Document:

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                                                                   EXHIBIT 10.41

                                SERVICE AGREEMENT

      This agreement ("Agreement") effective as of February 1, 2001 by and
between VENTIV HEALTH U.S. SALES INC., a New Jersey corporation ("VHS") and
ENDO PHARMACEUTICALS INC., a Delaware corporation ("CLIENT").

                             W I T N E S S E T H:

      WHEREAS, VHS provides integrated outsourced sales and marketing solutions
worldwide, including client field forces to the healthcare industry and has
certain expertise in the marketing and promotion of pharmaceutical products; and

      WHEREAS, CLIENT is an integrated pharmaceutical company which requires
sales and promotional services of VHS as more fully described in the Scope of
Services set forth in Schedule A to this Agreement, as the same may be amended
from time to time (the "Services"); and

      WHEREAS, VHS and CLIENT desire to enter into an agreement under which VHS
will provide such services to CLIENT.

      NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, it is agreed as follows:

A)    DEFINITIONS

      1. "Additional Term" is defined in Section 1 of this Agreement.

      2. "Authorized Representative" means, for each party, that individual
designated in writing at the time of the execution of this Agreement, as may be
changed in writing by a senior executive of such party at any time.

      3. "Baseline Sales" means the monthly Net Demand Sales levels of the
Products calculated and set by CLIENT pursuant to Schedule B as those sales
levels may be revised by written agreement of the parties.
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      4. "Budget" is defined in Section 3.1 of this Agreement.

      5. "Call" means the activity undertaken by a Sales Representative to
detail the Products, further described as a face-to-face presentation by a Sales
Representative to a HCP Target, which includes, but is not limited to a
discussion with the HCP Target of the features and benefits of the Products,
their contraindications, FDA approved uses and other pertinent information, and
includes giving the HCP Target Product Literature and samples of the Products.

      6. "Call Plan" means a plan designed by CLIENT, which is intended to
enhance the efficiency and effectiveness of the Sales Representatives in making
Calls.

      7. "CLIENT Representatives" is defined in Section 9.1 of this Agreement.

      8. "Client Service Manager" means a full-time employee of VHS assigned to
coordinate providing support services under this Agreement with respect to the
Endo Pharma Field Force and the Endo Specialty Force.

      9. "Components" is defined in Schedule A-1A.

      10. "Confidential Information" is defined in Section 5 of this Agreement.

      11. "Contract Administration Costs" is defined in Section 3.1 of this
Agreement.

      12. "Contract Service Fee" is defined in Section 3.1 of this Agreement.

      13. "DEA" means the United States Drug Enforcement Agency.

      14. "Direct Client Expense" is defined in the Summary of Services set
forth in Schedule A.

      15. "Direct Marketing Expenses" means the funds (which are part of the
Budget) to facilitate the detailing activity of Sales Representatives to HCP
Targets.

      16. "Disclosing Party" is defined in Section 5 of this Agreement.

      17. "District Manager" means an employee of VHS who is engaged under this
Agreement to manage Endo Pharma Sales Representatives or Specialty Sales
Representatives, as the case may be.

      18. "Endo Pharma Field Force" means the Endo Pharma Sales Representatives,
District Managers and Regional Directors assigned to manage the Endo Pharma
Sales Representatives.

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      19. "Endo Pharma Sales Representative" means an individual provided by VHS
who is engaged under this Agreement to detail the Products to the Endo Pharma
HCP Targets.

      20. "Endo Specialty Force" means the Endo Specialty Representatives and
the District Managers assigned to manage the Endo Specialty Representatives.

      21. "Endo Specialty Representative" means an individual provided by VHS
who is engaged under this Agreement to detail the Products in the assigned
specialty physician and institutional setting as designated by CLIENT.

      22. "Indirect Overhead" is defined in Section 3.1 of this Agreement.

      23. "Invoice Form" means the form of VHS monthly invoice described in
Section 3.1 of this Agreement, an example of which is set forth as Schedule B-Y
attached to this Agreement.

      24. "Net Demand Sales" means the total dispensed prescriptions of
Products, measured by IMS NPAPlus(TM) Prescription Audit multiplied by the fixed
average units per TRX multiplied by the fixed average net selling price as set
by CLIENT.

      25.   "PDMA" means the Prescription Drug Marketing Act as more fully
described in Schedule A-2.

      26. "Personnel Cost" is defined in Section 3.1 of this Agreement.

      27. "Product" shall mean any of the products sold by CLIENT, which are
listed in Schedule A-1A to this Agreement, as the same may be amended from time
to time; each iteration of which shall be dated and signed by the Authorized
Representative of each party to this Agreement.

      28. "Product Literature" shall mean promotional, informative and other
written information concerning the Products. All Product Literature shall be
provided by CLIENT and utilized by Endo Specialty Representatives and Endo
Pharma Sales Representatives when making Calls.

      29. "Project Manager" means an employee of VHS who is engaged under this
Agreement to assist VHS management and to coordinate administrative support for
the Endo Pharma Field Force and the Endo Specialty Force.

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      30. "Receiving Party" is defined in Section 5 of this Agreement.

      31. "Regional Director" means a VHS employee who is engaged under this
Agreement to manage the portion of the Endo Pharma Field Force located in such
Regional Director's geographic region.

      32. "Reports" means periodic reports of Calls and other particular reports
given to CLIENT, as set forth in Schedule A-1B.

      33. "Sales Representative" means a Endo Pharma Sales Representative and/or
a Endo Specialty Representative.

      34. "Services" means services for certain pharmaceutical products as more
fully described in the Scope of Services set forth in Schedule A.

      35. "Significant Loss" is defined in Schedule A-2.

      36. "Summary of Services" is defined in Section 2.1 of this Agreement.

      37. "HCP Targets" means: (i) the Endo Pharma HCP Targets who are the
licensed practitioners or others who are identified by CLIENT to VHS in writing
as potential prescription writers and/or customers for the Products, as the same
may be amended from time to time, (ii) Endo Specialty HCP Targets who are the
licensed practitioners or medical specialists, who are identified by CLIENT to
VHS in writing as potential prescription writers and customers for the Products,
as the same may be amended from time to time.

      38. "Term" is defined in Section 1 of this Agreement.

      39. "Theft" is defined in Schedule A-2.

      40. "VHS Representatives" is defined in Section 9.1 of this Agreement.

      41. "Works" is defined in Schedule A-1A.

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ARTICLE 1.   TERM

      This Agreement shall be in effect as of January 1, 2001 and shall remain
in effect through and including December 31, 2003 (the "Term"). This Agreement
will automatically renew for additional periods of one year each (each, an
"Additional Term"), unless, in the case of CLIENT, CLIENT gives written notice
of non-renewal to VHS at least ninety (90) days prior to the end of the Term or
any Additional Term and, in the case of VHS, VHS gives written notice of
non-renewal to CLIENT at least one hundred eighty (180) days prior to the end of
the Term or any Additional Term. The amount of compensation (both fixed and
variable fees) payable to VHS under Section 3.1 of this Agreement during any
Additional Term will be adjusted as mutually agreed upon. The provisions of this
Agreement (other than compensation), including those which expressly state that
they apply during the Term of this Agreement, shall continue to apply during any
Additional Term of this Agreement unless expressly amended or deleted.

ARTICLE 2.  SCOPE OF SERVICES AND PROFESSIONALISM AND COMPLIANCE

      2.1.  THE SCOPE OF SERVICES.

      The Scope of Services to be provided under this Agreement is set forth in
Schedule A to this Agreement as the same may be amended from time to time, each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement. The Scope of Services shall particularly include
the Reports (including the frequency and time for delivery of each Report as
specified in Schedule A-1B); each Report shall reflect 100% of the data intended
to be covered by such Report. Included with Schedule A is a Summary of Services
(the "Summary of Services") setting forth in summary fashion, broad categories
of Services to be provided under this Agreement; the Summary of Services is a
part of this Agreement and not simply a description of what this Agreement
contains. The Summary of Services may be amended from time to time with each
iteration dated and signed by the Authorized Representative of each party.
Should CLIENT elect to

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change the Scope of Services to be provided under this Agreement, the
compensation paid to VHS will be appropriately adjusted to reflect the change.

