Document:

CONSULTING AGREEMENT

         AGREEMENT made this 15th day of January, 2002, by and between
Adirondack Capital, LLC, a consulting firm domiciled in the State of Connecticut
hereinafter referred to as the "Consultant", and eSAFETYWORLD, Inc. whose
principal place of business is located at in Bohemia, New York hereinafter
referred to as "Company."

         WHEREAS, the Company desires to engage the services of the Consultant
to perform consulting services for the Company regarding as an independent
contractor and not as an employee; and

         WHEREAS, Consultant desires to consult with the Board of Directors, the
officers of the Company, and the administrative staff, and to undertake for the
Company consultation as to the direction of certain functions in said management
of;

         NOW, THEREFORE, it is agreed as follows:

1.   Term. The respective duties and obligations of the contracting parties
     shall be for a period of three years commencing on January 15, 2002. This
     Agreement shall automatically renew for an additional year at each
     anniversary date, unless either party gives sixty (60) days written notice
     to the other party of his intent not to renew for an additional period.

2.   Consultations. Consultant shall be available to consult with the Board of
     Directors, the officers of the Company, and the heads of the administrative
     staff, at reasonable times, concerning matters pertaining to the
     organization of the administrative staff, the fiscal policies of the
     Company, the relationship of the Company with its employees or with any
     organization representing its employees, and, in general, the important
     problems of concern in the business affairs of the Company. Consultant
     shall not represent the Company, its Board of Directors, its officers or
     any other members of the Company in any transactions or communications nor
     shall Consultant make claim to do so. It is understood that all substantive
     work performed by Consultant will be performed by or supervised by K. Ivan
     F. Gothner.

                                       1
<PAGE>

3.   Liability.  With regard to the services to be performed  by the  Consultant
     pursuant  to the terms of this  agreement,  the Consultant shall not be
     liable to the Company,  or to anyone who may claim any right due to any
     relationship with the Corporation, for any acts or omissions in the
     performance of services on the part of the Consultant or on the part of the
     agents or employees of the Consultant,  except when said acts or omissions
     of the Consultant are due to willful  misconduct or gross  negligence.  The
     Company shall hold the Consultant free and harmless  from any  obligations,
     costs, claims,  judgments, attorneys' fees, and attachments arising from or
     growing out of the services rendered to the Company pursuant to the terms
     of this agreement or in any way connected with the rendering of services,
     except when the same shall arise due to the willful  misconduct or gross
     negligence of the Consultant and the Consultant is adjudged to be guilty of
     willful misconduct or gross negligence by a court of competent
     jurisdiction.

4.   Compensation. The Consultant shall receive compensation from the Company
     for the performance of the services to rendered to the Company pursuant to
     the terms of the agreement of not less than $120,000 per annum payable in
     biweekly instalments. In addition, the Company shall reimburse the
     Consultant for any reasonable out of pocket expenses incurred by the
     Consultant pursuant to the terms of this agreement. Consultant shall be
     paid a bonus or success fee, as determined by the Board of Directors or the
     Compensation Committee thereof, for strategic acquisitions or mergers in
     which Consultant participates.

5.   Arbitration.  Any controversy or claim arising out of or relating to this
     contract,  or the breach  thereof,  shall be settled by arbitration  in
     accordance of the rules of the American  Arbitration  Association,  and
     judgment upon the award rendered by the arbitrator(s)  shall be entered in
     any court having  jurisdiction  thereof.  For that purpose,  the parties
     hereto consent to the jurisdiction  and venue of an  appropriate  court
     located in Suffolk County, State of New York.  In the event that litigation
     results from or arises out of this Agreement or the  performance  thereof,
     the parties agree to reimburse the prevailing  party's reasonable
     attorney's fees, court costs, and all other expenses,  whether or not
     taxable by the court as costs, in addition to any other relief to which the
     prevailing  party may be entitled.  In such event,  no action shall be
     entertained by said court or any court of  competent  jurisdiction  if
     filed more than one year  subsequent  to the date the  cause(s) of action

                                       2

<PAGE>

     actually  accrued regardless of whether damages were otherwise as of said
     time calculable.

         IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the 15th day of January, 2002.

eSAFETYWORLD, Inc.:

By:
    --------------------------

Adirondack Capital, LLC:

By:
    --------------

                                       3<PAGE>
                                                                    Exhibit 10.1

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as (----) . A complete, unredacted version of this
exhibit has been filed separately with the Securities and Exchange Commission.

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

                               PACKAGING AGREEMENT
                               -------------------

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<S>           <C>                                                                             <C>
ARTICLE 1.    DEFINITIONS......................................................................3

ARTICLE 2.    PROCESSING AND PACKAGING AND PRICE...............................................5

ARTICLE 3.    FORECASTS AND ORDERS.............................................................7

ARTICLE 4.    SPECIFICATIONS...................................................................8

ARTICLE 5.    PACKAGING MATERIALS..............................................................8

ARTICLE 6.    QUALITY CONTROL; ADVERSE EXPERIENCES AND RECALLS.................................9

ARTICLE 7.    WARRANTIES......................................................................11

ARTICLE 8.    INDEMNIFICATION.................................................................12

ARTICLE 9.    CONFIDENTIALITY.................................................................13

ARTICLE 10.   TERM AND TERMINATION............................................................13

ARTICLE 11.   GOVERNING LAW...................................................................14

ARTICLE 12.   MISCELLANEOUS...................................................................14
</TABLE>

<PAGE>

                               PACKAGING AGREEMENT
                               -------------------

      THIS AGREEMENT made as of this 15th day of February  , 2002, (the
                                     ----        ----------
"Effective Date"), (the "Agreement") by and between SEARLE & CO., a Delaware
corporation ("SEARLE"), and WATSON LABORATORIES, INC., a Nevada corporation
("WATSON");

      WHEREAS, WATSON has obtained rights to certain Products (as hereinafter
defined) and desires to have the Products packaged by SEARLE;

      NOW, THEREFORE, the parties agree as follows:

ARTICLE 1. DEFINITIONS

1.1.  "Affiliate" of a party means any corporation or other business entity
      controlled by, controlling or under common control with, such party. For
      this purpose "control" shall mean direct or indirect beneficial ownership
      of more than fifty percent (50%) of the voting or income interest in such
      corporation or other business entity.

1.2.  "Assets" has the meaning ascribed to such term in Section 2 of the Asset
      Purchase Agreement entered into between G.D. Searle & Co., SCS
      Pharmaceuticals and Watson Laboratories, Inc. dated September 30, 1997 and
      the Asset Purchase Agreement entered into between G.D. Searle & Co. and
      Watson Laboratories Inc. dated September 18, 1998.

1.3.  "ANDA" means an abbreviated new drug application that is submitted to the
      FDA for approval to manufacture and/or sell a pharmaceutical product in
      the United States.

1.4.  "Asset Purchase Agreement(s)" mean the Asset Purchase Agreement entered
      into between G.D. Searle & Co., SCS Pharmaceuticals and Watson
      Laboratories, Inc. dated September 30, 1997 and the Asset Purchase
      Agreement entered into between G.D. Searle & Co. and Watson Laboratories
      Inc. dated September 18, 1998.

1.5.  "Batch" means one (1) production lot of a Product as listed for each
      Product on Schedule 1.5.

1.6.  "Bulk Tablet Testing Specifications" means the procedures, requirements,
      standards, and other items related to testing of the Products in bulk
      tablet form attached as Schedule 1.6 as amended from time to time in
      accordance with the

                                       3

<PAGE>

      provisions hereof.

1.7.  "Contract Year" shall mean each consecutive twelve (12) month period
      commencing on January 1, 2002 and ending on the first anniversary of such
      date and each consecutive twelve (12) month period ending on an
      anniversary of such date during the term hereof.

1.8.  "FDA" means the United States Food and Drug Administration.

1.9.  "FTC" means the United States Federal Trade Commission.

1.10. "Law" means any federal, state or local law, ordinance, rule, regulation,
      or governmental requirement or restriction of any kind, and any rules,
      regulations, and orders promulgated thereunder.

1.11. "NDA" means a New Drug Application that is submitted to the FDA in order
      to obtain approval to manufacture and/or sell a pharmaceutical product in
      the United States.

1.12. "Ogestrel Agreement" means the Supply Agreement entered into between G.D.
      Searle & Co. and Watson Laboratories, Inc. dated October 16, 1997 and the
      Letter dated March 29, 2001, notifying Searle that Watson was extending
      this Supply Agreement solely for the products, Low-Ogestrel and Ogestrel.

1.13. "Packaging" means filling, inspecting, labeling, packaging and packing of
      the Products or any part thereof in accordance with the Packaging
      Specifications. The terms "Package," "Packaged" and "Packaging" in this
      Agreement shall have the identical meaning.

1.14. "Packaging Specifications" mean the procedures, requirements, standards
      and other items related to Packaging of the Products attached hereto as
      Schedule 1.14, as amended from time to time in accordance with the
      provisions hereof.

1.15. "Product(s)" means the pharmaceutical products listed on Schedule 1.5,
      meeting the Specifications.

1.16. "Public Information" means information that is publicly available or is
      generally known in the pharmaceutical industry.

1.17. "Searle Labeling" means the printed labels, labeling and packaging
      materials, including printed carton, container label and package inserts,
      as currently used by

                                       4

<PAGE>

      SEARLE for each Product.

1.18. "Specifications" shall mean both the Bulk Tablet Testing Specifications
      and the Packaging Specifications.

1.19. "Territory" means the United States and its possessions.

1.20. "Watson Labeling" means the printed labels, labeling and packaging
      materials, including printed carton, container label and package inserts,
      used by Watson and bearing Watson's name for each Product.

ARTICLE 2. PROCESSING AND PACKAGING AND PRICE

2.1.  Undertaking.
      -----------

      (a)   Subject to the limitations contained herein, SEARLE or its
            Affiliates hereby agrees to Package or to have Packaged WATSON's
            orders for the Products in the Territory and WATSON agrees to pay
            SEARLE for the quantity of Products so Packaged in accordance with
            this Agreement. However, for the Product, Nor Q.D., SEARLE hereby
            only agrees to conduct the required testing according to the Quality
            Responsibilities in Schedule 6.1. WATSON is responsible for all
            other aspects of Packaging Nor Q.D. SEARLE shall not be obligated to
            Package Products in excess of the capacity limitations described in
            Sections 3.1 and 3.2. For the duration of this Agreement, WATSON
            hereby grants to SEARLE a royalty-free license and right in the
            Territory to use such of the Assets as are necessary or useful to
            SEARLE in fulfilling its obligations under this Agreement.

      (b)   In addition, SEARLE or its Affiliates agree to conduct bulk tablet
            testing of the Products or to have such testing conducted and will
            report the results of these tests to WATSON within five (5) working
            days of receiving the results of these tests. SEARLE or its designee
            will conduct the tests in accordance with the Bulk Tablet Testing
            Specifications contained in Schedule 1.6.

      (c)   WATSON will review the results of the bulk tablet tests and in
            WATSON's sole discretion determine which lots of bulk Product are
            acceptable for release to SEARLE for Packaging. For each lot of bulk
            Product that WATSON releases to SEARLE for Packaging, WATSON shall
            provide SEARLE with written authorization to accept those lots of
            bulk Product. Without such written authorization from WATSON, SEARLE
            will not accept shipment of these lots of bulk Product.

      (d)   The parties acknowledge that any of SEARLE's obligations hereunder
            may be carried out, at SEARLE's election, by third party
            manufacturers appropriately qualified under all Laws to perform the
            Packaging obligations hereunder in compliance with the
            Specifications and all Laws; provided that SEARLE's use of any third
            party manufacturer shall require WATSON's

                                       5

<PAGE>

            prior written consent, which consent shall not be unreasonably
            withheld, and the written agreement by the third party to abide by
            and comply with the terms of this Agreement. Notwithstanding the
            above, the use of any third party manufacturer shall not relieve
            SEARLE of its obligations under this Agreement.

      (e)   WATSON will supply SEARLE, free of charge, with sufficient released
            Product in bulk form at least sixty (60) days before any finished
            Product delivery date set pursuant to Article 3 for SEARLE to comply
            with its Packaging commitments to WATSON under this Agreement.

