SUPPLY AND DEVELOPMENT AGREEMENT

<PAGE>
Note: Certain portions of this document have been marked "[C.I.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

                        SUPPLY AND DEVELOPMENT AGREEMENT

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                             ----
<S>                                                                          <C>
I     DEFINITIONS.........................................................      1
     1.1    Act...........................................................      1
     1.2    Product(s)....................................................      1
     1.3    FDA...........................................................      1
     1.4    Forecasted Needs..............................................      1
     1.5    Label, Labeled, or Labeling...................................      1
     1.6    Market Year...................................................      2
     1.7    Packaging.....................................................      2
     1.8    Specifications................................................      2
     1.9    Material Safety Data Sheet....................................      2
     1.10   Manufacturing Fee.............................................      2
II    PRODUCT MANUFACTURE AND SUPPLY......................................      2
     2.1    Manufacture and Purchase......................................      2
     2.2    Supply of Materials...........................................      3
     2.3    Materials Testing.............................................      4
     2.4    Material Safety Data Sheets...................................      4
     2.5    Commencement of Manufacturing for New Products................      4
     2.6    Purchase Orders...............................................      4
     2.7    Rejected Products.............................................      5
     2.8    Product Price.................................................      6
III   SHIPMENT AND RISK OF LOSS...........................................      6
     3.1    Shipment......................................................      6
     3.2    Delivery Terms................................................      6
     3.3    Claims........................................................      6
IV    TERM AND TERMINATION................................................      7
     4.1    Term..........................................................      7
     4.2    Termination...................................................      7
     4.3    Payment on Termination........................................      7
     4.4    Survival......................................................      7
V     CERTIFICATES OF ANALYSIS AND MANUFACTURING COMPLIANCE...............      8
     5.1    Certificates of Analysis......................................      8
     5.2    Stability Testing.............................................      8
     5.3    Additional Validation Work or Additional Testing..............      8
     5.4    FDA Inspection................................................      8
     5.5    NDA's, ANDA's, & 510(k)'s.....................................      8
VI    WARRANTIES..........................................................      8
     6.1    Conformity with Specifications................................      8
     6.2    Compliance with the Act.......................................      9
     6.3    Conformity with FDA regulations and cGMP's....................      9
     6.4    Compliance of Packaging and Labeling with Laws and
              Regulations................................................      9
     6.5    Access to HARMONY's Facilities................................      9
     6.6    Disclaimer....................................................      9
VII   PRODUCT RECALLS.....................................................      9
VIII FORCE MAJEURE: FAILURE TO SUPPLY....................................     10
     8.1    Force Majeure Events..........................................     10
     8.2    Failure to Supply.............................................     10
IX    IMPROVEMENTS........................................................     10
     9.1    Changes by SIRIUS.............................................     10
     9.2    Changes by HARMONY............................................     10
</TABLE>


                                       -i-

<PAGE>

<TABLE>
<S>                                                                           <C>
     9.3    Changes by Regulatory Authorities.............................     10
     9.4    Obsolete Inventory............................................     10
     9.5    Disposal Costs................................................     11
X     CONFIDENTIAL INFORMATION: INTELLECTUAL PROPERTY RIGHTS..............     11
     10.1   Confidential Information......................................     11
     10.2   Trademarks and Trade Names....................................     12
XI    RESEARCH & DEVELOPMENT SERVICES.....................................     12
     11.1   R&D Services..................................................     12
     11.2   New Product Development.......................................     13
XII   INDEMNIFICATION.....................................................     13
     12.1   Indemnification by HARMONY....................................     13
     12.2   Indemnification by SIRIUS.....................................     13
     12.3   Patent and Other Intellectual Property Rights.................     14
     12.4   Conditions of Indemnification.................................     14
     12.5   Evidence of Liability Insurance...............................     14
XIII General Provisions..................................................     14
     13.1   Notices.......................................................     14
     13.2   Entire Agreement; Amendment...................................     15
     13.3   Waiver........................................................     15
     13.4   Obligations to Third Parties..................................     15
     13.5   Assignment....................................................     15
     13.6   Governing Law and Arbitration.................................     15
     13.7   Severability..................................................     16
     13.8   Headings, Interpretation......................................     16
     13.9   Counterparts..................................................     16
     13.10 Independent Contractor........................................     16
SCHEDULE A 18............................................................
SCHEDULE A-4.............................................................     20
SCHEDULE A-5.............................................................     23
</TABLE>


