<PAGE>
                                                                    Exhibit 10.7


                              TAX SHARING AGREEMENT

                                       BY

                            ICN PHARMACEUTICALS, INC.

                                       AND

                                 RIBAPHARM INC.


<PAGE>

                                TABLE OF CONTENTS


                                                                            PAGE

SECTION 1.     Definition of Terms..............................              2

SECTION 2.     Allocation of Income Tax Liabilities.............              8

SECTION 3.     Preparation and Filing of Tax Returns............             12

SECTION 4.     Refunds, Carrybacks and Tax Benefits.............             16

SECTION 5.     Tax Payments and Intercompany Billings...........             20

SECTION 6.     Assistance and Cooperation.......................             26

SECTION 7.     Tax Records......................................             27

SECTION 8.     Tax Contests.....................................             28

SECTION 9.     No Inconsistent Actions..........................             29

SECTION 10.    Survival of Obligations..........................             32

SECTION 11.    Employee Matters.................................             32

SECTION 12.    Treatment of Payments; Tax Gross Up..............             33

SECTION 13.    Disagreements....................................             34

SECTION 14.    Late Payments....................................             34

SECTION 15.    Expenses.........................................             35

SECTION 16.    General..........................................             35
<PAGE>


                              TAX SHARING AGREEMENT

         This Agreement is entered into as of April 8, 2002, by ICN
Pharmaceuticals, Inc., a Delaware corporation ("ICN"), and Ribapharm Inc., a
Delaware corporation ("Ribapharm"). Capitalized terms used in this Agreement are
defined herein. Unless otherwise indicated, all "Section" references in this
Agreement are to sections of this Agreement.

                                    RECITALS

         WHEREAS, the board of directors of ICN has determined that it would be
in the best interests of ICN and its stockholders to completely separate the
Biotechnology Business from ICN;

         WHEREAS, ICN has caused Ribapharm to be incorporated in order to effect
such separation;

         WHEREAS, ICN has contributed and transferred to Ribapharm, and
Ribapharm has received, all the assets associated with the Biotechnology
Business;

         WHEREAS, ICN and Ribapharm intend that the contribution of the assets
associated with the Biotechnology Business qualified as a tax-free transfer
under Section 351 or 368(a)(1)(D) of the Code;

         WHEREAS, ICN currently owns all of the issued and outstanding Ribapharm
common stock;

         WHEREAS, ICN and Ribapharm currently contemplate that ICN will make an
initial public offering of an amount of ICN's Ribapharm common stock that will
reduce ICN's ownership of stock in Ribapharm to not less than 80% of the
combined voting power and value of all outstanding Ribapharm stock;

         WHEREAS, ICN currently contemplates that, following such initial public
offering, and subject to the satisfaction of certain conditions, ICN will
distribute to the holders of its common stock on a pro rata basis all of the
shares of Ribapharm common stock then owned by ICN;

<PAGE>

         WHEREAS, ICN and Ribapharm intend that the Distribution will be
tax-free to ICN and its stockholders under Section 355 and related provisions of
the Code;

         WHEREAS, as a result of the Distribution, Ribapharm will cease to be a
member of the affiliated group of which ICN is the common parent, effective as
of the Distribution Date; and

         WHEREAS, ICN and Ribapharm desire to provide for and agree upon the
allocation between the parties of liabilities for Taxes arising prior to, as a
result of, and subsequent to the Distribution, and to provide for and agree upon
other matters relating to Taxes;

         NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:

SECTION 1. DEFINITION OF TERMS.

For purposes of this Agreement (including the recitals hereof), the following
terms have the following meanings:

         "ACCOUNTING CUTOFF DATE" means, with respect to Ribapharm, any date as
of the end of which there is a closing of its financial accounting records.

         "ADJUSTMENT REQUEST" means any formal or informal claim or request
filed with any Tax Authority, or with any administrative agency or court, for
the adjustment, refund, or credit of Taxes, including (a) any amended Tax Return
claiming adjustment to the Taxes as reported on the Tax Return, or if
applicable, as previously adjusted, or (b) any claim for refund or credit of
Taxes previously paid.

         "AFFILIATE" means any entity that directly or indirectly is
"controlled" by the person or entity in question. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through ownership
of


                                       2
<PAGE>

voting securities, by contract or otherwise. Except as otherwise provided
herein, the term Affiliate shall refer to Affiliates of a person as determined
immediately after the Distribution.

         "AFFILIATION AND DISTRIBUTION AGREEMENT" means the Affiliation and
Distribution Agreement between ICN and Ribapharm dated April 8, 2002.

          "AGREEMENT"  means this Tax Sharing Agreement.

         "APPLICATION FOR RULING" means the letter, including all exhibits and
appendices attached thereto, filed by ICN on March 12, 2002, requesting a
private letter ruling from the Internal Revenue Service regarding the tax
consequences of the Distribution, as supplemented and amended from time to time.

         "BIOTECHNOLOGY BUSINESS" means the biotechnology business conducted by
Ribapharm that previously was conducted as a division of ICN.

         "CARRYBACK" or "CARRYFORWARD" means any net operating loss, net capital
loss, excess tax credit, foreign tax credit or other similar Tax Item which may
or must be carried from one Tax Period to another Tax Period under the Code or
other applicable Tax Law.

         "CODE" means the U.S. Internal Revenue Code of 1986, as amended from
time to time, or any successor law.

         "COMPANY" means ICN or Ribapharm, as the context requires.

         "CONSOLIDATED INCOME TAX RETURN" OR "COMBINED INCOME TAX RETURN" means,
for any Consolidated Period, any Tax Return relating to Income Tax which is
computed by reference to the assets and activities of members of the ICN Group
(other than members of the Ribapharm Group) and the Ribapharm Group.

         "CONSOLIDATED PERIOD" or "CONSOLIDATED PERIODS" means any taxable
period or periods (or portions thereof) between the Initial Public Offering
Date and the Distribution Date, during which period Ribapharm is a member of the
ICN Group.

         "CONTRIBUTION" has the meaning set forth in the Affiliation and
Distribution Agreement.



                                       3
<PAGE>

         "CONTRIBUTION DATE" means the date or dates, as the case may be, of the
Contribution.

         "DISTRIBUTION" means the distribution after the Initial Public Offering
by ICN of all of ICN's shares of Ribapharm common stock to ICN stockholders.

         "DISTRIBUTION DATE" means the date on which the Distribution occurs.

         "DISTRIBUTION DATE STRADDLE PERIOD" means any Tax Period that begins
before the Distribution Date and ends after the Distribution Date.

         "FEDERAL INCOME TAX" means any Income Tax imposed by the United States
government.

         "FOREIGN INCOME TAX" means any Income Tax imposed by any foreign
country or any possession of the United States, or by any political subdivision
of any foreign country or United States possession, which is an income tax as
defined in Treasury Regulation Section 1.901-2.

         "GROUP" means the ICN Group or the Ribapharm Group, as the context
requires.

         "ICN AFFILIATE" has the meaning set forth in the Affiliation and
Distribution Agreement.

         "ICN FEDERAL CONSOLIDATED RETURN" means, for any Consolidated Period,
any United States federal Consolidated Income Tax Return for the affiliated
group (as that term is defined in Code Section 1504) that includes ICN as the
common parent and that includes the Ribapharm Group.

         "ICN GROUP" means all corporations included in the ICN Federal
Consolidated Return.

         "INCOME TAX" means all Taxes (i) based upon, measured by, or calculated
with respect to, net income or net receipts, proceeds or profits or (ii) based
upon, measured by, or calculated with respect to multiple bases (including, but
not limited to, corporate franchise and occupation Taxes) if such Tax may be
based upon, measured by, or calculated with respect to one or more bases
described in clause (i) above.

         "INITIAL PUBLIC OFFERING" has the meaning set forth in the Affiliation
and Distribution Agreement.

         "INITIAL PUBLIC OFFERING DATE" means the date on which this Agreement
becomes effective pursuant to Section 16.10 of this Agreement date of the
Initial Public Offering.



                                       4
<PAGE>

         "INTERNAL REVENUE SERVICE" OR "IRS" means the United States Internal
Revenue Service or the United States Department of the Treasury, as the context
requires.

         "IPO DATE STRADDLE PERIOD" means any Tax Period that begins before the
Initial Public Offering Date and ends after the Initial Public Offering Date.

         "IRS PRIVATE LETTER RULING" means a private letter ruling issued by the
IRS in response to the Application for Ruling that provides that the
Distribution will qualify under Section 355 and related provisions of the Code
as a tax-free spin-off, and that no income, gain or loss will be recognized for
U.S. federal income tax purposes by ICN, the stockholders or former stockholders
of ICN, or any ICN Affiliate with respect to the Distribution.

