Document:

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                                                                    EXHIBIT 4.37

                             Dated December 2, 2003

                                  GALEN LIMITED

                                       and

          PHARMACEUTICAL DEVELOPMENT AND MANUFACTURING SERVICES LIMITED

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

                            MANUFACTURING, PACKAGING,
                        LABELLING, TESTING, QP RELEASE,
                          STORAGE & DESPATCH AGREEMENT

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

                              Ashurst Morris Crisp
                                 Broadwalk House
                                 5 Appold Street
                                     London
                                    EC2A 2HA

                               Tel : 020 7638 1111
                               Fax : 020 7638 1112

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                                    CONTENTS

<TABLE>
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CLAUSE                                                                               PAGE
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1.     DEFINITIONS..............................................................       1
2.     SUPPLIER OBLIGATIONS.....................................................       5
3.     COMPANY OBLIGATIONS......................................................       7
4.     VARIATION OF SPECIFICATIONS..............................................       8
5.     PRODUCT ORDERS...........................................................      10
6.     DESPATCH.................................................................      15
7.     RISK AND TITLE...........................................................      16
8.     CHARGES AND PAYMENT TERMS................................................      16
9.     CONFIDENTIALITY..........................................................      18
10.    REGULATORY PROCEDURES AND DATA RETENTION.................................      19
11.    PRODUCT ACCEPTANCE.......................................................      19
12.    INTELLECTUAL PROPERTY....................................................      23
13.    WARRANTIES & INDEMNITIES.................................................      24
14.    INSURANCE................................................................      28
15.    PRODUCT HOLD OR RECALL...................................................      28
16.    TERM AND TERMINATION.....................................................      29
17.    FORCE MAJEURE............................................................      30
18.    DISPUTE RESOLUTION.......................................................      31
19.    ARBITRATION..............................................................      31
20.    NOTICES..................................................................      32
21.    VARIATION................................................................      33
22.    ENTIRE AGREEMENT.........................................................      33
23.    GENERAL..................................................................      33

SCHEDULE 1..............................................................................
Schedule 1 - List of Galen Products, Isodur, Dynamin & Distribution Products............
SCHEDULE 2..............................................................................
Minimum Order Quantity for Galen Products, Dynamin and Isodur...........................
SCHEDULE 3..............................................................................
MPLT Charges............................................................................
SCHEDULE 4..............................................................................
Storage & Despatch Charges..............................................................
SCHEDULE 5..............................................................................
Technical Agreement.....................................................................
SCHEDULE 6..............................................................................
Guaranteed Order Value..................................................................
SCHEDULE 7..............................................................................
Bill of Materials for each Galen Product, Dynamin and Isodur............................
</TABLE>
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THIS AGREEMENT is made on the 2nd day of December 2003

BETWEEN:-

(1)      GALEN LIMITED, (No. NI 30077) whose principal place of business is at
         Unit 22, Seagoe Industrial Estate, Craigavon, Co Armagh, Northern
         Ireland, BT63 5UA (the "COMPANY" ); and

(2)      PHARMACEUTICAL DEVELOPMENT AND MANUFACTURING SERVICES LIMITED, (No. NI
         45055) whose principal place of business is at Almac House, 20 Seagoe
         Industrial Estate, Craigavon, Co Armagh, Northern Ireland, BT63 5QD
         (the "SUPPLIER").

WHEREAS:

A.       The Company sells certain pharmaceutical Products (as defined below) to
         its customers and the Company wishes to engage the Supplier to
         manufacture, package, label, test for release-to-market, QP release,
         store and despatch Products on behalf of the Company.

B.       The Supplier has agreed to manufacture, package, label, test for
         release-to-market, QP release, store and despatch Products on behalf of
         the Company and the Company has agreed to procure these services from
         the Supplier subject always to the terms and conditions set out below.

IT IS NOW AGREED AS FOLLOWS:-

1.       DEFINITIONS

1.1      In this agreement unless the context otherwise requires:-

         "AFFILIATE" means any business entity which controls, is controlled by,
         or is under common control with either the Supplier or Company. For the
         purpose of this definition "CONTROL" shall mean either ownership of
         more than 50 per cent. of the issued capital of the company (or other
         business entity) or a right to direct the business and/or policies
         (including dividend policies) and/or affairs of such company whether by
         law, contract, governmental decree or regulation, ownership of voting
         power or otherwise and if one or more persons fits any of the
         categories set out in this paragraph (whether or not they are acting in
         concert) each such person shall be treated as in control of such
         company;

         "BILL OF MATERIALS" means the standard costs of Raw Materials and
         packaging materials required in connection with the manufacture,
         packaging and labelling (as applicable) of each Galen Product, Dynamin
         and Isodur;

         "BUSINESS DAY" means Monday to Friday, 9.00 am to 5.00 p.m. excluding
         public holidays and bank holidays in Northern Ireland;

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         "BUSINESS PURCHASE AGREEMENT" means the business purchase agreement
         between Galen Limited and Pharmaceutical Development and Manufacturing
         Services Limited dated 2 December 2003;

         "CGMP" means current Good Manufacturing Practice of the pharmaceutical
         industry standards as required by the EMEA in the European Union (and
         as more particularly described in Directive 91/356/EEC of 13 June 1991
         or as amended by Directive 2001/83/EC) and the similar guidelines and
         requirements of any other recognised and applicable national regulatory
         body, including (without limitation) the MHRA in the United Kingdom,
         including all standards, guidelines and requirements in relation to
         product description, manufacturing processes, quality control,
         packaging instructions, specifications and guidelines relating to the
         manufacture, testing, analysis, QP release and packaging of medicinal
         products;

         "CONFIRMED ORDERS" is defined at clause 5.2;

         "CONSEQUENTIAL LOSS" is defined at clause 13.7;

         "DESPATCH NOTICE" is defined at clause 6.1;

         "DISTRIBUTION PRODUCTS" means those pharmaceutical products supplied
         and delivered to the Supplier during the Term by the Company or third
         party suppliers of the Company, as set out in schedule 1 or such other
         products as agreed by the Parties from time to time, which shall be
         tested for release-to-market, QP released, stored and despatched by the
         Supplier in accordance with the terms of this agreement;

         "DYNAMIN" means bulk capsules of Isodur pharmaceutical product, which
         are supplied by the Company to the Supplier (in finished dosage form)
         from time to time in accordance with clause 3.1(b), and which the
         Supplier shall package, label, test for release-to-market, QP release,
         store and despatch for the Company in accordance with the terms of this
         agreement;

         "EFFECTIVE DATE" means the date of the Business Purchase Agreement;

         "EMEA" means the European Agency for the Evaluation of Medicinal
         Products;

         "GALEN PRODUCTS" means those pharmaceutical products listed in schedule
         1 together with any other such products which may be added from time to
         time by agreement of the Parties, which the Supplier shall manufacture,
         package, label, test for release-to-market, QP release, store and
         despatch for the Company in accordance with the terms of this
         agreement. For the avoidance of doubt references to Galen Products in
         this agreement shall not include Dynamin, Isodur or Distribution
         Products;

         "GUARANTEED ORDER VALUE" is defined at clause 5.7;

         "INTELLECTUAL PROPERTY" means any and all patents, trade marks, service
         marks, logos, rights in designs, get-up, trade, business or domain
         names and copyrights, (whether registered or not and any applications
         to register or rights to apply for registration of any of the
         foregoing), rights in inventions, know-how, trade secrets and other
         confidential information, rights in databases and all other
         intellectual property rights of a similar or corresponding character
         which may now or in the future subsist in any part of the world;

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         "ISODUR" means bulk capsules of Isodur pharmaceutical product, which
         are supplied by the Company to the Supplier (in finished dosage form)
         from time to time in accordance with clause 3.1(b), and which the
         Supplier shall package, label, test for release-to-market, QP release,
         store and despatch for the Company in accordance with the terms of this
         agreement;

         "LOSSES" means any and all damages, costs (including, without
         limitation, reasonable legal and other professional fees reasonably
         incurred), claims, (including third party claims) liabilities,
         expenses, losses and demands;

         "MANUFACTURING AND PACKAGING INSTRUCTIONS" means all relevant and
         current (as at the date of this agreement) descriptions and
         instructions concerning the processes, formulae and quality standards
         to be observed by the Supplier in relation to the manufacture,
         packaging and labelling of Galen Products and packaging and labelling
         of Dynamin and Isodur as provided by the Company. The Manufacturing and
         Packaging Instructions may be varied from time to time by written
         agreement of the Parties;

         "MARKETING AUTHORISATION" means, in respect of a Product, the relevant
         and current (as at the date of this agreement) Marketing Authorisation
         issued by the EMEA (or such other regulatory body that replaces the
         EMEA from time to time) in respect of the manufacture and supply of
         that Product in the European Union and such other Marketing
         Authorisations issued by any other applicable regulatory body in any
         jurisdiction where the manufacture and supply of that Product may occur
         from time to time in accordance within the terms of this agreement,
         including (without limitation) the MHRA, as shall be deemed attached to
         the Technical Agreement;

         "MATERIALS" means all Raw Materials (excluding bulk capsules of Dynamin
         and Isodur) and packaging materials used in connection with the
         manufacture, packaging, labelling, testing for release-to-market and QP
         release of Galen Products, Dynamin and Isodur by the Supplier in
         accordance with the terms of this agreement;

         "MHRA" means the Medicines and Healthcare products Regulatory Agency;

         "MINIMUM QUANTITY" means the minimum order quantity, which shall be in
         batch sizes or multiples of batch sizes (or as otherwise agreed by the
         Parties from time to time), for each particular Galen Product or
         Dynamin or Isodur, which may be included in a Confirmed Order as
         detailed in schedule 2;

         "MLPT CHARGES" is defined at clause 8.1;

         "NOMINATED INDIVIDUAL" shall mean the respective Head of Quality (or as
         otherwise agreed by the Parties) for each of the Parties from time to
         time (as confirmed to each other in writing);

         "PARTY" shall mean a party to this agreement;

         "PRODUCT SHELF LIFE" means the shelf life of each Product as set out in
         the relevant Marketing Authorisation;

         "PRODUCTS" means the Galen Products, Dynamin, Isodur and the
         Distribution Products;

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         "QP RELEASE" is defined at clause 11.1 and "QP released" shall have the
         corresponding meaning;

         "QUALIFIED PERSON" has the meaning ascribed to it under Article 21 of
         Directive 75/319/EEC (or as amended by Directive 2001/83/EC);

         "RAW MATERIALS" means active pharmaceutical ingredients and excipients;

         "REJECTION NOTICE" is defined at clause 11.1;

         "SPECIFICATIONS" means all relevant and current (as at the date of this
         agreement) manufacturing, packaging, labelling and testing
         specifications for the Products (as applicable) as provided by the
         Company. The Specifications may be amended by the Parties from time to
         time in accordance with clause 4;

         "STOCK OUT" means a situation where the Supplier cannot comply with its
         despatch obligations hereunder due to the Company having insufficient
         stock of a particular Galen Product Dynamin or Isodur available in the
         Supplier storage facilities at the Supplier Premises at any time 30
         days after the due date for completion and delivery into storage of a
         relevant Confirmed Order. In the case of the full range of Kapake
         products ("KAPAKE") and the full range of Ursogal products ("URSOGAL")
         the Stock Out period would be at any time 60 days after the due date
         for completion and delivery into storage of a relevant Confirmed Order.

         "STORAGE & DESPATCH CHARGES" is defined at clause 8.2;

         "SUPPLIER PREMISES" shall mean the Supplier's premises situated at Unit
         22, Seagoe Industrial Estate, Craigavon, Co Armagh, Northern Ireland,
         BT63 5UA or such other place at which the Supplier may, following
         written authorisation from the Company (not to be unreasonably withheld
         or delayed) manufacture, package, label, test for release-to-market, QP
         release, store and/or despatch Products from time to time in accordance
         with the terms of this agreement;

         "TECHNICAL AGREEMENT" means the technical agreement attached from time
         to time to this agreement at schedule 5 and which describes the quality
         control and manufacturing process standards to be followed in
         connection with the manufacturing, packaging, labelling, testing for
         release-to-market, QP release, storage and/or despatch of Products
         (where applicable) and which, amongst other things, has the Marketing
         Authorisations for the relevant Products deemed attached thereto. The
         Technical Agreement may be varied from time to time by written
         agreement of the Parties, whereupon the Parties will substitute the
         amended Technical Agreement at schedule 5;

         "TERM" means the terms of this agreement as defined in clause 16.1;

         "TESTING FOR RELEASE-TO-MARKET" means performing all quality control
         and other necessary testing and analysis and completing all related
         documentation as required by cGMP and any relevant Marketing
         Authorisations in respect of Galen Products, Dynamin, Isodur and
         Distribution Products;

         "TOTAL ORDER VALUE" is defined at clause 5.7;

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         "VAT" means value added tax or any other tax of a similar nature that
         may be substituted for or levied in addition to it in each case at the
         rate current from time to time;

         "YEAR" means a continuous period of 12 months commencing on the
         Effective Date of this agreement and each consecutive 12 month period
         thereafter during the Term;

         "YEAR 1" means the continuous period of 12 months commencing on the
         Effective Date of this Agreement;

         "YEAR 2" means the continuous period of 12 months commencing at the end
         of Year 1; and

         "YEAR 3" means the continuous period of 12 months commencing at the end
         of Year 2.

1.2      Reference to the singular includes the plural and vice versa.

1.3      A reference to a part, clause or schedule is a reference to a part,
         clause or schedule to this agreement.

2.       SUPPLIER OBLIGATIONS

2.1      The Supplier shall:

         (a)      use all reasonable endeavours to fulfil Confirmed Orders on
                  the due date for completion specified therein and shall
                  provide written notice to the Company of completion of each
                  Confirmed Order. Completion of a Confirmed Order is deemed to
                  be the date that the relevant Galen Products, Dynamin and/or
                  Isodur are delivered into storage at the Supplier Premises by
                  the Supplier;

         (b)      procure Raw Materials and packaging materials, manufacture,
                  package, label, test for release-to-market and QP release all
                  Confirmed Orders for Galen Products at the Supplier Premises
                  in accordance with cGMP, the Technical Agreement, the
                  Marketing Authorisations, the Manufacturing and Packaging
                  Instructions and the Specifications;

         (c)      procure packaging materials, package, label, test for
                  release-to-market and QP release all Confirmed Orders for
                  Dynamin and Isodur at the Supplier Premises in accordance with
                  cGMP, the Technical Agreement, the Marketing Authorisations,
                  the Manufacturing and Packaging Instructions and the
                  Specifications;

         (d)      comply with its obligations under the Technical Agreement (as
                  may be amended by the Parties from time to time in accordance
                  with this agreement);

         (e)      provide and maintain clean and safe storage in accordance with
                  cGMP, the Technical Agreement and the relevant Marketing
                  Authorisations for all Products at the Supplier Premises until
                  such Products are despatched in accordance with clause 6;

         (f)      despatch all Products in accordance with clause 6;

                                     - 5 -
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         (g)      on two Business Days notice, permit authorised representatives
                  of the Company, the Company's customers or representatives of
                  any regulatory authorities from time to time during normal
                  working hours to enter and inspect the Supplier Premises in
                  order to:

                  (i)      inspect the same;

                  (ii)     inspect and take away samples of Products;

                  (iii)    observe and inspect operations, methods and records
                           relating to the Supplier's manufacturing, packaging,
                           labelling, testing for release-to-market, QP
                           releasing, storage and/or despatch of the Products
                           (but excluding, for the avoidance of doubt, any
                           financial records of the Supplier) and report any
                           legitimate concerns relating to any of those
                           processes to the respective Nominated Individuals for
                           discussion by the Parties at their earliest
                           convenience in order to determine how those
                           legitimate concerns are to be handled in respect of
                           the applicable Technical Agreement,

                           PROVIDED THAT the Company shall be responsible for
                           the safety of its representatives and customers at
                           all times during such visitation and shall ensure
                           that they comply with the confidentiality provisions
                           in clause 9 of this agreement and all reasonable
                           regulations and instructions issued by the Supplier
                           relating to the conduct of persons on the Supplier
                           Premises;

         (h)      unless otherwise provided herein, provide at its own cost,
                  expense and risk all equipment, plant, apparatus, appliances
                  necessary to enable the Supplier to manufacture, package,
                  label, test for release-to-market, QP release, store and/or
                  despatch Products (as appropriate) and otherwise fulfil its
                  obligations under this agreement;

         (i)      unless otherwise provided herein, provide at its own cost,
                  expense and risk all Materials necessary to enable the
                  Supplier to fulfil its obligations under this agreement;

         (j)      be responsible for managing all complaints from the Company in
                  relation to Products, including (without limitation) and,
                  provided that the complaint is solely due to the default of
                  the Supplier, at its sole cost promptly conducting all
                  necessary research and testing of Product batches relating to
                  such complaint, keeping the Company's Nominated Individual
                  fully informed of all such complaints, completing all related
                  paperwork and otherwise managing such complaints in a timely
                  manner and in accordance with best current industry standards
                  and regulations and with all due care, diligence and skill.
                  The Company shall reimburse the Supplier for all reasonable
                  direct costs and expenses incurred by the Supplier in relation
                  to the relevant complaint and in respect of managing that
                  complaint, save where such complaint is due to default by the
                  Supplier under this agreement;

         (k)      maintain its Manufacturer's Licence and Wholesale Dealer's
                  Licence, as granted by the MHRA as soon as practicable after
                  the date of this agreement, current at all times and notify
                  the Company of any changes to those facility licences which
                  will impact the Marketing Authorisations for the Products; and

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         (l)      be responsible for monitoring the condition of all Products
                  and bulk capsules of Isodur stored by the Supplier at the
                  Supplier Premises from time to time and shall notify the
                  Company promptly in the event that any such Product or bulk
                  capsules of Isodur are found to be damaged, and further shall
                  (on written instruction by the Company and at the Company's
                  reasonable cost) be fully responsible for the removal and
                  destruction of such damaged items together with any items
                  which the Company confirms are beyond their Product Shelf Life
                  from time to time.

3.       COMPANY OBLIGATIONS

3.1      The Company shall:

         (a)      provide the Supplier with all relevant information concerning
                  the Products to enable the Supplier to discharge its
                  obligations under this agreement in accordance with the
                  Technical Agreement, the Specifications and the Manufacturing
                  and Packaging Instructions;

         (b)      supply and deliver (or procure the supply and delivery of)
                  such quantities of bulk capsules of Isodur pharmaceutical
                  product (in finished dosage form) for the purposes of its
                  obligations under this agreement in respect of Dynamin and
                  Isodur, and Distribution Products to the Supplier from time to
                  time during the Term in accordance with the Technical
                  Agreement to enable the Supplier to meet Confirmed Orders and
                  comply with Despatch Notices. All such quantities of bulk
                  capsules of Isodur and Distribution Products shall be supplied
                  free of charge by the Company to the Supplier;

         (c)      provide to the Supplier all relevant details in the
                  Specification or Manufacturing and Packaging Instructions of
                  the Company's trade mark livery together with associated
                  original artwork required by the Supplier for the purposes of
                  obtaining packaging and labels for Galen Products, Dynamin and
                  Isodur, provided that the Supplier's reasonable costs of
                  providing new artwork drafts and generation shall be borne by
                  the Company. The Company hereby grants to the Supplier a
                  non-exclusive, non-assignable licence of the aforementioned
                  trade marks and their associated get-up, and of its
                  Intellectual Property in the aforementioned artwork, for the
                  Term, BUT only for the purpose of using the same to package
                  and label Galen Products, Dynamin and/or Isodur in accordance
                  herewith and in accordance with the Company's instructions
                  from time to time. All use of the Company's trade marks by the
                  Supplier shall at all times be for the benefit of the Company
                  and any goodwill accrued to the Supplier by its use of such
                  trade marks shall accrue to and be held in trust by it for the
                  Company, which goodwill the Supplier agrees to assign to the
                  Company at the Company's request at any time, whether during
                  or after the subsistence of this agreement;

         (d)      give the Supplier written notice of any change required to the
                  packaging and/or labelling of Galen Products, Dynamin and/or
                  Isodur during the Term (such notice to include all related
                  approved artworks from the Company), whereby the Supplier
                  shall obtain and commence using such revised packaging and/or
                  labels within three months of such notice. If the EMEA, MHRA
                  or any other applicable regulatory authority notifies the
                  Company of a required change to the packaging and/or
                  labelling, the Company shall provide written notice to the
                  Supplier within 5 Business

                                     - 7 -
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                  Days thereafter setting out full details of the changes to be
                  made. The Supplier shall use its reasonable endeavours to
                  obtain replacement packaging and/or labelling following such
                  notice according to the time schedule dictated by the EMEA,
                  MHRA or any other applicable regulatory authority but shall
                  not be held liable by the Company for failure to comply with
                  such time schedule provided the cause of such failure is
                  beyond the Supplier's reasonable control;

         (e)      in the event of any change in the packaging requirements made
                  pursuant to 3.1(d), bear the cost to the Supplier of any
                  unused packaging material reasonably held or purchased by the
                  Supplier, provided that such cost shall in no event exceed
                  more than 6 months' supply of packaging materials based on the
                  Company's forecasting obligations herein;

         (f)      give full details to the Supplier of any quality complaint
                  received by the Company regarding Products and discuss the
                  appropriate response to the complaint and the handling of the
                  complaint with the Supplier in accordance with clause 2.1(j);

         (g)      ensure that all information supplied to the Supplier for the
                  purposes of this agreement (including information contained in
                  the Technical Agreement) complies (where applicable) with the
                  Marketing Authorisation for the relevant Product;

         (h)      comply with its obligations under the Technical Agreement,
                  Specifications and Manufacturing and Packaging Instructions;

         (i)      seek a variation of the Marketing Authorisations in respect of
                  the Galen Products, Dynamin, Isodur and the Distribution
                  Products so that the Supplier is named as a manufacturer,
                  assembler, tester for release-to-market, storer and despatcher
                  of such Products (as applicable); and

         (j)      monitor stock levels of all Products and bulk capsules of
                  Isodur stored at the Supplier Premises from time to time by
                  the Supplier for the Company and shall be responsible for
                  identification of any such Products or bulk capsules of Isodur
                  that may be beyond their Product Shelf Life from time to time.