2.2.  Price and Payment.
      -----------------

      (a)   During the first Contract Year, the prices for Packaging the
            Products are set out in Schedule 2.2(a). Thereafter, the prices
            shall be adjusted as provided in subsection (c) below.

      (b)   Except as otherwise provided herein, including an event of Force
            Majeure affecting either party, during each Contract Year of this
            Agreement, WATSON shall purchase a minimum quantity of Products
            equal to US $(----) ("Minimum Quantity"). If in any such Contract
            Year, WATSON fails to purchase such Minimum Quantity, then WATSON
            shall pay SEARLE an amount equal to (----)% of the difference
            between US $(----) and the total price for all Products purchased by
            WATSON for delivery in such Contract Year. Purchase Orders issued by
            WATSON in 2001 for Product to be delivered in 2001 will not be
            included in the Minimum Quantity for 2002 even if Product so ordered
            is not delivered until 2002. Such Minimum Quantity will include the
            purchases made by WATSON under the Ogestrel Agreement for Ogestrel
            and Low-Ogestrel during the applicable Contract Year. It is agreed
            and understood that these liquidated damages are intended to
            compensate SEARLE for its lost profits and overhead costs which are
            difficult to calculate and project due to uncertainties in
            scheduling its manufacturing operations, and in no way are such
            liquidated damages to be construed as a penalty for WATSON's breach.

      (c)   By December 1st of each Contract Year, SEARLE shall provide WATSON
            with written notice of the prices for the following Contract Year.
            Effective January 1 of each year, SEARLE may increase its prices for
            the Product by an amount equal to increases in the Producer Price
            Index for Pharmaceutical Preparations, PCU2834, as published by the
            U.S. Bureau of Labor Statistics, over the previous twelve (12) month
            period, September to October. Price increases for the Product shall
            not exceed (----)% annually. Price changes will take effect January
            1 of each year and shall be effective for one year. These price
            changes will apply to any Purchase Orders issued by WATSON in the
            previous Contract Year provided the Purchase Order specifies a
            delivery date after January 1 of the current Contract Year. In the
            event the verifiable cost of SEARLE's packaging materials increases
            by more than (----)%

                                       6

<PAGE>

            in a Contract Year, however, SEARLE may adjust the Product(s) price
            to WATSON to reflect these increased packaging component costs.

      (d)   The Products will be shipped to a location in the Territory
            designated by WATSON, FCA (Incoterms 2000) SEARLE's manufacturing
            plant. Title and risk of loss shall pass to WATSON upon delivery of
            the Products to the common carrier.

      (e)   WATSON will pay in US currency for each shipment of Products within
            (----) days after the shipment of the Product(s).

ARTICLE 3. FORECASTS AND ORDERS

3.1.  Forecasts.
      ---------

      (a)  On a monthly basis, WATSON will provide SEARLE with a written (----)
           month non-binding rolling forecast of the quantities of each Product
           that WATSON expects to purchase during each of the next (----) months
           (the "(----) Month Forecast"), or the remaining months of the
           contract, if less than (----) months left in the contract. Except as
           may be provided otherwise in this Section 3, the forecast for each
           Contract Year will be limited to an amount not greater than (----)%
           of the forecast for the prior Contract Year.

      (b)  The first (----) months of each (----) Month Forecast (the "(----)
           Forecast") shall be firm and shall not have been changed from the
           forecasted amounts for the same calendar months contained in the
           prior (----) Month Rolling Forecast.

3.2.  Permitted Amount to be Ordered. WATSON shall submit a purchase order to
      ------------------------------
      SEARLE referencing this Agreement each month as required, with a delivery
      date of not less than (----) days after the date thereof. SEARLE will
      use its commercially reasonable efforts, but will be under no obligation,
      to supply Product in excess of (----)% of the (----) Month Forecast.

3.3.  Minimum Order Size. The minimum size of any order for any Product shall be
      ------------------
      (----) Batch of such Product with larger orders being in whole number
      multiples of a Batch. A Batch of bulk Product may be split between trade
      and sample presentations as long as the whole Batch is consumed in
      packaging within one month's time.

3.4.  Failure to Supply.
      -----------------

      (a)   In the event SEARLE fails or is unable to Package or conduct testing
            in accordance with the Bulk Tablet Testing Specifications or has
            reason to believe that it will be unable to so test or to Package
            the quantities of the Products ordered by WATSON to meet WATSON's
            requirements (within

                                       7

<PAGE>

            the limits described in Section 2.1 above and within thirty (30)
            days after the delivery date set forth in the applicable purchase
            order), WATSON may (i) purchase or obtain so much as to meet its
            requirements or any portion thereof from any other source, and/or
            (ii) to the extent permitted by law, Package or have Packaged the
            same under the applicable Specifications and quality control
            procedures. In such event, SEARLE shall provide WATSON or WATSON's
            contract manufacturer with all documents, data and other information
            necessary or useful for Packaging the Products at no cost for so
            long as SEARLE is unable to supply sufficient quantities of the
            Products to meet WATSON's requirements. Any such quantities Packaged
            by a secondary source pursuant to this Paragraph shall nonetheless
            be credited against the WATSON's Minimum Quantity purchase
            obligation under Paragraph 2.2(b).

ARTICLE 4. SPECIFICATIONS

4.1   Specifications. The Products shall be tested, Packaged, stored and shipped
      --------------
      in accordance with the Specifications and all Laws.

4.2   WATSON's Changes. The Specifications may be changed by WATSON, provided
      ----------------
      the Specifications at all times shall be in compliance with the Product
      Registration, from time to time with SEARLE's consent which shall not be
      unreasonably withheld, but not more often than (----) per year unless
      required by the FDA or other US government agency. All such changes shall
      be communicated to SEARLE in writing, after which the parties shall agree
      on the date of implementation of such changes as soon as reasonably
      practicable. If any such change results in increased Packaging, testing
      costs or obsolescence of any materials specifically purchased by SEARLE
      for Packaging of the Products under this Agreement prior to being notified
      in writing by WATSON of the change in the Specifications, WATSON shall
      reimburse SEARLE for any such increased costs and the actual out-of-pocket
      cost of all such materials except to the extent the quantity of such
      materials exceeds requirements greater than the previous (----) months of
      WATSON's forecasts. Upon being reimbursed for obsolete material and at
      WATSON's written request, SEARLE shall promptly ship any such materials to
      a location designated by WATSON or destroy such materials at WATSON's
      expense. If any such change or proposed change to the Specifications
      results in costs and expenses to SEARLE, WATSON shall promptly reimburse
      all such reasonable documented out-of-pocket costs and expenses.

ARTICLE 5. PACKAGING MATERIALS

5.1.  Supply. SEARLE will supply all materials required to Package the bulk
      ------
      Product provided by WATSON as described in Section 2.1 (e).

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<PAGE>

5.2.  Title and Risk of Loss. Title and risk of loss to all materials provided
      ----------------------
      by SEARLE shall pass to WATSON upon delivery of the finished Products
      incorporating such materials to the common carrier at SEARLE's
      manufacturing plant. SEARLE shall store and maintain all bulk Product and
      Packaging materials in accordance with the Specifications and in
      compliance with all applicable Laws.

ARTICLE 6. QUALITY CONTROL; ADVERSE EXPERIENCES AND RECALLS

6.1.  Quality Responsibilities. The Quality Responsibilities for SEARLE and
      ------------------------
      WATSON attached as Schedule 6.1 to this Agreement, shall be used by both
      Parties to assign the day-to-day responsibilities and manage the
      operations of both the WATSON and SEARLE Quality Assurance groups in
      regards to the Packaging of the Products by SEARLE for WATSON.

6.2.  Testing. SEARLE shall perform quality control tests and assays on the
      -------
      Products in accordance with the Bulk Tablet Testing Specifications.
      Results of such tests and assays as well as specific Batch samples of
      Products packaged under this Agreement following the date hereof will be
      submitted to WATSON with a Certificate of Analysis.

6.3.  Samples. SEARLE shall retain for at least one (1) year after the
      -------
      expiration date of the applicable lot or batch of Products a file sample
      properly stored from each lot or batch of Products Packaged, including
      market packages, sufficient to perform each quality control test specified
      in the Bulk Tablet Testing Specifications at least two (2) times.

6.4.  Quality Issues Bulk Product. Any quality, safety or similar issues related
      ---------------------------
      to the bulk Product supplied by WATSON to SEARLE are WATSON's
      responsibility to resolve; provided, however, that any quality, safety or
      similar issues related to the bulk Products caused by SEARLE's failure to
      comply with the terms of this Agreement or Laws, or SEARLE's negligence or
      willful misconduct shall be the responsibility of SEARLE, such
      responsibility to include, without limitation, the obligation to reimburse
      WATSON for loss or damage to the bulk Product. For any Product which
      cannot be released due to quality or safety issue related to the bulk
      Product which is the responsibility of WATSON hereunder, WATSON shall
      reimburse SEARLE for the direct cost of manufacture of the affected
      Product, said direct cost of manufacture to be calculated by adding the
      actual cost of : a) Packaging materials and supplies used to Package the
      affected Products; b)Wages of those employees directly employed in the
      packaging of the affected Products; and, (c) That portion of SEARLE's
      fixed overhead expenses directly attributable to the actual Packaging of
      the affected products, calculated and apportioned in accordance with
      generally accepted accounting principles.

                                       9

<PAGE>

6.5.  Other Products' Adverse Drug Experiences and Quality Complaints. WATSON
      ---------------------------------------------------------------
      shall be responsible for handling all Product complaints related to all
      Products. SEARLE and WATSON shall promptly forward any Product complaints
      received by either of them to the other no later than three (3) days
      following receipt and shall provide assistance in investigating such
      complaints as may be reasonably requested. Each party shall designate a
      representative who will handle Product complaint activities for such party
      and coordinate such activities with the other party.

6.6.  Recalls Relating to Products. Recalls of the Products shall be the
      ----------------------------
      responsibility of WATSON. The party desiring to initiate a recall shall
      notify the other and, immediately thereafter, both parties shall discuss
      appropriate alternatives, including whether a recall is required and the
      method of implementing a recall. SEARLE shall cooperate with WATSON in the
      event of any recall, field alert or similar event and provide such
      assistance in connection therewith as WATSON may reasonably request. The
      costs of any such recall or similar event shall be borne by WATSON, except
      if the recall resulted from SEARLE's negligence, or breach of this
      Agreement, in which case SEARLE shall reimburse WATSON for the costs and
      expenses reasonably borne and paid by WATSON to effect the recall.

6.7.  Inspection. SEARLE agrees to permit WATSON's designated representatives to
      ----------
      whom SEARLE has no reasonable objections to inspect SEARLE facilities at
      which the Products are Packaged, stored or tested for the purpose of
      determining compliance with applicable Law and the Specifications at
      reasonable times after reasonable notice during regular business hours.

6.8.  Quality Control Evaluation. Within (----) days after receipt of each
      --------------------------
      shipment, WATSON will inspect and make a quality control evaluation of
      such shipment (which shall include a certificate of analysis). In the
      event any shipment or part thereof fails, or there is manifest cause for
      WATSON to reasonably believe that any shipment or part thereof fails to
      conform to the Packaging Specifications or shall have been Packaged or
      shipped under conditions which do not comply with the FDA requirements or
      the provisions of this Agreement, WATSON may reject the same by giving
      written notice to SEARLE within the (----) day period, specifying the
      manner in which it fails to meet the requirements. SEARLE shall have
      (----) days within which to accept or reject WATSON's claims.

6.9.  Disputes. In the event of any dispute as to whether any shipment of
      --------
      Products fails in whole or part to meet the Packaging Specifications, such
      dispute shall be promptly resolved by an independent testing organization
      of recognized repute within the US pharmaceutical industry mutually agreed
      upon by the parties, the appointment of which shall not be unreasonably
      withheld or delayed by either party. Until any dispute is resolved, WATSON
      will not dispose of any

                                       10

<PAGE>

      nonconforming shipment without prior written authorization from and
      agreement with SEARLE. The fees and costs of such testing organization
      shall be borne by the party whose position is not sustained by the testing
      organization.

