EXHIBIT 2.1 ASSET PURCHASE AGREEMENT FOR VANIQA(R) BETWEEN WOMEN FIRST HEALTHCARE, INC. AS SELLER, AND SKINMEDICA, INC., OR ITS DESIGNEE

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Title: EXHIBIT 2.1 ASSET PURCHASE AGREEMENT FOR VANIQA(R) BETWEEN WOMEN FIRST HEALTHCARE, INC. AS SELLER, AND SKINMEDICA, INC., OR ITS DESIGNEE
Governing Law: Delaware Date: 5/14/2004
Industry: Biotechnology and Drugs Law Firm: Latham & Watkins LLP; Morrison & Foerster LLP; Sector: Healthcare

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EXHIBIT 2.1

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ASSET PURCHASE AGREEMENT

FOR VANIQA(R)

BETWEEN

WOMEN FIRST HEALTHCARE, INC.

AS SELLER,

AND

SKINMEDICA, INC., OR ITS DESIGNEE

AS PURCHASER

DATED AS OF APRIL 29, 2004

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TABLE OF CONTENTS

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SECTION 1. DEFINITIONS AND INTERPRETATION............................................................. 1

SECTION 1.01. Defined Terms.......................................................... 1

SECTION 1.02. Other Defined Terms.................................................... 9

SECTION 1.03. Interpretation......................................................... 10

SECTION 1.04. Singular; Plural; Use of Words......................................... 10

SECTION 2. CONSUMMATION OF TRANSACTION................................................................ 11

SECTION 2.01. Acquired Assets........................................................ 11

SECTION 2.02. Assumed Liabilities.................................................... 12

SECTION 2.03. Purchase Price......................................................... 13

SECTION 2.04. Closing; Deliveries.................................................... 14

SECTION 2.05. Assumption of Assumed Contracts........................................ 15

SECTION 2.06. Risk of Loss........................................................... 16

SECTION 2.07. Bankruptcy Court Approval.............................................. 16

SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER................................................... 16

SECTION 3.01. Organization, Etc...................................................... 16

SECTION 3.02. Authority; Execution and Delivery; Enforceability...................... 17

SECTION 3.03. Consents and Approvals; No Violations.................................. 17

SECTION 3.04. Financial Statements and Books and Records............................. 17

SECTION 3.05. Absence of Certain Changes............................................. 18

SECTION 3.06. Undisclosed Liabilities................................................ 18

SECTION 3.07. Taxes.................................................................. 18

SECTION 3.08. Title of Assets........................................................ 18

SECTION 3.09. Intellectual Property.................................................. 18

SECTION 3.10. Material Contracts..................................................... 19

SECTION 3.11. Compliance with Law.................................................... 19

SECTION 3.12. Accounts Receivable.................................................... 20

SECTION 3.13. Inventory.............................................................. 20

SECTION 3.14. Customers and Representatives.......................................... 20

SECTION 3.15. Regulatory Matters..................................................... 20

SECTION 3.16. Litigation............................................................. 21

SECTION 3.17. Environmental Matters.................................................. 21

SECTION 3.18. Brokers or Finders..................................................... 22

SECTION 3.19. No Other Seller Representations or Warranties.......................... 22

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SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER................................................ 22

SECTION 4.01. Organization, Etc...................................................... 22

SECTION 4.02. Authority; Execution and Delivery; Enforceability...................... 22

SECTION 4.03. Consents and Approvals; No Violations.................................. 23

SECTION 4.04. Litigation............................................................. 23

SECTION 4.05. Brokers or Finders..................................................... 23

SECTION 4.06. Sufficient Funds....................................................... 23

SECTION 4.07. "As Is" Transaction.................................................... 24

SECTION 4.08. No Other Purchaser Representations or Warranties....................... 24

SECTION 5. ACTIONS PRIOR TO THE CLOSING............................................................... 24

SECTION 5.01. Confidentiality........................................................ 24

SECTION 5.02. Taxes.................................................................. 24

SECTION 5.03. Bulk Transfer Laws..................................................... 25

SECTION 5.04. Returns Handling....................................................... 25

SECTION 5.05. Consents and Approvals................................................. 25

SECTION 5.06. Conduct of the Business Pending the Closing............................ 26

SECTION 5.07. Financial Statements................................................... 27

SECTION 5.08. Certain Contracts...................................................... 27

SECTION 6. BANKRUPTCY AND OTHER COVENANTS............................................................. 27

SECTION 6.01. Bankruptcy Court Filings and Approvals................................. 27

SECTION 6.02. Assumption of Contracts: Notice to Reject Designated Contracts......... 28

SECTION 6.03. Release of Liens....................................................... 28

SECTION 6.04. Transfer of Assets..................................................... 28

SECTION 6.05. [Intentionally Omitted]................................................ 29

SECTION 6.06. Notice of Procedure Order.............................................. 29

SECTION 6.07. No Solicitation; Bankruptcy Court Procedures........................... 29

SECTION 6.08. Overbid Procedures..................................................... 29

SECTION 6.09. Break-Up Fee and Expense Reimbursement................................. 30

SECTION 7. CONDITIONS TO OBLIGATIONS.................................................................. 30

SECTION 7.01. Conditions to Obligations of Purchaser................................. 30

SECTION 7.02. Conditions to Obligations of Seller.................................... 31

SECTION 7.03. Conditions to Obligations of Purchaser and Seller...................... 32

SECTION 8. ACTIONS AFTER THE CLOSING.................................................................. 32

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SECTION 8.01. Transfer of Regulatory Matters......................................... 32

SECTION 8.02. Effective Time of Closing.............................................. 32

SECTION 8.03. Insurance.............................................................. 32

SECTION 8.04. Access to Information.................................................. 33

SECTION 8.05. No Use of Certain Names................................................ 33

SECTION 8.06. Customer Notifications................................................. 34

SECTION 8.07. Further Assurances and Services........................................ 34

SECTION 8.08. Reasonable Access to Records and Certain Personnel..................... 35

SECTION 8.09. Adverse Event Reporting................................................ 35

SECTION 8.10. Post-Closing Matters................................................... 36

SECTION 9. TERMINATION; TERMINATION PAYMENT........................................................... 36

SECTION 9.01. Termination............................................................ 36

SECTION 9.02. Effect of Termination.................................................. 38

SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION FROM ESCROW ACCOUNT........... 38

SECTION 10.01. Survival............................................................... 38

SECTION 10.02. Indemnification by Seller.............................................. 38

SECTION 10.03. Indemnification by Purchaser........................................... 39

SECTION 10.04. Calculation of Losses.................................................. 40

SECTION 10.05. Procedures............................................................. 40

SECTION 10.06. Sole Remedy; No Additional Representations............................. 41

SECTION 10.07. Limitations on Liability............................................... 41

SECTION 10.08. Cooperation............................................................ 41

SECTION 11. MISCELLANEOUS............................................................................. 42

SECTION 11.01. Notices................................................................ 42