      2.2.  PROFESSIONALISM AND COMPLIANCE.

      VHS shall perform the Services, and shall require each person provided by
VHS to perform the Services, (i) in a professional manner consistent with
industry standards; (ii) in conformance with that level of care and skill
ordinarily exercised by other professional contract sales organizations; and
(iii) in compliance with all applicable local, state and federal laws and
regulations.

ARTICLE 3.  COMPENSATION BUDGET AND REIMBURSEMENT

      3.1.  COMPENSATION - BASE FEES.

      Subject to the limitation set out below. CLIENT shall pay VHS compensation
for the Scope of Services performed under this Agreement, which compensation
shall be the Base Fee, as set forth in Schedule B to this Agreement, and shall
be based upon the following components (which for the year 2001 are subsumed in
the fixed Base Fee amount for 2001 set forth on Schedule B):

            a.    "Payroll Costs", which shall mean the amounts actually paid by
                  VHS to members of the Endo Pharma Field Force and the Endo
                  Specialty Force during the applicable period in respect of
                  salary and benefits (other than pursuant to a VHS bonus
                  program, the aggregate cost of which is approved and funded by
                  CLIENT as a passthrough expense);

            b.    "Contract Administration Costs", which mean the amounts, other
                  than Payroll Costs, actually paid by VHS during the applicable
                  period that are directly related to the provision of Services
                  that are identified under the Scope of Services under the
                  column headed "Included as Part of the VHS Base Fee" and that
                  are allocated to this Agreement on the books of VHS;

            c.    an allocation of indirect overhead and sales, general and
                  administrative expense of VHS ("Indirect Overhead") based
                  upon the ratio of:  (i) the total

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                  number of Endo Pharma Sales Representatives plus Endo
                  Specialty Representatives to (ii) the total number of persons
                  employed by VHS as sales representatives; provided that (x)
                  the allocation to CLIENT shall not exceed 7.7% of the total
                  indirect overhead and sales, general and administrative
                  expense of VHS and (y) the allocation shall be determined by
                  using the total number of persons employed by VHS as sales
                  representatives (which shall for purposes of this
                  determination never be lower than 2,961, the number of such
                  sales representatives as of the end of the last payroll period
                  in January 2001).

In addition, CLIENT shall pay a fee (the "Contract Service Fee") which is
computed as a percentage of the quarterly Net Demand Sales of the Products up to
the Baseline Sales, with the relevant percentage set out on Schedule B.

      CLIENT shall notify VHS of the Net Demand Sales in a quarter reasonably
promptly after the end of that quarter and tender payment of the applicable
Contract Service Fee with that notice. Upon termination or expiration of this
Agreement, the Contract Service Fee for any quarter or portion thereof that has
not been invoiced shall be paid as a termination payment. VHS shall invoice
CLIENT monthly in arrears for the Base Fee and shall set forth on each invoice
the actual headcount of all persons employed by VHS as Sales Representatives as
of the end of the pay period ending in approximately mid-month for the month
covered by such invoice. In addition the Invoice Form, in addition to setting
out in reasonable detail the amounts of the Payroll Costs, Contract
Administration Costs and the Indirect Overhead (using the agreed upon line items
as reflected in Schedule B-Y) shall contain a written explanation of any line
item amount that varies by more than 10% plus or minus from that particular line
item reflected on the Budget for that same period (each a "Variant Amount",
provided that no such explanation is required and the variance is not a Variant
Amount if the dollar amount of the variation is $5,000 or less). Each VHS
invoice shall also separately set forth in

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reasonable detail the amount of any Client Passthrough Expense for which VHS
seeks reimbursement. CLIENT shall pay the full amount of each VHS invoice except
any Client Passthrough Expense in excess of the amount allowed for such item in
the Budget. VHS and CLIENT shall in addition, review the aggregate of all
Variant Amounts within 30 days of the end of each calendar quarter. In that
connection, CLIENT may request additional justification for any Variant Amount
and, to the extent CLIENT is not reasonably satisfied with such justification,
CLIENT may require a credit against future invoices (or at the end of the Term,
a refund) equal to the unjustified Variant Amounts.

      3.2.  BUDGET

      The annual budget ("Budget") for 2001 is attached to this Agreement as
Schedule B-Y.

      VHS shall prepare a draft Budget for each calendar year of the Term of
this Agreement beginning with calendar year 2002 (and any Additional Term) and
deliver such Budget to CLIENT at least sixty (60) days prior to the beginning of
that calendar year. The Budget shall set out in reasonable detail the Base Fee
and CLIENT Passthrough Expenses, if any, estimated to be payable by CLIENT in
the forthcoming year. Upon receipt thereof, CLIENT will promptly review the
Budget and the parties will then reconcile any issues related thereto. CLIENT
and VHS recognize that the Budget, as with any projection, may require
adjustment due to changes in expenses, market conditions and numerous other
factors and agree to review the Budget no less frequently than every three (3)
months for possible adjustment.

      If CLIENT does not approve a Budget at least thirty (30) days prior to the
beginning of any calendar year, or is unable to reach agreement with VHS on any
proposed adjustment thereto, including a CLIENT-required reduction in Client
Passthrough Expenses (as set forth in Section 3.3 of this Agreement), CLIENT and
VHS agree to have their senior officers meet forthwith in an attempt to resolve
the matter. If such a resolution is not reached within thirty (30) days from
such meeting and unless each party agrees in writing to continue good faith
negotiations as to the Budget for an

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additional sixty (60) days, CLIENT shall be deemed to have given notice of
termination under Section 10.1 of this Agreement effective ninety (90) days
after such thirtieth (30th) day referred to the prior clause.

      3.3.  CLIENT PASSTHROUGH EXPENSES

      VHS may request that CLIENT approve particular Client Passthrough Expense
items prior to incurrence thereof and once approved by CLIENT, CLIENT shall pay
the same when invoiced. In addition, CLIENT may require, on not less than thirty
(30) days' notice, that amounts provided in the Budget for Client Passthrough
Expenses be reduced; provided that such reduction shall not materially impair
the ability of VHS to meet its performance obligations under this Agreement.

      Notwithstanding anything herein to the contrary, in no event shall CLIENT
be required to pay VHS Client Passthrough Expenses in excess of the amounts
provided for such expenses in the Budget unless otherwise specifically agreed to
by CLIENT in writing.

      3.4.  ADDITIONAL EXPENSES

      CLIENT may request VHS to incur particular expenses in addition to those
already relating to the Scope of Services and reflected in the Budget, in which
case those expenses will be added to the Client Passthrough Expenses payable by
CLIENT. All additional expenses must be agreed to in writing by CLIENT prior to
such expenses being incurred.

      3.5.  VARIABLE FEES

      In addition to the amounts set forth above, CLIENT shall pay to VHS the
Variable Fees based solely upon VHS exceeding the performance measures set forth
in Schedule B to this Agreement.

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      3.6.  PAYMENT DUE

      Invoices are due and payable within 30 days of receipt thereof, except to
the extent of any amount disputed by CLIENT. CLIENT shall pay the undisputed
amount of each invoice as and when due. In addition to VHS's right to terminate
this Agreement under Section 10.2 in the case of non-payment of any undisputed
amount, if VHS elects not to terminate this Agreement in the case of non-payment
of any undisputed amount, CLIENT shall pay VHS a finance charge of
one-and-one-half (1.5%) percent per month for the undisputed amount on each
invoice past due for more than 60 days from the payment date stated in the
invoice.

