WARNER CHILCOTT PLC
S-4/A, EX-10.4, 2001-01-19
PHARMACEUTICAL PREPARATIONS
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<PAGE>   1
                                                                    Exhibit 10.4


                                                                REDACTED VERSION








                            ASSET PURCHASE AGREEMENT



                                     between



                          BRISTOL-MYERS SQUIBB COMPANY
                                   as Seller,



                                       and



                             WARNER CHILCOTT, INC.,
                                  as Purchaser





                          Dated as of January 26, 2000
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                            <C>
                      ARTICLE I SALE AND PURCHASE OF ASSETS


Section 1.1       Purchase and Sale.........................................       1
Section 1.2       Transfer of Assets........................................       1
Section 1.3       Assumed Liabilities.......................................       3
Section 1.4       Closing...................................................       5
Section 1.5       Risk of Loss..............................................       5
Section 1.6       Purchase Price Adjustment.................................       5


                   ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER


Section 2.1       Organization..............................................       6
Section 2.2       Authority; Execution and Delivery; Enforceability.........       6
Section 2.3       Consents and Approvals; No Violations.....................       6
Section 2.4       Financial Statements......................................       7
Section 2.5       Absence of Certain Changes................................       7
Section 2.6       Title of Assets...........................................       7
Section 2.7       Intellectual Property.....................................       7
Section 2.8       Contracts.................................................       8
Section 2.9       Compliance with Law.......................................       9
Section 2.10      Litigation................................................      10
Section 2.11      Brokers or Finders........................................      10
Section 2.12      Registrations.............................................      10
Section 2.13      Medical Information.......................................      11
Section 2.14      Websites and Domain Names.................................      11
Section 2.15      Knowledge.................................................      11
Section 2.16      No Other Representations or Warranties....................      11


                 ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER


Section 3.1       Organization..............................................      11
Section 3.2       Authority; Execution and Delivery; Enforceability.........      11
Section 3.3       Consents and Approvals; No Violations.....................      11
Section 3.4       Brokers and Finders.......................................      12
Section 3.5       No Proceedings............................................      12
Section 3.6       Availability of Funds.....................................      12
Section 3.7       No Other Purchaser Representations or Warranties..........      12
</TABLE>
<PAGE>   3
<TABLE>
<S>                                                                            <C>
                               ARTICLE IV COVENANTS


Section 4.1       Conduct of the Business...................................      12
Section 4.2       Access to Information.....................................      13
Section 4.3       Confidentiality...........................................      13
Section 4.4       Best Efforts..............................................      14
Section 4.5       Regulatory Approvals.  ...................................      14
Section 4.6       Property Transfer Taxes...................................      14
Section 4.7       [Reserved.]...............................................      15
Section 4.8       Publicity.................................................      15
Section 4.9       Supplemental Disclosure...................................      15
Section 4.10      Further Assurances........................................      15
Section 4.11      No Use of Certain Names...................................      15
Section 4.12      Geographic Limitations....................................      16
Section 4.13      Bulk Transfer Laws........................................      16
Section 4.14      Right of First Negotiation................................      16
Section 4.15      Copromotion Agreement.....................................      17
Section 4.16      Customer Notifications....................................      18
Section 4.17      Post-Closing Cooperation..................................      18
Section 4.18      Covenant Not to Compete...................................      19


                               ARTICLE V CONDITIONS


Section 5.1       Conditions to Each Party's Obligations....................      19
Section 5.2       Conditions to Obligations of Purchaser....................      19
Section 5.3       Conditions to Obligations of Seller.......................      20
Section 5.4       Waiver of Closing Conditions..............................      20
Section 5.5       Frustration of Closing Conditions.........................      21


                       ARTICLE VI TERMINATION AND AMENDMENT


Section 6.1       Termination...............................................      21
Section 6.2       Effect of Termination.....................................      21
Section 6.3       Amendments and Waivers....................................      22


                      ARTICLE VII SURVIVAL; INDEMNIFICATION
</TABLE>
<PAGE>   4
<TABLE>
<S>                                                                            <C>
Section 7.1       Survival of Representations...............................      22
Section 7.2       Indemnification by Seller.................................      22
Section 7.3       Indemnification by Purchaser..............................      23
Section 7.4       Calculation of Losses.....................................      23
Section 7.5       Termination of Indemnification............................      24
Section 7.6       Procedures................................................      24
Section 7.7       Sole Remedy; No Additional Representations................      25
Section 7.8       Limitations on Liability..................................      27


                            ARTICLE VIII MISCELLANEOUS


Section 8.1       Notices...................................................      26
Section 8.2       Definitions; Interpretation...............................      27
Section 8.3       Descriptive Headings......................................      32
Section 8.4       Counterparts..............................................      32
Section 8.5       Entire Agreement..........................................      32
Section 8.6       Fees and Expenses.........................................      32
Section 8.7       Governing Law.............................................      32
Section 8.8       Specific Performance......................................      32
Section 8.9       Assignment................................................      32
Section 8.10      Successors and Assigns....................................      32
Section 8.11      Severability..............................................      32
Section 8.12      Consent to Jurisdiction...................................      33
Section 8.13      Waiver of Jury Trial......................................      33
Section 8.14      Attorney Fees.............................................      33
</TABLE>
<PAGE>   5
                                    EXHIBITS


Exhibit A   Form of Assignment of Patent
Exhibit B   Form of Assignment of Trademarks
Exhibit C   Form of Assumption Agreement
Exhibit D   Form of Bill of Sale
Exhibit E-1 Form of Estrace Transitional Support and Supply Agreement
Exhibit E-2 Form of Ovcon Transitional Support and Supply Agreement
Exhibit F   Form of Trademark License Agreement

                                    SCHEDULES

Schedule 1.4(c)         Transfer of Purchase Price
Schedule 1.6            IMS Methodology
Schedule 2.3(a)         Consent and Approvals
Schedule 2.3(b)         Filings and Permits
Schedule 2.4            Financial Statements
Schedule 2.5            Certain Changes
Schedule 2.7(a)         Scheduled Intellectual Property
Schedule 2.7(b)         Encumbrances and Infringements on Intellectual Property
Schedule 2.7(c)         Other Intellectual Property
Schedule 2.8            Contracts
Schedule 2.9(a)         Noncompliance with Law
Schedule 2.9(b)(i)      Compliance with NDAs and ANDAs
Schedule 2.9(b)(ii)     Regulatory Notices
Schedule 2.10           Litigation
Schedule 2.12           Regulatory Approvals
Schedule 2.14           Websites and Domain Names
Schedule 3.6            Purchaser Financing Actions
Schedule 4.1            Conduct of Business
Schedule 8.2(a)         Knowledge of Seller
<PAGE>   6
            ASSET PURCHASE AGREEMENT dated as of January 26, 2000, between
Bristol-Myers Squibb Company, a Delaware corporation ("Seller"), and Warner
Chilcott, Inc., a Delaware corporation ("Purchaser").

            Seller, directly or indirectly through its Affiliates, manufactures,
distributes, markets and sells Estrace(R) Cream (including two presentations
thereof that have been developed by Seller as of the date hereof, but not yet
launched, "Estrace Cream"), Ovcon(R) 35 ("Ovcon 35"), and Ovcon(R) 50 ("Ovcon
50"; and together with Ovcon 35 and Estrace Cream, the "Products"). Seller
desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the
Acquired Assets (Section 8.2(b) identifies the sections of this Agreement in
which this term and other capitalized terms used herein and not defined in
Section 8.2(a) are defined). In addition, Purchaser has agreed to assume from
Seller the Assumed Liabilities.

            Accordingly, the parties hereby agree as follows:


                                    ARTICLE I

                           SALE AND PURCHASE OF ASSETS

            Section 1.1 Purchase and Sale. On the terms and subject to the
conditions of this Agreement, at the Closing, Seller shall, and shall cause its
Affiliates to, sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser shall purchase from Seller and its Affiliates, all the right, title
and interest of Seller and such Affiliates in, to and under the Acquired Assets,
for (a) U.S. $180,000,000, payable in cash as set forth in Section 1.4, minus
the purchase price adjustment, if any, determined in accordance with Section
1.6(b) (the "Purchase Price") and (b) the assumption by Purchaser of the Assumed
Liabilities. The purchase and sale of the Acquired Assets and the assumption of
the Assumed Liabilities are referred to in this Agreement collectively as the
"Acquisition".

            Section 1.2 Transfer of Assets. (a) The term "Acquired Assets" means
all Seller's and its Affiliates' rights, title and interest in, to and under
those certain assets set forth below:

            (i) the Intellectual Property;

            (ii) all Seller's rights, title and interest in and to any and all
      regulatory files (including correspondence with regulatory authorities),
      registrations, applications, approvals, licenses and permits relating to
      the Businesses or the Acquired Assets (including the Products) as of the
      Closing Date from the United States Food and Drug Administration (the
      "FDA") or, to the extent they exist, any other applicable regulatory
      authority in any country, in each case to the extent transferable in light
      of regulatory and, other than in the case of material portions of any of
      the NDAs or ANDAs relating to the Products, practical considerations;
<PAGE>   7
            (iii) all market materials, research data, customer and sales
      information, product literature, promotional materials and data,
      advertising and display materials and all training materials in whatever
      medium (e.g., audio, visual or print) exclusively related to the
      Businesses or the Acquired Assets (including the Products), in each case
      to the extent transferable in light of legal, contractual and practical
      considerations;

            (iv) all records and recorded information, including customer and
      supplier lists exclusively related to the Businesses or the Acquired
      Assets (including the Products), other than the Retained Information, in
      each case to the extent transferable in light of legal, contractual and
      practical considerations; and

            (v) all the rights relating to the Acquired Assets set forth in
      clauses (i) and (ii) above, including all claims, counterclaims, credits,
      causes of action, choses in action, rights of recovery and rights of
      setoff.

            (b) Purchaser acknowledges and agrees that Seller conducts the
Business only in certain jurisdictions and not on a worldwide basis.

            (c) Purchaser also acknowledges and agrees that it is not acquiring
any rights, title or interest in, to and under any of the following assets (the
"Excluded Assets"):

            (i) any real estate owned or leased by Seller or any of its
      Affiliates;

            (ii) all cash and cash equivalents of Seller or any of its
      Affiliates;

            (iii) the Excluded Estrace Products and the Names;

            (iv) all Accounts Receivable;

            (v) any assets, properties or rights of Seller or any of its
      Affiliates other than the Acquired Assets;

            (vi) any inventories of the Businesses, including raw materials,
      goods in process, finished goods, packaging, supplies and labels;

            (vii) any manufacturing equipment and packaging assets used in the
      manufacture of the Products, and any warranty rights applicable to such
      manufacturing equipment;

            (viii) any refund or credit of Taxes attributable to any Excluded
      Tax Liability;
<PAGE>   8
            (ix) all rights, claims and credits of Seller or any of its
      Affiliates, relating to any Excluded Asset or any Excluded Liability,
      including any such items arising under insurance policies and all
      guarantees, warranties, indemnities and similar rights in favor of Seller
      or any of its Affiliates relating to any Excluded Asset or any Excluded
      Liability;

            (x) all rights of Seller or any of its Affiliates under this
      Agreement and the Related Instruments; and

            (xi) all Retained Information.

            (d) Purchaser shall acquire the Acquired Assets free and clear of
all liabilities, obligations and commitments of Seller or any of its Affiliates,
other than the Assumed Liabilities, and free and clear of all Liens, other than
Permitted Liens.

