Document:

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                                                                   EXHIBIT 10.19

                                           *** Text Omitted and Filed Separately
                                                Confidential Treatment Requested
                                            Under 17 C.F.R.(S)(S). 200.80(b)(4),
                                                            200.83 and 240.24b-2

               TERMINATION AND ASSET SALE AND PURCHASE AGREEMENT
               -------------------------------------------------

     THIS TERMINATION AND ASSET SALE AND PURCHASE AGREEMENT is entered into by
and between Abbott Laboratories, an Illinois corporation, with its principal
place of business at 100 Abbott Park Road, Abbott Park, Illinois 60064-3500
("Seller"), and Anesta Corp., a Delaware corporation with its principal place of
business at 4745 Wiley Post Way, Salt Lake City, Utah 84116 ("Purchaser").

                                  WITNESSETH:

     WHEREAS, Seller and Purchaser entered into a certain Research &
Development, License, Supply and Distribution Agreement dated December 27, 1989,
as amended August 12, 1991 and December 30, 1992, a letter agreement dated
August 31, 1995, and a Trademark License Agreement dated June 11, 1999
(collectively, the "Original Agreements") regarding the development and
marketing of certain oral transmucosal fentanyl citrate products;

     WHEREAS, Seller and Purchaser desire to terminate the Original Agreements
prior to their respective expiration dates;

     WHEREAS, Seller desires to sell and assign or license to Purchaser certain
intellectual property rights and related assets associated with such oral
transmucosal fentanyl citrate products, to have Purchaser assume certain of
Seller's liabilities associated therewith, and to provide certain services to
Purchaser on an interim basis; and

     WHEREAS, Purchaser desires to purchase or license such intellectual
property rights and assets, assume such liabilities from Seller, and have Seller
perform certain services on an interim basis.

     NOW THEREFORE, in consideration of the foregoing and of the mutual promises
and covenants contained in this Agreement, Seller and Purchaser agree as
follows:

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                                   ARTICLE I

                                  DEFINITIONS
                                  -----------
     1.1  Definitions. As used in this Agreement, the following terms shall have
          -----------
the following meanings:

               (a)  "Abbott Non-Patent Rights" shall mean all rights, other than
                     ------------------------
          Abbott Patent Rights, that are owned by or licensed to Abbott with the
          right to sublicense, and that arise out of work done with, or refer or
          relate to Products, any intermediate composition or material
          therefore, or the methods of making or using the same, including, but
          not limited to, any and all rights which relate to:

                    (i)   trade secrets, know-how, show-how, computer software,
               unpatented and unpatentable inventions, discoveries and ideas;

                    (ii)  manufacturing, technical and technological
               information, methods, processes and techniques, whether relating
               to successful or unsuccessful work;

                    (iii) preclinical and clinical, in vivo and in vitro study
               data, characterization, biochemistry, enzymology, toxicology,
               pharmacology and other information relating to safety and
               efficacy;

                    (iv)  Investigational New Drug Applications, New Drug
               Applications and Drug Master Files, as such terms are defined
               under the Act; and

                    (v)   any other information relating thereto, or to
               formulations, designs, practices or methods of administration or
               use.

               (b)  "Abbott Patent Rights" shall mean the patents and patent
                     --------------------
          applications set forth in Exhibit A-1, and any continuation, division,
          continuation-in-part, and any provisional applications, and any
          substitutions, extensions, registrations, confirmations, re-
          examinations, reissues or renewals of such patents.

               (c)  "Act" shall mean the United States Food, Drug and Cosmetic
                     ---
          Act, as amended, and all regulations thereunder.

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               (d)  "Affiliate" shall mean, with respect to each party, any
                     ---------
          legal entity that controls, is controlled by, or is under common
          control with such party. For purposes of this definition, a party
          shall be deemed to be in control of another entity if the former
          entity owns or controls, directly or indirectly, more than fifty
          percent (50%) of the outstanding voting equity of the other entity (or
          other comparable ownership interest for an entity other than a
          corporation).

               (e)  "Anesta Non-Patent Rights" shall have the meaning set forth
                     ------------------------
          in the Original Agreements.

               (f)  "Anesta Patent Rights" shall have the meaning set forth
                     --------------------
          in the Original Agreements.

               (g)  "Anesta Technology" shall have the meaning set forth in
                     -----------------
          the Original Agreements.

               (h)  "Assets" shall mean all of Seller's right, title and
                     ------
          interest in and to the property described in Exhibit A.

               (i)  "Books and Records" shall mean all: (i) Financial Books and
                     -----------------
          Records; (ii) Manufacturing and Regulatory Books and Records; (iii)
          Marketing Books and Records; and (iv) any other records and data used
          in connection with the Assets or the manufacture, sale and
          distribution of Products or Licensed Products in the Territory, but
          excluding any records, data or other items covered by (i)-(iii) above
          to the extent such records, data or other items pertain to property
          that is not an Asset, a Product or a Licensed Product.

               (j)  "Closing" shall mean the consummation of the transactions
                     -------
          contemplated by this Agreement, as more particularly described in
          Article IV.

               (k)  "Closing Date" shall mean March 30, 2000, or such other date
                     ------------
          as the parties may mutually agree to in writing, but in no event later
          than March 31, 2000, such that the Closing actually takes place
          consistent with Section 4.4.

               (l)  "Confidential Information" shall mean any and all
                     ------------------------
          information including, but not limited to, ideas, proposals, plans,
          know-how, reports, drawings, designs, data, discoveries, inventions,
          improvements, suggestions, specifications, products, samples,
          components and materials relating to the

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          Products, including all information relating to the manufacture,
          formulation, analysis, stability, clinical data, clinical studies,
          clinical effects, marketing and distribution plans and data and
          indications for use of the Products which a party discloses to the
          other party, except any portion thereof which:

                    (i)   is known to the receiving party or its Affiliates at
               the time of disclosure, is documented by written records made
               prior to the date of disclosure, and is not disclosed under a
               confidential obligation or the Original Agreement;

                    (ii)  is disclosed to the receiving party by an independent
               third party other than an Affiliate who has a right to make such
               disclosure;

                    (iii) becomes patented, published or otherwise part of the
               public domain through no fault of the receiving party or its
               Affiliates; or

                    (iv)  is independently developed by or for the receiving
               party without access to Confidential Information disclosed
               hereunder or under the Original Agreement, as evidenced by its
               written records.

               (m)  "Contracts" shall mean all agreements, contracts, purchase
          and sale orders, commitments, licenses and enforceable arrangements to
          which Seller is a party that are related to the Anesta Technology or
          the manufacture, marketing, sale and distribution of Products or
          Licensed Products. Such Contracts are listed on Exhibit A-2.

               (n)  "DEA" shall mean the United States Drug Enforcement
                     ---
          Administration.

               (o)  "Effective Date" shall mean the date of full execution of
                     --------------
          this Agreement.

               (p)  "FDA" shall mean the United States Food and Drug
                     ---
          Administration or any successor entity thereto.

               (q)  "Field" shall have the meaning set forth in the Original
                     -----
          Agreement.

               (r)  "Financial Books and Records" shall mean shall mean all
                     ---------------------------
          books of account, records, files and invoices, including all
          accounting records; inventory records; sales and chargeback data; and
          pricing information to

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          wholesalers/distributors, relating to the Assets, the Licensed
          Products or the Products, as more fully set forth in Exhibit A-3.

               (s)  "Fully Burdened Manufacturing Costs" shall have the meaning
                     ----------------------------------
          set forth in the Original Agreements.

               (t)  "Liabilities" shall mean all of the liabilities of Seller
                     -----------
          described in Exhibit B.

               (u)  "Licensed Marks" shall have the meaning set forth in the
                     --------------
          Trademark License Agreement between the parties dated June 11, 1999.

               (v)  "Licensed Products" shall have the meaning set forth in the
                     -----------------
          Original Agreements.

               (w)  "Manufacturing and Regulatory Books and Records" shall mean
                     ----------------------------------------------
          all regulatory data, correspondence, files and reports; quality
          control records and manuals; research and development files, including
          clinical research records; records and laboratory books, including
          product claims; patent disclosures; correspondence; litigation files;
          production and equipment maintenance data; and any other records or
          data generated in connection with the development or manufacture of
          Licensed Products or Products in the Territory, as more fully set
          forth in Exhibit A-4.

               (x)  "Manufacturing Equipment" shall mean Seller's manufacturing
                     -----------------------
          equipment dedicated to the production of Products set forth in Exhibit
          C.

               (y)  "Marketing Books and Records" shall mean all sales
                     ---------------------------
          promotional data and materials, advertising and marketing materials,
          sales training materials, and educational support program materials;
          market research; customer lists; pricing information for third party
          payors; supplier lists; business plans; and catalogs relating to the
          Products, as more fully set forth in Exhibit A-5.

               (z)  "Net Sales" shall have the meaning set forth in the Original
                     ---------
          Agreements, except where the name Abbott appears, Purchaser shall be
          substituted.

               (aa) "Products" shall mean the oral transmucosal fentanyl citrate
                     --------
          products known as Actiq(R) and Fentanyl Oralet(R).

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               (bb) "Purchase Price" shall have the meaning as specified in
                     --------------
          Section 2.3.

               (cc) "Targeted Sales Force" shall mean the employees of Seller
                     --------------------
          that are dedicated to the sales and promotion of Products, identified
          in Exhibit D .

               (dd) "Trademarks" shall mean the trademarks and their respective
                     ----------
          registrations set forth in Exhibit A-6, together with the goodwill of
          the business symbolized by such trademarks.

               (ee) "Transitional Activities" shall mean the additional
                     -----------------------
          activities with respect to Products that Seller shall perform on
          behalf of Purchaser during the Transition Period, which activities
          shall include: [...***...]

               (ff) "Transition Period" shall mean the period from the Closing
                     -----------------
          Date until such time as Purchaser has assumed, or has caused a third
          party to assume, full control of the Transitional Activities, but,
          which in no event, shall be later than December 31, 2000.

               (gg) "Territory" shall mean the fifty (50) states of the United
                     ---------
          States, including its territories and possessions.

     1.2  Interpretation Words and phrases denoting the singular number include
          --------------
the plural and vice versa.

                                  ARTICLE II

                   TERMINATION OF THE ORIGINAL AGREEMENT AND
                   -----------------------------------------
                          SALE AND PURCHASE OF ASSETS
                          ---------------------------

     2.1  Termination of Original Agreement. Upon the terms and subject to
          ---------------------------------
the conditions of this Agreement and for the consideration herein provided,
Seller and Purchaser shall terminate the Original Agreement effective on the
Closing Date, and except as otherwise provided herein, neither party shall have
any further obligations to the other thereunder. Effective upon such

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termination, all of the licenses granted under the Original Agreements shall
terminate, and Seller shall have no further right to manufacture, promote,
market or sell the Licensed Products, or to use or practice the Anesta
Technology, except (a) as provided in the Supply Agreement described in Section
3.1, and (b) as necessary for the orderly transition of the Transitional
Activities from Seller to Purchaser during the Transition Period, as further
described in Article VIII.

     2.2 Sale and Purchase of Assets. Upon the terms and subject to the
         ---------------------------
conditions of this Agreement and for the consideration herein provided, on the
Closing Date, Seller shall sell, assign, transfer and convey all of its right,
title and interest in and to the Assets and the Books and Records to Purchaser,
and Purchaser shall purchase all of the Assets and Books and Records from
Seller. At the Closing, Seller shall deliver to Purchaser, and Purchaser shall
accept and receive from Seller all of the Assets and the Marketing Books and
Records. The remaining Books and Records shall be delivered in accordance with
Section 8.8.

     2.3  Consideration. Upon the terms and subject to the conditions of this
          -------------
Agreement, Purchaser shall make payments to Seller as follows:

          (a)  Closing Cash Payment. Purchaser shall deliver to Seller at the
               --------------------
     Closing in partial payment for the termination of the Original Agreement
     (the "Fee") and the sale, assignment, conveyance, transfer and delivery of
           ---
     the Assets and the Marketing Books and Records, immediately available funds
     in the amount of Five Million Dollars ($5,000,000.00);

          [...***...]

     The items described in Subsections 2.3(a) through (d) collectively shall
constitute the Fee and the purchase price for the Assets and the Books and
Records ("Purchase Price").

     2.4  Allocation. The parties agree that within forty-five (45) days after
          ----------
Closing, the Purchase Price shall be allocated among the Fee, the Assets and the
Books and Records in accordance with the fair market value of the Fee, the
Assets and the Books and Records, respectively. Further, the parties agree to
prepare, execute and file an Internal Revenue Service Form 8594 in a timely
fashion in accordance with the rules under Internal Revenue Code Section 1060
reflecting such allocation. This allocation shall be binding on the parties for
all tax reporting purposes.

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     2.5 Assumption of Liabilities. At the Closing, except as otherwise set
         -------------------------
forth herein, Purchaser shall assume the Liabilities pursuant to an Assumption
of Liabilities in the form attached as Exhibit B-1, and the parties shall each
execute and deliver to the other an Assignment and Assumption of Contracts in
the form attached as Exhibit B-2. The parties do not intend to confer any
benefit under this Agreement on anyone other than the parties and nothing
contained herein shall be deemed to confer any such benefit on any such other
person. The previous sentence, however, shall not be deemed to alter or diminish
Purchaser's indemnity obligations to Seller under Article VII hereof.

                                  ARTICLE III

                             ADDITIONAL COVENANTS
                             --------------------

     3.1 Manufacturing and Supply Agreement. At the Closing, Seller and
         ----------------------------------
Purchaser shall enter into a manufacturing, supply and shipping agreement
("Supply Agreement"), in substantially the form attached hereto as Exhibit F,
  ----------------
whereby Seller shall manufacture, supply and ship such quantities of Products as
Purchaser may order from time to time for sale by Purchaser in the Territory.
The Supply Agreement shall have a term of twenty-four (24) months, with
Purchaser having an option, exercisable at Purchaser's sole discretion upon six
(6) months prior written notice to Seller, to extend the term for up to twelve
(12) additional months. The firm price per unit of Product sold to Purchaser
under the Supply Agreement shall be Fully Burdened Manufacturing Costs
[...***...] In the event of an unanticipated increase in raw material costs or
other unanticipated circumstances which cause the Fully Burdened Manufacturing
Costs [...***...] the parties shall negotiate an appropriate adjustment to the
maximum price per unit for the affected Product.

     3.2 Solicitation of Targeted Sales Force. For the period starting from
         ------------------------------------
the Effective Date and ending on March 28, 2000, Purchaser shall be entitled to
directly or indirectly solicit and hire the Targeted Sales Force, as more fully
described in Subsection 8.5(c). Concurrent with such activity of Purchaser,
Seller may, at its election, directly or indirectly take reasonable steps to
retain the Targeted Sales Force; provided, however, that Seller shall not object
to or otherwise

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interfere with Purchaser's efforts under this Section 3.2. The Targeted Sales
Force shall be under no obligation to Purchaser with respect to Purchaser's
efforts to solicit and/or hire the Targeted Sales Force. Each Targeted Sales
Force member shall be free to accept or not accept any offer of employment made
by Purchaser.

     3.3 Non-Solicitation. For the period starting from March 29, 2000, and
         ----------------
ending on December 31, 2000, Purchaser and its Affiliates shall not directly or
indirectly solicit for employment any member of the Targeted Sales Force. The
terms of this Section 3.3 shall not preclude Purchaser or its Affiliates from
hiring a member of the Targeted Sales Force who initiates the contact with
Purchaser during the six (6)-month period described above.

     3.4 Non-Compete. Except as otherwise provided in the Supply Agreement,
         -----------
for the period starting on the Closing Date and ending on [...***...], Seller
shall not develop, manufacture, market, sell, promote or distribute in the
Territory any oral transmucosal product that contains fentanyl citrate as an
active ingredient contained in a solid matrix or other form secured to a handle
or other similar device.

     3.5 Purchase and Sale of Manufacturing Equipment. Upon the expiration
         --------------------------------------------
or termination of the Supply Agreement, Seller shall sell, assign, transfer,
convey and deliver to Purchaser and Purchaser shall purchase, accept and receive
from Seller the Manufacturing Equipment. The purchase price for the
Manufacturing Equipment shall be the then-current net book value of the
Manufacturing Equipment, calculated in accordance with generally accepted
accounting principles consistently applied and estimated [...***...] Seller
shall cause the Manufacturing Equipment to be shipped and delivered, at
Purchaser's expense, to the destination specified by Purchaser.

     3.6 Non-Exclusive License. At the Closing, Seller and Purchaser shall
         ---------------------
enter into a non-exclusive license agreement ("License Agreement"), in
                                               -----------------
substantially the form attached hereto as Exhibit G, whereby Seller shall grant
to Purchaser and its Affiliates a worldwide, non-exclusive, fully paid and
royalty free license, with the right to sublicense, under the Abbott Patent
Rights and Abbott Non-Patent Rights to make, have made, use, offer for sale,
sell and import Licensed Product in the Field. Further, the parties acknowledge
and agree that in the event Seller makes or obtains rights to any improvements
or innovations with respect to Abbott

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Patent Rights or Abbott Non-Patent Rights, then Seller shall negotiate in good
faith with Purchaser a license to such improvements or innovations on
commercially reasonable terms.

                                  ARTICLE IV

                                    CLOSING
                                    -------

     4.1  Closing. The Closing shall occur at Seller's offices in Abbott Park,
          -------
Illinois on the Closing Date, unless another place or date is agreed to in
writing by Purchaser and Seller.

     4.2  Items to be Delivered by Seller. Seller shall deliver to Purchaser or
          -------------------------------
Purchaser's agent at or immediately prior to the Closing, the following items:

               (a)  Bill of Sale. A bill of sale for all of the Assets
                    ------------
          constituting personal property in the form attached hereto as Exhibit
          H;

               (b)  Other Instruments of Conveyance. Such other instruments of
                    -------------------------------
          conveyance and transfer as shall be effective to vest in Purchaser
          title to the Assets to be sold, conveyed, transferred and delivered
          hereunder, including, without limitation, instruments for recordation
          or assignments and other similar instruments which evidence the
          transfer of title (to include an assignment of the Trademarks in the
          forms attached hereto as Exhibit I);

               (c)  Assignment and Assumption of Contracts. A signature page to
                    --------------------------------------
          the Assignment and Assumption of Contracts executed by an authorized
          representative of Seller;

               (d)  License Agreement. A signature page to the License Agreement
                    -----------------
          executed by an authorized representative of Seller;

               (e)  Supply Agreement. A signature page to the Supply Agreement
                    ----------------
          executed by an authorized representative of Seller; and

               (f)  Business Records.  All original Marketing Books and Records.

     4.3  Items to be Delivered by Purchaser. Purchaser shall deliver to Seller
          ----------------------------------
at the Closing, the following:

               (a)  Cash Payment. The portion of the Purchase Price described in
                    ------------
          Subsection 2.3(a) by wire transfer, such wire transfer to be directed
          to:

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               [...***...]

               (b)  Assumption of Liabilities. An Assumption of Liabilities
                    -------------------------
          pursuant to the provisions of Section 2.5 hereof in the form attached
          hereto as Exhibit B-l and a signature page to the Assignment and
          Assumption of Contracts executed by an authorized representative of
          Purchaser;

               (c)  Supply Agreement. A signature page to the Supply Agreement
                    ----------------
          executed by an authorized representative of Purchaser;

               (d)  License Agreement. A signature page to the License Agreement
                    -----------------
          executed by an authorized representative of Purchaser; and

               (e)  Board Approval. A Certificate signed by Purchaser's
                    --------------
          Corporate Secretary evidencing approval by Purchaser's Board of
          Directors of the transactions contemplated herein in the form attached
          hereto as Exhibit J.

     4.4  Consummation of Closing. All acts, deliveries and confirmations
          -----------------------
comprising the Closing, regardless of chronological sequence, shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing, and none of such acts, deliveries or
confirmations shall be effective unless and until the last of same shall have
occurred.

