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Asset Purchase Agreement - F. Hoffman-La Roche LTd. and ICN Pharmaceuticals Inc.

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                            ASSET PURCHASE AGREEMENT


THIS ASSET PURCHASE  AGREEMENT (this "Agreement") is made and entered into as of
2 October 1998 by and between  F.Hoffmann-La Roche Ltd,  Grenzacherstrasse  124,
CH-4070 Basel,  Switzerland ("Seller") on the one hand and ICN Puerto Rico, Inc.
with  registered  offices at Bo.  Mariana Road 909 KM 1.1  Humacao,  Puerto Rico
00791-9731 ("Buyer"),  a wholly-owned  subsidiary of ICN Pharmaceuticals,  Inc.,
ICN Plaza,  3300  Hyland  Avenue,  Costa Mesa,  CA 92626  ("ICN") and ICN acting
either as a direct party to this Agreement with respect to certain matters or as
a guarantor of performance by Buyer hereunder on the other hand.

WHEREAS Seller and Buyer are both engaged in the pharmaceutical business;

WHEREAS Seller wishes to sell and Buyer wishes to buy the Assets (as hereinafter
defined) related to certain pharmaceutical products of Seller;

WHEREAS in connection  with the  contemplated  purchase of the Assets Seller and
ICN wish for ICN to  engage  also as a party to this  Agreement  with  regard to
specific matters and to guarantee due performance by Buyer under this Agreement;

NOW THEREFORE,  in consideration of the representations,  warranties,  covenants
and agreements set forth herein, the parties hereto agree as follows:


1.        DEFINITIONS

1.1       "Active  Ingredients" mean the  pharmaceutical  compounds known by the
          chemical names set forth in Schedule 1.1 hereto.

1.2       "Affiliate" of a party means any  corporation or other business entity
          controlled by,  controlling or under common control with,  such party.
          For this purpose  "control"  shall mean direct or indirect  beneficial
          ownership  of more than  fifty  percent  (50%) of the voting or income
          interest  in such  corporation  or other  business  entity;  provided,
          however,  Genentech, Inc., with offices located at 460 Point San Bruno
          Boulevard,  South  San  Francisco,  California,  94080,  shall  not be
          considered an Affiliate of Seller.

1.3       "Assets" has the meaning ascribed to such term in Article 2.

1.4       "Business" means the business as currently conducted by Seller and its
          Affiliates with respect to manufacture and sale of the Products in the
          Territory.

1.5       "cGMP's"  shall mean the  then-current  Good  Manufacturing  Practices
          applicable to the manufacture of pharmaceutical products for human use
          in the  Territory in  accordance  with  regulations  of the  competent
          authority in the Territory.

1.6       "Closing" has the meaning ascribed to such term in Article 10.1.


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1.7       "Closing Date" has the meaning ascribed to such term in Article 10.1.

1.8       "Damages" has the meaning ascribed to such term in Article 12.2.1.

1.9       "Disclosure Schedule" means the disclosure schedule delivered prior to
          the  Effective  Date to  Buyer  by  Seller  in  connection  with  this
          Agreement.  The sections of the Disclosure  Schedule correspond to the
          sections of this Agreement,  but information  disclosed in any section
          of the  Disclosure  Schedule shall be deemed to be disclosed as to all
          relevant sections thereof,  except as otherwise  specifically provided
          herein.

1.10      "Distribution  Agreements" means the agreements referred to in Article
          8.10.

1.11      "DOJ" means the United States Department of Justice.

1.12      "Effective Date" means 1 October 1998.

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

1.14      "FTC" means the United States Federal Trade Commission.

1.15      "HSR Act" means the  Hart-Scott-Rodino  Antitrust  Improvements Act of
          1976, as amended, and the rules and regulations thereunder.

1.16      "Indemnifiable  Claims"  has the  meaning  ascribed  to  such  term in
          Article 12.2.1 and 12.3.

1.17      "Indemnified  Party" has the meaning  ascribed to such term in Article
          12.4.

1.18      "Indemnifying  Party" has the meaning ascribed to such term in Article
          12.4.

1.19      "Inventory" has the meaning ascribed to such term in Article 2.6.

1.20      "Know-How" has the meaning ascribed to such term in Article 2.3.

1.21      "Litigation" has the meaning as ascribed to such term in Art. 4.13.

1.22      "Marketing and Promotional Documents" has the meaning ascribed to such
          term in Article 2.5.

1.23      "Material  Adverse Effect" means an event that has a material  adverse
          effect on the Assets, taken as a whole.

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1.24      "Patents"  means  any  patent or  patent  application  and any and all
          divisions,  continuations,   continuations-in-part,   re-examinations,
          reissues,  extensions,  pending  or granted  supplementary  protection
          certificates,     substitutions,     confirmations,     registrations,
          revalidations, revisions, additions and the like, of or to said patent
          and patent application.

1.25      "Products"  means each packaging size of each finished  pharmaceutical
          dosage form  identified by the Trademarks as defined in Art. 2.1 below
          and marketed or formerly marketed by Seller or its Affiliates or third
          party  distributors of Seller or Seller's  Affiliates in the Territory
          as defined in Art. 1.33 hereinbelow.

1.26      "Purchase Price" means such term as used in Article 3.

1.27      "Registrations" has the meaning ascribed to such term in Article 2.2.

1.28      "Roche  Labeling"  means the printed  labels,  labeling and  packaging
          materials,  including  printed  carton,  container  label and  package
          inserts,  as  currently  used by Seller  and its  Affiliates  for each
          Product.

1.29      "Roche Net Sales"  means  gross  sales  after  deduction  of  returns,
          distributor  discounts,  sales rebates  (price  reduction)  and volume
          (quantity)  discount as well as sales taxes (e.g.  value added  taxes)
          and other taxes directly linked to the sales (e.g. excise taxes).

1.30      "Roche Process" means,  for each Product,  the  manufacturing  process
          approved in the Registrations for each such Product.

1.31      "Roche Sales  Statements" means the monthly Roche Net Sales by Product
          in the  Territory  for the  twelve  month  period  ended 31 July 1998,
          attached as Schedule 1.31.

1.32      "Toll  Manufacturing  Agreements"  means the agreement  referred to in
          Article 8.9.

1.33      "Territory"  means worldwide  except India.  Buyer  acknowledges  that
          Assets may not exist and Products may not be marketed in all countries
          of the Territory.

1.34      "Trademarks" has the meaning ascribed to such term in Article 2.1.

1.35      "World-wide  Safety Reports" has the meaning  ascribed to such term in
          Article 2.4.


2         ASSETS BEING SOLD

          Subject to the terms and  conditions  of this  Agreement,  at Closing,
          Seller shall sell,  transfer,  assign,  convey and deliver or cause an
          Affiliate of Seller to sell, transfer,  assign,  convey and deliver to
          Buyer,  forever,  all of the rights,  title, and interest of Seller or
          Seller's   Affiliates  in  the  assets  solely  and  exclusively  used
          for/dedicated  to  the  Products  in the  Territory  as  listed  below
          (collectively, the "Assets") and Buyer shall assume all rights, title,
          and interest of Seller in the Assets and all obligations and


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          responsibilities  associated therewith;  provided that Buyer shall not
          assume any liabilities  relating to the Assets or the Business arising
          prior to Closing or from events preceding Closing.

2.1       Trademarks:   Trademarks   mean   the   trademarks,   service   marks,
          registrations  and  applications  for the  Territory  and all goodwill
          related  thereto,  which are set forth on Schedule 2.1  including  for
          each  Trademark  the  registration  or  application   number,   owner,
          registration  and  expiration  dates,  marks and class.  The trademark
          files contain, to the extent available, the pertaining documents, such
          as the usual consent  letters,  coexistence and prior right agreements
          which are not included in Schedule  2.1 or Schedule 2.1 (a).  Schedule
          2.1 may contain trademark registrations and applications which may not
          be  supported  by use and  therefore  may  unavoidably  expire  due to
          non-use.  Trademarks also includes any copyrights and any unregistered
          trade dress that are owned by Seller which are associated  solely with
          the  Products  and (only as to trade  dress)  currently  used on or in
          association  with such Products in the Territory.  "Trademarks"  shall
          not include  copyrights and trade dress associated with the divisions,
          companies  or  corporate   entities  of  Seller,   its  Affiliates  or
          distributors.  "Trademarks" also does not include copyrights and trade
          dress  associated  with the Products and also associated with products
          not being transferred by Seller.  Trademarks does not include the word
          "Roche",  the Roche logo,  the housemark  Roche or the hexagon used by
          Roche. Trademarks does also not include the trademarks associated with
          the hexagon or with  trademarks  used by Seller or its  Affiliates for
          other products which are not subject matter of this  Agreement.  Buyer
          is aware that Trademarks does  additionally  not include the following
          trademarks: (a) trademarks which are subject matter of agreements with
          third  parties  which are listed in Schedule  2.1(a);  (b)  trademarks
          combined with "Roche" which are listed in Schedule 2.1(b); and (c) the
          associated trademarks which are listed in Schedule 2.1(c). Details and
          consequences of the trademarks  listed in Schedule 2.1(a),  2.1(b) and
          2.1(c) are regulated in Art. 4.16 and 8.3 below.

2.2       Registrations:  All  marketing  approvals,  registrations,  regulatory
          files  and  approvals,   governmental  authorizations,   licenses  and
          permits,  and  applications  therefor,  required for the marketing and
          sale of the Products in the Territory  that are owned by Seller or its
          Affiliates   (the   "Registrations"),   as  well  as  the   pertaining
          registration dossiers. The Registrations include,  without limitation,
          registrations   covering  all  sales  reflected  in  the  Roche  Sales
          Statements  set forth in Schedule  1.31, as well as the  registrations
          listed in Schedule 2.2, for which there are no current sales.

2.3       Manufacturing Technology and Know-How: The ownership and/or beneficial
          interest of Seller in the Roche manufacturing  technology and know-how
          that  is   solely   and   exclusively   used  in  the   pharmaceutical
          manufacturing  of any Product  for the  Territory,  including  but not
          limited to specifications  and test methods  (Products,  raw material,
          packaging,    stability   and   other   applicable    specifications),
          pharmaceutical   manufacturing  and  packaging  instructions,   master
          formula, validation reports (process, analytical methods and cleaning)
          to the extent available,  stability data, analytical methods,  records
          of complaints, annual product reviews to the extent available, and

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          other master documents necessary to manufacture,  control, and release
          of the Products by Seller (the  "Know-How")  including  all  documents
          associated  therewith;  and  a  non-exclusive,   perpetual,   paid-up,
          irrevocable,  royalty-free license, with right to sub-license,  to use
          any  manufacturing  technology and know-how that are necessary or used
          in  pharmaceutical  manufacturing  of any Product (but not exclusively
          used thereto) with such license or sub-license being restricted to use
          for the Products in the Territory and Seller  retains the right to use
          or to license such manufacturing  technology and know-how for use with
          any products in the Territory except for Competing Products as defined
          in Art. 6.5. Seller shall, to the extent available,  provide a list of
          all suppliers of components and raw materials, and copies of GMP audit
          reports of all suppliers, whether third parties or Affiliates.

2.4       World-wide  Safety  Reports:  A copy of the world-wide  safety reports
          with respect to the Products (the "World-wide Safety Reports"). Seller
          shall  make  available  to  Buyer  for  transfer  a  print-out  and an
          electronic  copy of the World-wide  Safety Reports with respect to the
          Products  but Buyer  shall have all  responsibility  and shall pay all
          costs   associated   with  converting  such  electronic  copy  of  the
          World-wide  Safety Reports into the format from which Buyer can access
          that information.

2.5       Marketing and  Promotional  Documents:  The marketing and  promotional
          documents,  such  as  clients  lists,  promotional  plans  and  items,
          promotional  materials  and  training  manuals,  that are  solely  and
          exclusively  used with the  Products,  to the extent  available in the
          Territory  (the  "Marketing  and  Promotional  Documents").  All  such
          documents  shall  be  shipped  Ex  Works   (Incoterms  1990)  Seller's
          location.