            Section 1.3 Assumed Liabilities. (a) Upon the terms and subject to
the conditions of this Agreement, Purchaser shall assume, effective as of the
Closing, and from and after the Closing Purchaser shall pay, perform and
discharge when due, only the following liabilities, obligations and commitments
of Seller and its Affiliates (the "Assumed Liabilities")

            (i) except to the extent set forth in Section 1.3(c)(ii), all
      liabilities arising out of or relating to any product liability, breach of
      warranty or similar claim for injury to person or property, regardless of
      when asserted, which resulted from the use or misuse of Products or
      otherwise related to the Products (including all Proceedings relating to
      any such liabilities);

            (ii) except to the extent set forth in Section 1.3(c)(iii) (A) and
      (B), all liabilities arising out of or relating to the return of any
      Products on or after the Closing Date, whether or not sold by Seller or
      its Affiliates prior to, on or after the Closing Date;

            (iii)  except to the extent set forth in Section 1.3(c)(iii)(C), all
      liabilities arising out of or relating to any rebates related to any
      Products;

            (iv) all liabilities for Taxes arising out of or relating to,
      directly or indirectly, the Businesses or the Acquired Assets (including
      the Products) or the ownership, sale or lease of any of the Acquired
      Assets, other than the Excluded Tax Liabilities; and

            (v) all other liabilities, obligations and commitments of whatever
      kind and nature, primary or secondary, direct or indirect, absolute or
      contingent, known or unknown, whether or not accrued, arising out of or
      relating to, directly or indirectly, the Businesses or the Acquired Assets
      (including the Products) or the ownership, sale or lease of any of the
      Acquired Assets but only to the extent related to any period on or after
      the Closing Date.
<PAGE>   9
            (b) Purchaser and Seller hereby agree to reimburse one another,
dollar for dollar, in the event that any of their or their respective
Affiliate's customers offset, against accounts payable by such customer to
Seller or Purchaser or their respective Affiliates, the cost of any Products
returned by such customer, in each case which are the responsibility of the
other party hereto pursuant to this Section 1.3. Seller and Purchaser agree to,
and to cause their respective Affiliates to, provide notice to one another of
any such offset for which such party or its Affiliate is entitled to be
reimbursed pursuant to this Section 1.3(b). Payment shall be made promptly
following receipt of notice of any such offset by a customer (together with
supporting documentation). Seller and Purchaser shall, and Seller shall cause
its Affiliates to, cooperate to ensure that a customer does not offset returns
of any Product against both Seller (or any of its Affiliates) and Purchaser.

            (c) Notwithstanding any other provision of this Agreement or any
Related Instrument, Purchaser shall not assume any Excluded Liability, each of
which shall be retained and paid, performed and discharged when due by Seller
and its Affiliates. The term "Excluded Liability" shall mean:

            (i) account payables and liabilities, obligations and commitments of
      Seller or any of its Affiliates for materials and services with respect to
      the manufacture of any Products;

            (ii) all liabilities arising out of or relating to any product
      liability, breach of warranty or similar claim for injury to person or
      property, regardless of when asserted, which resulted from the use or
      misuse of Products manufactured by or on behalf of Seller and shipped to a
      third party prior to the Closing (the "Shipped Products") or otherwise
      related to the Shipped Products (including all Proceedings relating to any
      such liabilities);

            (iii) all liabilities arising out of or relating to (A) the return
      after the Closing Date of any Shipped Products which returns are a result
      of adulteration or misbranding (within the meaning of the FDA Act or the
      rules and regulations promulgated thereunder) by Seller, (B) the return
      during the six (6) month period after the Closing Date of any Products
      that on the date of return have an expiration date not earlier than three
      (3) months and not later than six (6) months after such date of return and
      (C) rebates related to any Shipped Products which were shipped to a third
      party prior to December 31, 1999;

            (iv) any Tax payable with respect to any business, asset, property
      or operation of Seller or any member of any affiliated group of which
      Seller is a member (including any Taxes relating to or arising out of the
      operation of the Businesses) for any Pre-Closing Tax Period, other than
      any Tax for which Purchaser is responsible pursuant to Section 4.6
      ("Excluded Tax Liability");

            (v) any liability, obligation or commitment of Seller or any of its
      Affiliates arising out of or relating to any Excluded Asset;
<PAGE>   10
            (vi) any liability, obligation or commitment of any kind arising out
      of or relating to employment, compensation or benefits (including
      severance) for the present or future employees of Seller or any of its
      Affiliates for all employment relating to the Businesses; or

            (vii) except to the extent specifically provided in Section 1.3(a)
      (i), (ii), (iii), (iv), (v) and (vi), all other liabilities, obligations
      and commitments of whatever kind and nature, primary or secondary, direct
      or indirect, absolute or contingent, known or unknown, whether or not
      accrued, arising out of or relating to, directly or indirectly, the
      Businesses or the Acquired Assets (including the Products) but only to the
      extent related to any period prior to the Closing Date.

            (d) Each of Purchaser's and Seller's obligations under this Section
1.3 will not be subject to offset or reduction by reason of any actual or
alleged breach of any representation, warranty or covenant contained in this
Agreement or any Related Instrument or any right or alleged right to
indemnification hereunder.

            (e) For the avoidance of doubt, if there is any conflict between the
terms of this Section 1.3 and the terms of either of the Supply Agreements with
respect to any liabilities arising out of, or related to, directly or
indirectly, Products (as such term is defined in the applicable Supply
Agreement) sold by Seller or its Affiliates to Purchaser pursuant to such Supply
Agreement, the terms of such Supply Agreement shall govern.

            Section 1.4 Closing. (a) The consummation of the transactions
contemplated by this Agreement (the "Closing") will take place on the second
business day following the satisfaction or waiver of the conditions set forth in
Article V hereof, at 10:00 a.m., at the offices of Kirkland & Ellis, 153 East
53rd Street, New York, New York, or at such other time and place as shall be
mutually agreed upon by the parties. The date on which the Closing occurs is
referred to herein as the "Closing Date."

            (b) At the Closing, Seller shall deliver or cause to be delivered to
Purchaser, the following: (i) a duly executed Trademark License Agreement; (ii)
a duly executed Assignment of Patent; (iii) a duly executed Assignment of
Trademarks; (iv) a duly executed Bill of Sale; (v) the termination agreements
referred to in Section 4.15(d), duly executed, and (vi) the Seller's Officer's
Certificate.

            (c) At the Closing, Purchaser shall deliver to Seller, the
following: (i) cash in the aggregate amount of $180,000,000 by electronic funds
transfer of immediately available funds in the amounts and to the accounts of
such entities as are designated by Seller on Schedule 1.4(c) (with such entities
to designate to Purchaser in writing not less than two (2) business days prior
to Closing the relevant account numbers of the accounts to which such transfers
should be made) ; (ii) a duly executed Trademark License Agreement; (iii) a duly
executed Assignment of Patent; (iv) a duly executed Assignment of Trademarks;
(v) the termination agreements referred to in Section 4.15(d), duly executed;
(vi) a duly executed instrument of assumption of the Assumed Liabilities
<PAGE>   11
substantially in the form of Exhibit C (the "Assumption Agreement"); and (vii)
the Purchaser's Officer's Certificate.

            Section 1.5 Risk of Loss. Until the Closing, any loss of or damage
to the Acquired Assets from fire, casualty or any other occurrence shall be the
sole responsibility of Seller or its Affiliates, as applicable. On the Closing
Date, title to the Acquired Assets shall be transferred to Purchaser and
Purchaser shall thereafter bear all risk of loss associated with the Acquired
Assets and be solely responsible for procuring adequate insurance to protect the
Acquired Assets against any such loss.

            Section 1.6 Purchase Price Adjustment. (a) Promptly after execution
of this Agreement, Seller shall retain IMS Health Incorporated ("IMS") to
determine the Months of Supply of each Product Line that were held by Seller's
or its Affiliates' wholesale customers as of the end of the month immediately
preceding the month in which the Closing Date occurs (the "Calculation Date").
"Months of Supply" shall be calculated by IMS using the methodology set forth on
Schedule 1.6. For purposes of this Section 1.6, "Product Line" means each of (i)
all Ovcon 35 and Ovcon 50 Products determined in the aggregate (the "Ovcon
Product Line") and (ii) all Estrace Cream Products determined in the aggregate
(the "Estrace Product Line"). Seller shall request that IMS deliver to each of
Seller and Purchaser, as soon as practicable after the Closing Date, a notice
(the "IMS Notice") setting forth the Months of Supply as of the Calculation Date
for each Product Line.

            (b) If the Months of Supply of the Ovcon Product Line, as set forth
in the IMS notice, exceeds 2.1, then Seller shall pay to Purchaser in cash,
within 10 business days of receipt of the IMS Notice, the product of (i) the
Months of Supply of the Ovcon Product Line as of the Calculation Date minus 2.1
and (ii) $2,463,000. If the Months of Supply of the Estrace Product Line, as set
forth in the IMS Notice, exceeds 2.4, then Seller shall pay to Purchaser in
cash, within 10 business days of receipt of the IMS Notice, the product of (A)
the Months of Supply of Estrace Product Line as of the Calculation Date minus
2.4 and (B) $1,565,000. For the avoidance of doubt, to the extent that any
amounts payable by Seller pursuant to this clause (b) are less than zero,
Purchaser shall have no obligation to pay the absolute value of such amounts to
Seller.

            (c) Notwithstanding anything to the contrary set forth in this
Agreement, the foregoing shall be Purchaser's sole and exclusive remedy with
respect to Seller's (and its Affiliates') sales practices related to incentives
or other inducements to purchase Products offered, or volume of the Products
sold, to Seller's (or such Affiliates') customers, in each case, prior to the
Closing Date. Purchaser shall not be entitled to recovery under Article VII for
any Losses arising from any breaches of representations and warranties or
breaches of covenants in this Agreement or in any Related Instrument relating to
such sales practices or volume of sales.
<PAGE>   12
                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF SELLER

            Seller represents and warrants to Purchaser as follows:

            Section 2.1 Organization. Each of Seller and Mead Johnson & Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of Seller and its Affiliates has all
requisite corporate power and authority to own, lease and operate the Acquired
Assets and to carry on the Businesses as they are presently conducted.

            Section 2.2 Authority; Execution and Delivery; Enforceability.
Seller has the requisite corporate power and authority to execute and deliver
this Agreement and to perform all of its obligations hereunder, and each of
Seller and its Affiliates has the requisite corporate power and authority to
execute and deliver each Related Instrument to which it is a party and to
perform all of its obligations thereunder. The execution and delivery of this
Agreement and the Related Instruments and the performance by Seller and its
Affiliates of their respective obligations hereunder and thereunder have been
authorized by all requisite corporate action on their respective parts. This
Agreement has been validly executed and delivered by Seller and, assuming that
this Agreement has been duly authorized, executed and delivered by Purchaser,
constitutes, and each Related Instrument that is to be executed and delivered by
Seller or an Affiliate of Seller will constitute when executed and delivered by
Seller or such Affiliate, as applicable (assuming that such Related Instrument
has been duly authorized, executed and delivered by Purchaser to the extent
applicable), a valid and binding obligation of such party, enforceable against
such party in accordance with its terms.

            Section 2.3 Consents and Approvals; No Violations. (a) Except as set
forth on Schedule 2.3(a), neither the execution and delivery of this Agreement
nor any Related Instrument by Seller or any Affiliate of Seller party thereto,
nor the performance by Seller or such Affiliate of its obligations hereunder or
thereunder will (i) violate the certificate of incorporation, by-laws or other
organizational document of Seller or such Affiliate, (ii) conflict with or
result in a violation or breach of, or constitute a default under, any contract,
agreement or instrument to which Seller or such Affiliate is a party or by which
Seller or such Affiliate or the Acquired Assets are bound, or result in the
creation or imposition of any Lien upon any of the Acquired Assets or (iii)
violate or conflict with any law, rule, regulation, judgment, order or decree of
any court applicable to Seller, such Affiliate or the Acquired Assets, except in
the case of clauses (ii) or (iii) for violations, breaches or defaults which
would not result in a Material Adverse Effect, have a material adverse effect on
Seller's ability to consummate the transactions contemplated hereby or
materially delay the consummation of the transactions contemplated hereby.