      3.7.  INSPECTION RIGHT

      Upon prior written notice and at mutually agreeable times within 14 days
of such prior written notice, CLIENT has the right to inspect the books and
records of VHS that relate to this Agreement for the purpose of auditing the
documents and invoices with respect to the Scope of Services provided hereunder.

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ARTICLE 4. REPRESENTATIONS OF THE PARTIES

      4.1.  VHS REPRESENTATIONS

      VHS represents to CLIENT that:

            (a) it has the requisite expertise, experience and skill to render
the Services and that it shall use all reasonable efforts to cause the Services
to be performed in a competent, efficient and professional manner and no less
favorable than the overall manner in which similar services are performed for
other parties by VHS.

            (b) the execution, delivery and performance of this Agreement by VHS
and the consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action; that this Agreement constitutes
the legal, valid and binding obligation of VHS, enforceable in accordance with
its terms (except to the extent enforcement is limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general principles of equity); and that this Agreement and performance
hereunder does not violate or constitute a breach under any organizational
document of VHS or any contract, other form of agreement, or judgment or order
to which VHS is a party or by which it is bound.

            (c) VHS will maintain insurance with financially sound carriers in
the amounts and types (with the deductibles or retentions) as set forth in
Schedule C to this Agreement, as the same may be amended from time to time; each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement.

      4.2.  CLIENT REPRESENTATIONS

      CLIENT represents to VHS that:

            (a) The execution, delivery and performance of this Agreement by
CLIENT and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite

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corporate action; that this Agreement constitutes the legal, valid and binding
obligation of CLIENT, enforceable in accordance with its terms (except to the
extent enforcement is limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally and by general principles of equity);
and that this Agreement and performance hereunder does not violate or constitute
a breach under any organizational document of CLIENT or any contract, other form
of agreement, or judgment or order to which CLIENT is a party or by which it is
bound.

            (b) CLIENT will maintain insurance with financially sound carriers
or through one or more financially sound self-insurance arrangements in the
amounts and types (and with the deductibles or retentions) as set forth in
Schedule C to this Agreement, as the same may be amended from time to time; each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement.

ARTICLE 5.  CONFIDENTIALITY

      During the performance of the Services contemplated by this Agreement,
each party may learn confidential, proprietary and/or trade secret information
of the other party ("Confidential Information"). The party disclosing
Confidential Information shall be referred to as the "Disclosing Party" and the
party receiving Confidential Information shall be referred to as the "Receiving
Party."

      Confidential Information means any information, unknown to the general
public, which is disclosed by the Disclosing Party to the Receiving Party under
this Agreement. Confidential Information includes, without limitation,
technical, trade secret, commercial and financial information about either
party's (a) research and development; (b) marketing plans and techniques,
contacts and customers; (c) organization and operations; (d) business
development plans (i.e., licensing, supply, acquisitions, divestitures and
combined marketing); (e) products, licenses, trademarks, patents, other types of
intellectual property and any other contractual rights or interests and (f) in
the case of VHS, the names and work assignments of VHS employees. The Receiving
Party shall neither use nor

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disclose Confidential Information from the Disclosing Party for any purpose
other than is specifically allowed by this Agreement.

      Upon the expiration or termination of this Agreement, the Receiving Party
shall return to the Disclosing Party all tangible forms of Confidential
Information, including any and all copies and/or derivatives of Confidential
Information made by either party or their employees as well as any writings,
drawings, specifications, manuals or other printed or electronically stored
material based on or derived from, Confidential Information. Any material or
media that is unable to be returned, as expressly consented to by the Disclosing
Party, must be destroyed and the destroying party shall provide the Disclosing
Party a certificate that such destruction has occurred. The Receiving Party
shall not disclose to third parties any Confidential Information or any reports,
recommendations, conclusions or other results of work under this Agreement
without the prior consent of an executive officer of the Disclosing Party. The
obligations set forth in this Section 5, including the obligations of
confidentiality and non-use shall be continuing and shall survive the expiration
or termination of this Agreement and will continue for a period of five (5)
years from the date of such expiration or termination.

      The obligations of confidentiality and non-use set forth herein shall not
apply to the following: (i) Confidential Information at or after such time that
it is or becomes publicly available through no fault of the Receiving Party;
(ii) Confidential Information that is already independently known to the
Receiving Party as shown by prior written records; (iii) Confidential
Information at or after such time that it is disclosed to the Receiving Party by
a third party with the legal right to do so; (iv) Confidential Information
required to be disclosed pursuant to judicial process, court order or
administrative request, provided that the Receiving Party shall so notify the
Disclosing Party sufficiently prior to disclosing such Confidential Information
as to permit the Disclosing Party to seek a protective order.

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ARTICLE 6.  INDEPENDENT CONTRACTOR

      VHS and its directors, officers and the persons providing services under
this Agreement are at all times independent contractors with respect to CLIENT.
Persons provided by VHS to perform Services shall not be deemed employees of
CLIENT. CLIENT shall not be responsible for VHS's acts or the acts of its
officers, agents and employees while performing the Services whether on CLIENT
premises or elsewhere.

      VHS shall not be responsible for any cost, however, attributable to: (i)
any actions by CLIENT that caused a person provided by VHS to perform services
under this Agreement to be reclassified as an employee of CLIENT, (ii) any
unlawful or discriminatory acts of CLIENT, and (iii) language in any CLIENT
benefit plan that is deemed to extend coverage to persons provided by VHS to
perform services under this Agreement based on their activities under this
Agreement.

ARTICLE 7.  OWNERSHIP OF PROPERTY AND DEVELOPMENTS

      Except as otherwise provided in Schedule A-1A attached to this
Agreement, all materials and documents supplied by VHS to CLIENT during the Term
of this Agreement, which relate to the Services shall be the sole and exclusive
property of CLIENT. Each party agrees to hold all such property and
developments, confidential in accordance with Section 5 of this Agreement. All
property and developments, distributed to licensed practitioners, shall be
returned, delivered or assigned to CLIENT upon the expiration or termination of
this Agreement.

ARTICLE 8.  FINDER'S FEES; PROPERTY TRANSFER AND THIRD PARTY EMPLOYMENT

      8.1.  EMPLOYMENT OR RETENTION BY CLIENT

      CLIENT may not employ or retain, during the Term of this Agreement or
within one (1) year after the termination of this Agreement, any person employed
by VHS to provide services under this Agreement unless the applicable finder's
fee is paid to VHS by CLIENT in the amount set forth in

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Schedule B to this Agreement (as the same may be amended from time to time, each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement).

      8.2.  TRANSFER OF PROPERTY WHEN CLIENT EMPLOYS VHS PERSONNEL

      In the event CLIENT employs or retains any VHS personnel in accordance
with Section 8.1 of this Agreement, the parties agree that:

            (i)   any and all training materials provided to or made
                  exclusively available to such VHS personnel in connection
                  with providing services under this Agreement shall (other
                  than proprietary selling skills, materials of VHS and, as
                  to all others, only so long as, in the case of any licensed
                  training materials, such transfer is permitted by the
                  license), at the option of CLIENT (exercised by giving
                  prompt written notice to VHS), be transferred to CLIENT
                  with no payment by CLIENT (except, in the case of any
                  licensed training material, CLIENT shall pay to the
                  licensor any applicable license transfer or termination
                  fee), so long as in the case of any licensed material,
                  CLIENT assumes in writing all remaining obligations under
                  the license and shall use all reasonable efforts to obtain
                  a release of VHS for any liability for the same; and

            (ii)  any and all equipment provided to such VHS personnel in
                  connection with the Services under this Agreement and which
                  has been approved by CLIENT may, at the option of CLIENT (so
                  long as, in the case of any leased or licensed equipment, such
                  transfer is permitted by the lease or license, as the case may
                  be), be transferred (x) in the case of equipment owned by VHS
                  or in which VHS has equity under a finance lease, upon payment
                  by CLIENT of an amount equal to the net book value (if any) of
                  the equipment on the books of VHS at the time of transfer and
                  (y) in the case of leased or licensed equipment, upon payment
                  by CLIENT of any amount due the lessor or licensor as a

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                  transfer or termination fee and upon assumption in writing by
                  CLIENT of all remaining obligations under the lease or
                  license, as the case may be, together with using all
                  reasonable efforts to obtain the release of VHS for any
                  liability for the same.