6.10. Replacement Products. If any Products shipped hereunder are rejected by
      --------------------
      WATSON, SEARLE agrees to ship as soon as reasonably possible after notice
      of such rejection (or if there is a dispute with regard to the rejection,
      after notice of the determination of the independent testing organization)
      replacement Products either newly packaged or, with the consent of WATSON,
      reworked from the rejected shipment using an FDA approved procedure with
      respect thereto. SEARLE's requirement to ship replacement Product is
      entirely contingent on first receiving sufficient replacement bulk
      Products from WATSON to allow SEARLE to package replacement Product, the
      cost of such replacement bulk Product to be reimbursed to WATSON within
      (----) days if SEARLE does not reasonably and in good faith dispute
      Watson's rejection of Product. If SEARLE does so dispute WATSON's
      rejection, SEARLE will only be responsible for the cost of such
      replacement bulk Product if its position is sustained by the testing
      organization as set forth in Section 6.9 above.

6.11. Government Inspections/Communications. Each party shall promptly notify
      -------------------------------------
      the other part of any government inspections or communications to or from
      any governmental agency (including the reporting of adverse drug
      experiences or field alerts) that might adversely affect the other
      parties' ability to perform its obligations under this Agreement.

ARTICLE 7. WARRANTIES

7.1.  SEARLE Warranties. SEARLE warrants that:
      -----------------

      (a)   the Packaging and all materials furnished by SEARLE will comply with
            the Packaging Specifications and with all applicable Laws, including
            all current Good Manufacturing Practices ("GMPs");

      (b)   EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, SEARLE
            MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
            EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED
            WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

7.2.  WATSON Warranties. WATSON warrants that:
      -----------------

      (a)   to the extent that it provides any bulk Product, other materials or
            engages in Packaging with respect to the Products, all such bulk
            Product, materials and Packaging will comply with the Specifications
            and with all applicable Laws, including GMPs; and

                                       11

<PAGE>

      (b)   EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, WATSON
            MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
            EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED
            WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE 8. INDEMNIFICATION

8.1.  In Favor of SEARLE. WATSON shall defend, indemnify and hold SEARLE, its
      ------------------
      Affiliates and the officers, directors and employees of each harmless from
      and against any and all claims, demands, losses, damages, liabilities,
      settlement amounts, costs or expenses whatsoever (including reasonable
      attorneys' fees) arising from or related to any claim, action or
      proceeding made or brought against such party by a third party (i) as a
      result of WATSON's use, promotion, sale and/or distribution of the
      Products except to the extent such liability arises from SEARLE's breach
      of any warranty or representation herein, SEARLE's failure to perform any
      covenant herein, or the negligent act or omission of SEARLE in performing
      its obligations under this Agreement or (ii) as a result of WATSON's
      breach of any warranty or representation herein, WATSON's failure to
      perform any covenant herein, or the negligent act or omission of WATSON in
      performing its obligations under this Agreement.

8.2.  In Favor of WATSON. SEARLE shall defend, indemnify and hold WATSON and its
      ------------------
      officers, directors and employees harmless from and against any and all
      claims, demands, losses, damages, liabilities, settlement amounts, costs
      or expenses whatsoever (including reasonable attorneys' fees) arising from
      or related to any claim, action or proceeding made or brought against such
      party by a third party as a result of SEARLE's breach of any warranty or
      representation herein, SEARLE's failure to perform any covenant herein, or
      the negligent act or omission of SEARLE in performing its obligations
      under this Agreement.

8.3.  Notice; Defense. In the event of any claim, action or proceeding for which
      ---------------
      a party is entitled to indemnity hereunder, the party seeking indemnity
      ("Claimant") shall promptly notify the other party ("Indemnitor") of such
      matter in writing, provided that the failure to give timely notice to the
      Indemnitor shall not release the Indemnitor from any liability to Claimant
      except to the extent the Indemnitor is actually prejudiced thereby.
      Indemnitor shall promptly, but in no event later than thirty (30) days
      from date of notice, assume responsibility for and shall have full control
      of the defense of such matter and Claimant shall fully cooperate in
      Indemnitor's handling and defense thereof. Failure to assume the defense
      within the aforementioned time period shall constitute a waiver of the
      Indemnitor's rights to assume the defense and, except as otherwise
      provided herein, the Claimant shall have the full right to conduct the
      defense, settle or otherwise dispose of the claim at the Indemnitor's
      expense. The Indemnitor shall have the right to settle or

                                       12

<PAGE>

      compromise claims against the Claimant involving the payment of money by
      Indemnitor only in exchange for an unconditional release of Claimant. All
      other dispositions of claims must be approved by Claimant, which approval
      shall not be unreasonably withheld.

8.4.  Limitation. Notwithstanding any provision of this Agreement which might
      ----------
      otherwise be to the contrary, except as expressly set forth in Section
      2.2(b), (i) no party shall be entitled to indemnification with respect to
      any claim or suit to the extent such claim or suit results from its own
      negligence or willful misconduct, or any action to which it has consented
      to in writing, and (ii) neither party shall be liable to the other for
      punitive, exemplary, indirect or special damages or lost profits or other
      consequential damages of any kind.

ARTICLE 9. CONFIDENTIALITY

During the term of this Agreement and for a period of three (3) years thereafter
except as otherwise provided in the Asset Purchase Agreement, no party shall,
without the specific written consent of the other party, disclose to any third
party (except to governmental health or regulatory authorities to obtain and
maintain the registration of the Products or other disclosures required by law)
or use for its own purposes any confidential information which is received from
the other party or its agent(s) pursuant to this Agreement concerning the
Products or the other party's business unless such information:

            a.    was or becomes public through no fault of the receiving party,
                  or

            b.    was obtained from a third party legally entitled to use and
                  disclose the same, or

            c.    was known to the party prior to entering into this Agreement.

For this purpose, Assets shall be deemed WATSON's property in the Territory and
not subject to any obligation of confidentiality by WATSON with respect to the
Territory.

ARTICLE 10. TERM AND TERMINATION

10.1. Term. The term of this Agreement shall be, unless terminated earlier as
      ----
      provided herein commencing on the Effective Date and termination on
      December 31, 2003.

10.2. Termination by Either Party. Either party shall have the right to
      ---------------------------
      terminate this Agreement immediately upon written notice to the other:

      (a)   if the other party is dissolved or liquidated, files or has filed
            against it a petition under any bankruptcy or insolvency law, makes
            an assignment for the benefit of its creditors or has a received
            appointed for all or substantially all of its property and is not
            withdrawn within sixty (60) days of appointment; or

                                       13

<PAGE>

      (b)   if the other party shall commit any material breach (whether
            remediable or not) of its obligations under this Agreement and, if
            remediable, shall fail to remedy the breach within sixty (60) days
            after receipt of written notice from the non-breaching party
            describing such breach.

10.3  Termination With Notice. WATSON shall be entitled to terminate this
      -----------------------
      Agreement in its entirety, with an effective date of December 31, 2002, by
      giving written notice to SEARLE on or before July 1, 2002. In the event,
      WATSON submits a written request to SEARLE by July 1, 2002, that it would
      like to terminate this Agreement only as related to an individual Product
      or Products, effective December 31, 2002, SEARLE will have 1 month to
      respond to this request. No later than August 1, 2002 Pharmacia will
      notify WATSON in writing if it accepts WATSON's request for termination.
      This decision will be at Pharmacia's sole discretion and if WATSON does
      not receive a response from SEARLE by August 1, 2002, SEARLE will be
      deemed to have rejected WATSON's request for a partial termination.

10.4  Without Prejudice. Termination of this Agreement, due to the fault of
      -----------------
      either party, shall be without prejudice to any other rights or remedies
      then or thereafter available to either party under this Agreement or
      otherwise.

10.5  Products and Materials. Promptly after expiration or termination of this
      ----------------------
      Agreement, SEARLE will complete work on all in process Products. WATSON
      will pay SEARLE the price determined pursuant to Section 2 for Products
      Packaged by SEARLE. In addition, WATSON shall reimburse SEARLE for the
      cost of any packaging and labeling materials remaining in SEARLE's
      inventory, which packaging and labeling material will be promptly
      delivered to WATSON at a place of WATSON's designation. However, in no
      event shall the quantity of Products and packaging/labeling materials to
      be purchased by WATSON under this provision after expiration or
      termination exceed WATSON's forecasts for the preceding six (6) month
      period.

ARTICLE 11. GOVERNING LAW

This Agreement shall be governed by and interpreted and enforced in accordance
with the laws of the State of Delaware of the United States of America
regardless of the choice of law principles of Delaware or any other
jurisdiction.

ARTICLE 12. MISCELLANEOUS

12.1. Costs. Each party shall bear its own costs and expenses incurred in
      -----
      negotiating this Agreement.

                                       14

<PAGE>

12.2. Notices. Any notice required or permitted to be given hereunder shall be
      -------
      deemed sufficient if sent by facsimile letter or overnight courier, or
      delivered by hand to SEARLE or WATSON at the respective addresses and
      facsimile numbers set forth below or at such other address and facsimile
      number as either party hereto may designate. If sent by facsimile letter,
      notice shall be deemed given when the transmission is completed if the
      sender has a confirmed transmission report. If a confirmed transmission
      report does not exist, then the notice will be deemed given when the
      notice is actually received by the person to whom it is sent. If delivered
      by overnight courier, notice shall be deemed given when it has been signed
      for. If delivered by hand, notice shall be deemed given when received.

      if to SEARLE, to:
            Searle & Co.
            Calle Jardines #99
            Caguas, Puerto Rico 00725
                  Attention: Finance Director
                  Fax number: (787) 286-4034

      with a copy to:
            Legal Counsel
            Pharmacia CentreSource
            7000 Portage Road
            Kalamazoo, Michigan 49001-0199
                  Fax number: (616) 833-6310

      if to WATSON, to:
            Watson Laboratories, Inc.
            PO Box 1900
            311 Bonnie Circle
            Corona CA 91718-1900
                  Attention: Maria Chow
                  Fax number: (909) 493-5807

      with a copy to:
            General Counsel
            Watson Laboratories, Inc.
            311 Bonnie Circle
            Corona, CA 92880
                  Fax number: (909)279-8094

12.3. Survival. The provisions of Articles 8, 9 and 11 shall survive the
      --------
      expiration or other termination of this Agreement.

                                       15

<PAGE>

12.4. Entire Agreement. This Agreement, together with any Schedules hereto and
      ----------------
      the Asset Purchase Agreement, constitute the entire Agreement between the
      parties concerning the subject matter hereof; it may not be modified or
      amended except in writing signed by all parties. All agreements or
      arrangements (if any) among the parties executed prior to the date hereof
      (except for the Asset Purchase Agreement), whether written or oral,
      relating to the subject matter hereof are hereby canceled and superseded.

12.5. Schedules. The Schedules (as amended from time to time by agreement of the
      ---------
      Parties in writing) form part of this Agreement and shall have the same
      force and effect as if expressly set out in the body of the Agreement and
      any reference to the Agreement shall include the Schedules. To the extent
      that there is conflict between or ambiguity relating to, on the one hand,
      any or all of the Schedules and, on the other, the remainder of this
      Agreement, the wording of the Agreement shall prevail.

12.6. Headings. Headings are inserted for convenience and shall not by
      --------
      themselves determine the interpretation of this Agreement.

12.7. Counterparts. This Agreement may be executed in counterparts, each of
      ------------
      which shall be deemed an original but together constituting one agreement.

12.8. Assignment. Except as otherwise provided in this Section, neither party
      ----------
      may assign or delegate any right or obligation hereunder without the prior
      written consent of the other party, which consent shall not be
      unreasonably withheld, and any attempted assignment or delegation in
      violation hereof shall be void. WATSON and SEARLE may each assign all or
      part of its rights and obligations hereunder to an Affiliate on notice to
      and without the necessity of securing the other party's consent, subject
      to and for so long as such assignee remains an Affiliate of the assignor.
      In addition, either party may assign all of its rights and obligations
      hereunder to a purchaser of all or substantially all of the assets or
      business to which this Agreement relates.