                                      -ii-

<PAGE>

                        SUPPLY AND DEVELOPMENT AGREEMENT

     This Manufacturing Agreement (the "Agreement") is made as of this 18th day
of September, 2001 by and between Sirius Laboratories, Inc., a Corporation duly
organized and existing under the laws of the State of Illinois with a place of
business at 100 Fairway Drive, Suite 130, Vernon Hills, IL 60061 (hereinafter
referred to as "SIRIUS"), and Harmony Laboratories, a North Carolina Corporation
with a place of business at 1109 south Main Street, Landis, North Carolina 28088
(hereinafter referred to as "HARMONY").

                                   WITNESSETH:

     WHEREAS, SIRIUS is engaged in the distribution and sale of certain
pharmaceutical products; and

     WHEREAS, HARMONY is engaged in the manufacture, distribution and sale of
such products and has the capability of manufacturing like products for third
parties; and

     WHEREAS, SIRIUS desires HARMONY to manufacture and sell the Products more
specifically described in Schedule A to SIRIUS, and HARMONY desires to do so.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter
expressed, the parties agree as follows:

                                  I DEFINITIONS

     1.1 ACT

     "Act" means the Federal Food, Drug and Cosmetic Act, as amended, and
regulations promulgated thereunder.

     1.2 PRODUCT(S)

     "Product(s)" means product(s) as listed in Schedule A manufactured,
packaged, labeled and/or finished by HARMONY to meet the Specifications (as
hereinafter defined).

     1.3 FDA

     "FDA" means the United States Food and Drug Administration, or any
successor entity thereto.

     1.4 FORECASTED NEEDS

     "Forecasted Needs" means SIRIUS's estimate of Products to be ordered from
HARMONY for each of the [c.i.] following the [c.i.] in which such estimate is
provided.

     1.5 LABEL, LABELED, OR LABELING

     "Label", "Labeled", or "Labeling" means all labels and other written,
printed, or graphic matter upon: (i) Product or any container or wrapper
utilized with Product or (ii) any written material accompanying Product.

<PAGE>

     1.6 MARKET YEAR

     "Market Year" means a period of twelve (12) months commencing on the date
the launch of Product manufactured by HARMONY.

     1.7 PACKAGING

     "Packaging" means all primary containers, cartons, shipping cases, inserts
or any other like material used in packaging, or accompanying, Product.

     1.8 SPECIFICATIONS

     "Specifications" means the specifications for raw materials and
manufacturing procedures of the Products as agreed to in writing by the Parties
or covered under HARMONY's Standard Operating Procedures ("SOP's"). The
Specifications shall include, without limitation: (i) raw material
specifications (including approved suppliers, art proofs, chemical, micro, and
packaging specifications); (ii) sampling requirements (i.e., lab, chemical, and
micro); (iii) compounding module, including compounding process and major
equipment; (iv) intermediate specifications; (v) packaging module (including
packaging procedures, torque and fill weights); (vi) finished Product
specifications release criteria including HARMONY's Acceptable Quality Limits
("AQL's"); (vii) stability specifications; and (viii) test methods.
Specifications shall be established and/or amended from time to time upon the
written agreement of both HARMONY and SIRIUS via a Product Change Request
("PCR") in accordance with Section IX below.

     1.9 MATERIAL SAFETY DATA SHEET

     "Material Safety Data Sheet" ("MSDS") means written or printed material
concerning a hazardous chemical which is prepared in accordance with the
regulations promulgated by the Occupational Safety & Health Administration, or
any successor entity thereto.