                                   ARTICLE V

                  REPRESENTATIONS, WARRANTIES AND DISCLAIMERS
                  -------------------------------------------

     5.1  Representations and Warranties by Seller. Seller represents and
          ----------------------------------------
warrants to Purchaser as of the Effective Date and as of the Closing Date that:

               (a)  Organization and Power. Seller is a corporation duly
                    ----------------------
          organized, validly existing and in good standing under the laws of the
          State of Illinois, and has all requisite power to execute, deliver and
          perform this Agreement and consummate the transactions contemplated
          hereby;

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               (b)  Authorization of Agreement, Enforceability. This Agreement
                    ------------------------------------------
          has been duly and validly authorized, executed and delivered by
          Seller, constitutes a valid and binding obligation of Seller and is
          enforceable against Seller in accordance with its terms;

               (c)  Effect of Agreement. The execution, delivery and performance
                    -------------------
          by Seller of this Agreement and the consummation of the transactions
          contemplated hereby will not: (i) violate the charter or by-laws of
          Seller or any provision of any law, statute, rule, regulation,
          judgment or decree to which Seller or any of the Assets are subject or
          bound; or (ii) result in the breach of or conflict with any material
          term, covenant, condition or provision of any agreement of Seller or
          by which Seller or any of the Assets are subject or bound;

               (d)  Government and Other Consents. To the best of Seller's
                    -----------------------------
          knowledge, no consent, authorization, license, permit, registration or
          approval of, or exemption or other action by any governmental or
          public body or authority is required in connection with Seller's
          execution, delivery or performance of this Agreement;

               (e)  Title to Assets. Seller has and is transferring to Purchaser
                    ---------------
          good and marketable title to the Assets, free and clear of all liens
          and encumbrances and all rights, title and interest in third parties;

               (f)  Litigation. To the best of Seller's knowledge, there are no:
                    ----------
          (i) outstanding orders, judgments, injunctions, awards or decrees of
          any court or arbitrator or other governmental regulatory body; or (ii)
          actions, suits, personal injury or product liability claims, legal
          administrative or arbitration proceedings or governmental
          investigations that are either in effect or pending or threatened
          against or relating to the Assets, Licensed Products or the Products,
          or affects Seller's ability to perform its obligations pursuant to
          this Agreement or any ancillary agreement hereto;

               (g)  Contracts. Exhibit A-2 identifies all of the Contracts.
                    ---------
          Seller has made available to Purchaser an accurate and complete copy
          of each Contract, including all amendments thereto, and has disclosed
          to Purchaser all amounts

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          owed thereunder. With respect to each Contract: (i) each such Contract
          is a valid and binding agreement of Seller, is in full force and
          effect in all material respects, and is enforceable in accordance with
          its terms subject to laws of general application relating to
          bankruptcy, insolvency and the relief of debtors; (ii) there has been
          no material default under such Contracts which not default has not
          been cured or waived; (iii) Seller has not received any notice or
          other communication, whether written or oral, regarding any actual,
          alleged or potential violation or breach of or default under any
          Contract; (iv) no event has occurred, and no circumstance or condition
          exists, that could reasonably be expected to result in a violation or
          other breach of any of the provisions of the Contracts, or give any
          person the right to declare a default or exercise any remedy under the
          Contracts or give any person the right to accelerate the maturity or
          performance of the Contracts or terminate the Contracts; and (v)
          Seller has not waived any of its rights under the Contracts. The
          representations and warranties in Subsections 5.1(g)(i), (ii) and (iv)
          are being made hereunder to the best of Seller's knowledge;

               (h)  Original Agreement. Seller has not sublicensed, assigned,
                    ------------------
          conveyed or otherwise transferred to any third party any rights under
          the Anesta Patents Rights or Anesta Non-Patent Rights;

               (i)  Brokerage and Finder's Fees. Neither Seller, nor any
                    ---------------------------
          officer, director or agent of Seller has employed any broker, finder,
          or agent with respect to this Agreement or the transactions
          contemplated hereby;

               (j)  Abbott Patents and Trademarks Enforcement. In the last three
                    -----------------------------------------
          (3) years, no third party has asserted any claim of infringement,
          misappropriation or misuse against Seller with respect to the
          Products, the Licensed Products or the Trademarks. In the last three
          (3) years, Seller has not asserted any claim of infringement,
          misappropriation or misuse against any third party as to the Anesta
          Patent Rights, Anesta Non-Patent Rights, Abbott Patent Rights, Abbott
          Non-Patent Rights, Licensed Marks or Trademarks and to the best of
          Seller's knowledge, knows of no such infringement, misappropriation or
          misuse respecting same that is currently ongoing;

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               (k)  Books and Records. Seller is transferring to Purchaser the
                    -----------------
          true and correct original copy of the Books and Records. To the best
          of Seller's knowledge, other than the Books and Records, Seller has
          not created or caused to be created any books or records relating to
          work performed under, or products covered by, the licenses granted
          pursuant to the Original Agreements;

               (l)  Development Work. To the best of Seller's knowledge, Seller
                    ----------------
          has not performed any research, development or other work pursuant to
          the licenses granted under the Original Agreements with respect to
          Licensed Products other than the Products;

               (m)  Abbott Patents. Except as set forth on Exhibit A-1 or in the
                    --------------
          licenses granted under the Original Agreements, there are no issued
          patents or pending patent applications owned by or licensed to Abbott
          with a right of sublicense, claiming an invention embodied or used in
          connection with any Product, or any intermediate composition or
          material therefore, or the methods of making or using the same; and

               (n)  Third Party Royalties. To the best of Seller's knowledge,
                    ---------------------
          Seller has not incurred and does not have any obligation to make
          royalty payments to any third party with respect to Products or
          Licensed Products.

          5.2  Disclaimers. PURCHASER ACKNOWLEDGES THAT SELLER IS
               -----------
TRANSFERRING ALL ASSETS "AS IS" "WHERE IS". EXCEPT FOR THE WARRANTIES EXPRESSLY
STATED ABOVE, SELLER MAKES NO OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND
RESPECTING THE ASSETS, THE PRODUCTS OR THEIR COMMERCIAL VIABILITY. SPECIFICALLY,
AND NOT BY WAY OF LIMITATION: (a) SELLER MAKES NO WARRANTIES, REPRESENTATIONS,
OR PROJECTIONS RESPECTING FUTURE COSTS, SALES, OR PROFITABILITY OF PRODUCTS; (b)
EXCEPT AS SET FORTH IN SUBSECTION 5.1(j), SELLER MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND WITH THE RESPECT TO THE TRADEMARKS, OR THAT THE TRADEMARKS
CAN BE USED, SOLD, OR PRACTICED WITHOUT INFRINGEMENT OF ANY RIGHTS OWNED OR
POSSESSED BY ANY THIRD PARTY; AND (c) SELLER MAKES NO WARRANTY OR REPRESENTATION
OF ANY

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KIND WITH THE RESPECT TO THE TRADEMARKS, OR THAT THE TRADEMARKS CAN BE USED,
SOLD, OR PRACTICED WITHOUT INFRINGEMENT OF ANY RIGHTS OWNED OR POSSESSED BY ANY
THIRD PARTY; AND (c) SELLER MAKES NO WARRANTY OR REPRESENTATION OF ANY KIND AS
TO THE VALIDITY OF THE TRADEMARKS. EXCEPT FOR THE WARRANTIES EXPRESSLY STATED
ABOVE, SELLER DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND,
EXPRESSED OR IMPLIED, ORAL OR WRITTEN, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR OR
SPECIAL PURPOSE.

     5.3  Representations and Warranties by Purchaser. Purchaser represents and
          -------------------------------------------
warrants to Seller as of the Effective Date and as of the Closing Date that:

               (a)  Organization and Power. Purchaser is a corporation duly
                    ----------------------
          organized, validly existing and in good standing under the laws of
          Delaware, and has all requisite corporate power and authority to
          execute this Agreement and consummate the transactions contemplated
          hereby. Purchaser's Board of Directors has approved execution of this
          Agreement and consummation of the transactions contemplated hereby;

               (b)  Authorization of Agreement. This Agreement has been duly and
                    --------------------------
          validly authorized, executed and delivered by Purchaser, constitutes a
          valid and binding obligation of Purchaser and is enforceable against
          Purchaser in accordance with its terms;

               (c)  Effect of Agreement. The execution, delivery and performance
                    -------------------
          of this Agreement and the consummation of the transactions
          contemplated hereby will not: (i) violate the charter or by-laws of
          Purchaser or any provision of any law, statute, rule, regulation,
          judgment or decree to which Purchaser is subject or bound; or (ii)
          result in the breach of or conflict with any term, covenant,
          conditions or provision of any agreement of Purchaser or by which
          Purchaser or any of its properties are subject or bound;

               (d)  Government and Other Consents. To the best of Purchaser's
                    -----------------------------
          knowledge, no consent, authorization, license, permit, registration or
          approval of, or exemption or other action by any governmental or
          public body or authority is required in connection with Purchaser's
          execution, delivery or performance of this Agreement; and

                                       15
<PAGE>

               (e)  Brokerage and Finder's Fees. Neither Purchaser nor any
                    ---------------------------
          officer, director or agent of Purchaser has employed any broker,
          finder or agent with respect to this Agreement or the transactions
          contemplated hereby.

                                  ARTICLE VI

                        OTHER AGREEMENTS OF THE PARTIES
                        -------------------------------

     6.1  Additional Documents. To the extent Seller discovers additional
          --------------------
documents after the Closing that Seller reasonably believes would have been
transferred as part of the Books and Records had they been discovered prior to
the Closing, Seller shall promptly notify Purchaser in writing of such discovery
and shall accord Purchaser ninety (90) days to advise Seller of how Purchaser
wishes to handle such documents. During such ninety (90) day period, Seller
shall, upon advanced written notice from Purchaser, provide Purchaser reasonable
access to the documents. Purchaser may, at its expense, instruct Seller to
deliver any or all of such documents to a specified destination, and Seller
shall have no obligation with respect to such documents after delivery in
accordance with Purchaser's instructions. If Purchaser does not respond to
Seller's notice within such ninety (90)-day period, Seller may dispose of such
documents in its sole discretion and thereafter, Seller shall have no obligation
with respect to such documents.

     6.2  Covenant of Further Assurances. In addition to and not in limitation
          ------------------------------
of other provisions of this Agreement, Seller agrees to execute such
instruments, at Purchaser's expense, as Purchaser reasonably determines to be
necessary to effect, perfect or confirm of record or otherwise, in Purchaser,
full right, title and interest in and to the Assets.

                                  ARTICLE VII

                            GENERAL INDEMNIFICATION
                            -----------------------

     7.1  Obligation of Seller to Indemnify. Seller agrees to indemnify, defend
          ---------------------------------
and hold harmless Purchaser (and its directors, officers, employees, Affiliates,
successors and assigns) from and against all losses, personal injuries,
liabilities, damages, deficiencies, costs or expenses

                                       16
<PAGE>

including, without limitation, reasonable attorneys' fees and disbursements
("Losses"), based upon, arising out of or otherwise in respect of:
  ------

               (a) any breach of any representation and warranty of Seller
          contained in Section 5.1 of this Agreement (other than the
          representations and warranties contained in Subsections 5.1(e) and
          5.1(h)) asserted in writing by Purchaser (or any Affiliate thereof)
          within twelve (12) months after the Closing Date;

               (b) the operations of Seller with respect to the development,
          manufacture, marketing, packaging, distribution, use or sale of
          Products by or on behalf of Seller prior to the Closing Date;

               (c) the operations of Seller with respect to packaging,
          distribution and administrative processing of Products by or on behalf
          of Seller from the Closing Date to the end of the Transition Period;

               (d) any breach of the representations and warranties of Seller
          contained in Subsections 5.1(e) and 5.1(h) or any failure of Seller to
          comply with any of its obligations, covenants or agreements set forth
          in this Agreement;

               (e) any and all obligations or liabilities arising or resulting
          from Seller's obligations under the Original Agreement, other than
          those described in subsection (b) above, prior to the Closing Date;

               (f) claims made by members of the Targeted Sales Force who accept
          employment with Purchaser, which claims arise from acts or omissions
          by Seller occurring prior to the expiration of their employment with
          Seller; and

               (g) any liabilities of Seller, other than the Liabilities, which
          arise out of the Anesta Technology or the Assets, Products, or
          Licensed Products.

   7.2    Obligation of Purchaser to Indemnify. Purchaser agrees to indemnify,
          ------------------------------------
defend and hold harmless Seller (and its directors, officers, employees,
Affiliates, successors and assigns) from and against all Losses based upon,
arising out of or otherwise in respect of:

               (a) any breach of any representation and warranty of Purchaser
          contained in Section 5.3 of this Agreement (other than the
          representations and warranties contained in Subsections 5.3(b) and
          5.3(c)) asserted in writing by Seller (or any Affiliate thereof)
          within twelve (12) months after the Closing Date;

                                       17
<PAGE>

               (b) the operations of Purchaser with respect to or the
          development, manufacture, marketing, packaging, distribution, use or
          sale of Products by or on behalf of Purchaser on or after the Closing
          Date, except to the extent covered by Subsection 7.1(c);

               (c) any breach of the representations and warranties of Purchaser
          contained in Subsections 5.3(b) and/or 5.3(c) or any Liability of
          Seller assumed by Purchaser pursuant to Section 2.4 or any failure by
          Purchaser to comply with any of its obligations, covenants or
          agreements under this Agreement; and

               (d) any and all obligations or liabilities arising or resulting
          from Purchaser's obligations set forth in the Original Agreement prior
          to the Closing Date.

                                       18
<PAGE>

     7.3  Legal Proceedings.
          -----------------

               (a) Notice of Claim. If any legal proceedings shall be
                   ---------------
          instituted, or any claim or demand made, against an indemnified party
          in respect of which an indemnifying party may be liable hereunder, or
          if either party hereto for any reason shall believe that it has a
          claim against the other pursuant to the indemnity provisions set forth
          in this Agreement, then the indemnified party or the party believing
          it has a claim against the other, as the case may be (in either case,
          the "Indemnified Party"), shall give prompt written notice hereunder
               -----------------
          to the indemnifying party or the party against whom the party giving
          notice believes it has a claim, as the case may be (in either case,
          the "Indemnifying Party") and shall use best efforts to send such
               ------------------
          notice no later than fifteen (15) days of the Indemnified Party's own
          notice of such claim; provided, however, that the failure to provide
          such prompt notice shall not affect the Indemnifying Party's
          obligation to indemnify except to the extent of the Indemnifying
          Party's actual damages caused by such failure. Such notice shall
          specify in reasonable detail the date such underlying claim or belief
          first was asserted or arose, the nature of the loss(es) for which
          payment is claimed, and the amount payable in respect thereto.

               (b) Opportunity to Defend. If an Indemnifying Party receives
                   ---------------------
          notice pursuant to Subsection 7.3(a) hereof, the Indemnifying Party
          may, at its sole option, elect to defend against the claims,
          liabilities and/or losses which are the subject of such notice, except
          that Seller shall have no authority to adjust, compromise or settle
          any claim involving any right of Purchaser to ownership or use of any
          of the Assets or to defend any claim which, if adversely determined,
          would materially impair the commercial prospects of the Products. If
          the Indemnifying Party elects to defend, then the Indemnified Party
          shall have the right to participate in such defense at its own
          expense, trial counsel shall be chosen by the Indemnifying Party and
          such trial counsel shall be reasonably satisfactory to the Indemnified
          Party, the costs of which shall be borne by the

                                       19
<PAGE>

          Indemnifying Party, and the Indemnified Party agrees to cooperate with
          the Indemnifying Party in such defense.

               (c) Reimbursement. If the amount of any actual loss indemnified
                   -------------
          against hereunder shall at any time subsequent to payment of any
          indemnity payable hereunder, be reduced by any recovery, settlement or
          other payment, then the amount of such reduction, less any expense
          incurred by the party receiving such recovery, settlement or other
          payment in connection therewith, shall be repaid promptly to the
          Indemnifying Party.

     7.4  Further Conditions. In no event shall a party seeking indemnity
          ------------------
hereunder, compromise or otherwise settle any such claim without the
Indemnifying Party's prior written consent, which consent shall not be
unreasonably withheld.

     7.5  Survival. Except as otherwise provided herein, the provisions of
          --------
Article VII hereof shall survive the Closing in accordance with their terms.

     7.6  Purchaser's Insurance. Purchaser shall obtain and keep in force
          ---------------------
during the term of its indemnity obligations to Seller under this Agreement
insurance policies providing the following minimum levels of coverage: general
comprehensive liability insurance covering each occurrence of bodily injury and
property damage in an amount of not less than One Million Dollars ($
1,000,000.00) per occurrence with an aggregate of Two Million Dollars
($2,000,000.00) in any calendar year with the special endorsement providing
coverage for Product and Completed Operations Liability in an amount of not less
than Ten Million Dollars ($10,000,000.00); and an umbrella policy in an amount
not less than Four Million Dollars ($4,000,000.00). The insurance policy shall
be endorsed to provide for written notification to Seller by the insurer not
less than thirty (30) days prior to cancellation, expiration, or modification. A
certificate of insurance evidencing compliance with this Section and referencing
this Agreement shall be furnished to Seller by Purchaser within ten (10) days of
the Closing, Date, or, in the event of insurance renewal, within ten (10) days
of such renewal.

                                       20
<PAGE>

                                 ARTICLE VIII

                   PRE-CLOSING AND POST-CLOSING TRANSACTIONS
                   -----------------------------------------

     8.1  Use of Names. As soon as practicable following the Closing,
          ------------
Purchaser shall use commercially reasonable efforts to seek the appropriate
approvals to market and sell the Products bearing labeling and using literature
not containing the name "Abbott Laboratories." Prior to Purchaser receiving such
approval, Seller shall use commercially reasonable efforts to exhaust its
then-current supply of labels containing the name Abbott Laboratories. Promptly
upon receipt of such approval and in accordance with any deadlines or other
timing requirements contained therein, Seller shall use commercially reasonable
efforts to make the transition to literature and labels consistent with such
approval. Nothing herein shall be construed as a grant of any rights to
Purchaser to the name "Abbott Laboratories", except that Purchaser may use
Seller's existing inventories of literature for Products that bear such name (so
long as Purchaser maintains its insurance and indemnity obligations hereunder).

     8.2  Notification of Third Parties. Seller and Purchaser shall cooperate
          -----------------------------
with one another in the notification to customers, regulatory agencies
(including but not limited to FDA and DEA), vendors, key opinion leaders,
clinicians, pharmacists, wholesalers and the Rocky Mountain Poison Control
Center of the transactions contemplated by this Agreement. Such notification
shall be in such form as is reasonably satisfactory to Seller and Purchaser.

     8.3  Customer Inquiries. For a period of one (1) year after the Closing
          ------------------
Date, Seller shall refer customer telephone inquiries respecting the Products to
Purchaser.

     8.4  Public Announcements. Upon the execution of this Agreement,
          --------------------
Purchaser shall issue a press release substantially in the form attached as
Exhibit K and during the first one hundred eighty (180) days after the Effective
Date, each party shall obtain the written consent of the other party prior to
making any other written public statement concerning this Agreement and the
transactions contemplated hereby, which consent shall not be unreasonably
withheld. Except as provided in Section 8.1, Purchaser and Seller shall not use
the name of the other party in any marketing or advertising materials without
prior written approval of the other party. The foregoing shall not be deemed to
prevent either party from: (a) making any public disclosure which may be
required of either party or its Affiliates at any time under the federal
securities

                                       21
<PAGE>

laws or by the rules and regulations of any national securities exchange upon
which the securities of either party or its Affiliates are traded; provided,
however, that the party required to make such disclosure shall, except where
impracticable, give reasonable advance notice to the other party of such
disclosure and use commercially reasonable efforts to secure confidential
treatment of such information; or (b) disclosing the substance or details of
this Agreement to its financial advisors, legal advisors, bona fide potential
corporate partners or any person or entity who has a bona fide interest in
investing in or acquiring substantially all of the assets or securities of such
party, provided that such party has used commercially reasonable efforts in good
faith to obtain a binder of confidentiality.

