Document:

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                                                                   Exhibit 10.8

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                            ASSET PURCHASE AGREEMENT

                                    between

                          BRISTOL-MYERS SQUIBB COMPANY
                                   as Seller

                                      and

                           GALEN (CHEMICALS) LIMITED
                                  as Purchaser

                           Dated as of June 29, 2001

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                               TABLE OF CONTENTS
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Article I. -- Sale and Purchase of Assets..........................................................

         Section 1.01 -- Purchase and Sale.........................................................

         Section 1.02 -- Transfer of Assets........................................................

         Section 1.03 -- Assumed Liabilities.......................................................

         Section 1.04 -- Closing...................................................................

         Section 1.05 -- Risk of Loss..............................................................

         Section 1.06 -- Purchase Price Adjustment.................................................

Article II. -- Representations and Warranties of Seller............................................

         Section 2.01 -- Organization..............................................................

         Section 2.02 -- Authority; Execution and Delivery; Enforceability.........................

         Section 2.03 -- Consents and Approvals; No Violations.....................................

         Section 2.04 -- Financial Statements......................................................

         Section 2.05 -- Absence of Certain Changes................................................

         Section 2.06 -- Title of Assets...........................................................

         Section 2.07 -- Intellectual Property.....................................................

         Section 2.08 -- Contracts.................................................................

         Section 2.09 -- Compliance with Law.......................................................

         Section 2.10 -- Litigation................................................................

         Section 2.11 -- Brokers or Finders........................................................

         Section 2.12 -- Registrations.............................................................

         Section 2.13 -- Medical Information.......................................................

         Section 2.14 -- Websites and Domain Names.................................................

         Section 2.15 -- Conduct of Business.......................................................

         Section 2.16 -- Knowledge.................................................................

         Section 2.17 -- No Other Representations or Warranties....................................
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Article III. -- Representations and Warranties of Purchaser........................................

         Section 3.01 -- Organization..............................................................

         Section 3.02 -- Authority; Execution and Delivery; Enforceability.........................

         Section 3.03 -- Consents and Approvals; No Violations.....................................

         Section 3.04 -- Brokers and Finders.......................................................

         Section 3.05 -- No Proceedings............................................................

         Section 3.06 -- Availability of Funds.....................................................

         Section 3.07 -- No Active Solicitation for Returns........................................

         Section 3.08 -- No Other Purchaser Representations or Warranties..........................

Article IV. -- Covenants...........................................................................

         Section 4.01 -- Conduct of the Business...................................................

         Section 4.02 -- Access to Information.....................................................

         Section 4.03 -- Confidentiality...........................................................

         Section 4.04 -- Best Efforts..............................................................

         Section 4.05 -- Regulatory Approvals......................................................

         Section 4.06 -- Property Transfer Taxes...................................................

         Section 4.07 -- Publicity.................................................................

         Section 4.08 -- Supplemental Disclosure...................................................

         Section 4.09 -- Further Assurances........................................................

         Section 4.10 -- No Use of Certain Names...................................................

         Section 4.11 -- Geographic Limitations....................................................

         Section 4.12 -- Bulk Transfer Laws........................................................

         Section 4.13 -- Customer Notifications....................................................

         Section 4.14 -- Post-Closing Cooperation..................................................

         Section 4.15 -- Covenant Not to Compete...................................................

         Section 4.16 -- Termination of License Agreement..........................................

Article V. -- Conditions...........................................................................
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         Section 5.01 -- Conditions to Each Party's Obligations....................................

         Section 5.02 -- Conditions to Obligations of Purchaser....................................

         Section 5.03 -- Conditions to Obligations of Seller.......................................

         Section 5.04 -- Waiver of Closing Conditions..............................................

         Section 5.05 -- Frustration of Closing Conditions.........................................

Article VI. -- Termination and Amendment...........................................................

         Section 6.01 -- Termination...............................................................

         Section 6.02 -- Effect of Termination.....................................................

         Section 6.03 -- Amendments and Waivers....................................................

Article VII. -- Survival;  Indemnification.........................................................

         Section 7.01 -- Survival of Representations...............................................

         Section 7.02 -- Indemnification by Seller.................................................

         Section 7.03 -- Indemnification by Purchaser..............................................

         Section 7.04 -- Calculation of Losses.....................................................

         Section 7.05 -- Termination of Indemnification............................................

         Section 7.06 -- Procedures................................................................

         Section 7.07 -- Sole Remedy; No Additional Representations................................

         Section 7.08 -- Limitations on Liability..................................................

Article VIII. -- Miscellaneous.....................................................................

         Section 8.01 -- Notices...................................................................

         Section 8.02 -- Definitions; Interpretation...............................................

         Section 8.03 -- Descriptive Headings......................................................

         Section 8.04 -- Counterparts..............................................................

         Section 8.05 -- Entire Agreement..........................................................

         Section 8.06 -- Fees and Expenses.........................................................

         Section 8.07 -- Governing Law.............................................................

         Section 8.08 -- Specific Performance......................................................

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         Section 8.09 -- Assignment................................................................

         Section 8.10 -- Successors and Assigns....................................................

         Section 8.11 -- Severability..............................................................

         Section 8.12 -- Consent to Jurisdiction...................................................

         Section 8.13 -- Waiver of Jury Trial......................................................

         Section 8.14 -- Attorney Fees.............................................................

Exhibit A -- Form of Assumption Agreement..........................................................

Exhibit B -- Form of General Assignment and Bill of Sale...........................................

Schedule 1.01(a) -- Purchase Price.................................................................

Schedule 1.06(b) -- Purchase Price Adjustment......................................................

Schedule 1.04(c) -- Account of Seller..............................................................

Schedule 1.06 -- Methodology for Calculation of Months of Supply...................................

Schedule 2.03(a) -- Violations.....................................................................

Schedule 2.03(b) -- Consents and Approvals.........................................................

Schedule 2.04 -- Statements of Net Sales and Product Contributions.................................

Schedule 2.05 -- Material Adverse Change Since March 31, 2001......................................

Schedule 2.07(a) -- Intellectual Property..........................................................

Schedule 2.07(b) -- Exceptions to Intellectual Property............................................

Schedule 2.08 -- Contracts with Respect to the Business............................................

Schedule 2.09(a) -- Exeptions to Compliance with Law...............................................

Schedule 2.09(b)(i) -- Exceptions to FDA Compliance................................................

Schedule 2.09(b)(ii) -- FDA Notice Since January 1, 1996...........................................

Schedule 2.10 -- Litigation........................................................................

Schedule 2.12 -- Registrations.....................................................................

Schedule 2.14 -- Websites and Domain Names.........................................................

Schedule 2.15 -- Conduct of Business...............................................................

Schedule 4.01 -- Exceptions to Conduct of Business in the Ordinary Course..........................
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Schedule 7.02(b) -- Limitations on Seller's Indemnification Obligations............................

Schedule 8.02(a) -- Representatives................................................................

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     ASSET PURCHASE AGREEMENT dated as of June 29, 2001, (the "Agreement Date")
between Bristol-Myers Squibb Company, a Delaware corporation ("Seller"), and
Galen (Chemicals) Limited, a Republic of Ireland corporation ("Purchaser").

     Seller has the right, directly or indirectly through its Affiliates, to
manufacture, distribute, market and sell estradiol tablets under the trademark
Estrace(R) throughout the world (excluding, estradiol tablets under the
trademark Estrace(R) for use, distribution, marketing and sale in Canada) and
generic estradiol tablets throughout the world (excluding, Estradiol Tablets for
use, distribution, marketing and sale in Canada and the United States) (each a
"Product", together, the "Products"). Seller desires to sell to Purchaser, and
Purchaser desires to purchase from Seller, the Acquired Assets (Section 8.02(b)
identifies the sections of this Agreement in which this term and other
capitalized terms used herein and not defined in Section 8.02(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 1.01  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) the amount set forth on
Schedule 1.01(a), payable in cash as set forth in Section 1.04, minus the
Purchase Price adjustment, if any, determined in accordance with Section 1.06(b)
(the "Purchase Price") and (b) the assumption by Purchaser of the Assumed
Liabilities. The purchase and sale of the Acquired Assets and the assumption of
the Assumed Liabilities are referred to in this Agreement collectively as the
"Acquisition".

SECTION 1.02  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 right, title and interest in and to any and all
               regulatory files (including correspondence with regulatory
               authorities), registrations, applications, approvals, licenses
               and permits exclusively relating to the Business or the Acquired
               Assets (including the Products) as of the Closing Date from any
               applicable regulatory authority in any country (other than the
               United States and Canada), in each case to the extent
               transferable in light of regulatory considerations;

      (iii)    all marketing 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 Business or to the Acquired Assets (including the
               Products), in each case to the extent transferable in light of
               legal, contractual and practical considerations;

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       (iv)    all records and recorded information, including customer and
               supplier lists exclusively related to the Business 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 Names;

       (iv)    all Accounts Receivable;

        (v)    any assets, properties or rights of Seller or any of its
               Affiliates other than the Acquired Assets, except as
               specifically set forth in the Supply Agreement;

       (vi)    any inventories of the Business, 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;

       (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;

       (xi)    all Retained Information, except as set forth in Section 4.02(b);
               and

      (xii)    NDAs, except as specifically set forth in the Supply Agreement.

     (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 1.03  ASSUMED LIABILITIES.

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     (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 1.03(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 the Products or otherwise related to the
               Products (including all Proceedings relating to any such
               liabilities);

       (ii)    except to the extent set forth in Section 1.03(c)(iii) (A) and
               (B), all liabilities arising out of or relating to the return of
               any Product 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 1.03(c)(iii)(C), all
               liabilities arising out of or relating to any rebates or
               chargebacks related to any Product;

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

        (v)    all other liabilities, obligations and commitments of whatever
               kind and nature, primary or secondary, direct or indirect,
               absolute or contingent, known or unknown, whether or not accrued,
               arising out of or relating to, directly or indirectly, the
               Business 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, U.S.
dollar for dollar, in the event that (i) 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 Product
returned by such customer, or (ii) they or any of their respective Affiliates
are required to issue a credit for the account of any customer for returns, in
each case which are the responsibility of the other party hereto pursuant to
this Section 1.03. Seller and Purchaser agree to, and to cause their respective
Affiliates to, provide notice to one another of any such offset or issuance of
credit for which such party or its Affiliate is entitled to be reimbursed
pursuant to this Section 1.03(b). Payment shall be made promptly following
receipt of notice of any such offset by or issuance of a credit to 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)    accounts payable and liabilities, obligations and commitments of
               Seller or any of its Affiliates for materials and services with
               respect to the

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               manufacture of any Product (it being understood that these
               obligations are ones that are not covered by sections 1.03(a)(i),
               (ii) or (iii));

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

      (iii)    all liabilities arising out of or relating to (A) the return
               after the Closing Date of any Shipped Products which returns are
               a result of adulteration or misbranding (within the meaning of
               the FDA Act or the rules and regulations promulgated thereunder)
               by Seller, (B) the return during the six (6) month period after
               the Closing Date of any Shipped Product that on the date of
               return has an expiration date that is less than six (6) months
               after such date of return, including expired Product (with all
               such returns to be shipped at Seller's expense F.O.B. BMS'
               designated Return Goods Processor, The Ballantine Group, Inc.'s
               facility; and (C) rebates or chargebacks related to any Shipped
               Products;

       (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 Business) for any Pre-Closing
               Tax Period, other than any Tax for which Purchaser is responsible
               pursuant to Section 4.06 ("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 Business;

      (vii)    all liabilities arising out of or relating to (A) any
               investigation by any Governmental Entity relating to the pricing
               of Shipped Products (the "Pricing Investigation") or (B) any
               private litigation to the extent that such litigation relates to
               a Pricing Investigation; and

     (viii)    except to the extent specifically provided in Section 1.03(a)
               (i), (ii), (iii) and (iv), 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 Business 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 1.03
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.

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     (e)  For the avoidance of doubt, if there is any conflict between the terms
of this Section 1.03 and the terms of the Supply Agreement with respect to any
liabilities arising out of, or related to, directly or indirectly, the Products
(as such term is defined in the Supply Agreement) sold by Seller or its
Affiliates to Purchaser pursuant to the Supply Agreement, the terms of the
Supply Agreement shall govern.

SECTION 1.04  CLOSING.

     (a)  The consummation of the transactions contemplated by this Agreement
("Closing") will, subject to the satisfaction or waiver of the conditions set
forth in Article V hereof, take place at 5:00 p.m. on June 29, 2001 or at such
other time as shall be mutually agreed upon by the parties. The date on which
Closing occurs is referred to herein as the "Closing Date."

     (b)  At Closing, Seller shall deliver or cause to be delivered to
Purchaser, the following: (i) a duly executed Bill of Sale; and (ii) the
Seller's Officer's Certificate.

     (c)  At Closing, Purchaser shall deliver to Seller, the following: (i) cash
in the aggregate amount set forth in Schedule 1.01(a) by electronic funds
transfer of immediately available United States Dollars in the amounts and to
the accounts of such entities as are designated by Seller on Schedule 1.04(c)
(with such entities to designate to Purchaser in writing not less than two (2)
business days prior to Closing the relevant account numbers of the accounts to
which such transfers should be made); (ii) a duly executed instrument of
assumption of the Assumed Liabilities substantially in the form of Exhibit A
(the "Assumption Agreement"); and (iii) the Purchaser's Officer's Certificate.

SECTION 1.05  RISK OF LOSS.

     Until 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. At Closing, 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 1.06  PURCHASE PRICE ADJUSTMENT.

     (a)  Promptly after execution of this Agreement, Seller shall retain IMS
Health Incorporated ("IMS") to determine the Months of Supply of the Product
that was held by Seller's or its Affiliates' wholesale and chain customers, as
of June 30, 2001 (the "Calculation Date"). "Months of Supply" shall be
calculated as well as by Quality King, using the methodology set forth on
Schedule 1.06. For purposes of this Section 1.06, Product means estradiol
tablets under the trademark Estrace(R) only. Seller shall request that IMS
deliver to each of Seller and Purchaser, as soon as practicable after the
Closing Date, a notice (the "IMS Notice") setting forth the Months of Supply as
of the Calculation Date for the Product.

     (b)  The Purchase Price shall be adjusted in accordance with the formula
set forth on Schedule 1.06(b).

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

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any breaches of representations and warranties or breaches of covenants in this
Agreement or in any Related Instrument relating to such sales practices or
volume of sales.

                                  ARTICLE II.

                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Purchaser, as of the Agreement Date, as
follows:

SECTION 2.01  ORGANIZATION.

     Seller 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 Business as they are presently
conducted.

SECTION 2.02  AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.

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

SECTION 2.03  CONSENTS AND APPROVALS; NO VIOLATIONS.

     (a)  Except as set forth on Schedule 2.03(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 2.03(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

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Effect, materially impair Seller's ability to consummate the transactions
contemplated hereby or materially delay the consummation of the transactions
contemplated hereby.

SECTION 2.04  FINANCIAL STATEMENTS.

     Schedule 2.04 sets forth the "Statements of Net Sales and Products
Contribution" for the Products for the years ended December 31, 1998, 1999, 2000
and the quarter ended March 31, 2001 (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 Business.

SECTION 2.05  ABSENCE OF CERTAIN CHANGES.

     Except as set forth on Schedule 2.05, since March 31, 2001 and through the
Agreement Date, there has not been any material adverse change in the business
or results of operations of the Business, taken as a whole. Except as set forth
on Schedule 2.05, since March 31, 2001 and through the Agreement Date, Seller
has caused each Business to be conducted in the ordinary course. Except as set
forth on Schedule 2.05, since March 31, 2001 and through the Agreement Date,
none of Seller or its Affiliates has taken any action that, if taken after the
Agreement Date, would constitute a breach of any of the covenants set forth in
Section 4.01.

SECTION 2.06  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 1.02(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 2.06 does not
relate to Intellectual Property, which is the subject of Section 2.07.

SECTION 2.07  INTELLECTUAL PROPERTY.

     (a)  Schedule 2.07(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; (ii) all common
law trademarks and service marks used exclusively in the Business, and (iii) all
licenses or agreements to which Seller or any of its Affiliates is a party with
respect to the Intellectual Property.

     (b)  Except as set forth on Schedule 2.07(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 Business 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;

       (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 Business (including any demand or request
               that Seller license rights from a third party); and

                                       7
<PAGE>   14

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

     (c)  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 Business.

SECTION 2.08  CONTRACTS.

     Except as set forth on Schedule 2.08, 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 Business 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 the Business or to compete with any
               Person or otherwise restricts the rights of Seller and/or its
               Affiliates to use or disclose any information in its or their
               possession;

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

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

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

     Except as set forth in Schedule 2.08, 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

                                       8
<PAGE>   15
expected to have a Material Adverse Effect. Except as set forth in Schedule
2.08, 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 2.09  COMPLIANCE WITH LAW.

     (a)  Except as set forth on Schedule 2.09(a) or to the extent that it could
not reasonably be expected to have a Material Adverse Effect, (i) the Business
is conducted 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 Business are in full force and effect, (iii) since
January 1, 1996, no Governmental Entity has served notice that Seller and its
Affiliates (with respect to the Business), the Business or the Acquired Assets
were or are in violation of any law, statute, ordinance, rule, regulation or
order in any jurisdiction and, to the Knowledge of Seller, there are no grounds
for the same and (iv) since January 1, 1996, none of Seller or any of its
Affiliates has received written notice from any United States Governmental
Entity or any other 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 2.09(b)(i), the Business is
               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
               relating to the Products, and each of the NDAs has been approved
               by, and none of Seller or any of its Affiliates has received any
               notice in writing which has, or reasonably should have, led
               Seller to believe that any of the NDAs 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 which is material to
               the conduct of the Business as currently conducted by Seller.
               Except as set forth on Schedule 2.09(b)(i), with respect to the
               Products for which an NDA 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.ss.ss.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 2.09(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.

                                       9

<PAGE>   16
       (ii)    Except as set forth on Schedule 2.09(b)(ii), neither Seller nor
               any of its Affiliates has received any notice since January 1,
               1996 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 Products and/or arising
               out of the conduct of the Business 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 Agreement Date, 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 (including
the Products), the conduct of the Business or the transactions contemplated by
this Agreement and each Related Instrument, in respect of which Purchaser would
become liable as a result of the consummation of the transactions contemplated
hereby which is reasonably likely to be adversely determined, and if adversely
determined, is reasonably likely to result in a Material Adverse Effect.

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

SECTION 2.11  BROKERS OR FINDERS.

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

SECTION 2.12  REGISTRATIONS.

     Schedule 2.12 sets forth all regulatory approvals for the Products.

SECTION 2.13  MEDICAL INFORMATION.

     Seller has made available to Purchaser copies of (a) all serious adverse
event reports and periodic adverse event reports with respect to the Products
that have been filed with the FDA since January 1, 1996, including any material
correspondence or other material documents

                                       10

<PAGE>   17
relating thereto, (b) a schedule of all payouts made by Seller since January 1,
1996 to end-users in respect of claims relating to the Products and (c) a
schedule of all actual or threatened claims made by end-users since January 1,
1996 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  CONDUCT OF BUSINESS.

     Seller conducts the Business in the countries, territories and possessions
set forth in Schedule 2.15.

SECTION 2.16  KNOWLEDGE.

     The individuals set forth on Schedule 8.02(a) are Seller's and its
Affiliates' representatives with primary responsibility in their respective
areas of expertise.

SECTION 2.17  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.

                                  ARTICLE III.

                  REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to Seller, as of the Agreement Date,
as follows:

SECTION 3.01  ORGANIZATION.

     Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Northern Ireland. 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 3.02  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 3.03  CONSENTS AND APPROVALS; NO VIOLATIONS.

                                       11

<PAGE>   18
     (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.

SECTION 3.04  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 3.05  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 3.06  AVAILABILITY OF FUNDS.

     Purchaser as of the Closing Date will have, available funds necessary to
consummate the transaction contemplated by this Agreement.

SECTION 3.07  NO ACTIVE SOLICITATION FOR RETURNS.