         "OTHER TAX" means any Tax that is not an Income Tax.

         "PAYMENT DATE" means (i) with respect to any ICN Federal Consolidated
Return, the due date for any required installment of estimated taxes determined
under Code Section 6655, the due date (determined without regard to extensions)
for filing the return determined under Code Section 6072, and the date the
return is filed, and (ii) with respect to any Consolidated or Combined Income
Tax Return (other than an ICN Federal Consolidated Return), for any Consolidated
Period, the corresponding dates determined under the applicable Tax Law.

         "POST-DISTRIBUTION PERIOD" means any Tax Period that begins on or after
the Distribution Date, and, in the case of any Distribution Date Straddle
Period, the portion of such Distribution Date Straddle Period that begins after
the Distribution Date.

         "PRE-DISTRIBUTION PERIOD" means any Tax Period that (i) begins on or
after the Initial Public Offering Date and, in the case of any IPO Date Straddle
Period, the portion of such IPO Date Straddle Period that begins on or after the
Initial Public Offering Date and (ii) ends before the Distribution Date, and, in
the case of any Distribution Date Straddle Period, the portion of such
Distribution Date Straddle Period that begins on or after the Initial Public
Offering Date and ends on the Distribution Date.

         "PRIME RATE" means the base rate on corporate loans charged by
Citibank, N.A., New York, New York from time to time, compounded on each March
31, June 30, September 30 and December 31.



                                       5
<PAGE>

         "RESPONSIBLE COMPANY" means, with respect to any Tax Return, the
Company having responsibility for preparing and filing such Tax Return under
this Agreement.

         "RESTRUCTURING TAX" means the Taxes described in clauses (ii) and (iii)
of Section 2.5(a).

         "RIBAPHARM GROUP" means Ribapharm and all corporations included in the
Ribapharm Federal Consolidated Return, or, during any Consolidated Period, that
would be included in such Return if Ribapharm was not included in the ICN
Federal Consolidated Return.

         "RIBAPHARM FEDERAL CONSOLIDATED RETURN" means any United States federal
Income Tax Return or Returns in respect of periods after the Consolidated Period
filed by Ribapharm alone or for the affiliated group (as that term is defined in
Code Section 1504) that includes Ribapharm as the common parent.

         "SEPARATE COMPANY TAX" means any Tax computed by reference solely to
the assets and activities of a member or members of a single Group.

         "STRADDLE PERIOD" means any IPO Date Straddle Period or Distribution
Date Straddle Period, as the context requires.

         "STATE INCOME TAX" means any Income Tax imposed by any State of the
United States or by any political subdivision of any such State.

         "TAINTING ACT" shall have the meaning provided in Section 9.

         "TAX" or "TAXES" means any income, gross income, gross receipts,
profits, capital stock, franchise, withholding, payroll, social security,
workers compensation, unemployment, disability, property, ad valorem, stamp,
excise, severance, occupation, service, sales, use, license, lease, transfer,
import, export, value added, alternative minimum, estimated or other similar tax
(including any fee, assessment, or other charge in the nature of or in lieu of
any tax) imposed by any governmental entity or political subdivision thereof,
and any interest, penalties, additions to tax, or additional amounts in respect
of the foregoing.



                                       6
<PAGE>

         "TAX AUTHORITY" means, with respect to any Tax, the governmental entity
or political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the collection of such Tax for such entity or political
subdivision.

         "TAX BENEFIT" means any refund of, credit against, or other reduction
in otherwise required Tax payments (including any reduction in estimated tax
payments) and any interest in respect of the foregoing, net of the effect on
otherwise required Tax payments of any associated or corresponding item of
income or gain, or other increase in otherwise required Tax payments.

         "TAX CONTEST" means an audit, review, examination, or any other
administrative or judicial proceeding with the purpose or effect of
redetermining Taxes of any of the Companies or their Affiliates (including any
administrative or judicial review of any claim for refund).

         "TAX ITEM" means, with respect to any Income Tax, any item of income,
gain, loss, deduction, or credit or other item that has the effect of increasing
or decreasing the amount of any Income Tax payable.

         "TAX LAW" means the law of any governmental entity or political
subdivision thereof relating to any Tax.

         "TAX OPINION" means a favorable opinion from ICN's counsel regarding
the federal income tax consequences, under Section 355 and related provisions of
the Code, of the Distribution.

         "TAX OPINION SUBMISSION" means any and all information, including any
representation or material fact, submitted to counsel in connection with the Tax
Opinion.

         "TAX PERIOD" means, with respect to any Tax, the period for which the
Tax is reported as provided under the Code or other applicable Tax Law.

         "TAX RECORDS" means Tax Returns, Tax Return workpapers, documentation
relating to any Tax Contest, and any other books of account or records required
to be maintained under the


                                       7
<PAGE>

Code or other applicable Tax Laws or under any record retention agreement with
any Tax Authority.

         "TAX RETURN" means any report of Taxes due (including any report of
estimated tax payments), any claims for refund of Taxes paid, any information
return with respect to Taxes, or any other similar report, statement,
declaration, or document required to be filed under the Code or other Tax Law,
including any attachments, exhibits, or other materials submitted with any of
the foregoing, and including any amendments or supplements to any of the
foregoing.

         "TRANSACTIONS" means the transactions contemplated by the Affiliation
and Distribution Agreement, including the Contribution, the Initial Public
Offering and the Distribution.

         "TREASURY REGULATIONS" means the regulations promulgated from time to
time under the Code as in effect for the relevant Tax Period.

SECTION 2.        ALLOCATION OF INCOME TAX LIABILITIES.

         2.1. GENERAL RULE.

         (a) ICN LIABILITY. ICN shall indemnify and hold harmless the Ribapharm
Group from and against any liability for Taxes for which ICN is liable under
this Section 2.

         (b) RIBAPHARM LIABILITY. Ribapharm shall indemnify and hold harmless
the ICN Group other than members of the Ribapharm Group from and against any
liability for Taxes for which Ribapharm is liable under this Section 2.

         (c) Except as otherwise provided in the Agreement, this Agreement
allocates liabilities for Taxes between the ICN Group and the Ribapharm Group
solely for Pre-Distribution Periods and Post-Distribution Periods.

         2.2 FEDERAL INCOME TAX. Except as otherwise provided in this Agreement,
Federal Income Tax liability shall be allocated as follows:



                                       8
<PAGE>
              (a) CONSOLIDATED PERIOD. For each Consolidated Period, Ribapharm
shall be liable for and pay to ICN an amount equal to the Federal Income Tax
determined under the "Stand Alone Method." Under this method Ribapharm's
liability for Tax for any Taxable Period is computed as if Ribapharm had (i)
never been part of the ICN Group and (ii) filed a consolidated Federal Income
Tax Return as parent of the Ribapharm Group with each eligible member of that
Group; provided, however, that the provisions of Section 2.6(a) regarding
special rules for application of the Stand Alone Method shall apply. ICN shall
be liable for all Federal Income Tax for the Consolidated Period other than
amounts for which Ribapharm is liable pursuant to this Section 2.2(a).

              (b) POST-DISTRIBUTION PERIODS. With respect to all
Post-Distribution Periods, Ribapharm shall be responsible for all Federal Income
Tax imposed on members of the Ribapharm Group, and ICN shall be responsible for
all Federal Income Tax imposed on members of the ICN Group.

         2.3. STATE AND FOREIGN INCOME TAXES. Except as otherwise provided in
this Agreement, State and Foreign Income Tax liability shall be allocated as
follows:

              (a) STATE AND FOREIGN CONSOLIDATED OR COMBINED INCOME TAXES FOR
EACH CONSOLIDATED PERIOD. Ribapharm shall be liable for and pay to ICN any State
Income Tax or Foreign Income Tax with respect to any Consolidated or Combined
Income Tax Return relating to State Income Tax or Foreign Income Tax in an
amount that is equal to the amount determined under the Stand Alone Method for
the period covered by such Tax Return; provided, however, that Ribapharm's State
Income Tax liability shall be calculated taking into account ICN's worldwide
apportionment schedule, where applicable. ICN shall be liable for and pay any
State Income Tax or Foreign Income Tax with respect to any Consolidated or
Combined State or Foreign Income Tax Return relating to State Income Tax or
Foreign Income Tax other than the amount for which Ribapharm is liable pursuant
to this Section 2.3(a).



                                       9
<PAGE>

              (b) SEPARATE COMPANY TAXES. For each Pre-Distribution Period in
the case of any State or Foreign Income Tax which is a Separate Company Tax,
Ribapharm shall be liable for and shall pay any such Separate Company Tax
imposed under Tax Law on any member of the Ribapharm Group and ICN shall be
liable for and shall pay any such Separate Company Tax imposed on any member of
the ICN Group other than a member of the Ribapharm Group.

