable by Schein to Bayer for the Extended Period shall be as
          follows:

          (a)  For the period commencing on March 1, 2000 to March 31, 2000, the
               service fee shall be *.

          (b)  For each three month period commencing on April 1, 2000, the
               service fee shall be at a rate of *.

          The service fee shall be due thirty (30) days after the end of the
          applicable period.

----------
*    Material omitted pursuant to a request for confidential treatment. The
     omitted material has been filed separately with the Securities and
     Exchange Commission.

<PAGE>

     3.2  SALES COMMISSION. For the Extended Period, Schein shall pay to Bayer
          amounts equal to the following percentage of sales of Product to
          Customers in the Territory by Bayer as reported by DDD:

                            DDD Sales                       Commission %
                            ---------                       ------------

                 Up to $*                                         *

                 Sales in excess of $* but
                   not in excess of $*                            *

                 Sales in excess of $*                            *

5.   REAFFIRMATION OF AGREEMENT AND OTHER DOCUMENTS. Except as modified herein,
     all of the covenants, terms and conditions of the Agreement remain in full
     force and effect and are hereby ratified and reaffirmed in all respects. In
     the event of any conflict, inconsistency or incongruity between the terms
     and conditions of this Amendment and the covenants, terms and conditions of
     the Agreement the terms and conditions of this Amendment shall govern and
     control.

6.   COUNTERPARTS. This Amendment may be executed in two or more counterparts,
     each of which together shall constitute an original but which, when taken
     together, shall constitute but one instrument and shall become effective
     when copies hereof, when taken together, bear the signatures of all
     required parties and persons.

     IN WITNESS WHEREOF, this Amendment is executed as of the day and year first
above written.

                              BAYER CORPORATION

                              By: /s/ Gerald Rosenberg
                                  ----------------------------------------
                              Name: Gerald Rosenberg
                                    --------------------------------------
                              Title: SR VP/General Manager
                                     -------------------------------------

                              SCHEIN PHARMACEUTICAL, INC.

                              By: /s/ Adam Levitt
                                  ----------------------------------------
                                  Name: Adam Levitt
                                  Title: Senior Vice President, Brand Products

----------
*    Material omitted pursuant to a request for confidential treatment. The
     omitted material has been filed separately with the Securities and
     Exchange Commission.<PAGE>
                                                                   Exhibit 10.59

                                 AMENDMENT NO. 1
                                     TO THE
                           EMPLOYMENT AGREEMENT DATED
                            NOVEMBER 18, 1999 BETWEEN
                 SCHEIN PHARMACEUTICAL, INC. AND DARIUSH ASHRAFI

Reference is made to the Employment Agreement dated November 18, 1999 between
Schein Pharmaceutical, Inc. and Dariush Ashrafi (the "Employment Agreement").
Capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Employment Agreement.

1.    Section 11.8 of the Employment Agreement is deleted and restated to read
      as follows:

            "11.8 Maximum Payment. Notwithstanding anything herein to the
      contrary, if it is determined that any payment made to the Executive,
      whether pursuant to the terms of this Agreement or otherwise (including
      but not limited to any stock option agreement), would be subject to the
      excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
      as amended, or any interest or penalties with respect to such excise tax
      (such excise tax, together with any interest or penalties thereon, is
      herein referred to as an "Excise Tax"), then the Executive shall be
      entitled to an additional payment or payments (a "Gross-Up Payment") in an
      amount that will place him in the same after-tax economic position that he
      would have enjoyed if the Excise Tax had not applied. The amount of the
      Gross-Up Payment shall be determined by the nationally recognized firm of
      accountants serving as the Company's independent auditors immediately
      prior to the Change of Control which resulted in the application of the
      Excise Tax, in their sole discretion, and shall be payable upon the
      Executive's demand."

Except as amended hereby, the Employment Agreement shall continue in full force
and effect.

Dated as of December 31, 1999

/s/ Dariush Ashrafi                          SCHEIN PHARMACEUTICAL, INC.
-----------------------------
Dariush Ashrafi

                                             By: /s/ Martin Sperber
                                                 -------------------------------
                                                     Martin Sperber
                                                     Chairman and CEO

<PAGE>

                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT is entered into as of this 18th day of November,
1999 by and between Schein Pharmaceutical, Inc. (the "Company"), a Delaware
corporation, and Dariush Ashrafi (the "Executive").

      The Executive is presently employed by the Company as the Executive Vice
President and Chief Financial Officer;

      The Company desires to employ the Executive and the Executive is willing
to be employed by the Company as the President and Chief Operating Officer; and

      The Company and the Executive desire to set forth the terms and conditions
of such employment.

      In consideration of the foregoing and of the mutual covenants and
agreements of the parties set forth in this Agreement, and of other good and
valuable consideration, the adequacy and receipt of which is acknowledged, the
parties hereto agree as follows:

1. Term of Employment

            The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment, in accordance with the terms and conditions set forth
herein, for a term commencing on the date hereof (the "Effective Date") and
terminating, unless otherwise terminated earlier in accordance with Section 5
hereof, on the fifth anniversary of the Effective Date (the "Employment Term"),
provided that, on the fifth anniversary of the Effective Date, and on each
anniversary of the Effective Date thereafter (each such date, an "Anniversary
Date"), the Employment Term shall be automatically extended, subject to earlier
termination as provided in Section 5 hereof, for additional one year periods,
unless, at least six months prior to the fifth anniversary of the Effective Date
or any Anniversary Date, as applicable, the Company or the Executive has
notified the other in writing that the Employment Term shall terminate at the
end of the then current term. If such original Employment Term is so extended,
such extended term shall thereafter be the "Employment Term" for purposes of
this Agreement.

2. Position and Responsibilities

            During the Employment Term, the Executive shall serve as the
President and Chief Operating Officer of the Company. The Executive shall report
to the Chief Executive Officer. The Executive shall, to the extent appointed or
elected, serve on the Board of Directors of the Company (the "Board") as a
director and as a member of any committee of the Board, in each case, without
additional compensation. The Company shall use its reasonable best efforts to
include the Executive in the slate of nominees for the Board. The Executive
shall, to the extent appointed or elected, serve as a director or as a member of
any committee of the Board (or the equivalent bodies in a non-corporate
subsidiary or affiliate) of any of the Company's subsidiaries

<PAGE>

or affiliates and as an officer or employee (in a capacity commensurate with his
position with the Company) of any such subsidiaries or affiliates, in all cases,
without additional compensation or benefits and any compensation paid to the
Executive, or benefits provided to the Executive, in such capacities shall be a
credit with regard to the amounts due hereunder from the Company. The Executive
shall have reporting responsibility for the areas set forth on Exhibit A hereto.
The Executive shall devote substantially all of his business time, attention and
energies to the performance of his duties hereunder, provided the foregoing will
not prevent the Executive from participating in charitable, community or
industry affairs and from managing his and his family's personal passive
investments, provided that these activities do not materially interfere with the
performance of his duties hereunder or create a potential business conflict or
the appearance thereof.

