GEN RX INC, 10-K, 1996-04-01

GEN RX INC
10-K, 1996-04-01
PHARMACEUTICAL PREPARATIONS

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

Annual Report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the Year Ended December 31, 1995
Commission File Number 0-24496

GEN/Rx,Inc.
(Name of Business)

NEW YORK 11-2728666
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

1776 BROADWAY, SUITE 1900, NEW YORK, NEW YORK 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

Registrant's telephone number, including area code: (212) 581-5100
Securities registered pursuant to Section 12(b) of the Exchange Act of 1934:

Title of class Name of each exchange on which registered

None
-------------- -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

Common Stock $.004 par value
----------------------------
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days: Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

$2,933,760

AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF MARCH 6, 1996 (ASSUMING SOLELY FOR PURPOSES OF THIS CALCULATION
THAT ALL DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ARE "AFFILIATES").

18,813,745

Number of shares of common stock outstanding as of March 6, 1996

The Registrant's revenues for its most recent fiscal year were $4,976,000.

PORTIONS OF THE FOLLOWING DOCUMENTS HAVE BEEN INCORPORATED BY REFERENCE
INTO THIS ANNUAL REPORT ON FORM 10-K:

IDENTITY OF DOCUMENTS PARTS OF FORM 10-K INTO WHICH
DOCUMENT IS INCORPORATED

Proxy Statement for the 1996 Annual Meeting Part III
of Common Shareholders of Registrant
<PAGE> 2
10-K
PART I

ITEM 1. BUSINESS

GENERAL

GEN/Rx, Inc. ("GEN/Rx" or the "Company"), is a holding company which, through
its subsidiaries, is in the business of developing, manufacturing and
distributing generic injectable drugs. GEN/Rx has three wholly-owned
subsidiaries, AUSA, Inc. ("AUSA"), which markets generic injectable prescription
drug products for human use, American Veterinary Products, Inc. ("AVP"), which
markets prescription and non- prescription generic injectable drug products for
animal use (see "Discontinued Operations" below), and Collins Laboratories, Inc.
("Collins"), which has been inactive since its inception. Unless the context
requires otherwise, references in this Annual Report to the "Company" shall be
deemed to include collectively GEN/Rx and all of its subsidiaries.

AVP was incorporated in the state of Colorado in 1976. Following its acquisition
in January 1988, its stock was exchanged for shares of Transmed Express, Inc.
("Transmed"), a publicly held company, incorporated in New York State. As a
result of this transaction, AVP became a wholly-owned subsidiary of Transmed. In
March 1993, the Company's name was changed to GEN/Rx, Inc.

The Company has experienced significant operating losses since its inception,
resulting in a deficit equity position. The Company's financial position and
operating results raise substantial doubt about its ability to continue as a
going concern. While management intends to dispose of one of its subsidiaries
that has incurred significant operating losses, it does not expect proceeds from
such disposition to be sufficient to fund continuing operations. As a result,
the Company is seeking to obtain additional financing from its majority
shareholder and primary creditor Apotex USA Inc. ("Apotex") during 1996
sufficient to fund its future activities. There is no assurance, however, that
such financing will be secured and obtained. It is unlikely that any other
financing will be available to the Company.

Since the Merger, the Company has been dependent on Apotex for continued funding
of its operating activities. Through December 31, 1995, Apotex has advanced the
Company $3,364,000 pursuant to the Loan Agreement, as amended, and owes Apotex
approximately $447,000 arising from intercompany transactions including costs
incurred for interest on the advances pursuant to the Loan Agreement, as
amended, services performed on behalf of the Company by Apotex employees and the
Company's share of facility costs where Apotex employees perform services on
behalf of the Company.

The Company expects to continue to be dependent on Apotex for financing of its
operations in the foreseeable future.

In light of the Company's continuing operating losses and use of cash, in
February 1996, the Company retained the services of Hill Thompson Capital
Markets, Inc., an investment banking firm, to assist management in its efforts
to identify steps and strategies to reduce losses, generate returns on the
Company's assets and maximize shareholder values. The Company expects Hill
Thompson Capital Markets, Inc. to conclude its evaluation and submit their
recommendations in April 1996.

The Company's executive offices are located at 1776 Broadway Suite 1900, New
York, New York 10019, and its telephone number is (212) 581-5100.

RECENT DEVELOPMENTS

Business Combination:

On April 13, 1995, a merger (the "Merger") of GEN/Rx, Inc.'s newly formed
wholly-owned subsidiary, GEN/Rx Acquisition Subsidiary, Inc., with and into AUSA
was consummated. Pursuant to the Merger, the Company acquired all the assets of
AUSA, a company engaged in the distribution of injectable drugs.

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AUSA was a subsidiary of Apotex USA, Inc. ("Apotex"). As part of the Merger
transaction, the Company issued to Apotex (the former shareholder of AUSA)
13,288,874 shares of its Common Stock and is obligated to issue to Apotex, an
additional 2,064,966 shares as soon as practicable following an amendment to the
Company's Certificate of Incorporation increasing the number of authorized
shares of common stock. After issuance of the additional shares, Apotex will own
approximately seventy four (74%) percent of the outstanding Common Stock of the
Company. In addition, warrants to purchase 270,000 shares of common stock of
GEN/Rx for $1.50 per share were issued to various individuals in connection with
the Merger.

Since after issuance of the additional 2,064,966 shares upon amendment to the
Company's Certificate of Incorporation increasing the number of authorized
shares, the former shareholders of AUSA will own 74% of GEN/Rx, Inc., the
transaction has been accounted for as if AUSA acquired the net assets of GEN/Rx
for the previously issued and outstanding shares of GEN/Rx. The excess of the
fair value of the previously issued and outstanding stock of GEN/Rx, Inc. over
the fair value of its assets was recorded as goodwill. See "Notes to Financial
Statements--2. Business Combination".

In addition, in connection with the Merger and pursuant to a Loan Agreement
dated April 13, 1995 between the Company and Apotex, Apotex lent the Company
$500,000 represented by a Term Note dated April 13, 1995 and $2,000,000
represented by a revolving line of credit note dated April 13, 1995. See
"Default of Loan Covenants" below. The notes bear interest at 1% over prime and
mature on April 13, 1998. These notes are secured by all of the assets of the
Company. In addition, as additional consideration for the loans, Apotex received
warrants exercisable at $1.00 per share to purchase shares of the Company's
common stock in an amount equal to one share for each dollar advanced pursuant
to the Loan Agreement. The warrants have a term of three years. At December 31,
1995, the Company had borrowed $2,500,000 pursuant to this Loan Agreement.

Default of Loan Covenants:

On November 29, 1995, the Company entered into an agreement with Apotex to amend
the Loan Agreement. As amended, the Loan Agreement permitted Apotex, in its
discretion, to advance sums in excess of the $2,500,000 original loan amount,
that were due December 22, 1995, but otherwise were treated as if they had been
advanced pursuant to the Loan Agreement. The Company requested additional
advances and Apotex advanced the Company approximately $325,000 through December
31, 1995. The Company agreed that failure to repay the amounts when due would
constitute a default under the Loan Agreement. The Company also issued to Apotex
a warrant to purchase an additional 813,783 shares of the Company's common
stock, par value $.004 per share, at an exercise price of $.75 per share in
connection with the amendment. The warrants have a term of three years.

The Company's failure to pay the amounts due December 22, 1995 constituted an
Event of Default under the Loan Agreement, as amended, and Apotex accelerated
the entire amount of indebtedness (approximately $3,500,000) of the Company and
its subsidiaries, which are jointly and severally liable for the debt, by a
letter dated January 2, 1996, which required the Company to turn over to Apotex
all of the collateral on January 5, 1996. At December 31, 1995, the Company owed
Apotex approximately $3,563,000.

Apotex sought and received the appointment of a receiver for AVP's Ft. Collins
plant in a proceeding in Larimer County, Colorado, on January 4, 1996. The order
permits the receiver to exercise control over AVP's bank accounts, accounts
receivable and inventory. As a result of the November 29 letter amendment to the
Loan Agreement and the appointment of a receiver, AVP is not receiving any cash
proceeds. In addition, pursuant to the Loan Agreement, as amended, accounts
receivable of AUSA has been assigned to Apotex and collections thereof are being
deposited into the bank accounts of Apotex. The Company at present lacks the
liquidity needed to carry on its business.

Discontinued Operations:

In connection with an inspection of AVP's manufacturing facility from October
1994 through May 1995 by the U.S. Food and Drug Administration ("FDA"), AVP
received a "warning letter" from the Denver

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District Office of the FDA setting forth certain deviations from current good
manufacturing practice regulations ("GMP"s) and violations of related provisions
of the Federal Food, Drug and Cosmetic Act.

In June 1995, following new management's investigation of the matters set forth
in the warning letter, management suspended the manufacture of products
indefinitely. In December 1995, management decided to discontinue the operations
of AVP, because it determined, that the time and financial commitment required
to rehabilitate AVP's operations would be too great for it to pursue. In
connection with management's decision to discontinue the operations of AVP, the
Company laid-off substantially all of its personnel at this facility and
recorded a provision of $5,646,000 in its 1995 financial statements. Results of
operations of AVP is shown separately as discontinued operations on the
consolidated statement of operations. See "Notes to Financial Statements--4.
Discontinued Operations."

AUSA, INC.

AUSA currently markets 5 generic injectable drug products in 15 package and
dosage configurations as well as a cyanide antidote kit, all of which are
manufactured by unrelated companies. All of AUSA's current products are
distributed under the Yorpharm label, either directly from AUSA to hospitals and
other health care institutions in the United States, or indirectly to the same
customer base through numerous wholesalers across the country.

AUSA's strategy is to offer a broad line of generic injectable prescription
drugs. AUSA may market other products pursuant to distribution agreements or
licensing arrangements. AUSA has and continues to take steps to broaden its
product line by seeking to enter into product development and manufacturing
agreements, joint ventures, licensing and distribution licensing agreements as
well as internal product development efforts. To date, AUSA has not manufactured
any human injectable drugs; however, it has entered into contract manufacturing
arrangements with other companies.

SALES AND MARKETING

AUSA's products are sold primarily to wholesalers, hospitals, home infusion
providers, nursing homes, nursing home providers, and health maintenance
organizations through its own sales force, which currently consists of 3
experienced regional account managers and a Director of Sales.

AUSA believes that over the last several years, the emphasis on cost containment
by institutional buyers has contributed to industry-wide consolidation in both
the purchase and distribution of pharmaceuticals. As part of their cost
reduction efforts, health care providers have increasingly adopted a bid-based
group purchasing approach under which various institutional purchasers join
together in buying groups to solicit bids from a variety of approved vendors for
the supply of certain products, typically for a one to two-year period. In
addition, in an effort to reduce their inventories and related carrying costs,
hospitals and other institutions have designated certain drug and hospital
supply wholesalers as their "prime vendors". Under this type of arrangement, a
wholesaler serves as a depot for substantially all of a hospital's product
needs, allowing an institution to maintain minimal inventories and receive
overnight deliveries of several manufacturers' goods from a single source.

Although purchasing compliance varies, the group purchase organization's (GPO's)
and the wholesalers who deliver the product represent a major impersonal buying
force with considerable power. AUSA believes that participation in these
programs is vital to the success of any supplier to the hospital and
institutional marketplace. Of the primary care U.S. hospitals, approximately
3,000 hospitals of 300 beds or more account for a majority of the industry
purchases. Major GPOs such as Premier and Veterans Administration claim to
represent a significant percentage of national hospital purchases. To this end,
AUSA has established a Bid and Contract Administration department devoted to
negotiating and administering such contracts and prime vendor relationships.

Three of the Company's customers accounted for approximately 30%, 18% and 10% of
sales from continuing operations in 1995. The loss of any one or more of these
customers would have a material adverse impact on the Company's business.

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COMPETITION

AUSA competes with at least twelve pharmaceutical manufacturers, including both
generic and brand-name manufacturers, almost all of these companies have been in
business for a longer period of time than AUSA and have a greater number of
products on the market, and almost all of which have greater financial and other
resources. The following companies are considered to be AUSA's primary
competitors: Abbott Laboratories, Astra Pharm, Gensia Pharmaceuticals, Inc.,
SoloPak Pharmaceuticals, Inc., Marsam Pharmaceuticals, Inc./Schein
Pharmaceutical, Inc., American Regent, Inc., American Home Products Corp.,
I.M.S. Ltd., Fujisawa USA Inc. and Bedford Laboratories.

The competitive factors affecting generic injectable pharmaceutical products are
price, quality, breadth of product line, the ability to introduce generic
versions of brand-name drugs promptly after a patent expires, reputation,
distribution capabilities, customer service (including participation in "prime
vendor" programs and maintenance of sufficient inventories for timely
deliveries). AUSA believes that price is the most significant competitive
factor, particularly as the number of generic entrants with respect to
particular products increase. As competition from other manufacturers
intensifies, selling prices typically decline. In this regard, AUSA competes not
only with generic injectable drug manufacturers, but also with manufactures of
brand-name injectable products, who may reduce prices in order to make their
products competitive with generic products.

Profit margins on new generic drug products typically are relatively high upon
their introduction into the marketplace and are expected to decline as more
companies enter the market. Accordingly, the maintenance of certain levels of
profitability will be dependent, in part, on AUSA's ability to develop and
introduce new products to the market and on its ability to maintain efficient,
low-cost production capabilities.

PRODUCTS AND PRODUCT DEVELOPMENT

Existing Products

AUSA currently markets 5 generic injectable drug products in 15 package and
dosage configurations as well as a cyanide antidote kit. AUSA currently
purchases all of these products from third parties. The products currently
marketed are: Caffeine/Sodium Benzoate, Dehydrated Alcohol 98%, Gold Sodium
Thiomalate Injection, Papaverine HCL Injection, Morphine Sulfate Injection and
the Cyanide Antidote Kit.

During 1995, one of the Company's products accounted for approximately 62% of
its sales from continuing operations and yielded a substantial portion of the
gross margin of the Company. Until other companies introduced this product to
market in the second half of calendar 1995, the Company was the sole generic
distributor of the product. While the Company cannot quantify the effect
relating to anticipated increased competition for this product, it does
anticipate that sales and gross margin of such product will decline in the
future. In addition, the Company is dependent on one supplier of this product.
Management believes that the loss of this source of supply of the product would
have a material adverse impact on the Company's business.

Product Development

AUSA seeks to develop and/or contract to develop a broad range of generic
injectable drug products for human use which can be marketed soon after ANDA
approval and when the future patent date of equivalent brand-name drugs expires.

Development of a generic injectable prescription drug product, including
sourcing of raw materials, formulation, testing of pilot batches and obtaining
FDA approval, generally takes two to three years. In selecting drugs to develop,
AUSA considers a variety of factors, including (i) estimated market size, (ii)
likely availability of raw materials, (iii) anticipated level of competition,
(iv) estimated timing of FDA approval, (v) likelihood of being the first (or an
early) generic entrant into the product market, (vi) projected ability to
produce the product at a cost low enough to permit such product to be price
competitive, and (viii) identifying companies that can develop and/or
manufacture the product. AUSA believes that the

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ability to select appropriate products for development, to develop such products
on a timely and economic basis, to submit applications for and obtain FDA
approval in a timely manner and offer a broad line of products are important
factors in successfully competing in the generic injectable drug industry.

AUSA also is expending efforts in the development of injectable products that
will be offered in various unique or value added packaging configurations,
including, vials, piggyback containers, pharmacy bulk packages and prefilled
syringes, and in various dosage forms, including liquid and lypholized.

Research and development costs in the Company's current year were $1,093,000.
AUSA did incur research and development costs prior to the current year.

EMPLOYEES

As of February 6, 1996, AUSA had 16 full-time employees. Of these employees,
seven were engaged in product development, five were involved with sales and
marketing and four were devoted to finance and administration. The Company
laid-off approximately 24 employees including 17 employees of AVP during the
three month period ending in January 1996.

GOVERNMENT REGULATION

All pharmaceutical manufacturers and distributors are subject to extensive
regulation by the Federal government, principally by the FDA, and, to a lesser
extent, by the Drug Enforcement Administration and state governments. The
Federal Food, Drug, and Cosmetic Act, the Controlled Substances Act, and other
Federal statutes and regulations govern or influence the testing, manufacture,
safety, labeling, storage, recordkeeping, approval, sales, advertising and
promotion of the Company's products. Noncompliance with applicable requirements
can result in judicially and/or administratively imposed sanctions including the
initiation of product seizures, injunction actions, fines and criminal
prosecutions. Administrative enforcement measures can involve the recall of
products, as well as the refusal of the government to enter into supply
contracts or to approve new drug applications. The FDA also has the authority to
withdraw approval of drugs in accordance with regulatory due process procedures.

FDA approval is generally required before any new drug, including a generic
equivalent of a previously approved drug, can be marketed. To obtain FDA
approval for a new drug, a company must, among other things, demonstrate that
its facilities comply with the FDA's GMP regulations. The FDA may inspect the
company's facilities to assure such compliance prior to approval or at any other
reasonable time. GMP regulations must be followed at all times during the
manufacture and other processing of drugs. To comply with the standards set
forth in these regulations, the Company must continue to expend significant
time, money and effort in the areas of quality control and quality assurance.

To obtain FDA approval of a new drug, a company must demonstrate, among other
requirements, the safety and effectiveness of the proposed drug. There are
currently three basic ways to satisfy the FDA's safety and effectiveness
requirements:

1. New Drug Applications ("NDA" or "full NDA"): Unless either of the
procedures discussed in paragraphs 2 and 3 below is available, a
company must submit to the FDA full reports of well- controlled
clinical studies and other data to prove that a drug is safe and
effective and meets other requirements for approval.

2. "Paper" NDAs: In certain instances in the past, the FDA permitted
safety and effectiveness to be shown by submission of published
literature and journal articles in a so-called "paper" NDA. As a result
of passage of the Drug Price Competition and Patent Term Restoration
Act of 1984 (the "Waxman-Hatch Act"), "paper" NDAs are now recognized
in the statute, although they are infrequently used because of the lack
of sufficient information in the literature on the majority of drugs.

3. Abbreviated New Drug Applications ("ANDAs"): The Waxman-Hatch Act
established a statutory procedure for submission and FDA review and
approval of ANDAs for generic

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versions of drugs previously approved by the FDA (such previously
approved drugs are hereinafter referred to as "listed drugs"). In place
of clinical studies to establish the generic drug's safety and
effectiveness, an ANDA applicant typically is required to submit data
demonstrating that the proposed product is equivalent to the listed
drug. In addition to the equivalence data, an ANDA must contain
virtually all other information required of a full NDA (e.g. chemistry,
manufacturing, labeling, and stability data).

The Waxman-Hatch Act also established certain statutory protections for listed
drugs. Under the Waxman- Hatch Act, an ANDA for a generic drug may be approved,
but such approval may not be made effective for interstate marketing until all
relevant patents for the listed drug have expired or been determined to be
invalid or not infringed by the generic drug. Prior to enactment of the
Waxman-Hatch Act, the FDA did not consider the patent status of a previously
approved drug. In addition, under the Waxman-Hatch Act, the FDA did not consider
the patent status of a previously approved drug. In addition, under the Waxman-
Hatch Act, statutory non-patent exclusivity periods are established following
approval of certain listed drugs, where specific criteria are met by the drug.
If exclusivity is applicable to a particular listed drug, the effective date of
approval of ANDAs (and, in at least one case, submission of an ANDA) for the
generic version of the listed drug is usually delayed until the expiration of
the exclusivity period, which, for newly approved drugs, can be either three or
five years. The Waxman-Hatch Act also provides for extensions of up to five
years of certain patents covering drugs to compensate the patent holder for
reduction of the effective market life of the patented drug resulting from the
time involved in the Federal regulatory review process.

During 1995, patent terms for a number of listed drugs were extended when the
Uruguay Round Agreements Act (the "URAA") went into effect to implement the
latest General Agreement on Tariffs and Trade (the "GATT") to which the United
States became a treaty signatory in 1994. Under GATT, the term of patents was
established as 20 years from the date of patent application. In the United
States, the patent terms historically have been calculated at 17 years from the
date of patent grant. The URAA provided that the term of issued patents be
either the existing 17 years from the date of patent grant or 20 years from the
date of application, whichever was longer. The effect generally was to add
patent life to already issued patents, thus delaying FDA approvals of
applications for generic products.

In addition to the Federal government, states have laws regulating the
manufacture and distribution of pharmaceuticals, as well as regulations dealing
with the substitution of generic for brand-name drugs. The Company's operations
are also subject to regulation, licensure and inspection by the states in which
they are located and/or do business.

The Company also is governed by Federal and state laws of general applicability,
including laws regulating matters of environmental quality, working conditions,
and equal employment opportunity.

The Federal government made significant changes to Medicaid drug reimbursement
as part of the Omnibus Budget Reconciliation Act of 1990 ("OBRA"). Generally,
OBRA provides that generic drug manufacturers and distributors must offer the
state an 11% rebate on drugs dispensed under the Medicaid program and must have
entered into a formal drug rebated agreement, as the Company has, with the
Federal Health Care Financing Administration. Although not required under OBRA,
the Company has also entered into similar state agreements.

ITEM 2. PROPERTIES

The Company's executive offices occupy a 3,000 square foot office in New York
City, New York. The Company has an informal agreement with Apotex as sublessor
of such space. The lease between Apotex and the landlord expires July 31,1999.

AVP's manufacturing facility occupies an 11,000 square foot facility on
approximately 3 acres of land in Ft. Collins Colorado. See "Business - Recent
Developments - Discontinued Operations."

AUSA leases a 7,000 square foot facility in Lake Forest, Illinois for its human
injectable product development operations.

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ITEM 3. LEGAL PROCEEDINGS

On January 4, 1996, in connection with the default by the Company on the Loan
Agreement, as amended (See "Business-Recent Developments-Default of Loan
Covenants"), a receiver was appointed by the District Court of Larimer County,
Colorado. The Court's order permits the receiver to exercise control over the
bank accounts, accounts receivable and inventory of AVP. The cash proceeds from
the sale of goods are being held in trust by the receiver on behalf of Apotex
pursuant to the terms of the Loan Agreement, as amended. The Company is a
defendant in certain actions arising in the normal course of business. In the
opinion of management, the appointment of the receiver is expected to have a
material effect on the financial condition and results of operations of the
Company. The ultimate disposition of the certain actions occurring in the normal
course of business matters is not expected to have a material effect on the
financial condition or results of operations of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted during the year to a vote of the security holders of
the Company through the solicitation of proxies or otherwise.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Market Information: The Company's Common Stock is traded in the
over-the-counter market and is quoted on the Electronic Bulletin Board under the
ticker symbol "GNRX." The following table sets forth the range for high and low
bid quotations for the Registrant's common shares as reported by the National
Quotation Bureau, Inc. These prices are believed to be representative
inter-dealer quotations, without, retail markup, markdown or commissions and may
not represent prices at which actual transactions occurred.