     8.5  Pre-Closing and Transition Period.
          ---------------------------------

               (a) Seller's Operations Prior to Closing. During the period
                   ------------------------------------
          between the Effective Date and the Closing Date, except as otherwise
          contemplated by this Agreement, Seller shall continue to perform its
          obligations under the Original Agreements in the ordinary and usual
          course in a manner consistent with its performance of such obligations
          prior to the Effective Date.

               (b) Seller's Covenants Prior to Closing. During the period
                   -----------------------------------
          between the Effective Date and the Closing Date, Seller shall not,
          outside the ordinary course of business and without Purchaser's prior
          written consent, which consent shall not be unreasonably withheld: (i)
          take any actions that can reasonably be expected to increase the
          amounts due by Seller under the Contracts; (ii) become a party to an
          acquisition transaction specifically pertaining to Products; (iii)
          commence a legal proceeding with respect to the Assets, the Anesta
          Technology, the Products or the Licensed Products; or (iv) enter into
          any transaction or take any other action outside the ordinary course
          of business with respect to the Products or Licensed Products.

               (c) Purchaser's Communication with Targeted Sales Force. On or
                   ---------------------------------------------------
          about March 13, 2000, Purchaser shall, in cooperation with Seller,
          provide a written communication package to the Targeted Sales Force
          describing the employment opportunities with Purchaser. Thereafter, on
          or about March 21 and March 22, 2000, Purchaser shall conduct on-site
          interviews in Salt Lake City with

                                       22
<PAGE>

          those interested members of the Targeted Sales Force. On or about
          March 23, 2000, Purchaser shall send out by express mail services
          offers for employment to those members of the Targeted Sales Force
          that Purchaser selects. Such offers shall remain open until 5:00 p.m.
          CST on March 28, 2000. Thereafter, Purchaser shall be subject to the
          terms and conditions of Section 3.3.

               (d) Transitional Activities. During the Transition Period, in
                   -----------------------
          addition to the manufacture and shipping obligations of Seller under
          the Supply Agreement, Seller also shall perform the Transitional
          Activities on behalf of Purchaser. On a quarterly basis during the
          Transition Period, Seller shall reconcile the net amount owed
          Purchaser from the sale of Products to third parties. Such
          reconciliation shall be performed in a manner consistent with the
          reconciliation example set forth in Exhibit L. Seller shall pay
          Purchaser all amounts due according to such reconciliation not later
          than thirty (30) days after the end of the quarter for which such
          reconciliation was performed. Such payment shall be made by wire
          transfer to the First Security Bank of Utah, or such other bank as
          Anesta shall specify from time to time. Concurrent with such wire
          transfer, Seller shall transmit to Purchaser a report summarizing the
          calculations performed pursuant to the reconciliation. The parties
          shall cooperate to effect the orderly transition of the Transitional
          Activities from Seller to Purchaser.

               (e) Assistance. During the Transition Period, if requested by
                   ----------
          Purchaser, Seller shall provide Purchaser reasonable levels of non-
          technical assistance in the transfer to Purchaser of Seller's business
          and operations relating to the Assets, the Products and the Licensed
          Products. Seller shall provide such assistance to Purchaser in
          specific areas and functions, including, without limitation, those
          areas and functions set forth in Exhibit M. Seller shall remain
          responsible for the salaries of Seller's personnel participating in
          such assistance efforts, but Purchaser shall reimburse Seller for all
          travel, lodging and meals expenses incurred by such personnel.

     8.6  Returns. The parties acknowledge and agree that Product returns shall
          -------
be administered in accordance with the following:

                                       23
<PAGE>

               (a) Pre-Closing. For all Products sold prior to the Closing Date
                   -----------
          and returned thereafter, the liability for such returns shall be fixed
          [...***...] and shall be deducted from the final payment due by
          Purchaser to Seller on [...***...] After the Closing Date, the cost of
          all returns of Products shall be the sole responsibility of Purchaser.

               (b) Transition Period. For all Products returned during the
                   -----------------
          Transition Period, Seller shall administer such returns in accordance
          with its Hospital Products Division's standard return goods policy.
          The cost of these returns shall be charged to Purchaser in accordance
          with the reconciliation example set forth in Exhibit L.

               (c) Post-Transition Period. For all Products sold after the
                   ----------------------
          expiration of the Transition Period, except as otherwise provided in
          the Supply Agreement, Purchaser shall be solely responsible for all
          administrative and financial obligations associated with any return of
          such Products.

               (d) Out-Dated Product. The parties shall accord the following
                   -----------------
          financial treatment with respect to finished Product in inventory at
          Abbott facilities as of the Closing Date ("Abbott Inventory"): (i) the
                                                     ----------------
          cost of any Abbott Inventory that becomes out-dated during the
          Transition Period shall be [...***...]and such charge shall be
          recognized as part of the quarterly reconciliation; and (ii) on or
          about December 31, 2000, the parties shall meet and mutually agree on
          a final settlement regarding future out-dated Abbott Inventory, taking
          into consideration the then-current level of Abbott Inventory and the
          then-current market demand for Products. This final settlement shall
          be recognized as part of the final reconciliation of the Transition
          Period.

     8.7  Limitations. All assistance provided pursuant to Subsection 8.5(e)
          -----------
shall be provided subject to the availability of Seller's appropriate personnel.
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, RESPECTING
THE ASSISTANCE TO BE PROVIDED BY IT PURSUANT TO THIS ARTICLE VIII OR THE QUALITY
THEREOF.

* Confidential Treatment Requested

                                       24
<PAGE>

     8.8  Post-Closing Transfers. Pursuant to Subsections 2.3 (b) and (c), on
          ----------------------
the date specified in such Subsections, Seller shall deliver to Purchaser the
original Manufacturing and Regulatory Books and Records and the original
Financial Books and Records, respectively, and Purchaser shall deliver to Seller
the appropriate cash payments, respectively, by wire transfer in accordance with
the wire instruction set forth in Subsection 4.3(a).

                                  ARTICLE IX
                                  ----------

                             CONDITIONS TO CLOSING
                             ---------------------

     9.1  General Conditions. The obligations of Seller and Purchaser to
          ------------------
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction that, at or prior to the Closing, no order, statute, rule,
regulation, executive order, injunction, stay, decree or restraining order shall
have been enacted, entered, promulgated or enforced by any court of competent
jurisdiction or governmental or regulatory authority or instrumentality that
prohibits the consummation of the transactions contemplated hereby, and no
proceeding by any governmental or regulatory authority or instrumentality shall
be pending or threatened, which seeks to prohibit or declare illegal the
transactions contemplated by this Agreement.

     9.2  Conditions to Obligations of Seller. The obligations of Seller to
          -----------------------------------
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction by Purchaser or waiver by Seller at or prior to the Closing of
each of the following conditions:

               (a)  Purchaser shall have performed in all material respects its
          obligations required under this Agreement to be performed by it at or
          prior to Closing;

               (b)  The representations and warranties of Purchaser contained
          herein shall be true and correct in all material respects at and as of
          the Effective Date and at and as of the Closing Date as though
          restated on and as of such date (except in the case of any
          representation and warranty that by its terms is made as of a date
          specified therein, in which case such representation and warranty
          shall be true and correct in all material respects as of such date);

                                       25
<PAGE>

               (c)  Seller shall have received from Purchaser the portion of the
          Purchase Price and the documents referred to in Section 4.3; and

               (d)  Seller shall have received from Purchaser a certificate
          signed by an appropriate officer of Purchaser as to Purchaser's
          compliance with the conditions set forth in paragraphs (a) and (b) of
          this Section 9.2.

     9.3  Conditions to Obligations of Purchaser. The obligations of Purchaser
          --------------------------------------
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction by Seller or waiver by Purchaser at or prior to the Closing
of each of the following conditions:

               (a)  Seller shall have performed in all material respects its
          obligations required under this Agreement to be performed by it at or
          prior to Closing;

               (b)  The representations and warranties of Seller contained
          herein shall be true and correct in all material respects at and as of
          the Effective Date and at and as of the Closing Date as though
          restated on and as of such date (except in the case of any
          representation and warranty that by its terms is made as of a date
          specified therein, in which case such representation and warranty
          shall be true and correct in all material respects as of such date);

               (c)  Purchaser shall have received from Seller the documents
          referred to in Section 4.2;

               (d)  Contracts shall have been assigned to Purchaser, any
          required consents under such Contracts permitting such assignment
          shall have been obtained and Purchaser shall be reasonably satisfied
          that such Contracts are in full force and effect and that Purchaser
          shall be entitled to the full rights and benefits of Seller under each
          such Contract without any material adverse modification therein; and

               (e)  Purchaser shall have received from Seller a certificate
          signed by an appropriate officer of Seller as to Seller's compliance
          with the conditions set forth in paragraphs (a), (b) and (d) of this
          Section 9.3.

                                       26
<PAGE>

                                   ARTICLE X
                                   ---------

                                  TERMINATION
                                  -----------

     This Agreement may be terminated by either Seller or Purchaser in the event
of a material breach by other party that remains uncured after having received
sixty (60) days prior written notice thereof from the non-breaching party.
Notwithstanding the foregoing, in the event Purchaser fails to make the cash
payments to Seller specified in Sections 2.3(b) or (c) by the specific dates
stated therein and does not cure such breach after receiving two (2) business
days prior written notice from Seller, Seller may immediately take any or all of
the following actions: (a) terminate this Agreement and reinstate in its
entirety the Original Agreements; (b) terminate the Supply Agreement; and (c)
terminate the License Agreement. In the event Seller elects to terminate this
Agreement and reinstate the Original Agreements, Purchaser shall not be entitled
to be reimbursed for any payments made to date to Seller pursuant to this
Agreement.

                                   ARTICLE XI

                               GENERAL PROVISIONS
                               ------------------

     11.1 Survival of Representations. Except where and to the extent expressly
          ---------------------------
stated otherwise, all representations, warranties, covenants and agreements set
forth herein shall survive the execution and delivery of this Agreement and the
transfer of Assets hereunder and shall be effective regardless of any
investigations that may have been made at any time by or on behalf of the non-
breaching party.

     11.2 Notices. All communications under the Agreement attached hereto shall
          -------
be in writing and shall either be faxed, sent by courier (Federal Express or
equivalent) or mailed by first class mail, postage prepaid, to the facsimile
number and/or address specified below. If faxed, such communication shall be
deemed to be given when sent; provided, however, that such fax shall be
confirmed by sending a hard copy by courier or first class mail (by methods
specified herein) within one (1) working day of the sending of such fax. If sent
by courier or mailed by first class mail as specified herein, such communication
shall be deemed to be given either two (2) business days after sending (for
communications sent by courier) or five (5)

                                       27
<PAGE>

business days after mailing (for communications sent by mail). All
communications hereunder shall be sent:

               (a)  if to Seller, at its address shown below or such other
          address as it may give to Purchaser by notice hereunder:

                    Abbott Laboratories
                    200 Abbott Park Road
                    Abbott Park, IL 60064-3537
                    Attention: Senior Vice President, Hospital Products
                    Telefax:   [...***...]
                    With a copy to:

                    Legal Division
                    Abbott Laboratories
                    100 Abbott Park Road
                    Abbott Park, IL 60064-3500
                    Attention: Divisional Vice President, D-322
                    Telefax:   [...***...]

               (b)  if to Purchaser, at its address shown below or such other
          address as it may give to Seller by notice hereunder:

                    Anesta Corp.
                    4745 Wiley Post Way
                    Salt Lake City, Utah 84116
                    Attention: President and CEO
                    Telefax:   (801) 595-1406

                    With a copy to:

                    Cooley Godward LLP
                    2595 Canyon Blvd.
                    Suite 250
                    Boulder, CO  80302-6737
                    Attention: James C. Linfield, Esq.
                    Telefax:   (303) 546-4099

     11.3 Confidentiality of Information. During the term of this Agreement it
          ------------------------------
may be necessary for a party or its Affiliate(s) to disclose to the other
certain Confidential Information. In addition, the parties acknowledge that
certain Confidential Information was disclosed between the parties pursuant to
the Original Agreements. Except to the extent expressly authorized by this

* Confidential treatment requested

                                       28
<PAGE>

Agreement or otherwise agreed in writing by the parties, the parties agree that
from the Effective Date until May 1, 2008, the receiving party shall keep
confidential and shall not publish or otherwise disclose and shall not use for
any purpose other than as provided for in this Agreement any Confidential
Information furnished to it by the other party pursuant to this Agreement or the
Original Agreements. No Confidential Information shall be disclosed to any
employee, agent, consultant, Affiliate, or sublicensee who does not have a need
for such information, and then only after the disclosing party has a standing
arrangement with or has obtained prior agreement from such person or entity to
whom disclosure is to be made to hold in confidence and not make use of such
information for any purpose other than those permitted by this Agreement. Each
party will use at least the same standard of care as it uses to protect its own
Confidential Information of a similar nature to ensure that such employees,
agents, consultants, Affiliates and sublicensees do not disclose or make any
unauthorized use of such Confidential Information, but no less than reasonable
care. Each party will promptly notify the other upon discovery of any
unauthorized use or disclosure of the Confidential Information. Nothing in this
Section 11.3 shall prohibit Purchaser from disclosing Confidential Information
in connection with its applications for, or maintenance or enforcement of,
patent protection.

     11.4 Amendment and Modifications. This Agreement may be amended, modified
          ---------------------------
or supplemented only by written agreement of the parties hereto.

     11.5 Assignment. The rights and obligations of Purchaser and Seller under
          ----------
this Agreement and the agreements provided for herein shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, but may not be assigned by either party without the prior written
consent of the other, except either party may assign its rights or obligations
hereunder to an Affiliate of said party without the other party's consent,
provided, that no such assignment in such instance shall relieve the assigning
party of its obligations hereunder, and provided further that either party may
make such an assignment without the other party's consent to a successor to all
or substantially all of the assets or business of such party to which this
Agreement relates, whether in a merger, sale of stock, sale of assets or other
transaction.

     11.6 Expenses. Except as otherwise provided herein, Purchaser and Seller
          --------
agree that each of the parties hereto shall bear its own expenses incurred in
connection with the execution

                                       29
<PAGE>

and delivery of this Agreement and the consummation of the transactions
contemplated hereby. Purchaser will pay all recording fees (including, but not
limited to, fees and expenses associated with recording of patent and trademark
assignments) and all sales and use taxes payable in connection with the sale,
transfer, delivery and assignment to be made to Purchaser hereunder.

     11.7  Headings. All headings in this Agreements are for convenience only
           --------
and shall not affect the interpretation or meaning or any provision hereof.

     11.8  Waiver and Preservation of Remedies. No delay on the part of either
           -----------------------------------
of the parties hereto in exercising any right, power or privilege hereunder
shall operate as a waiver thereof; nor shall any waiver on the part of either
party of any such right, power or privilege, nor any single or partial exercise
of any such right, power or privilege, preclude any further exercise thereof or
the exercise of any other such right, power or privilege. The rights and
remedies of each party based on, arising out of, or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement shall in no way be limited by the fact that the act,
omission, occurrence upon which any claims of any such inaccuracy or breach is
based may also be the subject matter of any other representation, warranty,
covenant or agreement contained in this Agreement (or in any other agreement
between the parties) as to which there is no inaccuracy or breach.

     11.9  Exhibits. The Exhibits are a part of this Agreement as if fully set
           --------
forth herein. All references herein to paragraphs, subparagraphs, sections,
subsections, clauses, and exhibits shall be deemed references to such parts of
this Agreement, unless the context otherwise requires.

     11.10 Severability. If any provision of this Agreement is found or
           ------------
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration shall not invalidate
any other provision hereof, and this Agreement shall thereafter continue in full
force and effect except that such invalid or unenforceable provision shall be
reformed by a court of competent jurisdiction so as to effect insofar as is
practicable the intention of the parties as set forth in this Agreement,
provided that if such court is unable or unwilling to effect such reformation,
the invalid or unenforceable provision shall be deemed deleted to the same
extent as if it had never existed.

     11.11 Governing Law. This Agreement shall be governed by and construed in
           -------------
accordance with the laws of the State of Illinois, without regard choice of law
principles.

                                       30
<PAGE>

     11.12 Counterparts. This Agreement may be executed in one or more
           ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     11.13 Government Clearances. Purchaser shall bear the responsibility
           ---------------------
and expense of notifying any appropriate governmental agency of this Agreement
or transactions under this Agreement and obtaining any legally necessary
approvals thereto. Seller shall assist Purchaser to the extent reasonably
necessary to notify all such appropriate governmental agencies and shall execute
such documents as Purchaser may reasonably request Seller to execute in such
regard, at Purchaser's expense.

     11.14 Alternative Dispute Resolution. Any controversy or claim arising out
           ------------------------------
of or relating to this Agreement, or the breach thereof, shall be resolved
through the alternative dispute resolution procedure set forth in Exhibit N.

     11.15 Entirety of Agreement. This Agreement constitutes the entire
           ---------------------
agreement of the parties, merges all prior negotiations, agreements and
understandings, and states in full all representations and warranties which have
induced this Agreement, there being no representations or warranties other than
those herein stated.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.

ANESTA CORP.                                    ABBOTT LABORATORIES

By: /s/ Thomas B. King                          By: /s/ Richard A. Gonzalez
    -----------------------                         -----------------------
    Thomas B. King                                  Richard A. Gonzalez
    President and Chief                             Senior Vice President,
    Executive Officer                               Hospital Products

Date: 3/13/00                                   Date: 3/13/00
      ---------------------                           ---------------------

                                       31
<PAGE>

                                   EXHIBIT A
                                   ---------

                                    ASSETS

Subject to the provisions of Section 6.1, the Assets are as follows:

1. All Contracts identified on Exhibit A-2.

2. All Financial Books and Records identified on Exhibit A-3.

3. All Manufacturing Books and Records identified on Exhibit A-4.

4. All Marketing Books and Records identified on Exhibit A-5.

5. All such other Books and Records not identified on Exhibits A-3, A-4 or A-5.

6. All Trademarks identified on A-6.
<PAGE>

                                  EXHIBIT A-1
                                  -----------

                             ABBOTT PATENT RIGHTS

5041 Family:
-----------

         US D-338,956 issued August 31, 1993 (expires August 31, 2007)

5042 Family:
-----------

         US D-336,955 issued June 29, 1993 (expires June 29, 2007)

5049 Family:
-----------

         US 5,490,989 issued February 13, 1996 (expires February 13, 2013)

         US 5,296,234 issued March 22, 1994 (expires October 11, 2011)

         [...***...]

5433 Family:
-----------

         US 5,419,911 issued May 30, 1995 (expires September 28, 2013)

         Australia Patent No. 682720 issued February 5, 1998 (expires September
         14, 2014)

         [...***...]

* Confidential Treatment Requested
<PAGE>

                                  EXHIBIT A-2
                                  -----------

                                   CONTRACTS
[...***...]