4.       VARIATION OF SPECIFICATIONS

4.1      The Company may at any time propose a variation to a Specification by
         at least 60 days' written notice to the Supplier or by such other
         reasonable notice period as agreed by the Parties from time to time
         (consent of the Supplier not to be unreasonably withheld or delayed).
         The Supplier may at any time propose a variation to a Specification by
         at least 60 days' written notice to the Company or by such other
         reasonable notice period as agreed by the Parties from time to time,
         provided that the Company may (at its sole discretion) reject such
         variation if it reasonably believes such variation may detrimentally
         affect the Company or any of its rights hereunder.

4.2      Either Party may at any time in order to comply with applicable law or
         regulation propose a variation to a Specification by at least 60 days'
         written notice to the other Party. The Parties shall then negotiate in
         good faith to agree the changes to the Specification and the time scale
         in which to implement such variation in order to comply with applicable
         law or regulation.

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4.3      Any agreed variation of a Specification, whether pursuant to clause 4.1
         or 4.2, shall be incorporated by amendment to the relevant
         Specification set out in the Technical Agreement.

4.4      If, following receipt by the Supplier of a written notice proposing a
         variation of Specification by the Company under clause 4.2, the
         Supplier (in the reasonable opinion of the Company) unreasonably
         withholds its consent to such variation or the Supplier is unable (for
         whatever reason) to comply with the variation, in each case within 60
         days of such notice, the Company may (at its entire discretion and
         without prejudice to any other rights or remedies the Company may have
         hereunder in respect of such failure to comply by the Supplier or to
         the rest of the Supplier's obligations hereunder) on further written
         notice to the Supplier:

         (a)      terminate any Confirmed Orders for any Galen Product, Dynamin
                  and/or Isodur which is the subject of the proposed variation;

         (b)      terminate all of the Supplier's obligations hereunder in
                  respect of any Galen Product, Dynamin and/or Isodur which is
                  the subject of the proposed variation (hereinafter referred to
                  in this clause 4.4 as a "TERMINATED PRODUCT"); and

         (c)      contract with any third party for the manufacture, packaging,
                  labelling, testing for release-to-market, QP release, storage
                  and/or despatch of any such Terminated Product; and

         (d)      require that this agreement be amended to reflect the
                  Terminated Products which are the subject of the proposed
                  variation, including (without limitation) reducing the
                  Guaranteed Order Value in accordance with clause 5.8, provided
                  that such amendments shall be without prejudice to the
                  Parties' rights and obligations under this agreement in so far
                  as they apply to the remaining Galen Products, Isodur and/or
                  Dynamin.

4.5      The Company shall bear all costs necessarily incurred by the Supplier
         as a result of any changes to Specifications made pursuant to clause
         4.1 provided the Company has requested such changes or such changes
         which are necessary to comply with the relevant Marketing Authorisation
         or Specifications or any revision to such Marketing Authorisations or
         Specifications. Any direct costs reasonably and necessarily incurred by
         the Supplier as a result of any change to Specifications requested by
         the Supplier pursuant to clause 4.1 shall be shared equally by the
         Parties provided that any cost savings resulting to the Supplier from
         such change to Specifications shall be fairly reflected (by way of a
         reduction) in the MPLT Charges. Costs incurred as a result of any
         change to Specifications made pursuant to clause 4.2 shall be borne by
         the Company provided that any reduced cost of Materials or increased
         efficiency in relation to any of the Supplier's obligations hereunder
         due to such change in Specification shall be shared equally between the
         Parties.

4.6      If any Galen Product, Dynamin and/or Isodur is terminated by the
         Company pursuant to clauses 4.1, 4.2 or 4.7 the Company shall reimburse
         the cost to the Supplier reasonably incurred based on the Company's
         forecasting obligations hereunder up to:

         (a)      three months' supply of Raw Materials in respect of Kapake and
                  Ursogal;

         (b)      six months' supply of Raw Materials in respect of any other
                  Galen Product; or

                                     - 9 -
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         (c)      six months' supply of Materials (excluding Raw Materials) for
                  any Galen Product, Dynamin and/or Isodur,

         to the extent such Materials relate to the Terminated Product.

4.7      Notwithstanding the foregoing provisions in this clause 4, the Company
         may at its discretion terminate any Product from the scope of this
         agreement provided that the Guaranteed Order Value shall not be diluted
         or reduced on the basis of such termination.

5.       PRODUCT ORDERS

5.1      GUARANTEED ORDERS

         (a)      During the Term the Company agrees to order Galen Products,
                  Dynamin and Isodur from the Supplier and the Supplier agrees
                  to provide Galen Products, Dynamin and Isodur, in each case
                  from time to time and in accordance with the terms of this
                  agreement.

         (b)      From the commencement of and during Year 3 the Company
                  warrants and undertakes to grant to the Supplier the exclusive
                  right to manufacture, package, label, test for
                  release-to-market, QP release, store and/or despatch (where
                  applicable) of any or all of the Products for the Company
                  provided that the Supplier's MPLT, timing, Storage & Despatch
                  Charges and any other relevant charges are no less favourable
                  to the Company than any then current third party supplier's
                  charges to manufacture, package, label, test for
                  release-to-market, QP release, store and/or despatch (where
                  applicable) each such Product and timing in respect thereof
                  and further provided that:

                  (i)      the Company shall at least 6 months prior to the end
                           of Year 2 notify the Supplier in writing of its
                           intention to contract during Year 3 with a third
                           party supplier for the manufacture, packaging,
                           labelling, testing for release-to-market, QP release,
                           storage and/or despatch (where applicable) of any or
                           all of the Products;

                  (ii)     the Company shall as soon as practicable following
                           such notice obtain and provide to the Supplier a
                           written proposal from such third party supplier (the
                           "PROPOSAL"), such Proposal to include a quotation
                           relating to charges and time-scale in which such
                           third party supplier can manufacture, package, label,
                           test for release-to-market, QP release, store and/or
                           despatch (where applicable) the relevant Product or
                           Products;

                  (iii)    the Company shall not notify such third party
                           suppliers that the Supplier shall be given the
                           opportunity to match the Proposal in relation to such
                           charges and time-scale;

                  (iv)     the Supplier shall provide a written proposal to the
                           Company within 10 Business Days of receipt of the
                           Proposal, such proposal to set out the Supplier's
                           proposed charges and time-scale in respect of the
                           manufacture, package, label, test for
                           release-to-market, QP release, store and/or despatch
                           (where applicable) for the relevant Product or
                           Products; and

                                     - 10 -
<PAGE>

                  (v)      the Company undertakes not to engage the services of
                           the third party supplier provider if the Supplier's
                           proposal matches or betters the Proposal.

5.2      ORDERING PROCESS

         (a)      Prior to the first Business Day of each month during Year 1
                  and Year 2, the Company shall provide the Supplier with a
                  written forecast of the Company's anticipated requirements for
                  each Galen Product, Dynamin and/or Isodur to be manufactured,
                  packaged, labelled, tested for release-to-market, QP released
                  and delivered into storage at the Supplier Premises in
                  accordance with the provisions of this agreement for each of
                  the following 12 months. The first three months of each 12
                  month forecast shall be firm irrevocable orders confirming
                  quantities and due date for completion of manufacturing,
                  packaging, labelling testing for release-to-market, QP release
                  and delivery into storage at the Supplier Premises of each
                  such Galen Product, Dynamin and/or Isodur ("CONFIRMED
                  ORDERS"). For the avoidance of doubt, the due date for
                  completion of manufacturing, packaging, labelling, testing for
                  release-to-market, QP release and delivery into storage at the
                  Supplier Premises of each Galen Product, Dynamin and/or
                  Isodur, which forms the subject of a Confirmed Order, shall
                  (unless otherwise agreed by the Parties) be the last day of
                  the month in respect of which that Confirmed Order relates. In
                  no event shall the Company place a Confirmed Order for Galen
                  Products, Dynamin and/or Isodur where the order contained
                  therein for a particular Galen Product or Dynamin or Isodur is
                  less than the Minimum Quantity in respect of such Galen
                  Product, Dynamin and Isodur.

         (b)      Subject as hereinafter set out, the Supplier shall not without
                  good reason refuse to accept in writing all Confirmed Orders
                  placed by the Company in accordance with the terms of clause
                  5.2(a) within 5 Business Days of receipt thereof. If the
                  quantity of Galen Products, Dynamin and/or Isodur requested to
                  be delivered in a given month under a Confirmed Order exceeds
                  by more than 20 per cent. the quantity forecast in the most
                  recent forecast for that month provided under clause 5.2(a),
                  then the Supplier shall be entitled to reject such portion of
                  the Confirmed Order as is in excess of the 20 per cent.
                  tolerance in its absolute discretion. The Supplier shall
                  deliver written notification of any such rejection under this
                  clause 5.2(b) to the Company within 5 Business Days of the
                  Supplier's receipt of the Confirmed Order.

         (c)      The Company shall provide Confirmed Orders for Galen Products,
                  Dynamin and/or Isodur in each month that are not less than 75
                  per cent. of the most recent forecast for that month provided
                  under clause 5.2(a) and shall not reduce a forecast for any
                  month by more than 25 per cent. of the forecast for that month
                  given in the immediately preceding month.

         (d)      The Company shall use all reasonable endeavours to ensure that
                  Confirmed Orders correspond with the anticipated requirements
                  set out in the monthly forecasts.

         (e)      For the avoidance of doubt (but subject to clause 5.1(b)), the
                  Company shall be under no obligation whatsoever to place any
                  Confirmed Orders with the Supplier during Year 3.

                                     - 11 -
<PAGE>

         (f)      In relation to the forecasting obligations of the Company
                  hereunder the Company will use its reasonable endeavours to
                  ensure that the forecasting utilised by the Company shall:

                  (i)      follow historical patterns of forecasting used by the
                           Company in the two year period prior to the date of
                           this agreement; and

                  (ii)     not contain any unexpected or unusual elements which
                           would or may result in difficulties for the Supplier
                           in fulfilling its manufacturing and distribution
                           obligations hereunder.

                  Notwithstanding the foregoing, the Supplier shall during the
                  first three months of the Term use its best endeavours to meet
                  any additional Confirmed Orders which do not follow the
                  Company's historical forecasting patterns.

5.3      If, for any reason, the Supplier believes that it is unlikely to be
         able to fulfil any (or any part of any) Confirmed Order, it shall
         promptly inform the Company in writing of this belief. However nothing
         in this clause 5.3 shall release the Supplier from its obligation to
         fulfil any Confirmed Order.

5.4      In the event that the Supplier fails to fulfil any (or part of any)
         Confirmed Order within 10 Business Days after the due date specified in
         the Confirmed Order (the "ORDER DEADLINE"), and in the absence of fault
         on the part of the Company for such default, in particular in relation
         to the Company's forecasting obligations hereunder, the Company may (at
         its entire discretion and without prejudice to any other rights or
         remedies it may have hereunder in respect of such default) on written
         notice to the Supplier:

         (a)      terminate any such Confirmed Order;

         (b)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of any and all actual orders
                  received by the Company for Galen Products (excluding Kapake
                  and Ursogal), Dynamin and/or Isodur which are cancelled by
                  customers of the Company due to a Stock Out occurring (if any)
                  in respect of such failure by the Supplier to meet an Order
                  Deadline; and

         (c)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of any and all:

                  (i)      actual orders received by the Company for Kapake
                           and/or Ursogal which are cancelled by customers of
                           the Company due to a Stock Out occurring (if any) in
                           respect of such failure by the Supplier to meet an
                           Order Deadline; and

                  (ii)     customer orders for Kapake and/or Ursogal that would
                           reasonably be expected to have been received by the
                           Company but which were not so received due to a Stock
                           Out occurring (if any) in respect of such failure by
                           the Supplier to meet an Order Deadline (based on the
                           customers' ordering history for Kapake and/or Ursogal
                           during the 60 days immediately prior to such a Stock
                           Out occurring).

                                     - 12 -
<PAGE>

         For the purposes of clause 5.4(b) damages would be in respect of the
         period commencing on the date of the Stock Out and ending on the date
         being the earlier of (i) the Stock Out no longer existing and (ii) the
         relevant Product or Products being terminated in accordance with clause
         5.5 (if applicable).

         For the purposes of clause 5.4(c) damages would be in respect of the
         period commencing on the date of the Stock Out and ending on the date
         the earlier of (i) the Stock Out no longer existing and customers'
         orders received reverting to a level consistent with ordering history
         for Kapake and/or Ursogal during the 60 days immediately prior to such
         a Stock Out occurring (provided that the Supplier shall not be
         responsible for such damages beyond the date falling 3 months from the
         date of the end of the Stock Out) and (ii) the relevant Product or
         Products being terminated in accordance with clause 5.5 (if
         applicable).

         For the purposes of this clause 5, a Confirmed Order will be deemed to
         be fulfilled by the Supplier to the extent that no less than 95 per
         cent., in relation to Kapake and Ursogal and no less than 75 per cent.
         of any other Product detailed in the relevant Confirmed Order is
         manufactured and delivered into storage at the Supplier Premises by the
         Supplier in accordance with this agreement.

5.5      In the event that the Supplier fails to fulfil any (or part of any)
         Confirmed Order in accordance with Order Deadlines on three or more
         occasions in any period of 90 days during the Term, and provided that
         such failures relate to different batches of a Product or Products and
         in the absence of fault on the part of the Company on each occasion, in
         particular in relation to its forecast obligation hereunder, the
         Company may (at its entire discretion and without prejudice to any
         other rights or remedies it may have hereunder in respect of such
         default or to the rest of the Supplier's obligations hereunder) on
         written notice to the Supplier:

         (a)      terminate all of the Supplier's obligations hereunder in
                  respect of any Galen Product, Dynamin and/or Isodur, which is
                  the subject of any such failed Order Deadline (hereinafter
                  referred to in this clause 5.5 as a "TERMINATED PRODUCT");

         (b)      contract with any third party for the manufacture, packaging,
                  labelling, testing for release-to-market, QP release, storage
                  and/or despatching of any such Terminated Product;

         (c)      require that this agreement be amended to reflect the reduced
                  number of Galen Products, Dynamin and/or Isodur, including
                  (without limitation) reducing the Guaranteed Order Value in
                  accordance with clause 5.8, provided that such amendments
                  shall be without prejudice to the Parties' rights and
                  obligations under this agreement in so far as they apply to
                  the remaining Products;

         (d)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of any and all actual orders
                  received by the Company for Terminated Products (excluding
                  Kapake and Ursogal) which are cancelled by customers of the
                  Company due to a Stock Out occurring (if any) in respect of
                  such Terminated Products. For the purposes of this clause
                  5.5(d) damages would be in respect of the period commencing on
                  the date the later of (i) termination of such Product or
                  Products by the Company in accordance with this clause 5.5 and
                  (ii) a Stock Out occurring (if any), and ending on the date
                  the

                                     - 13 -
<PAGE>

                  earlier of (i) when the Company "qualifies" a new supplier for
                  such Terminated Products and (ii) 3 months after the end of
                  the Stock Out;

         (e)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of:

                  (i)      any and all actual orders received by the Company for
                           Kapake and/or Ursogal which are cancelled by
                           customers of the Company due to a Stock Out occurring
                           (if any) in respect of such Terminated Products; and

                  (ii)     customers' orders for Kapake and/or Ursogal that
                           would reasonably be expected to have been received by
                           the Company but which were not so received due to a
                           Stock Out occurring (if any) in respect of such
                           Terminated Products (based on the customers' ordering
                           history for Kapake and/or Ursogal during the 60 days
                           immediately prior to such a Stock Out occurring);

                  For the purposes of this clause 5.5(e) damages would be in
                  respect of the period commencing on the date the later of (i)
                  termination of such Product or Products by the Company in
                  accordance with this clause 5.5 and (ii) a Stock Out occurring
                  (if any), and ending on the date the earlier of (i) when the
                  Company "qualifies" a new Supplier for such Terminated
                  Products and customers' orders received revert to a level
                  consistent with ordering history for Kapake and/or Ursogal
                  during the 60 days immediately prior to such a Stock Out
                  occurring and (ii) 3 months after the end of the Stock Out;
                  and

         (f)      subject to clause 13.7, recover from the Supplier (by way of
                  direct damages) a cash payment to the value of any and all
                  reasonable costs incurred by the Company in relation to
                  "identifying" and "qualifying" a new supplier for the
                  Terminated Products.

5.6      Without prejudice to clause 5.2, specific arrangements for Galen
         Products, Dynamin or Isodur may be agreed between the Parties from time
         to time, including (without limitation) arrangements to deal with
         promotional activity being conducted by the Company. The costs of any
         such promotional activity are to be at the Company's own expense.

5.7      GUARANTEED ORDER VALUE

         (a)      Subject to clauses 4.4(d), 5.5(c), 11.9(c), 16.4 and 17.5 the
                  Company warrants that the Total Order Value for both Year 1
                  and Year 2 combined shall be (pound)19.65 million (the
                  "GUARANTEED ORDER VALUE").

         (b)      In the event that the Total Order Value for both Year 1 and
                  Year 2 combined (the "ACTUAL VALUE") is less than Guaranteed
                  Order Value, the Company shall compensate the Supplier by
                  making a cash payment to the Supplier in the amount of 50 per
                  cent. multiplied by the difference between the Actual Value
                  and the Guaranteed Order Value.

         (c)      In the event that the Actual Value is greater than the
                  Guaranteed Order Value by (pound)2 million or less, the
                  Supplier shall make a cash rebate payment to the Company in
                  the amount of 10 per cent. multiplied by the difference
                  between the Actual Value and the Guaranteed Order Value.

                                     - 14 -
<PAGE>

         (d)      In the event that the Actual Value is greater than(pound)21.65
                  million, the Supplier shall make a cash rebate payment to the
                  Company in the amount equal to:

                  (i)      15 per cent. multiplied by the difference between the
                           Actual Value and(pound)21.65 million; plus

                  (ii)     L200,000.

         The payments referred to in paragraphs (b), (c) and (d) above shall be
         paid within 60 days of the end of Year 2. For the purposes of this
         clause 5.7, "TOTAL ORDER VALUE" shall mean the total of all MPLT
         Charges which the Supplier may, by virtue of this agreement, invoice
         the Company for in respect of all Confirmed Orders received by the
         Supplier during any given Year. For the avoidance of doubt, the Total
         Order Value shall be exclusive of any applicable VAT.

5.8      For the avoidance of doubt, in respect of any reference in this
         agreement to "reduction of Guaranteed Order Value", "reducing the
         Guaranteed Order Value" or other similar reference (including, without
         limitation, such references within clauses 4.4(d), 5.5(c), and 11.9(c))
         such reduction or revised Guaranteed Order Value shall be calculated on
         the basis of a pro rata reduction from the date of termination of the
         relevant Product until the end of Year 2 by reference to the values set
         out in schedule 6.

6.       DESPATCH

6.1      The Company shall provide the Supplier with at least 3 Business Days'
         advanced notice in writing of its despatch requirements for Products,
         including (without limitation) quantities, despatch and collection
         timing (a "DESPATCH NOTICE"). For the avoidance of doubt, storage,
         despatch and collection of Products shall take place at Unit 14 of the
         Supplier Premises or as otherwise agreed and the form of the Despatch
         Notice is to be agreed by the Parties as soon as practicable following
         the date of this agreement.

6.2      The Supplier shall despatch the Products in accordance with the terms
         of the Despatch Notice and this clause 6.

6.3      The Supplier shall forward a copy of each despatch note (or such other
         form of confirmation of despatch of Products as the Supplier shall use
         from time to time) to the Company within two Business Days of such
         despatch or as otherwise agreed by the Parties from time to time.

6.4      If the Supplier fails due to its negligent act or omission or in the
         event of a Stock Out to despatch any Products within 5 Business Days
         after the due delivery date specified in the relevant Despatch Notice
         (a "DESPATCH FAILURE"), then in the absence of fault on the part of the
         Company, the Company may (at its entire discretion and without
         prejudice to any other rights or remedies it may have hereunder in
         respect of such default or to the rest of the Supplier's obligations
         hereunder) on written notice to the Supplier:

         (a)      terminate any outstanding Despatch Notice in respect of which
                  there has been a Despatch Failure resulting in the
                  cancellation of that order by a customer of the Company; and

                                     - 15 -
<PAGE>

         (b)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of any and all actual orders for Products which are
                  cancelled by customers of the Company due to a Despatch
                  Failure.

6.5      In the event that 15 per cent. or more of the Despatch Notices result
         in Despatch Failures in any 90 day period during the Term, and in the
         absence of fault on the part of the Company in respect of any such
         Despatch Failures, hereunder:

         (a)      the Nominated Individuals will meet within 5 Business Days of
                  written request served by the Company to discuss the Despatch
                  Failures; and

         (b)      if at any time within a period of 30 days following such
                  meeting 15 per cent. or more of the Despatch Notices result in
                  Despatch Failures the Company may terminate all of the
                  Supplier's obligations hereunder in respect of storing and
                  despatching Products on behalf of the Company; and

         (c)      in the event of the Supplier failing to meet its obligations
                  under (b) above and subject to clause 13.7, recover from the
                  Supplier (by way of direct damages) a cash payment to the
                  value of any and all reasonable costs incurred by the Company
                  in transporting stocks of all Products from the Supplier
                  Premises to new storage and despatch facilities.

7.       RISK AND TITLE

7.1      Subject to clause 14, title and risk in Dynamin, Isodur and the
         Distribution Products shall remain with the Company at all times.

7.2      Subject to clause 14, title and risk in Galen Products shall pass from
         the Supplier to the Company following safe delivery of the Products
         into storage at the Supplier Premises, provided that payment of all
         MPLT Charges due and properly invoiced by the Supplier in respect of
         those Galen Products have been made by the Company.

8.       CHARGES AND PAYMENT TERMS

8.1      The charges which shall be paid by the Company to the Supplier for
         performance of all of its obligations hereunder (excluding the Storage
         & Despatch Charges), (the "MPLT CHARGES") shall be as set out in
         schedule 3.

8.2      The charges which shall be paid by the Company to the Supplier for
         performance of all of its storage and despatch obligations hereunder,
         (the "STORAGE & DESPATCH CHARGES") shall be as set out in schedule 4.

8.3      Unless otherwise stated, all sums payable under this agreement are
         exclusive of VAT and any other duties or taxes. Any VAT or other duties
         or taxes payable in respect of such sums shall be payable in addition
         to such sums.