     To the extent that the Products do not have any safety or efficacy issues,
Purchaser agrees that it shall not actively solicit their customers to return
Products with a shelf life of at least six months from the Closing Date that was
sold by Seller.

SECTION 3.08  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.

                                  ARTICLE IV.

                                   COVENANTS

                                       12

<PAGE>   19
SECTION 4.01  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
4.01, and shall cause its Affiliates to, operate the Business 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 Business. Without limiting the generality of the
foregoing, and except as otherwise contemplated by this Agreement, from the
Agreement Date until the 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 Business; (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 the 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 the 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 Products line extensions. 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 4.02  ACCESS TO INFORMATION.

     (a)  After the date hereof and prior to 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 Business and Seller shall, and shall
cause its Affiliates to, furnish promptly to Purchaser such available
information concerning the Acquired Assets and the Business as Purchaser may
reasonably request; provided, however, that such access does not unreasonably
disrupt the normal operations of Seller, its Affiliates or the Business.

     (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, including but not limited to the provision of a full copy of the NDA
(other than portions of the NDA that pertain to supplemental registrations filed
on behalf of Novartis and its Affiliates pursuant to the Novartis Agreements 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. Such
Retained Information shall be used by Purchaser only as provided in the Supply
Agreement.

SECTION 4.03   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

                                       13
<PAGE>   20
subject to the terms of a confidentiality agreement between Purchaser and Seller
dated January 21, 2001 (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 Business 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 lenders (to the extent required by such lenders) all
information relating to the Business delivered to such persons in connection
with the financing of the transactions contemplated by this Agreement and (ii)
publicly disclose Retained Information relating to the Business (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).

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

     (c)  Seller shall use commercially reasonable efforts to keep confidential,
and to cause its Affiliates and its and their officers, directors, employees and
advisors to keep confidential, all information relating to the Business, except
(i) as required to be disclosed by Seller under any of its existing agreements
with Roberts, Novartis or any of their respective Affiliates, (ii) as used by
Seller and its Affiliates in the manufacture, development, use and sale of the
products other than a Competitive Business Product, and (iii) 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 4.03(c). The covenant set forth in
this Section 4.03(c) shall terminate five (5) years after the termination of the
Supply Agreement.

SECTION 4.04  BEST EFFORTS.

     (a)  On the terms and subject to the conditions of this Agreement, and
subject to Section 3.06 with respect to Purchaser's obligation to have
sufficient 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 4.05, Purchaser and Seller shall use their respective best
efforts to cause the Closing to occur on or prior to June 29, 2001.

SECTION 4.05  REGULATORY APPROVALS.

     (a)  On May 29, 2001, 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

                                       14
<PAGE>   21
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)  Except as provided in Section 4.05(a), 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 Business.

SECTION 4.06  PROPERTY TRANSFER TAXES.

     Except as otherwise provided herein, any fees, charges, Taxes or other
payments required to be made to any Governmental Entity in connection with the
transfer of the Acquired Assets and the assignment and the assumption of the
Assumed Liabilities pursuant to the terms of this Agreement shall be paid 50% by
Seller and 50% by Purchaser. 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 4.07  PUBLICITY.

     Except as otherwise required by law or applicable stock exchange
requirements, prior to 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 4.08  SUPPLEMENTAL DISCLOSURE.

     Seller shall have the right from time to time prior to the second business
day preceding Closing to supplement or amend the Schedules with respect to any
matter hereafter arising or discovered which if existing or known on the
Agreement Date 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 Agreement Date for purposes of Article VII hereof.

SECTION 4.09  FURTHER ASSURANCES.

     Each party shall from time to time after 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

                                       15
<PAGE>   22
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 4.10  NO USE OF CERTAIN NAMES.

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

     (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 or on order by BMS as of the Closing Date, to
the extent permitted under Section 2.01(d) of the Supply Agreement.

     (c)  "Names" means "Bristol-Myers Squibb Company", "Bristol-Myers Squibb",
"BMS", "Bristol-Myers Products", "B-MS", "Squibb" and "E.R. Squibb & Sons",
"Mead Johnson", "Apothecon", "Invamed", "Apothecon/Invamed", "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 2.07.

SECTION 4.11  GEOGRAPHIC LIMITATIONS.

     (a)  After the Closing Date, and so long as the Sale and License Agreement
(the "Roberts Agreement") dated October 31, 1994, among Seller, Bristol-Myers
Squibb Canada Inc., a Delaware corporation, and Roberts Laboratories Inc., a New
Jersey corporation (such corporation, its successors or assigns is hereby
referred to as "Roberts"), is in effect, and to the extent permitted by law,
Purchaser shall not, and shall not permit its Affiliates to, market or sell, any
products bearing the Estrace(R) name or Estradiol Tablets in Canada (unless
otherwise agreed to in writing by Roberts). To the extent permitted by law,
Purchaser shall (i) include the following provision in any agreement or on the
face of any purchase order form, invoice or similar instrument related to the
sale of Estrace Tablets or Estradiol Tablets (in the case of purchase order
forms, invoices or similar instruments, only after exhaustion of Purchaser's
existing stock of such instruments): "Buyer shall use/sell/distribute the goods
only within the country where Seller has delivered them and shall not directly
or indirectly, export them to any other country" and (ii) if it becomes aware of
any resale of Estrace Tablets or Estradiol Tablets into Canada by a customer who
purchased Estrace Tablets or Estradiol Tablets from Purchaser, use commercially
reasonable efforts to prevent further resales by such customer, including
stopping sales to such customer. Purchaser agrees to meet with Roberts at its
request to discuss matters relating to the unauthorized importation and sale
into Canada of Estrace Tablets or Estradiol Tablets. Purchaser acknowledges and
agrees that the Acquired Assets do not confer any rights to distribute, market
or sell Estradiol Tablets or Estrace Tablets in Canada. Purchaser

                                       16
<PAGE>   23
acknowledges that the rights to distribute, market or sell Estradiol Tablets and
Estrace Tablets in Canada have previously been sold by Seller to Roberts.

     (b)  Purchaser acknowledges and agrees:

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

       (ii)    that certain rights to use the Estrace(R)trademark in Canada
               were licensed by Seller to Roberts pursuant to the Roberts
               Agreement; and

      (iii)    that Purchaser will not take any actions that violate Roberts'
               rights under such agreement, including registering, applying to
               register or otherwise using the Estrace(R) trademark (or a mark
               confusingly similar thereto) in Canada (unless otherwise agreed
               to in writing by Roberts); and

       (iv)    to permit BMS to share adverse event information with Roberts in
               the same manner as required of BMS under the Roberts Agreement
               and with Novartis and its Affiliates as required of BMS under the
               Novartis Agreements..

     (c)  Purchaser acknowledges and agrees that the Acquired Assets do not
include or confer any rights to distribute, market or sell Estradiol Tablets in
the United States or Canada or to manufacture Estradiol Tablets in Canada.
Purchaser acknowledges that the rights to distribute, market or sell Estradiol
Tablets in the United States have previously been sold by Seller to Novartis and
its Affiliates. After the Closing Date, Purchaser shall not, and shall not
permit its Affiliates to, market, distribute or sell any Estradiol Tablets in
the United States and shall use commercially reasonable efforts to prevent any
customer who purchases Estradiol Tablets from Purchaser, to the extent permitted
by law, from marketing, distributing or selling Estradiol Tablets in the United
States.

     (d)  Purchaser acknowledges and agrees that Seller and its Affiliates may
continue to manufacture for Novartis, its Affiliates, and its and their
licensees, successors, and assigns (collectively, "Novartis") for distribution,
marketing and sale within the United States Estradiol Tablets or products
substantially the same as Estradiol Tablets and may nonexclusively license and
transfer manufacturing know-how and patents covering the manufacture of
Estradiol Tablets or products substantially the same as Estradiol Tablets to
Novartis at any time so that Novartis may manufacture same.

     (e)  Seller shall retain all rights, title and interests in and to the
NDAs for each Product.

     (f)  Seller agrees that it will not amend, supplement or otherwise modify
the provisions of the Roberts Agreement in connection with the Estrace(R)
trademark that would materially adversely affect Purchaser's rights hereunder
and Seller further agrees that, to the extent permitted by law, it will, at
Purchaser's request, use commercially reasonable efforts to enforce the
provisions of Sections 4.3 and 4.4(b) of the Roberts Agreement (provided that
Purchaser will reimburse Seller for any reasonable out-of-pocket expenses
incurred with respect to such enforcement).

     (g)  The provisions of Section 4.11 shall survive any Closing under this
Agreement or the consummation of the transaction contemplated by this Agreement.

                                       17

<PAGE>   24

SECTION 4.12  BULK TRANSFER LAWS.

     Purchaser hereby waives compliance by Seller and its Affiliates with the
provisions of any so-called "bulk transfer law" of any jurisdiction in
connection with the sale of the Acquired Assets to Purchaser.

SECTION 4.13  CUSTOMER NOTIFICATIONS.

     Promptly after the Closing Date, Purchaser shall notify all customers of
the Business (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 should be sent to Purchaser's
Distributor at Warner Chilcott, Inc., 100 Enterprise Drive, Rockaway, NJ 07866,
Attention: Manager, Customer Service.

SECTION 4.14  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 Closing to ensure the
orderly transition of the Business from Seller to Purchaser and to minimize any
disruption to the Business and the other respective businesses of Seller and
Purchaser that might result from the transactions contemplated hereby. After
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 Business (to the extent within the control of such
party) as is reasonably requested for financial reporting and accounting
matters.

     (b)  After 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 Business. Purchaser shall retain the books and records of Seller
and its Affiliates included in the Acquired Assets for a period of seven years
after Closing. After the end of such seven-year period, before disposing of such
books or records, Purchaser shall give notice to such effect to Seller and shall
give Seller, at Seller's cost and expense, an opportunity to remove and retain
all or any part of such books or records as Seller may select.

     (c)  Each party shall reimburse the other for reasonable out-of-pocket
costs and expenses incurred in assisting the other pursuant to this Section
4.14. Neither party shall be required by this Section 4.14 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
Business).

SECTION 4.15  COVENANT NOT TO COMPETE.

                                       18

<PAGE>   25
 (a)  After Closing, Seller shall not, and shall cause its subsidiaries not to,
(i) for a period of ten (10) years following the Closing Date, engage in the
manufacture, marketing, distribution or sale of any Estrace Tablets and
Estradiol Tablets sold or to be sold under any NDA or its local equivalent or
sold or to be sold under any New Drug Application, ANDA or Products License
Application or supplement thereto referring to any Product, which is the subject
of any NDA, as a reference drug or (ii) for a period of three (3) years
following the Closing Date, engage in the marketing, distribution or sale of any
product for hormone replacement therapy, in oral form, that has
17(beta)-Estradiol as its primary active ingredient (each of (i) and (ii) being
a "Competitive Business").

     (b)  The foregoing shall not be construed to prevent Seller or any of its
subsidiaries from doing any of the following: (i) manufacturing Estrace Tablets
under the Supply Agreement, (ii) acquiring any Person that derives less than 5%
of its revenues from a Competitive Business (or any Person that derives an
amount equal to or in excess of 5% of its revenues from a Competitive Business
so long as Seller causes such Person to divest such Competitive Business within
two (2) years from the date of acquisition), and thereafter owning, managing,
operating or controlling such Person, (iii) owning up to 10% of the voting
equity securities or any non-voting equity or debt securities of any Person
primarily engaged in a Competitive Business whose securities are publicly traded
on a national securities exchange or in the over-the-counter market (or an
amount in excess of 10% so long as Seller divests such excess within two (2)
years), (iv) owning any equity or debt securities through any employee benefit
or pension plan (v) fulfilling manufacturing responsibilities to Roberts under
the Roberts Supply Agreement, (vi) fulfilling manufacturing responsibilities to
Novartis and its Affiliates under the Novartis Agreements for Estradiol Tablets
or products substantially the same as Estradiol Tablets for use in the United
States; or (vii) the use of Estradiol Tablets, Estrace Tablets or estradiol in
any form in research and development as conducted by Seller and its Affiliates.

     (c)  It is specifically agreed that Section 4.15(a) shall not apply if
Seller acquires or is acquired by, merges or consolidates with a Third Party
that derives any revenue from a Competitive Business.

SECTION 4.16  TERMINATION OF LICENSE AGREEMENT.

     At Closing, the Parties agree that the Trademark License Agreement dated as
of February 15, 2000, between Warner Chilcott, Inc., a Delaware corporation and
Mead Johnson & Company, a Delaware corporation shall be terminated, except to
the extent that Seller or its Affiliates require the use of the Trademark in
order to manufacture Products for Purchaser and its Affiliates under the Supply
Agreement.

                                   ARTICLE V.

                                   CONDITIONS

SECTION 5.01  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 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.

                                       19

<PAGE>   26
 (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 5.02  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 1.04(b).

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

     (f)  During the period from March 31, 2001 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 5.03  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
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.

                                       20

<PAGE>   27
     (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 1.04(c).

SECTION 5.04  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 5.02 or 5.03,
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 5.05  FRUSTRATION OF CLOSING CONDITIONS.

     Neither Purchaser nor Seller may rely on the failure of any condition set
forth in this Article V to be satisfied if such failure was caused by such
party's failure to act in good faith or to use its best efforts to cause the
Closing to occur, to the extent required by Section 4.04. Purchaser may only
rely on the failure of the condition set forth in Section 5.02(e) if it has used
commercially reasonable efforts in accordance with Section 3.06 to obtain
adequate financing to enable it to consummate the Acquisition.

                                  ARTICLE VI.

                           TERMINATION AND AMENDMENT

SECTION 6.01  TERMINATION.

     This Agreement may be terminated at any time prior to the Closing by:

     (a)  Mutual consent of Seller and Purchaser;

     (b)  Either Seller or Purchaser if the Closing shall not have occurred on
or before June 29, 2001 (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 6.01(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 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.

                                       21
<PAGE>   28

SECTION 6.02  EFFECT OF TERMINATION.

     If this Agreement is terminated and the transactions contemplated hereby
are abandoned as described in Section 6.01, this Agreement shall become null and
void and of no further force and effect, except for the provisions of (i)
Section 4.03 relating to the obligation of Purchaser to keep confidential
certain information and data obtained by it from Seller or its Affiliates, (ii)
Section 8.06 relating to certain expenses, (iii) Sections 2.11 and 3.04 relating
to finder's fees and broker's fees, (iv) Section 6.01 and this Section 6.02, (v)
Section 4.07 relating to publicity and (vi) Section 8.07 relating to governing
law. Nothing in this Section 6.02 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 6.03  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 7.01  SURVIVAL OF REPRESENTATIONS.

     The representations and warranties contained in this Agreement (including
the Schedules), in any Related Instrument, the Seller's Officer's Certificate,
the Purchaser's Officer's Certificate and in any other document delivered in
connection herewith or therewith shall survive the Closing solely for purposes
of this Article VII and shall terminate at the close of business on the
eighteen-month anniversary of the Closing Date; provided, that, the
representations and warranties contained in Section 2.01 (Organization); Section
2.02 (Authority; Execution and Delivery; Enforceability); Section 3.01
(Organization and Section 3.02 (Authority; Execution and Delivery;
Enforceability) shall terminate on the third anniversary of the Closing Date..

SECTION 7.02  INDEMNIFICATION BY SELLER.

     (a)  Subject to Section 1.06(c), and 7.08, 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 7.07(b), any breach of any
               covenant of Seller contained in this Agreement or in any Related
               Instrument (other than the Supply Agreement);

      (iii)    any Excluded Liability; and

                                       22
<PAGE>   29
       (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's indemnification obligations under this Section 7.02 shall be
limited as set forth in Schedule 7.02(b).

     (c)  The limitations contained in Schedule 7.02(b) shall not be applicable
to indemnification pursuant to Section 7.02(a)(i) only as it relates to breaches
of the representations set forth in Section 2.01 and 2.02.

SECTION 7.03  INDEMNIFICATION BY PURCHASER.

     Subject to Section 7.08, 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 7.03(a) to the
extent the liability or obligation is directly caused by any action taken or
omitted to be taken by Seller or any of its Affiliates.

     (b)  subject to the provisions of Section 7.07(b), any breach of any
covenant of Purchaser contained in this Agreement or in any Related Instrument
(other than the Supply Agreement);

     (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 7.04  CALCULATION OF LOSSES.

     The amount of any Loss for which indemnification is provided under clause
(i) of Section 7.02(a) or clause (a) of Section 7.03 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 7.02(a) or clause (a) of Section 7.03 or the
incurrence or payment of any indemnified Loss. Any indemnity payment under
clause (i) of Section 7.02(a) or clause (a) of Section 7.03 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

                                       23
<PAGE>   30
any such payment not to be treated as an adjustment to such price for federal
income Tax purposes.

SECTION 7.05  TERMINATION OF INDEMNIFICATION.

     The obligations to indemnify and hold harmless any party, (a) pursuant to
Section 7.02(a)(i) or 7.03(a), shall terminate on the eighteen-month anniversary
of the Closing Date (except to the extent that pursuant to Section 7.01 any
representation or warranty survives past such anniversary) and (b) pursuant to
the other clauses of Sections 7.02 and 7.03, 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 7.06 to the party to be providing the
indemnification.

SECTION 7.06  PROCEDURES.

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

     (b)  If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party assumes such defense, the Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party for any period during which the Indemnifying Party has
not assumed the defense thereof (other than during any period in which the
Indemnified Party shall have failed to give notice of the Third Party Claim as
provided above). If the Indemnifying Party chooses to defend or prosecute a
Third Party Claim, all the indemnified parties shall cooperate in the defense or
prosecution thereof. Such cooperation shall include the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of records
and information that are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the Indemnifying Party 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

                                       24

<PAGE>   31
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 7.02 or 7.03 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 7.02 or 7.03, 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 7.07  SOLE REMEDY; NO ADDITIONAL REPRESENTATIONS.

     (a)  Except as otherwise specifically provided in Section 1.06(c) or in any
Related Instrument, each of Purchaser and Seller acknowledges and agrees that,
to the extent Closing occurs, its sole and exclusive remedy after 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
Agreement), the Acquisition and the other transactions contemplated hereby and
thereby, the Business, 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
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 Agreement), the
Acquisition and the other transactions contemplated hereby and thereby, the
Business, the Acquired Assets and the Assumed Liabilities (other than claims of,
or causes of action arising from, fraud or relating to breaches of covenants
requiring performance after the Closing Date) it may have against the other
party hereto arising under or based upon any applicable law or arising under or
based upon common law or otherwise (except pursuant to the indemnification
provisions set forth in Section 7.02 or Section 7.03, 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 7.07(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 Business 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 Business. For the avoidance of doubt, Purchaser's
access to such

                                       25

<PAGE>   32
information and its opportunity to meet with such personnel shall
not limit Purchaser's right to make a claim for indemnification under
Section 7.02(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 Business
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 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 Business, and that
Purchaser is purchasing the Acquired Assets "as is", "where is" and "with all
faults". Without limiting the generality of the foregoing, except as expressly
set forth in the representations and warranties set forth in Article II of this
Agreement (including the Schedules), the Related Instruments or in the Seller's
Officer's Certificate, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

SECTION 7.08  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 7.02(a)(i) or 7.03(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 8.01  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

                                       26

<PAGE>   33

          P.O. Box 4000
          Route 206 at Province Line Road
          Princeton, NJ 08543-4000
          Telephone:  (609) 252-4311
          Facsimile:  (609) 252-4232
          Attention:  Vice President and Senior Counsel -- PRI & WSBD

          with a copy to:

          Reed Smith LLP
          Princeton Forrestal Village
          136 Main Street
          Princeton, NJ 08540
          Telephone:  (609) 514-5990
          Facsimile:  (609) 951-0824
          Attention:  Betty Yan, Esq.

     (b)  if to Purchaser, to:

          Galen Holdings PLC
          100 Enterprise Drive
          Rockaway, NJ 07866
          Telephone  (973) 442-3371
          Facsimile:  (973) 442-3316
          Attention:  President and Chief Executive Officer

          with a copy to:  General Counsel

SECTION 8.02  DEFINITIONS; INTERPRETATION.