12.9. Waiver of Default. No waiver of any default hereunder by any party or any
      -----------------
      failure to enforce any rights hereunder shall be deemed to constitute a
      waiver of any subsequent default with respect to the same or any other
      provision hereof. No waiver shall be effective unless made in writing with
      specific reference to the relevant provision(s) of this Agreement and
      signed by a duly authorized representative of the party granting the
      waiver.

12.10. Not for Benefit of Creditors. The provisions of this Agreement are
       ----------------------------
      intended only for the regulation of relations between the parties. Except
      as expressly provided in Article 8 (and then subject to the limitations
      stated in such Article), this Agreement is not intended for the benefit of
      any person, firm or entity not a party

                                       16

<PAGE>

      hereto and no rights are granted to such third parties hereunder.

12.11. Force Majeure. If any party is prevented from performing any obligation
       -------------
      hereunder by reason of fire, explosion, strike, labor dispute, casualty,
      accident, lack or failure of transportation facilities, flood, war, civil
      commotion, acts of God, any law, order or decree of any government or
      subdivision thereof or any other cause beyond the reasonable control of
      such party ("Force Majeure), then such party shall be excused form
      performance hereunder to the extent and for the duration of such
      prevention, provided it first notifies the other party in writing of such
      prevention. The foregoing shall not apply to any prevention due to any
      governmental regulatory action resulting directly from the fault of
      SEARLE.

12.12. Publicity. Neither SEARLE nor WATSON, nor any Affiliate thereof, will
       ---------
      issue or cause publication of any press release or other announcement or
      public communication with respect to this Agreement or the transactions
      contemplated hereby without the prior written consent of the other party,
      which consent will not be unreasonably withheld or delayed.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.

SEARLE & CO.                                    WATSON LABORATORIES, INC.

By:                                             By:
   -----------------------------                   -----------------------------

Title:                                          Title:
      --------------------------                      --------------------------

                                       17

<PAGE>

                                    SCHEDULES
                                    ---------

               1.5               Products and Batch Lot Sizes
               1.6               Bulk Tablet Testing Specifications
               1.14              Packaging Specifications
               2.2(a)            Purchase Prices
               6.1               Quality Agreement and Quality Responsibilities

<PAGE>

                                  SCHEDULE 1.5

                          PRODUCTS AND BATCH LOT SIZES
                          ----------------------------

<TABLE>
<CAPTION>

CODE                         DESCRIPTION                          LOT SIZE (Cartons)            TABLETS
----                         -----------                          ------------------            -------
<S>                          <C>                                  <C>                           <C>
25428                        Brevicon (----)                      (----)                        (----)
X25428                       Brevicon (----) Samples              (----)                        (----)
27928                        Levora (----)                        (----)                        (----)
X27928                       Levora (----) Samples                (----)                        (----)
26528                        Norinyl 1/50 (----)                  (----)                        (----)
25928                        Norinyl 1/35 (----)                  (----)                        (----)
X25928                       Norinyl 1/35 (----) Samples          (----)                        (----)
A023091                      NorQD tablets                        (----)                        (----)
27428                        Tri-Norinyl (----)                   (----)                        (----)
X27428                       Tri-Norinyl (----) Samples           (----)                        (----)
29128                        Trivora (----)                       (----)                        (----)
X29128                       Trivora (----) Samples               (----)                        (----)
</TABLE>

Schedule 1.5 to Packaging Agreement

<PAGE>

                                 TRIVORA Tablets
          Low Dose: Levonorgestrel 0.05 mg / Ethinyl Estradiol 0.03 mg
        Medium Dose: Levonorgestrel 0.075 mg / Ethinyl Estradiol 0.04 mg
         High Dose: Levonorgestrel 0.125 mg / Ethinyl Estradiol 0.03 mg

<TABLE>
<S>                                      <C>
------------------------------------------------------------------------------------------------------------------------------------
Bulk Tablet Holding Period               (----) days from start of manufacture of the earliest of the Trivora lots
------------------------------------------------------------------------------------------------------------------------------------
Expiration Date Assignment               (----) months from start of manufacture of the earliest of the Trivora lots
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
IN-PROCESS SPECIFICATION (GRANULATION)

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

------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
TEST                                     SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
Blend Uniformity                         (----)% - (----)% L.S.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINISHED GOODS SPECIFICATION

------------------------------------------------------------------------------------------------------------------------------------
TEST                                           INTERNAL SPECIFICATION                          REGULATORY SPECIFICATION
                                    ------------------------------------------------------------------------------------------------
                                     Low Dose      Medium Dose      High Dose           Low Dose      Medium Dose       High Dose
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>            <C>             <C>                <C>             <C>              <C>
Description                         Blue, round,   White, round,   Pink, round,       Blue, flat-     White, flat-     Pink, flat-
                                    flat-faced,    flat-faced,     flat-faced,        faced,          faced,           faced,
                                    bevel-edge,    bevel-edge,     bevel-edge,        beveled-edge    beveled-edge     beveled-edge
                                    uncoated.      uncoated.       uncoated.          tablets with    tablets with     tablets with
                                    Debossed       Debossed one    Debossed one       the company     the company      the company
                                    one side       side            side               identifier on   identifier on    identifier on
                                    "WATSON",      "WATSON",       "WATSON",          one side and    one side and     one side and
                                    other side     other side      other side         the product     the product      the product
                                    "50/30"        "75/40"         "125/30"           identifier on   identifier on    identifier on
                                                                                      the other.      the other.       the other.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                 <C>                                               <C>
Identification Test (HPLC)          Retention time of main sample peak                Retention time of main sample peak conforms to
                                    correspond to those of the standard.              those of the standard.
------------------------------------------------------------------------------------------------------------------------------------
Identification Test
(Melting Point, Class I)            (----)                                            (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TRIVORA SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

<TABLE>
<S>                                 <C>                                               <C>
------------------------------------------------------------------------------------------------------------------------------------
Assay Levonorgestrel (HPLC)         (----)% - (----)%                                 (----)% - (----)% of the label claim
------------------------------------------------------------------------------------------------------------------------------------
Assay Ethinyl Estradiol (HPLC)      (----)% - (----)%                                 (----)% - (----)% of the label claim
------------------------------------------------------------------------------------------------------------------------------------
Content Uniformity (HPLC)
Levonorgestrel                      Conforms to current USP criteria                  Conforms to current USP requirements
------------------------------------------------------------------------------------------------------------------------------------
Content Uniformity (HPLC)
Ethinyl Estradiol                   Conforms to current USP criteria                  Conforms to current USP requirements
------------------------------------------------------------------------------------------------------------------------------------
Dissolution Levonorgestrel
Q = 80% at 60 min.                  Conforms to USP Acceptance Table                  Conforms to current USP requirements
------------------------------------------------------------------------------------------------------------------------------------
Dissolution Ethinyl Estradiol
Q = 75% at 60 min.                  Conforms to USP Acceptance Table                  Conforms to current USP requirements
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                 <C>              <C>               <C>           <C>              <C>                 <C>
Residual Methanol                   (----)           (----)            (----)        (----)           (----)              (----)

------------------------------------------------------------------------------------------------------------------------------------
               6-Keto EE
               --------------------
               9,11 - DEE
               --------------------
               6-OH-LNRG
               -------------------- (----)%          (----)%           (----)%       (----)%          (----)%             (----)%
Related        6-OH-EE              on any           on any            on any        on any           on any              on any
Substances     -------------------- individual       individual        individual    individual       individual          individual
               6-Keto-LNRG
               --------------------
               6,7 - DEE
               --------------------
               6,7 - DLNRG
               --------------------
               5,6 - Delta LNRG
               --------------------
               LNRG SYNT. IMP
               ---------------------------------------------------------------------------------------------------------------------
               Total
               Related Substances   (----)           (----)            (----)        (----)           (----)              (----)
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic                   NMT (----)       NMT (----)        NMT (----)    NMT (----)       NMT (----)          NMT (----)
Microbial Count                     cfu/g            cfu/g             cfu/g         cfu/g            cfu/g               cfu/g
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                 <C>              <C>               <C>                       <C>
Escherichia coli                                     (----)
--------------------------------------------------------------------------------
Salmonella                                           (----)                                      No filed requirement
--------------------------------------------------------------------------------
Coliform bacteria                   (----)           (----)            (----)
--------------------------------------------------------------------------------
Fungi                               (----)           (----)            (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

TRIVORA SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

                             NORINYL 1 + 35 Tablets
                 Norethindrone 1 mg / Ethinyl Estradiol 0.035 mg

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Bulk Tablet Holding Period               (----) days from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
Expiration Date Assignment               (----) months from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
IN-PROCESS SPECIFICATION (GRANULATION)

------------------------------------------------------------------------------------------------------------------------------------
TEST                                     SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Blend Assay                              Norethindrone:  (----)% - (----)% l.s.
                                         Ethinyl Estradiol: (----)% - (----)% l.s.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
FINISHED GOODS SPECIFICATION

------------------------------------------------------------------------------------------------------------------------------------
TEST                              INTERNAL SPECIFICATION                             REGULATORY SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                <C>
Appearance                        Yellow-green, round, flat-faced, bevel-edged       Yellow-green, flat-faced, beveled-edge tablets
                                  tablet.  Debossed one side "WATSON"; other         with the company identified on one side and the
                                  side, "259".                                       product identifier on the other side.
------------------------------------------------------------------------------------------------------------------------------------
Identification Test               Retention time of main sample peak correspond      Conforms to current USP requirements.
(TLC or HPLC)                     to those of the standard.
Norethindrone
------------------------------------------------------------------------------------------------------------------------------------
Identification Test (HPLC)        Retention time of main sample peak correspond      Retention time of main sample peak conforms to
Ethinyl Estradiol                 to those of the standard.                          that of the standard.
------------------------------------------------------------------------------------------------------------------------------------
Assay Norethindrone               (----)% - (----)%                                  (----)% - (----)% of label claim
------------------------------------------------------------------------------------------------------------------------------------
Assay Ethinyl Estradiol           (----)% - (----)%                                  (----)% - (----)% of label claim
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NORINYL 1+35 SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                                         <C>
Uniformity of Dosage Units               Conforms to current USP criteria                            Conforms to USP requirements
Norethindrone
------------------------------------------------------------------------------------------------------------------------------------
Uniformity of Dosage Units               Conforms to current USP criteria                            Conforms to USP requirements
(Ethinyl Estradiol)
------------------------------------------------------------------------------------------------------------------------------------
Dissolution                              Conforms to USP Acceptance Table                            Conforms to USP
Norethindrone
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Dissolution HPLC                         Conforms to USP Acceptance Table                            Conforms to USP
Ethinyl Estradiol
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic                            (----)                                                      N/A
Microorganisms
------------------------------------------------------------------------------------------------------------------------------------
Escherichia coli                         (----)                                                      N/A
------------------------------------------------------------------------------------------------------------------------------------
Salmonella                               (----)                                                      N/A
------------------------------------------------------------------------------------------------------------------------------------
Fungi                                    (----)                                                      N/A
------------------------------------------------------------------------------------------------------------------------------------
Coliform bacteria                        (----)                                                      N/A
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NORINYL 1+35 SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>
                             NORINYL 1 + 50 Tablets
                     Norethindrone 1 mg / Mestranol 0.05 mg

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Bulk Tablet Holding Period               (----) days from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
Expiration Date Assignment               (----) months from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
IN-PROCESS SPECIFICATION (GRANULATION)

No filed requirement for blend uniformity or blend assay.
--------------------------------------------------------------------------------

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
FINISHED GOODS SPECIFICATION

