Document:

<PAGE>   1
                                                                    Exhibit 10.4

                                                                REDACTED VERSION

                            ASSET PURCHASE AGREEMENT

                                     between

                          BRISTOL-MYERS SQUIBB COMPANY
                                   as Seller,

                                       and

                             WARNER CHILCOTT, INC.,
                                  as Purchaser

                          Dated as of January 26, 2000
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                                TABLE OF CONTENTS

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

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

                   ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER

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

                 ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER

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

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

                               ARTICLE V CONDITIONS

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

                       ARTICLE VI TERMINATION AND AMENDMENT

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

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

                            ARTICLE VIII MISCELLANEOUS

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

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

                                    SCHEDULES

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

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

            Accordingly, the parties hereby agree as follows:

                                    ARTICLE I

                           SALE AND PURCHASE OF ASSETS

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

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

            (i) the Intellectual Property;

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

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

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

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

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

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

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

            (iii) the Excluded Estrace Products and the Names;

            (iv) all Accounts Receivable;

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

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

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

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

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

            (xi) all Retained Information.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                    REPRESENTATIONS AND WARRANTIES OF SELLER

            Seller represents and warrants to Purchaser as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

            Purchaser represents and warranties to Seller as follows:

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

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

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

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

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

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

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

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

                                    COVENANTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            (b) Purchaser acknowledges and agrees:

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

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

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

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

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

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

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

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

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

            (b)  Each of Purchaser and Seller agrees that:

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

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

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

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

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

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

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

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

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

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

                                    ARTICLE V

                                   CONDITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE VI

                            TERMINATION AND AMENDMENT

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

            (a) Mutual consent of Seller and Purchaser;

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

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

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

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

                                   ARTICLE VII

                            SURVIVAL; INDEMNIFICATION

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

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

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

            (iii) any Excluded Liability; and

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

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

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

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

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

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

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

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

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

            (c) any Assumed Liability; and

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

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

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

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

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

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

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

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

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

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

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

                                  ARTICLE VIII

                                  MISCELLANEOUS

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

            (a)   if to Seller, to:

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

                        with a copy to:

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

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

                        with a copy to:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Acquisition                                                   1.1

Assumed Liabilities                                         1.3(a)

Assumption Agreement                                        1.4(c)

Calculation Date                                            1.6(a)

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

Competitive Business                                        4.18(a)

Confidentiality Agreement                                   4.3(a)

Contracts                                                     2.8

DOJ                                                         4.5(a)

Estrace Cream                                              Preamble

Estrace Product Line                                        1.6(a)

Excluded Assets                                             1.2(c)

Excluded Liability                                          1.3(c)

Excluded Tax Liability                                      1.3(c)

FDA                                                         1.2(a)

FDA Act                                                     2.9(a)

Final Offer                                                 4.14(b)

Financial Statements                                          2.4

FTC                                                         4.5(a)

IMS                                                         1.6(a)

IMS Notice                                                  1.6(a)

indemnified party                                           7.6(a)

Losses                                                      7.2(a)

Months of Supply                                           1.6(a)

Names                                                       4.11(c)

Offering Memorandum                                         4.3(a)

Ovcon 35                                                   Preamble

Ovcon 50                                                   Preamble

Ovcon License Agreement                                     4.15(c)

Ovcon Product Line                                          1.6(a)

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

Products                                                   Preamble

Purchase Price                                                1.1

Purchaser                                                  Preamble

Purchaser's Officer's Certificate                           5.3(c)

Right                                                        4.14

Roberts                                                     4.12(a)

Roberts Agreement                                           4.12(a)

Seller                                                     Preamble

Seller's Officer's Certificate                              5.2(c)

Shipped Products                                          1.3(c)(ii)

Third Party                                                  4.14

Third Party Claim                                           7.6(a)

WC Ireland                                                  4.15(c)
</TABLE>

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

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

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

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

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

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

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

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

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

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

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

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

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

                              BRISTOL-MYERS SQUIBB COMPANY

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

                              WARNER CHILCOTT, INC.

                               By: /s/ Beth Hecht
                                   -------------------------
                                   Name: Beth Hecht
                                   Title: Senior Vice President
                                          and General Counsel<PAGE>   1

                                                                    Exhibit 10.5

                                                                  EXECUTION COPY

                ESTRACE TRANSITIONAL SUPPORT AND SUPPLY AGREEMENT

                                     between

                      WESTWOOD-SQUIBB PHARMACEUTICALS, INC.

                                       and

                             WARNER CHILCOTT, INC.,

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

<S>                                                                                                   <C>
                                                 ARTICLE I

DEFINITIONS                                                                                              1
                  Section  1.1  Definitions                                                              1
                  Section  1.2  Other Definitions                                                        3
                  Section  1.3  Interpretations                                                          4

                                                ARTICLE II

GENERAL TERMS OF SUPPLY                                                                                  4
                  Section  2.1  Sale and Purchase of Product                                             4
                  Section  2.2  Forecasts                                                                6
                  Section  2.3  Ordering                                                                 6
                  Section  2.4  Minimum Inventory                                                        6
                  Section  2.5  Shipments                                                                7
                  Section  2.6  Receipt of Product; Acceptance                                           7
                  Section  2.7  Quality Control; Change in Specifications or Supplier                    9
                  Section  2.8  Material Safety Data Sheets                                             10
                  Section  2.9  WSP Supply Contracts                                                    10
                  Section  2.10  Line Extension Products and New Products                               10

                                                ARTICLE III

PURCHASE PRICE FOR PRODUCTS AND CLOSING INVENTORY                                                       10
                  Section  3.1  Purchase Price                                                          10
                  Section  3.2  Audit of Cost Records                                                   11

                                                ARTICLE IV

PAYMENTS AND REPORTS                                                                                    12
                  Section  4.1  Payment                                                                 12
                  Section  4.2  Mode of Payment                                                         12
                  Section  4.3  Taxes                                                                   12
                  Section  4.4  Late Payments                                                           12
</TABLE>

                                       i
<PAGE>   3
<TABLE>
<S>                                                                                                   <C>
                                                 ARTICLE V

COMPLIANCE WITH LAWS; REPRESENTATIONS AND WARRANTIES                                                    12
                  Section  5.1  Compliance with Law; Cooperation                                        12
                  Section  5.2  WSP Warranties                                                          13
                  Section  5.3  WC Warranties                                                           14
                  Section  5.4  DISCLAIMER OF WARRANTIES                                                14
                  Section  5.5  No Reliance by Third Parties                                            14

                                                ARTICLE VI

INDEMNIFICATION; REMEDIES FOR BREACH                                                                    14
                  Section  6.1  WSP Indemnity                                                           14
                  Section  6.2  WC Indemnity                                                            15
                  Section  6.3  Control of Proceedings                                                  15
                  Section  6.4  Remedy for Failure to Supply Products                                   16
                  Section  6.5  Insurance                                                               18
                  Section  6.6  Limitations on Liability                                                18

                                                ARTICLE VII

COMPLIANCE WITH GOVERNMENT REGULATIONS                                                                  19
                  Section  7.1  Government Communications                                               19
                  Section  7.2  Access to Records                                                       19
                  Section  7.3  Governmental and Regulatory Inspections                                 19
                  Section  7.4  WC Inspections                                                          19

                                               ARTICLE VIII

PRODUCT RECALLS; ADVERSE EXPERIENCES; PRODUCT QUALITY                                                   20
                  Section  8.1  Product Recalls                                                         20
                  Section  8.2  Adverse Experience                                                      20
                  Section  8.3  Product Quality Complaints                                              21
                  Section  8.4  Medical Inquiries                                                       22

                                                ARTICLE IX

CONFIDENTIALITY                                                                                         22
                  Section  9.1  Confidentiality Requirement                                             22
                  Section  9.2  Use of Information                                                      23
                  Section  9.3  Purchased Assets                                                        23
                  Section  9.4  Relief                                                                  23
</TABLE>

                                       ii
<PAGE>   4
<TABLE>
<S>                                                                                                   <C>
                                                 ARTICLE X

TERMINATION                                                                                             23
                  Section 10.1  Term                                                                    23
                  Section 10.2  Breach                                                                  24
                  Section 10.3  Insolvency or Bankruptcy                                                24
                  Section 10.4  Termination Without Cause                                               24
                  Section 10.5  Effect of Termination                                                   24
                  Section 10.6  Accrued Rights, Surviving Obligations                                   25

                                                ARTICLE XI

FORCE MAJEURE                                                                                           25

                                                ARTICLE XII

ALTERNATE MANUFACTURERS                                                                                 25
                  Section 12.1  Qualification of Initial Alternate Manufacturer                         25
                  Section 12.2  Manufacture of Products by the Initial Alternate
                        Manufacturer During the Term                                                    27
                  Section 12.3  Transition of Entire Manufacturing to the Initial
                        Alternate Manufacturer                                                          27
                  Section 12.4. Technical Assistance Upon Termination of Agreement                      28

                                               ARTICLE XIII

NOTICES                                                                                                 28

                                                ARTICLE XIV

MISCELLANEOUS PROVISIONS                                                                                29
                  Section 14.1  Assignment                                                              29
                  Section 14.2  Non-Waiver                                                              30
                  Section 14.3  Dispute Resolution                                                      30
                  Section 14.4  Entirety of Agreement.                                                  31
                  Section 14.5  Public Announcements                                                    32
                  Section 14.6  Governing Law                                                           32
                  Section 14.7  Relationship of the Parties                                             32
                  Section 14.8  Counterparts                                                            32
                  Section 14.9  Severability                                                            32
                  Section 14.10  Expenses                                                               32
</TABLE>

                                      iii
<PAGE>   5
<TABLE>
<S>                                                                                                   <C>
                  Section 14.11  Descriptive Headings                                                   32
                  Section 14.12  Amendments and Waivers                                                 32
</TABLE>

                                       iv
<PAGE>   6
         ESTRACE TRANSITIONAL SUPPORT AND SUPPLY AGREEMENT dated as of January
26, 2000, between Westwood-Squibb Pharmaceuticals, Inc., a corporation duly
organized and existing under the laws of the State of Delaware ("WSP"), and
Warner Chilcott, Inc., a corporation duly organized and existing under the laws
of the State of Delaware ("WC").