     (a)  For purposes of this Agreement:

     "Accounts Receivable" means 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 Business as of the close of
business on the Closing Date.

     "Affiliate" means, 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.

     "Agreement Date" means the date first set forth above.

     "ANDA" means 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.

     "Bill of Sale" means the General Assignment and Bill of Sale in
substantially the form of Exhibit B.

     "Business" means the business of manufacturing, distributing, marketing and
selling the Products, as currently conducted by Seller and its Affiliates.

     "Code" means the Internal Revenue Code of 1986, as amended.

                                       27

<PAGE>   34
     "Estrace Tablets" means estradiol tablets as described in NDAs #81-295,
84-499 and 84-500 and marketed under the trademark Estrace(R).

     "Estradiol Tablets" means generic estradiol tablets as described in the
NDAs #81-295, 84-499 and 84-500.

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

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

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

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

     "Intellectual Property" means all the data, Formulae, assays, test methods,
technology, Patents, technical information (including master batch record,
analytical methods including validation protocol and the drug master file),
inventions, processes, specifications, know-how, trade dress, secrets, goodwill
and copyrights, which are currently owned by Seller and used exclusively in the
conduct of the Business.

     "Knowledge" means (i) with respect to Seller, the actual knowledge of the
representatives of Seller set forth on Schedule 8.02(a) after due inquiry, and
(ii) with respect to Purchaser, the actual knowledge of any officer of Purchaser
after due inquiry.

     "Lien" means 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 Business or the Acquired Assets (including the Products), taken
as a whole.

     "NDA" means a New Drug Application, ANDA or Products 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 Products which are necessary for FDA approval to market a Product in
the United States.

     "Novartis Agreements" means the Supply Agreement between Bristol-Myers
Squibb Laboratories Company and Biochemie U.S., Inc. dated December 8, 2000, the
Asset Purchase Agreement between Seller and Novartis dated December 8, 2000, and
the License Agreement between Seller and Biochemie U.S., Inc., dated as of
January 3, 2001, as the foregoing may have been heretofore amended or amended
hereafter.

     "Patents" means 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 exclusively
in the conduct of the Business.

                                       28

<PAGE>   35
     "Permitted Liens" means, collectively (a) Liens for taxes or assessments
which are not delinquent or are being contested in good faith by appropriate
proceedings, (b) statutory mechanics, warehousemen's, materialmens, contractors,
workmen's, repairmen's and carriers liens, and other similar Liens arising in
the ordinary course for obligations which are not delinquent, (c) the rights, if
any, of third parties, appearing in product advertisements for the Products
being transferred as part of the Acquired Assets, and (d) Liens which do not
materially impair the current use or the value of the assets subject to such
Liens.

     "Person" means 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.

     "Pricing Investigation" has the meaning set forth in Section 1.03(c)(vii).

     "Related Instruments" means the Assumption Agreement and the Supply
Agreement.

     "Retained Information" means any and all books and records prepared and
maintained by Seller in connection with the Business, including all regulatory
files (including correspondence with regulatory authorities), research data,
marketing data, laboratory books, batch records and stability studies, that do
not relate exclusively to the Business and are used in connection with Seller's
or its Affiliates' conduct of the Business prior to the Closing Date.

     "Roberts Supply Agreement" means the Estrace(R) Supply Agreement between
Seller and Roberts Laboratories dated October 31, 1994 as extended pursuant to
letter agreement dated October 4, 1999.

     "Supply Agreement" means the Supply Agreement dated as of the date hereof
between Purchaser and Seller or an Affiliate of Seller.

     "Taxes", or "Tax" in the singular form, means 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" means any report, return or other information filed with any
taxing authority with respect to Taxes imposed upon or attributable to the
operations of the Business.

     "Third Party" means a Person who or which is neither a party nor an
Affiliate of a party.

     "Trademarks" means all trademarks set forth on Schedule 2.07(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. For sake of clarity, the Trademarks do not include any marks
associated with the use of the Products in Canada.

     "United States" means the fifty states of the United States of America and
the District of Columbia.

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

                                       29
<PAGE>   36
<TABLE>
<CAPTION>

                                  TERM                    SECTION
<S>                                                       <C>
Acquired Assets                                            1.02(a)

Acquisition                                                1.01

Assumed Liabilities                                        1.03(a)

Assumption Agreement                                       1.04(c)

Calculation Date                                           1.06(a)

Closing                                                    1.04(a)

Closing Date                                               1.04(a)

Competitive Business                                       4.15(a)

Confidentiality Agreement                                  4.03(a)

Contracts                                                  2.08

DOJ                                                        4.05(a)

Excluded Assets                                            1.02(c)

Excluded Liability                                         1.03(c)

Excluded Tax Liability                                     1.03(c)

FDA                                                        1.02(a)

FDA Act                                                    2.09(a)

Financial Statements                                       2.04

FTC                                                        4.05(a)

IMS                                                        1.06(a)

IMS Notice                                                 1.06(a)

Indemnified Party                                          7.06(a)

Indemnifying Party                                         7.06(a)

Losses                                                     7.02(a)

Months of Supply                                           1.06(a)

Names                                                      4.10(c)

Novartis                                                   4.11(d)

Proceeding                                                 2.10(a)

Product(s)                                                 Preamble

</TABLE>

                                       30
<PAGE>   37

<TABLE>
<CAPTION>

<S>                                                       <C>
Purchase Price                                            1.01

Purchaser                                                 Preamble

Purchaser's Officer's Certificate                         5.03(c)

Roberts                                                   4.11(a)

Roberts Agreement                                         4.11(a)

Seller                                                    Preamble

Seller's Officer's Certificate                            5.02(c)

Shipped Products                                          1.03(c)(ii)

Third Party Claim                                         7.06(a)

</TABLE>

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

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

SECTION 8.03  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 8.04  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 8.05  ENTIRE AGREEMENT.

                                       31

<PAGE>   38
     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), in the Purchaser's
Officer's Certificate, the Seller's Officer's Certificate or in the Related
Instruments or the Confidentiality Agreement.

SECTION 8.06  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 8.07  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 other than Section 5-1401 of the New York General
Obligations Law.

SECTION 8.08  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 8.09  ASSIGNMENT.

     This Agreement may not be assigned by any party hereto without the prior
written consent of the other party, provided, however, that Purchaser may assign
this Agreement to any of its Affiliates or to any successor to substantially all
of its pharmaceutical business, without the prior written consent of Seller
provided, further, that, Purchaser fully and unconditionally guarantees the
obligations of such entity. Any attempted assignment in violation of this
Section 8.09 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

                                       32

<PAGE>   39
intent and purpose of such invalid provision; provided, however, that the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.

SECTION 8.12  CONSENT TO JURISDICTION.

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

SECTION 8.13  WAIVER OF JURY TRIAL.

     Each party hereto hereby waives to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or any Related Instrument. Each party hereto (a) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that 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.

                                       33

<PAGE>   40

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

                               BRISTOL-MYERS SQUIBB COMPANY

                               By: /s/ Robert J. Brown
                                   -------------------------------------------
                                   Name: Robert J. Brown
                                   Title: Vice President, Corporate Development,
                                          Worldwide Medicines Group

                               GALEN (CHEMICALS) LIMITED

                               By: /s/ Roger M. Boissonneault
                                   -------------------------------------------
                                   Name: Roger M. Boissonneault as
                                   Title: Attorney-in-fact for John King,
                                          Director and Secretary of
                                          Galen (Chemicals) Limited

                                       34<PAGE>   1

                                                                  Exhibit 10.9
==============================================================================

                                SUPPLY AGREEMENT

                                    Between

                   BRISTOL-MYERS SQUIBB LABORATORIES COMPANY

                                      and

                           GALEN (CHEMICALS) LIMITED

                           Dated as of June 29, 2001

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

<PAGE>   2
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                     <C>

Article I. -- Definitions..........................................................................

         Schedule 1.01 -- Definitions..............................................................

         Section 1.02 -- Other Definitions.........................................................

         Section 1.03 -- Interpretations...........................................................

Article II. -- General Terms of Supply.............................................................

         Section 2.01 -- Sale and Purchase of Product..............................................

         Section 2.02 -- Forecasts.................................................................

         Section 2.03 -- Ordering..................................................................

         Section 2.04 -- Shipments.................................................................

         Section 2.05 -- Receipt of Product; Acceptance............................................

         Section 2.06 -- Quality Control; Change in Specifications or Supplier.....................

         Section 2.07 -- Material Safety Data Sheets...............................................

         Section 2.08 -- BMS Supply Contracts......................................................

         Section 2.09 -- Line Extension Products and New Products..................................

         Section 2.10 -- BMS Reserved Rights.......................................................

         Section 2.11 -- Maintenance of NDAs.......................................................

         Section 2.12 -- Promotional and Advertising Materials.....................................

         Section 2.13 -- License Grant.............................................................

Article III. -- Purchase Price for Products and Closing Inventory..................................

         Section 3.01 -- Purchase Price............................................................

         Section 3.02 -- Audit of Cost Records.....................................................

Article IV. -- Payments and Reports................................................................

         Section 4.01 -- Payment...................................................................

         Section 4.02 -- Mode of Payment...........................................................

         Section 4.03 -- Taxes.....................................................................
</TABLE>

                                       i

<PAGE>   3
<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                     <C>
         Section 4.04 -- Late Payments.............................................................

Article V. -- Compliance with Laws; Representations and Warranties.................................

         Section 5.01 -- Compliance with Law; Cooperation..........................................

         Section 5.02 -- BMS Warranties............................................................

         Section 5.03 -- The Company Warranties....................................................

         Section 5.04 -- Disclaimer of Warranties..................................................

         Section 5.05 -- No Reliance by Third Parties..............................................

Article VI. -- Indemnification; Remedies for Breach................................................

         Section 6.01 -- BMS Indemnity.............................................................

         Section 6.02 -- The Company Indemnity.....................................................

         Section 6.03 -- Control of Proceedings....................................................

         Section 6.04 -- Remedy for Failure to Supply Products.....................................

         Section 6.05 -- Insurance.................................................................

         Section 6.06 -- Limitations on Liability..................................................

Article VII. -- Compliance with Government Regulations.............................................

         Section 7.01 -- Government Communications.................................................

         Section 7.02 -- Access to Records.........................................................

         Section 7.03 -- Governmental and Regulatory Inspections...................................

         Section 7.04 -- The Company Inspections...................................................

Article VIII. -- Product Recalls; Adverse Experiences; Product Quality Complaints; and
                 Medical Inquiries.................................................................

         Section 8.01 -- Product Recalls...........................................................

         Section 8.02 -- Adverse Experience........................................................

         Section 8.03 -- Product Quality Complaints................................................

         Section 8.04 -- Medical Inquiries.........................................................

Article IX. -- Confidentially......................................................................

         Section 9.01 -- Confidentiality Requirement...............................................

         Section 9.02 -- Use of Information........................................................
</TABLE>

                                       ii

<PAGE>   4
<TABLE>
<CAPTION>

                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                     <C>

         Section 9.03 -- Purchased Assets..........................................................

         Section 9.04 -- Relief....................................................................

Article X. -- Termination..........................................................................

         Section 10.01 -- Term.....................................................................

         Section 10.02 -- Breach...................................................................

         Section 10.03 -- Bankruptcy...............................................................

         Sectoin 10.04 -- Effect of Termination....................................................

         Section 10.05 -- Accrued Rights, Surviving Obligations....................................

Article XI. -- Force Majeure.......................................................................

Article XII. -- Qualification of Backup Supplier...................................................

         Section 12.01 -- Qualification of Initial Back-up Supplier................................

         Section 12.02 -- Manufacture of Products by the Initial Back-up Supplier During the Term..

         Section 12.03 -- Technical Assistance Upon Termination of Agreement.......................

         Section 12.04 -- Confidentiality..........................................................

Article XIII. -- Notices...........................................................................

Article XIV. -- Miscellaneous Provisions...........................................................

         Section 14.01 -- Assignment...............................................................

         Section 14.02 -- Non-Waiver...............................................................

         Section 14.03 -- Dispute Resolution.......................................................

         Section 14.04 -- Entirety of Agreement....................................................

         Section 14.05 -- Public Announcements.....................................................

         Section 14.06 -- Governing Law............................................................

         Section 14.07 -- Relationship of the Parties..............................................

         Section 14.08 -- Counterparts.............................................................

         Section 14.09 -- Severability.............................................................

         Section 14.10 -- Expenses.................................................................

         Section 14.11 -- Descriptive Headings.....................................................

</TABLE>

                                      iii

<PAGE>   5
<TABLE>
<CAPTION>

                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                     <C>
         Section 14.12 -- Amendments and Waivers...................................................

         Section 14.13 -- Successors and Assigns...................................................

         Section 14.14 -- Consent to Jurisdiction..................................................

         Section 14.15 -- Waiver of Jury Trial.....................................................

         Section 14.16 -- Attorney Fees............................................................

Schedule 1.01(a) -- List of Products and Associated Trademarks.....................................

Schedule 1.01(b) -- Product Specifications.........................................................

Schedule 2.03(a) -- Initial Order of Product by Company for First Six Months
                        After Effective Date.......................................................

Schedule 2.04(a) -- List of Shipping Destinations..................................................

Schedule 2.04(b) -- Certificate of Analysis........................................................

Schedule 3.01 -- Initial Purchase Price; Minimum Batch Sizes.......................................

Schedule 3.01(b) -- Initial Forecast...............................................................

Schedule 3.01(c) -- Variable Product Costs.........................................................
</TABLE>

                                       iv
<PAGE>   6

     SUPPLY AGREEMENT dated as of June 29, 2001 between Bristol-Myers Squibb
Laboratories Company, a company organized under the laws of the Republic of
Ireland ("BMS"), and Galen (Chemicals) Limited, a company organized under the
laws of the Republic of Ireland (the "Company").

     Bristol-Myers Squibb Company, a corporation organized and existing under
the laws of Delaware ("BMS Parent"), directly or indirectly through its
Affiliates, manufactures, distributes, markets and sells the Products in and
outside the United States. The Company and BMS Parent have entered into an Asset
Purchase Agreement dated as of the date hereof pursuant to which BMS Parent will
sell to the Company, and the Company will purchase from BMS Parent, on the
Effective Date, certain rights, title and interest in and to the Products. The
Company wishes to purchase from BMS, and BMS wishes to supply to the Company,
the Company's entire requirements of each Product, for distribution, sale and
use in the Territory pursuant to the terms and conditions set forth in this
Agreement.

     Accordingly, the parties hereto agree as follows:

                                   ARTICLE I.

                                  DEFINITIONS

SECTION 1.01  DEFINITIONS.

     For purposes of this Agreement:

     "Affiliate" means, 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 the 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.

     "Agreement" means this agreement, together with all appendices, exhibits
and schedules hereto, and as the same may be amended or supplemented from time
to time.

     "Asset Purchase Agreement" means the Asset Purchase Agreement dated as of
the date hereof, between BMS Parent and the Company pursuant to which BMS Parent
has agreed to sell to the Company and the Company has agreed to purchase from
BMS Parent, certain rights, title and interest in and to the Products.

     "Company's Proportionate Share" means, with respect to any NDA, a fraction,
the denominator of which is the number of Estradiol Tablets and Estrace Tablets
sold by BMS, directly or indirectly, in the United States under such NDA during
the prior calendar year, and the numerator of which is the number of Estrace
Tablets sold in the United States under such NDA during the prior calendar year,
provided, however, that until January 1, 2002, such calculation shall be based
on number of tablets sold during the period January 1, 2001 - June 30, 2001.

     "Controlled By" means, with respect to any Patent, Know-How, data,
regulatory filing or registration, that a Party owns or has a license to such
Know-How, data, regulatory filing or registration and has the ability to grant
to the other Party access, a license or a sublicense (as applicable) to such
Patent, Know-How, data, regulatory filing or registration as provided for herein
without violating the terms of any agreement or other arrangement with any Third
Party existing at the time such Party would be first required hereunder to grant
the other Party such access, license or sublicense.

     "Effective Date" means the Closing (as defined in the Asset Purchase
Agreement) as provided in Section 1.04 of the Asset Purchase Agreement.

     "Estrace Tablets" means estradiol tablets as described in NDAs #81-295,
84-499 and 84-500 marketed under the trademark Estrace(R).

<PAGE>   7
     "Estradiol Tablets" means the generic estradiol tablets as described in
NDAs #81-295, 84-499 and 84-500.

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

     "Firm Order" means a written irrevocable firm purchase order for the
Products, which order shall include a delivery schedule specifying the delivery
date for each Product ordered, and the location to which shipment of the Product
is to be delivered.

     "Good Manufacturing Practices" means current good manufacturing practices,
as established by the FDA and all other applicable Laws, including all
applicable U.S., federal, state, foreign and local environmental, health and
safety law and regulations in effect at the time and place of manufacture of the
Products.

     "Laws" means all laws, rules, regulations, ordinances and other
requirements of any governmental authority or instrumentality within the
Territory and any other jurisdiction in which Products are manufactured.

     "Line Extension" to the Product Line means any new formulation, dosage
form, presentation, or line extension of any existing Product in the Product
Line under the Estrace(R) trademark.

     "Material Data Safety Sheet" means the material safety data sheet used to
comply with the Occupational Safety and Health Administration's Hazard
Communication Standard, 29 CFR 1910.1200.

     "NDA" means a New Drug Application or Abbreviated New Drug 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 supplements filed by BMS to the NDA in order
to manufacture products for Novartis under the Novartis Agreements and/or for
Roberts under the Roberts Supply Agreement (as such terms are defined in the
Asset Purchase Agreement)), including all documents, data and other information
concerning a Product which are necessary for FDA approval to market a Product in
the United States.

     "Novartis Agreements" means the Supply Agreement between Bristol-Myers
Squibb Laboratories Company and Biochemie U.S., Inc. dated December 8, 2000, the
Asset Purchase Agreement between Seller and Novartis dated December 8, 2000, and
the License Agreement between Seller and Biochemie U.S., Inc, dated as of
January 3, 2001, as the foregoing may have been heretofore amended or as may be
amended hereafter.

     "Party" means BMS or the Company and, when used in the plural, means BMS
and the Company.

     "Patents" means all patents and patent applications, and all additions,
divisions, continuations, continuations in-part, substitutions, reissues,
extensions, registrations and renewals of any of the foregoing that are
Controlled by BMS as of the Effective Date and used in the manufacture of the
Products, and, which, but for the license rights granted by BMS to Company
hereunder, would be infringed by the manufacture, use or sale of the Product
Line in the Territory.

     "Person" means any individual, group, corporation, partnership or other
organization or entity (including 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.).

     "Product" means any of the products listed on Schedule 1.01A, packaged and
labeled in accordance with applicable Law and the applicable Product
Registration, including all strengths and packaging configurations of the final
finished dosage form as presented and marketed on the Effective Date. This
definition shall cover both commercial and sample Products, and references to
Products in this Agreement shall be references to both commercial and sample
forms of the Products. Each SKU listed on Schedule 1.01A constitutes a separate
Product.

     "Product Line" means all Estrace Tablets in all countries of the world (but
excluding, for purposes of this Agreement Estrace Tablets for use, distribution,
marketing and sale in Canada) and Estradiol Tablets in all countries

                                       2

<PAGE>   8
of the world (but excluding for purposes of this Agreement Estradiol Tablets
for use, distribution, marketing and sale in Canada and the United States).

     "Product Registrations" means the approvals or registrations for each
Product which have been received by BMS Parent or its Affiliates in the
Territory, including without limitation, any ANDA or NDA for each Product.

     "Product-Exclusive Know-How means all data, Retained Information, formulae,
assays, test methods, technology, technical information, inventions, processes,
specifications, know-how, and trade secrets that are Controlled by BMS as of the
Closing Date and used by BMS exclusively to manufacture Estrace Tablets and
Estradiol Tablets, but currently are not used in the manufacture, research,
development, or marketing of products other than Estrace Tablets and Estradiol
Tablets (including products to be manufactured for Novartis under the Novartis
Agreements and/or for Roberts under the Roberts Supply Agreement).