SECTION 11.02. Descriptive Headings................................................... 43

SECTION 11.03. Counterparts........................................................... 43

SECTION 11.04. Entire Agreement....................................................... 43

SECTION 11.05. Fees and Expenses...................................................... 43

SECTION 11.06. Injunctive Relief...................................................... 43

SECTION 11.07. Assignment............................................................. 43

SECTION 11.08. Successors and Assigns................................................. 43

SECTION 11.09. Severability........................................................... 44

SECTION 11.10. Waiver of Jury Trial................................................... 44

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SECTION 11.11. Governing Law; Exclusive Jurisdiction.................................. 44

SECTION 11.12. Schedules, Exhibits and Other Agreements............................... 45

SECTION 11.13. Amendments and Waivers................................................. 45

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated as of April 29,

2004 (the "Agreement Date") is between Women First HealthCare, Inc., a Delaware

corporation ("Seller" or "WFHC"), and SkinMedica, Inc., a Delaware corporation,

or its designee (subject to and in accordance with Section 11.08 hereof)

("Purchaser").

RECITALS

WHEREAS, Seller is engaged in the business, directly or indirectly through

its Affiliates (as defined in Section 1.01), of distributing, marketing and

selling current presentations and formulations of the prescription form of

VANIQA(R) (eflornithine hydrochloride) Cream, 13.9% (the "Product") for use in

the Indication (as defined in Section 1.01) (such business as conducted by

Seller, the "Business");

WHEREAS, Seller intends to file a voluntary petition for relief under

Chapter 11 of the Bankruptcy Code (as defined in Section 1.01) in the Bankruptcy

Court (as defined in Section 1.01);

WHEREAS, Seller intends to request that the Bankruptcy Court authorize and

approve the transactions contemplated herein through the Chapter 11 Case (as

defined in Section 1.01) pursuant to, among others, Sections 105, 363 and 365 of

the Bankruptcy Code;

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to

purchase from Seller, Seller's right, title and interest in and to the Acquired

Assets (as defined in Section 1.01); and

WHEREAS, Purchaser desires to assume, and Seller desires to have assumed,

the Assumed Liabilities (as defined in Section 2.02(a)).

NOW, THEREFORE, in consideration of the premises and the mutual covenants

and promises contained herein, and for other good and valuable consideration,

the receipt and sufficiency of which are hereby acknowledged, the parties hereby

agree as follows:

SECTION 1.

DEFINITIONS AND INTERPRETATION

SECTION 1.01. DEFINED TERMS.

For purposes of this Agreement:

"Acquired Assets" shall mean (a) the Intellectual Property, (b) the Books

and Records, (c) the Marketing Materials, (d) the Inventory, (e) the Regulatory

Documentation, (f) the Assumed Contracts, (g) the content (including any data or

databases, the design, and look and feel) of, and any software owned by Seller

used to operate, the web sites having any of the URLs listed on Schedule 3.09(a)

(excluding all Names), and (h) all rights directly relating to the foregoing,

including all claims, counterclaims, credits, causes of action, choses in

action, rights of recovery and rights of setoff, but specifically excluding the

Excluded Assets.

"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, shall mean 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.

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"Alternative Transaction" shall mean a transaction or series of related

transactions pursuant to which Seller accepts a Qualified Bid for the Acquired

Assets or any group of assets that includes the Acquired Assets, other than that

of Purchaser, as the highest or best offer.

"Assignment of Copyrights" shall mean the Assignment of Copyrights

agreement executed by Seller and Purchaser in substantially the form of Exhibit

"Assignment of Internet Names" shall mean the Assignment of Internet Names

agreement executed by Seller and Purchaser in substantially the form of Exhibit

"Assignment of Seller Patents" shall mean the Assignment of Patents

agreement executed by Seller and Purchaser in substantially the form of Exhibit

"Assignment of Trademarks" shall mean the Assignment of Trademarks

agreement executed by Seller and Purchaser in substantially the form of Exhibit

"Assumed Contracts" shall mean the Contracts listed on Exhibit E.

"Assumption Agreement" shall mean the Assumption Agreement executed by

Purchaser in substantially the form of Exhibit F.

"Auction" shall mean the auction that Seller will conduct at the time and

place set forth in the Bidding Procedures Order in the event that Seller

receives one or more Qualified Bids in addition to Purchaser's Qualified Bid

under this Agreement.

"Avoidance Action" shall mean all rights and avoidance claims of Seller

arising under Chapter 5 of the Bankruptcy Code.

"Balance Sheet" shall mean the balance sheet of Seller as of December 31,

2003 included in the Financial Statements.

"Bankruptcy Code" shall mean title 11 of the United States Code, as

amended and in effect from time to time.

"Bankruptcy Court" shall mean the United States Bankruptcy Court for the

District of Delaware having jurisdiction over Seller and its assets.

"Bidding Procedures" shall have the meaning set forth in the Bidding

Procedures Order.

"Bidding Procedures Order" shall mean the order of the Bankruptcy Court,

pursuant to Sections 105(a), 363 and 365 of the Bankruptcy Code: (a) authorizing

and scheduling the Auction; (b) approving procedures for the submission of

Qualified Bids; (c) in the case of any subsequent Qualified Bids, approving the

initial overbid of at least $1,250,000 and further incremental overbids of at

least $100,000; (d) approving the Break-Up Fee and Expense Reimbursement; (e)

scheduling a hearing to consider approval of such sale; and (f) approving the

form and manner of notice of the Auction procedures and sale hearing, which

order shall be submitted to the Bankruptcy Court in the form attached as Exhibit

"Bill of Sale" shall mean the Bill of Sale in substantially the form of

Exhibit H.

"BMS" shall mean Bristol-Myers Squibb Company.

"BMS Know-How" shall have the meaning set forth in the Master Vaniqa(R)

License Agreement.

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"BMS Manufacturing Know-How" shall have the meaning set forth in that

certain Supply Agreement dated June 25, 2002, as amended pursuant to the First

Amendment to Supply Agreement dated September 8, 2003, between WFHC and BMS.

"Books and Records" shall mean (a) all books, records and recorded

information, including customer, physician and supplier lists, of Seller or its

Affiliates primarily related to the Business as of the Closing Date and (b)

laboratory books, batch records, stability and clinical studies and regulatory

files, if any, related to the Seller Patents.

"Business Day" shall mean a day other than Saturday, Sunday or any other

day on which banking institutions in New York, New York or San Diego, California

are required or authorized to close by law or executive order.

"CERCLA" shall have the meaning given in the definition of "Hazardous

Substance or Waste."

"C.F.R." shall mean the U.S. Code of Federal Regulations.