         Bristol-Myers Squibb Company, a corporation duly organized and existing
under the laws of the State of Delaware and the parent of WSP ("BMS"), directly
or indirectly through its Affiliates, manufactures, distributes, markets and
sells three products known as Ovcon(R) 35, Ovcon(R) 50 (together with Ovcon(R)
35, "Ovcon") and Estrace(R) Cream ("Estrace"). WC (i) has entered into an Asset
Purchase Agreement dated as of the date hereof pursuant to which BMS will sell
to WC, and WC will purchase from BMS, on the Effective Date, certain rights,
title and interest in and to these three products, including intellectual
property assets relating thereto and (ii) has entered into an Ovcon Transitional
Support and Supply Agreement dated as of the date hereof with Bristol-Myers
Squibb Laboratories Company, a corporation duly organized and existing under the
laws of Ireland and a subsidiary of BMS ("BMSLC"), with respect to the supply of
Ovcon by BMSLC to WC (the "Ovcon Supply Agreement").

         WC wishes to purchase from WSP, and WSP wishes to supply to WC, WC's
entire requirements of each Product (as hereinafter defined), for 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 1.1 Definitions. For purposes of this Agreement:

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

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

                                       1
<PAGE>   7
         "Asset Purchase Agreement" shall mean the Asset Purchase Agreement
dated January 26, 2000, pursuant to which BMS had agreed to sell to WC, and WC
has agreed to purchase from BMS, certain rights, title and interest in and to
Estrace and Ovcon.

         "Effective Date" means the Closing Date, as defined in the Asset
Purchase Agreement.

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

         "Laws" means all laws, rules, regulations, ordinances and other
requirements of any governmental authority or instrumentality.

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

         "Party" means WSP or WC and, when used in the plural, shall mean WSP
and WC.

         "Person" shall mean 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 1.1A, including
any Line Extension Products that may be added to such Schedule pursuant to
Section 2.10.2, 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 presentations existing 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.

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

         "Related Agreements" means the Asset Purchase Agreement, the Ovcon
Supply Agreement and the Trademark License Agreement.

         "Specifications" for each Product means such specifications for each
Product as set forth in Schedule 1.1B, as the same may be amended or
supplemented from time to time hereafter by WC pursuant to Section 2.7.2, by the
mutual agreement of the Parties in a writing duly executed by authorized
representatives of each Party hereto or in accordance with Section 2.7.4.

                                       2
<PAGE>   8
         "Term" means the period from the Effective Date until the date that is
ten (10) years from the Effective Date. The Term shall be deemed to expire on
such earlier date as the Agreement is terminated in accordance with Article 10.

         "Territory" means all countries worldwide with the exception, with
respect to the Estrace(R) trademark, of Canada.

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

         "Trademark License Agreement" means the Trademark License Agreement of
even date herewith, under which WC has granted to BMS an exclusive, royalty free
license to use the "Estrace(R)" trademark for the marketing, distribution and
sale of tablets under the Estrace(R) name.

         Section 1.2 Other Definitions. The following terms have the meanings
set forth in the Sections set forth below:

<TABLE>
<CAPTION>
                               TERM                                                  SECTION
                               ----                                                  -------
<S>                                                                                  <C>
12.3.1 Notice                                                                        12.3.1

AAA                                                                                  14.3.2

Additional Alternate Manufacturer                                                    12.2.3

Back-up Termination Date                                                             12.3.1

BMSLC                                                                                Preamble

Confidential Information                                                             9.1.1

Executed Supply Default                                                              6.4.5

Forecast                                                                             2.2

Initial Alternate Manufacturer                                                       12.1.1

Initial Period                                                                       6.4.5

Line Extension Products                                                              Schedule 2.10.2

Lost Profits                                                                         6.4.5

Non-Serious Adverse Effect                                                           8.2.2

Ovcon Supply Agreement                                                               Preamble

Product Quality Complaint                                                            8.3

Purchase Price                                                                       3.1.1

Qualifying Product                                                                   6.4.5

Recall                                                                               8.1.1
</TABLE>

                                       3
<PAGE>   9
<TABLE>
<CAPTION>
                               TERM                                                  SECTION
                               ----                                                  -------
<S>                                                                                  <C>
Rules                                                                                14.3.2

Serious Adverse Event                                                                8.2.2

Significant Customers                                                                6.4.5

Stockout                                                                             6.4.5

Subsequent Period                                                                    6.4.5

Technical Assistance                                                                 12.1.5

WC Party                                                                             6.1

WSP Party                                                                            6.2
</TABLE>

         Section 1.3 Interpretations.

                  1.3.1 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.

                  1.3.2 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 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.

                                       4
<PAGE>   10
                                   ARTICLE II

                             GENERAL TERMS OF SUPPLY

         Section 2.1 Sale and Purchase of Product.

                  2.1.1 During the Term of this Agreement, WC hereby grants to
WSP a royalty-free, non-exclusive and non-transferrable right and license in the
Territory under such rights and to use such assets that are owned or licensed by
WC as are necessary to allow WSP to manufacture and supply the Products
exclusively to WC under this Agreement. Notwithstanding the foregoing, WSP may
transfer its right and license under this Section 2.1.1, at WSP's election, to
an Affiliate or to the Initial Alternate Manufacturer in connection with the
transfer of its manufacturing and supply obligations under this Agreement to
such Affiliate or the Initial Alternate Manufacturer in accordance with Sections
2.7.3 and 12.3.1, respectively, provided that WSP may retain such right and
license to the extent necessary to continue manufacturing the Products in
accordance with this Agreement (including as contemplated by Section 12.3.2).

                  2.1.2 WSP shall use commercially reasonable efforts to sell to
WC, and subject to Sections 6.4.3, 12.2.2 and 12.3, WC shall purchase from WSP,
all of WC's requirements for each Product for distribution, sale and use in the
Territory during the Term, pursuant to purchase orders submitted by WC to WSP
from time to time in accordance with Section 2.3, at a price determined in
accordance with Section 3.1, and subject to the warranties set forth in Section
5.2.1.

                  2.1.3 All Products purchased hereunder shall be resold by WC
and its Affiliates solely in the Territory. All Products supplied hereunder
shall be in finished dosage form, filled, labeled and packaged for commercial
sale by WC in accordance with the terms and conditions of this Agreement and the
Specifications and applicable Laws. WSP shall solely and exclusively supply the
Products to WC and WC's designees, and neither WSP nor its Affiliates shall have
the right to manufacture or supply the Products to any other Person. WSP 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 WC under this Agreement.

                  2.1.4 For up to 180 days following the Closing Date (or such
earlier time as WSP may, in its sole discretion, determine), each Product
manufactured hereunder shall continue to be labeled and packaged with the same
labels and packaging that are currently used WSP in connection with the
Products. After such time, each such Product shall be manufactured with a
labeling and packaging identifying BMS or any Affiliate thereof as the
manufacturer of the Products and WC (or WC's designee) as the distributor
thereof. Within sixty (60) days following the Closing Date, WC shall provide to
WSP final specifications for the revised labeling and packaging of each Product,
including all necessary photo-ready art (or its substantial equivalent)
reflecting such modification. Subject to the provisions of this Section 2.1.4,
WC shall control all labeling and packaging content (and any changes or
supplements thereto) for each Product and shall have the responsibility at WC's
expense for any changes or supplements thereto, including the expense of
securing any approvals required by the FDA or other applicable

                                       5
<PAGE>   11
regulatory authorities for any such changes or supplements. WSP shall be
responsible for obtaining such labels (and any changes or supplements thereto)
in accordance with the content specified by WC. Any changes to the labeling and
packaging shall be communicated to WSP in writing at least 90 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). WSP shall not be
required to implement such changes until its first batch run after the
expiration of such 90-day period. Each Product shall be sold under one label
throughout the Territory. Notwithstanding the foregoing, if at any time WC
desires to sell Products under one or more additional labels, WC shall notify
WSP of such desire, which notice shall include a reasonably detailed description
of such proposed additional labels and WC's anticipated annual volume
requirements for each SKU which will bear an additional label. WSP shall have
the right, but not the obligation, to elect, at its sole option, to manufacture
such Products with such additional label(s). If WSP elects to manufacture such
Products with such additional label(s), all additional costs (calculated on a
fully burdened cost basis) incurred by WSP in connection with such manufacturing
of such Products with such additional labels shall be borne by WC. If WSP elects
not to manufacture such Products with such additional label(s), WC may use the
Initial Alternate Manufacturer to manufacture such Products under such label(s).