            (b) Except for the applicable requirements of the HSR Act and except
as set forth on Schedule 2.3(b), no filing with, and no permit, authorization,
consent or approval of, any Governmental Entity is necessary for the
consummation by Seller of the
<PAGE>   13
transactions contemplated by this Agreement, except for those filings, permits,
authorizations, consents or approvals the failure of which to be made or
obtained would not result in a Material Adverse Effect, materially impair
Seller's ability to consummate the transactions contemplated hereby or
materially delay the consummation of the transactions contemplated hereby.

            Section 2.4 Financial Statements. Schedule 2.4 sets forth the
"Statements of Net Sales and Product Contribution" for the Products for the
years ended December 31, 1997 and 1998 and for the nine months ended September
30, 1998 and 1999 (collectively, the "Financial Statements"). The Financial
Statements have been prepared in accordance with Seller's accounting policies
applied on a consistent basis, which are in accordance with GAAP and fairly
present, in all material respects, as of the dates thereof and for the periods
then ended the product contribution (as described therein) of the Businesses.

            Section 2.5 Absence of Certain Changes. Except as set forth on
Schedule 2.5, since September 30, 1999 and through the date hereof, there has
not been any material adverse change in the business or results of operations of
the Businesses, taken as a whole. Except as set forth on Schedule 2.5, since
September 30, 1999 and through the date hereof, Seller has caused each Business
to be conducted in the ordinary course. Except as set forth on Schedule 2.5,
since September 30, 1999 and through the date hereof, none of Seller or its
Affiliates has taken any action that, if taken after the date of this Agreement,
would constitute a breach of any of the covenants set forth in Section 4.1.

            Section 2.6 Title of Assets. Seller or an Affiliate of Seller has,
or as of the Closing Date will have, good and valid title to all the Acquired
Assets, except, in the case of the Acquired Assets set forth in clauses (iii)
and (iv) of Section 1.2(a), those sold or otherwise disposed of in the ordinary
course of business consistent with past practices and not in violation of this
Agreement, in each case free and clear of all Liens, other than Permitted Liens.
This Section 2.6 does not relate to Intellectual Property, which is the subject
of Section 2.7.

            Section 2.7 Intellectual Property. (a) Schedule 2.7(a) sets forth a
complete and correct list of: (i) all patented or registered Intellectual
Property and pending patent applications or other applications for registration
of Intellectual Property owned or used in the Businesses; (ii) all common law
trademarks and service marks used in the Businesses; and (iii) all licenses or
similar agreements or arrangements to which Seller or any of its Affiliates is a
party, either as licensee or licensor, relating to the Intellectual Property.
<PAGE>   14
            (b) Except as set forth on Schedule 2.7(b):

            (i) Seller or one of its Affiliates owns and possesses all right,
      title and interest in, to and under the Intellectual Property used in the
      Businesses in the United States free and clear of any liens, encumbrances
      or other restrictions; and no claim by any third party contesting the
      validity, enforceability, use or ownership of any such Intellectual
      Property has been made and is currently outstanding, nor to the Knowledge
      of Seller, is any threatened or are there any grounds for the same;

            (ii) none of Seller or any of its Affiliates has received any
      notices of, nor is aware of any facts which would indicate a reasonable
      likelihood of, any infringement or misappropriation by, or conflict with,
      any third party with respect to the Intellectual Property used in the
      Businesses in the United States (including any demand or request that
      Seller license rights from a third party); and

            (iii) to the Knowledge of Seller, the conduct of the Businesses in
      the United States does not infringe, misappropriate or otherwise conflict
      with any rights of any third parties.

            (c) Except as set forth on Schedule 2.7(c), Seller has the right to
use and convey all the Other Intellectual Property that is material to the
conduct of the Businesses.

            (d) No present or former employee or consultant of Seller and no
other person owns or has any proprietary, financial or other interest, direct or
indirect, in the Intellectual Property used in the Businesses in the United
States.

            Section 2.8 Contracts. Except as set forth on Schedule 2.8, none of
Seller or its Affiliates is a party to or bound by any oral or written contract,
lease, license, indenture, agreement, commitment or any other legally binding
arrangement, that is used, held for use or intended for use, primarily in, or
that arises primarily out of, the operation or conduct of the Businesses and
under which Purchaser will have any liability or other obligation after the
Closing ("Contracts") and that is:

            (i) or contains a covenant not to compete or covenants that in any
      way purport to restrict the business activity of Seller and/or its
      Affiliates or limit the freedom of Seller and/or its Affiliates to engage
      in any of the Businesses or to compete with any Person or otherwise
      restricts the rights of Seller and/or its Affiliates to use or disclose
      any information in its or their possession;

            (ii) a Contract involving payment by Seller and/or any of its
      Affiliates of more than $50,000 or extending for a term more than 180 days
      from the date of this Agreement (unless terminable without payment or
      penalty upon no more than 60 days' notice), other than purchase orders
      entered into in the ordinary course of any Business consistent with past
      practice;
<PAGE>   15
            (iii) a Contract involving the obligation of Seller and/or any of
      its Affiliates to deliver products or services for payment of more than
      $50,000 or extending for a term more than 180 days from the date of this
      Agreement (unless terminable without payment or penalty upon no more than
      60 days' notice), other than sales orders entered into in the ordinary
      course of any Business consistent with past practice; or

            (iv) a Contract for the sale of any Acquired Asset (other than
      inventory sales in the ordinary course of business) or the grant of any
      preferential rights to purchase any Acquired Asset or requiring the
      consent of any party to the transfer thereof or that creates a
      relationship with any distributor, dealer, manufacturer's representative
      or sales agency or that provides for payments to or by any Person based on
      sales, purchases, or profits, other than direct payments for goods; or

            (v) a lease, installment or conditional sale agreement, or other
      Contract affecting the ownership of, leasing of, title to, use of or any
      other interest in any Acquired Assets (except personal property leases and
      installment or conditional sales agreements having a value per item or
      aggregate payments of less than $50,000 or extending for a term less than
      180 days from the date of this Agreement (unless terminable without
      payment or penalty upon no more than 60 days' notice)).

            Except as set forth in Schedule 2.8, all Contracts listed in the
Schedules are valid, binding and in full force and effect, except for such
failures to be valid, binding, and in full force and effect that, individually
or in the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 2.8, Seller or its
Affiliates have performed all obligations required to be performed by them to
date under the Contracts, and they are not (with or without the lapse of time or
the giving of notice, or both) in breach or default in any respect thereunder
and, to the Knowledge of Seller, no other party to any Contract is (with or
without the lapse of time or the giving of notice, or both) in breach or default
in any respect thereunder, except for such noncompliance, breaches and defaults
that, individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect. Complete and correct copies of all
Contracts listed in the Schedules, together with all modifications and
amendments thereto, have been made available to Purchaser.

            Section 2.9 Compliance with Law. (a) Except as set forth on Schedule
2.9(a) or to the extent that it could not reasonably be expected to have a
Material Adverse Effect, (i) the Businesses are conducted in the United States
in compliance with all permits, government licenses, registrations, approvals,
concessions, franchises, authorizations, orders, injunctions and decrees and
applicable laws, including the United States Food, Drug and Cosmetics Act of
1938, as amended from time to time (the "FDA Act"), (ii) all governmental
licenses, permits, registrations, approvals, concessions, franchises and
authorizations principally employed in, or necessary to the ongoing
<PAGE>   16
conduct of, the Businesses in the United States are in full force and effect,
(iii) since January 1, 1995, no Governmental Entity has served notice that
Seller and its Affiliates (with respect to the Businesses), the Businesses or
the Acquired Assets were or are in violation of any law, statute, ordinance,
rule, regulation or order in the United States and, to the Knowledge of Seller,
there are no grounds for the same and (iv) since January 1, 1995, none of Seller
or any of its Affiliates has received written notice from any United States
Governmental Entity that there are any circumstances currently existing which
would lead to any loss or refusal to renew any governmental licenses, permits,
registrations, approvals, concessions, franchises and authorizations on terms
less advantageous to Seller and its Affiliates than the terms of those licenses,
permits, registrations, approvals, concessions, franchises and authorizations
currently in force.

            (b) (i) Except as set forth on Schedule 2.9(b)(i), the Businesses
are conducted in compliance in all material respects with all applicable laws
and regulations in connection with the preparation and submission to the FDA of
each of the NDAs (or ANDAs) relating to the Products, and each of the NDAs (or
ANDAs) has been approved by, and none of Seller or any of its Affiliates has
received any notice in writing which has, or reasonably should have, led Seller
to believe that any of the NDAs (or ANDAs) are not currently in good standing
with the FDA. To its Knowledge, Seller or its Affiliates have filed with the FDA
all required notices, supplemental applications and annual or other reports,
including adverse experience reports, with respect to each NDA (or ANDA) which
is material to the conduct of the Businesses as currently conducted by Seller.
With respect to the Products for which an NDA (or an ANDA) has been approved by
the FDA, the applicant and all persons performing operations covered by the
application acted in compliance in all material respects with 21 U.S.C.
Sections 355 or 357, 21 C.F.R. Parts 314 or 430 et. seq., respectively,
and all terms and conditions of such application. Except as set forth on
Schedule 2.9(b)(i), none of Seller or any of its Affiliates or any of their
agents have prepared or have any rights to any ANDA filings (or equivalent
non-U.S. filings) relating to the Products.

            (ii) Except as set forth on Schedule 2.9(b)(ii), neither Seller nor
any of its Affiliates has received any notice since January 1, 1995 that any
United States governmental or regulatory agency (including the FDA) has
commenced, or, to the Knowledge of Seller, threatened to initiate any action to
withdraw its approval or request the recall of any Product, or commenced or
threatened to initiate any action to enjoin production of the Products at any
facility.

            (iii) All manufacturing operations conducted by Seller and its
Affiliates relating to the manufacturing of the Products are being conducted in
compliance in all material respects with current good manufacturing practices as
set forth in 21 C.F.R. Parts 210 and 211.

            (iv) Seller and its Affiliates have made available to Purchaser
copies of all material (A) reports of inspection observations, (B) establishment
inspection reports, and (C) warning letters as well as any other documents
received by Seller or any of its Affiliates from the FDA relating to the Product
and/or arising out of the conduct of the
<PAGE>   17
Businesses that assert ongoing material lack of compliance with any material
applicable laws or regulatory requirements (including those of the FDA) by
Seller or its Affiliates.

            Section 2.10 Litigation. (a) As of the date hereof, except as set
forth on Schedule 2.10, there is no claim, action, or proceeding, including
product liability claims (collectively, a "Proceeding"), pending or, to Seller's
Knowledge, threatened against Seller or its Affiliates (in respect of the
Acquired Assets), the Acquired Assets (including the Products), the conduct of
the Businesses or the transactions contemplated by this Agreement and each
Related Instrument, in respect of which Purchaser would become liable as a
result of the consummation of the transactions contemplated hereby which is
reasonably likely to be adversely determined, and if adversely determined, is
reasonably likely to result in a Material Adverse Effect.

            (b) There are no outstanding orders, injunctions or decrees of any
United States Governmental Entity that apply to the Acquired Assets (or will
apply to Purchaser after the Closing) that restrict the ownership, disposition
or use of the Acquired Assets or the conduct of the Businesses, in each case, in
any material respect.

            Section 2.11 Brokers or Finders. Neither Seller nor any of its
Affiliates has retained any agent, broker, investment banker, financial advisor
or other firm or Person that is or will be entitled to any brokers' or finder's
fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement, and there are no claims for any of
the foregoing.

            Section 2.12 Registrations. Schedule 2.12 sets forth all regulatory
approvals for the Products.

            Section 2.13 Medical Information. Seller has made available to
Purchaser copies of (a) all serious adverse event reports and periodic adverse
event reports with respect to the Products that have been filed with the FDA
since January 1,1995, including any material correspondence or other material
documents relating thereto, (b) a schedule of all payouts made by Seller since
January 1, 1995 to end-users in respect of claims relating to the Products and
(c) a schedule of all actual or threatened claims made by end-users since
January 1, 1995 against Seller or its Affiliates relating to the Products.

