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                                                                  Exhibit 10.702
                                                                  EXECUTION COPY

                         GOVERNANCE AGREEMENT dated as of November 20, 1994
                    (this "Agreement"), among CIBA-GEIGY LIMITED, a Swiss
                    corporation ("Ciba"), CIBA-GEIGY CORPORATION, a New York
                    Corporation that is an indirect wholly owned subsidiary of
                    Ciba ("C Corp"), and CHIRON CORPORATION, a Delaware
                    corporation (the "Company").

               WHEREAS Ciba and the Company have determined to enter into a
          strategic partnership in the area of biotechnology under which the two
          companies will enter into various collaborations, the Company will
          remain an autonomous and entrepreneurial business and will continue to
          make acquisitions of businesses and technologies within its strategic
          mission and Ciba will make substantial investments in the Company so
          as to enhance its capabilities for growth and strategic success;

               WHEREAS Ciba, C Corp, CIBA Biotech Partnership, Inc., a Delaware
          corporation ("Holdings"), and the Company have entered into the
          Investment Agreement dated as of the date hereof (the "Investment
          Agreement");

               WHEREAS each of Ciba, C Corp, Holdings and the Company have each
          determined to engage in the transactions contemplated by the
          Investment Agreement pursuant to which transactions Ciba initially
          will own a minority of the then outstanding shares of Common Stock of
          the Company; and

               WHEREAS Ciba, C Corp and the Company desire to establish in this
          Agreement certain terms and conditions concerning the corporate
          governance of the Company and certain terms and conditions concerning
          the acquisition and disposition of securities of the Company by Ciba
          and its Subsidiaries.

               NOW, THEREFORE, in consideration of the mutual promises and
          agreements contained herein and for other good and valuable
          consideration, the sufficiency and receipt of


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          which are hereby acknowledged, the parties hereto hereby agree as
          follows:

                                      ARTICLE I

                                     DEFINITIONS

               SECTION 1.01. DEFINITIONS. As used in this Agreement, the
          following terms shall have the following meanings:

               "ACQUISITION" means any acquisition of (i) any 10% or greater
          voting interest in any Person, (ii) the business of any Person or
          (iii) any assets of any Person comprising all or a Substantial Part of
          either such Person or the Company, in each case whether such
          acquisition be by merger, consolidation, the purchase of stock or
          assets or otherwise, but shall not include (a) any such acquisition of
          an equity interest in any Person primarily as part of the
          establishment of a technology collaboration with such Person so long
          as the value of the consideration for such equity is less than
          $20,000,000 and is paid in cash or (b) any such acquisition which in
          substance is the acquisition of intellectual property and not of a
          business or any operating assets of a business, so long as the
          consideration for such intellectual property does not include Equity
          Securities.

               "AFFILIATE" has the meaning assigned to such term in the
          Investment Agreement.

               "ANCILLARY AGREEMENTS" has the meaning assigned to such term in
          the Investment Agreement.

               "ASSOCIATE" has the same meaning as in Rule 12b-2 promulgated
          under the Exchange Act.

               "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of
          the Company except where the context requires otherwise.

               "BUYOUT TRANSACTION" means a tender offer, merger, sale of
          substantially all of the Company's assets or similar transaction
          involving Ciba or one of its Affiliates and the Company or the
          Unaffiliated Equity Holders that (1) offers each Unaffiliated Equity
          Holder the opportunity to dispose of all Equity Securities owned by
          such stockholder or otherwise provides for the acquisition of all (but
          not less than all) Equity Securities owned by such stockholder, in
          each case for consideration reflecting such stockholder's


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          proportionate share of the Third Party Sale Value Consideration and
          (2) for each class of Equity Securities, provides the same
          consideration for each security within such class.

               "CCD" means Ciba Corning Diagnostics Corp., a Delaware
          corporation.

               "CIBA'S PERCENTAGE INTEREST" means the percentage of Voting
          Power, determined on the basis of the number of shares of Voting Stock
          actually outstanding, that is controlled directly or indirectly by
          Ciba or any Subsidiary of Ciba (other than the Company and its
          Subsidiaries), including by beneficial ownership.

               "CLOSING" means the date shares of Common Stock are accepted for
          payment pursuant to the Offer.

               "COMMON STOCK" means the Common Stock of the Company, and any
          other capital stock of the Company that does not have a fixed,
          floating or formulaic right to the payment of dividends or of a
          preferential amount upon liquidation.

               "COMPANY" has the meaning set forth above.

               "DIRECTOR" means a member of the Board of Directors.

               "DISCRIMINATORY TRANSACTION" means any transaction or other
          corporate action (other than those imposed pursuant to the express
          terms of this Agreement and other than those imposed, without the
          happening of a contingency, on each other stockholder) which would
          (x) impose limitations on the legal rights of Ciba or any of its
          Affiliates or Associates as a stockholder of the Company,
          including, without limitation, any action which would impose
          restrictions based upon the size of security holding, nationality
          of a securityholder, the business in which a securityholder is
          engaged or other considerations applicable to Ciba and not to
          stockholders generally, (y) deny any benefit to Ciba or any of its
          Affiliates or Associates, proportionately as a holder of any class
          of Voting Stock, that is made available to other holders of any
          class of Voting Stock or  (z) otherwise materially adversely
          discriminate against Ciba, its Affiliates or Associates as
          stockholders of the Company.

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                                                                               4

               "EFFECTIVENESS OF THE AGREEMENT" means the Closing.

               "EQUITY SECURITY" means (i) any Common Stock or other Voting
          Stock, (ii) any securities of the Company convertible into or
          exchangeable for Common Stock or other Voting Stock or (iii) any
          options, rights or warrants (or any similar securities) issued by the
          Company to acquire Common Stock or other Voting Stock.

               "EXCHANGE ACT" means the Securities Exchange Act of 1934 and the
          rules and regulations promulgated thereunder, as amended.

               "EXECUTIVE OFFICER" has the meaning set forth in Section 2.12(c).

               "EXTRAORDINARY DIVIDEND" means (i) the first dividend paid by the
          Company with respect to its Common Stock (other than pro rata
          dividends paid solely in additional shares of Common Stock), (ii) if
          the Company has previously paid a cash dividend with respect to its
          Common Stock, the payment by the Company of a dividend with respect to
          its Common Stock (other than pro rata dividends paid solely in
          additional shares of Common Stock) if the per share amount of such
          dividend, when taken together with the aggregate per share amount of
          cash dividends paid by the Company within the preceding 12 months,
          exceeds 5% of the Company's net earnings per share (determined in
          accordance with GAAP) for such 12 month period or (iii) the payment by
          the Company of a dividend with respect to any capital stock other than
          Common Stock unless such dividend is required by the instrument
          creating such capital stock.

               "FAIR MARKET VALUE" means, as of any date of determination, (i)
          in the case of a security, the average of the closing sale prices of
          such security during the 10-day period immediately preceding such date
          of determination on the principal U.S. or foreign securities exchange
          on which such security is listed or, if such security is not listed or
          primarily traded on any such exchange, the average of the closing sale
          prices or the closing bid quotations of such security during the
          10-day period preceding such date of determination on the Nasdaq
          National Market or any comparable system then in use or, if no such
          quotations are available, the fair market value of such security as of
          such date of determination as determined in good faith by a majority
          of the Independent Directors (or, in the case of


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          any securities payable as part of the Third Party Sale Value
          Consideration, by the arbitrator(s) pursuant to Section 4.01(d) to the
          extent applicable); and (ii) in the case of property other than cash
          or a security, the fair market value of such property on such date of
          determination as determined in good faith by a majority of Independent
          Directors.

               "FIRST STANDSTILL PERIOD" means the period beginning at the
          Effectiveness of this Agreement and terminating at the later to occur
          of (i) January 15, 2000, and (ii) the fifth anniversary of the
          Closing.

               "GAAP" means U.S. generally accepted accounting principles.

               "INDEBTEDNESS" of any Person means, without duplication, (a) all
          obligations of such Person for borrowed money, (b) all obligations of
          such Person under conditional sale or other title retention agreements
          relating to property or assets purchased by such Person, (c) all
          obligations of such Person issued or assumed as the deferred purchase
          price of property or services, (d) all Indebtedness of others secured
          by (or for which the holder of such Indebtedness has an existing
          right, contingent or otherwise, to be secured by) any lien on property
          owned or acquired by such Person, whether or not the obligations
          secured thereby have been assumed, (e) all guarantees by such Person
          of Indebtedness of others, (f) all obligations of such Person in
          respect to interest rate protection agreements, foreign currency
          exchange agreements or other interest or exchange rate hedging
          arrangements, in each case other than those entered into primarily as
          a hedge, and (g) all capital lease obligations of such Person.

               "INDEPENDENT DIRECTOR" means a Director of the Company (i) who is
          not and has never been an officer or employee of the Company, any
          Affiliate or Associate of the Company or of an entity that derived 5%
          or more of its revenues or earnings in its most recent fiscal year
          from transactions involving the Company or any Affiliate or Associate
          of the Company, (ii) who is not and has never been an officer,
          employee or director of Ciba (except for Mr. Henri Schramek, who shall
          be an Independent Director), any Affiliate or Associate of Ciba or of
          an entity that derived more than 5% of its revenues or earnings in its
          most recent fiscal year from transactions involving Ciba or any
          Affiliate or Associate of Ciba and (iii) who has no


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          affiliation, compensation, consulting or contracting arrangement with
          the Company, Ciba or their respective Affiliates or any other entity
          such that a reasonable person would regard such Director as likely to
          be unduly influenced by management of the Company or Ciba,
          respectively, but shall not include any Investor Director or
          Management Director.