<TABLE>
<CAPTION>
Bid
Quarter Ended High Low
<S> <C> <C>
December 31, 1995 $1.25 $.25
September 30, 1995 1.25 .25
June 30, 1995 2.25 .75
March 31, 1995 2.50 .50

December 31, 1994 1.12 2.00
September 30, 1994 1.25 2.12
June 30, 1994 1.12 2.25
March 31, 1994 1.25 1.87
</TABLE>

(b) Holders: As of February 1, 1996, there were approximately 200 holders
of record of the Company's Common Stock. The Company believes that, in addition,
there are a number of beneficial owners of its stock whose shares are held in
"street name."

(c) Dividends: During the two most recent years, the Company paid no cash
dividends on its Common Stock. The payment of future dividends on its Common
Stock is subject to the discretion of the Board of Directors and is dependent on
many factors, including the Company's earnings and capital needs. In addition,
the payment of cash dividends on its Common Stock is currently prohibited under
its loan agreements.

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ITEM 6. SELECTED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS):

Since, after issuance of the additional 2,064,966 shares upon amendment to the
Company's Certificate of Incorporation increasing the number of authorized
shares, the former shareholders of AUSA will own 74% of GEN/Rx, the merger
transaction was accounted for as if AUSA acquired the net assets of GEN/Rx for
the previously issued and outstanding shares of GEN/Rx. Accordingly, the
selected financial data presented herewith are those of AUSA. See Notes to
Financial Statements -- 2. Business Combination.

<TABLE>
<CAPTION>
JULY 1, 1994
(DATE OF INCEPTION)
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
1995 1994
------------ -------------------
<S> <C> <C>
Net sales $ 4,976
Cost of sales 3,274

Gross profit 1,702
Operating expenses:
Product development 1,093
Selling and distribution 2,149 $ 347
General and administrative 843 116
-------- -----
4,085 463

Operating (loss) from continuing operations (2,383) (463)
Interest expense 1,069
--------
(Loss) from continuing operations (3,452) (463)

Discontinued Operations:
(Loss) from discontinued operations until suspension
of operating activities (1,009)
(Loss) from discontinued operations after suspension
of operating activities (1,897)
Estimated (loss) on disposition (5,646)
--------
(Loss) from discontinued operations (8,552)
--------
NET (LOSS) $(12,004) $(463)
======== =====

(Loss) per share of Common Stock:
Continuing operations $ (.18)
Discontinued operations (.44)
--------
Net (loss) $ (.62)
========
Weighted average number of
common shares outstanding 19,313
========
BALANCE SHEET DATA

Working capital (deficit) $ (4,736) $(487)
Property and equipment, net 352 23
Total assets 2,056 812
Shareholders' deficit (4,321)
Divisional deficit (463)
</TABLE>

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has experienced
significant operating losses since its inception, resulting in a deficit equity
position. The Company's financial position and operating results raise
substantial doubt about its ability to continue as a going concern. While
management intends to dispose of one of its subsidiaries that has incurred
significant operating losses, it does not expect proceeds from such disposition
to be sufficient to fund continuing operations. As a result, the Company is
seeking to obtain additional financing from its majority shareholder and primary
creditor Apotex during 1996 sufficient to fund its future activities. There is
no assurance, however, that such financing will be received. It is unlikely that
any other financing will be available to the Company. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

In connection with an inspection of its manufacturing facility from October 1994
through May 1995 by the FDA, AVP received a "warning letter" from the Denver
District Office of the FDA setting forth certain deviations from current good
manufacturing practice regulations and alleged violations of related provisions
of the Federal Food, Drug and Cosmetic Act.

In June 1995, following new management's investigation of the matters set forth
in the warning letter, management suspended the manufacture of products
indefinitely. As a consequence of management's subsequent determination that the
time and financial commitment required to rehabilitate AVP's operations would be
too great for it to pursue, management decided to discontinue the operations of
AVP and is currently exploring its alternatives with respect to such business,
including its disposition by sale or otherwise. In connection with management's
decision to discontinue the operations of AVP, the Company laid-off
substantially all of its personnel at this facility and recorded a provision of
$848,000 in its 1995 financial statements. See "Notes to Financial Statements -
Note 4. Discontinued Operations."

In addition, management assessed the value of goodwill acquired in connection
with the business combination compared to its carrying value. As a result of
management's determination that a significant and permanent impairment of the
goodwill associated with AVP's veterinary business occurred, the Company took a
charge of $4,799,000 for the write-down of goodwill that arose in connection
with the Merger. See "Notes to Financial Statements--4. Discontinued
Operations".

Results of operations of AVP is shown as "discontinued operations" on the
consolidated statement of operations. Accordingly, results of operations
discussed below is that of AUSA, a subsidiary engaged in the distribution of
injectable generic drugs primarily to hospitals. Results of operations of AUSA
prior to January 1, 1995 were insignificant and, accordingly, no comparison
between the two periods has been made.

The following should be read in conjunction with the Company's financial
statements and the related notes thereto included elsewhere herein.

RESULTS OF OPERATIONS:

Net Sales:

Net sales for the year December 31, 1995 were $4,976,000. The Company's current
injectable product line for human use is purchased for resale from unrelated
manufacturers and consists of six drugs representing approximately sixteen
products. Sales of one of these products accounted for approximately 62% of net
sales during the year. Competition on this product was minimal during a
substantial portion of the period. Management expects competition on sales of
this product in the near term to intensify, accordingly; sales and gross margins
of this product are expected to decrease from levels experienced in the current
period.

11
<PAGE> 12
Gross Margins:

Gross margins were adversely affected by the write-off of short-dated
inventories aggregating approximately $600,000. The write-off of inventories
resulted from the purchase of quantities of certain products in excess of the
market demand for such products. Gross margins excluding inventory write-offs
approximated $2,302,000 or 46% of net sales.

Operating Expenses:

Selling and Distribution:

As a result of the Company's current financial difficulties in January 1996, the
Company laid-off a substantial number of its employees in the sales department .
As a result, management expects selling and distribution costs to decrease from
current levels in the future.

General and Administrative:

Management expects general and administrative costs to decrease from current
levels in the future as a result of decreases in personnel costs.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, the Company had cash and working capital deficiency of
$15,000 and $4,736,000, respectively. The Company is dependent on continued
financing from Apotex, (see "Financing" below).

FINANCING

The Company's current level of liquidity and capital resources is not sufficient
to fund current operations and growth of the Company's business.

In connection with the business combination, the Company and Apotex had entered
into lending arrangements under a Loan Agreement dated April 13, 1995 (the "Loan
Agreement"). Apotex lent the Company $500,000 in the form of a term loan and
$2,000,000 in the form of a revolving loan. Both loans were evidenced by
promissory notes and would have matured April 13, 1998. The Company has borrowed
the entire line of credit, and the aggregate indebtedness of $2,500,000 is
outstanding. These loans bear interest at the rate of 1% over prime. Interest
was payable on the first business day of each March, June, September and
December, and the Company failed to pay certain accrued and unpaid interest when
due. The Company secured repayment of these amounts by all of the assets of the
Company and its subsidiaries, including AVP's plant in Fort Collins, Colorado.
As additional consideration for the loans, the Company had issued in favor of
Apotex, warrants to purchase the Company's common stock at a purchase price of
$1 per share at the rate of one share for each dollar of loan advanced. The
warrants have a term of three years.

On November 29, 1995, the Company entered into an agreement with Apotex to amend
the Loan Agreement. As amended, the Loan Agreement permitted Apotex, in its
discretion, to advance sums in excess of the $2,500,000, original loan amount,
that were due December 22, 1995, but otherwise were treated as if they had been
advanced pursuant to the Loan Agreement. The Company requested additional
advances and Apotex advanced the Company approximately $325,000 through December
31, 1995. The Company agreed that failure to repay the amounts when due would
constitute a default under the Loan Agreement. The Company also issued to Apotex
a warrant to purchase an additional 813,783 shares of the Company's common
stock, at an exercise price of $.75 per share in connection with the amendment.
The warrants have a term of three years.

12
<PAGE> 13
of the Company and its subsidiaries, which are jointly and severally liable for
the debt, by a letter dated January 2, 1996, which required the Company to turn
over to Apotex all of the collateral on January 5, 1996.

Apotex sought and received the appointment of a receiver for the Ft. Collins
plant in a proceeding in Larimer County, Colorado, on January 4, 1996. The order
permits the receiver to exercise control over the Company's bank accounts,
accounts receivable and inventory. As a result of the November 29, 1995 letter
amendment to the Loan Agreement and the appointment of a receiver, AVP is not
receiving any cash proceeds. In addition, pursuant to the Loan Agreement, as
amended, accounts receivable of AUSA has been assigned to Apotex and collections
thereof are being deposited into the bank accounts of Apotex. The Company, at
present, lacks the liquidity needed to carry on its business.

There can be no assurance that Apotex will continue to finance the Company nor
that alternative sources of financing will be available to the Company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements after signature page.

ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On July 10, 1995, the Board of Directors of Gen/Rx, Inc., selected and approved
the Accounting Firm of Richard A. Eisner & Company, LLP as independent public
accountants to audit the Company's financial statements for the fiscal year
ending December 31, 1995. Accordingly, the accounting firm of Ehrhardt, Keefe,
Steiner & Hottman PC, which was the independent accountant for the Company's
most recent certified financial statements (fiscal year ended December 31, 1994)
was dismissed in its capacity as the Company's accountants effective July 10,
1995.

There were no disagreements between the Company and Ehrhardt, Keefe, Steiner &
Hottman PC on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure in connection with the
audits of the two most recent fiscal years and any subsequent interim period to
the date hereof. Nor did the report of Ehrhardt, Keefe, Steiner & Hottman PC, on
the Registrant's financial statements for the fiscal years ended December 31,
1994 and 1993 contain any adverse opinion or disclaimer of opinion and was not
qualified as to uncertainty, audit scope or accounting principles.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The only member of the Board of Directors of the Company is Jack H. Schramm. Mr.
Schramm is 47 years old and has served as a Director since April 13, 1995 and as
Acting President since January 1996. Mr. Schramm has been a Director of Apotex
USA Inc., the Company's majority shareholder and primary creditor, since 1993.
From 1993 through January 1996, Mr. Schramm was Executive Vice President and
since January 1996, President of Apotex USA Inc. From 1991 to 1993, Mr. Schramm
was a financial and international marketing consultant to Genpharm, a Canadian
pharmaceutical company. From 1982 to 1990, Mr. Schramm was Senior Vice President
of Joffee Lasalle Company, a Manhattan commercial real estate firm.

Executive Officers:

The executive officers of the Company consist of Mr. Jack H. Schramm, Acting
President and Director and Richard J. Strobel, Vice President, Finance and
Administration and Chief Financial Officer.

13
<PAGE> 14
PART III.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth a summary for the years ended December 31, 1995,
1994 and 1993, of the cash compensation paid by the Company, as well as certain
other compensation paid or accrued during such years, to the Company's executive
officers.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------ ----------------------
NAME AND OTHER OPTIONS
PRINCIPAL ANNUAL (# OF
POSITION YEAR SALARY BONUS COMPENSATION SHARES)
- -------- ---- ------ ----- ------------ -------
<S> <C> <C> <C> <C> <C>
Jack H. Schramm 1995 None None None None
Acting President (1) 1994 None None None None
1993 None None None None

Richard J. Strobel 1995 $ 68,855 None None 30,000
Vice President, 1994 None None None None
Finance & Admin 1993 None None None None
and Assistant
Secretary (2)

John R. Toedtman 1995 $119,000 None None None
Chief Executive 1994 $ 88,000 None None None
Officer (3) 1993 None None None 100,000

John J. DeTemple 1995 $ 28,000 None None None
President (4) 1994 $125,000 None None None
1993 $ 90,000 None None 150,000
</TABLE>

(1) Does not include warrants to purchase 50,000 shares of common stock of the
Company at$1.50 per share that Mr. Schramm received in connection with the
merger.

(2) Richard J. Strobel has served as Vice President, Finance and Administration
since April 13, 1995. For his service in this capacity, Mr. Strobel receives an
annual salary of $100,000.

(3) John Toedtman served as President of the Company and each of its
subsidiaries from April 13, 1995 through January 8, 1996 at an annual salary of
$150,000 and as director of GEN/Rx, AVP and Collins for each of the last three
years. Effective January 8, 1996, Mr. Toedtman resigned from all of his
capacities served with the Company. Prior to April 13, 1995, Mr. Toedtman served
as Chief Executive Officer.

(4) John DeTemple served as President of the Company and each of its
subsidiaries until April 12, 1995 and as director of GEN/Rx, AVP and Collins
until December 31, 1995. Effective December 31, 1995, Mr. DeTemple resigned as
director of the Company.

Steven E. Novick served as Director of the Company and each of its subsidiaries
from April 13, 1995 through January 10, 1996. Since 1993, Mr. Novick was
President and Chief Executive Officer of Apotex. On January 10, 1996, Mr. Novick
resigned from all capacities served with the Company and Apotex. Mr. Novick
received no remuneration for his capacities served with the Company.

Employment Agreements:

None of the Company's executive officers have employment agreements with the
Company, except that, the Company is a party to an agreement with Richard J.
Strobel, the Company's Chief Financial Officer, which recites that he is
entitled to a severance payment equal to nine months' salary. If his employment
with the Company is terminated other than by reason of death or for "cause", as
determined by the Board of Directors.

14
<PAGE> 15
Stock Option Grants in Last Year:

In connection with employment with the Company on April 13, 1995, Mr. Strobel
was granted options to purchase 30,000 shares of the Company's common stock at
$1.00 per share pursuant to the Company's 1994 Stock Option Plan. Options for
10,000 shares shall become exercisable on each of April 13, 1996, April 13, 1997
and April 13, 1998 and expire on April 13, 2000.

Directors Compensation

Directors who are officers or employees of the Company are not compensated and
do not receive expense reimbursement for their service as a director. John
DeTemple received $45,000 for services as a director.

Compensation Committee Interlocks and Insiders Participation

None of the Company's executive officers has served on the Board of Directors or
on the Compensation Committee of any other entity, any of whose officer's served
on the Board of Directors of the Company.

Since April 13, 1995, Mr. Schramm has been a director of the Company and Apotex.
Mr. Novick was a director of the Company and Apotex from April 13, 1995 until
his resignation on January 10, 1996.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and NASDAQ, copies of which are required by regulation to be furnished to the
Company.

Based solely on review of the copies of such forms furnished to the Company, the
Company believes that during fiscal 1994 its officers, directors and ten percent
(10%) beneficial owners complied with all Section 16(a) filing requirements with
the exceptions that Mr. John R. Toedtman, the Company's former President and a
former Director, filed his Form 3, Initial Statement of Beneficial Ownership of
Securities, 283 days late with the Securities and Exchange Commission and
Threshold Technologies Partners, L.P., a ten percent (10%) Shareholder of the
Company at the time, filed its Form 3, Initial Statement of Beneficial Ownership
of Securities, 234 days late with the Securities and Exchange Commission.

PERFORMANCE GRAPH

The following graph provides a comparison on a cumulative basis of the yearly
percentage change over the last five fiscal years in (a) the total Stockholder
return on the Company's Common Stock with (b) the total return on the NASDAQ
Stock Market of all domestic issuers traded on NASDAQ's NMS and Small-Cap Market
("NASDAQ Stock-Market Index") and (c) the total return of domestic issuers
having the same Standard Industrial Classification Industry Group Number as the
Company (SIC 2834) and traded on NASDAQ's NMS or Small-Cap Market (the "Industry
Index"). Such yearly percentage change has been measured by dividing (1) the sum
of (A) the amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the price per share at the end and
at the beginning of the measurement period, by (ii) the price per share at the
beginning of the measurement period. The NASDAQ Stock Market Index has been
selected as the required broad equity market index. The Industry Index consists
of publicly traded companies in a business similar to that of the Company.

ASSUMES $100 INVESTED ON JANUARY 1, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DECEMBER 31, 1995

<TABLE>
<CAPTION>
Legend
Index Description 1989 1990 1991 1992 1993 1994
- ----------------- ---- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GEN/Rx, Inc. 100 1475.41 4813.03 3770.49 4836.07 3688.42

Index for NASDAQ Stock Market
(US Companies) 100 119.70 193.36 159.30 144.96 158.90
</TABLE>

15
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Index for NASDAQ Stocks (SIC 2834) 100 81.12 104.14 105.16 126.14 132.44
</TABLE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information regarding beneficial ownership of the
Company's Common Stock as of February 1 1996; (i) by each person who owned or is
known by the Company to own beneficially five (5%) percent or more of the
Company's outstanding Common Stock; (ii) by all directors; and (iii) by all
directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
Shares Owned Percentage of
Name and Address of Beneficially and Outstanding Shares
Beneficial Owner of Record of Common Stock
---------------- ---------------- ------------------
<S> <C> <C>
Apotex USA, Inc. 13,288,874 70.6%
1776 Broadway, Suite 1900
New York, NY 10019

John R. Toedtman 1,073,003 5.7%
11 Birch Drive
Basking Ridge, NJ 07920

Jack H. Schramm *
1776 Broadway, Suite 1800
New York, NY 10019 (3)

All Executive Officers and Directors 12,500 *
</TABLE>

* Less than 1%

(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, herein, each person has
sole power to vote or dispose or direct the disposition of the shares owned
beneficially.

(2) Excludes 3,313,783 shares issuable upon exercise of warrants to acquire
2,500,000 shares at an exercise price of $1.00 per share, and 813,783 shares at
an exercise price of $.75 per share. Excludes an aggregate of 270,000 shares
subject to warrants (exercisable at $1.50 per share) granted to 12 persons who
were employees of or consultants to Apotex at April 12, 1995, the date that
Apotex acquired shares of the Company's Common Stock, and also excludes
2,064,966 shares that Apotex will become immediately entitled to receive upon an
amendment to the Company's Certificate of Incorporation increasing the number of
authorized shares of common stock.

(3) Excludes 50,000 shares subject to warrants (exercisable at $1.50 per share)
granted to Mr. Jack H. Schramm who was an employee of Apotex at April 12, 1995,
the time that Apotex acquired shares of the Company's Common Stock.

(4) Includes 10,000 shares issuable upon exercise of stock options at an
exercise price of $1.00 per share.

ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

16
<PAGE> 17
transaction, the Company issued to Apotex (the former shareholder of AUSA)
13,288,874 shares of its Common Stock and is obligated to issue to Apotex, an
additional 2,064,966 shares as soon as practicable following an amendment to the
Company's Certificate of Incorporation increasing the number of authorized
shares of common stock. After issuance of the additional shares, Apotex will own
approximately seventy four (74%) percent of the outstanding Common Stock of the
Company. In addition, warrants to purchase 270,000 shares of common stock of
GEN/Rx for $1.50 per share were issued to various individuals in connection with
the Merger.

In addition, in connection with the Merger and pursuant to a Loan Agreement
dated April 13, 1995 between the Company and Apotex, Apotex lent the Company
$500,000 represented by a Term Note dated April 13, 1995 and $2,000,000
represented by a revolving line of credit note dated April 13, 1995. The notes
bear interest at 1% over prime and mature on April 13, 1998. These notes are
secured by all of the assets of the Company. In addition, as additional
consideration for the loans, Apotex received warrants exercisable at $1.00 per
share to purchase shares of the Company's common stock in an amount equal to one
share for each dollar advanced pursuant to the Loan Agreement. The warrants have
a term of three years. At December 31, 1995, the Company had borrowed $2,500,000
pursuant to this Loan Agreement.

The Company's failure to pay the amounts due December 22, 1995 constituted an
Event of Default under the Loan Agreement and Apotex accelerated the entire
amount of indebtedness (approximately $3,500,000) of the Company and its
subsidiaries, which are jointly and severally liable for the debt, by a letter
dated January 2, 1996, which required the Company to turn over to Apotex all of
the collateral on January 5, 1996.

Apotex sought and received the appointment of a receiver for the Ft. Collins
plant in a proceeding in Larimer County, Colorado, on January 4, 1996. The order
permits the receiver to exercise control over AVP's bank accounts, accounts
receivable and inventory. As a result of the November 29 letter amendment to the
Loan Agreement and the appointment of a receiver, AVP is not receiving any cash
proceeds. In addition, pursuant to the Loan Agreement, as amended, accounts
receivable of AUSA has been assigned to Apotex and collections thereof are being
deposited into the bank accounts of Apotex.

Interest expense incurred on these obligations for the year ended December 31,
1995 approximated $1,067,000 including imputed interest assigned to the value of
the warrants issued to Apotex of $915,000.

The Company currently utilizes the service of certain employees of Apotex in the
areas of product development, quality assurance, regulatory affairs, management
information systems, purchasing and other clerical work. As compensation for
these services, AUSA pays to Apotex its pro-rata portion of the salary and
related benefits of these individuals. The costs incurred for these services for
the year ended December 31, 1995 was $352,000. In addition, AUSA reimburses
Apotex for a portion of the occupancy costs incurred in connection with the
building occupied by Apotex regulatory affairs, and personnel. The costs
incurred for these services for the year ended December 31, 1995 was $65,265.

17
<PAGE> 18
In addition, the Company currently occupies office space as a subtenant of
Apotex although no formal agreement currently exists. The Company's monthly rent
(paid directly to the landlord) is equivalent to the rent provided in the lease
agreement between Apotex and the landlord.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1)&(2) Financial Statements.

See Index to Financial Statements after Signature Page.

(a)(3) Exhibits.

2.5 Amended and Restated Master Agreement dated April 13,1995.

2.7 Plan and Agreement of Merger dated April 13, 1995.

2.25 Verified Complaint for Appointment of Receiver.

2.27 Order Appointing Receiver.

11 Computation of per share data.

16 Letter regarding change in accountants incorporated by reference to
the Registrant's Current Report on Form 8-K dated July 10, 1995.

21 Subsidiaries of the Registrant

18
<PAGE> 19
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated: March 28, 1996 GEN/RX, Inc.
---------------------------
(Registrant)

By: /s/ Jack H. Schramm
------------------------
Jack H. Schramm
President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jack H. Schramm
- -------------------------
Jack H. Schramm Acting President, and Director March 28, 1996
(Chief Executive Officer)

/s/ Richard J. Strobel
- -------------------------
Richard J. Strobel Vice President, Finance and March 28, 1996
Administration
(Chief Financial Officer)
</TABLE>

<PAGE> 20
GEN/RX, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
FILED WITH THE ANNUAL REPORT OF THE COMPANY ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INCLUDED IN PART II:
- --------------------

Report of Independent Public Accountants F-2

Consolidated Balance Sheets at December 31, 1995 and December 31, 1994 F-3

Consolidated Statements of Operations for the year ended December 31, 1995

and for the period July 1, 1994 (inception) through December 31, 1994 F-4

Consolidated Statements of Cash Flows for the year ended December 31, 1995

and for the July 1, 1994 (inception) through December 31, 1994 F-5

Consolidated Statement of Changes in Stockholders' and Divisional Equity
(Deficit) for the year ended December 31, 1995 and for the period July 1, 1994
(inception) through December 31, 1994 F-6

Notes to Consolidated Financial Statements F-7 through F-13
</TABLE>

Other financial statement schedules are omitted because the conditions requiring
their filing do not exist or the information required thereby is included in the
financial statements filed, including the notes thereto.