3. Compensation and Benefits

      During the Employment Term, the Company shall pay and provide the
Executive the following:

            3.1 Base Salary. The Company shall pay the Executive a base salary
(the "Base Salary") in the amount of $550,000 per year plus additional
compensation (the "Additional Compensation") of $75,000 per year for the
Employment Term. The Base Salary shall be paid to the Executive in accordance
with the Company's normal payroll practices for its senior executives. The
Additional Compensation shall be paid in four equal quarterly installments on
the first normal Company payroll date that falls within each fiscal quarter. If
the Base Salary (or Additional Compensation, as the case may be) is increased,
it shall not thereafter be decreased and shall thereafter, as increased, be the
Base Salary (or Additional Compensation, as the case may be) hereunder. The
Additional Compensation shall not be included in any calculation of retirement
benefits or other employee benefits, except as provided for herein. The
Executive's aggregate Base Salary and Additional Compensation shall be reviewed
annually and shall be increased based upon the Executive's performance and
consistent with the increases received by other senior officers.

            3.2 Annual Bonus. The Company shall pay to the Executive as an
annual bonus (the "Annual Bonus") with respect to each fiscal year ending during
the Employment Term beginning with fiscal year 2000, an amount which is a
percentage of the sum of the Executive's then current Base Salary and Additional
Compensation, which percentage is calculated by multiplying two times the
percentage increase in the Company's EPS (as hereinafter defined) for the bonus
year over the greater of the EPS for the prior year and the Company's Base EPS
(as hereinafter defined) for such bonus year; provided, however, that no bonus
shall be paid with respect to any fiscal year when such percentage increase is
not at least 15%. The Annual Bonus for any given year shall be paid to the
Executive no later than the thirty-first day of March, in the year following the
year in which such Annual Bonus is earned, or such other date in accordance with
the Company's practice for other senior executives. The Company's Earnings Per
Share ("EPS") for any fiscal year shall be the Earnings Per Share, as reflected
in the Company's audited

                                       2
<PAGE>

Consolidated Statement of Operations prepared in accordance with generally
accepted accounting principals for such fiscal year; provided, however, that the
Compensation Committee (the "Compensation Committee") of the Board shall
determine whether extraordinary items shall be included or excluded in the
calculation of EPS for purposes of this Agreement in any given year. The
Company's Base Earnings Per Share (the "Base EPS") shall equal (i) for the year
2000, the EPS for 1999 and (ii) for each subsequent year, 110% of the Base EPS
for the immediately preceding fiscal year. Notwithstanding the foregoing, the
Executive shall have no right to receive any bonus payment in excess of two
times the sum of the Executive's then current Base Salary and Additional
Compensation, unless such bonus payment is first approved by the Compensation
Committee, in its sole discretion. If the exclusion or inclusion of
extraordinary items in determining EPS affects the amount of the Executive's
bonus for any given year, or the Compensation Committee does not approve a bonus
in excess of two times the sum of the Executive's current Base Salary and
Additional Compensation, the bonus formula for calculating an increase in EPS in
determining the Executive's bonus the following year will reflect an adjustment
from EPS in the prior year to the amount of EPS that would have resulted in the
bonus actually paid to the Executive for such year. Notwithstanding any
provision contained herein to the contrary, the Executive's 1999 Annual Bonus
shall be determined in accordance with the Company's Management Incentive
Program as in effect immediately prior to the Effective Date, and the payment of
such bonus shall not be adversely affected by the provisions of this Agreement.

            3.3 Long-Term Incentives: Options. During the Employment Term, the
Executive will be granted a stock option (each, an "Annual Option"), on the
Effective Date and on such date in each fiscal year that option grants are
generally made to senior executives, under the Schein Pharmaceutical, Inc. 1999
Stock Option Plan or other Company plan (the "Plan") to purchase such number of
shares of the Company's common stock (the "Common Stock"), on a basis and in a
manner commensurate with the Executive's position and consistent with the
Company's practice with respect to its other senior executives; provided,
however, that in no event shall Annual Options be granted during any fiscal year
to purchase less than an aggregate of fifty thousand shares of Common Stock
(subject to any adjustment for stock splits, dividends, recapitalizations and
similar corporate events). The exercise price with respect to each share of
Common Stock subject to an Annual Option shall be the fair market value on the
date of grant, determined in accordance with the Plan. Each Annual Option will
become exercisable in three equal annual installments beginning one year after
the date of grant, provided that the Executive is employed by the Company on
such vesting date.

            3.4 Long-Term Incentives: Stock.

      (a)   The Company shall sell and the Executive shall purchase 250,000
            shares of Common Stock (the "Incentive Shares"), at the closing
            price of the Common Stock on the New York Stock Exchange on the
            Effective Date (the "Purchase Price"). The Company shall loan the
            Purchase Price to the Executive to purchase the Incentive Shares,
            which loan shall be evidenced by a promissory note

                                       3
<PAGE>

            substantially in the form attached hereto as Exhibit B. If the loan
            or interest is due and the Incentive Shares are not then registered
            for resale and if Rule 144 is unavailable, at the Executive's
            request during the Employment Term, the Executive shall sell, and
            the Company shall purchase from the Executive, such number of the
            Incentive Shares as shall be sufficient to satisfy the Executive's
            obligation to the Company. The Company shall purchase such Incentive
            Shares at the average closing price of the Common Stock on the New
            York Stock Exchange for the 20 trading days prior to the date the
            Company receives such request, subject to any contractual or legal
            limitations on the Company's ability to purchase the Incentive
            Shares. Certificates representing the Incentive Shares shall contain
            the following legend:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
                  ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE.
                  THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
                  DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
                  EXEMPTION THEREFROM. IN ADDITION, THESE SECURITIES WERE ISSUED
                  PURSUANT TO THAT CERTAIN EMPLOYMENT AGREEMENT DATED AS
                  NOVEMBER 18, 1999 BETWEEN DARIUSH ASHRAFI AND THE COMPANY AND
                  ARE SUBJECT TO THE PROVISIONS OF THE EMPLOYMENT AGREEMENT AND
                  THE PROMISSORY NOTE DATED AS OF NOVEMBER 18, 1999, ISSUED BY
                  DARIUSH ASHRAFI TO THE COMPANY IN CONNECTION WITH THE PAYMENT
                  FOR THE SECURITIES."

      (b)   Each time that the Company proposes to register any of its
            securities under the Securities Act (other than pursuant to a
            registration on Form S-4, S-8 or any successor form), whether or not
            for sale for its own account, it will each such time give written
            notice to the Executive of its intention to do so, not less than 30
            days prior to filing such registration statement. Upon the written
            request of the Executive made within 15 days after the receipt of
            any such notice (which request shall specify the Incentive Shares
            intended to be disposed of by the Executive and the intended method
            of disposition thereof), the Company will use its reasonable best
            efforts, consistent with the Company's existing agreements, to
            effect the registration under the Securities Act of all Incentive
            Shares which the Company has been so requested to register by the
            Executive, to the extent requisite to permit the disposition (in
            accordance with the intended methods thereof as aforesaid) of the
            Incentive Shares so to be registered, provided, that, if at any time
            after giving written notice of its intention to register any
            securities and prior to the effective

                                       4
<PAGE>

            date of the registration statement filed in connection with such
            registration, the Company shall determine for any reason not to
            register or to delay registration of such securities, the Company
            may, at its election, give written notice of such determination to
            the Executive and, thereupon, (i) in the case of a determination not
            to register, shall be relieved of its obligation to register any
            Incentive Shares in connection with such registration and (ii) in
            the case of a determination to delay registering, shall be permitted
            to delay registering any Incentive Shares, for the same period as
            the delay in registering such other securities. The Company will pay
            all registration expenses in connection with each registration of
            Incentive Shares requested pursuant to this Section.

            3.5 Employee Benefits. The Executive shall, to the extent eligible,
be entitled to participate at a level commensurate with his position in all
employee benefit welfare and retirement plans and programs, as well as equity
plans, generally provided by the Company to its senior executives in accordance
with the terms thereof as in effect from time to time.