               "INDEX DEBT" means the Company's senior, unsecured,
          noncredit-enhanced long-term indebtedness for borrowed money.

               "INVESTMENT AGREEMENT" has the meaning set forth above.

               "INVESTMENT GRADE" means a rating of at least Baa3 by Moody's or
          of at least BBB- by S&P. If the rating system of Moody's or S&P shall
          change, or if either such rating agency shall cease to be in the
          business of rating corporate debt obligations, the Company and Ciba
          shall negotiate in good faith to amend the applicable reference to a
          specific rating in this definition to reflect such changed rating
          system or the nonavailability of ratings from such rating agency.

               "INVESTOR DIRECTOR" means a Director who is designated for such
          position by Ciba in accordance with Section 2.01.

               "LEVEL I ACQUISITION" means any Acquisition by the Company or any
          of its Subsidiaries for which the sole consideration given by the
          Company and its Subsidiaries consists of cash and/or shares of
          Specified Equity Securities having an aggregate Fair Market Value not
          exceeding, when taken together with the Fair Market Value of the
          consideration given by the Company and its Subsidiaries (such value
          being determined as of the date of the giving of the relevant
          consideration) for all other Acquisitions by them being consummated
          simultaneously with such Acquisition or previously consummated during
          the same fiscal year of the Company during which such Acquisition is
          consummated, $125,000,000.

               "LEVEL II ACQUISITION" means any Acquisition by the Company or
          any of its Subsidiaries that is not a Level I Acquisition.


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               "LEVEL I STOCK ISSUANCE" means (i) during the five year period
          commencing with the Effectiveness of this Agreement, any Stock
          Issuance providing gross proceeds not exceeding (A) when taken
          together with the gross proceeds from all other Stock Issuances being
          consummated simultaneously with such issuance or previously
          consummated during such five year period (including Stock Issuances
          pursuant to the Subscription Agreement), $700,000,000, or (B) when
          taken together with the gross proceeds from all other Stock Issuances
          being consummated simultaneously with such issuance or previously
          consummated during such five year period (excluding Stock Issuances
          pursuant to the Subscription Agreement), $400,000,000 and (ii) during
          each subsequent five year period, any Stock Issuance providing gross
          proceeds not exceeding (A) when taken together with the gross proceeds
          from all other Stock Issuances being consummated simultaneously with
          such issuance or previously consummated during such five year period
          (including Stock Issuances pursuant to the Subscription Agreement),
          the aggregate of (1) $400,000,000 plus (2) if positive, the
          Subscription Amount (as defined in the Subscription Agreement) as of
          the commencement of such period less $200,000,000 or (B) when taken
          together with the gross proceeds from all other Stock Issuances being
          consummated simultaneously with such issuance or previously
          consummated during such five year period (excluding Stock Issuances
          pursuant to the Subscription Agreement), $400,000,000.

               "LEVEL II STOCK ISSUANCE" means any Stock Issuance that is not a
          Level I Stock Issuance.

               "MANAGEMENT DIRECTOR" means a Director who is also an employee of
          the Company or any other Director designated as such by the Nominating
          Committee in accordance with Section 2.01.

               "MARKET PURCHASE" means an acquisition of Equity Securities that
          is within the definition of "Rule 10b-18 Purchase" under Rule 10b-18
          under the Exchange Act as in effect on the date hereof that satisfies
          the conditions of paragraph (b) of Rule 10b-18.

               "MEASUREMENT STANDARDS" means the measurement standards set and
          approved pursuant to Section 2.12.

               "MOODY'S" means Moody's Investor Service, Inc.


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               "NEW SECURITY" means any Equity Security issued by the Company
          after the Closing; PROVIDED that "New Security" shall not include (i)
          any securities issuable upon conversion of any convertible Equity
          Security, (ii) any securities issuable upon exercise of any option,
          warrant or other similar Equity Security or (iii) any securities
          issuable in connection with any stock split, stock dividend or
          recapitalization of the Company where such securities are issued to
          all stockholders of the Company on a proportionate basis.

               "NOMINATING COMMITTEE" shall mean the Nominating Committee of the
          Board of Directors as described in Section 2.03(b)(ii).

               "OFFER" has the meaning assigned to such term in the Investment
          Agreement.

               "OPERATING PLAN" means an operating plan of the Company and its
          Subsidiaries for any fiscal year and will include, at a minimum, an
          operating budget, a research and development budget, a capital
          expenditures budget, a financing plan and financial and operating
          performance goals for the Company (including sales and net profits and
          any appropriate qualitative objectives).

               "PERSON" means an individual, a partnership, a joint venture, a
          corporation, a trust, an incorporated or unincorporated organization,
          a government or any department or agency thereof.

               "PRO RATA SHARE" means the fraction of an entire issuance of New
          Securities, the numerator of which shall be the number of shares of
          Common Stock owned by Ciba and its Affiliates (other than the Company
          and its Subsidiaries) immediately prior to such issuance of such New
          Securities and the denominator of which shall be the aggregate number
          of shares of Common Stock outstanding immediately prior to such
          issuance of such New Securities.

               "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
          Agreement dated as of the date hereof, by and among Ciba, C Corp,
          Holdings and the Company.

               "SEC" means the Securities and Exchange Commission.


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               "SECOND STANDSTILL PERIOD" means the period commencing at the end
          of the First Standstill Period and terminating at the date that Ciba
          and its Affiliates become the beneficial owners of all outstanding
          shares of Equity Securities.

               "SECTION 16 OFFICERS" has the meaning assigned to such term in
          Section 2.03(b)(iv).

               "SECURITIES ACT" means the Securities Act of 1933 and the rules
          and regulations promulgated thereunder, as amended.

               "SIGNIFICANT SUBSIDIARY" has the meaning assigned to such term in
          the Investment Agreement.

               "S&P" means Standard & Poor's Corporation.

               "SPECIFIED EQUITY SECURITIES" means (i) any Common Stock, (ii)
          any nonvoting preferred stock (or any convertible preferred stock
          having voting rights on an as-converted basis) of the Company having a
          fixed, floating or formulaic dividend rate and a fixed liquidation
          preference, that does not participate in the financial results of the
          Company or any of its Subsidiaries or other business operations and
          the value of which is not derived from any other security or business
          operation and (iii) any debt securities of the Company convertible
          into any of the foregoing.

               "STANDSTILL PERIODS" means the First Standstill Period and the
          Second Standstill Period.

               "STOCK ISSUANCE" means any issuance of any Equity Securities or
          other capital stock (including any options, warrants or other rights
          with respect thereto) of the Company or any of its Subsidiaries,
          except (i) to a wholly owned Subsidiary of the Company or to the
          Company, as the case may be, (ii) as contemplated by the exception set
          forth in Section 2.04(b)(ii), and (iii) issuances of Specified Equity
          Securities in connection with (A) any Level I Acquisition and (B) to
          the extent approved in accordance with Section 2.04, any Level II
          Acquisition.

               "STRATEGIC PLAN" means the strategic plan of the Company and its
          Subsidiaries which sets forth the strategic direction for the Company
          and its Subsidiaries and their businesses (by strategic business
          units) for an open long


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          term horizon and for a period of three fiscal years in quantitative
          terms. While the specific items addressed in the Strategic Plan will
          depend upon the circumstances at the time of preparation, the parties
          expect the first Strategic Plan prepared after the Closing will be
          based generally on the items set forth in Annex A.

               "STRATEGIC PLANNING COMMITTEE" means the Strategic Planning
          Committee of the Board of Directors as described in Section 2.03(b)
          (iii).

               "STRATEGIC REVIEW" means a review and process that determines
          whether the Strategic Plan is still valid, reviews progress to date,
          updates key elements of the Strategic Plan, if deemed necessary, and
          proposes modifications in objectives and strategies if deemed
          necessary. It includes a review of (i) whether assumptions (including
          as to market factors, competition, regulation, patents, pipeline,
          etc.) are still valid; (ii) whether objectives are still realistic;
          (iii) whether strategies and programs are on track; (iv) whether
          resource assessments are still valid; and (v) an updated outlook
          (financial and nonfinancial) if material deviations are expected.

               "SUBSCRIPTION AGREEMENT" means the Subscription Agreement dated
          as of the date hereof among Ciba, C Corp, Holdings and the Company.

               "SUBSIDIARY" has the same meaning as in Rule 12b-2 promulgated
          under the Exchange Act.

               A "SUBSTANTIAL PART" of any Person means, as of any date of
          determination, more than 10% of the Fair Market Value of the total
          assets of such Person and its Subsidiaries as of the end of such
          Person's most recent fiscal quarter ending prior to such date of
          determination.

               "SUPERMAJORITY VOTE OF THE BOARD" means approval by a majority of
          the entire Board of Directors, which majority includes a majority of
          all Investor Directors and a majority of all Independent Directors.

               "THIRD PARTY SALE VALUE" means the value that an unaffiliated
          third party would be expected (based on financial analyses generally
          used by investment bankers in the preparation of a fairness opinion
          for an acquisition transaction) to pay for all the Equity Securities
          of the



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          Company in an arm's-length transaction negotiated by a willing seller
          and a willing buyer.

                 "THIRD PARTY SALE VALUE CONSIDERATION" means consideration at
          least equal as of the relevant date to Third Party Sale Value.