      8.3.  EMPLOYMENT OR RETENTION BY THIRD PARTY

      Should any third party contract service organization with a contract with,
or seeking to enter into an arrangement with, CLIENT (under which the third
party is supplying or will supply field force services to CLIENT), employ or
retain (as a consultant or otherwise) with the active and intentional
participation of CLIENT during the Term of this Agreement or within one (1) year
after the termination of this Agreement, any person employed by or used by VHS
to provide services under this Agreement, CLIENT shall use all reasonable
efforts to cause such third party to pay VHS $25,000 for each person so employed
or retained as liquidated damages. To the extent the amount payable to VHS under
the immediately prior sentence is not paid within two weeks of invoicing, CLIENT
shall pay VHS that amount.

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ARTICLE 9.  INDEMNIFICATION

      9.1.  VHS INDEMNIFIES

      VHS agrees to indemnify and hold CLIENT, its officers, directors, agents,
representatives and employees (collectively, "CLIENT Representatives") harmless
from and against any and all liabilities, losses, proceedings, actions, damages,
claims or expenses of any kind, including costs and attorneys' fees, which
result from, relate to or arise from (i) any negligent or willful acts or
omissions by VHS or any of its officers, directors, employees, agents or
representatives (collectively, "VHS Representatives"), (ii) any acts or
omissions by any VHS Representatives outside the scope of this Agreement or
(iii) any breach of this Agreement by any VHS Representative in connection with
the representations, duties and obligations of VHS under this Agreement.

      9.2.  CLIENT INDEMNIFIES

      CLIENT agrees to indemnify and hold VHS Representatives harmless from and
against any and all liabilities, losses, proceedings, actions, damages, claims
or expenses of any kind, including costs and attorneys' fees, which result from
(i) any negligent or willful acts or omissions by any CLIENT Representative in
connection with the representations, duties and obligations of CLIENT under this
Agreement, (ii) any breach of this Agreement by any CLIENT Representative in
connection with the representations, duties and obligations of CLIENT under this
Agreement or (iii) products liability claims relating to any Product of CLIENT
involved with the Services.

      9.3.  INDEMNIFICATION PROCESS

      Any indemnity available hereunder shall be dependent upon the party
seeking indemnity providing prompt notice to the indemnitor of any claim or
lawsuit giving rise to the indemnity; provided, however, that failure to comply
with this notice requirement shall not reduce the indemnitor's indemnification
obligation except to the extent that the indemnitor is prejudiced as a result.
Thereafter, the indemnitor shall have exclusive control over the handling of the
claim or

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lawsuit, and the indemnitee shall provide reasonable assistance to the
indemnitor in defending the claim; provided that indemnitor shall keep
indemnitee regularly apprised of the status of such claim or lawsuit and shall
not settle such claim or lawsuit without first obtaining the written consent of
the indemnitee.

ARTICLE 10. TERMINATION

      10.1. NOTICE

      Notwithstanding any implication raised by the renewal provisions of
Section 1 of this Agreement, (i) CLIENT may terminate this Agreement at any time
by giving 90 days prior written notice to VHS and (ii) VHS may terminate this
Agreement at any time by giving 180 days prior written notice to CLIENT. Upon
the effective date of any such termination, the parties shall have no further
obligation to each other (other than those set forth in Sections 5, 7, 8, 9,
10.3 and 11 hereof), except that CLIENT shall: (a) pay the amount of any fixed
and/or variable fees due under Section 3.1 of this Agreement for Services
actually performed by VHS through the date such termination is effective; and
(b) pay any reimbursement amount due under Section 3.3 of this Agreement for
Client Passthrough Expenses actually incurred and related to the performance of
Services through the date such termination is effective.

      10.2. IMMEDIATE TERMINATION

      This Agreement may be terminated effective immediately upon giving written
notice as follows:

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<PAGE>   19
            (a) by VHS, if payment to VHS by CLIENT is not made when due and
such payment is not made within thirty (30) days from the date of notice to
CLIENT of such nonpayment, which notice shall include notice of the risk of
termination if such nonpayment continues for more than an additional thirty (30)
days; or

            (b) by either party, in the event that the other party has committed
a material breach of this Agreement and such breach has not been cured within
thirty (30) days of receipt of written notice from the non-breaching party of
such breach; or

            (c) by either party, in the event that the other party has become
insolvent or has been dissolved or liquidated, filed or has filed against it, a
petition in bankruptcy and such petition is not dismissed within sixty (60) days
of the filing; makes a general assignment for the benefit of creditors; or has a
receiver appointed for all or substantially all of its assets.

      Upon the effective date of such termination, the parties shall have no
further obligation to each other (other than those set forth in Sections 5, 7,
8, 9, 10.3 and 11), except that CLIENT shall: (a) pay the amount of any fixed
and/or variable fees due under Section 3.1 of this Agreement for Services
actually performed by VHS through the date such termination is effective; and
(b) pay any reimbursement amount due under Section 3.3 of this Agreement for
Client Passthrough Expenses actually incurred and related to the performance of
Services through the date such termination is effective.

      10.3. SPECIAL TERMINATION EXPENSES

      In the case of any termination of this Agreement by CLIENT under Section
10.1 of this Agreement, CLIENT, at its sole option, may elect to have any
equipment provided to VHS personnel in connection with the Services under this
Agreement transferred to CLIENT to the same extent as such equipment would be
transferable under Section 8.2 (ii) of this Agreement, upon payment by

                                       19
<PAGE>   20
CLIENT of the amounts and assumption of any lease all as set forth in Section
8.2 (ii).

      In the case of any termination of this Agreement by VHS under Section
10.2, CLIENT shall (in addition to all other payment obligations under this
Agreement) promptly pay (or if paid by VHS, reimburse VHS therefor) (i) the
amount due any lessor or licensor of property provided to VHS personnel in
connection with providing services under the Agreement, for any early
termination of the lease or license and (ii) in the case of equipment provided
to VHS personnel in connection with providing services under this Agreement
owned by VHS or in which VHS has equity under a finance lease, an amount equal
to the net book value (if any) of the equipment on the books of VHS at the time
of termination; provided that such licensed or leased equipment shall then be
the sole property of CLIENT (except in the case of a finance lease, where CLIENT
will have sole ownership only after the finance lease is paid.)

ARTICLE 11. MISCELLANEOUS

      11.1. ASSIGNMENT

      Neither VHS nor CLIENT may assign this Agreement or any of its rights,
duties or obligations hereunder without the other party's prior written consent;
provided, however, that either VHS or CLIENT may assign its rights, duties and
obligations as part of an acquisition of VHS or CLIENT, as the case may be,
without obtaining the other party's prior written consent so long as the
acquirer (i) is a financially capable business entity and (ii) expressly assumes
in writing those rights, duties and obligations under this Agreement and this
Agreement itself.

      11.2. MERGER

      This Agreement supersedes all prior arrangements and understandings
between parties related to the subject matter of this Agreement other than
Section 11 of the Agreement, dated January 15, 1999, between the parties hereto.
This Agreement, including any schedules, attachments or exhibits

                                       20
<PAGE>   21
entered into hereunder, contains all of the terms and conditions of this
Agreement between the parties and constitutes the complete understanding of the
parties with respect thereto.

      11.3. FORCE MAJEURE

      Noncompliance with the obligations of this Agreement due to a state of
force majeure, the laws or regulations of any government, regulatory or judicial
authority, war, civil commotion, destruction of facilities and materials, fire,
flood, earthquake or storm, labor disturbances, shortage of materials, failure
of public utilities or common carriers, and any other causes beyond the
reasonable control of the applicable party, shall not constitute a breach of
contract.