2.6       Inventory:  Buyer shall in addition,  pursuant to the Supply Agreement
          attached  as  Schedule  2.6,  purchase  Seller's  and its  Affiliates'
          Inventory of all finished Products (including samples), that are owned
          by Seller or an  Affiliate  of Seller and that have been  approved  by
          Seller  as  meeting  specifications  and  otherwise  saleable  in  the
          ordinary and normal course of business as of the  Effective  Date (the
          "Inventory").;  the  quantity  which  shall be set forth in a document
          delivered by Seller at Closing,  and based on a physical  inventory to
          be taken on 30 September 1998. The Inventory shall be shipped EX WORKS
          (Incoterms  1990) Seller's  location at dates mutually  agreed upon by
          Seller  and  Buyer  consistent  with  the  transfer  of the  marketing
          responsibilities from either party to the other.

2.7       Assumed Agreements: Subject to Art. 6.2 and 7.1 Seller agrees or shall
          cause an  Affiliate  to agree that the  agreements  with  unaffiliated
          third  parties  relating to the  Products  listed in Schedule 2.7 (the
          "Assumed  Agreements")  shall be  assigned  to Buyer and  Buyer  shall
          assume  the  Assumed  Agreements  on  the  same  terms  now  existing,
          provided,  however,  that if such Assumed  Agreements cover also other
          products than the Products, they shall only be assigned and assumed to
          the extent they relate to the Products. Some of the Assumed Agreements
          are  licence  manufacturing  agreements  under  which the third  party
          formulates the Products ex active  substances  delivered by the Seller
          or its Affiliates and distributes them locally for its own account.
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3         PURCHASE PRICE

3.1       Purchase  Price:   The  purchase  price  for  the  sale,   conveyance,
          assignment, transfer and delivery of the Assets (except the Inventory)
          provided  for in  Article  2 hereof  shall be US$  178,800,000.--  (US
          Dollars one hundred seventy eight million eight  hundred-thousand (the
          "Purchase Price").

          The Purchase Price shall be allocated  among the  Affiliates/countries
          in accordance with Schedule 3.1.

3.2       Payment of Purchase Price

3.2.1     Note. At the Closing, Buyer shall deliver the Purchase Price to Seller
          in the  form of (a) a cash  payment  in the  principal  amount  of US$
          89,400,000.--  and (b) a  promissory  note from  Buyer,  as maker,  to
          Seller,  as payee, in the principal  amount of US$  89,400,000.-- in a
          form a set forth under Schedule 3.2.1(the  "Note").  Concurrently with
          the  delivery  of the Note,  Seller  shall  assign  the Note to ICN in
          exchange  for  2,883,871  shares of the common  stock,  $.01 par value
          ("Common  Stock") of ICN.  For  purposes  hereof,  the term  "Original
          Common  Stock"  shall  mean such  2,883,871  shares  of  Common  Stock
          received  hereunder.  The shares of  Original  Common  Stock  shall be
          registered  in the name of  Seller  (or an  Affiliate  of  Seller,  as
          designated  by  Seller).  In the  event  such  shares  are  held by an
          Affiliate  of Seller,  such  Affiliate  shall be deemed  "Seller"  for
          purposes  of  this  Section  3.2  and  Seller  hereby  guaranties  all
          obligations of such Affiliate under this Section 3.2.

3.2.2     Price Guaranty.  ICN guarantees that Seller will get the full Purchase
          Price by December 31, 2000, or earlier if there is a change of control
          over ICN,  and  hence,  since  part of the  Purchase  Price is paid by
          shares of ICN which, at the time of signature are traded approximately
          at 50% of the Guaranteed  Price (as defined  hereinafter)  which trade
          price may or may not move up to the  Guaranteed  Price until  December
          31. 2000 (or the date of a change of  control),  the parties  agree on
          the following price guaranty wording:

          On  December  31,  1999,  on December  31,  2000 and on a  Restriction
          Termination  Date (as defined  under section 3.2.4 below and occurring
          before December 31, 2000) (each a "Guaranty Date"),  ICN guaranties to
          Seller that the then  current  market  price per share of ICN's Common
          Stock,  based on the average  closing sale price on the New York Stock
          Exchange  for the 10 trading  days prior to each such  Guaranty  Dates
          (plus  dividends paid to Seller since the Closing on such shares) (the
          "Current   Market   Price")  shall  equal  or  exceed  the  applicable
          Guaranteed Price (as defined below) for such Guaranty Date.

          For purposes hereof, "Guaranteed Price" shall be US$ 31 (thirty one US
          Dollars) plus 6% p.a. from Effective Date).
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          In the event that the Current Market Price is less than the Guaranteed
          Price on a  Guaranty  Date,  ICN shall pay to Seller not later than 30
          days  following  such Guaranty Date ((i)on  December 31, 2000 and on a
          Restriction  Termination Date (at a Restriction  Termination Date only
          at the option of Seller  upon  Seller's  request  which  shall be made
          within 10 business days upon written information by ICN to Seller that
          a Restriction Termination Date has occurred) in cash of US Dollars and
          (ii) on December 31, 1999 in the form of  additional  shares of Common
          Stock or of non-voting preferred shares (if Seller's holding in Common
          Stock  would  increase  over five  percent)  at the  option of Seller,
          valued at the then  Current  Market  Price as of the date of  payment,
          which  additional  shares of Common  Stock shall be referred to as the
          "Additional  Shares", or in cash as the parties shall agree;  however,
          in the event that ICN until and including December 31, 1999 shall have
          disposed (or committed to dispose) of a material portion of its assets
          the payment shall be in cash) the amount by which (A) the product (the
          "Guaranteed  Value") of the  Guaranteed  Price for such  Guaranty Date
          times the number of shares of  Original  Common  Stock,  owned on such
          date by  Seller  ("Seller's  Common  Stock")  exceed  (B) the sum (the
          "Actual  Value") of (i) the product of the then  Current  Market Price
          times the  aggregate of the number of shares of Seller's  Common Stock
          and number of  Additional  Shares,  if any, and (ii) the amount of any
          dividends  paid to Seller since the Closing on any  Additional  Shares
          theretofore  received by Seller (whether or not such Additional Shares
          are then owned by Seller) (the "Dividend  Payment") and (iii) any cash
          payment made on December 31, 1999,  plus  interest of 6 % p.a. on such
          cash payment.

          In the event that, on December 31, 2000,  the Actual Value exceeds the
          Guaranteed Value, Seller shall, within 30 days after such date, return
          to ICN (i) that amount of cash received on December 31, 1999,  (only),
          plus interest of 6 % p.a. on such cash payment, or (ii) that number of
          Additional  Shares  (only)  received  hereunder , and valued as of the
          date of such  return,  in the same manner as stated  above,  in either
          case  equal to the  amount  by which  the  Actual  Value  exceeds  the
          Guaranteed Value.

3.2.3     Capital  Gains.  In the event that Seller shall,  at any time prior to
          December 31, 2000, sell to any third party, excluding any Affiliate of
          Seller,  ICN or any  Affiliate of ICN,  any shares of Original  Common
          Stock  received  hereunder for a net sale price per share in excess of
          the  Guaranteed  Price,  fifty percent of such excess shall be paid to
          ICN] in the form of the  return  of shares of  Original  Common  Stock
          received hereunder,  valued,  based on the Current Market Price, as of
          the date of  payment or in cash at  Seller's  option 10 days after the
          month in which the sale occurred.  The remaining fifty percent of such
          excess shall be kept by Seller as  participation in such capital gain.
          On December 31, 2000,  any Original  Common Stock  received  hereunder
          which remains  unsold shall be deemed sold at the Current Market Price
          on that date and the capital  gain, if any,  divided  according to the
          formula  above.  After  December 31,  2000,  Seller is entitled to all
          additional capital gains.

3.2.4     Restrictions  on  Transfer.  Except as  provided  for in this  Section
          3.2.4, prior to December 31, 2000, Seller shall not, without ICN's

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          prior written consent, sell any of the shares of Common Stock received
          hereunder  unless the net price to be received by Seller  would exceed
          the Guaranteed Price.  Seller undertakes that such a sale will be made
          in a way which does not hurt the  market;.  Any shares of Common Stock
          may be sold by Seller to an Affiliate  of Seller,  at any time without
          restriction,  provided that such Affiliate  shall agree to be bound by
          the terms of this Agreement  relating to any such shares  purchased by
          it.

          The foregoing  restrictions  shall  terminate in the event (the day of
          any such event, the "Restriction Termination Date") that (i) ICN shall
          enter into an agreement (x) to merge or  consolidate  with or into any
          other corporation or entity or other person (whether or not ICN is the
          surviving  corporation),  or (y) to transfer all or a substantial part
          of ICN's assets to any other unaffiliated  corporation or other entity
          or person, or (ii) there occurs any other corporate  reorganization or
          transaction  or series of related  transactions,  following  which the
          present  shareholders  of ICN  would  be  expected  to own less in the
          aggregate  than 50 % of the  voting  power or equity  of the  ultimate
          parent  corporation  or other entity  surviving or resulting from such
          merger,  consolidation,  reorganization or other transaction, or (iii)
          any person  shall have  commenced a tender or  exchange  offer for any
          shares of ICN Common Stock.

3.2.5     Voting  Rights.  Seller  shall take such  action as may be required so
          that all shares of Common Stock received hereunder and owned by Seller
          are voted in  accordance  with the  recommendations  of ICN's Board of
          Directors.

3.2.6     Anti-Dilution  Adjustments to Guaranteed  Price. In the event that ICN
          issues additional shares of Common Stock pursuant to a stock dividend,
          stock  distribution  or subdivision,  the then  applicable  Guaranteed
          Price  shall,  concurrently  with  the  effectiveness  of  such  stock
          dividend,  stock  distribution  or  subdivision,   be  proportionately
          reduced,  and in the event the  outstanding  shares of Common Stock of
          ICN  shall  be  combined  or  consolidated,   by  reclassification  or
          otherwise,  into a lesser  number  of  shares  of  Common  Stock,  the
          Guaranteed Price shall,  concurrently  with the  effectiveness of such
          combination or consolidation, be proportionately increased.

3.2.7     Investment  Representations  of  Seller.  The  Seller  represents  and
          warrants to ICN as follows:

          (a)       Experience.   It   is   knowledgeable,   sophisticated   and
                    experienced in making investments,  and is qualified to make
                    decisions with respect to investment in the Common Stock.

          (b)       Investment.  It is acquiring the Common Stock for investment
                    for its own account and not with a view to, or for resale in
                    connection  with, any distribution  thereof.  It understands
                    that the shares of Common Stock (the "Shares") have not been
                    registered under the Securities Act of 1933, as amended (the
                    "Securities  Act") by reason of a specified  exemption  from
                    the registration provisions of the Securities Act which

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                    depends upon,  among other  things,  the bona fide nature of
                    its investment intent as expressed herein.

          (c)       Rule  144.  It  acknowledges  that the  Shares  must be held
                    indefinitely  unless they are subsequently  registered under
                    the Securities Act or an exemption from such registration is
                    available. It has been advised or is aware of the provisions
                    of Rule 144 promulgated under the Securities Act.

          (d)       Access  to  Data.  It has  had  an  opportunity  to  discuss
                    business,   management   and  financial   affairs  with  its
                    management  and  has  had  the  opportunity  to  view  ICN's
                    facilities.

          (e)       Financial Condition. Its financial condition is such that it
                    is able to bear  all  risks of  holding  the  Shares  for an
                    indefinite period of time.

          (f)       Authorization.  It is duly  authorized  to enter  into  this
                    Agreement and to consummate  the  transactions  contemplated
                    hereby.

3.2.8     Registration Rights Agreement.  ICN shall agree to register the Shares
          under the Securities Act pursuant to a Registration  Rights  Agreement
          in the form attached hereto as Schedule  3.2.9,  which Agreement shall
          be executed and delivered at the Closing.

3.3       Termination of Certain  Provisions.  Notwithstanding  any provision of
          this Agreement to the contrary,  the rights and  obligations of Seller
          and ICN with respect to shares of Common Stock received hereunder (and
          any shares issued in dividends or distributions thereon) and set forth
          in Section 3.2.4 and 3.2.5. shall terminate,  with respect to any such
          shares of Common  Stock,  upon the sale of such  shares by Seller to a
          third party.