               "TOTAL VOTING POWER" means the aggregate number of votes entitled
          to be voted in an election of Directors of the Company by all the
          outstanding Voting Stock.

               "UNAFFILIATED EQUITY HOLDERS" means holders of Equity Securities
          other than Ciba or any of its Affiliates.

               "VOTING POWER" means the ability to vote or to control, directly
          or indirectly, by proxy or otherwise the vote of any Voting Stock.

               "VOTING STOCK" means securities having the right to vote
          generally in any election of Directors of the Company.

               "13D GROUP" means any group of Persons formed for the purpose of
          acquiring, holding, voting or disposing of Voting Stock which would be
          required under Section 13(d) of the Exchange Act, and the rules and
          regulations thereunder (as in effect, and based on legal
          interpretations thereof existing, on the date hereof), to file a
          statement on Schedule 13D with the SEC as a "person" within the
          meaning of Section 13(d)(3) of the Exchange Act if such group
          beneficially owned Voting Stock representing more than 5% of any class
          of Voting Stock then outstanding.

               SECTION 1.02. INTERPRETATION.  The rules of interpretation set
          forth in Section 7.04 of the Investment Agreement shall apply to this
          Agreement, and the provisions thereof shall be deemed to be
          incorporated by reference herein.

                                      ARTICLE II

                                 CORPORATE GOVERNANCE

               SECTION 2.01. COMPOSITION OF THE BOARD OF DIRECTORS. Subject to
          this Article II, the fundamental policies and strategic direction of
          the Company shall be determined by its Board of Directors as provided
          in this


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          Article II. The composition of the Board of Directors and manner of
          selecting members thereof shall be as follows:

               (a)  At and after the Effectiveness of this Agreement, the Board
          of Directors shall be comprised of 11 Directors. The number of such
          Directors may be increased only in accordance with Sections 2.01(g)
          and 2.04(a).

               (b)  Immediately following the Effectiveness of this Agreement,
          the Company shall elect to its Board of Directors the three
          individuals notified prior to the Closing by Ciba to the Company,
          which individuals will include Dr. Alex Krauer (unless any such
          individual is unable or unwilling to serve, in which event the Company
          shall elect a substitute individual designated by Ciba prior to the
          Closing), each of whom is designated as an Investor Director by Ciba.
          The Company agrees to file with the SEC, and to transmit to all
          holders of record of Common Stock and other Voting Stock, the
          information referred to in Section 14(f) of the Exchange Act in
          connection with such election as and to the extent required by such
          Section 14(f). Each such individual (or if applicable such
          individual's substitute) shall be assigned to the class of the Board
          of Directors notified by Ciba to the Company prior to the Closing.
          Following the Effectiveness of this Agreement, the current Directors
          of the Company listed under the heading of "Management Directors" in
          Schedule 2.01 shall be deemed and continue to be Management Directors
          and the current Directors of the Company listed under the heading
          "Independent Directors" in Schedule 2.01 shall be deemed and continue
          to be Independent Directors, in each case until the expiration of the
          term of their respective elections (or any earlier termination,
          resignation or removal).

               (c)  Except as otherwise provided herein, at all times from and
          after the Effectiveness of this Agreement, the Directors shall be
          nominated as follows (it being understood that such nomination shall
          include any nomination of any incumbent Director for reelection to the
          Board of Directors):

                    (i) the Nominating Committee shall nominate three Management
               Directors, two of whom shall be the two most senior executives of
               the Company;

                    (ii) Ciba shall have the right to designate three Investor
               Directors, each of whom shall be nominated by the Nominating
               Committee; and


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                    (iii) the Nominating Committee shall nominate the remaining
               Directors, each of whom (A) shall have an outstanding reputation
               for personal integrity and distinguished achievement in areas
               relevant to the Company (in applying the foregoing criteria the
               Nominating Committee shall be guided by the quality of the
               individuals currently serving as directors of the Company and
               Ciba) and (B) shall be an Independent Director.

               (d)  Notwithstanding anything in the foregoing paragraph (c) to
          the contrary, (i) at any time Ciba's Percentage Interest is less than
          30% but at least 20%, the Directors shall be nominated as set forth in
          such paragraph (c) except Ciba shall have the right to designate for
          nomination two Investor Directors and (ii) at any time Ciba's
          Percentage Interest shall be less than 20%, the Directors shall be
          nominated as set forth in such paragraph (c) except Ciba shall have
          the right to designate for nomination one Investor Director.

               (e)  In connection with each annual meeting of the stockholders
          of the Company, Ciba shall have the right to designate for nomination
          a number of nominees for Director that together with the persons
          designated for nomination by Ciba who are Directors in the classes not
          standing for election at such annual meeting equals the number of
          Investor Directors that Ciba is entitled to designate for nomination
          pursuant to this Section 2.01 as of the date of such annual meeting.
          Each person so designated shall be included in management's slate of
          nominees for such annual meeting.

               (f)  Ciba and the Nominating Committee, respectively, shall have
          the right to designate any replacement for a Director designated for
          nomination or nominated in accordance with this Section 2.01 by Ciba
          or the Nominating Committee, respectively, upon the death,
          resignation, retirement, disqualification or removal from office for
          other cause of such Director. Such replacement for any Independent
          Director shall also be an Independent Director conforming to the
          standard set forth in clause (A) of Section 2.01(c)(iii). The Board of
          Directors shall elect each person so designated.

               (g) Without limiting the generality of Section 2.01(c), in the
          event that at any time after the Effectiveness of this Agreement the
          number of Investor


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          Directors on the Board of Directors differs from the number that Ciba
          has the right (and wishes) to designate pursuant to this Section 2.01,
          (i) if the number of Investor Directors exceeds such number, Ciba
          shall promptly take all appropriate action to cause to resign that
          number of Investor Directors as is required to make the remaining
          number of such Investor Directors conform to this Section 2.01 or (ii)
          if the number of Investor Directors otherwise is less than such
          number, the Company shall take all necessary action to create
          sufficient vacancies on the Board of the Company to permit Ciba to
          designate the full number of Investor Directors which it is entitled
          (and wishes) to designate pursuant to this Section 2.01 (such action
          to include expanding the size of the Board of Directors, seeking the
          resignation or removal of Directors or, at the request of Ciba,
          calling a special meeting of the shareholders of the Company for the
          purpose of removing Directors to create such vacancies to the extent
          permitted by applicable law). Upon the creation of any vacancy
          pursuant to the preceding sentence Ciba, shall designate the person to
          fill such vacancy in accordance with this Section 2.01 and the Board
          of Directors shall elect each person so designated.

               (h) Notwithstanding anything herein to the contrary, no
          individual who is an officer, director, partner or principal
          stockholder of any competitor of the Company or any of its
          Subsidiaries (other than Ciba and its Affiliates) or any competitor of
          Ciba or any of its Subsidiaries (other than the Company) shall serve
          as a Director without the unanimous consent of the Nominating
          Committee.

               SECTION 2.02. SOLICITATION AND VOTING OF SHARES. (a) The Company
          shall use its best efforts to solicit from the stockholders of the
          Company eligible to vote for the election of Directors proxies in
          favor of the nominees selected in accordance with Section 2.01.

               (b)  In any election of Directors or any meeting of the
          stockholders of the Company called expressly for the removal of
          Directors, so long as the Board of Directors includes (and will
          include after any such removal) the number of Investor Directors
          contemplated by Section 2.01, Ciba and its Affiliates shall be present
          for purposes of establishing a quorum and shall vote all their shares
          of Voting Stock (i) in favor of any nominee or Director selected in
          accordance with Section 2.01, (ii) in favor of removal of any Director
          as contemplated by Section 2.01(g)


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          and (iii) otherwise against the removal of any Director designated in
          accordance with Section 2.01. Subject to Section 2.08, in any other
          matter submitted to a vote of the stockholders of the Company, Ciba
          may vote any or all of its shares in its sole discretion unless such
          matter was approved by Ciba or a majority of the Investor Directors in
          accordance with Section 2.04 or 2.12, in which case Ciba and its
          Affiliates shall cast all their votes in favor of such matter.

               (c)  Ciba agrees that it will, and will cause any of its
          Subsidiaries (other than the Company and its Subsidiaries) to, take
          all action as a stockholder of the Company or as is otherwise
          reasonably within its control, as necessary to effect the provisions
          of this Agreement.

               SECTION 2.03. COMMITTEES.  (a) Subject to the general oversight
          and authority of the full Board of Directors, the Board of Directors
          shall establish, empower and maintain the committees of the Board of
          Directors contemplated by this Section 2.03.