      11.4. SEVERABILITY

      If any provision of this Agreement is finally declared or found to be
illegal or unenforceable by a court of competent jurisdiction, both parties
shall be relieved of all obligations arising under such provision, but, if
capable of performance, the remainder of this Agreement shall not be affected by
such declaration or finding.

      11.5. AMENDMENT

      No modification, extension or release from any provision hereof shall be
affected by mutual agreement, acknowledgment, acceptance of contract documents,
or otherwise, unless the same shall be in writing signed by the other party and
specifically described as an amendment or extension of this Agreement.

      11.6. GOVERNING LAW

      This Agreement shall be construed according to the laws of the State of
Delaware without regards to the conflict of laws provisions thereof.

      11.7. ARBITRATION

      a. All disputes over the meaning and interpretation of this Agreement
shall be resolved by conciliation and non-binding mediation and if such
mediation is unsuccessful then such disputes shall be finally settled by a
single Arbitrator selected by VHS and CLIENT. If VHS and CLIENT

                                       21
<PAGE>   22
cannot agree on a single Arbitrator, then disputes shall be resolved by an
Arbitration Panel comprising one arbitrator appointed by VHS and one arbitrator
appointed by CLIENT, and a Chairman of the Arbitration Panel appointed by the
first two arbitrators. Any such arbitration proceeding shall be conducted in
accordance with the arbitration rules of the AAA; shall be held in the
Commonwealth of Pennsylvania, unless otherwise agreed by the parties; and the
arbitration award shall be final and nonappealable and such award may be entered
in any court having jurisdiction.

      b. In order to initiate procedures for dispute resolution by conciliation,
mediation and arbitration either party may give written notice to the other of
intention to resolve a dispute, and absent satisfactory resolution, then to
arbitrate. Such notice shall contain a statement setting forth the nature of the
dispute and the resolution sought. If, within thirty (30) days of such notice a
resolution by conciliation between the parties themselves or by mediation has
not been achieved to the satisfaction of both parties, and if within sixty (60)
days from said written notice an Arbitration Panel has not been appointed with
an arbitration schedule satisfactory to both parties, then either party may
proceed with judicial remedies.

      11.8. COUNTERPARTS

      This Agreement may be executed in any number of counterparts, each of
which, when executed, shall be deemed to be an original and all of which
together shall constitute one and the same document.

      11.9. NOTICES

      Any notices required or permitted under this Agreement shall be given in
person or sent by first class, certified mail or by facsimile transmission, by
overnight courier or by hand delivery to:

                                       22
<PAGE>   23
      VHS:

            Ventiv Health U.S. Sales, Inc.
            200 Cottontail Lane
            Somerset, NJ 08873
            Attention: William C. Pollock, President
            Fax #: (732) 537-4999

      with a copy to:

            Peter D. Hutcheon, Esq.
            Norris, McLaughlin & Marcus, P.A.
            721 Route 202/206
            P.O.  Box 1018
            Somerville, NJ  08876-1018
            (Overnight delivery address: 721 Route 202/206, Bridgewater, NJ
            08807)
            Fax #: (908) 722-0755

      CLIENT:

            Endo Pharmaceuticals Inc.
            100 Painters Drive
            Chadds Ford, PA 19317
            Attention: Peter A. Lankau, Sr. Vice President, U.S. Business
            Fax #: (610) 558-9682

      with a copy to:

            Endo Pharmaceuticals Inc.
            100 Painters Drive
            Chadds Ford, PA 19317
            Attention: Caroline E. Berry, General Counsel
            Fax #: (610) 558-9684

or to such other address or to such other person as may be designated by written
notice given from time to time during the term of this Agreement by one party to
the other. Notice shall be deemed to have been given immediately in the case of
notice delivered by facsimile transmission (if transmission is confirmed) or by
hand delivery. Notices shall be deemed given on the next business day in the
case of notice sent by overnight courier.

                                       23
<PAGE>   24
      WHEREFORE, the parties hereto have caused this Agreement to be executed by
their duly authorized representatives as of the date first above written.

                                       VENTIV HEALTH U.S. SALES, INC.

                                       By:   /s/ PATRICK FORTEAU
                                             ----------------------------------
                                             Name:  Patrick Fourteau
                                             Title: President

                                       ENDO PHARMACEUTICALS INC.

                                       By:   /s/ PETER A. LANKAU
                                             ----------------------------------
                                             Name:  Peter A. Lankau
                                             Title: Senior Vice President, U.S.
                                                    Business

                                       24<PAGE>   1
                                                                Exhibit 4.8

                         OPTION TO PURCHASE COMMON STOCK
                         OF GENEVA STEEL HOLDINGS CORP.

               This certifies that, for value received, Stephen M. Bunker
("Executive") is hereby granted the option to purchase from Geneva Steel
Holdings Corp., a Delaware corporation (the "Company"), 25,000 shares of common
stock of the Company, upon the terms and subject to the conditions set forth
below (the "Option").

               1. Definitions. For purposes of this Option Agreement, except as
otherwise provided or unless the context otherwise requires, all capitalized
terms not otherwise defined have the meanings ascribed to them in this Section
1. Whenever the context requires, such terms shall include the plural number as
well as the singular.

         "Business Day" means any day except Saturday, Sunday and any other day
on which commercial banks in Salt Lake City, Utah are authorized by law to
close, except that for the purpose of Section 5, "Business Day" means any day
other than a Saturday, Sunday and any day on which the Common Stock is not
traded on an exchange or in a market.

         "Cause" means circumstances where the Executive (i) is convicted of a
felony, a crime of moral turpitude or any crime involving the Company or its
subsidiaries (other than pursuant to actions taken at the direction or with the
approval of the Board of Directors of the Company or board of directors or
managing board of any subsidiary), (ii) is found by reasonable determination of
the Company, made in good faith, to have engaged in (A) willful misconduct, (B)
willful or gross neglect, (C) fraud, (D) misappropriation or (E) embezzlement in
the performance of his duties or (iii) willfully and repeatedly fails to
discharge his duties as an employee of the Company or its subsidiaries.

         "Change of Control" means a Change of Control as defined in the Term
Loan Agreement, dated as of January 3, 2001, among Geneva Steel LLC, as
borrower, Citicorp USA, Inc., as agent on behalf of the lenders thereto, and the
other lenders named therein.

         "Common Stock" means the common stock of the Company, par value, $.01
per share, or any other class of stock resulting from successive changes or
reclassifications of the Common Stock.

         "Company" is defined in the introductory paragraph.

         "Control" means, with respect to any Person, the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities or other beneficial interest, or by contract
or otherwise.

         "Executive" is defined in the introductory paragraph.

         "Exercise Price" is defined in Section 4(d).

         "Expiration Date" has the meaning set forth in Section 4(a).

         "Fair Market Value" is defined in Section 5(b).
<PAGE>   2
         "Issuance or Sale Date" is defined in Section 5(a)(ii).

         "Operating Company" means Geneva Steel LLC, a Delaware limited
liability company.

         "Option" is defined in the introductory paragraph.

         "Option Plan" means the Geneva Steel Holdings Corp. 2001 Stock Option
Plan, adopted under the Third Amended Plan of Reorganization of Geneva Steel
Company, as modified.

         "Optionee" means the Executive and any Permitted Transferee who holds
the Option from time to time.