------------------------------------------------------------------------------------------------------------------------------------
TEST                               INTERNAL SPECIFICATION                             REGULATORY SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                               <C>
Appearance                         White, round, flat-faced, bevel-edged tablet.      White, round, flat-faced, beveled-edge tablet;
                                   Debossed one side "WATSON"; other side,            debossed "WATSON" on one side and "265" on
                                   "265".                                             the other side.
------------------------------------------------------------------------------------------------------------------------------------
Identification Test                Retention time of main sample peak correspond      Conforms to current USP requirements.
(TLC or HPLC)                      to those of the standard.
Norethindrone
------------------------------------------------------------------------------------------------------------------------------------
Identification Test B HPLC         Retention time of main sample peak correspond      Retention time of main sample peak conforms to
Mestranol                          to those of the standard.                          that of the standard.
------------------------------------------------------------------------------------------------------------------------------------
Assay Norethindrone                (----)% - (----)%                                  (----)% - (----)% of label claim
------------------------------------------------------------------------------------------------------------------------------------
Assay Ethinyl Estradiol            (----)% - (----)%                                  (----)% - (----)% of label claim
------------------------------------------------------------------------------------------------------------------------------------
Uniformity of Dosage Units         Conforms to current USP criteria                   Conforms to current USP requirements
Norethindrone
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NORINYL 1+50 SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                <C>
Uniformity of Dosage Units         Conforms to current USP criteria                   Conforms to current USP requirements
Mestranol
------------------------------------------------------------------------------------------------------------------------------------
Dissolution Norethindrone          Conforms to USP Acceptance Table                   Conforms to USP requirements
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Dissolution Ethinyl Estradiol      Conforms to USP Acceptance Table                   Conforms to USP requirements
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic                      (----)                                             N/A
Microorganisms
------------------------------------------------------------------------------------------------------------------------------------
Escherichia coli                   (----)                                             N/A
------------------------------------------------------------------------------------------------------------------------------------
Salmonella                         (----)                                             N/A
------------------------------------------------------------------------------------------------------------------------------------
Fungi                              (----)                                            N/A
------------------------------------------------------------------------------------------------------------------------------------
Coliform bacteria                  (----)                                             N/A
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NORINYL 1+50 SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

                             BREVICON 0.5/35 Tablets
              Norethindrone USP 0.5 mg / Ethinyl Estradiol 0.035 mg

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Bulk Tablet Holding Period               (----) days from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
Expiration Date Assignment               (----) months from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
IN-PROCESS SPECIFICATION (GRANULATION)

------------------------------------------------------------------------------------------------------------------------------------
TEST                                     SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Blend Assay                              Norethindrone:  (----)% - (----)%
                                         Ethinyl Estradiol: (----)% - (----)%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINISHED GOODS SPECIFICATION

------------------------------------------------------------------------------------------------------------------------------------
TEST                                INTERNAL SPECIFICATION                               REGULATORY SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                                  <C>
Appearance                          Blue, round, flat-faced, bevel-edged tablet.         Blue, flat-faced, beveled-edge tablets with
                                    Debossed one side "WATSON"; other side,              company identifier on one side and product
                                    "254".                                               identifier on the other,
------------------------------------------------------------------------------------------------------------------------------------
Identification Test                 Retention time of main sample peak correspond        Passes test.
Norethindrone                       to those of the standard.
------------------------------------------------------------------------------------------------------------------------------------
Identification Test                 Retention time of main sample peak correspond        Passes test.
Ethinyl Estradiol                   to those of the standard.
------------------------------------------------------------------------------------------------------------------------------------
Assay (Norethindrone)               (----)% - (----)%                                    (----)% - (----)% L.S.
------------------------------------------------------------------------------------------------------------------------------------
Assay (Ethinyl Estradiol)           (----)% - (----)%                                    (----)% - (----)% L.S.
------------------------------------------------------------------------------------------------------------------------------------
Uniformity of Dosage Units          Conforms to current USP criteria                     Conforms to USP requirements
Norethindrone
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

BREVICON SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                                  <C>
Uniformity of Dosage Units          Conforms to current USP criteria                     Conforms to USP requirements
Ethinyl Estradiol
------------------------------------------------------------------------------------------------------------------------------------
Dissolution Norethindrone           Conforms to USP Acceptance Table                     Conforms to USP requirements
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Dissolution Ethinyl Estradiol       Conforms to USP Acceptance Table                     Conforms to USP requirements
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic                       (----)                                               N/A
Microorganisms
------------------------------------------------------------------------------------------------------------------------------------
Escherichia coli                    (----)                                               N/A
------------------------------------------------------------------------------------------------------------------------------------
Salmonella                          (----)                                               N/A
------------------------------------------------------------------------------------------------------------------------------------
Fungi                               (----)                                               N/A
------------------------------------------------------------------------------------------------------------------------------------
Coliform bacteria                   (----)                                               N/A
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

BREVICON SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

                             LEVORA 0.15/30 Tablets
               Levonorgestrel 0.15 mg / Ethinyl Estradiol 0.03 mg

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Bulk Tablet Holding Period               (----) days from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
Expiration Date Assignment               (----) months from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
IN-PROCESS SPECIFICATION (GRANULATION)

------------------------------------------------------------------------------------------------------------------------------------
TEST                                     SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Blend Assay                              Levonorgestrel: (----)% - (----)% L.S.
                                         Ethinyl Estradiol: (----)% - (----)% L.S.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINISHED GOODS SPECIFICATION

------------------------------------------------------------------------------------------------------------------------------------
TEST                             INTERNAL SPECIFICATION                             REGULATORY SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                                                <C>
Description                      White, round, flat-faced, beveled edge tablet,     White, flat-faced, beveled-edge tablets with the
                                 uncoated.  Debossing one face, "15/30"; other      company identifier on one side and the product
                                 face "WATSON".                                     identifier on the other.
------------------------------------------------------------------------------------------------------------------------------------
*Identification Test (HPLC)      Retention time of main component peaks in the      Retention time of main sample peak conforms to
                                 sample compares to that of the corresponding       that of the standard.
                                 peaks in the standard.
------------------------------------------------------------------------------------------------------------------------------------
*Identification Test             (----)                                             (----)
(Melting Point, Class I)
------------------------------------------------------------------------------------------------------------------------------------
Assay (Levonorgestrel)           (----)% - (----)%                                  (----)% - (----)% of the label claim
------------------------------------------------------------------------------------------------------------------------------------
Assay (Ethinyl Estradiol)        (----)% - (----)%                                  (----)% - (----)% of the label claim
------------------------------------------------------------------------------------------------------------------------------------
Content Uniformity HPLC          Conforms to current USP criteria                   Conforms to current USP requirements
Levonorgestrel
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

LEVORA SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                                                <C>
Content Uniformity HPLC          Conforms to current USP criteria                   Conforms to current USP requirements
Ethinyl Estradiol
------------------------------------------------------------------------------------------------------------------------------------
Dissolution                      Conforms to USP Acceptance Table                   Conforms to current USP requirements
Levonorgestrel
Q = 80% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Dissolution                      Conforms to USP Acceptance Table                   Conforms to current USP requirements
Ethinyl Estradiol
Q = 75% at 60 min.
------------------------------------------------------------------------------------------------------------------------------------
Disintegration                           (----)                                     N/A
------------------------------------------------------------------------------------------------------------------------------------
Residual Methanol                        (----)                                     (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                <C>                   <C>                                                         <C>
                   6-Keto EE             (----)
                   ---------------------------------------------------------------------------------
                   9,11 - DEE            (----)
                   ---------------------------------------------------------------------------------
                   6-OH-LNRG             (----)
                   ---------------------------------------------------------------------------------
                   6-OH-EE               (----)
*Related           ---------------------------------------------------------------------------------
Substances         6-Keto-LNRG           (----)                                                          (----)
                   ---------------------------------------------------------------------------------
                   6,7 - DEE             (----)
                   ---------------------------------------------------------------------------------
                   6,7 - DLNRG           (----)
                   ---------------------------------------------------------------------------------
                   5,6 - Delta LNRG      (----)
                   ---------------------------------------------------------------------------------
                   LNRG SYNT. IMP        (----)
                   ---------------------------------------------------------------------------------
                   Total                 (----)                                                          (----)
                   Related Substances
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic                            (----)                                                          (----)
Microorganisms
------------------------------------------------------------------------------------------------------------------------------------
Escherichia coli                         (----)

----------------------------------------------------------------------------------------------------
Salmonella                               (----)                                                          Not a filed requirement
----------------------------------------------------------------------------------------------------
Fungi                                    (----)
----------------------------------------------------------------------------------------------------
Coliform bacteria                        (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Identification and Related Substances testing performed by PHARMACIA; all other
results derived from Certificate of Analysis provided by (----).
--------------------------------------------------------------------------------

LEVORA SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

                                 NOR-QD Tablets
                           Norethindrone, USP 0.35 mg

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>
Bulk Tablet Holding Period                 (----) days from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
Expiration Date Assignment                 (----) months from start of manufacture
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
IN-PROCESS SPECIFICATION (GRANULATION)

------------------------------------------------------------------------------------------------------------------------------------
TEST                                       SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>
Assay (Norethindrone)                      (----)% - (----)%  L.S.
------------------------------------------------------------------------------------------------------------------------------------
Content Uniformity                         Passes Test
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic Microorganisms               (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINISHED GOODS SPECIFICATION

------------------------------------------------------------------------------------------------------------------------------------
TEST                                INTERNAL SPECIFICATION                           REGULATORY SPECIFICATION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                              <C>
Appearance                          Yellow, round, flat-faced, bevel-edged tablet.   Yellow, flat-faced, beveled edge tablets
                                    Debossed one side "WATSON" and "235";            debossed with "Watson 235" on one side, and
                                    the other side blank.                            blank on reverse.
------------------------------------------------------------------------------------------------------------------------------------
Identification                      Rf values of standard and sample compare.        Rf values of standard and sample compare.
------------------------------------------------------------------------------------------------------------------------------------
Assay (Norethindrone)               (----)% - (----)%                                (----)% - (----)% L.S.
------------------------------------------------------------------------------------------------------------------------------------
Content Uniformity                  Conforms to current USP criteria                 Conforms to current USP requirements
------------------------------------------------------------------------------------------------------------------------------------
Disintegration (without disks)      (----)                                           (----) the use (----)

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOR-QD SPECIFICATION
Schedule 1.6 to Packaging Agreement

<PAGE>

                             PLACEBO TABLETS, 50 mg

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TEST                                   INTERNAL SPECIFICATIONS                       REGULATORY SPECIFICATIONS

------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                           <C>
Description                            Round, flat-faced, disc, beveled edged        Flat-faced, discoid, beveled edged tablets, no
                                       tablets. 3/16 inch diameter, uncoated.        scoring, debossed with company identifier on
                                       Debossed: One face "WATSON"; "P1" on          one side.
                                       the other side
                                       Orange colored, 50 mg tablet                  40-0996-XX Orange / pale orange / peach
                                                                                     colored, 50 mg tablet
------------------------------------------------------------------------------------------------------------------------------------
Identification Test (TLC)              Absence of steroids                           No steroids present
------------------------------------------------------------------------------------------------------------------------------------
Disintegration                         (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Hardness                               (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Residual Methanol                      (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic Microbial Count          (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Coliform bacteria                      (----)                                        No filed requirement
----------------------------------------------------------------------------------
Fungi                                  (----)
----------------------------------------------------------------------------------
E. Coli                                (----)
----------------------------------------------------------------------------------
Salmonella                             (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

SPECIFICATION: PLACEBO 50 mg
Schedule 1.6 to Packaging Agreement

<PAGE>

                      PLACEBO TABLETS, 100 mg (for LEVORA)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TEST                                   INTERNAL SPECIFICATIONS                       REGULATORY SPECIFICATIONS

------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                           <C>
Description                            Round, flat-faced, beveled edged tablets.     Flat-faced, discoid, beveled edged tablets, no
                                       Uncoated, 1/4 inch diameter.  Debossed: One   scoring, debossed with company identifier on
                                       face "WATSON"; "P1" on the other side         one side.
                                       Pale orange / Peach colored, 100 mg tablet
                                                                                     40-0997-XX Orange / pale orange / peach
                                                                                     colored, 100 mg tablet
------------------------------------------------------------------------------------------------------------------------------------
Identification Test (TLC)              Absence of steroids                           No steroids present
------------------------------------------------------------------------------------------------------------------------------------
Disintegration                         (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Hardness                               (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Residual Methanol                      (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic Microbial Count          (----)                                        (----)
------------------------------------------------------------------------------------------------------------------------------------
Coliform bacteria                      (----)
----------------------------------------------------------------------------------
Fungi                                  (----)
----------------------------------------------------------------------------------   No filed requirement
E. Coli                                (----)
----------------------------------------------------------------------------------
Salmonella                             (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