         2.4 OTHER TAXES. For each Pre-Distribution Period except as otherwise
provided in this Agreement, Ribapharm shall be liable to and pay the applicable
Tax Authority any Other Tax that is imposed on any member of the Ribapharm Group
and ICN shall be liable to and pay the applicable Tax Authority any Other Tax
that is imposed on any member of the ICN Group other than a member of the
Ribapharm Group.

         2.5  TRANSACTION TAXES.

              (a) GENERAL. Except as otherwise provided in this Section 2.5, ICN
shall be responsible for and pay, and shall indemnify and hold harmless the
Ribapharm Group from and against any liability for, any and all Taxes resulting
from the Transactions. This shall include but not be limited to (i) any sales
and use, gross receipts, or other transfer Taxes imposed on the transfers
occurring pursuant to the Transactions; (ii) any Tax resulting from any income
or gain recognized under Treasury Regulation Sections 1.1502-13 or 1.1502-19 (or
any corresponding provisions of other applicable Tax Laws) as a result of the
Transactions; and (iii), except as otherwise provided in Section 2.5(b), any Tax
resulting from any income or gain recognized as a result of any of the
Transactions failing to qualify for tax-free treatment under Code Sections 351,
355, 361, 368 or other provisions of the Code (as contemplated in the IRS
Private Letter Ruling or the Tax Opinion) or corresponding provisions of other
applicable Tax Laws.



                                       10
<PAGE>
              (b) INCONSISTENT ACTS AND EVENTS. Notwithstanding the provisions
of Section 2.5(a), Ribapharm shall be liable for, and shall indemnify and hold
harmless ICN from and against any liability for, any Restructuring Tax to the
extent arising from (i) any breach by Ribapharm of the representations or
covenants under Section 9, (ii) any Tainting Act performed by Ribapharm, (iii)
the inaccuracy of any factual statements or representations made by Ribapharm or
to the IRS in connection with the Application for Ruling or an IRS Private
Letter Ruling (if issued), and to counsel in connection with any Tax Opinion
Submission (if made) or Tax Opinion (if obtained), but only to the extent such
inaccuracy arises from facts in existence prior to the Distribution Date or (iv)
any Section 355(e) Event with respect to Ribapharm. A Section 355(e) Event with
respect to Ribapharm will occur if Section 355(e) of the Code applies to the
Distribution as a result of one or more persons acquiring directly or indirectly
stock of Ribapharm representing a 50% or greater interest in Ribapharm within
the meaning of Section 355(e).

         2.6. CALCULATION OF TAX LIABILITY.

              (a) STAND ALONE METHOD. The following rules shall apply for
purposes of computing Ribapharm's liability under the Stand Alone Method: (i)
transactions during any Consolidated Period between a member of the Ribapharm
Group and a member of the ICN Group that is not a member of the Ribapharm Group
shall, for Federal Income Tax purposes, be accounted for pursuant to the
provisions of the regulations under IRC Section 1502 that govern intercompany
transactions (and to the extent appropriate for State or Foreign Income Tax
purposes, similar rules shall apply in the case of transactions between such
members which are included in State or Foreign Consolidated or Combined Income
Tax Returns); (ii) during Consolidated Periods all computations shall be made in
conformity with the positions, elections and accounting methods used by ICN in
preparing the consolidated returns of the ICN Group; (iii) the highest marginal
tax rate to which the Ribapharm Group could be subject under applicable Tax Law
shall be deemed to be the only Tax rate to which such group is subject under



                                       11
<PAGE>

such law; and (iv) subject to (i) through (iii) above, all computations and
other determinations shall be made in accordance with the the laws and
regulations applying to affiliated groups filing consolidated returns
(including, in the case of any company that becomes or ceases to be a member of
any Group, the laws and regulations applicable to a company that becomes or
ceases to be a member of a such Group), as well as all other relevant federal
Tax laws and regulations (and similar rules shall apply in the case of State or
Foreign Taxes in respect to Consolidated or Combined Returns for such Taxes).

              (b) The principles of Treasury Regulation Section 1.1502-76(b) as
reasonably interpreted, agreed and applied by the Companies shall apply in
determining whether a Tax Item is attributable to a Tax Period provided that (x)
no election shall be made under Treasury Regulation Section 1.1502-76(b)(2)(ii)
(relating to ratable allocation of a year's items) and (y) if the Distribution
Date is not an Accounting Cutoff Date, the provisions of Treasury Regulation
Section 1.1502-76(b)(2)(iii) will be applied to ratably allocate the items
(other than extraordinary items) for the month which includes the Distribution
Date.

              (c) In determining the apportionment of Tax Items between
Pre-Distribution Periods and Post-Distribution Periods, any Tax Items relating
to the Transactions shall be treated as an extraordinary item described in
Treasury Regulation Section 1.1502-76(b)(2)(ii)(C) and shall be allocated to
Pre-Distribution Periods, and any Taxes related to such items shall be treated
under Treasury Regulation Section 1.1502-76(b)(2)(iv) as relating to such
extraordinary item and shall be allocated to Pre-Distribution Periods.

         2.7. TAX PAYMENTS AND INTERCOMPANY BILLINGS. Each Company shall pay the
Taxes allocated to it by this Section 2 either to the applicable Taxing
Authority or to the other Company in accordance with Section 5.

SECTION 3.  PREPARATION AND FILING OF TAX RETURNS.



                                       12
<PAGE>

         3.1. GENERAL. Except as otherwise provided in this Section 3, Tax
Returns shall be prepared and filed when due (including extensions) by the
person obligated to file such Tax Returns under the Code or applicable Tax Law.
The Companies shall provide, and shall cause their Affiliates to provide,
assistance and shall cooperate with one another in accordance with Section 6
with respect to the preparation and filing of Tax Returns, including providing
information required to be provided in Section 6.

         3.2. PRE-DISTRIBUTION PERIOD AND STRADDLE PERIOD TAX RETURNS. All Tax
Returns required to be filed for Pre-Distribution Periods or Straddle Periods,
shall be:

              (1) prepared and filed by ICN, in the case of any Consolidated
Income Tax Return; and

              (2) in all other cases, prepared and filed, or caused to be
prepared and filed, by the Company to which such Tax Return relates. Ribapharm
shall, for each Tax Period or portion thereof for which Ribapharm or a member of
the Ribapharm Group is included in a Tax Return described in clause (1) of the
preceding sentence, provide ICN with (i) a true and correct pro forma tax return
for the Ribapharm Group together with an accompanying computation of Tax
liability of the Group prepared in accordance with the Stand Alone Method, (ii)
separate pro forma tax returns for each member of the Ribapharm Group together
with accompanying computations of the separate tax return Tax liabilities of
each member of the Group, and (iii) a reconciliation of book income to federal
taxable income for each member of the Ribapharm Group. Ribapharm hereby agrees
to use its best efforts to provide ICN with such returns and computations no
later than the first day of the sixth month following the end of the period to
which such returns and computations relate, but in any event shall provide such
returns and computations to ICN no later than the fifteenth day of the sixth
month following the end of the period to which such returns and computations
relate. Ribapharm, in preparing the above mentioned pro forma tax returns for
its Group, shall


                                       13
<PAGE>

not consider or give effect to any (i) net operating loss carryover or
carryback, (ii) capital loss carryover or carryback, (iii) excess charitable
deduction carryover, (iv) excess tax carryover or carryback, or (v) other
similar carryback or carryback item.

         3.3. POST-DISTRIBUTION PERIOD TAX RETURNS.

              (1) All Tax Returns related exclusively to Ribapharm or to a
member of the Ribapharm Group for Post-Distribution Periods shall be prepared
and filed (or caused to be prepared and filed) by Ribapharm,

              (2) All Tax Returns related exclusively to ICN or to a member of
the ICN Group, excluding for this purpose Ribapharm or members of the Ribapharm
Group, for Post-Distribution Periods shall be prepared and filed (or caused to
be prepared and filed) by ICN.

         3.4. TAX ACCOUNTING PRACTICES.

              (a) GENERAL RULE. Except as otherwise provided in this Section
3.4, any Tax Return for any Pre-Distribution Period or any Straddle Period, and
any Tax Return for any Post-Distribution Period to the extent items reported on
such Tax Return might reasonably affect items reported on any Tax Return for any
Pre-Distribution Period or any Straddle Period, shall be prepared in accordance
with past Tax accounting practices used with respect to the Tax Returns in
question (unless such past practices are no longer permissible under the Code or
other applicable Tax Law), and to the extent any items are not covered by past
practices (or in the event such past practices are not longer permissible under
the Code or other applicable Tax Law), in accordance with reasonable Tax
accounting practice selected by the Responsible Company.