     "Product-Non-Exclusive Know-How means all Retained Information, data,
formulae, assays, test methods, technology, technical information, inventions,
processes, specifications, know-how, and trade secrets that are Controlled by
BMS as of the Closing Date and used by BMS to manufacture Estrace Tablets and
Estradiol Tablets, but which are currently used in the manufacture, research,
development, or marketing of products other than Estrace Tablets and Estradiol
Tablets.

     "Related Agreements" means the Asset Purchase Agreement and any other
written agreements between the Parties contemplated thereunder.

     "Retained Information" means any and all books and records prepared and
maintained by Seller, including all regulatory files (including correspondence
with regulatory authorities), research data, marketing data, laboratory books,
batch records and stability studies, that relate to the conduct of the Business
and are used in connection with Seller's or its Affiliates' conduct of the
Business on the Closing Date.

     "Specifications" means, for each Product, such specifications as set forth
in Schedule 1.01B, as the same may be amended or supplemented from time to time
hereafter by the Company pursuant to Section 2.06(b), by the mutual agreement of
the Parties in a writing duly executed by authorized representatives of each
Party hereto or in accordance with Section 2.06(d).

     "Term" means the Initial Term and the Renewal Term, if any.

     "Territory" means (i) with respect to Estrace Tablets, anywhere in the
world except Canada; and (ii) with respect to Estradiol Tablets, anywhere in the
world except the United States and Canada.

     "Third Party" means any Person who or which is neither a Party nor an
Affiliate of a Party.

     "Third Party Purchaser" means with respect to Estrace Tablets and Estradiol
Tablets (or products substantially the same as Estradiol Tablets) for sale in
Canada, Roberts Laboratories Inc., its Affiliates or their respective successors
and assigns and with respect to Estradiol Tablets (or products substantially the
same as Estradiol Tablets) for sale in the United States, Novartis AG, its
Affiliates or their respective successors and assigns.

     "United States" means the fifty states of the United States of America and
the District of Columbia.

SECTION 1.02  OTHER DEFINITIONS.

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

<TABLE>
<CAPTION>

TERM                                             SECTION
----                                             -------
<S>                                              <C>
AAA                                              13.03(b)

</TABLE>
                                       3
<PAGE>   9
<TABLE>
<CAPTION>

TERM                                             SECTION
----                                             -------
<S>                                              <C>
Additional Back-up Supplier                      12.03(a)
BMS Party                                        6.02
Company Party                                    6.01
Excused Supply Default                           6.04(e)(i)
Force Majeure Event                              11
Forecast                                         2.02
Initial Back-up Supplier                         12.01(a)
Initial Period                                   6.04(e)(ii)
Initial Term                                     10.01(a)

Lost Profits                                     6.04(e)(iii)
Non-Serious Adverse Effect                       8.02(b)
Product Quality Complaint                        8.03
Purchase Price                                   3.01
Qualifying Product                               6.04(e)(iv)
Recall                                           8.01(a)
Renewal Term                                     10.01(b)
Rules                                            13.03(b)
Serious Adverse Event                            8.02(b)
Significant Customer                             6.04(e)(v)
Subsequent Period                                6.04(e)(vii)
Stockout                                         6.04(e)(vi)
Technical Assistance                             12.01(e)
Technical Information                            2.11(d)

</TABLE>

SECTION 1.03  INTERPRETATIONS.

     (a)  In the event 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.

     (b)  The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise, (A) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or therein), (B) any
reference to any Laws herein shall be construed as referring to such Laws as
from time to time enacted, repealed or amended, (C) any reference herein to any
Person shall be

                                       4

<PAGE>   10
construed to include the Person's successors and assigns, (D) 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 (E) all references herein to Articles, Sections, Exhibits
or Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules of this Agreement.

                                  ARTICLE II.

                            GENERAL TERMS OF SUPPLY

SECTION 2.01  SALE AND PURCHASE OF PRODUCT.

     (a)  During the Term of this Agreement, the Company hereby grants to BMS a
royalty-free, non-exclusive and non-transferable right and license to use such
assets that are owned or licensed by the Company as are necessary to allow BMS
to manufacture and supply the Products exclusively to the Company under this
Agreement. Notwithstanding the foregoing, BMS may transfer its right and license
under this Section 2.01(a) to an Affiliate of BMS or to a Third Party in
accordance with Section 2.06(c).

     (b)  BMS shall use commercially reasonable efforts to sell to the Company,
and the Company shall, subject to Article XI, Section 2.06(c) and Section 12.02,
purchase from BMS, all of the Company's requirements for each Product for
distribution, sale and use in the Territory during the Term, pursuant to Firm
Orders submitted by the Company to BMS from time to time in accordance with
Section 2.03, at a price determined in accordance with Section 3.01, and subject
to the warranties set forth in Section 5.02(a). At any time, upon not less than
twelve (12) months' prior written notice to BMS, the Company may terminate its
obligation to purchase any Product from BMS hereunder and itself (or through an
Affiliate or Third Party) commence manufacturing such Product; provided,
however, that BMS shall have no obligation to recommence selling any such
Product to the Company at any time after the Company has terminated its
obligation to purchase any such Product in accordance with this Section 2.01(b).

     (c)  All Products supplied hereunder shall be in finished dosage form,
filled, labeled and packaged for commercial sale or distribution as samples, as
the case may be, by the Company in accordance with the terms and conditions of
this Agreement, the Specifications and applicable Laws. BMS shall solely and
exclusively supply the Product Line to the Company and its designees, and
neither BMS nor its Affiliates shall have the right to manufacture or supply the
Product Line or any Product therein to any other Person. BMS shall be
responsible for the purchase of all raw materials in accordance with the NDAs
and other regulatory filings for the Products as necessary to supply finished
Products to the Company under this Agreement.

     (d)  For up to the later of 180 calendar days following the Effective Date,
each Product manufactured hereunder shall continue to be labeled and packaged
with the same labels and packaging that are used by BMS in connection with the
Products as of the Effective Date. After such time, each such Product shall be
manufactured with labeling and packaging identifying BMS or any Affiliate
thereof as the manufacturer of the Products and the Company (or the Company's
designee) as the distributor thereof. Within 60 calendar days following the
Effective Date, the Company shall provide to BMS final specifications for the
revised labeling and packaging of each Product, including all necessary
photo-ready art (or its substantial equivalent) reflecting such modification.

     (e)  Subject to the provisions of Section 2.01(d), the Company shall
control the content and type of all labeling and packaging (and any changes or
supplements thereto) for each Product and shall have the responsibility, at the
Company's expense, for any changes or supplements thereto, including the expense
of securing any approvals required by the FDA or other applicable regulatory
authorities for any such changes or supplements. BMS shall be responsible for
obtaining such labels (and any changes or supplements thereto) in accordance
with the content specified by the Company. The Company shall use commercially
reasonable efforts to communicate any changes to the labeling and packaging to
BMS in writing at least 90-calendar days prior to the desired implementation
date together with the required documentation specifying the content to be
included in the labeling and packaging, including all necessary photo-ready art
(or its substantial equivalent). BMS shall use its

                                       5

<PAGE>   11
commercially reasonable efforts to implement such changes as of its first batch
run after the Company's desired implementation date, but in no event later than
the later of (i) 180-days after the receipt of such request and (ii) the
Company's desired implementation date. Each Product shall be sold by the Company
under one label throughout the Territory. Notwithstanding the foregoing, if at
any time the Company desires to sell Products under one or more labels, the
Company shall notify BMS of such desire, which notice shall include a reasonably
detailed description of such proposed additional labels and the Company's
anticipated annual volume requirements for each SKU which will bear an
additional label. BMS shall have the right, but not the obligation, to elect, at
its sole option, to manufacture such Products with such additional labels. If
BMS elects to manufacture such Products with such additional label(s), all
additional costs (calculated on a fully burdened cost basis) incurred by BMS in
connection with such manufacturing of such Products with such additional labels
shall be borne by the Company. If BMS elects not to manufacture the Products
with such additional labels, the Company shall have the right to use the Initial
Back-Up Supplier to manufacture such Products under such label(s).

     (f)  No terms and conditions contained in any Firm Order, acknowledgment,
invoice, bill of lading, acceptance or other preprinted form issued by either
Party shall be effective to the extent they are inconsistent with or modify the
terms and conditions contained herein.

     (g)  BMS agrees that if at any time during the Term of this Agreement it is
unable to supply sufficient quantities of a Product to supply all of the
Company's requirements for such Product and all the requirements supplied by BMS
for Estrace Tablets for sale in Canada or Estradiol Tablets (or products
substantially the same as Estradiol Tablets) for sale in the United States and
Canada by the Third Party Purchaser for whom BMS manufactures same, BMS shall
allocate the supply of such Product (and products) among the Company, BMS, its
Affiliates and any such Third Party Purchaser in good faith on a
non-discriminatory and equitable basis.

SECTION 2.02  FORECASTS.

     Upon execution of this Agreement, and thereafter within the first 10
business days of each calendar quarter during the Term, the Company shall
provide BMS with a good faith rolling forecast ("Forecast") of the estimated
quantities and anticipated delivery schedules for each Product on a country by
country basis, for the following 24-month period, by calendar quarters. Subject
to Section 2.03(a), the first six months of each such Forecast shall consist of
the 3-month Firm Order placed by the Company concurrently with such Forecast
pursuant to Section 2.03(b) (for Products to be delivered within months 4-6 of
such Forecast) and the 3-month Firm Order placed on the date of the previous
Forecast (for Products to be delivered within months 1-3 of the current
Forecast). Subject to the foregoing, the Parties agree to use commercially
reasonable efforts to correspond, discuss and/or meet periodically, at mutually
convenient times and places, to discuss each Party's requirements under this
Agreement and the mechanisms that can be established to assure that those
requirements are met on a timely basis.

SECTION 2.03  ORDERING.

     (a)  The Company will provide BMS with a Firm Order for the period from the
Effective Date up to and including September 30, 2001, which Firm Order shall be
attached as Schedule 2.03(a). BMS will supply the quantities set forth in
Schedule 2.03(a) for each Product in accordance with the delivery schedule set
forth therein, and to the extent such Firm Order is not sufficient to meet the
Company's actual requirements for any Product for such period, BMS will use
commercially reasonable efforts to supply the Company with its requirements
beyond the amounts specified in Schedule 2.03(a). The Company agrees to purchase
such quantities of each Product as supplied by BMS in accordance with Schedule
2.03(a). For periods after September 30, 2001, Firm Orders shall be filled by
BMS in accordance with the Firm Orders placed by the Company pursuant to Section
2.03(b).

     (b)  Except as provided in Section 2.03(a) above, within 10 days after the
beginning of each such calendar quarter, the Company shall place a Firm Order
specifying the quantities of each Product to be purchased by the Company with
respect to the next succeeding calendar quarter. BMS shall promptly notify the
Company in writing if at any time BMS has reason to believe that BMS will not be
able to fill a Firm Order for any Product in all material respects in accordance
with the delivery schedule specified therein by the Company and pursuant to the
terms and conditions of this Agreement. Notwithstanding the foregoing, any Firm
Order for any

                                       6

<PAGE>   12
Product placed for a calendar quarter in accordance with this Section 2.03(b)
shall be between 75% and 125% of the most recent forecast estimated quantity for
such Product for such calendar quarter provided by the Company to BMS in
accordance with Section 2.02 prior to the Firm Order being placed by the
Company.

     (c)  All Products ordered by the Company shall be consistent with BMS'
current minimum batch sizes for the related Product, or multiples thereof, as
set forth in Schedule 3.01. BMS shall give the Company not less than six months'
notice prior to changing its minimum batch sizes, and shall not change the
minimum batch sizes without the prior written consent of the Company.

SECTION 2.04  SHIPMENTS.

     BMS shall ship each Firm Order, F.O.B. the manufacturing facility for each
Product (whether manufactured by BMS or, if and to the extent permitted
hereunder, by an Affiliate of BMS or a Third Party) to the Company or its
designee to the destinations specified by the Company in the applicable Firm
Order. Freight (including customs clearance costs) and insurance shall be for
the account of the Company. Title shall pass to the Company and the risk of
loss, delay or damage in transit shall be with the Company, from and after
delivery to the common carrier. BMS shall package each Product for shipment in
accordance with its customary practices therefor, unless otherwise specified in
writing by the Company. The Company shall use its commercially reasonable
efforts to request alternative packaging for shipment at least 30 business days
prior but in no event less than 10 business days prior to such shipment, in
which event any extra costs incurred by BMS on account of changes requested by
the Company shall be promptly reimbursed by the Company. In the event that BMS
receives less than 30 business days notice of a request for alternative
packaging, BMS shall not be required to repackage any such shipments that have
already been packed for shipment. BMS shall include the following with each
shipment of the Products: (a) the Company purchase order number, (b) the BMS lot
and batch numbers for each Product included, (c) the quantity of the Products
and (d) the Certificate of Analysis (the form of which is attached hereto as
Schedule 2.04(b)).

SECTION 2.05  RECEIPT OF PRODUCT; ACCEPTANCE.

     (a)  The Company shall be entitled to reject any portion or all of any
shipment of Products that does not conform to the Certificate of Analysis or
otherwise fails to comply with the representations and warranties set forth in
Section 5.02(a) (unless such non-conformity was attributable to an act or
omission of the Company or the common carrier once the Product was delivered by
BMS to such common carrier), provided, that, (a) the Company shall notify BMS
within 15 business days after receipt of such shipment if it is rejecting a
shipment due to obvious physical damage, obvious packaging defect or quantity
discrepancies that are evident upon visual inspection of the packaged Products
as shipped by BMS and (b) in the case of Products having defects other than
those obvious defects, the Company shall notify BMS within 15 business days
after the Company becomes aware of such defect. Notwithstanding anything
contained herein, the Company shall have no obligation to inspect the Products
beyond a visual inspection of each shipment for obvious physical damage or
quantity discrepancies that are evident upon visual inspection of the packaged
Products as shipped by BMS. Without in any way limiting BMS' indemnity
obligation as set forth in Section 6.01, if no notice is provided by the Company
within such time periods (i.e., 15 business days), then the Company shall be
deemed to have accepted the shipment. Any notice of rejection by the Company
shall be accompanied by a reasonably detailed statement of its reasons for
rejection and a report of any pertinent analysis performed by the Company on the
allegedly nonconforming Product, together with the methods and procedures used.
BMS shall notify the Company as promptly as reasonably possible, but in any
event within 10 business days after receipt of such notice of rejection, whether
it accepts the Company's assertions of nonconformity.

     (b)  Whether or not BMS accepts the Company's assertion of nonconformity,
promptly upon receipt of a notice of rejection, unless otherwise specified by
the Company, BMS shall use commercially reasonable efforts to provide
replacement Products for those rejected by the Company in the original shipment.
If the Product rejected by the Company from such original shipment ultimately is
found to be nonconforming (whether pursuant to Section 2.05(c) or if BMS so
acknowledges in writing), BMS shall bear all expenses for such replacement
Product (including all transportation and/or disposal charges and cost of
manufacture for such nonconforming Product), to the extent the Company
previously paid for any corresponding nonconforming Product. If it is determined

                                       7

<PAGE>   13
subsequently that such Product was in fact conforming (whether pursuant to
Section 2.05(c) or if the Company so acknowledges in writing), then the Company
shall be responsible not only for the purchase price of the allegedly
nonconforming Product (including all transportation charges), but also, upon
receipt and acceptance by the Company in accordance with the procedures (and at
the same price charged in the original shipment) set forth above, the
replacement Product. Replacement shipments shall also be subject to the
procedures contained in Section 2.05(a). BMS shall be under no obligation to
accept a return of Product except as provided in this paragraph.

     (c)  If BMS disagrees with any alleged nonconformity, then an independent
Good Manufacturing Practices certified laboratory (or other expert) of
recognized repute, reasonably acceptable to both Parties, shall analyze an
aliquot sample or such other portions of a shipment, furnished by the Company
from the shipment received by the Company, as may be necessary to substantiate
whether the shipment rejected by the Company conformed in all material respects
to the Certificate of Analysis and/or any other pertinent Specifications or
otherwise failed to comply with the representations and warranties set forth in
Section 5.02(a) at the time of delivery to the common carrier. The laboratory
shall use such procedures and tests as the laboratory may consider necessary or
appropriate to reach a conclusion. Both Parties agree to cooperate with the
independent laboratory's reasonable requests for assistance in connection with
its analysis hereunder. Both Parties shall be bound by the laboratory's results
of analysis, which, absent manifest error, shall be deemed final as to any
dispute over compliance of the Product in all material respects with the
Certificate of Analysis and/or any other pertinent Specifications and/or the
representations and warranties set forth in Section 5.02(a). If the laboratory
analysis shows that the Products do not conform in all material respects to the
Certificate of Analysis and/or any other pertinent Specifications and/or the
representations and warranties set forth in Section 5.02(a) at the time of
delivery to the common carrier, the costs of such analysis shall be paid by BMS.
If the laboratory analysis shows that the Products do conform in all material
respects to the Certificate of Analysis and/or any other pertinent
Specifications and/or the representations and warranties set forth in Section
5.02(a) at the time of delivery to the common carrier, the costs of such
analysis shall be paid by the Company.

     (d)  If BMS acknowledges an alleged nonconformity (or if the laboratory
concludes that the Product was nonconforming), BMS promptly (and in any case
within thirty calendar days thereafter) shall make arrangements for the return,
reworking or disposal, at BMS' option, of the nonconforming Product. If BMS
requests that the Company dispose of such nonconforming Product, BMS shall give
the Company written instructions as to how the Company or its agent shall, at
BMS' expense and liability, lawfully dispose of any non-conforming Products, and
the Company shall provide BMS with written certification of such destruction.
BMS shall pay, or reimburse the Company, for any reasonable return shipping
charges or out-of-pocket costs incurred by the Company for such return shipment
or lawful disposal of such nonconforming Product in accordance with BMS'
instructions.

SECTION 2.06  QUALITY CONTROL; CHANGE IN SPECIFICATIONS OR SUPPLIER.

     (a)  BMS shall conduct all quality control testing of the Products prior to
shipment in accordance with the applicable NDAs and Laws. BMS shall retain
records and samples of Products relating to such testing as required by Law and,
from time to time upon prior notice from the Company, shall provide the Company
with reasonable access during normal business hours to such records; provided,
however, that such access does not unreasonably disrupt the normal operations of
BMS. If the Company conducts quality control testing of Products after delivery
thereof to the Company, the Company shall use the same analytical methodology as
used by BMS. Upon written request from the Company, BMS shall provide a
reasonably detailed description of the analytical methodology used by BMS for
quality control testing of the Products.

     (b)  The Company shall have the right, at its expense and in consultation
with BMS, to change the Specifications with respect to any Product from time to
time, including as may be required by any regulatory agency having jurisdiction
over such Product, on not less than 120 calendar days' prior written notice to
BMS (or such shorter period as required by any regulatory agency or mutually
agreed by the Parties). In such event, upon the reasonable request of the
Company and at the Company's sole expense, BMS shall assist with all analytical
or experimental work to be performed in connection with making such change, and
BMS shall be responsible, at Company's expense, for filing all changes proposed
by the Company and for seeking approval of any such change

                                       8

<PAGE>   14
by each applicable regulatory authority. The Parties may also amend the
Specifications with respect to any Product by mutual agreement.