3.4       Payment for Inventory:  In addition to the Purchase Price according to
          Article 3.1 above, Buyer shall pay to Seller or an Affiliate of Seller
          in US  Dollars,  where  this is the  national  currency,  or in  Swiss
          Francs,  in all  other  countries,  for the  Inventory,  based  on the
          quantity  document  delivered by Seller at Closing,  price per unit as
          set forth in Schedule  2.6.  Buyer shall  effect such  payment so that
          Seller  shall  receive it on its  designated  bank  account  within 90
          (ninety)  days  from the  Effective  Date  (but in no  event  prior to
          Closing) subject to confirmation  that  inventories  (other than those
          for the  Products  Dalmane/Dalmadorm  and Librax for the  U.S.-market)
          will not exceed 120 days supply in average

3.5       Purchase Price Adjustment: In the event a regulatory authority finally
          refuses,  through no fault of Buyer, to assign a Registration  (i.e. a
          Registration  needed by Buyer to sell the  Products  in the  market as
          currently done by Seller and its  Affiliates;  not a registration of a
          change  of   manufacturer,   process,   analysis,   specification   or
          manufacturing  site  etc.) to  Buyer  within  2 (two)  years  from the
          Closing  Date,  the  Purchase  Price shall be adjusted  downward by an
          amount  based  on  the  sales   associated   with  such   non-assigned
          Registration as reflected in the Roche Sales Statements. Such purchase
          price adjustment shall be paid by Seller to Buyer by returning an

<PAGE>
10


          appropriate  amount of shares of Original Common Stock,  valued at the
          Guaranteed   Price  as  of  the  Guaranty  Date  next  preceding  such
          adjustment plus pro rata 6% p.a or in cash at the option of Seller.


4         REPRESENTATIONS AND WARRANTIES OF SELLER

4.1       Organization: Seller is a corporation duly organized, validly existing
          and  in  good  standing  under  the  laws  of  its   jurisdiction   of
          organization,  with full  corporate  power and authority to consummate
          the transactions contemplated hereby.

4.2       Authority;  The execution and delivery of this Agreement by Seller and
          the  consummation  and  performance of the  transactions  contemplated
          hereby,  have  been  duly  and  validly  authorized  by all  necessary
          corporate  and other  proceedings,  and this  Agreement  has been duly
          authorized,  executed,  and  delivered  by Seller  and,  assuming  the
          enforceability against Buyer, constitutes the legal, valid and binding
          obligation of Seller, enforceable in accordance with its terms.

4.3       Title to  Assets;  Except as set forth in  Schedule  4.3  Seller or an
          Affiliate  of Seller has good and  marketable  title to all the Assets
          and will convey good and marketable  title at Closing,  free and clear
          of any and all liens,  encumbrances,  charges,  claims,  restrictions,
          pledges,  security  interests,  or impositions of any kind  (including
          those of  secured  parties).  None of the  Assets is  leased,  rented,
          licensed, or otherwise not owned by Seller or an Affiliate.

4.4       No Violation or Conflict: The execution and delivery of this Agreement
          by Seller and the performance of this Agreement (and the  transactions
          contemplated  herein) by Seller (a) do not and will not conflict with,
          violate or constitute or result in a default under any law,  judgment,
          order,  decree,  the articles of  incorporation or bylaws of Seller or
          any  contract  or  agreement  to which  Seller  is a party or by which
          Seller is bound or (b) will not result in the  creation or  imposition
          of any lien,  charge,  mortgage,  claim,  pledge,  security  interest,
          restriction  or  encumbrance of any kind on, or liability with respect
          to,  the  Assets  except as  otherwise  provided  herein or  otherwise
          disclosed on the Disclosure Schedule.

4.5       Patents:  Seller does not own any Patents  with  respect to the Active
          Ingredients or the Products or the manufacturing of Active Ingredients
          or the Products in the Territory.

4.6       Registrations:  As per Seller's  central  registration  data bank, the
          registrations   covering  the  sales  reflected  in  the  Roche  Sales
          Statements,  together with the  registrations  listed on Schedule 2.2,
          constitute all  Registrations  held by Seller or its Affiliates in the
          Territory. In the event additional registrations are discovered at any
          time, they will be transferred forthwith to Buyer at Seller's expense.
          Except as set forth on Schedule 4.6 of the  DISCLOSURE  SCHEDULE,  the
          Registrations (a) are in the name of Seller or an Affiliate of Seller,
          (b) constitute all licenses, permits, approvals,  qualifications,  and
          governmental  specifications,  authorizations  or  requirements  which
          Seller or its  Affiliates  have in  connection  with the marketing and
          sale of the Products in the  Territory,  and (c) to the best knowledge
          of Seller after due inquiry made, constitute all such licenses,

<PAGE>
11


          permits, approvals,  qualifications,  and governmental specifications,
          authorizations,  and requirements necessary for the marketing and sale
          of the Products in the Territory as currently  conducted by Seller and
          its Affiliates. All Registrations are in full force and effect. Seller
          has complied with all its obligations  under these  Registrations  and
          all  applicable  laws  and  regulations.  To  Seller's  knowledge,  no
          Registration  is likely to be  suspended,  cancelled  or revoked or is
          likely not to qualify for  assignment  to Buyer  provided  Buyer makes
          best efforts to obtain the authorities' consent to such an assignment.
          It  is,   however,   understood  that  Seller  does  not  warrant  the
          possibility of continuation  of any  Registration in the name of Buyer
          in the event Buyer decides to have Products  manufactured by an entity
          other than the company which is actually manufacturing that Product as
          of the  Closing  Date,  and,  finally,  Seller  does not  warrant  any
          continuation  of  price  reimbursement  for  the  Products  by  social
          security  institutions  following the transfer of the Registrations to
          Buyer.  Roche  shall  bear  50 % of a  total  amount  of up to USD one
          million  of  registration  fees due by Buyer  for the  assignment  and
          re-registration of the  Registrations,  any exceeding fees being borne
          entirely by Buyer.

4.7       Inventory:  As of the  Effective  Date,  each Product in the Inventory
          shall  meet  the   specifications   therefor   as  set  forth  in  the
          manufacturing  documentation  and  Registrations for such Product with
          the competent authority in the country concerned of the Territory. The
          Inventory will be in good condition, properly stored and in compliance
          with  applicable  laws,  usable and saleable in the ordinary course of
          business. The Inventory shall in each case be sufficient to maintain a
          running  business for 90 days.  Seller  represents  and warrants  that
          since  January 1, 1998 it has not made or  instituted  any  unusual or
          novel method of sale in the conduct of the Business  inconsistent with
          past practices.

4.8       Taxes:  As of the date  hereof,  there are no liens for taxes upon the
          Assets except for liens for current taxes not yet due and payable.

4.9       Absence  of  Certain  Changes:  As of the  date  hereof  and as of the
          Closing  Date and  except as  otherwise  disclosed  on the  Disclosure
          Schedule, there has not been any material adverse change in the Assets
          and Seller is not aware of any facts,  circumstances,  or  proposed or
          contemplated  events that would have a Material  Adverse  Effect after
          Closing.

4.10      Violations of Law:  Except as set forth in Schedule  4.10, to the best
          of Seller's  knowledge  after due inquiry  made,  the operation of the
          Assets  by  Seller  (i) does not  violate  or  conflict  with any law,
          governmental  specification,  authorization,  or  requirement,  or any
          decree,  judgment,  order,  or  similar  restriction  in any  material
          respect,  or (ii) has not  been  the  subjectof  an  investigation  or
          inquiry by any governmental agency or authority  regarding  violations
          or alleged violations,  or found by any such agency or authority to be
          in  violation,  of any law,  other than  investigations,  inquiries or
          findings  that have not had, or are  reasonably  likely not to have, a
          Material Adverse Effect.
<PAGE>
12


4.11      Financial Information:

4.11.1    Roche Sales  Statements.  The Roche Sales  Statements are accurate and
          complete  in all  material  respects,  reflect  only  actual bona fide
          transactions,  are consistent with the accounting records of the Roche
          legal  entities,  and were prepared in accordance  with  International
          Accounting Standards ("IAS") consistently applied.

4.11.2    Liabilities.   Seller  and  its   Affiliates   have  no   liabilities,
          contingent, absolute, accrued or otherwise, relating to the Assets.

4.12      No  Government  Restrictions:  The Seller  believes  that no  consent,
          approval,  order or authorization of, or registration,  declaration or
          filing  with,  any  governmental  agency is required to be obtained or
          made by or with respect to Seller in connection with the execution and
          delivery of this Agreement by Seller or the  consummation by it of the
          transactions  contemplated  hereby to be consummated by it except with
          respect to the filing of a  pre-merger  notification  report under the
          HSR Act.

4.13      Litigation:  Except as set forth on  Schedule  4.13 of the  Disclosure
          Schedule or for adverse drug  reports  annexed to Schedule  4.13,  the
          Assets are not the  subject of (i) any  outstanding  judgment,  order,
          writ,  injunction  or decree of any  arbitrator or  administrative  or
          governmental authority or agency,  limiting,  restricting or affecting
          the Assets in a way that would have a Material  Adverse  Effect,  (ii)
          any pending or, to the best of Seller's  knowledge,  after due inquiry
          made,   threatened   claim,   suit,   proceeding,   charge,   inquiry,
          investigation  or action of any kind,  and (iii) any court suits filed
          with respect to the Assets since 1 January 1990. To the best knowledge
          of  Seller,  there  are no  claims,  actions,  suits,  proceedings  or
          investigations pending or threatened by or against Seller with respect
          to the transactions contemplated hereby, at law or in equity or before
          or  by  any  supranational,   federal,   state,   municipal  or  other
          governmental department, commission, board, agency, instrumentality or
          authority.

4.14      Agreements;  Required  Consents for Assignment or Termination:  To the
          best of Seller's knowledge, Schedule 2.7 sets forth all of the Assumed
          Agreements.  Seller and its  Affiliates  and, to the best knowledge of
          Seller,  each other party to each Assumed  Agreement  has performed in
          all  material  respects  each term,  covenant  and  condition  of each
          Assumed  Agreement  which is to be  performed by them at or before the
          date  hereof.  Each of the  Assumed  Agreements  is in full  force and
          effect and constitutes  the legal and binding  obligation of Seller or
          its Affiliate and, to the best knowledge of Seller,  the other parties
          thereto.  Subject to Art. 6.2 and 7.1 (consent of counterparties)  the
          Assumed  Agreements,  to  the  extent  related  to the  Products,  are
          assignable to and assumable by Buyer.

4.15      Manufacturing  Technology and Know-How:  The Manufacturing  Technology
          and Know-How  will be sufficient  to enable Buyer to  manufacture  the
          Products to the same standard as Seller currently enjoys.  The Product
          formulations fully conform with the pertaining  Registrations approved
          by the competent government authorities in the Territory.
<PAGE>
13


4.16      Trademarks  Seller or an Affiliate of Seller owns the  Trademarks  set
          forth in Schedule 2.1 which are formally  registered  or applied.  All
          Trademark  registrations  set  forth in  Schedule  2.1 have  been duly
          issued and have not been cancelled,  abandoned or otherwise terminated
          to the best knowledge of Seller. All Trademark  applications set forth
          in  Schedule  2.1 have been  duly  filed  and  maintained  to the best
          knowledge  of Seller.  Seller  shall not be obliged  to  maintain  any
          Trademark after the Closing.

          Seller will pay any fees for such renewals of any of the Trademarks as
          were  initiated  by it prior to the  Closing.  All other  renewal  and
          maintenance  fees as well as the costs and expenses of  defending  the
          Trademarks against  infringements by third parties occurring after the
          Closing Date shall be paid by Buyer.

          Seller will  arrange for the files  relating to the  Trademarks  to be
          handed over to Buyer without delay after the Closing.