8.4      The Supplier shall submit invoices for MPLT Charges and the Storage &
         Despatch Charges at the end of each month, such invoices to be
         submitted in the lawful currency of the United Kingdom.

                                     - 16 -
<PAGE>

8.5      The Company shall pay to the Supplier the full amount of each invoice
         to the bank account designated by the Supplier in the lawful currency
         of the United Kingdom, without any deduction or discount within 45 days
         of the date of each invoice.

8.6      Both parties reserve the right to charge interest at 2 per cent. per
         annum above the base rate of the UK branch of the Bank of Ireland rates
         on all overdue amounts hereunder, such interest being deemed to accrue
         on a day to day basis from the due date for payment.

8.7      Subject to clause 8.10, on provision by the Supplier to the Company of
         reasonable written evidence of any increase (provided such increase is
         greater than 5 per cent.) in the cost to the Supplier of procuring the
         Bill of Materials of any Galen Products, Isodur and/or Dynamin, then
         the parties shall increase applicable MPLT Charges in respect of the
         relevant Product or Products as set out in schedule 3 to reflect (i)
         the amount of any such increase and (ii) an additional 8.5% of the
         amount of such increase to reflect the increased cost of rejects and
         process waste. For the avoidance of doubt this provision shall not
         apply in respect of any increase in cost incurred by the Supplier due
         to any wrongful act or omission by the Supplier (including, without
         limitation, any penalties or increase supply costs incurred by the
         Supplier due to late purchasing of Materials).

8.8      Subject to clause 8.10, the Supplier hereby undertakes to promptly
         notify the Company of any decrease (provided such decrease is greater
         than 5 per cent.) in the cost to the Supplier of procuring the Bill of
         Materials of any Galen Products, Isodur and/or Dynamin. On receipt of
         such notice or in the event that the Company obtains reasonable
         evidence that there has been a material decrease in the cost to the
         Supplier of procuring any Bill of Materials (and such evidence is
         presented to the Supplier), the parties shall reduce the MPLT Charges
         in respect of the relevant Products, Isodur and/or Dynamin in schedule
         3 to reflect (i) the amount of any such reduction and (ii) an
         additional 8.5% of the amount of such reduction to reflect the reduced
         cost of rejects and process waste.

8.9      Subject to clause 8.10, if at any stage during the Term there is an
         increase or decrease in the cost to the Supplier of procuring any Bill
         of Materials which is greater than or equal to 10 per cent., the
         Parties agree to meet to discuss such change within 5 Business Days of
         notice by either Party.

8.10     The Parties' respective Nominated Individuals or other agreed parties
         shall meet at least every 6 months during the Term (the first such
         meeting to be six months after the date of this agreement) for the
         purposes of reviewing and implementing any changes referred to in
         clauses 8.7, 8.8 and 8.9 and any other relevant issues in respect of
         this agreement from time to time. For the avoidance of doubt, at the
         first six monthly meeting after the date of this agreement the Parties
         shall determine the percentage increases or decreases referred to in
         clauses 8.7, 8.8 and 8.9 by reference to the Bill of Materials for each
         Galen Product, Isodur and Dynamin as set out in schedule 7 and at
         subsequent six monthly meetings by reference to the same, or as may
         have been updated (provided any such increase or decrease was greater
         than 5 per cent.) by the Parties at the prior six monthly meeting. For
         the avoidance of doubt, changes referred to at clauses 8.7, 8.8 and 8.9
         may only be raised and/or implemented at or immediately following such
         six monthly meetings.

                                     - 17 -
<PAGE>

9.       CONFIDENTIALITY

9.1      As used in this agreement, the term "CONFIDENTIAL INFORMATION" means
         any technical or business information furnished by one party (the
         "DISCLOSING PARTY") to the other party (the "RECEIVING PARTY") in
         connection with this agreement. Such Confidential Information may
         include, without limitation, trade secrets, know-how, inventions,
         technical data or specifications, testing methods, business or
         financial information, research and development activities, regulatory
         data, product and marketing plans and customer and supplier
         information. Confidential Information that is disclosed orally or
         visually shall be documented in a written notice prepared by the
         Disclosing Party and delivered to the Receiving Party within 30 days of
         disclosure; such notice shall summarise the Confidential Information
         disclosed to the Receiving Party and reference the time and place of
         disclosure.

9.2      The Receiving Party agrees that it shall:-

         (a)      maintain all Confidential Information in strict confidence,
                  except that the Receiving Party may disclose or permit the
                  disclosure of any Confidential Information to its directors,
                  officers, employees, consultants and advisors who are
                  obligated to maintain the confidential nature of such
                  Confidential Information for the purposes set forth in this
                  agreement;

         (b)      use all Confidential Information solely for the purposes set
                  forth in this agreement or as otherwise authorised by this
                  agreement; and

         (c)      allow its directors, officer, employees, consultants and
                  advisors to reproduce the Confidential Information only to the
                  extent necessary to effect the purposes set forth in this
                  agreement or as otherwise authorised by this agreement, with
                  all such reproductions being considered Confidential
                  Information.

9.3      The obligation set out in clause 9.2 shall not apply to the extent that
         the Receiving Party can demonstrate that certain Confidential
         Information:-

         (a)      was in the public domain prior to the time of its disclosure
                  under this agreement;

         (b)      entered the public domain after the time of its disclosure
                  under this agreement through means other than an unauthorised
                  disclosure resulting from an act or omission of the Receiving
                  Party;

         (c)      was subsequently disclosed to the Receiving Party without any
                  obligation of confidence by a third party provided that such
                  third party was acting lawfully and not in breach of any duty
                  of confidence;

         (d)      is independently developed or discovered without the aid,
                  application or use of Confidential Information; or

         (e)      is required to be disclosed to comply with applicable laws or
                  regulations, or with a court or administrative order, provided
                  that the Disclosing Party takes all reasonable and lawful
                  actions to obtain confidential treatment for such disclosure
                  and, if possible, to minimise the extent of such disclosure.

                                     - 18 -
<PAGE>

9.4      Following the termination of this agreement, the Receiving Party shall
         return to the Disclosing Party all originals, copies and summaries of
         documents, materials and other tangible manifestations of Confidential
         Information in the possession or control of the Receiving Party save
         that either party may retain one copy of any such Confidential
         Information if required to do so under any regulatory or legal
         requirement. The obligations in this clause 9.4 shall not apply to any
         Confidential Information which the Company shall have a continuing
         right to use under clause 12. The obligations set forth in this clause
         shall survive for a period of 10 years following termination of this
         agreement.

10.      REGULATORY PROCEDURES AND DATA RETENTION

10.1     Any Party requested to submit information for a governmental or
         regulatory inspection (the "INSTRUCTED PARTY") shall, providing that
         the inspection relates to the Products and the work performed for the
         Company by the Supplier hereunder, promptly notify the other Party as
         soon as practicable. If the Instructed Party is requested to prepare
         responses as a result of a request made by any such inspection in
         respect of the manufacture, packaging, labelling, testing for
         release-to-market, QP release, storage and/or despatch of Products as
         contemplated under this agreement, the response submitted shall be
         subject to review by the other Party before submission to such
         authority. The other Party shall (upon request of the Instructed Party)
         use their best endeavours to provide support for preparing such
         responses. The Instructed Party is not entitled to amend any additional
         submission which any other Party is hereby entitled to provide. Primary
         responsibility for preparation of a response to a request for
         information is deemed to be with the Company in the absence of any
         contrary categorical statement from the governmental or regulatory
         inspecting authority. Any response shall be submitted to the
         governmental or regulatory authority by the Company alone. The Supplier
         shall not undertake any communications relating to the Products with
         any governmental or regulatory authority.

10.2     If the Supplier's participation in any regulatory review relating to
         Products is:

         (a)      not routine; and

         (b)      not related to the performance of the Supplier of its
                  obligations hereunder; and

         (c)      material with regard to personnel, time and expense,

         the Parties shall review costs associated with the participation and
         shall agree to a reasonable rate of compensation in advance of the
         participation in the aforementioned governmental regulatory inspection.
         All other costs associated with such review are to be borne by the
         Party incurring the same.

10.3     The Supplier shall be responsible for the archiving and retention of
         all relevant documentation in accordance with the terms outlined in the
         relevant ICH Guidelines.

11.      PRODUCT ACCEPTANCE

11.1     The Supplier shall procure that all batches of Products despatched by
         the Supplier shall be the subject of quality control certificates of
         analysis and a certificate of conformity signed by a Qualified Person
         ("QP RELEASE") confirming that each of the products covered by such
         certificate conform with the relevant Specifications, the Manufacturing
         and Packaging

                                     - 19 -
<PAGE>

         Instructions and the Technical Agreement and were (as applicable
         hereunder) manufactured, packaged, labelled, tested for
         release-to-market, stored and despatched in accordance with the
         relevant Marketing Authorisations and cGMP. All such Products shall be
         deemed accepted by the Company unless the Company, acting reasonably
         and in good faith, (and in the absence of a negligent act or omission
         of the Company) shall give written notice of rejection (a "REJECTION
         NOTICE") to the Supplier as soon as reasonably practicable, but in any
         event within 10 Business Days, following despatch.

11.2     The Rejection Notice shall state in reasonable detail (sufficient to
         enable the Supplier to identify the nature of the problem and the tests
         or studies to be conducted by or on its behalf to confirm or dispute
         the same) the reason why any Product (or batch of Products) are not
         acceptable to the Company. Any Rejection Notice shall be accompanied by
         copies of all written reports relating to tests, studies or
         investigations performed by or for the Company on the rejected Products
         as at the date of the Rejection Notice.

11.3     The Supplier shall as soon as reasonably practicable, but in any event
         within 30 Business Days, following receipt of a Rejection Notice
         either:

         (a)      acknowledge in writing to the Company that the Products in
                  question were validly rejected and correct and/or replace all
                  rejected Products and place all such replacement Products into
                  storage at the Supplier Premises and provide written
                  notification to the Company of such on the date that the
                  replacement Products are so placed into storage. The Supplier
                  shall be fully responsible for all costs associated with
                  correcting and/or replacing and placing such Products into
                  storage and shall compensate the Company for all direct costs
                  reasonably suffered or incurred by it in returning any
                  rejected Products to the Supplier Premises; or

         (b)      require the Company to return the rejected Products or samples
                  thereof to the Supplier for further testing (at the cost of
                  the Supplier). The Supplier shall use its reasonable
                  endeavours to complete such testing as soon as reasonably
                  practicable following receipt of such rejected Products or
                  samples.

         During the period of testing under clause 11.3(b) the Supplier shall
         use all reasonable endeavours to comply with any additional Confirmed
         Orders placed by the Company outside the scope of the Company's
         forecasting obligations hereunder.

11.4     The Company's test results or basis for rejection of Products shall be
         conclusive unless the Supplier notifies the Company, within 20 Business
         Days of receipt by the Supplier of a Rejection Notice or, in respect of
         clause 11.3(b) the rejected Products or samples thereof, that the
         Supplier disagrees with such test results or its responsibility for the
         problem in question, such notice to attach copies of all related test
         results and other documentary evidence available to the Supplier in
         support of the its case. On receipt of such notice (and accompanying
         documentation) the Company shall have 10 Business Days to review the
         Supplier's case, after which time the Company will, at its option,
         either:

         (a)      acknowledge in writing to the Supplier that it had mistakenly
                  rejected the Products in question and compensate the Supplier
                  for all direct costs reasonably suffered or incurred by the
                  Supplier in relation to testing any rejected Products or
                  samples in accordance with clause 11.3(b); or

                                     - 20 -
<PAGE>

         (b)      arrange for representative samples of the Products in question
                  to be submitted to a mutually acceptable independent
                  laboratory or consultant (if a laboratory analysis issue) for
                  analysis or review, the costs of which shall be paid by the
                  Party that is determined by the independent laboratory or
                  consultant to have been incorrect in its determination of
                  whether the Products should be rejected. All tests carried out
                  by the laboratory (or consultant) shall comply with the
                  analytical methods relating to the Specifications, Marketing
                  Authorisations, Manufacturing and Packaging Instructions and
                  the Technical Agreement.

11.5     If it is agreed or otherwise determined by the independent laboratory
         or consultant pursuant to clause 11.4(b) that the Company:

         (a)      had the right to reject the Products which are the subject of
                  the Rejection Notice as a result of a failure by the Supplier
                  to comply with any or all of the Marketing Authorisations,
                  cGMP, Specifications, Manufacturing and Packaging Instructions
                  or Technical Agreement, the Supplier shall correct and replace
                  into storage at the Supplier Premises for the Company such
                  Products within 30 Business Days of such determination and
                  shall be fully responsible for all costs associated with the
                  testing, correcting and/or replacing and placing into storage
                  of such Products in accordance with clause 11 and shall
                  compensate the Company for all direct costs reasonably
                  suffered or incurred by it in returning any rejected Products
                  to the Supplier Premises;

         (b)      was not justified in rejecting any of the Products, the
                  Company shall compensate the Supplier for all direct costs
                  reasonably suffered or incurred by the Supplier in relation to
                  testing such Products in accordance with clause 11.3(b).

11.6     For the avoidance of doubt, the supply of replacement Products pursuant
         to clause 11.3(a) and 11.5(a) shall be without prejudice to any other
         right or remedy which the Company may have under this agreement, at law
         or otherwise.

11.7     In the event of any non-conformity, fault or defect being found in any
         Product (whether pursuant to clause 11.3(a) or 11.5(a)), the Supplier
         shall not part with possession of any Product, which is or may be
         affected by such non-conformity, fault or defect to any third party and
         shall, in accordance with the Company's instructions, dispose of all
         stocks of such Products with all reasonable skill and care and in such
         a way that it is not identifiable as connected in any way with the
         Product or the Company.

11.8     If the Supplier is unable to correct and/or replace all rejected
         Products and place into storage in accordance with clauses 11.3(a) or
         11.5(a) within 30 Business Days (a "REPLACEMENT FAILURE"), then the
         Company may (at its entire discretion and without prejudice to any
         other rights or remedies it may have hereunder in respect of such
         default or to the rest of the Supplier's obligations hereunder) on
         written notice to the Supplier:

         (a)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of any and all actual orders for
                  Galen Products (excluding Kapake and Ursogal), Dynamin and/or
                  Isodur which are cancelled by customers of the Company due to
                  a Stock Out occurring (if any) in respect of such Replacement
                  Failure;

                                     - 21 -
<PAGE>

         (b)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of any and all:

                  (i)      actual orders for Galen Products for Kapake and/or
                           Ursogal, which are cancelled by customers of the
                           Company due to a Stock Out occurring (if any) in
                           respect of such Replacement Failure; and

                  (ii)     customer orders for Kapake and/or Ursogal that would
                           reasonably be expected to have been received by the
                           Company but which were not so received due to a Stock
                           Out occurring (if any) in respect of such Replacement
                           Failure (based on the customers' ordering history for
                           Kapake and/or Ursogal during the 60 days immediately
                           prior to such a Stock Out occurring).

         For the purposes of clause 11.8(a) damages would be in respect of the
         period commencing on the date of the Stock Out and ending on the date
         the earlier of (i) the Stock Out no longer existing and (ii) the
         relevant Product or Products being terminated in accordance with clause
         11.9 (if applicable).

         For the purposes of clause 11.8(b) damages would be in respect of the
         period commencing on the date of the Stock Out and ending on the date
         the earlier of (i) the Stock Out no longer existing and customers'
         orders received reverting to a level consistent with ordering history
         for Kapake and/or Ursogal during the 60 days immediately prior to such
         a Stock Out occurring (provided that the Supplier shall not be
         responsible for such damages beyond the date falling 3 months from the
         date of the end of the Stock Out) and (ii) the relevant Product or
         Products being terminated in accordance with clause 11.9 (if
         applicable).

11.9     If there are three or more Replacement Failures during any 90 day
         period during the Term, the Company may (at its entire discretion and
         without prejudice to any other rights or remedies it may have hereunder
         in respect of such default or to the rest of the Supplier's obligations
         hereunder) on written notice to the Supplier:

         (a)      terminate all of the Supplier's obligations hereunder in
                  respect of any such rejected Product (hereinafter referred to
                  in this clause 11.9 as a "REJECTED PRODUCT");

         (b)      contract with any third party for the manufacture, packaging,
                  labelling, testing for release-to-market, QP release, storage
                  and/or despatching of any such Rejected Product;

         (c)      require that this agreement be amended to reflect any Rejected
                  Products, including (without limitation) reducing the
                  Guaranteed Order Value in accordance with clause 5.8, provided
                  that such amendments shall be without prejudice to the
                  Parties' rights and obligations under this agreement in so far
                  as they apply to the remaining Products;

         (d)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of any and all actual orders
                  received by the Company for Rejected Products (excluding
                  Kapake and Urgosal) which are cancelled by customers of the
                  Company due to a Stock Out occurring (if any) in respect of
                  such Rejected Products. For the purposes of this clause
                  damages would be in respect of the period commencing on the
                  date the later of

                                     - 22 -
<PAGE>

                  (i) termination of such Product or Products by the Company in
                  accordance with this clause 11.9 and (ii) a Stock Out
                  occurring (if any), and ending on the date the earlier of (i)
                  when the Company "qualifies" a new supplier for such Rejected
                  Products and (ii) 3 months after the end of the Stock Out;

         (e)      subject to clause 13.7, recover from the Supplier (by way of
                  damages for direct loss of gross profits) a cash payment to
                  the value of and in respect of:

                  (i)      any and all actual orders received by the Company for
                           Kapake and/or Ursogal which are cancelled by
                           customers of the Company due to a Stock Out occurring
                           (if any) in respect of such Rejected Products; and

                  (ii)     customers' orders for Kapake and/or Ursogal that
                           would reasonably be expected to have been received by
                           the Company but which were not so received due to a
                           Stock Out occurring (if any) in respect of such
                           Rejected Products (based on the customers' ordering
                           history for Kapake and/or Ursogal during the 60 days
                           immediately prior to such Stock Out occurring);

                  For the purposes of this clause damages would be in respect of
                  the period commencing on the date the later of (i) termination
                  of such Product or Products by the Company in accordance with
                  this clause 11.9 and (ii) a Stock Out occurring (if any), and
                  ending on the date the earlier of (i) when the Company
                  "qualifies" a new supplier for such Rejected Products and
                  customers' orders received revert to a level consistent with
                  ordering history or Kapake and/or Ursogal during the 60 days
                  immediately prior to such a Stock Out occurring and (ii) 3
                  months after the end of the Stock Out;

                  and

         (f)      recover from the Supplier (by way of direct damages) a cash
                  payment to the value of any and all reasonable costs incurred
                  by the Company in relation to "identifying and qualifying" a
                  new supplier for the Rejected Products.

12.      INTELLECTUAL PROPERTY

12.1     Other than pursuant to clauses 3.1 or 12.2, nothing in this agreement
         shall affect, or grant any right to, Intellectual Property owned by the
         Parties prior to the commencement of this agreement.

12.2     All Intellectual Property which subsists in any documents, drawings,
         items, designs, processes, software or any other thing developed by the
         Supplier or any of its employees or agents (whether in conjunction with
         the Company or not) in performance of the agreement shall vest in the
         Supplier unless otherwise agreed in writing between the Parties.

12.3     The Company shall be responsible for obtaining all necessary consents
         in respect of the use of any third party's Intellectual Property by the
         Supplier which subsists in any materials provided by the Company to the
         Supplier pursuant to clause 3.1(a) or (b), which are necessary for the
         Supplier's performance of this agreement, provided that the Supplier
         shall enter into such licences or other agreement as may reasonably be
         required for such purpose. Where any royalties or other sums are
         payable to any third party in respect of the use of any

                                     - 23 -
<PAGE>

         such Intellectual Property, such sums shall be paid by the Company
         unless otherwise specified.

12.4     The Supplier shall have the right to assign any of the Supplier's
         Intellectual Property rights to any third party.

13.      WARRANTIES & INDEMNITIES

13.1     The Supplier hereby warrants to the Company that:-

         (a)      all Products manufactured, packaged, labelled, tested for
                  release-to-market, QP released, stored and/or despatched
                  hereunder have been so manufactured, packaged, labelled,
                  tested for release-to-market, QP released, stored and/or
                  despatched with all due skill, competence, care and attention
                  and will at the time of delivery conform in all respects with
                  the Specifications and the Manufacturing and Packaging
                  Instructions and will, subject to clause 13.3(c), be free from
                  any non-conformity, fault or defects caused by breach of any
                  of the Supplier's warranties in this clause 13.1;

         (b)      all Products manufactured, packaged, labelled, tested for
                  release-to-market, QP released, stored and/or despatched
                  hereunder have been so manufactured, packaged, labelled,
                  tested for release-to-market, QP released, stored and/or
                  despatched in accordance with the terms of this agreement, the
                  Technical Agreement, the Marketing Authorisations, the cGMP
                  and all applicable European Union and United Kingdom
                  legislation, rules and other requirements of the appropriate
                  regulatory authorities (including without limitation the EMEA
                  and the MHRA) in force from time to time during the Term;

         (c)      the labels and packaging produced and/or obtained by the
                  Supplier for each Galen Product, Isodur and Dynamin will
                  conform to the label copy and packaging copy provided and
                  approved by the Company to the Supplier in the Technical
                  Agreement;

         (d)      the Products shall at all times during the Term be free and
                  clear from any mortgage, charge, pledge, lien, encumbrance,
                  third party right or interest of any kind and not misbranded
                  or adulterated; and

         (e)      it has the power and authority to execute and deliver the
                  agreement and perform its obligations thereunder.

13.2     The Supplier does not exclude or limit its liability (if any) to the
         Company:

         (a)      in respect of any claim for death or personal injury caused by
                  the negligence of the Supplier;

         (b)      in respect of any claim for death or personal injury caused by
                  the negligence of the Supplier under Part 2 of the Consumer
                  Protection (Northern Ireland) Order 1987;

         (c)      in respect of any other liability which may not be limited or
                  excluded at law; or

         (d)      fraud or dishonesty.