F-1
<PAGE> 21
[RICHARD A EISNER & COMPANY, LLP LETTERHEAD]

REPORT OF INDEPENDENT AUDITORS

Board of Directors
Gen/Rx, Inc.
New York, New York

We have audited the accompanying consolidated balance sheets of Gen/Rx,
Inc. and subsidiaries, as at December 31, 1995 and December 31, 1994, and the
related consolidated statements of operations, cash flows and changes in
stockholders' and divisional equity (deficit) for the year ended December 31,
1995 and the period from July 1, 1994 (date of inception) to December 31, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements enumerated above present
fairly, in all material respects, the consolidated financial position of Gen/Rx,
Inc. and subsidiaries at December 31, 1995 and December 31, 1994, and the
results of their operations and their cash flows for the year ended December
31, 1995 and the period from July 1, 1994 (date of inception) to December 31,
1994 in conformity with generally accepted accounting principles.

the accompanying financial statements have bene prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred losses from operations since
inception and has a working capital deficiency at December 31, 1995 which
raises substantial doubt about the Company's ability to continue as a going
concern. The Company has been dependent upon its parent for financing and
management intends to continue to seek financing from its parent. There is no
assurance that such financing will continue to be provided. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.

Richard A. Eisner & Company, LLP

New York, New York
February 8, 1996

F-2

<PAGE> 22
GEN/RX, INC.
CONSOLIDATED BALANCE SHEETS
(Notes 1 and 2)

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
ASSETS 1995 1994
------ ------------ ------------
<S> <C> <C>
Current assets:
Cash $ 15 $ 4
Accounts receivable, net of allowances of $631 (Note 5) 539
Inventories (Note 6) 24 753
Prepaid expenses and other current assets 4 31
Assets of discontinued operations (Note 4) 1,059
--------

Total current assets 1,641 788

Property and equipment, at cost less
accumulated depreciation (Note 7) 352 23
Deposits and other assets 63 1
-------- ------

$ 2,056 $ 812
======== ======

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Notes payable--Apotex (Notes 8 and 11) $ 3,563
Advances--Apotex $1,275
Accounts payable 887
Accrued expenses and other current liabilities 480
Estimated liabilities of discontinued operations (Note 4) 1,447
--------

Total current liabilities 6,377

Divisional (deficit) (463)
------

Commitment, contingencies and other matters (Note 12)

Shareholders' equity:
Common Stock, par value $.004 per share, authorized
20,000,000 shares; issued and outstanding
18,813,745 shares, to be issued 2,064,966 shares 84
Additional capital 7,889
Accumulated deficit (12,294)
--------

Total shareholders' (deficit) (4,321)
--------
$ 2,056 $812
======== ====
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE> 23
GEN/RX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Notes 1 and 2)

<TABLE>
<CAPTION>
JULY 1, 1994
(DATE OF INCEPTION)
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
1995 1994
------------ -------------------
<S> <C> <C>
Net sales $ 4,976

Cost of sales 3,274
--------

Gross profit 1,702

Operating expenses:

Product development 1,093
Selling and distribution 2,149 $ 347
General and administrative 843 116
-------- -----

4,085 463
-------- -----

Operating (loss) from continuing operations (2,383) (463)

Interest expense 1,069
-------- -----

(Loss) from continuing operations (3,452) (463)

Discontinued operations: (Note 4)
(Loss) from discontinued operations until suspension
of operating activities (1,009)
(Loss) from discontinued operations during suspension
of operating activities (1,897)
Estimated (loss) on disposition (5,646)
--------
(Loss) from discontinued operations (8,552)
--------

NET (LOSS) $(12,004) $(463)
======== =====

(Loss) per share of Common Stock:
Continuing operations $(.18)
Discontinued operations (.44)
--------

Net (loss) $ (.62)
========

Weighted average number of
common shares outstanding 19,313
========
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE> 24
GEN/RX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Notes 1 and 2)

<TABLE>
<CAPTION>
JULY 1, 1994
YEAR (DATE OF INCEPTION)
ENDED TO
DECEMBER 31, DECEMBER 31,
1995 1994
------------ -------------------
<S> <C> <C>
Cash flows from operating activities:
Loss from continuing operations $(3,452) $ (463)
Adjustments to reconcile net loss
to net cash provided (used) by operating
activities:
Depreciation and amortization 16
Imputed interest 915
Changes in assets and liabilities:
(Increase) in accounts receivable (539)
Decrease in inventories 728 (753)
(Increase) in prepaid expenses
and other assets (30) (32)
Increase in accounts payable
and other current liabilities (2,544)
Net cash (used) by discontinued operations (2,233)
------- -------

Net cash provided (used) by operating activities (2,051) (1,248)
------- -------

Cash flows from financing activities:
Proceeds from advances - Apotex 1,275
Proceeds from notes payable - Apotex 3,033
Principal payments under notes payable - Apotex (248)
Net cash (used) by discontinued operations (344)
------- -------

Net cash provided by financing activities 2,441 1,275
------- -------

Cash flows from investing activities:
Capital expenditures (349) (23)
Net cash (used) by discontinued operations (30)
------- -------

Net cash (used) by investing activities (379) (23)
------- -------

Net increase in cash 11 4
Cash at beginning of period 4 0
------- -------

Cash at end of period $ 15 $ 4
======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE> 25
GEN/RX, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' AND DIVISIONAL
EQUITY (DEFICIT) FOR THE PERIODS JULY 1, 1994 (INCEPTION)
THROUGH DECEMBER 31, 1994 AND YEAR ENDED DECEMBER 31, 1995
(Notes 1 and 2)

<TABLE>
<CAPTION>
COMMON STOCK
-----------------
NUMBER
OF ADDITIONAL ACCUMULATED DIVISIONAL
SHARES AMOUNT CAPITAL DEFICIT DEFICIT
------ ------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Balance,July 1, 1994 ( inception) 0 $ 0 $ 0 $ 0 $0
Net loss for the period July 1, 1994
(Inception) through December 31, 1994 (463)
------ ------- ------ -------- -------

Balance - December 31, 1994 0 0 0 (463)

Net income for period January 1, 1995
through April 3, 1995 290
Capital contribution 1,673
Shares issued April 3, 1995 upon
incorporation 1 1,673 (173) (1,500)
Shares canceled April 13, 1995
in connection with Merger (1) (1,673) 1,673
Shares issued April 13, 1995
in connection with Merger 13,289 53 4,498
Shares to be issued in connection
with Merger 2,065 9
Issued and outstanding GEN/Rx
shares 5,525 22 654
Issuance of warrants 947

Net loss for the year ended
December 31, 1995 290 (12,294)
------ ------- ------ -------- -------

Balance, December 31, 1995 20,879 $ 84 $7,889 $(12,294) $ 0
====== ======= ====== ======== =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE> 26
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. THE COMPANY:

GEN/Rx, Inc. ("GEN/Rx") through its wholly-owned subsidiary AUSA, Inc. ("AUSA"),
operates in one business segment, the distribution of generic pharmaceuticals.
Products are in injectable form and marketed primarily to hospitals and
wholesalers in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has experienced
significant operating losses since its inception, resulting in a deficit equity
position. The Company's financial position and operating results raise
substantial doubt about its ability to continue as a going concern. While
management intends to dispose of one of its subsidiaries that has incurred
significant operating losses, (see "Note 4. Discontinued Operations" below) it
does not expect proceeds from such disposition to be sufficient to fund
continuing operations. As a result, the Company is seeking to obtain additional
financing from its majority shareholder and primary creditor Apotex USA Inc.
("Apotex") during 1996 sufficient to fund its future activities. There is no
assurance, however, that such financing will be secured and obtained. It is
unlikely that any other financing will be available to the Company. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

2. BUSINESS COMBINATION:

On April 13, 1995, a merger (the "Merger") of GEN/Rx, Inc., with and into AUSA
was consummated. Pursuant to the Merger, GEN/Rx acquired all the assets of AUSA
which commenced operations as Yorpharm, a division of Apotex, in July 1994. In
April 1995, prior to the Merger, the net assets of Yorpharm were transferred to
the newly formed corporation, AUSA a subsidiary of Apotex. As part of the Merger
transaction, GEN/Rx issued to Apotex (the former shareholder of AUSA) 13,288,874
shares of its Common Stock and is obligated to issue to Apotex, an additional
2,064,966 shares as soon as practicable following an amendment to the Company's
Certificate of Incorporation increasing the number of authorized shares of
common stock. After issuance of the additional shares, Apotex will own
approximately seventy four (74%) percent of the outstanding Common Stock of
GEN/Rx. In addition, warrants to purchase 270,000 shares of common stock of
GEN/Rx for $1.50 per share were issued to various individuals in connection with
the Merger.

Since, after issuance of the additional 2,064,966 shares upon amendment to the
Company's Certificate of Incorporation increasing the number of authorized
shares, the former shareholders of AUSA will own 74% of GEN/Rx, the transaction
was accounted for as if AUSA acquired the net assets of GEN/Rx for the
previously issued and outstanding shares of GEN/Rx. Accordingly, the financial
statements presented herewith are those of AUSA. The merger was accounted for as
a purchase of GEN/Rx for $5,711,000. The excess of the fair value of the
previously issued and outstanding stock of GEN/Rx, Inc. over the fair value of
its assets of $5,036,000 was recorded as goodwill. See "4. Discontinued
Operations" below.

In addition, in connection with the merger and pursuant to a Loan Agreement
dated April 13, 1995, as amended on November 29, 1995 between the Company and
Apotex, Apotex agreed to make loans to the Company. See "8. Notes
Payable--Apotex" below.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation:

The consolidated financial statements include the accounts of AUSA, and from
April 13, 1995, its parent GEN/Rx and GEN/Rx's other wholly-owned subsidiary,
American Veterinary Products, Inc. ("AVP"). See "Discontinued Operations" below.
References herein to the "Company" refer to AUSA, GEN/Rx and AVP, collectively.

F-7
<PAGE> 27
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995--CONTINUED

Inventories:

Inventories are stated at the lower of cost (first-in, first-out) or market
value.

Depreciation and Amortization:

Property and equipment are depreciated straight-line over their estimated useful
lives which are from three to seven years.

Product Development:

Research and development expenses represent costs incurred by the Company to
develop new products and obtain premarketing regulatory approval for such
products. All such costs are expensed as incurred.

Revenue Recognition:

The Company recognizes revenue at the time it ships product and it provides for
returns and allowances based upon actual subsequent allowances and historical
trends.

Per Share Data:

Per share data is based upon the weighted average number of common shares and
equivalents outstanding and 2,064,966 shares to be issued following an amendment
to the Company's Certificate of Incorporation increases the number of authorized
shares of common stock. The dilutive effect, if any, of outstanding options and
warrants is computed using the "treasury stock" method. Fully dilutive has not
been presented because it is not different from primary amounts.

Cash Equivalents:

For purposes of the statement of cash flows, the Company considers all highly
liquid money market instruments with original maturity of three months or less
to be cash equivalents.

Concentration of Credit Risk:

Financial instruments that potentially subject the Company to credit risk
consist of trade receivables. The Company markets its products primarily to
domestic wholesalers, distributors and hospitals. The risk associated with this
concentration is believed by the Company to be limited due to the large number
of distributors, wholesalers, and hospitals, their geographic dispersion and the
performance of certain credit evaluation procedures (see "5. Accounts
Receivable-Major Customers"). Collateral is generally not required.

Estimates:

Preparation of these financial statements in conformity with generally accepted
accounting principals require the use of management's estimates.

4. DISCONTINUED OPERATIONS:

In connection with an inspection of its manufacturing facility from October 1994
through May 1995 by the U.S. Food and Drug Administration ("FDA"), AVP received
a "warning letter" from the Denver District Office of the FDA setting forth
certain alleged deviations from current good manufacturing practice regulations
and alleged violations of related provisions of the Federal Food, Drug and
Cosmetic Act.

In June 1995, following new management's investigation of the matters set forth
in the warning letter, management suspended the manufacture of products
indefinitely. In December 1995, management decided to discontinue the operations
of AVP and is currently exploring its alternatives with respect to disposition
of the remaining assets of such business, including by sale or otherwise. In
connection with the decision during the fourth quarter to dispose of AVP, the
Company laid-off substantially all of its

F-8
<PAGE> 28
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995--CONTINUED

personnel at this facility and recorded a charge of $848,000 consisting of a
provision for estimated loss on disposition of AVP's assets of $398,000, a
provision for estimated operating losses of $450,000 from AVP's business through
the expected time of disposition and the write-off of goodwill that arose in
connection with the Merger applicable to AVP's business of $4,798,000.

Results from discontinued operations are as follows (in thousands):

<TABLE>
<CAPTION>
APRIL 13, 1995
(DATE OF ACQUISITION)
THROUGH
DECEMBER 31,
1995
---------------------
<S> <C>
Net Sales $ 779
(Loss) from operations (2,906) (a)
Provision for loss on disposition (5,646)
(Loss) from discontinued operations $(8,552)
</TABLE>

(a) Includes losses of $1,897 incurred from the period July 1, 1995 when
operating activities were suspended, through December 31, 1995.

The assets, and estimated liabilities of the discontinued operations have been
reclassified on the balance sheet to separately identify them and consist of the
following (in thousands):

<TABLE>
<S> <C>
Cash and restricted cash $ 155
Accounts receivable 243
Inventories 158
Fixed assets 500
Other assets 3
------

Total assets $1,059
======

Notes payable - banks $ 137
Accounts payable 587
Accrued expenses and other liabilities 273
Estimated costs of disposal 450
------

Total estimated liabilities $1,447
======
</TABLE>

AVP is also liable to Apotex for all borrowing and advances pursuant to the Loan
Agreement, as amended. See "Note 8" below.

Disposition of the assets of the discontinued operations is expected to occur by
the end of the second quarter of 1996.

As a result of management's determination that a significant and permanent
impairment of the goodwill associated with AVP's veterinary business occurred,
the Company took a charge of $4,798,000 in the fourth quarter for the write-down
of goodwill that arose in connection with the merger applicable to AVP's
business. Such charge is included in the estimated loss of disposal of
discontinued operations on the consolidated statement of operations.

F-9
<PAGE> 29
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995--CONTINUED

<TABLE>
<CAPTION>
5. ACCOUNTS RECEIVABLE: DECEMBER 31,
1995
--------------
(In Thousands)
<S> <C>
Accounts receivable $1,170
Allowances:
Doubtful accounts (100)
Returns and allowances (300)
Price adjustments (231)
------

Accounts receivable,
net of allowances $ 539
======
</TABLE>

Pursuant to the Loan Agreement, as amended (see Note 8.), accounts receivable
has been assigned to Apotex and collections thereof are deposited into the bank
accounts of Apotex.

Major Customers:

6. INVENTORIES:

Inventories relating to continuing operations at December 31, 1995 and 1994
consist of finished goods. During 1995, the Company took charges aggregating
$600,000 for the write-off of short-dated inventories.

7. PROPERTY, PLANT AND EQUIPMENT:

<TABLE>
<CAPTION>
1995 1994
---- ----
(In Thousands)
<S> <C> <C>
Machinery and equipment $267
Office equipment, furniture and fixtures 101 $23
---- ---
368 23
Less accumulated depreciation and
amortization 16 0
---- ---
$352 $23
==== ===
</TABLE>

8. NOTES PAYABLE--APOTEX:

On January 2, 1996, Apotex, the majority shareholder and primary creditor of the
Company, accelerated approximately $3,500,000 of the outstanding indebtedness of
the Company in favor of Apotex. The Company had failed to pay Apotex
approximately $1,000,000 of indebtedness when it was due on December 22, and, as
a result, after a 10-day grace period, the Company's failure to pay that amount
constituted an Event of Default under the existing lending arrangements between
the Company, as borrower, and Apotex.

The Company and Apotex had entered into these lending arrangements under a Loan
Agreement dated April 13, 1995 (the "Loan Agreement"). At that date, Apotex
agreed to lend to the Company $500,000 in the form of a term loan and up to
$2,000,000 in the form of a revolving loan. Both loans were evidenced by
promissory notes and would have matured April 13, 1998. The Company has borrowed
the entire line of credit, and the aggregate indebtedness of $2,500,000 is
outstanding. These loans bore interest at the rate of 1% over prime. Interest
was payable on the first business day of each March, June, September and
December, and the Company failed to pay certain accrued and unpaid interest when
due.

F-10
<PAGE> 30
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995--CONTINUED

The Company secured repayment of these amounts by all of the assets of the
Company, including AVP's plant in Fort Collins, Colorado. As additional
consideration for the loans, the Company had issued in favor of Apotex, warrants
to purchase the Company's common stock at a purchase price of $1 per share at
the rate of one share for each dollar of loan advanced. The warrants are
exercisable for a period of three years.

On November 29, 1995, the Company entered into an agreement with Apotex to amend
the Loan Agreement. As amended, the Loan Agreement permitted Apotex, in its
discretion, to advance sums in excess of the $2,500,000 original loan amount,
that were due December 22, 1995, but otherwise were treated as if they had been
advanced pursuant to the Loan Agreement. The Company requested additional
advances and Apotex advanced the Company approximately $325,000 through December
31, 1995. The Company also agreed that failure to repay the amounts when due
would constitute a default under the Loan Agreement. The Company also issued to
Apotex a warrant to purchase an additional 813,783 shares of the Company's
common stock, par value $.004 per share, at an exercise price of $.75 per share
in connection with the amendment. The warrants have a term of three years.

At December 31, 1995, the Company was indebted to Apotex for an aggregate of
$3,563,000 including accounts payable converted to notes pursuant to the
amendment of the loan agreement of $447,000. The Company continues to receive
additional advances from Apotex subsequent to December 31, 1995 The Company's
defaults constituted Events of Default under the Loan Agreement and Apotex USA
accelerated the entire amount of indebtedness of the Company and its
subsidiaries, which are jointly and severally liable for the debt, by a letter
dated January 2, 1996, which required the Company to turn over to Apotex all of
the collateral on January 5, 1996. As a result, all of the borrowing pursuant to
the Loan Agreement, as amended, is classified as current on the balance sheet as
at December 31, 1995.

Apotex sought and received the appointment of a receiver for AVP's plant in a
proceeding in Larimer County, Colorado, on January 4, 1996. The order permits
the receiver to exercise control over AVP's bank accounts, accounts receivable
and inventory. As a result of the November 29 letter amendment to the Loan
Agreement and the appointment of a receiver, AVP is not receiving any cash
proceeds.

Interest expense during 1995 aggregated $1,069,000 including imputed interest of
$915,000 assigned to the value of warrants issued in connection with the Merger
and Loan Agreement, as amended with Apotex.

9. SHAREHOLDERS' DEFICIT:

Warrants:

In connection with the Merger (see "Note 2.--Business Combination" above) and
pursuant to a Loan Agreement April 13, 1995 as amended November 29, 1995; (see
"8. Notes Payable--Apotex", above) as additional consideration for the loans,
the Company must issue Apotex warrants to purchase shares of the Company's
common stock at the rate of one share for each dollar of loan advanced. Under
the terms of the agreement Apotex received 2,500,000 warrants exercisable at
$1.00 per share, 813,783 warrants exercisable at $.75 per share and as at
December 31, 1995 is obligated to issue an additional 498,032 warrants
exercisable at $.75 per share.

Also in connection with the Merger, the Company issued 270,000 warrants to
certain employees and consultants to Apotex, exercisable at $1.50 per share of
common stock . All of the warrants have a term of three years.

Stock Options:

The following is a summary of stock option activity during the period July 1,
1994 (inception) through December 31, 1994 and the year ended in 1995.

F-11
<PAGE> 31
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995--CONTINUED

<TABLE>
<CAPTION>
1995 1994
------------------------ -----------------------
PRICE PER PRICE PER
SHARE SHARE SHARE SHARE
----- ----- ----- -----
<S> <C> <C> <C> <C>
Outstanding at beginning of period 885,160 $.75 to 885,160 $.75 to
$2.00 $2.00
Granted 161,500 $.97 to
$1.88
Exercised 0 0
Canceled 352,000 $.75 to
$2.00
Outstanding at end of period 694,660 $.75 to 885,160 $.75 to
======= $2.00 ======= $2.00
</TABLE>

The Company's 1990, 1992 and 1994 Incentive Stock Option Plan each provide that
options may be granted to employees of the Company for the purchase of up to
300,000 shares of the Company's Common Stock.

In addition, the Company had options outstanding to purchase 259,500 shares at
prices ranging from $.75 to $1.00 per share not pursuant to any plan.

Options for 412,860 shares were exercisable at December 31, 1995 at prices
ranging from $.75 to $2.00 per share.

10. INCOME TAXES:

At December 31, 1995, the Company has a net operating loss carryforward for
income tax purposes aggregating approximately $4,441,000 which expires in the
year 2010.

The gross provision for income tax benefit and increase in valuation allowance
thereon for the year ended December 31, 1995, was approximately $2,036,000.

The tax effects of the significant temporary differences and carryforwards which
give rise to the deferred tax asset are as follows (in thousands):

<TABLE>
<S> <C>
Loss $ 1,510

Temporary differences:

Provision for obsolete inventory 204
Provision for bad debt 34
Provision for loss on discontinued
operations 288
-------
2,036

Less valuation allowance
thereon (2,036)
=======
$ 0
=======
</TABLE>

GEN/Rx has pre-acquisition net loss carryforwards of approximately $2,700,000
which were generated by AVP and therefore have utilization limitations. The
carryforwards will expire in the years 2007 through 2009. In addition, the Tax
Reform Act of 1986 contains provisions which limit the net operating loss
carryforwards available for use should significant changes in ownership interest
occur. The Company has had an ownership change which will result in the
applications of these limitations.

F-12
<PAGE> 32
GEN/RX, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995--CONTINUED

11. RELATED PARTY TRANSACTIONS:

The Company and Apotex are parties to a Loan Agreement as Amended whereby Apotex
has advanced to the Company $3,811,000 less repayments of $248,000 through
December 31, 1995. The amount also includes accounts payable of $447,000 arising
in the ordinary course of business which was converted to notes payable in
connection with the amendment to the Loan Agreement with Apotex on November 29,
1995. Interest expense incurred on these obligations for the year ended December
31, 1995 approximated $1,067,000 including imputed interest of $915,000. See "8.
Notes Payable--Apotex" above.

In addition, the Company currently occupies office space as a subtenant of
Apotex although no formal agreement currently exists. The Company's monthly rent
(paid directly to the landlord) is equivalent to the rent provided in the lease
agreement between Apotex and the landlord.

The Company believes that the charges for these services and space are fair.

12. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS:

Leases:

At December 31, 1995, the Company had minimum rental commitments aggregating
$184,000 under a noncancelable operating lease expiring in 1998. Amounts payable
thereunder are $60,000 in 1996, $61,000 in 1997 and $63,000 in 1998. Rent
expense charged to continuing operations in 1995 was $91,000.

Legal proceedings:

On January 4, 1996, in connection with the default by the Company on the Loan
Agreement, as amended (See "Note 8. Notes Payable--Apotex"), a receiver was
appointed by the District Court of Larimer County, Colorado. The Court's order
permits the receiver to exercise control over the bank accounts, accounts
receivable and inventory of AVP. The cash proceeds from the sale of goods are
being held in trust by the receiver on behalf of Apotex pursuant to the terms of
the Loan Agreement, as amended. In addition, the Company is a defendant in
certain actions arising in the normal course of business. In the opinion of
management, the appointment of the receiver is expected to have a material
effect on the financial condition and results of operations of the Company. The
ultimate disposition of the certain actions occurring in the normal course of
business matters is not expected to have a material effect on the financial
condition or results of operations of the Company.

Other matters:

During 1995, one of the Company's products accounted for approximately 62% of
its sales from continuing operations and yielded the substantial portion of the
gross margin of the Company. Until other companies introduced this product to
market in the second half of calendar 1995, the Company was the sole generic
distributor of the product. While the Company cannot quantify the effect
relating to anticipated increased competition for this product, it does
anticipate that sales and gross margin of such product will decline in the
future. In addition, the Company is dependent on one supplier of this product.
Management believes that the loss of the source of supply of the product would
have a material adverse impact on the Company's business.

F-13
<PAGE> 33
EXHIBIT INDEX

2.5 Amended and Restated Master Agreement dated April 13,1995.

2.7 Plan and Agreement of Merger dated April 13, 1995.

2.25 Verified Complaint for Appointment of Receiver.

2.27 Order Appointing Receiver.

11 Computation of per share data.

16 Letter regarding change in accountants incorporated by reference to
the Registrant's Current Report on Form 8-K dated July 10, 1995.

21 Subsidiaries of the Registrant

<PAGE> 1
APOTEX USA INC./GEN/Rx, INC

AMENDED AND RESTATED
MASTER AGREEMENT

THIS AMENDED AND RESTATED MASTER AGREEMENT dated as of the 13th day of
April, 1995, by and among AUSA, INC., a Delaware corporation ("AI"), APOTEX USA
INC., a Delaware corporation ("Apotex"), GEN/Rx, Inc., a New York corporation
("Gen/Rx"), AMERICAN VETERINARY PRODUCTS, INC., a Colorado corporation
("AVP-Colorado"), and COLLINS LABORATORIES, INC., a Colorado corporation
("Collins").

W I T N E S S E T H:

WHEREAS, capitalized terms used in this agreement are used in this
agreement as defined in Section 15 of this agreement, except to the extent
specifically otherwise indicated; and

WHEREAS, the Gen/Rx Companies are engaged in the business of
developing, manufacturing and marketing injectable products for human and
animal uses; and

WHEREAS, Apotex is engaged in the business of distributing injectable
products for humans; and

WHEREAS, Apotex and the Gen/Rx Companies desire to enter into an
agreement pursuant to which Apotex will acquire approximately seventy
percent (70%) of the Common Stock of Gen/Rx on a fully diluted basis; and

WHEREAS, Apotex and the Gen/Rx Companies desire to enter into an
agreement pursuant to which AI will become a subsidiary of Gen/Rx; and

WHEREAS, the Gen/Rx Companies have asked for certain loans and loan
facilities to be funded by Apotex; and

WHEREAS, to secure such indebtedness, AVP-Colorado has granted to
Shermfin the Deed of Trust, which was recorded in the public records of
Larimer County, Colorado, on March 24, 1995; and

WHEREAS, the Parties entered into a Master Agreement dated January 26,
1995; and

WHEREAS, this Amended and Restated Master Agreement is intended to
amend and restate in its entirety such Master Agreement, which shall have
no further force or effect.

<PAGE> 2
NOW, THEREFORE, in consideration of the above premises and in consideration
of the mutual covenants and undertakings of the parties as set forth below, the
parties hereto, intending to be legally bound, agree as follows:

1. CLOSING.

a. Subject to the terms and conditions set forth in this agreement, the
Closing shall be held on the Closing Date or such earlier or later date as shall
be mutually agreed to by the parties at their sole discretion, at 10:00 a.m. at
the offices of Sills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A., One
Riverfront Plaza, Newark, New Jersey. The Parties shall consummate the
transactions contemplated by this agreement on or prior to the seventh day after
the date on which all of the conditions set forth in Sections 8, 9, and 10 of
this agreement shall have been satisfied or waived.

b. All payments to be made pursuant to this agreement shall be made in
U.S. Dollars by certified or bank check in good "next day" funds or by wire
transfer in accordance with instructions of the receiving Party.

2. CLOSING DATE DELIVERIES -- THE GEN/Rx COMPANIES AND THE GEN/Rx SUB.

On or prior to the Closing Date, the Gen/Rx Companies and the Gen/Rx Sub
shall have delivered to Apotex

a. Stock certificates evidencing the First Transaction Shares and
1,935,034 shares of the Supplemental Shares, fully executed by authorized
officers of Gen/Rx;

b. The Certificate of Representations, executed by each of the Gen/Rx
Companies;

c. The Deed of Trust Amendment, executed by AVP-Colorado;

d. The Term Note, executed by Gen/Rx, AVP-Colorado, AI and Collins;

e. The Line of Credit Note, executed by Gen/Rx, AVP-Colorado, AI and
Collins;

f. The Assignment of Leases and Rents, executed by AVP-Colorado;

g. Financing Statements on form UCC-1 or other form executed by each of
the Gen/Rx Companies and AI;

h. The Gen/Rx Warrant, executed by Gen/Rx;

i. A Solvency Certificate dated the Closing Date executed by Responsible
Officers of each of the Gen/Rx Companies;

-2-

<PAGE> 3
j. Certificates from the Secretary of State (or other appropriate
authority of such jurisdiction) evidencing the good standing:

i. of Gen/Rx in New York;

ii. of Gen/Rx Sub in Delaware;

iii. of AVP-Colorado in Colorado; and

iv. of Collins in Colorado;

k. A secretary's certificate from the secretary of Gen/Rx,
substantially in the form of Exhibit H to this agreement, as to the incumbency
and signatures of the Persons authorized to sign the 1995 Transactions
Documents on behalf of Gen/Rx and including a true, complete and correct copy of

i. Gen/Rx's Certificate of Incorporation, as amended
to date;

ii. Gen/Rx's Bylaws, as amended to date;

iii. the resolutions of Gen/Rx's Board of Directors
authorizing the execution and delivery of this agreement and the other
1995 Transactions Documents to which Gen/Rx is a signatory in the name
and on behalf of Gen/Rx and the execution and delivery of consent to
this agreement;

iv. all documents of Gen/Rx evidencing any other necessary
or appropriate corporate or partnership action and governmental
approvals with respect to the 1995 Transactions Documents;

v. the Security and Pledge Agreement; and

vi. such other documentation as Apotex or its special
counsel may request with respect to the representations contained
in this agreement;

l. A secretary's certificate from the secretary of Gen/Rx Sub,
substantially in the form of Exhibit H to this agreement, as to the incumbency
and signatures of the Persons authorized to sign the 1995 Transactions
Documents on behalf of Gen/Rx Sub and including a true, complete and correct
copy of

i. Gen/Rx Sub's Certificate of Incorporation, as amended
to date;

ii. Gen/Rx Sub's Bylaws, as amended to date;

iii. the resolutions of Gen/Rx Sub's Board of Directors
authorizing the execution and delivery of this agreement and the

-3-
<PAGE> 4
other 1995 Transactions Documents to which Gen/Rx Sub is a signatory in
the name and on behalf of Gen/Rx Sub and the execution and delivery of
consent to this agreement;

iv. all documents of Gen/Rx Sub evidencing any other necessary or
appropriate corporate or partnership action and governmental approvals
with respect to the 1995 Transactions Documents;

v. The Security and Pledge Agreement; and

vi. such other documentation as Apotex or its special counsel may
request with respect to the representations contained in this
agreement;

m. A secretary's certificate from the secretary of AVP-Colorado,
substantially in the form of Exhibit H to this agreement, as to the incumbency
and signatures of the Persons authorized to sign the 1995 Transactions
Documents on behalf of AVP-Colorado and including a true, complete and correct
copy of

i. AVP-Colorado's Certificate of Incorporation, as amended to date;

ii. AVP-Colorado's Bylaws, as amended to date;

iii. the resolutions of AVP-Colorado's Board of Directors authorizing
the execution and delivery of this agreement and the other 1995
Transactions Documents to which AVP-Colorado is a signatory in the name
and on behalf of AVP-Colorado and the execution and delivery of consent
to this agreement;

iv. all documents of AVP-Colorado evidencing any other necessary or
appropriate corporate or partnership action and governmental approvals
with respect to the 1995 Transactions Documents; and

v. such other documentation as Apotex or its special counsel may
request with respect to the representations contained in this
agreement;

n. A secretary's certificate from the secretary of Collins,
substantially in the form of Exhibit H to this agreement, as to the incumbency
and signatures of the Persons authorized to sign the 1995 Transactions
Documents on behalf of Collins and including a true, complete and correct copy
of

i. Collin's Certificate of Incorporation, as amended to date;

ii. Collin's Bylaws, as amended to date;

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<PAGE> 5
iii. the resolutions of Collin's Board of Directors authorizing the
execution and delivery of this agreement and the other 1995
Transactions Documents to which Collins is a signatory in the
name and on behalf of Collins and the execution and delivery of
consent to this agreement, as amended to date;

iv. all documents of Collins evidencing any other necessary or
appropriate corporate or partnership action and governmental
approvals with respect to the 1995 Transactions Documents; and

v. such other documentation as Apotex or its special counsel may
request with respect to the representations contained in this
agreement;

o. A certificate of a Responsible Officer of each of the Gen/Rx
Companies and Gen/Rx Sub, substantially in the form of Exhibit G to this
agreement, to the effect that each of the representations and warranties of
such company set forth in each of the 1995 Transactions Documents is true and
correct on the Closing Date as though made on and as of the Closing Date and
that such company has observed, performed, complied with and satisfied on and
as of the Closing Date each of the agreements and obligations required to be
observed, performed, complied with and satisfied by such company under the 1995
Transactions Documents on or prior to the Closing Date;

p. An original copy of each consent or waiver from third parties,
including Republic, deemed necessary or advisable by Apotex or its special
counsel in connection with the execution and delivery of the 1995 Transactions
Documents;

q. Copies of consolidated financial statements of each of the
Gen/Rx Companies as specified in the Certificate of Representations;

r. Copies of Uniform Commercial Code, judgment and tax lien
searches relating to the Gen/Rx Companies in the records of the Secretary of
State and appropriate county offices in each jurisdiction in which they do
business; and

s. A favorable opinion of Robinson, St. John & Wayne, counsel to
the Gen/Rx Companies and the Gen/Rx Sub, substantially in the form of Exhibit S.

3. CLOSING DATE DELIVERIES - AI & APOTEX.

On or prior to the Closing Date, AI or Apotex, as the case may be, shall
deliver:

a. To Gen/Rx, the certificates evidencing the newly issued shares
of the common stock of AI to which Gen/Rx shall have become entitled to receive
upon the effectiveness of the Merger;

b. The AI Certificate of Representations, executed by AI and
Apotex;

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<PAGE> 6
c. To the Gen/Rx Companies, a secretary's certificate from the
secretary of Apotex substantially in the form of Exhibit H to this agreement,
as to the incumbency and signatures of the Persons authorized to sign the 1995
Transactions Documents on behalf of Apotex and including a true, complete and
correct copy of

i. Apotex's Certificate of Incorporation, as amended to date;

ii. Apotex's Bylaws, as amended to date;

iii. the resolutions of Apotex's Board of Directors authorizing the
execution and delivery of this agreement and the other 1995
Transactions Documents to which Apotex is a signatory in the name
and on behalf of Apotex and the execution and delivery of consent to
this agreement;

iv. all documents of Apotex evidencing any other necessary or
appropriate corporate or partnership action and governmental
approvals with respect to the 1995 Transactions Documents; and

v. such other documentation as the Gen/Rx Companies or their
special counsel may request with respect to the representations
contained in this agreement;

d. to the Gen/Rx Companies, a secretary's certificate from the
secretary of AI substantially in the form of Exhibit H to this agreement, as to
the incumbency and signatures of the Persons authorized to sign the 1995
Transactions Documents on behalf of AI and including a true, complete and
correct copy of

i. AI's Certificate of Incorporation, as amended to date;

ii. AI's Bylaws as amended to date;

iii. the resolutions of AI's Board of Directors authorizing the
execution and delivery of this agreement and the other 1995
Transactions Documents to which AI is a signatory in the name and on
behalf of AI and the execution and delivery of consent to this
agreement;

iv. all documents of AI evidencing any other necessary or
appropriate corporate or partnership action and governmental
approvals with respect to the 1995 Transactions Documents; and

v. such other documentation as the Gen/Rx Companies or their special
counsel may request with respect to the representations contained in
this agreement;

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<PAGE> 7
e. To the Gen/Rx Companies, a certificate dated the Closing Date
of a Responsible Officer of each of AI and Apotex substantially in the form of
Exhibit G to the effect that all of the representations and warranties of AI or
Apotex, as the case may be, set forth in this agreement are true on and as of
the Closing Date and that each of AI and Apotex has observed, performed or
complied with each covenant set forth in this agreement to be observed,
performed or complied with by it.

f. A favorable opinion of Sills Cummis Zuckerman Radin Tischman
Epstein & Gross, P.A., counsel to AI and Apotex, substantially in the form of
Exhibit T.

4. CLOSING DATE DELIVERIES - MUTUAL DELIVERIES.

On or prior to the Closing Date,

a. The Parties thereto shall have executed and delivered the Plan
and Agreement of Merger;

b. AI shall have executed and delivered to the Secretary of State
for filing the Certificate of Merger;

c. the Gen/Rx Companies, AI and Apotex shall have executed the
Loan Agreement;

d. the Gen/Rx Companies, AI and Apotex shall have executed the
Security and Pledge Agreement; and

e. AVP-Colorado and a company to be formed by John DeTemple shall
have executed and delivered the Marketing Agreement.

5. CERTAIN RIGHTS & OBLIGATIONS PRIOR TO THE CLOSING DATE - THE GEN/Rx
COMPANIES.

The Gen/Rx Companies, jointly and severally, covenant and agree that, with
respect to the period commencing on the date of this agreement and ending on
the Closing Date:

a. From the date of this agreement and until the earlier of the
Closing Date or the termination of this agreement, none of the Gen/Rx Companies
shall directly or indirectly create, suffer or incur or permit to be created or
suffered or incurred any Encumbrance on, to or in respect of any of the Merger
Shares or enter into any agreement in respect of any of the Merger Shares,
except as contemplated by this agreement or amend in any manner Gen/Rx's
certificate of incorporation or otherwise alter the terms and conditions of
stock ownership of Gen/Rx.

b. The Gen/Rx Companies shall carry on the Business diligently and
substantially in the same manner as heretofore conducted, including performing
in all material respects all of its obligations under Contractual Obligations
to which any of the Gen/Rx Companies is a party or by which any of them is
bound and complying with all Requirements of Law.

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<PAGE> 8
c. The Gen/Rx Companies shall use their best efforts to
obtain, prior to the Closing, all Consents the Gen/Rx Companies require from
any Person in connection with the 1995 Transactions Documents. Such Consents
shall not be conditioned or qualified, shall be obtained at no expense to AI,
Apotex, the Gen/Rx Companies and without any adverse change in the terms of any
Contractual Obligations and shall otherwise be in form and substance reasonably
satisfactory to AI or Apotex, as the case may be (collectively, "Material
Consents"). The Gen/Rx Companies shall in addition use their best efforts to
obtain, prior to the Closing, all Consents that AI or Apotex reasonably
requests in writing it obtain and that are required in connection with any of
the transactions contemplated by this agreement. In addition, the Gen/Rx
Companies shall make all designations, declarations, registrations and other
filings with (or notifications to), each Governmental Authority that are
required on the part of any of the Gen/Rx Companies as a condition to any of the
transactions contemplated by this agreement. The Gen/Rx Companies shall deliver
to Apotex copies of all such consents obtained and all approvals,
authorizations, designations, declarations, registrations and filings made.

d. The Gen/Rx Companies shall use their best efforts to
satisfy all of the conditions listed in Sections 8 and 10.

e. None of the Gen/Rx Companies shall at any time, directly or
indirectly make any public announcement (including any announcement to
employees of the Gen/Rx Companies generally) or press release regarding the
existence or negotiations of this agreement or any of the other 1995
Transactions Documents, or the consummation of any of the transactions
contemplated by this agreement or any of the other 1995 Transactions Documents
without the prior written Consent of Apotex, except as required by the
Securities and Exchange Commission.

f. None of the Gen/Rx Companies shall, directly or indirectly,
encourage, solicit or conduct discussions or negotiations with, or provide any
information to, any Person concerning any merger, sale of substantial assets,
sale of securities in the Gen/Rx Companies or any similar transaction involving
any of the Gen/Rx Companies.

g. None of the Gen/Rx Companies shall at any time directly or
indirectly;

i. hold itself out to others as being associated in any
capacity with AI or Apotex; or

ii. use in connection with any business enterprise other
than AI or Apotex any trade name now or heretofore used by or in
connection with the business of AI or Apotex or any variation
thereof.

6. CERTAIN ADDITIONAL RIGHTS & OBLIGATIONS -- GEN/Rx COMPANIES

The Gen/Rx Companies, jointly and severally, covenant and agree that
at all times from and after the date of this agreement:

a. The Gen/Rx Companies shall furnish to AI and Apotex any and
all information pertaining to the Business, Regulatory Approvals, the Merger
Shares or the Premises that AI or Apotex from time to time reasonably requests.
The Gen/Rx Companies shall give to AI, Apotex and their respective
representatives (including accountants, engineers, consultants,

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<PAGE> 9
counsel and employees) full access, during reasonable business hours, to all of
the Business, including the Premises, Contractual Obligations, Books and Records
(including working papers) and other information (including all returns filed
relating to Taxes) and deliver to AI and Apotex true and correct copies of any
Contractual Obligations, Books and Records, Regulatory Approvals and other
information as AI or Apotex from time to time reasonably requests. The Gen/Rx
Companies shall cause their independent public accountant to permit AI's or
Apotex's accounting personnel and accountants to examine, when and as reasonably
requested by AI or Apotex, any records and working papers relating to the Gen/Rx
Companies and shall cause their other representatives to furnish to AI or
Apotex, as the case may be, any information reasonably requested by AI or
Apotex, as the case may be, such independent public accountant or other
representative may possess relating to the Business, the Merger Shares or the
Premises. AI or Apotex, as the case may be, shall be entitled to maintain an
employee reasonably acceptable to the Gen/Rx Companies on the Premises,
including, for the purposes of carrying out the foregoing provisions of this
Section 6(a) and facilitating the orderly commencement of the transactions
contemplated by this agreement. The Gen/Rx Companies shall keep AI and Apotex
(through reports to Apotex) informed as to (i) matters having a material impact
on the Business, the Merger Shares or the Premises, and (ii) matters outside the
ordinary course of business and pertaining to the Business or the Premises. AI
and Apotex shall have the right to communicate from time to time, orally or in
writing, with one or more individual and/or groups of employees of the Gen/Rx
Companies. If this agreement is terminated or the Concurrent Transactions are
not consummated for any reason, all data, information, files, records, copies of
documents, work sheets, and other materials obtained by AI or Apotex or their
representatives in connection with this agreement shall be returned to Gen/Rx.

b. Whether in connection with the execution and delivery of this
agreement or the consummation of the transactions contemplated hereby or by the
1995 Transactions Documents, Apotex shall cause to be drafted, signed and filed
any public announcement or filing with any Governmental Authority that AI or
Apotex may be required to make or file, and each of the Gen/Rx Companies shall
cooperate with the making or filing of any such announcement or filing. On or
prior to the date of this agreement, the Gen/Rx Companies shall have provided to
Apotex the name of any Governmental Authority to which the Gen/Rx Companies deem
it necessary or advisable to disclosure hereunder and this agreement, any
amendment hereto and the consummation of the transactions contemplated hereunder
and thereunder, and the Gen/Rx Companies, AI and Apotex shall cooperate to make
any such disclosure.

c. Gen/Rx shall cause AI's stockholder, Apotex, to receive the First
Transaction Shares and 1,935,034 of the Supplemental Shares at the time of the
Merger. The remaining 2,064,966 Supplemental Shares shall be issued as soon as
practicable following an amendment to Gen/Rx's Certificate of Incorporation
increasing the number of authorized shares of Common Stock to a number large
enough to permit the issue of the balance of the Merger Shares.

d. Apotex shall be entitled to retain all of the Supplemental Shares if,
180 days after the Closing Date, the FDA Letter shall remain in effect or shall
not have been cancelled, terminated or rescinded by the FDA or if, as a result
of or arising out of any FDA Proceedings or action, manufacture, distribution or
sale of any products at the Premises shall have been terminated, discontinued,
suspended, restricted or otherwise limited.

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<PAGE> 10
e. If Apotex is not permitted to retain all of the Supplemental Shares
under the provisions of Section d above, Apotex shall be entitled to
retain 2.5 Supplemental Shares for each dollar by which the consolidated gross
revenues from the sale by AVP-Colorado, Gen/Rx, AI, Collins and any other
entity then owned directly or indirectly by Gen/Rx of products other than those
listed on Schedule 22 to the Gen/Rx Certificate of Representations shall equal
an amount in excess of $5,000,000 in the six-month period during the
Supplemental Shares Measuring Period selected by Apotex. The aggregate number
of Supplemental Shares shall not exceed 4,000,000.

f. For purposes of this agreement, "Supplemental Shares Measuring
Period" means

i. the 21-month period beginning May 1, 1995; or

ii. at Gen/Rx's option, the 36-month period beginning May 1, 1995,
if Gen/Rx shall have received from Apotex warrants to purchase 500,000
shares of the common stock of XeChem and 100,000 shares of common stock
of XeChem.

g. At such time as Apotex shall no longer be entitled to retain any
Supplemental Shares, Apotex shall promptly return to Gen/Rx share certificates
evidencing such Supplemental Shares, and, from and after the date of such
return, Apotex shall no longer be reflected as the holder of such Supplemental
Shares on the Books and Records of Gen/Rx.

h. Gen/Rx shall cause to be submitted to its shareholders at their next
regularly scheduled meeting a proposal to increase in the number of shares of
authorized Common Stock to a number not less than 40,000,000 Shares. Immediately
following such approval, Gen/Rx shall cause its certificate of incorporation to
be amended to increase the total number of authorized shares of the Common
Stock to equal the newly authorized number of shares. As soon as practicable
thereafter, Gen/Rx shall issue to Apotex share certificates evidencing the
Supplemental Shares not theretofore issued.

i. On or prior to June 30, 1995, Gen/Rx shall cause to be submitted to
the Securities and Exchange Commission a registration statement covering shares
of the Common Stock now held by persons who were subscribers in Gen/Rx's 1994
private placement offering.

j. AI shall offer employment to all of the salesmen of the injectables
division of Apotex.