          Until 31  December  1998  Seller  will  promptly  notify  Buyer of any
          infringement  or  threatened  infringement  of any  of the  Trademarks
          coming  to  its  attention  and  will,  if  the  registration  of  the
          Trademarks  is still in its name,  at the  expense  of Buyer take such
          action  against  the  infringer  as Buyer may  reasonably  request  to
          restrain such  infringement,  or alternatively  authorize Buyer or its
          nominee  to take such  action in its own name.  In the  latter  event,
          Seller or its Affiliate  will at Buyer's  expense  provide  reasonable
          assistance to Buyer.

          With  respect to the  trademarks  listed in Schedule  2.1(a)  Buyer is
          aware that such a trademark  cannot be  assigned  to Buyer  unless the
          third party gives its consent to the  assignment as may be required by
          the third  party or unless it is  clarified  that Buyer is entitled to
          enter in the  agreement  with the third party or unless the  agreement
          with the third party is  terminated.  After  Closing  Seller and Buyer
          will enter into negotiation with the third parties in good faith.

          With  respect to the  trademarks  listed in Schedule  2.1(b)  Buyer is
          aware that such a trademark cannot be assigned to Buyer as long as the
          third  party is  entitled  to  insist on the use of the  trademark  in
          combination with the trademark  ROCHE.  After Closing Seller and Buyer
          will enter into  negotiations  with the third parties in good faith to
          obtain  their  permission  to the  use of the  trademark  without  the
          trademark  ROCHE or to obtain  their  permission  to use  trademark in
          combination with a trademark owned by Buyer.

          With  respect to the  trademarks  listed in Schedule  2.1(c)  Buyer is
          aware that such an associated trademark can only be assigned under the
          conditions  that the trademark is not  associated  with the hexagon or
          with a  trademark  used by Roche  for  other  products  which  are not
          subject matter of this Agreement and the association can be dissolved.
          After  Closing  Seller  will use all  reasonable  effort to obtain the
          consent of the  competent  Trademark  Authorities  that the  according
          trademark can be assigned separately to Buyer.
<PAGE>
14


          Seller grants to Buyer the non-exclusive right, subject to the Assumed
          Agreements according to Art. 2.7 and 6.2 hereof, to use the Trademarks
          listed in Schedule  2.1(a) and 2.1(c)  until the  aforesaid  obstacles
          have been  removed.  Seller will not grant to any further  third party
          the right to use the trademarks listed in Schedule 2.1(a),  2.1(b) and
          2.1(c).

          When the aforesaid  obstacles  have been removed  Seller is obliged to
          assign the according  Trademark listed in Schedule 2.1(a),  2.1(b) and
          2.1(c) to Buyer without any culpable delay according to Art. 8.3.


4.17      No Infringement  of Third Party Rights:  Except as set forth herein or
          in the  Disclosure  Schedule,  the use of the  Assets by Seller in the
          Territory does not infringe any third party rights.


5         REPRESENTATIONS AND WARRANTIES OF BUYER AND ICN

5.1       Organization:  Buyer  and ICN each is a  corporation  duly  organized,
          validly   existing  and  in  good  standing  under  the  laws  of  its
          jurisdiction of organization,  with full corporate power and authority
          to consummate the transactions contemplated hereby.

5.2       Authority:  The execution and delivery of this Agreement and all other
          Agreements to be executed in connection  with this  Agreement by Buyer
          and ICN, and the  consummation  and  performance  of the  transactions
          contemplated hereby and thereby, have been duly and validly authorized
          by all necessary  corporate and other proceedings,  and this Agreement
          and all  other  Agreements  to be  executed  in  connection  with this
          Agreement has been duly authorized,  executed,  and delivered by Buyer
          and ICN and, assuming the enforceability  against Seller,  constitutes
          the legal, valid and binding obligation of Buyer and ICN respectively,
          enforceable in accordance with its terms.

5.3       No  Violation  or  Conflict:.  The  execution  and  delivery  of  this
          Agreement and all other  Agreements to be executed in connection  with
          this Agreement by Buyer and ICN and the  performance of this Agreement
          and all  other  Agreements  to be  executed  in  connection  with this
          Agreement (and the  transactions  contemplated  herein and thereby) by
          Buyer and ICN do not and will not conflict with, violate or constitute
          or result in a default under any law,  judgment,  order,  decree,  the
          articles of  incorporation  or bylaws of Buyer or ICN, or any contract
          or agreement to which Buyer or ICN is a party or by which Buyer or ICN
          is bound.

5.4       No  Government  Restrictions:  Except as set forth on Schedule 5.4 and
          for  consents the failure of which to obtain would not have a material
          adverse effect no consent,  approval,  order or  authorization  of, or
          registration,  declaration or filing with, any governmental  agency is
          required to be obtained or made by or with  respect to Buyer or ICN in
          connection  with the execution and delivery of this  Agreement and all
          other  Agreements to be executed in connection  with this Agreement by
          Buyer or ICN or the consummation by either Buyer or ICN of th

<PAGE>
15


          transactions  contemplated hereby to be consummated by either Buyer or
          ICN except  with  respect to the filing of a  pre-merger  notification
          report under the HSR Act.

5.5       Litigation:  There  are no  claims,  actions,  suits,  proceedings  or
          investigations  pending or, to the best of Buyer's or ICN's knowledge,
          threatened by or against Buyer or ICN with respect to the transactions
          contemplated  hereby,  at  law  or in  equity  or  before  or  by  any
          supranational,   federal,   state,  municipal  or  other  governmental
          department, commission, board, agency, instrumentality or authority.

5.6       Capitalization.  The  authorized  capital  stock  of ICN  consists  of
          200,000,000  authorized  shares of Common Stock, $ .01 par value,  and
          10,000,000  authorized  shares of Preferred Stock, $ .01 par value. As
          of May 11,  1998 there  were  outstanding  72,863,133shares  of Common
          Stock,  as of July  1,  1998,  821  shares  of  Series  D  Convertible
          Preferred Stock, and as of December 31, 1997 employee stock options to
          purchase an  aggregate  of  8,920,000  shares of ICN Common  Stock (of
          which  options to purchase an  aggregate  of  5,643,000  shares of ICN
          Common Stock were exercisable). As of June 23, 1998 a total of 615,750
          shares of Common Stock were issuable upon conversion of ICN's Series D
          Convertible  Preferred  Stock,  and a total of 20,917 shares of Common
          Stock were issuable upon the  conversion of certain other  convertible
          debt securities of ICN. All outstanding shares of capital stock of ICN
          have been duly  authorized  and validly  issued and are fully paid and
          non-assessable.   Except  as  set  forth  in  this  Section  and  this
          Agreement,  that  certain  Agreement  for the Sale and  Purchase  of a
          Portfolio of Pharmaceutical,  OTC and Consumer  Healthcare Products by
          and between Smith Kline Beecham P.L.C. and ICN  Pharmaceuticals,  Inc.
          and  that  certain  Stock  Purchase   Agreement  by  and  between  ICN
          Pharmaceuticals,  Inc. and Schering-Plough  Corporation dated July 28,
          1995,  and except for changes since  December 31, 1997  resulting from
          the exercise of employee stock options outstanding on such date, there
          are  outstanding  (a) no  shares  of  capital  stock or  other  voting
          securities  of  ICN,  (b) no  securities  of ICN  convertible  into or
          exchangeable for shares of capital stock or voting  securities of ICN,
          and no  options  or other  rights  to  acquire  from  ICN,  and (c) no
          obligation of ICN to issue,  any capital stock,  voting  securities or
          securities  convertible  into or  exchangeable  for  capital  stock or
          voting  securities of ICN (the items in clauses (a), (b) and (c) being
          referred  to  collectively  as  "Company  Securities").  There  are no
          outstanding   obligations  of  ICN  or  any  of  its  subsidiaries  to
          repurchase, redeem or otherwise acquire any Company Securities.

<PAGE>
16


5.7       Shares  to  be  Issued  to  Seller.   Upon  the  consummation  of  the
          transactions contemplated hereby, all shares of Common Stock of ICN to
          be issued to Seller  will have been  validly  issued,  fully  paid and
          non-assessable and will be free and clear of any lien, charge or other
          encumbrance  or claim and the issuance  thereof will not be subject to
          any preemptive or similar rights.


5.8       SEC Filings.

          (a)       ICN has made  available to Seller the annual reports on Form
                    10-K for its fiscal years ended  December 31, 1996 and 1997,
                    its quarterly  reports on Form 10-Q for its fiscal  quarters
                    ended  March 31 and June 30,  1998 its proxy or  information
                    statements relating to meetings of, or actions taken without
                    a meeting by, the  stockholders  of ICN held since  December
                    31,1995, and all of its other reports, statements, schedules
                    and  registration  statements  filed with the Securities and
                    Exchange Commission (the "SEC") since December 31, 1996.

          (b)       As of its filing date,  each such report or statement  filed
                    pursuant to the Securities Exchange Act of 1934, as amended,
                    did not contain any untrue  statement of a material  fact or
                    omit to state any material  fact  necessary in order to make
                    the   statements   made   therein,   in  the  light  of  the
                    circumstances under which they were made, not misleading.

          (c)       Each   such   registration    statement,   as   amended   or
                    supplemented,   if   applicable,   filed   pursuant  to  the
                    Securities  Act of 1933,  as  amended,  as of the date  such
                    statement or amendment  became effective did not contain any
                    untrue  statement  of a  material  fact or omit to state any
                    material fact required to be stated  therein or necessary to
                    make the statements therein not misleading.

5.9.      Financial  Statements.  The audited consolidated  financial statements
          and  unaudited   consolidated  interim  financial  statements  of  ICN
          included in its annual  reports on Form 10-K and the quarterly  report
          on Form 10-Q referred to in Section 5.8 fairly present,  in conformity
          with generally accepted accounting  principles applied on a consistent
          basis  (except  as  may  be  indicated  in  the  notes  thereto),  the
          consolidated   financial   position   of  ICN  and  its   consolidated
          subsidiaries as of the dates thereof and their consolidated results of
          operations  and changes in  financial  position  for the periods  then
          ended  (subject  to  normal  year-end  adjustments  in the case of any
          unaudited  interim  financial   statements).   For  purposes  of  this
          Agreement, "Balance Sheet" means the consolidated balance sheet of ICN
          as of December 31, 1997 set forth in ICN 10-K and "Balance-Sheet Date"
          means December 31, 1997.

5.10.     Absence of Certain Changes.  Since the Balance Sheet Date, ICN and its
          subsidiaries  have  conducted  their  business in the ordinary  course
          consistent  with  past  practice  and,  except as  described  in ICN's
          subsequent  SEC-filings,  there has not been any event,  occurrence or
          development  of a state of  circumstances  or facts  which  has had or
          reasonably could be expected to have a material adverse effect on ICN.
<PAGE>
17


5.11      No Undisclosed Material  Liabilities.  There are no liabilities of ICN
          or any of its  subsidiaries of any kind  whatsoever,  whether accrued,
          contingent, absolute, determined, determinable or otherwise, and there
          is no existing  condition,  situation  or set of  circumstances  which
          could  reasonably  be  expected to result in such a  liability,  other
          than: (i) liabilities  disclosed or provided for in the Balance Sheet;
          (ii)   liabilities   incurred  in  the  ordinary  course  of  business
          consistent  with past practice since the Balance Sheet Date,  which in
          the aggregate are not material to ICN and its subsidiaries, taken as a
          whole; and (iii) liabilities under this Agreement.


6         SELLER'S COVENANTS

6.1       Maintenance  of Assets:  Seller agrees that from the date hereof until
          the Closing Date that,  except as  specifically  disclosed in Schedule
          6.1 or unless otherwise consented to by Buyer in writing, Seller shall

6.1.1     except as disclosed on the DISCLOSURE  SCHEDULE maintain the Assets in
          good status and condition and not sell or dispose of any of the Assets
          except in the ordinary course of business;

6.1.2     continue the Business in the ordinary  course of business and not make
          or  institute  any  unusual  or  novel  methods  of  purchase,   sale,
          management,  operation,  or other business  practice in the conduct of
          the Business inconsistent with past practices;

6.1.3     not enter into any  material  contract  or  commitment,  engage in any
          transaction, extend credit or incur any obligation with respect to the
          Assets/Business,  in each case not in the usual and ordinary course of
          business and consistent with normal business practices;

6.1.4     use best  efforts to maintain  Roche Net Sales of the  Products in the
          Territory until Closing. it being understood that Seller is not liable
          for the  effects of  exchange  rate  fluctuations  and the  effects of
          currency translations; and

6.1.5     promptly  inform  Buyer of any change in the Assets  that could have a
          Material Adverse Effect.