                                     - 24 -
<PAGE>

13.3     The Company warrants to the Supplier that:

         (a)      it has authority to supply (and to authorise the Supplier to
                  use as contemplated by this agreement) the Technical
                  Agreement, the Marketing Authorisations, Specifications,
                  Manufacturing and Packaging Instructions and any other written
                  instructions or information furnished by it to the Supplier
                  for the purposes of this agreement and any work undertaken by
                  the Supplier hereunder shall not infringe the rights
                  (including any Intellectual Property rights) of any third
                  party provided that such work is undertaken strictly in
                  accordance with the Technical Agreement, the Marketing
                  Authorisations, Specifications, Manufacturing and Packaging
                  Instructions and other such written instructions or
                  information;

         (b)      the sale by the Company of Products manufactured, packaged,
                  labelled, tested for release-to-market, QP released, stored
                  and/or despatched by the Supplier hereunder shall not infringe
                  the rights (including any Intellectual Property rights) of any
                  third party provided that such work is undertaken strictly in
                  accordance with the Technical Agreement, the Marketing
                  Authorisations, Specifications, Manufacturing and Packaging
                  Instructions or any other written instructions or information
                  furnished by the Company to the Supplier for the purposes of
                  this agreement;

         (c)      the Isodur bulk capsules supplied to the Supplier in
                  accordance with clause 3.1(b) will have been manufactured by
                  the Company's third party suppliers and delivered to the
                  Supplier with due skill, competence, care and attention;

         (d)      the Isodur bulk capsules supplied to the Supplier in
                  accordance with clause 3.1(b) will have been handled and
                  stored by the Company's third party suppliers in accordance
                  with the terms of the Technical Agreement, the relevant
                  Marketing Authorisations, cGMP and all appropriate European
                  Union and United Kingdom legislation, rules and other
                  requirements of the appropriate regulatory authorities
                  (including without limitation the EMEA and the MHRA) in force
                  from time to time during the Term;

         (e)      the Isodur bulk capsules will, during their Product Shelf
                  Life, continue to conform to the Company's warranties set out
                  in this clause 13.3, provided that the Dynamin and Isodur are
                  packaged, labelled, tested for release-to-market, QP released,
                  stored and despatched by the Supplier with due skill,
                  competence, care and attention and in accordance with this
                  agreement; and

         (f)      it has the power and authority to execute and deliver the
                  agreement and perform its obligations thereunder.

13.4     Subject to clause 13.2, and except for liability which may arise under
         clause 13.5, no liability of the Supplier to the Company whether under
         this agreement or otherwise in connection with the manufacture,
         packaging, labelling, testing for release-to-market, QP release,
         storage and/or despatch of Products hereunder shall arise unless a
         claim is notified in writing to the Supplier within 12 months after
         such time as the Company first becomes aware of such claim. Except for
         liability which may arise under clauses 13.3 or 13.6, no liability of
         the Company to the Supplier whether under this agreement or otherwise
         in connection with the manufacture, packaging, labelling, testing for
         release-to-market, QP release, storage and/or despatch of Products
         hereunder shall arise unless a claim is notified in writing to the

                                     - 25 -
<PAGE>

         Company within 12 months after such time as the Supplier first becomes
         aware of such claim.

13.5     The Supplier undertakes to indemnify and keep the Company fully
         indemnified in respect of:-

         (a)      all Losses which the Company may suffer or incur from any
                  third party claims or allegations concerning product liability
                  which are caused by, arise out of or relate to:

                  (i)      a breach of any of the Supplier's warranties
                           contained in clause 13.1;

                  (ii)     negligence or other wrongful conduct; or

                  (iii)    a breach of any statutory duty,

                  by or of the Supplier, its employees, agents, sub-contractors
                  or Affiliates; and

         (b)      all Losses which the Company may suffer or incur in connection
                  with any third party claims or allegations that the Galen
                  Products, Isodur or Dynamin infringes any Intellectual
                  Property right of a third party (other than a claim covered
                  under clause 13.6(b).

                  The Company shall forward to the Supplier as soon as may be
                  reasonably practicable notice of any claim, liability, demand,
                  matter or circumstance against which the Company claims to be
                  indemnified (the "CLAIM"), and giving such reasonable details
                  thereof as the Company then has from time to time thereafter
                  keeping the Supplier reasonably informed of the same and shall
                  not admit any liability nor make any payment, settlement or
                  compromise in respect of such Claim without the written
                  consent of the Supplier (such consent not to be unreasonably
                  withheld). The Supplier shall, if it so chooses and by prior
                  written notice to the Company, in the name of the Company
                  control the conduct of the defence, settlement, compromise,
                  counterclaim and all third party action in respect of such
                  Claim, provided that the Supplier shall keep the Company
                  regularly informed as to the conduct thereof, all costs and
                  expenses incurred by the Supplier in controlling such conduct
                  shall be borne by the Supplier and the Supplier shall
                  indemnify the Company in respect of all reasonable costs and
                  expenses incurred as a result of such conduct.

13.6     The Company undertakes to indemnify and keep the Supplier fully
         indemnified in respect of:-

         (a)      all Losses which the Supplier may suffer or incur from any
                  third party claim as a result of:

                  (i)      any defect or error contained in the Manufacturing
                           Authorisations, the Technical Agreement
                           Specifications or the Manufacturing and Packaging
                           Instructions or any other incorrect or defective
                           information or instructions provided in writing by or
                           on behalf of the Company to the Supplier for the
                           purposes of this agreement;

                                     - 26 -
<PAGE>

                  (ii)     a breach of the Company's warranties contained in
                           clauses 5.7 (but subject to clauses 16.4 and 17.5) or
                           13.3; or

                  (ii)     a breach of any statutory duty; and

         (b)      all Losses which the Supplier may suffer or incur in
                  connection with any third party claims or allegations that the
                  Galen Products, Isodur or Dynamin infringes any Intellectual
                  Property rights of a third party (other than a claim covered
                  under clause 13.5(b)).

         The Supplier shall forward to the Company as soon as may be reasonably
         practicable notice of any claim, liability, demand, matter or
         circumstance against which the Supplier claims to be indemnified (the
         "CLAIM"), and giving such reasonable details thereof as the Supplier
         then has from time to time thereafter keeping the Company reasonably
         informed of the same and shall not admit any liability nor make any
         payment, settlement or compromise in respect of such Claim without the
         written consent of the Company (such consent not to be unreasonably
         withheld). The Company shall, if it so chooses and by prior written
         notice to the Supplier, in the name of the Supplier control the conduct
         of the defence, settlement, compromise, counterclaim and all third
         party action in respect of such Claim, provided that the Company shall
         keep the Supplier regularly informed as to the conduct thereof, all
         costs and expenses incurred by the Company in controlling such conduct
         shall be borne by the Company and the Company shall indemnify the
         Supplier in respect of all reasonable costs and expenses incurred as a
         result of such conduct.

13.7     LIMITATION OF LIABILITY

         (a)      Notwithstanding the foregoing provisions of this clause 13,
                  neither Party shall be liable for any Consequential Loss
                  suffered by any person whether such Consequential Loss arises
                  from breach of contract, or tort, or statutory duty or
                  negligence or any other wrongful act or default or in
                  connection with any other claim regardless of whether any
                  other remedy provided herein fails. "CONSEQUENTIAL LOSS" as
                  used here shall mean any indirect or consequential loss
                  (including loss of production, loss of profit, loss of
                  revenue, loss of contract, loss of opportunity, cost of
                  capital, cost of substitute services or claims of third
                  parties for any of the foregoing to the extent that such
                  losses are indirect or consequential). For the avoidance of
                  doubt, this limitation shall be without prejudice to the
                  Company's rights and remedies under clauses 5.4(b) and (c),
                  5.5(d) and (e), 6.4(b), 6.5(c), 11.8(a) and (b) and 11.9(d),
                  (e) and (f).

         (b)      Other than with respect to liability arising under clause 13.2
                  and the indemnification provisions set out in clause 13.5(b),
                  the total liability of the Supplier for any one claim and/or
                  the aggregate of all claims in any year howsoever caused
                  arising out of or in connection with this agreement shall be
                  limited to (pound)5,000,000.

         (c)      Other than with respect to liability arising under the
                  indemnification provisions set out in clauses 13.6(a)(ii) and
                  clause 5.7, the total liability of the Company howsoever
                  caused arising out of or in connection with this agreement
                  shall be limited to (pound)2,000,000 for all claims in any one
                  Year.

         (d)      For the avoidance of doubt, in relation to each Parties'
                  rights to claim for direct and indirect damages under this
                  agreement for loss and re-location including (without

                                     - 27 -
<PAGE>

                  limitation) in respect of the Company's rights under clauses
                  5.4(b) and (c), 5.5(d) and (e), 6.4(b), 6.5(c), 11.8(a) and
                  (b) and 11.9(d), (e) and (f) and without dilution of each
                  Parties' position in relation to mitigation of losses under
                  common law, the Parties hereby agree to take all reasonable
                  steps consistent with their duty to mitigate loss.

14.      INSURANCE

14.1     During the Term, the Company and the Supplier will maintain adequate
         liability insurance covering their respective obligations hereunder. In
         particular and unless otherwise agreed in writing the Supplier shall,
         subject to clauses 14.2 and 14.3, maintain at its own cost during the
         Term and for the Product Shelf Life of any Products manufactured,
         packaged, labelled, tested for release-to-market, QP released, stored
         and/or despatched by the Supplier hereunder with an insurer of good
         repute:

         (a)      Public Liability insurance for a sum assured of not less than
                  (pound)5,000,000; and

         (b)      Product Liability insurance for a sum assured of not less than
                  (pound)5,000,000.

14.2     The Supplier shall use all reasonable endeavours to obtain as soon as
         reasonably practicable after the date of this agreement and maintain at
         its own cost thereafter during the Term and for the Product Shelf Life
         of any Products manufactured, packaged, labelled, tested for
         release-to-market, QP released, stored and/or despatched by the
         Supplier hereunder with an insurer of good repute Product Liability
         insurance in accordance with clause 14.1 above.

14.3     Notwithstanding clause 14.2, the Company agrees that the Supplier shall
         be added as a "named insured party" to its existing Product Liability
         Insurance policy in respect of certain Company-owned Products until
         such time, not to exceed three months from the date of this agreement,
         as the Supplier can obtain its own Product Liability insurance cover in
         accordance with clause 14.2 above provided that the Supplier shall
         reimburse the Company for any related additional premium cost.

14.4     Upon request of either Party from time to time the other Party shall
         provide evidence of the current validity of the insurances required
         under clauses 14.1, 14.2 and 14.3 by submitting a copy of the original
         insurance certificates to the requesting Party and each Party shall
         notify the other as soon as reasonably practicable following any
         variation or termination or avoidance of such insurance.

14.5     For the avoidance of doubt, any breach of this clause by either Party
         shall be deemed to be a material breach of this agreement for the
         purposes of clause 16.2.

15.      PRODUCT HOLD OR RECALL

15.1     Without prejudice to any other rights or remedies available to the
         Company under this agreement or at law, in the event that the Company
         is required by law or regulation or reasonably considers it necessary
         to undertake a product hold or recall in respect of any Product as a
         result of it being defective or otherwise failing to comply with the
         applicable Specifications (or the Company reasonably suspecting that
         such Product is defective or fails to comply with the applicable
         Specifications), then:

                                     - 28 -
<PAGE>

         (a)      the Company shall be free to undertake a product hold or
                  recall in respect of all such Products; and

         (b)      PROVIDED such defect or other failure of such Products to
                  comply with the applicable Specifications was solely due to a
                  failure by or of the Supplier, its employees, agents,
                  sub-contractors or Affiliates to comply with any obligation in
                  this agreement, the Company shall be free to recover all
                  reasonable direct costs and expenses relating to such product
                  hold or recall from the Supplier, including (without
                  limitation) advertising expenses and all costs associated
                  with:

                  (i)      collection of Products from customers of the Company;

                  (ii)     return of Products to the Supplier;

                  (iii)    testing of Products; and

                  (iv)     correcting and/or replacing Products, and

                  the Supplier shall provide reasonable and prompt assistance to
                  the Company in relation to any such product hold or recall
                  programme.

15.2     If the product hold or recall is not solely due to a failure by the
         Supplier (or any agent, sub-contractor or employee of the Supplier) to
         comply with its obligation hereunder, the Supplier shall provide all
         reasonable assistance to the Company (at the Company's reasonable
         expense) in respect of any such product hold or recall.

15.3     Any dispute as to the cause of any defective Product or any Product
         which fails to comply with the Specifications, which are the subject of
         a product hold or recall, shall be dealt with in accordance with clause
         18.

16.      TERM AND TERMINATION

16.1     Subject to earlier termination as provided for in clause 16.2, this
         agreement shall commence on the Effective Date and shall remain in
         force for a fixed period of two (2) Years from the Effective Date (the
         "TERM") and, unless otherwise agreed by the parties in writing
         beforehand, and subject to clause 5.1(b) shall terminate automatically
         on the expiry of the Term.

16.2     In the event that any Party:

         (a)      suffers the appointment of a receiver or administrator over
                  any part of its property or the presentation of a winding-up
                  petition or passes a resolution for its winding-up except for
                  amalgamation or reconstruction;

         (b)      enters into any composition or arrangement with its creditors
                  or becomes insolvent;

         (c)      commits an irremediable material breach of this agreement;

         (d)      commits a remediable material breach of an obligation under
                  this agreement which it does not remedy within 60 days
                  starting on the day after receipt of written notice

                                     - 29 -
<PAGE>

                  from the other Party of giving details of such breach and
                  requiring the breaching Party to remedy the breach; or

         then this agreement may be terminated at any time by the other Party by
         written notice with immediate effect.

         For the purposes of this clause:

         (a)      a breach is remediable if time is not of the essence in
                  performing the obligation and if the breaching party can
                  comply with the obligation within the 60 day period; and

         (b)      a "material breach" means a breach (including, without
                  limitation, an anticipatory breach) which is serious in the
                  widest sense of having a serious effect on the benefit which
                  the innocent party would otherwise derive from this agreement
                  in accordance with its terms (but shall exclude any breach
                  under clauses 4.4, 5.4, 5.5, 6.4, 6.5, 11.8 and 11.9).

16.3     For the avoidance of doubt the parties agree that the Company cannot
         exercise its rights to termination and claims for any form of damages
         contemplated under clauses 5.4, 5.5, 6.4, 6.5, 11.8, 11.9 during the
         first three months of the Term save in the case of negligent act or
         omission of the Supplier.

16.4     In the event of termination by the Company under clause 16.2 the
         Company's warranties and obligations under clause 5.7 (in respect of
         the Guaranteed Order Value) shall no longer apply.

16.5     Termination of this agreement for any reason will be without prejudice
         to the rights and obligations of the parties accruing up to and
         including the date of such termination.

17.      FORCE MAJEURE

17.1     "EVENT OF FORCE MAJEURE" means, in relation to either Party, an event
         or circumstance beyond the reasonable control of that Party (the
         "CLAIMING PARTY") including, without limitation, strikes, lock outs and
         other industrial disputes (in each case, whether or not relating to the
         Claiming Party's workforce), war, civil war, act of God, fires,
         insurrection or riots, embargoes, requirements, regulations of any
         governmental authority or unavailability of raw materials in the market
         which comply with the Specifications and/or Marketing Authorisations.

17.2     The Claiming Party shall not be deemed to be in breach of this
         agreement or otherwise liable to the other Party (the "NON-CLAIMING
         PARTY") for any delay in performance or any non-performance of any
         obligations under this agreement (and the time for performance shall be
         extended accordingly) if and to the extent that the delay or
         non-performance is due to an Event of Force Majeure provided that:-

         (a)      the Claiming Party could not have avoided the effect of the
                  Event of Force Majeure by taking precautions which, having
                  regard to all matters known to it before the occurrence of the
                  Event of Force Majeure and all relevant factors, it ought to
                  have taken but did not take; and

                                     - 30 -
<PAGE>

         (b)      the Claiming Party has used all reasonable endeavours to
                  mitigate the effect of the Event of Force Majeure and to carry
                  out its obligations under this agreement in any other way that
                  is reasonably practicable.

17.3     On becoming aware of an Event of Force Majeure, the Claiming Party
         shall promptly notify the Non-claiming Party of the nature and extent
         of the circumstances giving rise to the Event of Force Majeure and its
         expected effect and duration. The Claiming Party shall use all
         reasonable endeavours to resume performance of its obligations under
         this agreement as soon as practicably possible.

17.4     If the Event of Force Majeure in question prevails for a continuous
         period in excess of six calendar months after the date on which it
         began, the Non-claiming Party may give notice to the Claiming Party
         terminating this agreement. The notice to terminate must specify the
         termination date, which must be not less than 30 clear days after the
         date on which the notice to terminate is given. Once a notice to
         terminate has been validly given, this agreement will terminate on the
         termination date set out in the notice. Neither Party shall have any
         liability to the other in respect of termination of this agreement due
         to an Event of Force Majeure, but all rights and liabilities which have
         accrued prior to termination shall subsist.

17.5     In the event of termination by the Company under clause 17.4, the
         Company's warranties and obligations under clause 5.7 (in respect of
         the Guaranteed Order Value) shall no longer apply.

18.      DISPUTE RESOLUTION

         The parties will act in good faith and use commercially reasonable
         efforts to promptly resolve any claim, dispute, controversy or
         disagreement (each a "DISPUTE") between the Parties or any of their
         respective subsidiaries, Affiliates, successors and assigns under or
         related to this agreement or any document executed pursuant to this
         agreement. If the parties are unable to amicably resolve a Dispute
         within 10 Business Days (the "DISPUTE RESOLUTION PERIOD") the parties
         may by agreement refer the dispute to the resolution mechanisms set out
         in clause 19 or otherwise proceed to court in accordance with clause
         23.8.

19.      ARBITRATION

19.1     Except as otherwise expressly provided herein, this agreement (and any
         dispute, controversy, proceedings or claim of whatever nature arising
         out of or in any way relating to this agreement or its formation) shall
         be governed by and construed in accordance with the laws of Northern
         Ireland. Subject to the Parties seeking to resolve disputes in
         accordance with clause 18, any dispute arising out of or in connection
         with this agreement including any question regarding its existence,
         validity or termination shall be referred to and finally resolved by
         arbitration under the Arbitration (Northern Ireland) Order 1996.

19.2     With respect to the proceedings to be adopted regarding any referral to
         arbitration:

         (a)      The number of arbitrators shall be three on the basis that
                  each Party shall select one arbitrator and the two so
                  appointed arbitrators will select the third (all such
                  selections to be made as soon as practicably possible
                  following the expiry of the Dispute Resolution Period and in
                  any event within 5 Business Days;

                                     - 31 -
<PAGE>

         (b)      The place of arbitration shall be Northern Ireland;

         (c)      The language to be used in the arbitral proceedings shall be
                  English; and

         (d)      Any determination by such arbitrators shall be final and
                  conclusively binding.

19.3     Judgement on the arbitral award may be entered in any court having
         jurisdiction thereof.

20.      NOTICES

20.1     Any notice, demand or other communication given or made under or in
         connection with the matters contemplated by this agreement shall be in
         writing and shall be delivered personally or sent by fax or prepaid
         first class post (air mail if posted to or from a place outside the
         United Kingdom):-

         In the case of Galen Limited to:
         Unit 22, Seagoe Industrial Estate
         Craigavon
         Co Armagh
         Northern Ireland
         BT63 5UA

         Attention: Company Secretary

         In the case of Pharmaceutical Development and Manufacturing Services
         Limited to:
         Almac House, Seagoe Industrial Estate
         Craigavon
         Co Armagh
         Northern Ireland
         BT63 5QD

         Attention: Graeme McBurney

         and shall be deemed to have been duly given or made as follows:

         (a)      if personally delivered, upon delivery at the address of the
                  relevant Party;

         (b)      if sent by first class post, two Business Days after the date
                  of posting;

         (c)      if sent by air mail, 5 Business Days after the date of
                  posting; and

         (d)      if sent by fax, on receipt by sender of delivery confirmation
                  report;

         provided that if, in accordance with the above provision, any such
         notice, demand or other communication would otherwise be deemed to be
         given or made after 5.00 p.m. such notice, demand or other
         communication shall be deemed to be given or made at 9.00 a.m. on the
         next Business Day.

20.2     A Party may notify the other Party to this agreement of a change to its
         name, relevant addressee, address or fax number provided that such
         notification shall only be effective on:-

                                     - 32 -
<PAGE>

         (a)      the date specified in the notification as the date on which
                  the change is to take place; or

         (b)      if no date is specified or the date specified is less than 5
                  Business Days after the date on which notice is given, the
                  date falling 5 Business Days after notice of any such change
                  has been given.

21.      VARIATION

         Subject to the provisions of clause 4, no purported variation of the
         operative clauses of this agreement shall take effect unless made in
         writing and signed by an authorised representative of each Party and
         expressly incorporating the terms of this agreement.

22.      ENTIRE AGREEMENT

22.1     Each Party on behalf of itself and as agent for each of its Affiliates
         acknowledges and agrees with the other Party that:-

         (a)      this agreement together with any other documents referred to
                  in this agreement and in particular the Business Purchase
                  Agreement, Technical Agreement, Manufacturing and Packaging
                  Instructions, Specifications and the Marketing Authorisations
                  (together the "DOCUMENTS") constitutes the entire and only
                  agreement between the Parties and their respective Affiliates
                  relating to the subject matter of the Documents and that each
                  of the Documents shall be read together in determining the
                  obligations of each Party; and

         (b)      neither it nor any of its Affiliates have been induced to
                  enter into any Document in reliance upon, nor have they been
                  given, any warranty, representation, statement, assurance,
                  covenant, agreement, undertaking, indemnity or commitment of
                  any nature whatsoever other than as are expressly set out in
                  the Documents and, to the extent that any of them have been,
                  it (acting on behalf of itself and as agent on behalf of each
                  of its Affiliates) unconditionally and irrevocably waives any
                  claims, rights or remedies which any of them might otherwise
                  have had in relation thereto.

23.      GENERAL

23.1     This agreement shall only become binding on the Parties in the event
         that the Business Purchase Agreement becomes unconditional in all
         respects.

23.2     Other than to its Affiliates the Supplier shall not assign,
         sub-contract or otherwise transfer this agreement or any of its rights
         and obligations hereunder without the prior written consent of the
         Company (such consent not to be unreasonably withheld or delayed).