              (b) REPORTING OF TRANSACTION TAX ITEMS. The tax treatment reported
on any Tax Return of Tax Items relating to the Transaction shall be consistent
with the treatment of such item in the IRS Private Letter Ruling (if issued) or
the Tax Opinion (if obtained). To the extent there is a Tax Item relating to the
Transactions which is not covered by the IRS Private Letter Ruling or the Tax
Opinion, the tax treatment of such Tax Items on a Tax Return shall be


                                       14
<PAGE>

determined by the Responsible Company with respect to such Tax Return, provided
(i) there is substantial authority for such tax treatment, and (ii) such tax
treatment is not inconsistent with the tax treatment contemplated in the IRS
Private Letter Ruling or the Tax Opinion. Such Tax Return shall be submitted for
review pursuant to Section 3.5(a), and any dispute regarding such proper tax
treatment shall be referred for resolution pursuant to Section 13 sufficiently
in advance of the filing date of such Tax Return (including extensions) to
permit timely filing of the return.

         3.5. RIGHT TO REVIEW TAX RETURNS.

              (a) GENERAL. The Responsible Company with respect to any Tax
Return shall make such Tax Return and related Tax Records available for review
by the other Company, if requested, to the extent (i) such Tax Return relates to
Taxes for which the requesting party may be liable, (ii) such Tax Return relates
to any additional Taxes for which the requesting party may be liable in whole or
in part as a result of adjustments to the amount of Taxes reported on such Tax
Return, (iii) such Tax Return relates to Taxes for which the requesting party
may have a claim for Tax Benefits under this Agreement, or (iv) the requesting
party reasonably determines that it must inspect such Tax Return to confirm
compliance with the terms of this Agreement. The Responsible Company shall use
its reasonable best efforts to make such Tax Return and Tax Records available
for review as required under this paragraph sufficiently in advance of the due
date for filing such Tax Returns to provide the requesting party with a
meaningful opportunity to analyze and comment on such Tax Returns and have such
Tax Returns modified before filing, taking into account the person responsible
for payment of the Tax (if any) reported on such Tax Return and the materiality
of the amount of Tax liability with respect to such Tax Return. The Companies
shall attempt in good faith to resolve any issues arising out of the review of
such Tax Returns or Tax Records.



                                       15
<PAGE>

              (b) EXECUTION OF RETURNS PREPARED BY OTHER PARTY. In the case of
any Tax Return which is required to be prepared and filed by one Company under
this Agreement and which is required by law to be signed by another Company (or
by its authorized representative), the Company that is legally required to sign
such Tax Return shall not be required to sign such Tax Return under this
Agreement if there is not substantial authority for the tax treatment of any
material items reported on the Tax Return. Any such Tax Return shall be supplied
by the Company responsible for its preparation and filing to the Company
responsible for its signing at least five days prior to the due date of such Tax
Return (including applicable extensions) and such signing Company shall deliver
an executed copy of such Tax Return to the filing Company at least two days
prior to the due date of such Tax Return (including applicable extensions).

SECTION 4.  REFUNDS, CARRYBACKS AND TAX BENEFITS.

         4.1. COMPENSATION FOR USE OF RIBAPHARM CONSOLIDATED PERIOD TAX ITEMS.
In the event that (i) the ICN Group realizes an actual Tax Benefit during any
Consolidated Period as a result of the use by members of the ICN Group (other
than members of the Ribapharm Group) of Tax Items of the Ribapharm Group and
(ii) as a result of such use the Federal Income Tax liability of the Ribapharm
Group for any Post-Distribution Period is greater than the amount of such
liability computed under the Stand Alone Method (but without regard to clauses
(iii) and (iv) of Section 2.6(a)), then ICN will pay to Ribapharm, in accordance
with Section 5.7, an amount equal to the lesser of (x) the excess of the Tax
Benefit actually realized by ICN referred to in clause (i) over the amount of
any prior payments to Ribapharm pursuant to this Section 4.1 in respect of that
Tax Benefit and (y) the excess referred to in clause (ii) for such
Post-Distribution Period.

         4.2. CLAIMS FOR REFUND, CARRYBACKS, AND SELF-AUDIT ADJUSTMENTS (
"ADJUSTMENT REQUESTS ").

              (a) CONSENT REQUIRED FOR ADJUSTMENT REQUESTS RELATED TO
CONSOLIDATED OR COMBINED INCOME TAX RETURNS. Except as provided in paragraph (b)
below, each of the


                                       16
<PAGE>
 Companies hereby agrees that, unless the other Company consents in writing,
which consent shall not be unreasonably delayed or withheld, no Adjustment
Request shall be filed with respect to any Consolidated or Combined Income Tax
Return that included the Ribapharm Group for a Pre-Distribution Period and
affects the Ribapharm Group Tax liability. Any Adjustment Request which the
Companies consent to make under this Section 4.2 shall be prepared and filed by
the Responsible Company under Sections 3.2 and 3.3 for the Tax Return to be
adjusted. The Company requesting the Adjustment Request, if other than the
Responsible Company, shall provide to the Responsible Company all information
required for the preparation and filing of such Adjustment Request in such form
and detail as reasonably requested by the Responsible Company.

              (b) EXCEPTION FOR ADJUSTMENT REQUESTS RELATED TO AUDIT
ADJUSTMENTS. Each Company shall be entitled, without the consent of the other
Company, to require ICN to file an Adjustment Request to take into account any
net operating loss, net capital loss, deduction, credit, or other adjustment
attributable to such Company or any member of its Group corresponding to any
adjustment resulting from any audit by the Internal Revenue Service or other Tax
Authority with respect to Consolidated or Combined Income Tax Returns for any
Pre-Distribution Period.

              (c) OTHER ADJUSTMENT REQUESTS PERMITTED. Nothing in this Section
4.2 shall prevent any Company or its Affiliates from filing any Adjustment
Request with respect to Tax Returns which are not Consolidated or Combined
Income Tax Returns or with respect to any Other Taxes; provided, however, that
neither Company shall file an amended Tax Return with respect to Separate
Company or Other Taxes for which the other Company is liable under this
Agreement without the written consent of such other Company (which consent shall
not be unreasonably withheld). If any refund or credit is obtained as a result
of any such Adjustment Request (or otherwise), the parties shall recalculate the
amounts that would have been paid under


                                       17
<PAGE>

this Agreement based on the changes resulting in such refund or credit, and
shall make such payments between them as necessary to place each in the position
it would have been in had the payments made under this Agreement originally been
made based on such changes.

              (d) PAYMENT OF REFUNDS AND OTHER TAX BENEFITS. Except as set forth
in Section 4.2(e), any refunds or other Tax Benefits received by either Company
(or any of its Affiliates) as a result of any Adjustment Request which are for
the account of the other Company (or member of such other Company's Group) shall
be paid by the Company receiving (or whose Affiliate received) such refund or
Tax Benefit to such other Company in accordance with Section 5.

              (e) ORDERING OF AND PAYMENT FOR CARRYBACKS.

                   (i) In the event that a member of the ICN Group other than a
member of the Ribapharm Group, on the one hand, and a member of the Ribapharm
Group, on the other hand, are each entitled to carryback a Tax Item to a
Pre-Distribution Period, the respective Tax Items shall be used under the rules
of applicable Tax Law (which shall be, in the case of Carrybacks to such Tax
Periods of the affiliated group of which ICN is the common parent, the rules
contained in Treasury Regulation Section 1.1502-21).

                   (ii) Any Tax refund or other Tax Benefit resulting from the
Carryback of any member of one Group (the "Carryback Group") of any Tax Item
arising after the Distribution Date to a Pre-Distribution Period shall be for
the account of the Carryback Group (and in the event the Ribapharm Group is the
Carryback Group, then upon receipt of the Tax refund or other Tax Benefit, ICN
shall pay to Ribapharm the amount of such Tax refund or other Tax Benefit);
provided, however, that if at the time of the use of the Carryback Items of a
member of the Carryback Group, a member of the other Group (the "Other Group")
possesses Carryback Tax Items which, but for the ordering rule set forth in (i)
above, would have been available to be used (the "Other Group Carryback") in
lieu of the Carryback Group's Tax Items, then (but only to the extent of the
Other Group Carryback) the Carryback Group shall not be


                                       18
<PAGE>

entitled to payment of the amount of such Tax refund or Tax Benefit until the
earlier of (X) the date on which a member of the Other Group claims the Other
Group Carryback on a Tax Return or (Y) the date on which a member of the
Carryback Group would have been able to use the Carryback had it not been
claimed with respect to the Pre-Distribution Period Tax Return.

