Document:

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                                                                EXHIBIT 4.1

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                         ICN PHARMACEUTICALS, INC.

                                    and

                               RIBAPHARM INC.

                                    and

                           THE BANK OF NEW YORK,

                                 as Trustee

                            --------------------

                                 INDENTURE

                         Dated as of July 18, 2001

                            --------------------

                       $400,000,000 Principal Amount

                        (Plus Over-allotment Option)

               6 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2008

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                           CROSS-REFERENCE TABLE

  TIA                                                   Indenture
Section                                                  Section
-------                                                  -------
310(a)(1)..............................................   7.10
   (a)(2)..............................................   7.10
   (a)(3)..............................................   N.A.
   (a)(4)..............................................   N.A.
   (b).................................................   7.08; 7.10; 12.02
   (c).................................................   N.A.
311(a).................................................   7.11
   (b).................................................   7.11
   (c).................................................   N.A.
312(a).................................................   2.05
   (b).................................................   12.03
   (c).................................................   12.03
313(a).................................................   7.06
   (b)(1)..............................................   N.A.
   (b)(2)..............................................   7.06
   (c).................................................   7.06; 12.02
   (d).................................................   7.06
314(a).................................................   4.02
   (b).................................................   N.A.
   (c)(1)..............................................   12.04
   (c)(2)..............................................   12.04
   (c)(3)..............................................   N.A.
   (d).................................................   N.A.
   (e).................................................   12.05
   (f).................................................   N.A.
315(a).................................................   7.01(B)
   (b).................................................   7.05; 12.02
   (c).................................................   7.01(A)
   (d).................................................   7.01(C)
   (e).................................................   6.11
316(a)(last sentence)..................................   2.09
   (a)(1)(A)...........................................   6.05
   (a)(1)(B)...........................................   6.04
   (a)(2)..............................................   N.A.
   (b).................................................   6.07
317(a)(1)..............................................   6.08
   (a)(2)..............................................   6.09
   (b).................................................   2.04
318(a).................................................   12.01

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                             TABLE OF CONTENTS

                                                                       Page
                                                                       ----

                I. DEFINITIONS AND INCORPORATION BY REFERENCE

      1.01 Definitions....................................................1
      1.02 Other Definitions..............................................5
      1.03 Incorporation by Reference of Trust Indenture Act..............5
      1.04 Rules of Construction..........................................6

                             II. THE SECURITIES

      2.01 Form and Dating................................................6
      2.02 Execution and Authentication...................................7
      2.03 Registrar, Paying Agent and Conversion Agent...................8
      2.04 Paying Agent To Hold Money in Trust............................9
      2.05 Securityholder Lists...........................................9
      2.06 Transfer and Exchange..........................................9
      2.07 Replacement Securities........................................10
      2.08 Outstanding Securities........................................10
      2.09 Securities Held by the Company, Ribapharm or an Affiliate.....10
      2.10 Temporary Securities..........................................11
      2.11 Cancellation..................................................11
      2.12 Defaulted Interest............................................11
      2.13 CUSIP Numbers.................................................11
      2.14 Deposit of Moneys.............................................12
      2.15 Book-Entry Provisions for Global Securities...................12
      2.16 Special Transfer Provisions...................................13
      2.17 Restrictive Legends...........................................17

                              III. REDEMPTION

      3.01 Right of Redemption...........................................17
      3.02 Notices to Trustee............................................17
      3.03 Selection of Securities to Be Redeemed........................18
      3.04 Notice of Redemption..........................................18
      3.05 Effect of Notice of Redemption................................19
      3.06 Deposit of Redemption Price...................................19
      3.07 Securities Redeemed in Part...................................19
      3.08 Repurchase at Option of Holder upon a Change in Control.......19
      3.09 Conversion Arrangement on Call for Redemption.................23

                               IV. COVENANTS

      4.01 Payment of Securities.........................................24
      4.02 Maintenance of Office or Agency...............................24
      4.03 Reports.......................................................25
      4.04 Compliance Certificate........................................25
      4.05 Stay, Extension and Usury Laws................................25
      4.06 Corporate Existence...........................................26
      4.07 Notice of Default.............................................26

                               V. SUCCESSORS

      5.01 When Company and Ribapharm May Merge, etc.....................26
      5.02 Successor Substituted.........................................26

                         VI. DEFAULTS AND REMEDIES

      6.01 Events of Default.............................................27
      6.02 Acceleration..................................................28
      6.03 Other Remedies................................................29
      6.04 Waiver of Past Defaults.......................................29
      6.05 Control by Majority...........................................29
      6.06 Limitation on Suits...........................................29
      6.07 Rights of Holders to Receive Payment..........................30
      6.08 Collection Suit by Trustee....................................30
      6.09 Trustee May File Proofs of Claim..............................30
      6.10 Priorities....................................................31
      6.11 Undertaking for Costs.........................................31