SPECIFICATION: PLACEBO 100 mg (for Levora)
Schedule 1.6 to Packaging Agreement

<PAGE>

                      PLACEBO TABLETS, 100 MG (for TRIVORA)
                      -------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TEST                                  INTERNAL SPECIFICATIONS                          REGULATORY SPECIFICATIONS

------------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                                              <C>
                                       Round, flat-faced, beveled edged tablets.       Flat-faced, discoid, beveled edged tablets,
                                       Uncoated, 1/4 inch diameter.  Debossed: One     no scoring, debossed with company identifier
                                       face "WATSON"; "P1" on the other side           on one side.
                                       Peach colored, 100 mg tablet
                                                                                       40-0997-XX Orange / pale orange / peach
Description                                                                            colored, 100 mg tablet
------------------------------------------------------------------------------------------------------------------------------------
Identification Test (TLC)             Absence of steroids                              No steroids present
------------------------------------------------------------------------------------------------------------------------------------
Disintegration                        (----)                                           (----)
------------------------------------------------------------------------------------------------------------------------------------
Hardness                              (----)                                           (----)
------------------------------------------------------------------------------------------------------------------------------------
Residual Methanol                     (----)                                           (----)
------------------------------------------------------------------------------------------------------------------------------------
Total Aerobic Microbial Count         (----)                                           (----)
------------------------------------------------------------------------------------------------------------------------------------
Coliform bacteria                     (----)
----------------------------------------------------------------------------------
Fungi                                 (----)                                           No filed requirement
----------------------------------------------------------------------------------
E. Coli                               (----)
----------------------------------------------------------------------------------
Salmonella                            (----)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

SPECIFICATION: PLACEBO 100mg (for Trivora)
Schedule 1.6 to Packaging Agreement

<PAGE>

                                  SCHEDULE 1.14

                            PACKAGING SPECIFICATIONS
                            ------------------------

Schedule 1.14 to Packaging Agreement

<PAGE>

                   Applicable 'Product Assembly Specification'

      25428                 Brevicon (----)                           PAS # 9467

      X25428                Brevicon (----) Samples                   PAS # 9467

                            Brevicon Blister                          PAS # 9448

      27928                 Levora (----)                             PAS # 9445

      X27928                Levora (----) Samples                     PAS # 9492

                            Levora Blister                            PAS # 9482

      26528                 Norinyl 1/50 (----)                       PAS # 9459

                            Norinyl 1/50 Blister                      PAS # 9450

      25928                 Norinyl 1/35 (----)                       PAS # 9459

      X25928                Norinyl 1/35 (----) Samples               PAS # 9467

                            Norinyl 1/35 Blister                      PAS # 9449

      27428                 Tri-Norinyl (----)                        PAS # 9477

      X27428                Tri-Norinyl (----) Samples                PAS # 9518

                            Tri-Norinyl Blister                       PAS # 9476

      29128                 Trivora (----)                            PAS # 9441

      X29128                Trivora (----) Samples                    PAS # 9491

                            Trivora Blister                           PAS # 9466

Schedule 1.14 to Packaging Agreement

<PAGE>

                                 SCHEDULE 2.2(a)

                          WATSON PHARMACEUTICALS, INC.
                                 PRODUCT PRICING

DESCRIPTION / UNIT OF MEASURE                                      PRICE
-----------------------------                                      -----

Trivora 28 168 (X29128) / CN                                     $(----)*
Trivora 28 168 (29128) / CN                                      $(----)*
Norinyl 1/35 28 84 PTP ((X25928) / CN                            $(----)*
Norinyl 1/35 28 W 168 (25928) / CN                               $(----)*
Norinyl 1/50 28 W 168 (26528) / CN                               $(----)*

Brevicon .5/35 28 84 PTP (X25428) / CN                           $(----)*
Brevicon .5/35 28 W 84 (25428) / CN                              $(----)*

Tri-Norinyl 28 84 PTP (X27428) / CN                              $(----)*
Tri-Norinyl 28 W 168 (27428) / CN                                $(----)*

Nor QD Tablets (A023091) / FULL LOT                              $(----)**

Levora 28 84 PTP (X27928) / CN                                   $(----)***
Levora 0.15/30 28 168 (27928) / CN                               $(----)***

Levora 28 84 PTP (X27928) / CN                                   $(----)****
Levora 0.15/30 28 168 (27928) / CN                               $(----)****

* Includes packaging, tablet release, stability and micro testing.

** Includes only tablet release, bulk stability and micro testing.

*** Represents Pharmacia continuing with the (----) bulk contract through April
15, 2002 and includes tablet manufacture, packaging, tablet release, stability
and micro testing.

**** Represents Pharmacia packaging bulk tablets provided from Watson, tablet
release, stability and micro testing after expiration of the (----) bulk
contract.

Schedule 2.2(a) to Packaging Agreement

<PAGE>

                              CONTRACT MANUFACTURER
                                QUALITY AGREEMENT

THIS QUALITY AGREEMENT made as of this 15th day of February , 2002, (the
                                       ----        ---------------
"Quality Agreement") by and between SEARLE & CO., a Delaware corporation, and
its Affiliates ("SEARLE"), and WATSON LABORATORIES, INC., a Nevada corporation
("WATSON"). This Quality Agreement supplements the Packaging Agreement signed by
both parties on the 15th day of February , 2002.
                    ----        ---------------

1.0   QUALITY REQUIREMENTS

      This Quality Agreement defines requirements to be followed when finished
      Product is packaged and/or tested for WATSON to ensure compliance with
      current Good Manufacturing Practice guidelines ("cGMPs"), and other
      regulatory requirements.

2.0   DEFINITIONS

      Product Testing - includes analytical and microbiological testing, when
      required, of in-process granulation and finished product testing.

      Internal Specifications - statistically based in-house action limits;
      these specifications cannot exceed registered specifications.

      Registered Specifications - Product specifications as submitted in the
      approved Product's (s) NDA/ANDA.

                                       1

Schedule 6.1 to Packaging Agreement

<PAGE>

3.0   PRODUCT

      Refer to Attachment 1 for the list of products and the services to be
      provided by SEARLE for each of the products. The list is limited to the
      Products covered by the referenced Packaging Agreement.

4.0   PROCESSES

      4.1   Premises

            4.1.1 SEARLE will package and/or test the products at its Caguas,
                  Puerto Rico facility and will not use or transfer at a later
                  date any of the operations/testing for the products to third
                  parties or other sites without the prior written agreement of
                  WATSON. Approval by WATSON shall not be unreasonably withheld.

            4.1.2 The premises and equipment used to package and/or test must be
                  in compliance with cGMPs, current regulatory requirements, and
                  in accordance with the documentation approved by WATSON.

      4.2   GMP Guidelines

            The cGMP guidelines to be applied are the United States cGMPs listed
            in Code of Federal Regulations ("CFR") Parts, 210 and 211 and
            associated Compliance Guidance.

      4.3   Materials

            SEARLE is responsible for ensuring that all materials procured for
            use in production or in analytical and microbiological testing are
            in full compliance with the registered specifications.

      4.4   Documentation

            4.4.1 SEARLE will provide on request packaging, analytical and
                  microbiological testing documents which have been approved by
                  its Quality and Compliance unit. Routinely, SEARLE will
                  provide Watson with Certificates of Quality (C of Q) and
                  Certificates of Analysis (C of A) for products packaged and/or
                  tested by SEARLE.

            4.4.2 SEARLE will maintain original documentation according to the
                  record retention procedure consistent with cGMP requirements.

                                       2

Schedule 6.1 to Packaging Agreement

<PAGE>

            4.4.3 WATSON shall be responsible for providing SEARLE with the
                  relevant portions of the most current NDA/ANDA's listed in
                  Attachment 1, including but not limited to the Registered
                  Specifications, so that SEARLE may fully comply with its
                  responsibilities under this Quality Agreement.

      4.5   Methods

            The Product must be packaged and/or tested exactly as specified
            within the Specifications. No changes may be made to these methods
            without the prior written authorization of WATSON.

      4.6   Packaging Specifications

            The current, approved Packaging Specifications will be utilized. No
            changes may be made to these Packaging Specifications without the
            prior written authorization of WATSON.

      4.7   Batch Numbering

            Products manufactured by a facility other than SEARLE: The batch
            numbering system of the company that manufactured the Product will
            be used. At its discretion, SEARLE may assign a SEARLE batch number
            but all documents must cross-reference the batch number assigned by
            the facility that manufactured the product.

      4.8   Expiration Date Assignment

            Established expiry dating shall be used for all products packaged by
            SEARLE. Expiration date assignment will be calculated as follows:
            date of manufacture plus established expiry dating. For calculation
            of expiration dating, the date of manufacture is defined as the date
            in the manufacturing process when the active ingredient is added.

      4.9   Rework.

            Rework is not permitted without prior authorization by WATSON.
            Routine corrective actions performed in process do not require prior
            authorization by WATSON.

      4.10  Manufacturing and Equipment Data

            SEARLE is responsible for keeping records of machine usage, raw
            materials

                                       3

Schedule 6.1 to Packaging Agreement

<PAGE>

            batch numbers and certification, in process results and parameters,
            and previous Product used in machinery if non-dedicated machinery is
            used.

5.0   QUALITY ASSURANCE

      5.1   Testing

            5.1.1 Packaging components. SEARLE will ensure that all materials
                  used are in compliance with the approved Packaging
                  Specifications.

            5.1.2 Finished Product. SEARLE will test all Product batches to the
                  Specifications. Test results failing the internal
                  specifications require an investigation and must be reported
                  to WATSON. WATSON concurrence on disposition of the product is
                  required.

      5.2   Release Procedures

            5.2.1 SEARLE is responsible for ensuring and documenting conformance
                  with the approved Specifications for those operations/testing
                  performed by SEARLE.

            5.2.2 WATSON has responsibility for ensuring proper documentation
                  and conformance with the approved NDA/ANDA requirements for
                  those operations performed at facilities other than SEARLE.

            5.2.3 Product Acceptance. WATSON will inspect each delivery of
                  Product prior to release for distribution. WATSON will provide
                  written notification to the appropriate facility when defects
                  are found. Transfer of product into inventory shall be deemed
                  Product acceptance by WATSON.

            5.2.4 Release to the Market. The Quality Assurance Department of
                  WATSON will release the Product for distribution based on
                  inspection results and C of A / C of Q documents.

            5.2.5 Certificate of Analysis and Certificate of Quality. SEARLE
                  will sign a C of A confirming that the Product has been
                  tested, and meets the registered specifications. Test
                  specifications and test results must be included for each
                  test. SEARLE will also provide a C OF Q , see Attachment 2 for
                  example, stating the Product has been packaged in accordance
                  with the approved batch record. The C of Q will contain
                  language that confirms any and all deviations and
                  investigations related to the lot were completed in compliance
                  with applicable SOP's, and the Quality Agreement. Both the C
                  of A and of C of Q shall accompany each batch of Product
                  shipped from SEARLE. When appropriate, the language contained
                  in the C of Q example may be consolidated onto the C of A
                  document.

                                       4

Schedule 6.1 to Packaging Agreement

<PAGE>

      5.3   Product Refusal

      Product that have been inspected and fails to meet WATSON acceptance
            criteria will be rejected. Written notification will be supplied to
            the appropriate contract manufacturer detailing the reason(s) for
            the refusal of the Product.

      5.4   Documentation

            Requests for full documentation. SEARLE commits to providing a full
            documentation package by fax within 24 hours or within a reasonable
            period if requested by WATSON for Product quality concerns, any
            regulatory reasons (e.g., batch recall) or unsatisfactory audit
            report.

      5.5   Retained samples

            Finished Product. SEARLE will retain, at minimum, sufficient samples
            of the Product, to carry out two full specification tests for the
            expiry period of the Product plus one year. This section is
            applicable to those products packaged by SEARLE.

      5.6   Stability

            SEARLE is responsible for maintaining a stability-testing program
            for the Product and will provide a stability report to WATSON
            annually. Any problem, which arises as a result of this program once
            confirmed, will be notified immediately to WATSON Quality Assurance.
            A minimum of one batch per year of the Product shall be included in
            the stability program..