6.2       Consents:  Seller shall use all  reasonable  best efforts to cooperate
          with  Buyer in  obtaining  the  consents  of the third  parties to the
          assignment  to Buyer of the  Assumed  Agreements,  to the extent  they
          relate to the  Products,  at the same terms as currently  contained in
          the  Assumed  Agreements;  provided,  however,  Seller  shall  not  be
          required  to make any payment of any kind  whatsoever  to Buyer or any
          third party, or waive any rights or assume any obligations  other than
          those obligations set forth in the Assumed  Agreements,  in connection
          with obtaining any such required consents.
<PAGE>
18



6.3       Disclosure  Supplements:  From time to time prior to the Closing Date,
          Seller will  promptly  inform Buyer,  in writing,  with respect to any
          matter that may arise  hereafter  and that,  if existing or  occurring
          prior to the Closing Date, would have been required to be set forth or
          described herein or in the Disclosure Schedule.

6.4       Access:  From and after the date  hereof and up to Closing  (except as
          otherwise provided herein), Buyer and its authorized agents, officers,
          and  representatives  shall have  access to the Assets  during  normal
          business hours upon  reasonable  prior notice and at a time and manner
          mutually agreed upon between Buyer and Seller in order to conduct such
          examination  and   investigation   of  the  Assets  as  is  reasonably
          necessary,  provided  that such  examinations  shall not  unreasonably
          interfere with Seller's operations and activities.

6.5       Non-Compete:  Seller  covenants  and agrees  that for a period of five
          years  following  the  Closing  Date,  neither  Seller  nor any of its
          Affiliates will directly or indirectly  engage in the Territory in the
          manufacture,  marketing and  distribution  of products having both the
          same chemical  substance and being promoted for the same indication as
          the Products (hereinafter  "Competing  Products").  Should, during the
          aforesaid  five  year period,  either Seller or an Affiliate of Seller
          as a consequence of an acquisition of a company or a business  acquire
          any Competing Products, Buyer shall have the right of first refusal to
          acquire  such  Competing  Products  from  Seller or its  Affiliate  at
          conditions to be  negotiated in good faith.  Should Buyer not exercise
          its right of first refusal or should  subsequently  held  negotiations
          between Seller and Buyer fail, Seller shall make good faith-efforts to
          divest the Competing Products to a third party.

6.6       Further  Assurances:  Seller  shall  use  all  reasonable  efforts  to
          implement  the  provisions  of this  Agreement,  and for such  purpose
          Seller,  at the request of Buyer, at or after Closing,  will,  without
          further  consideration,  execute and deliver,  or cause to be executed
          and  delivered,  to  Buyer  such  deeds,  assignments,  bills of sale,
          consents and other  instruments  in addition to those required by this
          Agreement,  in form and substance  satisfactory to Buyer, as Buyer may
          reasonably  deem  necessary or desirable to implement any provision of
          this Agreement.


7         BUYER'S COVENANTS

7.1       Consents:  Buyer shall use all  reasonable  best efforts to obtain the
          consents  of the  third  parties  to the  assignment  to  Buyer of the
          Assumed Agreements,  to the extent they relate to the Products, at the
          same terms as currently contained in the Assumed Agreements; provided,
          however,  Buyer  shall not be required to make any payment of any kind
          whatsoever to Seller or any third party, or waive any rights or assume
          any obligations  other than those obligations set forth in the Assumed
          Agreements,  in connection with obtaining any such required  consents.
          If Buyer is unable to obtain a required  consent  within a  reasonable
          period of time,  Seller  may,  but is not  obliged  to  terminate  the
          pertaining  Assumed Agreement (for the Products or as a whole). For as
          long as an Assumed  Agreement has neither been assumed nor  terminated
          with respect to the Products, Seller shall continue to honor the terms
          of the relevant Assumed Agreement, for the Products for the account

<PAGE>
19


          and  benefit  of  Buyer,  and Buyer  shall  indemnify  Seller  for all
          liability  relating to the Products (and only the Products) under such
          Assumed  Agreement  other than any  liability  arising  from  Seller's
          negligence or failure to perform. Buyer shall give Seller all licenses
          and  marketing  authorizations  necessary  or required and deliver all
          active  substances and Products  received from Buyer or its Affiliates
          or  manufactured  by  Buyer or its  Affiliates  or  third  parties  to
          continue to fulfill its obligations under these Assumed Agreements and
          any other agreement which by mistake was not listed under Schedule 2.7
          (but  which  shall  be added  to  Schedule  2.7)  until  such  Assumed
          Agreements (or other agreement)  expire,  terminate or are assigned to
          Buyer with respect to the Products.

7.2       Transfer  of  Products:   Following  Closing,   Buyer  shall  use  all
          reasonable best efforts and, except as otherwise set forth herein,  at
          its  own  expense,   to  obtain  as  expeditiously  as  possible  such
          governmental approvals and registrations from the competent regulatory
          authorities in the Territory,  as may be necessary with respect to the
          manufacture  and sale of the Products by Buyer or its designee  (other
          than Seller or an Affiliate of Seller). Notwithstanding the foregoing,
          Seller shall at its expense  assist with such  transfers by (a) making
          available  to Buyer  the  equivalent  in  man-hours  of time with DRAC
          company  (Dr.  Peter)  for up to an  amount  of  Swiss  Francs  20,000
          (twenty-thousand)and  (b)  providing  in  an  expeditious  manner  all
          information in Seller's  possession  reasonably  requested by Buyer to
          facilitate the registration  transfers. If such governmental approvals
          and  registrations  from the competent  regulatory  authorities in the
          Territory  are not  obtained by Buyer  within five months from Closing
          due to Buyer's failure to obtain such approvals and  registrations  as
          expeditiously as possible, Seller and its Affiliates shall be entitled
          to do anything  necessary to avoid the duty, if any, to distribute the
          Products concerned in the Territory concerned, including, as action of
          last resort and only if Buyer fails to use its reasonable best efforts
          to obtain such approvals as  expeditiously  as possible,  the right to
          de-register the Products concerned in such Territory.

7.3       Labeling:  Following  Closing,  Buyer  shall at its own expense and as
          expeditiously  as possible use all  reasonable  efforts to obtain such
          approvals of competent government  authorities in the Territory as may
          be necessary to change Buyer's labeling for each Product in such a way
          that any reference to Seller or its  Affiliates are removed as well as
          implement such change of labeling.  Buyer may use the current Labeling
          on the Inventory  existing at Closing approved by Seller prior to such
          use until such inventory is exhausted,  subject to applicable laws and
          regulations  in the  Territory.  Buyer  may,  however,  use the  Roche
          labeling  only in  connection  with clearly  identifying  Buyer as the
          responsible person for  commercializing the Products in a way which is
          customary in the industry and is to be approved in advance by Seller.

7.4       References  to  Seller:  Other  than  as  set  forth  in  Article  7.3
          hereinabove,  any reference to Seller or its  Affiliates or any use of
          the  trademarks,  tradenames,  or logos of Seller or its Affiliates by
          Buyer in connection  with the Products  after Closing must be approved
          by Seller prior to such use. It is understood  that the  Trademarks do
          not fall under this provision.
<PAGE>
20


7.5       Further  Assurances:   Buyer  shall  use  all  reasonable  efforts  to
          implement  the  provisions  of this  Agreement,  and for such  purpose
          Buyer, at the request of Seller,  at or after Closing,  will,  without
          further  consideration,  execute and deliver,  or cause to be executed
          and  delivered,  to Seller  such  consents  and other  instruments  in
          addition to those  required by this  Agreement,  in form and substance
          satisfactory  to Seller,  as Seller may  reasonably  deem necessary or
          desirable to implement any provision of this Agreement.


8         COVENANTS BY BUYER AND SELLER

8.1       Technology Transfer:  Buyer and Seller shall work together to commence
          transfer of the Know-How to Buyer promptly after Closing. Seller shall
          use all reasonable efforts to assist Buyer in assuming  manufacture of
          the Products,  provided,  however,  that Seller cannot ensure  Buyer's
          ability to successfully manufacture the Products. Seller shall have no
          obligation to provide manufacturing support for any Product and Seller
          shall not be  responsible  for any delay  and other  consequences,  if
          Buyer  elects to use a process  that is  materially  different  from a
          Roche  Process.  If Buyer elects to transfer a Roche  Process,  Seller
          shall provide reasonable access to Seller's  manufacturing  facilities
          and for a period of up to two years up to 50 (fifty)total  man-days of
          technical support  free-of-charge.  Thereafter,  Buyer shall reimburse
          Seller  for   providing   such   technical   assistance   at  Seller's
          then-standard hourly charge for rendering technical assistance,  which
          as of the date of this  Agreement  is US$ 150.00  (one  hundred  fifty
          United States  Dollars) per hour,  plus all  reasonable  out-of-pocket
          expenses  incurred by Seller in rendering  such  assistance.  Seller's
          obligation to provide hands-on manufacturing support for a transferred
          Product  shall  cease   following   successful   manufacture   of  the
          registration batch for such Product.

8.2       Stability  Studies:  As soon as possible  following  execution of this
          Agreement,  Buyer shall qualify  appropriate  testing sites for future
          stability  studies.  Seller  shall  continue  through  completion  all
          on-going  stability  studies for the Products  and provide  Buyer with
          copies of the resulting data as available.

8.3       Assignment of Trademarks: By or before Closing, Buyer and Seller shall
          prepare in good faith an  assignment  pursuant to which Seller  agrees
          the  Trademarks  shall be assigned  to Buyer.  Schedule  2.1  contains
          trademark  registrations  and  applications  which,  as  indicated  by
          Seller,  are not supported by use and therefore may unavoidably expire
          due to  non-use  prior to  Closing.  Following  Closing,  Buyer  shall
          prepare  and  Seller  shall  execute  such   documents  as  Buyer  may
          reasonably request in order to assign and record the assignment of the
          Trademarks.  Buyer  shall use all  reasonable  efforts to  record,  as
          expeditiously as possible, the transfer of the Trademarks in the major
          markets with the competent authorities in the Territory, provided that
          Buyer shall not have an  obligation  to transfer  Trademarks  in minor
          markets  which  Buyer may not want to use.  Buyer will  inform  Seller
          within a reasonable period of time about the Trademarks Buyer does not
          wish to transfer.  The  responsibility  and expense of  preparing  and
          filing such  documents  and any actions  required  ancillary  thereto,
          shall be borne solely by Buyer. Notwithstanding anything contained
<PAGE>
21


          elsewhere herein,  Buyer shall hold Seller and its Affiliates harmless
          from and  against  any loss or damage,  including  but not  limited to
          fees,  penalties,  fines or third party claims, due to Buyer's failure
          to record  any  assignment  of any such  Trademarks  pursuant  to this
          Article,  except  if such  loss or  damage  is due to the  conduct  of
          Seller.  The  aforesaid  is  applicable  accordingly  in case  that an
          assignment  has to be made  regarding a  trademark  which is listed in
          Schedule 2.1(a), 2.1(b) and 2.1(c).

8.4       Assignment of  Registrations:  As soon as practicable and in any event
          within 45 (forty five) days from Closing Seller shall deliver to Buyer
          current  box,  label and package  inserts for each pack of Products as
          registered  in the  Territory.  At or following  Closing,  Buyer shall
          prepare  and  Seller  shall  execute  such   documents  as  Buyer  may
          reasonably   request  in  order  to  record  the   assignment  of  the
          Registrations.  Buyer  shall  pay any user  fees  associated  with any
          Product  that  accrues  after  Closing  but prior to  transfer of such
          Registration.  Notwithstanding  anything  contained  elsewhere herein,
          Buyer shall hold Seller and its  Affiliates  harmless from and against
          any loss or damage,  including  but not  limited  to fees,  penalties,
          fines or third  party  claims,  due to  Buyer's  failure to record any
          assignment of any such Registrations pursuant to this Article,  except
          if such loss or damage is due to the conduct of Seller.