         "Permitted Transferee" means any of the following: (i) any revocable
trust created for the benefit of the Executive during the lifetime of the
Executive of which the Executive (whether in the capacity as a trustee, settlor
or otherwise) has voting and dispositive control over the assets held by such
trust, (ii) any irrevocable trust created for the benefit of the Executive
and/or any spouse of the Executive and/or any descendant of the Executive (which
term shall include any adopted child or stepchild of the Executive) of which the
Executive is a trustee having voting and dispositive control over the assets
held by such trust, (iii) a custodianship for the benefit of a minor who is a
descendant of the Executive (which term shall include any adopted child or
stepchild of the Executive), to which any transfer is made pursuant to and which
is valid under the Uniform Transfers to Minors Act, the Uniform Gifts to Minors
Act or a substantially similar act, and of which the Executive is a custodian
having voting or dispositive control over the assets held pursuant to such
custodianship, (iv) any partnership, limited liability company or similar entity
all of the ownership interests in which are held by the Executive alone, or by
the Executive and any spouse of the Executive and/or any descendant of the
Executive (which term shall include any adopted child or stepchild of the
Executive) and/or any Person referred to in clauses (i) - (iii) above, which is
Controlled by the Executive, (v) any corporation (including, without limitation,
any direct or indirect subsidiary of any such corporation) which is wholly-owned
directly or indirectly, by the Executive alone or by the Executive and any one
or more Persons referred to in clauses (i) - (iv) above and which is Controlled
by the Executive, and (vi) the initial transferee of any Option that paid
consideration for such transfer; provided, however, that any Option transferred
for value shall not be further transferable or assignable except to a legal
guardian for, or estate of, such initial transferee that paid consideration for
such Option.

         "Person" means an individual, partnership, corporation, limited
liability company, trust or other entity of whatever nature.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Termination" means any of (i) a discharge of the Executive, (ii)
reduction in compensation of the Executive, (iii) the assignment of the
Executive to any duties inconsistent in any material respect to the Executive's
position (including status, offices, title and reporting requirements),
authority, duties or responsibilities or (iv) requiring the Executive to be
based at any office or location that is more than seventy-five (75) miles from
Vineyard, Utah.

         2. Issuance of the Option. The Option are being issued to Stephen M.
Bunker as of August 15, 2001.

                                       2
<PAGE>   3
         3. Registration; Transfers and Exchanges. An Optionee may transfer the
Option, in whole or in part, from time to time, to one or more Permitted
Transferees, by surrendering this Option Agreement, with the form of assignment
attached to this Agreement as Exhibit A duly executed, at the office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Optionee). Upon such surrender, the Company shall issue
and deliver to the Optionee a new Option Agreement, in the name of the Permitted
Transferee or Permitted Transferees and in the denomination or denominations
specified in such instrument of assignment. If the right to purchase less than
all of the shares of Common Stock issuable upon exercise of the Option shall be
so transferred, the Optionee shall be entitled to receive a new Option Agreement
covering in the aggregate the number of shares of Common Stock with respect to
which the right to purchase shall not have been so transferred, and the
transferee or transferees shall be entitled to receive a new Option Agreement
covering in the aggregate the remaining number of shares of Common Stock
issuable upon the exercise of Option. An Option Agreement which is surrendered
upon transfer of an Option shall be cancelled by the Company.

         4. Duration; Exercise of Option.

               (a) The Option expires on August 15, 2011.

               (b) The Option becomes exercisable with respect to 6,250 shares
on the date of this Option Agreement and with respect to an additional 6,250
shares on each of the first, second and third anniversaries of the date of this
Option Agreement.

               (c) The exercisability of these Option accelerates upon the death
or disability of the Executive, a Change of Control of the Company or the
Operating Company, or the Termination of the Executive's employment with either
the Company or the Operating Company other than for Cause.

               (d) The exercise price of the Option is $0.62 per share.

               (e) The Option may be exercised, in whole or in part, to the
extent it has become exercisable, on any Business Day on or prior to the
applicable Expiration Date. After the close of business on the applicable
Expiration Date, the Option to the extent same remains unexercised, shall lapse
and become void and of no value.

               (f) Exercise of the Option shall be made only by a written notice
in substantially the form of Exhibit B delivered in person or by mail to the
Secretary of the Company at the Company's principal executive office (or such
other office or agency of the Company as it may designate by notice in writing
to the Optionee), specifying the number of shares of Common Stock to be
purchased and accompanied by payment therefor and otherwise in accordance with
the terms of this Option Agreement. The Exercise Price for any shares of Common
Stock purchased pursuant to the exercise of the Option shall be paid, in the
discretion of the Optionee: (i) in cash (including cash equivalents), (ii) by a
broker-assisted delivery of shares of Stock already owned by the optionee for at
least six (6) months, (iii) by a broker-assisted "cashless exercise" effected in
accordance with rules adopted by the Committee and reasonably acceptable to
optionee or (iv) any combination of the foregoing. Any shares of Common Stock
withheld upon exercise as payment of the Exercise Price shall be valued at their
Fair Market Value on the trading day preceding the date of exercise of the
Option. The Optionee

                                       3
<PAGE>   4
shall deliver the notice of exercise along with this Agreement to the Secretary
of the Company, who shall endorse hereon a notation of such exercise and return
this Option Agreement to the Optionee.

               (g) On or before the tenth (10th) day (or if the 10th day shall
not be a Business Day, then on the next Business Day thereafter) after each
exercise of these Option, the Company shall issue and deliver to the Optionee,
in the name of the Optionee or any Permitted Transferee, a certificate for the
shares of Common Stock issuable upon such exercise, to the extent shares are
issuable. Such certificate shall be deemed to have been issue, and any person so
designated to be named therein shall be deemed to have become the holder of
record of such shares of Common Stock, as of the date of the exercise of the
Option.

         5. Adjustment of Number of Shares.

               (a) The number of shares of Common Stock acquired upon the
exercise of the Option shall be subject to adjustment from time to time, as
follows:

                    (i) In case the Company shall (A) subdivide or split the
outstanding shares of its Common Stock into a larger number of shares, (B)
combine the outstanding shares of its Common Stock into a smaller number of
shares, or (C) reclassify the outstanding shares of its Common Stock, each
Optionee shall thereafter be entitled to receive upon the exercise of the Option
(subject to such further adjustments as may be required pursuant to this Section
5(a)(i) and Sections 5(a)(ii)-(v)) the number of shares of Common Stock of the
Company which at the date of such conversion it would have owned and been
entitled to receive had such Option been exercised immediately prior to the
happening of the first of such events to occur after the date of this Agreement
and prior to such conversion. An adjustment made pursuant to this Section
5(a)(i) shall become effective immediately upon the effectiveness of a
subdivision, split, combination or reclassification.

                    (ii) Except as provided in Section 5(c), in case the Company
shall at any time or from time to time sell or issue shares of Common Stock (or
securities convertible into shares of Common Stock) at a price per share (or
having a conversion price per share) less than the Fair Market Value as of the
date of issuance or sale (the "Issuance or Sale Date") of such shares or of such
convertible securities, then, and in each such case, the number of shares of
Common Stock for which the Option are exercisable shall be adjusted so that the
Optionee shall be entitled to receive, upon the exercise thereof, the number of
shares of Common Stock determined by multiplying (A) the number of shares of
Common Stock for which such Option were exercisable on the day immediately prior
to the Issuance or Sale Date by (B) a fraction, (1) the numerator of which shall
be the sum of (x) the number of shares of Common Stock outstanding on the day
immediately prior to the Issuance or Sale Date, and (y) the number of additional
shares of Common Stock issued or sold (or into which the convertible securities
may be converted), and (2) the denominator of which shall be the sum of (x) the
number of shares of Common Stock outstanding on the day immediately prior to the
Issuance or Sale Date, and (2) the number of shares of Common Stock which the
aggregate consideration receivable by the Company for the total number of shares
of Common Stock so issued or sold (or into which the convertible securities may
be converted) would purchase at such Fair Market Value on the Issuance or Sale
Date. An adjustment made pursuant to this Section 5(a)(ii) shall be made on the
next Business Day following the Issuance or Sale Date and shall be effective
retroactively

                                       4
<PAGE>   5
immediately after the close of business on such date. For purposes of this
Section 5(a)(ii), the aggregate consideration receivable by the Company in
connection with the issuance or sale of shares of Common Stock or of securities
convertible into shares of Common Stock shall be deemed to be equal to the sum
of the aggregate offering price (before deduction of reasonable underwriting
discounts or commissions and expenses) of all such securities sold plus the
minimum aggregate amount, if any, payable upon conversion of any such
convertible securities into shares of Common Stock. Notwithstanding the
foregoing, in the event that this Section 5(a)(ii) shall apply because the
Company shall issue to all holders of its Common Stock as a class any rights,
warrants or option enabling them to subscribe for or purchase shares of Common
Stock, the Issuance or Sale Date shall be the record date relating thereto.