                                VII. TRUSTEE

      7.01 Duties of Trustee.............................................31
      7.02 Rights of Trustee.............................................32
      7.03 Individual Rights of Trustee..................................33
      7.04 Trustee's Disclaimer..........................................33
      7.05 Notice of Defaults............................................34
      7.06 Reports by Trustee to Holders.................................34
      7.07 Compensation and Indemnity....................................34
      7.08 Replacement of Trustee........................................35
      7.09 Successor Trustee by Merger, etc..............................36
      7.10 Eligibility; Disqualification.................................36
      7.11 Preferential Collection of Claims Against Company.............36

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                        VIII. DISCHARGE OF INDENTURE

      8.01 Termination of the Obligations of the Company and Ribapharm...36
      8.02 Application of Trust Money....................................37
      8.03 Repayment to Company..........................................38
      8.04 Reinstatement.................................................38

                               IX. AMENDMENTS

      9.01 Without Consent of Holders....................................39
      9.02 With Consent of Holders.......................................39
      9.03 Compliance with Trust Indenture Act...........................40
      9.04 Revocation and Effect of Consents.............................40
      9.05 Notation on or Exchange of Securities.........................40
      9.06 Trustee Protected.............................................41

                               X. CONVERSION

      10.01 Conversion Privilege; Restrictive Legends....................41
      10.02 Conversion Procedure.........................................41
      10.03 Fractional Shares............................................42
      10.04 Taxes on Conversion..........................................43
      10.05 Company and Ribapharm to Provide Stock.......................43
      10.06 Adjustment of Conversion Rate................................44
      10.07 Limitations on Adjustment....................................49
      10.08 Other Adjustments............................................50
      10.09 Notice of Adjustment.........................................50
      10.10 Notice of Certain Transactions...............................50
      10.11 Effect of Reclassifications, Consolidations, Mergers or
             Sales on Conversion Privilege...............................51
      10.12 Trustee's Disclaimer.........................................52
      10.13 Return of Funds Deposited for Redemption of Converted
             Securities..................................................52

                             XI. SUBORDINATION

      11.01 Agreement to Subordinate.....................................52
      11.02 Certain Definitions..........................................53
      11.03 Liquidation; Dissolution; Bankruptcy.........................53
      11.04 Company and Ribapharm Not To Make Payments with Respect to
             Securities in Certain Circumstances.........................54
      11.05 When Distribution Must Be Paid Over..........................55
      11.06 Notice by Company and Ribapharm..............................55
      11.07 Subrogation..................................................55
      11.08 Relative Rights..............................................55
      11.09 Subordination May Not Be Impaired by Company or Ribapharm....56
      11.10 Distribution or Notice to Representative.....................56
      11.11 Rights of Trustee and Paying Agent...........................56
      11.12 Officers' Certificate........................................57
      11.13 Obligation of Company and Ribapharm Unconditional............57
      11.14 Not to Prevent Events of Default.............................58

                             XII. MISCELLANEOUS

      12.01 Trust Indenture Act Controls.................................58
      12.02 Notices......................................................58
      12.03 Communication by Holders with Other Holders..................59
      12.04 Certificate and Opinion as to Conditions Precedent...........59
      12.05 Statements Required in Certificate or Opinion................60
      12.06 Rules by Trustee and Agents..................................60
      12.07 Legal Holidays...............................................60
      12.08 No Recourse Against Others...................................60
      12.09 Duplicate Originals..........................................61
      12.10 Governing Law................................................61
      12.11 No Adverse Interpretation of Other Agreements................61
      12.12 Successors...................................................61
      12.13 Separability.................................................61
      12.14 Table of Contents, Headings, etc.............................61

Exhibit A   -   Form of Global Security

Exhibit B   -   Form of Legends

Exhibit C   -   Form of Transfer Certificate - Non QIB

Exhibit D   -   Form of Transfer Certificate - Reg. S

Exhibit E   -   Form of Transfer Certificate - Registration Statement

<PAGE>   5

     INDENTURE, dated as of July 18, 2001 among ICN PHARMACEUTICALS,  INC.,
a  Delaware  corporation  (the  "COMPANY"),   RIBAPHARM  INC.,  a  Delaware
corporation ("RIBAPHARM"),  and THE BANK OF NEW YORK, a banking corporation
duly  organized  and existing  under the laws of the State of New York,  as
trustee (the "Trustee").