            Section 2.14 Websites and Domain Names. Other than the domain names
set forth on Schedule 2.14, none of Seller or any of its Affiliates has any
interest or ownership rights in any domain names or websites exclusively
relating to the Products.

            Section 2.15 Knowledge. Seller represents that the individuals set
forth on Schedule 8.2(a) are Seller's and its Affiliates' representatives with
primary responsibility in their respective areas of expertise.

            Section 2.16 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article II (including the
Schedules), the Seller's Officer's Certificate and the Related Instruments, none
of Seller, its Affiliates or
<PAGE>   18
any other Person makes any other express or implied representation or warranty
on behalf of Seller or any of its Affiliates.


                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

            Purchaser represents and warranties to Seller as follows:

            Section 3.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. Purchaser has
all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as now being conducted.

            Section 3.2 Authority; Execution and Delivery; Enforceability.
Purchaser has the requisite corporate power and authority to execute and deliver
this Agreement and the Related Instruments and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
Related Instruments and the performance by Purchaser of its obligations
hereunder and thereunder have been authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been validly executed and delivered
by Purchaser and, assuming that this Agreement has been duly authorized,
executed and delivered by Seller, constitutes, and each Related Instrument that
is to be executed and delivered by Purchaser will constitute when executed and
delivered by Purchaser (assuming that such Related Instrument has been duly
authorized, executed and delivered by Seller and/or its Affiliates to the extent
applicable), a valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.

            Section 3.3 Consents and Approvals; No Violations. (a) Neither the
execution and delivery of this Agreement nor any Related Instrument by Purchaser
nor the performance by Purchaser of its obligations hereunder or thereunder will
(i) violate the certificate of incorporation, by-laws or other organizational
document of Purchaser, (ii) conflict with or result in a violation or breach of,
or constitute a default under, any contract, agreement or instrument to which
Purchaser is a party or by which any of its properties or assets are bound or
(iii) violate or conflict with any law, rule, regulation, judgment, order or
decree, except in the case of clauses (ii) or (iii) for violations, breaches or
defaults which would not have a material adverse effect on Purchaser's ability
to consummate the transaction contemplated hereby or materially delay the
consummation of the transactions contemplated by this Agreement.

            (b) Except for the applicable requirements of the HSR Act, no filing
with, and no permit, authorization, consent or approval of, any Governmental
Entity is necessary for the consummation by Purchaser of the transactions
contemplated by this Agreement, except for those filings, permits,
authorizations, consents or approvals the failure of which to be made or
obtained would not materially impair Purchaser's ability to
<PAGE>   19
consummate the transaction contemplated hereby or materially delay the
consummation of the transactions contemplated hereby.

            Section 3.4 Brokers and Finders. Neither Purchaser nor its
Affiliates has retained any agent, broker, investment banker, financial advisor
or other firm or Person that is or will be entitled to any brokers' or finder's
fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement, and there are no claims for any of
the foregoing.

            Section 3.5 No Proceedings. There is no Proceeding, pending or, to
the Knowledge of Purchaser, threatened against Purchaser which would affect
Purchaser's ability to consummate the transactions contemplated by this
Agreement and each Related Instrument.

            Section 3.6 Availability of Funds. Purchaser has used its
commercially reasonable efforts and will continue to use its commercially
reasonable efforts to obtain the funds necessary to consummate the Acquisition
for so long as this Agreement has not been terminated in accordance with the
provisions of Article VI. Without limiting the provisions of this Section 3.6,
Purchaser acknowledges and agrees that for purposes of Section 3.6 "commercially
reasonable efforts" shall include the actions set forth on Schedule 3.6.

            Section 3.7 No Other Purchaser Representations or Warranties. Except
for the representations and warranties contained in this Article III, the
Purchaser's Officer's Certificate and the Related Instruments neither Purchaser
nor any other Person makes any other express or implied representation or
warranty on behalf of Purchaser.
<PAGE>   20
                                   ARTICLE IV

                                    COVENANTS

            Section 4.1 Conduct of the Business. During the period from the date
hereof until the Closing, Seller shall, except as otherwise contemplated by this
Agreement or as set forth on Schedule 4.1, and shall cause its Affiliates to,
operate the Businesses only in the ordinary course of business consistent with
past practices and shall, and shall cause its Affiliates to, use its or their
reasonable efforts to preserve intact the Acquired Assets and the Businesses.
Without limiting the generality of the foregoing, and except as otherwise
contemplated by this Agreement, from the date of this Agreement until Closing
Date, without the prior written consent of Purchaser (which consent shall not be
unreasonably withheld), Seller: (a) shall not, and shall cause its Affiliates
not to, mortgage, pledge or subject to any Lien (other than Permitted Liens) any
Acquired Asset, (b) shall, and shall cause its Affiliates to, use its and their
reasonable efforts to maintain satisfactory relationships with and preserve the
goodwill of suppliers and customers in connection with the conduct of the
Businesses, (c) shall not, and shall cause its Affiliates not to, transfer or
grant any rights or options in or to any of the Acquired Assets except for the
transfer of inventory in the ordinary course of business, (d) shall not, and
shall cause its Affiliates not to, transfer to any third party any rights under
any licenses, sublicenses or other agreements with respect to any Intellectual
Property, (e) shall, and shall cause its Affiliates to, conduct its marketing
and promotional activities with respect to the Products in the ordinary course
of each Business consistent with past practices, (f) shall not, and shall cause
its Affiliates not to, institute any new methods of purchase, sale or operation
nor institute any changes in the product pricing or in promotional allowances
other than in the ordinary course of each Business consistent with past
practices, (g) shall not, and shall cause its Affiliates not to, make any
material changes in selling, pricing or advertising practices inconsistent with
past practices and (h) shall not launch any Product packaging changes or Product
line extensions, including the Estrace(R) Cream "Unit of Use" line extension.
Without limiting the foregoing in clause (g), Seller shall not, and shall cause
its Affiliates not to, engage in any special promotions of any Product or
establish any tie-ins of any Product with any of Seller's or its Affiliates'
other products.

            Section 4.2 Access to Information. (a) After the date hereof and
prior to the Closing, Seller shall, and shall cause its Affiliates to, permit
Purchaser and its representatives and agents to have reasonable access during
normal business hours to Seller's and its Affiliates' books and records,
manufacturing facilities and personnel primarily relating to the Acquired Assets
and the Businesses and Seller shall, and shall cause its Affiliates to, furnish
promptly to Purchaser such available information concerning the Acquired Assets
and the Businesses as Purchaser may reasonably request; provided, however, that
such access does not unreasonably disrupt the normal operations of Seller, its
Affiliates or the Businesses.

            (b) In addition, at any time prior to, on or after the Closing (i)
Seller shall cooperate with Purchaser in making Retained Information available,
(ii) Seller shall
<PAGE>   21
furnish copies (the first such copy being at Seller's cost and any additional
copies being at Purchaser's cost) of such Retained Information for review by
Purchaser, to the extent practicable, at the reasonable request of Purchaser,
and (iii) upon written notice from Purchaser of any request for Retained
Information, Seller shall promptly designate appropriate contacts with respect
thereto, and shall make such contacts reasonably available to Purchaser.

            Section 4.3 Confidentiality. (a) Purchaser acknowledges that the
information being provided to it in connection with the Acquisition and the
consummation of the other transactions contemplated hereby is subject to the
terms of a confidentiality agreement between Purchaser and Seller dated November
1, 1999 (the "Confidentiality Agreement"), the terms of which are incorporated
herein by reference. Effective upon, and only upon, the Closing, the
Confidentiality Agreement shall terminate with respect to information relating
solely to the Businesses or otherwise included in the Acquired Assets or
relating to the Products; provided, however, that Purchaser acknowledges that
any and all other information provided to it by Seller or Seller's
representatives concerning Seller and its Affiliates shall remain subject to the
terms and conditions of the Confidentiality Agreement after the Closing Date.
Notwithstanding the foregoing, Seller acknowledges and agrees that Purchaser may
(i) disclose to prospective purchasers of its notes, their representatives, all
other Persons deemed necessary by Purchaser in connection therewith and
Purchaser and its Affiliates' lenders (to the extent required by such lenders)
all information relating to the Businesses (other than the Financial Statements)
set forth in Purchaser's confidential offering circular dated as of January 26,
2000 (the "Offering Memorandum") delivered to such Persons in connection with
the financing of the transactions contemplated by this Agreement and (ii)
publicly disclose Retained Information (other than the Financial Statements)
relating to the Businesses (A) if and to the extent required by applicable law,
rule or regulation or (B) with the consent of Seller (not to be unreasonably
withheld). Purchaser may not disclose the Financial Statements to any Persons
except with the prior consent of Seller, to be given in its sole discretion.

            (b) Each of Purchaser and Seller agrees that the terms of this
Agreement and the Related Instruments shall not be disclosed or otherwise made
available to the public and that copies of this Agreement and the Related
Instruments shall not be publicly filed or otherwise made available to the
public, except where such disclosure, availability or filing is required by
applicable law and only to the extent required by such law. In the event that
such disclosure, availability or filing is required by applicable law, each of
Purchaser and Seller (as applicable) agrees to use commercially reasonable
efforts to obtain "confidential treatment" of this Agreement and the Related
Instruments with the U.S. Securities and Exchange Commission (or the equivalent
treatment by any other Governmental Entity) and to redact such terms of this
Agreement and the Related Instruments as the other party shall request.

            (c) Seller shall keep confidential, and cause its Affiliates and its
and their officers, directors, employees and advisors to keep confidential, all
information relating to the Businesses, except as required by law or
administrative process and except for
<PAGE>   22
information that is available to the public on the Closing Date, or thereafter
becomes available to the public other than as a result of a breach of this
Section 4.3(c). The covenant set forth in this Section 4.3(c) shall terminate
five (5) years after the later of the termination of the Estrace Supply
Agreement and the termination of the Ovcon Supply Agreement.

            Section 4.4 Best Efforts. (a) On the terms and subject to the
conditions of this Agreement, and subject to Section 3.6 with respect to
Purchaser's obligation to obtain funds, each party shall use its best efforts to
cause the Closing to occur, including taking all reasonable actions necessary to
comply promptly with all legal requirements that may be imposed on it or any of
its Affiliates with respect to the Closing. Without limiting the foregoing or
the provisions set forth in Section 4.5, and subject to Section 3.6 with respect
to Purchaser's obligation to obtain funds, Purchaser and Seller shall use their
respective best efforts to cause the Closing to occur on or prior to February
15, 2000.

            Section 4.5 Regulatory Approvals. (a) On January 14, 2000, each of
Purchaser and Seller filed appropriate forms under the HSR Act with the United
States Federal Trade Commission ("FTC") and the United States Department of
Justice ("DOJ"). Each of Seller and Purchaser shall as promptly as practicable,
supply the FTC and the DOJ such supplemental information requested, if any, in
connection with the transactions contemplated hereby pursuant to the HSR Act.
Any supplemental information shall be in substantial compliance with the
requirements of the HSR Act. Each of Purchaser and Seller shall furnish to the
other such necessary information and reasonable assistance as the other may
request in connection with its preparation of any submission that is necessary
under the HSR Act. Seller and Purchaser shall keep each other apprised of the
status of any communications with, and any inquiries or requests for additional
information from, the FTC and the DOJ and shall comply promptly with any such
inquiry or request. Each of Seller and Purchaser shall use its best efforts to
obtain any clearance required under the HSR Act for the consummation of the
transactions contemplated by this Agreement.

            (b) Each of Seller and Purchaser shall use commercially reasonable
efforts to procure all applicable regulatory approvals necessary to consummate
the transactions contemplated hereby, including the transfer from Seller to
Purchaser, within 90 days of the Closing Date, of all Seller's rights, title and
interest to regulatory approvals relating to the Products or the Businesses.