               (b)  The following committees shall be established, empowered and
          maintained by the Board of Directors at all times during the term of
          this Agreement:

                    (i) an Audit Committee, consisting solely of Investor
               Directors and Independent Directors and a majority of whose
               members shall be Independent Directors;

                    (ii) a Nominating Committee, responsible, among other
               things, for recommending the nomination of Directors, all
               pursuant to Section 2.01, and comprised and conducting itself
               as follows:

                         (A) until the fifth anniversary of the Effectiveness of
                    this Agreement and thereafter if Ciba's Percentage Interest
                    is less than 40%, the Nominating Committee shall be
                    comprised of two Independent Directors, one Management
                    Director and one Investor Director;

                         (B) on and after the fifth anniversary of the
                    Effectiveness of this Agreement, so long as Ciba's
                    Percentage Interest is at least 40%, the Nominating
                    Committee shall be composed of two


<PAGE>
                                                                              16

               Independent Directors, one Management Director and two Investor
               Directors;

                    (C) a majority of the Independent Directors shall designate
               the Independent Directors that serve on the Nominating Committee,
               the Chief Executive Officer of the Company shall designate the
               Management Director that serves on the Nominating Committee and a
               majority of the Investor Directors shall designate the Investor
               Directors that serve on the Nominating Committee;

                    (D) a quorum of the Nominating Committee required for any
               action thereby shall require the attendance of each member
               thereof who is an Independent Director or an Investor Director;
               and

                    (E) the Nominating Committee shall act by majority vote of
               the entire Nominating Committee; PROVIDED, HOWEVER, that (1) on
               and after the fifth anniversary of the Effectiveness of this
               Agreement, so long as Ciba's Percentage Interest is at least 40%,
               the Management Director member of the Nominating Committee cannot
               vote to break any tie vote between all the Investor Director
               members, on the one hand, and all the Independent Director
               members, on the other hand, and (2) in addition on and after the
               eleventh anniversary of the Effectiveness of this Agreement, so
               long as Ciba's Percentage Interest is at least 49%, the Investor
               Director members shall have a deciding vote (meaning that, with
               respect to any motion before the committee, if the two Investor
               Director members vote one way and the two Independent Director
               members vote the other way, the vote of the Investor Directors
               will control) to break any tie vote between all the Investor
               Director members, on the one hand, and all the Independent
               Director members, on the other hand;

               (iii) a Strategic Planning Committee, coming into existence and
          having the responsibilities as set forth in Section 2.12 and comprised
          and conducting itself as follows:

                    (a) the Strategic Planning Committee shall be comprised of
               the three Investor Directors, three Independent Directors (who
               shall be designated by


<PAGE>

                                                                              17

               a majority of the Independent Directors) and one Management
               Director (who shall be designated by a majority of the Management
               Directors); and

                    (b) a quorum of the Strategic Planning Committee required
               for any action thereby shall require the attendance of each
               member thereof, and the Strategic Planning Committee shall act by
               majority vote of the entire Strategic Planning Committee;
               PROVIDED, HOWEVER, that the Management Director member of the
               Strategic Planning Committee cannot vote to break any tie vote
               between all the Investor Director members, on the one hand, and
               all the Independent Director members, on the other hand.

               (iv) a Compensation Committee, responsible, among other things,
          for recommending to the Board of Directors, for approval by a majority
          of the Board of Directors (subject to Sections 2.04 and 2.12), (a) the
          adoption and amendment of all employee benefit plans and arrangements,
          (b) the engagement of, terms of any employment agreements and
          arrangements with and termination of all persons designated as by the
          Company as "officers" for purposes of Section 16 of the Exchange Act
          ("Section 16 Officers"), (c) the policies, limitations and procedures
          under which the Stock Option Plan Administration Committee shall
          operate and (d) the granting under the Company's employee benefit
          plans of stock options and other equity rights to Section 16 Officers,
          and consisting solely of Investor Directors and Independent Directors
          who constitute disinterested persons (as such term is defined in Rule
          16b-3(d) under the Exchange Act) and a majority of whose members shall
          be Independent Directors;

               (v) a Stock Option Plan Administration Committee, responsible,
          among other things, for (A) recommending to the Board of Directors,
          for approval by a majority of the Board of Directors, subject to
          Sections 2.04 and 2.12, the adoption and amendment of all stock option
          plans of the Company and (B) the administration of such plans
          (including, subject to Sections 2.04 and 2.12, the approval of all
          grants under the Company's employee benefit plans of stock options and
          other equity rights to all persons other than those persons for
          whom such grants are required to be approved by the Compensation
          Committee pursuant to paragraph (iv) above), and


<PAGE>

                                                                              18

          (unless the composition of the committee is otherwise changed in a
          manner consistent with this Agreement by the Board of Directors)
          consisting solely of two Management Directors; and

               (vi) such other committees as the Board of Directors deems
          necessary or desirable; PROVIDED that such committees are established
          in compliance with the terms of this Agreement.

               (c) Except as otherwise provided in this Agreement or as
     agreed by a majority of the Investor Directors, the number of Investor
     Directors on each committee of the Board of Directors shall be the same
     proportion of the total membership of such committee as the number of
     Investor Directors, as the case may be, is of the entire Board of
     Directors.

               (d) No action by any committee of the Board of Directors shall
     be valid unless taken at a meeting for which adequate notice has been
     duly given or waived by the members of such committee. Such notice shall
     include a description of the general nature of the business to be
     transacted at the meeting, and no other business may be transacted at
     such meeting unless all members of the committee are present and consent
     to the consideration of such other business. Any committee member unable
     to participate in person at any meeting shall be given the opportunity
     to participate by telephone. The Board of Directors or the remaining
     committee members shall designate an Investor Director, Independent
     Director or Management Director to replace any absent or disqualified
     Investor Director member, Independent Director member or Management
     Director member, respectively, of any committee. In the event that any
     Investor Director or Independent Director ceases to serve on any
     committee of the Board of Directors and, after a reasonable time, no
     successor to such Director is designated in accordance with the terms
     hereof to serve on such committee, the number of members of such
     committee may be reduced if such reduction does not (and no such
     reduction is intended to) result in a change of the relative authorities
     within such committee among the Investor Directors (taken as a group),
     the Independent Directors (taken as a group) and the Management
     Director. Each of the committees established by the Board of Directors
     pursuant to this Section 2.03 shall establish such other rules and
     procedures for its operation and governance (consistent with the terms
     of this Agreement) as

<PAGE>

                                                                              19


     it shall see fit and may seek such consultation and advice as to matters
     within its purview as it shall require.

               SECTION 2.04. APPROVAL REQUIRED FOR CERTAIN ACTIONS.  (a) So long
     as Ciba's Percentage Interest is at least 40%, the approval of Ciba shall
     be required for the Company or any of its Subsidiaries to do or effect any
     of the following:

                 (i) the entry by the Company or any of its Subsidiaries into
          any Discriminatory Transaction;

                (ii) a Level II Stock Issuance;

               (iii) a reclassification, combination, split, subdivision or
          redemption, purchase or other acquisition, directly or indirectly, of
          any debt or equity securities or other capital stock of the Company;

                (iv) any amendment to the Certificate of Incorporation of the
          Company or, subject to Section 2.01, any change in the size or
          composition of the Board of Directors or any committee thereof;

                 (v) any amendment to the By-laws of the Company; PROVIDED that
          Ciba's approval to any such amendment voted on by the Board of
          Directors and approved by a majority of Investor Directors will be
          deemed to have been given unless prior to the Board of Directors' vote
          on such amendment Ciba notifies the Company of its disapproval
          thereof;

                (vi) any incurrence, assumption or issuance by the Company or
          any of its Subsidiaries of Indebtedness (other than any Indebtedness
          of CCD assumed at the Closing and any refinancings thereof to the
          extent such refinancings do not increase the aggregate outstanding
          principal amount thereof) that, when aggregated with the principal
          amount of all then outstanding Indebtedness of the Company and its
          Subsidiaries incurred, assumed or issued after the date of this
          Agreement (other than any Indebtedness of CCD assumed at the Closing
          and any refinancings thereof to the extent such refinancings do not
          increase the aggregate outstanding principal amount thereof), exceeds
          $460,000,000 if such incurrence, assumption or issuance (A) might
          reasonably be expected to result in the Index Debt being rated less
          than

<PAGE>
                                                                              20


          Investment Grade by Moody's or S&P or (B) occurs at a time when the
          Index Debt is rated less than Investment Grade by Moody's or S&P;

                (vii) the adoption or implementation of any takeover defense
          measures (except against Persons other than Ciba and its Affiliates),
          including the institution, amendment or redemption by the Company or
          any of its Subsidiaries of any stockholder rights plan or similar plan
          or device, or any change of control matters (including change of
          control provisions in future collaborations that could have a material
          adverse effect on the value of Ciba's holdings in the Company if Ciba
          were to increase its ownership interest in the Company);

               (viii) any transaction involving or any action by the Company or
          any Subsidiary (a) leading to a circumstance in which any Person or
          13D Group (other than Ciba and/or its Affiliates) shall beneficially
          own or control Equity Securities representing a percentage of Total
          Voting Power, or any equity interest in the Company or its successor,
          greater than 15% or (b) requiring the approval or participation of
          holders of a majority of the Voting Stock or Equity Securities;

                 (ix) any Level II Acquisition;

                  (x) any sale, asset exchange, lease, exchange, mortgage,
          pledge, transfer or other disposition by merger or otherwise by the
          Company or any of its Subsidiaries (in one transaction or a series of
          related transactions) of all of the business or assets of the Company
          and its Subsidiaries taken as a whole or of any part thereof
          constituting a Substantial Part of the Company;

                 (xi) any change in the Company's fiscal year;

                (xii) any change in the strategic mission of the Company and its
          Subsidiaries from that of being a technology-driven health care
          company; or

               (xiii) the dissolution of the Company or any Significant
          Subsidiary thereof; the adoption of a plan of liquidation of the
          Company or any Significant Subsidiary thereof; or any action by the
          Company or any Significant Subsidiary thereof to commence any suit,

<PAGE>
                                                                              21


          case, proceeding or other action (A) under any existing or future law
          of any jurisdiction relating to bankruptcy, insolvency, reorganization
          or relief of debtors seeking to have an order for relief entered with
          respect to the Company or any Significant Subsidiary thereof, or
          seeking to adjudicate the Company or any Significant Subsidiary
          thereof a bankrupt or insolvent, or seeking reorganization,
          arrangement, adjustment, winding up, liquidation, dissolution,
          composition or other relief with respect to the Company or any
          Significant Subsidiary thereof or (B) seeking appointment of a
          receiver, trustee, custodian or other similar official for the Company
          or any Significant Subsidiary thereof, or for all or any Substantial
          Part of the assets of the Company or any Significant Subsidiary
          thereof, or making a general assignment for the benefit of the
          creditors of the Company or any Significant Subsidiary thereof.