     Each party agrees as follows for the benefit of the other  parties and
for the equal and ratable  benefit of the  Holders of the  Company's 6 1/2%
Convertible Subordinated Notes due 2008 (the "SECURITIES").

               I. DEFINITIONS AND INCORPORATION BY REFERENCE

1.01 DEFINITIONS.

     "AFFILIATE"  means any person  directly or indirectly  controlling  or
controlled by or under direct or indirect  common  control with the Company
or Ribapharm,  as the case may be. For this purpose,  "control"  shall mean
the power to direct the  management  and  policies of a person  through the
ownership of securities, by contract or otherwise.

     "AGENT"  means  any  Registrar,  Paying  Agent,  Conversion  Agent  or
co-registrar.

     "BOARD OF  DIRECTORS"  means the Board of  Directors of the Company or
Ribapharm,  as the case may be, or any committee thereof  authorized to act
for it hereunder.

     "BOARD  RESOLUTION"  means a copy  of a  resolution  certified  by the
Secretary or an Assistant  Secretary  of the Company or  Ribapharm,  as the
case may be, to have been duly adopted by its Board of Directors  and to be
in full force and effect on the date of such  certification,  and delivered
to the Trustee.

     "CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents  (however  designated) of capital stock of the Company or
Ribapharm,  as the case may be, and all warrants or options to acquire such
capital stock.

     "COMPANY"  means  the  party  named as such  above  until a  successor
replaces it  pursuant to the  applicable  provision  hereof and  thereafter
means the successor.

     "COMPANY  REQUEST" or "COMPANY ORDER" means a written request or order
signed on behalf of the  Company or  Ribapharm,  as the case may be, by its
Chairman  of the Board,  its  President  or any Vice  President  and by its
Treasurer  or  an  Assistant  Treasurer,  its  Secretary  or  an  Assistant
Secretary, and delivered to the Trustee.

     "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in SECTION 12.02 or such other address as the Trustee may
give notice of to the Company.

     "DAILY MARKET PRICE" means the price of a share of ICN Common Stock or
Ribapharm  Common  Stock,  as  the  case  may  be,  on the  relevant  date,
determined  (a) on the basis of the last reported sale price regular way of
the ICN Common  Stock or  Ribapharm  Common  Stock,  as the case may be, as
reported in the case of the Company,  on The New York Stock Exchange,  Inc.
(the "NYSE") and, in the case of Ribapharm,  on the Nasdaq  National Market
(the "NNM"),  or if the ICN Common Stock or Ribapharm  Common Stock, as the
case may be, is not then listed on the NYSE or the NNM, as reported on such
national  securities  exchange or automated quotation system upon which the
ICN Common Stock or Ribapharm  Common Stock, as the case may be, is listed,
or (b) if there is no such  reported  sale on the day in  question,  on the
basis of the average of the closing bid and asked quotations regular way as
so reported,  or (c) if the ICN Common Stock or Ribapharm  Common Stock, as
the case may be,  is not  listed on the  NYSE,  the NNM or on any  national
securities  exchange or  automated  quotation  system,  on the basis of the
average of the high bid and low asked quotations  regular way on the day in
question  in the  over-the-counter  market  as  reported  by  the  National
Association of Securities Dealers Automated  Quotation System, or if not so
quoted,  as reported  by  National  Quotation  Bureau,  Incorporated,  or a
similar organization.
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     "DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

     "DEPOSITARY"  means The  Depository  Trust  Company,  its nominees and
successors.

     "EXCESS PAYMENT" means the excess of (A) the aggregate of the cash and
the  value  of  other  consideration  paid  by  the  Company  or any of its
subsidiaries or Ribapharm or any of its  subsidiaries,  as the case may be,
with  respect  to shares of ICN  Common  Stock or  Ribapharm  Common  Stock
acquired in a tender  offer or other  negotiated  transaction  over (B) the
market value of such acquired  shares after giving effect to the completion
of such  tender  offer or other  negotiated  transaction.  The value of any
consideration paid by the Company or any of its subsidiaries,  or Ribapharm
or  any of its  subsidiaries,  in a form  other  than  cash  or  marketable
securities  shall be  determined in good faith by the Board or Directors of
the  Company or  Ribapharm,  as the case may be, and  described  in a Board
Resolution.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "HOLDER" or  "SECURITYHOLDER"  means a person in whose name a Security
is registered on the Registrar's books.

     "IAI GLOBAL  SECURITY" means a permanent Global Security in registered
form  representing  the aggregate  principal  amount of securities  sold to
Institutional Accredited Investors.