                  2.1.5 No terms and conditions contained in any purchase 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.

         Section 2.2 Forecasts. Upon execution of this Agreement, and thereafter
on the first business day of each calendar quarter during the Term, WC shall
provide WSP with a good faith rolling forecast ("Forecast") of 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 2.3.1, the first six (6) months of each such
Forecast shall consist of the 3-month firm order placed by WC concurrently with
such Forecast pursuant to Section 2.3.2 (to be delivered within months 4-6 of
such Forecast) and the 3-month firm order placed on the date of the previous
Forecast (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 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.

                                       6
<PAGE>   12
         Section 2.3 Ordering.

                  2.3.1 Upon execution of this Agreement, WC will provide WSP
with its best estimate of its requirements for the first six (6) months after
the Effective Date, which estimate shall be attached as Schedule 2.3.1. WSP will
supply such Product quantities set forth in Schedule 2.3.1 in accordance with
the delivery schedule set forth therein, and to the extent such estimated
amounts do not meet WC's actual requirements for such six-month period, WSP will
use commercially reasonable efforts to supply WC with its requirements beyond
the amounts specified in Schedule 2.3.1. WC agrees to purchase such quantities
of each Product as supplied by WSP in accordance with Schedule 2.3.1. Following
the initial six-month period, orders shall be filled by WSP in accordance with
the orders placed by WC pursuant to Section 2.3.2.

                  2.3.2 Except as provided in Section 2.3.1, three (3) months
before the beginning of any calendar quarter during the Term, WC shall place an
irrevocable firm purchase order in writing to WSP of the Product quantities to
be purchased by WC with respect to such calendar quarter (and specify the
delivery schedule and destination for the Products ordered). WSP shall promptly
notify WC in writing if at any time BMS has reason to believe that WSP will not
be able to fill an order for Product in all material respects in accordance with
the delivery schedule specified hereunder by WC and pursuant to the terms and
conditions of this Agreement. At any time and from time to time, upon request
from WC, WSP shall provide WC with information regarding the estimated time
period at the time of such request between the receipt of a purchase order in
accordance with this Section 2.3.2 and the expected delivery date for the
related Products set forth in such purchase order, which, in any event, shall
not be later than ninety (90) days after the receipt of such purchase order.

                  2.3.3 All Product ordered by WC shall be consistent with WSP
current minimum batch sizes, or multiples thereof, as set forth in Schedule
3.1.1. WSP shall give WC six (6) months' notice prior to changing its minimum
batch sizes, and shall not change the minimum batch sizes without the prior
written consent of WC.

         Section 2.4  Minimum Inventory.

                  2.4.1 WC Requirement. WC will use commercially reasonable
efforts to maintain at least one (1) month's inventory of each Product in its
distribution centers in the United States (calculated for each Product, at any
time, as one-twelfth of the amount of such Product manufactured by WSP during
the prior calendar year) at all times beginning six months after the Effective
Date through the date that is one month prior to the end of the Term. Such
requirement will instead continue until the end of the Term if WC and WSP agree
in writing at least one month prior to such date that WC will purchase any
remaining inventory on hand at the end of the Term.

                  2.4.2 WSP Requirement. WSP will use commercially reasonable
efforts to maintain at least one (1) month's inventory of each Product in its
distribution centers in the United States at all times beginning six months
after the Effective Date through the date that is one month prior to the end of
the Term. Such requirement will instead continue until the end of the Term if WC
and WSP agree in writing prior to such date that

                                       7
<PAGE>   13
WC will purchase any remaining inventory on hand at the end of the Term. Said
one-month inventory for each Product shall be calculated at any time, as
one-twelfth of the amount of such Product manufactured by WSP during the prior
calendar year.

         Section 2.5 Shipments. WSP shall ship each order, F.O.B. the
manufacturing facility for each Product (whether manufactured by WSP or, if and
to the extent permitted hereunder, by an Affiliate of WSP or a Third Party) to
WC or its designee to the destinations specified by WC pursuant to Section
2.3.2. Freight and insurance shall be for the account of WC or shall be
reimbursed by WC, and WSP shall use commercially reasonable efforts to assist WC
in arranging any desired insurance. Title shall pass to WC, and the risk of
loss, delay or damage in transit shall be with WC, from and after delivery to
the common carrier. WSP shall package each Product for shipment in accordance
with its customary practices therefor, unless otherwise specified by WC, in
which event any extra costs incurred by WSP on account of changes requested by
WC shall be reimbursed by WC. WSP shall include the following with each shipment
of the Products: (a) the WC purchase order number, (b) the WSP lot and batch
numbers, (c) the quantity of the Products and (d) the Certificate of Analysis
(the form of which is attached hereto as Schedule 2.5).

         Section  2.6  Receipt of Product; Acceptance.

                  2.6.1 WC 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 5.2.1 (unless such non-conformity was attributable to an act or omission
of WC or the common carrier once the Product was delivered by WSP to such common
carrier provided that the Products were packaged for shipment in accordance with
Section 2.5); provided that (a) WC shall notify WSP within fifteen (15) business
days after receipt of such shipment if it is rejecting a shipment due to obvious
physical damage or quantity discrepancies that are evident upon visual
inspection of the packaged Products as shipped by WSP, and (b) in the case of
Products having defects other than those obvious defects, WC shall notify WSP
within fifteen (15) business days after WC becomes aware of such defect.
Notwithstanding anything contained herein, WC 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 WSP. Without in any way
limiting WSP's indemnity obligation as set forth in Section 6.1, if no notice is
provided by WC within such time periods (i.e., fifteen (15) business days), then
WC shall be deemed to have accepted the shipment. Any notice of rejection by WC
shall be accompanied by a reasonably detailed statement of its reasons for
rejection and a report of any pertinent analysis performed by WC on the
allegedly nonconforming Product, together with the methods and procedures used.
WSP shall notify WC as promptly as reasonably possible, but in any event within
ten (10) days after receipt of such notice of rejection, whether it accepts WC's
assertions of nonconformity.

                  2.6.2 Whether or not WSP accepts WC's assertion of
nonconformity, promptly upon receipt of a notice of rejection, unless otherwise
specified by WC, WSP shall use commercially reasonable efforts to provide
replacement Products for those rejected by WC in the original shipment. However,
if the Products rejected by WC from

                                       8
<PAGE>   14
such original shipment ultimately are found to be nonconforming (whether
pursuant to Section 2.6.3 or if WSP so acknowledges in writing), WSP 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 WC previously paid for any corresponding nonconforming Product. If it is
determined subsequently that such Product was in fact conforming (whether
pursuant to Section 2.6.3 or if WC so acknowledges in writing), then WC 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 WC 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 this
subparagraph. WSP shall be under no obligation to accept a return of Product
except as provided in this subparagraph.

                  2.6.3 If WSP 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 WC from the
shipment received by WC, as may be necessary to substantiate whether the
shipment rejected by WC conformed in all material respects to the Certificate of
Analysis and/or any other pertinent Specifications 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 at the time of delivery to the common carrier. The costs incurred
by the laboratory shall be borne by the losing Party.

                  2.6.4 If WSP acknowledges an alleged nonconformity (or if the
laboratory concludes that the Product was nonconforming), WSP promptly (and in
any case within thirty (30) days thereafter) shall make arrangements for the
return, reworking or disposal, at WSP's option, of the nonconforming Product. If
WSP requests that WC dispose of such nonconforming Product, WSP shall give WC
written instructions as to how WC or its agent should, at WSP's expense and
liability, lawfully dispose of any non-conforming Products, and WC shall provide
WSP with written certification of such destruction. WSP shall pay, or reimburse
WC, for any reasonable return shipping charges or out-of-pocket costs incurred
by WC for such return shipment or lawful disposal of such nonconforming Product
in accordance with WSP's instructions.

                                       9
<PAGE>   15
         Section 2.7 Quality Control; Change in Specifications or Supplier.

                  2.7.1 WSP shall conduct all quality control testing of the
Products prior to shipment in accordance with the applicable NDAs and Laws. WSP
shall retain records pertaining to such testing as required by Law and, from
time to time upon the prior notice shall provide WC with reasonable access
during normal business hours to such records; provided, however, that such
access does not unreasonably disrupt the normal operations of WSP.