     1.10 MANUFACTURING FEE

     "Manufacturing Fee" means the fee paid by SIRIUS to HARMONY for services
required to manufacture and package Products. The Manufacturing Fee is quoted in
single final Product unit increments (i.e. by the bottle or tube.) The
Manufacturing Fee shall include [c.i.] for [c.i.] The Manufacturing Fee does not
include, without limitation, [c.i.]. Except as noted above, these [c.i.] are
[c.i.] and shall be [c.i.] in accordance with Section XI contained herein. In
addition, the Manufacturing Fee does not include [c.i.]. These items are billed
separately in accordance with paragraph 2.8 and 2.2 below.

                        II PRODUCT MANUFACTURE AND SUPPLY

     2.1 MANUFACTURE AND PURCHASE.

     Subject to the terms and conditions of this Agreement, HARMONY agrees that
it will manufacture for and provide to SIRIUS, and SIRIUS agrees that it will
purchase from HARMONY, its [c.i.] of each of the Products, identified in
Schedule A attached hereto, as follows:

     -     From the date of each U.S. Product launch until [c.i.] thereafter,
          HARMONY shall manufacture and SIRIUS shall purchase [c.i.];


                                      -2-

<PAGE>

     -     Thereafter, for [c.i.] HARMONY shall manufacture and SIRIUS shall
          purchase at least 50% of SIRIUS's annual requirements of such Product;
          and

     -     Thereafter, for [c.i.], HARMONY shall manufacture and SIRIUS shall
          purchase [c.i.].

     With respect to [c.i.] in which SIRIUS is [c.i.] to purchase [c.i.] from
HARMONY, SIRIUS [c.i.] may purchase from HARMONY and HARMONY shall manufacture
[c.i.].

     In the event that [c.i.] does not [c.i.] may, in its sole discretion,
adjust the [c.i.] to [c.i.].

     SIRIUS shall pay HARMONY for Products as defined in paragraph 2.7 below.
HARMONY shall manufacture Products in accordance with the Specifications or
pursuant to exceptions approved by SIRIUS, and in sufficient quantity to meet
SIRIUS's Forecasted Needs for the length of this Agreement.

     2.2 SUPPLY OF MATERIALS.

          (a) If SIRIUS is to supply any material for manufacture of Products as
set forth under this Section, SIRIUS shall notify HARMONY, in writing,
specifying which materials it intends to supply. SIRIUS shall provide HARMONY
with said material [c.i.] along with Certificates of Analysis and MSDS sheets
relating to same, [c.i.] to HARMONY's scheduled production of Product requiring
said material and in sufficient amounts for HARMONY's manufacture of Product
[c.i.] necessary to support [c.i.] or the [c.i.] whichever [c.i.]. SIRIUS
supplied material [c.i.] shall be either subject to [c.i.] or [c.i.]. All SIRIUS
supplied material shall be shipped to HARMONY [c.i.]. In the event SIRIUS ships
or causes to ship such material [c.i.], HARMONY, [c.i.], may either [c.i.] or
[c.i.], which shall be [c.i.]. HARMONY is hereby authorized by SIRIUS to [c.i.]
any portion of SIRIUS supplied material [c.i.]. [c.i.] shall be responsible for
the supply and quality of said materials. [c.i.] shall be responsible for [c.i.]
and [c.i.] of [c.i.] material [c.i.]. For each lot of materials supplied by
SIRIUS, HARMONY shall perform the quality control and inspection tests as agreed
to in the Specifications unless SIRIUS and HARMONY have made arrangements in
writing for Pre-Approved material. [c.i.] shall have the right to reject any
Pre-Approved material which [c.i.] in accordance with paragraph 2.3 below.
HARMONY warrants that it will maintain, for the benefit of SIRIUS, complete and
accurate records of the inventory of all such SIRIUS supplied raw materials.
HARMONY will use [c.i.] to avoid the commingling of SIRIUS supplied raw
materials with any other raw materials and to avoid use of SIRIUS raw materials
obtained pursuant to this Agreement for any purpose not [c.i.] to the completion
of this Agreement. If requested by SIRIUS, HARMONY will provide to SIRIUS a
[c.i.] report limited to [c.i.] inventory balance of each SIRIUS supplied/owned
material stored at HARMONY. This reporting will be supplied exclusively on
[c.i.].