               (b)  So long as Ciba's Percentage Interest is at least 40%, the
     approval of a majority of the Investor Directors shall be required for the
     Board of Directors to approve or authorize, and for the Company or any of
     its Subsidiaries to do, any of the following:

                (i) the declaration or payment by the Company of any
          Extraordinary Dividend;

               (ii) the issuance of any Equity Securities or other capital stock
          (or any options, warrants or rights with respect thereto) of the
          Company or any of its Subsidiaries to any of their directors, officers
          or other employees as compensation (pursuant to any plan or
          otherwise), except the issuance of Common Stock or options for the
          purchase thereof (A) pursuant to any employee compensation plan in
          existence at the Closing as long as the number of shares issued or
          issuable at any time pursuant to grants in any year (other than grants
          described in the following clause (B) or (C)) (1) does not exceed the
          lesser of 4% of the number of shares of Common Stock outstanding at
          the beginning of such year and 1,750,000 and (2) are issued for a
          price (or, in the case of options, having an exercise price) at least
          equal to fair market value (as defined in such plan), (B) as
          contemplated by Section 5.14(f) of the Investment Agreement or (C) to
          officers or other employees of the CCD component of the Company's
          diagnostics business during the three year period

<PAGE>
                                                                              22


          commencing with the Closing in amounts consistent with amounts granted
          to comparable employees of the Company;

               (iii) (A) during the five year period commencing with the
          Closing, (1) any changes to any employment agreement (or related
          arrangements) entered into between the Company and C. William Zadel as
          contemplated by the Investment Agreement and (2) any disposition (in
          one transaction or a series of related transactions) of all of the
          business or assets of CCD or 25% or more thereof and (B) during the
          one year period commencing with the Closing, any removal, termination
          (including constructive termination) or replacement of him as chief
          operating officer of the business of CCD (other than for cause);

                (iv) any amendment to the By-laws of the Company;

                 (v) in connection with any Acquisition by the Company or any of
          its Subsidiaries, the giving of any consideration by the Company or
          any of its Subsidiaries other than cash, shares of Specified Equity
          Securities or, to the extent any other required approval pursuant to
          Section 2.04 has been obtained, any assets of the Company or any of
          its Subsidiaries;

                (vi) subject to any other approval required under this Section
          2.04, the issuance of any security of the Company or any Subsidiary
          other than Specified Equity Securities; or

               (vii) the establishment of any committee of the Board of
          Directors other than as provided in Section 2.03(b)(i) through (v).

               (c) With respect to any Acquisitions or Stock Issuances
     consummated by the Company or any of its Subsidiaries between the fifth and
     tenth anniversaries of the Effectiveness of this Agreement (and for each
     subsequent five year period), Ciba and the Company shall negotiate in good
     faith prior to the beginning of such period regarding whether the
     $125,000,000 limit in the definition of Level I Acquisition or the
     $400,000,000 limits in the definition of Level I Stock Issuance should be
     revised; PROVIDED that, absent any mutual written agreement among the
     parties hereto, such limits shall continue unchanged during such periods.

<PAGE>
                                                                              23


               SECTION 2.05. MATERIAL TRANSACTIONS WITH CIBA.  The Company shall
     not enter into any contract, agreement or transaction, with Ciba or any of
     its Affiliates after the Closing described in Item 404 of Regulation S-K
     promulgated by the SEC unless a majority of the Independent Directors or
     holders of a majority of the Voting Power of the Voting Stock which is held
     by Unaffiliated Equity Holders approve such contract, agreement or
     transaction; PROVIDED, HOWEVER, that the restrictions contained in this
     Section 2.05 shall not apply to any contract, agreement or transaction that
     is expressly contemplated by the Investment Agreement, this Agreement or
     any other Ancillary Agreement.

               SECTION 2.06. ENFORCEMENT OF THIS AGREEMENT.  A majority of the
     Independent Directors shall have full and complete authority on behalf of
     the Company to enforce the terms of this Agreement.

               SECTION 2.07. CERTIFICATE OF INCORPORATION AND BY-LAWS.  The
     Company and Ciba shall take or cause to be taken all lawful action
     necessary to ensure at all times that the Company's Certificate of
     Incorporation and By-laws are not at any time inconsistent with the
     provisions of this Agreement. Not later than the Effectiveness of this
     Agreement, the Board of Directors shall amend the Company's By-laws to
     reflect the provisions of Sections 2.04, 2.10, 2.11 and 2.12. At Ciba's
     request the Board of Directors shall adopt (and if necessary submit and
     recommend for approval by stockholders) other amendments to the Company's
     Certificate of Incorporation or By-laws reasonably necessary to implement
     the provisions of this Agreement.

               SECTION 2.08. ADVISORS.  The Independent Directors shall be
     entitled to retain, at the cost and expense of the Company, the services of
     an investment banking firm of national reputation of their choice and one
     law firm of their choice to advise them in their capacity as Independent
     Directors with respect to any matter on which the Independent Directors, as
     a group, are required or permitted to act hereunder.

               SECTION 2.09. NOMINATION TO CIBA BOARD OF DIRECTORS.  Unless
     otherwise prohibited by applicable law and unless he is unwilling or unable
     to serve, at the first opportunity available under Ciba's standard
     operating procedures after the Effectiveness of this Agreement, Ciba shall
     nominate Dr. William J. Rutter for election to its Board of Directors and
     shall renominate Dr. Rutter to its

<PAGE>
                                                                              24


     Board of Directors at the conclusion of any term during which Dr. Rutter
     shall serve as a director of Ciba for so long as Dr. Rutter shall remain
     the Chairman of the Board of Directors or the principal executive officer
     of the Company.

               SECTION 2.10. STRATEGIC PLANNING PROCESS.  (a) Management of the
     Company shall prepare and propose to the Board of Directors a three year
     Strategic Plan, beginning with the period 1996-1998. The Strategic Plan for
     1996-1998 will be proposed to the Board of Directors within six months of
     the Closing, and a Strategic Plan for each subsequent period will be
     proposed not later than two months before the beginning of the first fiscal
     year covered by such Plan. The goals of each Strategic Plan shall be
     aggressive but reasonable and achievable. In connection with the
     preparation of each Strategic Plan, management of the Company shall confer
     on a reasonable basis with the Investor Directors.

               (b)  From time to time at the request of management of the
     Company, and at least once a year during the second and third fiscal years
     of a Strategic Plan and prior to the budgeting process for the following
     year, management of the Company will hold a Strategic Review with the Board
     of Directors and, in light of such review, management, or any three
     Directors, may propose to the Board of Directors revisions or updates to
     the Strategic Plan in light of changed circumstances.

               (c) The entire Board of Directors shall consider and vote upon
     any proposed new Strategic Plan or any revisions or updates to an existing
     Strategic Plan, and approval of such matters will require a Supermajority
     Vote of the Board.

               SECTION 2.11. OPERATING PLANNING PROCESSES.  (a) The management
     of the Company will, on an annual basis, prepare and recommend to the Board
     of Directors an Operating Plan for each fiscal year that is consistent with
     the then applicable Strategic Plan. Management will submit an Operating
     Plan for each fiscal year not later than one month before the beginning of
     such fiscal year. The financial and operating performance goals in each
     Operating Plan shall be aggressive but reasonable and achievable and the
     budgets shall be reasonably designed to achieve such goals.

               (b) The Operating Plan will be subject to the approval of the
     Board of Directors. At any time after

<PAGE>
                                                                              25


     fiscal year 1995 that there is not in effect a Strategic Plan covering the
     current year adopted by the Board of Directors in accordance with Section
     2.10, approval of an Operating Plan will require a Supermajority Vote of
     the Board and, except as set forth in Section 2.12, at all other times
     approval of an Operating Plan will be by majority vote of the Board of
     Directors.

               SECTION 2.12. MEASUREMENT STANDARDS.  (a) In connection with its
     review and approval of the Operating Plan for each fiscal year, the Board
     of Directors also shall set and approve Measurement Standards for that
     fiscal year. The Measurement Standards will be set with a view such that
     failure to meet such Measurement Standards taken as a whole (and taking
     into account, to the extent the Directors judge to be appropriate, any
     qualitative standards included in such goals) would represent an
     unreasonably low rate of accretion in the overall valuation of the Company
     compared to the expectations underlying the then effective Strategic Plan;
     it being understood that the annual rate of accretion should not be less
     than 7% in the absence of unusual circumstances (but may be considerably
     more). While the Measurement Standards will be derived from the financial
     and operating performance goals in the applicable Operating Plan and
     Strategic Plan, if, as anticipated, the goals of those Plans are aggressive
     (but reasonable and achievable), the Measurement Standards would be
     expected to be significantly lower than those goals. If during a fiscal
     year, events for which management should not reasonably be held accountable
     or which management would not reasonably be expected to anticipate occur
     that significantly adversely impact the Company's ability to fulfill
     applicable Measurement Standards, the Directors shall in good faith
     discuss whether revisions to the Measurement Standards are appropriate.
     Approved Measurement Standards shall not change, however, without further
     action of the Board of Directors under the next paragraph.