                  2.7.2 WC shall have the right, at its expense and in
consultation with WSP, to change the Specifications from time to time, including
as may be required by any regulatory agency having jurisdiction over the
Product, on not less than one hundred and twenty (120) days prior written notice
to WSP (or such shorter period as required by any regulatory agency or mutually
agreed by the Parties). In such event, WSP shall, at WC's request and expense,
assist with all analytical or experimental work to be performed in connection
with making such change, and WC shall be responsible, at its expense, for filing
all changes proposed by WC and for seeking approval of any such change by each
applicable regulatory authority. The Parties may also amend the Specifications
by mutual agreement.

                  2.7.3 At any time and from time to time, WSP in its sole
discretion may change, without the consent of but with prior notice to and
consultation with, WC, the manufacturer used in the manufacturing of the
Products to BMS or another Affiliate of BMS, provided that (a) WSP shall bear
all costs of transferring production to BMS or such Affiliate and (b) the
Purchase Price for the Products shall remain substantially the same. WC shall
cooperate with WSP in any reasonable manner to effect such transfer and shall be
responsible for making any required filing with respect to such change in
manufacturer and seeking approval from each applicable regulatory authority. WSP
shall reimburse WC for all reasonable out-of-pocket expenses incurred by WC or
its Affiliates or agents in connection with such filings and the preparation
thereof.

                  2.7.4 Subject to Section 2.7.2, at any time and from time to
time, WSP in its sole discretion may change, without the consent of but with
prior notice to and consultation with, WC, 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 (a) WSP
shall bear all costs associated with changing any manufacturing processes and/or
locations used in manufacturing any Product and (b) the Purchase Price for any
such Products shall remain substantially the same. WC shall cooperate with WSP
in any reasonable manner to effect such transfer and shall be responsible for
making any required filing with respect to such change and seeking approval from
each applicable regulatory authority. WSP shall reimburse WC for all reasonable
out-of-pocket expenses incurred by WC or its Affiliates or agents in connection
with such filings and the preparation thereof.

                  2.7.5 With respect to any regulatory filings and approvals
made or sought by either Party under this Section 2.7, each Party shall provide
reasonable cooperation to the other Party in connection therewith. If a change
proposed to be made to the

                                       10
<PAGE>   16
Specifications or the manufacture of the Products under this Section 2.7
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 2.8 Material Safety Data Sheets. WSP shall provide WC with all
information currently set forth in the applicable Material Safety Data Sheet for
each Product provided by WSP to its own employees.

         Section 2.9 WSP Supply Contracts. Notwithstanding any provision of this
Agreement that may imply or provide to the contrary, WSP shall have the sole
right, but not the obligation, at its sole discretion and expense, to maintain
and enforce any contract entered into by WSP or its Affiliates covering the
supply of any compounds, intermediates, biomaterials, packaging components,
containers and other materials used in the manufacture of a Product.

         Section 2.10 Line Extension Products and New Products.

                  2.10.1 Except as set forth in Section 2.10.3, WSP shall have
no obligation, express or implied, to develop new formulations, dosages, forms
of administration, or preparations for the Products.

                  2.10.2 Once WC 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 1.1.A to reflect the inclusion of
such Line Extension Product.

                  2.10.3 During the Term, upon request by WC, WSP shall provide
WC with a reasonable level of technological assistance and consultation in
support of WC's development and regulatory efforts in connection with all Line
Extension Products, including those services set forth in Schedule 2.10.3. WC
will reimburse WSP 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 WC regardless of inventorship, and to the
extent that WSP or its Affiliates or any of their employees or consultants
acquire rights in or to any such developments, WSP 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 WC or
WC's designee.

                                   ARTICLE III

        PURCHASE PRICE FOR PRODUCTS AND CLOSING INVENTORY

         Section 3.1  Purchase Price.

                                       11
<PAGE>   17
                  3.1.1 The purchase price for commercial and sample supplies of
each Product sold to WC pursuant to Article 2 hereof shall be equal to the price
for such Product set forth on Schedule 3.1.1 for purchase orders received by WSP
under Section 2.3 prior to January 1, 2001 (as adjusted from time to time
pursuant to this Section 3.1.1 and Section 3.1.2, the "Purchase Price"). The
Purchase Price of each such Product shall be adjusted as of January 1, 2001, and
on each January 1 thereafter 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 WSP has elected to adjust the
Purchase Price as set forth in Section 3.1.2 below for such year. The Purchase
Price adjustment under this Section 3.1.1 shall be retroactively effective to
said January 1, and shall apply to all purchase 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.

                  3.1.2 WSP 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, 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 3.1.2 sets forth the applicable
variable costs for each Product as of January 1, 2000. All other components of
the Purchase Price of such Product for such year shall be adjusted by the index
set forth above. WSP shall act in good faith in connection with the above
Purchase Price adjustment.

                  For purposes of pricing Products ordered by WC 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
3.1.1, until such time as WSP notifies WC 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 WSP has so notified WC in writing that WSP 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 WC during such year
shall be deemed to be increased accordingly, retroactive to January 1 of such
year. If WSP does not notify WC of any change under this Section 3.1.2 within a
given calendar year, WSP shall be deemed to have waived its right to apply this
Section 3.1.2 with respect to such year.

                  3.1.3 Unless otherwise set forth on Schedule 3.1.1, 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 3.1.1 (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 3.1.

                                       12
<PAGE>   18
         Section 3.2 Audit of Cost Records. Not more frequently than once with
respect to any year in which WSP has elected to adjust its price under Section
3.1.2, WC shall have the right to have a "Big Five" accounting firm audit,
within 12 months of such price adjustment, WSP's books and records relating to
the manufacture of the Products, for the sole purpose of verifying WSP's
determination of the change in costs underlying such price adjustment. Such
audit shall be at WC's expense (which shall include reimbursement to WSP for the
administrative costs it incurs in connection with the review), at reasonable
times during normal business hours and upon reasonable notice to WSP. A copy of
the auditing entity's conclusions of its audit shall be furnished to WSP at
least ten (10) days prior to disclosure to WC to allow WSP an opportunity to
review the accuracy of the auditing firm's conclusions prior to disclosure to
WC. WC shall bear the full cost of such audit unless such audit discloses a
variance of more than five percent (5%) from the amount due, in which event, WSP
shall bear the full cost of such audit. Any amounts that are determined to be
due and owing by WSP to WC following such audit shall be paid within thirty (30)
business days thereafter, together with any interest due thereon from the date
of overpayment by WC 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 WC from exercising any other rights
it may have as a consequence of the lateness of any payment.

                                   ARTICLE IV

                              PAYMENTS AND REPORTS

         Section 4.1 Payment. WSP shall submit invoices to WC for Products
promptly after shipment. The invoices shall reflect the price for the Products
as set forth in Section 3.1. Payments shall be made by WC within thirty (30)
days of receipt of the invoice. In addition, WSP, in its sole discretion, shall
determine, and may from time to time change without the consent of, but with
notice to, WC, the identity of the party that shall invoice WC for any Product
supplied hereunder which shall be WSP, BMS or an Affiliate of BMS.

         Section 4.2 Mode of Payment. WC shall make all payments required under
this Agreement by electronic funds transfer in United States dollars to a bank
account designated by WSP.

         Section 4.3 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 WSP to WC of any Product hereunder shall be the responsibility of and for the
account of WC. Such amounts shall be included on WSP's invoices to WC for such
Products. If WSP obtains any credit for the amounts of the tax, such amount
shall be repaid by WSP to WC when it is received by WSP. Anything to the
contrary notwithstanding, WC shall have no obligation to pay any income tax
imposed on WSP or any of its Affiliates which may arise from the transactions
contemplated by this Agreement.

         Section 4.4 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 twelve

                                       13
<PAGE>   19
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
WSP from exercising any other rights it may have as a consequence of the
lateness of any payment.

                                    ARTICLE V

              COMPLIANCE WITH LAWS; REPRESENTATIONS AND WARRANTIES

         Section 5.1 Compliance with Law; Cooperation.

                  5.1.1 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.
WC shall store the Products sold to it in compliance with all applicable Laws,
including, without limitation, the Prescription Drug Marketing Act, as amended
during the term of this Agreement. WSP and WC 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, 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.

                  5.1.2 Reasonable Cooperation. WSP and WC 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 5.2 WSP Warranties.

                  5.2.1 WSP warrants that each Product manufactured by or for
WSP and sold to WC 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 WC;

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

                                       14
<PAGE>   20
                  (iii)    shall be manufactured in accordance with Good
                           Manufacturing Practices, as established by FDA and
                           all other applicable Laws, including all applicable
                           US federal, state and local environmental, health and
                           safety law and regulations in effect at the time and
                           place of manufacture of the Products; and

                  (iv)     will have a shelf life of not less than those months
                           set forth in Schedule 1.1(A) at the time the same is
                           tendered to the common carrier for delivery to WC.

