Document:

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                                                                    Exhibit 4.13

                        DATED the 22nd day of July, 2003

                                     BETWEEN

                               DRAXIS HEALTH INC.

                                     - and -

                               SHIRE BIOCHEM INC.

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

                            ASSET PURCHASE AGREEMENT

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

                           Fraser Milner Casgrain LLP
                             1 First Canadian Place
                              100 King Street West
                                Toronto, Ontario
                                     M5X 1B2

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                                TABLE OF CONTENTS

<Table>
<S>      <C>                                                                                       <C>
                                              ARTICLE 1
                                            INTERPRETATION

1.1      Definitions................................................................................2
1.2      Accounting Principles.....................................................................14
1.3      Governing Law; Attornment.................................................................14
1.4      Entire Agreement; Amendment...............................................................14
1.5      Calculation of Time.......................................................................14
1.6      Performance on Holidays...................................................................14
1.7      Waiver of Rights..........................................................................15
1.8      Knowledge.................................................................................15
1.9      Tender....................................................................................15
1.10     Severability..............................................................................15
1.11     Conflict..................................................................................16
1.12     Consents and Approvals....................................................................16
1.13     Remedies Cumulative.......................................................................16
1.14     Additional Rules of Interpretation........................................................16
1.15     Schedules and Exhibits....................................................................17

                                              ARTICLE 2
                                     PURCHASE AND SALE OF ASSETS

2.1      Purchase and Sale.........................................................................18
2.2      Excluded Assets...........................................................................19

                                              ARTICLE 3
                                  PURCHASE PRICE AND RELATED MATTERS

3.1      Amount of Purchase Price..................................................................19
3.2      Preparation of Closing Reports............................................................20
3.2.1    Initial Preparation.......................................................................20
3.2.2    Dispute Settlement........................................................................20
3.3      Payment of Purchase Price.................................................................21
3.3.1    Closing Date Payment......................................................................21
3.3.2    Closing Inventory Payment.................................................................21
3.4      Allocation of Purchase Price..............................................................21
3.5      Transfer Taxes............................................................................21
3.6      Assumption of Certain Obligations and Excluded Liabilities................................22
3.6.1    Assumption of Certain Obligations.........................................................22
3.6.2    Post Closing Adjustments for Certain Post-Closing Conditional Assumed Obligations.........22
3.6.3    No Liabilities............................................................................22
3.7      Permax(R), Alertec(R) and Zanaflex(R) Milestone Payment...................................23
3.7.1    Permax(R) Milestone Payments..............................................................23
3.7.2    Alertec(R) Milestone Payments.............................................................24
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                                                                             ii.

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<S>      <C>                                                                                       <C>
3.7.3    Zanaflex(R) Milestone Payments............................................................24
3.8      Royalty Payments..........................................................................25
3.8.1    Payment of Royalties......................................................................25
3.8.2    Reporting of Royalty Payments.............................................................26
3.8.3    Royalty Payment Records Retention.........................................................26
3.8.4    Termination of Royalty Payments...........................................................26
3.8.5    Minimum Royalty Payment for Hectorol(TM)..................................................27
3.8.6    Additional Royalty Payment for Alertec(R).................................................28
3.9      Royalty Sharing Arrangement...............................................................28
3.10     Eli Lilly Payment.........................................................................28
3.11     Eli Lilly Relief Repayment................................................................28
3.12     Reduction in Milestone Payments...........................................................29

                                              ARTICLE 4
                                    REPRESENTATIONS AND WARRANTIES

4.1      Representations and Warranties of the Vendor..............................................29
4.1.1    Incorporation and Status of the Vendor....................................................29
4.1.2    Authorization of Sale by Vendor...........................................................29
4.1.3    Title to Purchased Assets.................................................................30
4.1.4    Conflicting Instruments...................................................................30
4.1.5    Regulatory Approvals......................................................................30
4.1.6    Books and Records.........................................................................30
4.1.7    Financial Information and Closing Reports.................................................31
4.1.8    No Change.................................................................................31
4.1.9    Front Loading.............................................................................31
4.1.10   Business Carried on in Ordinary Course....................................................31
4.1.11   Non-Arms Length Transactions..............................................................32
4.1.12   Offered Employees.........................................................................33
4.1.13   Employee Benefit Plans....................................................................33
4.1.14   Sufficiency and Condition of Assets.......................................................34
4.1.15   Contracts.................................................................................34
4.1.16   Customers and Suppliers...................................................................34
4.1.17   Legal Proceedings.........................................................................35
4.1.18   Compliance with Applicable Laws...........................................................35
4.1.19   Residence of Vendor; GST and QST Status...................................................35
4.1.20   Inventories...............................................................................35
4.1.21   Intellectual Property.....................................................................36
4.1.22   Product Registrations and Regulatory Status...............................................38
4.1.23   Generic Versions..........................................................................40
4.1.24   Disclosure................................................................................41
4.2      Representations and Warranties of the Purchaser...........................................41
4.2.1    Incorporation, Authority and Enforceability...............................................41
4.2.2    Investment Canada Act.....................................................................41
4.2.3    Residence of Purchaser; GST and QST Status................................................41
4.3      Commission................................................................................42
4.4      Non-Waiver................................................................................42
</Table>

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                                                                            iii.

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<S>      <C>                                                                                       <C>
4.5      Survival of Representations and Warranties of the Vendor..................................42
4.6      Survival of Representations and Warranties of the Purchaser...............................43

                                              ARTICLE 5
                                    OTHER COVENANTS OF THE PARTIES

5.1      Covenants of the Vendor...................................................................43
5.1.1    Customers.................................................................................44
5.1.2    Refunds and Returns.......................................................................44
5.1.3    Retail Sales Tax Certificate..............................................................45
5.1.4    Books and Records and Marketing Materials.................................................45
5.1.5    Option for Levulan........................................................................45
5.1.6    Vendor's Product Liability Insurance......................................................46
5.1.7    Accrued Royalty Payments..................................................................46
5.1.8    Proof of Payment..........................................................................46
5.1.9    Shortage of Hectorol(TM)..................................................................46
5.2      Covenants of the Purchaser................................................................47
5.2.1    Covenant to Promote Products..............................................................47
5.2.2    Covenant to File..........................................................................47
5.2.3    Compliance during COGS Royalty Period.....................................................47
5.2.4    Purchaser's General Liability Insurance...................................................47
5.2.5    Product Monographs........................................................................48
5.2.6    Site Change for Alertec...................................................................48
5.3      Cost Sharing..............................................................................48
5.4      Cooperation...............................................................................49

                                              ARTICLE 6
                                        CONDITIONS OF CLOSING

6.1      Conditions for the Benefit of the Purchaser...............................................49
6.1.1    Legal Opinion.............................................................................49
6.1.2    Regulatory Approvals......................................................................49
6.1.3    No Legal Proceedings......................................................................49
6.1.4    Satisfactory Reports and Opinions on Investigations.......................................50
6.1.5    Closing Documents.........................................................................50
6.1.6    Employees.................................................................................50
6.1.7    Non-Competition Agreement.................................................................50
6.1.8    Transition Services Agreement.............................................................51
6.1.9    Escrow Agreement..........................................................................51
6.1.10   Consents..................................................................................51
6.1.11   Board of Directors Approval...............................................................51
6.2      Conditions for the Benefit of the Vendor..................................................51
6.2.1    Legal Opinion.............................................................................51
6.2.2    Board of Directors Approval...............................................................51
6.2.3    Escrow Agreement..........................................................................51
6.3      Waiver....................................................................................52
6.4      Failure to Satisfy Conditions.............................................................52
</Table>

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                                                                             iv.

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<S>      <C>                                                                                       <C>
                                              ARTICLE 7
                                           INDEMNIFICATION

7.1      Indemnification by Vendor.................................................................52
7.1.1    General Indemnity.........................................................................52
7.1.2    Bulk Sales Indemnity......................................................................54
7.1.3    Allocation of Liability for Individual Claims.............................................55
7.1.4    Allocation of Liability for Class Action Claims...........................................56
7.2      Indemnification by the Purchaser..........................................................57
7.3      Agency for Representatives................................................................57
7.4      Notice of Third Party Claims..............................................................58
7.5      Defence and/or Settlement of Third Party Claims...........................................58
7.6      Assistance for Third Party Claims.........................................................58
7.7      Direct Claims.............................................................................59
7.8      Failure to Give Timely Notice.............................................................59
7.9      Reductions and Subrogation................................................................59
7.10     Tax Effect................................................................................59
7.11     Payment and Interest......................................................................60
7.12     Limitation................................................................................60
7.13     Additional Rules and Procedures...........................................................60
7.14     Liability for Conduct of the Parties......................................................61
7.15     Limitation of Liability...................................................................61

                                              ARTICLE 8
                                            MISCELLANEOUS

8.1      Confidentiality...........................................................................61
8.2      Further Assurances........................................................................62
8.3      Public Announcements......................................................................62
8.4      Notices...................................................................................63
8.5      Time of the Essence.......................................................................64
8.6      Costs and Expenses........................................................................64
8.7      Effect of Closing; No Merger..............................................................64
8.8      Counterparts..............................................................................65
8.9      Assignment................................................................................65
8.10     Parties in Interest.......................................................................65
8.11     Third Parties.............................................................................65
8.12     English Language..........................................................................65
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                 THIS AGREEMENT dated the 22nd day of July, 2003

B E T W E E N :

                              DRAXIS HEALTH INC., a corporation incorporated
                              under the laws of Canada, with its head office at
                              2nd floor, 6870 Goreway Drive, Mississauga,
                              Ontario, L4V 1P1

                                                                  (the "VENDOR")

                              - and -

                              SHIRE BIOCHEM INC., a corporation incorporated
                              under the laws of Canada, with its head office at
                              275 Armand-Frappier Boulevard, Laval, Quebec, H7V
                              4A7

                                                               (the "PURCHASER")

RECITALS:

          1.   The Purchaser is engaged in the marketing, promotion,
distribution and sale of pharmaceutical products in Canada;

          2.   The Vendor is licensed by third parties pursuant to certain
license agreements to use, market, promote and sell certain prescription
pharmaceutical products in Canada through Draxis Pharmaceutica, a division of
the Vendor;

          3.   The Purchaser wishes to purchase from the Vendor and the Vendor
wishes to sell, transfer and assign to the Purchaser the rights of the Vendor to
certain pharmaceutical products pursuant to certain license agreements and
certain related property and assets used by the Vendor in respect of such
pharmaceutical products upon the terms and conditions hereinafter set forth;

          NOW THEREFORE in consideration of the premises and mutual agreements
hereinafter set out and of other consideration (the receipt and sufficiency of
which are acknowledged by each Party), the Parties agree as follows:

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                                                                              2.

                                    ARTICLE 1
                                 INTERPRETATION

1.1       DEFINITIONS

          In this Agreement:

          "ACCOUNTING RECORDS" means all of the Vendor's books of account,
accounting records and other financial data and information relating to the
Products, and includes all records, data and information stored electronically,
digitally or on computer related media;

          "ACCOUNTS RECEIVABLE" means all accounts receivable, trade
receivables, book debts and other debts due or accruing due to the Vendor in
respect of the Products;

          "ADDITIONAL ALERTEC ROYALTY" has the meaning ascribed thereto in
Section 3.8.6;

          "AFFILIATE" means, with respect to any person, any other person that
directly or indirectly controls, is controlled by, or is under common control
with that other person. For purposes of this definition, a person "controls"
another person if that person directly or indirectly possesses the power to
direct or cause the direction of the management and policies of that other
person, whether through ownership of securities, by contract or otherwise and
"controlled by" and "under common control with" have similar meanings;

          "AGREEMENT" means this asset purchase agreement and all Schedules and
Exhibits attached hereto;

          "ALERTEC GENERIC EVENT" has the meaning ascribed thereto in Section
3.7.2;

          "ANDS" means Abbreviated New Drug Submissions filed with Health
Canada;

          "APPLICABLE LAW" means, in respect of any person, property,
transaction or event, any domestic or foreign statute, law (including the common
law), ordinance, rule, interpretation, authorization, permit, regulation,
treaty, restriction, regulatory policy, standard, code, guideline, by-law or
Order that applies in whole or in part to such person, property, transaction or
event;

          "ARTICLES" means, with respect to any body corporate, the original or
restated articles of incorporation, articles of amendment, articles of
amalgamation, articles of arrangement, articles of reorganization, articles of
revival, letters patent, memorandum of agreement, special act or statute and any
other instrument or constating document by or pursuant to which the body
corporate is incorporated or comes into existence;

          "ASSUMED OBLIGATIONS" has the meaning ascribed to that term in Section
3.6.1 and are specifically identified in Schedule 3.6.1;

          "BOOKS AND RECORDS" means the Accounting Records from January 1, 2001,
and all books, records, books of account, sales and purchase records, data
packages, marketing materials, lists of suppliers and customers, credit and
pricing information, inventory data and

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                                                                              3.

accounts receivable data, quality assurance and quality control reports,
consulting reports and research and development information relating to the
Products and all other documents, files, records, correspondence;

          "BULK SALES LEGISLATION" means the BULK SALES ACT (Ontario) and
legislation of any other jurisdiction having similar import;

          "BUSINESS" means the Vendor's business in respect of the use,
marketing, promotion, distribution and sale of the Products;

          "BUSINESS DAY" means a day other than a Saturday, Sunday or any other
day on which the principal chartered banks located in the City of Montreal or in
the City of Toronto are not open for the transaction of domestic business during
normal banking hours;

          "CLAIM" means any act, omission or state of facts, and any Legal
Proceeding, Third Party Claim, Direct Claim, assessment, judgment, settlement or
compromise relating thereto (whether with or by a Party or a third person),
which may give rise to a right to indemnification under Sections 7.1 or 7.2;

          "CLASS ACTION DAMAGES AWARD" has the meaning ascribed thereto in
Section 7.1.4;

          "CLOSING" means the completion of the sale to and purchase by the
Purchaser of the Purchased Assets and the completion of all other transactions
contemplated by this Agreement that are to occur contemporaneously therewith;

          "CLOSING ACCOUNTS RECEIVABLE REPORT" means the unaudited Accounts
Receivable aging list as of the Closing Date in respect of the Products prepared
in accordance with generally accepted accounting principles, consistently
applied;

          "CLOSING DATE" means the date of this Agreement;

          "CLOSING DATE PAYMENT" has the meaning ascribed thereto in Section
3.3.1;

          "CLOSING DOCUMENT" means any document or instrument delivered prior
to, at or subsequent to the Closing as provided in or pursuant to this Agreement
or the Contracts;

          "CLOSING INVENTORY PAYMENT" means the book value of the Inventories as
of 12:01 a.m. on the Closing Date as determined in accordance with Section 3.2;

          "CLOSING INVENTORY REPORT" means the report of the book value of the
Inventories as of 12:01 a.m. on the Closing Date prepared in accordance with
generally accepted accounting principles, consistently applied;

          "CLOSING PROFIT AND LOSS STATEMENT" means the unaudited profit and
loss statement of the Vendor relating to the Business for the period between
January 1, 2003 and the Closing Date, prepared in accordance with generally
accepted accounting principles, consistently applied;

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                                                                              4.

          "CLOSING REPORTS" means: (i) the Closing Profit and Loss Statement;
(ii) the Closing Inventory Report; and (iii) the Closing Accounts Receivable
Report;

          "CLOSING TIME" means 9:00 a.m. Toronto time on the Closing Date or
such other time on the Closing Date as the Parties agree that the Closing shall
take place;

          "COGS ROYALTY PERIOD" has the meaning ascribed thereto in Section
3.8.1;

          "COLLECTIVE AGREEMENT" means any collective agreement, letter of
understanding, letter of intent or other written communication with any labour
union or employee association that governs the terms and conditions of
employment of any of the Offered Employees;

          "COMMERCIALLY REASONABLE EFFORTS" means reasonable efforts and
resources at least equal to those normally used by an ethical pharmaceutical
company under similar circumstances as those affecting the Purchaser in Canada
for a compound, formulation or product owned by it or to which it has rights,
which has a similar market potential at a similar state in its product life to
the Product, taking into account the formulations for the Product, the
manufacture of the Product, the competitiveness of the marketplace of the
Product, the proprietary positions held in respect of the Product and any
infringement or threat of infringement thereof, the applicable regulatory
structures and requirements applicable to the Product, the clinical and
pre-clinical study results pertaining to the Product, time and cost of
completion of development of the Product, the actual and anticipated market
penetration of the Product, the profitability of the Product, the size and
location of the subject market for the Product within Canada and any other
relevant factors, as would be determined by an experienced Canadian
pharmaceutical marketing professional, under similar circumstances as those
affecting the Purchaser, in its reasonable discretion;

          "CONSENT" means any consent, approval, permit, amendment, restatement,
waiver, ruling, exemption, or acknowledgement, on terms that are satisfactory to
the Purchaser, including:

          (a)  any that should have been obtained in respect of any contracts
               related to the Products for a previous transaction, event or
               occurrence for which the consent of any other person(s)
               (including any previous licensors) was required; and

          (b)  any that:

               (i)    is required from any person (other than the Vendor) under
                      the terms of any Contract issued to or for the benefit of
                      the Vendor; or

               (ii)   is requested by the Purchaser; or

               (iii)  is required by the other party(ies) to the Contract as a
                      condition of their consent and approval;

               in connection with the sale, assignment and transfer of the
               Purchased

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                                                                              5.

               Assets to the Purchaser and the completion of the other
               transactions contemplated herein or which is otherwise necessary
               to permit the Parties to perform their obligations as
               contemplated (including, the right of the Purchaser to enjoy all
               rights and benefits under the Contracts after Closing in the same
               manner as was enjoyed by the Vendor prior to Closing, subject to
               any amendments, restatements, waivers, rulings, exemptions or
               acknowledgement);

          "CONTRACTS" means those contracts, agreements, instruments and other
legally binding commitments or arrangements, written or oral, in respect of the
Business as identified in Schedule 4.1.15 and including any amendments or
restatements thereof;

          "COST OF GOODS" means the Purchaser's cost of raw materials, work in
process and finished goods and all royalties payable to third parties and the
Vendor in respect of each of Hectorol(TM), Diastat(R), Zanaflex(R), Permax(R)
and Alertec(R), but shall not include any increase in the royalties paid to the
licensors of the Products which occur after the Closing and which royalties are
for the sole benefit of such licensors;

          "DEFENDING PARTY" has the meaning ascribed thereto in Section 7.6;

          "DIN" means a drug identification number issued by TPD;

          "DIRECT CLAIM" means any Claim asserted against an Indemnitor by an
Indemnitee which does not result from a Third Party Claim;

          "ELAN TRANSACTION" has the meaning ascribed to that term in Section
4.1.24 and is specifically described in Schedule 4.1.24;

          "ELI LILLY AGREEMENT" means the License and Supply Agreement dated May
8, 1998 between the Vendor and Eli Lilly Canada Inc.;

          "ELI LILLY INTEREST AMOUNT" has the meaning ascribed to that term in
Section 3.1(d);

          "ELI LILLY PAYMENT" means the total amount of all contingent and fixed
licence payments from and after the Closing Date payable to Eli Lilly Canada
Inc. under the Eli Lilly Agreement, as specifically related to Permax(R) as
amended by the Consent and Amendment Agreement dated July 21, 2003 between Eli
Lilly Canada Inc., the Purchaser and the Vendor;

          "EMPLOYEE" means an individual who is actively employed by the Vendor
in the Business;

          "EMPLOYEE BENEFIT PLANS" means all compensation, bonus, deferred
compensation, incentive compensation, share purchase, share appreciation, share
option, severance or termination pay, vacation pay, hospitalization or other
medical, health and welfare benefits, life or other insurance, dental,
disability, salary continuation, supplemental unemployment benefits,
profit-sharing, mortgage assistance, employee loan, employee discount, employee
assistance, pension, retirement or supplemental retirement benefit plan,
arrangement or

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                                                                              6.

agreement, including any defined benefit or defined contribution pension plan
and any group registered retirement savings plan, and any other similar employee
benefit plan, arrangement or agreement, whether oral or written, formal or
informal, funded or unfunded, including policies with respect to holidays, sick
leave, vacations, expense reimbursements and automobile allowances and rights to
company-provided automobiles, that are sponsored or maintained or contributed to
or required to be contributed to, by the Vendor for the benefit of any of the
Offered Employees, whether or not insured and whether or not subject to any
Applicable Law, except that the term "EMPLOYEE BENEFIT PLANS" shall not include
any statutory plans with which the Vendor is required to comply, including the
Canada/Quebec Pension Plan or plans administered pursuant to applicable
provincial health tax, workers' compensation, workers' safety and insurance and
employment insurance legislation;

          "ENCUMBRANCE" means any mortgage, charge, easement, encroachment,
lien, adverse claim, restrictive covenant, assignment by way of security,
security interest of any nature, servitude, pledge, hypothecation, security
agreement, title retention agreement, right of occupation, option or privilege
or any agreement to create any of the foregoing;

          "ESCROW AGENT" means Fraser Milner Casgrain LLP;

          "ESCROW AGREEMENT" means the escrow agreement in the form
substantially attached hereto as Exhibit C;

          "ESCROW AMOUNT" means the amount held pursuant to the Escrow
Agreement;

          "EXCLUDED ASSETS" has the meaning ascribed thereto in Section 2.2;

          "FINANCIAL INFORMATION" means the financial information of the Vendor
relating to the Business as attached hereto in Schedule 4.1.7;

          "FIRST PARTY" has the meaning ascribed thereto in Section 6.4;

          "GENERIC EVENT" means, after the occurrence of a NOC Event in respect
of a Product, [ * ] or more of the Net Sales of the applicable Product in any
month when compared to the Reference Period for such Product;

          "GOVERNMENTAL AUTHORITY" means any domestic or foreign government,
whether federal, provincial, state, territorial or municipal; and any
governmental agency, ministry, department, Tribunal, commission, bureau, board
or other instrumentality exercising or purporting to exercise legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government, including the Health Protection Branch of Health Canada, TPD and
PMPRB;

          "GST" means taxes, interest, penalties and fines imposed under Part IX
of the EXCISE TAX ACT (Canada) and the regulations made thereunder; and "GST
LEGISLATION" means such act and regulations collectively;

          "HECTOROL LAUNCH DATE" has the meaning ascribed thereto in Section
3.8.5;

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                              7.