     (c)  At any time and from time to time, BMS in its sole discretion may,
without the consent of but with not less than 180 days' prior written notice to,
and consultation with, the Company, change the manufacturer used in the
manufacturing of the Products to an Affiliate of BMS or to another BMS facility.
BMS may with the prior written consent of the Company (which consent shall not
be unreasonably withheld) change the manufacturer used in the manufacturing of
the Products to a Third Party. The Company shall cooperate with BMS (and such
other manufacturer, if applicable) in any reasonable manner to effect such
transfer to an Affiliate of BMS or, in the case of a Third Party, to such Third
Party as to which the Company has given its written consent. BMS shall be
responsible for making any required filing with respect to such change in
manufacturer and seeking approval from each applicable regulatory authority.
Additionally, BMS shall be responsible for all costs incurred by either Party
with respect to such change in manufacturer. In the event that the manufacturer
used in the manufacturing of the Products is changed to an Affiliate of BMS or a
Third Party as provided in this Section 2.06(c), BMS shall ensure that the
Purchase Price for the Products after such change in manufacturer remains
substantially equal to the amounts set forth on Schedule 3.01, as adjusted from
time to time pursuant to Sections 3.01(b) - (d).

     (d)  Subject to Section 2.06(b), at any time and from time to time, BMS in
its sole discretion may change, without the consent of but with at least
90 days' prior written notice to (if no regulatory action is required) and at
least 180 days' prior written notice to (if regulatory action is required), and
consultation with, the Company, any manufacturing processes and/or locations
used in manufacturing any Product, any intermediates, excipients, reagents or
other compounds used in the manufacture of any Product, and any suppliers of any
components used in making a Product, provided that no such change results in or
causes an interruption of supply of Product to the Company or delays or
otherwise adversely affects the ability of the Company to transition the
manufacturing of such Product to the Company except where such change results
from a change in manufacturing processes and/or locations in response to a
pronouncement of the FDA or a change in applicable Law. The Company shall
cooperate with BMS in any reasonable manner to effect such change. BMS shall be
responsible for making any required filing with respect to such change and
seeking approval from each applicable regulatory authority. Additionally,
BMS shall be responsible for all costs incurred by either Party with respect to
such change. In the event of such change, as provided in this Section 2.06(d),
BMS shall ensure that the Purchase Price for the Products after such change
remains substantially equal to the amounts set forth on Schedule 3.01,
as adjusted from time to time pursuant to Sections 3.01(b) - (d).

     (e)  With respect to any regulatory filings and approvals made or sought by
either Party under this Section 2.06, each Party shall provide reasonable
cooperation to the other Party in connection therewith. If a change proposed to
be made to the Specifications or the manufacture of the Products under this
Section 2.06 requires prior approval by any applicable regulatory authority
before implementation, such change will not be implemented in respect of
a Product until such change has been so approved.

SECTION 2.07  MATERIAL SAFETY DATA SHEETS.

     BMS shall provide the Company with all information in the applicable
Material Safety Data Sheet as it exists at the Effective Date for each Product
provided by BMS and thereafter as reasonably requested by the Company.

SECTION 2.08  BMS SUPPLY CONTRACTS.

     Notwithstanding any provision of this Agreement that may imply or provide
to the contrary, BMS shall have the sole right, but not the obligation, at its
sole discretion and expense, to maintain and enforce any contract entered into
by BMS or its Affiliates covering the supply of any compounds, intermediates,
biomaterials, packaging components, containers and other materials used in the
manufacture of the Products. Upon termination of BMS' supply obligation under
this Agreement, BMS will assign, to the extent assignable and if requested by
the Company, any contracts exclusively relating to the supply of any compounds,
intermediates, biomaterials, packaging components, containers and other material
used in the manufacture of the Products, and the Company shall be solely

                                       9

<PAGE>   15
responsible for all obligations arising under such assigned contracts after the
date of assignment. Except as provided in Article XI, nothing contained in this
paragraph shall excuse BMS from performing its obligations under this Agreement.
For the avoidance of doubt, termination without cause by BMS and/or expiration
of a supply contract by BMS, in itself, does not constitute a Force Majeure
Event.

SECTION 2.09  LINE EXTENSION PRODUCTS AND NEW PRODUCTS.

     (a)  Except as set forth in Section 2.09(c), BMS shall have no obligation,
express or implied, to develop new formulations, dosages, forms of
administration, or preparations for the Products.

     (b)  Once the Company has obtained any regulatory approvals that may be
required, if any, to market a Line Extension Product in any country of the
Territory, such Line Extension Product shall be included as a Product under this
Agreement and the Parties shall amend Schedule 1.01A to reflect the inclusion of
such Line Extension Product.

     (c)  During the Term, upon request by the Company, BMS shall provide the
Company with a reasonable level of technological assistance and consultation in
support of the Company's development and regulatory efforts in connection with
all Line Extension Products. The Company will reimburse BMS and its Affiliates
for their fully-burdened costs associated with such development and regulatory
efforts, including without limitation, capital expenses, equipment and supplies,
personnel costs and reasonable out-of-pocket expenses. Any and all rights
arising out of any development work under this Section shall be owned by the
Company regardless of inventorship, and to the extent that BMS or its Affiliates
or any of their employees or consultants acquire rights in or to any such
developments, BMS shall, or shall ensure that its Affiliates or their employees
or agents shall, promptly take such actions and execute such documents as may be
necessary to assign such rights to the Company or the Company's designee.

SECTION 2.10  BMS RESERVED RIGHTS.

     For the avoidance of doubt, nothing in this Agreement shall be deemed to
prohibit or restrict the right of BMS and its Affiliates to manufacture
(anywhere in the world):

        (i)    any Estrace Tablets for sale or distribution to a Third Party
               Purchaser for resale, distribution and/or use in Canada;

       (ii)    any Estradiol Tablets for sale, marketing and distribution for
               animal use anywhere in the world;

      (iii)    bulk active pharmaceutical ingredient for Estrace Tablets and
               Estradiol Tablets (or products substantially the same as
               Estradiol Tablets) to any Third Party Purchaser; and

       (iv)    any Estradiol Tablets (or products substantially the same as
               Estradiol Tablets) for sale or distribution to a Third Party
               Purchaser for resale, distribution and/or use within the United
               States or Canada.

SECTION 2.11  MAINTENANCE OF NDAS.

     (a)  BMS shall retain all rights, title and interests in and to the NDAs
during the period that BMS is supplying a Product to the Company hereunder, and
for so long thereafter, even after the Company assumes such manufacturing
obligations hereunder, as BMS may elect. During the period that BMS retains all
rights, title and interests in and to the NDAs, BMS shall have sole
responsibility for maintaining, and shall use commercially reasonable efforts to
maintain the NDAs until such time as BMS in its discretion may assign its rights
to the NDAs to the Company (subject to the Company's agreement to do so, as
provided in (b) below) or to Novartis and its Affiliates (and their successors
and assigns or their exclusive licensees for the manufacture of Estradiol
Tablets).

                                       10

<PAGE>   16
The Company shall reimburse BMS for the Company's Proportionate Share of BMS'
fully-burdened costs to maintain the NDAs. BMS shall keep the Company informed
on a timely basis as to any developments that would have a material adverse
effect on any NDA. Where BMS may lawfully do so and subject to any
confidentiality obligations as BMS may have to Third Parties with respect to
Third Party information included therein, BMS shall provide the Company, upon
request after reasonable notice from the Company, with access to copies of all
filings submitted by BMS to the FDA, other than those filings made on behalf of
Novartis or its Affiliates, for each Product. BMS shall have the final
decision-making authority in every case on whether and how to maintain the NDAs
and any other issues in connection with such NDAs (including, but not limited
to, decisions to recall the Products) and on whether and how to communicate with
the FDA and other applicable governmental agencies or authorities in connection
therewith; provided, that BMS will not, except where required by, or to fulfill
its obligations under, applicable law or except where required by a governmental
agency or authority acting within the scope of its authority, supplement, amend
or otherwise alter an NDA so as to breach this Agreement or to materially and
adversely alter the rights granted to the Company hereunder or under the Asset
Purchase Agreement that are derived from such NDA.

     (b)

        (i)    BMS shall have no obligation to assign, license or otherwise
               transfer to the Company any right to or interest in any NDA.

       (ii)    If BMS believes that it is in the best interests of the Parties
               to transfer or assign the NDAs for the Products to the Company,
               and is lawfully able to do so (including taking into account its
               obligations to Novartis), then BMS will so notify the Company in
               writing. Within 30 days after receipt of such notice by the
               Company, the Company will notify BMS if it agrees that it is in
               the best interests of the parties to assign the NDAs for the
               Products to the Company. If the Parties are in agreement, BMS
               will assign to the Company, and the Company shall accept and
               take, all rights, title and interests under such NDAs assigned by
               BMS, and the Company shall be responsible for the performance of
               all obligations under such NDAs thereafter. Where BMS transfers
               any such NDAs to the Company, the Company shall, at the written
               request of BMS and/or any other Third Party Purchaser, cooperate
               with BMS or any such Third Party Purchaser to file on behalf of
               BMS or such Third Party Purchaser with the FDA any supplement to
               such transferred NDA ("Supplemental Registration") that is
               required in connection with BMS or any Third Party Purchaser
               manufacturing, finishing or packaging any product (other than a
               Product) for which the manufacture, finishing or packaging
               thereof would require that a supplemental registration to the NDA
               be so filed, and BMS (or such Third Party Purchaser) shall
               reimburse the Company for its out-of-pocket costs incurred in
               connection therewith.

      (iii)    If the Company does not deliver a notice pursuant to clause
               (ii) of this Section 2.11(b) that it agrees to assume the
               obligations under the NDAs within 30 days, BMS, in its sole
               discretion, may transfer or assign any such NDAs to a Third Party
               Purchaser. BMS will notify the Company of same and such Third
               Party Purchaser shall be responsible for the performance of all
               obligations under such NDAs thereafter. If BMS transfers any such
               NDAs to a Third Party Purchaser, the Company shall provide the
               same cooperation and assistance thereafter to such Third Party
               Purchaser as it would have provided to BMS hereunder with respect
               to such NDAs, and BMS will obligate such Third Party Purchaser to
               provide the same cooperation and assistance thereafter to the
               Company as BMS would have provided to the Company hereunder.

                                       11

<PAGE>   17
     (c)  Upon BMS receiving written notice from the Company (in accordance with
this Supply Agreement or otherwise) stating that the Company intends to commence
the manufacture, finishing or packaging of any Product (and where, and for so
long as, BMS retains all rights to such NDA), BMS shall, with respect to such
Product, prepare (in consultation with the Company) and file such supplemental
regulatory filings ("Company Supplemental Registrations") with the applicable
regulatory authority that may be required in connection with the manufacture,
formulation, finishing or packaging of such Product at each Company facility
where the Company proposes to manufacture, formulate, finish or package such
Product. The Company will provide BMS with all information and data needed to
make such filings, and will reimburse BMS for its fully-burdened expenses to
prepare, file and maintain such Company Supplemental Registrations. The Company
shall not commence the manufacture, formulation, finishing or packaging of any
such Product until all necessary Company Supplemental Registrations approvals
have been obtained from the applicable regulatory authorities.

     (d)  The Company shall not at any time knowingly do, cause to be done, or
omit or permit any act inconsistent with any such NDAs or related Company
Supplemental Registrations. In respect of each Product manufactured by the
Company pursuant to a NDA maintained by BMS (or by a Third Party Purchaser) or
to a Company Supplemental Registration applicable to such Product, the Company
shall, upon written notice from BMS, provide to BMS (or such Third Party
Purchaser) any and all material information (the "Technical Information")
necessary to enable BMS (or such Third Party Purchaser) (i) to make any filings
required by applicable Law in connection with the NDAs and Company Supplemental
Registrations, (ii) to otherwise maintain the NDAs and Company Supplemental
Registrations and (iii) to include complete and accurate information in the
annual reports made by BMS (or such Third Party Purchaser) to the FDA in
relation to the Product. In response to all written notices from BMS delivered
to the Company in accordance with this subsection (d), the Company shall, to the
extent not required to be reported to BMS by the Company under applicable law
and/or as listed on Form FDA 2252, set forth in reasonable detail the nature of
the Technical Information that the Company is required to provide to BMS in
respect of each Product and the date by which such Technical Information shall
be provided to BMS in respect of each Product. The Company shall use its
commercially reasonable efforts to provide such Technical Information to BMS on
or before the date set forth in any such written notice. The Company shall
execute, acknowledge and deliver such further instruments as BMS may reasonably
request, and use commercially reasonable efforts to do all such other acts, as
promptly as possible, which may be necessary or appropriate to obtain and
maintain the NDAs and Supplemental Registrations.

     (e)  Not more frequently than twice in any calendar year, BMS (or any Third
Party Purchaser to whom it may transfer an NDA) may inspect and audit any
facility owned, leased or otherwise used by the Company which is the subject of
a Company Supplemental Registration for the purpose of ensuring that all
Products manufactured at such facility are manufactured in accordance with Good
Manufacturing Practices. Such audits shall occur upon not less than 10 days'
prior notice to the Company, and such audit shall only be conducted during
normal business hours.

     (f)  The Company hereby indemnifies BMS and its Affiliates, including its
and their officers, directors, agents and employees, and shall hold the same
harmless from and against any claims, suits, liabilities, causes of action,
damages or expenses (including reasonable attorneys' fees) arising in connection
with any failure or omission by the Company to act in a manner consistent with
the NDAs or Supplemental Registrations or any failure or omission by the Company
to (i) provide to BMS the Technical Information in accordance with Section
2.11(d), and/or (ii) operate any facility owned, leased or otherwise used by the
Company or its Affiliates in accordance with any NDA, Company Supplemental
Registration or Laws applicable to such facility.

     (g)  If, with respect to any Product manufactured in a Company facility
pursuant to a Company Supplemental Registration, the Company proposes to change
(i) any manufacturing process, formulation or testing standard relating to such
Product or (ii) the packaging of any Product, the Company shall inform BMS (or
such Third Party Purchaser to whom BMS may transfer the NDA) of any such
proposed change and upon reasonable notice to BMS reasonably sufficient to
enable BMS to implement same in an orderly fashion and to obtain all necessary
regulatory approvals prior to the effective date of such proposed change, obtain
the prior written consent (which consent may not be unreasonably withheld) of
BMS (or such Third Party Purchaser) prior to implementing any proposed change.

                                       12

<PAGE>   18
     (h)  BMS or its Affiliates may, without the consent of the Company, use the
NDAs in connection with (i) the manufacture of Estrace Tablets by or for a Third
Party Purchaser in and outside the United States for marketing, sale and use in
Canada, (ii) the manufacture of Estradiol Tablets (or products substantially the
same as Estradiol Tablets) anywhere in the world for marketing, sale and use in
the United States and Canada, and (iii) the manufacture, use, promotion,
marketing, distribution and sale of any Estradiol Tablets (or products
substantially the same as Estradiol Tablets) anywhere in the world for other
than human use.

     (i)  Without the prior written consent of BMS, Company and its Affiliates
will not, and will not use the NDAs, any rights licensed to it under Section
2.13 or any Information provided by BMS to: (i) manufacture Estrace Tablets
anywhere in the world for, or knowingly sell or market Estrace Tablets to, a
Third Party for marketing, sale and use in Canada, and (ii) manufacture
Estradiol Tablets anywhere in the world for, or knowingly sell or market
Estradiol Tablets to, any Third Party for marketing, sale and use in the United
States or Canada.

SECTION 2.12  PROMOTIONAL AND ADVERTISING MATERIALS.

     (a)  The Company shall be solely responsible for designing, preparing and
distributing at its sole expense all promotional materials and advertisements
used by or on behalf of it in the promotion and marketing of the products within
the Product Line. The Company will ensure that such materials and advertisements
comply with, and the Company will be solely responsible and liable for any
failure of such materials to comply with, the applicable labeling and Product
Registration for a given product in the Product Line and with applicable law and
regulations, notwithstanding any prior review and/or use of such materials by
BMS. The Company shall be solely responsible for submitting all promotional and
advertising materials prepared by or for it to FDA for review and, where
required by law, approval following review by BMS and for negotiating with FDA
for approvals of such materials; provided, that BMS has submitted to FDA such
authorization as may be required by law for the Company to submit such
promotional and advertising materials (which BMS will use commercially
reasonable efforts to effect as promptly as reasonably practicable after the
Effective Date); and provided, further, that the Company shall promptly inform
BMS of the substance of any responses received to such materials (and provide
a copy of any written responses received from or sent to FDA with respect
thereto).

     (b)  The Company shall have strategic responsibility and sole authority and
responsibility at its expense for conducting and developing symposia, seminars,
technical and scientific exhibits and other professional relations events with
respect to the Product Line.

SECTION 2.13  LICENSE GRANT.

     (a)  BMS hereby grants to the Company a fully paid up, perpetual,
non-exclusive right and license under any Patents, Product-Exclusive Know-How
and Product-Non-Exclusive Know-How for the purpose of manufacturing,
distributing, marketing and selling the Product Line and any Line Extension
Products developed by the Company.

     (b)  Subject to BMS' obligations to Third Parties as of the Effective Date
(including without limitation to Roberts under the Roberts Supply Agreement and
to Novartis under the Novartis Agreements), BMS hereby further grants to the
Company a fully paid up, perpetual, non-exclusive right and license under any
Product-Exclusive Know-How to make, have made, use and sell products other than
(1) the Product Line, (2) any Estradiol Products for sale or use in the United
States and Canada ,and (3) any Estrace Products for sale or use in Canada.

     (c)  BMS retains all rights under all BMS Patents and Know-How for which
rights are not expressly licensed to Company hereunder. Company covenants and
agrees that it will use and practice the BMS Patents and Know-How solely in
accordance with the rights expressly licensed to it hereunder.

                                  ARTICLE III.

               PURCHASE PRICE FOR PRODUCTS AND CLOSING INVENTORY

                                       13

<PAGE>   19
SECTION 3.01  PURCHASE PRICE.

     (a)  The purchase price for commercial and sample supplies of each Product
sold to the Company pursuant to Article II during the Term of this Agreement
shall be equal to the price for such Product set forth on Schedule 3.01 for Firm
Orders received by BMS under Section 2.03 (as adjusted from time to time
pursuant to Section 3.01(b) - (d), the "Purchase Price").

     (b)  The Purchase Price of each such Product shall be adjusted effective as
of each January 1 during the Term, by such percentage increase in the U.S.
Producers Price Index for Finished Goods (or successor index) as published by
the U.S. Department of Labor, Bureau of Statistics (or successor governmental
entity), as shall have occurred for the immediately preceding twelve month
period, except to the extent, however, that BMS has elected to adjust the
Purchase Price as set forth in Section 3.01(c) below for such year. The Purchase
Price adjustment under this Section 3.01(b) shall be retroactively effective to
said January 1, and shall apply to all Firm Orders received on or after such
date, even though the index figures needed to calculate such change will not be
available until published by the Bureau of Statistics at a time after January 1.

     (c)  BMS may elect in its discretion to adjust for any given year that
portion of the prior year's Purchase Price of a Product that represents such
Product's variable costs (including without limitation costs of labor, cost of
supplies and materials, and cost of Third Party supplies and services, but
excluding overhead) by the actual percentage change in such variable costs
incurred in that year, rather than adjusting such portion by the change in the
index set forth above. Schedule 3.01(c) sets forth the applicable variable costs
for each Product as of the Effective Date. All other components of the Purchase
Price of such Product for such year shall be adjusted by the index set forth
above. BMS shall act in good faith in connection with the above Purchase Price
adjustment.

     (d)  For purposes of pricing Products ordered by the Company on said
January 1 and thereafter, all components of the Purchase Price of such Product
shall be adjusted as of January 1 by the change in the index as set forth in
Section 3.01(b), until such time as BMS notifies the Company that it is electing
to change said portion of the annual adjustment to the Purchase Price
attributable to variable costs by the difference between the percentage change
in the actual variable cost component of such Product and the percentage change
attributable to the index. If BMS has so notified the Company in writing that
BMS is electing, for such year, to change the portion of the annual adjustment
to the Purchase Price that is attributable to variable costs in accordance with
the foregoing, then the Purchase Price with respect to all Firm Orders placed by
the Company during such year shall be deemed to be increased accordingly,
retroactive to January 1 of such year. If BMS does not notify the Company of any
change under this Section 3.01(d) within a given calendar year, BMS shall be
deemed to have waived its right to apply this Section 3.01(d) with respect to
such year.