          (b) HARMONY shall be responsible for supply, [c.i.], of all other
commodities necessary for the manufacture of Products which are not supplied by
SIRIUS pursuant to Section 2.2 above.

          (c) SIRIUS shall provide HARMONY with Specifications (including art
proofs) for Packaging and Labeling, and HARMONY shall purchase, [c.i.] Packaging
and Labeling in accordance with the Specifications.

          (d) All HARMONY supplied materials [c.i.] on the respective [c.i.] for
Product, into which the material was converted, and [c.i.], all in accordance
with the provisions of paragraph 2.7 below.


                                       -3-

<PAGE>

     2.3 MATERIALS TESTING.

     All raw materials and packaging supplies shall, when received by HARMONY,
be submitted to analysis and evaluation in accordance with HARMONY's SOP's to
determine whether or not said materials meet the Specifications. The [c.i.]
shall be borne by [c.i.], except for [c.i.]. HARMONY agrees to maintain and,
[c.i.] make available records of all such analyses and evaluations.

     2.4 MATERIAL SAFETY DATA SHEETS.

     Prior to HARMONY's receipt and testing, and as a condition precedent of any
testing or formulation work by HARMONY pursuant to this Agreement, SIRIUS shall
provide MSDS sheets to HARMONY for Products and all components necessary for the
manufacture of Products, except that HARMONY shall be responsible for MSDS
sheets of components purchased by HARMONY [c.i.] pursuant to this Agreement. Any
components or Products requiring disposal shall be presumed hazardous unless
otherwise provided in the MSDS information provided.

     2.5 COMMENCEMENT OF MANUFACTURING FOR NEW PRODUCTS.

     No later than [c.i.] the commencement of the initial Market Year of a new
Product, SIRIUS agrees to notify HARMONY of its delivery requirements, including
[c.i.], for the [c.i.] and shall provide its Forecasted Needs for the first
Market Year in order to ensure timely delivery of Product for initial sale and
marketing.

     2.6 PURCHASE ORDERS.

          (a) SIRIUS agrees to purchase from HARMONY all Products manufactured
for SIRIUS by HARMONY in accordance with the terms of this Agreement to the
extent such Products meet the Specifications or exceptions approved by SIRIUS.

          (b) Products shall be ordered by SIRIUS by the issuance of separate,
pre-numbered purchase orders in increments of [c.i.]. HARMONY will supply SIRIUS
with the estimated batch yield of each Product. [c.i.] HARMONY may update these
estimates based upon actual manufacturing experience.

          (c) At the initiation of the first Market Year for each Product and
thereafter at the end of [c.i.] SIRIUS shall provide HARMONY with specific data
as to its Forecasted Needs for such Product for the [c.i.]. It is understood and
agreed that with respect to any forecasts issued to HARMONY by SIRIUS pursuant
to the terms hereof, the forecast for [c.i.] thereof shall constitute a firm
order for Products, regardless of receipt of SIRIUS's actual purchase order, and
shall specify the requested delivery dates thereof and HARMONY shall meet those
dates, [c.i.]. HARMONY may, [c.i.] produce and deliver Product up to [c.i.] to
the requested delivery date in order to accommodate fluctuations in production
demands. The [c.i.] of the period addressed in the forecast shall be utilized by
HARMONY for purposes of raw material acquisition on behalf of SIRIUS and HARMONY
production planning. Although HARMONY shall [c.i.] the raw material inventory
purchased on behalf of SIRIUS, certain raw materials may have long lead times,
require a minimum order quantity, and/or present a substantial economic order
quantity. Therefore, HARMONY may order the [c.i.] to support up to [c.i.] of
SIRIUS's Forecasted Needs, or the [c.i.], whichever is [c.i.]. Should [c.i.]
subsequently [c.i.] will be [c.i.] for any [c.i.]. Any such material which is
[c.i.] of that required to support up to [c.i.] of SIRIUS's Forecasted Needs may
be subject to [c.i.] and [c.i.] according to the terms provided in Section 2.8
below.