"Chapter 11 Case" shall mean the bankruptcy case to be commenced by Seller

under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

"Cleanup" shall mean all actions required to: (A) cleanup, remove, treat

or remediate Hazardous Materials in the indoor or outdoor environment; (B)

prevent the Release of Hazardous Materials so that they do not migrate, endanger

or threaten to endanger public health or welfare of the indoor or outdoor

environment; (C) perform pre-remedial studies and investigations and

post-remedial monitoring and care; or (D) respond to any government requests for

information or documents in any way relating to cleanup, removal, treatment or

remediation or potential cleanup, removal, treatment or remediation of Hazardous

Materials in the indoor or outdoor environment.

"Contract" shall mean any agreement, contract, evidence of indebtedness,

purchase order, lease, security or pledge agreement, or license to which Seller

is a party or is bound and which relates primarily to the Business or Seller's

operations of distributing, marketing and selling the Product, whether oral or

written, but excluding all Employee Plans.

"Copyrights" shall mean the copyrights, copyright registrations and

applications held in Seller's name set forth on Schedule 3.09(a), and any other

copyrights or works of authorship owned by Seller which are used or held for use

primarily in the conduct or operation of the Business.

"Cure Costs" shall mean all costs required to be paid pursuant to Section

365 of the Bankruptcy Code in connection with the assumption and assignment of

the Assumed Contracts.

"DDMAC" shall have the meaning given in the definition of "Regulatory

Documentation."

"Default" shall mean (i) a breach of or default under any Contract, (ii)

the occurrence of an event that with the passage of time or the giving of notice

or both would constitute a breach of or default under any Contract, or (iii) the

occurrence of an event that with or without the passage of time or the giving of

notice or both would give rise to a right of termination, renegotiation or

acceleration under any Contract.

"Employee Plan" shall mean each employee benefit plan as defined in

Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,

maintained, used or held for use in the conduct or operation of the Business

covering any employee of Seller.

"Environmental Claim" shall mean any claim, action, cause of action,

investigation or notice (written or oral) by any Person alleging potential

liability (including, without limitation, potential liability

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for investigatory costs, Cleanup costs, governmental response costs, natural

resources damages, property damages, personal injuries, or penalties) arising

out of, based on or resulting from (A) the presence, or Release into the indoor

or outdoor environment, of any Hazardous Materials at any location, whether or

not owned or operated, used or held for use in the conduct or operation of the

Business, or (B) circumstances forming the basis of any violation, or alleged

violation, of any Environmental Laws.

"Environmental Laws" shall mean all federal, state, local and foreign laws

and regulations relating to pollution or protection of human health or the

environment, including without limitation, laws relating to Releases or

threatened Releases of Hazardous Materials into the indoor or outdoor

environment (including, without limitation, ambient air, surface water, ground

water, land surface or subsurface strata) or otherwise relating to the

manufacture, processing, distribution, use, treatment, storage, Release,

disposal, transport or handling of Hazardous Materials and all laws and

regulations with regard to record keeping, notification, disclosure and

reporting requirements respecting Hazardous Materials, and all laws relating to

endangered or threatened species of fish, wildlife and plants and the management

or use of natural resources.

"Escrow Amount" shall mean an amount equal to $1,000,000.

"Excluded Assets" shall mean all assets, properties and rights of Seller

and any of its Affiliates of whatever kind and nature, real or personal,

tangible or intangible, that are not used or held for use primarily in the

operation or conduct of the Business.

"Expense Reimbursement" shall mean all of the reasonable, documented

out-of-pocket costs and expenses, including reasonable attorneys' fees, and fees

of other professionals, incurred on or after March 1, 2004 by Purchaser for or

in connection with the negotiation, documentation and implementation of this

Agreement and the transactions contemplated hereby and participation in the

Chapter 11 Case, in an amount not to exceed $250,000 in the aggregate.

"FDA" shall mean the United States Food and Drug Administration, or any

successor entity.

"Final Order" shall mean an order issued and entered by the Bankruptcy

Court or by any other court of competent jurisdiction which has not been

reversed, stayed, modified, or amended and as to which (i) the time to appeal or

petition for review, rehearing or certiorari has expired and no appeal or

petition for review, rehearing or certiorari has been timely filed, or (ii) any

appeal or petition for review, rehearing or certiorari has been finally decided

and no further appeal or petition for review, rehearing or certiorari can been

taken or granted.

"Financial Statements" shall mean the audited consolidated balance sheets

of Seller as of December 31, 2003 and 2002 and the related consolidated

statements of operations, stockholders' equity (deficit), and cash flows for

each of the three years in the period ended December 31, 2003 included in

Seller's Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

"GAAP" shall mean United States generally accepted accounting principles

as in effect on the Agreement Date.

"Gillette" shall mean The Gillette Company, a Delaware corporation.

"Gillette Know-How" shall have the meaning set forth in the Master

Vaniqa(R) License Agreement.

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"Gillette Patents" shall mean: (a) U.S. Patents 4,720,489 and 5,648,394;

(b) all divisionals, continuations, continuations-in-part, reissues, extensions,

reexaminations, or renewal applications related to the foregoing; and (c) all

foreign equivalents to any of the foregoing.

"Governmental Entity" shall mean any court of competent jurisdiction,

legislature, governmental agency, administrative agency or commission or other

governmental authority or other instrumentality of the United States or any

other country, or any state, county, city or other political subdivision

thereof.

"Hazardous Materials" shall mean (i) all substances defined as Hazardous

Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous

Substances Pollution Contingency Plan ("NOHSPCP"), 40 C.F.R. Section 300.5; (ii)

all substances which are designated pursuant to Section 311(b)(2)(A) of the

Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. Section 1251 et seq.;

(iii) any element, compound, mixture, solution, or substance which is designated

pursuant to Section 102 of the Comprehensive Environmental Response,

Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq.; (iv)

any hazardous waste having the characteristics which are identified under or

listed pursuant to Section 3001 of the Resource Conservation and Recovery Act

("RCRA"), 42 U.S.C. Section 6901 et seq.; (v) any toxic pollutant listed under

Section 307(a) of the FWPCA; (vi) any hazardous air pollutant which is listed

under Section 112 of the Clean Air Act, 42 U.S.C. Section 7401 et seq.; (vii)

any imminently hazardous chemical substance or mixture with respect to which

action has been taken pursuant to Section 7 of the Toxic Substances Control Act,

15 U.S.C. Section 2601 et seq.; (viii) petroleum, crude oil, or any fraction

thereof; (ix) exposed asbestos and (x) dangerous, toxic, or hazardous substances

or similar terms under any other federal, state, provincial or local

Environmental Law.

"IND" shall have the meaning given in the definition of "Regulatory

Documentation."

"Indication" shall mean the treatment of unwanted facial hair in women.

"Intellectual Property" shall mean, collectively, (a) the Know-How, (b)

the Trademarks, (c) the Copyrights, (d) the Trade Dress, (e) the Internet Names

and (f) the Seller Patents.

"Internet Names" shall mean the web addresses, domain names and phone

numbers held in Seller's name set forth in Schedule 3.09(a), and the

applications and registrations therefor.