            Section 4.6 Property Transfer Taxes. Except as otherwise provided
herein, any fees, charges, Taxes or other payments required to be made to any
Governmental Entity in connection with the transfer of the Acquired Assets and
the assignment and assumption of the Assumed Liabilities pursuant to the terms
of this Agreement shall be paid 50% by Purchaser and 50% by Seller. Seller and
Purchaser shall cooperate in timely making and filing all filings, Tax Returns,
reports and forms as may be required with respect to any Taxes payable in
connection with the transfer of the Acquired Assets.
<PAGE>   23
            Section 4.7  [Reserved.]

            Section 4.8 Publicity. Except as otherwise required by law or
applicable stock exchange requirements, prior to the Closing neither Purchaser
nor Seller shall, and each of them shall cause their respective Affiliates,
representatives and agents not to, issue or cause the publication of any press
release or public announcement with respect to the transactions contemplated by
this Agreement without the express prior written approval of the other party,
which approval shall not unreasonably be withheld. The content of the initial
press release announcing the execution of this Agreement shall be mutually
agreed by Purchaser and Seller.

            Section 4.9 Supplemental Disclosure. Seller shall have the right
from time to time prior to the second business day preceding the Closing to
supplement or amend the Schedules with respect to any matter hereafter arising
or discovered which if existing or known at the date of this Agreement would
have been required to be set forth or described in any such Schedule. Any such
supplemental or amended disclosure shall not be deemed to have cured any breach
of any representation or warranty made in this Agreement for purposes of
determining whether or not the conditions set forth in Article V have been
satisfied, but will be deemed to have cured any such breach of representation or
warranty made in this Agreement and to have been disclosed as of the date of
this Agreement for purposes of Article VII hereof.

            Section 4.10 Further Assurances. Each party shall from time to time
after the Closing, without additional consideration, execute and deliver such
further instruments and take such other action as may be reasonably requested by
the other party to make effective the transactions contemplated by this
Agreement and each Related Instrument. With respect to all documents,
information and other materials included in the Acquired Assets, in addition to
paper and other tangible copies, Seller shall, upon Purchaser's request, also
provide to Purchaser electronic copies of such documents, information and other
materials, provided that Seller or its Affiliates or their respective agents
have electronic copies thereof. The foregoing requirement shall only apply to
such documents, information and other material exclusively related to the
Acquired Assets, and Seller shall have no obligation to reformat or otherwise
alter or modify any such materials in order to provide them to Purchaser.

            Section 4.11 No Use of Certain Names. (a) Purchaser shall promptly,
and in any event within six (6) months after the Closing, complete the revision
of all product literature relating to the Products (i) to delete all references
to the Names and (ii) to delete all references to Seller's or its Affiliates'
customer service address or phone number; provided, however, that for a period
of six (6) months from the Closing Date Purchaser may continue to distribute
product literature that uses any Names, addresses or phone numbers to the extent
that such literature exists on the Closing Date, and Seller hereby grants to
Purchaser rights under any copyrights and other intellectual property owned by
Seller (and covenants to cause each of its Affiliates to grant Purchaser rights
under any copyrights and other intellectual property owned by such Affiliate) to
the extent necessary to allow Purchaser to so use such product literature. In no
event shall
<PAGE>   24
Purchaser use any Names after the Closing in any manner or for any purpose
different from the use of such Names by Seller during the 90-day period
preceding the Closing, except as provided in the Supply Agreements.

            (b) Seller hereby grants a non-exclusive right and license to
Purchaser under the Names to the extent necessary to allow Purchaser and its
Affiliates and their designees to market, distribute and sell the Products
utilizing the labels and packaging existing on the Closing Date, to the extent
permitted under Section 2.1.4 of each of the Supply Agreements.

            (c) "Names" means "Bristol-Myers Squibb Company", "Bristol-Myers
Squibb", "BMS", "Bristol-Myers Products", "B-MS", "Squibb" and "E.R. Squibb &
Sons", "Mead Johnson", "Mead Johnson & Company" variations and derivatives
thereof and any other logos or trademarks, trade names or service marks of
Seller or its Affiliates not included on Schedule 2.7.

            Section 4.12 Geographic Limitations. (a) After the Closing Date, and
so long as the [REDACTED], is in effect, Purchaser shall not, and shall not
permit its Affiliates to, market or sell, and shall use commercially reasonable
efforts to prevent any other Person from marketing or selling, any products
bearing the Estrace(R) name in [REDACTED]. In furtherance of the foregoing,
Purchaser shall (i) include the following provision in any agreement or on the
face of any purchase order form, invoice or similar instrument related to the
sale of Estrace Cream (in the case of purchase order forms, invoices or similar
instruments, only after exhaustion of Purchaser's existing stock of such
instruments): "Buyer shall use/sell/distribute the goods only within the country
where Seller has delivered them and shall not directly or indirectly, export
them to any other country" and (ii) if it becomes aware of any [REDACTED] by a
customer, use commercially reasonable efforts to prevent further resales by such
customer, including stopping sales to such customer.

            (b) Purchaser acknowledges and agrees:

            (i) that the Acquired Assets do not include or confer any rights to
      manufacture, distribute, market or sell any products under the "Estrace"
      name in Canada;

            (ii) that certain rights to use the Estrace(R) trademark in
      [REDACTED] were licensed by Seller to [REDACTED]; and

            (iii) that Purchaser will not take any actions that violate
      [REDACTED] under such agreement, including registering, applying to
      register or otherwise using the Estrace(R) trademark (or a mark
      confusingly similar thereto) in [REDACTED] (unless otherwise agreed to in
      writing by [REDACTED]).

            (c) Seller agrees that it will not amend, supplement or otherwise
modify the provisions of the [REDACTED] related to the Estrace(R) trademark.
<PAGE>   25
            Section 4.13 Bulk Transfer Laws. Purchaser hereby waives compliance
by Seller and its Affiliates with the provisions of any so-called "bulk transfer
law" of any jurisdiction in connection with the sale of the Acquired Assets to
Purchaser.

            Section 4.14 Right of First Negotiation. If, during the period from
the Closing Date until the fifth anniversary thereof, Seller (or any of its
Affiliates) determines that it is interested in entering into an arrangement
with an unaffiliated person (hereinafter a "Third Party") to sell or out-license
the right to sell (any such rights being hereafter referred to as a "Right") any
of the Excluded Estrace Products (subject to the Roberts Agreement), Seller (or
any of its Affiliates, as applicable) shall give Purchaser a right of first
negotiation to acquire such Right as follows:

            (a) Seller shall give written notice to Purchaser of its (or any of
its Affiliates) interest in selling or out-licensing the Right. Purchaser shall
have fifteen (15) days after receipt of such notice to decide whether or not it
wishes to pursue negotiations for such an arrangement with respect to such Right
and to submit a proposal to Seller. In the event that Purchaser declines to
pursue negotiations or does not reply to Seller's notice within the fifteen (15)
day period, Seller (or any of its Affiliates, as applicable) shall be free to
negotiate and enter into an arrangement with respect to such Right with a Third
Party.

            (b) In the event that Purchaser expresses interest in negotiations
and submits a preliminary proposal, then for an additional thirty (30) day
period, Seller shall conduct negotiations on an exclusive basis with Purchaser
diligently and in good faith to reach an agreement with Purchaser. At the end of
such thirty (30) day period, if the parties have not reached an agreement at
such time, Purchaser shall give Seller a written notice setting forth the final
offer by Purchaser for such an arrangement (the "Final Offer"). If Seller (or
any of its Affiliates, as applicable) rejects the Final Offer, it shall
thereafter be free to negotiate and enter into an arrangement with respect to
such Right with a Third Party as provided in Section 4.14(c) below.

            (c) In the event Seller and Purchaser fail to negotiate a written
agreement pursuant to Sections 4.14(b) above within the period provided therein,
Seller (or any of its Affiliates, as applicable) shall be free to enter into an
arrangement for the selling or out-licensing of the Right with a Third Party;
provided, however, that for a period of twelve months from the expiration of the
thirty (30) day exclusive negotiation period set forth in Section 4.14(b) Seller
shall not, and shall cause its Affiliates not to, enter into an arrangement with
a Third Party with respect to such Right on terms less favorable to Seller and
its Affiliates than the Final Offer without first reoffering to Purchaser the
opportunity to enter into an arrangement on the terms set forth in the Final
Offer. In the event of such a reoffer, Purchaser shall have fifteen (15) days to
advise Seller of its interest in entering into an arrangement on such terms. In
the event that Purchaser expresses interest in such an arrangement on such
terms, Purchaser and Seller (or any of Seller's Affiliates, as applicable) shall
conduct exclusive negotiations and conclude an agreement incorporating such
terms within thirty (30) days thereafter. For purposes of
<PAGE>   26
this Section 4.14(c), Purchaser acknowledges and agrees that Seller (or any of
its Affiliates, as applicable) shall have the right, in its sole discretion, to
determine whether an offer from a Third Party that consists in whole or in part
of non-cash compensation is more or less favorable to Seller and its Affiliates
than the Final Offer.

            Section 4.15 Copromotion Agreement. (a) Purchaser acknowledges and
agrees that by execution of this Agreement, Seller and its Affiliates have
satisfied their obligation under Section 15 of the Copromotion Agreement
entitled "Right of First Negotiation".

            (b)  Each of Purchaser and Seller agrees that:

            (i) the Copromotion Agreement shall remain in full force and effect
      up to the Closing Date;

            (ii) until such date, it will perform under the Copromotion
      Agreement in the ordinary course of business and consistent with past
      practice; and

            (iii) upon the Closing, the Copromotion Agreement shall terminate;
      provided that each party thereto shall remain liable for any obligations
      or liabilities thereunder (including payment obligations) which survive
      such termination, in accordance with Section 12 thereof.

            (c) Each of Purchaser and Seller agrees that upon the Closing the
License Agreement among Purchaser, Warner Chilcott Laboratories Ireland Limited
("WC Ireland") and Seller dated as of February 1, 1999 (the "Ovcon License
Agreement"), shall terminate; provided that each party thereto shall remain
liable for any obligations or liabilities thereunder (including payment
obligations) which survive such termination in accordance with Section 8
thereof.

            (d) on the Closing Date (i) Purchaser shall enter into, and Seller
shall cause Apothecon, Inc. to enter into, a termination agreement with respect
to the Copromotion Agreement that is consistent with Section 4.15 (b)(iii) and
(ii) Purchaser and Seller shall enter into, and Purchaser shall cause WC Ireland
to enter into, a termination agreement with respect to the Ovcon License
Agreement that is consistent with Section 4.15(c).

            Section 4.16 Customer Notifications. Promptly after the Closing
Date, Seller and Purchaser shall jointly notify all customers of the Businesses
(i) of the transfer of the Acquired Assets to Purchaser, (ii) that all purchase
orders for Products received by Seller or any of its Affiliates prior to the
Closing Date but not filled as of such date will be transferred to Purchaser;
provided that, to the extent that any purchase order cannot be so transferred,
Seller and Purchaser shall cooperate with each other to ensure that such
purchase order is filled and that Purchaser receives the same economic benefit
and assumes the same liability associated with filling such purchase order as if
such purchase order had been so transferred, and (iii) that all subsequent
purchase orders for Products
<PAGE>   27
should be sent to Purchaser at Warner Chilcott, Inc., 100 Enterprise Drive,
Suite 280, Rockaway, NJ 07866, attention: William Poll, V.P. Finance & Trade
Relations. Seller and Purchaser shall share the costs of such notification.

            Section 4.17 Post-Closing Cooperation. (a) Purchaser and Seller
shall cooperate with each other, and shall cause their officers, employees,
agents, auditors, Affiliates and representatives to cooperate with each other,
for a period of 180 days after the Closing to ensure the orderly transition of
the Businesses from Seller to Purchaser and to minimize any disruption to the
Businesses and the other respective businesses of Seller and Purchaser that
might result from the transactions contemplated hereby. After the Closing, upon
reasonable written notice, Purchaser and Seller shall furnish or cause to be
furnished to each other and their employees, counsel, auditors and
representatives access, during normal businesses hours, to such information and
assistance relating to the Businesses (to the extent within the control of such
party) as is reasonably requested for financial reporting and accounting
matters.