     (e)  Unless otherwise set forth on Schedule 3.01, the initial Purchase
Price for line extension products shall be determined using substantially the
same methodology as was used to determine the initial purchase prices for the
Products set forth on Schedule 3.01 (i.e., fully burdened manufacturing costs
plus 15%), and shall be subject to the same purchase price adjustments
applicable to all Purchase Prices as set forth in Section 3.01.

SECTION 3.02  AUDIT OF COST RECORDS.

     Not more frequently than once with respect to any year in which BMS has
elected to adjust the Purchase Price under Section 3.01, the Company shall have
the right to have a "Big Five" accounting firm audit, within 12 months of such
Purchase Price adjustment, BMS' books and records relating to the manufacture of
the Products, for the sole purpose of verifying BMS' determination of the change
in costs underlying such price adjustment. Such audit shall be at reasonable
times during normal business hours and upon reasonable notice to BMS. A copy of
the auditing firm's conclusions of its audit shall be furnished to BMS at least
ten (10) days prior to disclosure to the Company to allow BMS an opportunity to
review the accuracy of the auditing firm's conclusions. The Company shall bear
the full cost of such audit (including, without limitation, reimbursement to BMS
for administrative costs it incurs in connection with the audit) unless such
audit discloses a variance of more than five percent (5%) from the Purchase
Price adjustment imposed by BMS, in which event, BMS shall bear the full cost of
such audit. Any amounts that are determined to be due and owing by BMS to the
Company following such audit shall be paid within

                                       14

<PAGE>   20
thirty (30) business days thereafter, together with any interest due thereon
from the date of overpayment by the Company at the rate of twelve percent (12%)
per annum; provided that in no event shall such rate exceed the maximum legal
annual interest rate. The payment of such interest shall not limit the Company
from exercising any other legal rights it may have as a consequence of the
lateness of any payment.

                                  ARTICLE IV.

                              PAYMENTS AND REPORTS

SECTION 4.01  PAYMENT.

     BMS shall submit invoices to the Company for Products promptly after
shipment. The invoices shall reflect the Purchase Price for the Products as set
forth in Section 3.01. Payments shall be made by the Company within 30 calendar
days of receipt of the invoice. In addition, BMS, in its sole discretion, shall
determine, and may from time to time change without the consent of, but with
written notice to, the Company, the identity of the party that shall invoice the
Company for any Product supplied hereunder which shall be BMS or an Affiliate of
BMS.

SECTION 4.02  MODE OF PAYMENT.

     The Company shall make all payments required under this Agreement by
electronic funds transfer in United States dollars to a bank account designated
by BMS.

SECTION 4.03  TAXES.

     Any and all transfer, sales, use, registration and other taxes imposed upon
or with respect to or measured by the sale or delivery by BMS to the Company of
any Product hereunder shall be the responsibility of and for the account of the
Company. Such amounts shall be included on BMS' invoices to the Company for such
Products. If BMS obtains any credit for the amounts of the tax, such amount
shall be repaid by BMS to the Company when it is received by BMS. Anything to
the contrary notwithstanding, the Company shall have no obligation to pay any
income tax imposed on BMS or any of its Affiliates which may arise from the
transactions contemplated by this Agreement.

     SECTION 4.04  LATE PAYMENTS.

     In the event that any payment due hereunder is not made when due, the
payment shall accrue interest from the date due at the rate of 12% per annum,
provided that in no event shall such rate exceed the maximum legal annual
interest rate. The payment of such interest shall not limit BMS from exercising
any other legal rights it may have as a consequence of the lateness of any
payment.

                                   ARTICLE V.

              COMPLIANCE WITH LAWS; REPRESENTATIONS AND WARRANTIES

SECTION 5.01  COMPLIANCE WITH LAW; COOPERATION.

     (a)  Compliance with Law. Each Party shall maintain in full force and
effect all necessary licenses, permits and other authorizations required by Law
to carry out its duties and obligations under this Agreement. Each Party shall
comply with all Laws applicable to its activities under this Agreement and each
Related Agreement, including without limitation, any requirements of any product
license applicable to the Products in the Territory. The Company shall store the
Products sold to it in compliance with all applicable Laws, including, without
limitation, the Prescription Drug Marketing Act. BMS and the Company each shall
keep all records and reports required to be kept by applicable Laws. The Parties
will reasonably cooperate with one another with the goal of ensuring full
compliance with Laws. Each Party will cooperate with the other to provide such
letters,

                                       15

<PAGE>   21
documentation and other information on a timely basis as the other Party may
reasonably require to fulfill its reporting and other obligations under
applicable Laws to applicable regulatory authorities.

     (b)  Reasonable Cooperation. BMS and the Company each hereby agrees to use
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary or proper to make effective the
transactions contemplated by this Agreement, including such actions as may be
reasonably necessary to obtain approvals and consents of governmental Persons
and other Persons, provided that no Party shall be required to (i) pay money
(other than as expressly required pursuant to the terms and conditions of this
Agreement or a Related Agreement) or (ii) assume any other material obligation
not otherwise required to be assumed by this Agreement or any Related Agreement.

SECTION 5.02  BMS WARRANTIES.

     (a)  BMS warrants that each Product manufactured by or for BMS and sold to
the Company under this Agreement:

        (i)    will not be adulterated or misbranded under applicable Laws at
               the time the same is tendered to the common carrier for delivery
               to the Company;

       (ii)    will meet the Specifications therefor at the time the same is
               tendered to the common carrier for delivery to the Company;

      (iii)    shall be manufactured, labeled and packaged in accordance with
               Good Manufacturing Practices and all other applicable laws
               including all applicable U.S. federal, state and local
               environmental health and safety Laws in effect at the time and
               place of manufacture of the Products, except to the extent that
               the Company has assumed responsibility for such manufacturing,
               labeling and/or packaging; and

       (iv)    will have a shelf life of not less than those months set forth in
               Schedule 1.01A at the time the Products are tendered to the
               common carrier for delivery to the Company.

     (b)  THE LIMITED WARRANTIES PROVIDED IN SECTION 5.02(a) ARE BMS' SOLE
WARRANTIES WITH RESPECT TO A PRODUCT THAT IS MADE BY BMS OR FOR BMS UNDER THIS
AGREEMENT AND IS MADE IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WARRANTIES OF QUALITY, PERFORMANCE, MERCHANTABILITY AND
FITNESS FOR A PARTICULAR USE OR PURPOSE. EXCEPT AS MAY BE EXPRESSLY SET FORTH IN
THIS ARTICLE V OR IN ANY RELATED AGREEMENT, BMS MAKES NO OTHER REPRESENTATIONS
OR WARRANTIES OF ANY KIND WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES WITH RESPECT TO LACK OF INFRINGEMENT OF ANY THIRD
PARTY INTELLECTUAL PROPERTY RIGHTS THAT MAY RESULT FROM THE MANUFACTURE, USE,
EXPORT, IMPORTATION OR SALE OF ANY PRODUCT.

SECTION 5.03  THE COMPANY WARRANTIES.

The Company represents and warrants to BMS that the Company shall adhere to all
applicable Laws relating to the handling, storage and disposal of each Product.

SECTION 5.04  DISCLAIMER OF WARRANTIES.

                                       16
<PAGE>   22
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY RELATED AGREEMENT, THERE
ARE NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, MADE OR GIVEN BY
EITHER PARTY HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY PRODUCT.

SECTION 5.05  NO RELIANCE BY THIRD PARTIES.

     The representations and warranties of a Party set forth in this Agreement
are intended for the sole and exclusive benefit of the other Party hereto, and
may not be relied upon by any Third Party.

                                  ARTICLE VI.

                      INDEMNIFICATION; REMEDIES FOR BREACH

SECTION 6.01  BMS INDEMNITY.

     BMS shall defend, indemnify and hold harmless the Company, its Affiliates,
and its and their employees, agents, officers, and directors (a "Company Party")
from and against any and all losses, liabilities, damages, fees (including,
until such time as BMS has notified the Company in writing that it will assume
control of a given claim, reasonable attorneys fees and costs of litigation
pertaining to such claim), and expenses paid or payable by a Company Party to a
Third Party and that result from or arise in connection with any claim
(including, without limitation, product liability claims, strict liability or
tort claims), action, suit or other proceeding made or brought by such Third
Party against a Company Party including claims, actions, suits or proceedings
for bodily injury, death or property damage, in any such case, based on the
breach of any representation or warranty of BMS contained in Section 5.02(a), or
breach of any material obligation of BMS contained in Sections 2.11 and 8.02;
provided, however, that BMS shall not be obligated to indemnify a Company Party
for any loss, liability, damages, fees or expenses incurred by such Company
Party to the extent attributable to any breach of this Agreement by the Company
{or}, a Company Party OR THE COMPANY'S CONTRACTORS/LICENSEES or to any act or
omission constituting gross negligence or willful misconduct on the part of the
Company {or}, a Company Party OR THE COMPANY'S CONTRACTORS/LICENSEES, or to any
action that is taken by BMS pursuant to and in accordance with this Agreement or
any action taken by BMS upon the direction of the Company (including
modifications of the Specifications pursuant to Section 2.06(b)) or to any
failure of the Company to identify a Product defect or nonconformity actually
known by the Company prior to the use of such Product by a Third Party.

SECTION 6.02  THE COMPANY INDEMNITY.

     The Company shall defend, indemnify and hold harmless BMS, its Affiliates,
and its and their employees, agents, officers, and directors (a "BMS Party")
from and against any and all losses, liabilities, damages, fees (including,
until such time as the Company has notified BMS in writing that it will assume
control of a given claim, reasonable attorneys fees and costs of litigation
pertaining to such claim), and expenses paid or payable by a BMS Party to a
Third Party that result from or arise in connection with (A) subject to BMS'
indemnity obligations under 6.01 and except for any liability that is an
"Excluded Liability" (as such term is defined under the Asset Purchase
Agreement), any claim (including, without limitation, product liability claims,
strict liability or tort claims), action or proceeding made or brought against
such BMS Party by or on behalf of a Third Party for bodily injury, death or
property damage to the extent such injury, death or damage is alleged to be or
is in fact caused by, or is alleged to or in fact arises from, the use or supply
of a Product after the Effective Date (regardless of which Party manufactured
it) or the Company's breach of this Agreement or the exercise by the Company,
its Affiliates or sublicensees of the rights licensed to it under Section 2.13
hereof; (B) any claim, action, suit or other proceeding made or brought by a
Third Party based on (i) the breach by the Company of any of its representations
or warranties contained in Section 5.03(a), or breach of any material obligation
of Company contained in Sections 2.11 and 8.02 (ii) infringement of a Third
Party's trademarks by reason of labeling for Products or any materials used in
promoting or advertising a Product, or (iii) infringement of a Third Party's
patent rights by reason of the manufacture, use, import, export, or sale of a
Product after the Effective Date by or for the Company or its Affiliates under
this Agreement (other than by reason of a manufacturing process used in the
manufacture of a Product by BMS or its Affiliates or any or their

                                       17
<PAGE>   23
agents); or (C) the failure by the Company to comply with applicable Laws
related to (x) the marketing, promotion, distribution and sale of the Products
and/or (y) to the manufacture and labeling of the Products where manufactured by
or for the Company other than by BMS, BMS' Affiliates or BMS contractors;
provided, however, that the Company shall not be obligated to indemnify a BMS
Party for any loss, liability, damages, fees or expenses incurred by such BMS
Party to the extent attributable to a breach by BMS of this Agreement or any
Related Agreement, or to any act or omission constituting gross negligence or
willful misconduct on the part of BMS or a BMS Party.

SECTION 6.03  CONTROL OF PROCEEDINGS.

     (a)  To receive the benefits of the indemnity under Section 6.01 or 6.02,
as applicable, an indemnified Party must (i) give the indemnifying Party written
notice of any claim or potential claim promptly after the indemnified Party
receives written notice of any such claim and (ii) allow the indemnifying Party
to assume exclusive control of the defense and settlement (including, without
limitation, all decisions relating to litigation, defense and appeal) of any
such claim, provided that (i) the controlling Party has confirmed its
indemnification obligation to such indemnified Party under this Section 6.03
with respect to a given claim) and (ii) such controlling Party may not settle
such claim or enter into any voluntary consent judgment in any manner that would
(x) require payment by the other Party, (y) materially adversely affect the
rights granted to the other Party hereunder, or (z) materially conflict with the
terms of this Agreement, without first obtaining the other Party's prior written
consent.

     (b)  The indemnified Party shall (so long as such cooperation does not
vitiate any legal privilege to which it is entitled) reasonably cooperate with
the indemnifying Party in its defense of the claim (including, without
limitation, making documents and records available for review and copying and
making persons within its/his/her control available for pertinent testimony). If
the indemnifying Party defends the claim, an indemnified Party may participate
in, but not control, the defense of such claim using attorneys of its/his/her
choice and at its/his/her sole cost and expense. An indemnifying Party shall
have no obligation or liability under this Article VI as to any claim for which
settlement or compromise of such claim is made by an indemnified Party without
the prior written consent of the indemnifying Party.

     (c)  If the indemnifying Party notifies the other in writing that it will
not defend the other Party against such claim asserted against the other Party,
or if the indemnifying Party fails to defend or take other reasonable, timely
action, in response to such claim asserted against the other Party, the
indemnified Party shall have the right, but not the obligation, to defend or
take other reasonable action to defend its interests in such proceedings, and
shall have the right to litigate, settle or otherwise dispose of any such claim
without limiting its rights to indemnification under this Article VI; provided,
however, that the Party shall not have the right to settle such claim or enter
into a consent judgment in a manner that adversely affects the rights granted to
the indemnifying Party hereunder, or would materially conflict with this
Agreement, or would require a payment by the indemnifying Party without the
prior written consent of the Party entitled to control the defense.

SECTION 6.04  REMEDY FOR FAILURE TO SUPPLY PRODUCTS.

     (a)  During the Initial Period, in the event BMS breaches its obligation to
use its commercially reasonable efforts to supply Qualifying Products in
accordance with Section 2.01(b), and (a) such breach is not due to an Excused
Supply Default and (b) such breach results in a Stockout with respect to such
Qualifying Product, then BMS shall indemnify the Company for the actual direct
damages and Lost Profits of the Company resulting from such Stockout with
respect to such Qualifying Product, provided that the aggregate amount payable
by BMS under this Section 6.04(a) for all Stockouts with respect to all
Qualifying Products shall not exceed $25,000,000.

     (b)  During the Subsequent Period, in the event BMS breaches its obligation
to use its commercially reasonable efforts to supply Qualifying Products in
accordance with Section 2.01(b), and (a) such breach is not due to an Excused
Supply Default and (b) such breach results in a Stockout with respect to such
Qualifying Product, then BMS shall indemnify the Company for only the actual
direct damages of the Company resulting from such Stockout (which, for the
avoidance of doubt, shall not include any Lost Profits).

                                       18
<PAGE>   24
     (c)  The Company shall use commercially reasonable efforts to avoid the
occurrence of a Stockout, including through the allocation of its inventories of
Qualifying Products at any time amongst its customers that individually account
for more than 5% or more of its sales of any Qualifying Product (calculated
based on its most recent twelve (12) calendar months of sales) in any effort to
fill as many purchase orders, in part, as possible. In addition, the Company
shall use commercially reasonable efforts to mitigate any losses resulting from
a Stockout with respect to any Qualifying Product, including purchasing
conforming Products of such stocked-out Products from the Initial Back-up
Manufacturer, if the Initial Back-up Manufacturer has been qualified in
accordance with Section 12.01(a).

     (d)  Except as expressly provided in Section 2.05 (with respect to returns
of nonconforming Products) and Section 6.01 (with respect to any breaches of
representations or warranties of BMS in Section 5.02(a)), the Company
acknowledges and agrees that the remedies set forth in this Sections 6.04(a) and
6.04(b) shall be the Company's sole and exclusive remedies with respect to (i)
any failure by BMS to comply with its obligations to supply Products to the
Company in accordance with the terms of this Agreement, including its obligation
to use commercially reasonable efforts to supply Products set forth in Section
2.01(b), and (ii) the Company's inability or failure to supply its customers
with Products.

     (e)  For the purposes of this Section 6.04:

          (i)    "Excused Supply Default" shall mean the failure by BMS to
                 supply Qualifying Products to the Company if such failure is
                 caused primarily by (a) a Force Majeure Event, (b) a change in
                 Law, (c) an act or omission which does not constitute, or an
                 event which does not result from, the gross negligence or
                 wilful misconduct of BMS or its Affiliates, (d) the Company's
                 requirements for such Qualifying Product exceeding its
                 forecasts provided under Section 2.02 with respect to such
                 Qualifying Product and (e) the Company's requirements for such
                 Qualifying Product exceeding the firm purchase orders made by
                 the Company under Section 2.03 with respect to such Qualifying
                 Product.

          (ii)   "Initial Period" shall mean, with respect to any Qualifying
                 Product, the period beginning on the Effective Date and ending
                 on the earlier to occur of (i) the fifth anniversary of the
                 Effective Date and (ii) twelve (12) months after the Company
                 has qualified the Initial Back-up Manufacturer pursuant to
                 Article XII.

          (iii)  "Lost Profits" shall mean provable lost profits suffered by the
                 Company with regard to a Qualifying Product as a result of a
                 Stockout of such Qualifying Product to the extent suffered or
                 incurred by the Company during the period commencing on the
                 first date on which such Stockout shall have occurred and
                 ending on the first date thereafter on which the Company shall
                 have received a shipment of such Qualifying Product under this
                 Agreement.

          (iv)   "Qualifying Product" shall mean (a) SKU #075508, (b) SKU
                 #075608, and (c) SKU #002101; and Qualifying Products shall not
                 include any other Products.

          (v)   "Significant Customer", determined as of any time with respect
                 to any Qualifying Product, shall mean any one or more customers
                 of the Company who, in the aggregate, accounted for more than
                 15% of the Company's sales of such Qualifying Product during
                 the twelve (12) calendar months immediately preceding such
                 determination (or such shorter period of time between such
                 calculation and the Effective Date).

          (vi)   "Stockout" shall mean, with respect to any Qualifying Product,
                 the failure by BMS to supply the Company with any conforming
                 Qualifying Product such that the Company is unable to supply
                 any Significant Customer with any conforming

                                       19
<PAGE>   25
               Qualifying Product from the inventories maintained by BMS and the
               Company, for a period of 60 consecutive days (in the case of any
               Significant Customer that is comprised of more than one customer,
               60 consecutive days with respect to each such customer) after the
               exhaustion of all such inventories; provided, however, that (a)
               such 60-day period shall be deemed to commence upon the Company's
               giving notice to BMS of its inability to supply its Significant
               Customers, and (b) such 60-day period shall be extended by the
               amount of any delay attributable to an Excused Supply Default.
               For the avoidance of doubt, a Stockout shall end on the first
               date on which the Company shall have received shipment of such
               Qualifying Product under this Agreement and any failure
               thereafter by BMS to supply the Company with such Qualifying
               Product shall not constitute a Stockout unless and until such
               time, if any, as all the conditions included in the definition of
               Stockout shall have occurred again with respect to such
               Qualifying Product.

      (vii)    "Subsequent Period" shall mean, with respect to any Qualifying
               Product, the period beginning on the date that the Initial Period
               for such Qualifying Product ends and ending on the termination or
               expiration of this Agreement.

SECTION 6.05  INSURANCE.

     (a)  The Company will maintain at all times during the period that any
Product is being distributed or sold by or through the Company hereunder, and
for fifteen (15) years thereafter, comprehensive general liability insurance,
with endorsements for contractual liability and product liability with coverage
limits of not less than Fifty Million Dollars ($50,000,000) per occurrence or in
the aggregate. The minimum level of insurance set forth herein shall not be
construed to create a limit on the Company's liability hereunder. On the
Effective Date, the Company shall furnish to BMS a certificate of insurance
evidencing such coverage as of such date. Each such certificate of insurance, as
well as any certificates evidencing new or modified coverages of the Company,
shall include a provision whereby sixty (60) days' written notice must be
received by BMS prior to coverage modification or cancellation by either the
Company or the insurer. In addition, the Company shall promptly notify BMS of
any cancellation or modification of such insurance coverage and of any new or
modified coverage. In the case of a modification or cancellation of such
coverage, the Company shall promptly provide BMS with a new certificate of
insurance evidencing that the Company's coverage meets the requirements in the
first sentence of this Section 6.05.