* Confidential Treatment Requested
<PAGE>

                                  EXHIBIT A-3
                                  -----------

                          FINANCIAL BOOKS AND RECORDS

 .   Detailed  breakdown of fully-burdened manufacturing costs
 .   Detail of shipments to wholesalers (amount, shipping, address, etc)
 .   Detail of OTFC- related property, plant and equipment, including accumulated
    depreciation (original equipment cost, depreciation method, useful lives and
    salvage value)
 .   Sales and Royalty Data
    .  Actual Gross Units and Sales
    .  Return Units and Dollars
    .  Wholesaler Chargebacks
    .  Cash Discounts
    .  Customer Rebates
    .  Administration Fees
    .  Managed Care Rebates
    .  Medicaid and State Rebates
    .  Any other Deduction to Sales

 .   Detail of product returns by month and reason (i.e. expired, damaged, etc)
    for 1998 and 1999 along with a copy of the returned goods policy.
 .   Updated 2000 sales forecast by month including any available YTD
    information.
<PAGE>

                                  EXHIBIT A-4
                                  -----------

                MANUFACTURING AND REGULATORY BOOKS AND RECORDS

 .   Manufacturing/QA
    .   A copy of letter of reference to [...***...] DMF
    .   Specifications for the bulk drug and finished product
    .   A complete list of all stability protocols for the finished product
        [...***...]
    .   Quantity of  bulk drug available
    .   Outstanding DEA quota issued to Abbott
    .   When was each lot manufactured, originally tested, retested, and what
        were the results of the testing
    .   All annual updates to any regulatory submissions since approval
    .   Master Batch records for Actiq and Oralet
    .   SOPs for OTFC manufacturing operations
    .   Equipment development history, including functional requirement and
        factory acceptance testing
    .   Validation reports - equipment and facilities qualification, process
        validation, cleaning validation and any related computer validation
        Master production plan and materials plan for Actiq and Oralet FLTS
        release documentationo Annual product reviews
    .   Audit reports of approved vendors
    .   Approved supplier list and supplier certifications
    .   Any product out of specification or technical complaint investigation
        reports
    .   Design patent for Oralet/Handle/Overcap

 .   R & D/Medical
    .  Files related to Oralet Phase IV work [...***...]
    .  Any DDMAC materials not previously forwarded
    .  All adverse event reporting files
    .  Proposals, protocols, and measurement instruments in development
       related to Health Economics and Outcomes/Quality of Life for Actiq
    .  Current and historical functional requirements documents
    .  A list of all scientific reports by number and title not submitted
    .  Any product development history reports  not submitted to Anesta's IND
       or NDA
    .  Any scientific reports not submitted to Anesta's IND or NDA
    .  Any product methods development  reports not submitted to Anesta's IND
       or NDA
    .  Copies of all related test methods
    .  All Risk Management Materials
       [...***...]
       .  All RMP related files for Oralet, [...***...]

* Confidential treatment requested
<PAGE>

                                  EXHIBIT A-5
                                  -----------

                          MARKETING BOOKS AND RECORDS
 .    Market Research
     [...***...]
 .    Records of shipments to wholesalers -
 .    Reports from launch retail telemarketing distribution program activities
 .    Package and Patient leaflet
     .  Mechanical artwork related to patient leaflet
     .  Existing inventories of PI and patient leaflet
 .    All existing inventory and location, mechanical artwork, tape masters, and
     filed related to all promotional materials, including sales materials,
     journal advertisements, giveaways, etc
        [...***...]

* Confidential treatment requested

                                       i
<PAGE>

 .  Files and full status report on launch of CD ROM project
 .  Existing inventory and location of all reprints
[...***...]
 .  Medica Education materials, [...***...]
 .  Current and historical physician target lists and up to date
   activity/status report on each physician/practice
 .  Activity reports completed by the AOS and sales management
 .  Sales experiency by territory including key physician targets [...***...]
 .  Any sales information from the Risk Management plan
   [...***...]
 .  Territory alignment and files for sales representative location [...***...]
 .  Harrison & Star and Goble Actiq product files [...***...]
 .  Convention display translites and other convention displays ( table top
   units, intermediate size displays)
 .  Copies of all marketing plans, market analysis work i.e. by physician,
   region, group, etc.
 .  Detailed account  and review of all marketing commitments for 2000
 .  List of all advocates by specialty [...***...]
 .  Review status of all publication activities
 .  Review status of all public relation activities
 .  Review status of all contracts
   [...***...]
 .  Any pharmacoeconomic data or research data on Actiq
 .  All Sales training materials and files for the 1/99 initial training and the
   Fall training sessions [...***...]
 .  1-800# medical affairs activities [...***...]
 .  Listing of fulfillment, including name and address and materials sent
   [...***...]

* Confidential treatment requested

                                      ii
<PAGE>

                                  EXHIBIT A-6
                                  -----------

                                  TRADEMARKS

United States Trademark Registration Number 1,763,593, ORALET
<PAGE>

                                  EXHIBIT A-7
                                  -----------

                   GUARANTEED EARN-OUT MAXIMUMS AND MINIMUMS

                      Year         Min ($000)  Max ($000)  LRP ($000)
                      ----         ---------   ---------   ---------
                      [...***...]

*Prorated for 9 months.

**Prorated for 4 months

* Confidential Treatment Requested
<PAGE>

                                   EXHIBIT B
                                   ---------

                                  LIABILITIES

1.   Seller's obligations under the Contracts after the Closing Date relating to
     the Product.

2.   Product returns after the Closing Date.

3.   United States governmental rebates and reimbursements for Product sold
     after the Closing Date.

4.   Any third party royalty obligation after the Closing Date arising from the
     manufacture, use or sale of Product.
<PAGE>

                                  EXHIBIT B-1

                       FORM OF ASSUMPTION OF LIABILITIES
<PAGE>

                           ASSUMPTION OF LIABILITIES

     Reference is made to the Termination and Asset Sale and Purchase Agreement
dated as of March 13, 2000 ("Agreement") between Abbott Laboratories ("Seller")
and Anesta Corp. ("Purchaser"). (Note: any capitalized terms used herein and not
otherwise defined shall have the respective meanings as set forth in the
Agreement.)

     Purchaser hereby confirms that effective as of the Closing Date, Purchaser
shall:

          1)   assume responsibility for payment of all United States government
          rebates and reimbursements relating to Products;

          2)   assume responsibility for the Product returns pursuant to Section
          8.6(a) of the Agreement;

          3)   assume responsibility for the Contracts assigned to Purchaser as
          specified in the Agreement, with respect to the period from and after
          the Closing Date; and

          4)   assume responsibility for payment of third party royalty
          obligations arising from the manufacture, use or sale of Products.

     In Witness Whereof, Purchaser has executed this Assumption of
Liabilities as of the date set forth below.

                                     ANESTA CORP.

                                     By:_____________________________
                                     Name:___________________________
                                     Title:__________________________
                                     Date:___________________________
<PAGE>

                                  EXHIBIT B-2
                                  -----------

                    ASSIGNMENT AND ASSUMPTION OF CONTRACTS
<PAGE>

                    ASSIGNMENT AND ASSUMPTION OF CONTRACTS

     Reference is made to the Termination and Asset Sale and Purchase Agreement
dated as of March 13, 2000 ("Agreement") between Abbott Laboratories ("Seller")
and Anesta Corp. ("Purchaser"). (Note: any capitalized terms used herein and not
otherwise defined shall have the respective meanings as set forth in the
Agreement.)

     Effective as of the Closing Date, Seller hereby assigns to Purchaser all of
Seller's right, title, and interest in and to the Contracts as referenced for
assignment on Exhibit A-2 of the Agreement.

     Purchaser hereby confirms that effective as of the Closing Date, Purchaser
shall assume all responsibility for the Contracts assigned to Purchaser under
the Agreement.

     In Witness Whereof, Seller and Purchaser have executed this document as
of the date set forth below.

ABBOTT LABORATORIES                         ANESTA CORP.

By:______________________________           By:______________________________
Name:____________________________           Name:____________________________
Title:___________________________           Title:___________________________
Date:____________________________           Date:____________________________

<PAGE>

                                   EXHIBIT C
                                   ---------

                            MANUFACTURING EQUIPMENT
Asset
Number         Asset Description       Comment

[...***...]

* Confidential Treatment Requested
<PAGE>

                                   EXHIBIT D
                                   ---------

                             TARGETED SALES FORCE
<PAGE>

                ABBOTT ALTERNATE SITE ORGANIZATION AREA LISTING
                -----------------------------------------------

                             ACTIQ - EAST DISTRICT
                             ---------------------
     [...***...]

* Confidential Treatment Requested
<PAGE>

                                   EXHIBIT E
                                   ---------

                         ALLOCATION OF PURCHASE PRICE

                             Intentionally Omitted
<PAGE>

                                   EXHIBIT F
                                   ---------

                               SUPPLY AGREEMENT

<PAGE>

                                   EXHIBIT G
                                   ---------

                            FORM OF PATENT LICENSE
<PAGE>

                                   EXHIBIT H
                                   ---------

                             FORM OF BILL OF SALE
<PAGE>

                                 BILL OF SALE

     Reference is made to the Termination and Asset Sale and Purchase Agreement
dated as of March 13, 2000 ("Agreement") between Abbott Laboratories ("Seller")
and Anesta Corp. ("Purchaser"). (Note: any capitalized terms used herein and not
otherwise defined shall have the respective meanings as set forth in the
Agreement.) Pursuant to and in accordance with the Agreement, and for valuable
consideration receipt of which is hereby acknowledged by Abbott, Abbott hereby
sells, transfers and assigns to Anesta Corp. all of Abbott's right, title and
interest in and to the Assets, to have and hold said Assets unto Anesta Corp.,
its successors and assigns forever.

     In Witness Whereof, this Bill of Sale has been duly executed on behalf of
Abbott as of the _____ day of March, 2000.

                                              ABBOTT LABORATORIES

                                              By:_____________________________
                                              Name:___________________________
                                              Title:__________________________
<PAGE>

                                   EXHIBIT I
                                   ---------

                           ASSIGNMENT OF TRADEMARKS
<PAGE>

                             TRADEMARK ASSIGNMENT

     WHEREAS, Abbott Laboratories, a corporation existing under the laws of the
state of Illinois, is the owner of the United States Trademark Registration
Number 1,763,593, ORALET; and

     WHEREAS, Anesta, a corporation existing under the laws of the state of
Delaware, is desirous of acquiring all right, title and interest in and to said
trademark registration; and

     WHEREAS, Abbott is willing to assign any and all of its right to the said
trademark registration,

     NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, Abbott does hereby sell, transfer, convey and assign to
Anesta any and all of its right, title and interest in and to the trademark and
its registration, including the goodwill of the business symbolized by the
trademark.

Dated this      day of March, 2000.

ABBOTT LABORATORIES

By:
Title:
<PAGE>

                                   EXHIBIT J
                                   ---------

                      CERTIFICATE OF CORPORATE SECRETARY
<PAGE>

                                 ANESTA CORP.

                            SECRETARY'S CERTIFICATE

     In connection with the Termination and Asset Sale and Purchase Agreement
dated March ___, 2000 (the "Agreement"), between Anesta Corp., a Delaware
corporation ("Anesta"), and Abbott Laboratories, an Illinois corporation
("Abbott"), pursuant to which the parties will terminate that certain Research
and Development, License, Supply and Distribution Agreement dated December 27,
1989, as amended August 12, 1991 and December 30, 1992, a letter agreement dated
August 31, 1995, and a Trademark License Agreement dated June 11, 1999
(collectively, the "Original Agreements"), the undersigned, Theodore H. Stanley,
M.D., hereby certifies that he is the duly authorized and elected Secretary of
Anesta, and that the facts set forth below are true, complete and correct.
Capitalized terms used herein shall have the same meaning as defined in the
Agreement unless otherwise stated herein.

     This Certificate is made with the knowledge that it will be delivered to
Abbott at the Closing pursuant to the terms of the Agreement.

     At a meeting of Anesta's Board of Directors on February 29, 2000, the Board
adopted resolutions approving the Agreement on substantially the terms set forth
in the term sheet dated February 3, 2000, and further authorizing the President
and Chief Executive Officer of Anesta to negotiate with Abbott, and, in this
connection, to execute and deliver the Termination Agreement among the Company
and Abbott in substantially the form presented to the directors, with such
changes as the President and Chief Executive Officer, in his discretion, deems
necessary or advisable. The resolutions adopted by the Board on February 29,
2000 have not been revoked, modified or amended, and are in full force and
effect.

     The statements, lists and descriptions contained or referred to herein are
true and correct and do not set forth facts which are false or misleading, nor
do they omit to set forth facts in the absence of which would make such
statements, lists and descriptions false or misleading.

     In Witness Whereof, the undersigned has executed this Certificate on March
___, 2000.

                                                  ------------------------------
                                                  Theodore H. Stanley, M.D.

                                                            Secretary
<PAGE>

                                   EXHIBIT K
                                   ---------

                                 PRESS RELEASE
<PAGE>

                                   EXHIBIT L
                                   ---------

                   TRANSITION PERIOD RECONCILIATION EXAMPLE

[...***...]

*assumes Seller will be responsible for administering these payments related to
sales that occur in the Transition Period.

* Confidential Treatment Requested
<PAGE>

                                   EXHIBIT M
                                   ---------

                               ABBOTT ASSISTANCE
                               -----------------

Order Processing/Distribution:
------------------------------
[...***...]

Pricing/Invoicing:
------------------
[...***...]

Customer Service:
-----------------
[...***...]

Technical/Systems staffing/ability/needs:
-----------------------------------------
[...***...]

* Confidential treatment requested
<PAGE>

                                   EXHIBIT N
                                   ---------

                   ALTERNATIVE DISPUTE RESOLUTION PROCEDURE

     The parties recognize that bona fide disputes as to certain matters may
arise from time to time during the term of this Agreement which relate to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution ("ADR") provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units within
twenty-eight (28) days after such notice is received (all references to "days"
in this ADR provision are to calendar days).

     If the matter has not been resolved within twenty-eight (28) days of the
notice of dispute, or if the parties fail to meet within such twenty-eight (28)
days, either party may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel in such a proceeding.

1.   To begin an ADR proceeding, a party shall provide written notice to the
     other party of the issues to be resolved by ADR. Within fourteen (14) days
     after its receipt of such notice, the other party may, by written notice to
     the party initiating the ADR, add additional issues to be resolved within
     the same ADR.

2.   Within twenty-one (21) days following receipt of the original ADR notice,
     the parties shall select a mutually acceptable neutral to preside in the
     resolution of any disputes in this ADR proceeding. If the parties are
     unable to agree on a mutually acceptable neutral within such period, either
     party may request the President of the CPR Institute for Dispute Resolution
     ("CPR"), 366 Madison Avenue, 14th Floor, New York, New York 10017, to
     select a neutral pursuant to the following procedures:

     (a)    The CPR shall submit to the parties a list of not less than five (5)
            candidates within fourteen (14) days after receipt of the request,
            along with a Curriculum Vitae for each

                                       i
<PAGE>

            candidate. No candidate shall be an employee, director, or
            shareholder of either party or any of their subsidiaries or
            affiliates.

     (b)    Such list shall include a statement of disclosure by each candidate
            of any circumstances likely to affect his or her impartiality.

     (c)    Each party shall number the candidates in order of preference (with
            the number one (1) signifying the greatest preference) and shall
            deliver the list to the CPR within seven (7) days following receipt
            of the list of candidates. If a party believes a conflict of
            interest exists regarding any of the candidates, that party shall
            provide a written explanation of the conflict to the CPR along with
            its list showing its order of preference for the candidates. Any
            party failing to return a list of preferences on time shall be
            deemed to have no order of preference.

     (d)    If the parties collectively have identified fewer than three (3)
            candidates deemed to have conflicts, the CPR immediately shall
            designate as the neutral the candidate for whom the parties
            collectively have indicated the greatest preference. If a tie should
            result between two candidates, the CPR may designate either
            candidate. If the parties collectively have identified three (3) or
            more candidates deemed to have conflicts, the CPR shall review the
            explanations regarding conflicts and, in its sole discretion, may
            either (i) immediately designate as the neutral the candidate for
            whom the parties collectively have indicated the greatest
            preference, or (ii) issue a new list of not less than five (5)
            candidates, in which case the procedures set forth in subparagraphs
            2(a) - 2(d) shall be repeated.

3.   No earlier than twenty-eight (28) days or later than fifty-six (56) days
     after selection, the neutral shall hold a hearing to resolve each of the
     issues identified by the parties. The ADR proceeding shall take place at a
     location agreed upon by the parties. If the parties cannot agree, the
     neutral shall designate a location other than the principal place of
     business of either party or any of their subsidiaries or affiliates.

                                      ii
<PAGE>

4.   At least seven (7) days prior to the hearing, each party shall submit the
     following to the other party and the neutral:

     (a)   a copy of all exhibits on which such party intends to rely in any
           oral or written presentation to the neutral;

     (b)   a list of any witnesses such party intends to call at the hearing,
           and a short summary of the anticipated testimony of each witness;

     (c)   a proposed ruling on each issue to be resolved, together with a
           request for a specific damage award or other remedy for each issue.
           The proposed rulings and remedies shall not contain any recitation of
           the facts or any legal arguments and shall not exceed one (1) page
           per issue.

     (d)   a brief in support of such party's proposed rulings and remedies,
           provided that the brief shall not exceed twenty (20) pages. This page
           limitation shall apply regardless of the number of issues raised in
           the ADR proceeding.

     Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery
     shall be required or permitted by any means, including depositions,
     interrogatories, requests for admissions, or production of documents.

5.   The hearing shall be conducted on two (2) consecutive days and shall be
     governed by the following rules:

     (a)    Each party shall be entitled to five (5) hours of hearing time to
            present its case. The neutral shall determine whether each party has
            had the five (5) hours to which it is entitled.

     (b)    Each party shall be entitled, but not required, to make an opening
            statement, to present regular and rebuttal testimony, documents or
            other evidence, to cross-examine witnesses,

                                      iii
<PAGE>

            and to make a closing argument. Cross-examination of witnesses shall
            occur immediately after their direct testimony, and cross-
            examination time shall be charged against the party conducting the
            cross-examination.

     (c)    The party initiating the ADR shall begin the hearing and, if it
            chooses to make an opening statement, shall address not only issues
            it raised but also any issues raised by the responding party. The
            responding party, if it chooses to make an opening statement, also
            shall address all issues raised in the ADR. Thereafter, the
            presentation of regular and rebuttal testimony and documents, other
            evidence, and closing arguments shall proceed in the same sequence.

     (d)    Except when testifying, witnesses shall be excluded from the hearing
            until closing arguments.

     (e)    Settlement negotiations, including any statements made therein,
            shall not be admissible under any circumstances. Affidavits prepared
            for purposes of the ADR hearing also shall not be admissible. As to
            all other matters, the neutral shall have sole discretion regarding
            the admissibility of any evidence.

6.   Within seven (7) days following completion of the hearing, each party may
     submit to the other party and the neutral a post-hearing brief in support
     of its proposed rulings and remedies, provided that such brief shall not
     contain or discuss any new evidence and shall not exceed ten (10) pages.
     This page limitation shall apply regardless of the number of issues raised
     in the ADR proceeding.

7.   The neutral shall rule on each disputed issue within fourteen (14) days
     following completion of the hearing. Such ruling shall adopt in its
     entirety the proposed ruling and remedy of one of the parties on each
     disputed issue but may adopt one party's proposed rulings and remedies on
     some issues and the other party's proposed rulings and remedies on other
     issues. The neutral shall not issue any written opinion or otherwise
     explain the basis of the ruling.

                                      iv
<PAGE>

8.   The neutral shall be paid a reasonable fee plus expenses. These fees and
     expenses, along with the reasonable legal fees and expenses of the
     prevailing party (including all expert witness fees and expenses), the fees
     and expenses of a court reporter, and any expenses for a hearing room,
     shall be paid as follows:

     (a)    If the neutral rules in favor of one party on all disputed issues in
            the ADR, the losing party shall pay 100% of such fees and expenses.

     (b)    If the neutral rules in favor of one party on some issues and the
            other party on other issues, the neutral shall issue with the
            rulings a written determination as to how such fees and expenses
            shall be allocated between the parties. The neutral shall allocate
            fees and expenses in a way that bears a reasonable relationship to
            the outcome of the ADR, with the party prevailing on more issues, or
            on issues of greater value or gravity, recovering a relatively
            larger share of its legal fees and expenses.

9.   The rulings of the neutral and the allocation of fees and expenses shall be
     binding, non-reviewable, and non-appealable, and may be entered as a final
     judgment in any court having jurisdiction.

10.  Except as provided in paragraph 9 or as required by law, the existence of
     the dispute, any settlement negotiations, the ADR hearing, any submissions
     (including exhibits, testimony, proposed rulings, and briefs), and the
     rulings shall be deemed Confidential Information. The neutral shall have
     the authority to impose sanctions for unauthorized disclosure of
     Confidential Information.

11.  All disputes referred to ADR, the statute of limitations, and the remedies
     for any wrong that may be found, shall be governed by the laws of the State
     of Illinois.

                                       v
<PAGE>

12.  The neutral may not award punitive damages. The parties hereby waive the
     right to punitive damages.

13.  The hearings shall be conducted in the English language.

14.  The parties shall not have ex parte communications with the neutral during
     the pendancy of the ADR proceeding before such neutral.