"Inventory" shall mean the units of finished Product packaged for

commercial sale as of the Closing Date all of which are located at UPS

Logistics.

"Know-How" shall mean the Manufacturing Know-How and the WFHC Know-How.

"Knowledge" or "Known" shall mean with respect to Seller, the actual

knowledge of each of the individuals set forth on Schedule 1.01(a).

"Liability" shall mean any liability, whether known or unknown, whether

asserted or unasserted, whether absolute or contingent, whether accrued or

unaccrued, whether liquidated or unliquidated, and whether due or to become due.

"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).

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"Manufacturing Know-How" shall mean the percentages and specifications of

ingredients, the manufacturing processes, specifications, technology,

inventions, assays, quality control and testing procedures, know-how and trade

secrets owned by Seller and used to manufacture, formulate, test and package the

Product for sale, marketing and distribution as of the Closing Date. For the

sake of clarity, none of the foregoing information shall be included in Know-How

to the extent that such information is covered by any claim of any Patent.

"Marketing Materials" shall mean all marketing materials, marketing

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) held in Seller's name and

primarily related to the Business or the Acquired Assets as of the Closing Date.

"Master Vaniqa(R) License Agreement" shall mean that certain License

Agreement dated June 25, 2002, among WFHC, Gillette and BMS in effect as of the

Effective Date (as defined therein), a copy of which is attached hereto as

Exhibit I.

"Master Vaniqa(R) Purchase Agreement" shall mean that certain Asset

Purchase Agreement for Vaniqa(R) dated June 25, 2002 among WFHC, Gillette, BMS

and the Partnership, a copy of which is attached hereto as Exhibit J.

"Material Adverse Effect" shall mean, with respect to a Person, a material

adverse effect, whether individually or in the aggregate, (a) on the business,

operations, financial condition, assets or properties, or Liabilities of such

Person or (b) on the ability of such Person to consummate the transactions

contemplated hereby, provided, however, a material adverse effect shall not

include general economic or industry circumstances or events and, with respect

to Seller, shall not include changes or effects resulting directly or indirectly

from the filing by Seller of the Chapter 11 Case.

"Names" shall mean "Women First HealthCare" and variations and derivates

thereof, any other logos, trademarks, trade names or service marks of Seller

other than the Trademarks, and any NDC Numbers of Seller.

"NDA" shall mean any new drug application filed pursuant to the

requirements of the FDA, as more fully defined in 21 C.F.R. Section 314.5 et

seq., and any equivalent application filed with any Governmental Entity.

"NDC Number" shall mean the unique, identifying number assigned to a drug

product, including the labeler code, product code and package code, in

connection with the drug listing requirements of Section 510(j) of the FD&C Act

and applicable FDA rules and regulations.

"NOHSPCP" shall have the meaning given in the definition of "Hazardous

Substance or Waste."

"Order" shall mean any decree, order, injunction, rule, judgment, or

consent of or by any court or Governmental Entity.

"Ordinary Course of Business" shall mean the operation of the Business by

Seller in the usual and ordinary course in a manner substantially similar to the

manner in which Seller operated during the fiscal year ended December 31, 2003.

"Partnership" shall mean Westwood-Squibb Colton Holdings Partnership.

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"Patents" shall mean patents and patent applications, and all additions,

divisions, continuations, continuations-in-part, provisionals, continued

prosecution applications, substitutions, reissues, extensions, registrations and

renewals of any of the foregoing.

"Permits" shall mean all transferable licenses, permits, approvals,

certificates of occupancy, authorizations, operating permits, registrations,

plans and the like relating exclusively to the conduct of the Business for which

consent is obtained.

"Permitted Liens" shall mean each of the following: (i) Liens for Taxes

not yet due and payable as of the Closing Date; (ii) statutory Liens which

secure amounts not due and payable as of the Closing Date that arise, and which

are customarily discharged, in the ordinary course of business; (iii) the Shire

License Agreement; and (iv) easements, right of way and similar imperfections of

title and encumbrances, if any, that individually or in the aggregate, do not

materially impair the Acquired Assets or their use in the Business.

"Person" shall mean any individual, group, corporation, partnership or

other organization or entity, including any Governmental Entity.

"Pipeline Number" shall mean the number of tubes of Product equal to (i)

the estimated number of tubes of Product held by wholesalers, chain warehouses

and pharmacies (calculated for pharmacies as one-half of the April 2004

withdrawal rate per NDC or reasonably equivalent prescription data) as of April

30, 2004 (the "April Estimate") plus (ii) the number of tubes of Product, if

any, shipped by Seller to wholesalers, chain warehouses and pharmacies on or

after May 1, 2004 and before the seventh Business Day prior to the Closing Date

minus (iii) the product of (A) the Withdrawal Rate times (B) the number of days

from and including May 1, 2004 until (but excluding) the seventh Business Day

prior to the Closing Date minus (iv) the Repurchase Tubes (as defined in Section

2.02(b)) minus (v) any tubes of Product returned to Seller by wholesalers, chain

warehouses or pharmacies on or after May 1, 2004 and before the seventh Business

Day prior to the Closing Date and included in the calculation of Liability to

Customers (as defined in Section 2.03(a)(i))). Each of Seller and Purchaser

acknowledges and agrees that it will cooperate with the other in good faith to

establish the April Estimate using data and information available to each of

Seller and Purchaser.

"Product Registrations" shall mean the NDAs (including any marketing

authorization approvals) and comparable regulatory filings in any country and

approvals for the Product held in Seller's name as set forth in Schedule

1.01(b).

"Qualified Bid" shall have the meaning set forth in the Bidding Procedures

Order.

"RCRA" shall have the meaning given in the definition of "Hazardous

Substance or Waste."

"Registered Intellectual Property" shall mean any Intellectual Property

that is the subject of an application, certificate, filing, registration or

other document issued, filed with or recorded by any Governmental Entity, other

public legal authority or internet domain registrars or registries.

"Regulation" shall mean any law, statute, regulation, ruling, rule or

Order of, administered or enforced by or on behalf of, any court or governmental

authority.

"Regulatory Documentation" shall mean (a) all regulatory filings and

supporting documents, chemistry, manufacturing and controls data and

documentation, preclinical and clinical studies and tests, (b) the NDA and all

regulatory files and foreign equivalents related thereto, (c) all records

maintained under record keeping or reporting requirements of the FDA or any

other Governmental Entity including all investigational new drug ("IND")

applications, IND annual and safety reports, drug master files, FDA

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warning letters, FDA Notices of Adverse Finding Letters, FDA audit reports

(including any responses to such reports), any correspondence with the

Department of Drug Marketing, Advertising and Communications (the "DDMAC"),

adverse event files, periodic safety update reports, complaint files, and annual

product quality reviews and (d) the complete complaint, adverse event and

medical inquiry filings with respect to the Product, in each case held by Seller

or its Affiliates related to the Business, including the Product Registrations.