8.5       Access to Information:  Buyer and Seller will,  upon reasonable  prior
          notice, make available to the other, to the extent reasonably required
          for the purpose of assisting Seller or Buyer in obtaining governmental
          approvals and preparation of tax returns  relating to the Assets,  and
          prosecuting  or defending or preparing for the  prosecution or defense
          of any action, suit, claim, complaint,  proceeding or investigation at
          any time brought by or pending against Seller or Buyer relating to the
          Assets or the Toll Manufacturing Agreements, other than in the case of
          litigation between the parties hereto, such information or records (or
          copies thereof) in their possession after Closing, it being understood
          that attorney-client  privileged information shall be excepted. In the
          event Buyer or ICN are required under accounting Regulation S-X of the
          U.S.  Securities  and Exchange  Commission  to file audited  financial
          statements of the business acquired hereunder,  Buyer and Seller shall
          cooperate to produce any required  documents  and Seller shall use all
          reasonable  efforts  to  provide  Buyer  in a timely  manner  with all
          information  available  to Seller and  necessary  for Buyer to prepare
          such financial  statements,  it being  understood  that Buyer shall be
          responsible   and  pay  for  preparing  and  auditing  such  financial
          statements.  Notwithstanding  any  provision  of this  Agreement it is
          understood   that  neither   party  shall  be  required  to  have  any
          information   audited  or  to  reconcile  such  information  with  the
          accounting  standards  used by the receiving  party or required by any
          government authority.

8.6       Press  Releases:  Neither the Seller nor the Buyer,  nor any Affiliate
          thereof, will issue or cause publication of any press release or other
          announcement or public communication with respect to this Agreement or
          the transactions contemplated hereby without the prior written consent
          of the other party, which consent will not be unreasonably withheld or
          delayed.  Unless  otherwise  required by applicable  law, the Purchase
          Price shall not be disclosed.
<PAGE>
22


8.7       Customer  Information:  Buyer and Seller  shall agree on the text of a
          joint  announcement  informing  the  customers in the Territory of the
          transfer of the Products to Buyer or its relevant Affiliate. Should it
          be appropriate  for any party to make an  announcement  on its own, it
          will have to be approved by the other party,  which  approval will not
          be unreasonably withheld or delayed.

8.8       Government  Filings:  Each of the  parties  will  use  its  respective
          reasonable  good faith  efforts to obtain,  and to cooperate  with the
          other in obtaining, all authorizations, consents, orders and approvals
          of any  governmental  agencies,  that may be or  become  necessary  in
          connection with the consummation of the  transactions  contemplated by
          this Agreement  prior to or after Closing,  and to take all reasonable
          actions to avoid the entry of any order or decree by any  governmental
          agency  prohibiting the consummation of the transactions  contemplated
          hereby, provided, however, that Seller and its Affiliates shall not be
          required to agree to any consent  decree or order in  connection  with
          the objections of the FTC or DOJ to the  transactions  contemplated by
          the Agreement.

8.9       Toll  Manufacturing  Arrangements and Supply of active  substances and
          Products:

          Before  Closing Buyer and the  Affiliates of Seller which  manufacture
          the  Products  shall  enter  into the Toll  Manufacturing  Agreements,
          effective as from the  Effective  Date, in the form and with the Roche
          Affiliates as attached as Schedule 8.9 (a) hereto,  under which Seller
          or  Seller's  Affiliates  shall  toll  manufacture  for  Buyer  or its
          Affiliates the Products on the basis of active substances and/or other
          necessary materials supplied by Buyer or its Affiliates free of charge
          (existing toll  manufacturing  agreements are not  renegotiated;  e.g.
          Taiwan).  If not all Toll  Manufacturing  Agreements  are signed until
          Closing  Date they shall be signed until  November  30,  1999,  at the
          latest.  The  manufacturing fee for the Basel site and the fee for the
          Nutley site for Fluoro-Uracil is attached under Schedule 8.9 (aa).

          If  the  parties  cannot  agree  otherwise,  such  Toll  Manufacturing
          Agreements shall expire 18 month after Effective Date at the latest.

          Until 18 month  after  Effective  Date Seller or its  Affiliates  will
          supply  to Buyer  or its  Affiliates  free of  charge  Ex Works  Basel
          (Incoterms 1990) the quantities of active  substances for the Products
          (U.S Products  excluded;  see below) as set forth in Schedule 8.9 (b).
          Neither Seller nor its Affiliates will  manufacture  and/or supply any
          additional active substances.

          The above does not relate to the Products Dalmane/Dalmadorm and Librax
          for the U.S.-market.  Seller and its Affiliates have stopped producing
          active  substance and galenical  production of these  Products.  There
          will therefore be no supply of active  substances or finished Products
          for the U.S.-market of these Products other than the inventory of such
          finished Products which is purchased under this Agreement.
<PAGE>
23


          Seller  represents  and  warrants  that  the  above  mentioned  active
          substances shall be manufactured in accordance with the Know-How,  the
          applicable  laws and  regulations  and cGMPs,  and that as of the date
          shipped,  shall meet the  specifications.  Each such shipment shall be
          analyzed in accordance with Seller's methods of analysis. Seller makes
          no further  representations  and disclaims any warranties of any kind,
          express or  implied,  to Buyer for any active  substance  supplied  by
          Seller  hereunder,  including  without  limitation  any  warranties of
          merchantability or fitness for a particular purpose.

          Subject  to the  following  limitations,  with  respect  to the active
          substances  mentioned  above,  Seller  shall be  liable  for and shall
          indemnify  and  hold  harmless   Buyer  in  respect  of  any  and  all
          liabilities,  losses, damages,  claims or lawsuits,  including but not
          limited  to any  liabilities,  losses,  damages,  claims  or  lawsuits
          arising out of the manufacture, use, sale or marketing of these active
          substances,  including but not limited to any claims made (directly or
          indirectly)  by or on  behalf  of  consumers  who  have  purchased  or
          otherwise  obtained  and/or used the  Products  containing  the active
          substances,  arising from Seller's (i) breach of this Agreement,  (ii)
          negligence or willful  misconduct,  (iii) breach of statutory  duty or
          (iv) act,  omission or default howsoever caused on the part of Seller,
          its Affiliates,  employees and agents.  Notwithstanding the foregoing,
          (i) Seller shall not be liable to Buyer, whether in contract,  tort or
          otherwise, for any consequential, indirect, economic or financial loss
          or damage  (including,  without  prejudice  to the  generality  of the
          foregoing,  any  loss  of  turnover,  revenue,  profits,  business  or
          goodwill)  howsoever caused, and (ii) Seller's liability in respect of
          shipments of active  substances which do not conform to specifications
          shall be limited as set out hereinabove.

          Subject  to the  following  limitations,  with  respect  to the active
          substances  mentioned  above,  Buyer  shall be  liable  for and  shall
          indemnify  and  hold  harmless  Seller  in  respect  of  any  and  all
          liabilities,  losses, damages,  claims or lawsuits,  including but not
          limited  to any  liabilities,  losses,  damages,  claims  or  lawsuits
          arising out of the manufacture, use, sale or marketing of these active
          substances,  including but not limited to any claims made (directly or
          indirectly)  by or on  behalf  of  consumers  who  have  purchased  or
          otherwise  obtained  and/or  used the active  substances  or  Products
          containing the active  substances,  arising from Buyer's (i) breach of
          this Agreement, (ii) negligence or willful misconduct, (iii) breach of
          statutory duty or (iv) act,  omission or default  howsoever  caused on
          the part of Buyer,  its  employees  and  agents.  Notwithstanding  the
          foregoing,  Buyer shall not be liable to Seller,  whether in contract,
          tort  or  otherwise,  for any  consequential,  indirect,  economic  or
          financial  loss  or  damage  (including,   without  prejudice  to  the
          generality of the foregoing, any loss of turnover,  revenue,  profits,
          business or goodwill) howsoever caused.
<PAGE>
24


8.10      Distribution  Arrangements:  Buyer and Seller, or their Affiliates, at
          Closing shall enter into the Distribution Agreement, effective as from
          the  Effective  Date,  attached as Schedule  8.10 hereto,  under which
          Seller or its Affiliates  shall distribute for Buyer or its Affiliates
          the Products for a period of up to six month after  Effective  Date in
          geographical  areas in which  such  Products  are  currently  sold and
          distributed by Seller and its Affiliates (not by third  parties),  but
          in which Buyer and its Affiliates  have not yet obtained the necessary
          approvals for the distribution of the Products.

8.11      Returns:  Until the Closing Date,  Seller shall be responsible for all
          returns.  From and after the Closing Date, Seller shall be responsible
          for all returns  arising from sales before  Closing and Buyer shall be
          responsible  for all returns  arising  from sales after  Closing.  The
          situation whereby returns after Closing increase materially beyond the
          level of the previous  business year,  shall be governed by particular
          provisions in the Distribution Agreement,  the principle thereof being
          to split the  responsibility of such returns in a fair way between the
          parties.

8.12      Adverse  Events  Reports.  Seller  shall,  for as long as Seller or an
          Affiliate  of Seller  markets  products  identical  with the  Products
          outside the  Territory,  provide  Buyer with a copy of all serious (as
          defined by the  International  Conference  on  Harmonization)  adverse
          events  concerning the Products which come to the attention of Seller.
          Buyer shall, for as long as Buyer or an Affiliate of Buyer markets the
          Products, provide Seller with a copy of all serious (as defined by the
          International  Conference on Harmonization)  adverse events concerning
          the Products which come to the attention of Buyer. The copies shall be
          supplied as CIOMS I forms  within 2 days of being  processed by either
          Seller or Buyer, as the case may be.


9         CONDITIONS PRECEDENT TO CLOSING

9.1       Conditions  to  Obligations  of  Buyer:  The  obligation  of  Buyer to
          complete  the  transactions  contemplated  hereby  is  subject  to the
          satisfaction  on or  prior  to  the  Closing  Date  of  the  following
          conditions  (all or any of which  may be waived in whole or in part by
          Buyer):

9.1.1     Representations  and Warranties:  The  representations  and warranties
          made by Seller in this  Agreement  shall have been true and correct in
          all  respects as of the Closing Date with the same force and effect as
          though  said  representations  and  warranties  had  been  made on the
          Closing Date (except for  representations  and warranties made as of a
          specified  date,  which will be true and correct in all respects as of
          the specified date).

9.1.2     Performance:  Seller shall have performed and complied in all material
          respects with all agreements,  obligations and conditions  required by
          this  Agreement to be so performed or complied  with by it prior to or
          at Closing.

9.1.3     HSR Act  Approvals:  All required  waiting  periods  under the HSR Act
          shall have expired or been  terminated  or approval has been  received
          from the FTC or DOJ.
<PAGE>
25


9.1.4     Government  Approvals:  All approvals of the competent  authorities in
          the  Territory  required  for  the  consummation  of the  transactions
          contemplated  by this  Agreement,  if any,  have been obtained and all
          waiting periods under  applicable  laws, if any, shall have expired or
          been terminated.

9.1.5     Litigation: No investigation,  suit, action, or other proceeding shall
          be threatened or pending before any court or governmental  agency that
          seeks  the  restraint,   prohibition,  damages,  or  other  relief  in
          connection with this Agreement or the consummation of the transactions
          contemplated  by this  Agreement  unless such action  would not have a
          Material Adverse Effect.

9.1.6     No Adverse  Change:  During the period from the date of this Agreement
          to the Closing Date there shall not have occurred or been  discovered,
          and there  shall not exist on the  Closing  Date except for that which
          has been  otherwise  disclosed  elsewhere in this  Agreement or in the
          Disclosure Schedule,  any condition or fact that would have a Material
          Adverse Effect.