                                      vi
<PAGE>

                               SUPPLY AGREEMENT
                                    between
                                 Anesta Corp.
                                      and
                              Abbott Laboratories

     This Agreement, dated this _____ day of March 2000 ("Effective Date"), is
by and between Anesta Corp., a Delaware corporation having its principle place
of business at 4745 Wiley Post Way, Salt Lake City, Utah 84116 ("Anesta") and
Abbott Laboratories, an Illinois corporation, having its principle place of
business at 100 Abbott Park Road, Abbott Park, IL 60064-3500 ("Abbott").

                                  WITNESSETH:
                                  -----------

     WHEREAS, Anesta owns rights to the proprietary drug Actiq(R) and Fentanyl
Oralet(R), and desires Abbott to manufacture and sell to and distribute for
Anesta, Anesta's total United States requirements of such products; and

     WHEREAS, Abbott desires to manufacture and sell to and distribute for
Anesta, Anesta's total United States requirements of Actiq(R) and Fentanyl
Oralet(R).

     NOW THEREFORE, in consideration of the premises and the mutual promises and
agreements contained herein, Anesta and Abbott agree as follows:

                                   ARTICLE I

     The following words and phrases, when capitalized and used in this
Agreement, shall have the following meanings:

     1.1  "Confidential Information" shall mean all information disclosed
           ------------------------
hereunder or under the Original Agreements (as defined in the Termination
Agreement) and identified as being confidential except any portion thereof
which:

                                       1
<PAGE>

          (a)   is known to the recipient before receipt thereof under this
                Agreement, as evidenced by its written records;

          (b)   is disclosed in good faith to the recipient after acceptance of
                this Agreement by a third person lawfully in possession of such
                information and not under an obligation of nondisclosure;

          (c)   is or becomes part of the public domain through no fault of the
                recipient;

          (d)   is developed by or for the recipient independently of
                information disclosed hereunder as evidenced by the recipient's
                written records or other competent evidence; or

          (e)   is required by law to be disclosed.

     1.2  "Contract Year" shall mean the twelve (12)-month period commencing on
           -------------
April 1, 2000.

     1.3  "DEA" shall mean the United States Drug Enforcement Administration.
           ---

     1.4  "Fully Burdened Manufacturing Costs" shall have the meaning set forth
           ----------------------------------
in the Original Agreements.

     1.5  "Product" shall mean Fentanyl Oralet(R)or Actiq(R)that meets the
           -------
respective Product Specifications.

     1.6  "Product Specifications" shall mean a detailed description of the
           ----------------------
respective Product set forth in [...***...] in effect as of the Effective Date,
or as modified according to applicable laws and regulations or as otherwise
mutually agreed in writing by the parties.

     1.7  "Termination Agreement" shall mean that certain Termination and Asset
           ---------------------
Sale and Purchase Agreement between Abbott and Anesta dated March 13, 2000.

     1.8. "Transition Period" shall have the meaning set forth in the
           -----------------
Termination Agreement.

* Confidential treatment requested

                                       2
<PAGE>

                                  ARTICLE II

                       MANUFACTURE AND SUPPLY OF PRODUCT
                       ---------------------------------

     2.1    Purchase and Sale of Product. Abbott shall manufacture, sell and
            ----------------------------
deliver Product pursuant to Section 2.6 and Anesta shall purchase Anesta's total
United States requirements of Product exclusively from Abbott, subject to the
provisions of Section 4.3(a). The firm price per unit of Product sold to
Purchaser hereunder be [...***...] In the event of an unanticipated increase in
raw material costs or other unanticipated circumstances which cause the Fully
Burdened Manufacturing Costs to exceed [...***...] the parties shall negotiate
an appropriate adjustment to the maximum price per unit for the affected
Product. [...***...]

     2.2    Minimum Orders. The minimum quantity of Product ordered hereunder in
            --------------
any one order shall be the minimum batch size of the Abbott manufacturing
facility based upon a single shift production run.

     2.3    Manufacture of Product
            ----------------------

     2.3.1  Product Manufacture; Access to Drug Master Files; Labeling.
            ----------------------------------------------------------
Abbott shall manufacture Product in accordance with the Product Specifications
and current Good Manufacturing Practices ("cGMP") of the United States Food and
Drug Administration ("FDA") and other applicable rules and regulations of the
FDA and other United States governmental or regulatory agencies with
jurisdiction over the manufacture, use or sale of the Product as then in effect.
To the extent permissible under applicable laws and regulations, Abbott shall
grant Anesta reference rights to all Drug Master Files ("DMFs") necessary to
support Anesta's New Drug Applications ("NDAs") for Product and to enable Anesta
to assume manufacture of the Product upon expiration or earlier termination of
this Agreement. Abbott shall keep its DMFs up-to-date and shall inform Anesta
prior to any modifications that affect Product in order to permit Anesta to
amend or supplement any affected regulatory applications and files for Product.
Abbott shall label Product in accordance with label copy that Anesta provides.
Abbott shall maintain label artwork masters current with Anesta-approved Product
labeling. Anesta shall provide Abbott advance review of Product labeling changes
initiated by Anesta. Further, Anesta shall have final approval of any Product
labeling changes initiated by Abbott. Such copy may be

* Confidential Treatment Requested

                                       3
<PAGE>

modified from time to time by agreement of the parties. Anesta shall reimburse
Abbott for Abbott's actual costs of making any label copy changes. During the
term of this Agreement, Abbott shall submit to the DEA bulk drug quantity
requests required to support Anesta's forecasts of Product.

     2.3.2 Quality Control. Abbott shall apply its quality control procedures
           ---------------
and in-plant quality control checks on the manufacture of Product for Anesta in
the same manner as Abbott applies such procedures and checks to products that
Abbott manufactures and sells for its own account. In addition, Abbott shall
test and release Product in accordance with the test methods described in the
documents referenced in Section 1.6 to ensure that Product conforms to the
Product Specifications. The parties each acknowledge that the documents
referenced in Section 1.6 establish procedures to obtain mutual consent for any
changes to Product Specifications to assure cGMP compliance, and each party
hereby agrees to abide by the procedures set forth therein.

     2.3.3 Audits. Anesta quality assurance and regulatory affairs personnel
           ------
shall have the right, upon reasonable written notice to Abbott, to conduct
during normal business hours a general quality assurance audit and inspection of
Abbott's quality assurance and regulatory records and production facilities
relating to the manufacture of Product, and special follow-up audits as
necessary. The general quality assurance audits and inspections may be conducted
once each calendar year. Visits by Anesta to Abbott's production facilities may
involve the transfer of Confidential Information and shall be subject to the
terms of Article V hereof. The results of such audits and inspections shall be
considered Confidential Information under Article V and shall not be disclosed
to third persons, including, but not limited to, the FDA and other government
regulatory agencies, unless required by law. Anesta shall use its commercially
reasonable efforts to provide Abbott with prior written notice of such legally
required disclosure, but if the circumstances of such disclosure make prior
notice impracticable, Anesta shall notify Abbott in writing of such disclosure
promptly thereafter.

     2.3.4 Product Disposition. Abbott shall appropriately and fully
           -------------------
document the validation, manufacturing, testing (incoming, in-process, release
and stability) and all process deviations and material nonconformances according
to approved batch records, test methods, protocols, quality action limits and
Product Specifications. Abbott shall provide to Anesta a

                                       4
<PAGE>

certificate of analysis, not later than ten (10) days after the release of each
batch or lot, confirming that such batch or lot meets the Product
Specifications.

     2.3.5 Notification of Complaints; Adverse Event Reporting. Anesta shall
           ---------------------------------------------------
be responsible for complaint receipt, opening, investigation (excluding
manufacturing related issues), customer response, closure and any subsequent
required Adverse Event reporting to the FDA. Abbott, as the manufacturer of the
Product, shall provide reasonable assistance in failure analysis and complaint
investigation. Abbott shall forward to Anesta any Product complaint Abbott
receives within one (1) business day of Abbott's receipt and knowledge of such
complaint. Anesta shall notify Abbott of any Product complaints that may involve
issues of Abbott's manufacturing or packaging of Product in sufficient time to
allow Abbott to evaluate the complaints and assist Anesta in responding to such
complaints.

     2.3.6 Commercial Stability. Abbott shall test Product lots (in any
           --------------------
strength) kept on stability for compliance with the applicable Product stability
protocols contained in the Product NDAs. Abbott shall submit the data and
records of any applicable investigations for review and approval by Anesta prior
to incorporating such information into any internal or external reports. Abbott
shall communicate to Anesta that a Product lot does not meet Product
Specifications within three (3) business of days of learning of such confirmed
results so that Anesta may consider and determine the appropriate regulatory
action. Abbott shall reasonably cooperate with Anesta in taking all appropriate
and required actions under applicable regulations with respect to such Product
lots. Abbott shall invoice Anesta for the atypical (non-planned) stability
maintenance costs incurred by Abbott as a result of additional requirements
initiated by or attributable to Anesta. Further, the parties acknowledge that
Abbott has been conducting a thirty-six (36) month stability program for Actiq
commenced prior to the Effective Date and scheduled to be completed by June 30,
2000, and commenced performing, prior to the Effective Date, stability testing
of the first six (6) lots of each strength of Actiq. Abbott shall continue the
ongoing thirty-six (36) month stability program for Actiq through June 30, 2000,
and will continue the ongoing stability testing for the first six (6) lots of
each strength of Actiq during the term of this Agreement.

     2.3.7 Sample Retention. Abbott shall retain samples of each lot or batch of
           ----------------
Products in compliance with applicable Abbott Standard Operating Procedures.

                                       5
<PAGE>

     2.3.8 Compliance with Laws. Abbott shall use commercially reasonable
           --------------------
efforts to comply with all applicable present orders, regulations, requirements
and laws of any and all United States in connection with the manufacture of the
Product, including, without limitation, all laws and regulations applicable to
the transportation, storage, use, handling and disposal of hazardous materials
resulting from or relating to the manufacture of Products.

     2.4   Exclusive Shipping. For the term of this Agreement, Abbott shall be
           ------------------
solely responsible for shipping finished Product only to Anesta customers that
have the appropriate authorization from the DEA, including, without limitation,
primary wholesalers and hospitals in the United States, as provided in Section
2.6. Notwithstanding the foregoing in this Section 2.4, Abbott shall not be
obligated to ship Product to customers in the retail pharmacy trade.

     2.5   Price and Payment
           -----------------

     2.5.1 Price. Anesta shall have sole authority to set and change the Product
           -----
price charged to wholesalers, hospitals, pharmacies and other customers.

     2.5.2 Payment. During the Transition Period, payment for Product
           -------
manufactured and supplied hereunder shall be governed by Section 8.5 of the
Termination Agreement. Upon expiration of the Transition Period and thereafter,
Abbott shall invoice Anesta monthly for Product delivered pursuant to Section
2.6. Anesta shall make payment net thirty (30) days from the date of receipt of
Abbott's invoice. A late payment service charge of one and one-half percent
(1.5%) per month (or the highest amount allowed by law, if lower than 1.5%)
shall be paid by Anesta on all past due accounts. Abbott shall provide notice to
Anesta of past due amounts at least ten (10) days prior to the application of
any late payment service charge.

     2.5.3 Taxes. Anesta shall pay any federal, state, county or municipal sales
           -----
or use tax, excise, customs charges, duties or similar charge, or any other tax
assessment (other than that assessed against income), license, fee or other
charge lawfully assessed or charged on the manufacture, sale or transportation
of Product sold pursuant to this Agreement.

     2.6   Delivery. Abbott shall deliver Product to Anesta, F.C.A. Abbott's
           --------
plant or other facility at Abbott Park, Illinois or other facility the parties
may agree to in writing, packaged and labeled for shipment to such third parties
as Anesta designates in its purchase orders or otherwise in writing from time to
time. Shipment shall be via an Anesta-approved carrier, and title and risk of
loss to the Products shall pass to Anesta upon delivery to such carrier. All
shipments shall be subject to applicable regulations and documentation
requirements promulgated by the DEA.

                                       6
<PAGE>

     2.7    Orders and Forecasts
            --------------------

     2.7.1  First Order Estimate. Anesta shall provide Abbott with a written
            --------------------
estimate of Anesta's monthly requirements for Product for the [...***...]
following the expiration of the Transition Period (the "Initial Forecast
Period") not later [...***...] Such estimate shall be a rolling forecast and
Anesta shall provide a quarterly update to such rolling forecast not later than
ninety (90) days prior to the beginning of the next quarterly period. Subject to
Subsection 2.7.3 below, Abbott acknowledges that such quantities are estimates
only. Within twenty (20) days of receipt of the initial rolling forecast and
each quarterly update, Abbott shall confirm in writing that it shall be able to
manufacture the quantities of Product listed in each rolling forecast, or if
Abbott cannot so confirm, Abbott shall advise Anesta in writing of the quantity
of Product Abbott shall be able to manufacture for the period of such forecast.
Notwithstanding the foregoing, Abbott shall use commercially reasonable efforts
to manufacture one hundred percent (100%) of the quantities of Product listed in
Anesta's rolling forecast, and after confirming that it shall be able to
manufacture a particular quantity of Product, Abbott shall not revoke such
confirmation or revise such quantity downward. If Abbott determines that it
cannot manufacture a quantity of Product previously confirmed by Abbott, the
parties shall meet and confer to discuss the circumstances giving rise to
Abbott's determination and the appropriate means to address them.

     2.7.2  Scheduling. Abbott and Anesta shall cooperate fully in estimating
            ----------
and scheduling production for Product.

     2.7.3  First Firm Order. The Product quantities reflected in the first
            ----------------
[...***...] of Anesta's initial forecast provided pursuant to Subsection 2.7.1
shall constitute a firm order and shall be accompanied by Anesta's standard
purchase order, subject to Subsection 2.7.5 below.

     2.7.4. Subsequent Firm Orders. Anesta shall place a firm order for the
            ----------------------
second quarter of the Initial Forecast Period prior to the expiration of the
first quarter of the Initial Forecast Period. Thereafter, the [...***...] of the
then-current rolling forecast shall constitute a firm order, and Anesta shall
place such firm orders on a quarterly basis, no later than ninety (90) days
prior to the commencement of each succeeding [...***...] period.

* Confidential Treatment Requested

                                       7
<PAGE>

     2.7.5 Purchase Orders. Each purchase order for Product shall be governed by
           ---------------
the terms of this Agreement and none of the provisions of such purchase order
shall be applicable, except those specifying quantity ordered, delivery dates,
special shipping instructions and invoice information. Abbott may reject
Anesta's purchaser order only if: (a) such purchase order sets forth shipping
instructions, delivery dates, invoice information or other material information
which are inconsistent with this Agreement; or (b) the total amount in such
purchase order exceeds the forecast for the relevant quarter by more than
[...***...] If either of such conditions occurs, Abbott shall notify Anesta of
such rejection and the basis for it within thirty (30) days of receipt of
Anesta's purchase order.

     2.8   Guarantees and Warranties
           -------------------------

     2.8.1 Abbott's Guarantee. Abbott guarantees to Anesta that Product Abbott
           ------------------
delivers hereunder pursuant to this Agreement at the time of delivery shall not
be adulterated or misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act, as amended, or within the meaning of any applicable state or
municipal law in which the definitions of adulteration and misbranding are
substantially the same as those contained in the Federal Food, Drug and Cosmetic
Act, as such Act and such laws are constituted and effective at the time of
delivery and will not be an article which may not under the provisions of
Sections 404 and 505 of such Act be introduced into interstate commerce.

     2.8.2 Abbott's Product Warranty. Abbott represents and warrants to Anesta
           -------------------------
that Product shall be free from defects in material and workmanship and shall be
manufactured: (a) in accordance with and conformity to the Product
Specifications; and (b) in compliance with all applicable statutes, laws, rules
or regulations, including those relating to the environment, food or drugs and
occupational health and safety, including, without limitation, those enforced or
promulgated by the FDA. Abbott further represents and warrants to Anesta that
the performance of its obligations under this Agreement shall not result in a
violation or breach of, and shall not conflict with or constitute a default
under, its Certificate of Incorporation or corporate bylaws or any agreement,
contract, commitment or obligation to which Abbott or any of its affiliates is a
party or by which it is bound.

* Confidential Treatment Requested

                                       8
<PAGE>

     2.8.3 Exceptions to Abbott's Product Warranty. Subject to Subparagraph
           ---------------------------------------
2.8.4, the replacement provisions of Subparagraph 2.8.1 shall be Anesta's sole
and exclusive remedy for non-conforming or defective Product. ABBOTT MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCT. ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY
DISCLAIMED BY ABBOTT. Neither party shall be liable to the other for indirect,
incidental or consequential damages resulting from any breach of this Agreement.

     2.8.4 Abbott Indemnification. Abbott shall indemnify and hold harmless
           ----------------------
Anesta, its affiliates, officers, directors and employees from and against all
claims, causes of action, settlement costs, including reasonable attorneys'
fees, losses or liabilities of any kind related to this Agreement and asserted
by third persons that arise out of or are attributable to: (a) any intentional,
wrongful or negligent act or omission on the part of Abbott's employees, agents
or representatives; or (b) the lack of safety or efficacy of the Product
supplied by Abbott resulting from Abbott's failure to manufacture Product in
accordance with the terms hereunder.

     2.8.5 Anesta Indemnification. Anesta shall indemnify and hold harmless
           ----------------------
Abbott, its affiliates, officers, directors and employees from and against all
claims, causes of action, settlement costs, including reasonable attorneys'
fees, losses or liabilities of any kind related to this Agreement and asserted
by third persons which arise out of or are attributable to: (a) any intentional,
wrongful or negligent act or omission on the part of Anesta's employees, agents
or representatives; (b) the use of or lack of safety or efficacy of Product,
except to the extent resulting from Abbott's failure to manufacture Product in
accordance with the terms hereunder; or (c) Anesta's proprietary rights relating
to the Product; provided, however, that in the event Abbott seeks
indemnifications from Anesta pursuant to subpart (c) of this Section, then: (i)
Anesta's obligation to indemnify Abbott shall be Abbott's sole remedy against
Anesta for such claims; and (ii) Anesta shall have the right, in its sole
discretion, to obtain for Abbott the right to: (A) continue to manufacture the
Product; (B) replace or modify the relevant Product so as to make the Product
non-infringing; or (C) terminate the Agreement, with no further liability to
Abbott for such termination.

     2.8.6 Notice of Indemnity Claim. Each indemnified party agrees to give the
           -------------------------
indemnifying party prompt written notice of any matter upon which such
indemnified party

                                       9
<PAGE>

intends to base a claim for indemnification (an "Indemnity Claim") under this
Section. The indemnifying party shall have the right to participate jointly with
the indemnified party in the indemnified party's defense, settlement or other
disposition of any Indemnity Claim.

     2.8.7 Settlement of Indemnity Claims. With respect to any Indemnity Claim
           ------------------------------
relating solely to the payment of money damages and which could not result in
the indemnified party becoming subject to injunctive or other equitable relief
or otherwise adversely affect the business of the indemnified party in any
manner, and as to which the indemnifying party shall have acknowledged in
writing the obligation to indemnify the indemnified party hereunder, the
indemnifying party shall have the sole right to defend, settle or otherwise
dispose of such Indemnity Claim, on such terms as the indemnifying party, in its
sole discretion, shall deem appropriate; provided, that, the indemnifying party
shall provide reasonable evidence of its ability to pay any damages claimed and
with respect to any such settlement shall have obtained the written release of
the indemnified party from the Indemnity Claim. The indemnifying party shall
obtain written consent from the indemnified party (which such consent shall not
be unreasonably withheld) prior to ceasing to defend, settle or otherwise
dispose of any Indemnity Claim if, as a result thereof, the indemnified party
would become subject to injunctive or other equitable relief or the business of
the indemnified party would be adversely affected in any manner.