"Related Instruments" shall mean the Confidentiality Agreement, Bill of

Sale, Assumption Agreement, Assignment of Trademarks, Assignment of Copyrights,

Assignment of Seller Patents, Assignment of Internet Names, Seller's Officer's

Certificate, Purchaser's Officer's Certificate and any other agreements entered

into in connection with the transaction contemplated in this Agreement.

"Release" shall mean any release, spill, emission, discharge, leaking,

pumping, injection, deposit, disposal, discharge, dispersal, leaching or

migration into the indoor or outdoor environment (including, without limitation,

ambient air, surface water, groundwater and surface or subsurface strata) or

into or out of any property, including the movement of Hazardous Materials

through or in, the air, soil, surface water, groundwater or property.

"Requirements of Laws" shall mean any applicable foreign, federal, state

and local laws, statutes, regulations, rules, codes, ordinances, enforceable

judgments, injunctions, decrees and orders, permits, approvals, treaties,

enacted, adopted, issued or promulgated by any Governmental Entity or common law

in effect as of the Closing Date.

"Sale Hearing" shall mean the hearing of the Bankruptcy Court to approve

the transactions contemplated by this Agreement.

"Sale Order" shall mean the order of the Bankruptcy Court to be entered

pursuant to, among others, Sections 105, 363 and 365 of the Bankruptcy Code

approving the conveyance of the Acquired Assets on the terms and conditions set

forth in this Agreement to Purchaser, in the form attached as Exhibit K.

"Seller Patents" shall mean (a) U.S. Patent Application Serial Number

60/315,832 and U.S. Patent Application Serial Number 60/312,657, (b) all

divisionals, continuations, continuations-in-part, improvements, reissues,

extensions, reexaminations, or renewal applications related to the foregoing,

and (c) all foreign equivalents to any of the foregoing. All such Patents and

foreign equivalents granted or filed as of the date of this Agreement are set

forth on Schedule 3.09(a).

"Shire" shall mean Shire Pharmaceuticals Ireland Limited.

"Shire License Agreement" shall mean that certain License and Supply

Agreement dated as of December 15, 2003 between WFHC and Shire.

"Taxes" or "Tax" in the singular form, shall mean any and all taxes,

levies or other like assessments, including 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 any Governmental Entity.

"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 Business.

"Third Party" shall mean a Person who or which is neither a party hereto

nor an Affiliate of a party hereto.

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<PAGE>

"Trade Dress" shall mean the trade dress and packaging held and used by

Seller or held for use by Seller in the conduct or operation of the Business as

of the Closing Date.

"Trademarks" shall mean all trade names, logos, common law trademarks and

service marks, trademark and service mark registrations and applications

therefor held in Seller's name which are used or held for use in the Business as

set forth on Schedule 3.09(a), together with the goodwill associated therewith.

"United States" or "U.S." shall mean the fifty (50) states of the United

States of America, the District of Columbia, Puerto Rico and all possessions and

territories of the United States of America.

"U.S.C." shall mean the United States Code.

"WFHC Know-How" shall mean product specifications, processes, product

designs, plans, trade secrets, ideas, concepts, inventions, manufacturing,

engineering and other manuals and drawings, standard operating procedures,

formulae, flow diagrams, chemical, pharmacological, toxicological,

pharmaceutical, physical, analytical, safety, quality assurance, quality control

and clinical data, technical information, research records, and all other

confidential or proprietary technical and business information which is used

primarily in the Business, in each case owned by WFHC or its Affiliates as of

the Closing Date; provided, however, that "WFHC Know-How" shall not include the

Gillette Know-How, BMS Know-How, BMS Manufacturing Know-How or Manufacturing

Know-How. For the sake of clarity, none of the foregoing information shall be

included in know-how to the extent that such information is covered by any claim

of any Patents.

"Withdrawal Rate" shall mean the quotient of (i) number of tubes estimated

or presumed to have been dispensed during April 2004 based on the April 2004

withdrawal rate per NDC or reasonably equivalent prescription data divided by

(ii) thirty (30).

SECTION 1.02. OTHER DEFINED TERMS.

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

below:

<TABLE>

TERM SECTION

---- -------

<S> <C>

Agreement Preamble

Agreement Date Preamble

Assumed Liabilities 2.02

Break-Up Fee 6.09

Business Recitals

Closing 2.04(a)

Closing Date 2.04(a)

Confidentiality Agreement 5.01

Conflict 3.03(a)

Customers 3.14

Deposit 2.03(b)

Disclosure Schedule Preamble to Section 3

Escrow Account 2.03(a)(ii)

Excluded Liabilities 2.02(b)

FD&C Act 3.11

Financing Commitment 4.06

Hearing Date 9.01(k)

Indemnified Party 10.05(a)

Indemnifying Party 10.05(a)

</TABLE>

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<PAGE>

<TABLE>

TERM SECTION

---- -------

<S> <C>

Liability to Customers 2.03(a)(i)

Losses 10.02(a)

Non-Serious Adverse Event 8.09(c)

Proceedings 3.09(c)

Product Recitals

Purchase Price 2.03(a)(i)

Purchaser Preamble

Purchaser Indemnified Parties 10.02(a)

Purchaser's Officer's Certificate 2.04(c)(ii)

Representatives 3.14

Repurchase Liability 2.02(b)

Repurchase Tubes 2.02(b)

Restricted Persons 6.07(b)

Seller Preamble

Seller's Officer's Certificate 2.04(b)

Serious Adverse Event 8.09(c)

Supply Arrangement 9.01(k)

Third Party Claim 10.05(a)

Topping Offer 6.08

Transfer Taxes 5.02(a)

Transition Services 8.07(b)

WFHC Preamble

</TABLE>

SECTION 1.03. INTERPRETATION.

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.

SECTION 1.04 SINGULAR; PLURAL; USE OF WORDS.

The definitions of the terms in this Agreement 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 in this Agreement 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 in this Agreement), (b) any

reference in this Agreement 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 of this Agreement,

and (d) all references in this Agreement to Sections, Exhibits or Schedules

shall be construed to refer to Sections, Exhibits and Schedules of this

Agreement. Any law or statute defined or referred to herein shall mean such law

or statute as from time to time amended, modified or supplemented, including by

succession of comparable successor laws and statutes.

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<PAGE>

SECTION 2.

CONSUMMATION OF TRANSACTION

SECTION 2.01. ACQUIRED ASSETS.

(a) Transfer of Acquired Assets.

(i) On the terms and subject to the conditions of this

Agreement, at the Closing, Seller shall sell, assign,

transfer, convey and deliver to Purchaser, and Purchaser

shall purchase, acquire and accept from Seller, all the

right, title and interest of Seller as of the Closing

Date in, to and under the Acquired Assets, free and

clear of all Liens, other than Permitted Liens, in

accordance with Section 363(f) of the Bankruptcy Code.

(ii) Purchaser acknowledges and agrees that the Acquired

Assets do not include (A) any rights in or to any

Patents other than the Seller Patents, (B) any rights in

or to any other intellectual property other than the

Intellectual Property or (C) any rights in or to any

Excluded Assets.