          "HECTOROL ROYALTY DATE" has the meaning ascribed thereto in Section
3.8.5;

          "IMPROVEMENTS" means improvements to the extent the Vendor has such
rights at Closing pursuant to the terms of the applicable Contracts related to
the Products, modifications, additions to any Product, whether patented or
unpatented, including formulations, isomers, salts, polymorphs, metabolites,
line extensions, combinations, compositions and presentations of such active
agents, whether or not marketed under the names of the Products, and new
medications, new additional dosage forms or strengths, new oral and non-oral
formulations, generic versions, new/additional drug delivery systems, pro-drugs,
analogues or process improvements;

          "INCOME TAX ACT" means, collectively, the INCOME TAX ACT, R.S.C. 1985,
5th Supplement, the Income Tax Application Rules, R.S.C. 1985, 5th Supplement,
and the Income Tax Regulations, in each case as amended to the date hereof and,
where a reference is made to a provision under the INCOME TAX ACT, it shall be
deemed to include, where applicable, any Notice of Ways and Means Motion, any
Bill tabled in the House of Commons or any press release or publicly
disseminated statement by or on behalf of the Minister of Finance which may
result in an amendment to the INCOME TAX ACT;

          "INDEMNITEE" means any Party and its Representatives entitled to
indemnification under this Agreement;

          "INDEMNITOR" means any Party obligated to provide indemnification
under this Agreement;

          "INDEMNITY PAYMENT" means any amount of a Loss required to be paid
pursuant to Sections 7.1 or 7.2;

          "INDEPENDENT ACCOUNTANT" has the meaning ascribed thereto in Section
3.2.2;

          "INDIVIDUAL DAMAGES AWARD" has the meaning ascribed thereto in Section
7.1.3;

          "INTELLECTUAL PROPERTY RIGHTS" means:

          (a)  any and all proprietary rights in any jurisdiction in which the
               Vendor has rights provided under:

               (i)    patent law;

               (ii)   copyright law;

               (iii)  trademark law;

               (iv)   design patent or industrial design law;

               (v)    semiconductor chip or mask work law;

               (vi)   trade secret law; or

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                                                                              8.

               (vii)  any other statutory provision or common law principle
                      applicable to rights to intellectual property which may
                      provide a right in either:

                      A.   ideas, formulae, algorithms, concepts, inventions,
                           technologies, software, data compilations, drawings,
                           specifications, confidential business information,
                           procedures or know-how generally, including without
                           limitation, trade secret; or

                      B.   the expression or use of such ideas, formulae,
                           algorithms, concepts, inventions technologies,
                           software, data compilations, drawings,
                           specifications, confidential business information,
                           procedures or know-how; and

          (b)  any and all applications, registrations, licenses, sub-licenses,
               franchises, agreements or any other evidence of a right in any of
               the foregoing;

          "INTERESTED PERSON" means any present or former officer, director,
shareholder or employee, of the Vendor or any other person with which the Vendor
or any of the foregoing does not deal at arm's length within the meaning of the
INCOME TAX ACT;

          "INVENTORIES" means all inventories of every kind and nature and
wheresoever situate used in or produced by the Business in respect of the
Products, including all finished goods, work in process, raw materials, goods in
transit, new and unused production and shipping supplies and all other materials
and supplies on hand but excluding inventories that are no longer saleable or
usable or inventories that are obsolete or slow-moving;

          "LEGAL PROCEEDING" means any actual or threatened litigation, action,
suit, investigation, hearing, claim, complaint, grievance, inquiry, assessment
with respect to fines or penalties, arbitration, administrative proceeding,
criminal proceeding or other proceeding and includes any appeal or review and
any application for same;

          "LEVULAN" means LEVULAN(R) KERASTICK(R) (5-amino-levulinic acid
hydrochloride);

          "LEVULAN LICENSE AGREEMENT" has the meaning ascribed to that term in
Section 5.1.5;

          "LICENCE" means any licence, permit, approval, authorization,
certificate, directive, order, variance, registration, right, privilege,
concession or franchise issued, granted, conferred or otherwise created by any
Governmental Authority;

          "LICENSED I.P." has the meaning ascribed to that term in Section
4.1.21(a);

          "LOSS" means any and all loss, liability, damage, cost, expense,
charge, fine, penalty or assessment, including any royalty payments, resulting
from or arising out of any Claim, including the costs and expenses of any Legal
Proceeding, assessment, judgment,

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                                                                              9.

settlement or compromise relating thereto and all interest, punitive damages,
fines and penalties and reasonable legal fees and expenses incurred in
connection therewith, including loss of profits and consequential damages;

          "MARKETING MATERIALS" means all usable and merchantable inventories of
label artwork, advertising and promotional materials relating to the Products,
including tangible and intangible advertising and promotional materials;

          "NDS" means New Drug Submissions filed with Health Canada as
identified in Schedule 4.1.22;

          "NET SALES" means the total gross sales (number of units shipped times
the invoiced price per unit) to third persons representing sales invoiced by the
Purchaser of the Product(s), less deductions for the following to the extent
actually paid or allowed:

          (a)  sales and excise taxes and duties (including import duties) paid
               or allowed by a selling party and any other governmental charges
               imposed upon the manufacture or sale of a Product;

          (b)  normal and customary trade, quantity and cash discounts (up to
               the normal and customary discount in Canada for early payment of
               invoices) and rebates, charge-backs and administrative fees
               (including rebates to social and welfare systems);

          (c)  allowances, charge-backs and credits to third persons on account
               of rejected, damaged, outdated, returned, withdrawn or recalled
               Product or on account of retroactive price reductions affecting a
               Product;

          (d)  amounts due to third persons on account of rebate payments; and

          (e)  transport, freight, insurance, handling and distribution
               transportation charges and insurance through the whole
               distribution pipeline (e.g., from the Purchaser through to a
               customer).

          In addition, the Purchaser shall be entitled to deduct from Net Sales
any receivables that are deemed to be uncollectible according to the Purchaser's
internal accounting principles consistently applied ("UNCOLLECTIBLE
RECEIVABLES"). Such bad debt deduction shall be applied to Net Sales in the
period in which such receivables are written off and shall be exclusive of any
bad debt or uncollectible receivables of either Party unrelated to the Product.
To the extent that the Purchaser collects any of the Uncollectible Receivables,
such amount shall be added to Net Sales according to the Purchaser's internal
accounting principles in the period in which such Uncollectible Receivables are
collected.

          Sales between or among the Purchaser and its Affiliates shall be
excluded from the computation of Net Sales, but Net Sales shall include the
first sales to third parties by any such Affiliates. The supply of Product as
commercial samples (in quantities customary within the pharmaceutical industry)
or for use in clinical studies shall not be included within the computation of
Net Sales. Where (i) the consideration for Product shall include any non-cash

<Page>

                                                                             10.

element; or (ii) Product shall be transferred to the Purchaser in any manner
other than an invoiced sale, the Net Sales applicable to any such transaction
shall be deemed to be the Purchaser's average Net Sales for the applicable
quantity for the period in question;

          "NOC" means a Notice of Compliance from TPD;

          "NOC EVENT" means the date on which regulatory approval for any
generic version of a Product has been granted or issued to an arm's length third
party with no direct relationship to the Purchaser, including without limitation
an NOC and/or DIN;

          "NON-COMPETITION AGREEMENT" means the non-competition agreement in the
form substantially attached hereto as Exhibit E;

          "NON-FULFILLMENT EVENT" has the meaning ascribed thereto in Section
5.2.1;

          "NOTICE OF ALLEGATION" means an allegation made pursuant to the
Patented Medicines (Notice of Compliance) Regulations;

          "OFFERED EMPLOYEE" means an Employee who accepts an offer of
employment made by the Purchaser;

          "ORDER" means any order, directive, judgment, decree, award or writ of
any Tribunal;

          "OVERAGE" has the meaning ascribed thereto in Section 3.8.1;

          "OWNED I.P." has the meaning ascribed thereto in Section 4.1.21(a);

          "PARTIES" means the Vendor and the Purchaser and "PARTY" means either
one of them;

          "PERMAX GENERIC EVENT" has the meaning ascribed thereto in Section
3.7.1;

          "PMPRB" means the Patented Medicines Prices Review Board as
constituted under the PATENT ACT (Canada);

          "POST NOC EVENT" means a reduction of up to [ * ] of Net Sales of the
applicable Product in any month after the occurrence of a NOC Event when
compared to the Reference Period;

          "PRIME RATE" for any day means the rate of interest expressed as a
rate per annum that the Royal Bank of Canada establishes at its office in
Montreal, Quebec as the reference rate of interest that it will charge on that
day for Canadian dollar demand loans to its customers in Canada and which it at
present refers to as its prime rate;

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             11.

          "PRODUCTS" means the following: PERMAX(R) (pergolide mesylate);
ZANAFLEX(R) (tizanidine hydrochloride); DIASTAT(R) (diazepam rectal gel);
ALERTEC(R) (modafinil); and HECTOROL(TM) (1 (TO THE POWER OF alpha) -
hydroxyvitamin d SUB(2)); and, in each case:

          (a)  any and all Product Registrations therefor and any and all
               documentation in support of the Product Registration; and

          (b)  any and all Improvements thereto;

and "PRODUCT" means any one of them;

          "PRODUCT REGISTRATION" means the following (including both hard copies
and electronic copies), with respect to each of the Products:

          (a)  all NDS set forth on Schedule 4.1.22 and any and all supplements,
               amendments, annual reports and regulatory files relating thereto,
               including any and all regulatory filings (including any
               registrations and licenses, all DINs, regulatory drug lists and
               correspondence, and Governmental Authority and the Vendor's
               minutes of meetings and telephone conferences), Licences and
               supporting documents, annual reports, validation data,
               pre-clinical and clinical studies and tests related to the
               Products and any Improvements thereto, and all audit reports of
               clinical studies, all investigational new drug applications and
               amendments, supplements, annual reports and safety reports
               associated therewith, any ANDS, all drug master files, Health
               Canada approvals for export, all documents relating to any
               clinical studies for indications whether or not approval has been
               granted to such indications by Health Canada;

          (b)  all other regulatory information, including records maintained
               under current good manufacturing practices or other record
               keeping or reporting requirements of Health Canada or any other
               Governmental Authority, including all submissions, correspondence
               and communications with Governmental Authorities in connection
               with the Products (including any advertising and promotion
               documents and similar forms), all documents relating to recalls
               or market withdrawals of any of the Products, copies of all
               promotional materials distributed, copies of all scientific or
               technical materials regarding any of the Products, "Adverse
               Event" and similar files, health hazard evaluations, complaint
               files, manufacturing records (including standard operating
               procedures), laboratory notebooks, and manufacturing audit
               reports of the Vendor and third party manufacturers; as well as
               any foreign (non-Canadian) equivalents of any of the foregoing
               and any internal memoranda and documents relating to any of the
               above to the extent to which the Vendor has the right to such
               information pursuant to the provisions of the applicable
               Contracts related to the Products;

          "PURCHASE PRICE" means the price payable by the Purchaser to the
Vendor for the Purchased Assets provided for in Section 3.1;

<Page>

                                                                             12.

          "PURCHASED ASSETS" has the meaning ascribed thereto in Section 2.1;

          "QST" means taxes, interest, penalties and fines imposed under the ACT
RESPECTING THE QUEBEC SALES TAX and the regulations thereunder; and "QST
LEGISLATION" means such act and regulations collectively;

          "REFERENCE PERIOD" means the average monthly Net Sales of the
applicable Product for the four (4) month period immediately preceding the month
in which a NOC Event occurs in respect of such Product;

          "REGULATORY APPROVAL" means any approval, consent, ruling,
authorization, permit or acknowledgement that may be required from any person by
Applicable Law, the terms of any Licence or the conditions of any Order or
otherwise which is required in connection with the sale of the Purchased Assets
to the Purchaser and the completion of the other transactions contemplated
herein or which is otherwise necessary to permit the Parties to perform their
obligations as contemplated herein;

          "RELIEVED AMOUNT" has the meaning ascribed thereto in Section 3.11;

          "REPRESENTATIVE" means, in respect of an Indemnitee, each director,
officer, employee, agent, solicitor, accountant, professional advisor and other
representative of that Indemnitee;

          "ROYALTY PAYMENT" has the meaning ascribed thereto in Section 3.8.1;

          "ROYALTY PRODUCTS" has the meaning ascribed thereto in Section 3.8.1;

          "SNDS" means a Supplementary New Drug Submission filed with Health
Canada;

          "TAX LEGISLATION" means, collectively, the INCOME TAX ACT, QST
Legislation, GST Legislation and all federal, provincial, territorial,
municipal, foreign, or other statutes imposing a tax, including all treaties,
conventions, case law, interpretation bulletins, circulars and releases, rules,
regulations, orders, and decrees of any jurisdiction;

          "TAX RETURNS" means all reports, elections, returns, and other
documents required to be filed under the provisions of any Tax Legislation and
any tax forms required to be filed, whether in connection with a Tax Return or
not, under any provisions of any applicable Tax Legislation;

          "TAX" OR "TAXES" means all taxes, assessments, charges, dues, duties,
rates, fees, imposts, levies and similar charges of any kind lawfully levied,
assessed or imposed by any Governmental Authority under any applicable Tax
Legislation, including, Canadian federal, provincial, territorial, municipal and
local, foreign or other income, capital, goods and services, sales, use,
consumption, excise, value-added, business, real property, personal property,
transfer, franchise, withholding, payroll, or employer health taxes, customs,
import, anti-dumping or countervailing duties, Canada Pension Plan
contributions, employment insurance premiums, and

<Page>

                                                                             13.

provincial workers' compensation payments, including any interest, penalties and
fines associated therewith;

          "THIRD PARTY" has the meaning ascribed thereto in Section 7.13(a);

          "THIRD PARTY CLAIM" means any Claim asserted against an Indemnitee
that is paid or payable to, or claimed by, any person who is not a Party;

          "TRANSITIONAL SERVICES AGREEMENT" means the transitional services
agreement in the form substantially attached hereto as Exhibit D;

          "TPD" means the Therapeutic Product Directorate of Health Canada;

          "TRIBUNAL" means any court (including a court of equity), arbitrator
or arbitration panel and any other Governmental Authority, stock exchange,
professional or business organization or association or other body exercising
adjudicative, regulatory, judicial or quasi-judicial powers;

          "UNSOLD INVENTORY" has the meaning ascribed thereto in Section 5.1.9;

          "VENDOR'S INTELLECTUAL PROPERTY" means all Intellectual Property
Rights owned, used under consent, in-licensed or controlled, in whole or in
part, by the Vendor that is required by the Vendor for the carrying on by the
Vendor of the Business, or that is necessary or useful for the manufacture, use,
marketing, promotion, distribution and sale of the Products including;

          (a)  all trade-marks, trade names, designs, graphics, slogans, logos,
               service marks, brand names, internet domain names and
               registrations and other commercial symbols and all applications
               therefor;

          (b)  all patents (including divisions, reissues, renewals,
               re-examinations, continuations, continuations in part and
               extensions) and all applications therefor;

          (c)  all copyrights, industrial designs and other industrial property
               rights and all applications therefor; and

          (d)  all know-how, trade secrets, including Product specifications,
               Product designs, planned research and development, current and
               planned research and distribution methodologies and processes,
               customer lists, current and anticipated customer requirements,
               market studies, recipes, composition of ingredients, ideas,
               concepts, component specifications, test methods, pre-clinical,
               clinical and toxicology and stability data, validation data of
               analytical methods, business methodologies and processes,
               confidential information and any licensed property or technology;

and including those set forth in Schedule 4.1.21;

          "VENDOR'S PERSONNEL" has the meaning ascribed thereto in Section 1.8;
and

<Page>

                                                                             14.

          "ZANAFLEX GENERIC EVENT" has the meaning ascribed in Section 3.7.3.

1.2       ACCOUNTING PRINCIPLES

          Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be to the generally
accepted accounting principles from time to time approved by the Canadian
Institute of Chartered Accountants, or any successor entity thereto, applicable
as at the date on which any calculation or determination is required to be made
in accordance with generally accepted accounting principles, applied
consistently.

1.3       GOVERNING LAW; ATTORNMENT

          This Agreement shall be construed, interpreted and enforced in
accordance with, and the rights of the Parties shall be governed by, the laws of
the Province of Ontario and the laws of Canada applicable therein (excluding any
conflict of law rule or principle of such laws that might refer such
interpretation or enforcement to the laws of another jurisdiction). Each Party
irrevocably submits to the non-exclusive jurisdiction of the courts of the
Province of Ontario with respect to any matter arising hereunder or relating
hereto.

1.4       ENTIRE AGREEMENT; AMENDMENT

          This Agreement, together with all agreements contemplated or executed
in connection with this Agreement, constitute the entire agreement between the
Parties with respect to the transactions herein contemplated and cancels and
supersedes any prior understandings, agreements, negotiations and discussions,
written or oral, between the Parties with respect thereto including the letter
of intent between the Parties dated April 15, 2003. There are no
representations, warranties, terms, conditions, undertakings or collateral
agreements or understandings, express or implied, between the Parties other than
those expressly set forth in this Agreement or in any Closing Document. This
Agreement may not be amended, supplemented or otherwise modified in any respect
except by written instrument executed by the Parties.

1.5       CALCULATION OF TIME

          In this Agreement, a period of days shall be deemed to begin on the
first day after the event which began the period and to end at 5:00 p.m.
(Toronto time) on the last day of the period. If any period of time is to expire
hereunder on any day that is not a Business Day, the period shall be deemed to
expire at 5:00 p.m. (Toronto time) on the next succeeding Business Day.

1.6       PERFORMANCE ON HOLIDAYS

          If any act (including the giving of notice) is otherwise required by
the terms hereof to be performed on a day which is not a Business Day, such act
shall be valid if performed on the next succeeding Business Day.

<Page>

                                                                             15.

1.7       WAIVER OF RIGHTS

          Any waiver of, or consent to depart from, the requirements of any
provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.

1.8       KNOWLEDGE

          Where any representation, warranty or other statement in this
Agreement is expressed to be made by the Vendor to its knowledge or is otherwise
expressed to be limited in scope to matters known to the Vendor or of which the
Vendor is aware, it shall mean such knowledge after due inquiry and
investigation as is actually known to the:

          (a)  directors, except for Mr. Leslie Dan;

          (b)  officers;

          (c)  management personnel or persons performing similar functions for
               the Vendor;

          (d)  other persons with primary or supervising responsibility for the
               Business, or part thereof; or

          (e)  persons with involvement with the Business relating to quality
               control and quality assurance;

          (collectively the "VENDOR'S PERSONNEL")

who have overall responsibility for or knowledge of the matters relevant to such
statement and the Vendor hereby confirms that it has made appropriate inquiries
of all such Vendor's Personnel.

1.9       TENDER

          Any tender of documents or money hereunder may be made upon the
Parties or their respective counsel and money shall be tendered by wire transfer
or electronic funds transfer in Canadian funds.

1.10      SEVERABILITY

          Any provision in this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

<Page>

                                                                             16.