                                       -4-

<PAGE>

           (d) SIRIUS shall issue written purchase orders for Products to HARMONY
at least [c.i.] to the requested delivery date if the requirements are at or
below [c.i.] of the most recently supplied Forecasted Needs for such period, and
at least [c.i.] to the requested delivery date if the requirements exceed
[c.i.].

          (e) SIRIUS's purchase orders shall designate the desired quantities of
Products, delivery dates and destinations. HARMONY shall fill and ship all
orders of Products in accordance with SIRIUS's instructions. If SIRIUS's
purchase order is not received in accordance to paragraph 2.5 (d) above, then
HARMONY will use [c.i.] to meet SIRIUS's requested delivery dates. However,
HARMONY will only be required to meet the delivery dates confirmed to SIRIUS by
HARMONY, in writing, so long as said dates are [c.i.] from receipt of SIRIUS's
purchase order. A Purchase Order may specify up to [c.i.] shipping destinations
per batch of Product. Additional destinations can be accommodated only upon
[c.i.].

     2.7 REJECTED PRODUCTS.

          (a) SIRIUS may reject any Product which fails to meet the
Specifications. SIRIUS shall, within [c.i.] after its receipt of any shipment of
Product and related Certificate of Analysis of Product batch (as described in
paragraph 5.1 hereof), notify HARMONY in writing of any claim relating to
rejected Product batch and, failing such notification, shall be deemed to have
accepted such Product batch. Such notice to HARMONY shall [c.i.] the ways in
which the Product batch failed to perform to Specifications. HARMONY shall have
an opportunity to [c.i.] said Product batch and dispute SIRIUS rejection
according to the provisions provided in this Section 2.7. All Products shall be
submitted to inspection and evaluation in accordance with HARMONY's SOP's to
determine whether or not said Products meet the Specifications. As to any such
Product batch (including phases of or complete batches of bulk product) which is
determined by [c.i.] to fail the Specifications and may which is rejected by
[c.i.] ("Rejected Product"), HARMONY shall [c.i.] [c.i.]. If requested, HARMONY
shall [c.i.] with SIRIUS for [c.i.] of Rejected Product.

          (b) In the event of a conflict between the test results of HARMONY and
the test results of SIRIUS with respect to any shipment of Product batch, sample
of such Product batch shall be submitted by [c.i.] to an independent laboratory
[c.i.] for testing against the Specifications under procedures employed in the
Specifications. The fees and expenses of such laboratory testing shall be
[c.i.]. If results from the independent laboratory are inconclusive, final
resolution will be settled in accordance with paragraph 13.6 (b) below.

          (c) For the [c.i.] registration batches and [c.i.] validation batches
of a Product produced by HARMONY, or in the event a Rejected Product is due to
SIRIUS supplied information, formulations or materials, [c.i.] shall bear [c.i.]
costs [c.i.] for Rejected Product including cost of [c.i.]. In the event that
the [c.i.] registration batches or [c.i.] validation batches of Product fails to
meet specifications due to HARMONY's gross negligence, [c.i.] shall bear [c.i.]
of [c.i.] for the Rejected Product including [c.i.]. Thereafter, in the event a
Rejected Product is due to the failure of HARMONY to comply with applicable
written procedures, and such failure affects the marketability of the Product,
[c.i.] shall bear [c.i.] of the [c.i.]. In the event the Product does not meet
final specifications, but such failure is not due to either SIRIUS supplied
information or HARMONY's failure to follow written procedures, [c.i.] shall bear
[c.i.] with [c.i.] shall bear [c.i.]. Destruction of rejected Product shall be
in accordance with all applicable laws and regulations and [c.i.] shall
indemnify [c.i.] for any liability, costs or expenses, including attorney's fees
and court costs, relating to a failure to dispose of such Product in accordance
with such laws and regulations. [c.i.] shall also provide to [c.i.] all
manifests and other applicable evidence of proper destruction as may be
requested by applicable law.