7. CERTAIN RIGHTS & OBLIGATIONS -- AI & APOTEX

AI and Apotex, jointly and severally, agree as follows:

a. Neither AI nor Apotex shall at any time prior to the Closing Date
directly or indirectly:

i. hold itself out to others as being an agent for any of the
Gen/Rx Companies; or

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<PAGE> 11
ii. use in connection with any business enterprise other than
the Business any trade name now or heretofore used by or in connection
with the Business by any of the Gen/Rx Companies or any variation
thereof.

b. Each of AI and Apotex hereby represents and warrants to each of
the Gen/Rx Companies that each of AI and Apotex has all requisite power and
authority to execute, deliver and perform its respective obligations under this
agreement and under the other 1995 Transactions Documents.

c. AI and Apotex shall furnish to the Gen/Rx Companies any and all
information pertaining to the business heretofore conducted by AI and Apotex,
any regulatory approvals required of AI or Apotex, the AI Shares or the AI
Premises that Gen/Rx from time to time reasonable requests. AI and Apotex shall
give to the Gen/Rx Companies and their respective representatives (including
accountants, engineers, consultants, counsel and employees) full access, during
reasonable business hours, to all of the business of AI and Apotex, including
the AI Premises, AI's contractual obligations, AI's books and records (including
working papers) and other information (including all returns filed relating to
Taxes) and deliver to the Gen/Rx Companies true and correct copies of any of
AI's contractual obligations. AI's books and records, such regulatory approvals
and other information relating to AI or Apotex as Gen/Rx from time to time
reasonably requests. AI and Apotex shall cause their independent public
accountant to permit the Gen/Rx Companies' accounting personnel and accountants
to examine, when and as reasonably requested by Gen/Rx, and records and working
papers relating to AI or Apotex and shall cause their other representatives to
furnish to the Gen/Rx Companies any information reasonably requested by the
Gen/Rx Companies, such independent public accountant or other representative
may possess relating to the business of AI or Apotex, the AI Shares, or the AI
Premises. The Gen/Rx Companies shall be entitled to maintain an employee
reasonably acceptable to AI or Apotex, as the case may be, on the AI Premises,
including, for the purposes of carrying out the foregoing provisions of this
Section 7(c) and facilitating the orderly commencement of the transactions
contemplated by this agreement. AI and Apotex shall keep the Gen/Rx Companies
shall keep informed as to (i) matters having a material impact on the Business
of AI and Apotex, the AI Shares or the AI Premises, and (ii) matters outside
the ordinary course of business and pertaining to the Business of AI and
Apotex, the AI Shares or the AI Premises. The Gen/Rx Companies shall have the
right to communicate from time to time, orally or in writing, with one or more
individual and/or groups of employees of AI and Apotex. If this agreement is
terminated or the Concurrent Transactions are not consummated for any reason,
all data, information, files, records, copies of documents, work sheets, and
other materials obtained by any of the Gen/Rx Companies or their
representatives in connection with this agreement shall be returned to Apotex.

d. Apotex shall use its best efforts to cause all
purchasing/supply agreements entered into under the name YORPHARM Inc. to be
transferred to AI, to the extent transferable.

e. In the event that Apotex or AI receives cash proceeds from any
Settlement or judgment relating to

i. the lawsuit with King Pharmaceuticals, Inc. described on
Schedule 2 to the AI Certificate of Representations; or

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<PAGE> 12
ii. its discussions with [Faulding] described in Schedule 7
to the AI Certificate of Representations,

Apotex or AI, as the case may be, shall first apply such proceeds on account of
all costs and expenses of Apotex and AI incurred in connection with either of
the matters described in clauses (i) and (ii) above (including, without
limitation, costs and expenses against which Apotex and/or AI have agreed to
indemnify any of the Gen/Rx Companies), and second shall pay any remaining
proceeds to Gen/Rx,

f. Gen/Rx shall cause its independent public accountants to prepare
a reviewed balance sheet of AI as at the Closing Date within 180 days. Such
accountants shall deliver a copy of such reviewed balance sheet promptly to
Apotex and to Gen/Rx, and, absent manifest error, AI's balance sheet as of the
Closing Date as determined by such accountants shall be deemed final for all
purposes. In the event that the amount of tangible assets (including accounts
receivable) shown on such Closing Date balance sheet shall exceed liabilities
shown thereon by an amount less than $1,500,000, Apotex shall promptly convey
to AI an amount of additional assets, in such form as Apotex in its sole
discretion shall determine, equal to the amount by which $1,500,000 exceeds
such excess; such independent public accountants shall confirm the amount of
such assets in writing to Apotex, AI and Gen/Rx. In the event that the amount
of such excess shall exceed $1,500,000, then the amount of such excess shall be
deemed an advance of under the Line of Credit Note as of the Closing Date.

g. If Apotex shall be required to convey to AI any such additional
assets, Apotex shall pay to AI an amount of interest calculated at the rate
payable under the Line of Credit Note for the amount of such assets for the
period beginning on the Closing Date and ending on the date on which such assets
shall have been conveyed to AI.

8. CONDITIONS TO THE OBLIGATIONS OF AI AND APOTEX.

a. The respective obligations of AI and Apotex under this agreement
to consummate the transactions and to take the actions contemplated hereby on
or prior to the Closing Date shall be subject to the satisfaction, or waiver
by AI or Apotex, as the case may be, of each of the following conditions:

i. Each of the Gen/Rx Companies and the Gen/Rx Sub shall
have performed and complied in all material respects with each and
every covenant, agreement and condition required by this agreement
to be performed by it prior to or at the Closing Date;

ii. Each of the representations and warranties of the
Gen/Rx Companies and the Gen/Rx Sub contained herein or in any of the
1995 Transactions Documents shall be true, complete and accurate on and
as of the date when made and the Closing Date; and

b. This agreement shall be of no force or effect until all of
the conditions set forth in this Section 8 are either satisfied or waived. All
of said conditions are material and for Apotex's benefit and may only be waived
in writing by Apotex. Waiver of any one condition shall not imply the waiver of
any other condition. Each of the Gen/Rx Companies and the Gen/Rx

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<PAGE> 13
Sub acknowledges that Apotex may insist upon strict performance of each and
every one of said conditions.

c. Apotex and AI shall have received a Phase I environmental
investigation of the Premises satisfactory in form and substance to Apotex and
AI prepared by an environmental engineering or consulting firm satisfactory to
Apotex and AI.

d. Apotex and AI shall have received a due diligence report by an
accounting firm of national reputation with regard to the Books and Records,
Taxes and financial statements of the Gen/Rx Companies satisfactory in form and
substance to Apotex and AI.

e. Neither the Business nor any of Gen/Rx Companies's material
properties shall have been, and shall be threatened to be, materially affected
adversely in any way as a result of fire, explosion, earthquake, disaster,
accident, labor dispute, change in technology, obsolescence of product or
service, resignation of key personnel, any action by the United States or any
other governmental authority, flood, drought, embargo, riot, civil disturbance,
uprising, activity of armed forces, or act of God or public enemy.

f. The shareholders and board of directors of AI shall have approved
this agreement and the other 1995 Transactions Documents and the transactions
contemplated hereby and thereby.

g. The board of directors of Apotex shall have approved this agreement
and the other 1995 Transactions Documents and the transactions contemplated
hereby and thereby.

h. The board of directors of Apotex, Inc., an Ontario corporation and
an affiliate of Apotex, shall have approved this agreement and the other 1995
Transactions Documents and the transactions contemplated hereby and thereby.

i. The form and substance of all legal matters contemplated herein and
of all documents used or delivered hereunder shall be approved by and
acceptable to AI and Apotex and to their special counsel.

9. CONDITIONS TO OBLIGATIONS OF THE GEN/Rx COMPANIES AND THE GEN/Rx SUB.

The respective obligations of the Gen/Rx Companies and the Gen/Rx Sub
under this agreement to consummate the transactions and to take the actions
contemplated hereby at the Closing shall be subject to the satisfaction, or
waiver by them, of each of the following conditions:

a. Each of AI and Apotex shall have performed and complied in all
material respects with each and every covenant, agreement and condition required
by this agreement to be performed by them, respectively, prior to or at the
Closing Date.

b. Each of the representations and warranties of each of AI and Apotex
contained herein or in any of the 1995 Transactions Documents shall be true,
complete and accurate as of the date when made and the Closing Date.

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<PAGE> 14
c. Neither AI's business nor any of AI's material properties shall have
been, and shall be threatened to be, materially affected adversely in any way as
a result of fire, explosion, earthquake, disaster, accident, labor dispute,
change in technology, obsolescence of product or service, resignation of key
personnel, any action by the United States or any other governmental authority,
flood, drought, embargo, riot, civil disturbance, uprising, activity of armed
forces, or act of God or public enemy.

d. The shareholder and board of directors of Gen/Rx Sub shall have
approved this agreement and the other 1995 Transactions Documents and the
transactions contemplated hereby and thereby.

e. The board of directors of Gen/Rx shall have approved this agreement
and the other 1995 Transactions Documents and the transactions contemplated
hereby and thereby.

f. The form and substance of all legal matters contemplated herein and
of all documents used or delivered hereunder shall be approved by and acceptable
to Gen/Rx Companies and to their special counsel.

10. CONDITIONS TO THE OBLIGATIONS OF THE PARTIES.

The respective obligations of each of the Gen/Rx Companies, AI and Apotex
under this agreement to consummate the transactions and to take the actions
contemplated hereby at the Closing shall be subject to the satisfaction, or
waiver by each of the Gen/Rx Companies, AI and Apotex of the following
conditions:

a. There shall be no

i. Proceeding that would have a material adverse effect on

(1) the business, operations, assets or condition (financial or
otherwise) of any of the Gen/Rx Companies, the Gen/Rx Sub, AI or
Apotex; or

(2) the transactions contemplated hereby or by the 1995 Transactions
Documents, the rights or remedies of any Party hereunder or under
the 1995 Transactions Documents or on the ability of any Party to
perform its obligations hereunder or under the 1995 Transactions
Documents;

ii. Injunction, writ, preliminary restraining order or any order of
any nature issued by any Governmental Authority directing that the
transactions provided for herein or in any of the 1995 Transactions
Documents not be consummated as herein or therein provided; or

iii. Requirement of Law pursuant to which any of the Gen/Rx Companies
or the Gen/Rx Sub shall have been suspended from conducting all or any
part of its Business at any time within 180 days prior to the Closing
Date, other than as disclosed on the Schedules delivered pursuant to the
Certificate of Representations; or

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<PAGE> 15
iv. Voluntary suspension within 180 days prior to the
Closing Date due to CGMP practices deficiencies evident from any
FDA plant inspection, other than as disclosed on the Schedules
delivered pursuant to the Certificate of Representations; or

v. Audit showing any CGMP practices deficiencies, other
than as disclosed on Schedule 9 delivered pursuant to the
Certificate of Representations, at any time within six months
preceding the Closing Date.

b. The Gen/Rx Companies shall have received a "fairness
opinion" satisfactory in form and substance to the boards of directors of
Gen/Rx, AI and Apotex regarding the transactions contemplated by this agreement
and the other 1995 Transactions Documents.

11. JOINT & SEVERAL OBLIGATIONS.

The respective representations, warranties, covenants or agreements of
the Gen/Rx Companies set forth in this agreement or any of the other 1995
Transactions Documents are joint and several, except as otherwise specifically
provided herein. The obligations of the Gen/Rx Companies and AI under the Loan
Agreement in favor of Apotex are joint and several from and after the Closing
Date.

12. CERTAIN REMEDIES & LEGAL MATTERS.

a. This agreement, the Schedules and Exhibits hereto, the 1995
Transactions Documents and all documents or instruments executed and delivered
pursuant hereto or thereto shall be deemed to be made in the State of New
Jersey and shall be governed by the internal laws of said state.

b. No Party shall be required to elect any remedy available
for the breach of any of 1995 Transactions Documents, but each of them may
pursue all or any such remedies, together or in the alternative. Every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or thereunder or now or hereafter
existing at law or in equity or otherwise. Assertion or employment of any right
or remedy hereunder or thereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Every right and remedy given by any of 1995 Transactions Documents or by law to
any party may be exercised from time to time, and as often as may be deemed
expedient, by such party, as the case may be. No delay or omission of any party
to exercise any right or remedy accruing upon any default under any 1995
Transactions Document shall impair any such right or remedy or constitute a
waiver of any such default or an acquiescence therein.

c. Each Party hereby

i. consents to be subject to the personal jurisdiction of
the New Jersey Courts in any Proceeding relating to, arising
out of or in connection with this agreement or any of the
other 1995 Transactions Documents;

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ii. agrees that, in any such Proceeding, service of process or
notice that is in writing and sent by certified or registered mail,
return receipt requested, postage prepaid, shall have the same force and
effect as if notice were personally served upon such Party;

iii. agrees that any such Proceeding shall be litigated in the
New Jersey Courts; and

iv. further agrees that any such New Jersey Court shall be
entitled to award to the prevailing Party in any such Proceeding such
Party's reasonable legal fees and expenses, in addition to any other
amount to which such prevailing Party may be entitled.

d. Each of the Parties agrees that money damages (even if
ascertainable) would be inadequate to compensate them for their damages
resulting from the failure on the part of the other Parties to perform their
obligations under this agreement to comply with the provisions of Sections 5, 6
and 7 of this agreement. Each of the parties also recognizes the unique nature
of the Merger Shares. There is no adequate remedy at law for any breach of their
respective covenants contained in Sections 5, 6, and 7 of this agreement.
Therefore, each of the Parties expressly agrees that any breach or threatened
breach of any such provision of this agreement shall entitle Apotex, in addition
to any other legal remedy available to it and without the necessity of providing
actual damages or the posting of any bond or other security and notwithstanding
the pendency of any other proceeding, to apply to the New Jersey Courts for an
injunction, temporary and/or permanent, to prevent any violation of any such
provision of this agreement or otherwise to specifically enforce any of such
provisions of this agreement, and each of the Parties acknowledges and agrees
that such injunction would, in those circumstances, be necessary to protect
Apotex's interests. If any Proceeding ensues to enforce the injunctive relief
provided herein, for actual breach of this agreement or any of the other 1995
Transactions Documents, then any Party against whom any such injunction may
issue shall pay all of the reasonable professional fees and disbursements
incurred by the Party that sought any such injunctive relief.

e. Each of the Gen/Rx Companies, the Gen/Rx Sub, AI and Apotex
hereby knowingly, voluntarily and intentionally WAIVES THE RIGHT TO A TRIAL BY
JURY in respect of any litigation based upon any of the 1995 Transactions
Documents or any other document or obligation resulting from or relating to any
agreement or document in connection herewith or therewith, any course of
dealing, statements (whether oral or written) or actions of any party, and
regardless of whether such right arose and was created as a result of statutory
enactment. Each of the Gen/Rx Companies, the Gen/Rx Sub acknowledges that this
provision is a material inducement for Apotex's entering into the 1995
Transactions Documents.

f. If Apotex has instituted any Proceeding to enforce any right
or remedy under any of 1995 Transactions Documents and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
Apotex or AI, as the case may be, then and in every such case each of the Gen/Rx
Companies, the Gen/Rx Sub, Apotex and AI shall, subject to any determination in
such Proceeding, be restored to their former positions hereunder, and thereafter
all rights and remedies of Apotex and AI shall continue as though no such
Proceeding had been instituted.

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g. Any provision of any of the 1995 Transactions Documents or
part thereof that in any way contravenes any applicable law of any jurisdiction
or that is declared by any court to be void or unenforceable shall to the extent
of such contravention of law, invalidity or unenforceability be deemed to be
separate and shall not affect any other provision or part of the 1995
Transactions Documents and shall not affect the interpretation of any of the
1995 Transactions Documents in any other jurisdiction.

13. INDEMNIFICATION OBLIGATIONS.

a. Subject to the limitations hereinafter set forth, the Gen/Rx
Companies shall indemnify and save AI, Apotex, and each of their respective
shareholders, Affiliates, officers and directors harmless from, against, for
and in respect of:

i. any Loss suffered, sustained, incurred or required
to be paid by any indemnified party because of

(1) the untruth, inaccuracy or breach of any representation,
warranty, agreement or covenant of any of the Gen/Rx Companies
or the Gen/Rx Sub contained in or made in connection with this
agreement or any of the other 1995 Transactions Documents;

(2) the assertion against AI or Apotex of any liability or
obligation of any of the Gen/Rx Companies or any of their
respective Affiliates or in connection with or related to the
Gen/Rx Companies' or the Gen/Rx Sub operations prior to the
Closing Date or any product manufactured or sold by any of the
Gen/Rx Companies prior to the Closing Date, whether absolute or
contingent, matured or unmatured, known or unknown;

(3) the assertion against AI or Apotex of any liability or
obligation of the Gen/Rx Companies or any of their respective
Affiliates or related to the Gen/Rx Companies' operations at any
time, whether absolute or contingent, matured or unmatured,
known or unknown;

(4) any storage, treatment, discharge, cleanup or disposal of any
airborne, solid or hazardous wastes or any other toxic or
hazardous substances on or into the atmosphere on or over any of
the real property owned, leased or otherwise occupied by any of
the Gen/Rx Companies;

(5) any personal injury, death or property damage or any warranty
or guaranty attributable to any product manufactured, processed
or sold by any of the Gen/Rx Companies at any time;

ii. all reasonable costs and expenses (including, without
limitation, attorney's fees, interests and penalties) incurred by any
indemnified party in connection with any Proceeding, demand, assessment
or judgment incident to any of the matters indemnified against in this
Section 13.

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<PAGE> 18
b. Subject to the limitations hereinafter set forth, AI and Apotex
shall indemnify and save the Gen/Rx Companies and each of their respective
shareholders, Affiliates, officers and directors harmless from, against, for and
in respect of:

i. any Loss suffered, sustained, incurred or required to be paid by any
indemnified party because of

(1) the untruth, inaccuracy or breach of any representation, warranty,
agreement or covenant of Apotex contained in or made in connection
with this agreement or any of the other 1995 Transactions Documents;

(2) the assertion against any of the Gen/Rx Companies of any liability
or obligation of Apotex or in connection with or related to Apotex's
operations prior to the Closing Date or any product sold by Apotex
prior to the Closing Date, whether absolute or contingent, matured
or unmatured, known or unknown;

(3) the assertion against any of the Gen/Rx Companies of any liability
or obligation of Apotex or in connection with or related to Apotex's
operations not related to the Gen/Rx Companies' or AI's products at
any time, whether absolute or contingent, matured or unmatured,
known or unknown;

(4) any storage, treatment, discharge, cleanup or disposal of any
airborne, solid or hazardous wastes or any other toxic or hazardous
substances on or into the atmosphere on or over any of the real
property owned, leased or otherwise occupied by AI or Apotex;

(5) any personal injury, death or property damage or any warranty or
guaranty attributable to any product other than the Gen/Rx
Companies' Products sold by Apotex at any time;

(6) the lawsuit with King Pharmaceuticals, Inc. described in Schedule 2
to the AI Certificate of Representations; and

ii. all reasonable costs and expenses (including, without limitation,
attorney's fees, interests and penalties) incurred by any indemnified
party in connection with any Proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 13.

14. INDEMNIFICATION PROCEDURES.

a. The obligations and liabilities of each indemnifying party hereunder
with respect to claims resulting from the assertion of liability by the other
Party or third parties shall be subject to the following terms and conditions:

i. The indemnified party shall give prompt written notice to the
indemnifying party of any claim that might give right to a claim by the
indemnified

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<PAGE> 19
party against the indemnifying party based on the indemnity agreements
contained in Section 13 hereof, stating the nature and basis of said
claims and the amounts thereof, to the extent known (but the obligations
of the indemnifying party under Sections 13 and 14 shall not be impaired
by failure to give such notice except to the extent such failure
actually prejudices the rights of the indemnifying party).

ii. In the event any Proceeding is brought against the indemnified
party, with respect to which the indemnifying party may have liability
under the indemnity agreements contained in Section 13 hereof, the
Proceeding shall, upon the written acknowledgment by the indemnifying
party that it is obligated to indemnify under such indemnity agreement,
be defended (including all Proceedings on appeal or for review that
counsel for the indemnified party shall deem appropriate) by the
indemnifying party. The indemnified party shall be entitled to
participate in the defense of any such Loss or potential Loss at its own
expense (subject to the following sentence), and, in the event that any
indemnified party elects to participate in the defense of such Loss or
potential Loss, the indemnifying parties shall consult and cooperate
with the indemnified party on a reasonable basis in the defense of or
against any such Loss or potential Loss. The indemnified party shall
have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the indemnified party's own
expense unless

(1) the employment of such counsel and the payment of such fees and
expenses both shall have been specifically authorized by the
indemnifying party in connection with the defense of such
Proceeding, or

(1) such indemnified party shall have reasonably concluded and
specifically notified the indemnifying party that there may be
specific defenses available to it that are different from or
additional to those available to the indemnifying party or that such
action, suit or proceeding involves or could have an effect upon any
matter beyond the scope of the indemnity agreements contained in
Section 13 hereof;

in any of such events the indemnifying party, to the extent made
necessary by such defenses, shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party. In such
case only that portion of such fees and expenses reasonably related to
matters covered by the indemnity agreements contained in Section 13
hereof shall be borne by the indemnifying party. The indemnified party
shall be kept fully informed of such Proceeding at all stages thereof
whether or not it is so represented. The indemnifying party shall make
available to the indemnified party and its attorneys and accountants all
books and records of the indemnifying party relating to such
Proceedings, and the Parties hereto agree to render to each other such
assistance as they may reasonably require of each other in order to
ensure the proper and adequate defense of any such Proceeding.

iii. If the indemnifying party, within a reasonable time after notice of
any such Loss or potential Loss, fails to adequately defend the
indemnified parties, then the indemnified parties will (upon further
notice to the indemnifying parties)

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<PAGE> 20
have the right to undertake the defense or Settlement of such Loss
or potential Loss on behalf of, and for the account and risk of the
indemnifying parties, subject to the right of the indemnifying parties
to participate in the defense of such Loss or potential Loss at any time
prior to Settlement or final determination thereof.

iv. Anything in this Section 14 to the contrary
notwithstanding, the indemnifying parties shall obtain the prior written
approval of the indemnified parties before entering into any Settlement
of any Loss or potential Loss or the entry of any judgment with respect
to any Loss or potential Loss, that does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the
indemnified parties a release from all liability in respect of such Loss
or potential Loss.

b. Except as herein expressly provided, the remedies provided in
Sections 13 and 14 hereof shall be cumulative and shall not preclude
assertion by any Party of any other rights or the seeking of any other rights
or remedies against any other Party hereto. No failure or delay by any Party
in exercising any of its rights or remedies hereunder or under any of the other
1995 Transactions Documents will operate as a waiver thereof, nor will any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the parties provided in this Agreement are cumulative and
not exclusive of any rights or remedies provided by law.

c. Notwithstanding the foregoing, under no circumstances will AI
or Apotex be required to pay any amount of damages in excess of the amount of
funding otherwise required under the various 1995 Transactions Documents. The
rights and remedies provided in Sections 13 and 14 hereof shall survive
the termination of this Agreement and the other 1995 Transactions Documents.
Each of the Gen/Rx Companies and the Gen/Rx Sub hereby waives any claim it now
has or may ever have against AI or Apotex for any special, consequential,
punitive or indirect damages. UNDER NO CIRCUMSTANCES SHALL AI OR APOTEX BE
LIABLE TO ANY OF THE GEN/Rx COMPANIES, THE GEN/Rx SUB OR ANY OTHER PERSON FOR
ANY LOSS OF PROFITS OR SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES OF ANY KIND
WHATSOEVER, EVEN IF SUCH PARTY HAS BEEN ADVISED AS TO THE POSSIBILITY OF SUCH
DAMAGES.