                   (iii) In the event the Carryback of Tax Items of a member of
the ICN Group other than a member of the Ribapharm Group, or a member of the
Ribapharm Group, as the case may be, does not result in a Tax refund, due to an
offsetting Tax adjustment to a member of the Other Group, then the Other Group
shall promptly pay the amount of any decrease in Tax liability resulting from
the Carryback claim, provided, however, that in the event the Other Group
possesses Carryback Items which, but for the ordering rules set forth in (i)
above would have been available to be used in lieu of the Carryback Group's
Items, then (but only to the extent of the Other Group Carryback), the Other
Group shall not be required to pay the amount of such decrease in Tax liability
to the Carryback Group until the earlier of (X) the date on which a member of
the Other Group claims the Other Group Carryback on a Tax Return or (Y) the date
on which a member of the Carryback Group would have been able to utilize the
Carryback had it not been claimed with respect to the Pre-Distribution Period
Tax Return.

         4.3. ADJUSTMENT OF TAX ITEMS. In the event that the Carryback of Tax
Items of one Group, or a Tax adjustment attributable to such Group under the
terms of this Agreement, results in the disallowance or limitation of Tax Items
claimed on the Tax Return as filed, the Carryback Group shall be responsible for
any increase in Tax liability resulting from the disallowance or limitation of
Tax attributes; provided, however, that in the event the disallowance or
limitation of Tax attributes results in a Tax Benefit resulting from the use of
such Tax attributes in another Tax Period, such Tax Benefit shall be deemed to
be for the account of the Carryback Group for such purposes of this Agreement.



                                       19
<PAGE>

         4.4. ADJUSTMENTS ON AUDIT. If, upon examination by any Tax Authority of
any Tax Return including a member of the ICN Group or Ribapharm Group for any
Tax Period, any item of deduction, credit or expense is disallowed for which ICN
is or may be liable for Taxes hereunder (or an item of income is required to be
recognized on a Tax Return which was not reported on such Tax Return), in either
such case resulting in a tax detriment suffered by the ICN Group, and such
disallowance (or recognition) results in a Tax Benefit to the Ribapharm Group
(with respect to that Tax Period or another Tax Period), then Ribapharm shall
pay to ICN the amount of such Tax Benefit that is realized in the form of an
actual reduction in Tax (which shall be computed by comparing the Tax which
would have been owed by Ribapharm but for the item giving rise to the Tax
Benefit with the Tax owed by Ribapharm taking such item into account) provided,
however, that in no case will the amount that Ribapharm is required to pay to
ICN with respect to such Tax Benefit exceed the corresponding tax detriment to
ICN (reduced by payments previously made by Ribapharm to ICN with respect to
such Tax Benefit). Any payment required to be made hereunder shall be made in
accordance with Section 5.10. The provisions of this Section 4.4 shall apply
mutatis mutandis where an item of deduction, credit or expense is disallowed for
which Ribapharm is or may be liable for Taxes hereunder (or any item of income
is required to be recognized on a Tax Return which was not reported on such Tax
Return), as they apply where the ICN Group suffers such a detriment. For
avoidance of doubt, any payment required to be made by ICN to the Ribapharm
Group under this Section 4.4 shall, to the extent applicable, be deemed as an
offset to amounts owing by Ribapharm to ICN under Section 2.2 hereof.

SECTION 5.  TAX PAYMENTS AND INTERCOMPANY BILLINGS.

         5.1. PAYMENT OF TAXES WITH RESPECT TO ICN FEDERAL CONSOLIDATED RETURNS.
In the case of any ICN Federal Consolidated Return



                                       20
<PAGE>

              (a) COMPUTATION AND PAYMENT OF TAX DUE. Unless otherwise agreed to
by the Companies, at least five business days prior to any Payment Date, ICN
shall compute the amount of Tax required to be paid to the Internal Revenue
Service (taking into account the requirements of Section 3.4 relating to
consistent accounting practices) with respect to such Tax Return on such Payment
Date and shall notify Ribapharm in writing of the amount of Tax required to be
paid on such Payment Date. ICN will pay such amount to the Internal Revenue
Service on or before such Payment Date.

              (b) COMPUTATION AND PAYMENT OF RIBAPHARM LIABILITY WITH RESPECT TO
TAX DUE. Within 30 days following any Payment Date, Ribapharm will pay to ICN
the excess (if any) of

                   (i) the amount of liability determined as of such Payment
Date with respect to the applicable Tax Period allocable to Ribapharm in a
manner consistent with the provisions of Section 2.2, over

                   (ii) the amount equal to the cumulative net payments with
respect to such Tax Return prior to such Payment Date made by Ribapharm or
members of its Group. If the amount in clause (ii) above is greater than the
amount in clause (i) above as of any Payment Date, then ICN shall pay such
excess to Ribapharm within 30 days following the Payment Date.

              (c) INTEREST ON INTERGROUP TAX ALLOCATION PAYMENTS. In the case of
any payments to ICN required under paragraph (b) of this Section 5.1, Ribapharm
shall also pay to ICN an amount of interest computed at the Prime Rate on the
amount of the payment required based on the number of days from the applicable
Payment Date until the date of Ribapharm's subsequent payment. In the case of
any payments by ICN required under paragraph (b) of this Section 5.1, ICN shall
also pay to Ribapharm an amount of interest computed at the Prime Rate on the
amount of the payment required based on the number of days from the applicable
Payment Date until the date of ICN's subsequent payment of such amount to
Ribapharm.



                                       21
<PAGE>

         5.2. PAYMENT OF FEDERAL INCOME TAX RELATED TO ADJUSTMENTS.

              (a) ADJUSTMENTS RESULTING IN UNDERPAYMENTS. ICN shall pay to the
Internal Revenue Service when due any additional Federal Income Tax required to
be paid as a result of any adjustment to the tax liability with respect to any
ICN Federal Consolidated Return. Ribapharm shall pay to ICN an amount that is
allocable to Ribapharm under Section 2.2 within 30 days from the later of (i)
the date the additional Tax was paid by ICN or (ii) the date of receipt by
Ribapharm of a written notice and demand from ICN for payment of the amount due,
accompanied by evidence of payment and a statement detailing the Taxes paid and
describing in reasonable detail the particulars relating thereto. Any payments
required under this Section 5.2 (a) shall include interest computed at the Prime
Rate based on the number of days from the date the additional Tax was paid by
ICN to the date of the payment under this Section 5.2(a).

              (b) ADJUSTMENTS RESULTING IN OVERPAYMENTS. Within 30 days of
receipt by ICN of any Tax Benefit resulting from any adjustment to the tax
liability with respect to any ICN Federal Consolidated Return, ICN shall pay to
Ribapharm its share of any such Tax Benefit, as determined in accordance with
the principles of Sections 2.2 and 4. Any payments required under this Section
5.2(b) shall include interest computed at the Prime Rate based on the number of
days from the date the Tax Benefit was received by ICN to the date of payment to
Ribapharm under this Section 5.2(b).

         5.3. PAYMENT OF STATE INCOME TAX RELATING TO PRE-DISTRIBUTION PERIODS.

              (a) COMPUTATION AND PAYMENT OF TAX DUE. Unless otherwise agreed to
by the Companies, at least five business days prior to any Payment Date for any
Tax Return with respect to any State Income Tax relating to a Pre-Distribution
Period, the Responsible Company shall compute the amount of Tax required to be
paid to the applicable Tax Authority (taking into


                                       22
<PAGE>

account the requirements of Section 3.4 relating to consistent accounting
practices) with respect to such Tax Return on such Payment Date and--

                   (i) If such Tax Return is a Consolidated or Combined State
Income Tax, the Responsible Company shall, if ICN is not the Responsible Company
with respect to such Tax Return, notify ICN in writing of the amount of Tax
required to be paid on such Payment Date. ICN will pay such amount to such Tax
Authority on or before such Payment Date.

                   (ii) If such Tax Return is with respect to a Separate Company
Tax, the Responsible Company shall, if it is not the Company liable for the Tax
reported on such Tax Return, notify the Company liable for such Tax in writing
of the amount of Tax required to be paid on such Payment Date. The Company
liable for such Tax will pay such amount to such Tax Authority on or before such
Payment Date.