     "ICN COMMON STOCK" means the common stock,  par value $0.01 per share,
of the Company,  as it exists on the date of this  Indenture,  or any other
shares of Capital  Stock of the  Company  into  which the ICN Common  Stock
shall be reclassified or changed.

     "INDENTURE"  means this Indenture as amended or supplemented from time
to time.

     "INSTITUTIONAL  ACCREDITED  INVESTOR"  means an "accredited  investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Act that is
an institutional investor.

     "INTEREST" includes  liquidated damages,  unless the context otherwise
requires.

     "LIQUIDATED  DAMAGES"  has the meaning  provided  in the  Registration
Rights Agreement.

     "MATURITY DATE" means July 15, 2008.

     "NON-U.S.  PERSON" means a person who is not a U.S. person (as defined
in Regulation S pursuant to the Securities Act).

     "OFFICER"  means the Chairman of the Board,  the  President,  any Vice
President,  the Chief Financial Officer,  the Treasurer or the Secretary of
the Company or Ribapharm, as the case may be.

     "OFFICERS'  CERTIFICATE" means a certificate signed by two Officers or
by an Officer and an Assistant  Treasurer or an Assistant  Secretary of the
Company or Ribapharm, as the case may be.

     "OPINION OF COUNSEL"  means a written  opinion from legal  counsel who
may be an employee of or counsel for the Company or Ribapharm,  as the case
may be, or other counsel reasonably acceptable to the Trustee.

     "PERSON"  means  any  individual,  corporation,  partnership,  limited
liability company, joint venture, association,  joint-stock company, trust,
unincorporated  organization  or  government  or other  agency or political
subdivision thereof.

     "QIB" means a "qualified  institutional  buyer"  within the meaning of
Rule 144A under the Securities Act.

     "REDEMPTION PRICE" means, with respect to a Security to be redeemed by
the  Company  in  accordance  with  ARTICLE  III,  the  percentage  of  the
outstanding  principal  amount of such Security payable by the Company upon
such redemption.

<PAGE>   7

     "REGISTRATION   RIGHTS   AGREEMENT"  means  the  Registration   Rights
Agreement  dated as of July 18, 2001 among the Company,  Ribapharm  and the
Initial Purchaser.

     "REGULATION S" means Regulation S under the Securities Act.

     "REGULATION S GLOBAL  SECURITY"  means a permanent  Global Security in
registered form  representing the aggregate  principal amount of Securities
sold in reliance on Regulation S.

     "REPURCHASE PRICE" means, with respect to a Security duly tendered for
purchase by the Company or Ribapharm in accordance  with SECTION 3.08, 100%
of the outstanding principal amount of such Security so tendered.

     "RESPONSIBLE  OFFICER"  shall  mean,  when  used with  respect  to the
Trustee,  any officer within the corporate trust department of the Trustee,
including  any  vice  president,   assistant  vice   president,   assistant
secretary,  assistant treasurer,  trust officer or any other officer of the
Trustee who customarily  performs  functions  similar to those performed by
the persons  who at the time shall be such  officers,  respectively,  or to
whom any  corporate  trust  matter is  referred  because  of such  person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of the Indenture.

     "RESTRICTED  SECURITY" means a Security that constitutes a "restricted
security"  within the meaning of Rule 144(a)(3)  under the Securities  Act;
provided,  however,  that the  Trustee  shall be  entitled  to request  and
conclusively  rely on an  Opinion of Counsel  with  respect to whether  any
Security constitutes a Restricted Security.

     "RIBAPHARM"  means the party  named  above as such  until a  successor
replaces it  pursuant to the  applicable  provision  hereof and  thereafter
means the successor.

     "RIBAPHARM  COMMON  STOCK"  means  common  stock,  par value $0.01 per
share,  of Ribapharm,  as it exists on the date of this  Indenture,  or any
other shares of Capital Stock of Ribapharm into which the Ribapharm  Common
Stock shall be reclassified or changed.

     "RIBAPHARM  IPO" means an initial  public  offering of common stock of
Ribapharm registered under the Securities Act.

     "RIBAPHARM  SPIN-OFF"  means the  distribution  by the  Company to its
stockholders  of its interest in Ribapharm in a transaction  qualifying for
tax-free  treatment under Section 355 of the Internal Revenue Code of 1986,
as amended (the "CODE").

     "RULE 144A  GLOBAL  SECURITY"  means a  permanent  Global  Security in
registered form  representing the aggregate  principal amount of Securities
sold in reliance on Rule 144A.

     "SEC" means the Securities and Exchange Commission.

     "SECURITIES" means the 6 1/2% Convertible  Subordinated Notes due 2008
issued by the Company pursuant to this Indenture.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SECURITYHOLDER"   has  the   meaning   given  to  such  term  in  the
Registration Rights Agreement.