23.3     If any part of this agreement is held to be unlawful or unenforceable
         that part shall be struck out and the Parties shall use all reasonable
         endeavours to insert a lawful and enforceable substitute provision
         which, as closely as may be possible, reflects the intended purpose and
         operation of the original provision as intended by the Parties and, in
         any event, the remainder of this agreement shall remain in full force
         and effect.

                                     - 33 -
<PAGE>

23.4     Save as otherwise expressly provided herein, no delay neglect or
         forbearance by a Party in enforcing its rights under this agreement
         shall be a waiver or prejudice of those rights.

23.5     The rights and remedies herein provided are cumulative with and not
         exclusive of any rights or remedies provided by law.

23.6     Nothing in this agreement and no action taken by the parties pursuant
         to this agreement shall constitute, or be deemed to constitute, a
         partnership, association, joint venture or other co-operative activity.

23.7     This agreement (and any dispute, controversy, proceedings or claims of
         whatever nature arising out of or in any way relating to this agreement
         or its formation) shall be governed by and construed in accordance with
         the law of Northern Ireland.

23.8     Each of the parties to this agreement irrevocably agrees that the
         courts of Northern Ireland shall have exclusive jurisdiction to hear
         and decide any suit, action or proceedings, and/or (subject to clause
         18) to settle any disputes, which may arise out of or in connection
         with this agreement and, for these purposes, each Party irrevocably
         submits to the jurisdiction of the courts of Northern Ireland.

23.9     The Contracts (Rights of Third Parties) Act 1999 shall not apply to
         this agreement and no rights or benefits expressly or impliedly
         conferred by it shall be enforceable under that Act against the parties
         to it by any other person.

IN WITNESS whereof this agreement has been duly executed on the date first above
written.

                                     - 34 -
<PAGE>

Signed by                  )
for and on behalf of       )
GALEN LIMITED              )

Signed by                  )
for and on behalf of       )
PHARMACEUTICAL             )
DEVELOPMENT AND
MANUFACTURING
SERVICES LIMITED

                                     - 35 -<PAGE>

                                                                    EXHIBIT 4.38

                                                                  EXECUTION COPY

[ASHURT MORRIS CRISP LOGO]

Business Purchase Agreement

Galen Limited

and

Pharmaceutical Development and Manufacturing Services
Limited

for the sale and purchase of the UK pharmaceutical
products manufacturing business and certain assets of
Galen Limited, a subsidiary of Galen Holdings Plc

2 December 2003

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                 PAGE
<S>                                                    <C>
INTERPRETATION......................................     3
SALE AND PURCHASE...................................    10
CONSIDERATION.......................................    11
COMPLETION..........................................    11
LIABILITIES.........................................    13
RECEIVABLES.........................................    14
CONTRACTS...........................................    15
STOCK AND INTERMEDIATES.............................    16
PREPAYMENTS BY SELLER AND CUSTOMERS.................    19
EMPLOYEES...........................................    21
FUTURE TRADING AND TRADE ENQUIRIES..................    22
MHRA LICENCES.......................................    23
VALUE ADDED TAX.....................................    23
WARRANTIES..........................................    24
PROTECTION OF GOODWILL..............................    27
ANNOUNCEMENTS, ETC..................................    29
ASSIGNMENT..........................................    30
COSTS...............................................    30
ENTIRE AGREEMENT....................................    30
WAIVER, AMENDMENT...................................    31
FURTHER ASSURANCE & ASSIGNMENT OF LEASES............    31
NOTICES.............................................    33
COUNTERPARTS........................................    35
GOVERNING LAW AND JURISDICTION......................    35
INVALIDITY..........................................    35
THIRD PARTY RIGHTS..................................    36

SCHEDULE 1................................................
Allocation of Consideration...............................
SCHEDULE 2................................................
Warranties................................................
SCHEDULE 3................................................
Assumed Employees.........................................
SCHEDULE 4................................................
Contracts.................................................
SCHEDULE 5................................................
Galen Marketing Authorisations............................
SCHEDULE 6................................................
Properties................................................
SCHEDULE 7................................................
IT Equipment and Contracts................................
SCHEDULE 8................................................
Intermediate Valuation Policies and Procedures............
SCHEDULE 9................................................
Hire Purchase Agreements..................................
APPENDIX 1................................................
Lists of IT Equipment.....................................
APPENDIX 2................................................
Capital Grants............................................
</TABLE>

<PAGE>

THIS AGREEMENT is made on 2 December 2003

BETWEEN:

(1)      PHARMACEUTICAL DEVELOPMENT AND MANUFACTURING SERVICES LIMITED
         (No. NI45055) whose registered office is at Almac House, 20 Seagoe
         Industrial Estate, Craigavon, Northern Ireland BT63 5QD (the "BUYER");
         and

(2)      GALEN LIMITED (No. NI30077) whose registered office is at Unit 22,
         Seagoe Industrial Estate, Craigavon, Co Armagh, Northern Ireland BT63
         5UA (the "SELLER" or "GALEN").

RECITALS

(A)      The Seller carries on the Business (as hereinafter defined) as part of
         its group and is the beneficial owner, or is otherwise able to procure
         the transfer, of the Assets (as hereinafter defined).

(B)      The Seller has agreed to sell, and the Buyer has agreed to purchase,
         the Business as a going concern and the Assets on the terms hereinafter
         set out.

THE PARTIES AGREE AS FOLLOWS:

1.       INTERPRETATION

1.1      The following words and expressions shall, unless the context otherwise
         requires, have the following meanings:

         "ACCOUNTS" means the audited financial statements (comprising a balance
         sheet, profit and loss account, cash flow statement, notes and
         directors' report and auditors' certificates) of the Seller for the
         financial period ended on the Accounts Date in the Agreed Form;

         "ACCOUNTS DATE" means 30 September 2002;

         "AGREED FORM" means, in relation to a document, in the form agreed
         between the parties on or prior to the date hereof and for the purposes
         of identification signed on their behalf;

         "ASSETS" means all assets, property or rights of the Seller relating to
         or connected with or belonging to or used in the Business which shall,
         without limitation include the Goodwill, Intermediates, Books and
         Records, Contracts, Galen Marketing Authorisations, IT Equipment and
         Assets, IT Contracts, Business Intellectual Property, Properties, Fixed
         Plant and Loose Plant together with the assets and rights and the
         benefit of any claims directly and exclusively relating to the
         Business, other than the Excluded Assets;

         "ASSIGNMENT" means the deed of assignment dated 31 March 2002 between
         (1) Galen Limited and (2) Atoze Analytical Limited (3) Mairead Heron
         and others and (4) Galen Holdings plc;

         "ASSUMED CREDIT AMOUNT" means the capital payments outstanding as at
         Completion to be made pursuant to the Hire Purchase Agreements as set
         out in the Agreed Form document

                                     - 3 -
<PAGE>

         entitled "Agreed Credit Amount" to be prepared by the Seller and
         delivered to the Buyer on Completion (the "AGREED CREDIT AMOUNT SIDE
         LETTER");

         "ASSUMED EMPLOYEES" means those employees engaged in the Business as at
         Completion and set out in the list in the Agreed Form headed "Assumed
         Employees" at schedule 3 to this agreement;

         "BOOKS AND RECORDS" means the lists of customers and suppliers, books
         of account, financial records, and all other records exclusively
         relating to the Business and Assets on whatsoever medium they are
         stored;

         "BUSINESS" means the pharmaceutical products manufacturing business in
         the United Kingdom and the Republic of Ireland and associated
         packaging, distribution and logistics services carried on by Seller at
         the date of this agreement at the Properties including third party
         contract manufacturing carried on by the Seller as part of the "PDMS
         division" of the Business but excluding:

         (a)      the business carried on by the Seller or the Seller's Group
                  relating to intravenous fluids and related products from time
                  to time (the "IVEX BUSINESS");

         (b)      the business or associated activities and any developments
                  carried on by the Seller or the Seller's Group from time to
                  time in relation to the Seller's Group's products based on the
                  intravaginal ring technology platform (the "IVR BUSINESS");

         (c)      unless otherwise agreed between the parties pursuant to the
                  Supply Agreement, any third party contract manufacturing,
                  development, and packaging carried on by the Seller or the
                  Seller's Group outside the "PDMS division" which shall include
                  contract manufacturing, development and packaging services (as
                  appropriate) in relation to Normax, Codanthrusate, Cephradine,
                  Cefaclor and Dynamin;

         (d)      any sales or marketing activities in connection with those
                  parts of the business of the Seller or any member of the
                  Seller's Group not comprising the Business;

         "BUSINESS DAY" means any day which is not a Saturday, Sunday or a bank
         or public holiday in Northern Ireland;

         "BUSINESS INTELLECTUAL PROPERTY" means Intellectual Property owned by
         the Seller or any member of the Seller's Group and used wholly and
         exclusively in the Business, together with the goodwill relating
         thereto;

         "BUYER'S GROUP" means the Buyer, its parent, any of its parent's
         subsidiary undertakings and their associated companies from time to
         time, all of them and each of them as the context admits;

         "BUYER'S SOLICITORS" means L'Estrange and Brett Solicitors, Arnott
         House, 12-16 Bridge Street, Belfast BT1 1LS;

         "COMPLETION" means the completion of the sale and purchase of the
         Business and Assets in accordance with clause 4;

                                     - 4 -
<PAGE>

         "COMPLETION DATE" means 2 December 2003 or such other date as the
         Seller and Buyer may agree;

         "CONFIRMED ORDERS" shall have the meaning attributed to it in the
         Supply Agreement;

         "CONNECTED PERSON" means a person who is connected with another for the
         purpose of section 839 of the TA;

         "CONTRACTS" means all contracts and arrangements entered into prior to
         Completion by the Seller's Group but which are wholly or partly
         unperformed at the Completion Date relating to the Business set out in
         the list in the Agreed Form headed "Contracts" at schedule 4 to this
         agreement but excluding those contracts which are Excluded Assets;

         "CREDITORS" means all trade and other debts, accrued charges and all
         other amounts owing by the Seller or any member of the Seller's Group
         in connection with the Business as at Completion;

         "DEED OF COVENANT" means the deed of covenant in the Agreed Form to be
         entered into between the Buyer and Galen Holdings at Completion;

         "DISCLOSURE LETTER" means an Agreed Form letter of today's date
         together with the attachments thereto addressed by the Seller to the
         Buyer disclosing exceptions to the Warranties in the Agreed Form;

         "ELECTION NOTICES" means the notices to be prepared by each party for
         the purposes of section 198 of the Capital Allowances Act 2001 in the
         Agreed Form;

         "ENCUMBRANCE" means any mortgage, charge, pledge, lien, security or
         other third party right or interest (legal or equitable) or restriction
         over or in respect of the use of the relevant asset, security or right
         save for the third party rights disclosed to the Buyer in the
         Disclosure Letter in relation to the Properties;

         "EXCLUDED ASSETS" means any assets or rights and the benefit of any
         claims consisting of or comprised in the following:

         (a)      statutory books and records of the Seller (other than the
                  Books and Records);

         (b)      Retained Employees;

         (c)      benefits from insurance policies put in place by the Seller's
                  Group in relation to the Business and/or the Assets;

         (d)      Receivables;

         (e)      the Stock;

         (f)      cash at bank and in hand;

                                     - 5 -
<PAGE>

         (g)      the Genzyme Contracts;

         (h)      the Client Equipment and Special Tools (set out in Appendix 6
                  of the Genzyme Contracts dated June 2001);

         (i)      any prepayments received by the Seller or the Seller's Group
                  in relation to the Business which are governed by clause 9 of
                  this agreement;

         (j)      the MHRA Licences;

         (k)      the equipment and tools set out in Appendix 2 of the
                  manufacturing and supply agreement, dated 1 June 202 between
                  the Seller and Schering-Plough Limited;

         (l)      finished goods comprising stock of the Business held at the
                  Properties or elsewhere as at Completion; and

         (m)      the Retained IT Equipment, Assets and Contracts.

         "EXCLUDED LIABILITIES" means those liabilities and obligations of the
         Business or Assets or (subject to clause 10.6) Assumed Employees as at
         the Completion Date which are not Liabilities which shall include but
         are not limited to:

         (a)      liabilities of the Seller's Group to Taxation;

         (b)      amounts owed to any third party by way of overdraft or other
                  borrowings; and

         (c)      Creditors of the Business;

         "FIXED PLANT" means the fixed plant, machinery, equipment and tooling
         used directly and exclusively in the Business attached or fixed to the
         Properties occupied by Galen as at the date hereof;

         "GALEN HOLDINGS" means Galen Holdings plc (registered number NI25836),
         whose registered office is at Unit 22, Seagoe Industrial Estate,
         Craigavon, Northern Ireland BT63 5UA;

         "GALEN LEASE" means the lease, in the Agreed Form, of part of the
         Properties to be entered into on Completion between the Buyer (1) and
         the Seller (2);

         "GALEN MARKETING AUTHORISATIONS" means those licences set out in the
         list in the Agreed Form headed "Galen Marketing Authorisations" at
         Schedule 5 to this agreement;

         "GENZYME CONTRACTS" means (i) the Manufacturing and Supply Agreement
         dated 1 June 2000 between the Seller and Renegal LLC and (ii) the
         Manufacturing and Supply Agreement dated 15 June 2001 between Galen
         Limited (1) Renagel LLC (2) and Genzyme Corporation (3) and those
         agreements entered into pursuant to the same, including any variation
         thereof;

         "GENZYME SIDE LETTER" means the letter from the Seller in the Agreed
         Form in respect of the conduct of the Genzyme Contracts;

                                     - 6 -
<PAGE>

         "GOODWILL" means the goodwill, custom and connection relating to the
         Business as at Completion together with the exclusive right for the
         Buyer and its successors and assigns to represent itself as carrying on
         the Business in succession to the Seller and together with the trade
         name "PDMS" associated with the Business;

         "HIRE PURCHASE AGREEMENTS" means those agreements with First Trust and
         NIIB summarised in Schedule 9;

         "HOLDING COMPANY" has the meaning given to it in Article 4 of The
         Companies (Northern Ireland) Order 1986 (as amended);

         "I.N.I." means Invest Northern Ireland (formerly the Industrial
         Development Board for Northern Ireland) a statutory corporation
         established under the Industrial Development Act (Northern Ireland)
         2002 of 64 Chichester Street, Belfast, BT1 4JX;

         "INTELLECTUAL PROPERTY" means any and all patents, registered and
         unregistered trade marks, rights in designs, trade, business or domain
         names, copyrights, rights in inventions, know-how, trade secrets and
         other confidential information, rights in databases and other
         intellectual property rights of a similar or corresponding character
         which may subsist in any part of the world;

         "INTERIM PERIOD" means the period of up to fifteen weeks (or such
         longer period as the parties may agree in writing) commencing on the
         Completion Date;

         "INTERMEDIATES" means work in progress produced in the course of the
         Business and stored at the Properties as at Completion;

         "IT CONTRACTS" means the contracts relating to IT Equipment set out in
         Part 2 of Schedule 7;

         "IT EQUIPMENT AND ASSETS" means the IT equipment and assets set out in
         Part 1 of Schedule 7;

         "IVEX BUSINESS" has the meaning set out in the definition of "Business"
         above;

         "IVR BUSINESS" has the meaning set out in the definition of "Business"
         above;

         "LEASES" means the following:

         (a)      a lease dated 2 March 1989 between (1) Department of Economic
                  Development and (2) the Seller; and

         (b)      a lease dated 1 August 1969 between (1) Craigavon Development
                  Commission and (2) Northern Ireland Carriers Limited (subject
                  to the Assignment);

         "LETTERS OF OFFER" means a letter of offer dated 3 March 1998 from IDB
         to Galen Holdings and a financial assistance agreement dated 13 May
         1999 between IDB and Galen Holdings under which IDB agreed to grant
         financial assistance to Galen Holdings;

                                     - 7 -
<PAGE>

         "LIABILITIES" means those liabilities of the Business relating to the
         Assets and the Leases, the obligations under the Contracts and the
         liabilities relating to the Assumed Employees at the Completion Date
         which the Buyer has expressly assumed responsibility for under the
         terms of this agreement and which are not Excluded Liabilities;

         "LISTING RULES" means the listing rules of the UK Listing Authority
         made pursuant to Part VI of the Financial Services and Markets Act
         2000;

         "LONDON STOCK EXCHANGE" means London Stock Exchange plc;

         "LOOSE PLANT" means the movable plant, machinery, equipment, desk top
         computers, spare parts, tooling, vehicles and furniture used directly
         and exclusively in the Business;

         "MHRA" means the Medicines and Healthcare Products Regulatory Agency;

         "MHRA LICENCES" means the Manufacturing and Assembly Licence dated 13
         May 2003, the Manufacturing and Assembly - Specials Licence dated 13
         May 2003, the Wholesale Dealers Licence dated 14 April 2003 and the
         Wholesale Dealers (Import) Licence dated 28 February 2003 granted to
         Galen by the Medicines and Healthcare Products Regulatory Agency;

         "MODEL CODE" the code as set out in Chapter 16 of the Listing Rules;

         "PROPERTIES" means the premises set out in schedule 6 to this agreement
         and "PROPERTY" shall mean any one of them;

         "RECEIVABLES" means those amounts owed to the Seller or the Seller's
         Group directly and exclusively in connection with the Business as at
         the Completion Date;

         "REGULATIONS" means the Transfer of Undertakings (Protection of
         Employment) Regulations 1981;

         "RELATED PERSONS" means, in relation to any party, its holding
         companies and the subsidiary undertakings and associated companies from
         time to time of such holding companies, all of them and each of them as
         the context admits;

         "RESTRICTED SERVICES" means services the nature of which are carried on
         by the Business as at the date hereof, including for the avoidance of
         doubt those services carried out by the Business as at Completion;

         "RESTRICTED TERRITORY" means England, Wales, Scotland, the Republic of
         Ireland and the province of Northern Ireland;

         "RETAINED EMPLOYEES" means the persons whose names are set out in the
         list in the agreed form headed "Retained Employees";

         "RETAINED IT EQUIPMENT, ASSETS AND CONTRACTS" means all the IT
         equipment, assets and contracts owned by any member of the Sellers
         Group which is not expressly set out in Parts 1 and 2 of Schedule 7;

                                     - 8 -

<PAGE>

         "SELLER'S ACCOUNTANTS" means PricewaterhouseCoopers, Waterfront Plaza,
         8 Laganbank Road, Belfast, BT1 3LR;

         "SELLER'S GROUP" means the Seller, Galen Holdings and any subsidiary of
         Galen Holdings;

         "SELLER'S SOLICITORS" means Ashurst Morris Crisp, Broadwalk House, 5
         Appold Street, London EC2A 2HA;

         "STOCK" means raw materials and packaging materials acquired in the
         course of the Business at the Properties as at Completion and, for the
         avoidance of doubt, the parties acknowledge that the references to
         "Stock" in clause 8 of this Agreement shall be a reference to the Stock
         of the Business at Completion excluding any free issue material,
         including without prejudice to the foregoing, any bulk capsules of
         Isodur;

         "SUB-LEASE" means a sub-lease dated 4 January 2002 between (1) Galen
         Limited and (2) Syngal Limited (as varied by a deed of variation dated
         30 March 2002);

         "SUBSIDIARY" has the meaning given to it in Article 4 of The Companies
         (Northern Ireland) Order 1986 (as amended);

         "SUPPLY AGREEMENT" means the manufacturing, packaging, labelling,
         testing for release-to-market, QP release, storage and despatch
         agreement in the Agreed Form to be entered into between the Seller and
         the Buyer at Completion;

         "TA" means the Income and Corporation Taxes Act 1988;

         "TAXATION" means any tax and any duty, impost, levy or governmental
         charge in the nature of tax whether domestic or foreign and any fine,
         penalty or interest connected therewith (a) including (without
         prejudice to the generality of the foregoing) corporation tax, income
         tax, national insurance and social security contributions, capital
         gains tax, inheritance tax, capital transfer tax, development land tax,
         value added tax, customs, excise and import duties, any deferred
         taxation and any other payment whatsoever which the relevant party or
         any member of their group of companies is or may be or become bound to
         make to any person as a result of any enactment relating to any of the
         foregoing (b) but excluding any stamp duty or stamp duty reserve tax
         payable on this agreement or any instrument executed pursuant to this
         agreement;

         "TECHNICAL AGREEMENT" means the technical agreement in the Agreed Form,
         to be entered into between the Seller and Buyer at Completion;

         "TRANSITIONAL SERVICES AGREEMENT" means the agreement for transitional
         IT and support services in the Agreed Form, to be entered into between
         the Seller and the Buyer at Completion;

         "UK LISTING AUTHORITY" means the Financial Services Authority in its
         capacity as the competent authority for the purposes of Part VI of the
         Financial Services and Markets Act 2000; and

         "WARRANTIES" means the warranties given pursuant to clause 13 and
         schedule 2;

                                     - 9 -

<PAGE>

1.2      The words and expressions defined in the schedules hereto shall have
         the meanings set out therein.

1.3      References to the "parties" or the "Parties" hereto shall include their
         respective permitted assignees and in the case of individuals their
         respective successors in title, personal representatives, heirs and
         estates and references to the masculine gender shall include the
         feminine and vice versa.

1.4      References to statutes or statutory provisions include references to
         any orders or regulations made thereunder and references to any
         statute, provision, order or regulation include references to that
         statute, provision, order or regulation as re-enacted from time to time
         before the date hereof (subject as otherwise expressly provided herein)
         and to any previous statute, statutory provision, order or regulation
         amended, modified, re-enacted or replaced by such statute, provision,
         order or regulation before the date hereof.

1.5      References to persons shall include bodies corporate and
         unincorporated, associations, partnerships and individuals.

1.6      Headings to clauses and paragraphs are for information only and shall
         not form part of the operative provisions of this agreement and shall
         be ignored in construing the same.

1.7      References to recitals, clauses or schedules are to recitals to,
         clauses of and schedules to this agreement.

1.8      The recitals, the schedules and documents in the Agreed Form form part
         of the operative provisions of this agreement and references to this
         agreement shall, unless otherwise expressly stated, include references
         to the recitals, the schedules and documents in the Agreed Form.