              (b) COMPUTATION AND PAYMENT OF RIBAPHARM LIABILITY WITH RESPECT TO
TAX DUE. Within 30 days following the due date (including extensions) for filing
any Consolidated or Combined Income Tax Return with respect to State Income Tax
(excluding any Tax Return with respect to payment of estimated Taxes or Taxes
due with a request for extension of time to file) relating to a Pre-Distribution
Period, Ribapharm shall pay to ICN the Tax liability allocable to Ribapharm as
determined by ICN under the provisions of Sections 2.3 and 4 (and following the
procedures described in Section 5.2(a)), plus interest computed at the Prime
Rate on the amount of the payment based on the number of days from the due date
(including extensions) to the date of payment by Ribapharm to ICN.

         5.4. PAYMENT OF STATE INCOME TAXES RELATED TO ADJUSTMENTS.

              (a) ADJUSTMENTS RESULTING IN UNDERPAYMENTS. ICN shall pay to the
applicable Tax Authority when due any additional State Income Tax required to be
paid as a result of any adjustment to the Tax liability with respect to any Tax
Return for any Consolidated or Combined


                                       23
<PAGE>
Income Tax Return with respect to State Income Taxes for any Pre-Distribution
Period. Ribapharm shall pay to ICN its respective share of any such additional
Tax payment determined in accordance with Sections 2.3 and 4 within 30 days from
the later of (i) the date the additional Tax was paid by ICN or (ii) the date of
receipt by Ribapharm of a written notice and demand from ICN for payment of the
amount due, accompanied by evidence of payment and a statement detailing the
Taxes paid and describing in reasonable detail the particulars relating thereto.
Ribapharm shall also pay to ICN interest on its respective share of such Tax
computed at the Prime Rate based on the number of days from the date the
additional Tax was paid by ICN to the date of its payment to ICN under this
Section 5.4(a).

              (b) ADJUSTMENTS RESULTING IN OVERPAYMENTS. Within 30 days of
receipt by ICN of any Tax Benefit resulting from any adjustment to the Tax
liability with respect to any Consolidated or Combined Tax Return for any State
with respect to State Income Taxes for any Pre-Distribution Period, ICN shall
pay to Ribapharm its share of any such Tax Benefit determined in accordance with
the principles of Sections 2.3 and 4. Any payments required under this Section
5.4(b) shall include interest computed at the Prime Rate based on the number of
days from the date the Tax Benefit was received by ICN to the date of payment
under this Section 5.4(b).

         5.5. PAYMENT OF SEPARATE COMPANY TAXES AND OTHER TAXES. Each Company
shall pay, or shall cause to be paid, to the applicable Tax Authority when due
all Separate Company Taxes and Other Taxes owed by such Company or a member of
such Company's Group.

         5.6. INDEMNIFICATION PAYMENTS. If any Company (the "payor") is required
to pay to a Tax Authority a Tax that another Company (the "responsible party")
is required to pay to such Taxing Authority under this Agreement, the
responsible party shall reimburse the payor within 30 days of delivery by the
payor to the responsible party of an invoice for the amount due, accompanied by
evidence of payment and a statement detailing the Taxes paid and describing in
reasonable detail the particulars relating thereto. The reimbursement shall
include interest on the


                                       24
<PAGE>

Tax payment computed at the Prime Rate based on the number of days from the date
of the payment to the Tax Authority to the date of reimbursement under this
Section 5.6.

         5.7. COMPENSATION FOR USE OF RIBAPHARM CONSOLIDATED PERIOD TAX ITEMS.
In the event ICN is required to pay Ribapharm in accordance with Section 4.1,
Ribapharm shall deliver to ICN an invoice stating the amount due to Ribapharm,
accompanied by a reasonably detailed calculation of that amount, as prescribed
by section 4.1. ICN shall pay Ribapharm within 30 days from the due date
(including any extensions) for the Tax Return filed by Ribapharm with respect to
such amount, including interest computed at the Prime Rate based on the number
of days from such due date to the date ICN pays Ribapharm.

         5.8. PAYMENT OF REFUNDS AND OTHER TAX BENEFITS.

              (a) Except as otherwise provided in this Agreement, if a member of
one Group receives a Tax refund or other Tax Benefit with respect to Taxes for
which a member of the other Group is liable hereunder, the Company receiving
such Tax refund or other Tax Benefit shall make a payment to the Company who is
liable for such Taxes hereunder within 30 days following the receipt of the Tax
refund or other Tax Benefit in an amount equal to such Tax refund or other Tax
Benefit, plus interest on such amount computed at the Prime Rate based on the
number of days from the date of receipt of the Tax refund or other Tax Benefit
to the date of payment under this Section 5.8.

              (b) In the event one Group is reimbursed for its payment of a Tax
liability of the other Group, the amount of such reimbursement shall be computed
net of any Tax Benefit realized by the reimbursed Group as the result of payment
of the other Group's Tax liability.

         5.9. PAYMENT FOR CARRYBACKS. Each Company shall pay the other Company
for Carrybacks in accordance with Section 4.2(e). Any such payment shall include
interest at the Prime Rate based on the number of days from the date Company is
required to make the payment under Section 4.2(e) to the date the Company
actually makes the payment.



                                       25
<PAGE>

         5.10. PAYMENT FOR ADJUSTMENTS ON AUDIT. Any payment required under
Section 4.4 shall be made within 30 days of the due date (including any
extensions) of the Tax Return on which the Tax Benefit described in that section
is claimed. Such payment shall include interest computed at the Prime Rate based
on the number of days from such due date to the date the payment is made.

SECTION 6.  ASSISTANCE AND COOPERATION.

         6.1. GENERAL. Each of the Companies shall cooperate (and cause their
respective Affiliates to cooperate) with each other and with each other's
agents, including accounting firms and legal counsel, in connection with Tax
matters relating to the Companies and their Affiliates including (i) preparation
and filing of Tax Returns, (ii) determining the liability for and amount of any
Taxes due (including estimated Taxes) or the right to and amount of any refund
of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or
judicial proceeding in respect of Taxes assessed or proposed to be assessed.
Such cooperation shall include making all information and documents in their
possession relating to the other Companies and their Affiliates available to
such other Companies as provided in Section 7. Each of the Companies shall also
make available to each other, as reasonably requested and available, personnel
(including officers, directors, employees and agents of the Companies or their
respective Affiliates) responsible for preparing, maintaining, and interpreting
information and documents relevant to Taxes, and personnel reasonably required
as witnesses or for purposes of providing information or documents in connection
with any administrative or judicial proceedings relating to Taxes. Any
information or documents provided under this Section 6 shall be kept
confidential by the Company receiving the information or documents, except as
may otherwise be necessary in connection with the filing of Tax Returns or in
connection with any administrative or judicial proceedings relating to Taxes.



                                       26
<PAGE>

         6.2. INCOME TAX RETURN INFORMATION. Each Company will provide to each
other Company information and documents relating to their respective Groups
required by the other Companies to prepare Tax Returns. The Responsible Company
shall determine a reasonable compliance schedule for such purpose in accordance
with past practices. Any additional information or documents the Responsible
Company requires to prepare such Tax Returns will be provided in accordance with
past practices, if any, or as the Responsible Company reasonably requests and in
sufficient time for the Responsible Company to file such Tax Returns timely.

SECTION 7.  TAX RECORDS.

         7.1. RETENTION OF TAX RECORDS. Except as provided in Section 7.2, each
Company shall preserve and keep all Tax Records exclusively relating to the
assets and activities of their respective Groups for Pre-Distribution Periods,
and ICN shall preserve and keep all other Tax Records relating to Taxes of the
Groups for Pre-Distribution Periods, for so long as the contents thereof may
become material in the administration of any matter under the Code or other
applicable Tax Law, but in any event until the later of (i) the expiration of
any applicable statutes of limitation, as extended, and (ii) seven years after
the Distribution Date. Prior to disposing of any Tax Records which it is
required to preserve and keep under this Section 7, a Company shall provide
90-days written notice to the other Company. Such notice shall include a list of
the records to be disposed of describing in reasonable detail each file, book,
or other record accumulation being disposed of. The notified Company shall have
the opportunity, at its cost and expense, to copy or remove, within such 90-day
period, all or any part of such Tax Records.

         7.2. STATE INCOME TAX RETURNS. Tax Returns with respect to State Income
Taxes and workpapers prepared in connection with preparing such Tax Returns
shall be preserved and kept, and disposed of, in accordance with the guidelines
of Section 7.1, by the Company responsible for preparing and filing the
applicable Tax Return.



                                       27
<PAGE>

         7.3. ACCESS TO TAX RECORDS. The Companies and their respective
Affiliates shall make available to each other for inspection and copying during
normal business hours upon reasonable notice all Tax Records in their possession
to the extent reasonably requested by the other Company in connection with the
preparation of Tax Returns, audits, litigation, or the resolution of items under
this Agreement.

SECTION 8.  TAX CONTESTS.