                  5.2.2 THE LIMITED WARRANTIES PROVIDED IN SECTION 5.2.1 ARE
WSP'S SOLE WARRANTIES WITH RESPECT TO A PRODUCT THAT IS MADE BY WSP OR FOR WSP
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 5 OR IN ANY RELATED AGREEMENT, WSP 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 5.3 WC Warranties.

                  5.3.1  WC represents and warrants to WSP that:

                  (i)      WC shall adhere to all applicable Laws relating to
                           the handling, storage and disposal of each Product in
                           each country in the Territory; and

                  (ii)     WC will make any filings on its own behalf or on
                           behalf of WSP that are required to be made by it
                           under any Product Registrations relating to the
                           Products, including the filing of any "adverse event
                           reports" as required by applicable law.

         Section 5.4 DISCLAIMER OF WARRANTIES. 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 5.5 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.

                                       15
<PAGE>   21
                                   ARTICLE VI

                      INDEMNIFICATION; REMEDIES FOR BREACH

         Section 6.1 WSP Indemnity. WSP shall defend, indemnify and hold
harmless WC, its Affiliates, and its and their employees, agents, officers, and
directors (a "WC Party") from and against any and all losses, liabilities,
damages, fees (including, until such time as WSP has notified WC 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 WC Party
to a Third Party and that result from or arise in connection with any claim,
action, suit or other proceeding made or brought by such Third Party against a
WC Party, in any such case, based on the breach of any representation or
warranty of WSP contained in Section 5.2.1; provided, however, that WSP shall
not be obligated to indemnify a WC Party for any loss, liability, damages, fees
or expenses incurred by such WC Party to the extent attributable to any breach
of this Agreement by WC, a WC Party or WC's contractors/licensees or to any act
or omission constituting gross negligence or wilful misconduct on the part of
WC, a WC Party, or a WC contractor/licensee, or to any action taken required to
be taken by WSP pursuant to this Agreement or any action taken by WSP upon the
direction of WC (including modifications of the Specifications pursuant to
Section 2.7.2) or to any failure of WC to identify a Product defect or
nonconformity actually known by WC prior to the use of such Product by a Third
Party.

         Section 6.2 WC Indemnity. WC shall defend, indemnify and hold harmless
WSP, its Affiliates, and its and their employees, agents, officers, and
directors (a "WSP Party") from and against any and all losses, liabilities,
damages, fees (including, until such time as WC has notified WSP in writing that
it will assume control of a given claim, attorneys fees and costs of litigation
pertaining to such claim), and expenses paid or payable by a WSP Party to a
Third Party that result from or arise in connection with (A) subject to WSP's
indemnity obligations under Section 6.1, any claim (including, without
limitation, product liability claims, strict liability or tort claims), action
or proceeding made or brought against such WSP 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 or WC's breach of this
Agreement, (B) any claim, action, suit or other proceeding made or brought by a
Third Party based on (i) the breach by WC of any of its representations or
warranties contained in Section 5.3.1; (ii) infringement of a Third Party's
trademarks by reason of the use of "WC", "Estrace" or any variant thereof on the
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 by or for WC or its
Affiliates under this Agreement (other than by reason of a manufacturing process
used in the manufacture of a Product by WSP or its Affiliates or any or their
agents) or (C) the failure by WC to comply with applicable Laws related to the
marketing, promotion, distribution and sale of the Products; provided, however,
that WC shall not be obligated to indemnify a WSP Party for any loss, liability,
damages, fees or expenses incurred by such WSP Party to the extent attributable
to a breach by WSP of any obligation, covenant, agreement,

                                       16
<PAGE>   22
representation or warranty of WSP contained in this Agreement or any Related
Agreement, or to any act or omission constituting gross negligence or wilful
misconduct on the part of WSP or a WSP Party.

         Section 6.3 Control of Proceedings. To receive the benefits of the
indemnity under Section 6.1 or 6.2, 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 all decisions relating to litigation, defense and
appeal) of any such claim (so long as it has confirmed its indemnification
obligation to such indemnified Party under this Section 6.3 with respect to a
given claim); provided that the controlling Party may not settle such claim or
enter into any voluntary consent judgment in any manner that would require
payment by the other Party, or would materially adversely affect the rights
granted to the other Party hereunder, or would materially conflict with the
terms of this Agreement, without first obtaining the other Party's prior written
consent. 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 6 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.

                  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 6; 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.

                                       17
<PAGE>   23
         Section 6.4 Remedy for Failure to Supply Products.

                  6.4.1 During the Initial Period, in the event WSP breaches its
obligation to use its commercially reasonable efforts to supply Qualifying
Products in accordance with Section 2.1.2, 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 WSP shall indemnify WC for the actual direct
damages and Lost Profits of WC resulting from such Stockout with respect to such
Qualifying Product, provided that the aggregate amount payable by WSP under this
Section 6.4.1 for all Stockouts with respect to all Qualifying Products shall
not exceed $45,000,000, less any amounts paid under Section 6.4.1 of the Ovcon
Supply Agreement. For the avoidance of doubt, the aggregate amount payable by
BMS and its Affiliates under this Section 6.4.1 and under Section 6.4.1 of the
Ovcon Supply Agreement shall not exceed $45,000,000.

                  6.4.2 During the Subsequent Period, in the event WSP breaches
its obligation to use its commercially reasonable efforts to supply Qualifying
Products in accordance with Section 2.1.2, 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 WSP shall indemnify WC for only the actual direct
damages of WC resulting from such Stockout (which, for the avoidance of doubt,
shall not include any Lost Profits).

                  6.4.3 WC 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, WC 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
Alternate Manufacturer, if the Initial Alternate Manufacturer has been qualified
in accordance with Section 12.1.1.

                  6.4.4 Except as expressly provided in Section 2.6 (with
respect to returns of nonconforming Products) and Section 6.1 (with respect to
any breaches of representations or warranties of WSP in Section 5.2.1), WC
acknowledges and agrees that the remedies set forth in Sections 6.4.1 and 6.4.2
shall be WC's sole and exclusive remedies with respect to (i) any failure by WSP
to comply with its obligations to supply Products to WC in accordance with the
terms of this Agreement, including its obligation to use commercially reasonable
efforts to supply Products set forth in Section 2.1.2, (ii) WC's inability or
failure to supply its customers with Products and (iii) any failure by WSP to
maintain an inventory of Products in accordance with Section 2.4.2.

                                       18
<PAGE>   24
                  6.4.5 For the purposes of this Section 6.4:

                           (i) "Excused Supply Default" shall mean the failure
                  by WSP to supply Qualifying Products to WC if such failure is
                  caused primarily by (a) a force majeure event as specified in
                  Article XI of this Agreement, (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
                  WSP or its Affiliates, (d) WC's requirements for such
                  Qualifying Product exceeding its forecasts provided under
                  Section 2.2 with respect to such Qualifying Product and (e)
                  WC's requirements for such Qualifying Product exceeding the
                  firm purchase orders made by WC under Section 2.3 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 WC has qualified the Initial Alternate Manufacturer
                  pursuant to Article XII.

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

                           (iv) "Qualifying Product" shall mean either of (a)
                  SKU #075403 and (b) SKU #075415; 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 WC who, in the aggregate, accounted for more
                  than 15% of WC'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 WSP to supply WC with any
                  conforming Qualifying Product such that WC is unable to supply
                  any Significant Customer with any conforming Qualifying
                  Product from the inventories maintained by WSP and WC
                  (including those maintained under Section 2.4), for a period
                  of sixty (60) consecutive days (in the case of any Significant
                  Customer that is comprised of more than one customer, sixty
                  (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 WC's giving notice to WSP of its inability to
                  supply its Significant Customers, and (b) such 60-day period
                  shall be

                                       19
<PAGE>   25
                  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 WC shall have received shipment
                  of such Qualifying Product under this Agreement and any
                  failure thereafter by WSP to supply WC 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 6.5 Insurance.

                  6.5.1 WC shall maintain at all times during the period that
any Product is being distributed or sold by or through WC 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 and
in the aggregate. The minimum level of insurance set forth herein shall not be
construed to create a limit on WC's liability hereunder. On the Effective Date,
WC shall furnish to WSP 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 WC, shall include a provision whereby
sixty (60) days' written notice must be received by WSP prior to coverage
modification or cancelation by either WC or the insurer. In addition, WC shall
promptly notify WSP of any cancelation or modification of such insurance
coverage and of any new or modified coverage. In the case of a modification or
cancelation of such coverage, WC shall promptly provide WSP with a new
certificate of insurance evidencing that WC's coverage meets the requirements in
the first sentence of this Section 6.5.1.

                  6.5.2 WSP will maintain at all times during the period that
any Product is being supplied to WC by WSP and is being manufactured by or for
WSP, 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.

                                       20
<PAGE>   26
                  Section 6.6 Limitations on Liability.