               (b) The entire Board of Directors shall consider and vote upon
     the establishment or revision of Measurement Standards, and approval of
     such matters will require a Supermajority Vote of the Board.

               (c)  In the event Measurement Standards for any fiscal year
     commencing with 1996 have not been approved by the beginning of such fiscal
     year, then until Measurement Standards for such fiscal year are approved
     pursuant to this Section 2.12, the Company shall not take any of the

<PAGE>
                                                                              26


     following actions unless approved by a Supermajority Vote of the Board:

                 (i) the granting of stock options and other equity rights to
          any Section 16 Officers;

                (ii) increasing compensation of any officer included in the
          compensation table of the Company's most recent annual proxy statement
          (or who would be included in the compensation table of the Company's
          next annual proxy statement) (an "Executive Officer");

               (iii) initiating any new collaboration or entering into any new
          material licenses of technology with any entity, including Ciba; or

                (iv) initiating new material capital projects.

               (d)  The Strategic Planning Committee will function from time to
     time from and after the first day immediately following any fiscal year for
     which the Company shall have failed to meet the applicable Measurement
     Standards and will continue to function until the Measurement Standards for
     a subsequent full fiscal year are fulfilled. The Strategic Planning
     Committee will prepare and recommend to the entire Board of Directors a
     remedial plan to restore the Company to compliance with applicable
     Measurement Standards. In addition, during such period the Company shall
     not take any of the following actions unless approved by a Supermajority
     Vote of the Board:

                 (i) approving the remedial plan proposed by the Strategic
          Planning Committee;

                (ii) approving the Operating Plan proposed pursuant to Section
          2.11(a); or

               (iii) setting the form and amount of compensation of any
          Executive Officer (on which matter the Management Directors shall not
          vote).

               (e)  In the event the Company fails to meet the Measurement
     Standards for two consecutive fiscal years, then thereafter until the
     Measurement Standards for a subsequent full fiscal year are fulfilled, in
     addition to the responsibilities of the Strategic Planning Committee set
     forth in paragraph (d) above, the Strategic Planning Committee shall have
     the delegated power of the Board of

<PAGE>
                                                                              27


     Directors to set the compensation and terminate the employment of the
     Executive Officers. In addition, during such period the Company shall not
     take any of the following actions unless approved by a Supermajority Vote
     of the Board (and by any vote required pursuant to Section 2.04):

                 (i) all matters requiring approval by a Supermajority Vote of
          the Board pursuant to paragraph (d) above;

                (ii) hiring of any Executive Officers (on which matter the
          Management Directors shall not vote);

               (iii) issuance of any Equity Security (other than (A) stock
          options consistent with past practice (other than to Section 16
          Officers) and (B) pursuant to exercise of a warrant or option or
          conversion of a convertible security, in each case that is outstanding
          at the beginning of such period);

                (iv) incurrence or issuance of any Indebtedness by the Company
          or any of its Subsidiaries other than in the ordinary course of
          business; or

                 (v) initiation of any material Acquisition by the Company or
          any of its Subsidiaries.

                                     ARTICLE III

                          EQUITY PURCHASES FROM THE COMPANY

               SECTION 3.01. SUBSCRIPTION RIGHTS. So long as Ciba has the right
     to designate any Investor Directors pursuant to Section 2.01, if the Board
     of Directors shall authorize the issuance of New Securities to any Person
     (other than (i) any New Securities issued to officers, employees or
     directors of the Company or any of its Subsidiaries pursuant to any
     employee stock offering, plan or arrangement in compliance with Section
     2.04(b) and (ii) Ciba or its Affiliates (other than the Subsidiaries of the
     Company)), then, prior to each such issuance of New Securities, the Company
     shall offer to Ciba a Pro Rata Share of such New Securities.  Any offer of
     New Securities made to Ciba under this Section 3.01 shall be made by notice
     in writing (the "Subscription Notice") at least 5 days prior to the date on
     which the meeting of the Board of Directors is held to authorize the
     issuance of such New Securities.  The

<PAGE>
                                                                              28


     Subscription Notice shall set forth (i) the number of New Securities
     proposed to be issued to Persons other than Ciba and the terms of such New
     Securities, (ii) the consideration (or manner of determining the
     consideration by reference to the market price), if any, for which such New
     Securities are proposed to be issued and the terms of payment, (iii) the
     number of New Securities offered to Ciba in compliance with the provisions
     of this Section 3.01 and (iv) the proposed date of issuance of such New
     Securities.  Not later than 20 days after such Board of Directors meeting
     authorizing such issuance is held, Ciba shall notify the Company in writing
     whether it elects to purchase all or any portion of the New Securities
     offered to Ciba pursuant to the Subscription Notice. If Ciba shall elect to
     purchase any such New Securities, the New Securities which it shall have
     elected to purchase shall be issued and sold to Ciba by the Company at the
     same time and on the same terms and conditions as the New Securities are
     issued and sold to third parties (except that, if such New Securities are
     issued for consideration other than cash, Ciba shall pay the Fair Market
     Value thereof). If, for any reason, the issuance of New Securities to third
     parties is not consummated, Ciba's right to its Pro Rata Share of such
     issuance shall lapse, subject to Ciba's ongoing subscription right with
     respect to issuances of New Securities at later dates or times.

               SECTION 3.02. ISSUANCE AND DELIVERY OF NEW SECURITIES AND
     VOTING STOCK.  The Company represents and covenants to Ciba that (i) upon
     issuance all of the shares of New Securities sold to Ciba pursuant to
     this Article III shall be duly authorized, validly issued, fully paid
     and nonassessable and will be approved (if outstanding securities of the
     Company of the same type are at the time already approved) for quotation
     on the NASDAQ National Market or for quotation or listing on the
     principal trading market for the securities of the Company at the time
     of issuance and (ii) upon delivery of such shares, they shall be free
     and clear of all claims, liens, encumbrances, security interests and
     charges of any nature and shall not be subject to any preemptive right
     of any Shareholder of the Company. If at the time of issuance of any
     shares of Common Stock pursuant to this Article III, the Company shall
     not have redeemed the Rights (as defined in the Rights Agreement dated
     as of August 29, 1994, between the Company and Continental Stock
     Transfer and Trust Company, as Rights Agent), then each share of Common
     Stock issued pursuant hereto shall have attached to it Rights or new
     rights with

<PAGE>
                                                                              29


     terms substantially the same as, and at least as favorable to Ciba as,
     are provided under the Rights. Each share issued or delivered by the
     Company hereunder shall bear the legend set forth in Section 3.02(d) of
     the Investment Agreement.

                                      ARTICLE IV

               LIMITATIONS ON PURCHASES OF ADDITIONAL EQUITY SECURITIES

               SECTION 4.01. PURCHASES OF EQUITY SECURITIES.  (a)  During the
     First Standstill Period, Ciba shall not, directly or indirectly,
     purchase or otherwise acquire any Equity Securities from any Person
     other than the Company unless (i) such acquisition is a Market Purchase
     and (ii) immediately after such purchase or acquisition, Ciba's
     Percentage Interest would not exceed the greatest of (A) 49.9%, (B) the
     highest Ciba's Percentage Interest resulting from any acquisition by
     Ciba or its Affiliates of Equity Securities that has been approved
     pursuant to paragraph (c) below and (C) the highest Ciba's Percentage
     Interest immediately following any action by the Company (including a
     purchase by the Company of outstanding Equity Securities or a sale of
     Equity Securities to Ciba or its Affiliates by the Company) that
     increases Ciba's Percentage Interest.

               (b)  Subject to Section 4.01(d), during the Second Standstill
     Period, Ciba shall not, directly or indirectly, purchase or otherwise
     acquire any Equity Securities from any Person other than the Company unless
     (i) such acquisition is a Market Purchase and (ii) immediately after such
     purchase or acquisition, Ciba's Percentage Interest would not exceed the
     greatest of (A) 55%, (B) the highest Ciba's Percentage Interest resulting
     from any acquisition by Ciba or its Affiliates of Equity Securities that
     has been approved pursuant to paragraph (c) below and (C) the highest
     Ciba's Percentage Interest immediately following any action by the Company
     (including a purchase by the Company of outstanding Equity Securities or a
     sale of Equity Securities to Ciba or its Affiliates by the Company) that
     increases Ciba's Percentage Interest.

               (c)  Except with respect to a Buyout Transaction, which shall be
     governed by paragraph (d) below, any purchase or other acquisition of
     Equity Securities by Ciba or its Affiliates (other than the Company and its
     Subsidiaries)

<PAGE>
                                                                              30


     from any Person other than the Company not permitted by Section 4.01(a) or
     (b) shall require the approval of a majority of the Independent Directors
     acting solely in the interest of the Unaffiliated Equity Holders and in
     granting such approval the Independent Directors, unless a majority of them
     decide otherwise, will require a purchase price for such Equity Securities
     in connection therewith reflecting a proportionate share of then prevailing
     Third Party Sale Value; PROVIDED that no such purchase shall increase
     Ciba's Percentage Interest above 79.9%.