(iii) Purchaser acknowledges and agrees that the Acquired

Assets shall be subject in all respects to the license

rights previously granted by Seller to Shire under the

Shire License Agreement.

(iv) Notwithstanding anything contained in this Agreement to

the contrary, (A) from and after the Closing, Seller and

its respective Affiliates shall retain all of their

respective rights, title and interest in and to the

Excluded Assets, and (B) Seller may retain an archival

copy of all Books and Records, Marketing Materials,

Regulatory Documentation and other documents or

materials conveyed by Seller hereunder.

(b) No Assignment. Notwithstanding anything to the contrary

contained in this Agreement, except as provided in the Sale Order, if the sale,

assignment, transfer, conveyance or delivery or attempted sale, assignment,

transfer, conveyance or delivery to Purchaser of any asset that would be an

Acquired Asset, other than any Assumed Contract listed on Exhibit E hereto or

any asset or assets that are material to the conduct of the Business on the

whole, is (i) prohibited by any Requirements of Laws or (ii) would require any

authorizations, approvals, consents or waivers from a Third Party or

Governmental Entity and such authorizations, approvals, consents or waivers

shall not have been obtained prior to the Closing or obviated by the Sale Order,

then in either case the Closing shall proceed without the sale, assignment,

transfer, conveyance or delivery of such asset and this Agreement shall not

constitute a sale, assignment, transfer, conveyance or delivery of such asset.

In the event that the Closing proceeds without the sale, assignment, transfer,

conveyance or delivery of any such asset, then following the Closing, the

parties shall use their reasonable commercial efforts, and cooperate with each

other in good faith, to obtain promptly such authorizations, approvals, consents

or waivers; provided, however, that Seller shall not be required to pay any

consideration to obtain any such authorization, approval, consent or waiver.

Pending such authorization, approval, consent or waiver, the parties shall

cooperate with each other in good faith (at their own expense) in any reasonable

and lawful arrangements that will provide to Purchaser the benefits of use of

such asset and to Seller the benefits, including any indemnities, that, in each

case, it would have obtained had the asset been conveyed to Purchaser at the

Closing. To the extent that Purchaser is provided the benefits of an asset

pursuant to this Section 2.01(b), from and after the Closing Date Purchaser

shall perform the obligations of Seller with respect to such asset that arise

after the Closing Date and satisfy any related obligations and Liabilities with

respect to such asset that arise

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<PAGE>

after the Closing Date, that in each case, but for the lack of an authorization,

approval, consent or waiver to assign such obligations or Liabilities to

Purchaser, would be Assumed Liabilities. If authorization, approval, consent or

waiver for the sale, assignment, transfer, conveyance or delivery of any such

asset not sold, assigned, transferred, conveyed or delivered at the Closing is

obtained, Seller shall assign, transfer, convey and deliver such asset to

Purchaser at no additional cost to Purchaser.

SECTION 2.02. ASSUMED LIABILITIES.

(a) Upon the terms and subject to the conditions of this

Agreement, Purchaser shall assume, effective as of the Closing Date, and

Purchaser shall pay, perform and discharge when due, the following Liabilities,

obligations and commitments of Seller and its Affiliates (the "Assumed

Liabilities"):

(i) all Liabilities, obligations and commitments that

Purchaser has expressly assumed or agreed to assume

under this Agreement (including as contemplated by

Section 5.04 hereof);

(ii) all Liabilities arising out of or relating to any

product liability, breach of warranty or similar claim

for injury to Person or property due to the use or

misuse of any Product sold after the Closing Date or the

use or misuse of Acquired Assets after the Closing Date;

(iii) all Liabilities (excluding Cure Costs) arising after the

Closing Date and arising under the Assumed Contracts;

and

(iv) the Liability to Customers and the Repurchase Liability,

each of which shall be deducted from the Purchase Price

pursuant to Section 2.03(a)(i).

(b) Prior to the Closing Date, Seller may make offers to

repurchase tubes of Product from wholesale customers at prices to be specified

by Seller and shall use commercially reasonable efforts to repurchase tubes of

Product with expiration dates prior to June 30, 2005. Seller agrees to keep

Purchaser reasonably informed of its efforts and progress in repurchasing tubes

of Product. The number of tubes of Product, regardless of expiration date, that

such customers agree in writing delivered on or before the seventh Business Day

prior to the Closing Date to return following such date at the prices specified

by Seller in its offers or at other prices mutually agreed to by Seller and such

customers shall be referred to herein as the "Repurchase Tubes." The aggregate

dollar amount required to repurchase the Repurchase Tubes at the prices agreed

upon by Seller and such customers shall be referred to herein as the "Repurchase

Liability." The parties acknowledge and agree that the Repurchase Tubes shall be

destroyed and in no event shall the Repurchase Tubes be re-sold by Seller or

Purchaser.

for the Assumed Liabilities expressly specified in Section 2.02(a), Purchaser

shall not assume, or otherwise be responsible for, any Liabilities of Seller

whether liquidated or unliquidated, or known or unknown, whether arising out of

occurrences prior to, at or after the Closing Date ("Excluded Liabilities"),

which Excluded Liabilities include:

(i) all Liabilities arising out of or relating to any

product liability, breach of warranty or similar claim

for injury to Person or property, whether based on

negligence, breach of warranty, strict liability,

enterprise liability or any other legal or equitable

theory arising from defects in products, due to the use

or misuse of any Product sold on or prior to the Closing

Date

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<PAGE>

or the use or misuse of the Acquired Assets on or prior

to the Closing Date;

(ii) any Liability to or in respect of any employees or

former employees of Seller;

(iii) any Liability of Seller in respect of any Tax (except as

contemplated by Section 5.02 below); and

(iv) Environmental Claims arising from occurrences prior to

the Closing Date.

SECTION 2.03.PURCHASE PRICE.

(a) Purchase Price. As full and fair consideration for the

Acquired Assets, Purchaser agrees to:

(i) deliver or cause to be delivered to Seller at the

Closing by wire transfer in immediately available funds

an amount equal to Twenty-Five Million Dollars

($25,000,000.00) minus (A) the dollar amount of any

obligations of Seller to wholesalers and chain

warehouses for Product returned by such parties to

Seller on or before the seventh Business Day prior to

the Closing Date and not replaced by Seller with

alternative product or a return of purchase price on or

before such date, utilizing payment terms acceptable to

these customers and Seller, provided such payment terms

shall not be below 90% of the original net invoice price

without Purchaser's approval (the "Liability to

Customers"); minus (B) the Repurchase Liability; minus

used by Purchaser (in whole or in part, without recourse

by Seller to any amount not so used) to obtain a Supply

Arrangement (as defined in Section 9.01(k)); minus (D)

the value (based on Seller's January 2004 Wholesale

Acquisition Cost price of $42.32 per tube) of any tubes

of Product shipped by Seller between April 15, 2004 and

the seventh Business Day prior to the Closing Date in

excess of 16,463 tubes of Product (provided that any

tubes of Product sold by Seller directly to physicians

consistent with past practice shall not be counted in

this calculation) (such amount, the "Purchase Price");

minus (E) the Deposit; minus (F) the Escrow Amount.