            3.6 Perquisites. The Company shall provide to the Executive, at the
Company's sole expense, all perquisites which other senior executives of the
Company are generally entitled to receive from time to time, commensurate with
his position as a senior executive of the Company. The Company will furnish the
Executive with an automobile or an automobile allowance, and will reimburse the
Executive for all normal operating costs including insurance, gas, normal
maintenance and repairs, in keeping with the Company's automobile policy in
effect for senior executives from time to time.

            3.7 Right to Change Plans. The Company shall not be obligated by
reason of this Section 3 to institute, maintain, or refrain from changing,
amending, or discontinuing any benefit plan, program, or perquisite prior to a
Change of Control (as hereinafter defined), so long as such changes are
similarly applicable to all senior executives generally. However, if the split
dollar life insurance in place with respect to the Executive on the Effective
Date is adversely changed or eliminated, or if the Company does not grant the
Executive options to purchase 50,000 shares (as such number may be adjusted in
accordance with Section 3.3 herein) in a given year, another benefit of
equivalent value shall be given to the Executive. Following a Change of Control,
the Company shall not change, amend or discontinue any benefit plan, program, or
perquisite in a manner which results in a diminution of benefits to the
Executive without the approval of the Incumbent Board (as hereinafter defined).

4. Expenses

            Upon submission of appropriate documentation, in accordance with its
generally-applicable policies in effect from time to time, the Company shall
pay, or reimburse the Executive for, all ordinary and necessary expenses, in a
reasonable amount, which the Executive incurs in performing his duties under
this Agreement including, but not limited to, travel, entertainment,
professional dues and subscriptions, and all dues, fees, and expenses associated

                                       5
<PAGE>

with membership in various professional, business, and civic associations and
societies in which the Executive participates in accordance with the Company's
generally-applicable policies in effect from time to time.

5. Termination and Definition of Certain Terms

            5.1 Termination of Employment. The Executive's employment with the
Company (including but not limited to any subsidiary or affiliate of the
Company) and the Employment Term shall terminate upon the occurrence of the
first of the following events:

      (a)   Automatically on the date of the Executive's death.

      (b)   Upon the Disability of the Executive.

      (c)   Upon written notice by the Company to the Executive of a termination
            for Cause, in accordance with the provisions of Section 5.3 hereof,
            provided such termination for Cause has been approved by a majority
            of the Board. Such notice shall include the Board's determination as
            to whether the Cause may be cured, and shall be of no effect if the
            Executive so cures to the Board's sole satisfaction within ten
            business days of the Company's giving of the notice.

      (d)   Upon thirty days written notice by the Company to the Executive of
            an involuntary termination without Cause.

      (e)   Upon thirty days written notice by the Executive to the Company of a
            termination for Good Reason (which notice sets forth in reasonable
            detail the facts and circumstances claimed to provide a basis for
            such termination) unless the Good Reason event is cured within such
            thirty day period. Anything contained herein to the contrary
            notwithstanding, the Executive may only terminate his employment for
            Good Reason if he gives notice to the Company within thirty days
            from the date that he becomes aware of the event that constitutes
            the Good Reason for terminating his employment.

      (f)   Upon thirty days written notice by the Executive to the Company of
            the Executive's voluntary termination of employment without Good
            Reason (which the Company may, in its sole discretion, make
            effective earlier than any notice date).

            5.2 Definition of Disability. The Executive shall be considered to
have a "Disability" if he satisfies the definition set forth in the Company's
long-term disability benefit plan in which he is enrolled at the time of the
determination or if there is no such plan, for a continuous period of six
months, he is unable to perform his duties under this Agreement for reasons of
health, and, in the opinion of a physician appointed by the Company and
reasonably

                                       6
<PAGE>

acceptable to the Executive, such disability will continue for a prolonged
period of time.

            5.3 Definition of Cause. The term "Cause" shall mean the occurrence
of any of the following:

      (a)   The Executive's willful and continued failure to substantially
            perform his duties under this Agreement for the Company or its
            affiliates (other than any such failure resulting from the
            Executive's incapacity due to physical or mental illness) after a
            written demand for substantial performance is delivered by the
            Board, which demand specifically identifies the manner in which the
            Board believes that the Executive has not substantially performed
            his duties;

      (b)   The willful commission by the Executive of fraud, misappropriation
            or intentional material damage to the property or business of the
            Company; or

      (c)   The conviction of the Executive for the commission of a felony. No
            act or failure to act shall be "willful" unless done, or omitted to
            be done, not in good faith and without reasonable belief that the
            act or failure to act was in the best interests of the Company.

            5.4 Definition of Good Reason. The term "Good Reason" shall mean the
occurrence of any of the following:

      (a)   The Company assigning the Executive to duties or responsibilities
            that are inconsistent, in any significant respect, with the scope of
            duties or responsibilities provided for under this Agreement, unless
            such assignment is temporary and as a result of medical reasons
            affecting the Executive; provided, however, if the Chief Financial
            Officer begins reporting to the Chief Executive Officer it shall not
            constitute Good Reason under this Agreement;

      (b)   Any reduction in the Executive's Base Salary or Additional
            Compensation provided for under this Agreement;

      (c)   Except where expressly approved by the Executive, (i) the relocation
            of the Executive's principal place of business from more than a 20
            mile radius of the Executive's principal place of business as of the
            date of this Agreement and (ii) in the event of a Change of Control,
            the relocation of the Executive's principal place of business as of
            the date immediately prior to such Change of Control;

      (d)   After the Executive gives notice pursuant to Section 5.1(e) and the
            Company has not cured the failure contained in the notice within
            thirty days of receipt of the notice by the Company, the failure of
            the Company to pay to the Executive any portion of the Executive's
            current compensation, or to pay to the Executive any portion of an
            installment of deferred compensation under any deferred

                                       7
<PAGE>

            compensation program of the Company;

      (e)   The failure by the Company (i) to continue in effect any
            compensation plan in which the Executive participates unless (A)
            other senior executives of the Company are similarly affected or (B)
            an equitable arrangement (embodied in an ongoing substitute or
            alternative plan) has been made with respect to such plan or (ii) to
            continue the Executive's participation therein (or in such
            substitute or alternative plan) on a basis not materially less
            favorable than that in effect immediately prior to such failure,
            unless other senior executives of the Company are similarly
            affected; provided, however, if the split dollar life insurance in
            place with respect to the Executive on the Effective Date is
            adversely changed or eliminated, or if the Company does not grant
            the Executive options to purchase 50,000 shares (as such number may
            be adjusted in accordance with Section 3.3 herein) in a given year,
            it shall constitute Good Reason under this Agreement; or

      (f)   The failure of a successor, as such term is used in Section 9.1
            herein, to assume this Agreement, by operation of law or otherwise.