            (b) After the Closing, upon reasonable written notice, Purchaser and
Seller shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Acquired Assets (including access to books and
records) as is reasonably requested for the filing of all Tax returns, and
making of any election related to Taxes, the preparation for any audit by any
Taxing authority, and the prosecution or defense of any claim, suit or
proceeding related to any Tax return. Seller and Purchaser shall cooperate with
each other in the conduct of any audit or other proceeding relating to Taxes
involving the Businesses. Purchaser shall retain the books and records of Seller
and its Affiliates included in the Acquired Assets for a period of seven years
after the Closing. After the end of such seven-year period, before disposing of
such books or records, Purchaser shall give notice to such effect to Seller and
shall give Seller, at Seller's cost and expense, an opportunity to remove and
retain all or any part of such books or records as Seller may select.

            (c) Each party shall reimburse the other for reasonable
out-of-pocket costs and expenses incurred in assisting the other pursuant to
this Section 4.17. Neither party shall be required by this Section 4.17 to take
any action that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations (or, in the case of Purchaser, the
Businesses).

            Section 4.18 Covenant Not to Compete. (a) After the Closing, Seller
shall not, and shall cause its subsidiaries not to, (i) for a period of ten (10)
years following the Closing Date, engage in the manufacture, marketing,
distribution or sale of any generic equivalent of any Product or (ii) for a
period of three (3) years following the Closing Date, engage in the manufacture,
marketing, distribution or sale of any product for hormone replacement therapy,
in cream form and vaginally applied, that has 17(beta)-Estradiol as its primary
active ingredient (each of (i) and (ii) being a "Competitive Business").
<PAGE>   28
            (b) The foregoing shall not be construed to prevent Seller or any of
its subsidiaries from doing any of the following: (i) manufacturing Estrace
Cream under the Estrace Supply Agreement, (ii) manufacturing, marketing,
distributing or selling a product in tablet form under the name Estrace(R),
(iii) acquiring any Person that derives less than 5% of its revenues from a
Competitive Business (or any Person that derives an amount equal to or in excess
of 5% of its revenues from a Competitive Business so long as Seller causes such
Person to divest such Competitive Business within two (2) years from the date of
acquisition), and thereafter owning, managing, operating or controlling such
Person, (iv) owning up to 10% of the voting equity securities or any non-voting
equity or debt securities of any Person primarily engaged in a Competitive
Business whose securities are publicly traded on a national securities exchange
or in the over-the-counter market (or an amount in excess of 10% so long as
Seller divests such excess within two (2) years), or (v) owning any equity or
debt securities through any employee benefit or pension plan.


                                    ARTICLE V

                                   CONDITIONS

            Section 5.1 Conditions to Each Party's Obligations. The respective
obligation of each party to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing of the following conditions:

            (a) The waiting period (including any extensions thereof) applicable
to the consummation of the transactions contemplated by this Agreement required
pursuant to the HSR Act shall have expired or been terminated.

            (b) There shall not be in effect any statute, regulation, order,
decree or judgment of any Governmental Entity which makes illegal or enjoins or
prevents the consummation of the transactions contemplated by this Agreement.

            Section 5.2 Conditions to Obligations of Purchaser. The obligation
of Purchaser to effect the transactions contemplated by this Agreement shall be
further subject to the satisfaction or waiver by Purchaser at or prior to the
Closing of the following conditions:

            (a) The representations and warranties of Seller made in this
Agreement (including the Schedules) and the Related Instruments that are
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects as of the Closing
Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date).
<PAGE>   29
            (b) Seller shall have performed in all material respects all
obligations and covenants required to be performed or complied with by Seller
under this Agreement by the time of Closing.

            (c) Purchaser shall have received from Seller a certificate, dated
the Closing Date, duly executed by an authorized officer of Seller, reasonably
satisfactory in form to Purchaser, to the effect of (a) and (b) above (the
"Seller's Officer's Certificate").

            (d) Seller shall have delivered or caused to be delivered to
Purchaser each of the documents specified in Section 1.4(b).

            (e) Purchaser shall have obtained adequate financing to enable it to
consummate the Acquisition.

            (f) During the period from September 30, 1999 until the Closing,
there shall not have occurred, and there shall not exist on the Closing Date,
any condition or fact which has, or would reasonably be expected to have, a
Material Adverse Effect.

            Section 5.3 Conditions to Obligations of Seller. The obligation of
Seller to effect the transactions contemplated by this Agreement shall be
further subject to the satisfaction (or waiver) at or prior to the Closing of
the following conditions:

            (a) The representations and warranties of Purchaser made in this
Agreement and the Related Instruments that are qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct in all
material respects as of the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects, on and as of such earlier date).

            (b) Purchaser shall have performed in all material respects all
obligations and covenants required to be performed or complied with by Purchaser
under this Agreement by the time of Closing.

            (c) Seller shall have received from Purchaser a certificate, dated
the Closing Date, duly executed by an authorized officer of Purchaser,
reasonably satisfactory in form to Seller, to the effect of (a) and (b) above
(the "Purchaser's Officer's Certificate").

            (d) Purchaser shall have delivered or caused to be delivered to
Seller each of the documents specified in Section 1.4(c).

            Section 5.4 Waiver of Closing Conditions. Purchaser and Seller
acknowledge and agree that if Purchaser or Seller has knowledge of a failure of
any
<PAGE>   30
condition set forth in Section 5.2 or 5.3, respectively, or of any breach by the
other party of any representation, warranty or covenant contained in this
Agreement, and such party proceeds with the Closing, such party shall be deemed
to have waived such condition or breach and such party and its successors,
assigns and Affiliates shall not be entitled to be indemnified pursuant to
Article VII, to sue for damages or to assert any other right or remedy for any
losses, arising from any matters relating to such condition or breach,
notwithstanding anything to the contrary contained herein or in any certificate
delivered pursuant hereto.

            Section 5.5 Frustration of Closing Conditions. Neither Purchaser nor
Seller may rely on the failure of any condition set forth in this Article V to
be satisfied if such failure was caused by such party's failure to act in good
faith or to use its best efforts to cause the Closing to occur, to the extent
required by Section 4.4. Purchaser may only rely on the failure of the condition
set forth in Section 5.2(e) if it has used commercially reasonable efforts in
accordance with Section 3.6 to obtain adequate financing to enable it to
consummate the Acquisition.


                                   ARTICLE VI

                            TERMINATION AND AMENDMENT

            Section 6.1 Termination. This Agreement may be terminated at any
time prior to the Closing by:

            (a) Mutual consent of Seller and Purchaser;

            (b) Either Seller or Purchaser if the Closing shall not have
occurred on or before June 30, 2000 (unless the failure to consummate the
Closing by such date shall be due to the failure of the party seeking to
terminate this Agreement to have fulfilled any of its obligations under this
Agreement);

            (c) Either Seller or Purchaser if a condition to its obligation to
perform becomes incapable of fulfillment and such condition shall not have been
waived by the other party; provided, that Seller or Purchaser, as the case may
be, may not seek termination pursuant to this Section 6.1(c) if such condition
is incapable of fulfillment due to the failure of Seller or Purchaser, as the
case may be, to perform the agreements set forth herein required to be performed
by such party, at or before the Closing; or

            (d) Either Seller or Purchaser if any court of competent
jurisdiction or other competent Governmental Entity shall have issued a statute,
rule, regulation, order, decree or injunction or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such statute, rule, regulation, order, decree
or injunction or other action shall have become final and nonappealable.
<PAGE>   31
            Section 6.2 Effect of Termination. If this Agreement is terminated
and the transactions contemplated hereby are abandoned as described in Section
6.1, this Agreement shall become null and void and of no further force and
effect, except for the provisions of (i) Section 4.3 relating to the obligation
of Purchaser to keep confidential certain information and data obtained by it
from Seller or its Affiliates, (ii) Section 8.6 relating to certain expenses,
(iii) Sections 2.11 and 3.4 relating to finder's fees and broker's fees, (iv)
Section 6.1 and this Section 6.2, (v) Section 4.15(a) (except to the extent that
this Agreement has terminated pursuant to Section 6.1(b) as a result of a
failure to close which is solely a result of Seller's failure to fulfill
obligations under this Agreement which were within Seller's control), (vi)
Section 4.8 relating to publicity and (vii) Section 8.7 relating to governing
law. Nothing in this Section 6.2 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or to impair the right of any party to compel specific performance by
any other party of its obligations under this Agreement.

            Section 6.3 Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing Purchaser, on the one hand, or
Seller, on the other hand, may waive compliance by the other party with any term
or provision of this Agreement that such other party was or is obligated to
comply with or perform.


                                   ARTICLE VII

                            SURVIVAL; INDEMNIFICATION

            Section 7.1 Survival of Representations. The representations and
warranties contained in this Agreement (including the Schedules), in any Related
Instrument, the Seller's Officer's Certificate, the Purchaser's Officer's
Certificate and in any other document delivered in connection herewith or
therewith shall survive the Closing solely for purposes of this Article VII and
shall terminate at the close of business on the eighteen-month anniversary of
the Closing Date; provided that the representations and warranties contained in
Section 2.1 (Organization); Section 2.2 (Authority; Execution and Delivery;
Enforceability); Section 3.1 (Organization) and Section 3.2 (Authority;
Execution and Delivery; Enforceability) shall terminate on the third anniversary
of the Closing Date.
<PAGE>   32
            Section 7.2 Indemnification by Seller. (a) Subject to Section
1.6(c), Seller shall indemnify Purchaser and its Affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives against, and hold them harmless from, any loss, liability,
claim, damage or expense (including reasonable legal fees and expenses)
("Losses"), as incurred (payable promptly upon written request), to the extent
arising from:

            (i) any breach of any representation or warranty of Seller that
      survives the Closing and is contained in this Agreement (including the
      Schedules), the Seller's Officer's Certificate or in any Related
      Instrument (other than the Supply Agreements);

            (ii) subject to the provisions of Section 7.7(b), any breach of any
      covenant of Seller contained in this Agreement or in any Related
      Instrument (other than the Supply Agreements);

            (iii) any Excluded Liability; and

            (iv) any fees, expenses or other payments incurred or owed by Seller
      to any brokers, financial advisors or comparable other Persons retained or
      employed by it in connection with the transactions contemplated by this
      Agreement or by any Related Instrument.

            (b)  Seller shall not be required to indemnify any Person, and shall
not have any liability:

            (i) under clause (i) of Section 7.2 (a) unless the aggregate of all
      Losses for which Seller would, but for this clause (i), be liable exceeds
      on a cumulative basis an amount equal to $2,000,000, and then only to the
      extent of any such excess;

            (ii) under clause (i) of Section 7.2(a) for any individual items (or
      series of related individual items) where the Loss relating thereto is
      less than $50,000, in which case such items shall not be aggregated for
      purposes of clause (i) of this Section 7.2(b);

            (iii) under clause (i) of Section 7.2(a) in excess of an amount
      equal to $25,000,000; and

            (iv) under clause (i) of Section 7.2(a) to the extent the liability
      or obligation is directly caused by any action taken or omitted to be
      taken by Purchaser or any of its Affiliates;

provided, however, that the limitations in the preceding clauses (i)-(iv) of
this Section 7.2(b) shall not be applicable to indemnification under clause (i)
of Section 7.2(a) with respect to the representations and warranties set forth
in Sections 2.1 and 2.2.
<PAGE>   33
            Section 7.3 Indemnification by Purchaser. Purchaser shall indemnify
Seller, its Affiliates and each of their respective officers, directors,
employees, stockholders, agents and representatives against, and agrees to hold
them harmless from, any Loss, as incurred (payable promptly upon written
request), to the extent arising from or in connection with or otherwise with
respect to:

            (a) any breach of any representation or warranty of Purchaser that
survives the Closing and is contained in this Agreement, the Purchaser's
Officer's Certificate or in any Related Instrument (other than the Supply
Agreements); provided that Purchaser shall not be required to indemnify any
Person, and shall not have any liability under this Section 7.3(a) to the extent
the liability or obligation is directly caused by any action taken or omitted to
be taken by Purchaser or any of its Affiliates; provided further, however, that
the limitation in the preceding proviso shall not be applicable to
indemnification under this clause (a) of Section 7.3 with respect to the
representations and warranties set forth in Sections 3.1 and 3.2;

            (b) subject to the provisions of Section 7.7(b), any breach of any
covenant of Purchaser contained in this Agreement or in any Related Instrument
(other than the Supply Agreements);

            (c) any Assumed Liability; and

            (d) any fees, expenses or other payments incurred or owed by
Purchaser to any brokers, financial advisors or other comparable Persons
retained or employed by it in connection with the transactions contemplated by
this Agreement or by any Related Instrument.