2.       SALE AND PURCHASE

2.1      Upon the terms and subject to the conditions of this agreement, the
         Seller shall sell as beneficial owner and shall transfer or procure the
         sale or transfer of the Assets and the Business as a going concern to
         the Buyer with effect from the Completion Date (unless otherwise
         specified in this agreement) free from any Encumbrances and together
         with all accrued benefits and rights attaching thereto and property and
         risk in the Assets shall vest in the Buyer from Completion.

2.2      The Excluded Assets are not included in the sale and purchase pursuant
         to clause 2.1.

2.3      The Consideration for such sale and purchase shall be as specified in
         clause 3.

2.4      Nothing in this agreement shall pass to the Buyer or shall be construed
         as acceptance by the Buyer of any liability, debt or other obligation
         of the Seller or any members of the Seller's Group other than the
         Liabilities or any obligation which is expressly assumed by the Buyer
         under the terms of this agreement

                                     - 10 -

<PAGE>

2.5      I.N.I. granted financial assistance to Galen Holdings pursuant to the
         Letters of Offer part of which was used by Galen Holdings to purchase
         some of the Assets ("THE RELEVANT ASSETS"). Subject to the provisions
         of clause 2.6 and 2.7 below, upon delivery of the Relevant Assets to
         the Buyer at Completion, the Buyer shall (subject to it being entitled
         to receive any associated benefits) assume and become responsible for
         the outstanding obligations and liabilities of Galen Holdings to I.N.I.
         as at Completion associated with the Relevant Assets as set out in
         Appendix 2 to this agreement (the "ASSUMED I.N.I. LIABILITIES") and the
         Buyer shall indemnify and keep Galen Holdings indemnified in respect of
         all claims, costs, expenses and demands following Completion arising
         from The Assumed I.N.I. Liabilities excluding any obligations or
         liabilities arising from facts or circumstances which have occurred
         prior to Completion.

2.6      Galen Holdings shall indemnify and keep the Buyer indemnified in
         respect of all claims, costs, expenses and demands arising prior to
         Completion in respect of the Assumed I.N.I. Liabilities.

2.7      For the avoidance of doubt, the Buyer shall not assume any liabilities
         of Galen Holdings and/or the Seller to I.N.I other than the Assumed
         I.N.I. Liabilities expressly set out in Appendix 2 to this agreement
         whether arising under the Letters of Offer or otherwise and Galen
         Holdings and/or the Seller shall indemnify and keep the Buyer
         indemnified in respect of all other claims costs expenses and demands
         arising in respect of the Letters of Offer or any other financial
         assistance granted by I.N.I. to Galen Holdings or the Seller at any
         time.

3.       CONSIDERATION

         The consideration shall be the sum of twenty million pounds sterling
         (L20,000,000), to be satisfied by the Assumed Credit Amount under
         the Agreed Credit Amount Side Letter with the balance payable in cash
         on Completion. The Consideration shall be apportioned amongst the
         Assets as more particularly set out in schedule 1 to this agreement.

4.       COMPLETION

4.1      Completion shall take place at the registered office of the Seller (or
         at such other location as the Seller and Buyer agree) on the Completion
         Date immediately after the execution of this agreement.

4.2      On Completion, the Seller shall make available to the Buyer at the
         Properties:

         (a)      the Books and Records;

         (b)      the Loose Plant and shall deliver all other Assets hereby
                  agreed to be sold, title to which can be transferred by
                  delivery (and shall pass upon such delivery) and shall permit
                  the Buyer to enter into and take possession of the Assets;

         and shall deliver to the Buyer:

         (c)      where agreed as necessary between the parties, duly executed
                  assignments or registered user agreements of the Business
                  Intellectual Property in the Agreed Form;

                                     - 11 -

<PAGE>

         (d)      where agreed as necessary between the parties, releases under
                  seal or certificates of non-crystallisation of charge of any
                  Encumbrances to which any of the Assets are subject duly
                  executed by those entitled to the benefit thereof;

         (e)      duly executed land registry transfers in the Agreed Form in
                  respect of those parts of the Properties that consist of a
                  registered title;

         (f)      a duly executed land registry transfer of 170 Tandragee Road
                  in the agreed form;

         (g)      a duly executed deed of assignment in respect of the Leases in
                  relation to which the provisions of clause 21.2 shall apply;

         (h)      a duly signed Genzyme Side Letter and Agreed Credit Amount
                  Side Letter;

         (i)      all documents of title and certificates for the operation and
                  use of, and all service documents within the possession of the
                  Seller pertaining to, the Fixed Plant and the Loose Plant and
                  make available Stock and stock records to the Buyer;

         (j)      the Contracts and the books, accounts, reference lists of
                  customers, credit reports, price lists, cost records,
                  catalogues, advertising and all other documents, papers and
                  records in the possession or under the control of the Seller
                  relating to the Contracts duly written up to the Completion
                  Date;

         (k)      all such records (or copies if the originals have been
                  properly retained) as are referred to in section 49 of the
                  Value Added Tax Act 1994;

         (l)      a copy of the minutes of a meeting of the directors of the
                  Seller in the Agreed Form authorising the execution by that
                  party of this agreement and of any other documentation that
                  may be necessary or desirable arising out of or in connection
                  with this agreement or the transactions contemplated thereby
                  and appointing the relevant signatory or signatories to sign
                  this agreement and any such other documentation on its behalf;

         (m)      originals and counterparts of the Supply Agreement, the
                  Transitional Service Agreement, the Deed of Covenant and the
                  Technical Agreement duly executed by the Seller; and

         (n)      duly signed Election Notices.

4.3      Upon compliance by the Seller with the provisions of clause 4.2 the
         Buyer shall:

         (a)      provide for the electronic transfer of funds of the sum
                  referred to in clause 3 to a bank account designated by the
                  Seller, and in the event of the sum being transferred to the
                  client account of the Seller's Solicitors, the receipt of the
                  Seller's Solicitors therefore be a good discharge to the
                  Buyer;

         (b)      deliver to the Seller the originals and counterparts of the
                  Supply Agreement, the Technical Agreement, the Transitional
                  Service Agreement and the Deed of Covenant duly executed by
                  the Buyer; and

                                     - 12 -

<PAGE>

         (c)      deliver to the Seller duly signed Election Notices.

4.4      Immediately following the transfer of funds and delivery of the
         counterparts of the documentation referred to in clause 4.3, the Buyer
         and Seller shall:

         (a)      enter into the Galen Lease;

         (b)      enter into a licence in the Agreed Form to provide for
                  occupancy rights for the Seller for a period of three months
                  from Completion in respect of Building 1; and

         (c)      submit a joint notification to the Medicines and Healthcare
                  Products Regulatory Agency confirming that Completion has
                  taken place.

4.5      As soon as practicable following Completion and, in any event, within
         the time limit specified by section 201 of the Capital Allowances Act
         2001, each party shall deliver a copy of the Election Notices, duly
         signed by both parties, to their respective Inspector of Taxes.

5.       LIABILITIES

5.1      The Seller shall indemnify and keep indemnified each member of the
         Buyer's Group against all claims, costs, expenses and demands arising
         following Completion in respect of all debts, liabilities and
         obligations of the Business including, subject to the provisions set
         out in clause 5.1(a) below, the Liabilities and the Excluded
         Liabilities (save for any claims, costs, expenses and demands arising
         from the Assumed I.N.I. liabilities following Completion), provided
         that:

         (a)      in respect of the Liabilities and the Assumed I.N.I.
                  liabilities (other than any such Liabilities relating to
                  Assumed Employees which shall be dealt with between the
                  parties pursuant to the terms of clause 10 of this agreement)
                  such claim, cost, expense or demand arises in relation to the
                  period prior to the Completion Date;

         (b)      in respect of the Excluded Liabilities, such claim, costs,
                  expenses or demands arises at any time whether before and/or
                  after Completion;

         (c)      such claim, cost, expenses or demand relates solely to the
                  Business (whether or not as part of the Seller's Group);

         (d)      the Seller shall not be liable to pay or perform any such
                  claims, costs, expenses or demands to the extent that such
                  arises from or has increased due to any actions taken or
                  omissions made by the Buyer or any member of the Buyer's Group
                  following Completion; and

         (e)      the Seller shall not be liable for such claims, costs or debt
                  arising in the ordinary course of trade in respect of the
                  contractual obligations of the Seller's Group or the Business,
                  save where such claims, costs or any debt arise from any
                  breach or non-performance of those contractual obligations by
                  the Seller's Group prior to Completion.

                                     - 13 -

<PAGE>

5.2      The Buyer shall indemnify and keep indemnified each member of the
         Seller's Group against all claims, costs, expenses or demands arising
         in respect of the Liabilities of the Business provided that:

         (a)      such claim, cost, expense or demand arises in relation to any
                  matter arising following Completion; and

         (b)      the Buyer shall not be liable to pay or perform any such
                  claims, costs, expenses or demands to the extent that such
                  arises from or has increased due to any actions taken or
                  omissions made by the Seller or any member of the Seller's
                  Group prior to the Completion Date.

6.       RECEIVABLES

6.1      The Buyer shall not acquire the Receivables which shall remain the
         property and the responsibility of the Seller.

6.2      The Seller and the Buyer shall cause to be prepared from the accounting
         records of the Business a list of the Receivables showing (inter alia)
         the names of the debtors and the amounts owing to the Seller or any
         member of the Seller's Group by each of the relevant debtors.

6.3      Notwithstanding that the Receivables are excluded from the Assets
         hereby agreed to be sold the Buyer agrees that it will, as agent for
         the Seller, use all reasonable endeavours to collect the Receivables
         (to the extent not collected upon Completion) and will hold the sums of
         money representing the same upon trust for the Seller subject to the
         following terms and conditions or such other terms, conditions or
         arrangements as may be agreed from time to time in writing between the
         Seller and the Buyer:

         (a)      the Buyer shall not without the prior written consent of the
                  Seller effect any settlement compromise or release any claim
                  in respect of any of the Receivables nor without such consent
                  institute, carry on, defend, compromise, abandon or submit to
                  judgment in any legal proceedings or join in and submit to
                  arbitration or give security or indemnities for costs, pay any
                  sum of money into court or obtain payment of money lodged in
                  court;

         (b)      if it becomes apparent that recovery of any of the Receivables
                  is not likely to be possible within a reasonable period unless
                  legal proceedings are instituted the Buyer will advise the
                  Seller in writing and furnish the Seller with particulars of
                  the steps taken by the Buyer to effect recovery. Where the
                  debtor in question is a continuing debtor of the Business
                  after the Completion Date the Seller shall consult with the
                  Buyer before instituting any legal proceedings;

         (c)      The Seller shall not seek to recover Receivables direct but
                  shall inform the Buyer of any payments that may be made to the
                  Seller in respect thereof;

         (d)      Within ten Business Days of the end of each month commencing
                  after Completion the Buyer shall provide the Seller with a
                  statement of the Receivables collected in that month (or, in
                  the case of the first such month, the period between
                  Completion and the

                                     - 14 -

<PAGE>

         end of such month) and shall remit to the Seller the amounts so
         received during that period;

         (e)      After the expiration of six months from Completion the
                  obligations of the Buyer under this clause 6 to collect
                  Receivables on behalf of the Seller shall cease save that if
                  thereafter any payments are made to the Buyer in respect of
                  Receivables the Buyer shall remit the same to the Seller less
                  its reasonable costs and expenses; and

         (f)      the Seller shall pay all reasonable expenses of the Buyer
                  properly incurred directly in connection with the collection
                  of Receivables and any other such fee or payment as shall be
                  agreed between the parties hereto.

7.       CONTRACTS

7.1      The Seller undertakes with effect from the Completion Date to assign to
         the order of the Buyer or to procure the assignment to the order of the
         Buyer all the Contracts and the IT Contracts which are capable of
         assignment without the consent of other parties or without breaching
         the terms of such IT Contracts and Contracts.

7.2      In so far as any of the IT Contracts and Contracts are not assignable
         to the Buyer without the agreement of or novation by or consent to the
         assignment from another party this Agreement shall not constitute an
         assignment or attempted assignment if such assignment or attempted
         assignment would constitute a breach of such IT Contracts and
         Contracts.

7.3      If any of the IT Contracts and Contracts cannot be assigned or novated
         to the Buyer without the consent of a third party, then each of the
         Seller and the Buyer shall use their respective reasonable endeavours
         to obtain such consent.

7.4      In any case where the consent in clause 7.3 above is refused or
         otherwise not obtained and until it is obtained or where any of the IT
         Contracts and Contracts are incapable of transfer to the Buyer by
         assignment or by other means:

         (a)      the Seller shall hold those IT Contracts and Contracts and any
                  monies, goods or other benefits received thereunder as agent
                  of and trustee for the Buyer and shall forthwith upon receipt
                  of the same account for and pay or deliver to the Buyer such
                  monies, goods and other benefits;

         (b)      the Buyer shall perform those IT Contracts and Contracts in
                  accordance with their terms and conditions as sub-contractor
                  to the Seller provided that sub-contracting is permissible
                  under the terms of the IT Contracts and Contract in question,
                  and where sub-contracting is not permissible, the Buyer shall
                  perform the IT Contracts and Contracts in accordance with
                  their terms and conditions as agent for the Seller and
                  indemnify and keep indemnified the Seller against all
                  obligations, debts, costs, claims, demands, expenses and
                  damages in respect thereof; and

         (c)      the Seller shall give all reasonable assistance to the Buyer
                  at the cost of the Buyer to enable it to enforce the rights of
                  the Seller under the IT Contracts and Contracts and shall at
                  all times act with regard to the IT Contracts and Contracts in
                  accordance with the Buyer's reasonable instructions from time
                  to time and will, at the cost of the Buyer,

                                     - 15 -

<PAGE>

                  provide access to all relevant books, documents and other
                  information in relation to such IT Contracts and Contracts as
                  is within its possession or the possession of the Seller's
                  Group and as the Buyer may reasonably request from time to
                  time.

7.5      To the extent that any payment is made to the Seller in respect of the
         IT Contracts and Contracts on or after the Completion Date the Seller
         shall receive the same as trustee, shall record such payment separately
         in its books and shall account to the Buyer for the same on the
         Completion Date or if received thereafter within seven Business Days of
         receipt.

7.6      If, for any reason, the Seller is unable to procure the assignment to
         the Buyer of the Software Licences required to operate the CS3 Software
         System as set out in Part 2 of Schedule 7 to this Agreement (the "CS3
         LICENCES") and, in the Buyer's reasonable opinion, such inability to
         assign the CS3 Licences has a material impact on the Buyer's ability to
         operate the Business in the same manner as it is operated on a
         day-to-day basis by the Seller at Completion, the Buyer shall be
         entitled to obtain such number of new software licences as are required
         to operate the Business in the same manner as it is operated by the
         Seller at Completion (the "REPLACEMENT CS3 LICENCES") provided that the
         Seller shall reimburse the Buyer the cost of obtaining the Replacement
         CS3 Licences within 5 Business Days of demand by the Buyer. Nothing in
         this clause shall release the Buyer from its obligations to mitigate
         its loss pursuant to this clause 7.

8.       STOCK AND INTERMEDIATES

8.1      The Seller shall retain legal and beneficial title to the Stock
         exclusively subject to the provisions of this clause. The Stock shall
         remain the property of the Seller and no title shall pass to the Buyer
         until such time as the Stock is paid for in full by the Buyer. Unless
         otherwise expressly permitted by this agreement the Buyer shall not
         perform any act or make any statement directly or indirectly
         inconsistent with the exclusive title of the Seller to the Stock.

8.2      The Seller shall within fourteen days of Completion deliver to the
         Buyer a statement of the value of the Stock which shall include a full
         inventory of the Stock following a physical stock-take carried out at
         each of the locations from which the Business is carried on with
         representatives of both the Seller and the Buyer present (the "STOCK
         VALUATION"). During this stock-take the Seller and Buyer shall jointly
         use all their reasonable endeavours to procure that any obsolete stock
         within the Stock is identified. Any such items of Stock which are
         identified by both parties as obsolete shall be destroyed by the Buyer
         (unless expressly agreed to the contrary) and the Seller will reimburse
         the Buyer for all reasonable costs incurred in this destruction
         process.

8.3      The Stock shall be valued at cost. The Seller shall comply with any
         reasonable requests of the Buyer's representatives for evidence or
         information to verify the cost of the Stock.

8.4      The Buyer shall confirm its agreement to the Stock Valuation within
         seven days of receipt of the same (or within such longer period as
         shall be agreed in writing between the parties). In the event the Stock
         Valuation is not confirmed within such agreed period, any dispute with
         respect to the determination of the value of any part of the Stock
         shall be referred for final settlement to a firm of chartered
         accountants nominated jointly by the Seller and the Buyer or, failing
         such nomination within 14 days after a request for determination by
         either the Seller or

                                     - 16 -

<PAGE>

         the Buyer, nominated at the request of either of them by the President
         for the time being of the Ulster Society of the Institute of Chartered
         Accountants in Ireland. The accountants shall be entitled to call for
         submissions from both the Buyer and the Seller as to objections in
         relation to the valuation of the Stock and may call for and inspect
         such documents as they may reasonably consider necessary. In making
         their determination, the accountants shall act as experts and not as
         arbitrators, their decision shall (in the absence of manifest error) be
         final and binding on the parties and their fees shall be borne and paid
         by the Seller and the Buyer in such proportions as the accountants
         determine.

8.5      The accountants appointed as experts pursuant to this clause shall, in
         giving their determination, state what adjustments (if any) are
         necessary to the valuation in such form as it stands at that time, in
         respect of the matters in dispute in order to comply with the
         requirements of this agreement and shall give its reasons therefore and
         shall make such determination as soon as is reasonably practicable
         after their appointment and in any event by not later than 30 days
         after their appointment.

8.6      For such time as there shall be any Stock retained by the Seller, the
         Buyer shall maintain such Stock at the Properties in such condition as
         the Seller's Group may reasonably instruct and the Buyer shall be under
         an obligation to maintain the Stock in the same condition as evidenced
         by the stock-take undertaken in accordance with clause 8.2.

8.7      The Seller shall have the right to inspect the Stock from time to time
         whilst it remains the property of the Seller or the Seller's Group and
         the Buyer shall be obliged to comply with all reasonable requests of
         the Seller or its agents in respect of inspection of the Stock.

8.8      The Buyer shall have the right to remove or to use the Stock in the
         normal course of its business on the terms and conditions of this
         clause 8. Unless otherwise expressly permitted by this agreement the
         Buyer shall at no time remove the Stock or any part of it or allow it
         or any part of it to be removed from its place of storage at the
         Properties.

8.9      The Buyer shall inform the Seller of the level of Stock at the
         Properties at the end of each month within 7 Business Days of the last
         day of each month, and of the quantities of Stock which it has removed
         during the preceding month in accordance with this clause 8.

8.10     For the avoidance of doubt, the Seller shall have no liability in
         respect of delivery of the Stock.

8.11     The Buyer shall at all times keep the Stock marked clearly by batch
         number, as being the property of the Seller. The Seller hereby consents
         to the Stock being in the possession of the Buyer but such consent is
         conditional upon the Stock remaining separate and clearly identified as
         the property of the Seller as provided in this clause 8.11.

8.12     The Buyer shall keep an accurate and up-to-date inventory of the Stock
         showing the description, quantity, shelf life and dates of delivery to
         and removal of each item from the Stock. The Seller or its duly
         appointed agents or servants shall be entitled at any reasonable time
         to examine and take copies of such inventory and all other books,
         records, invoices and other documents in the possession of the Buyer
         relating to any part of the Stock.

                                     - 17 -

<PAGE>

8.13     In the event that any Stock exceeds its shelf life, the Buyer shall
         immediately notify the Seller and shall be obliged, if the Seller
         wishes, to destroy such stock in accordance with accepted practice and
         relevant regulations, provided that the Seller shall be liable for any
         direct costs incurred by the Buyer in carrying out any such requests.

8.14     The Seller shall invoice the Buyer on a monthly basis for all items of
         the Stock which the Buyer has removed during the preceding month, such
         invoice to be based on information provided by the Buyer in accordance
         with clause 8. The Buyer shall pay for the Stock within 30 days of the
         date of the invoice in a manner specified by the Seller. The Stock
         shall be invoiced to the Buyer at the value as per clause 8.3 plus
         Value Added Tax. The Seller shall be entitled to charge interest on
         overdue accounts at the rate of 2 per cent. per annum above the base
         rate from time to time of Ulster Bank plc from the due date for payment
         until receipt by the Seller of the full amount, both before and after
         judgment. The Seller may suspend the supply of Stock to the Buyer where
         any amounts are overdue under any order until all such amounts are
         paid.

8.15     The Buyer hereby undertakes that the Stock is used in rotation, i.e. on
         a "first in, first out" basis and further undertakes that the Stock
         shall be utilised and purchased in preference to any stock purchased or
         otherwise obtained by the Buyer or the Buyer's agents, representatives
         or subcontractors either prior to or following Completion.

8.16     The Buyer acknowledges that no charges shall be made or shall be
         payable by the Seller in respect of the warehousing services carried
         out pursuant to this clause 8.

8.17     All expenses incurred in the storage, maintenance and administration of
         the Stock after purchase shall be borne by the Buyer. Upon delivery of
         the Stock on purchase by the Buyer, the risk in those goods shall pass
         to the Buyer, which shall be wholly responsible thereafter for their
         safe custody.

8.18     The Buyer shall at all times during the term of this agreement comply
         with the requirements of any appropriate regulatory authority with
         regard to the safe storage, handling and use of the Stock.

8.19     Neither party shall sell any Stock belonging to it unless it has first
         granted to the other party the opportunity to purchase any such stock
         at cost or the other party has given its consent in writing.

8.20     The Seller and Buyer shall jointly procure that at the stock-take
         referred to in clause 8.2 above the value of the Intermediates is
         determined and following this stock-take the Seller shall within
         fourteen Business Days of Completion deliver to the Buyer a statement
         of the value of the Intermediates (the "DRAFT INTERMEDIATES
         VALUATION"). The Intermediates shall be valued in accordance with the
         accounting policies and procedures set out in Schedule 8 of this
         agreement.

8.21     The Buyer shall notify the Seller within fourteen Business Days of
         receipt of the Draft Intermediates Valuation whether or not it accepts
         the valuation for the purposes of this agreement.