15. CERTAIN DEFINITIONS.

As used in this agreement or any of the other 1995 Transactions
Documents,

a. "Affiliate" means any corporation or other partnership or other
entity that a Person, directly or indirectly (through one or more
intermediates), either controls, is controlled by, is under common control
with, or owns five percent (5%) or more beneficial interest, and, with respect
to individuals, the members of their families.

b. "AI" means AUSA, Inc., a Delaware corporation.

c. "AI Certificate of Representations" means the Certificate of
Representations, substantially in the form of Exhibit D to this agreement,
dated the Closing Date, signed by Responsible Officers of AI and Apotex.

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d. "AI Common Stock" means the common stock of AI, no par value.

e. "AI Premises" means AI's chief executive offices.

f. "AI Shares" means the 1,000 outstanding shares of capital stock of AI
immediately prior to the Closing Date.

g. "ANADA" means an "abbreviated new animal drug application" under the
Federal Food, Drug and Cosmetic Act, codified at 21 U.S.C. 360(b).

h. "ANDA" means an "abbreviated new drug application" under Section 505(j)
of the United States of America Food, Drug and Cosmetics Act, codified at 21
U.S.C. 355(j).

i. "Apotex" means Apotex USA, Inc., a Delaware corporation.

j. "Assignment of Rents" means the Assignment of Leases and Rents dated the
Closing Date substantially in the form of Exhibit R to this agreement.

k. "Audited Financial Statements" has the meaning ascribed to it in Section
30(a) of the Certificate of Representations.

l. "AVP-Colorado" means American Veterinary Products, Inc., a Colorado
corporation.

m. "Books and Records" means all books and records, including ledgers,
journals, receipts, files, orders, correspondence, financial statements,
computer software, including programs, tapes and disks, computer printouts, data
and other financial and business information.

n. "Business" means the business carried on by the Gen/Rx Companies in
connection with the Subject Products.

o. "Business Day" means a day other than a Saturday, Sunday, legal holiday
or other day on which banking institutions in the State of New York are
authorized or required by law to close.

p. "CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. 9601 et seq., and the regulations promulgated
thereunder.

q. "Certificate of Merger" means the Certificate of Merger dated the
Closing Date executed and delivered by AI, substantially in the form of Exhibit
A to the Agreement and Plan of Merger.

r. "Certificate of Representations" means the Certificate of
Representations, substantially in the form of Exhibit C to this agreement, dated
the Closing Date, signed by Responsible Officers of the respective Gen/Rx
Companies.

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<PAGE> 22
s. "CGMP" means Current Good Manufacturing Practices, as determined from
time to time by any Governmental Authority, applicable to the Subject Products.

t. "Closing" means the consummation of the transactions contemplated by
this agreement.

u. "Closing Date" means the date on which the Closing occurs.

v. "Collins" means Collins Laboratories, Inc., a Colorado corporation.

w. "Common Stock" means Gen/Rx's common stock, par value $.004 per share.

x. "Concurrent Transactions" means, collectively, the transactions
contemplated by this agreement and the other 1995 Transactions Documents and
intended to be consummated concurrently with the consummation of the
transactions contemplated by this agreement, on the date of this agreement or on
the Closing Date, or thereafter as contemplated by this agreement.

y. "Consents" means any consents, Permits, approvals, filings, actions,
waivers and similar writings.

z. "Contractual Obligation", as applied to any Person, means any provision
of any security issued by that person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.

aa. "Current Balance Sheet" has the meaning ascribed to it in Section 30(d)
of the Certificate of Representations.

ab. "Deed of Trust" means the deed of trust made by AVP-Colorado dated
March 24, 1995, in favor of Shermfin.

ac. "Deed of Trust Amendment" means the amended and restated deed of trust
dated the Closing Date made by AVP-Colorado, substantially in the form of
Exhibit Q to this agreement.

ad. "DeTemple" means John DeTemple, President of Gen/Rx.

ae. "Directly or indirectly" means any action as an individual, principal,
agent, or trustee, as a partner or in conjunction with any entity, or through
the means of any Affiliate, corporation, partnership, association, trust or
other entity, or by any other means; or by acting as an officer, director,
employee, agent, consultant, contractor or investor of any corporation or entity
(other than solely as an investor owning one percent (1%) or less of the stock
of any corporation having more than 500 stockholders).

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<PAGE> 23
af. "Effective Date" has the meaning ascribed to it in the Plan and
Agreement of Merger.

ag. "Encumbrance" means any pledge, lien, security interest, claim,
charge, escrow, encumbrance, mortgage, indenture, easement, license, security
agreement, limitation on transfer, option, right of first refusal or other
restriction on any of the Equity Interests.

ah. "Environmental Conditions" means any environmental
contamination or pollution threatened contamination or pollution arising out of
any release or discharge or threatened release or discharge of Hazardous
Substances into the environment.

ai. "Environmental Laws" means, collectively, all federal,
regional, state, county or local laws, statutes, ordinances, decisional law,
rules, regulations, codes, orders, decrees, notices, directives and judgments
relating to public health or safety, pollution, damage to or protection of the
Environment, Environmental Conditions, Releases or threatened Releases of
Hazardous Substances into the Environment or the use, manufacture, processing,
distribution, treatment, storage, generation, disposal, transport or handling of
Hazardous Substances, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") (42 U.S.C.
Section 9601 et seq.), the Resource Conservation and Recovery Act ("RCRA") (42
U.S.C. Section 6901 et seq.), the Atomic Energy Act, 42 U.S.C. Section 2014 et
seq., the Clean Water Act (33 U.S.C. Section 1251 et. seq.), the Toxic
Substances Control Act ("TSCA") (15 U.S.C. Section 2601 et seq.), and their
implementing regulations.

aj. "Equity Interests" means, collectively, the Merger Shares and
any other shares of the Common Stock into which any indebtedness of Gen/Rx in
favor of Apotex may be converted or any other securities that are or may be
issued by any of the Gen/Rx Companies and that Apotex may from time to time
have the right to buy from any of the Gen/Rx Companies.

ak. "FDA" means the United States of America Food and Drug
Administration and any successor thereto.

al. "FDA Letter" means the warning letter dated November 28, 1994
of the FDA to AVP-Colorado, a copy of which has been previously furnished to
Apotex.

am. "First Transaction Shares" means 11,353,840 shares of the
Common Stock to be issued immediately upon the merger of Gen/Rx Sub into Al.

an. "Generally Accepted Accounting Principles" means generally
accepted accounting principles in effect in the United States of America from
time to time.

ao. "Gen/Rx" means Gen/Rx, Inc., a New York corporation.

ap. "Gen/Rx Companies" means, collectively, Gen/Rx, AVP-Colorado
and Collins.

aq. "Gen/Rx's Financial Statements" has the meaning ascribed to it
in Section 30(a) of the Certificate of Representations.

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ar. "Gen/Rx Sub" means GEN/Rx Acquisition Subsidiary, Inc., a Delaware
corporation, the special subsidiary of Gen/Rx formed in contemplation of the
transactions described in the 1995 Transactions Documents.

as. "Gen/Rx Warrant" means the warrant dated the Closing Date executed by
Gen/Rx in favor of Apotex evidencing the right to purchase shares of the Common
Stock, substantially in the form of Exhibit F to this agreement.

at. "Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

au. "Hazardous Substances" means, collectively,

i. any pollutant, contaminant, petroleum, crude oil or any fraction
thereof or hazardous waste or hazardous substance, within the meaning of
such terms under CERCLA or any other Environmental Law;

ii. any other hazardous or toxic substance or material, or any material
requiring investigation or remediation, within the meaning of any
Environmental Law applicable to the Premises or operations conducted
thereon; and

iii. any other regulated substance or material.

av. "Including," "includes" and "include" means, respectively, "including,
without limitation," "includes, without limitation" and "include, without
limitation".

aw. "Interim Financial Statements" has the meaning ascribed to it in
Section 30(a) of the Certificate of Representations.

ax. "Invention" means any idea, design, concept, technique, software,
invention, discovery, improvement, method or know-how, whether or not
patentable, resulting from the development of any of the Subject Products and
first conceived or first reduced to practice solely by any of the Gen/Rx
Companies or jointly by any of the Gen/Rx Companies, AI or Apotex at any time
during or following the term of this Agreement.

ay. "LC Loan Commitment" has the meaning ascribed to it in Section 1(a)(i)
of the Loan Agreement.

az. "Line of Credit Loans" means loans advanced under the LC Loan
Commitment or evidenced by the Line of Credit Note.

ba. "Line of Credit Note" means the Line of Credit Note dated the Closing
Date made by Gen/Rx, AVP-Colorado, Collins and AI, substantially in the form of
Exhibit I to this agreement.

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bb. "Line of Credit Period" means the period from and including the
Closing Date to and including the Loan Maturity Date or such earlier date on
which the LC Loan Commitment shall terminate as provided in the Loan Agreement.

bc. "Listed Drug" has the meaning ascribed to it in 21 U.S.C
355(j).

bd. "Loan Agreement" means the Loan Agreement dated the Closing
Date among the Gen/Rx Companies, AI and Apotex substantially in the form of
Exhibit B to this agreement.

be. "Loan Maturity Date" means the first Business Day of the first
month after the month in which third anniversary of the Closing Date occurs;

bf. "Loss" means any loss, liability, Proceeding, claim, damage,
demand, deficiency, judgment, penalty, fine, cost (including costs of
investigation), expense (including reasonable legal and consulting fees and
expenses) or Settlement, including interest and attorneys' and expert and
consultant's fees, costs and expenses, arising out of any of the foregoing.

bg. "Marketing Agreement" means the marketing agreement dated the
Closing Date by and between AVP-Colorado and a corporation to be formed by John
DeTemple, substantially in the form of Exhibit E to this Agreement.

bh. "Master Agreement" means this Amended and Restated Master
Agreement, which amends and restates in its entirety the Master Agreement dated
January 26, 1995 among the Parties.

bi. "Material Consents" has the meaning ascribed to it in Section
5(c) of this agreement.

bj. "Merger" means the merger of AI into Gen/Rx Sub pursuant to the
Plan and Agreement of Merger.

bk. "Merger Shares" means the shares of the Common Stock that
Apotex shall be entitled to receive as a result of the Merger.

bl. "Mortgaged Premises" means the real property described on
Exhibit N to this agreement.

bm. "Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) or ERISA.

bn. "Notice of Borrowing" has the meaning ascribed to it in Section
1(e) of the Loan Agreement.

bo. "New Jersey Courts" means any state or federal court located in
the State of New Jersey.

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bp. "1995 Transactions Documents" means, collectively, this agreement and
those certain agreements and other documents that are or are scheduled to be
executed and delivered or entered into concurrently with this agreement or
concurrently with each other on the Closing Date or thereafter as contemplated
by this agreement.

bq. "OSHA" means Occupation Safety and Health Act.

br. "Outside Closing Date" means July 31, 1995.

bs. "Parties" means, collectively, the signatories to this agreement or to
any of the other 1995 Transactions Documents.

bt. "Permits" means, as to any person, all consents, approvals,
certificates and other licenses and permits (as any of the same may be modified
or otherwise amended) necessary for ownership, operation or use of the Business
or for any of the Merger Shares in accordance with all Requirements of Law.

bu. "Person" means any individual, corporation, partnership, trust,
association, Governmental Authority or any other entity.

bv. "Plan" means at any particular time, any employee benefit plan (i)
which is covered by ERISA and in respect of which a company or any subsidiary
thereof or a commonly controlled entity thereof, is an employee as defined in
Section 3(5) of ERISA, or (ii) with respect to which a company or a commonly
controlled entity incurs liability under Section 4069 of ERISA.

bw. "Plan and Agreement of Merger" means the Plan and Agreement of Merger
dated the Closing Date between AI and the Gen/Rx Sub, substantially in the form
of Exhibit A attached to this agreement.

bx. "Post-Merger AI Shares" means the shares of AI's Common Stock held of
record by Gen/Rx after the Merger.

by. "Premises" means the Gen/Rx Companies' plant or other locations where
the Gen/Rx Companies develop, manufacture, handle, store or otherwise have
control over the Subject Products.

bz. "Proceeding" means any civil proceeding, suit, action, dispute or claim
(or to the best knowledge of any of any of the Gen/Rx Companies, on the one
hand, or AI or Apotex, on the other hand, as the case may be, any civil or
administrative investigation), including any by, involving or before any
arbitrator or any Governmental Authority, formal or informal.

ca. "Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Internal Revenue Code.

cb. "Regulatory Approvals" means all Consents, permits, approvals and
authorizations of or filings with any Governmental Authority or industry
self-regulatory body

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necessary or desirable in connection with a Party's obligations under the 1995
Transactions Documents.

cc. "Remedial Action" means any and all:

i. investigations of Environmental Conditions of any kind
or nature whatsoever, including but not limited to assessments, remedial
investigations, sampling or monitoring; or

ii. actions taken to address Environmental Conditions of
any kind or nature whatsoever, including the use, implementation,
application, installation, operation or maintenance of removal actions,
in-situ or ex-situ remediation technologies applied to the surface and
sub-surface soils including biological treatment, land farming, soil
vapor extraction, soil washing, solvent extraction and thermal
desportion, excavation and off-site treatment or disposal of sails,
wells, sumps, trenches or other systems for the recovery of groundwater
or free product, systems for long term treatment of surface water or
groundwater, engineering controls or institutional controls.

cd. "Reportable Event" means any of the events set forth in Section
4043 of ERISA.

ce. "Requirement of Law" means, as to any Person, the certificate
of incorporation and bylaws or other organizational or governing documents of
such Person, and any rule, regulation, ordinance, law, judicial decision,
determination, order, including an injunction, judgment, writ, award or decree,
Permit, grant, license or other authorization of an arbitrator, court or other
Governmental Authority, in each case applicable to or binding upon such Person,
including the conduct of its business, or any of its properties, assets or
revenues or to which such Person or any of its properties, assets or revenues
is subject, including those relating to environmental, land-use zoning and
product safety matters.

cf. "Responsible Officer" means, with respect to a corporation,
its Chairman of the Board, President, any Vice President, Secretary or
Treasurer.

cg. "Restricted Securities" means any Equity Interests that are
"restricted securities" as such term is used in Rule 144.

ch. "Rule 144" means Rule 144, as in effect from time to time,
promulgated under the Securities Act.

ci. "Securities Act" means the Securities Act of 1933, as in effect
from time to time.

cj. "Securities and Exchange Commission" means the Securities and
Exchange Commission of the United States of America, and any successor
Governmental Authority.

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ck. "Securities Exchange Act" means the Securities Exchange Act of
1934, as in effect from time to time.

cl. "Security and Pledge Agreement" means the Security and Pledge
Agreement dated the Closing Date among the Gen/Rx Companies and Apotex,
substantially in the form of Exhibit O attached to this agreement.

cm. "Security Instruments" means, collectively, the Assignment of
Rents, the Security and Pledge Agreement, the Deed of Trust Amendment and the
various other documents and instruments (including, without limitation, UCC-1
Financing Statements) that create, evidence or are useful in creating,
evidencing or perfecting Encumbrances in favor of Apotex on the assets and
Premises of any of the Gen/Rx Companies and AI.

cn. "Settlement" means any settlement, adjustment or other
compromise.

co. "Shermfin" means Shermfin Corp., a Delaware corporation.

cp. "Solvency Certificate" means a solvency certificate
substantially in the form of Exhibit P to this agreement.

cq. "Supplemental Shares" means 4,000,000 shares of the Common
Stock issuable pursuant to and as provided in Section 6(c) hereof.

cr. "Supplemental Shares Measuring Period" has the meaning ascribed
to it in Section 6(f) hereof.

cs. "Taxes" means any federal, state or local tax, fine, penalty
and/or interest (with respect to the foregoing).

ct. "Term Loan" has the meaning ascribed to it in Section 1(a)(ii)
of the Loan Agreement.

cu. "Term Loan Advance" means each advance of principal in respect
of the Term Loan; it is anticipated that the entire Term Loan Commitment will
be advanced in a single advance on the Closing Date.

cv. "Term Loan Commitment" means a maximum of $500,000.

cw. "Term Note" means the Term Note dated the Closing Date made by
Gen/Rx, AVP-Colorado, Collins and AI, substantially in the form of Exhibit J to
his agreement.

cx. "Territory" means the United States of America, together with
its possessions, territories and commonwealths, and Canada.

cy. "U.S. Dollars" means lawful currency of the United States of
America.

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<PAGE> 29
16. NOTICES.

All notices and other communications provided for in this agreement shall
be deemed to have been duly given to a Party if mailed by registered or
certified mail, postage prepaid, or by Federal Express or similar overnight
delivery service, or by facsimile transmission or electronic mail confirmed by
first class mail, to the address set forth on Schedule A to this agreement. A
copy of any notice to AI or Apotex shall be given, in the manner set forth
above, to:

Sills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102-5400
Attention: Steven M. Goldman, Esq.
Phone: (201) 643-5099
Fax: (201) 643-6500

A copy of any notice given hereunder to the Gen/Rx Companies shall be given in
the manner set forth above, to:

Robinson St. John & Wayne
2 Penn Plaza
Newark, New Jersey 07105
Attention: William P. Oberdorf, Esq.
Phone: (201) 491-3300
Fax: (201) 491-3333

17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

All representations, warranties, covenants and agreements made hereunder,
in any of the other 1995 Transactions Documents or in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this agreement and the other 1995 Transactions
Documents and the consummation of the transactions contemplated hereby.

18. TERMINATION OF AGREEMENT.

a. This agreement (except for the provisions of Section 19 which shall
continue in effect) and the transactions contemplated hereby may be terminated
and abandoned at any time prior to the Closing Date:

i. by the mutual written consent of the Gen/Rx Companies, on the one hand
and AI and Apotex, on the other hand, in writing;

ii. by the Gen/Rx Companies, on the one hand or Apotex, on the other hand,
upon written notice given to the other after entry of a restraining order
or injunction restraining or prohibiting any of the transactions
contemplated to occur on the Closing Date unless a party has been
successful in removing such injunction or restraining order within 20 days
from the date of its issuance;

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<PAGE> 30
iii. by Apotex if the conditions set forth in Sections 8 and 10 of this
agreement have not been satisfied or waived by Apotex on or prior to the
Outside Closing Date, and Apotex gives Gen/Rx notice of such termination;
or

iv. by Gen/Rx if the conditions set forth in Sections 9 and 10 of this
agreement have not been satisfied or waived by Gen/Rx on or prior to
Outside Closing Date, and Gen/Rx gives Apotex notice of such termination.

b. Upon such termination there shall be no liability on the part of any
party to the others except that any party shall be entitled to recover damages
if any such termination is caused by the failure of any or the conditions
contained in Sections 8, 9 and 10 and such failure is caused by a willful or
intentional misrepresentation or breach of covenant of another party.

19. PAYMENT OF EXPENSES.

The Gen/Rx Companies shall bear all of the fees and expenses (including all
the fees and disbursements of counsel) incurred by any of the Gen/Rx Companies,
the Gen/Rx Sub, AI and Apotex in connection with (i) the development,
preparation and execution of, and any amendment, supplement or modification to,
this agreement, the other 1995 Transactions Documents and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, and (ii) subject to the terms and
provisions of Section 12 hereof, enforcement or preservation of any rights under
this agreement, the other 1995 Transactions Documents and any such other
documents. In the event that the transactions contemplated by this agreement are
not consummated, each party shall bear its own fees and expenses.

20. COUNTERPARTS.

Each of this agreement and the other 1995 Transactions Documents may be
executed simultaneously in one or more counterparts, each one of which is hereby
deemed an original, but all of which together shall constitute one and the same
instrument.

21. INTERPRETATION.

a. All personal pronouns used in this agreement or any of the other 1995
Transactions Documents, whether used in the masculine, feminine or neuter
gender, shall include all other genders; the singular shall include the plural,
and vice versa. The headings of the Sections of this agreement and of the other
1995 Transactions Documents are inserted for convenience of reference only and
shall not constitute a part of this agreement or such other 1995 Transactions
Documents as the case may be. All references herein or therein to Sections are
to sections of the agreement in which such reference appears unless otherwise
indicated. In addition, the words "hereof," "herein" and "hereunder" and words
of similar import when used in this agreement, any of the other 1995
Transactions Documents or any other certificate or document made or delivered
pursuant hereto shall refer to this agreement, such other 1995 Transactions
Documents or such other certificate or document, as the case may be, as a whole
and not to any particular provision of this agreement or the other 1995
Transactions Documents.

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<PAGE> 31
b. This agreement, which shall be deemed to include each of the
Schedules attached hereto and each of the agreements set forth as Exhibits
hereto, the other 1995 Transactions Documents and any other written agreements,
documents or instruments executed and delivered in connection herewith or
therewith, set forth the entire agreement and understanding of the parties with
respect to the transactions contemplated hereby and supersede all prior
agreements, arrangements and understandings relating to the subject matter of
this agreement. This agreement expressly supersedes and replaces in its entirety
a certain Master Agreement dated as of January 26, 1995 by and among the parties
hereto.

c. None of this agreement or any of the other 1995 Transactions
Documents may be amended other than by written instrument executed by the
parties hereto or thereto, and, in the case of the agreements set forth in the
exhibits hereto, by a written instrument executed by the parties thereto. The
terms of this agreement and the other 1995 Transactions Documents shall not be
amended or modified by the pre-printed terms of any purchase order or
acknowledgment, which shall be considered solely for the convenience of the
Party issuing such purchase order or acknowledgment, regardless of whether the
other Party may have signed or accepted the same.

d. Subject to the restrictions on transfers set forth herein, this
agreement and the other 1995 Transactions Documents shall inure to the benefit
of, be binding upon and be enforceable by and against the Parties and their
respective successors and permitted assigns. In the event that the Closing
Date shall not have occurred on or prior to the Outside Closing Date (other
than through the actions or omissions of any Party), this agreement shall be
rescinded promptly upon written notice by any Party.

e. No person who is not a party to this agreement shall have any legal,
equitable or other rights by virtue of this agreement or any of the other 1995
Transactions Documents.

f. Notwithstanding any collaborative efforts of the parties hereunder,
none of the Gen/Rx Companies, on the one hand, and AI or Apotex, on the other
hand, are (and nothing in any of the 1995 Transactions Documents shall be
construed to constitute them) partners, joint venturers, agents,
representatives or employees of the other party, nor to create any relationship
between them other than that of an independent contractor. Neither Party shall
not have any responsibility or liability for the actions of any other party,
except as specifically provided in the 1995 Transactions Documents.