     2.9   Product Recalls and Withdrawals.
           -------------------------------

     2.9.1 Responsibilities. In the event (a) any United States governmental or
           ----------------
regulatory authority issues a request, directive or order that a Product be
recalled or withdrawn, (b) a court of competent jurisdiction orders such recall
or withdrawal or (c) Anesta determines, after consultation with Abbott, that a
recall or withdrawal is necessary or advisable (each a "Recall"), Anesta shall,
at Anesta's sole cost and expense, conduct any Recall, unless the Recall was
caused by the manufacture, packaging, storage, or handling of the recalled
Product by Abbott. In the event the Recall was caused by Abbott as described
above, Abbott promptly shall reimburse Anesta for all direct costs of the Recall
upon submission to Abbott by Anesta of an itemized statement thereof. However,
as circumstances giving rise to the Recall are identified, the parties shall
meet to: (v) jointly review the appropriateness and/or scope of the Recall; (w)
determine which party should initiate the Recall with the FDA and the customer
base; (x) mutually agree to the impacted customer population; (y) determine the
timing and logistics of the Recall; and (z)

                                      10
<PAGE>

mutually agree to the language used in any recall letter, telephone script and
media or other public announcement. For purposes of this Section 2.9, the
expenses of Recall shall include, but not be limited to, the expenses of
notification and destruction or return of the recalled Product and all other
costs incurred in connection with such Recall.

     2.9.2 Recall Dispute. If the parties do not agree as to the circumstances
           --------------
giving rise to the Recall, and those circumstances are specifically and solely
related to disputed test results, then representative samples of the Product
subject to Recall shall be submitted to a mutually acceptable third party
laboratory, which shall determine whether such recalled Product meets the
Product Specifications. The parties agree that such laboratory's determination
shall be final and determinative. The party against whom the third party tester
rules shall bear the reasonable costs of the third party testing. If the third
party tester rules that the batch meets the Product Specifications, Anesta shall
bear the costs of the recall. If the third-party tester rules that the batch
does not meet Product Specifications, Abbott shall bear the costs of the Recall.

     2.10  Purchase of Manufacturing Equipment. Upon the expiration or earlier
           -----------------------------------
termination of this Agreement, Abbott shall sell, assign, transfer, convey and
deliver to Anesta and Anesta shall purchase, accept and receive from Abbott the
manufacturing equipment set forth on Exhibit A (the "Manufacturing Equipment").
[...***...] Abbott shall cause the Manufacturing Equipment to be removed,
packaged, shipped and delivered, at Anesta's sole cost and expense, to the
destination specified by Anesta. To the extent requested in writing by Anesta,
Abbott shall provide Anesta reasonable technical assistance installing and
operating the Manufacturing Equipment. Such technical assistance shall be
offered at the rate of [...***...], plus travel expenses.

     2.11  Returned Product. Abbott shall notify Anesta in writing promptly upon
           ----------------
receipt of any Product returned from a third party customer. Anesta shall be
solely responsible for the costs associated for all such returns. Abbott shall
handle, and if appropriate, dispose of, such Product returns in accordance with
the applicable regulations and documentation requirements promulgated by the
DEA.

* Confidential Treatment Requested

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<PAGE>

                                  ARTICLE III
                    NO GRANT OF EXPRESS OR IMPLIED LICENSE
                    --------------------------------------

     3.1  Abbott's Proprietary Rights. Except as otherwise provided in the
          ---------------------------
Termination Agreement, Abbott has granted no license, express or implied, to
Anesta to use Abbott proprietary technology, know-how or rights relating to the
manufacturing and packaging technology used with respect to the manufacture and
packaging of Product. If Abbott, in its sole discretion, deems patentable any
improvement or invention related to Abbott's proprietary technology, know-how or
rights relating to the Product made or reduced to practice in the course of this
Agreement (the "Technology"), then Abbott shall notify Anesta in writing of such
Technology and Abbott shall be entitled to apply for patent protection on such
improvements or inventions at Abbott's expense and risk. The parties shall
negotiate in good faith mutually agreeable terms under which Anesta may obtain a
license to such Technology in the Field, as that term is defined in the
Termination Agreement. During the period of such negotiations, Abbott shall not
convey to a third party the right to practice such Technology; provided, however
that if the parties do not reach an agreement as to the terms under which Anesta
may obtain a license to practice such Technology within ninety (90) days after
Abbott's notice to Anesta, then Abbott shall be free to convey rights to such
Technology to a third party in its sole discretion.

     3.2  Anesta's Proprietary Rights. No license, express or implied, is
          ---------------------------
granted to Abbott to use Anesta's proprietary technology, know-how or rights
relating to the Product, other than for the purposes of this Agreement. If
Anesta, in its sole discretion, deems patentable any improvement or invention
related to Anesta's proprietary technology, know-how or rights relating to the
Product, then Anesta shall be entitled to apply for patent protection on such
improvements or inventions at its expense and risk.

                                  ARTICLE IV

                             TERM AND TERMINATION
                             --------------------

     4.1  Term. This Agreement shall commence on the date first above written
          ----
and the initial term shall expire at the end of the second Contract Year;
provided, however, Anesta may, at its sole discretion upon six (6) months prior
written notice to Abbott, extend the term of this Agreement for up to an
additional twelve (12) months.

                                      12
<PAGE>

         4.2      General  Termination  Rights.  Either party may terminate
                  ----------------------------
this Agreement by giving to the other party sixty (60) days prior written notice
as follows:

                  (a) Upon the bankruptcy or the insolvency of the other party;

                  (b) Upon the breach of any warranty or any other material
         provision of this Agreement by the other party if the breach is not
         cured within sixty (60) days after written notice thereof to the party
         in default; or

                  (c) Upon the breach of Sections 2.3(b) or (c) of the
         Termination Agreement by the other party if the breach is not cured in
         accordance with the terms and conditions thereunder.

         4.3      Strategic Termination.  Anesta may terminate this Agreement
                  ----------------------
 as follows:

                  (a) by giving Abbott ninety (90) days written notice, if
         Anesta determines, in its sole discretion, that Anesta's manufacturing
         capacity is sufficient to meet its United States supply requirements
         for Actiq and Fentanyl Oralet, whether manufactured according to the
         Product Specifications or using other specifications; or

(b)      [...***...]

         4.4      Reimbursement Upon Termination. Upon termination pursuant to
                  ------------------------------
this Article IV, Anesta shall reimburse Abbott for Abbott's cost of all supplies
purchased and on hand or on order, if such supplies were ordered by Abbott based
on firm purchase orders or Anesta's rolling forecast of Product and such
supplies cannot be reasonably used by Abbott for other purposes. Abbott shall
invoice for amounts due hereunder. Payment shall be made pursuant to
Subparagraph 2.5.2.

         4.5      Return of Inventory. In the event of any termination, Abbott
                  -------------------
shall return any remaining inventory of Product to Anesta at Anesta's expense,
unless such termination shall have been as a result of a breach of this
Agreement by Abbott, in which case such inventory shall be returned at Abbott's
expense. Prior to the effective date of such termination, the parties shall meet
in good faith and confer in order to determine the amount of money Anesta shall
pay Abbott for such inventory.

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<PAGE>

                                    ARTICLE V

                            CONFIDENTIAL INFORMATION
                            ------------------------

         5.1      Non-Disclosure. The parties recognize that, during the term of
                  --------------
this Agreement, each party may exchange Confidential Information. Abbott shall
not disclose to third persons Confidential Information received from Anesta, and
shall not use Confidential Information disclosed to it by Anesta for Abbott's
benefit (other than in the performance of its obligation hereunder) or for the
benefit of any third person. Anesta shall not disclose to third persons
Confidential Information received from Abbott, and Anesta shall not use
Confidential Information disclosed to it by Abbott for Anesta's benefit (other
than in the performance of its obligations hereunder) or for the benefit of any
third person. For the purposes of this Agreement, the terms and conditions of
this Agreement shall be considered as Confidential Information.

         5.2      Limited Rights to Disclosed Confidential Information.
                  ----------------------------------------------------
Notwithstanding the above, nothing contained in this Agreement shall preclude
Anesta or Abbott from utilizing Confidential Information as may be necessary in
prosecuting patent rights, obtaining governmental marketing approvals, or in
manufacturing Product pursuant to this Agreement. The obligations of the parties
relating to Confidential Information shall expire five (5) years after the
termination of this Agreement.

         5.3      Requests for Disclosure of Confidential Information. If either
                  ---------------------------------------------------
party is requested to disclose any Confidential Information in connection with a
legal or administrative proceeding, such party shall give the other party prompt
notice of such request. The other party may seek an appropriate protective order
or other remedy and/or waive compliance with the provisions of this Agreement.
If such party seeks a protective order or other remedy, the other party shall
cooperate. If such party fails to obtain a protective order or waive compliance
with the relevant provisions of this Agreement, the disclosing party shall
disclose only that portion of the Confidential Information which its legal
counsel determines it is required to disclose.

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<PAGE>

                                   ARTICLE VI

                                  MISCELLANEOUS
                                  -------------

         6.1      Force Majeure. Any delay in the performance of any of the
                  -------------
duties or obligations of either party hereto (except the payment of money) shall
not be considered a breach of this Agreement and the time required for
performance shall be extended for a period equal to the period of such delay,
provided that such delay has been caused by or is the result of any acts of God,
acts of the public enemy, insurrections, riots, embargoes, labor disputes,
including strikes, lockouts, job actions, boycotts, fires, explosions, floods,
shortages of material or energy, or other unforeseeable causes beyond the
control and without the fault or negligence of the party so affected. The
affected party shall give prompt notice to the other party of such cause, and
shall take promptly whatever reasonable steps necessary to relieve the effect of
such cause. If Abbott becomes subject to an event of force majeure or problems
are encountered which interfere with production of Product at Abbott's Lake
County, Illinois plant, the parties shall agree mutually on implementation of an
agreed upon action plan to transfer production to another Abbott plant. Parties
shall meet, after the execution of this Agreement and at the request of either
party, to discuss and define such an action plan.

         6.2      Notice. All notices hereunder shall be delivered either: (a)
                  ------
personally; (b) by facsimile and confirmed by first class mail (postage
prepaid); (c) by registered or certified mail (postage prepaid); or (d) by
overnight courier, to the following addresses of the respective parties:

         If to Anesta:
                           Anesta Corp.
                           4745 Wiley Post Way
                           Salt Lake City, Utah  84116
                           Facsimile Number: (801) 595-1406
                           Attention:  President and Chief Executive Officer

         With copy to:
                           Cooley Godward LLP
                           2595 Canyon Boulevard
                           Suite 250
                           Boulder, CO  80302-6737
                           Attention:  James C. Linfield, Esq.

                                      15
<PAGE>

                           Facsimile Number:(303) 546-4099

         If to Abbott:     Abbott Laboratories
                           200 Abbott Park Road
                           Abbott Park, Illinois 60064-3537.
                           Facsimile Number: [...***...]
                           Attention: President, Hospital Products Division

         With              copy to: Divisional Vice President, Domestic Legal
                           Operations 100 Abbott Park Road, D-322 AP6D Abbott
                           Park, Illinois 60064-3500 Facsimile Number:
                           [...***...]

         Notices shall be effective upon receipt if personally delivered or
delivered by facsimile, or on the third business day following the date of
mailing or on the day following dispatch by courier. A party may change its
address listed above by written notice to the other party.

         6.3      Choice of Law. This  Agreement  shall be construed,
                  -------------
interpreted and governed by the laws of the State of Illinois, without regard to
its choice of law rules.

         6.4      Alternative Dispute Resolution. The parties recognize that
                  ------------------------------
bona fide disputes may arise which relate to the parties' rights and obligations
under this Agreement. The parties agree that any such dispute shall be resolved
by the alternative dispute resolution procedure set forth in Exhibit C.

         6.5      Assignment. Neither party shall assign this Agreement nor any
                  ----------
part thereof without the prior written consent of the other party; provided,
however, that: (a) either party may assign this Agreement to one of its
subsidiaries without the other party's consent; or (b) either party, without
such consent, may assign or sell the same in connection with the transfer or
sale of substantially all of its business to which this Agreement pertains or in
the event of its merger or consolidation with another company. Any permitted
assignee shall assume all obligations of its assignor under this Agreement. No
assignment shall relieve any party of responsibility for the performance of any
accrued obligation that such party then has hereunder.

         6.6      Entire Agreement. This Agreement and its exhibits and the
                  ----------------
Termination Agreement constitutes the entire understanding between the parties
concerning the subject matter hereof and supersede all written or oral prior
agreements or understandings with respect thereto. No course of dealing or usage
of trade shall be used to modify the terms and conditions hereof.

*  Confidential treatment requested

                                      16
<PAGE>

         6.7      Severability. This Agreement is subject to the restrictions,
                  ------------
limitations, terms and conditions of all applicable laws, governmental
regulations, approvals and clearances. If, for any reason, any term or provision
of this Agreement shall be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other term or provision hereof, and this Agreement shall be interpreted and
construed as if such term or provision, to the extent the same shall have been
held to be invalid, illegal or unenforceable, had never been contained herein.

         6.8      Waiver - Modification of Agreement. No waiver or modification
                  ----------------------------------
of any of the terms of this Agreement shall be valid unless in writing and
signed by authorized representatives of each party. Failure by either party to
enforce any such rights under this Agreement shall not be construed as a waiver
of such rights nor shall a waiver by either party in one or more instances be
construed as constituting a continuing waiver or as a waiver in other instances.

         6.9      Insurance. Both parties shall obtain and maintain, at its sole
                  ---------
expense, insurance sufficient in both its nature and amount, to cover its
performance and obligation under this Agreement. Each party shall provide the
other with evidence of such insurance coverage upon request.

         6.10     Survival. Termination, expiration, cancellation or abandonment
                  --------
of this Agreement through any means and for any reason shall not relieve the
parties of any obligation accruing prior thereto and shall be without prejudice
to the rights and remedies of either party with respect to any antecedent breach
of any of the provisions of this Agreement.

         6.11     Binding  Effect.  This  Agreement  shall be binding upon and
                  ---------------
inure to the benefit of each of the parties and is successors and permitted
assigns.

                                      17
<PAGE>

         IN WITNESS WHEREOF, the parties intending to be bound by the terms and
conditions hereof have caused this Agreement to be signed by their duly
authorized representatives on the date first above written.

ABBOTT LABORATORIES                             ANESTA CORP.
By:      /s/ Richard A. Gonzalez                By:    /s/ Thomas B. King
   ---------------------------------               ------------------------
   Richard A. Gonzalez                             Thomas B. King
   Senior Vice President, Hospital Products        President and Chief Executive
                                                   Officer
Date:    3/13/00                                Date:    3/13/00
     -------------------------------                 ----------------------

                                      18
<PAGE>

                               Supply Agreement

                                    Anesta

                                      and

                              Abbott Laboratories

                                   Exhibit A

                            Manufacturing Equipment
                            -----------------------
Asset
Number         Asset Description                                  Comment

[...***...]

* Confidential Treatment Requested
<PAGE>

                                Supply Agreement

                                     Anesta

                                       and

                               Abbott Laboratories

                                    Exhibit B

                             Abbott Long Range Plan
                             ----------------------

         Year                                     Forecasted Units of Products
         ----                                     ----------------------------
         [...***...]

* Prorate for portion of Contract Year if applicable
* Confidential treatment requested
<PAGE>

                               Supply Agreement

                                    Anesta

                                      and

                              Abbott Laboratories

                                   Exhibit C

                        Alternative Dispute Resolution
                        ------------------------------

The parties recognize that bona fide disputes as to certain matters may arise
from time to time during the term of this Agreement which relate to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution ("ADR") provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units within
twenty-eight (28) days after such notice is received (all references to "days"
in this ADR provision are to calendar days).

If the matter has not been resolved within twenty-eight (28) days of the notice
of dispute, or if the parties fail to meet within such twenty-eight (28) days,
either party may initiate an ADR proceeding as provided herein. The parties
shall have the right to be represented by counsel in such a proceeding.

1.     To begin an ADR proceeding, a party shall provide written notice to the
       other party of the issues to be resolved by ADR. Within fourteen (14)
       days after its receipt of such notice, the other party may, by written
       notice to the party initiating the ADR, add additional issues to be
       resolved within the same ADR.

2.     Within twenty-one (21) days following receipt of the original ADR notice,
       the parties shall select a mutually acceptable neutral to preside in the
       resolution of any disputes in this ADR proceeding. If the parties are
       unable to agree on a mutually acceptable neutral within such period,
       either party may request the President of the CPR Institute for Dispute
       Resolution ("CPR"), 366 Madison Avenue, 14th Floor, New York, New York
       10017, to select a neutral pursuant to the following procedures:
<PAGE>

       (a)    The CPR shall submit to the parties a list of not less than five
              (5) candidates within fourteen (14) days after receipt of the
              request, along with a Curriculum Vitae for each candidate. No
              candidate shall be an employee, director, or shareholder of either
              party or any of their subsidiaries or affiliates.

       (b)    Such list shall include a statement of disclosure by each
              candidate of any circumstances likely to affect his or her
              impartiality.

       (c)    Each party shall number the candidates in order of preference
              (with the number one (1) signifying the greatest preference) and
              shall deliver the list to the CPR within seven (7) days following
              receipt of the list of candidates. If a party believes a conflict
              of interest exists regarding any of the candidates, that party
              shall provide a written explanation of the conflict to the CPR
              along with its list showing its order of preference for the
              candidates. Any party failing to return a list of preferences on
              time shall be deemed to have no order of preference.

       (d)    If the parties collectively have identified fewer than three (3)
              candidates deemed to have conflicts, the CPR immediately shall
              designate as the neutral the candidate for whom the parties
              collectively have indicated the greatest preference. If a tie
              should result between two candidates, the CPR may designate either
              candidate. If the parties collectively have identified three (3)
              or more candidates deemed to have conflicts, the CPR shall review
              the explanations regarding conflicts and, in its sole discretion,
              may either (i) immediately designate as the neutral the candidate
              for whom the parties collectively have indicated the greatest
              preference, or (ii) issue a new list of not less than five (5)
              candidates, in which case the procedures set forth in
              subparagraphs 2(a) - 2(d) shall be repeated.

3.     No earlier than twenty-eight (28) days or later than fifty-six (56) days
       after selection, the neutral shall hold a hearing to resolve each of the
       issues identified by the parties. The ADR proceeding shall take place at
       a location agreed upon by the parties. If the parties cannot agree, the
       neutral shall designate a location other than the principal place of
       business of either party or any of their subsidiaries or affiliates.
<PAGE>

4.     At least seven (7) days prior to the hearing, each party shall submit the
       following to the other party and the neutral:

       (a)    a copy of all exhibits on which such party intends to rely in any
              oral or written presentation to the neutral;

       (b)    a list of any witnesses such party intends to call at the hearing,
              and a short summary of the anticipated testimony of each witness;

       (c)    a proposed ruling on each issue to be resolved, together with a
              request for a specific damage award or other remedy for each
              issue. The proposed rulings and remedies shall not contain any
              recitation of the facts or any legal arguments and shall not
              exceed one (1) page per issue.

       (d)    a brief in support of such party's proposed rulings and remedies,
              provided that the brief shall not exceed twenty (20) pages. This
              page limitation shall apply regardless of the number of issues
              raised in the ADR proceeding.

       Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery
       shall be required or permitted by any means, including depositions,
       interrogatories, requests for admissions, or production of documents.

5.     The hearing shall be conducted on two (2) consecutive days and shall be
       governed by the following rules:

       (a)    Each party shall be entitled to five (5) hours of hearing time to
              present its case. The neutral shall determine whether each party
              has had the five (5) hours to which it is entitled.
<PAGE>

       (b)    Each party shall be entitled, but not required, to make an opening
              statement, to present regular and rebuttal testimony, documents or
              other evidence, to cross-examine witnesses, and to make a closing
              argument. Cross-examination of witnesses shall occur immediately
              after their direct testimony, and cross-examination time shall be
              charged against the party conducting the cross-examination.