8.22     If the Buyer notifies the Seller that it does not accept the Draft
         Intermediates Valuation:

                                     - 18 -

<PAGE>

         (a)      it shall, at the same time, set out in a notice in writing its
                  reasons in full for such non-acceptance and specify the
                  adjustments which, in its opinion, should be made to the Draft
                  Intermediates Valuation in order to comply with the
                  requirements of this agreement and deliver a copy of such
                  notice to the Seller; and

         (b)      the parties shall use all reasonable endeavours to meet and
                  discuss the objections of the Buyer and to reach agreement
                  upon the adjustments (if any) required to be made to the Draft
                  Intermediates Valuation.

8.23     If the Buyer is satisfied with the Draft Intermediates Valuation
         (either as originally submitted or after adjustments agreed between the
         Seller and the Buyer) or if the Buyer fails to notify the Seller of its
         non-acceptance of the Draft Intermediate Valuation within the fourteen
         Business Day period referred to in clause 8.21 above, then the Draft
         Intermediates Valuation supplied by the Seller shall be deemed to
         constitute the agreed Intermediates Valuation for the purposes of this
         agreement the ("AGREED INTERMEDIATES VALUATION").

8.24     In the event that the parties do not reach an agreement over the value
         of the Intermediates pursuant to clause 8.22 above, the value of the
         Intermediates shall be referred for final settlement to a firm of
         chartered accountants nominated jointly by the Seller and the Buyer or,
         failing such nomination within 14 days after a request for
         determination by either the Seller or the Buyer, nominated at the
         request of either of them by the President for the time being of the
         Ulster Society of the Institute of Chartered Accountants in Ireland.
         The accountants shall be entitled to call for submissions from both the
         Buyer and the Seller as to objections in relation to the Draft
         Intermediates Valuation and may call for and inspect such documents as
         they may reasonably consider necessary. In making their determination,
         the accountants shall act as experts and not as arbitrators, their
         decision shall (in the absence of manifest error) be final and binding
         on the parties and their fees shall be borne and paid by the Seller and
         the Buyer in such proportions as the accountants determine.

8.24     The accountants appointed as experts pursuant to this clause shall, in
         giving their determination, state what adjustments (if any) are
         necessary to the Draft Intermediates Valuation in such form as it
         stands at that time, in respect of the matters in dispute in order to
         comply with the requirements of this agreement and shall give their
         reasons therefore and shall make such determination as soon as is
         reasonably practicable after their appointment and in any event by not
         later than 30 days after their appointment.

8.25     Within seven Business Days of the agreement or determination of the
         Value of the Intermediates, or as otherwise agreed between the Parties,
         the Buyer shall make a payment to the Seller of an amount equal to the
         sum specified as the aggregate value of the Intermediates in the Agreed
         Intermediates Valuation as per clause 8.20 plus Value Added Tax
         together with interest on the principal amount thereof at the rate of 2
         per cent. per annum above the base rate from time to time of Ulster
         Bank plc computed from the date the payment is due pursuant to this
         clause 8.25.

9.       PREPAYMENTS BY SELLER AND CUSTOMERS

9.1      The following provisions shall apply in respect of any prepayments to
         or by the Seller's Group in relation to the Business only:

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<PAGE>

         (a)      the Seller shall account to the Buyer for all prepayments
                  received by the Seller's Group in respect of any Contracts not
                  wholly completed or discharged at Completion by the Seller's
                  Group to the extent that such prepayments exceed the actual
                  costs incurred by the Seller's Group (if any) in partially
                  performing such contracts and arrangements prior to
                  Completion; and

         (b)      the Buyer shall account to the Seller for all payments made by
                  the Seller's Group in respect of any Contracts not wholly
                  completed or discharged at Completion by suppliers of goods
                  and services to the extent that such payments exceed the value
                  of goods and/or services already supplied prior to Completion.

9.2      All rates, water, gas, electricity and telephone charges, salaries,
         wages, and other outgoings and costs of a periodic nature which are
         chargeable by reference to a period commencing before and ending after
         Completion shall be apportioned on a time basis pro rata (provided that
         any such outgoings or costs chargeable by reference to the extent of
         the user of any property or rights shall be apportioned between the
         Seller and the Buyer according to the extent of such user). For the
         avoidance of doubt, any rent which shall be payable following
         Completion by the Seller under the provisions of clause 21.2 shall not
         be so proportioned but instead the Buyer shall procure that the total
         amount of such rent payable shall be reimbursed in full to the Seller
         or such member of the Seller's Group as shall have paid such rent as if
         such payment was an apportionment under the provisions of clause 9.3.

9.3      Where any amounts are to be apportioned under this agreement, the
         Seller shall provide the Buyer with details of the apportionments with
         supporting vouchers or similar documentation, and in the absence of
         dispute between the Seller and the Buyer, the appropriate payment shall
         be made by or to the Seller in accordance with the terms of this clause
         9. If the amount of any apportionment is in dispute, the matter shall
         be referred for final settlement to a firm of chartered accountants
         nominated jointly by the Seller and the Buyer or, failing such
         nomination, within 14 days after request by either the Seller or the
         Buyer, nominated at the request of either of them by the President for
         the time being of the Ulster Society of the Institute of Chartered
         Accountants in Ireland. The accountants shall be entitled to call for
         and inspect such documents as they may reasonably consider necessary.
         In making their determination, the accountants shall act as experts and
         not as arbitrators, their decision shall (in the absence of manifest
         error) be final and binding on the parties and their fees shall be
         borne and paid by the Seller and the Buyer in such proportions as the
         accountants determine. The amount determined to be due in accordance
         with this clause shall be paid within 14 days of the date of
         determination, together with interest calculated on a daily basis (as
         well after as before judgment), from the date of determination until
         the date of actual payment, at the rate of 2 per cent per annum above
         the base lending rate from time to time of Ulster Bank Limited.

9.4      In relation to any expenditure or outgoing of the Business which is
         consideration for a taxable supply and which is apportioned under this
         clause 9 that part of the amount of the expenditure or outgoing which
         is input tax for the purposes of VAT shall be apportioned to the party
         which is entitled to recover such input tax or obtain credit for it
         pursuant to the Value Added Tax Act 1994. In relation to any receivable
         of the Business which is consideration for a taxable supply and which
         is apportioned under this clause 8 that part of the amount of the
         receivable which is output tax for VAT purposes shall be apportioned to
         the party which is

                                     - 20 -

<PAGE>

         obliged to account for such output tax to HM Customs & Excise pursuant
         to the Value Added Tax Act 1994.

9.5      Any payment due between the parties pursuant to this clause 9 (save as
         otherwise provided for in clause 9.3) shall be paid within thirty days
         of Completion.

10.      EMPLOYEES

10.1     The Seller and the Buyer acknowledge and agree that the sale and
         purchase of the Business and Assets pursuant to this agreement will
         constitute a relevant transfer for the purposes of the Regulations and
         that it will not operate so as to terminate any of the contracts of
         employment of the Assumed Employees.

10.2     The Buyer hereby undertakes to indemnify the Seller against all
         liabilities, obligations, costs, losses, damages and demands arising
         from or in respect of any of the Assumed Employees following
         Completion, provided that and to the extent that such claims do not
         arise either directly or indirectly due to any action or omission on
         the part of the Seller prior to Completion.

10.3     If the contract of employment of any Assumed Employee is found (or
         alleged) not to have effect after Completion as if originally made with
         the Buyer, the Buyer agrees that:

         (a)      in consultation with the Seller, it will, or will procure that
                  it will within fourteen days of being informed of such finding
                  or allegation, make to the relevant Assumed Employee an offer
                  in writing to employ him under a new contract of employment to
                  take effect on the termination referred to below; and

         (b)      any such offer of employment made by the Buyer will be on
                  terms and conditions which when taken as a whole do not differ
                  in any material way from the terms and conditions of
                  employment of that Assumed Employee immediately before
                  Completion (save as to the identity of the employer).

         Upon that offer being made (or at any time after the offer should have
         been made if no offer is made) the Seller will terminate the employment
         of the relevant Assumed Employee, and the Buyer shall indemnify the
         Seller against all liabilities, obligations, costs, claims and demands
         arising directly or indirectly out of the employment of that Assumed
         Employee from Completion until such termination (up to a maximum of 6
         months from Completion) and the Seller shall make available to the
         Buyer the services of the employee concerned during such period.

10.4     If the contract of employment of any person who is immediately prior to
         Completion employed by a member of the Seller's Group (other than an
         Assumed Employee) is found or alleged to have effect after Completion
         as if originally made with the Buyer or another member of the Buyer's
         Group the Seller (on behalf of the relevant member of the Seller's
         Group) agrees that:

         (a)      in consultation with the Buyer, it will, within fourteen days
                  of being so requested procure that a member of the Seller's
                  Group makes to that employee an offer in

                                     - 21 -

<PAGE>

                  writing to employ him under a new contract of employment
                  subject to, and to take effect upon , the termination referred
                  to below; and

         (b)      the offer to be made will be on terms and conditions which
                  when taken as a whole do not differ in any material way from
                  the terms and conditions of employment of that employee
                  immediately before Completion.

         Upon that offer being made (or at any time after the offer should have
         been made if the offer is not made), the Buyer shall terminate the
         employment of the employee concerned. The Seller (on behalf of the
         relevant member of the Seller's Group) shall indemnify the Buyer
         against all liabilities arising from the employment of that employee at
         all times up until such termination (up to a maximum period of 6 months
         from the Completion Date) and the termination of such employment and
         the Buyer shall make available to the Seller the services of the
         employee concerned during such period.

10.5     The Buyer confirms that it will not be taking any measures which would
         give rise to an obligation on the Seller to consult under Regulation 10
         of the Regulations.

10.6     The Buyer shall discharge and hereby undertakes to indemnify the Seller
         against all liabilities, obligations, costs, claims, demands, actions,
         awards, penalties and expenses (including, without limitation, all
         reasonable legal and professional fees and expenses) arising from or in
         respect of the Assumed Employees before Completion in respect of any
         breach of Regulation 10(3) of the Regulations by the Buyer.

10.7     Subject to clause 10.6 above, the Seller shall discharge and hereby
         undertakes to indemnify the Buyer against all liabilities, obligations,
         costs, claims, demands, actions, awards, penalties and expenses
         (including, without limitation, all reasonable legal and professional
         fees and expenses) arising from or in respect of any of the Assumed
         Employees before Completion.

10.8     The Seller shall discharge and hereby undertakes to indemnify the Buyer
         against all liabilities, obligations, costs, claims, demands, actions,
         awards, penalties and expenses (including, without limitation, all
         reasonable legal and professional fees and expenses:

         (a)      arising from or in respect of any of the Retained Employees
                  provided that and to the extent that such claims do not arise
                  either directly or indirectly due to any action or omission on
                  the part of the Buyer prior to the date hereof; and

         (b)      by or in respect of any other person, agent, employee or
                  contractor of the Seller or any member of the Seller's Group
                  who claims (whether correctly or not) that the Buyer has
                  inherited liability from the Seller in respect of them by
                  virtue of the Regulations.

11.      FUTURE TRADING AND TRADE ENQUIRIES

11.1     The Seller shall promptly refer to the Buyer all enquires relating to
         the Business and assign to the Buyer all orders directly and
         exclusively relating to the Business which it receives after Completion
         for such period as the Seller remains subject to the undertaking set
         out in clause 15.1(a) of this agreement.

                                     - 22 -

<PAGE>

11.2     The Seller shall notify and keep informed the Buyer of any claims
         against the Seller brought by any third party in respect of any
         products or services supplied by the Seller in relation to the
         Business. If the Seller considers that it is desirable to take
         preventative action with a view to avoiding such claims, the Buyer
         agrees that it shall consult with the Seller as to what preventative
         action may be taken.

12.      MHRA LICENCES

12.1     The Seller undertakes with effect from Completion to permit the Buyer
         to operate the Business under the MHRA Licences for the Interim Period
         or until the Buyer is granted licences in its name by the MHRA (the
         "PDMS MHRA LICENCES") whichever is the earlier.

12.2     In consideration for the permission granted by the Seller in clause
         12.1, the Buyer will procure that no acts are performed or amendments
         or omissions made to the quality systems, processes and procedures
         currently employed by the Seller or its agents or representatives in
         carrying on the Business which may affect either directly or indirectly
         the validity of the MHRA Licences and the Buyer shall hold harmless and
         indemnify and keep indemnified the Seller and each member of the
         Seller's Group against all losses, claims, expenses and damage
         (including legal and other professional fees and expenses reasonably
         and properly incurred) that result from the Buyer being in breach of
         the provisions of this clause 12.2.

12.3     Both parties will use all their reasonable endeavours and perform all
         such acts that may be reasonably necessary during the Interim Period to
         ensure the PDMS MHRA Licences are granted and each party will provide
         the other with any information they may reasonably request on the
         progress of such applications.

13.      VALUE ADDED TAX

13.1     All amounts expressed in this agreement as being payable by any party
         hereto are expressed exclusive of any value added tax which may be
         chargeable thereon and the amount of any such value added tax shall be
         payable in addition thereto subject as hereinafter provided.

13.2     The Seller and the Buyer shall use all reasonable endeavours to ensure
         that the conditions of article 5(1) of the Value Added Tax (Special
         Provisions) Order 1995 SI 1268 and of section 49 of the Value Added Tax
         Act 1994 are fulfilled so that the sale of the Business and Assets
         hereunder is properly treated as neither a supply of goods nor a supply
         of services for the purposes of value added tax.

13.3     The Seller and the Buyer shall each give notice of the transfer of the
         Business and Assets to H.M. Customs and Excise.

13.4     The Seller shall on the Completion Date deliver to the Buyer all
         records referred to in section 49(1) of the Value Added Tax Act 1994 in
         respect of the Business and the Buyer hereby undertakes to preserve
         such records for such periods as may be required by law and shall
         during that period afford reasonable access to them at the request of
         the Seller.

13.5     In the event that H.M. Customs and Excise determine that value added
         tax is chargeable on the sale of the Business and Assets hereunder or
         any of them, the Seller shall immediately notify the Buyer of such
         determination and the Buyer agrees that such value added tax shall

                                     - 23 -

<PAGE>

         be in addition to the Consideration and the Buyer shall (against
         production by the Seller of tax invoices in respect thereof) pay the
         amount of any such value added tax forthwith to the Seller but such
         payment shall be without prejudice to the right of the Buyer under this
         agreement to call upon the Seller to make or join in an appeal against
         the aforesaid determination.

13.6     All value added tax payable in respect of goods and services supplied
         or deemed to be supplied by the Seller in connection with the Business
         prior to Completion, and all interest payable thereon and penalties
         attributable thereto, shall be paid to H.M. Customs and Excise by the
         Seller, and the Seller shall be entitled to receive and to retain for
         its own benefit all reimbursement or credit from H.M. Customs and
         Excise for value added tax borne by the Seller on goods and services
         supplied to the Seller prior to Completion and any payments received in
         respect of value added tax overpaid to H.M. Customs and Excise prior
         thereto.

14.      WARRANTIES

14.1     The Seller warrants to the Buyer in terms of the warranties in schedule
         2 which shall remain in full force and effect after Completion as more
         particularly set out in this agreement.

14.2     The Buyer hereby warrants that it has all requisite individual and
         corporate power to enter into and perform this agreement and the
         transactions and matters contemplated thereby and has taken all
         necessary action to authorise the entry into and performance of this
         agreement and the transactions and matters contemplated thereby.

14.3     Any information supplied by any Assumed Employee to the Seller or its
         directors, employees, agents or advisers in connection with the
         Warranties, or otherwise in relation to the Business and Assets shall
         not constitute a representation or warranty or guarantee as to the
         accuracy thereof by such employee and the Seller undertakes to the
         Buyer (and its respective directors, officers, employees, agents and
         advisers) that it will not bring and hereby waives any and all claims
         which it may otherwise have against such employee in respect thereof
         save in respect of fraud or fraudulent concealment.

14.4     Each of the Warranties shall be construed as a separate Warranty and
         (save as expressly provided to the contrary) shall not be limited by
         the terms of any of the other Warranties.

14.5     Save in the case of fraud or fraudulent concealment by the Seller, the
         Seller shall be under no liability in respect of any claim under the
         Warranties and any such claim shall be wholly barred and unenforceable
         unless written notice of such claim setting out such details of the
         events or circumstances giving rise to the relevant claim as are
         available to the Buyer (including the grounds on which such claim is
         based and, if capable of preparation by the Buyer, the estimated amount
         claimed to be payable in respect thereof) shall have been served upon
         the Seller by the Buyer as soon as possible after it becomes likely
         that a claim will be made and, in any event:

         (a)      in the case of a claim under the Warranties, by not later than
                  5.00 p.m. on the day falling twelve months after the date
                  hereof; and

         (b)      the liability of the Seller for any claim specified in such
                  notice shall absolutely determine and cease (unless the amount
                  payable in respect of the relevant claim has been agreed as
                  settled or satisfied by the Seller within nine months of the
                  date of such

                                     - 24 -

<PAGE>

                  written notice) if legal proceedings have not been instituted
                  through being properly issued and validly served in respect of
                  such claim on the Seller within six months of the date of such
                  written notice.

14.6     Save in the case of fraud or fraudulent concealment, the Seller shall
         be under no liability in respect of any claim under the Warranties:

         (a)      where the liability of the Seller in respect of that claim
                  would (but for this clause 14) have been less
                  than L5,000; or

         (b)      unless and until the liability in respect of that claim when
                  aggregated with the liability of the Seller in respect of all
                  other such claims (including any claims which would otherwise
                  have arisen save for the provisions of clause 14.6(a)) shall
                  exceed L200,000 at which time the Seller shall be liable for
                  the full amount of the claim not merely the excess over that
                  sum.

14.7     Save in the case of fraud or fraudulent concealment, the aggregate
         liability of the Seller in respect of all claims under this agreement
         shall not in any circumstances exceed the cash consideration paid to
         the Seller under clause 3 of this agreement.

14.8     The Seller shall be under no liability in respect of any claim under
         the Warranties if the facts or circumstances giving rise thereto have
         been fairly disclosed in the Disclosure Letter prior to the entering
         into of this agreement or are otherwise known to the Buyer or any
         employees, officers or advisers to the Buyer at the date hereof. For
         the purposes of this clause "fairly disclosed" shall mean disclosed in
         such a manner and in such detail as to enable the Buyer to make a
         reasonably well informed assessment of the matter.

14.9     No liability (whether in contract, tort or otherwise) shall attach to
         the Seller in respect of any claim under the Warranties to the extent
         that:

         (a)      the claim or the events giving rise to the claim would not
                  have arisen but for an act, omission or transaction following
                  Completion by or on behalf of the Buyer's Group otherwise than
                  in the ordinary and proper course of the Business as carried
                  on by the Seller at present or which would not have arisen but
                  for any claim, election or surrender or disclaimer relating to
                  Taxation made or omitted to be made or notice or consent given
                  or omitted to be given by the Buyer's Group under the
                  provisions of any statutes relating to Taxation the making,
                  giving or doing of which was assumed in computing the Taxation
                  liabilities of the Seller's Group for the purposes of the
                  Accounts;

         (b)      the claim occurs wholly or partly out of or the amount thereof
                  is increased as a result of:

                  (i)      any change in the accounting principles or practices
                           of the Buyer's Group introduced or having effect
                           after Completion unless the same is introduced to
                           bring the accounting principles and practices into
                           line with generally accepted accounting principles
                           and practices in the UK in relation to a business of
                           the type carried on by the Business; or

                                     - 25 -
<PAGE>

                  (ii)     any increase in the rates of Taxation made after
                           Completion and which affects matters occurring prior
                           thereto; or

                  (iii)    any change in law or regulation or in its
                           interpretation or administration by the English or
                           Northern Irish courts, by the Inland Revenue or by
                           any other fiscal, monetary or regulatory authority in
                           each case occurring after Completion and which
                           affects matters occurring prior thereto;

         (c)      the loss or damage giving rise to the claim is actually
                  recovered by the Buyer's Group under any policy of insurance;
                  or

         (d)      the claim relates to a claim or liability for Taxation and
                  would not have arisen but for any winding-up or cessation of
                  trading after Completion of the Business or any part thereof.

14.10    No liability will arise and no claim may be made under any of the
         Warranties to the extent that the matter giving rise to such claim is
         remediable unless within the period of 30 days following the Buyer
         becoming aware of such matter, the Buyer shall have given written
         notice thereof to the Seller in accordance with this clause 14 and such
         matter shall not have been remedied to the reasonable satisfaction of
         the Buyer within that period of 30 days following the date of service
         of such notice.

14.11    Clause 14.12 shall apply in circumstances where:

         (a)      any claim is made against the Buyer's Group which may give
                  rise to a claim by the Buyer against the Seller under the
                  Warranties; or

         (b)      the Buyer's Group is or may be entitled to make recovery from
                  some other person of any sum in respect of any facts or
                  circumstances by reference to which the Buyer has or may have
                  a claim against the Seller under the Warranties; or

         (c)      the Seller shall have paid to the Buyer an amount in respect
                  of a claim under the Warranties and subsequent to the making
                  of such payment the Buyer's Group becomes or shall become
                  entitled to recover from some other person a sum which is
                  referable to that payment.

14.12    In the circumstances provided in clause 14.11, the Buyer shall and
         shall procure that the Buyer's Group shall:

         (a)      subject to receiving an undertaking from the Seller in respect
                  of all costs properly incurred thereby by the Buyer's Group,
                  promptly and diligently take all such action as the Seller may
                  reasonably request including the institution of proceedings
                  and the instruction of professional advisers approved by the
                  Seller (such approval not to be unreasonably withheld) to act
                  on behalf of the Buyer to avoid, dispute, resist, compromise,
                  defend or appeal against any such claim against the Buyer's
                  Group as is referred to in clause 14.11(a) or to make such
                  recovery by the Buyer' Group as is referred to in clause
                  14.11(b) or clause 14.11(c), as the case may be;

                                     - 26 -
<PAGE>

         (b)      not settle or compromise any liability or claim to which such
                  action is referable without the prior written consent of the
                  Seller which consent shall not be unreasonably withheld or
                  delayed; and

         (c)      in the case of clause 14.11(c) only, promptly repay to the
                  Seller an amount equal to the amount so recovered or, if
                  lower, the amount paid by the Seller to the Buyer, less, in
                  each case any costs incurred by the Buyer's Group in so
                  recovering or any Taxation incurred by the Buyer's Group on
                  the amount received.