22. FURTHER ASSURANCES.

Each Party agrees that upon request of any other Party, it shall, at
any time and from time to time, do any and all other acts and things as may
reasonably be required or advisable to carry out its obligations hereunder and
under the other 1995 Transactions Documents and to consummate the Concurrent
Transactions contemplated hereby.

23. JOINT EFFORT.

Preparation of the 1995 Transactions Documents has been a joint effort
of the Parties, and none of the 1995 Transactions Documents shall be construed
more severely, strictly or restrictively against any Party by virtue of such
Party's having drafted the language in question.

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<PAGE> 32

[THIS PAGE INTENTIONALLY LEFT BLANK]

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<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals or caused these presents to be signed by their proper officers as of the
day and year first above written.

AUSA, INC. GEN/Rx, INC.

By: /s/ Steven Novick By: /s/ John Toedtman
------------------------------- -------------------------------
Title: Steven Novick, President Title: John Toedtman, Chairman

APOTEX USA, INC. AMERICAN VETERINARY PRODUCTS, INC.

By: /s/ Steven Novick By: /s/ John Toedtman
------------------------------- -------------------------------
Title: Steven Novick, President Title: John Toedtman, Chairman

COLLINS LABORATORIES, INC.

By: /s/ John Toedtman,
-------------------------------
Title: John Toedtman, Chairman

-33-

<PAGE> 34
DESCRIPTION OF SCHEDULES
------------------------

SCHEDULE A Parties to this Agreement

-34-

<PAGE> 35
LIST OF EXHIBITS
----------------

EXHIBIT A Form of Plan and Agreement of Merger and Form of Certificate
of Merger

EXHIBIT B Form of Loan Agreement

EXHIBIT C Form of Certificate of Representations (Gen/Rx Companies)

EXHIBIT D Form of AI Certificate of Representations (Apotex and AI)

EXHIBIT E Form of Marketing Agreement

EXHIBIT F Form of Gen/Rx Warrant

EXHIBIT G Form of Responsible Officer's Certificate

EXHIBIT H Form of Secretary's Certificate

EXHIBIT I Form of Line of Credit Note

EXHIBIT J Form of Term Note

EXHIBIT K Intentionally Omitted

EXHIBIT L Form of Future Warrant

EXHIBIT M Intentionally Omitted

EXHIBIT N Description of the Mortgaged Premises

EXHIBIT O Form of Security and Pledge Agreement

EXHIBIT P Form of Solvency Certificate

EXHIBIT Q Form of Deed of Trust Amendment

EXHIBIT R Form of Assignment of Rents

EXHIBIT S Form of Opinion of Counsel to the Gen/Rx Companies and Gen/Rx
Sub

EXHIBIT T Form of Opinion of Counsel to AI and Apotex

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<PAGE> 36
SCHEDULE A

PARTIES TO THIS AGREEMENT

THE GEN/RX COMPANIES AND AI (after the Closing Date)

GEN/Rx, Inc.
American Veterinary Products, Inc.
Collins Laboratories, Inc.
11 Birch Drive
Basking Ridge, New Jersey 07920
ATTENTION: Mr. John R. Toedtman
Telephone: (908) 766-5507
Facsimile: (908) 766-5507

APOTEX AND AI (prior to the Closing Date)
Apotex USA, Inc.
1776 Broadway, Suite 1800
New York, New York 10019
ATTENTION: Mr. Steven Novick
Telephone: (212) 644-9200 Ext. 26
Facsimile: (212) 644-9370

-36-

<PAGE> 1
AUSA, INC. --
GEN/RX ACQUISITION SUBSIDIARY, INC.

PLAN AND AGREEMENT OF MERGER

THIS PLAN AND AGREEMENT OF MERGER dated as of April 13, 1995, by and
between AUSA, INC., a Delaware corporation ("AI"), and Gen/Rx Acquisition
Subsidiary, Inc., a Delaware corporation ("Gen/Rx Sub").

W I T N E S S E T H:
_ _ _ _ _ _ _ _ _ _

WHEREAS, if not defined in Section 8 of this agreement,
capitalized terms used in this agreement are used in this agreement
as defined in Section 15 of the Amended and Restated Master Agreement
dated April 13, 1995 (the "Master Agreement") to which AI and Gen/Rx
(the parent of Gen/Rx Sub) are parties, except to the extent
specifically otherwise indicted; and

WHEREAS, the Gen/Rx Companies are engaged in the business of
developing, manufacturing and marketing injectable products for human
animal uses; and

WHEREAS, AI is engaged in the business of distributing
injectable products for humans; and

WHEREAS, AI and Gen/Rx Sub intend to merge, with AI as the
surviving corporation; and

WHEREAS, AI and Gen/Rx Sub intend that, by virtue of the
Merger, AI shall become a wholly owned subsidiary of Gen/Rx, and the
existing stockholders of AI shall receive Gen/Rx stock in consideration
of the Merger; and

WHEREAS, the Merger of AI and Gen/Rx Sub is a part of a series
of transactions contemplated by the Master Agreement.

NOW, THEREFORE, in consideration of the above premises and in
consideration of the mutual covenants and undertakings of the parties as set
forth below, the parties hereto, intending to be legally bound, agree as
follows:

<PAGE> 2
1. CLOSING.

Subject to the terms and conditions set forth in this agreement, the
Closing shall be held on the Closing Date or such earlier or later date as shall
be mutually agreed to by the parties at their sole discretion, at 10:00 a.m. at
the offices of Sills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A., One
Riverfront Plaza, Newark, New Jersey. The Parties shall consummate the
transactions contemplated by this agreement on or prior to the seventh day after
the date on which all of the conditions set forth in Sections 9, 10 and 11 of
the Master Agreement shall have been satisfied or waived.

2. GENERAL

a. On the Effective Date, the separate existence of Gen/Rx Sub shall cease,
and it shall be merged into AI in accordance with the applicable laws of the
State of Delaware. AI shall be the surviving corporation.

b. AI's certificate of incorporation, as in effect immediately prior to the
Effective Date, until further amended, shall be and remain the certificate of
incorporation of the surviving corporation.

c. AI's bylaws, as in effect immediately prior to the Effective Date, shall
be and remain the bylaws of the surviving corporation, until amended or
repealed.

d. The total number of shares that the surviving corporation shall be
entitled to issue shall be 1,500 shares, without par value, all of which shall
be designated common stock.

e. AI's directors on the Effective Date shall be the directors of the
surviving corporation and shall hold office until their successors shall have
been elected or qualified or until their resignation or removal according to law
or the bylaws of the surviving corporation.

f. AI's officers on the Effective Date shall be the officers of the
surviving corporation and shall hold office until their successors shall have
been elected and qualified or until their resignation or removal according to
law or the bylaws of the surviving corporation.

g. From and after the Effective Date, the surviving corporation shall
possess all the rights, privileges, powers and franchises of whatsoever nature
and description, public as well as private, and be subject to all the
restrictions, disabilities and duties of each of AI and Gen/Rx Sub, and all
rights, privileges, powers and franchises, and all property, real, personal and
mixed, of each of AI and Gen/Rx Sub and all debts due to AI or Gen/Rx Sub on
whatever account, for stock subscriptions as well as all other things, or
belonging to each of AI and Gen/Rx Sub shall be vested in the surviving
corporation. All property, rights, privileges, powers and franchises and all and
every other interest shall thereafter be as

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<PAGE> 3
effectively the property of the surviving corporation as they were of AI or
Gen/Rx Sub, and the title to any real estate vested by deed or otherwise in
either AI or Gen/Rx Sub shall not revert or be in any way impaired by reason of
this Merger. All rights of creditors and all liens upon the property of the AI
or Gen/Rx Sub shall be preserved, unimpaired, and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach to AI and may
be enforced against AI to the same extent as if the debts, liabilities and
duties had been incurred or contracted by AI. Any existing Proceeding, by or
against either AI or Gen/Rx Sub may be prosecuted to judgment or decree as if
this Merger had not taken place, or the surviving corporation may be
substituted in such Proceeding.

h. Gen/Rx Sub hereby agrees that at any time, or from time to
time, as and when requested by AI, or by any of its successors or assigns,
Gen/Rx Sub will execute and deliver, or cause to be executed and delivered in
its name by its last acting officers or by the corresponding officers of the
surviving corporation, all such conveyances, assignments, transfers, deeds or
other instruments, and will take or cause to be taken such further or other
action, as the surviving corporation, its successors or assigns may deem
necessary or desirable in order to evidence the transfer, vesting or devolution
of any property, right, privilege or franchise, or to vest or perfect in or
confirm to the surviving corporation, its successors and assigns, title to and
possession of all the property, rights, privileges, powers, immunities,
franchises and interests referred to in this Article 2 and otherwise to carry
out the intent and purposes hereof.

i. The Merger shall become effective, subject to satisfaction of
the various conditions of the respective parties set forth in the Master
Agreement, when:

i. This agreement has been approved by the stockholders of
each of the Constituent Corporations in accordance with applicable law
of the State of Delaware; and

ii. The Secretary of State of Delaware shall have accepted
for filing a fully executed Certificate of Merger, substantially in the
form attached to this agreement as Exhibit A.

3. CAPITAL STOCK OF THE CORPORATIONS

a. The mode of carrying into full and complete effect the Merger
of Gen/Rx Sub into AI and the basis and manner of converting the outstanding
capital stock of Gen/Rx Sub into shares of AI's capital stock and the
outstanding capital stock of Gen/Rx Sub into the Merger Shares shall be as
hereinafter set forth in this Article 3.

b. Each share of the Gen/Rx Sub's capital stock issued and
outstanding immediately prior to the Effective Date and all rights in respect
thereof shall, upon the Effective Date, by virtue of the Merger and without any
further action on the part of the holder thereof, be exchanged for, converted
into, and become a share of the fully paid and

-3-

<PAGE> 4
nonassessable common stock of AI. From and after the Effective Date, each
certificate that, prior to the Effective Date, evidenced and represented
outstanding shares of Gen/Rx Sub's capital stock shall evidence and represent
ownership of AI's common stock on the basis hereinbefore set forth. The
aforesaid exchange and conversion shall be complete and effective on the
Effective Date without regard to the date or dates upon which outstanding
certificates representing shares of Gen/Rx Sub's capital stock may be
surrendered for certificates of AI's common stock, as hereinafter provided.

c. Each of the AI Shares issued and outstanding immediately prior
to the Effective Date and all rights in respect thereof shall, upon the
Effective Date, by virtue of the Merger and without any further action on the
part of the holder thereof, be exchanged for, converted into, and become
13,288,874 shares of the Common Stock 13,277,874, plus 2,064,966 shares of
Common Stock to be issued upon a sufficient increase in the authorized shares
of Common Stock, each of which shall be fully paid and nonassessable. From and
after the Effective Date, each certificate that, prior to the Effective Date,
evidenced and represented the AI Shares shall evidence and represent ownership
of Gen/Rx common stock on the basis hereinbefore set forth. The aforesaid
exchange and conversion shall be complete and effective on the Effective Date
without regard to the date or dates upon which outstanding certificates
representing the AI Shares may be surrendered for certificates of the Common
Stock, as hereinafter provided.

d. On or after the Effective Date, each holder of the AI Shares
shall surrender his certificate or certificates in accordance with instructions
to be furnished him on or prior to the Effective Date, and shall be entitled
upon such surrender to receive in exchange therefor one or more certificates
evidencing the number of whole shares of the Common Stock into which the AI
Shares theretofore evidenced by the certificate or certificates so surrendered
have been exchanged and converted as aforesaid. On or after the Effective Date,
each holders of the Gen/Rx Sub's capital stock shall surrender his certificate
or certificates in accordance with instructions to be furnished him on or prior
to the Effective Date, and shall be entitled upon such surrender to receive in
exchange therefor one or more certificates evidencing the number of whole
shares of AI's common stock into which the certificates theretofore evidenced
by the certificate or certificates so surrendered shall have been exchanged and
converted as aforesaid.

e. No certificates evidencing fractional shares of capital stock
will be issued. Each stockholder who but for this provision would be entitled
to a fractional share of capital stock shall receive only the total number of
whole shares to which he is entitled, and any such fractional shares shall be
eliminated for all purposes and without compensation therefor.

f. The respective boards of directors of the Constituent
Corporations may amend this agreement at any time prior to the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware,
provided that an amendment made subsequent to the adoption of the agreement by
the stockholders of any of the Constituent Corporations shall

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<PAGE> 5
not (1) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such constituent
corporation, (2) alter or change any term of the certificate of incorporation
of the surviving corporation to be effected by the Merger, or (3) alter or
change any of the terms and conditions of the agreement if such alteration or
change would adversely affect the holders of any class or series thereof of
such Constituent Corporation.

4. ACCOUNTING TREATMENT

The Merger of Gen/Rx Sub into AI provided for hereby shall be accounted
for under the purchase method of accounting in accordance with generally
accepted accounting principles.

5. MEETINGS AND EXPENSES

a. Each of AI and Gen/Rx Sub shall submit this agreement to its
stockholder or stockholders for its or their approval as provided by the laws
of the State of Delaware, or on such later date or dates as the boards of
directors of each of the Constituent Corporation shall approve, and if it is
duly adopted by the requisite votes or consents of stockholders of both of the
Constituent Corporations and is not terminated and abandoned by the Constituent
Corporations, this agreement shall be duly certified by and on behalf of the
Constituent Corporations and the Certificate of Merger filed and reported in
accordance with the laws of the State of Delaware as soon as practicable after
such meetings to become effective on the Closing Date, if filed prior thereto.

b. Each of Gen/Rx Sub and AI shall bear its own expenses incurred in
connection with this agreement.

6. CONDUCT OF THE PARTIES PENDING MERGER

a. AI covenants and agrees with Gen/Rx Sub as follows: From the Closing
Date to the Effective Date, AI will carry on its business diligently and will
not take any action or engage in any transaction that shall be outside of the
ordinary course of business as conducted on the date hereof. Without limiting
the generality of the foregoing, except to the extent contemplated by this
agreement or consented to by Gen/Rx Sub by an instrument in writing signed by
any Responsible Officer on its behalf, AI will not:

i. Amend its certificate of incorporation;

ii. Redeem purchase, or otherwise acquire any capital stock or agree
to take any such action, issue, sell, or otherwise dispose of
any capital stock, including shares held in treasury, or other
securities, enter into any Contractual Obligation to issue any
capital stock or other securities, or issue any warrants,
rights, or options, to employees or otherwise.

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<PAGE> 6
iii. Directly or indirectly, (i) merge or consolidate with any other
corporation, (ii) dispose of any material amount of its property
otherwise than in the ordinary course of business, or (iii)
acquire or agree to acquire any business or substantially all of
the stock or assets of any corporation or business.

iv. Declare, authorize, or pay any distribution or dividend of cash,
property, or securities to its stockholders, directly or
indirectly.

v. Incur any long-term indebtedness, enter into any mortgage or
pledge of any of its properties or assets or any modification or
change in any existing indebtedness or contract, commitment,
mortgage, deed of trust, loan, or credit agreement reflected in
on any schedule to the AI Certificate of Representations or
effect any sale or other disposition of any of its properties or
assets, except in the ordinary course of business.

b. Gen/Rx Sub covenants and agrees with AI as follows: From the
Closing Date to the Effective Date, Gen/Rx Sub will carry on its business
diligently and will not take any action or engage in any transaction that shall
be outside of the ordinary course of business as conducted on the date hereof.
Without limiting the generality of the foregoing, except to the extent
contemplated by this agreement or consented to by AI by an instrument in
writing signed by any Responsible Officer on its behalf, Gen/Rx Sub will not:

i. Amend its certificate of incorporation;

ii. Redeem, purchase, or otherwise acquire any capital stock or
agree to take any such action, issue, sell, or otherwise dispose
of any capital stock, including shares held in treasury, or
other securities, enter into any Contractual Obligation to issue
any capital stock or other securities, or issue any warrants,
rights, or options, to employees or otherwise.

iii. Directly or indirectly, (i) merge or consolidate with any other
corporation, (ii) dispose of any material amount of its property
otherwise than in the ordinary course of business, or (iii)
acquire or agree to acquire any business or substantially all of
the stock or assets or any corporation or business.

iv. Declare, authorize, or pay any distribution or dividend of cash,
property, or securities to its stockholders, directly or
indirectly.

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<PAGE> 7
c. Subject to the terms and conditions herein provided, each of
the parties hereto shall use its best efforts to take, or cause to be taken,
all action, or do, or cause to be done, all things, necessary, proper, or
advisable under the laws of the State of Delaware to consummate and make
effective the transactions contemplated by this agreement, subject, however, to
the appropriate vote or consent of the stockholders of each of the parties
hereto in accordance with the applicable provisions of the General Corporation
Law of the State of Delaware.

d. All obligations of the parties hereto pursuant to this Section
6, except as otherwise expressly provided herein, shall expire, terminate, and
be extinguished upon the Effective Date.

7. CERTAIN CONDITIONS TO AI'S OBLIGATIONS.

AI's obligation to consummate the Merger contemplated by this agreement
shall be subject to compliance by the Gen/Rx Companies with their agreements
contained in the 1995 Transactions Documents and to the fulfillment to AI's
satisfaction on or before the Closing Date of the various conditions set forth
in the Master Agreement or otherwise in the 1995 Transactions Documents.

8. DEFINITIONS

As used in this agreement,

"Constituent Corporations" means, collectively, Gen/Rx Sub and AI.

"Effective Date" means the date on which the Merger becomes effective.

"Merger" means the merger provided for in this agreement between AI and
Gen/Rx Sub.

9. NOTICES.

All notices, consents and other communications require or that
may be given under this agreement shall be deemed to have been duly given if
given in accordance with the terms and provisions of Section 16 of the Master
Agreement.

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<PAGE> 8
IN WITNESS WHEREOF the parties hereto have set their hands and seals on the
day and year first above written.

AUSA, INC. GEN/RX ACQUISITION SUBSIDIARY,
INC.

By: /s/ STEVEN NOVICK By: /s/ JOHN TOEDTMAN
------------------------------- ------------------------------
Title: Steven Novick, President Title: John Toedtman, Chairman

-8-

<PAGE> 1
DISTRICT COURT, LARIMER COUNTY, COLORADO

CASE NO.

VERIFIED COMPLAINT FOR APPOINTMENT OF RECEIVER

APOTEX USA INC., a Delaware corporation,

Plaintiff,

AMERICAN VETERINARY PRODUCTS INC., a Colorado corporation,

Defendant.

Plaintiff, Apotex USA Inc., a Delaware corporation ("Lender"), hereby
states as its Complaint against the above-captioned defendant as follows:

JURISDICTION AND VENUE

1. This Court has jurisdiction over this matter pursuant to Colo. R.
Civ. P. 66 and Colo. Rev. Star. Section 13-1-124(1)(a) and (c) in that (a)
Lender seeks appointment of a receiver of property located in Larimer County;
and (c) defendant American Veterinary Products Inc. owns the property which is
the subject matter of this civil action.

2. Venue is proper in this Court because the property is located in
Larimer County and because the defendant resides in Larimer County.

PARTIES

3. Lender is a Delaware corporation with its principal place of business
located at 1776 Broadway, Suite 1800, New York, New York 10019.

4. Defendant American Veterinary Products Inc. ("Borrower") is a
Colorado corporation with its principal place of business at 1413 Duff Drive,
Fort Collins, Colorado 80524. Borrower is a wholly owned subsidiary of Gen/Rx,
Inc., a New York corporation ("Gen/Rx"). Lender holds of record approximately
70% of the stock of Gen/Rx.
<PAGE> 2
GENERAL ALLEGATIONS

5. In April 1995, Borrower, jointly and severally with Gen/Rx, AUSA
Inc., a Delaware corporation ("AUSA"), and Collins Laboratories, a Colorado
corporation ("Collins"), executed and delivered to Lender a Line of Credit Note
dated April 13, 1995, in the original principal amount of $2,000,000 and a Term
Note dated April 13, 1995, in the original principal amount of $500,000
(collectively, the "Notes"). The Notes are attached hereto as Exhibit A.

6. In November 1995, Borrower, jointly and severally with Gen/Rx, AUSA
Inc., a Delaware corporation ("AUSA"), and Collins Laboratories, a Colorado
corporation ("Collins"), executed and delivered to Lender a 30-Day Note dated
November 17, 1995, in the original principal amount of $150,000. In November
1995, Borrower, jointly and severally with Gen/Rx, AUSA, and Collins also
executed and delivered to Lender a 30-Day Note dated November 28, 1995, in the
principal amount of the aggregate of the unpaid amount of all sums thereafter
advanced by Lender on a revolving basis to Borrower, Gen/Rx, AUSA, or Collins.
These two Notes are referred to herein as the "30-Day Loan" and copies of them
are collectively attached hereto as Exhibit B.

7. The Notes are the subject of and further documented in the Loan
Agreement dated April 13, 1995, by and among Lender, Borrower, Gen/Rx, AUSA,
and Collins. The Loan Agreement was subsequently amended by letter agreement,
dated November 29, 1995, by and among Lender, Borrower, Gen/Rx, AUSA, and
Collins (the "Amendment"). In the Amendment, Borrower, Gen/Rx, AUSA, and
Collins acknowledged and agreed that they have borrowed the full amount from
the Lender under the Notes and have additionally borrowed from Lender an
aggregate approximate amount of $813,783, which amount represents four
additional loans made by Lender to Borrower, Gen/Rx, AUSA, and Collins, jointly
and severally, and which additional amount shall be due December 22, 1995
(i.e., the 30-day Loan). The April 13, 1995 Loan Agreement and the Amendment
are collectively referred to herein as the "Loan Agreement", copies of which
are collectively attached hereto as Exhibit C.