1.11      CONFLICT

          In the event of any conflict or inconsistency between the terms and
conditions in the body of this Agreement and those in any Schedule (including
any agreement entered into pursuant to this Agreement), the terms and conditions
in the body of this Agreement shall govern and take precedence and the Parties
shall take such steps as may be required or desirable to conform the conflicting
or inconsistent provisions thereof to this Agreement.

1.12      CONSENTS AND APPROVALS

          Unless otherwise specified, where the consent or approval of a Party
is contemplated or required by the terms of this Agreement, that Party shall not
unreasonably delay or withhold the giving of such consent or approval after a
request therefor has been made by the other Party.

1.13      REMEDIES CUMULATIVE

          The rights, remedies, powers and privileges herein provided to a Party
are cumulative and in addition to and not exclusive of or in substitution for
any rights, remedies, powers and privileges otherwise available to that Party.

1.14      ADDITIONAL RULES OF INTERPRETATION

          (a)  In this Agreement, unless the context requires otherwise, words
               in one gender include all genders and words in the singular
               include the plural and vice versa.

          (b)  The division of this Agreement into Articles, Sections, Schedules
               and other subdivisions, the inclusion of headings and the
               provision of a table of contents are for convenience of reference
               only and shall not affect the construction or interpretation of
               this Agreement. The headings in the Agreement are not intended to
               be full or precise descriptions of the text to which they refer.

          (c)  Unless something in the subject matter or context is inconsistent
               therewith, references herein to an Article, Section, paragraph,
               clause or Schedule are to the applicable article, section,
               subsection, paragraph, clause or schedule of this Agreement.

          (d)  Wherever the words "include", "includes" or "including" are used
               in this Agreement or in any Closing Document, they shall be
               deemed to be followed by the words "without limitation" and the
               words following "include", "includes" or "including" shall not be
               considered to set forth an exhaustive list.

          (e)  The words "hereof", "herein", "hereto", "hereunder", "hereby" and
               similar expressions shall be construed as referring to this
               Agreement in its entirety and not to any particular section or
               portion of it.

<Page>

                                                                             17.

          (f)  Unless otherwise specified, all dollar amounts in this Agreement,
               including the symbol "$", refer to Canadian currency.

          (g)  Unless otherwise indicated, all references in this Agreement to
               any statute include the regulations thereunder and all applicable
               guidelines, bulletins or policies made in connection therewith
               and which are legally binding, in each case as amended,
               re-enacted, consolidated or replaced from time to time and in the
               case of any such amendment, re-enactment, consolidation or
               replacement, reference herein to a particular provision shall be
               read as referring to such amended, re-enacted, consolidated or
               replaced provision.

          (h)  All references herein to any agreement (including this
               Agreement), document or instrument mean such agreement, document
               or instrument as amended, supplemented, modified, varied,
               restated or replaced from time to time in accordance with the
               terms thereof and, unless otherwise specified therein, includes
               all schedules and exhibits attached thereto.

          (i)  Unless the context otherwise requires, references in this
               Agreement to a "person" are to be broadly interpreted and shall
               include an individual (whether acting as an executor,
               administrator, legal representative or otherwise), body
               corporate, unlimited liability company, partnership, limited
               liability partnership, joint venture, trust, unincorporated
               association, unincorporated syndicate, any Governmental Authority
               and any other legal or business entity.

          (j)  The term "ordinary course", when used in relation to the conduct
               by the Vendor of the Business, or the conduct of business by any
               other person, means any transaction which constitutes an ordinary
               day-to-day business activity, conducted in a commercially
               reasonable and businesslike manner, having no unusual or special
               features, and, in the case of the Business, consistent with past
               practice and, in the case of any other person, being such as a
               person of similar nature and size and engaged in a similar
               business might reasonably be expected to carry out from time to
               time.

          (k)  Unless otherwise defined herein, words or abbreviations which
               have well-known trade meanings are used herein with those
               meanings.

1.15      SCHEDULES AND EXHIBITS

          The following are the Schedules and Exhibits attached to and
incorporated in this Agreement by reference and deemed to be a part hereof:

Schedule 2.1          Purchased Assets

Schedule 2.2          Excluded Assets

Schedule 3.1          Eli Lilly Interest Amount Calculation

<Page>

                                                                             18.

Schedule 3.6.1        Assumed Obligations

Schedule 3.6.2        Post-Closing Conditional Assumed Obligations

Schedule 4.1.5        Regulatory Approvals

Schedule 4.1.7        Financial Information

Schedule 4.1.11       Non-Arms Length Contracts

Schedule 4.1.12       Offered Employees

Schedule 4.1.13       Employee Benefit Plans

Schedule 4.1.15       Contracts

Schedule 4.1.16       Warranties and Other Obligations in favour of Customers

Schedule 4.1.17       Legal Proceedings

Schedule 4.1.21       Owned I.P. and Licensed I.P.

Schedule 4.1.22       Product Registrations, Regulatory Status and Quality
                      Assurance/Quality Control Audits

Schedule 4.1.23       Generic Versions Disclosure

Schedule 4.1.24       Description of Elan Transaction

Exhibit A     -       Opinion of Counsel to the Vendor

Exhibit B     -       Opinion of Counsel to the Purchaser

Exhibit C     -       Form of Escrow Agreement

Exhibit D     -       Form of Transitional Services Agreement

Exhibit E     -       Form of Non-Competition Agreement

                                    ARTICLE 2
                           PURCHASE AND SALE OF ASSETS

2.1       PURCHASE AND SALE

          Subject to the terms and conditions of this Agreement, the Vendor
agrees to sell, transfer and assign to the Purchaser and the Purchaser agrees to
purchase from the Vendor all of the Vendor's right, title and interest in, under
and to the Products, and certain of the property and assets directly related
thereto (other than the Excluded Assets), all as identified in Schedule 2.1
(collectively, the "PURCHASED ASSETS") and which can be classified as follows:

<Page>

                                                                             19.

          (a)  the Contracts;

          (b)  the Inventories;

          (c)  the Vendor's Intellectual Property; and

          (d)  the goodwill of the Business related to the Products.

2.2       EXCLUDED ASSETS

          Notwithstanding anything to the contrary in Section 2.1 or elsewhere
in this Agreement, the Purchased Assets shall not include any assets of the
Vendor that are not specifically listed in Schedule 2.1. Schedule 2.2 identifies
all of the assets of the Vendor used by the Vendor in the conduct of the
Business, except for the Purchased Assets. The assets identified in Schedule 2.2
shall be considered the "EXCLUDED ASSETS".

                                    ARTICLE 3
                       PURCHASE PRICE AND RELATED MATTERS

3.1       AMOUNT OF PURCHASE PRICE

          The aggregate price payable by the Purchaser to the Vendor for the
Purchased Assets (the "PURCHASE PRICE") is the sum of:

          (a)  $13,500,000.00; plus

          (b)  the Closing Inventory Payment; plus

          (c)  [ * ] related to the reimbursement of a payment made by the
               Vendor to Eli Lilly Canada Inc. on June 30, 2003 in respect of
               the Eli Lilly Agreement; and less

          (d)  the accrued unpaid interest on the Eli Lilly Payment up to, but
               not including, the Closing Date (the "ELI LILLY INTEREST AMOUNT")
               (being the accrued unpaid interest owing to Eli Lilly Canada Inc.
               calculated in accordance with the terms of the Eli Lilly
               Agreement, as amended by the Consent and Amendment Agreement
               ("Consent and Amendment Agreement") dated July 21, 2003 between
               Eli Lilly Canada Inc., the Purchaser and the Vendor, as more
               particularly described in Schedule 3.1). If there is an
               inconsistency between: (i) the Eli Lilly Agreement as amended by
               the Consent and Amendment Agreement; and (ii) the calculation in
               Schedule 3.1; then the Eli Lilly Agreement as amended by the
               Consent and Amendment Agreement, shall prevail.

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             20.

3.2       PREPARATION OF CLOSING REPORTS

3.2.1     INITIAL PREPARATION

          Promptly after the Closing Time, the Vendor shall prepare, at the
Vendor's expense and in accordance with generally accepted accounting
principles, consistently applied, the Closing Reports as at 12:01 a.m. on the
Closing Date and a calculation of the book value of the Inventories at that
time. A draft of the Closing Reports shall be delivered to the Purchaser no
later than one (1) Business Day following the Closing Date. The Purchaser may,
immediately after the Closing, proceed to conduct an inventory count of the
Inventories along with other procedures used in the verification of the draft
Closing Inventory Report. The Purchaser shall permit representatives of the
Vendor to be present at the inventory count and shall provide such
representatives promptly with copies of all working papers created in connection
with such verification. If the Purchaser does not give a notice of disagreement
in accordance with Section 3.2.2, the Purchaser shall be deemed to have accepted
the draft Closing Inventory Report, which shall be final and binding on the
Parties and the draft calculation of the Closing Inventory Report shall
constitute the book value of the Inventories for the purposes of this Agreement
immediately following the expiry date for the giving of such notice of
disagreement.

3.2.2     DISPUTE SETTLEMENT

          If the Purchaser disagrees with the calculation of the draft Closing
Inventory Report prepared pursuant to Section 3.2.1, it shall give notice to the
Vendor of such disagreement, whether oral or written (which shall be deemed to
be received immediately upon delivery of such notice to Vendor), no later than
three (3) Business Days after delivery of the draft Closing Inventory Report.
Upon giving said notice to the Vendor, payment of the Closing Inventory Payment
by the Purchaser to the Vendor as provided for in Section 3.3.2 shall be
immediately suspended until the final determination of the book value of the
Inventories in accordance with this Section 3.2.2. Any notice of disagreement
given by the Vendor shall set forth the particulars of such disagreement. The
Parties shall then use reasonable efforts to resolve such disagreement within a
period of fifteen (15) days following the giving of such notice. If the matter
is not resolved by the end of such fifteen (15) day period, then such
disagreement shall be submitted by the Parties to an accounting firm of
recognized national standing in Canada, which is independent of the Parties (the
"INDEPENDENT ACCOUNTANT"). If the Parties are unable to agree on the Independent
Accountant within a further 10 day period, either Party may apply under the
ARBITRATION ACT, 1991 (Ontario) to have a court appoint such accounting firm.
The Independent Accountant shall, as promptly as practicable (but in any event
within forty-five (45) days following its appointment), make a determination of
the book value of the Inventories, based solely on written submissions submitted
by the Parties to the Independent Accountant. The decision of the Independent
Accountant as to the book value of the Inventories shall be final and binding
upon the Parties and shall constitute both the book value of the Inventories for
the purposes of this Agreement and the amount of the Closing Inventory Payment.
The Purchaser agrees to pay to the Vendor, within three (3) Business Days of the
final decision of the Independent Accountant, the Closing Inventory Payment with
interest thereon (which interest is calculated based on the Prime Rate
commencing from the date which is four (4) Business Days after the Closing Date
until the date the Closing Inventory Payment is

<Page>

                                                                             21.

made). The Purchaser and the Vendor shall each pay one-half of the fees and
expenses of the Independent Accountant with respect to the resolution of the
dispute.

3.3       PAYMENT OF PURCHASE PRICE

          The Purchase Price shall be paid as follows:

3.3.1     CLOSING DATE PAYMENT

          The Purchaser shall pay at the Closing Time by certified cheque of
immediately available funds the following (collectively, the "CLOSING DATE
PAYMENT"):

          (a)  [ * ] to the Escrow Agent in accordance with the Escrow
               Agreement;

          (b)  [ * ] to the Vendor related to the reimbursement of a payment
               made by the Vendor to Eli Lilly Canada Inc. on June 30, 2003 in
               respect of the Eli Lilly Agreement; and

          (c)  the amount equal to [ * ] to the Vendor (being $13,500,000.00
               minus [ * ] (being the escrow amount)).

3.3.2     CLOSING INVENTORY PAYMENT

          Subject to Section 3.2.2, the Purchaser shall pay to the Vendor the
Closing Inventory Payment four (4) Business Days after the Closing Date by
certified cheque, bank draft or wire transfer of immediately available funds,
less the accrued unpaid interest on the Eli Lilly Payment up to the Closing Date
(being the accrued unpaid interest owing to Eli Lilly Canada Inc. calculated in
accordance with the terms of the Eli Lilly Agreement as amended by the Consent
and Amendment Agreement dated July 21, 2003 between Eli Lilly Canada Inc., the
Purchaser and the Vendor, as more particularly described in Schedule 3.1), to an
account specified by the Vendor.

3.4       ALLOCATION OF PURCHASE PRICE

          The Vendor and the Purchaser agree that the values of the Purchased
Assets are their respective fair market values thereof, and each Party shall
report the sale and purchase of the Purchased Assets for all federal, provincial
and local tax purposes. If either Party fails to file its Tax Returns as
aforesaid, such Party shall indemnify and save harmless the other Party in
respect of any additional Tax, and legal and/or accounting costs paid or
incurred by the other Party as a result of the failure to file as aforesaid.

3.5       TRANSFER TAXES

          The Purchaser shall be liable for and shall pay to the Vendor at the
Closing Time all federal and provincial sales taxes and all other Taxes or other
like charges properly payable upon and in connection with the transfer of the
Purchased Assets to the Purchaser, including, but

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             22.

not limited to GST and QST but excluding any income taxes payable by the Vendor
as a result of the completion of the transactions herein contemplated. The
Purchaser shall provide to the Vendor an Ontario provincial sales tax exemption
certificate on or prior to Closing in respect of the sale of the Inventories
located in the Province of Ontario.

3.6       ASSUMPTION OF CERTAIN OBLIGATIONS AND EXCLUDED LIABILITIES

3.6.1     ASSUMPTION OF CERTAIN OBLIGATIONS

          The Purchaser shall assume and shall pay, discharge and perform, as
the case may be, certain obligations to be performed by the Vendor on and after
Closing Date which by terms and conditions thereof are to be paid, discharged or
performed at any time on and after the Closing Date, as identified in Schedule
3.6.1 (the "ASSUMED OBLIGATIONS").

3.6.2     POST CLOSING ADJUSTMENTS FOR CERTAIN POST-CLOSING CONDITIONAL ASSUMED
          OBLIGATIONS

          The Vendor has already paid certain amounts to the applicable third
parties for certain of the obligations in Schedule 3.6.2, and the Purchaser
hereby agrees to reimburse to the Vendor, after Closing, those amounts that the
Vendor has already paid to the applicable third parties in respect of those
obligations in Schedule 3.6.2, within fifteen (15) Business Days after the
receipt by the Purchaser from the Vendor of proof of payment of such amounts and
any supporting documentation or records related to such obligations, including
without limitation, copies of all relevant contracts and/or agreements to the
extent they exist and the consent to the assignment of such obligations by the
Vendor to the Purchaser from the applicable third party, if required by the
applicable agreement. Upon:

          (a)  the Purchaser being presented with contracts (to the extent such
               contracts exist) by the Vendor; and

          (b)  the Purchaser being reasonably satisfied with the terms of such
               contracts;

the Purchaser shall provide the Vendor and the other party to the applicable
contract with a written notice of the Purchaser's assumption of such contract.

3.6.3     NO LIABILITIES

          Except as provided for in Section 3.6.1, the Purchaser shall not be
liable for, or assume, or be deemed to have assumed or guaranteed, or otherwise
be responsible for, any liability, obligation or claim of any nature, whether
direct or indirect, for any debts, obligations or liabilities of the Vendor
relating to the Purchased Assets, the Business or otherwise arising out of acts,
omissions or occurrences prior to the Closing or any conditions existing prior
to the Closing, without regard to whether such debt, obligation or liability is
known, knowable, or unknown, matured or unmatured, liquidated or unliquidated,
fixed or contingent. Without limiting the generality of the foregoing, all
liabilities of the Vendor, other than the Assumed Obligations shall be retained
and remain the obligations and liabilities of the Vendor (including all
liabilities and obligations of, or claims against, the Vendor, any division of
the Vendor, or of any corporate parent, predecessor, stockholder or Affiliate of
the Vendor, and claims arising out

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                                                                             23.

of the Business prior to the Closing, of any kind or nature, whether absolute,
accrued, contingent or otherwise, whether due or to become due and whether or
not asserted, and whether known or unknown, and however arising).

3.7       PERMAX(R), ALERTEC(R) AND ZANAFLEX(R) MILESTONE PAYMENTS

          The Purchaser agrees to pay the Vendor the following amounts:

3.7.1     PERMAX(R) MILESTONE PAYMENTS

          The Purchaser shall pay the Vendor an amount equal to [ * ] (plus
applicable taxes but excluding taxes payable on the Vendor's net income) payable
as follows:

          (a)    [ * ] on the six month anniversary of the Closing Date;

          (b)    [ * ] on the twelve month anniversary of the Closing Date;

          (c)    [ * ] on the eighteen month anniversary of the Closing Date;

          (d)    [ * ] on the twenty-four month anniversary of the Closing Date;

          (e)    [ * ] on the thirty month anniversary of the Closing Date;

          (f)    [ * ] on the thirty-six month anniversary of the Closing Date;
                 and

          (g)    [ * ] on the forty-two month anniversary of the Closing Date;

subject to the following:

          (i)    provided that on each date of payment, no Generic Event has
                 occurred with respect to Permax(R) ("PERMAX GENERIC EVENT");

          (ii)   the milestone payment(s) is reduced in accordance with Section
                 3.9 hereof; and

          (iii)  the milestone payment(s) is reduced in accordance with Section
                 3.12 hereof.

          For greater certainty, if a Permax Generic Event has occurred, the
          Vendor agrees that the Purchaser shall be relieved of its obligation
          to pay any of the foregoing unpaid milestone payments.

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* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             24.

3.7.2     ALERTEC(R) MILESTONE PAYMENTS

          The Purchaser shall pay the Vendor an amount equal to [ * ] (plus
applicable taxes but excluding taxes payable on the Vendor's net income) payable
as follows:

          (a)    [ * ] on the eighteen month anniversary of the Closing Date;

          (b)    [ * ] on the twenty-four month anniversary of the Closing Date;

          (c)    [ * ] on the thirty month anniversary of the Closing Date;

          (d)    [ * ] on the thirty-six month anniversary of the Closing Date;

          (e)    [ * ] on the forty-two month anniversary of the Closing Date;

subject to the following:

          (i)    provided that on each date of payment no Generic Event has
                 occurred with respect to Alertec(R) ("ALERTEC GENERIC EVENT");

          (ii)   the milestone payment(s) is reduced in accordance with Section
                 3.9 hereof; and

          (iii)  the milestone payment(s) is reduced in accordance with Section
                 3.12 hereof.

          For greater certainty, if an Alertec Generic Event has occurred, the
Vendor agrees that the Purchaser shall be relieved of its obligation to pay any
of the foregoing unpaid milestone payments.

3.7.3     ZANAFLEX(R) MILESTONE PAYMENTS

          The Purchaser shall pay the Vendor an amount equal to [ * ] (plus
applicable taxes but excluding taxes payable on the Vendor's net income) payable
as follows:

          (a)    [ * ] on the six month anniversary of the Closing Date;

          (b)    [ * ] on the twelve month anniversary of the Closing Date;

          (c)    [ * ] on the eighteen month anniversary of the Closing Date;

          (d)    [ * ] on the twenty-four month anniversary of the Closing Date;

          (e)    [ * ] on the thirty month anniversary of the Closing Date; and

          (f)    [ * ] on the thirty-six month anniversary of the Closing Date;

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             25.

subject to the following:

          (i)    provided that on each date of payment no Generic Event has
                 occurred with respect to Zanaflex(R) ("ZANAFLEX GENERIC
                 EVENT");

          (ii)   the milestone payment(s) is reduced in accordance with Section
                 3.9 hereof; and

          (iii)  the milestone payment(s) is reduced in accordance with Section
                 3.12 hereof.

          For greater certainty, if a Zanaflex Generic Event has occurred, the
Vendor agrees that the Purchaser shall be relieved of its obligation to pay any
of the foregoing unpaid milestone payments.

3.8       ROYALTY PAYMENTS

3.8.1     PAYMENT OF ROYALTIES

          After the Closing Date, the Purchaser agrees to pay to the Vendor
within sixty (60) days of the end of each calendar quarter, royalties (plus
applicable taxes but excluding taxes payable on the Vendor's net income) on Net
Sales of the following products (each, a "ROYALTY PAYMENT"):

          (a)    [ * ] of Net Sales of Hectorol(TM);

          (b)    [ * ] of Net Sales of Diastat(R);

          (c)    [ * ] of Net Sales of Alertec(R);

          (d)    [ * ] of Net Sales of Zanaflex(R); and

          (e)    [ * ] of Net Sales of Permax(R);

          (collectively, the "ROYALTY PRODUCTS")

subject to:

          (i)    the Purchaser's Cost of Goods, on a Royalty Product-by-Royalty
                 Product basis, not being greater than fifty percent (50%) of
                 Net Sales for the three (3) consecutive years after the Closing
                 Date ("COGS ROYALTY PERIOD"); and

          (ii)   the reduction of the Royalty Payment in accordance with Section
                 3.9 hereof, on a Product by Product basis; and

          (iii)  Section 3.8.4.