9.1.7     SEC  Accounting  Requirements:  Seller  shall  provide  Buyer prior to
          Closing  with  information  sufficient  to allow  Buyer to prepare any
          financial statements  concerning the business to be acquired by Buyer,
          required under  accounting  Regulation S-X of the U.S.  Securities and
          Exchange Commission, to be filed by Buyer.

9.2       Conditions  to  Obligations  of Seller:  The  obligation  of Seller to
          complete  the  transactions  contemplated  hereby  is  subject  to the
          satisfaction  on or  prior  to  the  Closing  Date  of  the  following
          conditions  (all or any of which  may be waived in whole or in part by
          Seller):

9.2.1     Representations  and Warranties:  The  representations  and warranties
          made by Buyer in this  Agreement  shall have been true and  correct in
          all  respects as of the Closing Date with the same force and effect as
          though  said  representations  and  warranties  had  been  made on the
          Closing Date (except for  representations  and warranties made as of a
          specified  date,  which will be true and correct in all respects as of
          the specified date).

9.2.2     Performance:  Buyer shall have  performed and complied in all material
          respects with all agreements,  obligations and conditions  required by
          this  Agreement to be so performed or complied  with by it prior to or
          at Closing.

9.2.3     HSR Act  Approvals:  All required  waiting  periods  under the HSR Act
          shall have expired or been  terminated  or approval has been  received
          from the FTC or DOJ.

9.2.4     Government  Approvals:  All approvals of the competent  authorities in
          the  Territory  required  for  the  consummation  of the  transactions
          contemplated  by this  Agreement,  if any,  have been obtained and all
          waiting periods under  applicable  laws, if any, shall have expired or
          been terminated.
<PAGE>
26


9.2.5     Litigation: No investigation,  suit, action, or other proceeding shall
          be threatened or pending before any court or governmental  agency that
          seeks  the  restraint,   prohibition,  damages,  or  other  relief  in
          connection with this Agreement or the consummation of the transactions
          contemplated  by this  Agreement  unless such action  would not have a
          Material Adverse Effect.

9.2.6     No Adverse  Change:  During the period from the date of this Agreement
          to the Closing Date there shall not have occurred or been  discovered,
          and there  shall not exist on the  Closing  Date except for that which
          has been otherwise disclosed elsewhere in this Agreement any condition
          or fact that would have a Material Adverse Effect.


10        THE CLOSING

10.1      The Closing:  Subject to the  satisfaction of all of the conditions to
          each  party's  obligations  set forth in  Article 9 hereof  (or,  with
          respect to any condition not satisfied,  the waiver in writing thereof
          by the party or parties for whose benefit the condition  exists),  the
          closing  of the  transactions  contemplated  by  this  Agreement  (the
          "Closing")  shall take place at 10.00 a.m.  (local time) on 1 November
          1998 or, if any approval from any competent authority in the Territory
          required for the consummation of the present  transaction has not been
          obtained  or any  waiting  period to be  observed  has not  expired or
          terminated by 1 November  1998, the Closing shall take place after the
          receipt of all required  government  approvals and after the expiry or
          termination of all waiting  periods agreed between the parties in good
          faith (the "Closing Date"). The transfer of the Assets shall be deemed
          to have occurred as of 00.01 a.m. of the Closing Date.

10.2      Deliveries by Seller. At Closing, Seller shall deliver to Buyer:

10.2.1    the General  Conveyance,  Assignment  and  Assumption  document as set
          forth in Schedule 10.2.1

10.2.2    The  general  form of  assignment  of the  Trademarks  as set forth in
          Article 8.3;

10.2.3    a general form of assignment of the Registrations;

10.2.4    subject to the Distribution  Agreement the Inventory and the statement
          of the quantity and location of the  Inventory as set forth in Article
          2.6;

10.2.5    subject to  contrary  provisions  in the  Distribution  Agreement  the
          Marketing and Promotional Documents as set forth in Article 2.5;

10.2.6    to the extent  available and  possible/practicable  hard copies of the
          registration files, Know-How documents, World-wide Safety Reports, all
          as set  forth in  Article 2  hereinabove.  All such  documents,  which
          cannot be delivered to Buyer at Closing,  shall be delivered by Seller
          to Buyer as soon as practicable after Closing.
<PAGE>
27


10.2.7    the Toll Manufacturing Agreements (if signed until Closing Date);

10.2.8    the Distribution Agreement;

10.2.9    except  as  otherwise  provided  herein,  such  agreements,  licenses,
          notices,  and  authorizations  as may be necessary  and  sufficient to
          enable  Buyer to use or operate  under the  Registrations  (if legally
          permissible)  and Know-How and that Buyer has  requested  from Seller;
          and

10.2.10   the Registration Rights Agreement

10.2.11   a receipt for the Purchase Price in accordance with Art. 3.

10.3      Deliveries  by Buyer.  At Closing,  Buyer shall deliver or cause to be
          delivered to Seller:

10.3.1    the General  Conveyance,  Assignment  and  Assumption  document as set
          forth in Schedule 10.2.1

10.3.2    The  Purchase  Price  payable in  accordance  with Article 3 including
          certificates representing the Original Common Stock;

10.3.3    the Toll Manufacturing Agreements(if signed until Closing Date);

10.3.4    the Distribution Agreement;

10.3.5    the Registration Rights Agreement.

10.4      Effects of Closing:  Upon Closing the  ownership of the Assets as well
          as the  full  responsibility  for the use of the  Assets  and the full
          responsibility  for the conduct of the business  comprising the use of
          the  Assets  shall  pass from  Seller to Buyer.  Seller  shall  remain
          exclusively  responsible  for the  conduct  of the  Business  prior to
          Closing  (including any consequences  therefrom which may appear after
          the Closing).  Buyer shall be exclusively  responsible for the conduct
          of the  Business  from  Closing.  Buyer  acknowledges  that as per the
          Closing the product  liability  insurance of Seller and its Affiliates
          will terminate and Buyer shall be responsible for proper  insurance of
          the product liability and other risks relating to the Products.

          The Closing shall further have the other effects  provided for in this
          Agreement.


11        TERMINATION

11.1      Termination:  This Agreement and the transactions  contemplated hereby
          may be terminated at any time prior to the Closing Date:

11.1.1    By the mutual written consent of Seller and Buyer;
<PAGE>
28


11.1.2    By either  Seller or Buyer if Closing  shall not have  occurred  on or
          before 26 February 1999;

11.1.3    By  either  Seller  or  Buyer  if  consummation  of  the  transactions
          contemplated  hereby  shall  violate any  non-appealable  final order,
          decree or judgment of any court or governmental  body having competent
          jurisdiction; or

11.1.4    By either  Seller or Buyer if there has been a material  violation  or
          breach by the other party of any of the agreements, representations or
          warranties  contained  in this  Agreement  that has not been waived in
          writing,  or if there has been a material failure of satisfaction of a
          condition  to the  obligations  of the other  party  that has not been
          waived in writing, and such violation, breach, or failure has not been
          cured within sixty (60) days of written notice to the other party.

11.2.     Effect of  Termination:  If this  Agreement is terminated  pursuant to
          Article 11.1,  all further  obligations of Seller and Buyer under this
          Agreement shall terminate without further liability of Seller or Buyer
          except (a) for the obligations of Buyer and Seller under Articles 8.6,
          14, and 15.2;  and (b) that such  termination  shall not  constitute a
          waiver  by any party of any  claim it may have for  damages  caused by
          reason of a breach by the other party of a  representation,  warranty,
          covenant or agreement.


12        INDEMNIFICATION

12.1      Remedy for Breach:

12.1.1    General Principle: After the Closing, the sole and exclusive remedy of
          Buyer and Seller for any breach or inaccuracy of any representation or
          warranty or any breach of any  covenant  under this  Agreement  by the
          other party hereto shall be the indemnities  contained in this Article
          12.

12.1.2    Notice:  Any  claims  that a party may have  arising  out of the other
          party's  breach of its  representations  and warranties or breach of a
          covenant hereunder shall be notified to the other party promptly,  but
          in no event  later  than 90  (ninety)  days  after  having  reasonably
          sufficient knowledge of the existence of a potential claim, by written
          notice describing the claim in reasonable  detail then known.  Failure
          to give  such  notice  on time  shall not  affect  the  other  party's
          indemnification  obligations  hereunder  except  to the  extent  it is
          prejudiced thereby.

12.1.3    Survival  of  representations  and  warranties:  The  representations,
          warranties,  covenants of Seller and Buyer contained in this Agreement
          shall  survive  the  Closing  Date,   but  any  claim  for  breach  of
          representations  and  warranties or of a covenant shall be entitled to
          indemnification  hereunder  only if  written  notice of such  claim is
          given to the other  party  hereto no later than 18  (eighteen)  months
          following  Closing  Date  except  that  (i)  the  representations  and
          warranties  contained in Art. 5.6 and 5.7 shall  survive  indefinitely
          and (ii) Buyer's  right to notify claims with respect to the following
          matters shall only terminate as follows:
<PAGE>
29


          a)        Claims  for  breach  of   warranties   and   representations
                    concerning Litigation (Art. 4.13) insofar as such Litigation
                    relatesto  product  liability  matters  shall be notified to
                    Seller no later than 5 (five)  years  following  the Closing
                    Date;

          b)        Claims  for  breach  of   warranties   and   representations
                    concerning  Trademarks  (Art.  4.15)  shall be  notified  to
                    Seller no later than 2 (two)  years  following  the  Closing
                    Date;

          c)        Claims  for  breach  of   warranties   and   representations
                    concerning  taxes  (Art.  4.8) may be notified to the Seller
                    until  the   expiration  of  the   applicable   statutes  of
                    limitations for taxes relevant to such claims.

          It  is  understood  that  if  and  when  either  party  has  done  the
          notification   for  the   pertaining   matter  within  the  applicable
          notification time, it may start court proceedings  pursuant to Art. 14
          at any time within one year of the date such claim was duly  notified.
          Seller and Buyer shall agree to use all reasonable efforts to mitigate
          any loss or damage for which they may seek indemnification  under this
          Article 12.

12.2      Indemnification by Seller:

12.2.1    Claims:  Subject to the limitations set forth in Article 12.2.2 to the
          fullest extent  permitted under applicable law, Seller shall indemnify
          Buyer and its  Affiliates  against  and  agrees to hold  Buyer and its
          Affiliates harmless from any and all damage,  loss,  liability,  third
          party  claims,  and  expense  (collectively,   "Damages")  (including,
          without   limitation,   reasonable   expenses  of  investigation   and
          attorneys'  fees and expenses in connection  with any action,  suit or
          proceeding  brought  against  Buyer  or its  Affiliates)  incurred  or
          suffered  by  Buyer  or  its   Affiliates   arising  out  of  (a)  any
          misrepresentation  or breach of a warranty or covenant  made by Seller
          herein,  (b) the  maintenance of the Assets by Seller prior to Closing
          or (c) the conduct of the Business by Seller or its  Affiliates  prior
          to Closing (collectively, "Indemnifiable Claims").

12.2.2    Limitations:  Notwithstanding  anything  to  the  contrary  set  forth
          elsewhere  herein,  Buyer and its Affiliates  shall not be entitled to
          indemnification  hereunder  with  respect to any  Indemnifiable  Claim
          brought under Article 12.2.1 unless the amount of Damages with respect
          to such Indemnifiable Claim exceeds US$ 30,000.  However, Seller shall
          in no event be required to pay Buyer and its Affiliates more than half
          of the  Purchase  Price  (Art.  3.1) in respect of  aggregate  damages
          asserted  pursuant  to  Article  12.2.1  (a) and (b)  except  that the
          aforesaid  limitation in respect of aggregate  damages shall not apply
          to any Indemnifiable  Claim based on breach of Seller's warranties and
          representations   concerning   Litigation  in  the  field  of  product
          liability.

