<PAGE>   1
                                                                    Exhibit 10.1

                                                                  EXECUTION COPY
                                                                REDACTED VERSION


================================================================================




                            ASSET PURCHASE AGREEMENT



                                     between



                          BRISTOL-MYERS SQUIBB COMPANY
                                   as Seller,



                                       and



                             WARNER CHILCOTT, INC.,
                                  as Purchaser





                          Dated as of January 26, 2000




================================================================================

(Confidential treatment has been requested for certain portions of this document
which have been omitted and will be filed separately with the Secretary of the
Securities and Exchange Commission. Omitted portions are indicated by
[REDACTED].)
<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
</TABLE>


                                       i
<PAGE>   3
<TABLE>
<S>                                                                         <C>
Section 3.6   Availability of Funds.......................................   12
Section 3.7   No Other Purchaser Representations or Warranties............   12


                              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
</TABLE>


                                       ii
<PAGE>   4
<TABLE>
<S>                                                                         <C>
                      ARTICLE VII SURVIVAL; INDEMNIFICATION


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>


                                      iii
<PAGE>   5
                                    EXHIBITS


<TABLE>
<S>           <C>
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
</TABLE>

                                    SCHEDULES

<TABLE>
<S>                    <C>
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
</TABLE>


                                       iv
<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) [REDACTED] (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;



                                       1
<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;



                                       2
<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


                                       3
<PAGE>   9
         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.

                  (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 [REDACTED] period after the Closing Date of any
         Products that on the date of return have an expiration date not earlier
         than [REDACTED] and not later than [REDACTED] after such date of return
         and (C) rebates related to any Shipped Products which were shipped to a
         third party prior to [REDACTED];

                  (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


                                       4
<PAGE>   10
         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;

                  (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) [REDACTED] by electronic funds transfer of immediately available
funds in the


                                       5
<PAGE>   11
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 [REDACTED] 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 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) [REDACTED]

                  (b) [REDACTED]

                  (c) [REDACTED]


                                   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


                                       6
<PAGE>   12
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 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 [REDACTED] and through the date hereof, there has not been
any material adverse change in the business or results of operations of the
Businesses, taken


                                       7
<PAGE>   13
as a whole. Except as set forth on Schedule 2.5, since [REDACTED] 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 [REDACTED] 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.

                  (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.



                                       8
<PAGE>   14
                  (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 [REDACTED] or extending for a term more than
         [REDACTED] from the date of this Agreement (unless terminable without
         payment or penalty upon no more than [REDACTED] notice), other than
         purchase orders entered into in the ordinary course of any Business
         consistent with past practice;

                  (iii) a Contract involving the obligation of Seller and/or any
         of its Affiliates to deliver products or services for payment of more
         than [REDACTED] or extending for a term more than [REDACTED] from the
         date of this Agreement (unless terminable without payment or penalty
         upon no more than [REDACTED] 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


                                       9
<PAGE>   15
         sales agreements having a value per item or aggregate payments of less
         than [REDACTED] or extending for a term less than [REDACTED] from the
         date of this Agreement (unless terminable without payment or penalty
         upon no more than [REDACTED] 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 conduct of, the Businesses in the United States are in full force and
effect, (iii) since [REDACTED], 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 [REDACTED] 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


                                       10
<PAGE>   16
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 [REDACTED] 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 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.



                                       11
<PAGE>   17
                  (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 [REDACTED], including any material correspondence or other material
documents relating thereto, (b) a schedule of all payouts made by Seller since
[REDACTED] 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 [REDACTED]
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 any other Person makes any other express or
implied representation or warranty on behalf of Seller or any of its Affiliates.




                                       12
<PAGE>   18
                                   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 consummate the
transaction contemplated hereby or materially delay the consummation of the
transactions contemplated hereby.



                                       13
<PAGE>   19
                  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.




                                       14
<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.



                                       15
<PAGE>   21
                  (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 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.



                                       16
<PAGE>   22
                  (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 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 [REDACTED] 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 [REDACTED].

                  Section 4.5 Regulatory Approvals. (a) On November 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


                                       17
<PAGE>   23
assignment and assumption of the Assumed Liabilities pursuant to the terms of
this Agreement shall be paid [REDACTED] by Purchaser and [REDACTED] 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.

                  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


                                       18
<PAGE>   24
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 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.  [REDACTED]

                  (b) [REDACTED]

                  (i) [REDACTED

                  (ii) [REDACTED]

                  (iii) [REDACTED]

                  (c) [REDACTED]


                  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.



                                       19
<PAGE>   25
                  Section 4.14 Right of First Negotiation. If, during the period
from the Closing Date until the [REDACTED] 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 [REDACTED] (subject to the [REDACTED]), 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 [REDACTED] 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 [REDACTED]
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
[REDACTED] 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 [REDACTED] 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 [REDACTED] 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 [REDACTED] 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 [REDACTED] thereafter. For purposes of
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


                                       20
<PAGE>   26
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


                                       21
<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 [REDACTED]
after the Closing. After the end of such [REDACTED] 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.  [REDACTED]

                  (b) [REDACTED]




                                       22
<PAGE>   28
                                    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).

                  (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.



                                       23
<PAGE>   29
                  (f) During the period from [REDACTED] 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 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


                                       24
<PAGE>   30
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 [REDACTED] (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.

                  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


                                       25
<PAGE>   31
(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 [REDACTED] 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.

                  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



                                       26
<PAGE>   32
                  (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 [REDACTED], 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 [REDACTED], 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 [REDACTED]; 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.



                                       27
<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.



                                       28
<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 [REDACTED] 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 [REDACTED] 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 [REDACTED]
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


                                       29
<PAGE>   35
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 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


                                       30
<PAGE>   36
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).

                  (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


                                       31
<PAGE>   37
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 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



                                       32
<PAGE>   38
                         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.

                  (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.



                                       33
<PAGE>   39
                  "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.

                  "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 [REDACTED].
"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.



                                       34
<PAGE>   40
                  "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.

                  "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


                                       35
<PAGE>   41
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.

                  "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:




                                       36
<PAGE>   42
<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)

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)
</TABLE>


                                       37
<PAGE>   43
<TABLE>
<CAPTION>
                    TERM                                        SECTION
                    ----                                        -------

<S>                                                             <C>
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)

Product Line                                                      1.6(a)

Products                                                         Preamble

Purchase Price                                                      1.1

Purchaser                                                        Preamble

Purchaser's Officer's Certificate                                 5.3(c)

Right                                                              4.14

[REDACTED]                                                      [REDACTED]

[REDACTED]                                                      [REDACTED]

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


                                       38
<PAGE>   44
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.

                  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.



                                       39
<PAGE>   45
                  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.

                  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


                                       40
<PAGE>   46
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 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.



                                       41
<PAGE>   47
                  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 VP & General Counsel







                                       42