               (d)  Ciba may propose and consummate a Buyout Transaction at any
     time after the sixth anniversary of the Closing (or, if the provisions of
     Section 2.12(e) are in effect on the fifth anniversary of the Closing or
     come into effect during any fiscal year that begins after the fifth
     anniversary of the Closing, at any time thereafter) and then only in
     accordance with the following procedures:

                 (i)   If Ciba is able to obtain the approval of a majority of
          the Independent Directors for a proposed Buyout Transaction, Ciba may
          proceed with such Buyout Transaction (in which event nothing in this
          Agreement shall prevent or impede such Buyout Transaction from
          proceeding or being consummated and the Company will take all action
          reasonably necessary to allow such transaction to proceed in
          accordance with the provisions hereof).

                (ii)   If Ciba is not able to obtain the approval of a majority
          of the Independent Directors for a proposed Buyout Transaction within
          four months after such Buyout Transaction is first proposed to the
          Directors of the Company, Ciba may either (a) withdraw such proposal
          (in which case Ciba may not again propose a Buyout Transaction for a
          period of one year after such withdrawal) or (b) request arbitration
          of the amount of the Third Party Sale Value pursuant to paragraph
          (iii) below; PROVIDED that, unless the provisions of Section 2.12(e)
          shall be in effect, a majority of the Independent Directors shall have
          the right (the "Postponement Right"), exercisable on only one occasion
          and within 14 days of Ciba's request for arbitration, to postpone
          such arbitration for a period of up to one year from the date of
          Ciba's request therefor, and if the Independent Directors shall so
          postpone the arbitration, Ciba shall either (1) withdraw its proposal
          for a Buyout Transaction, in which case Ciba

<PAGE>
                                                                              31


          may not again propose a Buyout Transaction for a period of one year,
          or (2) accept such postponement.

               (iii) Within 15 days of such arbitration request (or, if the
          Independent Directors shall have duly exercised the Postponement Right
          and Ciba shall have accepted such postponement pursuant to paragraph
          (ii) above, within 15 days of the first anniversary of such
          request), Ciba and the Company shall appoint an independent appraiser
          (which shall be an internationally recognized investment bank)
          mutually satisfactory to them that shall determine the aggregate Third
          Party Sale Value for each class of Equity Securities with respect to
          the proposed Buyout Transaction. If Ciba and the Company are unable to
          agree on a mutually acceptable appraiser within such 15-day period,
          such Third Party Sale Value shall be determined by a panel of three
          independent appraisers (which shall be internationally recognized
          investment banks), one of whom shall be appointed by Ciba, another by
          the Company and the third of whom shall be appointed by the other two
          appraisers or, if such two appraisers are unable to agree on a third
          appraiser within seven days after the appointment of the second of
          them, by the American Arbitration Association (or its successor);
          PROVIDED, HOWEVER, that if Ciba or the Company shall not have
          appointed its appraiser within 30 days after a request by Ciba for
          arbitration of the amount of the Third Party Sale Value, the
          determination of the Third Party Sale Value shall be made solely by
          the appraiser selected by the other party. Ciba and the Company may
          each submit to the appraiser (or, if applicable, the appraisers)
          their respective positions on the Third Party Sale Value (as a whole,
          and not on an Equity Security class by class basis) and may also
          submit written and oral presentations to support their respective
          positions. The appraiser or appraisers shall determine the aggregate
          amount of the Third Party Sale Value (and, if applicable, the Fair
          Market Value on the date of such determination of any securities
          payable as part of the Third Party Sale Value Consideration). If
          necessary, the appraiser or appraisers shall also allocate such
          aggregate Third Party Sale Value among the classes of Equity
          Securities. The appraiser or appraisers shall be directed to make
          their determination within thirty

<PAGE>
                                                                              32


          calendar days of appointment and such determination, when made, shall
          be final and binding with respect to the proposed Buyout Transaction.

               (iv) Within ten business days after the appropriate Third Party
          Sale Value is determined pursuant to the procedures set forth in
          paragraph (iii) above, Ciba shall elect (a) to proceed with a Buyout
          Transaction offering such Third Party Sale Value Consideration payable
          in cash and/or marketable securities (in which event nothing in this
          Agreement shall prevent or impede such Buyout Transaction from
          proceeding or being consummated and the Company will take all action
          reasonably necessary to allow such transaction to proceed in
          accordance with the provisions hereof) or (b) to withdraw its proposal
          for a Buyout Transaction (in which event Ciba may not again propose a
          Buyout Transaction for a period of one year after such withdrawal);
          PROVIDED, HOWEVER, that Ciba shall have the right to elect to withdraw
          its proposal for a Buyout Transaction pursuant to the foregoing clause
          (b) on only one occasion (it being understood that a withdrawal
          pursuant to the proviso to clause (b) of paragraph (ii) above shall
          not count as such a withdrawn proposal).

               (v)  In the event that a single appraiser is appointed under
          paragraph (iii) above, the fees and expenses of such appraiser shall
          be divided equally between Ciba and the Company. In the event that
          more than a single appraiser is appointed, the fees and expenses of
          the appraiser appointed by Ciba shall be paid by Ciba, the fees and
          expenses of the appraiser appointed by the Company shall be paid by
          the Company and the fees and expenses of the third appraiser shall be
          divided equally between Ciba and the Company.

               SECTION 4.02. ADDITIONAL LIMITATIONS.  During the Standstill
     Periods, Ciba shall not, and shall not permit its Subsidiaries to:

               (a) make, or in any way participate, directly or indirectly, in
          any "solicitation" of "proxies" to vote (as such terms are used in the
          proxy rules of the SEC) or seek to advise, encourage or influence any
          person or entity with respect to the voting of any shares of capital
          stock of the Company, initiate, propose or otherwise solicit
          stockholders of the Company for the

<PAGE>
                                                                              33


          approval of one or more stockholder proposals or induce or attempt to
          induce any other individual, firm, corporation, partnership or other
          entity to initiate any stockholder proposal; or

               (b) deposit any shares of Voting Stock into a voting trust or
          subject any shares of Voting Stock to any arrangement or agreement
          with respect to the voting of such securities or form, join or in any
          way participate in or otherwise encourage the formation of a 13D Group
          with respect to any shares of Common Stock.


                                      ARTICLE V

                               TRANSFER OF COMMON STOCK

               SECTION 5.01. TRANSFER OF COMMON STOCK.  (a) During the
     Standstill Periods, Ciba will not, and will not permit any wholly owned
     Subsidiary of Ciba to, directly or indirectly, sell, transfer or
     otherwise dispose of any shares of Common Stock except (i) pursuant to a
     registered underwritten public offering in accordance with the
     Registration Rights Agreement, (ii) in accordance with the volume and
     manner-of-sale limitations of Rule 144 promulgated under the Securities
     Act (regardless of whether such limitations are applicable) and (iii) to
     any directly or indirectly wholly owned Subsidiary of Ciba.

               (b)  During the Standstill Periods, Ciba will not, and will
     not permit any wholly owned Subsidiary of Ciba to, directly or
     indirectly, sell, transfer or otherwise dispose of any interest in any
     shares of Common Stock to any purchaser or group (within the meaning of
     Section 13(d)(3) of the Exchange Act) of purchasers, if, after giving
     effect to such sale, such purchaser or group of purchasers would, to
     Ciba's knowledge, own, or have the right to acquire, 5% or more of the
     then outstanding shares of Common Stock.

               (c)  During the Standstill Periods, Ciba shall not sell,
     transfer or otherwise dispose of any of the capital stock of any wholly
     owned Subsidiary of Ciba that owns shares of Common Stock, except to
     another wholly owned Subsidiary of Ciba.

               (d) Purported transfers of shares of Common Stock that are not
     in compliance with this Article V shall be of no force or effect.

<PAGE>
                                                                              34


                                      ARTICLE VI

                                    MISCELLANEOUS

               SECTION 6.01. NOTICES.  All notices, requests, claims, demands
     and other communications hereunder shall be in writing and shall be given
     (and shall be deemed to have been duly given upon receipt) by delivery in
     person, by cable, facsimile transmission, telegram or telex or by
     registered or certified mail (postage prepaid, return receipt requested) to
     the respective parties at the addresses (or at such other address for a
     party as shall be specified in a notice given in accordance with this
     Section 6.01) specified in Section 7.02 of the Investment Agreement.

               SECTION 6.02. AMENDMENTS; WAIVERS.  (a) No provision of this
     Agreement may be amended or waived unless such amendment or waiver is in
     writing and signed, in the case of an amendment, by the parties hereto, or
     in the case of a waiver, by the party against whom the waiver is to be
     effective; PROVIDED that no such amendment or waiver by the Company shall
     be effective without the approval of a majority of the Independent
     Directors or, in the case of an amendment to or waiver of the provisions of
     Article IV, without the approval of 100% of the Independent Directors
     (except for amendments or waivers of the provisions of Article IV that are
     administrative in nature and that do not materially adversely affect the
     rights of the Unaffiliated Equity Holders, which amendments and waivers
     shall only require the approval of a majority of the Independent
     Directors).

               (b) No failure or delay by any party in exercising any right,
     power or privilege hereunder shall operate as waiver thereof nor shall any
     single or partial exercise thereof preclude any other or further exercise
     thereof or the exercise of any other right, power or privilege. The rights
     and remedies herein provided shall be cumulative and not exclusive of any
     rights or remedies provided by law.