      5.7   Regulatory Inspections

            SEARLE will inform WATSON of any Regulatory Inspections, which may
            involve the Product and permit a representative from WATSON Quality
            Assurance to be present if required by WATSON. A copy of any
            reports, notices issued by a Regulatory Authority, which relates to
            the Product shall be provided to WATSON.

      5.8   Audits

            SEARLE shall agree to a facility site compliance audit with prior
            written notification given by WATSON to access manufacturing and
            control systems used to produce the Product. Such audits shall be
            conducted within regular business hours.

                                       5

Schedule 6.1 to Packaging Agreement

<PAGE>

      5.9   Corrective Actions from Audits

            5.9.1 Critical defects. In the case of any "Critical" defects
                  arising during audits by WATSON or Regulatory Authorities, no
                  further deliveries of Product may be delivered to WATSON until
                  corrective actions have been completed to the satisfaction of
                  WATSON.

            5.9.2 Other defects. In the case of other defects arising during
                  audits by WATSON or Regulatory Authorities, a satisfactory
                  corrective action program must be in place to the satisfaction
                  of WATSON before further deliveries of Product to WATSON may
                  be made.

      5.10  Recall / Field Alert / Complaints

            5.10.1 WATSON and SEARLE shall work together to mutually agree on
                   any recall decision. WATSON shall have the final authority to
                   initiate a Product recall. Refer to Packaging Agreement,
                   Article 6.6.

            5.10.2 SEARLE shall notify WATSON immediately of any confirmed
                   failure that meets Field Alert Report criteria. WATSON shall
                   notify the District office within three (3) days of the
                   failure.

            5.10.3 Product Complaints. Refer to Packaging Agreement, Article
                   6.5.

      5.11  Change Control and Deviations

            5.11.1 Change Control. SEARLE will inform WATSON and obtain written
                   approval in advance, of any proposal to change the following:

                        . Packaging materials or Packaging Specifications
                        . Site of packaging and/or testing
                        . Equipment used in packaging
                        . Product specifications
                        . In-process test method and /or instrument
                        . Laboratory equipment/instruments used in testing
                        . Testing laboratory
                        . Structural facilities, HVAC system
                        . Any other change that could affect the registration
                          status

                                       6

Schedule 6.1 to Packaging Agreement

<PAGE>

            5.11.2 Deviations. SEARLE will record any accidental deviations from
                   the packaging and/or testing of the Product in the
                   batch/testing records and clearly notify WATSON of any and
                   all deviations from the Quality Requirements for each batch.

      5.12  Annual Product Review

            SEARLE is responsible for performing and providing an Annual Product
            Review (APR) for the products listed in Attachment 1. APR completion
            will be performed following SEARLE schedule. A copy will be provided
            to WATSON.

      5.13  Signature Authority

            A list will be provided by WATSON detailing who has signature
            authority ("Quality") for items such as deviations, investigations,
            change controls, methods, specifications, master batch records etc.
            SEARLE is responsible to assure that only those listed approve
            documents. Any document approved by any other WATSON personnel may
            not be considered approved.

6.0   PROCESS CAPABILITY - VALIDATION

      6.1   Cleaning Validation

            SEARLE is responsible for ensuring that adequate cleaning is carried
            out between batches of different Products to prevent cross
            contamination. The cleaning process will be validated before the
            first Product batches are processed for WATSON. The validation will
            be updated to cover any new Products packaged in the same equipment
            or facilities as those used for WATSON Products.

      6.2   Computer System

            SEARLE is responsible for ensuring that computer systems, which are
            used for the packaging and/or laboratory testing of the batch, must
            be validated. Validation protocols and reports shall be available
            for WATSON for review on request.

7.0   STORAGE AND SHIPPING

      SEARLE will ensure that during packaging, storage and shipping of the
      Product that there is no possibility of deterioration, contamination or
      admixture with any other materials. SEARLE will only ship goods to WATSON
      warehouses or designated locations (listed in Attachment 2).

8.0   PERSONS FOR COMMUNICATION

                                       7

Schedule 6.1 to Packaging Agreement

<PAGE>

      The persons to whom communication regarding Quality Control and Quality
      Assurance matters between WATSON and SEARLE shall be identified.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth below.

WATSON LABORATORIES, INC.                   SEARLE & CO.

By:                                         By:
   ------------------------------------        ---------------------------------

Name:                                       Name:
    -----------------------------------          -------------------------------

Title:                                      Title:
     ----------------------------------           ------------------------------

Date:                                       Date:
     ----------------------------------          -------------------------------

                                       8

Schedule 6.1 to Packaging Agreement

<PAGE>

Attachment 1

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PRODUCT                             NDA/ANDA                   PRODUCT TESTING                PACKAGING
---------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                        <C>                            <C>
TRIVORA                             ANDA 74-538                       X                            X
---------------------------------------------------------------------------------------------------------------------
LEVORA                              ANDA 73-592                       X                            X
                                    ANDA 73-594
---------------------------------------------------------------------------------------------------------------------
NOR-QD                              NDA 17-060                        X
---------------------------------------------------------------------------------------------------------------------
BREVICON                            NDA 17-566                        X                            X
                                    NDA 17-743
---------------------------------------------------------------------------------------------------------------------
NORINYL 1+35                        NDA 13-625                        X                            X
                                    NDA 16-659
---------------------------------------------------------------------------------------------------------------------
NORINYL 1+50                        NDA 17-565                        X                            X
---------------------------------------------------------------------------------------------------------------------
TRI-NORINYL                         NDA 18-977                                                     X
---------------------------------------------------------------------------------------------------------------------
PLACEBO TABLETS

50 mg and
100 mg                              ---------                         X                            X
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       9

Schedule 6.1 to Packaging Agreement

<PAGE>

Attachment 2

                              CONTACT INFORMATION:
                              --------------------

WATSON LABORATORIES, INC.

<TABLE>
<CAPTION>

Primary:                                             Secondary:
<S>                                                  <C>

Al Golfo                                             Jeff Nornhold
--------------------------------------------         ------------------------------------------
Name                                                 Name
Manager, Contract Manufacturing and                  Director, Contract Manufacturing and
--------------------------------------------         ------------------------------------------
Business Alliance Quality                            Business Alliance Quality
--------------------------------------------         ------------------------------------------
Title                                                Title
311 Bonnie Circle, Corona CA  92880                  311 Bonnie Circle, Corona CA  92880
--------------------------------------------         ------------------------------------------
Address                                              Address
909-493-5318 / agolfo@watsonpharm.com                909-493-5364 / jnornhol@watsonpharm.com
--------------------------------------------         ------------------------------------------
Phone/eMail address                                  Phone/eMail address
      909-493-5819                                         909-493-5819
--------------------------------------------         ------------------------------------------
Fax Number                                           Fax Number
</TABLE>

SEARLE & CO.

<TABLE>
<CAPTION>

Primary:                                             Secondary:
<S>                                                  <C>

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

--------------------------------------------         ------------------------------------------
         Compliance Advisor                                   Quality & Compliance Team Leader
--------------------------------------------         ------------------------------------------
Title                                                Title

         Calle Jardines #99                                            Calle Jardines #99
--------------------------------------------         ------------------------------------------
         Caguas, Puerto Rico  00725                           Caguas, Puerto Rico  00725
--------------------------------------------         ------------------------------------------
Address                                              Address

         787-746-6201                                                  787-746-6201
--------------------------------------------         ------------------------------------------
Phone                                                Phone

         787-286-4000                                                  787-286-4000
--------------------------------------------         ------------------------------------------
Fax                                                  Fax
</TABLE>

                          WATSON DISTRIBUTION CENTERS:
                          ----------------------------

            Watson Laboratories, Inc.               Watson Laboratories, Inc.
            3400 W. Lake Avenue                     Mt. Ebo Corporate Park
            Glenview, IL 60025                      Route 22
                                                    Brewster, NY 10509

                                       10

Schedule 6.1 to Packaging Agreement

<PAGE>

Attachment 3

                             CERTIFICATE OF QUALITY
                             ----------------------

Product: _________________________    Product Code: ____________________________

Lot Number: ______________________    Expiration Date: _________________________

Release Date: ____________________    Total Units Released: ____________________

I hereby certify that the above tested finished drug product packaged by SEARLE
was packaged in accordance with all requirements listed in WATSON's Product
Registration and in accordance with current Good Manufacturing Practices for
Finished Pharmaceuticals as specified under 21 Code of Federal Regulations,
Parts 210 and 211, United States of America.

-----------------------------
Name

-----------------------------
Title

-----------------------------
Date

                                       11

Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  NORQD

                            QUALITY RESPONSIBILITIES
                            ------------------------

                                 Product: NORQD

Table 1. Quality Responsibilities for Searle and Watson

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Raw Material - Active Ingredient
..     Specifications                                      X
      --------------
..     Supply/procurement                                  X
      -----------
..     Selection                                           X
      ---------
..     Test
..     Sample Retention
..     Investigations
      .     Initiate
            --------
      .     Review                                        X
      .     Approve                                       X
..     Vendor Audits                                       X
      -------------
..     Vendor Certification Program                        X
      ----------------------------
----------------------------------------------------------------------------------------------------------------------------
Raw Material - Inert                                                                      (1) NDA Related
..     Specifications                                      X(1)
      --------------
..     Supply/procurement
             -----------
..     Selection                                           X
      ---------
..     Test
..     Sample Retention
..     Investigations
      .     Initiate
            --------
      .     Review                                        X
      .     Approve                                       X
..     Vendor audits
      -------------
..     Vendor Certification Program
      ----------------------------
----------------------------------------------------------------------------------------------------------------------------
Mfg. Master Batch Record                                                                  Watson may initiate changes.
..     Issuance
      .     Initiate
      .     Approve                                       X
..     Change Control
      .     Initiate
      .     Approve                                       X
----------------------------------------------------------------------------------------------------------------------------
Changes in Specification & Test Methods                                                   (1) NDA Related
                         --------------
(raw materials & bulk)
                 ----
..     Initiate                                            X(1)
..     Review                                              X
..     Approve                                             X
----------------------------------------------------------------------------------------------------------------------------
Executed Batch Records (bulk)
..     Storage
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       12
Schedule 6.1 to Packaging Agreement

<PAGE>

Product: NORQD
-------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                  <C>           <C>
Bulk Tablets
..     Supply Samples for Testing
..     Sample Retention
..     Investigation
      .     Review                                        X
      .     Approve                                       X
----------------------------------------------------------------------------------------------------------------------------
Annual Product Review (bulk)                                                              /1/ Analytical Related
                       ----
..     Provide Data                                                           X /1/
..     Review/Approve                                      X
..     Storage
----------------------------------------------------------------------------------------------------------------------------
In-Process Testing
..     Physical
..     Analytical, if applicable                                               X
----------------------------------------------------------------------------------------------------------------------------
REPORTS
..     Bulk tablet Drug listing                            X
..     Product Drug listing                                X
----------------------------------------------------------------------------------------------------------------------------
Bulk Tablets                                                                              *QAN to Watson
(Specification Testing)
..     Supply Tablet Samples
..     Test                                                                    X
..     Provide results to Watson                                               X
..     Disposition for Packaging                           X
..     Investigation (Analytical)
      .     Conduct                                                           X
      .     Review                                     X/*/ only              X
      .     Approve                                    X MRB's                X
----------------------------------------------------------------------------------------------------------------------------
Packaging Components
..     Specifications
      .     Establish                                     X
      .     Change                                        X
      .     Approve                                       X
..     Supply                                              X
..     Test                                                X
..     Disposition for Use                                 X
----------------------------------------------------------------------------------------------------------------------------
Labeling
..     Artwork/Approve                                     X
..     Master Labels
      .     Review                                        X
      .     Approve                                       X
..     Printing/Approve for Use                            X
..     Changes                                             X
----------------------------------------------------------------------------------------------------------------------------
Packaging In-Process Testing
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       13
Schedule 6.1 to Packaging Agreement