         8.1. NOTICE. Each of the parties shall provide prompt notice to the
other party of any pending or threatened Tax audit, assessment or proceeding or
other Tax Contest of which it becomes aware related to Taxes for Tax Periods for
which it is indemnified by the other party hereunder. Such notice shall contain
factual information (to the extent known) describing any asserted Tax liability
in reasonable detail and shall be accompanied by copies of any notice and other
documents received from any Tax Authority in respect of any such matters. If an
indemnified party has knowledge of an asserted Tax liability with respect to a
matter for which it is to be indemnified hereunder and such party fails to give
the indemnifying party prompt notice of such asserted Tax liability, then (i) if
the indemnifying party is precluded from contesting the asserted Tax liability
in any forum as a result of the failure to give prompt notice, the indemnifying
party shall have no obligation to indemnify the indemnified party for any Taxes
arising out of such asserted Tax liability, and (ii) if the indemnifying party
is not precluded from contesting the asserted Tax liability in any forum, but
such failure to give prompt notice results in a monetary detriment to the
indemnifying party, then any amount which the indemnifying party is otherwise
required to pay the indemnified party pursuant to this Agreement shall be
reduced by the amount of such detriment.

         8.2. CONTROL OF TAX CONTESTS. Each Company shall have full
responsibility and discretion in handling, settling or contesting any Tax
Contest involving a Tax for which it is


                                       28
<PAGE>

liable pursuant to Section 2 of this Agreement; provided, however, ICN shall
have full responsibility and discretion in handling, settling or contesting any
Tax Contest with respect to a Consolidated or Combined Income Tax Return of the
ICN Group. Furthermore, both Companies may participate in any Tax Contest with
respect to Restructuring Taxes regardless of whether it has liability or
indemnification obligations with respect to such Taxes under this Agreement.

SECTION 9.  NO INCONSISTENT ACTIONS.

              (a) Each of the Companies covenants and agrees that it has not and
will not take any action, and it has and will cause its Affiliates to refrain
from taking any action, which may be inconsistent with the Tax treatment of the
Transactions as contemplated in the Application for Ruling, Tax Opinion
Submission (if made), IRS Private Letter Ruling (if issued) or Tax Opinion (if
obtained) (any such action is referred to in this Section 9 as a "Tainting
Act"), unless (i) the Company or Affiliate thereof proposing such Tainting Act
(the "Requesting Party") either (A) obtains a ruling with respect to the
Tainting Act from the Internal Revenue Service or other applicable Tax Authority
that is reasonably satisfactory to the other Company (the "Requested Party")
(except that the Requesting Party shall not submit any such ruling request if a
Requested Party determines in good faith that filing such request might have a
materially adverse effect upon such Requested Party), or (B) obtains an opinion
reasonably acceptable to each Requested Party of independent,
nationally-recognized tax counsel acceptable to each Requested Party, on a basis
of assumed facts and representations consistent with the facts at the time of
such action, that such Tainting Act will not affect the Tax treatment of the
Transactions as contemplated in the Application for Ruling, Tax Opinion
Submission (if made), IRS Private Letter Ruling (if issued) or Tax Opinion (if
obtained), or (ii) each Requested Party consents in writing to such Tainting
Act, which consent shall be granted or withheld in the sole and absolute
discretion of each such Requested Party. Without limiting the foregoing:



                                       29
<PAGE>
                   (i) SPECIFIED ACTIONS. During the four-year period beginning
two years before the Distribution Date, unless clause (i) or (ii) of the
preceding paragraph is satisfied with respect to the applicable action, no
Company or its Affiliate has or will (A) liquidate or merge with or into any
other corporation (other than a merger which results in the outstanding stock of
such Company or its Affiliates immediately before the merger continuing to
represent at least eighty (80) percent of the outstanding voting stock and
non-voting stock of the merged corporations after the transaction); (B)
excluding the Initial Public Offering issue more than ten (10) percent, in the
aggregate, by vote or value, of its capital stock in one or more transactions;
(C) redeem, purchase or otherwise reacquire its capital stock in one or more
transactions, except to the extent such redemption, purchase or reacquisition
meets the requirements of section 4.05(1)(b) of Revenue Procedure 96-30; (D)
sell, exchange, distribute or otherwise dispose of, other than in the ordinary
course of business, more than twenty-five (25) percent of the assets
constituting the trades or businesses relied upon in the Application for Ruling,
Tax Opinion Submission (if made), IRS Private Letter Ruling (if issued) or Tax
Opinion (if obtained) to satisfy Section 355(b) of the Code; or (E) discontinue
or cause to be discontinued the active conduct of the trades or businesses
relied upon in the Application for Ruling, Tax Opinion Submission (if made), IRS
Private Letter Ruling (if issued) or Tax Opinion (if obtained) to satisfy
Section 355(b) of the Code.

                   (ii) NO INCONSISTENT PLAN OR INTENT. Each of the Companies
represents and warrants that neither it nor any of its Affiliates has any plan
or intent to take any action which is inconsistent with any factual statements
or representations in the Application for Ruling, and, in the event a Tax
Opinion Submission is made, each of the Companies represents and warrants that
neither it nor any of its Affiliates will form any plan or take any action which
is inconsistent with any factual statements or representations in such Tax
Opinion Submission. Regardless of any change in circumstances, each of the
Companies covenants and agrees that it will not take, and it will cause its
Affiliates to refrain from taking, any such inconsistent action


                                       30
<PAGE>

on or before the second anniversary of the Distribution Date other than as
permitted in this Section 9.

                   (iii) 355(E) COVENANT. Notwithstanding anything in this
Agreement to the contrary, each of ICN and Ribapharm covenants and agrees that,
during the two-year periods ending on and beginning on the Distribution Date,
unless clause (i) or (ii) of section 9(a) of this Agreement is satisfied with
respect to the applicable action, it has not and will not enter into any
negotiations, agreements or arrangements with respect to transactions or events
(including stock issuances, option grants, capital contributions or
acquisitions) which may cause the Distribution to be treated as part of a plan
pursuant to which one or more persons acquire directly or indirectly ICN or
Ribapharm stock, as the case may be, representing a "50 percent or greater
interest" within the meaning of Section 355(e)(4) of the Code.

                   (iv) AMENDED OR SUPPLEMENTAL RULINGS. Each of the Companies
covenants and agrees that it will not file, and it will cause its Affiliates to
refrain from filing, any amendment or supplement to the Application for Ruling
with respect to the Transactions subsequent to the Distribution Date without the
consent of the other Companies, which consent shall not be unreasonably
withheld.

                   (v) LIABILITY FOR BREACH OF REPRESENTATIONS OR OMISSION OR
MISSTATEMENT OF MATERIAL FACTS. Ribapharm represents that (i) it has read the
Application for Ruling, and will read any amendment or supplement to the
Application for Ruling (each a "Supplemental Application") and any Tax Opinion
Submission made available to it by ICN, (ii) all information relating to
Ribapharm or any member of the Ribapharm Group contained in such Application for
Ruling, Supplemental Application and Tax Opinion Submission is or will be true,
correct and complete in all material respects at the time such information is
submitted, and (iii) except to the extent that Ribapharm shall have notified ICN
in writing to the contrary, with reasonable specificity and as promptly as
possible, prior to the Distribution, all such information


                                       31
<PAGE>

supplied to ICN in writing by Ribapharm or any member of the Ribapharm Group
will be true, correct and complete in all material respects as of the
Distribution Date. If the IRS withdraws all, or any portion, of an IRS Private
Letter Ruling issued to ICN in connection with the Distribution, or if any Tax
Opinion obtained by ICN is rendered inapplicable or ineffective because of a
breach by Ribapharm or any member of the Ribapharm Group of a representation or
because of the omission or misstatement by Ribapharm or any member of the
Ribapharm Group of any material fact, which breach, omission or misstatement was
not known to ICN on or before the Distribution Date, Ribapharm and every member
of the Ribapharm Group shall be responsible for one hundred (100) percent of any
Restructuring Tax resulting from such breach, omission or misstatement, and
shall jointly and severally indemnify, on an after-tax-basis, ICN, each member
of the ICN Group other than a member of the Ribapharm Group, and their
directors, officers and employees and hold them harmless from and against such
Restructuring Tax.

              (b) Notwithstanding anything to the contrary in this Agreement,
each Company shall be solely liable for, and shall indemnify and hold harmless
the other Company from any Restructuring Tax resulting from a Tainting Act by
such first Company or its Affiliates, regardless of whether clause (i) or (ii)
of Section 9(a) was satisfied with respect to such Tainting Act.

SECTION 10.  SURVIVAL OF OBLIGATIONS.

         The representations, warranties, covenants and agreements set forth in
this Agreement shall be unconditional and absolute and shall remain in effect
without limitation as to time.