                  6.6.1 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 expressly provided in Section 6.4.1. Any action for breach of this
Agreement must be commenced within twelve (12) months after the end of the Term,
provided that the foregoing shall not apply to any claim by either Party for
indemnification under Section 6.1 or 6.2, or to any claim by either Party for
breach of the other Party's indemnity obligation.

                  6.6.2 WSP and WC 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.

                  6.6.3 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 6.6.3 shall not apply to Section 6.4.

                                   ARTICLE VII

                     COMPLIANCE WITH GOVERNMENT REGULATIONS

         Section 7.1 Government Communications. WC shall be solely responsible
for communicating with any governmental authority concerning the Products or the
marketing, distribution, or sale of the Products, and WSP shall have no such
communications except to the extent that they relate to WSP's manufacturing
activities under this Agreement or otherwise relate to the Products, in which
case WSP shall be responsible for such communications (it being understood,
however, that, notwithstanding the foregoing, (i) except to the extent that an
immediate communication is necessary under the circumstances or required by Law,
WSP in good faith shall consult in advance with WC regarding such communications
insofar as they relate to the Products or to WSP's ability to perform its
obligations pursuant to this Agreement and (ii) nothing in this paragraph shall
be deemed to restrict WC's independent rights to communicate with any
governmental authority, provided that to the extent such communications by WC
relate to WSP's manufacturing activities under this Agreement, WC in good faith
shall, except to the extent that an immediate communication is necessary under
the circumstances or required by Law, consult in advance with WSP regarding such
communications).

         Section 7.2 Access to Records. WC shall have reasonable access during
normal business hours to WSP's files, from time to time upon prior notice, to
review all such records, correspondence, notices, documents and other materials
(including warning

                                       21
<PAGE>   27
letters and letters of adverse findings) relating to the production, use or sale
of the Products; provided, however, that such access does not unreasonably
disrupt the normal operations of WSP.

         Section 7.3 Governmental and Regulatory Inspections. WSP shall notify
WC 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 WC copies of all correspondence, reports, notices, findings and
other material pertinent to such inspections or otherwise relating to the
production, use or sale of the Products (including all Form 483s), promptly
after they are received or produced by or on behalf of WSP from or to the FDA or
any other federal, state or foreign governmental or regulatory authority. All
notices sent to WC pursuant to this Section shall be sent to the attention of
the Senior Vice-President of Regulatory Affairs, Norma Enders.

         Section 7.4 WC Inspections. WSP shall, or if WSP is not manufacturing
the Products, WSP shall cause the Person manufacturing the Products to, afford
WC or WC'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 WSP. WC's exercise of its inspection rights hereunder shall
in no way waive, modify or diminish WSP's obligations under this Agreement.

                                  ARTICLE VIII

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

         Section 8.1 Product Recalls.

                  8.1.1 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 Recall. WSP
and WC 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,
or (b) a court of competent jurisdiction orders such a recall, or (c) WC
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
recall of such Product is appropriate (a "Recall"), each Party shall give
telephonic notice (to be confirmed in writing) to the other within twenty-four
(24) hours of the occurrence of such event.

                                       22
<PAGE>   28
                  8.1.2 WC shall consult with WSP, but WC shall have sole
responsibility for determining all corrective action to be taken and for
carrying out the Recall. WSP will provide full cooperation and assistance to WC
in connection therewith as may be requested by WC. WC shall be responsible for
all expenses of any such Recall (including any reasonable out-of-pocket expenses
incurred by WSP in connection with such cooperation, if and to the extent WC
authorized WSP to incur any such out-of-pocket expense), except to the extent
such Recall is attributable to a breach by WSP of Section 5.2.1, unless such
breach is the direct result of the information provided by WC under Section
2.1.3.

         Section 8.2 Adverse Experience. During the Term, 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. WC shall have the reporting
responsibility for such events to applicable regulatory health authorities in
the Territory, and WSP shall cooperate with WC in connection therewith as
requested by WC.

                  8.2.1 Serious Adverse Events (as defined in Section 8.2.2
below) for the Products of which WSP becomes aware shall be submitted to WC
within three (3) business days but no more than four (4) days from the date WSP
first became aware of such Serious Adverse Event. Non-Serious Adverse Events for
the Products (as defined in Section 8.2.2 below) that are reported to WSP shall
be submitted to WC no more than one (1) month from the date received by WSP;
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.

                  8.2.2 A "Serious Adverse Event" for the Products is defined as
any untoward medical occurrence that at any dose for any of the Products: (a)
results in death; (b) is life-threatening; (c) requires inpatient
hospitalization or prolongation of existing hospitalization; (d) results in
persistent or significant disability/incapacity; (e) is a congenital
anomaly/birth defect; (f) results in drug dependency or drug abuse; (g) is
cancer, or (h) is an overdose. A "Nonserious Adverse Event" for the Products is
defined as an untoward medical occurrence at any dose for any of the Products
that is not a Serious Adverse Event.

                  8.2.3 WSP shall report all such adverse events involving the
Products learned by it to:

                           Senior Vice President Regulatory Affairs
                           Warner Chilcott, Inc.
                           100 Enterprise Drive B Suite 280
                           Rockaway, NJ 07866
                           Facsimile No.:  (973) 442-3224
                           Telephone No.: (973) 442-3200

                                       23
<PAGE>   29
A CIOMS-I form or a form that contains the data elements of a CIOMS-I form is
recommended.

                  8.2.4 Serious Adverse Events concerning the Products learned
by WC shall be reported by WC to WSP at the time that WC reports such events to
FDA, and shall be sent to:

                           Vice President, Worldwide Safety & Surveillance
                           Bristol-Myers Squibb Company
                           P.O. Box 5400
                           Mail Stop HW19-1.01
                           Princeton, New Jersey 08543-5400
                           U.S.A.
                           Facsimile No.:   (609) 818-3804
                           Telephone No.:  (609) 818-3737

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

         Section 8.3 Product Quality Complaints. WSP shall inform WC's
Regulatory Affairs Department office of any Product Quality Complaint received
within three (3) business days but no more than four (4) days from the receipt
date by WSP. "Product Quality Complaint" is defined as any complaint that
questions the purity, identity, potency or quality of either of the Products,
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,
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 WC as set forth in Section 8.2.3 above. For Product
Quality Complaints received by WC relating to the Products, WC will notify WSP
and as appropriate, request the initiation of a complaint investigation. WSP
shall conduct such investigation and report its findings to WC's Regulatory
Affairs Department.

         Section 8.4 Medical Inquiries. WC's Product Information Department
shall handle all medical inquiries concerning the Products. WSP shall refer all
routine medical information requests in writing to WC as set forth in Section
8.2.3 above. Urgent medical information requests shall be referred by WSP to WC
by telephone to: Production Information Department: (973) 442-3236.

                                       24
<PAGE>   30
                                   ARTICLE IX

                                 CONFIDENTIALITY

         Section 9.1 Confidentiality Requirement.

                  9.1.1 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 9. 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, 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,
inter alia, 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 9.3, 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

                  (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

                                       25
<PAGE>   31
that, in the case of disclosures under (1), shall provide the other Party with a
copy of the proposed disclosure in sufficient time to allow reasonable
opportunity to comment thereon.

                  9.1.2 The obligations set forth in this Section 9.1 shall
survive the termination or expiration of this Agreement for five (5) years.
Nothing in this Article 9 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.

                  9.1.3 The confidentiality obligations set forth in this
Article 9 shall supersede the Confidentiality Agreement dated as of November 1,
1999 between the WC and BMS, 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 9.2 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.

         Section 9.3 Purchased Assets. Notwithstanding anything contained
herein, assets obtained by WC under the Asset Purchase Agreement, including
documents, data and other information provided to WC under clause (a) of Section
12.4.2, shall be deemed to be WC's Confidential Information and accordingly,
shall not be subject to any confidential treatment by WC, but shall be subject
to confidential treatment by WSP in accordance with the terms hereof.

         9.4 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 9.

                                    ARTICLE X

                                   TERMINATION

         Section 10.1 Term. This Agreement shall become effective as of the
Effective Date and, unless sooner terminated as provided in this Article 10 or
in Section 12.3.5, shall expire on the tenth anniversary of the Effective Date.
This Agreement shall automatically terminate if the Asset Purchase Agreement is
terminated.

         Section 10.2 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

                                       26
<PAGE>   32
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 10.3 Insolvency or 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 involuntary 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 10.4 Termination Without Cause. WC may, at any time at its sole
discretion, terminate this Agreement upon twelve (12) months' notice to WSP.

         Section 10.5 Effect of Termination.

                  10.5.1 Without limiting either Party's right to damages for
any breach of this Agreement, neither WSP nor WC 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 WSP and WC 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.

                  10.5.2 Any acceptance by WSP of any order from WC or the sale
of any Products by WSP to WC 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.