<PAGE>

Product: NORQD
-------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Finished Product (Packaged)
..     Specifications
      .     Establish                                     X
      .     Change                                        X
      .     Approve                                       X
..     Product Disposition for Shipment                    X
..     Retained Samples
      .     Sampling                                      X
      .     Storage                                       X
----------------------------------------------------------------------------------------------------------------------------
Stability Samples
..     Storage                                                                 X
..     Specifications/Methods/Protocol                                         X
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Testing                                                                 X
..     Report to Watson                                                        X
----------------------------------------------------------------------------------------------------------------------------
Validation                                                                                /1/ Packaging Related
         (Plans/Protocols/Reports)                                                        /2/ Analytical Related
..     Initiate                                          X /1/               X /2/
..     Approve                                           X /1/               X /2/
..     Execute                                           X /1/               X /2/
..     Final Approval                                      X
----------------------------------------------------------------------------------------------------------------------------
Product Complaints                                                                        /1/ Packaging Related
..     Receipt                                             X                               /2/ Analytical Related
..     Investigation
      .     Initiate                                    X /1/               X (2)
      .     Review                                        X                 X (2)
      .     Approve                                       X                 X (2)
      .     Respond to Complaints                         X
      .     Maintenance of Complaints Master File         X
      .     Complaints Trend Analysis                     X
      .     Storage of Complaints samples                 X
      .     Product recall decision                       X
      .     Regulatory affairs                            X
                                                          X
----------------------------------------------------------------------------------------------------------------------------
Annual Product Review                                                                     /1/ Packaging Related
..     Compile Package                                   X /1/               X /2/         /2/ Analytical Related
..     Review/Approve                                    X /1/               X /2/
..     Storage                                           X /1/
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       14
Schedule 6.1 to Packaging Agreement

<PAGE>

Product: NORQD
-------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Annual Report                                                                             /1/ Packaging Related
..     Provide Documents                                                      X /1/
..     Submission                                          X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       15
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Tri-Norinyl, Norinyls, Brevicon, Trivora
--------

                            QUALITY RESPONSIBILITIES
                            ------------------------

               Products: Tri-Norinyl, Norinyls, Brevicon, Trivora

Table 1. Quality Responsibilities for Searle and Watson

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Raw Material - Active Ingredient
..     Specifications                                      X
      --------------
..     Supply/procurement                                  X
             -----------
..     Selection                                           X
      ---------
..     Test
..     Sample Retention
..     Investigations
      .     Initiate
            --------
      .     Review                                        X
      .     Approve                                       X
..     Vendor audits                                       X
      -------------
..     Vendor Certification Program                        X
      ----------------------------
----------------------------------------------------------------------------------------------------------------------------
Raw Material - Inert                                                                      /1/ NDA Related
..     Specifications                                    X /1/
      --------------
..     Supply/Procurement                                  X
             -----------
..     Selection
      ---------
..     Test
..     Sample Retention
..     Investigations
      .     Initiate
            --------
      .     Review                                        X
      .     Approve                                       X
..     Vendor audits
      -------------
..     Vendor Certification Program
      ----------------------------
----------------------------------------------------------------------------------------------------------------------------
Mfg. Master Batch Record
..     Issuance
      .     Initiate
      .     Approve                                       X
..     Change Control
      .     Initiate
      .     Approve                                       X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       16
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Tri-Norinyl, Norinyls, Brevicon, Trivora
--------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                     <C>           <C>
Changes in Specification & Test Methods                                                   /1/ NDA Related
                         --------------
(raw materials & bulk)
                 ----
..     Initiate                                          X /1/
..     Review                                              X
..     Approve                                             X
----------------------------------------------------------------------------------------------------------------------------
Executed Batch Records (bulk)
                        ----
..     Storage
----------------------------------------------------------------------------------------------------------------------------
Bulk Tablets
..     Supply Samples for Testing
..     Sample Retention
..     Investigation
      .     Review
      .     Approve
----------------------------------------------------------------------------------------------------------------------------
In-Process Testing
..     Physical
..     Analytical, if applicable                                               X
----------------------------------------------------------------------------------------------------------------------------
Reports
..     Bulk tablet Drug listing                                                XX
..     Product Drug listing
----------------------------------------------------------------------------------------------------------------------------
Bulk Tablets
..     Supply tablet samples
..     Test                                                                    X
..     Provide results to Watson                           X                   X
..     Disposition for Packaging
..     Investigation (Analytical)
      .     Conduct                                                           X
      .     Review                                        X                   X
      .     Approve                                    /*/only                X
                                                        MRB's
----------------------------------------------------------------------------------------------------------------------------
Packaging Components                                                                      Watson may initiate changes
..     Specifications
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Supply                                                                  X
..     Test                                                                    X
..     Disposition for Use                                                     X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       17
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Tri-Norinyl, Norinyls, Brevicon, Trivora
--------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Labeling                                                                                  Watson may initiate changes
..     Artwork/Approve                                     X
..     Master Labels
      .     Review                                        X                   X
      .     Approve                                       X                   X
..     Printing/Approve for Use                                                X
..     Changes                                             X                   X
----------------------------------------------------------------------------------------------------------------------------
Packaging
In-Process Testing                                                            X
----------------------------------------------------------------------------------------------------------------------------
Finished Product (Packaged)
..     Specifications
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Test                                                                    X
..     Results to Watson                                                       X
..     Product Disposition for Shipment                                        X
..     Retained Samples
      .     Sampling                                                          X
      .     Storage                                                           X
----------------------------------------------------------------------------------------------------------------------------
Stability Samples
..     Storage                                                                 X
..     Specifications/Methods/Protocol                                         X
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Testing                                                                 X
..     Report to Watson                                                        X
----------------------------------------------------------------------------------------------------------------------------
Validation                                                                                /1/ Packaging and Analytical
(Plans/Protocols/Reports)
..     Initiate                                                              X /1/
..     Approve                                             X                 X /1/
..     Execute                                                               X /1/
..     Final Approval                                      X                 X /1/
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       18
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Tri-Norinyl, Norinyls, Brevicon, Trivora
--------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Product Complaints                                                                        /1/ Packaging
..     Receipt                                             X
..     Investigation
      .     Initiate                                                        X /1/
      .     Review                                        X                 X /1/
      .     Approve                                       X                 X /1/
      .     Respond to  Complaints                        X
      .     Maintenance of Complaints Master File         X
      .     Complaints Trend Analysis                     X
      .     Storage of Complaints samples                 X
      .     Product recall decision                       X
      .     Regulatory affairs                            X
----------------------------------------------------------------------------------------------------------------------------
Annual Product Review                                                                     /1/ Packaging
..     Compile/Package                                                       X /1/
..     Review/Approve                                                        X /1/
..     Storage                                                               X /1/
----------------------------------------------------------------------------------------------------------------------------
Annual Report                                                                             /1/ Packaging
..     Provide Documents                                                     X /1/
..     Submission                                          X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       19
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Levora
--------

                            QUALITY RESPONSIBILITIES
                            ------------------------

                                 Product: Levora

Table 1. Quality Responsibilities for Searle and Watson

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Raw Material - Active Ingredient
..     Specifications                                      X
      --------------
..     Supply/procurement                                  X
             -----------
..     Selection                                           X
      ---------
..     Test
..     Sample Retention
..     Investigations
      .     Initiate
            --------
      .     Review                                        X
      .     Approve                                       X
..     Vendor audits                                       X
      -------------
..     Vendor Certification Program                        X
      ----------------------------
----------------------------------------------------------------------------------------------------------------------------
Raw Material - Inert
..     Specifications                                      X
      --------------
..     Supply/procurement
             -----------
..     Selection                                           X
      ---------
..     Test
..     Sample Retention
..     Investigations
      .     Initiate
            --------
      .     Review                                        X
      .     Approve                                       X
..     Vendor audits                                       X
      -------------
..     Vendor Certification Program                        X
      ----------------------------
----------------------------------------------------------------------------------------------------------------------------
Mfg. Master Batch Record
..     Issuance
      .     Initiate
      .     Approve                                       X
..     Change Control
      .     Initiate
      .     Approve                                       X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       20
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Levora
--------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Changes in Specification & Test Methods
                         --------------
(raw materials & bulk)
               ------
..     Initiate                                            X
..     Review                                              X
..     Approve                                             X
----------------------------------------------------------------------------------------------------------------------------
Executed batch Records (bulk)
                        ----
..     Storage
----------------------------------------------------------------------------------------------------------------------------
Bulk Tablets
..     Supply Samples for Testing
..     Sample Retention
..     Investigation
      .     Initiate
      .     Review                                        X
      .     Approve                                       X
----------------------------------------------------------------------------------------------------------------------------
Annual Product Review (bulk)
                       ----
..     Provide Data
..     Review/Approve                                      X
..     Storage
----------------------------------------------------------------------------------------------------------------------------
In-Process Testing
..     Physical
..     Analytical, if applicable                                               X
----------------------------------------------------------------------------------------------------------------------------
Annual Report
..     Provide Data
              ----
..     Submission                                          X
---------------------------------------------------------------------------------------------------------------------------
Product Complaints (bulk)                                                                 /1/ Packaging
..     Receipt                                             X
..     Investigation
      .     Initiate                                                          X /1/
      .     Review                                        X
      .     Respond to Complaints                         X
..     Maintenance of Complaints Master File               X
..     Complaints Trend Analysis                           X
..     Storage of Complaints samples                       X
..     Product recall decision                             X
..     Regulatory affairs                                  X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       21
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Levora
--------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Process & Cleaning Validation
(Master Plan/Protocols/Reports)
..     Initiate
..     Approve                                             X
..     Execute
..     Final Approval                                      X
----------------------------------------------------------------------------------------------------------------------------
Reports
..     Bulk tablet Drug listing                            X
..     Product Drug Listing                                X
----------------------------------------------------------------------------------------------------------------------------
Bulk Tablets
..     Test                                                                    X
..     Provide Results to Watson                                               X
..     Disposition for Packaging                           X
..     Investigation (Analytical)
      .     Conduct                                                           X
      .     Review                                                            X
      .     Approve                                                           X
----------------------------------------------------------------------------------------------------------------------------
Packaging Components
..     Specifications
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Supply                                                                  X
..     Test                                                                    X
..     Disposition for Use                                                     X
----------------------------------------------------------------------------------------------------------------------------
Labeling
..     Artwork/Approve                                     X
..     Master Labels
      .     Review                                        X                   X
      .     Approve                                       X                   X
..     Printing/Approve for Use                                                X
..     Changes                                             X                   X
----------------------------------------------------------------------------------------------------------------------------
Packaging In-Process Testing                                                  X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       22
Schedule 6.1 to Packaging Agreement

<PAGE>

Product:  Levora
--------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Description of task                                     Watson              Searle        Comments
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>           <C>
Finished Product (Packaged)                                                               * Only MRB's
..     Specifications
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Test                                                                    X
..     Results to Watson                                                       X
..     Product Disposition for Shipment                   X/*/
..     Retained Samples
      .     Sampling                                                          X
      .     Storage                                                           X
----------------------------------------------------------------------------------------------------------------------------
Stability Samples
..     Storage                                                                 X
..     Specifications/Methods/Protocol                                         X
      .     Establish                                     X                   X
      .     Change                                        X                   X
      .     Approve                                       X                   X
..     Testing                                                                 X
..     Report to Watson                                                        X
----------------------------------------------------------------------------------------------------------------------------

Packaging/Cleaning/Method Validations
   (Plans/Protocols/Reports)
..     Initiate                                                                X
..     Approve                                                                 X
..     Execute                                                                 X
..     Final Approval                                                          X
----------------------------------------------------------------------------------------------------------------------------
Product Complaints
..     Receipt                                             X
..     Investigation
      .     Review                                        X                   X
      .     Approve                                       X                   X
      .     Respond to Complaints                         X
----------------------------------------------------------------------------------------------------------------------------
Annual Product Review                                                                     Copy to Watson
..     Compile Package                                                        X /1/        /1/ Packaging
..     Review/Approve                                      X                   X
..     Storage                                                                 X
----------------------------------------------------------------------------------------------------------------------------
Annual Report
..     Provide Documents                                                       X
..     Submission                                          X
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       23
Schedule 6.1 to Packaging Agreement

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