12.2.3    Form of Indemnification:  Indemnification by Seller to Buyer shall, at
          Seller's option,  be effected in ICN Shares,  valued at the Guaranteed
          Price as of the Guaranty Date next preceding such indemnification plus
          pro rata 6% p.a.,  and/or  cash.  To effect  any such  payment  in ICN
          Shares,  Seller  shall  surrender  to  ICN  one or  more  certificates
          representing  such number of shares of Original  Common Stock as shall
          represent   the   aggregate   value   of  the   amount   of  any  such
          indemnification  payment  and ICN shall  promptly  thereupon  issue to
          Seller new certificates  representing  such number of shares of Common
          Stock retained by Seller.
<PAGE>
30


12.3      Indemnification  by  Buyer.  Buyer  shall  indemnify  Seller  and  its
          Affiliates  against  and  agrees  to hold  Seller  and its  Affiliates
          harmless  from  any and all  Damages  (including  without  limitation,
          reasonable  expenses of investigation and attorneys' fees and expenses
          in  connection  with any action,  suit or proceeding  brought  against
          Seller  or its  Affiliates)  incurred  or  suffered  by  Seller or its
          Affiliates  arising  out of (a) any  misrepresentation  or  breach  of
          warranty or covenant made by Buyer  herein;  or (b) the conduct of the
          Business  by Buyer and its  Affiliates  after  Closing  (collectively,
          "Indemnifiable Claims"). Notwithstanding the foregoing, Buyer shall in
          no event be required to pay Seller and its  Affiliates  more than half
          of the  Purchase  Price  (Art.  3.1) in respect of  aggregate  damages
          asserted  pursuant  to  Article  12.3  (a) and  (b),  except  that the
          aforesaid  limitation shall not apply to Buyer's obligation to pay the
          Purchase  Price under Art. 3.1 above and the Inventory  under Art. 3.5
          above and all provisions related to these payments,  including but not
          limited to all  obligations  of Buyer relating to the shares of Common
          Stock set forth in this Agreement and its Exhibits.

12.4      Notice:  A party seeking  indemnification  pursuant to Article 12.2 or
          12.3 (an  "Indemnified  Party")  shall give prompt notice to the party
          from whom such indemnification is sought (the "Indemnifying Party") of
          the assertion of any claim, or the commencement of any action, suit or
          proceeding,  in  respect  of  which  indemnity  is or  may  be  sought
          hereunder  (whether or not the limits set forth in Article 12.2.2 have
          been exceeded) and will give the  Indemnifying  Party such information
          with respect thereto as the Indemnifying Party may reasonably request,
          but no failure to give such  notice  shall  relieve  the  Indemnifying
          Party  of  any   liability   hereunder   (except  to  the  extent  the
          Indemnifying Party has suffered actual prejudice thereby).

12.5      Participation in Defense:  The Indemnifying Party may, at its expense,
          participate  in or assume  the  defense  of any such  action,  suit or
          proceeding involving a third party. In such case the Indemnified Party
          shall have the right (but not the duty) to  participate in the defense
          thereof,  and to employ  counsel,  at its own expense,  separate  from
          counsel employed by the  Indemnifying  Party in any such action and to
          participate in the defense thereof.  The  Indemnifying  Party shall be
          liable  for  the  fees  and  expenses  of one  firm  as  counsel  (and
          appropriate  local counsel)  employed by the Indemnified  Party if the
          Indemnifying Party has not assumed the defense thereof. Whether or not
          the  Indemnifying  Party  chooses  to  defend or  prosecute  any claim
          involving a third party, all the parties hereto shall cooperate in the
          defense  or  prosecution  thereof  and  shall  furnish  such  records,
          information  and  testimony,  and attend such  conferences,  discovery
          proceedings,  hearings,  trials  and  appeals,  as may  be  reasonably
          requested in connection therewith.

12.6      Settlements:  The  Indemnifying  Party shall not be liable  under this
          Article for any settlement  effected without its consent of any claim,
          litigation or proceedings in respect of which  indemnity may be sought
          hereunder,  unless  the  Indemnifying  Party  refuses  to  acknowledge
          liability for indemnification under this Article 12 and/or declines to
          defend the Indemnified Party in such claim, litigation or proceeding.
<PAGE>
31



3         NOTICES

          Any notice required or permitted to be given hereunder shall be deemed
          sufficient  if sent by  facsimile  letter  or  overnight  courier,  or
          delivered by hand to Seller or Buyer at the  respective  addresses and
          facsimile  numbers  set  forth  below  or at such  other  address  and
          facsimile  number as either  party  hereto may  designate.  If sent by
          facsimile  letter,  notice shall be deemed given when the transmission
          is completed if the sender has a confirmed  transmission report and if
          the sender  has sent a  confirmation  copy by  registered  mail.  If a
          confirmed  transmission report does not exist, then the notice will be
          deemed  given when the notice is  actually  received  by the person to
          whom it is sent.  If delivered by overnight  courier,  notice shall be
          deemed given when it has been signed for. If delivered by hand, notice
          shall be deemed given when received.

          if to Buyer, to:

         ICN Puerto Rico, Inc.
         c/o ICN Pharmaceuticals, Inc.
 .        3300 Hyland Avenue
 .        Costa Mesa, California, USA
         Attention: Bill A. MacDonald
         Fax: ++1 714 641 7207


         if to ICN, to:

         ICN Pharmaceuticals, Inc.
         3300 Hyland Avenue
         Costa Mesa, California, USA
 .        Attention: General Counsel
         Fax: ++1 714 641 7274


         if to Seller, to:

         F.Hoffmann-La Roche Ltd
         CH-4070-Basel, Switzerland
         Attention: Head of Corporate
         Finance Business Development (CFD) department
         Fax: ++41 61 688 4169

         with a copy to:

         F.Hoffmann-La Roche Ltd
         CH-4070 Basel, Switzerland
         Attention:  Corporate Law Department
         Fax: ++41 61 688 1396

<PAGE>
32


14        ARBITRATION AND GOVERNING LAW

14.1      Except for the right of either  party to apply to a court of competent
          jurisdiction for a temporary  restraining order to preserve the status
          quo or prevent irreparable harm pending the selection and confirmation
          of a panel of arbitrators, any dispute, controversy, or claims arising
          under, out of or relating to this Agreement (and subsequent amendments
          thereof),  its  valid  conclusion,   binding  effect,  interpretation,
          performance,  breach or termination,  including tort claims,  shall be
          referred to and finally determined by arbitration, to the exclusion of
          any courts of law, in accordance  with the Rules of Arbitration of the
          International  Chamber  of  Commerce  as in  force  at the  time  when
          initiating  the  arbitration.  The arbitral  tribunal shall consist of
          three  arbitrators.  The place of arbitration shall be Paris,  France.
          The language to be used in the arbitral  proceedings shall be English.
          The  arbitration  decision shall be final and binding upon the parties
          and the parties agree that any award granted pursuant to such decision
          may be entered forthwith in any court of competent jurisdiction.  This
          arbitration  clause  and any award  rendered  pursuant  to it shall be
          governed  by the United  Nations  Convention  on the  Recognition  and
          Enforcement  of Foreign  Arbitration  Awards  signed in New York of 10
          June,  1958. The party to whom a favorable  ruling is awarded shall be
          entitled to  reimbursement of all its reasonable costs and expenses in
          arbitration by the other party.

14.2      The  present  Agreement  shall be  subject to the  substantive  law of
          Switzerland  (regardless of its or any other jurisdiction's  choice of
          law principles).


15        ADDITIONAL TERMS

15.1      Brokers:  Buyer  represents  to Seller  that it has not  employed  any
          investment banker,  broker,  finder or intermediary in connection with
          the transactions contemplated hereby who might be entitled to a fee or
          any  commission  from Seller  upon  consummation  of the  transactions
          contemplated  hereby.  Seller  represents  to  Buyer  that  it has not
          employed any such Person in such connection who might be entitled to a
          fee or any commission from Buyer upon consummation of the transactions
          contemplated hereby.

15.2      Expenses,  Taxes and Fees: Except as otherwise  expressly  provided in
          this  Agreement,  all legal,  accounting  and other costs and expenses
          incurred in  connection  herewith  and the  transactions  contemplated
          hereby  shall  be paid  by the  party  incurring  such  expenses.  Any
          possible  value added,  excise or transfer taxes or HSR filing fees or
          similar filing fees in other  countries  levied in connection with the
          present  Agreement shall be paid and borne solely by Buyer and are not
          included in the Purchase Price according to Art. 3 above.
<PAGE>
33


15.3      Successors and Assigns: This Agreement shall be binding upon and shall
          inure to the benefit of the parties  and their  respective  successors
          and assigns;  provided that this  Agreement may not be assigned by any
          party  without  the  written  consent of the other  party  except that
          either  party  may  assign  the  Agreement  to any  of its  Affiliates
          provided  it  guarantees  due  performance  of the  Agreement  by such
          Affiliate.

15.4      Amendments;  No Waiver: No provision of this Agreement may be amended,
          revoked  or waived  except by a writing  signed  and  delivered  by an
          authorized  officer of each party.  No failure or delay on the part of
          either  party in  exercising  any right  hereunder  will  operate as a
          waiver of, or impair, any such right. No single or partial exercise of
          any such right will preclude any other or further  exercise thereof or
          the exercise of any other  right.  No waiver of any such right will be
          deemed a waiver of any other right hereunder.

15.5      Counterparts:   This   Agreement  may  be  executed  in  one  or  more
          counterparts  all of which shall together  constitute one and the same
          instrument  and shall become  effective  when a  counterpart  has been
          signed by Buyer and  delivered  to Seller and a  counterpart  has been
          signed by Seller and delivered to Buyer.


IN  WITNESS  WHEREOF,   this  Agreement  has  been  signed  by  duly  authorized
representatives  of  each of the  parties  hereto  as of the  date  first  above
written.


F.Hoffmann-La Roche Ltd               ICN Puerto Rico, Inc.



By     /s/Dr. Max Brauchli              By   /s/ Bill A. MacDonald         
       ------------------------              -------------------------------- 

Name   Dr. Max Brauchli               Name   Bill A. MacDonald
       ------------------------              --------------------------------

Title:                                Title: Executive Vice President
       ------------------------              -------------------------------- 




                                      ICN Pharmaceuticals, Inc.



                                      By    /s/ Bill A. MacDonald         
                                            ---------------------------------
                                      Name  Bill A. MacDonald
                                            ---------------------------------
                                      Title Executive Vice President
                                            ---------------------------------







<PAGE>





                                    GUARANTY


The  undersigned   hereby   irrevocably  and   unconditionally   guarantees  the
performance by ICN Puerto Rico, Inc. and its Affiliates of all their  respective
obligations  under this Agreement and the ancillary  documents  entered pursuant
thereto.


                                      ICN Pharmaceuticals, Inc.



                                      By    /s/ Bill A. MacDonald         
                                            -----------------------------------
                                      Name  Bill A. MacDonald
                                            -----------------------------------
                                      Title Executive Vice President
                                            -----------------------------------


<PAGE>





                                List of Schedules

Schedules

  Schedule 1.1              (chemical names of transferred compounds)
  Disclosure Schedule       (Section 1.9)
  Schedule 1.31             (monthly Roche Net Sales by Product for the 12 month
                                            ended July 31, 1998)

  Schedule 2.1              (Trademarks owned by Seller or an Affiliate)
  Schedule 2.1(a)           (Other trademark license agreements)
  Schedule 2.1(b)           (Trademarks combined with Roche)
  Schedule 2.1(c)           (Other exclusions)
  Schedule 2.2              (Registrations without current sales)
  Schedule 2.6              (Supply Agreement)
  Schedule 2.7              (Assumed Agreements)
  Schedule 3.1              (Allocation of Purchase Price)
  Schedule 3.2.1            (Promissory Note)
  Schedule 3.2.9            (Registration Rights Agreement)
  Schedule 4.3              (Title to Assets)
  Schedule 4.10             (Violations of Law)
  Schedule 5.4              (Government Restrictions)
  Schedule 6.1              (Maintenance of Assets)
  Schedule 8.9 (a)          (Toll Manufacturing Agreements)
  Schedule 8.9 (aa)         (Toll Fees)
  Schedule 8.9 (b)          (Supplied active substances)
  Schedule 8.10             (Distribution Agreement)
  Schedule 10.2.1           (General Conveyance, Assignment and Assumption)