            5.5 Definition of Change of Control. As used herein, "Change of
Control" shall mean the occurrence of any of the following:

      (a)   An acquisition by any individual, entity or group (within the
            meaning of Section 13d-3 or 14d-1 of the Securities Exchange Act of
            1934, as amended (the "Act")) (a "Person") of beneficial ownership
            (within the meaning of Rule 13d-3 promulgated under the Act) of more
            than 50% of the combined voting power of the then outstanding voting
            securities of the Company entitled to vote generally in the election
            of directors to the Board (the "Outstanding Company Voting
            Securities"); excluding, however, the following: (x) any acquisition
            by the Company, (y) any acquisition by an employee benefit plan (or
            related trust) sponsored or maintained by the Company or (z) any
            acquisition by any corporation pursuant to a reorganization, merger,
            consolidation or similar corporate transaction (in each case, a
            "Corporate Transaction"), if, pursuant to such Corporate
            Transaction, the conditions described in (A), (B) and (C) of clause
            (c) of this Section 5.5 are satisfied;

      (b)   A change in the composition of the Board such that the individuals
            who, as of the Effective Date, constitute the Board (the Board as of
            the Effective Date shall be hereinafter referred to as the
            "Incumbent Board") cease for any reason to constitute at least a
            majority of the Board; provided that, for purposes of this paragraph
            (b), any individual who becomes a member of the Board subsequent to
            the Effective Date and whose election, or nomination for election by
            the Company's stockholders, was approved by a majority of the
            members of the Board who also are members of the Incumbent Board (or
            so deemed to be pursuant to

                                       8
<PAGE>

            this proviso) shall be deemed a member of the Incumbent Board; but,
            provided further, that any such individual whose initial assumption
            of office is in connection with a Change of Control described in
            paragraphs (a), (c) or (d) of this Section 5.5 or whose initial
            assumption of office occurs as a result of either an actual or
            threatened election contest (as such terms are used in Rule 14a-11
            of Regulation 14A promulgated under the Act) or other actual or
            threatened solicitation of proxies or consents by or on behalf of a
            Person other than the Board shall not be so deemed a member of the
            Incumbent Board; or

      (c)   The approval by the stockholders of the Company of a Corporate
            Transaction or, if consummation of such Corporate Transaction is
            subject, at the time of such approval by stockholders, to the
            consent of any government or governmental agency, the obtaining of
            such consent (either explicitly or implicitly by consummation);
            excluding, however, such a Corporate Transaction pursuant to which
            (A) the beneficial owners (or beneficiaries of the beneficial
            owners) of the Outstanding Company Voting Securities immediately
            prior to such Corporate Transaction will beneficially own, directly
            or indirectly, more than 60% of the outstanding shares of common
            stock of the corporation resulting from such Corporate Transaction,
            in substantially the same proportions as their ownership,
            immediately prior to such Corporate Transaction, of the Outstanding
            Company Voting Securities, (B) no Person (other than the Company,
            any employee benefit plan (or related trust) of the Company or the
            corporation resulting from such Corporate Transaction and any Person
            beneficially owning, immediately prior to such Corporate
            Transaction, directly or indirectly, 20% or more of the Outstanding
            Company Voting Securities) will beneficially own, directly or
            indirectly, 20% or more of the outstanding shares of common stock of
            the corporation resulting from such Corporate Transaction and (C)
            individuals who were members of the Incumbent Board will constitute
            at least a majority of the members of the board of directors of the
            corporation resulting from such Corporate Transaction; or

      (d)   The approval of the stockholders of the Company of (A) a complete
            liquidation or dissolution of the Company or (B) the sale or other
            disposition of all or substantially all the assets of the Company;
            excluding, however, such a sale or other disposition to a
            corporation with respect to which, following such sale or other
            disposition, (x) more than 60% of the then outstanding shares of
            common stock of such corporation and the combined voting power of
            the then outstanding voting securities of such corporation entitled
            to vote generally in the election of directors will be then
            beneficially owned, directly or indirectly, by the individuals and
            entities who were the beneficial owners (or beneficiaries of the
            beneficial owners), of the Outstanding Company Voting Securities
            immediately prior to such sale or other disposition in substantially
            the same proportion as their ownership, immediately prior to such
            sale or other disposition, of the Outstanding Company

                                       9
<PAGE>

            Voting Securities, (y) no Person (other than the Company and any
            employee benefit plan (or related trust) of the Company or such
            corporation and any Person beneficially owning, immediately prior to
            such sale or other disposition, directly or indirectly, 20% or more
            of the Outstanding Company Voting Securities) will beneficially own,
            directly or indirectly, 20% or more of the combined voting power of
            the then outstanding voting securities of such corporation entitled
            to vote generally in the election of directors and (z) individuals
            who were members of the Incumbent Board will constitute at least a
            majority of the members of the board of directors of such
            corporation.

Section 6. Consequences of a Termination of Employment

      6.1 Reference Salary/Reference Bonus.

      (a)   As used herein, "Reference Bonus" shall mean the higher of (i) the
            highest annual bonus earned by the Executive in respect of any of
            the three years ending immediately prior to the date of termination
            or, if higher, immediately prior to the year in which the first
            event constituting Good Reason occurs or (ii) if at least 50% of the
            then-current year has elapsed as of the date of termination, the
            higher of (A) the highest Annual Bonus earned by the Executive in
            respect of any of the two years ending immediately prior to
            termination or (B) the Annual Bonus that would be payable for such
            year, calculated assuming the results for such year equal the
            annualized results for such elapsed period.

      (b)   As used herein, "Reference Salary" shall mean the sum of the
            Executive's Base Salary and Additional Compensation as in effect
            immediately prior to the date of termination or, if higher, as in
            effect immediately prior to the first event constituting Good Reason
            hereunder.

      6.2 Termination Due to Death or Disability. If the Employment Term ends on
account of the Executive's termination due to death pursuant to Section 5.1(a)
or Disability pursuant to Section 5.1(b) above, the Executive (or, in the event
of death, the Executive's surviving spouse, or other beneficiary as so
designated by the Executive during his lifetime, or to the Executive's estate,
as appropriate) shall be entitled, in lieu of any other payments or benefits, to
the following:

      (a)   The Executive's unpaid Base Salary and Additional Compensation
            through the date of termination;

      (b)   Any incentive compensation awarded to the Executive but not yet paid
            for the year preceding the year of termination;

      (c)   A pro rata bonus equal to the product of (i) the Reference Bonus and
            (ii) a

                                       10
<PAGE>

            fraction, the numerator of which is the number of days in the year
            of termination through and including the date of termination and the
            denominator of which is 365;

      (d)   reimbursement for any unreimbursed business expenses incurred in
            accordance with Section 4 hereof prior to the date of termination;

      (e)   any amounts or benefits due under any equity or benefit plan, grant
            or program in accordance with the terms of said plan, grant or
            program but without duplication (such amounts specified in clauses
            (a), (b), (c), (d) and (e) are hereinafter referred to as the
            "Accrued Obligations"); and

      (f)   To the extent participating immediately prior to the date of
            termination, continued participation for the Executive and the
            Executive's dependents (to the extent participating at the time of
            termination) in all welfare plans (including, in the case of
            Disability, the split dollar life insurance policy if and to the
            extent in effect at the time of termination) for the period of one
            year from the date of termination or such longer period with respect
            to any welfare plan as is then the policy of the Company with
            respect to senior officers following such a termination, provided,
            however, that in the event the Executive obtains other employment
            that offers substantially similar or improved benefits, as to any
            particular welfare plan, such continuation of coverage by the
            Company for such benefits under such plan shall immediately cease.
            To the extent such coverage cannot be provided under the Company's
            welfare benefit plans without jeopardizing the tax status of such
            plans, for underwriting reasons or because of the tax impact on the
            Executive, the Company shall pay the Executive an amount such that
            the Executive can purchase such benefits separately.