               SECTION 6.03. SEVERABILITY.  If any term or provision of this
     Agreement or the application thereof to either party or set of
     circumstances shall, in any jurisdiction and to any extent, be finally
     held invalid or unenforceable, such term or provision shall only be

<PAGE>
                                                                              35


     ineffective as to such jurisdiction, and only to the extent of such
     invalidity or unenforceability, without invalidating or rendering
     unenforceable any other terms or provisions of this Agreement or under any
     other circumstances, and the parties shall negotiate in good faith a
     substitute provision which comes as close as possible to the invalidated or
     unenforceable term or provision, and which puts each party in a position
     as nearly comparable as possible to the position it would have been in but
     for the finding of invalidity or unenforceability, while remaining valid
     and enforceable.

               SECTION 6.04. ENTIRE AGREEMENT; ASSIGNMENT.  (a) The Investment
     Agreement, this Agreement, the Registration Rights Agreement, the other
     Ancillary Agreements and the agreements contemplated hereby and thereby
     constitute the entire agreement among the parties hereto with respect to
     the subject matter hereof and thereof and supersede all prior agreements
     and undertakings, both written and oral, between the parties with respect
     to the subject matter hereof.

               (b)  None of the parties to this Agreement shall assign any of
     its rights or obligations hereunder without the prior written consent of
     the other parties hereto, except that Ciba and C Corp may assign all or any
     of their rights and obligations hereunder to any wholly owned (directly or
     indirectly) Subsidiary of Ciba that agrees in writing to be bound by the
     provisions hereof; PROVIDED that no such assignment shall relieve Ciba or
     C Corp of their obligations hereunder.

               SECTION 6.05. PARTIES IN INTEREST.  This Agreement shall be
     binding upon and inure solely to the benefit of each party hereto, and
     nothing in this Agreement, express or implied, is intended to or shall
     confer upon any other person, other than the parties hereto and their
     respective permitted successors and assigns, any right, benefit or remedy
     of any nature or kind whatsoever under or by reason of this Agreement.

          SECTION 6.06. SPECIFIC PERFORMANCE.  The parties hereto recognize and
     agree that immediate irreparable damages for which there is no adequate
     remedy at law would occur in the event that any provision of this Agreement
     is not performed in accordance with the specific terms hereof or is
     otherwise breached. It is accordingly agreed that in the event of a failure
     by a party to perform its obligations

<PAGE>
                                                                              36


     under this Agreement, the nonbreaching party shall be entitled to specific
     performance through injunctive relief to prevent breaches of the provisions
     of this Agreement and to enforce specifically the provisions of this
     Agreement in any action instituted in any court having subject matter
     jurisdiction, in addition to any other remedy to which such party may be
     entitled, at law or in equity.

               SECTION 6.07. GOVERNING LAW.  This Agreement shall be governed
     by, and construed in accordance with, the laws of the State of Delaware
     applicable to contracts executed and to be fully performed in that State.
     All actions and proceedings arising out of or relating to this Agreement
     shall be brought by the parties and heard and determined only in a Delaware
     state court or a federal court sitting in that State and the parties hereto
     consent to jurisdiction before and waive any objections of venue to the
     Delaware Chancery Court.

               SECTION 6.08. COUNTERPARTS. This Agreement may be executed in one
     or more counterparts, each of which shall be deemed an original but all of
     which taken together shall constitute one and the same agreement.

               SECTION 6.09. EFFECTIVENESS; TERMINATION.  This Agreement shall
     become effective upon the Effectiveness of this Agreement. This Agreement
     shall terminate at such time (i) that the Investment Agreement is
     terminated in accordance with its terms, (ii) after the Effectiveness of
     this Agreement that Ciba and its Affiliates beneficially own Voting Stock
     representing 100% or less than 10% of the then applicable Total Voting
     Power or (iii) that any Person or 13D Group beneficially owns or controls
     Voting Stock representing more than 50% of the Total Voting Power;
     PROVIDED, HOWEVER, that, in the event that this Agreement shall terminate
     under clause (ii) because Ciba's ownership is less than 10%, Article IV
     shall survive such termination for a period of three years from the date of
     such termination.

               SECTION 6.10. WAIVER OF JURY TRIAL.  Each of the parties hereto
     hereby irrevocably waives all right to trial by jury in any action,
     proceeding or counterclaim (whether based on contract, tort or otherwise)
     arising out of or relating to this Agreement or the actions of any of them
     in the negotiation, administration, performance and enforcement thereof.

<PAGE>
                                                                              37


               SECTION 6.11. FINANCIAL STATEMENTS.  (a) From and after the
     Effectiveness of this Agreement, the Company shall furnish to Ciba:

                 (i) within 65 days after the end of each fiscal year, its
          consolidated balance sheet and related statements of income and
          changes in financial position, showing the financial condition of the
          Company and its consolidated Subsidiaries as of the close of such
          fiscal year and the results of its operations and the operations of
          such Subsidiaries during such year, all audited by KPMG Peat Marwick
          or other independent public accountants of recognized international
          standing and accompanied by an opinion of such accountants (which
          shall not be qualified in any material respect) to the effect that
          such consolidated financial statements fairly present the financial
          condition and results of operations of the Company on a consolidated
          basis in accordance with GAAP consistently applied; and

                (ii) within 35 days after the end of each of the first three
          fiscal quarters of each fiscal year, its consolidated balance sheet
          and related statements of income and changes in financial position,
          showing the financial condition of the Company and its consolidated
          Subsidiaries as of the close of such fiscal quarter and the results of
          its operations and the operations of such Subsidiaries during such
          fiscal quarter and the then elapsed portion of the fiscal year, all
          certified by one of the senior financial officers as fairly presenting
          the financial condition and results of operations of the Company on a
          consolidated basis in accordance with GAAP consistently applied,
          subject to normal year-end audit adjustments.

               (b) At the request of Ciba, at such time as Ciba is required to
     include the financial results of the Company in Ciba's financial
     statements, the Company shall cooperate with and assist Ciba in the
     translation of the financial statements referred to in paragraph (a) above
     in order to conform such financial statements to international accounting
     standards.

               SECTION 6.12. BUSINESS OPPORTUNITIES.  Except as otherwise
     provided in this Agreement, the Ancillary Agreements or otherwise pursuant
     to a written agreement among the parties, (i) neither Ciba nor any of its
     Subsidiaries or Affiliates (other than the Company and its

<PAGE>
                                                                              38


     Subsidiaries), on the one hand, nor Chiron or any of its Subsidiaries or
     Affiliates (other than, if applicable, Ciba and its Subsidiaries), on the
     other hand (each such group referred to in this Section 6.12 as a "party"),
     shall have any obligation to provide to or share with the other any of such
     party's corporate opportunities, (ii) each party shall have the right to
     pursue its own corporate opportunities and shall not be restricted from
     competing directly or indirectly with the other and (iii) each party shall
     have the right to pursue any corporate opportunities jointly created or
     developed by the parties or which otherwise become known to either of them
     (other than any such opportunity specifically directed to or otherwise made
     available for the benefit of the other party and subject to any obligation
     of confidentiality relating to such corporate opportunity). Each party may
     establish reasonable appropriate internal procedures and operations,
     including

<PAGE>
                                                                              39


     procedures which (subject to and consistent with Sections 2.04 and 2.12 and
     the right of the Investor Directors to vote upon any matter presented to
     the Board of Directors) are reasonably designed to protect potential
     opportunities during consideration by its Board of Directors.

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

                                   CHIRON CORPORATION,

                                   By   /s/ William J. Rutter
                                        -----------------------------------
                                        Name:
                                        Title:


                                   CIBA-GEIGY LIMITED

                                   By   /s/ Alex Krauer
                                        -----------------------------------
                                        Name:
                                        Title:

                                   By   /s/ John Cheesmond
                                        -----------------------------------
                                        Name:
                                        Title:


                                   CIBA-GEIGY CORPORATION

                                   By   /s/ McGraw
                                        -----------------------------------
                                        Name:
                                        Title:

<PAGE>
                                                                SCHEDULE 2.01 TO
                                                        THE GOVERNANCE AGREEMENT

                                  BOARD OF DIRECTORS

<TABLE>
<CAPTION>
     Management Directors
     ---------------------
     <S>                                     <C>
     William J. Rutter                       I
     Edward E. Penhoet                       II
     Jack W. Schuler                         III

<CAPTION>
     Independent Directors
     ---------------------
     <S>                                     <C>
     Donald A. Glaser                        I
     Pieter J. Strijkert                     I
     Gilbert F. Amelio                       II
     Henri Schramek                          II
     Lewis W. Coleman                        III
</TABLE>

<PAGE>

                                                                      ANNEX A TO
                                                        THE GOVERNANCE AGREEMENT


               The Strategic Plan will address, among other items, (i) a market
     and technology/patent analysis (including at the strategic business unit
     level); (ii) a competitive analysis; (iii) an analysis of regulatory
     developments and potential impacts; (iv) an analysis of critical success
     factors and potential changes; (v) an analysis of strengths, weaknesses,
     opportunities and threats; (vi) a portfolio analysis; (vii) strategic
     objectives (financial and non-financial); (viii) key strategies, programs
     and resources (including product pipeline assessment/projections,
     partnerships, joint ventures, acquisitions and capital expenditures, etc.);
     (ix) an analysis of equity and debt financing and (x) financial strategic
     parameters (including income before interest and taxes and earnings per
     share for a minimum of three fiscal years and including sensitivities and
     nonfinancial strategic parameters (including milestones on product
     approvals, introductions, etc.) and risk assessment.