     "SIGNIFICANT   SUBSIDIARY"  with  respect  to  any  Person  means  any
subsidiary  of such  Person that  constitutes  a  "significant  subsidiary"
within the meaning of Regulation S-X under the Securities Act.

     "SUBSIDIARY"  means (i) a  corporation,  a majority  of whose  capital
stock with voting power, under ordinary  circumstances,  to elect directors
is at the time, directly or indirectly,  owned by the Company or Ribapharm,
as the  case  may  be,  by one  or  more  subsidiaries  of the  Company  or
Ribapharm,  as the case may be, or by the Company or Ribapharm, as the case
may be,  and one or more  subsidiaries  thereof  or (ii) any  other  person
(other than a corporation)  in which the Company or Ribapharm,  as the case
may be, one or more  subsidiaries  thereof or the Company or Ribapharm,  as
the  case  may be,  and  one or  more  subsidiaries  thereof,  directly  or
indirectly,  at the date of determination  thereof,  have at least majority
ownership interest.

<PAGE>   8

     "TIA"  means  the Trust  Indenture  Act of 1939 (15 U.S.  Code  ss.ss.
77aaa-77bbbb)  as in  effect  on the  date of  this  Indenture,  except  as
provided in SECTION 9.03.

     "TRUSTEE"  means the  party  named as such in this  Indenture  until a
successor  replaces  it  in  accordance  with  the  provisions  hereof  and
thereafter means the successor.

1.02 OTHER DEFINITIONS.

             Term                                     Defined in Section
             ----                                     ------------------
       "BANKRUPTCY LAW"..........................              6.01
       "BUSINESS DAY"............................             12.07
       "CHANGE IN CONTROL".......................              3.08
       "COMMENCEMENT DATE".......................             10.06
       "CHANGE IN CONTROL NOTICE"................              3.08
       "CODE"....................................              1.01
       "CONVERSION AGENT"........................              2.03
       "CONVERSION DATE".........................             12.07
       "CUSTODIAN"...............................              6.01
       "DETERMINATION DATE"......................             10.06
       "DISTRIBUTION RECORD DATE"................             10.06
       "EVENT OF DEFAULT"........................              6.01
       "GLOBAL SECURITY".........................              2.01
       "INCUMBENT BOARD".........................              3.08
       "INDEBTEDNESS"............................             11.02
       "INITIAL PURCHASER".......................              2.01
       "LEGAL HOLIDAY"...........................             12.07
       "NNM".....................................              1.01
       "NYSE"....................................              6.01
       "PARTICIPANTS"............................              2.15
       "PAYING AGENT"............................              2.03
       "PHYSICAL SECURITIES".....................              2.01
       "PRIVATE PLACEMENT LEGEND"................              2.17
       "PURCHASE AGREEMENT"......................              2.01
       "REGISTRAR"...............................              2.03
       "REPRESENTATIVE"..........................             11.02
       "REPURCHASE DATE".........................              3.08
       "REPURCHASE RIGHT"........................              3.08
       "SENIOR INDEBTEDNESS".....................             11.02
       "TENDER PAYMENT DATE".....................             10.06
       "U.S. GOVERNMENT OBLIGATIONS".............              8.01

1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

     Whenever  this  Indenture  refers  to a  provision  of  the  TIA,  the
provision  is  incorporated  by  reference  in  and  made a  part  of  this
Indenture.

     The  following  TIA terms used in this  Indenture  have the  following
meanings:

     "COMMISSION" means the SEC;
     "INDENTURE SECURITIES" means the Securities;
     "INDENTURE SECURITY HOLDER" means a Securityholder or a Holder;
     "INDENTURE TO BE QUALIFIED" means this Indenture;
     "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
     "OBLIGOR"  on  the  indenture  securities  means  the  Company  or any
successor.

     All other  terms used in this  Indenture  that are defined by the TIA,
defined by TIA  reference  to another  statute or defined by SEC rule under
the TIA and not otherwise  defined  herein have the meanings so assigned to
them.

1.04 RULES OF CONSTRUCTION.

     Unless the context otherwise requires:

          (i) a term has the meaning assigned to it;

          (ii)  an  accounting  term  not  otherwise  defined  has the
     meaning  assigned to it in  accordance  with  generally  accepted
     accounting principles in effect on the date hereof;

          (iii) "or" is not exclusive;

          (iv)  words in the  singular  include  the plural and in the
     plural include the singular;

          (v) provisions apply to successive  events and transactions;
     and

          (vi)  "herein",  "hereof" and other words of similar  import
     refer  to this  Indenture  as a whole  and not to any  particular
     Article, Section or other subdivision.