     (b)  BMS will maintain at all times during the period that any Product is
being supplied to the Company by BMS and is being manufactured by or for BMS,
and for fifteen (15) years thereafter, a commercially reasonable program of
self-insurance and insurance with respect to its obligations under this
Agreement and any Related Agreement.

SECTION 6.06  LIMITATIONS ON LIABILITY.

     (a)  Notwithstanding any other provision in this Agreement, no Party shall
in any event be liable to the other Party or its Affiliates, officers,
directors, employees, stockholders, agents or representatives on account of any
breach hereof or any indemnity obligation set forth herein for any indirect,
consequential or punitive damages (including, but not limited to, lost profits,
loss of use, damage to goodwill or loss of business), EXCEPT TO THE EXTENT
PROVIDED IN SECTION 6.04(A). Any action for breach of this Agreement must be
commenced within twelve months after the end of the Term, provided nothing in
this Section 6.06(a) shall apply to any claim by either Party for
indemnification under Section 6.01 or 6.02, or to any claim by either Party for
breach of the other Party's indemnity obligation.

     (b)  BMS and the Company 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.

                                       20

<PAGE>   26
     (c)  The amount of any loss, liability, damage or expense for which
indemnification is provided under this Article VI shall be net of any amounts
actually recovered by the indemnified party in respect of such loss, liability,
damage or expense under its insurance policies, except that this Section 6.06(c)
shall not apply to Section 6.04.

                                  ARTICLE VII.

                     COMPLIANCE WITH GOVERNMENT REGULATIONS

SECTION 7.01  GOVERNMENT COMMUNICATIONS.

     BMS shall be responsible for all communications with any governmental
authority or agency relating to BMS' manufacturing activities under this
Agreement and the Company shall be responsible for all communication with any
governmental authority or agency concerning the marketing, distribution, or sale
of the Products.

SECTION 7.02  ACCESS TO RECORDS.

     The Company shall have reasonable access during normal business hours to
BMS' files, from time to time upon prior notice, to review all such records,
correspondence, notices, documents and other materials (including warning
letters and letters of adverse findings) relating to the manufacture of the
Products; provided, however, that such access does not unreasonably disrupt the
normal operations of BMS.

SECTION 7.03  GOVERNMENTAL AND REGULATORY INSPECTIONS.

     BMS shall notify the Company of any inspections by any governmental or
regulatory authorities of the premises where the Product is being manufactured,
to the extent such inspection relates to the manufacture of the Products,
promptly after such inspection, and shall provide to the Company copies of all
correspondence, reports, notices, findings and other material pertinent to such
inspections (including all Form 483s) promptly after they are received or
produced by or on behalf of BMS from or to the FDA or any other federal, state
or foreign governmental or regulatory authority. All notices sent to Galen
Holdings PLC, 100 Enterprise Drive, Rockaway, NJ 07866 Attention: Vice President
Regulatory Affairs.

SECTION 7.04  THE COMPANY INSPECTIONS.

     BMS shall, or if BMS is not manufacturing the Products, BMS shall cause the
Person manufacturing the Products to, afford the Company or the Company's
representatives reasonable access to (i) the premises where the Products are
being tested and/or manufactured and (ii) the personnel dedicated to the testing
and/or manufacture of the Products, in each case upon reasonable notice and at
reasonable times, to the extent necessary to conduct a reasonable audit;
provided, however, that such access does not unreasonably disrupt the normal
operations of BMS or such other manufacturer. The Company's exercise of its
inspection rights hereunder shall in no way waive, modify or diminish BMS'
obligations under this Agreement.

                                 ARTICLE VIII.

                     PRODUCT RECALLS; ADVERSE EXPERIENCES;
               PRODUCT QUALITY COMPLAINTS; AND MEDICAL INQUIRIES

SECTION 8.01   PRODUCT RECALLS.

     (a)  In the event that either Party obtains information that a Product or
any portion thereof should be alleged or proven not to meet the Specifications,
the labeling, or the Product Registration for such Product or to be otherwise
defective in the Territory, such Party shall notify the other Party immediately
and both Parties shall cooperate fully regarding the investigation and
disposition of any such matter, including with respect to any Product recall,
Product withdrawal or filed correction, as appropriate (collectively, a
"Recall"). BMS and the

                                       21
<PAGE>   27
Company shall each maintain such traceability records as are sufficient and as
may be necessary to permit a recall or field correction of any Products. In the
event (a) any applicable regulatory authority of a state or country in the
Territory should issue a request, directive or order that a Product be recalled,
(b) a court of competent jurisdiction orders such a Recall, or (c) the Company
determines that any Product already in interstate commerce in the Territory
presents a risk of injury or gross deception or is otherwise defective and that
a Recall of such Product is appropriate, each Party shall give telephonic notice
(to be confirmed in writing) to the other within 24 hours of the occurrence of
such event.

     (b)  Where BMS manufactured the given Product, BMS shall consult with the
Company, but BMS shall have sole responsibility for determining all corrective
action to be taken and for carrying out the Recall. The Company will provide
full cooperation and assistance to BMS in connection therewith as may be
requested by BMS. BMS shall be responsible for all expenses of any such Recall
(including any reasonable out-of-pocket expenses incurred by the Company in
connection with such cooperation, if and to the extent BMS authorized the
Company to incur any such out-of-pocket expense), except to the extent such
Recall is attributable to a breach by the Company of its obligations hereunder
(in which case the Company shall be responsible for the expenses associated with
any such Recall attributable to such breach). Where the Product was manufactured
by or for the Company (other than by or for BMS) at a time when BMS still
retained the rights to the NDA, the provisions of this Section 8.01(b) shall
apply mutatis mutandis.

SECTION 8.02  ADVERSE EXPERIENCE.

     Until such time as the NDAs may be assigned and transferred to the Company,
each Party shall promptly notify the other Party of any significant event(s)
that affect the marketing of the Products, including, but not limited to,
adverse drug experiences and governmental inquiries. The holder of the NDA shall
have the reporting responsibility for such events as provided under applicable
Law to applicable regulatory health authorities in the United States. Each of
BMS and the Company shall cooperate with the other Party in connection therewith
as reasonably requested by the other Party and as follows:

     (a)  Serious Adverse Events (as defined in Section 8.02(b) below) for the
Products of which one Party becomes aware shall be submitted to the other Party
within three business days but no more than four calendar days from the date the
first-mentioned party first became aware of such Serious Adverse Event.
Non-Serious Adverse Events for the Products (as defined in Section 8.02(b)
below) that are reported to one Party shall be submitted to the other Party no
more than one month from the date received by the first-mentioned Party;
provided, however, that medical and scientific judgment should be exercised in
deciding whether expedited reporting is appropriate in other situations, such as
important medical events that may not be immediately life-threatening or result
in death or hospitalization but may jeopardize the patient or may require
intervention to prevent a Serious Adverse Event outcome.

     (b)  Until the reporting procedures referenced in Section 8.02(e) herein
have been instituted by the Parties, a "Serious Adverse Event" for the Products
shall have the meaning set forth in 21 CFR ss. 314.80(a), as amended from time
to time and a "Non-Serious Adverse Event" for the Products shall mean an
untoward medical occurrence at any dose for any of the Products that is not a
Serious Adverse Event.

     (c)  The Company shall report all Non-Serious Adverse events involving the
Products learned by it to:

          Vice President, Drug Safety and Pharmacovigilance
          Bristol-Myers Squibb Company
          P.O. Box 5400
          Mail Stop HW19-1.01
          Princeton, New Jersey 08543-5400
          U.S.A.
          E-mail address: worldwide.safety@bms.com
          Facsimile No.:  (609) 818-7205

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<PAGE>   28

          Telephone No.: (609) 818-4305

     BMS shall report all such Non-Serious Adverse events involving the Products
learned by it to:

          Galen Holdings PLC
          100 Enterprise Drive
          Rockaway, NJ 07866
          Attention: Vice President - Regulatory Affairs
          Facsimile No: 973-442-3280
          Telephone No.: 973-442-3233

     A CIOMS-I form or a form that contains the data elements of a CIOMS-I form
is recommended.

     (d)  Serious Adverse Events concerning the Products learned by BMS shall be
reported by BMS to the Company at the time that BMS reports such events to FDA,
and shall be sent to:

          Galen Holdings PLC
          100 Enterprise Drive
          Rockaway, NJ 07866
          Attention: Vice President - Regulatory Affairs
          Facsimile No: 973-442-3280
          Telephone No.: 973-442-3233

     Serious and Non-Serious Adverse Events concerning the Products learned by
the Company shall be reported by the Company to BMS as set forth in Section
8.02(a), and shall be sent to:

          Vice President, Drug Safety and Pharmacovigilance
          Bristol-Myers Squibb Company
          P.O. Box 5400
          Mail Stop HW19-1.01
          Princeton, New Jersey 08543-5400
          U.S.A.
          Facsimile No.: (609) 818-7205
          Telephone No.: (609) 818-4305

     A CIOMS-I form or a form that contains the data elements of a CIOMS-I form
is recommended.

     (e)  As soon as practicable, the Parties shall use reasonable efforts to
negotiate and agree mutually acceptable procedures for reporting Serious Adverse
Events and Non-Serious Adverse Events, as applicable, to the other Party. The
Parties shall pay their respective costs incurred in reporting Serious Adverse
Events and Non-Serious Adverse Events, as applicable, to the other Party.

     (f)  Bms shall be entitled to share Adverse Event information with Novartis
and Roberts and their Affiliates to the extent required of BMS under the Roberts
Supply Agreement and the Novartis Agreements.

SECTION 8.03  PRODUCT QUALITY COMPLAINTS.

     The Company shall have sole responsibility, at its expense, for handling
all Product Complaints concerning the Products. The Company shall inform BMS'
Vice President for Drug Safety & Surveillance and Vice-President for
Manufacturing (or their designees) of any Product Quality Complaint received
within three business days but no more than four calendar days from the receipt
date by the Company. "Product Quality Complaint" is defined as any complaint
that questions the purity, identity, potency or quality of any Product, its
packaging, or labeling, or any complaint that concerns any incident that causes
the drug product or its labeling to be mistaken for, or applied to,

                                       23

<PAGE>   29
another article or any bacteriological contamination, or any significant
chemical, physical, or other change or deterioration in the distributed drug
product, or any failure of one or more distributed batches of the drug product
to meet the specifications therefor in the NDA for the Products. Such
information shall be sent to BMS as set forth in Section 8.02(c) above, and,
upon receipt, BMS will initiate a complaint investigation. For Product Quality
Complaints received by BMS relating to the Products, BMS will notify the Company
within three business days but no more than four days from the receipt date by
BMS and, if manufactured by BMS, will initiate a complaint investigation. BMS
shall conduct such investigation and report its findings to the Company's
Regulatory Affairs Department.

SECTION 8.04  MEDICAL INQUIRIES.

     The Company shall have sole responsibility, at its expense, for handling
all medical inquiries concerning the Products. BMS shall refer all routine
medical information requests in writing to the Company as set forth in Section
8.02(c) above. Urgent medical information requests shall be referred by BMS to
the Company by telephone. All information reported to BMS by the Company under
these Sections 8.02, 8.03 and 8.04 may be disclosed by BMS in its discretion to
any Third Party who manufactured a pertinent component of the applicable Product
for BMS, to Roberts Pharmaceuticals (and its successors and assigns) for use in
Canada and in filings with Canadian regulatory authorities, and to Novartis
Pharmaceuticals and its affiliates (and its and their successors and assigns)
for use in connection with the manufacture, use and sale of Estradiol Tablets
(or products substantially the same as Estradiol Tablets) in the United States.

                                  ARTICLE IX.

                                CONFIDENTIALITY

SECTION 9.01  CONFIDENTIALITY REQUIREMENT.

     (a)  Each Party acknowledges that it may receive confidential or
proprietary information of the other Party in the performance of this Agreement.
Each Party shall use commercially reasonable efforts to safeguard and to hold
such information received by it from the other Party in confidence, and shall
limit disclosure of the furnishing Party's information to those employees and
consultants of the receiving Party and its Affiliates who are bound by a written
obligation of confidentiality to the receiving Party that is consistent with the
terms of this Article IX. Each Party shall not, directly or indirectly,
disclose, publish or use for the benefit of any Third Party or itself, except in
carrying out its duties hereunder or as otherwise provided in Section 9.02, any
confidential or proprietary information of the other Party, without first having
obtained the furnishing Party's written consent to such disclosure or use.
"Confidential Information" shall include know-how, scientific information,
clinical data, efficacy and safety data, adverse event information, formulas,
methods and processes, specifications, pricing information (including discounts,
rebates and other price adjustments) and other terms and conditions of sales,
customer information, business plans, and all other intellectual property. This
restriction shall not apply to any information within the following categories:

        (i)    subject to Section 9.03, information that is known to the
               receiving Party or its Affiliates prior to the time of disclosure
               to it, to the extent evidenced by written records or other
               competent proof;

       (ii)    information that is independently developed by employees, agents,
               or independent contractors of the receiving Party or its
               Affiliates without reference to or reliance upon the information
               furnished by the disclosing Party, as evidenced by written
               records or other competent proof;

      (iii)    information disclosed to the receiving Party or its Affiliates by
               a Third Party that has a right to make such disclosure; or

                                       24

<PAGE>   30
       (iv)    any other information that becomes part of the public domain
               through no fault or negligence of the receiving Party.

     The receiving Party shall also be entitled to disclose the other Party's
Confidential Information (1) that is required to be disclosed in compliance with
applicable laws or regulations (including, without limitation, to comply with
SEC, NASDAQ or stock exchange disclosure requirements) or by order of any
governmental body or a court of competent jurisdiction, (2) as may be necessary
or appropriate in connection with the enforcement of this Agreement or any
Related Agreement or (3) as may be necessary for the conduct of clinical
studies, provided that the Party disclosing such information shall promptly
notify the other Party and shall use commercially reasonable efforts to obtain
confidential treatment of such information by the agency or court or other
disclosee, and that, in the case of disclosures under (1), shall (i) provide the
other Party with prompt prior notice of the proposed disclosure such that the
other Party may seek a protective order or other appropriate remedy and (ii)
provide the other Party with a copy of the proposed disclosure in sufficient
time to allow reasonable opportunity to comment thereon.

     (b)  The obligations set forth in this Section 9.01 shall survive the
termination or expiration of this Agreement for five years. Nothing in this
Article IX shall be construed to create or imply any right or license under any
patent rights, trademarks, copyrights or other intellectual property rights
owned or controlled by a Party or its Affiliates except as may be expressly set
forth in the other Articles of this Agreement.

     (c)  The confidentiality obligations set forth in this Article IX shall
supercede the confidentiality agreement dated as of January 21, 2001 between
Galen Holdings PLC and BMS, and shall govern any and all information disclosed
by either Party to the other pursuant thereto and shall be retroactively
effective to the date of such confidentiality agreement.

SECTION 9.02  USE OF INFORMATION.

     Each Party shall use, and cause each of its Affiliates to use, any
Confidential Information obtained by it from the other Party or their respective
Affiliates, pursuant to this Agreement or otherwise, solely in connection with
the transactions contemplated hereby. Nothing in this Agreement shall create or
imply any obligation on BMS' part to disclose to, or any right on Company's part
to receive or use, any information contained in any Supplemental Registration to
an NDA filed by BMS on behalf of Novartis and its Affiliates.

SECTION 9.03  PURCHASED ASSETS.

     Notwithstanding anything contained herein, the Acquired Assets obtained by
the Company under the Asset Purchase Agreement shall be deemed to be the
Company's Confidential Information and accordingly, shall not be subject to any
confidential treatment by the Company, but shall be subject to confidential
treatment by BMS in accordance with the terms hereof.

SECTION 9.04  RELIEF.

     Each Party shall be entitled, in addition to any other right or remedy it
may have, at law or in equity, to an injunction, without the posting of any bond
or other security, enjoining or restraining any other Party from any violation
or threatened violation of this Article IX.

                                   ARTICLE X.

                                  TERMINATION

SECTION 10.01  TERM.

                                       25

<PAGE>   31
     (a)  This Agreement shall become effective as of the Effective Date and
shall expire upon the fifth anniversary of the Effective Date (the "Initial
Term"), unless sooner terminated as provided in this Article X. This Agreement
shall automatically terminate if the Asset Purchase Agreement is terminated and
be of no further force or effect.

     (b)  On or prior to the third anniversary of the Effective Date, the
Company may request an extension of this Agreement for one additional two-year
term following the Initial Term (the "Renewal Term"). Such extension will be
subject to the consent of BMS, which consent shall not be unreasonably withheld
if such manufacturing can continue to be conducted in the same facility (in
accordance with BMS' then current manufacturing plans) and without BMS having to
incur additional capital costs. BMS shall notify the Company within 30 business
days after receipt of the Company's notice of whether or not it consents to such
extension and if not, its reasons for not consenting. .

SECTION 10.02  BREACH.

     Failure by either Party to comply in any material respect with any of its
material obligations contained in this Agreement shall entitle the other Party,
if it is not in material default hereunder, to give to the Party in default
notice specifying the nature of the default and requiring it to cure such
default. If such default is not cured within 60 days after the receipt of such
notice (or, if such default cannot be cured within such 60-day period, if the
Party in default does not commence and diligently continue substantive actions
to cure such default), the notifying Party shall be entitled, without prejudice
to any of its other rights conferred on it by this Agreement and in addition to
any other remedies available to it by law or in equity (except as provided in
Article VI), to terminate this Agreement by giving written notice to take effect
immediately upon delivery of such notice.

SECTION 10.03  BANKRUPTCY.

     In the event that a Party shall have become insolvent or bankrupt, or shall
have made an assignment for the benefit of its creditors, or there shall have
been appointed a trustee or receiver of such Party for all or a substantial part
of its property, or any case or proceeding shall have been commenced or other
action taken by or against such Party (as to which, if involuntarily commenced
against such Party, such Party would not be able to obtain dismissal within 90
days after commencement thereof) in bankruptcy or seeking reorganization,
liquidation, dissolution, winding-up, arrangement, composition or readjustment
of its debts or any other relief under any bankruptcy, insolvency,
reorganization or other similar act or law of any jurisdiction now or hereafter
in effect, then such Party shall not be relieved in any respect of its
obligations hereunder, and, in addition to any other remedies available to it by
law or in equity, the other Party may terminate this Agreement, in whole or in
part as the terminating Party may determine, by written notice to such Party.

SECTION 10.04  EFFECT OF TERMINATION.

     (a)  Without limiting either Party's right to damages for any breach of
this Agreement, neither BMS nor the Company shall incur any liability to the
other by reason of the expiration or termination of this Agreement as provided
herein, whether for loss of goodwill, anticipated profits or otherwise, and BMS
and the Company shall accept all rights granted and all obligations assumed
hereunder, including those in connection with such expiration or termination in
full satisfaction of any claim resulting from such expiration or termination.

     (b)  Any acceptance by BMS of any Firm Order from the Company or the sale
of any Products by BMS to the Company after the expiration or termination of
this Agreement shall not be construed as a renewal or extension of this
Agreement or as a waiver of termination thereof.

     (c)  Upon expiration or termination of this Agreement the right and license
granted to BMS pursuant to Section 2.01(a) shall immediately terminate and BMS
and its Affiliates and their agents shall cease any and all use of the Company
Confidential Information.

SECTION 10.05  ACCRUED RIGHTS, SURVIVING OBLIGATIONS.

                                       26

<PAGE>   32
     (a)  Except for automatic termination resulting from termination of the
Asset Purchase Agreement, termination, relinquishment or expiration of this
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of either Party prior to such termination,
relinquishment or expiration, and such termination, relinquishment or expiration
shall not relieve either Party from obligations which are expressly indicated to
survive termination or expiration of this Agreement.