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* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             26.

          In the event that during the COGS Royalty Period, the Purchaser's Cost
of Goods for any one of the above Royalty Products is greater than fifty percent
(50%) of the Net Sales for such Royalty Product, both parties shall equally
share in the amount by which Purchaser's Cost of Goods per Royalty Product is in
excess of fifty percent (50%) of its Net Sales for such Royalty Product
("OVERAGE") thereby enabling the Purchaser to offset its share of the Overage
against the royalties payable to the Vendor for such Royalty Products. For
clarity, only up to fifty percent (50%) of the Overage can be applied against
the royalties payable to the Vendor by the Purchaser on a Royalty
Product-by-Royalty Product basis. Notwithstanding the foregoing, the Vendor's
total liability for any Overage shall not exceed the total royalties payable to
the Vendor by the Purchaser in the three (3) year period for the Royalty Product
to which the Overage applies on a Royalty Product-by-Royalty Product basis.

3.8.2     REPORTING OF ROYALTY PAYMENTS

          In connection with each Royalty Payment, the Purchaser shall provide a
report setting forth the calculation of Net Sales and Cost of Goods for the
Royalty Products for the applicable period and the amount of the Royalty Payment
due, each in sufficient detail to permit the Vendor to determine whether the
calculation of Net Sales and Cost of Goods and the calculation of the Royalty
Payment due is accurate. The Purchaser shall cause its representatives and
employees to be reasonably available to the Vendor to discuss any questions or
comments of the Vendor concerning such report.

3.8.3     ROYALTY PAYMENT RECORDS RETENTION

          The Purchaser shall keep for a period of one (1) year from the date of
a Royalty Payment is paid, complete and accurate records of sales and all other
information necessary to accurately calculate the Net Sales and Cost of Goods
for the applicable period. The Vendor shall have the right, no more than once
per year, through an Independent Accountant to audit the records relating to any
Royalty Payment at the place or places of business where such records are
customarily kept in order to verify the accuracy of the reports of Net Sales and
Cost of Goods (if Overage payments are claimed by the Purchaser pursuant to
Section 3.8.1) made in connection with such Royalty Payment. Such audits may be
exercised during normal business hours upon ten (10) days prior written notice
to the Purchaser. The Vendor shall bear the full cost of such audit unless such
audit discloses an underpayment of more than five percent (5%) of a Royalty
Payment for any Product or more than a five percent (5%) overpayment by the
Vendor on account of an Overage for the Cost of Goods of any Product, in which
case the Purchaser shall bear the full cost of such audit. In the event that the
Independent Accountant determines that the Purchaser has underpaid with respect
to any Royalty Payment or the Vendor has overpaid with respect to any Overage,
the Purchaser shall make a payment in the amount of such underpayment or
overpayment, as applicable, to the Vendor within ten (10) days following such
audit, together with any interest due thereon (at a rate equal to the Prime
Rate).

3.8.4     TERMINATION OF ROYALTY PAYMENTS

          The Purchaser's obligation to pay the Vendor the royalties
contemplated in Section 3.8.1 for each Royalty Product shall terminate on a
Royalty Product-by-Royalty Product basis on the earliest of:

<Page>

                                                                             27.

          (a)    the occurrence of a Generic Event for such Royalty Product; or

          (b)    the termination of the applicable contract(s) under which the
                 Purchaser is being granted the rights to Hectorol(TM),
                 Diastat(R), Zanaflex(R), Permax(R) and Alertec(R), unless such
                 termination occurs as a result of the Purchaser's uncured
                 breach or termination thereof.

3.8.5     MINIMUM ROYALTY PAYMENT FOR HECTOROL(TM)

          If a Generic Event in respect of Hectorol(TM) has not occurred and the
Vendor has not received Royalty Payments from the Purchaser for Hectorol(TM)
that are equal to at least [ * ] on or before June 30, 2007 (hereinafter the
"HECTOROL ROYALTY DATE"), the Purchaser shall pay, within thirty (30) days of
the Hectorol Royalty Date, to the Vendor the difference between [ * ] and the
total amount of Royalty Payments paid by the Purchaser to the Vendor in respect
of Hectorol(TM) up to and including the Hectorol Royalty Date. For
clarification, subject to Section 3.8.4 hereof, the payment of any amount to the
Vendor pursuant to this provision does not alleviate the Purchaser's ongoing
obligations to continue to pay royalties to the Vendor after the Hectorol
Royalty Date pursuant to the provisions of Section 3.8.1.

          In the event a Generic Event in respect of Hectorol(TM) occurs:

          (i)    between June 30, 2004 and June 29, 2005 and the Vendor has not
                 received Royalty Payments for Hectorol(TM) since Closing that
                 are equal to or greater than [ * ]; or

          (ii)   between June 30, 2005 and June 29, 2006 and the Vendor has not
                 received Royalty Payments for Hectorol(TM) since Closing that
                 are equal to or greater than [ * ]; or

          (iii)  between June 30, 2006 and June 29, 2007 and the Vendor has not
                 received Royalty Payments for Hectorol(TM) since Closing that
                 are equal to or greater than [ * ];

then the Purchaser shall pay to the Vendor, within thirty (30) days of the
Generic Event for Hectorol(TM), the difference between:

          (a)    the amount referred to in (i), (ii) or (iii) above, as
                 applicable; and

          (b)    the total amount of Royalty Payments paid by the Purchaser to
                 the Vendor in respect of Hectorol(TM) up to and including the
                 date of the Generic Event for Hectorol(TM).

          For greater certainty, in the event that a payment is made by the
Purchaser to the Vendor as a result of the occurrence of an event in (i), (ii)
or (iii) above, thereafter no further royalty, milestone or instalment payments
shall be made by the Purchaser to the Vendor in respect of Hectorol(TM).

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* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             28.

          It is the Purchaser's intention to launch Hectorol(TM) by [ * ]
("HECTOROL LAUNCH DATE"). In the event that the Purchaser is delayed in
launching Hectorol(TM) by the Hectorol Launch Date because of the lack of
approval of an SNDS submission to Health Canada required for the approval of the
changes in the manufacturing of Hectorol which will result in an inability to
secure sufficient supply of Hectorol in order to meet the expected demand of the
Canadian market, then the dates in (i), (ii) and (iii) above, as well as the
Hectorol Royalty Date, will be extended by the period of time by which the
launch of Hectorol(TM) has been postponed.

3.8.6     ADDITIONAL ROYALTY PAYMENT FOR ALERTEC(R)

          Provided there has not been an Alertec Generic Event, and so long as
Alertec(R) is permitted to be sold as a drug pursuant to Schedule F of the Food
and Drug Regulations to the Food and Drugs Act (Canada), the Purchaser hereby
agrees that it shall pay to the Vendor [ * ] of Net Sales of Alertec(R), which
amount (plus applicable taxes but excluding taxes payable on the Vendor's net
income) shall be paid within sixty (60) days of the end of each twelve (12)
month period after the Closing Date ("ADDITIONAL ALERTEC ROYALTY"). The Parties
hereby agree that neither the Additional Alertec Royalty nor the Royalty
Products royalty for Alertec(R) nor the Alertec(R) milestone payments shall be
payable by the Purchaser to the Vendor upon the occurrence of an Alertec Generic
Event.

3.9       ROYALTY SHARING ARRANGEMENT

          In the event that the Purchaser is required to pay after Closing to
any third party any additional royalty or fee in order to continue to use,
market or sell any of the Products (other than additional royalties or fees paid
to the licensors of the Products, unless such licensors of the Products are
receiving these additional royalties or fees resulting from an arm's length
third party claim or entitlement), then the Purchaser shall be entitled to
deduct from the applicable royalty payment(s), milestone(s) or instalment
payment(s) owing by the Purchaser to the Vendor in respect of such Product,
fifty (50%) percent of any such royalty or fee paid to such third party by the
Purchaser.

3.10      ELI LILLY PAYMENT

          The Purchaser acknowledges and agrees that immediately after Closing
the Purchaser shall assume the Vendor's obligation to make the Eli Lilly Payment
to Eli Lilly Canada Inc., or its successor or assigns, in accordance with the
terms of the Eli Lilly Agreement, as amended by the Consent and Amendment
Agreement dated July 21, 2003 between Eli Lilly Canada Inc., the Purchaser and
the Vendor.

3.11      ELI LILLY RELIEF REPAYMENT

          After the Closing Date, in the event that the Purchaser is relieved of
having to pay any of the Eli Lilly Payment (the "RELIEVED AMOUNT"), the
Purchaser covenants and agrees to promptly remit to the Vendor an amount equal
to the Eli Lilly Interest Amount, as calculated per Schedule 3.1, on the
Relieved Amount on the Closing Date.

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             29.

3.12      REDUCTION IN MILESTONE PAYMENTS

          In the event of a Post NOC Event in the month in which a milestone
payment is due to the Vendor in respect of any Product, the Purchaser shall be
entitled to reduce the applicable milestone payment owed by the Purchaser to the
Vendor in respect of such Product by the corresponding percentage decrease in
Net Sales for such Product in the month in which such milestone payment is due
to the Vendor. For example, if after a NOC Event but before a Generic Event, the
Purchaser experiences a 25% reduction in Net Sales from the Reference Period in
the month in which the milestone payment is due for such Product, the milestone
payment due would be reduced by 25% and therefore a payment of 75% of the
applicable milestone amount would be made by the Purchaser to the Vendor in
respect of such Product.

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

4.1       REPRESENTATIONS AND WARRANTIES OF THE VENDOR

          The Vendor represents and warrants to the Purchaser as set out in this
Section 4.1 and acknowledges that the Purchaser is relying on such
representations and warranties in connection with the transactions contemplated
in this Agreement.

4.1.1     INCORPORATION AND STATUS OF THE VENDOR

          The Vendor is a corporation duly incorporated, organized and
subsisting under the laws of Canada and has the corporate power and capacity to
execute and deliver this Agreement, to sell the Purchased Assets to the
Purchaser as herein contemplated and to perform its other obligations hereunder.
No proceedings have been taken or authorized by the Vendor or, to the Vendor's
knowledge, by any other person with respect to the bankruptcy, insolvency,
liquidation, dissolution or winding up of the Vendor or with respect to any
amalgamation, merger, consolidation, arrangement or reorganization of, or
relating to, the Vendor. The Vendor has the necessary corporate power, authority
and capacity to own or lease its property and assets and to carry on the
Business as now being conducted by it and is registered, licensed or otherwise
qualified to carry on the Business in each province and territory in Canada,
being the only jurisdictions in which the nature of the Business as carried on
by the Vendor or the property or assets owned or leased by it makes such
qualification necessary. True and complete copies of the Articles of the Vendor
and all by-laws of the Vendor have been made available to the Purchaser. The
Articles of the Vendor and the by-laws of the Vendor constitute all of the
constating documents and by-laws of the Vendor, are complete and correct and are
in full force and effect.

4.1.2     AUTHORIZATION OF SALE BY VENDOR

          The execution and delivery of this Agreement and the completion of the
transactions herein contemplated have been duly and validly authorized by all
necessary corporate action on behalf of the Vendor and this Agreement has been
duly and validly executed and delivered by the Vendor and is a valid and binding
obligation of the Vendor enforceable against the Vendor in accordance with its
terms. There is no Legal Proceeding in progress, pending, or, to the knowledge
of the Vendor, threatened against or affecting the Vendor or

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                                                                             30.

affecting the title of the Vendor to any of the Purchased Assets at law or in
equity or before or by any Tribunal and, nor is there any Order outstanding
against or affecting the Vendor which, in any such case, might adversely affect
the ability of the Vendor to enter into this Agreement or to perform its
obligations hereunder.

4.1.3     TITLE TO PURCHASED ASSETS

          The Vendor is the owner of all of the Purchased Assets with good and
marketable title thereto, free and clear of all Encumbrances. No person has any
agreement, option, understanding or commitment for the purchase or other
acquisition from the Vendor of any of the Purchased Assets, other than pursuant
to purchase orders accepted by the Vendor in the ordinary course of the
Business.

4.1.4     CONFLICTING INSTRUMENTS

          Neither the entering into of this Agreement by the Parties nor the
completion of the transactions herein contemplated will: (a) conflict with, or
result in the breach or violation of or default under, or cause the acceleration
of any obligations of the Vendor under, any of the terms and provisions of (i)
any Applicable Law, (ii) the Articles of the Vendor or its by-laws or any
resolution of the directors or shareholders of the Vendor; or (iii) subject to
obtaining any Consent or Regulatory Approval which may be required thereunder in
connection with the completion of the transactions herein contemplated, any
Contract, or of any Licence or Order held by the Vendor in respect of the
Business or otherwise affecting the Business, or (b) relieve any other party to
any Contract of that party's obligations thereunder or enable it to terminate
its obligations thereunder.

4.1.5     REGULATORY APPROVALS

          Except as set forth in Schedule 4.1.5, no Regulatory Approval or
filing with any Governmental Authority or other person is required to be
obtained by the Vendor in connection with the execution, delivery and
performance by the Vendor of this Agreement or the Closing Documents or the sale
of any of the Purchased Assets hereunder.

4.1.6     BOOKS AND RECORDS

          The Vendor has made available to the Purchaser all Books and Records
relating to the Business. All material financial transactions of the Vendor
relating to the Business have been accurately recorded in the Accounting Records
in accordance with sound business and financial practice and the Accounting
Records accurately reflect the basis for the financial condition and the
revenues, expenses and results of operations of the Business as of and to the
date hereof. All Books and Records are in the full possession and control of and
are owned and controlled exclusively by the Vendor and are not dependent upon
any computerized or other system or device that is not exclusively owned and
controlled by the Vendor.

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                                                                             31.

4.1.7     FINANCIAL INFORMATION AND CLOSING REPORTS

          The Financial Information and the Closing Reports have been prepared
in accordance with generally accepted accounting principles applied on a basis
consistent with those of preceding periods.

4.1.8     NO CHANGE

          Since January 31, 2003, there has been no change in the Business or in
the operations, affairs, prospects or condition (financial or otherwise) of the
Business, including any such change arising as a result of any change in
Applicable Law, revocation of any Licence or as a result of fire, explosion,
accident, casualty, labour problem, flood, drought, riot, storm, act of God or
otherwise, other than in the ordinary course.

4.1.9     FRONT LOADING

          Since January 1, 2003, the Vendor has not altered its terms of sale of
any of the Products, including without limitation, the decreasing of its prices
for the Products, the changing of payment terms, the provision or introduction
of additional discounts (volume or otherwise) and/or the provision or
introduction of additional incentives to encourage the sale of additional
quantities of any one or more of the Products, that are not otherwise offered by
the Vendor in the ordinary course. The onus shall be on the Vendor to establish
with the sales records for the Products and the Books and Records that any
changes in the Vendor's terms of sale have been made in the ordinary course.

4.1.10    BUSINESS CARRIED ON IN ORDINARY COURSE

          Since January 31, 2003, the Vendor has carried on the Business in the
ordinary course, consistent with past practice and, in particular and without
limitation, has not:

          (a)  transferred, assigned, sold or otherwise disposed of any of its
               assets used in the Business except for the sale of Inventories in
               the ordinary course of Business;

          (b)  incurred or assumed any obligation or liability (fixed or
               contingent) relating to the Business other than current
               liabilities incurred since January 31, 2003 in the ordinary
               course of Business;

          (c)  paid any obligation or liability of the Business other than in
               the ordinary course of Business, consistent with past practice;

          (d)  made any material change with respect to any method of management
               operation or accounting in respect of the Business;

          (e)  except as disclosed in Schedule 4.1.12, increased the
               compensation paid or payable to Offered Employees or changed the
               benefits to which Offered Employees are entitled under any
               Employee Benefit Plan, created any new Employee Benefit Plan or
               cancelled any existing Employee Benefit Plan

<Page>

                                                                             32.

               other than increases or changes made in the ordinary course of
               Business consistent with past practice;

          (f)  created or permitted to exist any Encumbrance on any of the
               Purchased Assets;

          (g)  modified, amended or terminated any Contract or waived or
               released any right which it has or had, other than in the
               ordinary course of Business;

          (h)  except as disclosed in Schedule 4.1.21, entered into or become
               bound by any written or oral contract, agreement or arrangement,
               or made or authorized any capital expenditure relating to the
               Business;

          (i)  had a supplier terminate, or communicate to the Vendor the
               intention or threat to terminate, its relationship with the
               Vendor, or the intention to reduce substantially the quantity of
               products or services it sells to the Vendor, or any notice of any
               intention to increase any of the prices for any of the active
               pharmaceutical ingredients, raw materials or finished goods;

          (j)  taken any steps to adversely affect the level of the Inventories,
               and for certainty the Inventories are at a level consistent with
               the level of Inventories that has been maintained in the
               operation of the Business prior to the date hereof in accordance
               with the Vendor's past practice and reasonably anticipated
               requirements in light of seasonal adjustments, market
               fluctuations in Canada, the requirements of customers of the
               Business, and any manufacturer's required lead time;

          (k)  had its Accounts Receivable increase, and for certainty the
               Accounts Receivable as of the Closing Date are at a level
               consistent with the levels of Accounts Receivable that have been
               experienced in the operation of the Business for the two (2)
               years immediately prior to the Closing Date having regard for
               generally accepted accounting principles and with regard to
               historical seasonal fluctuations of the Business;

          (l)  had any customer terminate, or communicate to the Vendor the
               intention or threat to terminate, its relationship with the
               Vendor, or the intention to reduce substantially the quantity of
               products or services it purchases from the Vendor, or its
               dissatisfaction with the products or services sold by the Vendor;
               or

          (m)  authorized or agreed or otherwise become committed to do any of
               the foregoing.

4.1.11    NON-ARMS LENGTH TRANSACTIONS

          No Interested Person is indebted to the Vendor in respect of the
Business and, except as described in Schedule 4.1.11, the Vendor is not a party
to any contract with any Interested Person relating to the Business. No
Interested Person has any cause of action or other

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                                                                             33.

claim whatsoever against, or is owed any amount by the Vendor in connection with
the Business, except for claims in the ordinary course of Business such as for
accrued expense reimbursements, vacation pay and benefits under the Employee
Benefit Plans.

4.1.12    OFFERED EMPLOYEES

          (a)  Schedule 4.1.12 contains the names and titles or positions of the
               Offered Employees and their date of hire and the location of
               their employment, a list of all written contracts, a summary of
               the terms of all oral contracts, and the remuneration of, and
               Employee Benefit Plans applicable to, each Offered Employee.

          (b)  The Vendor is not a party to or bound by or subject to any
               Collective Agreement relating to the Offered Employees, has not
               made any commitment to, or conducted any negotiation or
               discussion with, any labour union or employee association with
               respect to any future agreement or arrangement, is not required
               to recognize any labour union or employee association
               representing its employees or any agent having bargaining rights
               for its employees.

          (c)  General relations between the Vendor and the Offered Employees
               are good and there is no present, pending or, to the Vendor's
               knowledge, threatened labour strike, dispute, slowdown or work
               stoppage with respect to the Offered Employees.

          (d)  The Vendor has no agreements or commitments, oral, written or
               otherwise, to any of the Offered Employees, other than as set
               forth in the written employment agreements for these Offered
               Employees listed in Schedule 4.1.12.

          (e)  No Offered Employee has filed a complaint against the Vendor and
               the Vendor is in compliance with all Applicable Laws relating to
               the Offered Employees and not liable to any Offered Employee for
               any damages under any Applicable Law, including without
               limitation the EMPLOYMENT STANDARDS ACT (Ontario), HUMAN RIGHTS
               CODE (Ontario), PAY EQUITY ACT (Ontario), OCCUPATIONAL HEALTH &
               SAFETY ACT (Ontario) and WORKPLACE SAFETY AND INSURANCE ACT
               (Ontario).

4.1.13    EMPLOYEE BENEFIT PLANS

          Schedule 4.1.13 lists or identifies all Employee Benefit Plans. Vendor
has not promised or otherwise agreed to amend the Employee Benefit Plans unless
otherwise required by Applicable Law. All obligations required by Applicable Law
or by contract to be performed in connection with the Employee Benefit Plans
have been performed and there are no outstanding defaults, violations, claims or
actions by or against any Employee Benefit Plan or any party to any Employee
Benefit Plan. The Vendor has provided to the Purchaser true and complete copies
of all Employee Benefit Plans (or where such Employee Benefit Plans are oral
commitments, written summaries of their terms) together with all plan summaries,
employee booklets and

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                                                                             34.

personnel manuals. All Offered Employee data necessary to administer the
Employee Benefit Plans is in the possession and control of the Vendor and has
been made available to the Purchaser and is complete and accurate.