<PAGE>   9

                             II. THE SECURITIES

2.01 FORM AND DATING.

     The Securities and the Trustee's  certificate of authentication  shall
be  substantially in the form set forth in EXHIBIT A, which is incorporated
in and forms a part of this  Indenture.  The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Security shall be dated the date of its authentication.

     Securities  offered  and sold in  reliance  on Rule  144A,  Securities
offered and sold in reliance on  Regulation  S and  Securities  offered and
sold to Institutional Accredited Investors shall be issued initially in the
form of one or more Global Securities,  substantially in the form set forth
in  EXHIBIT A (the  "GLOBAL  SECURITY"),  deposited  with the  Trustee,  as
custodian   for  the   Depositary,   duly   executed  by  the  Company  and
authenticated  by the Trustee as  hereinafter  provided  and shall bear the
legends set forth in EXHIBITS B-1 and B-2. The aggregate  principal  amount
of the Global  Security  may from time to time be increased or decreased by
adjustments  made on the  records  of the  Trustee,  as  custodian  for the
Depositary,  as hereinafter provided;  provided, that in no event shall the
aggregate  principal  amount of the Global  Security or  Securities  exceed
$400,000,000,  or $525,000,000 if the Initial Purchaser,  as defined in the
Purchase Agreement,  dated July 13, 2001 (the "PURCHASE AGREEMENT"),  among
the  Company,  Ribapharm  and UBS Warburg  LLC, as Initial  Purchaser  (the
"INITIAL  PURCHASER"),  elects to purchase  Additional Notes (as defined in
the Purchase Agreement).

     Securities  issued in  exchange  for  interests  in a Global  Security
pursuant to SECTION 2.15 may be issued and  Securities  offered and sold in
reliance on any other exemption from registration  under the Securities Act
other than as described in the preceding  paragraph  shall be issued in the
form  of  permanent   certificated   Securities  in   registered   form  in
substantially the form set forth in EXHIBIT A (the "PHYSICAL SECURITIES").

     All Notes offered and sold in reliance on Regulation S shall remain in
the form of a Global  Security  for at least one year  after the issue date
for the Securities.

2.02 EXECUTION AND AUTHENTICATION.

     One  Officer  of each of the  Company  and  Ribapharm  shall  sign the
Securities  for the  Company  and  Ribapharm,  respectively,  by  manual or
facsimile signature.

     If an Officer of either the Company or Ribapharm whose signature is on
a  Security  no  longer  holds  that  office  at the time the  Security  is
authenticated, the Security shall nevertheless be valid.

     A  Security  shall  not be valid  until  authenticated  by the  manual
signature of the Trustee.  The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture.

     Upon a  written  order of the  Company  and  Ribapharm  signed  by one
Officer  of  each  of  the  Company  and   Ribapharm,   the  Trustee  shall
authenticate  Securities  for  original  issue in the  principal  amount of
$400,000,000  and such  additional  principal  amount,  if any, as shall be
determined pursuant to the next sentence of this SECTION 2.02. Upon receipt
by the  Trustee  of an  Officers'  Certificate  stating  that  the  Initial
Purchaser  has elected to purchase  from the Company a specified  principal
amount of additional  Securities,  not to exceed $125,000,000,  pursuant to
Section l of the Purchase  Agreement,  the Trustee shall  authenticate  and
deliver such specified principal amount of additional Securities to or upon
the written  order of the Company and  Ribapharm  signed as provided in the
immediately preceding sentence. Such Officers' Certificate must be received
by the  Trustee  not later  than the  proposed  date for  delivery  of such
additional  Securities.   The  aggregate  principal  amount  of  Securities
outstanding at any time may not exceed  $525,000,000  except as provided in
SECTION 2.07.

     Upon the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
the  Securities  shall be joint and several  obligations of the Company and
Ribapharm.  Ribapharm will have no payment obligations under this Indenture
or the  Securities  unless and until either a Ribapharm  IPO or a Ribapharm
Spin-Off occurs.

<PAGE>   10

     Upon a  written  order of the  Company  and  Ribapharm  signed  by two
Officers or by an Officer and an Assistant Treasurer of each of the Company
and Ribapharm,  the Trustee shall  authenticate  Securities not bearing the
Private  Placement Legend to be issued to the transferee when sold pursuant
to an effective  registration  statement  under the  Securities  Act as set
forth in SECTION 2.16(D).