                  10.5.3 Upon expiration or termination of this Agreement, (a)
the right and license granted to WSP pursuant to Section 2.1.1 shall immediately
terminate and WSP and its Affiliates and their agents shall cease any and all
use of WC Confidential Information; and (b) WSP shall transfer and assign, to
the extent transferable in light of legal, contractual and practical
considerations, any and all regulatory approvals, if any exist, relating to the
Products, including the manufacture thereof, owned or controlled by BMS or its
Affiliates, to WC or WC's designee, when and as specified by WC.

                                       27
<PAGE>   33
         Section 10.6 Accrued Rights, Surviving Obligations.

                  10.6.1 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. Such termination, relinquishment or expiration
shall not relieve either Party from obligations which are expressly indicated to
survive termination or expiration of this Agreement.

                  10.6.2 Without limiting Section 10.6.1, termination,
relinquishment or expiration of this Agreement, in whole or in part, shall not
terminate WC's obligation to pay the Purchase Price for, and WSP's obligation to
supply, Products which have been sold to WC or firm-ordered by it hereunder
prior to the effective date of termination. All the Parties' rights and
obligations under Articles 1, 4 , 6, 7, 8, 9, 11, 13 and 14 and Sections 2.5,
2.6, 2.8, 5.1, 5.2, 5.3, 5.4, 5.5, 10.5 (as applicable), 10.6 and 12.4 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 supplier (including, without limitation, where such
shortage or failure is attributable to a supplier's breach of its agreement with
WSP or with a Third Party subcontractor or to an event of force majeure suffered
by such supplier), fire, flood, earthquake, hurricanes, storms, tornados,
explosion, riots, wars, civil disorder, failure of public utilities or common
carriers, labor disturbances, rebellion or sabotage. The Party suffering such
occurrence 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 occurrence; provided, that the Party suffering such
occurrence 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 days
thereafter. Notwithstanding the foregoing, nothing in this Article 11 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.

                                   ARTICLE XII

                             ALTERNATE MANUFACTURERS

         Section 12.1 Qualification of Initial Alternate Manufacturer.

                                       28
<PAGE>   34
                  12.1.1 Each Party shall, promptly after the Effective Date,
commence the use of its commercially reasonable efforts to qualify with the FDA
and any other applicable U.S. regulatory agency, an alternate manufacturer for
the Products (the "Initial Alternate Manufacturer") as soon as possible after
the Closing, but in any event not later than 24 months after the Closing. The
Parties acknowledge that the Initial Alternate Manufacturer must have sufficient
capacity to supply WC's forecasted requirements of the Products as of the
Closing Date at substantially the same prices for the Products as the initial
Purchase Prices set forth on Schedule 3.1.1 (assuming such Initial Alternate
Manufacturer manufactures all WC's forecasted requirements). WSP shall be deemed
to have used its commercially reasonable efforts for the purpose of this Section
12.1.1 if it shall provide Technical Assistance with respect to such
qualification of the Alternate Manufacturer.

                  12.1.2 Notwithstanding anything contained herein, so long as a
Party uses its commercially reasonable efforts to qualify the Initial Alternate
Manufacturer in accordance with the provisions of this Section 12.1.2, failure
to qualify the Initial Alternate Manufacturer shall not constitute a breach by
such Party of Section 12.1.1 of this Agreement or result in any right of the
other Party to terminate this Agreement.

                  12.1.3 After the Initial Alternate Manufacturer is so
qualified, WC shall use commercially reasonable efforts to maintain the
regulatory qualification of the Initial Alternate Manufacturer.

                  12.1.4 Any and all costs and expenses involved in obtaining
and maintaining the regulatory qualification of the Initial Alternate
Manufacturer shall be borne by WC, except that WSP shall bear the costs of the
Technical Assistance provided pursuant to Section 12.1.1, so long as WSP shall
only be responsible for the cost of providing to WC (or WC's designee) one set
of copies of the documents, data or other information set forth in Section
12.1.5(c).

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

                  (a) the assistance of WSP's employees and access to WSP's
         other internal resources to provide WC with a reasonable level of
         technical assistance and consultation in connection with the
         qualification process,

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

                  (c) 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 Alternate Manufacturer in order to obtain and/or maintain its
         regulatory qualification or is otherwise necessary to qualify or
         maintain the qualification of the Initial Alternate

                                       29
<PAGE>   35
         Manufacturer. With respect to all documents, data and other information
         provided in accordance with this clause (c), in addition to paper and
         other tangible copies, WSP shall, upon WC's request, also provide to WC
         electronic copies of such documents, data and other information,
         provided that WSP 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 WSP shall have no obligation to
         reformat or otherwise alter or modify any such materials in order to
         provide them to WC (or WC's designee).

         Section 12.2 Manufacture of Products by the Initial Alternate
Manufacturer During the Term.

                  12.2.1 Except as provided in Section 2.1.4, 12.2.2 or 12.3.1,
WC may not purchase any Products from the Initial Alternate Manufacturer.

                  12.2.2 Following qualification of the Initial Alternate
Manufacturer, WC may transfer a portion of the manufacture of the Products to
the Initial Alternate Manufacturer, provided that such transfer shall be limited
to the minimum amount of Products reasonably necessary to maintain the Initial
Alternate Manufacturer's regulatory qualification and to retain the Initial
Alternate Manufacturer 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 WC's requirements for the Products during such year,
provided that any Products manufactured by the Initial Alternate Manufacturer
pursuant to Section 2.1.4 shall not be counted for purposes of such 10%
limitation.

         Section 12.3 Transition of Entire Manufacturing to the Initial
Alternate Manufacturer.

                  12.3.1 At any time following regulatory qualification of the
Initial Alternate Manufacturer as contemplated by Section 12.1, WSP may elect to
terminate this Agreement and transfer the manufacture of the Products to the
Initial Alternate Manufacturer. WSP shall make such election by written notice
to WC (the "12.3.1 Notice") setting forth the intended termination date, which
shall be at least 12 months from the date of the 12.3.1 Notice.

                  12.3.2 Notwithstanding the Parties' obligations under Section
2.1.2, following delivery of the 12.3.1 Notice, WSP may transfer all or part of
its production of the Products to the Initial Alternate Manufacturer, provided
that WSP shall cooperate with WC to ensure a smooth transition to the Initial
Alternate Manufacture and to prevent any interruptions in supply to WC, and
provided further that in any event WSP shall continue to manufacture not less
than the minimum amount of Products reasonably necessary to maintain its
regulatory qualification to manufacture the Products and to maintain its ability
to be readily available to serve as a back-up supplier to WC, if necessary
within a commercially reasonable time. Following the transfer of the manufacture
of any Product to the Initial Alternate Manufacturer, WSP shall not be liable
for its obligations with respect to such Products under this Agreement or for
the compliance by the Initial Alternate Manufacturer with the terms and
conditions of this

                                       30
<PAGE>   36
Agreement with respect to such Products. WSP's obligation to maintain its
ability to serve as a back-up shall terminate upon the later of (i) the
qualification of an Additional Alternate Manufacturer and (ii) twelve (12)
months after the date of the 12.3.1 Notice (the "Back-up Termination Date").

                  12.3.3 Promptly after receipt of the 12.3.1 Notice, WC shall
commence using its commercially reasonable efforts to qualify with the FDA and
any other applicable U.S. regulatory agency an Additional Alternate
Manufacturer, as soon as possible and in any event with 12 months of the date of
the 12.3.1 Notice, to serve as a back-up source of Supply for the Products for
WC following termination of this Agreement. Such Additional Alternate
Manufacturer must have sufficient capacity to supply WC's forecasted
requirements of the Products as of the date of the 12.3.1 Notice at
substantially the same prices for the Products as the Purchase Price at such
time (assuming such Additional Alternate Manufacturer manufactures all of WC's
forecasted requirements at such time).

                  12.3.4 All costs relating to the initial regulatory
qualification of an Additional Alternate Manufacturer under Section 12.3.3 shall
be borne by WSP.

                  12.3.5 WSP may terminate this Agreement with notice to WC at
any time after the Back-up Termination Date.

         Section 12.4. Technical Assistance Upon Termination of Agreement.

                  12.4.1 During the twelve (12) month period following the
expiration of this Agreement or the termination of this Agreement pursuant to
Section 10.4, upon request of WC, WSP shall provide WC (or WC's designee) with
the assistance of its employees and access to its other internal resources to
provide WC with a reasonable level of technical assistance and consultation in
connection with the regulatory qualification of an additional alternate
manufacturer for the Product (an "Additional Alternate Manufacturer") for such
Products, provided that WC shall reimburse WSP for the fully-burdened cost of,
and reasonable out-of-pocket expenses incurred in connection with, such
technical assistance and consultation.