4.1.14    SUFFICIENCY AND CONDITION OF ASSETS

          Together with the Excluded Assets, the Purchased Assets are sufficient
for the Purchaser to carry on the Business as usually conducted and include all
proprietary rights, trade secrets and other property and assets, tangible and
intangible, used in connection with the Business. All tangible assets used in
the Business are in good condition. The Purchased Assets, together with the
Excluded Assets, form all of the assets of the Business.

4.1.15    CONTRACTS

          Except for the Contracts listed or identified on Schedule 4.1.15, the
Vendor is not a party to or bound by or subject to any agreement, contract or
commitment, written or oral, of any nature or kind relating to the Business
except for agreements and arrangements with respect to Offered Employees,
Employee Benefit Plans and persons receiving compensation for work or services
provided to the Vendor set forth and described in Schedule 4.1.13. Except as
disclosed in the Schedules referred to in this Section 4.1.15, no Consent is
required under any Contract or other agreement from any party thereto or any
other person and no notice is required to be given under any Contract or other
agreement to any party thereto or to any other person in connection with the
completion of the transactions herein contemplated. For certainty, except as
listed on Schedule 4.1.15, no Consent or notice is required to be received or
given in connection with the assignment of any Contract to the Purchaser
pursuant to this Agreement, including without limitation any Consent of or
notice to any Licensor or sublicensor of Intellectual Property Rights to the
Vendor or to a licensor or sublicensor of the Vendor. The Contracts are all in
good standing and in full force and effect with no amendments except as
disclosed on Schedule 4.1.15 and the Vendor is entitled to all rights and
benefits thereunder and has the right to assign any and/or all such right and
benefits in accordance with this Agreement, subject to obtaining Consent where
required. The copies of all Contracts made available to the Purchaser for
inspection are true and complete copies of the originals and all of the
Contracts are valid and binding obligations of the parties thereto enforceable
in accordance with their respective terms. The Vendor has complied with all
terms of the Contracts, has paid all amounts due thereunder, has not waived any
rights thereunder and no default or breach exists in respect thereof on the part
of any of the parties thereto and no event has occurred which, after the giving
of notice or the lapse of time or both, would constitute such a default or
breach. All amounts payable to the Vendor under the Contracts are still due and
owing to the Vendor without any right of set-off. Schedule 4.1.15 also sets
forth all material quotations, orders or tenders for contracts which remain open
for acceptance. No purchase commitment of the Vendor in respect of the Business
is in excess of normal requirements of the Business or is not terminable by the
Vendor without penalty on 30 days notice or less.

4.1.16    CUSTOMERS AND SUPPLIERS

          Except as set forth and described in Schedule 4.1.16, there are no
outstanding warranties, product replacement contracts or other product
fulfillment obligations with or to

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                                                                             35.

customers or other users of the products of the Business and the Vendor is not
required to provide any bonding or other financial security arrangements in
connection with any transactions with any of its customers or suppliers relating
to the Business, whether or not in the ordinary course of the Business. The
Vendor has no agreement, contract or commitment for sales of the products or
services of the Business at prices involving prospective losses. The current
customer breakdown in percentage of gross revenues is as set out in Schedule
4.1.16. The Vendor is not aware of any current supply problem with respect to
any of the Products, including the supply of raw materials required for the
manufacture of any of the Products.

4.1.17    LEGAL PROCEEDINGS

          Except as set forth and described in Schedule 4.1.17, there is no
Legal Proceeding (whether or not purportedly on behalf of the Vendor) in
progress, pending or, to the Vendor's knowledge, threatened against or affecting
the Business or the Purchased Assets before or by any Tribunal. Except as set
forth and described in Schedule 4.1.17, there is no Order outstanding against or
affecting the Vendor relating to the Business or the Purchased Assets. Without
limiting the generality of the foregoing, except as set forth and described in
Schedule 4.1.17, there is no Legal Proceeding involving any product liability
claim in progress, pending, or to the Vendor's knowledge, threatened against or
affecting the Business or the Purchased Assets.

4.1.18    COMPLIANCE WITH APPLICABLE LAWS

          The Vendor has conducted and is conducting the Business in compliance
with Applicable Law and is not in breach of any provision of Applicable Law. All
Licences are valid and subsisting and in good standing and there is no default
thereunder. None of the Licences:

          (a)  contains any burdensome term, provision, condition or limitation
               which has or could have an adverse effect on the Vendor or the
               Business; or

          (b)  except as specifically disclosed in this Agreement, requires any
               Regulatory Approval in connection with the completion of the
               transactions herein contemplated.

4.1.19    RESIDENCE OF VENDOR; GST AND QST STATUS

          The Vendor is not a "non-resident" of Canada within the meaning of the
INCOME TAX ACT. The Vendor is registered for the purposes of: (a) the GST
Legislation and its registration number is 872970769; and (b) the QST and its
registration number is 1020899073.

4.1.20    INVENTORIES

          The inventories of the Vendor relating to the Business consist solely
of items of tangible personal property of the kind and quality regularly used or
produced in the Business and are of merchantable quality, are saleable or
resalable (or useable) in the ordinary course of the Business for the purpose
for which they were intended and are at a level consistent with the level of
inventories that has been maintained in the operation of the Business prior to
the date hereof in accordance with normal business practice and reasonably
anticipated requirements in light of seasonal adjustments, market fluctuations
in the pharmaceutical industry and the requirements of

<Page>

                                                                             36.

customers of the Business. The Products in inventory, both commercial and
sample, do not have a shelf life or "best before" date that expires less than
twelve (12) months from the Closing Date.

4.1.21    INTELLECTUAL PROPERTY

          (a)  The Vendor's Intellectual Property set forth and described in
               Schedule 4.1.21 specifies, for each item, whether the Vendor's
               Intellectual Property (including all Intellectual Property
               pertaining thereto) is owned by the Vendor (in this Section
               "OWNED I.P.") or whether the Vendor has the right to use or was
               granted rights to the Intellectual Property under a licence
               agreement or arrangement from another person (in this Section
               "LICENCED I.P."). Schedule 4.1.21 sets out all of the Vendor's
               Intellectual Property in respect of the Products.

          (b)  Schedule 4.1.21 specifies, for each item of Owned I.P., the
               registration or application number, country, filing and
               expiration dates (if any), classes and, for any unregistered
               Owned I.P. not under application for registration, the products
               and/or services with respect to which and the countries in which
               such unregistered Owned I.P. is used.

          (c)  Except as set forth and described in Schedule 4.1.21, all of the
               Owned I.P. is subsisting and, to the Vendor's knowledge is valid,
               is owned by the Vendor with good and marketable title thereto
               free of any Encumbrance and the Vendor has the unencumbered right
               to use (where use includes, without limitation, the ability to
               modify, enhance, make derivative works, adapt, translate, market,
               license with right to grant sub-licenses, sell, rent and any
               other activity associated with the term "use", all without
               restriction of any kind from any third person (in this Section
               "USE")) the Owned I.P.; and all registrations and filings
               necessary to preserve the rights of the Vendor in and to the
               Owned I.P. have been made.

          (d)  The Vendor has secured valid written waivers of moral rights from
               all consultants and Employees who contributed to the creation or
               development of any of the Owned I.P. and an assignment of the
               Intellectual Property Rights for Owned I.P. to such contributions
               that the Vendor does not already own by operation of law.

          (e)  The Vendor has taken all necessary and appropriate steps to
               maintain, protect and preserve the confidentiality and secrecy of
               all the Owned I.P. not otherwise protected by patents, patent
               applications, trade marks or copyright and Licensed I.P. in the
               Vendor's possession (in this Section "CONFIDENTIAL PROPERTY").
               All use, disclosure or appropriation of Confidential Property
               owned by the Vendor by or to a third person has been pursuant to
               the terms of a written agreement between the Vendor and such
               third person. All use, disclosure or appropriation by the Vendor
               of Confidential Property not owned by the Vendor has been
               pursuant to the terms of a written agreement: (i) between the
               Vendor and the owner of

<Page>

                                                                             37.

               such Confidential Property; or (ii) between the Vendor and all
               third parties to whom disclosure of Confidential Property has
               been made prior to such disclosure and as permitted by the owner
               of such Confidential Property; or (iii) is otherwise lawful. All
               such written agreements are valid and subsisting and the Vendor
               is not aware of any breach of any such written agreements.

          (f)  Schedule 4.1.21 sets forth and describes all licence agreements
               or arrangements entered into by the Vendor under which any person
               has been granted rights by the Vendor to use Owned I.P.,
               specifies whether the rights granted to such person thereunder
               are exclusive or non-exclusive and sets forth a summary of the
               terms and conditions thereof (including geographic and other
               limitations and restrictions) and the amount of royalty payments,
               licence fees and other charges payable thereunder. Each licence
               agreement or arrangement with respect to Owned I.P. is valid and
               subsisting and in good standing and to the Vendor's knowledge
               there is no default thereunder.

          (g)  Schedule 4.1.21 specifies, for each item of Licenced I.P., the
               registration or application number, country, filing and
               expiration dates (if any), classes and, for any unregistered
               Licenced I.P. not under application for registration, the
               products and/or services with respect to which and the countries
               in which such unregistered Licenced I.P. is used and whether the
               rights granted to the Vendor thereunder are exclusive or
               non-exclusive and sets forth a summary of the terms and
               conditions thereof (including geographic and other limitations
               and restrictions and particulars of any requirement thereunder
               for the consent, approval, permit or acknowledgement of any
               person in connection with the assignment to the Purchaser of the
               right, title and interest of the Vendor as herein contemplated)
               and the amount of royalty payments, licence fees and other
               charges payable by, and any other obligations of, the Vendor
               thereunder. Each licence agreement or arrangement with respect to
               Licenced I.P. is valid and subsisting and in good standing and to
               the Vendor's knowledge there is no default thereunder and all
               Consents and notices required to be obtained or given in
               connection with the rights granted to the Vendor pursuant to any
               such license agreement have been properly obtained and/or given.

          (h)  The Vendor has the unencumbered rights to Use any Licenced I.P.
               (whether or not it is embedded or integrated into or combined
               with any Owned I.P.) pursuant to and in accordance with the terms
               of the applicable license agreement with the owner of the
               Licenced I.P.

          (i)  No person has provided notice of commencement of, or provided to
               the Vendor notice of intention to commence, any Legal Proceeding
               claiming infringement, adverse ownership, invalidity,
               unpatentability, lack of distinctiveness or conflict with respect
               to any of the Owned I.P. or the

<Page>

                                                                             38.

               Licenced I.P. or challenging any Intellectual Property Rights of
               the Vendor or a Licensor to the Vendor in and to the Owned I.P.
               or the Licenced I.P. or the right of the Vendor to use the Owned
               I.P. or the Licenced I.P. in the conduct of the Business.

          (j)  To the Vendor's knowledge the conduct of the Business by the
               Vendor, and the making, using and selling of the Products, does
               not conflict with, infringe upon or violate, and are not alleged
               by any person to conflict with, infringe upon or violate, the
               Intellectual Property Rights of any other person.

          (k)  The Vendor has not commenced any Legal Proceeding challenging the
               Intellectual Property Rights of any other person and, to the
               knowledge of the Vendor, there is no unauthorized Use,
               disclosure, infringement or misappropriation by any third person
               of any of the Vendor's Intellectual Property Rights.

          (l)  There are no actions that must be taken within thirty (30) days
               of the Closing Date that, if not taken, will result in the loss
               of any Intellectual Property Rights in and to the Owned I.P. and
               to the knowledge of the Vendor, the Licensed I.P., including the
               payment of any registration, maintenance or renewal fees or the
               filing of any responses to any patent and trademark office,
               actions, documents, applications or certificates for the purposes
               of obtaining, maintaining, perfecting or preserving or renewing
               any Intellectual Property Rights in and to the Owned I.P. and to
               the knowledge of the Vendor, the Licensed I.P.

4.1.22    PRODUCT REGISTRATIONS AND REGULATORY STATUS

          (a)  The Vendor is the lawful holder, or exclusive licensee in Canada
               of the lawful holder, of the Product Registrations.

          (b)  All of the Product Registrations are in full force and effect and
               have been duly and validly issued. There is no Legal Proceeding
               by any Governmental Authority pending or, to the knowledge of the
               Vendor, threatened seeking the recall of any of the Products or
               the revocation or suspension of any of the Product Registrations.
               The Vendor has made available to the Purchaser complete and
               correct copies of the Product Registrations, including both hard
               copies and electronic copies, if any.

          (c)  The Vendor has no information suggesting that: (i) the Products
               that are the subject of a NOC, cannot be marketed pursuant to the
               applicable NOC; or (ii) the Products not covered by a NOC cannot
               continue to be marketed in Canada substantially in the manner
               previously marketed by the Vendor and with the same marketing
               claims and Marketing Materials that are being or have been used
               by the Vendor. The Vendor has taken all

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                                                                             39.

               necessary steps to ensure that each Product can continue to be
               marketed under the applicable NDS or other applicable Product
               Registration.

          (d)  Except as disclosed in Schedule 4.1.22, there are no facts, which
               are reasonably likely to cause: (i) market withdrawal, recall or
               suspension of any of the Products; (ii) a change in the marketing
               classification of any of the Products; (iii) a material change in
               the labelling of any of the Products; or (iv) a termination or
               suspension of marketing of any of the Products.

          (e)  Except as disclosed in Schedule 4.1.22, the Vendor has not
               received any communication, nor are there any facts, to the
               knowledge of the Vendor, which furnish any reasonably likely
               basis for believing that the reimbursement rate paid by
               governmental or private third party payers for any of the
               Products, has, is, or will be reduced such that it would have a
               material impact on the sale of any of the Products.

          (f)  The Vendor has made available to the Purchaser: (i) all adverse
               drug experience information; (ii) customer complaints; (iii)
               investigations of complaints; (iv) TPD adverse event reports; and
               (v) reports of trends of adverse events; to the extent relating
               to the Products and to the extent that any of the foregoing is in
               the Vendor's possession. The Vendor has made available to the
               Purchaser all pre-clinical, clinical and validation data and any
               risk assessments in its possession that have been generated to
               demonstrate the safety and/or effectiveness of each of the
               Products. The pre-clinical and clinical studies conducted with
               respect to each of the Products were conducted in compliance with
               then-applicable TPD regulations and Product Registrations. The
               Product Registrations accurately and completely describe the
               pre-clinical and clinical studies.

          (g)  The Vendor (only with respect to the operation of the Business),
               and the Products (including the labelling thereof) are in
               compliance in all respects with all Applicable Laws. To the
               knowledge of the Vendor, there are no facts which furnish any
               reasonably likely basis for any notice of adverse findings,
               warning or other regulatory letters or sanctions, or similar
               notices, or other similar communication, and, since January 1,
               2001, there have been no recalls, field notifications (save and
               except for the "Dear Doctor" letter in respect of [ * ] sent in
               April, 2003), alerts or seizures requested or threatened relating
               to any of the Products or the Business. There have been no
               misstatements or material omissions relating to the Products or
               the Business in any regulatory submission or other document
               required to be maintained by Applicable Law and the accuracy of
               its regulatory submissions has not been contested by any
               Governmental Authority.

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             40.

          (h)  Neither the Vendor, nor any employee or officer of the Vendor,
               nor any other person, including any clinical investigator,
               involved in any services in connection with the Products was
               debarred or otherwise deemed to be ineligible to provide services
               in connection with any of the Products at the time such services
               were provided to the Vendor.

          (i)  The Vendor, its Employees, and, to the knowledge of the Vendor,
               all contract manufacturers, packagers, and other persons involved
               in the manufacture, processing, testing, promoting or advertising
               of the Products are in compliance with all applicable TPD
               regulations with respect to the Products.

          (j)  All filings and notices required to be delivered to any
               Governmental Authority with respect to any of the Products have
               been made on a timely basis.

          (k)  Except as disclosed in Schedule 4.1.22, the Vendor (with respect
               to the Business) and the Products are in compliance with the FOOD
               AND DRUG ACT (Canada) and CONTROLLED SUBSTANCE ACT (Canada) and
               all rules and regulations promulgated thereunder and other
               similar Canadian national and provincial statutes, rules and
               regulations, including record keeping, reporting, registration,
               security, labelling, and quota requirements.

          (l)  The Vendor has at all times and currently is in compliance with
               the reporting and pricing requirements of the PMPRB with respect
               to the Products. Set forth on Schedule 4.1.22 is a list and
               description of all reports required to be filed with the PMPRB,
               including pricing, with respect to the Products. The selling
               prices for each of the Products are and shall be at and as of the
               Closing in compliance with all Applicable Laws, including all
               PMPRB pricing guidelines.

          (m)  Except as disclosed in Schedule 4.1.22, the Vendor has carried
               out at regular intervals the required quality assurance/quality
               control audits of manufacturing facilities and companies that are
               service providers and/or suppliers of the Products to the Vendor
               and has made available to the Purchaser copies of all such
               quality assurance/quality control reports, complaints and/or
               correspondence related to such quality assurance/quality control
               audits.

4.1.23    GENERIC VERSIONS

          As of the Closing Date, except as disclosed in Schedule 4.1.23, the
Vendor is not engaged or working, directly or indirectly, on the development,
manufacturing or marketing of any generic version of any of the Products, and,
except as disclosed in Schedule 4.1.23, is not aware of any other person
working, directly or indirectly, on a generic version of any of the Products.
The Vendor is not aware of any ANDS filed with the TPD and has not received any
Notice of Allegation in connection with any of the Products by any manufacturer
of generic

<Page>

                                                                             41.

drugs. Except as disclosed in Schedule 4.1.23, the Vendor has not received any
requests for information that have been filed with Health Canada by a third
party pursuant to the Access to Information Act.

4.1.24    DISCLOSURE

          The representations and warranties of the Vendor contained in this
Agreement and in any agreement, certificate, affidavit, statutory declaration or
other document delivered or given pursuant to this Agreement are true and
correct and do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained in such
representations and warranties not misleading to a prospective purchaser of the
Purchased Assets. Except for matters disclosed herein, the Vendor has no
knowledge of any facts which, if known to the Purchaser, might reasonably be
expected to materially diminish the Purchaser's evaluation of the value of the
Business or might reasonably be expected to deter the Purchaser from completing
the transactions contemplated hereby. The Purchaser acknowledges the recent
divestiture by the Vendor of its rights to certain pipeline products to Elan
Corporation plc (the "ELAN TRANSACTION") as described in Schedule 4.1.24. The
Vendor hereby represents and warrants to the Purchaser that to the best of the
Vendor's knowledge the Elan Transaction has had no effect on the Business.

4.2       REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          The Purchaser represents and warrants to the Vendor as set out in this
Section 4.2 and acknowledges that the Vendor is relying on such representations
and warranties in connection with the transactions contemplated in this
Agreement.

4.2.1     INCORPORATION, AUTHORITY AND ENFORCEABILITY

          The Purchaser is a corporation duly incorporated and subsisting under
the laws of Canada and has the corporate power and capacity to enter into this
Agreement, to purchase the Purchased Assets from the Vendor as herein
contemplated and to perform its other obligations hereunder. The execution and
delivery of this Agreement and the completion of the transactions herein
contemplated have been duly and validly authorized by all necessary corporate
action on behalf of the Purchaser and this Agreement has been duly and validly
executed and delivered by the Purchaser and is a valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms.

4.2.2     INVESTMENT CANADA ACT

          The Purchaser is a non-Canadian within the meaning of the INVESTMENT
CANADA ACT (Canada).

4.2.3     RESIDENCE OF PURCHASER; GST AND QST STATUS

          The Purchaser is not a "non-resident" of Canada within the meaning of
the INCOME TAX ACT. The Purchaser is registered for the purposes of:

          (a)  GST Legislation, and its registration number is 888677176-RT; and

<Page>

                                                                             42.

          (b)  QST Legislation, and its registration number is 1020885943TQ001.

4.3       COMMISSION

          Each Party represents and warrants to the other Party that such other
Party will not be liable for any brokerage commission, finder's fee or other
similar payment in connection with the transactions contemplated hereby because
of any action taken by, or agreement or understanding reached by, that Party.

4.4       NON-WAIVER

          No investigations made by or on behalf of the Purchaser at any time
shall waive, diminish the scope of or otherwise affect any representation or
warranty made by the Vendor in this Agreement or in any Closing Document.