      6.3 Involuntary Termination by the Company Without Cause or Termination by
the Executive for Good Reason. If the Executive is involuntarily terminated by
the Company without Cause in accordance with Section 5.1(d) above or the
Executive terminates his employment for Good Reason in accordance with Section
5.1(e) above, the Executive shall be entitled, in lieu of any other payments or
benefits, subject to Section 7(b) hereof, to any Accrued Obligations and the
following:

      (a)   (i) If the termination occurs prior to the third anniversary of the
            Effective Date, a severance payment of at least $1.5 million, equal
            to the product of two times the sum of the Reference Salary and
            Reference Bonus, payable in equal amounts over a two year period in
            accordance with the Company's normal payroll practices provided,
            however, that if a Change of Control occurs while the Executive is
            receiving severance payments pursuant to this Section, the remaining
            severance payments shall be payable to the Executive in one lump
            sum;

                                       11
<PAGE>

            (ii) If the termination occurs on or after the third anniversary of
            the Effective Date, a severance payment equal to the product of the
            sum of the Reference Salary plus the Reference Bonus multiplied by a
            fraction (in no event less than one), the numerator of which is the
            remaining number of full months (counting the month in which such
            termination occurs as a full month) in the Employment Term and the
            denominator which is twelve, payable in equal amounts over the
            remaining term of the Agreement, but not less than one year, in
            accordance with the Company's normal payroll practices (plus, if
            such fraction is less than 3/2, up to six months (so that the total
            period for which severance payments are being made is 18 months) at
            a 50% rate, payable in the same manner) provided, however, that if a
            Change of Control occurs while the Executive is receiving severance
            payments pursuant to this Section, the remaining severance payments
            shall be payable to the Executive in one lump sum;

            (iii) If the termination occurs following a Change of Control, a
            severance payment equal to two times the sum of the Reference Salary
            and the Reference Bonus, but not less than $1.5 million, payable in
            a lump sum payment;

      (b)   To the extent participating immediately prior to the date of
            termination (or immediately prior to the first event constituting
            Good Reason, if more favorable), continued participation for the
            Executive and the Executive's dependents (to the extent
            participating at the time of termination) in all welfare plans
            (including the split dollar life insurance policy if and to the
            extent in effect at the time of termination or the time of the event
            constituting Good Reason, as applicable) for the period of severance
            payments (or, in the event of an accelerated lump sum payment under
            Section 6.3(a)(i) or (ii), the original period of severance payments
            without regard to such acceleration or, in the event of a lump sum
            payment under Section 6.3(a)(ii), two years) or such longer period
            with respect to any welfare plan as is then the policy of the
            Company with respect to senior officers following such a
            termination, provided, however, that in the event the Executive
            obtains other employment that offers substantially similar or
            improved benefits, as to any particular welfare plan, such
            continuation of coverage by the Company for such benefits under such
            plan shall immediately cease. To the extent such coverage cannot be
            provided under the Company's welfare benefit plans without
            jeopardizing the tax status of such plans, for underwriting reasons
            or because of the tax impact on the Executive, the Company shall pay
            the Executive an amount such that the Executive can purchase such
            benefits separately;

      (c)   Immediate full vesting of any outstanding stock options including,
            but not limited to, any Annual Options. The term of all of the
            Executive's outstanding stock options shall terminate on the earlier
            of (i) three years from the date of termination of the Executive's
            employment by the Company without Cause or by the Executive for Good
            Reason or (ii) the original remaining term applicable to such

                                       12
<PAGE>

            options; and

      (d)   Payment for up to one year of executive outplacement services from a
            major outplacement service firm of the Executive's choosing.

      6.4 Termination by the Company for Cause or Termination by the Executive
without Good Reason. If the Executive is terminated by the Company for Cause
pursuant to Section 5.1(c) or the Executive terminates his employment without
Good Reason pursuant to Section 5.1(e), the Executive shall be entitled to
receive all Accrued Obligations (other than the obligation specified in clause
(c) of Section 6.2 hereof).

      6.5 Nonrenewal of the Employment Term. If the Company elects not to renew
the Agreement at the end of the Employment Term, the Company shall pay the
Executive (i) for twelve months following the date of termination of the
Employment Term, an amount equal to the sum of his Reference Salary plus his
Reference Bonus payable in equal amounts over a twelve month period, in
accordance with the Company's normal payroll practices and (ii) for six months
thereafter, an amount equal to one-half times the sum of the Reference Salary
plus the Reference Bonus, payable in the same manner over a six month period;
provided, however, that if a Change of Control occurs while the Executive is
receiving severance payments pursuant to this Section, the remaining severance
payments shall be payable to the Executive in one lump sum. In addition, the
Executive and the Executive's dependents will, to the extent participating
immediately prior to the date of termination, continue to participate in all
welfare plans (other than the split dollar life insurance policy) for the period
of eighteen months from the date of termination of the Employment Term or such
longer period with respect to any welfare plan as is then the policy of the
Company with respect to senior officers following such a termination, provided,
however, that in the event the Executive obtains other employment that offers
substantially similar or improved benefits, as to any particular welfare plan,
such continuation of coverage by the Company for such benefits under such plan
shall immediately cease. To the extent such coverage cannot be provided under
the Company's welfare benefit plans without jeopardizing the tax status of such
plans, for underwriting reasons or because of the tax impact on the Executive,
the Company shall pay the Executive an amount such that the Executive can
purchase such benefits separately

Section 7. No Mitigation/No Offset/Release

(a)   In the event of any termination of employment hereunder, the Executive
      shall be under no obligation to seek other employment and, except as
      provided in Section 6.2 (b) hereof, there shall be no offset against any
      amounts due the Executive under this Agreement on account of any
      remuneration attributable to any subsequent employment that the Executive
      may obtain. The amounts payable hereunder shall not be subject to setoff,
      counterclaim, recoupment, defense or other right which the Company may
      have against the Executive or others.

                                       13
<PAGE>

      (b)   Any amounts payable and benefits or additional rights provided to
            the Executive from a termination due to Disability pursuant to
            Section 6.2 or pursuant to Section 6.3 beyond Accrued Obligations
            and amounts or rights due under law, and, in the case of a
            termination due to Disability pursuant to Section 6.2 or in the case
            of Section 6.3, beyond the sum of any amounts due (without execution
            of a release) under the Company severance program then in effect,
            shall only be payable if the Executive delivers to the Company a
            release of all claims of the Executive (other than those
            specifically payable or providable hereunder on or upon the
            applicable type of termination and any rights of indemnification
            under the Company's organizational documents) with regard to the
            Company, its subsidiaries and related entities and their respective
            past or present officers, directors and employees in substantially
            the form attached hereto as Exhibit C.

      (c)   Upon any termination of employment, upon the request of the Company,
            the Executive shall deliver to the Company a resignation from all
            offices and directorships and fiduciary positions of the Executive
            in which the Executive is serving with, or at the request of, the
            Company or its subsidiaries, affiliates or benefit plans.

      (d)   The amounts and benefits provided under Section 6 hereof are
            intended to be inclusive and not duplicative of the amounts and
            benefits due under the Company's employee benefit plans and programs
            to the extent they are duplicative.

8. Noncompetition and Confidentiality

            8.1 Confidential Information. The Executive shall not, without the
prior written consent of the Company, communicate or divulge (other than in the
regular course of the Company's business) to anyone other than the Company, its
subsidiaries and those designated by it, any confidential information, knowledge
or data relating to the Company or any of its subsidiaries or affiliates, or to
any of their respective businesses, obtained by the Executive before or during
the Employment Term from the Company or any of its subsidiaries, except to the
extent (A) the Executive determines in good faith that it is in the best
interest of the Company to do so, (B) the Executive is compelled pursuant to an
order of a court or other body having jurisdiction over such matter to do so (in
which case the Company shall be given prompt notice of such intention to divulge
and an opportunity to object to such disclosure), or (C) such information,
knowledge or data is public knowledge or generally known within the Company's
industry other than through improper disclosure by the Executive.