                  12.4.2 Promptly after termination or expiration of this
Agreement, WSP shall provide WC (or WC's designee) with copies of all documents,
data or other information relating to the manufacture of the Products that are
at such time in WSP's or its Affiliates' or its agents' control, that (a) are
Acquired Assets, but were not previously provided to WC either pursuant to the
Asset Purchase Agreement or pursuant to Section 12.1.5, or (b) are not Acquired
Assets, to the extent such documents, data and information are non-proprietary
to WSP and its Affiliates 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's and its Affiliates' internal and
operational purposes in the ordinary course of business. With respect to all
documents, data and other information provided in accordance with the preceding
sentence, (A) WSP shall be responsible for the cost of providing one set of
copies only, and (B) in addition to paper and other tangible copies, WSP shall,
upon WC's request,

                                       31
<PAGE>   37
also provide to WC electronic copies of such documents, data and other
information, provided that WSP 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 WSP shall have no obligation to reformat or otherwise alter or
modify any such materials in order to provide them to WC (or WC's designee).

                                  ARTICLE XIII

                                     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 WSP:

                           Bristol-Myers Squibb Company
                           Rte. 206 & Provinceline Rd.
                           Princeton, NJ 08543
                           Telephone: (609) 252-3456
                           Facsimile: (609) 252-6456
                           Attention: President of Technical Operations
                                                   Worldwide Medicines

                  with a copy to its Senior Counsel for Technical Operations at:

                           Bristol-Myers Squibb Company
                           6000 Thompson Road
                           East Syracuse, NY 13057
                           Telephone: (315) 432-2002
                           Facsimile: (315) 432-2279

                  (b)      If to WC:

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

                                       32
<PAGE>   38
                           with a copy to:

                           Kirkland & Ellis
                           153 East 53rd Street
                           New York, NY 100022
                           Telephone: (212) 446-4831
                           Facsimile:  (212) 446-4900
                           Attention:  Frederick Tanne, Esq.

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

                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

         Section 14.1 Assignment.

                  14.1.1 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 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.

                  14.1.2. Notwithstanding Section 14.1.1, WC 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, WSP. If WC 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 WC hereunder during the immediately preceding twelve (12) calendar
months (as reasonably determined by WSP), WSP 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 WSP's 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 3.1.1. Such Purchase Prices shall thereafter be subject to adjustment
as provided in Section 3.1. Upon an assignment of this Agreement by WC, WSP may
terminate this Agreement at any time after the earlier of (i) the second
anniversary of such assignment (provided WSP has given the assignee at least 12
months' prior notice) and (ii) such time as there is a qualified Initial
Alternate Manufacturer

                                       33
<PAGE>   39
pursuant to Article XII (provided WSP has given the assignee at least 12 months'
prior notice).

         Section 14.2 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  14.3  Dispute Resolution.

                  14.3.1 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 14.3.3 below, the Parties agree to follow the
procedures set forth in this Section 14.3 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 days of formal request by either Party to the
other, any Party may, by written notice to the other, have such dispute referred
to the President of WC 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 thirty (30) days after
such notice is received, then such dispute shall be finally resolved, but only
if written notice is thereafter served by a Party on the other Party
specifically requesting binding arbitration pursuant to Section 14.3.2.

                  14.3.2 Where a Party has served a written notice upon the
other requesting binding arbitration of a dispute pursuant to this Section
14.3.2, 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 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

                                       34
<PAGE>   40
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 14.3.

                  14.3.3 Notwithstanding anything to the contrary in this
Section 14.3, 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 9.

         Section 14.4 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 14.5 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 14.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.

         Section 14.7 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 WSP and WC. 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

                                       35
<PAGE>   41
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.

         Section 14.8 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 14.9 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 WSP and WC 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 Agreements, 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.

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

                                    WESTWOOD-SQUIBB PHARMACEUTICALS, INC.

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

                                       36
<PAGE>   42
                                    WARNER CHILCOTT, INC.

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

                                       37
<PAGE>   43
                                    SCHEDULE

<TABLE>
<S>                   <C>    <C>
Schedule 1.1A         -      List of Products and Trademarks

Schedule 1.1B         -      Specifications for the Products

Schedule 2.3.1        -      Initial Order of Product for First Six Months After Effective Date

Schedule 2.5          -      Certificate of Analysis

Schedule 2.10.2       -      Line Extension Products

Schedule 2.10.3       -      Development Activities

Schedule 3.1.1        -      Initial Purchase Price; Minimum Batch Sizes

Schedule 3.1.2        -      Variable Product Costs
</TABLE>

                                       1
<PAGE>   44
                                  SCHEDULE 1.1A
                   LIST OF PRODUCTS AND ASSOCIATED TRADEMARKS

<TABLE>
<CAPTION>
                    Products                                      Associated
                    --------                                      ----------
                                                                  Trademarks
                                                                  ----------
<S>                                                     <C>
Estrace Cream 42.5gm                                              Estrace(R)

Estrace Cream 12gm w/applicator                                   Estrace(R)

Ovcon-35 Tablet Oral 6x28                               Ovcon(R); Ovcon & Moon Design

Ovcon-35 Tablet Oral 6x28 CLI                           Ovcon(R); Ovcon & Moon Design

Ovcon-35 Tablet Oral 28's sample                        Ovcon(R); Ovcon & Moon Design

Ovcon-35 Tablet Oral 6x21                               Ovcon(R); Ovcon & Moon Design

Ovcon-50 Tablet Oral 6x28                               Ovcon(R); Ovcon & Moon Design

Ovcon-50 Tablet Oral 1x6x28                             Ovcon(R); Ovcon & Moon Design

Ovcon-50 Tablet Oral 6x28 sample                        Ovcon(R); Ovcon & Moon Design
</TABLE>

Note:  The shelf life for Estrace is three (3) years.

                                       1
<PAGE>   45
                                  SCHEDULE 1.1B
                             PRODUCT SPECIFICATIONS

                                  See Attached

                                       2
<PAGE>   46
                                 SCHEDULE 2.3.1
                         INITIAL ORDER OF PRODUCT BY WC
                    FOR FIRST SIX MONTHS AFTER EFFECTIVE DATE

                             [To be provided by WC]

                                       1
<PAGE>   47
                                  SCHEDULE 2.5
                             CERTIFICATE OF ANALYSIS

                                  See Attached

                                       1
<PAGE>   48
                                 SCHEDULE 2.10.2
                             LINE EXTENSION PRODUCTS

                  "Line Extension Products" shall mean any of (i) the Estrace
12gm 4 pack and (ii) the Estrace 1gm "Unit of Use".

                                       2
<PAGE>   49
                                 SCHEDULE 2.10.3
                             DEVELOPMENT ACTIVITIES

WSP will provide services for Line Extension Products and including:

1.       Formulation Development
2.       Analytical Development including stability studies
3.       Pilot Scale Production
4.       Process Scale-Up

WSP will issue written updates and reports, as agreed by the parties, in respect
of the foregoing.

                                       3
<PAGE>   50
                                 SCHEDULE 3.1.1
                   INITIAL PURCHASE PRICE; MINIMUM BATCH SIZES

<TABLE>
<CAPTION>
                                                                      INITIAL
                                                                   PURCHASE PRICE               MINIMUM
                                                                    (U.S. DOLLARS)              BATCH SIZE
                                                                    --------------              ----------
<S>                                                                <C>                          <C>
Estrace Cream 42.5gm                                                     0.880                    22,608

Estrace Cream 12gm w/applicator                                          0.765                    74,496

Estrace Cream 12gm 4 pack*                                               2.370                    74,160

Ovcon-35 Tablet Oral 6x28                                                4.692                    33,988

Ovcon-35 Tablet Oral 6x28 CLI                                            4.761                    33,988

Ovcon-35 Tablet Oral 28's sample                                         6.429                    18,470

Ovcon-35 Tablet Oral 6x21                                                4.520                    33,988

Ovcon-50 Tablet Oral 6x28                                                5.072                    33,852

Ovcon-50 Tablet Oral 1x6x28                                              5.244                    33,852

Ovcon-50 Tablet Oral 6x28 sample                                         7.360                    18,470
</TABLE>

--------
   * Line Extension Product

                                       4
<PAGE>   51
                                 SCHEDULE 3.1.2
                             VARIABLE PRODUCT COSTS

<TABLE>
<CAPTION>
                                                                                          VARIABLE PRODUCT
                                                                                          ----------------
                                                                                                COSTS
                                                                                                -----
<S>                                                                                      <C>
Estrace Cream 42.5gm                                                                                  .576

Estrace Cream 12gm w/applicator                                                                       .505

Estrace Cream 12gm 4 pack*                                                                           1.378

Ovcon-35 Tablet Oral 6x28                                                                            2.906

Ovcon-35 Tablet Oral 6x28 CLI                                                                        2.967

Ovcon-35 Tablet Oral 28's sample                                                                     3.789

Ovcon-35 Tablet Oral 6x21                                                                            2.763

Ovcon-50 Tablet Oral 6x28                                                                            3.239

Ovcon-50 Tablet Oral 1x6x28                                                                          3.390

Ovcon-50 Tablet Oral 6 x28 sample                                                                    4.596
</TABLE>

--------
   * Line Extension Product

                                       5

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