4.5       SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE VENDOR

          The representations and warranties of the Vendor contained in this
Agreement and in any Closing Document and in any agreement, certificate,
affidavit, statutory declaration or other document delivered or given pursuant
to this Agreement or any Closing Document shall survive the Closing and,
notwithstanding the Closing or any investigation made by or on behalf of the
Purchaser with respect thereto, shall continue in full force and effect for the
benefit of the Purchaser provided, however, that no claim in respect thereof
shall be valid unless it is made within the following time periods:

          (a)  in the case of a claim in respect of:

               (i)    the representations or warranties contained in Sections
                      4.1.1, 4.1.2, 4.1.3 and 4.1.17; and/or

               (ii)   any representation and warranty based on fraud, including
                      a claim in respect of a misrepresentation made or fraud
                      committed in filing a Tax Return or supplying information
                      for the purposes of any applicable Tax Legislation;

               there shall be no time limit within which such a claim may be
               made;

          (b)  in the case of a claim in respect of a representation or warranty
               relating to a Tax matter, other than a claim in respect of a
               misrepresentation made or fraud committed in filing a Tax Return
               or supplying information for the purposes of any applicable Tax
               Legislation, within a period commencing on the Closing Date and
               ending on the date on which the last applicable limitation period
               under any applicable Tax Legislation expires with respect to any
               taxation year which is relevant in determining any liability
               under this Agreement with respect to Tax matters;

<Page>

                                                                             43.

          (c)  in the case of a claim in respect of the representations or
               warranties contained in Sections 4.1.21, 4.1.23 and 4.1.24 within
               a period of [ * ] from the Closing Date;

          (d)  in the case of a claim in respect of any other representation or
               warranty within a period of [ * ] from the Closing Date;

and any such claim as aforesaid shall be made in accordance with the provisions
set forth in Article 7 and, upon the expiry of the relevant limitation period
referred to in clauses (a), (b) and (c) of this Section 4.5, the Vendor shall
have no further liability to the Purchaser with respect to the representations
or warranties referred to in such clauses, respectively, except in respect of
claims which have theretofore been made in accordance with the provisions set
forth above.

4.6       SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          The representations and warranties of the Purchaser contained in this
Agreement and in any Closing Document and in any agreement, certificate,
affidavit, statutory declaration or other document delivered or given pursuant
to this Agreement or any Closing Document shall survive the Closing and,
notwithstanding the Closing or any investigation made by or on behalf of the
Vendor with respect thereto, shall continue in full force and effect for the
benefit of the Vendor provided, however, that no claim in respect thereof shall
be valid unless it is made within the following time periods:

          (a)  in the case of a claim in respect of the representations and
               warranties set forth in Section 4.2.1, there shall be no time
               limit within which such a claim may be made; and

          (b)  in the case of a claim in respect of any other representation and
               warranty, within a period of [ * ] from the Closing Date;

and any such claim shall be made in accordance with the provisions set forth in
Article 7 and, upon the expiry of the relevant limitation period, the Purchaser
shall have no further liability to the Vendor with respect to any of such
representations or warranties, except with respect to claims which have been
properly made in accordance with the provisions set forth above.

                                    ARTICLE 5
                         OTHER COVENANTS OF THE PARTIES

5.1       COVENANTS OF THE VENDOR

          The Vendor hereby covenants and agrees with the Purchaser as set out
in this Section 5.1.

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             44.

5.1.1     CUSTOMERS

          Commencing forthwith after the date hereof, the Vendor shall use
commercially reasonable efforts to collect receivables from third parties prior
to the Closing Date, which efforts shall not interfere with the Purchaser's
relationship with such third parties from and after the Closing Date.

5.1.2     REFUNDS AND RETURNS

          For a period of four (4) years from the Closing Date, to the extent
that:

          (a)  any customer returns any Product to the Vendor or to the
               Purchaser for a refund, credit or rebate in accordance with
               industry practice; and

          (b)  the applicable lot for such Product has been sold in its entirety
               by the Vendor prior to the Closing Date;

the Purchaser shall deal with the Product in accordance with its standard
operating procedures, at the Vendor's cost, and the Vendor shall deal with such
return and pay to such customer any refund, credit or rebate in accordance with
industry practice.

With respect to partial lots of any Products sold by the Vendor prior to the
Closing Date, the Parties hereby agree to deal with customer returns, credits
and rebates for such Products as follows:

               (i)    if at the Closing Date less than fifty percent (50%)
                      of a lot of any Product was on hand at the Vendor (as
                      determined by the inventory count contemplated in Section
                      3.2.1), all returns, credits and rebates arising from such
                      lot will be for the account of the Vendor, and the
                      Purchaser shall deal with the Product in accordance with
                      its standard operating procedures, at the Vendor's cost,
                      and the Vendor shall deal with such return and pay to the
                      applicable customer any refund, credit or rebate in
                      accordance with industry practice; and

               (ii)   if at the Closing Date more than fifty percent (50%)
                      of a lot was on hand at the Vendor (as determined by the
                      inventory count contemplated in Section 3.2.1), all
                      returns, credits and rebates arising from such lot will be
                      for the account of the Purchaser and the Purchaser shall
                      deal with such returns and pay to the applicable customer
                      any refund, credit or rebate in accordance with industry
                      practice.

          Within thirty (30) days of the end of every calendar quarter following
the Closing Date, the Parties shall exchange any and all relevant information to
enable them to reconcile and account for the payment of any refunds, credits or
rebates to customers. The Parties further agree that if either Party has paid
any refund, credit or rebate to a customer on behalf of the other

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                                                                             45.

Party, such other Party shall reimburse any such refund, credit or rebate within
ten (10) days after the date that the foregoing information is exchanged.

5.1.3     RETAIL SALES TAX CERTIFICATE

          The Vendor shall deliver to the Purchaser a certificate issued by the
Minister of Finance (Ontario) pursuant to Section 6(1) of the ONTARIO RETAIL
SALES TAX ACT.

5.1.4     BOOKS AND RECORDS AND MARKETING MATERIALS

          Upon Closing the Vendor shall deliver to the Purchaser at the
Purchaser's offices in Laval, Quebec, the Books and Records and any and all
Marketing Materials.

5.1.5     OPTION FOR LEVULAN

          The Purchaser shall have an option for a period of [ * ] from the
Closing Date to acquire from the Vendor all of the Vendor's right, title and
interest in and to Levulan in consideration of a one-time payment of [ * ],
which will include all of the Vendor's inventory of Levulan. The agreement of
the parties evidencing such purchase shall contain representations, warranties,
covenants and indemnifications and non-competition covenants with respect to
Levulan that are substantially similar to those contained in this Agreement. In
addition to the foregoing, except for an offer by [ * ], in the event that the
Vendor, within twelve (12) months of the Closing Date, either:

          (a)  receives an offer from any third party to use, promote, market,
               sell and/or distribute Levulan; or

          (b)  the Vendor decides to sublicence its rights to use, promote,
               market, sell and/or distribute Levulan; or

          (c)  the licensor of Levulan wants to terminate the Vendor's license
               agreement and rights to Levulan (the "LEVULAN LICENSE
               AGREEMENT"), whether for breach or otherwise and has notified the
               Vendor thereof;

then the Vendor shall forthwith give to the Purchaser notice in writing of the
occurrence of any of the above, together with a copy of any offer or notice, as
applicable, setting out fully the details of such offer and/or notice. The
Purchaser shall be entitled to a right of first refusal to meet the terms of
such offer or cure any breach of the Levulan License Agreement, as applicable,
and receive an assignment of the Levulan Licence Agreement. The Purchaser shall
have a period of not less than thirty (30) days after the date of receipt of
such notice from the Vendor to exercise its rights of first refusal as described
herein. The Purchaser shall have the option to purchase at the Vendor's book
value any inventory of the Levulan product, free and clear of all liens,
encumbrances and security interests. If the Purchaser provides notice to the
Vendor within the thirty (30) day period, that the Purchaser wishes to exercise
its right of first refusal, the parties shall enter into good faith negotiations
to affect the transfer of the Vendor's rights to the Levulan product to the
Purchaser on terms and conditions satisfactory to the Purchaser and the

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* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             46.

Vendor, both parties acting reasonably. In the event that the parties are unable
to reach a satisfactory agreement regarding such transfer within six (6) months
from the date of the notice by the Purchaser to the Vendor of its desire to
exercise its right of first refusal, the Vendor shall be permitted to proceed
with such sublicensing and/or assignment of the Levulan Licence Agreement to any
third party.

5.1.6     VENDOR'S PRODUCT LIABILITY INSURANCE

          Subject to the ability to obtain insurance in respect of each of the
Products, the Vendor hereby agrees that the Vendor will have and maintain in
force such product liability insurance coverage which will include appropriate
product liability coverage related to each of the Products. Such product
liability insurance coverage will be non-contributory and primary with respect
to any other insurance or self insurance which may be maintained by the
Purchaser. The Vendor shall cause its insurers to issue certificates of
insurance evidencing that the coverage required under this Agreement are
maintained in force and no less than thirty (30) days' written notice shall be
given to the Purchaser prior to any cancellation, expiration or non-renewal of
the policies and the Purchaser shall have the right to receive an assignment of
any such policies. The Vendor shall provide copies of such certificates of
insurance to the Purchaser within five (5) Business Days of the Closing Date.
The commercial insurers selected by the Vendor shall have an AM Best rating of
B+ or better, or if such ratings are no longer available, a comparable rating
from a recognized insurance rating agency.

5.1.7     ACCRUED ROYALTY PAYMENTS

          The Vendor hereby agrees to pay to the Purchaser within thirty (30)
days of Closing the aggregate of all royalties owing but not paid in respect of
each of the Products for the period up to and including the Closing Date. In
connection with such payment, the Vendor shall provide a report setting forth
all of the information necessary for the calculation of the royalty payment due
in respect of each of the Products for the applicable period and the amount of
the royalty payment due in respect of each of the Products, each in sufficient
detail to permit the Purchaser to determine whether the calculation of the
royalty payment due in respect of each Product is accurate. The Vendor shall
cause its representatives and employees to be reasonably available to the
Purchaser to discuss any questions or comments of the Purchaser concerning such
report.

5.1.8     PROOF OF PAYMENT

          The Vendor hereby agrees to provide the Purchaser at the Closing Date
with written documentation from Eli Lilly Canada Inc. that confirms the Vendor's
payment of [ * ] to Eli Lilly Canada Inc. on June 30, 2003 in respect of the
Eli Lilly Agreement.

5.1.9     SHORTAGE OF HECTOROL(TM)

          In the event that the Purchaser is unable to sell the Inventory of
Hectorol as a result of a delay caused by the time required to obtain the
regulatory approval of the manufacturing changes related to Hectorol(TM), the
Vendor agrees to pay to the Purchaser the book

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             47.

value at Closing of the unsold inventory of Hectorol(TM) ("UNSOLD INVENTORY")
within thirty (30) days of the Purchaser's written request, which request shall
be submitted with information sufficient to permit the Vendor to determine the
accuracy of the book value at Closing of the Unsold Inventory and the quantity
of the Unsold Inventory. The Purchaser shall cause its representatives and
employees to be reasonably available to the Vendor to discuss any questions or
comments of the Vendor concerning the book value of the Unsold Inventory and the
quantity of the Unsold Inventory.

5.2       COVENANTS OF THE PURCHASER

5.2.1     COVENANT TO PROMOTE PRODUCTS

          The Purchaser shall at all times use Commercially Reasonable Efforts
to promote, detail and sell the Royalty Products in Canada (other than
Diastat(R)); provided, however in the event that the Purchaser is no longer able
to fulfil its obligations under Section 5.2.1 on a Commercially Reasonable
Efforts basis, on a Royalty Product-by-Royalty Product basis (each, a
"NON-FULFILLMENT EVENT"), the Purchaser shall use Commercially Reasonable
Efforts within [ * ] of the Non-fulfillment Event to either: (a) sublicense the
applicable Royalty Product to a third party with the Vendor's prior written
consent, such consent not to be unreasonably withheld or delayed; or (b) assign
its rights to the applicable Royalty Product to a third party, including the
applicable Royalty Payment payable to the Vendor pursuant to Section 3.8 hereof.
The Purchaser agrees that it will not withdraw the applicable Royalty Product
from the market during such [ * ] period, unless (i) compelled by law; or (ii)
the Royalty Product has a serious or substantial adverse event or reaction and
it would be prudent for an ethical pharmaceutical company under similar
circumstances to withdraw the applicable Royalty Product from the market.

5.2.2     COVENANT TO FILE

          The Purchaser agrees to file submissions to seek approval in Canada
for Hectorol IV formulation and/or the pre-dialysis indication of Hectorol with
TPD on or before the first anniversary of the Closing, provided that the
Purchaser has received the proper and appropriate documentation necessary for
such submission with TPD, including the applicable and appropriate adjustments
for a Canadian submission. The Purchaser will attempt to list any appropriate
patents with TPD in conjunction with the aforesaid submissions with TPD.

5.2.3     COMPLIANCE DURING COGS ROYALTY PERIOD

          The Purchaser shall use Commercially Reasonable Efforts at all times
during the COGS Royalty Period to comply with all Applicable Laws related to the
marketing, selling, advertising, distribution and supply of the Products in
Canada.

5.2.4     PURCHASER'S GENERAL LIABILITY INSURANCE

          Subject to the ability to obtain insurance in respect of each of the
Products, the Purchaser hereby agrees to maintain in force adequate and
customary general liability insurance

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             48.

coverage in respect to each of the Products during the term of the applicable
license agreement in respect of such Product.

5.2.5     PRODUCT MONOGRAPHS

          The Purchaser agrees that ninety (90) days after the date that the
Purchaser receives all necessary and appropriate documentation for the
submission to the applicable authorities for the amendment of monographs for
pharmaceutical drugs, which documentation is in the form and substance required
by the applicable Governmental Authority, the Purchaser shall initiate contact
with TPD to address the updating of the monographs for the Products resulting
from a difference between the applicable Product monograph approved in the
United States and the applicable Product monograph approved in Canada. The
Purchaser agrees to use Commercially Reasonable Efforts to obtain on a timely
basis all necessary and appropriate documentation for the submission to the
applicable Governmental Authority.

5.2.6     SITE CHANGE FOR ALERTEC

          The Purchaser agrees that ninety (90) days after the date that the
Purchaser receives all necessary and appropriate documentation for the
submission to the applicable authorities for the approval of the change in the
manufacturing site from [ * ] for release testing and stability in respect of
Alertec, which documentation is in the form and substance required by the
applicable Governmental Authority the Purchaser shall initiate contact with TPD
to notify and obtain the approval of TPD to the change in the manufacturing site
from [ * ] for release testing and stability in respect of Alertec. The
Purchaser agrees to use Commercially Reasonable Efforts to obtain on a timely
basis all necessary and appropriate documentation for the submission to the
applicable Governmental Authority.

5.3       COST SHARING

          The Parties hereby agree that the first [ * ] of costs and expenses
paid to third parties which is incurred by the Purchaser in pursuing contact
with TPD as described in Sections 5.2.5 and 5.2.6 hereof, shall be born by the
Purchaser and thereafter the Parties shall share any and all such additional
costs and expenses of the Purchaser paid to third parties as follows:

          (a)  two-thirds of all such additional costs and expenses of the
               Purchaser paid to third parties shall be for the account of the
               Vendor; and

          (b)  one-third of all such additional costs and expenses of the
               Purchaser paid to third parties shall be for the account of the
               Purchaser.

          The Purchaser agrees to provide to the Vendor documentation supporting
these costs and expenses paid to third parties, including proof of payment, and
the Purchaser shall notify the Vendor in writing when the Purchaser has incurred
the first [ * ] of costs and expenses paid to third parties. The Vendor agrees
to pay to the Purchaser the Vendor's share of such additional costs and expenses
of the Purchaser paid to third parties, within five (5) Business Days of receipt
of an invoice addressed to the Vendor from the Purchaser, together with the

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* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

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                                                                             49.

documentation supporting these costs and expenses paid to third parties. The
Purchaser agrees that after the Purchaser has incurred [ * ] of costs and
expenses paid to third parties, the Purchaser shall consult with the Vendor
regarding further third party costs to be incurred in pursuing the issue with
TPD as described in Sections 5.2.5 and 5.2.6 hereof.

5.4       COOPERATION

          Each Party hereby covenants and agrees with the other Party that the
Parties shall cooperate fully in good faith with each other and their respective
Representatives in connection with any steps required to be taken as part of
their respective obligations under this Agreement.

                                    ARTICLE 6
                              CONDITIONS OF CLOSING

6.1       CONDITIONS FOR THE BENEFIT OF THE PURCHASER

          The transactions herein contemplated, including the sale and purchase
of the Purchased Assets in accordance with the terms of this Agreement, are
subject to the following conditions precedent set out in this Section 6.1, each
of which is hereby declared to be for the exclusive benefit of the Purchaser.
Each of such conditions is to be satisfied in full at or prior to the Closing
Time. The Vendor covenants and agrees to use its reasonable efforts to cause
each of such conditions to be fulfilled at or prior to the Closing Time.

6.1.1     LEGAL OPINION

          A legal opinion of McCarthy Tetrault LLP dated the Closing Date and
being substantially in the form annexed hereto as Exhibit A shall have been
received by the Purchaser at the Closing Time. In rendering such opinion,
counsel may rely as to the laws of jurisdictions other than the Province of
Ontario upon the opinions of counsel qualified to practise in such jurisdictions
satisfactory to the Purchaser.

6.1.2     REGULATORY APPROVALS

          All Regulatory Approvals necessary to allow the Vendor to assign the
Licences to the Purchaser (or, if a Licence is not assignable, to allow the
Purchaser to obtain a new licence substantially the same as the non-assignable
Licence), on the terms which allow the Purchaser, in either case, to enjoy all
rights and benefits thereunder and to carry on the Business after the Closing in
the same manner as it is currently carried on, shall have been obtained. All
such Regulatory Approvals shall be unconditional or on terms satisfactory to the
Purchaser, acting reasonably.

6.1.3     NO LEGAL PROCEEDINGS

          No Order shall have been made and no Legal Proceeding shall have been
commenced or shall be pending or threatened against the Vendor or the Purchaser
which adversely affects or would adversely affect the title of the Vendor to the
Purchased Assets or

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  Exchange Commission.

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                                                                             50.

which enjoins, restricts or prohibits, or which asserts a claim or seeks a
remedy that would have the effect of enjoining, restricting or prohibiting the
completion of the transactions herein contemplated, or which, in the result,
could prohibit or materially restrict the Purchaser from carrying on the
Business in the ordinary course after Closing.

6.1.4     SATISFACTORY REPORTS AND OPINIONS ON INVESTIGATIONS

          At or prior to the Time of Closing, the Purchaser shall have been
furnished with reports and opinions satisfactory to it as to the results of the
investigations conducted by the Purchaser's Representatives as contemplated by
this Agreement including, without limitation, Section 4.1.2.

6.1.5     CLOSING DOCUMENTS

          The Purchaser shall have received such other opinions, agreements,
certificates, affidavits, statutory declarations, instruments of transfer and
other documentation reasonably required by the Purchaser to implement the
transactions herein contemplated, all of which shall be satisfactory in form and
substance to counsel for the Purchaser, acting reasonably.

6.1.6     EMPLOYEES

          Prior to the Closing Date, the Vendor shall provide the Purchaser with
Schedule 4.1.12 following which the Purchaser shall make written offers of
employment conditional upon the closing of the transactions contemplated herein
for some of the Employees whom it shall choose at its sole discretion. Employees
who accept the Purchaser's offer of employment shall be required to execute
employment agreements satisfactory in form and substance to the Purchaser and
shall become "Offered Employees".

          The Purchaser shall be liable for all employment-related obligations
relating to the Offered Employees immediately following the Closing Date and the
Purchaser hereby agrees to recognize each Offered Employee's years of service
with the Vendor for all purposes in the event that such Offered Employee's
employment is not terminated by the Purchaser for any reason within [ * ] of
the Closing Date. Notwithstanding the foregoing, should the Purchaser terminate
the employment of an Offered Employee for any reason within [ * ] of the Closing
Date, the Vendor shall pay the Purchaser any and all severance costs owing to
the Offered Employee, within fifteen (15) days of the Purchaser's written
request. Other than as specified above, the Vendor shall be liable and shall
indemnify the Purchaser for all employment-related obligations without
limitation incurred with respect to the Employees and for all employment-related
obligations including wages, vacation pay, bonus, incentive compensation, and
benefits claims, incurred with respect to the Offered Employees on or before to
the Closing Date.

6.1.7     NON-COMPETITION AGREEMENT

          The Non-Competition Agreement shall have been entered into by the
Vendor with the Purchaser.

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                                                                             51.