     (b)  Without limiting Section 10.05(a), termination, relinquishment or
expiration of this Agreement (except for automatic termination resulting from
termination of the Asset Purchase Agreement), in whole or in part, shall not
terminate the Company's obligation to pay the Purchase Price for, and BMS'
obligation to supply, Products which have been sold to the Company or
firm-ordered by it hereunder prior to the effective date of termination. All the
Parties' rights and obligations under Articles I, IV , VI, VII, VIII, IX, XI and
XIII and Sections 2.04, 2.05, 2.07, 5.01, 5.02, 5.03, 5.04, 5.05 and 10.05 (as
applicable) shall survive termination or expiration hereof.

                                  ARTICLE XI.

                                 FORCE MAJEURE

     Any delays in performance by any Party under this Agreement shall not be
considered a breach of this Agreement if and to the extent caused by occurrences
beyond the reasonable control of the Party affected, including but not limited
to acts of God, embargoes, governmental restrictions, materials shortages or
failure of any Third Party supplier (including, without limitation, where such
shortage or failure is attributable to a supplier's breach of its agreement with
BMS or with a Third Party subcontractor or to an event of force majeure suffered
by such supplier), fire, flood, earthquake, hurricanes, storms, tornadoes,
explosion, riots, wars, civil disorder, failure of public utilities or common
carriers, labor disturbances, rebellion or sabotage (a "Force Majeure Event").
The Party suffering the occurrence of the Force Majeure Event shall immediately
notify the other Party as soon as practicable of such inability and of the
period for which such inability is expected to continue, and any time for
performance hereunder shall be extended by the actual time of delay caused by
the Force Majeure Event, provided that the Party suffering such Force Majeure
Event uses commercially reasonable efforts to mitigate. The Party giving such
notice shall thereupon be excused from such of its obligations under this
Agreement as it is thereby disabled from performing, and shall have no liability
for such non-performance, for so long as it is so disabled and the 30 calendar
days thereafter. Notwithstanding the foregoing, nothing in this Article XI shall
excuse or suspend the obligation to make any payment due under this Agreement or
in any Related Agreement in the manner and at the time provided. If a Force
Majeure Event lasts for more than 60 calendar days and during such period BMS
cannot supply any Product to the Company as a result of the Force Majeure Event,
the Company may, in relation to that Product, (i) purchase such Product from a
Person other than BMS for the later of (a) the duration of the Force Majeure
Event or (b) the period (not exceeding 90 days beyond the cessation of the Force
Majeure Event) necessary to allow the Company to honor its binding purchase
commitments, if any, to such Person in effect at the time of cessation or (ii)
terminate this Agreement with respect to such Product.

                                  ARTICLE XII.

                        QUALIFICATION OF BACKUP SUPPLIER

SECTION 12.01  QUALIFICATION OF INITIAL BACK-UP SUPPLIER.

     (a)  At Company's request, each Party shall promptly commence the use of
its commercially reasonable efforts to qualify with the FDA and any other
applicable U.S. regulatory agency, a Back-up Supplier for the Products (the
"Initial Back-up Supplier") as soon as possible after such request, but in any
event not later than 24 months after the Closing. BMS shall be deemed to have
used its commercially reasonable efforts for the purpose of this Section
12.01(a) if it shall provide Technical Assistance with respect to such
qualification of the Back-up Supplier.

                                       27

<PAGE>   33
     (b)  Notwithstanding anything contained herein, so long as a Party uses its
commercially reasonable efforts to qualify the Initial Back-up Supplier in
accordance with the provisions of this Section 12.01(b), failure to qualify the
Initial Back-up Supplier shall not constitute a breach by such Party of Section
12.01(a) of this Agreement or result in any right of the other Party to
terminate this Agreement.

     (c)  After the Initial Back-up Supplier is so qualified, the Company shall
use commercially reasonable efforts to maintain the regulatory qualification of
the Initial Back-up Supplier.

     (d)  Any and all costs and expenses involved in obtaining and maintaining
the regulatory qualification of the Initial Back-up Supplier shall be borne by
the Company, except that BMS shall bear the costs of the Technical Assistance
provided pursuant to Section 12.01(a), so long as BMS shall only be responsible
for the cost of providing to the Company (or the Company's designee) one set of
copies of the documents, data or other information set forth in Section
12.01(e)(iii).

     (e)  For purposes of the foregoing, "Technical Assistance" shall mean
providing the Company (or Company's designee) with:

        (i)    the assistance of BMS' employees and access to BMS' other
               internal resources to provide the Company with a reasonable level
               of technical assistance and consultation in connection with the
               qualification process (it being understood that BMS shall not be
               obligated to provide more than one hundred twenty (120) man-hours
               of on-site consulting advice (including travel time) with respect
               to such Technical Assistance, unless BMS is reimbursed by Company
               for its fully-burdened costs incurred to provide such advice or
               services),

       (ii)    access to all documents, data and other information that (i) are
               necessary under applicable Law to qualify or maintain the
               qualification of the Initial Back-up Supplier and (ii) are
               Acquired Assets (as defined in the Asset Purchase Agreement) and
               that are at such time in BMS' or its Affiliates' or any of their
               agents' control; and

      (iii)    copies of all such documents, data and other information that is
               required under applicable Law to be provided to any Third Party
               in connection with the qualification process or to be held by the
               Initial Back-up Supplier in order to obtain and/or maintain its
               regulatory qualification or is otherwise necessary to qualify or
               maintain the qualification of the Initial Back-up Supplier. With
               respect to all documents, data and other information provided in
               accordance with this clause (e)(iii), in addition to paper and
               other tangible copies, BMS shall, upon the Company's request,
               also provide to the Company electronic copies of such documents,
               data and other information, provided that BMS or its Affiliates
               have electronic copies thereof, and provided further, that the
               foregoing requirement shall only apply to such documents, data
               and other information exclusively related to the manufacture of
               the Products, and BMS shall have no obligation to reformat or
               otherwise alter or modify any such materials in order to provide
               them to the Company (or the Company's designee).

SECTION 12.02  MANUFACTURE OF PRODUCTS BY THE INITIAL BACK-UP SUPPLIER
               DURING THE TERM.

     (a)  Except as provided in Section 12.02(b), 2.01(e) (last sentence), or
Article XI, the Company may not purchase any Products from the Initial Back-up
Supplier.

     (b)  Following qualification of the Initial Back-up Supplier, the Company
may transfer a portion of the manufacture of the Products to the Initial Back-up
Supplier, provided that such transfer shall be limited to the minimum amount of
Products reasonably necessary to maintain the Initial Back-up Supplier's

                                       28

<PAGE>   34
regulatory qualification and to retain the Initial Back-up Supplier as a back-up
source of supply for the Products on commercially reasonable terms, in any event
not to exceed, in any calendar year during the Term, 10% of the Company's
requirements for the Products during such year.

SECTION 12.03  TECHNICAL ASSISTANCE UPON TERMINATION OF AGREEMENT.

     (a)  During the twelve (12) month period following the expiration of this
Agreement or the termination of this Agreement, upon request of the Company, BMS
shall provide the Company (or the Company's designee) with the assistance of its
employees and access to its other internal resources to provide the Company with
a reasonable level of technical assistance and consultation in connection with
the regulatory qualification of an additional Back-up Supplier for the Product
(an "Additional Back-up Supplier"), provided, that, the Company shall reimburse
BMS for the fully-burdened cost of, and reasonable out-of-pocket expenses
incurred in connection with, such technical assistance and consultation.

     (b)  Promptly after termination or expiration of this Agreement, BMS shall
provide the Company (or the Company's designee) with copies of all documents,
data or other information relating to the manufacture of the Products that are
at such time in BMS' or its Affiliates' or its agents' control, that (a) are
Acquired Assets, but were not previously provided to the Company either pursuant
to the Asset Purchase Agreement or pursuant to Section 12.01(e), or (b) are not
Acquired Assets, to the extent such documents, data and information are the
subject of the licenses set forth in Section 2.13 and are necessary for the
manufacture of the Products. Following termination or expiration of this
Agreement, the documents, data or other information described in clause (a)
above shall not be used by BMS and its Affiliates for any purpose other than
BMS' and its Affiliates' internal and operational purposes in the ordinary
course of business and for the purpose of supplying Estrace Tablets and
Estradiol Tablets (or products substantially the same as Estradiol Tablets) to
the Third Party Purchasers. With respect to all documents, data and other
information provided in accordance with the preceding sentence, (A) BMS shall be
responsible for the cost of providing one set of copies only, and (B) in
addition to paper and other tangible copies, BMS shall, upon the Company's
request, also provide to the Company electronic copies of such documents, data
and other information, provided that BMS or its Affiliates have electronic
copies thereof, and provided further, that the foregoing requirement shall only
apply to such documents, data and other information exclusively related to the
manufacture of the Products, and BMS shall have no obligation to reformat or
otherwise alter or modify any such materials in order to provide them to the
Company (or the Company's designee).

     (c)  BMS shall not be obligated to provide more than one hundred twenty
(120) man-hours of on-site consulting advice (including travel time) with
respect to any single manufacturing site or conduct any tests, studies or assays
required for the transfer of such manufacturing of the Product to the Company or
its designee, unless BMS is reimbursed by Company for its fully-burdened costs
incurred to provide such advice or services.

SECTION 12.04  CONFIDENTIALITY.

     The Company shall obligate in writing such Initial Back-up Supplier and
Additional Back-up Supplier to use and hold all Confidential Information
disclosed to it by BMS in confidence and in a manner consistent with the
requirements set forth in Section 9.01. The Company shall take all necessary and
reasonable action to ensure compliance hereof. Futhermore, the Company shall
assume full responsibility and liability to BMS for any unauthorized use or
disclosure of Confidential Information of BMS by any Initial Back-up Supplier
and Additional Back-up Supplier.

                                 ARTICLE XIII.

                                    NOTICES

     All notices and other communications hereunzder 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

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<PAGE>   35

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 BMS, to:

          Bristol-Myers Squibb Company
          P.O. Box 4000
          Princeton, NJ 08543-4000
          Telephone: (609) 252-4311
          Facsimile: (609) 252-4232
          Attention:  Vice President and Senior Counsel -- PRI & WSBD

          with a copy to:

          Corporate Development
          Bristol-Myers Squibb Company
          Rt. 206 & Provinceline Road
          Princeton, NJ 08540
          United States of America
          Telephone: (609) 252-6498
          Facsimile: (252) 252-7498
          Attention: Robert J. Brown

          and

          Reed Smith LLP
          Princeton Forrestal Village
          136 Main Street, Suite 250
          Princeton, NJ 08540
          Telephone: (609) 514-5990
          Facsimile: (609) 951-0824
          Attention: Betty Yan, Esq.

     (b)  if to the Company, to:

          Galen Holdings PLC
          100 Enterprises Drive
          Rockaway, NJ 07866
          Facsimile :  973-442-3362
          Telephone :  973-442-3371
          Attention:  Senior Vice President - Corporate Development

     All notices shall be deemed given when received by the addressee.

                                  ARTICLE XIV.

                            MISCELLANEOUS PROVISIONS

SECTION 14.01  ASSIGNMENT.

     (a)  Except as otherwise provided for in Section 2.06 of this Agreement,
neither Party shall assign or otherwise transfer this Agreement or any interest
herein or right hereunder without the prior written consent of the other Party,
(not to be unreasonably withheld), and any such purported assignment, transfer
or attempt to assign or transfer any interest herein or right hereunder shall be
void and of no effect. Except that each Party (i) may assign

                                       30
<PAGE>   36

its rights and obligations hereunder to one of its Affiliates without the prior
consent of the other Party (although, in such event, the assigning Party shall
remain primarily responsible for all of its obligations and agreements set forth
herein, notwithstanding such assignment) and (ii) may assign its rights and
obligations to a successor (whether by merger, consolidation, reorganization or
other similar event) or purchaser of all or substantially all its business
assets relating to all Products, provided, that such successor or purchaser has
agreed in writing to assume all such Party's rights and obligations hereunder
and a copy of such assumption is provided to the other Party.

     (b)  Notwithstanding Section 14.01(a), the Company may assign this
Agreement, in whole but not in part, at any time after the first anniversary of
the Effective Date without the consent of, but with notice to, BMS. If the
Company makes any such assignment to a Third Party that could reasonably be
expected to purchase materially lower volumes of the Products than the average
volumes purchased by the Company hereunder during the immediately preceding
twelve (12) calendar months (as reasonably determined by BMS), BMS shall be
entitled to adjust the Purchase Prices of the Products based upon the volumes of
the Products that such assignee would reasonably be expected to purchase
following such assignment to reflect BMS' fully-burdened manufacturing cost for
production of Products following such assignment (assuming such lower volumes)
plus 15%, all calculated consistent with the methodology used to determine the
initial Purchase Prices on Schedule 3.01. Such Purchase Prices shall thereafter
be subject to adjustment as provided in Section 3.01. Upon an assignment of this
Agreement by the Company, BMS may terminate this Agreement at any time after the
earlier of (i) the second anniversary of such assignment (provided BMS has given
the assignee at least 12 months' prior notice) and (ii) such time as there is a
qualified Initial Back-up Manufacturer pursuant to Article XII (provided BMS has
given the assignee at least 12 months' prior notice).

SECTION 14.02  NON-WAIVER.

     Any failure on the part of a Party to enforce at any time or for any period
of time any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of such provisions or of any right of such Party thereafter to
enforce each and every such provision on any succeeding occasion or breach
thereof.

SECTION 14.03  DISPUTE RESOLUTION.

     (a)  The Parties recognize that disputes as to certain matters may from
time to time arise during the term of this Agreement which relate to either
Party's rights and/or obligations hereunder. It is the objective of the Parties
to establish procedures to facilitate the resolution of disputes arising under
or in connection with this Agreement, including without limitation all financial
disputes and any disputes as to the validity, construction, performance,
default, or breach hereof, in an expedient manner by mutual cooperation and
without resort to litigation. To accomplish this objective, but subject to
Section 14.03(c) below, the Parties agree to follow the procedures set forth in
this Section 14.03 if and when such disputes arise under or in connection with
this Agreement between the Parties. If the Parties cannot resolve the dispute
within 30 calendar days of formal request by either Party to the other, any
Party may, by notice to the other, have such dispute referred to the Chief
Executive Officer of the Company and the President of the BMS Worldwide
Medicines Group (or their designees) for attempted resolution by good faith
negotiations. If such personnel are unable to resolve such dispute within 30
calendar days after such notice is received, then such dispute shall be finally
resolved, but only if notice is thereafter served by a Party on the other Party
specifically requesting binding arbitration pursuant to Section 14.03(b).

     (b)  Where a Party has served a written notice upon the other requesting
binding arbitration of a dispute pursuant to this Section 14.03(b), any such
arbitration shall be held in New York, New York, according to the Commercial
Arbitration Rules (the "Rules") of the American Arbitration Association (the
"AAA"). Any arbitration herewith shall be conducted in the English language. The
arbitration shall be conducted by one arbitrator who is knowledgeable in the
subject matter which is at issue in the dispute and who is selected by mutual
agreement of the Parties or, failing such agreement, shall be selected according
to the AAA rules. The Parties shall have such discovery rights as the arbitrator
may allow, but in no event broader than that discovery permitted under the
Federal Rules of Civil Procedure. In conducting the arbitration, the arbitrator
shall apply the New York Rules of Evidence and shall be able to decree any and
all relief of an equitable nature, including but not limited to such relief as a
temporary restraining order, a preliminary injunction, a permanent injunction,
or replevin of property, as well as

                                       31
<PAGE>   37

specific performance. The arbitrator shall also be able to award direct damages
but shall not award any other form of damages (e.g., consequential, punitive or
exemplary damages). The reasonable fees and expenses of the arbitrators, along
with the reasonable legal fees and expenses of the Parties (including all expert
witness fees and expenses), the fees and expenses of a court reporter, and any
expenses for a hearing room, shall be paid as follows: If the arbitrators rule
in favor of one Party on all disputed issues in the arbitration, the losing
Party shall pay 100% of such fees and expenses; if the arbitrators rule in favor
of one Party on some issues and the other Party on other issues, the arbitrators
shall issue with the rulings a written determination as to how such fees and
expenses shall be allocated between the Parties. The arbitrators shall allocate
fees and expenses in a way that bears a reasonable relationship to the outcome
of the arbitration, with the Party prevailing on more issues, or on issues of
greater value or gravity, recovering a relatively larger share of its legal fees
and expenses. The decision of the arbitrators shall be final and may be entered,
sued on or enforced by the Party in whose favor it runs in any court of
competent jurisdiction at the option of such Party. Whether a claim, dispute or
other matter in question would be barred by the applicable statute of
limitations, which statute of limitations also shall apply to any claim or
disputes subject to arbitration under this Section, shall be determined by
binding arbitration pursuant to this Section 14.03.

     (c)  Notwithstanding anything to the contrary in this Section 14.03, either
Party may seek immediate injunctive or other interim relief without resort to
arbitration from any court of competent jurisdiction as necessary to enforce and
prevent infringement or misappropriation of the patent rights, copyright rights,
trademarks, confidential information, trade secrets, or other intellectual
property rights owned or controlled by a Party or its Affiliates or to prevent
breach of Article IX.

SECTION 14.04  ENTIRETY OF AGREEMENT.

     This Agreement, the Related Agreements and 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 or in the Related Agreements.

SECTION 14.05  PUBLIC ANNOUNCEMENTS.

     The form and content of any public announcement to be made by one Party
regarding this Agreement, or the subject matter contained herein, shall be
subject to the prior written consent of the other Party (which consent may not
be unreasonably withheld), except as may be required by applicable law
(including, without limitation, disclosure requirements of the SEC, NASDAQ, or
any stock exchange) in which event the other Party shall use commercially
reasonable efforts to give the other Party reasonable advance notice and
reasonable opportunity to review any such disclosure.

SECTION 14.06  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 OTHER THAN SECTIONS 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

SECTION 14.07  RELATIONSHIP OF THE PARTIES.

     In making and performing this Agreement, the Parties are acting, and intend
to be treated, as independent entities and nothing contained in this Agreement
shall be construed or implied to create an agency, partnership, joint venture,
or employer and employee relationship between BMS and the Company. Except as
otherwise provided herein, neither Party may make any representation, warranty
or commitment, whether express or implied, on behalf of or incur any charges or
expenses for or in the name of the other Party. No Party shall be liable for the
act of any other Party unless such act is expressly authorized in writing by
both Parties hereto.

                                       32
<PAGE>   38

SECTION 14.08  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 14.09  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 14.10  EXPENSES.

     Each of BMS and the Company shall bear its own direct and indirect expenses
incurred in connection with the negotiation and preparation of this Agreement
and the Related Agreements and, except as set forth in this Agreement or any
Related Agreement, the performance of the obligations contemplated hereby and
thereby.

SECTION 14.11  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 14.12  AMENDMENTS AND WAIVERS.

     This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the Parties. By an instrument in writing either Party 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.

SECTION 14.13  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 14.14  CONSENT TO JURISDICTION.

     For matters not required to be submitted to arbitration under Section
14.03, each of BMS and the Company 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 Party 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 Party further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party's respective address
set forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 14.14. Each Party 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

                                       33
<PAGE>   39
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 14.15  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 14.15.

SECTION 14.16  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.

                     [THE NEXT PAGE IS THE SIGNATURE PAGE]

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     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in multiple counterparts by its duly authorized representative.

                               BRISTOL-MYERS SQUIBB
                               LABORATORIES COMPANY

                               By: /s/  Robert J. Brown
                                   ---------------------------------------------
                                   Name:  Robert J. Brown
                                   Title: Vice President, Corporate Development,
                                          Worldwide Medicines Group

                               GALEN (CHEMICALS) LIMITED

                               By: /s/  Roger M. Boissonneault
                                   ---------------------------------------------
                                   Name:  Roger M. Boissonneault as
                                          Attorney-in-fact for
                                          John King, Director and Secretary of
                                          Galen (Chemicals) Limited
                                   Title:

                                       35

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