SECTION 11.  EMPLOYEE MATTERS.


                                       32
<PAGE>

         Each of the Companies agrees to utilize, or cause its Affiliates to
utilize, the alternative procedure set forth in section 5 of Revenue Procedure
96-60, 1996-2 C.B. 399, with respect to wage reporting.

SECTION 12.  TREATMENT OF PAYMENTS; TAX GROSS UP.

         12.1. TREATMENT OF TAX INDEMNITY AND TAX BENEFIT PAYMENTS. In the
absence of any change in tax treatment under the Code or other applicable Tax
Law, any Tax indemnity payments or Tax Benefit payments made by a Company under
Section 5 shall be reported for Tax purposes by the payor and the recipient as
distributions or capital contributions, as appropriate, occurring immediately
before the Distribution on the Distribution Date, but only to the extent the
payment does not relate to a Tax allocated to the payor in accordance with
Treasury Regulation Section 1.1502-33(d) (or under corresponding principles of
other applicable Tax Laws).

         12.2. TAX GROSS UP. If notwithstanding the manner in which Tax
indemnity payments and Tax Benefit payments were reported, there is an
adjustment to the Tax liability of a Company as a result of its receipt of a
payment pursuant to this Agreement, such payment shall be appropriately adjusted
so that the amount of such payment, reduced by the amount of all Income Taxes
payable with respect to the receipt thereof (but taking into account all
correlative Tax Benefits resulting from the payment of such Income Taxes), shall
equal the amount of the payment which the Company receiving such payment would
otherwise be entitled to receive pursuant to this Agreement.

         12.3. INTEREST UNDER THIS AGREEMENT. Anything herein to the contrary
notwithstanding, to the extent one Company ("indemnitor") makes a payment of
interest to another Company ("indemnitee") under this Agreement with respect to
the period from the date that the indemnitee made a payment of Tax to a Tax
Authority to the date that the indemnitor reimbursed the indemnitee for such Tax
payment, or with respect to the period from the date that the indemnitor


                                       33
<PAGE>

received a Tax Benefit to the date indemnitor paid the indemnitee with respect
to such Tax Benefit, the interest payment shall be treated as interest expense
to the indemnitor (deductible to the extent provided by law) and as interest
income by the indemnitee (includible in income to the extent provided by law).
The amount of the payment shall not be adjusted under Section 12.2 to take into
account any associated Tax Benefit to the indemnitor or increase in Tax to the
indemnitee.

SECTION 13.  DISAGREEMENTS.

         If after good faith negotiations the parties cannot agree on the
application of this Agreement to any matter concerning (i) calculation or
allocation of any liability for Tax, (ii) computation or payment of any Tax due,
(iii) compensation for any Tax Benefit, (iv) preparation or filing of any Tax
Return or (v) control of any Tax Contest, then the matter will be referred to an
independent law firm or an accounting firm acceptable to each of the parties
(the "Firm"). The Firm shall furnish written notice to the parties of its
resolution of any such disagreement as soon as practical, but in any event no
later than 45 days after its acceptance of the matter for resolution. Any such
resolution by the Firm will be conclusive and binding on all parties to this
Agreement. In accordance with Section 15, each party shall pay its own fees and
expenses (including the fees and expenses of its representatives) incurred in
connection with the referral of the matter to the Firm. All fees and expenses of
the Firm in connection with such referral shall be shared equally by the parties
affected by the matter.

SECTION 14. LATE PAYMENTS.

         Any amount owed by one party to another party under this Agreement
which is not paid when due shall bear interest at the Prime Rate plus two
percent, compounded on each March 31, June 30, September 30 and December 31,
from the due date of the payment to the date paid.


                                       34
<PAGE>

To the extent interest required to be paid under this Section 14 duplicates
interest required to be paid under any other provision of this Agreement,
interest shall be computed at the higher of the interest rate provided under
this Section 14 or the interest rate provided under such other provision.

SECTION 15. EXPENSES.

         Except as provided in Section 14, each Company and its Affiliates shall
bear their own expenses incurred in connection with preparation of Tax Returns,
Tax Contests, and other matters related to Taxes under the provisions of this
Agreement.

SECTION 16. GENERAL PROVISIONS.

         16.1. NOTICES. All notices and other communications hereunder shall be
in writing and shall be delivered in person, by telecopy, by express or
overnight mail delivered by a nationally recognized air courier (delivery
charges prepaid), or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:

                  (a)      If to ICN, to:

                           ICN Pharmaceuticals, Inc.
                           3300 Hyland Avenue
                           Costa Mesa, CA  92626
                           Attention:  Gregory Keever, Esq.

                  (b)      If to Ribapharm, to:

                           Ribapharm Inc.
                           3300 Hyland Avenue
                           Costa Mesa, CA  92626
                           Attention:  Roger D. Loomis, Jr., Esq.

or to such other address as the party to whom notice is given may have
previously furnished to


                                       35
<PAGE>

the others in writing in the manner set forth above. Any notice or communication
delivered in person shall be deemed effective on delivery or when delivery is
refused. Any notice or communication sent by telecopy or by air courier shall be
deemed effective on the first Business Day at the place at which such notice or
communication is received following the day on which such notice or
communication was sent.

         16.2. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement. The Agreement may be
delivered by facsimile transmission of a signed copy thereof.

         16.3. BINDING EFFECT; ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of either party, neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
either party hereto without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
ICN and Ribapharm may assign their respective rights, interests, duties,
liabilities and obligations under this Agreement to any of their respective
subsidiaries, but such assignment shall not relieve ICN or Ribapharm, as the
assignee, of its obligations hereunder. The schedules attached hereto or
referred to herein are an integral part of this Agreement and are hereby
incorporated into this Agreement and made a part hereof as if set forth in full
herein.



                                       36
<PAGE>

         16.4. DISPUTE RESOLUTION. Except as otherwise provided for in Section
13, resolution of any and all disputes arising from or in connection with this
Agreement, whether based on contract, tort, or otherwise (collectively,
"Disputes"), shall be governed by and settled in accordance with the provisions
of this Section 16.4. The parties hereto shall use all commercially reasonable
efforts to settle all Disputes without resorting to mediation, arbitration,
litigation or other third party dispute resolution mechanisms. If any Dispute
remains unsettled, the parties hereby agree to mediate such Dispute using a
mediator reasonably acceptable to all parties involved in such Dispute. If the
parties are unable to resolve such dispute through mediation, each party will be
free to commence proceedings for the resolution thereof. No party shall be
entitled to consequential, special, exemplary or punitive damages.

         16.5. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         16.6. WAIVER. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the party against which such
waiver is to be asserted. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any


                                       37
<PAGE>

party in exercising any right or privilege under this Agreement shall operate as
a waiver thereof, nor shall any waiver on the part of any party of any right or
privilege under this Agreement operate as a waiver of any other right or
privilege under this Agreement nor shall any single or partial exercise of any
right or privilege preclude any other or further exercise thereof or the
exercise of any other right or privilege under this Agreement. No failure by
either party to take any action or assert any right or privilege hereunder shall
be deemed to be a waiver of such right or privilege in the event of the
continuation or repetition of the circumstances giving rise to such right unless
expressly waived in writing by the party against whom the existence of such
waiver is asserted.

         16.7. AMENDMENT. This Agreement may not be amended or modified in any
respect except by a written agreement signed by both of the parties hereto.

         16.8. AUTHORITY. Each of the parties hereto represents to the other
that (a) it has the corporate power and authority to execute, deliver and
perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it has been duly authorized by all necessary corporate action, (c)
it has duly and validly executed and delivered this Agreement, and (d) this
Agreement is a legal, valid and binding obligation, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.

         16.9. INTERPRETATION. The headings contained in this Agreement, in any
Schedule hereto and in the table or contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Any capitalized term used in any Schedule but not otherwise
defined therein, shall have the meaning assigned to such term in this Agreement.
When a reference is made in this Agreement to an Article or a Section or
Schedule,


                                       38
<PAGE>

such reference shall be to an Article or Section of, or a Schedule to, this
Agreement unless otherwise indicated.

         16.10. EFFECTIVE TIME. This Agreement shall become effective upon the
time of purchase of the Firm Shares, as defined in the Underwriting Agreement by
and among ICN, Ribapharm and the underwriters named therein relating to the
Initial Public Offering.


                                       39
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by the respective officers as of the date set forth above.


                                               ICN PHARMACEUTICALS, INC.


                                               By:
                                                  ------------------------------
                                               Name:
                                               Title:


                                               RIBAPHARM INC.


                                               By:
                                                  ------------------------------
                                               Name:
                                               Title:



                                       40