6.1.8     TRANSITION SERVICES AGREEMENT

          The Transition Services Agreement shall have been entered into by the
Vendor with the Purchaser.

6.1.9     ESCROW AGREEMENT

          The Escrow Agreement shall have been entered into by the Vendor with
the Purchaser and the Escrow Agent.

6.1.10    CONSENTS

          All Consents necessary to allow the Vendor to assign the Contracts to
the Purchaser have been obtained.

6.1.11    BOARD OF DIRECTORS APPROVAL

          The Board of Directors and/or the Executive Committee of the Purchaser
shall have validly passed and taken all other necessary corporate action to
authorize the purchase of the Purchased Assets and the entering into of the
Agreement.

6.2       CONDITIONS FOR THE BENEFIT OF THE VENDOR

          The transactions herein contemplated, including the sale and purchase
of the Purchased Assets in accordance with the terms of this Agreement, are
subject to the conditions precedent set out in this Section 6.2, each of which
is hereby declared to be for the exclusive benefit of the Vendor. Each of such
conditions is to be satisfied in full at or prior to the Closing Time. The
Purchaser covenants and agrees to use its reasonable efforts to cause each of
such conditions to be fulfilled prior to the Closing Time.

6.2.1     LEGAL OPINION

          A legal opinion of Fraser Milner Casgrain LLP, dated the Closing Date
and being substantially in the form annexed hereto as Exhibit B shall have been
received by the Vendor at the Closing Time. In rendering such opinion, counsel
may rely as to the laws of jurisdictions other than the Province of Ontario upon
the opinions of counsel qualified to practise in such jurisdictions satisfactory
to the Vendor.

6.2.2     BOARD OF DIRECTORS APPROVAL

          The Board of Directors of the Vendor shall have validly passed and
taken all other necessary corporate action to authorize the sale of the
Purchased Assets and the entering into of the Agreement.

6.2.3     ESCROW AGREEMENT

          The Escrow Agreement shall have been entered into by the Purchaser
with the Vendor and the Escrow Agent.

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                                                                             52.

6.3       WAIVER

          Either Party may waive, by notice to the other Party, any condition
set forth in this Article 6 which is for its benefit. No waiver by a Party of
any condition, in whole or in part, shall operate as a waiver of any other
condition.

6.4       FAILURE TO SATISFY CONDITIONS

          If any condition set forth in Sections 6.1 or 6.2 is not satisfied at
the Closing Time, or if it becomes apparent that any such condition can not be
satisfied at the Closing Time, the Party entitled to the benefit of such
condition (the "FIRST PARTY") may terminate this Agreement by notice in writing
to the other Party and in such event:

          (a)  unless the other Party can show that the condition or conditions
               which have not been satisfied and for which the First Party has
               terminated this Agreement are reasonably capable of being
               performed or caused to be performed by the First Party or have
               not been satisfied by reason of a default by the First Party
               hereunder, the First Party shall be released from all obligations
               hereunder; and

          (b)  unless the First Party can show that the condition or conditions
               which have not been satisfied and for which the First Party has
               terminated this Agreement are reasonably capable of being
               performed or caused to be performed by the other Party or have
               not been satisfied by reason of a default by the other Party
               hereunder, then the other Party shall also be released from all
               obligations hereunder;

provided however that no release of obligations under this Section 6.4 shall
release either Party from any obligation under Section 4.3, Section 8.1, Section
8.3 or Section 8.6.

                                    ARTICLE 7
                                 INDEMNIFICATION

7.1       INDEMNIFICATION BY VENDOR

7.1.1     GENERAL INDEMNITY

          The Vendor shall indemnify, defend and save harmless the Purchaser and
each of its Representatives from and against any and all Loss suffered or
incurred by them, as a direct or indirect result of, or arising in connection
with or related in any manner whatever to:

          (a)  subject to Section 4.5 and the limitations set forth in Section
               7.12(a), any misrepresentation or breach of warranty made or
               given by the Vendor in this Agreement, in any Closing Document or
               in any other document delivered pursuant to this Agreement or any
               Closing Document;

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                                                                             53.

          (b)  any failure by the Vendor to observe or perform any covenant or
               obligation contained in this Agreement, any Closing Document or
               in any document delivered pursuant to this Agreement or any
               Closing Document;

and, without limiting the generality of the provisions of Sections 7.1.1(a) and
(b), the indemnity provided for in this Section 7.1.1 shall also extend to:

          (c)  any Claim against the Purchaser instituted prior to or after the
               Closing Time and whether or not disclosed on Schedule 4.1.17
               which is based on an act or omission of the Vendor prior to the
               Closing Time;

          (d)  any Claim in respect of liability for [ * ] against the
               Purchaser instituted after the Closing Time in respect of [ * ]
               that was supplied to any patient whose treatment with [ * ]
               commenced prior to the Closing Time, whether or not the basis of
               the Claim is identified or diagnosed after the Closing Time;

          (e)  any Claim against the Purchaser instituted after the Closing Time
               in respect of any one of the Products (excluding any Claims that
               are indemnified pursuant to Section 7.1.1(d)), which
               indemnification shall be in accordance with Sections 7.1.3 and
               7.1.4;

          (f)  any Claim against the Purchaser instituted prior to or after the
               Closing time and whether or not disclosed on Schedule 4.1.17, in
               connection with Section 4.1.21;

          (g)  any Taxes required to be paid by the Vendor relating to any
               period ending on or before the Closing Date. For greater
               certainty, this would include any non-compliance by the Vendor
               with any Tax Legislation, including without limitation the EXCISE
               TAX ACT (Canada), ONTARIO RETAIL SALES TAX ACT and the QST
               Legislation, as amended from time to time;

          (h)  any Claim against the Purchaser in respect of the indemnification
               obligations under Section 6.1.6;

          (i)  any Claim against the Purchaser instituted prior to or after the
               Closing Time and whether or not disclosed in Schedule 4.1.17
               which is related to the sale of any of the Products prior to
               Closing at prices in excess of the prices approved by PMPRB,
               either before or after the determination of such pricing by
               PMPRB;

          (j)  any facts giving rise to a Claim against the Purchaser instituted
               after the Closing Time and, whether or not any such facts are
               disclosed in Schedule 4.1.22, which is related to the Vendor not
               having carried out prior to Closing, in relation to the
               Inventories and all Products sold by the Vendor prior to Closing:

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                                                                             54.

               (i)    at regular intervals, the required quality assurance
                      and/or quality control audits of manufacturing facilities
                      and companies that are service providers and/or suppliers
                      of the Products to the Vendor; or

               (ii)   the required confirmatory release testing of each of
                      the Products;

          (k)  subject to the Purchaser's compliance with its obligations
               pursuant to Section 5.2.2, any Claim against or Loss suffered by
               the Purchaser in respect of the Vendor's failure to list the
               patent for [ * ] in its application to TPD;

          (l)  subject to the Purchaser's compliance with its obligations
               pursuant to Section 5.2.5, any Claim against or Loss suffered by
               the Purchaser that arises from the monographs for any of the
               Products that have not been updated by the Vendor, to the extent
               that the Claim or Loss arises out of a failure to warn in the
               applicable Product monograph of a material medical safety issue,
               resulting from a difference between the applicable Product
               monograph approved in the United States and the applicable
               Product monograph approved in Canada; and

          (m)  subject to the Purchaser's compliance with its obligations
               pursuant to Section 5.2.6, any Claim against or Loss suffered by
               the Purchaser that arises from the Vendor's failure to notify TPD
               of the site change from [ * ] for release testing and stability
               in respect of Alertec(R).

For greater certainty, claims for indemnification pursuant to Section 7.1.1(c)
to Section 7.1.1(k) shall not be subject to any time limit. Claims for
indemnification pursuant to Section 7.1.1(l) and Section 7.1.1(m) must be
asserted by the Purchaser on or before the second anniversary of the Closing
Date.

For greater certainty, the Parties hereby agree that the indemnification in
Section 7.1.1(l) shall not in any way be interpreted to limit or reduce the
indemnification in Sections 7.1.1(d) and/or 7.1.1(e).

7.1.2     BULK SALES INDEMNITY

          The Parties hereto believe that, assuming compliance with this
Agreement by both the Vendor and the Purchaser, it is both unnecessary for the
protection of the Vendor's creditors and impracticable to comply with the Bulk
Sales Legislation of the various jurisdictions in which the Purchased Assets are
located. Accordingly, in the event that any creditor of the Vendor should make
any claim against either the Purchaser or the Purchased Assets which is wholly
or partially based on the premise that the sale of the Purchased Assets did not
conform in any particular to the requirements of the Bulk Sales Legislation of
any jurisdiction in which the Purchased Assets are situated, the Vendor agrees
to indemnity and save the Purchaser harmless in principal, interest and costs,
including reasonable legal fees, against and from any such claim, whether or not
the claim is ultimately proved to be well founded. The Vendor hereby agrees that

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                                                                             55.

the limitations in Section 7.12 of this Agreement shall not apply to a Claim
under this Section 7.1.2.

7.1.3     ALLOCATION OF LIABILITY FOR INDIVIDUAL CLAIMS

          The Parties hereby agree that the Loss in respect of any Claim
pursuant to Section 7.1.1(e) which is determined for a specific individual
("INDIVIDUAL DAMAGES AWARD") shall be apportioned between the Parties as
follows:

          (a)  the proportion of the Individual Damages Award for which the
               Purchaser shall be liable to pay to the third party claimant
               shall be calculated as follows:

               (i)    the numerator shall equal the period of time commencing on
                      the [ * ] and ending on the date on which the third party
                      claimant ceases to use the applicable Product; and

               (ii)   the denominator shall be the period of time commencing on
                      the date on which the third party claimant [ * ] and
                      ending on the date on which the third party claimant [ * ]
                      the applicable Product;

               (iii)  the numerator (as defined above in Section 7.1.3(a)(i))
                      divided by the denominator (as defined above in Section
                      7.1.3(a)(ii)) shall be the "PURCHASER'S PERCENTAGE"; and

               (iv)   the Purchaser's Percentage multiplied by the Individual
                      Damages Award shall represent the proportion of the
                      Individual Damages Award for which the Purchaser shall be
                      liable to pay to the applicable third party claimant; and

          (b)  the proportion of the Individual Damages Award for which the
               Vendor shall be liable to pay to the third party claimant shall
               be calculated as follows:

               (i)    the numerator shall equal the period of time commencing on
                      the date on which the third party claimant [ * ] the
                      applicable Product and ending on the [ * ]; and

               (ii)   the denominator shall be the period of time commencing on
                      the date on which the third party claimant [ * ] the
                      applicable Product and ending on the date on which the
                      third party claimant [ * ] the applicable Product;

               (iii)  the numerator (as defined above in Section 7.1.3(b)(i))
                      divided by the denominator (as defined above in Section
                      7.1.3(b)(ii)) shall be the "VENDOR'S PERCENTAGE".

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             56.

               (iv)   the Vendor's Percentage multiplied by the Individual
                      Damages Award shall represent the proportion of the
                      Individual Damages Award for which the Vendor shall be
                      liable to pay to third parties.

The Parties hereby agree that:

          (a)  if the third party claimant [ * ] the applicable Product on or
               before the [ * ], then the Vendor shall be solely liable for
               paying the Individual Damages Award; and

          (b)  if the third party claimant [ * ] the applicable Product after
               the [ * ], then the Purchaser shall be solely liable for paying
               the Individual Damages Award.

7.1.4     ALLOCATION OF LIABILITY FOR CLASS ACTION CLAIMS

          In the event that any Claim pursuant to Section 7.1.1(e) is not
determined in a manner that permits allocation of liability to a specific
individual claimant pursuant to the provisions in Section 7.1.3 as a result of a
class action claim wherein the determination of individual claimant damages is
not determined by a court of competent jurisdiction ("CLASS ACTION DAMAGES
AWARD"), then the Parties hereby agree that the Loss in respect of any Claim
pursuant to Section 7.1.1(e) Class Action Damages Award shall be apportioned
between the Parties as follows:

          (a)  the proportion of the Class Action Damages Award for which the
               Purchaser shall be liable to pay shall be calculated as follows:

               (i)    the numerator shall equal the period of time commencing on
                      the [ * ] and ending on the date on which a [ * ] in
                      respect of the applicable Product which claim ultimately
                      proceeds by class action; and

               (ii)   the denominator shall be the period of time commencing on
                      the date on which the Vendor [ * ] Product and ending on
                      the date on which a [ * ] in respect of the applicable
                      Product which claim ultimately proceeds by class action;

               (iii)  the numerator (as defined above in Section 7.1.4(a)(i))
                      divided by the denominator (as defined above in Section
                      7.1.4(a)(ii)) shall be the "PURCHASER'S PERCENTAGE"; and

               (iv)   the Purchaser's Percentage multiplied by the Class Action
                      Damages Award shall represent the proportion of the Class
                      Action Damages Award for which the Purchaser shall be
                      liable to pay to third parties; and

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             57.

          (b)  the proportion of the Class Action Damages Award for which the
               Vendor shall be liable to pay shall be calculated as follows:

               (i)    the numerator shall equal the period of time commencing on
                      the date on which the [ * ] until the [ * ];

               (ii)   the denominator shall be the period of time commencing on
                      the date on which the [ * ] and ending on the date on
                      which a [ * ] in respect of the applicable Product which
                      claim ultimately proceeds by class action;

               (iii)  the numerator (as defined above in Section 7.1.4(b)(i))
                      divided by the denominator (as defined above in Section
                      7.1.4(b)(ii)) shall be the "VENDOR'S PERCENTAGE"; and

               (iv)   the Vendor's Percentage multiplied by the Class Action
                      Damages Award shall represent the proportion of the Class
                      Action Damages Award for which the Vendor shall be liable
                      to pay to third parties.

          The Parties hereby agree that this allocation of liability in respect
of claims pursuant to Section 7.1.1(d) and (e) is intended to be the full and
complete allocation of liability in respect of such claims as between the Vendor
and the Purchaser, including any direct liability as between the Parties and
liability to any third parties.

7.2       INDEMNIFICATION BY THE PURCHASER

          The Purchaser shall indemnify, defend and save harmless the Vendor and
each of the Vendor's Representatives from and against any and all Loss suffered
or incurred by them, as a direct or indirect result of, or arising in connection
with or related in any manner whatsoever to:

          (a)  subject to Section 4.6 and the limitations set forth in Section
               7.12(b), any misrepresentation or breach of any warranty made or
               given by the Purchaser in this Agreement, in any Closing Document
               or in any document delivered pursuant to this Agreement or any
               Closing Document; or

          (b)  any failure by the Purchaser to observe or perform any covenant
               or obligation contained in this Agreement, in any Closing
               Document or in any document delivered pursuant to this Agreement
               or any Closing Document.

7.3       AGENCY FOR REPRESENTATIVES

          Each Party agrees that it accepts each indemnity in favour of any of
its Representatives as agent and trustee of that Representative. Each Party
agrees that the other

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             58.

Party may enforce an indemnity in favour of any of that Party's Representatives
on behalf of that Representative.

7.4       NOTICE OF THIRD PARTY CLAIMS

          If an Indemnitee receives notice of the commencement or assertion of
any Third Party Claim, the Indemnitee shall give the Indemnitor reasonably
prompt notice thereof, but in any event no later than thirty (30) days after
receipt of such notice of such Third Party Claim. Such notice to the Indemnitor
shall describe the Third Party Claim in reasonable detail and shall indicate, if
reasonably practicable, the estimated amount of the Loss that has been or may be
sustained by the Indemnitee.

7.5       DEFENCE AND/OR SETTLEMENT OF THIRD PARTY CLAIMS

          The Indemnitor may participate in or assume the defence of any Third
Party Claim by giving notice to that effect to the Indemnitee not later than
thirty (30) days after receiving notice of that Third Party Claim (the "NOTICE
PERIOD"). The Indemnitor's right to do so shall be subject to the rights of any
insurer or other party who has potential liability in respect of that Third
Party Claim. The Indemnitor shall pay all of its own expenses of participating
in or assuming such defence. The Indemnitee shall co-operate in good faith in
the defence of each Third Party Claim, even if the defence has been assumed by
the Indemnitor and may participate in such defence assisted by counsel of its
own choice at its own expense. If the Indemnitee has not received notice within
the Notice Period that the Indemnitor has elected to assume the defence of such
Third Party Claim, the Indemnitee may, at its option, elect to settle or
compromise the Third Party Claim or assume such defence, assisted by counsel of
its own choosing and the Indemnitor shall be liable for all reasonable costs and
expenses paid or incurred in connection therewith and any Loss suffered or
incurred by the Indemnitee with respect to such Third Party Claim. If the
Indemnitor elects to assume the defence, settlement or compromise of a Third
Party Claim under this Section 7.5: (x) the Indemnitor shall not have the right
thereafter to contest its liability for such claim; (y) the Indemnitee shall, if
the Indemnitee elects to participate in a Third Party Claim with counsel of its
own choosing, be responsible for any of the legal expenses and costs of the
Indemnitee's own counsel incurred by the Indemnitee in connection with the
defence of such Third Party Claim; and (z) the Indemnitor may only settle or
compromise the Third Party Claim provided such settlement or compromise does not
adversely affect the Indemnitee, and the Indemnitor notifies the Indemnitee of
all of the terms of such settlement or compromise.

7.6       ASSISTANCE FOR THIRD PARTY CLAIMS

          The Indemnitor and the Indemnitee will use all reasonable efforts to
make available to the Party which is undertaking and controlling the defence of
any Third Party Claim (the "DEFENDING PARTY"):

          (a)  those employees and other persons whose assistance, testimony or
               presence is necessary to assist the Defending Party in evaluating
               and in defending any Third Party Claim; and

<Page>

                                                                             59.

          (b)  all documents, records and other materials in the possession of
               such Party reasonably required by the Defending Party for its use
               in defending any Third Party Claim;

and shall otherwise cooperate with the Defending Party. The Indemnitor shall be
responsible for all reasonable expenses associated with making such documents,
records and materials available and for all reasonable expenses of any employees
or other persons made available by the Indemnitee to the Indemnitor hereunder.

7.7       DIRECT CLAIMS

          Any Direct Claim shall be asserted by giving the Indemnitor reasonably
prompt written notice thereof. The Indemnitor shall then have a period of thirty
(30) days within which to respond in writing to such Direct Claim. If the
Indemnitor does not so respond within such 30 day period, the Indemnitor shall
be deemed to have rejected such Claim, and in such event the Indemnitee shall be
free to pursue such remedies as may be available to the Indemnitee.

7.8       FAILURE TO GIVE TIMELY NOTICE

          A failure to give timely notice as provided in this Article 7 shall
not affect the rights or obligations of any Party except and only to the extent
that, as a result of such failure, any Party which was entitled to receive such
notice was deprived of its right to recover any payment under its applicable
insurance coverage or was otherwise directly and materially damaged as a result
of such failure.

7.9       REDUCTIONS AND SUBROGATION

          If the amount of any Loss at any time subsequent to the making of an
Indemnity Payment in respect of that Loss is reduced by any recovery, settlement
or otherwise under or pursuant to any insurance coverage, or pursuant to any
claim, recovery, settlement or payment by or against any other person, the
amount of such reduction (less any costs, expenses (including Taxes) or premiums
incurred in connection therewith), shall promptly be repaid by the Indemnitee to
the Indemnitor. Upon making a full Indemnity Payment, the Indemnitor shall, to
the extent of such Indemnity Payment, be subrogated to all rights of the
Indemnitee against any third party that is not an Affiliate of the Indemnitee in
respect of the Loss to which the Indemnity Payment relates. Until the Indemnitee
recovers full payment of its Loss, any and all claims of the Indemnitor against
any such third party on account of such Indemnity Payment shall be postponed and
subordinated in right of payment to the Indemnitee's rights against such third
party. Without limiting the generality or effect of any other provision hereof,
the Indemnitee and Indemnitor shall duly execute upon request all instruments
reasonably necessary to evidence and perfect such postponement and
subordination.

7.10      TAX EFFECT

          If any Indemnity Payment received by an Indemnitee would constitute
taxable income to such Indemnitee, the Indemnitor shall pay to the Indemnitee at
the same time and on the same terms, as to interest and otherwise, as the
Indemnity Payment and additional amount

<Page>

                                                                             60.

sufficient to place the Indemnitee in the same after-Tax position as it would
have been if the Indemnity Payment had been received tax-free.

7.11      PAYMENT AND INTEREST

          All Losses shall bear interest at a rate per annum equal to the Prime
Rate, calculated and payable monthly, both before and after judgment, with
interest on overdue interest at the same rate, from the date that the Indemnitee
disbursed funds, suffered damages or losses or incurred a loss, liability or
expense in respect of a Loss, to the date of payment by the Indemnitor to the
Indemnitee.