Seller and Purchaser shall cooperate with each other to

calculate and mutually agree upon the amounts

contemplated by clauses (A), (B) and (D) above at least

five (5) Business Days prior to the Closing Date;

(ii) deliver or cause to be delivered to a separate bank

account of Seller (the "Escrow Account"), by wire

transfer in immediately available funds, the Escrow

Amount, pending determination of certain indemnification

obligations of Seller as set forth in Section 10.02. As

evidenced by the letter agreement, dated April 29, 2004,

between Seller's senior secured lenders and Purchaser,

Seller's senior secured lenders have agreed that

Purchaser's rights to any funds in the Escrow Account

pursuant to the terms of this Agreement are superior to

the rights of such lenders to, or liens held by such

lenders on, any funds in the Escrow Account. The parties

agree that the Escrow Amount shall be disbursed only

with the

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<PAGE>

written consent of Purchaser and Seller, unless the

Bankruptcy Court shall otherwise direct; and

(iii) assume the Assumed Liabilities as of the Closing.

(b) Earnest Money Deposit. Within four (4) Business Days after the

commencement of the Chapter 11 Case by Seller, Purchaser shall deliver to a

joint bank account of Seller and Purchaser, by wire transfer in immediately

available funds, an amount equal to $1,500,000 (the "Deposit"). Interest earned

on the Deposit shall be credited to and become part of the Deposit reflected as

it is credited to such accounts. As evidenced by the letter agreement, dated

April 29, 2004, between Seller's senior secured lenders and Purchaser, Seller's

senior secured lenders have agreed that Purchaser's rights to any funds in the

Earnest Money Deposit account pursuant to the terms of this Agreement are

superior to the rights of such lenders to, or liens held by such lenders on, any

funds in the Earnest Money Deposit account. The Deposit shall be disbursed in

accordance with one of the following provisions, whichever shall apply:

(i) If the Closing occurs, then at Closing the amount of the

Deposit shall be credited toward the Purchase Price and

delivered to Seller;

(ii) If this Agreement is terminated pursuant to Section 9 of

this Agreement (other than a termination with respect to

which the Deposit is payable to Seller pursuant to

clause (iii) below), then within two (2) Business Days

after such termination, the Deposit shall be returned to

Purchaser; or

(iii) If (x) this Agreement is terminated by Seller pursuant

to Section 9.01(c) of this Agreement and (y) as of the

date of such termination Purchaser does not have any

right to terminate this Agreement pursuant to Section 9,

then the Deposit shall be paid to Seller as liquidated

damages and not a penalty and as Seller's sole and

exclusive remedy. The parties recognize that the

determination of damages in the event of a termination

of this Agreement pursuant to Section 9 will be

difficult and that the disbursement of the Deposit

constitutes a reasonable estimate of such actual

damages, and therefore liquidated damages and not a

penalty.

SECTION 2.04. CLOSING; DELIVERIES.

(a) Closing. Provided that the Sale Order shall have been entered

and no stay with respect thereto shall be in effect and the closing of the

transactions contemplated hereby (the "Closing") is permitted under the terms of

the Sale Order, the Closing shall take place at the offices of Latham & Watkins

LLP, 12636 High Bluff Drive, Suite 300, San Diego, California 92130 and on a

date and time (the "Closing Date") to be mutually agreed upon by Purchaser and

Seller.

(b) Closing Deliveries by Seller. At the Closing, Seller shall

deliver or cause to be delivered four (4) originals or facsimiles (with

originals to follow within forty-eight (48) hours after the Closing) of each of

the following, in each case duly executed by Seller, (A) the Bill of Sale, (B)

the Assignment of Copyrights, (C) the Assignment of Trademarks, (D) the

Assignment of Seller Patents, (E) the Assignment of Internet Names, (F) the

Assumption Agreement, (G) a certificate, duly executed by an authorized officer

of Seller, in substantially the form attached hereto as Exhibit L ("Seller's

Officer's Certificate"), (H) a certified copy of the resolutions of the Board of

Directors of Seller approving the transactions contemplated hereby, (I) valid

and binding consents of all Persons whose consent was obtained pursuant to

Section 5.05(a)(i), and (J) such other documents, instruments and certificates

as may be appropriate to effect the transactions contemplated hereby as

Purchaser may reasonably request.

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<PAGE>

shall deliver or cause to be delivered to Seller:

(i) the Purchase Price in immediately available U.S. dollars

by electronic funds transfer in the amounts and to the

accounts of such entities as are designated by Seller to

Purchaser in writing not later than two (2) Business

Days prior to the Closing Date; and

(ii) four (4) originals or facsimiles (with originals to

follow within forty-eight (48) hours after the Closing)

of each of the following, in each case duly executed by

Purchaser, (A) the Assignment of Copyrights, (B) the

Assignment of Trademarks, (C) the Assignment of Seller

Patents, (D) the Assignment of Internet Names, (E) the

Assumption Agreement, (F) a certificate, duly executed

by an authorized officer of Purchaser, in substantially

the form attached hereto as Exhibit M ("Purchaser's

Officer's Certificate"), (G) a certified copy of the

resolutions of the Board of Directors of Purchaser

approving the transactions contemplated hereby and (H)

such other documents, instruments and certificates as

may be appropriate to effect the transactions

contemplated hereby as Seller may reasonably request.

(d) Delivery of Documents. All documents delivered at the Closing

by the parties pursuant to Sections 2.04(b) and 2.04(c)(ii) shall be dated as of

the Closing Date.

(e) Delivery of Certain Acquired Assets. On the Closing Date,

title to the Inventory, the Regulatory Documentation, the Books and Records and

the Marketing Materials shall be transferred to Purchaser. Immediately following

the Closing, Seller will make the Inventory available for pick-up by Purchaser

or its common carrier. In addition, promptly, but in no event later than ten

(10) days following the Closing Date, Seller will deliver to Purchaser that

portion of the Regulatory Documentation comprised of the complete complaint,

adverse event and medical inquiry filings with respect to the Product. Promptly,

but in no event later than thirty (30) days following the Closing Date, Seller

will deliver the Books and Records, the Marketing Materials and the balance of

the Regulatory Documentation to Purchaser. Seller shall bear the risk of loss to

the Inventory, the Regulatory Documentation, the Books and Records and the

Marketing Materials until they have been delivered to Purchaser or its common

carrier; thereafter, Purchaser shall bear all risk of loss associated with such

Acquired Assets and shall be solely responsible for procuring adequate insurance

to protect against such loss. Seller shall continue to maintain adequate

insurance against loss associated with the Acquired Assets until they have been

delivered to Purchaser or its common carrier.