                    (iii) Except as provided in Section 5(c), in case the
Company shall distribute to all holders of its shares of Common Stock as a class
evidences of its indebtedness, securities (other than Common Stock), assets
(other than cash dividends), or rights, warrants or option entitling them to
subscribe for or purchase any of its securities, then in each such case the
number of shares of Common Stock into which the Option shall thereafter be
exercisable shall be determined by multiplying (A) the number of shares of
Common Stock for which the Option were exercisable immediately prior to the
record date for determination of shareholders entitled to such distribution by a
fraction (B), (1) the numerator of which shall be the Fair Market Price per
share of Common Stock at such record date, and (2) the denominator of which
shall be such Fair Market Value per share less the amount of such cash dividend
and/or the fair value (as determined by the Company's independent accountants or
such investment bank or other agent selected by the Board of Directors and
reasonably acceptable to the Optionee, whose determination shall be conclusive
and shall be described in a statement filed with the Company) of the portion of
the evidences of indebtedness, securities (other than Common Stock), assets
(other than cash dividends) or rights, warrants or option so distributed
applicable to one share of Common Stock. An adjustment made pursuant to this
Section 5(a)(iii) shall be made upon the opening of business on the next
Business Day following the date on which any such dividend or distribution is
made and shall be effective retroactively immediately after the close of
business on the record date fixed for the determination of shareholders entitled
to receive such dividend or distribution.

                    (iv) In case the Company shall pay or make a dividend or
other distribution on any class of capital stock of the Company in shares of
Common Stock, then the number of shares of Common Stock for which the Option
shall thereafter be exercisable shall be determined by multiplying the number of
shares of Common Stock for which the Option were exercisable immediately prior
to the record date for determination of shareholders entitled to such dividend
or other distribution by a fraction, (A) the numerator of which shall be the sum
of the number of shares of Common Stock outstanding at such record date and the
total number of shares of Common Stock constituting such dividend or other
distribution, and (B) the denominator of which shall be the number of shares of
Common Stock outstanding at such record date. An adjustment pursuant to this
Section 5(a)(iv) shall become effective immediately after such record date.

                    (v) If any event occurs as to which, in the good faith
judgment of the Board of Directors of the Company, the other provisions of this
Section 5 are not strictly applicable, then the Board of Directors of the
Company may appoint its regular independent auditors or another firm of
independent public accountants of recognized national standing which

                                       5
<PAGE>   6
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles of such provisions, necessary to preserve,
without dilution, the rights of the Optionee. Upon receipt of such opinion, the
Board of Directors of the Company shall forthwith make the adjustments described
therein. In the event the Board of Directors determines not to appoint its or
other independent public accountants, and the Executive in good faith reasonably
determines that the appointment of such independent public accountant is
necessary or appropriate, the Executive shall be entitled to appoint such
independent public accountants as the Executive reasonably determines for
purposes of making the determination under this Section 5(a)(v).

               (b) Fair Market Value per share of Common Stock on any date shall
be deemed to be (i) the average of the daily closing prices for the twenty
consecutive Business Days ending on the Business Day before the day in question
or (ii) in the event that the Issuance or Sale Date shall be a record date, the
average of the daily closing prices for the twenty (20) consecutive Business
Days commencing thirty five Business Days before such record date. The closing
price for each day shall be the last reported sales price on the composite tape
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices on the National Association of
Securities Dealers Automated Quotation System or, if the Common Stock is not
then so quoted, by any New York Stock Exchange member firm selected from time to
time by the Company in good faith for that purpose.

               (c) Notwithstanding the foregoing provisions of this Section 5,
(i) no adjustment in the number of shares of Common Stock for which any Option
is exercisable shall be required unless such adjustment would require an
increase or decrease in such number of shares of at least one percent 1%,
provided any adjustments which by reason of this Section 5(c) are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment, and (ii) no adjustment in the number of shares of Common Stock for
which any Option are exercisable shall be required as a result of (A) exercise
of any option granted under the Option Plan or (B) the conversion of any
preferred stock issued pursuant to the Reorganization Plan into Common Stock.
All calculations under this Section 5 shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be.

               (d) Whenever the number of shares of Common Stock for which the
Option are exercisable is adjusted as provided in this Section 5, the Company
shall promptly mail to the Optionee a notice stating that the number of shares
of Common Stock for which the Option are exercisable has been adjusted and
setting forth the new number of shares of Common Stock (or describing the new
stock, securities, cash or other property) for which the Option are exercisable
as a result of such adjustment, a brief statement of the facts requiring such
adjustment and the computation thereof, and when such adjustment became
effective.

               (e) In case at any time the Company shall be party to any
transaction (including, without limitation, a consolidation or merger of the
Company with another corporation or a sale or transfer of all or part of the
Company's assets for cash, securities or other property) in which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Company or common stock or other securities of

                                       6
<PAGE>   7
another corporation or interests in a noncorporate entity or other property
(including cash) or any combination of any of the foregoing (each such
transaction being herein called the "Transaction" and the date of consummation
of the transaction being herein called the "Closing Date"), then lawful and
adequate provisions shall be made as a part of the terms of the Transaction so
that (A) the Option shall continue to remain outstanding, except that (B) the
Option shall thereafter be exercisable for, in lieu of the Common Stock issuable
upon such exercise prior to the Closing Date, the amount of securities or other
property to which the Optionee would actually have been entitled as a holder of
shares of Common Stock upon the consummation of the Transaction if the Optionee
had exercised such Option immediately prior to such Transaction (subject to
adjustments from and after the Closing Date nearly equivalent as possible to the
adjustments provided for in this Section 5(e)). In case securities or properties
other than common stock shall be issuable or deliverable upon conversion as
aforesaid, then all references in this Section 5 shall be deemed to apply, so
far as appropriate and as nearly as may be, to such other securities or
properties. Notwithstanding the foregoing, in the event the Company shall be
party to any Transaction in which the previously outstanding Common Stock shall
be changed into or exchanged for common stock or other securities of another
corporation, and such common stock or other securities are not traded on a
securities exchange or other public market, then the provisions of this Section
5(e) shall be deemed satisfied if the Executive shall receive fair and adequate
consideration in lieu of the Option, based on a good faith valuation of the
Company and the Transaction by an investment banking firm reasonably acceptable
to the Company and the Executive.

               (f) In the event that at any time, as a result of an adjustment
made pursuant to the provisions of Section 5(a), the Optionee shall become
entitled to receive any shares of the Company other than shares of Common Stock,
thereafter the number of such other shares so receivable upon exercise of the
Option shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Section 5(a), and the other provisions of this Section 5 with
respect to the Common Stock shall apply on like terms to any such other shares.

               (g) In connection with the exercise of the Option, no fractions
of shares of Common Stock shall be issued, but in lieu thereof the Company shall
pay a cash adjustment in respect of such fractional interest in an amount equal
to such fractional interest multiplied by the Fair Market Value per share of
Common Stock on the day on which such Option are deemed to have been exercised.

               (h) Nothing contained in an Option Agreement shall be construed
as conferring upon the Optionee the right to vote or receive dividends or to be
deemed for any purpose the holder of shares of Common Stock or of any other
securities of the Company which may at any time be issuable on the exercise of
the Option or be construed to confer upon the Optionee, as such, any of the
rights of a shareholder of the Company or any right to vote upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issue of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or, except as provided herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise, until the
Option shall have been exercised as provided herein.