            Section 7.4 Calculation of Losses. The amount of any Loss for which
indemnification is provided under clause (i) of Section 7.2(a) or clause (a) of
Section 7.3 shall be net of any amounts actually recovered by the indemnified
party under insurance policies with respect to such Loss and shall be (a)
increased to take account of any net Tax cost incurred by the indemnified party
arising from the receipt of indemnity payments hereunder (grossed up for such
increase) and (b) reduced to take account of any net Tax benefit immediately
realized by the indemnified party in cash arising from the incurrence or payment
of any such Loss. In computing the amount of any such Tax cost or Tax benefit,
the indemnified party shall be deemed to recognize all other items of income,
gain, loss deduction or credit before recognizing any item arising from the
receipt of any indemnity payment under clause (i) of Section 7.2(a) or clause
(a) of Section 7.3 or the incurrence or payment of any indemnified Loss. Any
indemnity payment under clause (i) of Section 7.2(a) or clause (a) of Section
7.3 shall be treated as an adjustment to the Purchase Price for Tax purposes,
unless a final determination (which shall include the execution of a Form 870-AD
or successor form) with respect to the indemnified party or any of its
Affiliates causes any such payment not to be treated as an adjustment to such
price for federal income Tax purposes.
<PAGE>   34
            Section 7.5 Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (a) pursuant to Section 7.2(a)(i) or
7.3(a), shall terminate on the eighteen-month anniversary of the Closing Date
(except to the extent that pursuant to Section 7.1 any representation or
warranty survives past such anniversary) and (b) pursuant to the other clauses
of Sections 7.2 and 7.3, shall not terminate; provided, however, that such
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the Person to be indemnified shall have, before the
expiration of the applicable period, previously made a claim by delivering a
notice of such claim (stating in reasonable detail the basis of such claim)
pursuant to Section 7.6 to the party to be providing the indemnification.

            Section 7.6 Procedures. (a) In order for a party (the "indemnified
party") to be entitled to any indemnification provided for under this Agreement
in respect of, arising out of or involving a claim made by any Person against
the indemnified party (a "Third Party Claim"), such indemnified party must
notify the indemnifying party (the "indemnifying party") in writing (and in
reasonable detail) of the Third Party Claim within 15 business days after
receipt by such indemnified party of notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
shall have been actually prejudiced as a result of such failure (except that the
indemnifying party shall not be liable for any expenses incurred during the
period in which the indemnified party failed to give such notice). Thereafter,
the indemnified party shall deliver to the indemnifying party, within five
business days' time after the indemnified party's receipt thereof, copies of all
notices and documents (including court papers) received by the indemnified party
relating to the Third Party Claim.

            (b) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party. Should the indemnifying party so elect to assume the defense
of a Third Party Claim, the indemnifying party shall not be liable to the
indemnified party for any legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof. If the indemnifying
party assumes such defense, the indemnified party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof (other than during any period in which the
indemnified party shall have failed to give notice of the Third Party Claim as
provided above). If the indemnifying party chooses to defend or prosecute a
Third Party Claim, all the indemnified parties shall cooperate in the defense or
prosecution thereof. Such cooperation shall include the retention and (upon the
indemnifying party's request) the provision to the indemnifying party of records
and information that are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the indemnifying party
<PAGE>   35
assumes the defense of a Third Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the indemnifying party's prior written consent (which
consent shall not be unreasonably withheld). If the indemnifying party assumes
the defense of a Third Party Claim, the indemnified party shall agree to any
settlement, compromise or discharge of a Third Party Claim that the indemnifying
party may recommend and that by its terms obligates the indemnifying party to
pay the full amount of the liability in connection with such Third Party Claim,
which releases the indemnified party completely in connection with such Third
Party Claim and that would not otherwise materially adversely affect the
indemnified party.

            (c) Other Claims. In the event any indemnified party should have a
claim against any indemnifying party under Section 7.2 or 7.3 that does not
involve a Third Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall deliver notice of such
claim with reasonable promptness to the indemnifying party. The failure by any
indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
under Section 7.2 or 7.3, except to the extent that the indemnifying party
demonstrates that it has been prejudiced by such failure. If the indemnifying
party disputes its liability with respect to such claim, the indemnifying party
and the indemnified party shall proceed in good faith to negotiate a resolution
of such dispute and, if not resolved through negotiations, such dispute shall be
resolved by litigation in an appropriate court of competent jurisdiction.

            Section 7.7 Sole Remedy; No Additional Representations. (a) Except
as otherwise specifically provided in Section 1.6(c) or in any Related
Instrument, each of Purchaser and Seller acknowledges and agrees that, to the
extent the Closing occurs, its sole and exclusive remedy after the Closing with
respect to any and all claims and causes of action relating to this Agreement
(including the Schedules), the Seller's Officer's Certificate, the Purchaser's
Officer's Certificate and the Related Instruments (other than the Supply
Agreements), the Acquisition and the other transactions contemplated hereby and
thereby, the Businesses, the Acquired Assets and the Assumed Liabilities (other
than claims of, or causes of action arising from, fraud or relating to breaches
of covenants requiring performance after the Closing Date) shall be pursuant to
the indemnification provisions set forth in this Article VII. In furtherance of
the foregoing, each of Purchaser and Seller hereby waives, from and after the
Closing, to the fullest extent permitted under applicable law, any and all
rights, claims and causes of action relating to this Agreement (including the
Schedules), the Seller's Officer's Certificate, the Purchaser's Officer's
Certificate and the Related Instruments (other than the Supply Agreements), the
Acquisition and the other transactions contemplated hereby and thereby, the
Businesses, the Acquired Assets and the Assumed Liabilities (other than claims
of, or causes of action arising from, fraud or relating to breaches of covenants
requiring performance after the Closing Date) it may have against the other
party hereto arising under or based upon any applicable law or arising under or
based upon common law or otherwise (except pursuant to the indemnification
provisions set forth in Section 7.2 or Section 7.3, as applicable).
<PAGE>   36
            (b) Each of Purchaser and Seller acknowledges and agrees that, to
the extent the Closing occurs, it shall not have any remedy after the Closing
with respect to any and all claims and causes of action relating to any breach
of any covenant requiring performance prior to the Closing under this Agreement
(including the Schedules) (other than claims of, or causes of action arising
from, fraud); provided that this Section 7.7(b) shall not apply to any breach of
a covenant that requires performance prior to and after the Closing to the
extent any breach of such covenant occurs after the Closing.

            (c) Purchaser acknowledges that it and its representatives have been
permitted full and complete access to the books and records, facilities,
equipment, tax returns, contracts, insurance policies (or summaries thereof) and
other properties and assets of the Businesses that it and its representatives
have desired or requested to see or review, and that it and its representatives
have had a opportunity to meet with the officers and employees of Seller and its
Affiliates to discuss the Businesses. For the avoidance of doubt, Purchaser's
access to such information and its opportunity to meet with such personnel shall
not limit Purchaser's right to make a claim for indemnification under Section
7.2(a).

            (d) Purchaser acknowledges that none of Seller, its Affiliates or
any other Person has made any representation or warranty, expressed or implied,
as to the accuracy or completeness of any information regarding the Businesses
furnished or made available to Purchaser and its representatives, except as
expressly set forth in this Agreement (including the Schedules), the Related
Instruments or the Seller's Officer's Certificate, and none of Seller, its
Affiliates or any other Person shall have or be subject to any liability to
Purchaser or any other Person resulting from the distribution to Purchaser, or
Purchaser's use of, any such information, documents or material made available
to Purchaser in any "data rooms", management presentations or in any other form
in expectation of the transactions contemplated hereby except to the extent such
information, documents or materials is included in the representations or
warranties of the Seller set forth in this Agreement (including the Schedules),
the Related Instruments or the Seller's Officers' Certificates.

            (e) Purchaser also acknowledges that, should the Closing occur,
except as expressly set forth in the representations and warranties set forth in
Article II of this Agreement (including the Schedules), Related Instrument or in
the Seller's Officer's Certificate, there are no representations or warranties
by Seller of any kind, express or implied, with respect to the Businesses, and
that Purchaser is purchasing the Acquired Assets "as is", "where is" and "with
all faults". Without limiting the generality of the foregoing, except as
expressly set forth in the representations and warranties set forth in Article
II of this Agreement (including the Schedules), the Related Instruments or in
the Seller's Officer's Certificate, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

      Section 7.8 Limitations on Liability. (a) Notwithstanding any provision
herein, neither Seller nor Purchaser shall in any event be liable to the other
party or its Affiliates, officers, directors, employees, stockholders, agents or
representatives on account of any
<PAGE>   37
indemnity obligation set forth in Section 7.2(a)(i) or 7.3(a) for any indirect,
consequential or punitive damages (including, but not limited to, lost profits,
loss of use, damage to goodwill or loss of business).

            (b) Seller and Purchaser shall cooperate with each other in
resolving any claim or liability with respect to which one party is obligated to
indemnify the other under this Agreement, including without limitation, by
making commercially reasonable efforts to mitigate or resolve any such claim or
liability.


                                  ARTICLE VIII

                                  MISCELLANEOUS

            Section 8.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon receipt if delivered
personally, or when sent if mailed by registered or certified mail (return
receipt requested) or by reputable overnight express courier (charges prepaid)
or transmitted by facsimile (with confirmation of transmittal) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):

            (a)   if to Seller, to:

                        Bristol-Myers Squibb Company
                        345 Park Avenue
                        New York, New York 10154-0037
                        Telephone:  (212) 546-4000
                        Facsimile:  (212) 605-9476
                        Attention:  Robert E. Ewers, Jr., Esq.
                                    Senior Counsel

                        with a copy to:

                        Cravath, Swaine & Moore
                        825 Eighth Avenue
                        New York, New York 10019
                        Telephone:  (212) 474-1000
                        Facsimile:  (212) 474-3700
                        Attention:  Susan Webster, Esq.
<PAGE>   38
            (b)   if to Purchaser, to:

                        Warner Chilcott, Inc.
                        100 Enterprise Drive
                        Suite 280
                        Rockaway, NJ 07866
                        Telephone: (973) 442-3200
                        Facsimile: (973) 442-3316
                        Attention: Beth Hecht, Esq.
                                   General Counsel

                        with a copy to:

                        Kirkland & Ellis
                        153 E. 53rd Street
                        New York, NY 10022
                        Telephone: (212) 446-4831
                        Facsimile: (212) 446-4900
                        Attention: Frederick Tanne, Esq.

            Section 8.2 Definitions; Interpretation. (a) For purposes of this
Agreement:

            "Accounts Receivable" shall mean all accounts receivable, notes
receivable and other indebtedness due and owed by any third party to Seller or
any of its Affiliates arising or held in connection with the Businesses as of
the close of business on the Closing Date.

            "Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly, controls, is controlled by, or is under common
control with, the specified Person. For purposes of this definition, the term
"control" as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
that Person, whether through ownership of voting securities or otherwise.

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

            "Assignment of Patent" shall mean the Assignment of Patent agreement
executed by Seller and Purchaser in substantially the form of Exhibit A.