       (c)    The party initiating the ADR shall begin the hearing and, if it
              chooses to make an opening statement, shall address not only
              issues it raised but also any issues raised by the responding
              party. The responding party, if it chooses to make an opening
              statement, also shall address all issues raised in the ADR.
              Thereafter, the presentation of regular and rebuttal testimony and
              documents, other evidence, and closing arguments shall proceed in
              the same sequence.

       (d)    Except when testifying, witnesses shall be excluded from the
              hearing until closing arguments.

       (e)    Settlement negotiations, including any statements made therein,
              shall not be admissible under any circumstances. Affidavits
              prepared for purposes of the ADR hearing also shall not be
              admissible. As to all other matters, the neutral shall have sole
              discretion regarding the admissibility of any evidence.

6.     Within seven (7) days following completion of the hearing, each party may
       submit to the other party and the neutral a post-hearing brief in support
       of its proposed rulings and remedies, provided that such brief shall not
       contain or discuss any new evidence and shall not exceed ten (10) pages.
       This page limitation shall apply regardless of the number of issues
       raised in the ADR proceeding.

7.     The neutral shall rule on each disputed issue within fourteen (14) days
       following completion of the hearing. Such ruling shall adopt in its
       entirety the proposed ruling and remedy of one of the parties on each
       disputed issue but may adopt one party's proposed rulings and remedies on
       some
<PAGE>

       issues and the other party's proposed rulings and remedies on other
       issues. The neutral shall not issue any written opinion or otherwise
       explain the basis of the ruling.

8.     The neutral shall be paid a reasonable fee plus expenses. These fees and
       expenses, along with the reasonable legal fees and expenses of the
       prevailing party (including all expert witness fees and expenses), the
       fees and expenses of a court reporter, and any expenses for a hearing
       room, shall be paid as follows:

       (a) If the neutral rules in favor of one party on all disputed issues in
           the ADR, the losing party shall pay 100% of such fees and expenses.

       (b) If the neutral rules in favor of one party on some issues and the
           other party on other issues, the neutral shall issue with the rulings
           a written determination as to how such fees and expenses shall be
           allocated between the parties. The neutral shall allocate fees and
           expenses in a way that bears a reasonable relationship to the outcome
           of the ADR, with the party prevailing on more issues, or on issues of
           greater value or gravity, recovering a relatively larger share of its
           legal fees and expenses.

9.     The rulings of the neutral and the allocation of fees and expenses shall
       be binding, non-reviewable, and non-appealable, and may be entered as a
       final judgment in any court having jurisdiction.

10.    Except as provided in paragraph 9 or as required by law, the existence of
       the dispute, any settlement negotiations, the ADR hearing, any
       submissions (including exhibits, testimony, proposed rulings, and
       briefs), and the rulings shall be deemed Confidential Information. The
       neutral shall have the authority to impose sanctions for unauthorized
       disclosure of Confidential Information.

11.    All disputes referred to ADR, the statute of limitations, and the
       remedies for any wrong that may be found, shall be governed by the laws
       of the State of Illinois.
<PAGE>

12.    The neutral may not award punitive damages. The parties hereby waive the
       right to punitive damages.

13.    The hearings shall be conducted in the English language.

14.    The parties shall not have ex parte communications with the neutral
       during the pendancy of the ADR proceeding before such neutral.
<PAGE>

                        NON-EXCLUSIVE LICENSE AGREEMENT
                        -------------------------------

         This Non-Exclusive License Agreement (the "Agreement") is dated this
                                                    ---------
___ day of March, 2000 and is entered into by and between Abbott Laboratories,
an Illinois corporation having a principal place of business at 100 Abbott Park
Road, Abbott Park, Illinois, 60064-3500 ("Abbott"), and Anesta Corp., a Delaware
                                          ------
corporation having a principal place of business at 4745 Wiley Post Way, Salt
Lake City, Utah 84116 ("Anesta").
                        ------

                                  BACKGROUND
                                  ----------

         WHEREAS, Abbott is the owner of certain patent rights related to the
manufacturing and packaging processes of certain oral transmucosal fentanyl
citrate products;

         WHEREAS, Anesta is in the business of marketing and selling such oral
transmucosal fentanyl citrate products; and

         WHEREAS, Anesta desires a non-exclusive license under Patent Rights (as
defined below), and Abbott is willing to grant such license.

         NOW, THEREFORE, in consideration of the recitals and the mutual
covenants and obligations contained herein, Abbott and Anesta agree as follows:

                                1. DEFINITIONS
                                   -----------

         1.1 "Affiliate" shall mean, with respect to each Party, any legal
              ---------
entity which controls, is controlled by, or is under common control with such
Party. For
<PAGE>

purposes of this definition, a Party shall be deemed to be in control
of another entity if the former entity owns or controls, directly or indirectly,
more than fifty percent (50%) of the outstanding voting equity of the other
entity (or other comparable ownership interest for an entity other than a
corporation).

     1.2 "Effective Date" shall mean the last date on which a Party executes
          --------------
this Agreement.

     1.3 "Field" shall mean any and all uses (including, without limitation,
          -----
pre-medication, sedation, analgesia, diagnostic procedure, emergency room, post-
op pain, burn treatment and all cancer-related pain management use) in
hospitals, surgi-centers and emergency health care facilities which are owned,
operated, affiliated or associated with hospitals, and any and all uses in the
home care and alternate site markets.

     1.4 "Licensed Product" shall mean oral transmucosal products within the
          ----------------
scope of Patent Rights and Non-Patent Rights, that consists of: (a) the unique
patented dosage form for the oral transmucosal administration in the Field of
the opioid, fentanyl citrate; (b) an opioid or other central nervous
system-acting drug with pre-medication, sedation, analgesic, diagnostic
procedure, emergency room, post-op pain, burn treatment, or cancer-related pain
management use; or (c) any intermediate composition or material therefor.

     1.5 "Non-Patent Rights" shall mean all rights, other than Abbott Patent
          -----------------
Rights, that are owned by or licensed to Abbott with the right to sublicense,
and that arise out of work done with, or refer or relate to Licensed Products,
any intermediate
<PAGE>

composition or material therefore, or the methods of making or using the same,
including, but not limited to, any and all rights which relate to:

               (i)   trade secrets, know-how, show-how, computer software,
          unpatented and unpatentable inventions, discoveries and ideas;

               (ii)  manufacturing, technical and technological information,
          methods, processes and techniques, whether relating to successful or
          unsuccessful work;

               (iii) preclinical and clinical, in vivo and in vitro study data,
                                               -------     -- -----
          characterization, biochemistry, enzymology, toxicology, pharmacology
          and other information relating to safety and efficacy;

               (iv)  Investigational New Drug Applications, New Drug
          Applications and Drug Master Files, as such terms are defined under
          the Act; and

               (v)   any other information relating thereto, or to formulations,
          designs, practices or methods of administration or use.

         1.6  "Party" shall mean either Abbott or Anesta and "Parties" shall
               -----                                          -------
mean both Abbott and Anesta.

         1.7  "Patent Rights" shall mean the patents and patent applications
               -------------
set forth in Exhibit A, and any continuation, division, continuation-in-part,
and any provisional applications, and any substitutions, extensions,
registrations, confirmations, re-examinations, re-issues or renewals of such
patents.

         1.8  "Termination Agreement" shall mean that certain Termination and
               ---------------------
Asset Sale and Purchase Agreement between the Parties dated March 13, 2000.
<PAGE>

         1.9 "Third Party" shall mean a natural person, corporation,
              -----------
partnership, joint venture, trust, any governmental authority or other business
entity or organization, and any other recognized organization other than the
Parties and/or their Affiliates.

                               2. RIGHTS GRANTED
                                  --------------

         2.1 License Grant. In partial consideration of the Purchase Price (as
             -------------
that term is defined in the Termination Agreement, Abbott hereby grants to
Anesta and its Affiliates, subject to the terms and conditions set forth herein,
a perpetual, worldwide, royalty-free, non-exclusive right and license, with the
right to sublicense, under Patent Rights and Non-Patent Rights to make, have
made, offer for sale, sell and use Licensed Products in the Field. In the event
this Agreement is terminated pursuant to Section 5.3 herein, the license granted
to Anesta under this Article 2 shall be revoked contemporaneously to such
termination.

         2.2 Disclosure. It is the intent of the Parties that the Books and
             ----------
Records, as that term is defined in the Termination Agreement, contain
sufficient information to enable Anesta to make or have made Licensed Products.
To the extent Anesta reasonably believes it does not have sufficient information
to make or have made Licensed Products, Anesta may request additional
information from Abbott. Upon receipt of such request, Abbott shall conduct a
reasonable inquiry to identify such information, and to the extent such
information exists and is identified, Abbott shall promptly disclose it to
Anesta.
<PAGE>

                       3. REPRESENTATIONS AND WARRANTIES
                          ------------------------------

         3.1   Abbott Representations and Warranties. Abbott represents and
               -------------------------------------
     warrants to Anesta the following:

         (a)   Abbott is the owner of the patents within Patent Rights and the
               technology and intellectual property within the Non-Patent
               Rights;

         (b)   Abbott has the right to license patents within Patent Rights and
               the technology and intellectual property within the Non-Patent
               Rights; and

         (c)   Abbott has the necessary corporate authority to enter into this
               Agreement.

         3.2   Anesta Representations and Warranties. Anesta represents and
               -------------------------------------
     warrants to Abbott the following:

         (a)   Anesta has the necessary corporate authority to enter into this
               Agreement; and

         (b)   Anesta will at all times during the terms of this Agreement and
               for so long as it shall sell Licensed Products, comply with all
               local, state or federal laws that may control the sale of
               Licensed Products or any other activity undertaken pursuant to
               this Agreement.

         3.3   Disclaimer. The Parties recognize that nothing in this Agreement
               ----------
     shall be construed as a representation or warranty by Abbott:

         (a)   concerning the validity or scope of any patent within Patent
               Rights;

         (b)   regarding the right to practice the technology covered by any
               patent within Patent Rights;
<PAGE>

         (c)   imposing an obligation on the part of Abbott to bring or
               prosecute infringement actions against Third Parties for
               infringement of any patent within Patent Rights; or

         (d)   conferring to Anesta by implication, estoppel or otherwise, any
               licenses, immunities or rights to any other patents or patent
               applications owned or controlled by Abbott.

         ABBOTT MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OTHER THAN THOSE MADE
HEREIN. ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY ABBOTT.

               4.   PUBLIC ANNOUNCEMENTS AND NON-PUBLICITY
                    --------------------------------------

         Public announcements, press releases and other public statements
concerning this Agreement shall be governed by Section 8.4 of the Termination
Agreement.

                            5. TERM AND TERMINATION
                               --------------------

         5.1  Term Regarding Patent Rights. This Agreement shall commence on the
              ----------------------------
Effective Date and shall have a perpetual term, unless otherwise terminated
earlier by operation of law or by acts of the Parties in accordance with the
terms of this Agreement.

         5.2  Termination for Cause. Either Party may terminate this Agreement
              ---------------------
upon written notice to the other Party in the event the other Party (a)
materially breaches this Agreement and fails to cure such breach within sixty
(60) days after receipt of written
<PAGE>

notice of breach from the non-breaching Party, or (b) makes a general assignment
for the benefit of creditors, has a receiver appointed on it's behalf, files or
otherwise becomes subject to bankruptcy or insolvency proceedings which
continues unstayed and in effect for a period of sixty (60) days.

         5.3  Termination by Abbott. Abbott may terminate this Agreement upon
              ---------------------
written notice to Anesta in the event Anesta materially breaches its obligations
to make the payments due to Abbott under Section 2.3 of the Termination
Agreement and fails to cure such breach in accordance with the terms and
conditions thereof.

         5.4 Accrued Rights and Obligations. The termination, expiration,
             ------------------------------
cancellation or abandonment of this Agreement through any means and for any
reason shall not relieve the Parties of any obligations accruing prior thereto
and shall be without prejudice to the rights and remedies of either Party with
respect to the antecedent breach of any of the provisions of this Agreement.

                              6. INDEMNIFICATION
                                 ---------------

         6.1   Indemnification by Anesta. Anesta shall indemnify, defend and
               -------------------------
hold harmless Abbott and its officers, directors, employees, agents and
representatives ("Abbott Indemnitees") from and against any and all liabilities,
                  ------------------
claims, demands, actions, suits, losses, damages, costs and expenses (including
reasonable attorneys' fees) based upon or arising out of:

         (a)   Anesta's negligence, willful or deliberate misconduct,
               recklessness, or breach of any covenant, agreement,
               representation or warranty made by Anesta in this Agreement; or
<PAGE>

         (b)   Anesta's manufacture, offer to sell, sale or use of Licensed
               Product.

          6.2  Indemnification by Abbott. Abbott shall indemnify, defend and
               -------------------------
hold harmless Anesta and its officers, directors, employees, agents and
representatives ("Anesta Indemnitees") from and against any and all liabilities,
                  ------------------
claims, demands, actions, suits, losses, damages, costs and expenses (including
reasonable attorneys' fees) based upon or arising out of Abbott's negligence,
willful or deliberate misconduct, recklessness, or breach of any covenant,
agreement, representation or warranty made by Abbott in this Agreement.

          6.3  Conditions of Indemnification. If Abbott proposes to seek
               -----------------------------
indemnification from Anesta under the provisions of this Article 6, Abbott shall
notify Anesta within thirty (30) days of receipt of notice of any such claim or
suit and shall cooperate fully with Anesta in the defense of such claims or
suits. No settlement or compromise shall be binding on Abbott hereto without
Abbott's prior written consent.

                                 7. MARKETING
                                    ---------

         Anesta shall properly mark all Licensed Products and any advertising
for Licensed Products with appropriate notice of patent coverage. In no event
shall Anesta use Abbott's name or any Abbott trademark.

                               8. MISCELLANEOUS
                                  -------------

          8.1  Entire Agreement. This Agreement, together with the exhibits,
               ----------------
constitutes the entire agreement between the Parties concerning the subject
matter
<PAGE>

hereof and supersedes all written or oral prior agreements or understandings
with respect thereto.

          8.2  Amendment or Modification. No Party shall claim any amendment,
               -------------------------
modification or release from any provision hereof by mutual agreement, unless in
writing signed by an authorized representative of each Party.

          8.3  Severability. If any term or provision of this Agreement shall
               ------------
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.

          8.4  Assignment. Anesta shall not assign this Agreement, in whole or
               ----------
in part, without the prior written consent of Abbott; provided, however, that
Anesta may make such an assignment without Abbott's consent to a successor to
all or substantially all of the assets or business of Anesta to which this
Agreement relates, whether in a merger, sale of stock, sale of assets or other
transaction. Any permitted assignee shall assume all of Anesta's obligations
under this Agreement. No permitted assignment shall relieve Anesta of
responsibility for the performance of any accrued obligation which Anesta then
has hereunder.

          8.5  Relationship of the Parties. The relationship of the Parties
               ---------------------------
under this Agreement is that of independent contractors. Nothing contained in
this Agreement is intended or is to be construed so as to constitute the Parties
as partners, joint ventures, or either party as an agent or employee of the
other. Neither Party has any express or
<PAGE>

implied right under this Agreement to assume or create any obligation on behalf
of, or in the name of, or to bind the other Party to any contract, agreement or
undertaking with any Third Party, and no conduct of the Parties shall be deemed
to infer such right.

         8.6  Notices. All notices hereunder shall be given in writing and
              -------
shall be given by mail, air courier, facsimile, or hand delivery properly
addressed. Until otherwise notified, notices shall be addressed as follows:

         If to Anesta:              Anesta Corp.
                                    4745 Wiley Post Way
                                    Salt Lake City, Utah 84116
                                    Attention:    Chief Executive Officer
                                    Telefax:(801) 595-1406

         With a copy to:
                                    Cooley Godward LLP
                                    2595 Canyon Boulevard
                                    Suite 250
                                    Boulder, CO  80302-6737
                                    Attention:    James C. Linfield, Esq.
                                    Telefax:(303) 546-4099

         If to Abbott:              Senior Vice President
                                    Hospital Products Division
                                    200 Abbott Park Road
                                    Abbott Park, Illinois 60064-3537

         With copy to:              Divisional Vice President
                                    Legal Division D-322
                                    100 Abbott Park Road
                                    Abbott Park, Illinois 60064-6050

Notices shall be effective upon receipt if personally delivered, on the third
business day following the date of mailing if sent by certified or registered
mail, and on the second business day following the date of delivery to the
express mail service if sent
<PAGE>

by express mail, or the date of transmission if sent by facsimile. A Party may
change its address listed above by notice to the other Party.

          8.7  Force Majeure. Any delay in the performance of any of the duties
               -------------
or obligations of either Party under this Agreement caused by an event outside
the affected Party's reasonable control shall not be considered a breach of this
Agreement, and the time required for performance shall be extended for a period
equal to the period of such delay. Such events shall including, without
limitation: acts of God; riots; embargoes; labor disputes, including strikes,
lockouts, job actions, or boycotts; fires; explosions; earthquakes; floods;
shortages of material or energy; or other unforeseeable causes beyond the
reasonable control and without the fault or negligence of the Party so affected.
The Party so affected shall give prompt notice to the other Party of such cause
and shall take whatever reasonable steps are necessary to relieve the effect of
such cause as rapidly as possible.

          8.8  Limitation of Liability. In no event shall either party be liable
               -----------------------
to the other for any incidental or consequential damages, including lost
profits, arising out of any breach of this Agreement.

          8.9  Governing Law. This Agreement shall be construed, interpreted and
               -------------
governed by the laws of the State of Illinois, without regard to conflicts of
law principles.

          8.10 Dispute Resolution. Any controversy or claim arising out of or
               ------------------
relating to this Agreement, or the breach thereof, shall be resolved through the
alternative dispute resolution described in Exhibit B.
<PAGE>

     8.11 Binding Effect. This Agreement shall be binding upon and shall inure
          --------------
to the benefit of the Parties hereto and their respective assigns and successors
in interest.

     8.12 Waiver. No waiver or modification of any of the terms of this
          ------
Agreement shall be valid unless in writing and signed by an authorized
representative of the Parties. Failure by either Party to enforce any rights
under this Agreement shall not be construed as a waiver of such rights, nor
shall a waiver by either Party in one or more instances be construed as
constituting a continuing waiver or as a waiver in other instances.

     8.13 Exhibits. All exhibits that are attached to this Agreement are
          --------
incorporated herein by reference.

     8.14 Headings. The headings used in this Agreement are for convenience
          --------
reference purposes only and shall not affect the meaning or interpretation
of this Agreement.

     8.15 Counterparts. This Agreement may be executed in two (2) original
          ------------
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, each Party has caused this Agreement to be executed on
its behalf by its duly authorized officer as of the Effective Date.

ABBOTT LABORATORIES                         ANESTA CORP.

By: /s/ Richard A. Gonzalez                 By: /s/ Thomas B. King
    --------------------------                  ---------------------------
    Richard A. Gonzalez                         Thomas B. King
    Senior Vice President,                      President and Chief
    Hospital Products                           Executive Officer

Date: 3/13/00                               Date: 3/13/00
      -----------------------                     -------------------------

<PAGE>

                        Non-Exclusive License Agreement

                                    Anesta

                                      and

                              Abbott Laboratories

                                   Exhibit A

                                 Patent Rights
                                 -------------

5041 Family:
-----------

         US D-338,956 issued August 31, 1993 (expires August 31, 2007)

5042 Family:
-----------

         US D-336,955 issued June 29, 1993 (expires June 29, 2007)

5049 Family:
------------

         US 5,490,989 issued February 13, 1996 (expires February 13, 2013)

         US 5,296,234 issued March 22, 1994 (expires October 11, 2011)

         [...***...]

5433 Family:
-----------

         US 5,419,911 issued May 30, 1995 (expires September 28, 2013)

         Australia Patent No. 682720 issued February 5, 1998 (expires September
         14, 2014)

         [...***...]

*Confidential Treatment Requested

<PAGE>

                        Non-Exclusive License Agreement

                                    Anesta

                                      and

                              Abbott Laboratories

                                   Exhibit B

                        Alternative Dispute Resolution
                        ------------------------------

The parties recognize that bona fide disputes as to certain matters may arise
from time to time during the term of this Agreement which relate to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution ("ADR") provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units within
twenty-eight (28) days after such notice is received (all references to "days"
in this ADR provision are to calendar days).