14.13    The Buyer shall by way of covenant, but not as a condition precedent to
         liability on the part of the Seller as soon as practicable:

         (a)      inform the Seller in writing of any fact, matter, event or
                  circumstance which comes to its notice or to the notice of the
                  Buyer's Group whereby it appears that the Seller is or is
                  likely to be liable to make any payment in respect of any
                  claim under the Warranties or whereby it appears the Buyer's
                  Group shall become or may become entitled to recover from some
                  other person a sum which is referable to a payment already
                  made by the Seller in respect of such a claim;

         (b)      thereafter keep the Seller informed of all material
                  developments in relation thereto; and

         (c)      provide at the cost of the Seller all such information and
                  documentation (no matter how it is recorded or stored) as the
                  Seller shall reasonably request and which the Buyer may
                  lawfully provide in connection therewith and also in
                  connection with any proceedings instituted by or against the
                  Buyer's Group under clause 14.12.

14.14    In the event that the Seller at any time after the date hereof shall
         wish to take out insurance against its liability hereunder, the Buyer
         undertakes to provide such information as the prospective insurer may
         require before effecting such insurance.

14.15    The Buyer hereby warrants and confirms that at the date hereof, it has
         not already formulated and is not aware of any claim it may have
         against the Seller under the Warranties PROVIDED THAT such confirmation
         shall not constitute a general waiver by the Buyer of any rights which
         it may have under this agreement for breach of warranty arising from
         information subsequently coming into the Buyer's possession which may
         in the future form the basis of such a claim.

14.16    The Buyer will take or procure the taking of all such reasonable steps
         and action as are necessary or as the Seller may reasonably require in
         order to mitigate any claim under the Warranties and the Buyer's Group
         shall act in accordance with such request subject to the Buyer being
         indemnified by the Seller against all reasonable costs and expenses
         incurred in connection therewith. Nothing in this agreement shall or
         shall be deemed to relieve the Buyer of any common law or other duty to
         mitigate any loss or damage incurred by it.

15.      PROTECTION OF GOODWILL

15.1     In consideration of the Buyer entering into the sale and purchase of
         the Business and Assets and subject to the provisions of clause 15.3
         below, the Seller undertakes to and with the Buyer

                                     - 27 -
<PAGE>

         that no member of the Seller's Group shall either directly or
         indirectly and either solely or jointly with any other person (either
         on its own account or as the agent of any other person) and in any
         capacity whatsoever:

         (a)      for a period of three years from Completion (the "RESTRICTED
                  PERIOD"), carry on or be engaged, concerned or interested
                  (save as the holder of shares or debentures in a listed
                  company which confer not more than three per cent. of the
                  votes which could be cast at a general meeting of the company)
                  in any business which would compete with the Business within
                  the Restricted Territory. For the avoidance of doubt, the
                  following activities shall not be competing with the Business
                  for the purposes of clause 15.1:

                  (i)      the carrying on by the Seller's Group of the Ivex
                           Business;

                  (ii)     the carrying on by the Seller's Group of the IVR
                           Business; and

                  (iii)    the sale or supply by any member of the Seller's
                           Group of those pharmaceutical products in respect of
                           which the Buyer or Buyer's Group provide
                           manufacturing or other services to any member of the
                           Seller's Group pursuant to the Supply Agreement (or
                           such agreement as shall replace the Supply Agreement
                           as agreed between the parties hereto); or

         (b)      during the Restricted Period, canvass or solicit orders from
                  any person who was a customer of the Business at any time
                  within the period of six months prior to Completion for the
                  provision of the Restricted Services; or

         (c)      for a period of two years from Completion, solicit or entice
                  away or endeavour to solicit or entice away from the Buyer any
                  Assumed Employees who are senior managers, directors or
                  project managers and any key employees who would be treated as
                  a "relevant employee" for the purposes of the Model Code
                  contained in the Listing Rules, whether or not such person
                  would commit any breach of his contract of employment or terms
                  of engagement by reason of his leaving the service of the
                  Buyer PROVIDED THAT this restriction will not apply to any
                  advertisement for recruitment made available generally through
                  any recruitment agency or advertisement available to the
                  public;

         (d)      use any trade or domain name (including the expression,
                  "PDMS") or e-mail address used by the Business at any time
                  during the two months immediately preceding the date of this
                  agreement or any other name intended or likely to be confused
                  with any such trade or domain name or e-mail address.

15.2     In consideration of the Buyer entering into this agreement, the Seller
         undertakes to and with the Buyer that it shall not and shall procure
         that no member of the Seller's Group shall:

         (a)      save as required by law or the rules of any governmental or
                  regulatory organisation, use or reveal to any person any of
                  the trade secrets, secret or confidential operations,
                  processes or dealings or any other confidential information
                  relating primarily and directly to the Business including
                  (without limitation) customer lists and names, sales targets
                  and statistics, market share statistics, surveys and reports
                  and pricing information relating to sales and purchases in
                  respect of the Business until such time

                                     - 28 -
<PAGE>

                  as the same falls into the public domain otherwise than by
                  reason of a breach of this undertaking; or

         (b)      attempt or knowingly assist or procure any other person to do
                  any of the foregoing things.

15.3     The provisions of clause 15.1 shall not prevent or restrict any member
         of the Seller's Group from acquiring the whole or any part of a
         business which, or the share capital of a company or group of companies
         whose business or a part of whose business, includes operations the
         carrying on of which would otherwise amount to a breach of the
         undertaking contained in clause 15.1 (the "COMPETITIVE OPERATIONS"), as
         part of a larger acquisition or series of related acquisitions PROVIDED
         THAT the relevant member of the Seller's Group shall within the
         following twelve months use their best endeavours to sell the
         Competitive Operations as soon as is reasonably practicable following
         such acquisition (which shall, without limitation, include inviting the
         Buyer to make a competitive bid for the sale of the Competitive
         Operations) save that the relevant member of the Seller's Group shall
         not be obliged to sell the Competitive Operations if those Competitive
         Operations comprise a minor part of the business or business of such
         company, group of companies or businesses acquired or in which the
         Seller's Group has acquired an interest. For the purpose of this clause
         15.3(b), "MINOR PART" of the business of such company, group of
         companies or business shall be part of its overall business in which
         the turnover of the Competitive Operations does not exceed the lower of
         ten per cent of the gross turnover per annum or L5 million gross
         turnover per annum of the Company, group of companies or business
         acquired.

15.4     The restrictions contained in this clause 15 are considered reasonable
         by the parties hereto and the Seller acknowledges that, in the light of
         the total price paid under this agreement and the manner of computation
         thereof, the nature of the Business and all other relevant matters, the
         provisions of this clause 15 are considered reasonably necessary for
         the protection of the interests of the Buyer.

15.5     In the event that any restriction in this clause 15 shall be found to
         be unenforceable but would be enforceable if some part thereof were
         deleted or the area of operation or the period of application reduced,
         such restriction shall apply with such modification as may be necessary
         to make it legal and enforceable.

15.6     Each undertaking contained in this clause 15 shall be construed as a
         separate undertaking and if one or more of the undertakings contained
         in this clause 15 is held to be against the public interest or unlawful
         or in any way an unreasonable restraint of trade the remaining
         undertakings shall continue to bind any member of the Seller's Group.

16.      ANNOUNCEMENTS, ETC.

16.1     Neither party shall disclose the making of this agreement nor its
         content (except those matters set out in the press release in the
         Agreed Form) and each party shall procure that each of its Related
         Persons and its professional advisers shall not make any such
         disclosure without the prior consent of the other party unless
         disclosure is to its professional advisers or required by law or the
         rules or standards of the London Stock Exchange or the Listing Rules of
         the UK Listing Authority or the rules and requirements of any other
         regulatory body Provided that this clause 15.1 does not apply to
         announcements, communications or circulars made or sent

                                     - 29 -
<PAGE>

         by the Buyer after Completion to customers, clients or suppliers of the
         Business to the extent that it informs them of the Buyer's acquisition
         of the Assets and the Business or to any announcements containing only
         information which has become generally available.

16.2     The restrictions contained in clause 16.1 shall apply without limit of
         time and whether or not this agreement is terminated.

17.      ASSIGNMENT

         This agreement is personal to the parties and accordingly no party
         without the prior written consent of the other shall assign, transfer
         or declare a trust of the benefit of all or any of any other party's
         obligations nor any benefit arising under this agreement.

18.      COSTS

         Unless expressly otherwise provided in this agreement, each of the
         parties shall bear its own legal, accountancy and other costs, charges
         and expenses connected with the sale and purchase of the Business and
         Assets.

19.      ENTIRE AGREEMENT

19.1     Each party, on behalf of itself and as agent for each of its Related
         Persons, acknowledges and agrees with the other party (each such party
         acting on behalf of itself and as agent for each of its Related
         Persons) that:

         (a)      this agreement together with any other documents referred to
                  in this agreement (together the "TRANSACTION DOCUMENTS")
                  constitutes the entire and only agreement between the parties
                  and their respective Related Persons relating to the subject
                  matter of the Transaction Documents;

         (b)      neither it nor any of its Related Persons has been induced to
                  enter into any Transaction Document in reliance upon, nor has
                  any such party been given, any warranty, representation,
                  statement, assurance, covenant, agreement, undertaking,
                  indemnity or commitment of any nature whatsoever other than as
                  are expressly set out in the Transaction Documents and, to the
                  extent that any of them has been, it (acting on behalf of
                  itself and as agent on behalf of each of its Related Persons)
                  unconditionally and irrevocably waives any claims, rights or
                  remedies which any of them might otherwise have had in
                  relation thereto;

         (c)      the only remedies available to it in respect of the
                  Transaction Documents (and, where appropriate, to its Related
                  Persons) are damages for breach of contract and, for breach of
                  clause 15.1 only, the ability to seek specific injunctive
                  relief and, for the avoidance of doubt, (neither it nor its
                  Related Persons, where appropriate) have any right to rescind
                  or terminate any Transaction Documents either for breach of
                  contract or for negligent or innocent misrepresentation or
                  otherwise;

         PROVIDED THAT the provisions of this clause 19 shall not exclude any
         liability which any of the parties or, where appropriate, their Related
         Persons would otherwise have to any other party or, where appropriate,
         to any other party's Related Persons or any right which any of

                                     - 30 -
<PAGE>

         them may have in respect of any statements made fraudulently by any of
         them prior to the execution of this agreement or any rights which any
         of them may have in respect of fraudulent concealment by any of them.

20.      WAIVER, AMENDMENT

20.1     A waiver of any term, provision or condition of, or consent granted
         under, this agreement shall be effective only if given in writing and
         signed by the waiving or consenting party and then only in the instance
         and for the purpose for which it is given.

20.2     No failure or delay on the part of any party in exercising any right,
         power or privilege under this agreement shall operate as a waiver
         thereof, nor shall any single or partial exercise of any such right,
         power or privilege preclude any other or further exercise thereof or
         the exercise of any other right, power or privilege.

20.3     No breach of any provision of this agreement shall be waived or
         discharged except with the express written consent of the Seller and
         the Buyer.

20.4     The rights and remedies herein provided are cumulative with and not
         exclusive of any rights or remedies provided by law.

20.5     No variation to this agreement shall be effective unless made in
         writing and signed by all the parties.

21.      FURTHER ASSURANCE & ASSIGNMENT OF LEASES

21.1     At any time after Completion, the Seller shall at the Seller's expense
         execute all such documents and do such acts and things as the Buyer may
         reasonably require for the purpose of vesting in the Buyer all of the
         Seller's Group's rights and/or interests in the Business and of the
         vesting in the Buyer the full legal and beneficial title to the Assets
         (including Intellectual Property used by the Business, but which as
         regards the Properties means the title now held by the Seller or to
         which it is entitled on the basis of the copy documents of title
         furnished) and giving to the Buyer the full benefit of this agreement,
         including (without prejudice to the generality of the foregoing) to
         answer to the best of the Sellers knowledge any queries raised by the
         Land Registry on the registration of the transfer(s) to the Buyers now
         held by the Seller. For the avoidance of doubt, there shall be no
         obligation on the Seller to pay stamp duty, stamp duty land tax or
         registration fees (including registration fees at the Land Registry of
         Northern Ireland or the Registry of Deeds, Belfast pursuant to this
         clause 21.1.

21.2     In this clause 21.2:

         "the Heron Lease" means the Lease referred to in paragraph (b) of the
         definition of "Leases", the Lessor's interest in which is now vested in
         Maired Heron, Catherin C.G. Heron, Mary P. Heron, Margaret C. Heron,
         Kathleen A, Heron and Charles Eugene Heron or their successors ("the
         Herons") and the lessee's interest in which is now vested in the
         Seller.

         "the Heron Assignment" means the deed of assignment in the Agreed Form
         attached hereto.

         "the Heron Premises" means the premises comprised in the Heron Lease.

                                     - 31 -
<PAGE>

21.3     It is acknowledged by the Buyer and the Seller that:

         (a)      Pursuant to clause 2(15) of the Heron Lease, the consent of
                  the Herons and/or their successors in title is required to
                  assign the Heron Premises and the benefit of the Heron Lease.

         (b)      The Heron Premises form part of the Properties and on
                  Completion, the Seller at the request of the Buyer is to
                  assign the Heron Premises to the Buyer.

         (c)      By virtue of an assignment dated 31 March 2002, the Heron
                  Premises were assigned to the Seller with Galen Holdings as
                  guarantor for the Seller guaranteeing the payment of the rent
                  reserved by the Heron Lease and the observance and performance
                  of the covenants and conditions contained in the Heron Lease
                  by the Seller ("the Guarantee").

         (d)      If the Heron Assignment shall not have been executed by the
                  Seller and the Herons and delivered to the Buyer at or prior
                  to Completion, then the following provisions shall apply:

                  (i)      The Seller shall permit the Buyer access to the Heron
                           Premises as licensee for the period from Completion
                           until the date that the Heron Assignment is delivered
                           to the Buyer duly executed by the Seller and the
                           Herons subject to the Buyer observing and performing
                           all the covenants in the Heron Lease (including the
                           obligation to pay rent) and indemnifying the Seller
                           and Galen Holdings against any claim brought by the
                           Herons and/or their successors in title under the
                           Heron Lease by reason of any breach of the covenants
                           and/or conditions of the Heron Lease but the Buyer
                           shall not by reason of such Licence or such indemnity
                           be liable for any alleged breach of clause 2(15) of
                           the Heron Lease by reason of this Licence which shall
                           at all times during the subsistence of the licence be
                           the responsibility and liability of the Seller.

                  (ii)     During the licence contained in clause 21.3(d)(i)
                           above the Seller shall at its cost continue to
                           endeavour to procure the Herons' consent to the
                           assignment of the Heron Lease and that the Herons
                           join as a party to the Heron Assignment for the
                           purpose of evidencing their consent to the assignment
                           and for the purposes of releasing the Guarantee. For
                           the avoidance of doubt, this obligation shall include
                           seeking a declaration or order of specific
                           performance from a court of competent jurisdiction in
                           the event of any persistent refusal on the part of
                           Herons to do either.

                  (iii)    To procure the consent of Herons to the assignment of
                           the Heron Lease from the Seller to the Buyer and the
                           release of the Guarantee, the Buyer shall (if
                           necessary and if required) offer such guarantor or
                           guarantors as the Herons may reasonably require and
                           furnish such documentation and information, both
                           financial and otherwise, as the Herons may also
                           reasonably require in that regard.

                                     - 32 -
<PAGE>

21.4     At any time after Completion the Buyer shall procure that it shall use
         all reasonable endeavours to promptly provide the Seller or their
         advisers with all information (including but not limited to providing
         access to meet with employees of the Business) relating to the
         operation of the Business prior to Completion which the Seller or any
         member of the Seller's Group may reasonably require pursuant to any
         request for information or similar obligation imposed by any legal or
         regulatory body to or on the Seller or any member of the Seller's
         Group. In the event of any information being supplied pursuant to this
         clause 21.4 the Seller shall meet any reasonable direct costs incurred
         by the Buyer.

21.5     In addition to clause 21.4 above the Buyer will provide the Seller with
         reasonable access to the Business quality assurance and quality
         compliance records, information and employees of the Business in
         existence at and relating to the period prior to Completion for a
         period of seven years from Completion to the extent reasonably required
         by any member of the Seller's Group in order to comply with applicable
         law and regulation from time to time. In the event of any information
         being supplied pursuant to this clause 21.5 the Seller shall meet any
         reasonable direct costs incurred by the Buyer.

21.6     The terms of this agreement shall insofar as they are not performed at
         Completion and subject as specifically otherwise provided in this
         agreement continue in force after and notwithstanding Completion.

21.7     At any time after Completion, the Buyer may request that the Galen
         Marketing Authorisations be transferred to the Buyer and Galen shall
         consent to the transfer of the Galen Marketing Authorisations to the
         Buyer and shall complete any documentation and/or perform any act
         reasonably requested by the Buyer which is necessary to effect the
         transfer of the Galen Marketing Authorisations.

21.8     The Seller will:

         (a)      Use all reasonable endeavours to procure that any Galen
                  Marketing Authorisations which require renewal in the period
                  between the Completion Date and the date that they are
                  transferred pursuant to clause 21.7 above, are renewed; and

         (b)      Procure that no acts are performed or amendments or omissions
                  made which may affect either directly or indirectly the
                  validity of the Marketing Authorisations, and the Seller shall
                  hold harmless and indemnify and keep indemnified the Buyer
                  against all losses, claims, expenses and damage (including
                  legal and other professional fees and expenses reasonably and
                  properly incurred) that result from the Seller being in breach
                  of the provisions of this clause 21.8(b).

22.      NOTICES

22.1     Any notice, demand or other communication given or made under or in
         connection with the matters contemplated by this agreement shall be in
         writing and shall be delivered personally or sent by fax or prepaid
         first-class post (air mail if posted to or from a place outside the
         United Kingdom):

         In the case of the Buyer:

                                     - 33 -
<PAGE>

         Pharmaceutical Development and Manufacturing Services Limited
         Almac House
         20 Seagoe Industrial Estate
         Craigavon
         Northern Ireland
         Fax: 02838 350729
         Attention: Dr. Allen J. McClay

         In the case of the Seller to:

         Galen Limited
         Seagoe Industrial Estate
         Craigavon
         Co. Armagh
         Northern Ireland
         BT63 5UA
         Fax: 02838 331500
         Attention: Company Secretary

         and shall be deemed to have been duly given or made as follows:

         (a)      if personally delivered, upon delivery at the address of the
                  relevant party;

         (b)      if sent by first class post, two business days after the date
                  of posting;

         (c)      if sent by air mail, five business days after the date of
                  posting; and

         (d)      if sent by fax, on receipt by sender of delivery confirmation
                  report;

         provided that if, in accordance with the above provisions, any such
         notice, demand or other communication would otherwise be deemed to be
         given or made after 5.00 p.m. on a business day such notice, demand or
         other communication shall be deemed to be given or made at 9.00 a.m. on
         the next business day.

22.2     Either party may notify the other party to this agreement of a change
         to its name, relevant addressee, address or fax number for the purposes
         of clause 22.1 provided that such notification shall only be effective
         on:

         (a)      the date specified in the notification as the date on which
                  the change is to take place; or

         (b)      if no date is specified or the date specified is less than
                  five days after the date on which notice is given, the date
                  falling five days after notice of any such change has been
                  given.

                                     - 34 -
<PAGE>

23.      COUNTERPARTS

         This agreement may be executed in any number of counterparts which
         together shall constitute one agreement. Either party may enter into
         this agreement by executing a counterpart and this agreement shall not
         take effect until it has been executed by both parties.

24.      GOVERNING LAW AND JURISDICTION

24.1     This agreement (and any dispute, controversy, proceedings or claim of
         whatever nature arising out of or in any way relating to this agreement
         or its formation) shall be governed by and construed in accordance with
         Northern Irish law.

24.2     Each of the parties to this agreement irrevocably agrees that the
         courts of Northern Ireland shall have exclusive jurisdiction to hear
         and decide any suit, action or proceedings, and/or to settle any
         disputes, which may arise out of or in connection with this agreement
         (respectively, "PROCEEDINGS" and "DISPUTES") and, for these purposes,
         each party irrevocably submits to the jurisdiction of the courts of
         Northern Ireland.

24.3     Each party irrevocably waives any objection which it might at any time
         have to the courts of Northern Ireland being nominated as the forum to
         hear and decide any Proceedings and to settle any Disputes and agrees
         not to claim that the courts of Northern Ireland are not a convenient
         or appropriate forum for any such Proceedings or Disputes and further
         irrevocably agrees that a judgment in any Proceedings or Disputes
         brought in any court referred to in this clause 24 shall be conclusive
         and binding upon the parties and may be enforced in the courts of any
         other jurisdiction.

24.4     Without prejudice to any other permitted mode of service the parties
         agree that service of any claim form, notice or other document
         ("DOCUMENTS") for the purpose of any Proceedings begun in Northern
         Ireland shall be duly served upon it if delivered personally or sent by
         registered post, in the case of:

         (a)      the Seller to its registered office (marked for the attention
                  of the Company Secretary); and

         (b)      the Buyer to its registered office (marked for the attention
                  of Dr. Allen J. McClay).

         or such other person and address in the United Kingdom as the Seller
         shall notify the Buyer in writing or vice versa from time to time.

25.      INVALIDITY

         If any provision of this agreement is or becomes invalid, illegal or
         unenforceable in any respect under the law of any jurisdiction:

         (a)      the validity, legality and enforceability under the law of
                  that jurisdiction of any other provision; and

         (b)      the validity, legality and enforceability under the law of any
                  other jurisdiction of that or any other provision

                                     - 35 -
<PAGE>

         shall not be affected or impaired in any way.

26.      THIRD PARTY RIGHTS

         The Contracts (Rights of Third Parties Act) 1999 shall not apply to
         this agreement and no person other than the parties to this agreement
         shall have any rights under it, nor shall it be enforceable under that
         Act by any person other than the parties to it.

IN WITNESS whereof this agreement has been executed on the date first above
written.

Signed by                           )
                                    )
for and on behalf GALEN LIMITED:    )

Signed by                           )
                                    )
for and on behalf of                )
PHARMACEUTICAL                      )
DEVELOPMENT AND                     )
MANUFACTURING LIMITED:              )

                                     - 36 -

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