            "Assignment of Trademarks" shall mean the Assignment of Trademarks
agreement executed by Seller and Purchaser in substantially the form of Exhibit
B.
<PAGE>   39
            "Bill of Sale" shall mean the Bill of Sale in substantially the form
of Exhibit D.

            "Business" shall mean the business of manufacturing, marketing,
distributing and selling the Products as currently conducted by Seller and its
Affiliates; provided, however, that in the case of Estrace Cream, the term
"Business" shall not include (i) the manufacturing, marketing, distributing or
selling of the Excluded Estrace Products and (ii) the manufacturing, marketing,
distributing or selling of Estrace Cream under Estrace(R) trademark in Canada,
which trademark was licensed by Seller to Roberts under the Roberts Agreement.
"Businesses" shall refer, collectively, to the Business of each Product.

            "Code" shall mean the Internal Revenue Code of 1986, as amended.

            "Copromotion Agreement" shall mean the Copromotion Agreement between
Apothecon, Inc., a wholly-owned subsidiary of Seller, and Purchaser dated
January 1, 1999.

            "Estrace Supply Agreement" shall mean the Estrace Transitional
Support and Supply Agreement dated as of the date hereof between Purchaser and
an Affiliate of Seller.

            "Excluded Estrace Products" shall mean any and all products
manufactured, marketed, distributed or sold in tablet form under the Estrace(R)
name.

            "Formulae" shall mean the percentages and specifications of
ingredients currently used, as of the Closing Date, to manufacture the Products
in each Business.

            "GAAP" shall mean United States generally accepted accounting
principles as in effect on the date hereof.

            "Governmental Entity" shall mean any Federal, state, local or
non-U.S. government or any court of competent jurisdiction, legislature,
governmental agency, administrative agency or commission or other governmental
authority or instrumentality, U.S. or non-U.S.

            "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

            "Intellectual Property" shall mean, collectively, Formulae,
Trademarks, Patents and any Other Intellectual Property.

            "Knowledge" shall mean (i) with respect to Seller, the actual
knowledge of the representatives of Seller set forth on Schedule 8.2(a) after
due inquiry, and (ii) with respect to Purchaser, the actual knowledge of any
officer of Purchaser after due inquiry.
<PAGE>   40
            "Lien" shall mean any lien (statutory or otherwise), claim, charge,
option, security interest, pledge, mortgage, restriction, financing statement or
similar encumbrance of any kind or nature whatsoever (including any conditional
sale or other title retention agreement and any lease having substantially the
same effect as any of the foregoing and any assignment or deposit arrangement in
the nature of a security device).

            "Material Adverse Effect" means a material and adverse effect upon
the business, operations, assets, liabilities, financial condition or operating
results of the Businesses or the Acquired Assets (including the Products), taken
as a whole.

            "NDA" shall mean a New Drug Application or Product License
Application for any Product, as appropriate, requesting permission to place a
drug on the market in accordance with 21 CFR Part 314, and all supplements filed
pursuant to the requirements of the FDA, including all documents, data and other
information concerning a Product which are necessary for FDA approval to market
a Product in the United States.

            "Other Intellectual Property" shall mean all the technology,
inventions, processes, specifications, know-how, trade secrets, goodwill and
copyrights, which are currently owned by Seller and used exclusively in the
conduct of the Businesses.

            "Ovcon Supply Agreement" shall mean the Ovcon Transitional Support
and Supply Agreement dated as of the date hereof between Purchaser and an
Affiliate of Seller.

            "Patents" shall mean all patents and patent applications, and all
additions, divisions, continuations, continuations in-part, substitutions,
reissues, extensions, registrations and renewals of any of the foregoing used in
the conduct of the Businesses.

            "Permitted Liens" shall mean, collectively (a) Liens for taxes or
assessments which are not delinquent or are being contested in good faith by
appropriate proceedings, (b) statutory mechanics', warehousemens',
materialmens', contractors', workmens', repairmens' and carriers' liens, and
other similar Liens arising in the ordinary course for obligations which are not
delinquent, (c) the rights, if any, of third parties, appearing in product
advertisements for the Products being transferred as part of the Acquired
Assets, and (d) Liens which do not materially impair the current use or the
value of the assets subject to such Liens.

            "Person" shall mean any individual, group, corporation, partnership
or other organization or entity (including any Governmental Entity).

            "Pre-Closing Tax Period" means all taxable periods ending on or
before the Closing Date and the portion ending on the Closing Date of any
taxable period that includes (but does not end on) the Closing Date.
<PAGE>   41
            "Related Instruments" shall mean the Assumption Agreement, the
Supply Agreements, the Assignment of Patent, the Assignment of Trademarks and
the Trademark License Agreement.

            "Retained Information" shall mean any and all books and records
prepared and maintained by Seller in connection with the Businesses, including
laboratory books, batch records and stability studies, that does not relate
exclusively to the Businesses, in connection with Seller's or its Affiliates'
conduct of the Businesses prior to the Closing Date.

            "Supply Agreements" shall mean the Estrace Supply Agreement and the
Ovcon Supply Agreement.

            "Taxes", or "Tax" in the singular form, shall mean any and all
taxes, levies or other like assessments, including, but not limited to, income,
transfer, gains, gross receipts, excise, inventory, property (real, personal or
intangible), custom duty, sales, use, license, withholding, payroll, employment,
capital stock and franchise taxes, imposed by the United States, or any state,
local or foreign government or subdivision or agency thereof.

            "Tax Return" shall mean any report, return or other information
filed with any taxing authority with respect to Taxes imposed upon or
attributable to the operations of the Businesses.

            "Trademarks" shall mean all trademarks set forth on Schedule 2.7(a)
and domain names set forth on Schedule 2.14 and all registrations, applications
and renewals for any of the foregoing, together with the goodwill associated
therewith.

            "Trademark License Agreement" shall mean the Trademark License
Agreement executed by Seller and Purchaser in substantially the form of Exhibit
F hereto.

            (b)  The following terms have the meanings set forth in the Sections
set forth below:


<TABLE>
<CAPTION>
                       TERM                                 SECTION
                       ----                                 -------
<S>                                                      <C>
Acquired Assets                                             1.2(a)

Acquisition                                                   1.1

Assumed Liabilities                                         1.3(a)

Assumption Agreement                                        1.4(c)

Calculation Date                                            1.6(a)

Closing                                                     1.4(a)
</TABLE>
<PAGE>   42
<TABLE>
<CAPTION>
                       TERM                                 SECTION
                       ----                                 -------
<S>                                                      <C>
Closing Date                                                1.4(a)

Competitive Business                                        4.18(a)

Confidentiality Agreement                                   4.3(a)

Contracts                                                     2.8

DOJ                                                         4.5(a)

Estrace Cream                                              Preamble

Estrace Product Line                                        1.6(a)

Excluded Assets                                             1.2(c)

Excluded Liability                                          1.3(c)

Excluded Tax Liability                                      1.3(c)

FDA                                                         1.2(a)

FDA Act                                                     2.9(a)

Final Offer                                                 4.14(b)

Financial Statements                                          2.4

FTC                                                         4.5(a)

IMS                                                         1.6(a)

IMS Notice                                                  1.6(a)

indemnified party                                           7.6(a)

Losses                                                      7.2(a)

Months of Supply                                           1.6(a)

Names                                                       4.11(c)

Offering Memorandum                                         4.3(a)

Ovcon 35                                                   Preamble

Ovcon 50                                                   Preamble

Ovcon License Agreement                                     4.15(c)

Ovcon Product Line                                          1.6(a)

Proceeding                                                  2.10(a)
</TABLE>
<PAGE>   43
<TABLE>
<CAPTION>
                       TERM                                 SECTION
                       ----                                 -------
<S>                                                      <C>
Product Line                                                1.6(a)

Products                                                   Preamble

Purchase Price                                                1.1

Purchaser                                                  Preamble

Purchaser's Officer's Certificate                           5.3(c)

Right                                                        4.14

Roberts                                                     4.12(a)

Roberts Agreement                                           4.12(a)

Seller                                                     Preamble

Seller's Officer's Certificate                              5.2(c)

Shipped Products                                          1.3(c)(ii)

Third Party                                                  4.14

Third Party Claim                                           7.6(a)

WC Ireland                                                  4.15(c)
</TABLE>

            (c) In the event of an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

            (d) The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (A) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (B) any reference
herein to any Person shall be construed to include the Person's successors and
assigns, (C) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (D) all references herein to Articles,
Sections, Exhibits or Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules of this Agreement.
<PAGE>   44
            Section 8.3 Descriptive Headings. The descriptive headings herein
are inserted for convenience only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.

            Section 8.4 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other party.

            Section 8.5 Entire Agreement. This Agreement (including the
Schedules) the Purchaser's Officer's Certificate, the Seller's Officer's
Certificate, the Related Instruments and the Confidentiality Agreement, along
with the Schedules and Exhibits hereto and thereto, contain the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter. Neither party shall be liable or bound to any other party in any
manner by any representations, warranties or covenants relating to such subject
matter except as specifically set forth herein (including the Schedules) the
Purchaser's Officer's Certificate, the Seller's Officer's Certificate or in the
Related Instruments or the Confidentiality Agreement.

            Section 8.6 Fees and Expenses. Regardless of whether or not the
transactions contemplated by this Agreement are consummated, each party shall
bear its own fees and expenses incurred in connection with the transactions
contemplated by this Agreement and the Related Instruments.

            Section 8.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.

            Section 8.8 Specific Performance. The parties hereto agree that if
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.

            Section 8.9 Assignment. This Agreement may not be assigned by any
party hereto without the prior written consent of the other party; provided that
Purchaser may assign its rights (but not its obligations) under this Agreement
in connection with its proposed financing of the Acquisition prior to the
Closing: (i) to Warner Chilcott PLC, if Purchaser fully and unconditionally
guarantees the obligations of such entity, or (ii) to its lenders (other than
lenders which are or may become public noteholders) as security for its
obligations to such lenders. Any attempted assignment in violation of this
Section 8.9 shall be void.
<PAGE>   45
            Section 8.10 Successors and Assigns. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto, their successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person or persons any right, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.

            Section 8.11 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
parties shall negotiate in good faith with a view to the substitution therefor
of a suitable and equitable solution in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid provision;
provided, however, that the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be in any way impaired thereby, it being intended that all of
the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.

            Section 8.12 Consent to Jurisdiction. Each of Purchaser and Seller
irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of
the State of New York, New York County, and (b) the United States District Court
for the Southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Agreement, any Related Instrument or any
transaction contemplated hereby or thereby. Each of Purchaser and Seller agrees
to commence any such action, suit or proceeding either in the United States
District Court for the Southern District of New York or if such suit, action or
other proceeding may not be brought in such court for jurisdictional reasons, in
the Supreme Court of the State of New York, New York County. Each of Purchaser
and Seller further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any action, suit or proceeding
in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 8.12. Each of Purchaser and Seller irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement, any Related Instrument or the
transactions contemplated hereby and thereby in (i) the Supreme Court of the
State of New York, New York County or (ii) the United States District Court for
the Southern District of New York, and hereby and thereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.

            Section 8.13 Waiver of Jury Trial. Each party hereto hereby waives
to the fullest extent permitted by applicable law, any right it may have to a
trial by jury in respect to any litigation directly or indirectly arising out
of, under or in connection with this Agreement or any Related Instrument. Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce that
<PAGE>   46
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement and the Related Instruments, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 8.13.

            Section 8.14 Attorney Fees. A party in breach of this Agreement
shall, on demand, indemnify and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including legal fees, incurred by such
other party by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief to
which such other party may be entitled.


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


                              BRISTOL-MYERS SQUIBB COMPANY


                              By:  /s/  Robert E. Ewers, Jr.
                                   -------------------------
                                   Name: Robert E. Ewers, Jr.
                                   Title: Authorized Signatory



                              WARNER CHILCOTT, INC.


                               By: /s/ Beth Hecht
                                   -------------------------
                                   Name: Beth Hecht
                                   Title: Senior Vice President
                                          and General Counsel


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