     The Trustee  may appoint an  authenticating  agent  acceptable  to the
Company,  and  following  the  earlier  to occur of a  Ribapharm  IPO and a
Ribapharm   Spin-Off,    Ribapharm,   to   authenticate   Securities.    An
authenticating  agent may authenticate  Securities whenever the Trustee may
do so. Each  reference in this Indenture to  authentication  by the Trustee
includes authentication by such Agent. An authenticating agent has the same
rights  as an Agent to deal  with  the  Company  or  Ribapharm,  and  their
respective Affiliates.

     The  Securities  shall be issuable  only in  registered  form  without
coupons  and only in  denominations  of  $1,000  principal  amount  and any
positive integral multiple thereof.

2.03 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off,  Ribapharm,  shall maintain an office or agency where
Securities  may be presented for  registration  of transfer or for exchange
("REGISTRAR"),  an office or agency where  Securities  may be presented for
payment  ("PAYING  AGENT") and an office or agency where  Securities may be
presented for conversion  ("CONVERSION  AGENT"). The Registrar shall keep a
register of the Securities and of their transfer and exchange.  The Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off, Ribapharm may appoint or change one or more co-registrars, one or
more additional paying agents and one or more additional  conversion agents
without notice and may act in any such capacity on its own behalf. The term
"Registrar" includes any co-registrar; the term "PAYING AGENT" includes any
additional  paying  agent;  and the term  "CONVERSION  AGENT"  includes any
additional conversion agent.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm  Spin-Off,  Ribapharm,  shall enter into an appropriate  agency
agreement with any Agent not a party to this Indenture. The agreement shall
implement the provisions of this  Indenture that relate to such Agent.  The
Company  and,  following  the  earlier  to occur of a  Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  shall  notify the Trustee of the name and
address of any Agent not a party to this  Indenture.  If the  Company  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm, fail to maintain a Registrar,  Paying Agent or Conversion Agent,
the Trustee shall act as such.

     The Company initially appoints the Trustee as Paying Agent,  Registrar
and Conversion Agent.

2.04 PAYING AGENT TO HOLD MONEY IN TRUST.

     Each  Paying  Agent  shall  hold  in  trust  for  the  benefit  of the
Securityholders  or the Trustee all moneys held by the Paying Agent for the
payment of the  Securities,  and shall notify the Trustee of any default by
the Company and,  following  the earlier to occur of a Ribapharm  IPO and a
Ribapharm Spin-Off,  Ribapharm,  in making any such payment. While any such
default continues,  the Trustee may require a Paying Agent to pay all money
held by it to the Trustee.  The Company and, following the earlier to occur
of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,  at any time may
require a Paying  Agent to pay all money  held by it to the  Trustee.  Upon
payment  over to the  Trustee,  the  Paying  Agent  shall  have no  further
liability  for the  money.  If the  Company,  a  subsidiary  thereof  or an
affiliate of any of them or,  following the earlier to occur of a Ribapharm
IPO and a Ribapharm  Spin-Off,  Ribapharm,  acts as Paying Agent,  it shall
segregate and hold as a separate  trust fund all money held by it as Paying
Agent.

2.05 SECURITYHOLDER LISTS.

     The  Trustee  shall  preserve  in as  current a form as is  reasonably
practicable the most recent list available to it of the names and addresses
of  Securityholders.  If the Trustee is not the Registrar,  the Company or,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  shall furnish to the Trustee on or before each interest payment
date and at such other  times as the Trustee may request in writing a list,
in such form and as of such date as the Trustee may reasonably  require, of
the names and addresses of Securityholders.

<PAGE>   11

2.06 TRANSFER AND EXCHANGE.

     Subject  to  SECTIONS  2.15  and 2.16  hereof,  where  Securities  are
presented to the Registrar  with a request to register their transfer or to
exchange  them  for an  equal  principal  amount  of  Securities  of  other
authorized denominations, the Registrar shall register the transfer or make
the exchange if its  requirements  for such  transaction are met. To permit
registrations  of transfer and  exchanges,  the Trustee shall  authenticate
Securities  at the  Registrar's  request.  The Company and,  following  the
earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, or
the  Trustee,  as the case may be,  shall  not be  required  (a) to  issue,
authenticate,  register the  transfer of or exchange any Security  during a
period beginning at the opening of business 15 days before the mailing of a
notice of  redemption  of the  Securities  selected  for  redemption  under
SECTION  3.04  and  ending  at the  close  of  business  on the day of such
mailing,  or (b) to register  the  transfer of or exchange  any Security so
selected for redemption in whole or in part, except the unredeemed  portion
of Securities being redeemed in part.