7.12      LIMITATION

          (a)  No claims may be asserted by the Purchaser or the Purchaser's
               Representatives under Section 7.1 unless and until the aggregate
               of the Losses of the Purchaser and its Representatives
               collectively, in respect of such Claims exceeds [ * ] in the
               aggregate, in which event the amount of all such Loss including
               such [ * ] amount may be asserted. Such limitation shall have no
               application to any Claim by the Purchaser against the Vendor
               relating to any misrepresentation or breach of warranty made or
               given by the Vendor in this Agreement.

          (b)  No Claim may be asserted by the Vendor or the Vendor's
               Representatives under Section 7.2 unless and until the aggregate
               of the Losses of the Vendor and its Representatives collectively,
               in respect of such Claims exceeds [ * ] in the aggregate, in
               which event the amount of all such Loss including such [ * ]
               amount may be recovered by the Vendor.

7.13      ADDITIONAL RULES AND PROCEDURES

          (a)  If any Third Party Claim is of a nature such that the Indemnitee
               is required by Applicable Law to make a payment to any person (a
               "THIRD PARTY") with respect to such Third Party Claim before the
               completion of settlement negotiations or related legal
               proceedings, the Indemnitee may make such payment and the
               Indemnitor shall, forthwith after demand by the Indemnitee,
               reimburse the Indemnitee for any such payment. If the amount of
               any liability under the Third Party Claim in respect of which
               such a payment was made, as finally determined, is less than the
               amount which was paid by the Indemnitor to the Indemnitee, the
               Indemnitee shall, forthwith after receipt of the difference from
               the Third Party, pay such difference to the Indemnitor.

          (b)  The Indemnitee and the Indemnitor shall co-operate fully with
               each other with respect to Third Party Claims, shall keep each
               other fully advised with respect thereto (including supplying
               copies of all relevant documentation promptly as it becomes
               available) and shall each designate

----------
* Material has been omitted and filed separately with the Securities and
  Exchange Commission.

<Page>

                                                                             61.

               a senior officer who will keep himself informed about and be
               prepared to discuss the Third Party Claim with his counterpart
               and with counsel at all reasonable times.

          (c)  For greater certainty, in respect of any limitation period for a
               Claim, if applicable, the Indemnitor agrees that so long as it
               receives notice of a Claim within the applicable limitation
               period, if applicable, such Claim shall be validly made upon
               receipt of such written notice by the Indemnitor, regardless of
               the time required to respond or to settle the Claim.

          (d)  In respect of any Third Party Claim for which the Vendor may be
               liable, the Purchaser agrees to assert its legitimate contractual
               claims for indemnification against the applicable licensor(s) in
               respect of such Third Party Claim, if any.

7.14      LIABILITY FOR CONDUCT OF THE PARTIES

          Except with respect to Section 7.1.1(d), the Purchaser hereby agrees
that to the extent that any liability is caused by the Purchaser's gross
negligence, recklessness or wilful misconduct, the Vendor shall have no
liability for the Purchaser's gross negligence, recklessness or wilful
misconduct. The Vendor hereby agrees that to the extent that any liability is
caused by the Vendor's gross negligence, recklessness or wilful misconduct, the
Purchaser shall have no liability for the Vendor's gross negligence,
recklessness or wilful misconduct.

7.15      LIMITATION OF LIABILITY

          The Parties hereby agree that neither Party shall be subject to a
maximum dollar amount as a limitation of liability for any Claims or
indemnification arising under or relating to this Agreement.

                                    ARTICLE 8
                                  MISCELLANEOUS

8.1       CONFIDENTIALITY

          Vendor shall not, without the prior written consent of the Purchaser,
disclose to any person any Confidential Information (as defined below), except
to the employees or representatives of the Vendor who need to know such
information for any reason contemplated by this Agreement (and then only to the
extent that such persons are under an obligation to maintain the confidentiality
of the Confidential Information), or use any Confidential Information for any
reason other than contemplated by this Agreement unless the Vendor has (i)
consulted with the Purchaser and obtained the Purchaser's prior written consent,
and (ii) been advised by counsel that disclosure is required to be made under
Applicable Law or the requirements of a national securities exchange or another
similar regulatory body. In the event that the Vendor is requested or required
by subpoena, civil investigative demand, interrogatories, requests for
information, or other similar process to disclose any Confidential Information,
the Vendor shall provide the Purchaser with prompt written notice of such
request or demands or

<Page>

                                                                             62.

other similar process so that the Purchaser may seek an appropriate protective
order or, if such request, demand or other similar process is mandatory, waive
the Vendor's compliance with the provisions of this Section 8.1 as appropriate.

          The term "Confidential Information" as used in this Section 8.1 means
the terms of this Agreement and all information (whether or not reduced to
writing) relating to the Purchaser's businesses, the Purchased Assets
(including, for certainty, the Products), the Assumed Obligations and any
information of the Business that may be considered confidential, whether
disclosed prior to or after the date hereof. The term "Confidential Information"
does not include information which becomes generally available to the public
other than as a result of disclosure by the Vendor, or becomes available to the
Vendor on a non-confidential basis from a source other than the Purchaser,
provided that to the knowledge of the Vendor, such source is not bound by a
confidentiality agreement with the Purchaser or is required to be disclosed by
Applicable Law, subject to the Purchaser being notified of the disclosure
requirement of such Applicable Law prior to any such disclosure by the Vendor
and the Purchaser having an opportunity to contest the Applicable Law.

          From and after the Closing Date, upon the Purchaser's written request,
the Vendor shall return to the Purchaser and cease its use of all Confidential
Information in the Vendor's possession or control including any copies thereof
or, except as otherwise contemplated in this Agreement and at the request of the
Purchaser, the Vendor will promptly destroy the Confidential Information and
certify such destruction to the Purchaser.

          For certainty:

          (a)  the confidentiality agreement between the Parties dated October
               7, 2002 is hereby terminated; and

          (b)  the confidentiality agreement between the Parties dated March 18,
               2003, continues in full force and effect and in the event of any
               inconsistency between this Agreement and the confidentiality
               agreement dated March 18, 2003, the terms and conditions of the
               confidentiality agreement dated March 18, 2003 shall prevail.

8.2       FURTHER ASSURANCES

          Each Party shall from time to time execute and deliver or cause to be
executed and delivered all such further documents and instruments and do or
cause to be done all further acts and things as the other Party may, before or
after the Closing Time, reasonably require as being necessary or desirable in
order to effectively carry out or better evidence or perfect the full intent and
meaning of this Agreement or any provision hereof.

8.3       PUBLIC ANNOUNCEMENTS

          Except to the extent required by Applicable Law, each Party agrees
that no disclosure or public announcement regarding this Agreement or the
transactions contemplated hereby shall be made by either Party without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or unduly delayed.

<Page>

                                                                             63.

8.4       NOTICES

      (a)      Any notice, direction or other communication (in this Section, a
               "notice") required or permitted to be given to a Party shall be
               in writing and shall be sufficiently given if delivered
               personally or transmitted by facsimile as follows:

               (i)    in the case of the Vendor, at:

                      2nd Floor
                      6870 Goreway Drive
                      Mississauga, Ontario
                      L4V 1P1
                      Attention:   President & CEO
                      Fax No.:  (905) 677-5494

                      with a copy to:

                      2nd Floor
                      6870 Goreway Drive
                      Mississauga, Ontario
                      L4V 1P1
                      Attention:   General Counsel
                      Fax No.:  (905) 677-5494

                      with a copy to:

                      McCarthy Tetrault LLP
                      Suite 4700
                      Toronto Dominion Bank Tower
                      Toronto-Dominion Centre
                      Toronto, Ontario
                      M5K 1E6
                      Attention:  David Woollcombe
                      Fax No.:  (416) 868-0673

               (ii)   in the case of the Purchaser, at

                      275 Armand-Frappier Boulevard
                      Laval, Quebec
                      H7V 4A7
                      Attention:  President & CEO
                      Fax No.:  (450) 978-7744

<Page>

                                                                             64.

                      with a copy to:

                      275 Armand-Frappier Boulevard
                      Laval, Quebec
                      H7V 4A7
                      Attention:  Senior Legal Counsel
                      Fax No.:  (450) 978-7739

                      with a copy to:

                      Fraser Milner Casgrain LLP
                      PO Box 100
                      1 First Canadian Place
                      Toronto, Ontario
                      M5X 1B2
                      Attention:  Michael Beairsto
                      Fax No.:  (416) 863-4592

          (b)  Any notice delivered personally, shall be deemed to have been
               given and received on the day on which it was delivered, if
               delivered prior to 5:00 p.m. (recipient's time) on a Business
               Day; otherwise on the first Business Day thereafter. Any notice
               transmitted by facsimile shall be deemed to have been given and
               received on the day of its transmission if the machine from which
               it was sent receives the answerback code of the Party to whom it
               was sent prior to 5:00 p.m. (recipient's time) on such day;
               otherwise on the first Business Day thereafter.

          (c)  Either Party may change its address for service from time to time
               by notice given to each of the other Party in accordance with the
               foregoing provisions.

8.5       TIME OF THE ESSENCE

          Time shall be of the essence of this Agreement.

8.6       COSTS AND EXPENSES

          Each Party shall be responsible for all costs and expenses (including
the fees and disbursements of legal counsel, bankers, investment bankers,
accountants, brokers and other advisors) incurred by it in connection with this
Agreement and the transactions contemplated herein.

8.7       EFFECT OF CLOSING; NO MERGER

          All provisions of this Agreement shall remain in full force and effect
notwithstanding the Closing, subject only to the limitation periods specified in
Sections 4.5 and 4.6 and the related indemnities in Article 7, and shall not
merge with or be extinguished by the Closing.

<Page>

                                                                             65.

8.8       COUNTERPARTS

          This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and both of which together shall constitute one and the
same instrument. To evidence its execution of an original counterpart of this
Agreement, a Party may send a copy of its original signature on the execution
page hereof to the other Party by facsimile transmission and such transmission
shall constitute delivery of an executed copy of this Agreement to the receiving
Party.

8.9       ASSIGNMENT

          This Agreement shall not be assigned by the Vendor without the prior
written consent of the Purchaser. This Agreement may be assigned by the
Purchaser:

          (a)  without the consent of the Vendor, to an Affiliate of the
               Purchaser, provided that such Affiliate provides written notice
               of the assignment to the Vendor indicating that the Affiliate
               agrees to be bound by the obligations, covenants and agreements
               contained in this Agreement; or

          (b)  to any person who is not an Affiliate of the Purchaser, upon the
               consent of the Vendor, such consent not to be unreasonably
               withheld.

8.10      PARTIES IN INTEREST

          This Agreement shall enure to the benefit of and be binding upon the
Parties and their respective successors, including any successor by reason of
the amalgamation or merger of a Party, and permitted assigns.

8.11      THIRD PARTIES

          Except as specifically set forth or referred to herein, nothing herein
is intended or shall be construed to confer upon or give to any person, other
than the Parties and their respective successors, including any successor by
reason of the amalgamation or merger of a Party, and permitted assigns, any
rights or remedies under or by reason of this Agreement.

8.12      ENGLISH LANGUAGE

          The parties confirm that it is their wish that this Agreement and any
other documents delivered or given pursuant to this Agreement, including
notices, have been and shall be in the English language only. Les parties aux
presentes confirment leur volonte que cette convention de meme que tous les
documents, y compris tous avis s'y rattachant, soient rediges en anglais
seulement.

                     [SIGNATURES APPEAR ON FOLLOWING PAGE.]

<Page>

                                                                             66.

          IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto.

                                      DRAXIS HEALTH INC.

                                      By: /s/ Douglas M. Parker
                                         ---------------------------
                                          General Counsel and Secretary

                                      SHIRE BIOCHEM INC.

                                      By: /s/ Joseph Rus
                                         ---------------------------
                                          Joseph Rus
                                          President and CEO<Page>

                                                                    Exhibit 4.14

                       AS AMENDED AND SUBMITTED TO THE TSE
                                  JUNE 27, 2001

                                STOCK OPTION PLAN

                                       OF

                               DRAXIS HEALTH INC.

1.        PURPOSE OF THE PLAN

          The Draxis Health Inc. Stock Option Plan (the "Plan) is intended to
attract and retain highly qualified officers, directors and employees who will
be motivated towards the success of Draxis Health Inc. (the "Corporation") or
any of its subsidiaries.

2.        ADMINISTRATION

          This Plan shall be administered by the Board of Directors of the
Corporation (the "Board"). Subject to the terms of the Plan, the Board is
authorized to approve persons to whom options may be granted, to construe and
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations and take all actions
necessary or advisable for the Plan's administration.

3.        GRANTING OF OPTIONS

          The Board may from time to time in the manner herein provided grant
options ("Options") to purchase common shares ("Shares") of the Corporation to
directors, officers, employees or area managers or arm's length consultants of
the Corporation and may provide for the number of Shares to be optioned to each
such director, officer, employee, area manager or arm's length consultant..
Options shall be exercised on or prior to a date determined by the Board of
Directors at the date of the grant, which shall be no later than ten years from
the date of the grant and shall be subject to the terms, conditions, limitations
and prohibitions as are herein contained or as may be in effect at the date of
the grant.

4.        SHARES SUBJECT TO PLAN

          The aggregate number of Shares that may be issued pursuant to the Plan
shall be 7,500,000 Shares. The number of Shares reserved for issuance to any one
person pursuant to options granted pursuant to this Plan or otherwise shall not
exceed 5% of the outstanding Shares.

June 27, 2001

<Page>

                                      - 2 -

5.        PARTICIPANTS

          The individuals who are eligible to receive Options hereunder shall be
directors, officers or employees of the Corporation or a subsidiary of the
Corporation or arm's length consultants of the Corporation or a subsidiary of
the Corporation (the "Eligible Optionees"). The Board shall from time to time,
in its sole discretion, determine which of those Eligible Optionees will be
granted Options under the Plan (the "Optionees") and the number of Shares to be
optioned to such Eligible Optionees. The Board shall not be precluded from
granting an Option to an Eligible Optionee solely because such Eligible Optionee
may previously have been granted an Option under the plan.

6.        OPTION PRICE

          The exercise price for an Option shall be fixed by the Board when such
Option is granted. Under no circumstances shall the exercise price for any
Option be less than the closing price of the Shares on The Toronto Stock
Exchange on the trading day immediately preceding the date of the grant.

7.        OPTION TERMS

          (a)   Subject to paragraph 3 hereof, the period during which any
                Option may be exercised, in whole or in part, shall be such
                period as the Board may determine (the "Option Period").

          (b)   In the event that any Option has not been exercised in respect
                of all Shares covered by the Option at the expiry of the Option
                Period, the Option shall thereupon expire.

          (c)   In the event of the death of an Optionee on or prior to the
                expiry of an Option, while in office and at a time when such
                Optionee has not fully exercised any outstanding Options, such
                Options, to the extent then exercisable but unexercised, shall
                be exercisable by such Optionee's executors or personal
                representatives within six (6) months after such Optionee's
                death notwithstanding the expiration date of the Option. In the
                event such Options are not exercised at the expiry of such
                six-month period, such Options shall expire.

          (d)   In the event of the total and permanent disability of an
                Optionee (as determined by the Board of Directors), such
                Optionee may, within six months after the date of such
                determination of disability or such other longer period as the
                Board of Directors may approve, notwithstanding the expiration
                date of the Option, exercise such part of the Option as is then
                exercisable. Unless the Board of Directors otherwise determines,
                in the event the Optionee has not

<Page>

                                      - 3 -

                exercised such Option at the expiry of such six-month period,
                the Option shall expire.

          (e)   Except as provided in subparagraphs 7(c) and (d) above, if an
                Optionee ceases to hold office as a director, officer, employee
                or area manager of the Corporation during the Option Period,
                such part of the Option as is then exercisable may be exercised
                by such Optionee for a period of thirty (30) days after such
                Optionee ceases to hold such office or position or for such
                longer period as the Board of Directors may approve, after which
                time the Option shall terminate; provided, however, that in no
                event may any option be exercised outside the Option Period.

8.        NON-ASSIGNABILITY

          Each Option shall be non-assignable and non-transferable and shall,
subject to the terms hereof, be exercisable only by the Optionee to whom it is
granted.

9.        RIGHTS OF OPTIONEES BEFORE EXERCISE OF OPTION

          The Optionees shall not have any rights whatsoever as shareholders in
respect of the Shares covered by such Options until such Options are exercised
and payment for such Shares has been made.

10.       EXERCISE OF OPTION

          Subject to the provisions of the Plan, an Option may be exercised from
time to time by delivery to the Corporation at its registered office of a
written notice of exercise in the form attached hereto as Schedule A specifying
the number of Shares with respect to which the Option is being exercised, and
accompanied by payment in full of the purchase price for the Shares then being
purchased and a duly executed Stock Option Agreement.

11.       SHARE CAPITAL ADJUSTMENTS

          If the outstanding Shares subject to this Plan are changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more amalgamations, reorganizations, re-capitalization, stock splits,
consolidations, stock dividends in the nature of stock splits or the like,
appropriate adjustments shall be made in the number and/or kind of shares or
securities for which the Options may thereafter be granted under this Plan and
for which Options then outstanding under this Plan may thereafter be exercised.
Any such adjustment in outstanding Options shall be made without changing the
aggregate exercise price applicable to the unexercised portions of such Option.

<Page>

                                      - 4 -

          No fractional securities shall be issued upon the exercise of an
Option. Accordingly, if as a result of any adjustment under this paragraph, an
Optionee would be entitled to a fractional security, the Optionee shall have the
right to acquire only the adjusted number of whole securities and no payment or
other adjustment will be made with respect to fractional securities so
disregarded.

12.       LIQUIDATION, DISSOLUTION OR WINDING-UP

          In the event that the Corporation proposes to liquidate, dissolve or
wind-up, the Corporation shall give written notice thereof to each Optionee and
such Optionee shall be entitled to exercise all then exercisable Options within
thirty (30) days of the giving of such notice, provided, however, that in no
event may such Option be exercised outside of the Option Period. Upon the
expiration of such thirty (30) day period, all rights of Optionees to such
Options or to exercise the same shall terminate and cease to have any further
force or effect, unless otherwise determined by the Board of Directors.

13.       CHANGE OF CONTROL

          Notwithstanding the foregoing, in the event that at any date following
the date hereof:

          (a)   any change in the ownership as of the date hereof, direct or
                indirect, of the outstanding shares of the Corporation as a
                result of which an individual, partnership, association, trust,
                unincorporated organization, ("person") or group of Persons,
                hold shares and/or other securities in excessive of the number
                which, directly or following conversion or exercise thereof,
                will entitle the holders thereof to cast 20% or more of the
                votes attaching all such shares and/or other securities of the
                Corporation which may be cast to elect the directors of the
                Corporation; or

          (b)   the sale, transfer or any manner of disposition of 50% or more
                of the assets of the Corporation to an arm's length Person;

and the Board of Directors recommends acceptance of such offer to the
Shareholders of the Corporation or, if the Board of Directors has made no
recommendation, the Shareholders have approved or accepted the proposed
transaction, then any Option outstanding hereunder, including Options not then
otherwise exercisable, shall become immediately exercisable upon the issuance of
the recommendation of the Board of Directors or the approval or acceptance of
the Shareholders, as the case may be.

14.       AMENDMENT OR TERMINATION

          The Board of Directors may terminate the Plan any time or, with the
consent of The Toronto Stock Exchange, amend the Plan at any time provided,
however,

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                                      - 5 -

that except as permitted herein, the Board may not, without the
approval of the Optionee to whom Options have been granted, alter or impair such
Option.

          The Board may from time to time make, amend and repeal such
regulations under the Plan as they deem expedient for the purpose of carrying
out the Plan and such regulations from time to time in force shall, together
with the Plan, be binding and conclusive on the Corporation and on all holders
of Options granted under the Plan and their legal personal representatives.

<Page>

                                      - 6 -

                                  SCHEDULE "A"

                                STOCK OPTION PLAN

                               DRAXIS HEALTH INC.

                              ELECTION TO PURCHASE

TO:       The Secretary of
          Draxis Health Inc.

          Pursuant to the terms of the stock option granted to me on
(the "Date of the Grant"), I hereby elect to purchase           common shares of
Draxis Health Inc. which were the subject of such stock option. I understand
that such purchase is subject to all the terms and conditions of such stock
option and of the Draxis Health Inc. Stock Option Plan.

          Enclosed is a certified cheque, bank draft or money order payable to
Draxis Health Inc. in the amount of $          , the full amount of the exercise
price for the number of common shares indicated above.

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DATE                                        (PRINT NAME)

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                                            (SIGNATURE)

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