            8.2 Agreement Not to Compete.

      (a)   Until the eighteen month anniversary of the date on which the
            Company makes its final Base Salary payment to the Executive
            pursuant to this Agreement, the

                                       14
<PAGE>

            Executive will not (other than on behalf of the Company) directly or
            indirectly;

                  (i) as an individual proprietor, partner, stockholder,
                  officer, employee, director, joint venturer, investor, lender,
                  consultant or in any other capacity whatsoever (other than as
                  the holder of not more than three percent of the total
                  outstanding stock of a publicly held company), engage in any
                  business which competes directly with the Company in the
                  generic drug business (provided that a business which derives
                  less than 20% of its revenues from generic drug products will
                  not be deemed to be competing directly with the Company) or
                  has products in the iron management field; or

                  (ii) recruit, solicit or induce, or attempt to induce, any
                  employee or employees of the Company (other than his personal
                  secretary) to terminate their employment with, or otherwise
                  cease their relationship with, the Company.

      (b)   If any restriction set forth in Section 8.2 hereof is found by any
            court of competent jurisdiction or arbitrator to be unenforceable
            because it extends for too long a period of time or over too great a
            range of activities or in too broad a geographic area, it shall be
            interpreted to extend only over the maximum period of time, range of
            activities or geographic area as to which it may be enforceable.

            8.3 Remedies. The restrictions contained in Sections 8.1 and 8.2
hereof are necessary for the protection of the business and goodwill of the
Company and are considered by the Executive to be reasonable to such purpose.
The Executive agrees that any breach of Sections 8.1 or 8.2 hereof will cause
the Company substantial and irreparable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, the
Company shall have the right to seek specific performance and injunctive relief.
In no event shall an asserted violation of the provisions of Sections 8.1 or 8.2
hereof constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.

            8.4 Delivery of Documents. Upon termination of the Executive's
employment with the Company, the Executive shall promptly deliver to the Company
all records, files, memoranda, notes, data, reports, price lists, customer
lists, plans, computer programs, software, software documentation, laboratory
and research notebooks and other documents (and all copies or reproductions of
such materials in his possession or control) belonging to the Company.

                                       15
<PAGE>

9. Assignment

            9.1 Assignment by the Company. This Agreement may and shall be
assigned or transferred to, and shall be binding upon and shall inure to the
benefit of, any successor of the Company, and any such successor shall be deemed
substituted for all purposes of the "Company" under the terms of this Agreement.
As used in this Agreement, the term "successor" shall mean any person, firm,
corporation or business entity which at any time, whether by merger, purchase,
or otherwise, acquires all or substantially all of the assets of the Company.
Notwithstanding such assignment, the Company shall remain, with such successor,
jointly and severally liable for all its obligations hereunder. Except as herein
provided, this Agreement may not otherwise be assigned by the Company.

            9.2 Assignment by the Executive. This Agreement is not assignable by
the Executive. This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, and
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive should die while any amounts payable to the Executive hereunder remain
outstanding, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, in the absence of such designee, to the
Executive's estate.

10. Legal Remedies

            10.1 Payment of Legal Fees. If the Executive sues to collect or
negotiates and reaches a settlement for any part or all of the payments provided
for hereunder (or otherwise successfully enforces the terms of this Agreement)
by or through a lawyer or lawyers, the Company shall advance all reasonable
costs of such collection or enforcement, including reasonable legal fees and
disbursements and other fees and expenses which the Executive may incur,
promptly after submission of documentation reasonably acceptable to the Company
in respect of such costs and expenses. All amounts paid by the Company shall
promptly be refunded to the Company if and when a court of competent
jurisdiction issues an unappealable order to the effect that the Company is
entitled to have such sums refunded. In addition, the Company shall reimburse
the Executive for his legal fees incurred in connection with the negotiation of
this Agreement.

            10.2 Notice. Any notices, requests, demands, or other communications
provided for by this Agreement shall be sufficient if in writing and if
delivered personally, sent by telecopier, sent by an overnight service or sent
by registered or certified mail. Notice to the Executive not delivered
personally (or by telecopy where the Executive is known to be) shall be sent to
the last address on the books of the Company, and notice to the Company not
delivered personally (or by telecopy to the known personal telecopy of the
person it is being sent to) shall be sent to it at its principal office. All
notices to the Company shall be delivered to the Chief Executive Officer with a
copy to the senior legal officer. Delivery shall be deemed to occur on the
earlier of actual receipt or tender and rejection by the intended recipient.

                                       16
<PAGE>

11. Miscellaneous

            11.1 Entire Agreement. This Agreement, except to the extent
specifically provided otherwise herein, supersedes any prior agreements or
understandings, including but not limited to the letter of employment from the
Company to the Executive, dated April 17, 1995 and the employment agreement
dated May 1, 1995, oral or written, between the parties hereto or between the
Executive and the Company, with respect to the subject matter hereof and
constitutes the entire Agreement of the parties with respect to the subject
matter hereof. To the extent any severance plan or program of the Company that
would apply to the Executive is more generous to the Executive than the
provisions hereof, the Executive shall be entitled to any additional payments or
benefits which are not duplicative, but shall otherwise not be eligible for such
plan or program.

            11.2 Modification. This Agreement shall not be varied, altered,
modified, canceled, changed, or in any way amended, nor any provision hereof
waived, except by mutual agreement of the parties in a written instrument
executed by the parties hereto or their legal representatives.

            11.3 Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect.

            11.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

            11.5 Tax Withholding. The Company may withhold from any benefits
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.

            11.6 Beneficiaries. The Executive may designate one or more persons
or entities as the primary and/or contingent beneficiaries of any amounts to be
received under this Agreement. Such designation must be in the form of a signed
writing acceptable to the Board or the Board's designee. The Executive may make
or change such designation at any time.

            11.7 Representation. The Executive represents that the Executive's
employment by the Company and the performance by the Executive of his
obligations under this Agreement do not, and shall not, breach any agreement
that obligates him to keep in confidence any trade secrets or confidential or
proprietary information of his or of any other party, to write or consult to any
other party or to refrain from competing, directly or indirectly, with the
business of any other party. The Executive shall not disclose to the Company,
and the Company shall not request that the Executive disclose, any trade secrets
or confidential or proprietary information of

                                       17
<PAGE>

any other party.

            11.8 Maximum Payment. Notwithstanding anything herein to the
contrary, if it is determined that any payment made to the Executive, whether
pursuant to the terms of this Agreement or otherwise, would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties with respect to such excise tax (such
excise tax, together with any interest or penalties thereon, is herein referred
to as an "Excise Tax"), then the Executive shall be entitled to an additional
payment (a "Gross-Up Payment") in an amount that will place him in the same
after-tax economic position that he would have enjoyed if the Excise Tax had not
applied. The amount of the Gross-Up Payment shall be determined by the
nationally recognized firm of accountants serving as the Company's independent
auditors immediately prior to the Change of Control which resulted in the
application of the Excise Tax, in their sole discretion.

12. Governing Law

      The provisions of this Agreement shall be construed and enforced in
accordance with the laws of the state of New Jersey, without regard to any
otherwise applicable principles of conflicts of laws.