                                       7
<PAGE>   8
               (i) Irrespective of any adjustments in the number or kind of
shares purchasable upon the exercise of the Option, an Option Agreement may
continue to express the same number and kind of shares as are stated on the
Option Agreement initially issued. Notwithstanding the foregoing, the Company
may, at its discretion, issue a new Option Agreement in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
number or kind or class of shares of stock or other securities or property
purchasable under an Option.

         6. Reservation of Shares. The Company shall at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its authorized and issued
shares of Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue shares of Common Stock upon exercise of the
Option, the full number of shares of Common Stock deliverable upon the exercise
of the Option in full. The Company covenants that all shares of Common Stock
which may be issued upon the exercise of the Option shall, upon issuance, be
fully paid and nonassessable and free from all company taxes, liens, charges and
security interests with respect to the issue thereof (other than income or
capital gains taxes to recipients).

         7. Payment of Taxes. The Company shall pay all documentary stamp taxes,
if any, attributable to the issuance of Option and issuance of shares of Common
Stock or other securities upon the exercise of Option, provided the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issue of any certificates for shares of Common
Stock in a name other than that of the Optionee, and the Company shall not be
required to issue or deliver such certificates unless or until the persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

         8. Obtaining of Governmental Approvals and Stock Exchange Listings. The
Company shall take all reasonable action which may be necessary to obtain and
keep effective any and all permits, consents and approvals of governmental
agencies and authorities, and shall make any and all filings under Federal and
State securities laws, necessary in connection with the issuance, distribution
and transfer of Option Agreements, the exercise of the Option, and the issuance,
sale, transfer and delivery of shares of Common Stock upon exercise of Option,
except that the foregoing provisions of this sentence shall not be deemed to
require registration of the Option or the shares of Common Stock issuable on
exercise of the Option under the Securities Act or similar state securities
laws. The Company shall use reasonable efforts to have the shares of Common
Stock which are issuable upon the exercise of the Option listed on the
securities exchange, if any, on which the then outstanding shares of Common
Stock are listed.

         9. Notices to Optionee.

               (a) Upon any adjustment of the number of shares of Common Stock
with respect to which the Option are exercisable pursuant to Section 5 hereof,
the Company within twenty (20) days thereafter shall cause notice of such
adjustment to be mailed by first class mail, postage prepaid, to the Optionee.
Where appropriate, such notice may be mailed in advance and included as a part
of any notice required to be mailed under any other provision of this Section 9.

                                       8
<PAGE>   9
                (b) In case:

                    (i) the Company shall take action to make any distribution
to the holders of its Common Stock;

                    (ii) the Company shall take action to offer for subscription
pro rata to the holders of its Common Stock any securities of any kind;

                    (iii) the Company shall take action to accomplish any
capital reorganization, or reclassification of the capital stock of the Company,
or consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or the sale or transfer
of all or substantially all of the assets of the Company; or

                    (iv) the Company shall take action with regard to a
voluntary or involuntary dissolution, liquidation or winding up of the Company;

then the Company shall (A) in case of any such distribution or subscription
rights, at least fifteen (15) days prior to the date or expected date on which
the books of the Company shall close or a record shall be taken for the
determination of holders entitled to such distribution or subscription rights,
and (B) in the case of any such reorganization, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up, at least fifteen
(15) days prior to the date or expected date when the same shall take place,
cause written notice thereof to be mailed to the Optionee. Such notice in
accordance with the foregoing clause (A) shall also specify, in the case of any
such distribution or subscription rights, the date or expected date on which the
holders of Common Stock shall be entitled thereto, and such notice in accordance
with the foregoing clause (B) shall also specify the date or expected date on
which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, as the case may be. If any action referred to in this
subsection 9(b) requires the approval of holders of shares of Common Stock, the
Company shall cause notice of the proposed action and the record date for the
determination of holders of Shares entitled to vote on such matter to be mailed
to each of the registered holders of the Option Certificates at his address
appearing on the Option Register, at least ten (10) days prior to such record
date, by first class mail, postage prepaid. The failure to give any notice
required by this subsection 9(b) or any defect therein shall not affect the
legality of any such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.

                                       9
<PAGE>   10
         10. Notices to the Company. Any notice pursuant to a Option Certificate
shall be sufficiently given to the Company, if sent by first class mail, postage
prepaid, or by hand addressed to:

                                    Geneva Steel Holdings Corp.
                                    10 South Geneva Road
                                    Vineyard, Utah   84058
                                    Attn:   Corporate Secretary

                  with a copy to:

                                    Stephen E. Garcia
                                    Kaye Scholer LLP
                                    311 S. Wacker Drive
                                    Suite 6200
                                    Chicago, Illinois  60606

         11. Miscellaneous

               (a) Costs and Expenses. The Company shall pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Optionee may
reasonably incur as a result of any contest by the Company, the Optionee or
others of the validity or enforceability of, or liability under, any provision
of this Agreement, plus, in each case in which payment is owed by the Company,
interest on any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended.
Notwithstanding the foregoing, the Company and the Optionee acknowledge and
agree that legal fees and expenses of the Optionee in connection with a contest
of the validity or enforceability of, or liability under, any provision of this
Agreement in which the Optionee does not prevail, shall not be reimbursable
pursuant to this Section 11(a). The Company acknowledges and agrees that in the
event the Optionee does not prevail, in no event shall the Optionee be required
to pay any legal fees and expenses of the Company.

               (b) Successors. All the covenants and provisions hereof shall be
binding upon any successors and assigns of the Company.

               (c) Termination. The rights granted pursuant to the terms of this
Option Agreement shall terminate at the close of business on the Expiration
Date.

               (d) Governing Law. This Option Agreement shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such state.

               (e) Benefits of this Agreement. Nothing herein shall be construed
to give to any person or corporation other than the Company, and the Optionee
any legal or equitable right, remedy or claim hereunder.

                                       10
<PAGE>   11
               (f) Conflicts. In the event of a conflict between the terms of
this Agreement and the Option Plan, the terms of this Agreement shall govern.

               IN WITNESS WHEREOF, the Company and the Optionee have caused this
Option Agreement to be duly executed as of the day and year first above written.

                                          GENEVA STEEL HOLDINGS CORP.

                                          By:  _________________________________
                                                 Name:
                                                 Title:
ATTEST:
_______________________________________
Name:
Title:

                                               _________________________________
                                                 Stephen M. Bunker

                                       11
<PAGE>   12
                                    EXHIBIT A
                               FORM OF ASSIGNMENT

                        (To be executed by the Optionee
                  if Optionee desires to transfer the Option)

               FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto _______________________________

        ________________________________________________________________
                 (Please print name and address of transferee)
        ________________________________________________________________
        ________________________________________________________________
        ________________________________________________________________
        ________________________________________________________________
        ________________________________________________________________

this Option, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________________ Attorney, to
transfer the within Option on the books of the within-named Company, with full
power of substitution.

Dated:  ___________________

                                           _____________________________________
                                           Signature
<PAGE>   13
                                    EXHIBIT B
                               NOTICE OF EXERCISE

                         (To be executed if the Optionee
                         desires to exercise the Option)

To:      Geneva Steel Holdings Corp.

                  The undersigned hereby irrevocably elects to exercise the
Option evidenced by the Option Agreement dated _________ with respect to
________ shares of Common Stock issuable upon the exercise of such Option and
requests that certificates for such shares of Common Stock be issued in the name
of:

                  Payment of the exercise price for such shares will be made as
follows: _______________________________________________________________________

Please insert social security or other identifying number: ___________________

                                    ____________________________________________
                                    (Please print name and address)

                                    ____________________________________________

                                    ____________________________________________

                                    ____________________________________________

Dated:  ___________________

                                     NOTICE

The signature(s) in the foregoing Subscription Form must correspond to the name
as written upon the face of this Option Agreement in every particular, without
alteration or enlargement or any change whatsoever.

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