If the matter has not been resolved within twenty-eight (28) days of the notice
of dispute, or if the parties fail to meet within such twenty-eight (28) days,
either party may initiate an ADR proceeding as provided herein. The parties
shall have the right to be represented by counsel in such a proceeding.

1.   To begin an ADR proceeding, a party shall provide written notice to the
     other party of the issues to be resolved by ADR. Within fourteen (14) days
     after its receipt of such notice, the other party may, by written notice to
     the party initiating the ADR, add additional issues to be resolved within
     the same ADR.

2.   Within twenty-one (21) days following receipt of the original ADR notice,
     the parties shall select a mutually acceptable neutral to preside in the
     resolution of any disputes in this ADR proceeding. If the parties are
     unable to agree on a mutually acceptable neutral within such period, either
     party may request the President of the CPR Institute for Dispute Resolution
     ("CPR"), 366 Madison Avenue, 14th Floor, New York, New York 10017, to
     select a neutral pursuant to the following procedures:

<PAGE>

     (a)  The CPR shall submit to the parties a list of not less than five (5)
          candidates within fourteen (14) days after receipt of the request,
          along with a Curriculum Vitae for each candidate. No candidate shall
          be an employee, director, or shareholder of either party or any of
          their subsidiaries or affiliates.

     (b)  Such list shall include a statement of disclosure by each candidate of
          any circumstances likely to affect his or her impartiality.

     (c)  Each party shall number the candidates in order of preference (with
          the number one (1) signifying the greatest preference) and shall
          deliver the list to the CPR within seven (7) days following receipt of
          the list of candidates. If a party believes a conflict of interest
          exists regarding any of the candidates, that party shall provide a
          written explanation of the conflict to the CPR along with its list
          showing its order of preference for the candidates. Any party failing
          to return a list of preferences on time shall be deemed to have no
          order of preference.

     (d)  If the parties collectively have identified fewer than three (3)
          candidates deemed to have conflicts, the CPR immediately shall
          designate as the neutral the candidate for whom the parties
          collectively have indicated the greatest preference. If a tie should
          result between two candidates, the CPR may designate either candidate.
          If the parties collectively have identified three (3) or more
          candidates deemed to have conflicts, the CPR shall review the
          explanations regarding conflicts and, in its sole discretion, may
          either (i) immediately designate as the neutral the candidate for whom
          the parties collectively have indicated the greatest preference, or
          (ii) issue a new list of not less than five (5) candidates, in which
          case the procedures set forth in subparagraphs 2(a) - 2(d) shall be
          repeated.

3.   No earlier than twenty-eight (28) days or later than fifty-six (56) days
     after selection, the neutral shall hold a hearing to resolve each of the
     issues identified by the parties. The ADR proceeding shall take place at a
     location agreed upon by the parties. If the parties cannot

<PAGE>

     agree, the neutral shall designate a location other than the principal
     place of business of either party or any of their subsidiaries or
     affiliates.

4.   At least seven (7) days prior to the hearing, each party shall submit the
     following to the other party and the neutral:

     (a)  a copy of all exhibits on which such party intends to rely in any oral
          or written presentation to the neutral;

     (b)  a list of any witnesses such party intends to call at the hearing, and
          a short summary of the anticipated testimony of each witness;

     (c)  a proposed ruling on each issue to be resolved, together with a
          request for a specific damage award or other remedy for each issue.
          The proposed rulings and remedies shall not contain any recitation of
          the facts or any legal arguments and shall not exceed one (1) page per
          issue.

     (d)  a brief in support of such party's proposed rulings and remedies,
          provided that the brief shall not exceed twenty (20) pages. This page
          limitation shall apply regardless of the number of issues raised in
          the ADR proceeding.

     Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery
     shall be required or permitted by any means, including depositions,
     interrogatories, requests for admissions, or production of documents.

5.   The hearing shall be conducted on two (2) consecutive days and shall be
     governed by the following rules:

<PAGE>

     (a)  Each party shall be entitled to five (5) hours of hearing time to
          present its case. The neutral shall determine whether each party has
          had the five (5) hours to which it is entitled.

     (b)  Each party shall be entitled, but not required, to make an opening
          statement, to present regular and rebuttal testimony, documents or
          other evidence, to cross-examine witnesses, and to make a closing
          argument. Cross-examination of witnesses shall occur immediately after
          their direct testimony, and cross-examination time shall be charged
          against the party conducting the cross-examination.

     (c)  The party initiating the ADR shall begin the hearing and, if it
          chooses to make an opening statement, shall address not only issues it
          raised but also any issues raised by the responding party. The
          responding party, if it chooses to make an opening statement, also
          shall address all issues raised in the ADR. Thereafter, the
          presentation of regular and rebuttal testimony and documents, other
          evidence, and closing arguments shall proceed in the same sequence.

     (d)  Except when testifying, witnesses shall be excluded from the hearing
          until closing arguments.

     (e)  Settlement negotiations, including any statements made therein, shall
          not be admissible under any circumstances. Affidavits prepared for
          purposes of the ADR hearing also shall not be admissible. As to all
          other matters, the neutral shall have sole discretion regarding the
          admissibility of any evidence.

6.   Within seven (7) days following completion of the hearing, each party may
     submit to the other party and the neutral a post-hearing brief in support
     of its proposed rulings and remedies, provided that such brief shall not
     contain or discuss any new evidence and shall not exceed ten (10) pages.
     This page limitation shall apply regardless of the number of issues raised
     in the ADR proceeding.

<PAGE>

7.   The neutral shall rule on each disputed issue within fourteen (14) days
     following completion of the hearing. Such ruling shall adopt in its
     entirety the proposed ruling and remedy of one of the parties on each
     disputed issue but may adopt one party's proposed rulings and remedies on
     some issues and the other party's proposed rulings and remedies on other
     issues. The neutral shall not issue any written opinion or otherwise
     explain the basis of the ruling.

8.   The neutral shall be paid a reasonable fee plus expenses. These fees and
     expenses, along with the reasonable legal fees and expenses of the
     prevailing party (including all expert witness fees and expenses), the fees
     and expenses of a court reporter, and any expenses for a hearing room,
     shall be paid as follows:

     (a)  If the neutral rules in favor of one party on all disputed issues in
          the ADR, the losing party shall pay 100% of such fees and expenses.

     (b)  If the neutral rules in favor of one party on some issues and the
          other party on other issues, the neutral shall issue with the rulings
          a written determination as to how such fees and expenses shall be
          allocated between the parties. The neutral shall allocate fees and
          expenses in a way that bears a reasonable relationship to the outcome
          of the ADR, with the party prevailing on more issues, or on issues of
          greater value or gravity, recovering a relatively larger share of its
          legal fees and expenses.

9.   The rulings of the neutral and the allocation of fees and expenses shall be
     binding, non-reviewable, and non-appealable, and may be entered as a final
     judgment in any court having jurisdiction.

10.  Except as provided in paragraph 9 or as required by law, the existence of
     the dispute, any settlement negotiations, the ADR hearing, any submissions
     (including exhibits, testimony, proposed rulings, and briefs), and the
     rulings shall be deemed Confidential Information. The neutral shall have
     the authority to impose sanctions for unauthorized disclosure of
     Confidential Information.

<PAGE>

11.  All disputes referred to ADR, the statute of limitations, and the remedies
     for any wrong that may be found, shall be governed by the laws of the State
     of Illinois.

12.  The neutral may not award punitive damages. The parties hereby waive the
     right to punitive damages.

13.  The hearings shall be conducted in the English language.

14.  The parties shall not have ex parte communications with the neutral during
     the pendancy of the ADR proceeding before such neutral.<PAGE>

                         FIFTH SUPPLEMENTAL INDENTURE

          FIFTH SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of April 4, 2000, among Mrs. Fields' Original Cookies, Inc., a Delaware
corporation (or its permitted successor) (the "Company"), The Mrs. Fields'
Brand, Inc., a Delaware corporation and a subsidiary of the Company, ("MFB"),
Great American Cookie Company, Inc., a Delaware corporation and a subsidiary of
the Company ("Great American"), Pretzelmaker, Inc., a Utah corporation and a
subsidiary of the Company ("Pretzelmaker"), and Pretzel Time, Inc. ("Pretzel
Time"), a Utah corporation and a subsidiary of the Company (together with
Pretzelmaker, the "Guaranteeing Subsidiaries" and, together with the other
Guarantors defined in the Indenture referred to herein, the "Guarantors"), and
The Bank of New York, as trustee under the Indenture referred to herein (the
"Trustee").

                              W I T N E S S E T H

          WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture, dated as of November 26, 1997, as amended by the First
Supplemental Indenture, dated as of August 24, 1998, the Second Supplemental
Indenture, dated as of August 24, 1998, the Third Supplemental Indenture, dated
as of November 20, 1998 and the Fourth Supplemental Indenture, dated as of
December 30, 1998 (as so amended, the "Indenture"), providing for the issuance
of an aggregate principal amount of up to $200.0 million of 10/1//8% Notes due
2004 (the "Notes");

          WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall
unconditionally guarantee all of the Company's Obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "Guarantee");
and

          WHEREAS, Pretzelmaker Holdings, Inc., a Colorado corporation ("Old
Pretzelmaker"), heretofore executed and delivered the Third Supplemental
Indenture, dated as of November 20, 1998, pursuant to which it  unconditionally
guaranteed all of the Company's Obligations under the Notes and the Indenture;
and

          WHEREAS, Pretzel Time, Inc., a Pennsylvania corporation ("Old Pretzel
Time"), heretofore executed and delivered the Fourth Supplemental Indenture,
dated as of December 30, 1998, pursuant to which it unconditionally guaranteed
all of the Company's Obligations under the Notes and the Indenture; and

          WHEREAS, (i) Old Pretzelmaker was merged with and into Pretzelmaker
Holdings, Inc. ("Pretzelmaker Holdings"), a Utah corporation and the predecessor
of Pretzelmaker, with Pretzelmaker Holdings as the surviving corporation, as of
January 27, 2000, (ii) Pretzelmaker Holdings was merged with and into
Pretzelmaker, effective as of April 4, 2000, and (iii) Old Pretzel Time has been
merged

<PAGE>

with and into Pretzel Time, with Pretzel Time as the surviving corporation, as
of January 27, 2000; and

          WHEREAS, Pretzelmaker acknowledges that the Indenture requires it to,
and Pretzelmaker desires to, assume Old Pretzelmaker's guarantee of the
Obligations under the Indenture and the Notes, and Pretzel Time acknowledges
that the Indenture requires it to, and Pretzel Time desires to, assume Old
Pretzel Time's guarantee of the Obligations under the Indenture and the Notes;
and

          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

          NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

          1.   Capitalized Terms.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

          2.   Agreement to Guarantee.  The Guaranteeing Subsidiaries hereby
agree as follows:

               (a) Along with all Guarantors named in the Indenture, to jointly
          and severally Guarantee to each Holder of a Note authenticated and
          delivered by the Trustee and to the Trustee and its successors and
          assigns, irrespective of the validity and enforceability of the
          Indenture, the Notes or the obligations of the Company hereunder or
          thereunder, that:

               (i)  the principal of and interest on the Notes will be promptly
                    paid in full when due, whether at maturity, by acceleration,
                    redemption or otherwise, and interest on the overdue
                    principal of and interest on the Notes, if any, if lawful,
                    and all other obligations of the Company to the Holders or
                    the Trustee hereunder or thereunder will be promptly paid in
                    full or performed, all in accordance with the terms hereof
                    and thereof; and

               (ii) in case of any extension of time of payment or renewal of
                    any Notes or any of such other obligations, that same will
                    be promptly paid in full when due or performed in accordance
                    with the terms of the extension or renewal, whether at
                    stated maturity, by acceleration or otherwise.  Failing
                    payment when due of any amount so guaranteed or any
                    performance so guaranteed for whatever reason,

                                       2
<PAGE>

                   the Guarantors shall be jointly and severally obligated to
                   pay the same immediately.

               (b) The obligations hereunder shall be unconditional,
          irrespective of the validity, regularity or enforceability of the
          Notes or the Indenture, the absence of any action to enforce the same,
          any waiver or consent by any Holder of the Notes with respect to any
          provisions hereof or thereof, the recovery of any judgment against the
          Company, any action to enforce the same or any other circumstance
          which might otherwise constitute a legal or equitable discharge or
          defense of a guarantor.

               (c) The following is hereby waived:  diligence  presentment,
          demand of payment, filing of claims with a court in the event of
          insolvency or bankruptcy of the Company, any right to require a
          proceeding first against the Company, protest, notice and all demands
          whatsoever.

               (d) This Guarantee shall not be discharged except by complete
          performance of the obligations contained in the Notes and the
          Indenture.

               (e) If any Holder or the Trustee is required by any court or
          otherwise to return to the Company, the Guaranteeing Subsidiaries,
          MFB, Great American, or any Custodian, Trustee, liquidator or other
          similar official acting in relation to either the Company or the
          Guaran teeing Subsidiaries, MFB, or Great American, any amount paid by
          either to the Trustee or such Holder, this Guarantee, to the extent
          theretofore discharged, shall be reinstated in full force and effect.

               (f) The Guaranteeing Subsidiaries shall not be entitled to any
          right of subrogation in relation to the Holders in respect of any
          obliga tions guaranteed hereby until payment in full of all
          obligations guaran teed hereby.

               (g) As between the Guarantors, on the one hand, and the Holders
          and the Trustee, on the other hand, (x) the maturity of the
          obligations guaranteed hereby may be accelerated as provided in
          Article 6 of the Indenture for the purposes of this Guarantee, notwith
          standing any stay, injunction or other prohibition preventing such
          acceleration in respect of the obligations guaranteed hereby, and (y)
          in the event of any declaration of acceleration of such obligations as
          provided in Article 6 of the Indenture, such obligations (whether or
          not
                                       3
<PAGE>

          due and payable) shall forthwith become due and payable by the
          Guarantors for the purpose of this Guarantee.
               (h) The Guarantors shall have the right to seek contribution
          from any non-paying Guarantor so long as the exercise of such right
          does not impair the rights of the Holders under the Guarantee.

               (i) Pursuant to Section 10.02 of the Indenture, after giving
          effect to any maximum amount and any other contingent and fixed
          liabilities that are relevant under any applicable Bankruptcy or
          fraudulent conveyance laws, and after giving effect to any collections
          from, rights to receive contribution from or payments made by or on
          behalf of any other Guarantor in respect of the obligations of such
          other Guarantor under Article 10 of the Indenture shall result in the
          obligations of such Guarantor under its Guarantee not constituting a
          fraudulent transfer or conveyance.

          3.   Execution and Delivery.  The Guaranteeing Subsidiaries agree that
the Guarantee shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.

                                       4
<PAGE>

          4.   Guaranteeing Subsidiaries May Consolidate, Etc. on Certain Terms.

               (a)  The Guaranteeing Subsidiaries may not consolidate with or
          merge with or into (whether or not such Guarantor is the surviving
          Person) another corporation, Person or entity whether or not
          affiliated with such Guarantor unless:

               (i)  subject to Section 10.05 of the Indenture, the Person formed
                    by or surviving any such consolidation or merger (if other
                    than a Guarantor or the Company) uncondition ally assumes
                    all the obligations of such Guarantor, pursuant to a
                    supplemental indenture in form and sub stance reasonably
                    satisfactory to the Trustee, under the Notes, the Indenture
                    and the Guarantee on the terms set forth herein or therein;
                    and

               (ii) immediately after giving effect to such transaction, no
                    Default or Event of Default exists.

               (b) In case of any such consolidation, merger, sale or
          conveyance and upon the assumption by the successor corporation, by
          supplemental indenture, executed and delivered to the Trustee and
          satisfactory in form to the Trustee, of the Guarantee endorsed upon
          the Notes and the due and punctual performance of all of the covenants
          and conditions of the Indenture to be performed by the Guarantor, such
          successor corporation shall succeed to and be substituted for the
          Guarantor with the same effect as if it had been named herein as a
          Guarantor. Such successor corporation thereupon may cause to be signed
          any or all of the Guarantees to be endorsed upon all of the Notes
          issuable hereunder which theretofore shall not have been signed by the
          Company and delivered to the Trustee. All the Guarantees so issued
          shall in all respects have the same legal rank and benefit under the
          Indenture as the Guarantees theretofore and thereafter issued in
          accordance with the terms of the Indenture as though all of such
          Guarantees had been issued at the date of the execution hereof.

               (c) Except as set forth in Articles 4 and 5 of the Indenture, and
          notwithstanding clauses (a) and (b) above, nothing contained in the
          Indenture or in any of the Notes shall prevent any consolidation or
          merger of a Guarantor with or into the Company or another Guarantor,
          or shall prevent any sale or conveyance of the property of a Guarantor

                                       5
<PAGE>

          as an entirety or substantially as an entirety to the Company or
          another Guarantor.

          5.   Releases.
               ---------

               (a) In the event of a sale or other disposition of all of the
          assets of any Guarantor, by way of merger, consolidation or otherwise,
          or a sale or other disposition of all of the capital stock of any
          Guarantor, then such Guarantor (in the event of a sale or other
          disposition, by way of merger, consolidation or otherwise, of all of
          the capital stock of such Guarantor) or the corporation acquiring the
          property (in the event of a sale or other disposition of all or
          substantially all of the assets of such Guarantor) will be released
          and relieved of any obligations under its Guarantee; provided that the
          Net Proceeds of such sale or other disposition are applied in
          accordance with the applicable provisions of the Indenture, including
          without limitation Section 4.10 of the Indenture. Upon delivery by the
          Company to the Trustee of an Officers' Certificate and an Opinion of
          Counsel to the effect that such sale or other disposi tion was made by
          the Company in accordance with the provisions of the Indenture,
          including without limitation Section 4.10 of the Indenture, the
          Trustee shall execute any documents reasonably required in order to
          evidence the release of any Guarantor from its obligations under its
          Guarantee.
               (b) Any Guarantor not released from its obligations under its
          Guarantee shall remain liable for the full amount of principal of and
          interest on the Notes and for the other obligations of any Guarantor
          under the Indenture as provided in Article 10 of the Indenture.

          6.   No Recourse Against Others.  No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the
Company, the Guaranteeing Subsidiaries or under the Notes, any Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the Commission that such a waiver is against public policy.

          7.   NEW YORK LAW TO GOVERN.  THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT

                                       6
<PAGE>

THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

          8.   Counterparts.  The parties may sign any number of copies of this
Supplemental Indenture.  Each signed copy shall be an original, but all of them
together represent the same agreement.

          9.   Effect of Headings.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

          10.  The Trustee.  The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries, MFB, Great American,
and the Company.

                                       7
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemen tal
Indenture to be duly executed and attested, all as of the date first above
written.
Dated:  As of April 4, 2000

                                 PRETZEL TIME, INC.

                                 By:/s/ Michael Ward
                                    ---------------------------------
                                    Name: Michael Ward
                                    Title: Vice President

                                 PRETZELMAKER, INC.

                                 By: /s/ Michael Ward
                                     ------------------------------
                                    Name: Michael Ward
                                    Title:Vice President

                                 MRS. FIELDS' ORIGINAL
                                 COOKIES, INC.

                                 By: /s/ Michael Ward
                                     ---------------------------------
                                     Name:Michael Ward
                                     Title: Vice President

                                 THE MRS. FIELDS' BRAND,
                                 INC.

                                 By: /s/ Michael Ward
                                     ---------------------------------
                                     Name: Michael Ward
                                     Title: Vice President

                                 GREAT AMERICAN COOKIE
                                 COMPANY, INC.

                                 By:/s/ Michael Ward
                                    ----------------------------------
                                     Name: Michael Ward
                                     Title: Vice President

                                       8
<PAGE>

                                 THE BANK OF NEW YORK,
                                 AS TRUSTEE

                                 By: /s/ Michele L. Russo
                                     ---------------------------------
                                     Name: Michele L. Russo
                                     Title: Assistant Vice President

                                       9

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