                                       18
<PAGE>

      IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement, as of the day and year first above written.

                                       /s/ DARIUSH ASHRAFI
                                       -----------------------------------------
                                       DARIUSH ASHRAFI

                                       SCHEIN PHARMACEUTICAL, INC.

                                       By: /s/ Martin Sperber
                                          --------------------------------------
                                            Name:  Martin Sperber
                                            Title: Chairman and Chief Executive
                                                      Officer

                                       19
<PAGE>

                                                                       EXHIBIT A

                    Duties, Authorities and Responsibilities

      The individuals responsible for the management and decision making for the
following functions shall report to the Executive:

                           Finance and Administration
                            Manufacturing Operations
                                  Distribution
                                 Brand Business
                           Generic Sales and Marketing
                            Research and Development
                              Business Development
                                  International

                                       20
<PAGE>

                                                                       EXHIBIT B

                                 PROMISSORY NOTE

$2,234,375.00                                                  November 18, 1999

      FOR VALUE RECEIVED, the undersigned, Dariush Ashrafi (the "Borrower"),
promises to pay to the order of Schein Pharmaceutical, Inc. (the "Company"), the
principal amount of two million two hundred thirty four thousand three hundred
seventy five dollars ($2,234,375.00) (the "Principal Amount") and all accrued
interest thereon in accordance with the terms hereof (the "Note Indebtedness").

      Interest. Interest shall accrue on the Principal Amount and Accrued
Interest (as hereinafter defined) outstanding from time to time at an interest
rate equal to the interest rate payable from time to time by the Company under
its principal bank revolving credit facility. Interest shall be payable annually
on the fifth business day after the Borrower receives his annual bonus
compensation, if any (the "Annual Bonus"), for serving in his capacity as an
employee of the Company (each such date, a "Payment Date"). If the after-tax
amount of any Annual Bonus is insufficient to pay all interest accrued on the
immediately following Payment Date, the unpaid portion will continue to accrue
("Accrued Interest") until the earlier of (i) such time as such Accrued Interest
is paid pursuant to the immediately preceding sentence and (ii) the Maturity
Date, except as otherwise provided herein.

      Term. The Note Indebtedness shall become due and payable in full on the
earlier of November 18, 2004 and the date six months following the date of
termination of the Borrower's employment with the Company by the Company for
Cause or the Borrower without Good Reason (as such terms are defined in the
Employment Agreement dated as of the date hereof between the Borrower and the
Company (the "Employment Agreement") (the "Maturity Date"). The Borrower shall
have the right to prepay this Promissory Note, in full or in part, at any time
without premium or penalty.

      Prepayment. The proceeds of this Promissory Note were used to purchase
250,000 shares of common stock, par value $.01 per share, of the Company (the
"Incentive Shares") pursuant to the terms of the Employment Agreement. In the
event that all or from time to time a portion of the Incentive Shares are sold
by the Borrower prior to the repayment of the Note Indebtedness, the proceeds
from any such sale shall be used to repay all or a portion of the Note
Indebtedness equal to the amount of the Note Indebtedness then outstanding
multiplied by a fraction, the numerator of which is the number of Incentive
Shares sold and the denominator of which is the total number of Incentive Shares
held by the Borrower immediately prior to such sale. Each such payment shall be
applied to payment of principal of and interest on this Promissory Note in

<PAGE>

proportion to the respective unpaid amounts thereof on the date of payment. The
Borrower shall give the Company written notice of any proposed sale of Incentive
Shares not less than five business days prior to such sale.

      Representations and Warranties. The Borrower represents to the Company
that he has the legal capacity to execute this Promissory Note and to carry out
all of the terms, conditions, covenants and provisions contained herein and that
there is no state of facts existing on the date hereof which would constitute an
Event of Default (as hereinafter defined).

      Default. Each of the following events or conditions constitutes an "Event
of Default":

      a. Failure by the Borrower to make any payment of principal or interest
      under this Promissory Note on or before thirty (30) days after the date
      such payment is due.

      b. Failure by the Borrower to comply with any other provision of this
      Promissory Note and the continuance of such failure for thirty (30) days
      or more after written notice from the Company.

      c. Any representation, warranty or other statement by or on behalf of the
      Borrower contained in this Promissory Note is false or misleading in any
      material respect when made.

      d. The Borrower becomes insolvent or bankrupt or makes an assignment for
      the benefit of creditors, or consents to the appointment of a trustee,
      receiver or liquidator.

      e. Bankruptcy, reorganization, arrangement, insolvency or liquidation
      proceedings are instituted by or against the Borrower, which proceedings
      are not dismissed or stayed within sixty (60) days after they are
      instituted.

If at any time during the term of this Agreement, there shall have occurred an
Event of Default, the Company shall have at any time thereafter the rights and
remedies provided by law, and without limiting the generality of the foregoing,
(i) the right to declare all amounts then remaining unpaid under this Promissory
Note to be immediately due and payable, and (ii) the right to take any available
action or proceeding, at law or in equity, which it deems necessary or advisable
for its protection and security. During the continuance of an Event of Default,
the Company shall have the right to offset any amounts owing by the Company to
the Borrower for any reason, including but not limited to, salary or bonus,
against any outstanding Note Indebtedness. If any action is brought to collect
this Promissory Note, the Company shall be entitled to recover from the Borrower
all the costs and expenses of that action, including, but not limited to,
reasonable attorney's fees, and the Company shall be entitled to judgment for
those additional amounts (in addition to the unpaid Note Indebtedness).

      Waiver of Rights. No failure or delay on the part of the Company to
exercise any right or remedy granted to the Company in this Promissory Note or
otherwise provided by law shall

<PAGE>

operate as a waiver of any such right or remedy. The Borrower hereby waives
presentment, demand, notice of dishonor, notice of protest and all other notices
and demands in connection with any delivery, acceptance, performance or default
of this Promissory Note and agrees that this Promissory Note may be modified
only by an agreement in writing signed by the Borrower and the Company.

      Governing Law. This Promissory Note shall be governed and interpreted in
accordance with the laws of the state of New Jersey, without regard to any
otherwise applicable principles of conflicts of laws.

Accepted and Acknowledged by:                 Accepted and Acknowledged by:

SCHEIN PHARMACEUTICAL, INC.                   BORROWER

By:_________________________________         ___________________________________
Name:  Martin Sperber                        Dariush Ashrafi
Title: Chairman and Chief Executive
        Officer

<PAGE>

                                                                       EXHIBIT C

                          GENERAL RELEASE OF ALL CLAIMS

      This General Release of all Claims (this "Agreement") is entered into by
and among Dariush Ashrafi (the "Executive"), and Schein Pharmaceutical, Inc., a
Delaware corporation (as it may be renamed from time to time, and including its
subsidiaries and affiliates) (collectively, the "Corporation"), effective as of
|_|.

      In consideration of the promises set forth in the Employment Agreement
between the Executive and the Corporation, dated November 18, 1999, (the
"Employment Agreement"), as well as any promises set forth in this Agreement,
the Executive and the Corporation agree as follows:

(1)   Return of Property

      All Corporation files, access keys, desk keys, ID badges and credit cards,
      and such other property of the Corporation as the Corporation may
      reasonably request, in the Executive's possession must be returned no
      later than the date of the Executive's termination from the Corporation
      (the "Termination Date").