SECTION 2.05. ASSUMPTION OF ASSUMED CONTRACTS.

The Sale Order will provide for the assumption by Seller and the sale and

assignment to Purchaser, effective upon the Closing, of the Assumed Contracts

such that as of the Closing Date, Seller shall assume pursuant to Section 365(a)

of the Bankruptcy Code and sell and assign to Purchaser pursuant to Sections

363(b), (f) and (m) and Section 365(f) of the Bankruptcy Code each of the

Assumed Contracts. The Assumed Contracts are set forth on Exhibit E and

identified by the date of the Assumed Contracts (if available) and the other

party or parties to such Assumed Contract. The Cure Costs have been determined

in good faith by Seller based on Seller's Books and Records and are as set forth

as of the date hereof on Schedule 2.05 of the Disclosure Schedule. Seller shall

be responsible for providing notice to the non-debtor parties to all Assumed

Contracts at least 30 calendar days prior to the Sale Hearing and shall make any

filings and appearances with the Bankruptcy Court as required by the Bankruptcy

Code or this Agreement. The Cure Costs shall be paid by Seller. True and

complete copies of the Assumed

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<PAGE>

Contracts, together with all amendments and supplements thereto and all waivers

of any terms thereof, have been made available to Purchaser prior to the

execution of this Agreement. Except as set forth on Schedule 2.05(a): (1)

subject to payment of any Cure Costs, and except for any default arising as a

result of the commencement of the Chapter 11 Case or as would not, individually

or in the aggregate, reasonably be expected to have a Material Adverse Effect on

Seller, each Assumed Contract is valid, binding and in full force and effect,

and is enforceable by Seller, as applicable, in accordance with its terms; (2)

subject to payment of any Cure Costs, and except for any default arising as a

result of the commencement of the Chapter 11 Case, Seller and, to the Knowledge

of Seller, each counterparty to any Assumed Contract, has performed in all

respects the obligations required to be performed by it to date and is not in

default under each Assumed Contract to which it is a party, except for such

failure or failures to perform which would not, individually or in the

aggregate, reasonably be expected to have a Material Adverse Effect on Seller;

(3) subject to payment of any Cure Costs and, except for any default arising as

a result of the commencement of the Chapter 11 Case, Seller has not received any

notice of default under any Assumed Contract to which it is a party, except as

would not, individually or in the aggregate, reasonably be expected to have a

Material Adverse Effect on Seller. Except as a result of the Chapter 11 Case or

as set forth on Schedule 2.05(a) of the Disclosure Schedule, as of the date

hereof, Seller is not in negotiations to amend, or contemplating the amendment

of, any Assumed Contract. Except as set forth in the Shire License Agreement,

Seller is not a party to or bound by any non-competition agreement that

materially impairs its ability to operate the Business. Purchaser shall use

commercially reasonable efforts to provide, to the extent necessary, evidence of

its ability to provide adequate assurance of future performance of the

obligations under the Assumed Contracts as required by Section 365 of the

Bankruptcy Code.

SECTION 2.06. RISK OF LOSS.

Except as otherwise provided in Section 2.04(e), (a) 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 and (b) at the Closing,

title to the Acquired Assets shall be transferred to Purchaser and Purchaser

shall thereafter bear all risk of loss associated with the Acquired Assets

including, without limitation, any loss from an environmental impact arising

from the Release or consumption of the Product after the Closing, and shall be

solely responsible for procuring adequate insurance to protect the Acquired

Assets against any such loss.

SECTION 2.07. BANKRUPTCY COURT APPROVAL.

Notwithstanding anything contained herein to the contrary, performance by

Seller of its obligations under this Agreement are expressly conditioned upon

entry of the Sale Order, that shall not have been stayed by the Closing, by the

Bankruptcy Court expressly approving such performance.

SECTION 3.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser, as of the date hereof and the

Closing Date (except as otherwise expressly provided herein), subject to such

exceptions as are disclosed in the disclosure schedule supplied by Seller (the

"Disclosure Schedule"), which Disclosure Schedule shall be deemed to be

representations and warranties of Seller as if made herein, as follows:

SECTION 3.01. ORGANIZATION, ETC.

Seller is a corporation duly incorporated, validly existing and in good

standing under the laws of the State of Delaware. Seller is duly authorized to

conduct its business and is in good standing in each jurisdiction where such

qualification is required, except for any jurisdiction where failure to so

qualify

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<PAGE>

would not have a Material Adverse Effect on Seller. Seller has full power and

authority, and holds all permits and authorizations, to carry on its business,

including the Business, and to own and use the assets and properties owned and

used by it, including the Acquired Assets, except where the failure to have such

power and authority or to hold such permits or authorizations would not have a

Material Adverse Effect on Seller.

SECTION 3.02. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.

Subject to entry of the Sale Order, Seller has all requisite power and

authority and has taken all actions necessary to execute and deliver this

Agreement and all Related Instruments to be executed and delivered by Seller, to

consummate the transactions contemplated hereby and thereby and to perform its

obligations hereunder and thereunder, and no other proceedings on the part of

Seller are necessary to authorize this Agreement or any Related Instrument to be

executed and delivered by Seller or to consummate the transactions contemplated

hereby or thereby. Subject to the provisions of the Bankruptcy Code and the

entry and effectiveness of the Sale Order: this Agreement has been duly and

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 will

constitute when executed and delivered by Seller, assuming that such Related

Instrument has been duly authorized, executed and delivered by Purchaser, if and

as applicable, a valid and binding obligation of Seller, enforceable against

Seller in accordance with its terms.

SECTION 3.03. CONSENTS AND APPROVALS; NO VIOLATIONS.

(a) Subject to entry of the Sale Order, the execution and delivery

by Seller of this Agreement and any Related Instruments, and the performance by

Seller of its obligations under this Agreement and any Related Instrument to be

executed and delivered by Seller and the consummation of the transactions

contemplated hereby and thereby will not: (i) conflict with or violate or breach

any of the terms, conditions or provisions of any organizational document of

Seller; (ii) conflict with or result in a violation or breach of, or constitute

a default (or an event which, with notice or lapse of time or both, would

constitute a breach or default) under, or result in the termination of, or

accelerate the performance required by, or cause the acceleration of the

maturity of any debt or obligation pursuant to, any Contract to which Seller is

a party or by which Seller or any of the Acquired Assets is bound, or result in

the creation or imposition of any Lien upon any of the Acquired Assets, other

than Permitted Liens; or (iii) violate or conflict with any Requirements of Laws

applicable to Seller 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 with respect to Seller (any of (i), (ii) and (iii), a

"Conflict").

(b) No permit, consent, approval, or registration, declaration or

filing with, any Person (so as not to trigger any Conflict) is necessary for the

execution and delivery of this Agreement or any Related Instrument by Seller or

the consummation by Seller of the transactions contemplated by this Agreement or

any Related Instrument to

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