8. The Notes are full recourse.

9. The Notes are secured by:

a. An Amended and Restated Deed of Trust to Public Trustee,
Security Agreement and Financing Statement, dated April 13, 1995, and recorded
in the Office of the Clerk and Recorder for Larimer County, State of Colorado
(the "Records") on May 15, 1995, under Reception No. 95027307, and under which
Lender is named as the Beneficiary and Borrower is named as the Grantor (the
"Deed of Trust"). The Deed of Trust is an amendment and restatement of the Deed
of Trust to Public Trustee, Security Agreement and Financing Statement, dated
March 23, 1995, and recorded in the Records on March 24, 1995, under Reception
No. 95016555, and under which Shermfin Corp., a Delaware corporation
("Shermfin"), is named as the Beneficiary and Borrower is named as the Grantor
(the "Original Deed of Trust"). In the Deed of Trust, Shermfin assigned all of
its rights in the Original Deed of

- 2 -
<PAGE> 3

Trust to Lender. Copies of the Deed of Trust and the Original Deed of Trust,
are collectively attached hereto as Exhibit D;

b. An Assignment of Leases and Rents, dated April 13, 1995, and
recorded in the Records on May 15, 1995, under Reception No. 95027308 (the
"Rent Assignment"), a copy of which is attached hereto as Exhibit E; and

c. A Security and Pledge Agreement dated April 13, 1995, with
financing statements recorded in the Records (collectively, the "Security
Interest"), copies of which are collectively attached hereto as Exhibit F.

The Notes, Deed of Trust, Rent Assignment and Security Interest are
collectively referred to herein as the "Loan Documents".

10. The Loan Documents constitute a lien and encumbrance upon certain
real property located in Larimer County, State of Colorado, and more
particularly described on Exhibit F attached hereto (the "Real Property"), and
the personal property contained thereon or used in correction with the
operation thereof, including Borrower's inventory, equipment, accounts and
intangibles (the "Personal Property"). The Real Property and Personal Property
are collectively referred to herein as the "Property".

11. The Real Property is comprised of two separate parcels. Parcel I, as
designated on Exhibit G, is a building located on Lot 6 of the Fort Collins
Business Center, with a street address of 1413 Duff Drive, Fort Collins,
Colorado. Parcel II, as designated on Exhibit G, is an adjoining vacant lot.

12. Under Section 7 of the Deed of Trust, Borrower absolutely and
irrevocably granted, bargained, sold, mortgaged and conveyed the Property to
the Public Trustee of Larimer County, Colorado, in trust for use and benefit of
Lender.

13. Borrower is currently in possession of the Property.

14. Borrower breached its obligations under the Loan Documents by not
paying to Lender on September 1 and December 1, 1995, the interest due and
owing on the $2.5 million loan represented by the Notes. In addition, Borrower
failed to pay on or prior to January 2, 1996, approximately $800,000 of debt to
Lender under the 30-day Loan due and owing on December 22, 1995 (plus a 10-day
grace period).

15. Borrower's failure to make the September 1 and December 1, 1995
payments under the Notes and the December 22, 1995 payment under the 30-day
Loan constitutes an "Event of Default" under Section 12 of the Deed of Trust.

16. As such, Borrower is in default of its obligations under the Loan
Documents and, pursuant to Section 13(a) of the Deed of Trust, Borrower has
declared the entire amount of all

-3-
<PAGE> 4
indebtedness secured by the Deed of Trust to be due and payable immediately.
The default letter, dated January 2, 1996, is attached hereto as Exhibit H.

17. Because Borrower is in default, Borrower's license to collect and
receive all rents, issues and profits automatically terminated and Borrower is
no longer entitled to collect or retain any income generated from the operation
of the Property. See Section 13(c) of the Deed of Trust. Further, because
Borrower is in default, Lender has the right to immediate and exclusive
possession of the collateral under the Notes, including the Borrower's
inventory and equipment located on the Real Property. See Section 13(f) of the
Deed of Trust.

18. Lender is in the process of preparing the papers necessary to
commence a foreclosure of the Real Property in the Office of the Public Trustee
for Larimer County. Lender believes that such foreclosure will be commenced
shortly.

19. Under the Loan Documents, Lender has an absolute right to the
appointment of a receiver in the present circumstances. See Section 13(d) of
the Deed of Trust.

20. Pursuant to said provisions, Borrower consented to the appointment of
a receiver by a court of competent jurisdiction upon the occurrence of an
"Event of Default" under the Deed of Trust.

21. Further, the Court must appoint a receiver for at least the following
reasons:

a. As further interest accrues, the value of the Lender's interest
in the Property will continue to diminish;

b. Borrower's veterinary product operations on the Property were
halted by the United States Food and Drug Administration (the "FDA") in the
summer of 1995. As a result, Borrower's business operations are generating
little or no revenue. As such, the Property is the only realistic means Lender
has of repayment of the Notes and the 30-day Loan and a receiver is necessary
to ensure that the inventory and equipment on the Property are not removed or
diverted from the Property beyond the jurisdiction of the Court; and

c. The FDA's inspections of the Property indicated that many
deficiencies must be corrected before the Property can be used again. To ensure
that the Property may become economically useful again, the building, equipment
and records thereon must be maintained intact until adequate financing can be
located to renovate the plant sufficiently to meet the FDA's standards.

22. To protect the Property, Lender's security interest in the inventory,
equipment, accounts and intangibles located on or derived from the Property and
Lender's interest in the Property during the pendency of the foreclosure, it is
essential that a receiver be appointed over the Property.

- 4 -
<PAGE> 5
23. In the present circumstances, Lender is entitled to the appointment
of a receiver of the Property.

WHEREFORE, Lender prays for judgment in its favor, and against defendant,
as follows:

(i) For appointment of a receiver over the Property;

(ii) For costs and expert witness and attorneys' fees; and

(iii) For such other and further relief as the Court deems just,
proper and permitted by law.

HOLME ROBERTS & OWEN, LLC
Duncan E. Barber (#16768)
Martin D. Litt (#23716)

/s/ Duncan E. Barber
-----------------------
Attorneys for Lender
1700 Lincoln Street, Suite 4100
Denver, CO 80203
303/861-7000

Plaintiff's Address:

1776 Broadway, Suite 1800
New York, New York 10019

- 5 -
<PAGE> 6
VERIFICATION

STATE OF NEW YORK )
) ss
NEW YORK COUNTY )

I have read the foregoing Verified Complaint for Appointment of Receiver
and state that the information contained herein is true and accurate to the
best of my knowledge, information and belief.

APOTEX USA INC.,
a Delaware corporation

By: /s/ JACK H. SCHRAMM
-------------------------
Jack H. Schramm
Executive Vice President

Subscribed and sworn to before me this 2nd day of January, 1996, by
Jack H. Schramm in his capacity as Executive Vice President of Apotex USA Inc.,
a Delaware corporation.

WITNESS my hand and official seal.

My commission expires: 7/24/97
------------

/s/ MARY NATALE
---------------------------------------
Notary Public MARY NATALE
Notary Public, State of New York
No. 4953736
Qualified in Nassau County
Commission Expires July 24, 1997

- 6 -

<PAGE> 1

DISTRICT COURT, LARIMER COUNTY, COLORADO

CASE NO.

ORDER APPOINTING RECEIVER

APOTEX USA INC., a Delaware corporation,

Plaintiff,

AMERICAN VETERINARY PRODUCTS INC., a Colorado corporation,

Defendant.

THIS MATTER having come before the Court on Verified Ex Parte Motion for
Appointment of Receiver (the "Motion"), filed by the plaintiff, Apotex USA
Inc., a Delaware corporation ("Lender"), and the Court having considered the
matter, upon notice to the defendant, being fully advised in the premises and
for other good cause appearing,

THE COURT HEREBY FINDS:

A. Jurisdiction and venue are proper.

B. Defendant American Veterinary Products Inc., a Colorado corporation
("Borrower"), is the record title owner of certain real property located in
Larimer County, State of Colorado, and more particularly described on Exhibit A
attached hereto (the "Real Property"), and the personal property contained
thereon or used in connection with the operation thereof (the "Personal
Property"). The Real Property and Personal Property are collectively referred
to herein as the "Property".

C. In April 1995, Borrower, jointly and severally with Gen/Rx, Inc., a
New York corporation ("Gen/Rx"), AUSA Inc., a Delaware corporation ("AUSA"),
and Collins Laboratories, a Colorado corporation ("Collins"), executed and
delivered to Lender a Line of Credit Note dated April 13, 1995, in the original
principal amount of $2,000,000 and a Term Note dated April 13, 1995, in the
original principal amount of $500,000 (collectively, the "Notes").

D. In November 1995, Borrower, jointly and severally, with Gen/Rx, AUSA,
and Collins, executed and delivered to Lender a 30-Day Note dated November 17,
1995, in the
<PAGE> 2
original principal amount of $150,000. In November 1995, Borrower, jointly and
severally with Gen/Rx, AUSA, and Collins also executed and delivered to Lender
a 30-Day Note dated November 28, 1995, in the principal amount of the aggregate
of the unpaid amount of all sums thereafter advanced by Lender on a revolving
basis to Borrower, Gen/Rx, AUSA, or Collins. These two Notes are referred to
herein as the "30-Day Loan."

E. The Notes are the subject of and further documented in the Loan
Agreement dated April 13, 1995, by and among Lender, Borrower, Gen/Rx, AUSA,
and Collins. The Loan Agreement was subsequently amended by letter agreement,
dated November 29, 1995, by and among Lender, Borrower, Gen/Rx, AUSA, and
Collins (the "Amendment"). In the Amendment, Borrower, Gen/Rx, AUSA, and
Collins acknowledged and agreed that they have borrowed the full amount from the
Lender under the Notes and have additionally borrowed from Lender an aggregate
approximate amount of $813,783, which amount represents four additional loans
made by Lender to Borrower, Gen/Rx, AUSA, and Collins, jointly and severally,
and which additional amount shall be due December 22, 1995 (i.e., the 30-day
Loan). The April 13, 1995 Loan Agreement and the Amendment are collectively
referred to herein as the "Loan Agreement".

F. The Notes are secured by:

1. An Amended and Restated Deed of Trust to Public Trustee,
Security Agreement and Financing Statement, dated April 13, 1995, and recorded
in the Office of the Clerk and Recorder for Larimer County, State of Colorado
(the "Records") on May 15, 1995, under Reception No. 95027307, and under which
Lender is named as the Beneficiary and Borrower is named as the Grantor (the
"Deed of Trust"). The Deed of Trust is an amendment and restatement of the Deed
of Trust to Public Trustee, Security Agreement and Financing Statement, dated
March 23, 1995, and recorded in the Records on March 24, 1995, under Reception
No. 95016555, and under which Shermfin Corp., a Delaware corporation
("Shermfin"), is named as the Beneficiary and Borrower is named as the Grantor
(the "Original Deed of Trust"). In the Deed of Trust, Shermfin assigned all of
its rights in the Original Deed of Trust to Lender;

2. An Assignment of Leases and Rents, dated April 13, 1995, and
recorded in the Records on May 15, 1995, under Reception No. 95027308 (the
"Rent Assignment"); and

3. A Security and Pledge Agreement dated April 13, 1995, with
financing statements recorded in the Records (collectively, the "Security
Interest").

The Notes, Deed of Trust, Rent Assignment and Security Interest are
collectively referred to herein as the "Loan Documents".

G. The Loan Documents constitute a lien and encumbrance upon the
Property.

H. Borrower is currently in possession of the Property.

- 2 -
<PAGE> 3
I. Borrower breached its obligations under the Loan Documents by not
paying to Lender on September 1 and December 1, 1995, the interest due and
owing on the $2.5 million loan represented by the Notes. In addition, Borrower
failed to pay on or prior to January 2, 1996, approximately $800,000 of debt to
Lender under the 30-day Loan due and owing on December 22, 1995 (plus a 10-day
grace period).

J. Because Borrower is in default under the Loan Documents, Lender has
an absolute right to the appointment of a receiver over the Property and all
rents, issues profits and income therefrom. See Section 13(d) of the Deed of
Trust.

K. Future payments on the Notes or payments to otherwise protect the
Property may not be forthcoming from Borrower. Unless a receiver is appointed,
Lender will sustain loss and diminution of its secured interest in the
Property.

L. Section 13(d) of the Deed of Trust provides that Lender is entitled
to the appointment of a receiver "ex parte and without notice" to Borrower.

Having considered the Complaint and Motion, Exhibits attached thereto, and the
representations of counsel, being fully advised in the premises and for good
cause appearing,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

1. Mr. Jack Roberts, whose address is 2745 22nd Street, Greeley,
Colorado, 80631, is hereby appointed receiver over the Property (the
"receiver").

2. The receiver shall forthwith post a bond in the amount of $50,000
with the Court.

3. The receiver is hereby directed and empowered to take from Borrower,
its agents and employees, immediate possession of the Property and all things
of value relating to the Property, exclude Borrower, its agents and employees,
from such possession, operate the Property and collect the rents, revenues,
income, profits and other benefits from the operation and management of the
Property.

4. The receiver is hereby appointed to take charge of and to manage,
operate and protect the Property, and is hereby given the powers and authority
usually held by receivers and reasonably necessary to accomplish the purpose of
this receivership, including the following powers:

a. to enter upon, take possession of and assume control of the
Property and all improvements thereto and all books, records and personal
property relating to the Property;

b. to retain security personnel as necessary to secure the
Property;

c. to the extent necessary, to conduct a full inventory of all
personal property comprised in the Property;

- 3 -
<PAGE> 4
d. to take possession of all bank accounts containing funds
associated with the Property and to open, transfer and change all bank and
trade accounts relating to the Property, so that all such accounts are the name
of the receiver;

e. to manage, operate, maintain and otherwise control the Property
as necessary to prevent diminution of the Property's value including, but not
limited to, (i) collection of rents and revenues; (ii) control of distribution
from the Property; and (iii) from the date of this order, the payment of taxes,
insurance, utility charges and other expenses and costs incurred in managing
and preserving the Property, provided however, that the receiver shall obtain
the prior written approval of Lender for any such cost or expense in excess of
$500.00;

f. to hire on a contract basis personnel necessary to maintain and
preserve the Property and to retain, hire and terminate property management and
other personnel, and contract for and obtain such services, utilities,
supplies, equipment, and goods as are reasonably necessary to operate, preserve
and protect the Property and to make such repairs to the grounds and
improvements on the Property as the Receiver may reasonably deem necessary;
provided however, no contract shall extend beyond the termination of the
receivership unless authorized by Lender and Borrower, which authorization
shall be deemed granted as a matter of course, unless an objection to such
contract or other agreement is given to the receiver within five (5) business
days after the giving of written notice by the receiver of the proposed
contract or other agreement to Lender and Borrower and their respective
counsel, if any;

g. to perform ordinary and necessary repairs and maintenance on the
Property, subject to the $500.00 limitation set forth above;

h. to make, enforce, modify, negotiate and enter into such leases
of the Property as the receiver may reasonably deem appropriate in connection
with the discharge of the receiver's duties; provided, however, no lease shall
extend beyond the termination of the receivership unless authorized by Lender
and Borrower, which authorization shall be deemed granted as a matter of
course, unless an objection to such lease is given to the receiver within ten
(10) business days after the giving of written notice by the receiver of the
proposed lease to Lender and Borrower and their respective counsel, if any;

i. to open, transfer and change all bank and trade accounts
relating to the Property, so that all such accounts are in the name of the
receiver;

j. to obtain and renew all insurance policies that the receiver
deems necessary for the protection of the Property and for the protection of
the interests of the receiver and the parties to this action with respect to
the Property, but in no event shall the receiver maintain insurance for the
Property in an amount less than that required under the Loan Documents;

k. upon written notice to Lender, Borrower and such other parties
who enter an appearance in this action, to issue receiver's certificates of
indebtedness, in exchange for funds advanced by Lender or third parties during
the term of this receivership, which receiver's

- 4 -
<PAGE> 5
certificates shall be a lien upon the Property to the extent permitted by
applicable law, shall be payable upon demand, or such other terms as may be
approved by the Court, and shall bear interest at the rate of 10% per annum, to
fund the expenses of the receivership in excess of the income derived from the
Property;

l. to borrow from Lender, on such reasonable terms as may be
mutually acceptable to Lender and the receiver, funds to meet working capital
needs of the Property in excess of the income from the Property, such
borrowings to be advances under the Loan Documents to be added to the
outstanding indebtedness of Borrower pursuant to the Loan Documents or to be
evidenced by one or more receiver's certificates as provided in subparagraph k
above, as Lender and the receiver may mutually determine;

m. to apply for, obtain and renew as necessary all licenses and
permits required for the operation of the Property, other than product-related
licenses or permits for operation of the Property as a factory for
pharmaceuticals;

n. with respect to any operation or activity that is now conducted
on the Property or is customarily conducted on similar properties, and that may
lawfully be conducted only under governmental license or permit, to continue
such operation or activity under the licenses or permits issued to Borrower
subject to compliance with the terms thereof;

o. to enter into contracts for those services necessary to aid the
receiver in the administration of the receivership, including the retention of
attorneys and accountants, with all reasonable expenses incurred in connection
therewith deemed to be expenses of the receivership;

p. to institute such legal actions as the receiver deems necessary
to collect accounts and debts, and enforce leases and other agreements relating
to the Property, and to recover possession of the Property from persons who may
now or in the future be wrongfully occupying the Property or any part thereof;

q. to change any or all locks on the Property;

r. generally to do such other lawful acts as the receiver
reasonably deems necessary to the effective operation and management of the
Property and to perform such other functions and duties as may from time to
time be required and authorized by this Court, by the laws of the State of
Colorado or by the laws of the United States of America; and

s. to hire a property manager for the Property with the prior
written approval of Lender, with the property manager's fee to be paid out of
the receiver's fee set forth below.

5. IT IS FURTHER ORDERED that the receiver is hereby directed to apply
the rents, revenues, issues and profits collected by the receiver in connection
with the management and operation of the Property: FIRST, to the necessary and
reasonable costs of maintaining and preserving the Property, including the fees
of the receiver as set forth below; SECOND, to the out-of-pocket expenses of
the receiver; THIRD, to the payment of the indebtedness secured by

- 5 -
<PAGE> 6

the Loan Documents; and FOURTH, to a fund to be held by the receiver in a
federally insured, interest-bearing account pending further order of this
Court. The receiver's payment to Lender hereunder shall not constitute a cure
of Borrower's default.

6. IT IS FURTHER ORDERED that the receiver's compensation for services
under this Order shall be $10 to $15 per hour calculated on the basis of actual
hours worked, not to exceed 50 hours during the first month and 20 hours per
month thereafter without the prior written approval of plaintiff. In addition,
Mr. Roberts will be reimbursed for his out-of-pocket expenses, including
without limitation 20 to 25 cents per mile for travel. Mr. Roberts'
compensation and reimbursements shall be paid monthly. When the receiver files
his final report and motion for discharge as set forth below, the receiver
shall file with this Court a fee application for final approval of the fees
paid to the receiver during the pendency of the receivership.

7. IT IS FURTHER ORDERED that commencing February 15, 1996, the receiver
shall file on the fifteenth day of each month with this Court a monthly report,
and serve same on counsel for Lender, Borrower and all other persons who enter
an appearance in this action, concerning the operation of the Property, and
shall endeavor to wind up the receivership expeditiously in cooperation with
Lender otherwise at the direction of the Court, giving due consideration to the
foreclosure proceedings initiated by Lender, and to submit a final report and
motion for discharge no later than forty-five (45) days after the date when the
foreclosure proceedings have been completed and all rights of redemption have
expired.

8. IT IS FURTHER ORDERED that Borrower, and all persons in active
concert and participation with it, including employees, agents, managers,
accountants and banks, be, and the same hereby are, ordered to deliver
immediately over to the receiver or his agents all receivership property
described above, including without limitation, any and all rental payments,
lease payments, keys to the Property, accounts receivable, security deposits,
trust accounts, bank accounts, personal need accounts, personnel files,
operations manuals, financial records, payroll records, records, contracts for
outside services and consultants, certificates and licenses, contracts, leases,
rent rolls, fixtures, inventory, supplies, furniture and equipment used or
associated therewith, and all other things of value relating to the Property
(including without limitation such records and other papers in its possession
or under its control as may be pertinent to the status of the Property and the
receiver's operation and management thereof), and continue to deliver
immediately to the receiver all books, rent rolls and other records relating to
the operation, maintenance and management of the receivership property, and to
permit the receiver to carry out his duties hereunder without interference.

9. IT IS FURTHER ORDERED that by making this request for the appointment
of a receiver, Lender does not render itself liable for the costs and expenses
of the receiver nor is Lender required to advance funds to the receiver to meet
the working capital needs of the Property.

- 6 -
<PAGE> 7
10. IT IS FURTHER ORDERED that except as may be expressly authorized by
this Court hereafter upon notice and a hearing, Borrower, and its agents,
employees, representatives or anyone claiming under such are enjoined from:

a. Collecting any rents, revenues, issues and profits from the
Property or withdrawing funds from any bank or other depository account
relating to the Property;

b. Terminating or causing to be terminated any license, permit,
lease, contract or agreement relating to the Property or the operation of any
of the businesses on the Property; or

c. Otherwise interfering with the operation of the Property or the
receivership's discharge of its duties hereunder.

11. IT IS FURTHER ORDERED that Sheriff's assistants to enforce the terms
of this Order in the form of peace-keeping duties is hereby authorized.

12. IT IS FURTHER ORDERED that the receiver shall forthwith file an oath
of receiver.

13. IT IS FURTHER ORDERED that Lender or receiver may from time to time
request that the Court enter additional orders to supplement, clarify or amend
this order.

14. AND IT IS FINALLY ORDERED that the receiver shall forthwith provide a
copy of this order to Borrower and any other persons in possession of the
Property or otherwise affected by this order.

ORDERED this _____ day of January, 1996.

BY THE COURT:

----------------------
District Court Judge

- 7 -

<PAGE> 1
EXHIBIT 11

COMPUTATION OF PER SHARE DATA
(UNAUDITED)

<TABLE>
<CAPTION>
Year Ended
December 31,
1995
------------
<S> <C>
Loss from continuing operations $(3,452,000)
Loss from discontinued operations (8,552,000)
-----------

Net Loss $12,004,000
===========

Primary:
Weighted average number of common
shares outstanding 19,313,000
===========

Loss from continuing operations $ (.18)
Loss from discontinued operations (.44)
-----------

Net Loss $ (.62)
===========

Assuming Full Dilution: (a)
Weighted average number of common
shares outstanding 19,313,000
===========

Loss from continuing operations $ (.18)
Loss from discontinued operations (.44)
-----------

Net Loss $ (.62)
===========
</TABLE>

(a) Not presented because dilution is less than 3 percent from primary amounts.

<PAGE> 1
EXHIBIT 21

SUBSIDIARIES OF REGISTRANT

<TABLE>
<CAPTION>
STATE OR OTHER NAME UNDER
JURISDICTION OF WHICH BUSINESS
NAME INCORPORATION IS CONDUCTED
---- ------------- ------------
<S> <C> <C>
American Veterinary Products, Inc. Colorado American Veterinary Products, Inc.

AUSA, Inc. Delaware AUSA, Inc.

Collins Laboratories, Inc. Colorado Inactive
</TABLE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00

</TABLE>