(2)   General Release and Waiver of Claims

      Except as provided in the last sentence of this paragraph (2), in
      consideration of the payments made and to be made, and benefits provided
      and to be provided, to the Executive pursuant to the Employment Agreement,
      the Executive hereby unconditionally and forever releases, discharges and
      waives any and all claims of any nature whatsoever, whether legal,
      equitable or otherwise, which the Executive may have against the
      Corporation arising at any time on or before the Termination Date, other
      than the Excluded Obligations. This release of claims extends to any and
      all claims of any nature whatsoever, other than with respect to the
      Excluded Obligations, whether known, unknown or capable or incapable of
      being known as of the Termination Date or thereafter. This Agreement is a
      release of all claims of any nature whatsoever by the Executive against
      the Corporation, other than with respect to the Excluded Obligations, and
      includes, other than as herein provided, any and all claims, demands,
      causes of action, liabilities whether known or unknown including those
      caused by, arising from or related to the Executive's employment
      relationship with the Corporation including, without limitation, any and
      all alleged discrimination or acts of discrimination which occurred or may
      have occurred on or before the Termination Date based upon race, color,
      sex, creed, national origin, age, disability or any other violation of any
      Equal Employment Opportunity Law, ordinance, rule, regulation or order,
      including, but not limited to, Title VII of the Civil Rights Act of 1964,
      as amended; the Civil Rights Act of 1991; the Age Discrimination in
      Employment Act, as amended (as further described in Section 4 below); the
      Americans with Disabilities Act; claims under the Employee Retirement
      Income Security Act of 1974, as amended ("ERISA"); or any other Federal,
      state or local laws or regulations regarding employment discrimination or
      termination of employment. This also includes claims

<PAGE>

      for wrongful discharge, fraud, or misrepresentation under any statute,
      rule, regulation or under the common law.

      The Executive agrees and understands and knowingly agrees to this release
      because it is his or her intent in executing this Agreement to forever
      discharge the Corporation from any and all present, future, foreseen or
      unforeseen causes of action except for the Excluded Obligations.

      Notwithstanding the foregoing, the Executive does not release, discharge
      or waive any rights (the "Excluded Obligations") (i) to payments and
      benefits provided for in the applicable subsection of Section 6 of the
      Employment Agreement, (ii) to payments provided for in Section 10.1 and
      Section 11.8 of the Employment Agreement and (iii) to indemnification that
      he or she may have under the By-Laws of the Corporation, the laws of the
      State of Delaware, any indemnification agreement between the Executive and
      the Corporation or any insurance coverage maintained by or on behalf of
      the Corporation.

(3)   Release and Waiver of Claims Under the Age Discrimination in Employment
      Act

      The Executive acknowledges that the Corporation advised him or her to
      consult with an attorney of his or her choosing, and through this
      Agreement advises him or her to consult with his or her attorney with
      respect to possible claims under the Age Discrimination in Employment Act
      of 1967, as amended ("ADEA"), and the Executive acknowledges that he or
      she understands that ADEA is a Federal statute that prohibits
      discrimination, on the basis of age, in employment, benefits, and benefit
      plans. The Executive wishes to waive any and all claims under the ADEA
      that he or she may have, as of the Termination Date, against the
      Corporation, and their respective shareholders, employees, or successors,
      and hereby waives such claims. The Executive further understands that by
      signing this Agreement he or she is in fact waiving, releasing and forever
      giving up any claim under the ADEA against the Corporation that may have
      existed on or prior to the Termination Date. The Executive acknowledges
      that the Corporation have informed him or her that he or she has, at his
      or her option, twenty-one (21) days following the Termination Date in
      which to sign the waiver of this claim under ADEA, and he or she does
      hereby knowingly and voluntarily waive said twenty-one (21) day period.
      The Executive also understands that he or she has seven (7) days following
      the date on which he or she signs this Agreement within which to revoke
      the release contained in this paragraph by providing to the Corporation a
      written notice of his or her revocation of the release and waiver
      contained in this paragraph. The Executive further understands that this
      right to revoke the release contained in this paragraph relates only to
      this paragraph and does not act as a revocation of any other term of this
      Agreement.

<PAGE>

(4)   Proceedings

      The Executive has not filed, and agrees not to initiate or cause to be
      initiated on his or her behalf, any complaint, charge, claim or proceeding
      against the Corporation before any local, state or Federal agency, court
      or other body relating to his or her employment or the termination of his
      or her employment, other than with respect to the Excluded Obligations
      (each individually, a "Proceeding"), and agrees not to voluntarily
      participate in any Proceeding. The Executive waives any right he or she
      may have to benefit in any manner from any relief (whether monetary or
      otherwise) arising out of any Proceeding.

(5)   Remedies

      In the event the Executive initiates or voluntarily participates in any
      Proceeding, or if he or she fails to abide by any of the terms of this
      Agreement, or if he or she revokes the ADEA release contained in Paragraph
      3 of this Agreement within the seven-day period provided under Paragraph
      3, the Corporation may, in addition to any other remedies it may have,
      reclaim any amounts paid to him or her under the termination provisions of
      the Employment Agreement or terminate any benefits or payments that are
      subsequently due under the Employment Agreement, without waiving the
      release granted herein. The Executive acknowledges and agrees that the
      remedy at law available to the Corporation for breach of any of his or her
      post-termination obligations under the Employment Agreement or his or her
      obligations under Paragraphs 2, 3 and 4 of this Agreement would be
      inadequate and that damages flowing from such a breach may not readily be
      susceptible to being measured in monetary terms. Accordingly, the
      Executive acknowledges, consents and agrees that, in addition to any other
      rights or remedies which the Corporation may have at law, in equity or
      under this Agreement, upon adequate proof of his or her violation of any
      such provision of this Agreement, the Corporation shall be entitled to
      immediate injunctive relief and may obtain a temporary order restraining
      any threatened or further breach, without the necessity of proof of actual
      damage.

      The Executive understands that by entering into this Agreement he or she
      will be limiting the availability of certain remedies that he or she may
      have against the Corporation and limiting also his or her ability to
      pursue certain claims against the Corporation.

(6)   Severability Clause

      In the event any provision or part of this Agreement is found to be
      invalid or unenforceable, only that particular provision or part so found,
      and not the entire Agreement, will be inoperative.

<PAGE>

(7)   Non-Admission

      Nothing contained in this Agreement will be deemed or construed as an
      admission of wrongdoing or liability on the part of the Corporation.

(8)   Governing Law

      This Agreement shall be governed by and construed in accordance with the
      laws of the State of New Jersey, applicable to agreements made and to be
      performed in that State, without regard to conflicts of law principles;
      and the parties agree to the jurisdiction of the U.S. District Court for
      the District of New Jersey, and agree to appear in any action in such
      courts by service of process by certified mail, return receipt requested,
      at the following addresses:

      To the Corporation:     100 Campus Drive
                              Florham Park, New Jersey 07932
                              Attention: General Counsel

      To the Executive:       [Insert Address]

THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT AND THAT HE FULLY
KNOWS, UNDERSTANDS, AND APPRECIATES ITS CONTENTS, AND THAT HE HEREBY EXECUTES
THE SAME AND MAKES THIS AGREEMENT AND THE RELEASE AND AGREEMENTS PROVIDED FOR
HEREIN VOLUNTARILY AND OF HIS OWN FREE WILL.

<PAGE>

      IN WITNESS WHEREOF, the parties have executed this as of the date first
set forth above.

                                    SCHEIN PHARMACEUTICAL, INC.

                                    By:_________________________________________
                                       Name:
                                       Title:

                                    EXECUTIVE

                                    ____________________________________________
                                    Dariush Ashrafi

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