                                       -5-

<PAGE>

     2.8 PRODUCT PRICE.

          (a) The initial Manufacturing Fees for each Product to be paid by
SIRIUS to HARMONY are listed in Schedule A. The parties hereto agree that the
Manufacturing Fees for each Product set out in Schedule A shall be [c.i.]. If
the parties are [c.i.] for any Product then this Agreement, effective [c.i.],
shall continue in force with [c.i.] until such time as [c.i.]. Prices for new
Products or new Product sizes, not initially included in Schedule A, [c.i.] and
[c.i.] and [c.i.] shall [c.i.] with respect to prices at the time said new
Products or new Product sizes are added to Schedule A.

          (b) Price of materials for each Product to be paid by SIRIUS to
HARMONY ("Quoted Price of Material") shall become a part of Schedule A within
[c.i.] of commencement of regular production of the applicable Product upon
written notice delivered to SIRIUS by HARMONY. Quoted Price of Material is
calculated as [c.i.]. Quoted Price of Material shall be invoiced on the invoice
for the Product into which the material was converted. Quoted Price of Material
does not include, without limitation, [c.i.]. These items will be invoiced to
SIRIUS [c.i.]. HARMONY's Quoted Price of Material will be adjusted [c.i.] and
Schedule A shall be amended accordingly. In the event, however, the cost of a
raw material [c.i.], HARMONY shall notify SIRIUS and, with [c.i.], [c.i.] for
said material to SIRIUS to compensate for the [c.i.]. Upon written request,
HARMONY shall provide to SIRIUS the [c.i.].

          (c) Payment of all amounts due hereunder shall be made in U.S.
dollars, [c.i.], after date of HARMONY's invoice therefor. Invoices for
Manufacturing Fees shall be generated upon [c.i.] (i) [c.i.] or (ii) [c.i.]
Product from HARMONY; [c.i.]. Total invoice shall be equal to the quantity of
Product [c.i.] times the Total Price per unit, [c.i.], as listed in Schedule A.
A [c.i.] of [c.i.] of total invoice can [c.i.] each month [c.i.]. If any invoice
has not been paid following the expiration of [c.i.], HARMONY, at its sole
discretion, has the right to [c.i.] on future orders and [c.i.] of Product if
SIRIUS's account is not current. Such [c.i.] shall not be considered a breach of
this Agreement by HARMONY. In the event [c.i.], a [c.i.] [c.i.] paid by SIRIUS
to HARMONY will be required prior to HARMONY ordering raw materials. In
addition, [c.i.] Manufacturing Fee [c.i.] prior to HARMONY manufacturing any
Product and the [c.i.] must be [c.i.] prior to shipment.

                          III SHIPMENT AND RISK OF LOSS

     3.1 SHIPMENT.

     Shipment of Product shall be in accordance with whatever means SIRIUS
instructs, provided that shipment is made in accordance with all relevant
statutory requirements. Product will be shipped to SIRIUS or its designee
immediately upon release, [c.i.]. At SIRIUS's request, HARMONY may, [c.i.] hold
Product in HARMONY's Warehouse [c.i.]. Product held at HARMONY will be [c.i.] in
accordance with paragraph 2.7 (c) above.

     3.2 DELIVERY TERMS.

     The purchase price of Products in Schedule A hereof shall be [c.i.]. [c.i.]
will bear [c.i.], or [c.i.], as well as [c.i.].

     3.3 CLAIMS.

     The weights, tares and tests affixed by HARMONY's invoice shall govern
unless established to be incorrect. Claims relating to quantity, weight and loss
or damage to any


                                       -6-

<PAGE>

Product sold under this Agreement shall be waived by SIRIUS unless made within
[c.i.] [c.i.] of receipt of Product by SIRIUS.

                             IV TERM AND TERMINATION

     4.1 TERM.

     This Agreement shall commence on the first day of the month following the
mutual signing of this document and will continue until the expiration of the
Fifth (5th) Market Year, individually, for each respective Product as identified
along with its term in Schedule A, unless sooner terminated pursuant to
paragraphs 4.2 or 8.2 below. This Agreement may be extended by mutual written
agreement between both parties and Schedule A shall be amended accordingly to
reflect extended terms. I