     No  service  charge  shall  be made  for  any  transfer,  exchange  or
conversion  of  Securities,  but the Company and,  following the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm,  may require
payment of a sum sufficient to cover any tax or other  governmental  charge
that may be imposed in connection with any transfer, exchange or conversion
of Securities,  other than exchanges pursuant to SECTIONS 2.10, 3.07, 3.08,
9.05 or 10.02 not involving any transfer.

2.07 REPLACEMENT SECURITIES.

     If the  Holder  of a  Security  claims  that  the  Security  has  been
mutilated,  lost, destroyed or wrongfully taken, the Company and, following
the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm
shall issue and the Trustee shall  authenticate  a replacement  Security if
the  Trustee's  requirements  are  met  and,  in the  case  of a  mutilated
Security,  such mutilated  Security is  surrendered to the Trustee.  In the
case of lost, destroyed or wrongfully taken Securities,  if required by the
Trustee,  an  indemnity  bond  must  be  provided  by the  Holder  that  is
sufficient  in the  judgment of the Trustee to protect  the  Company,  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  the  Trustee  or any Agent  from any loss which any of them may
suffer if a Security is  replaced.  The Trustee may charge for its expenses
in replacing a Security.

     In case  any such  mutilated,  lost,  destroyed  or  wrongfully  taken
Security has become or is about to become due and payable, the Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm in their discretion may,  instead of issuing a new Security,  pay
such Security when due.

     Every replacement Security is an additional  obligation of the Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off, Ribapharm only as provided in SECTION 2.08.

     The  provisions of this Section are  exclusive and shall  preclude (to
the extent  lawful)  all other  rights  and  remedies  with  respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

2.08 OUTSTANDING SECURITIES.

     Securities   outstanding   at  any   time   are  all  the   Securities
authenticated by the Trustee except for those converted, those cancelled by
it, those  delivered  to it for  cancellation  and those  described in this
SECTION  2.08  as  not  outstanding.  A  Security  does  not  cease  to  be
outstanding  because  the  Company,  Ribapharm  or one of their  respective
subsidiaries or Affiliates holds the Security.

     If a Security is replaced  pursuant to SECTION  2.07,  it ceases to be
outstanding  unless the Trustee  receives  proof  satisfactory  to it, or a
court holds, that the replaced Security is held by a protected purchaser.

     If the Paying Agent (other than the Company or  Ribapharm)  holds on a
redemption date or maturity date money sufficient to pay Securities payable
on that date, then on and after that date, such Securities  shall be deemed
to be no longer outstanding and interest on them shall cease to accrue.

<PAGE>   12

2.09 SECURITIES HELD BY THE COMPANY, RIBAPHARM OR AN AFFILIATE.

     In determining whether the Holders of the required aggregate principal
amount of Securities  have concurred in any  direction,  waiver or consent,
Securities  owned by the Company or  Ribapharm  or any of their  respective
subsidiaries  or an  Affiliate  of either of them  shall be  considered  as
though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction,  waiver or
consent,  only Securities  which the Trustee knows are so owned shall be so
disregarded.

2.10 TEMPORARY SECURITIES.

     Until  definitive  Securities are ready for delivery,  the Company and
Ribapharm  may  prepare  and  the  Trustee  shall  authenticate   temporary
Securities.  Temporary  Securities  shall be  substantially  in the form of
definitive  Securities  but  may  have  variations  that  the  Company  and
Ribapharm   consider   appropriate   for  temporary   Securities.   Without
unreasonable delay, the Company and Ribapharm shall prepare and the Trustee
shall  authenticate   definitive   Securities  in  exchange  for  temporary
Securities.

2.11 CANCELLATION.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off,  Ribapharm, at any time may deliver Securities to the
Trustee for cancellation.  The Registrar, Paying Agent and Conversion Agent
shall  forward  to the  Trustee  any  Securities  surrendered  to them  for
transfer,  exchange,  payment or  conversion.  The Trustee shall cancel all
Securities  surrendered  for  transfer,  exchange,  payment,  conversion or
cancellation.  All  cancelled  Securities  held  by the  Trustee  shall  be
disposed  of by the  Trustee in  accordance  with the  Trustee's  customary
procedures.  The Company and, following the earlier to occur of a Ribapharm
IPO and a Ribapharm  Spin-Off,  Ribapharm  may not issue new  Securities to
replace  Securities  that  it has  paid or  delivered  to the  Trustee  for
cancellation or that any  Securityholder  has converted pursuant to ARTICLE
X.

2.12 DEFAULTED INTEREST.

     If and to the extent the Company and,  following  the earlier to occur
of a  Ribapharm  IPO and a  Ribapharm  Spin-Off,  Ribapharm,  defaults in a
payment of  interest on the  Securities,  the Company  and,  following  the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
shall pay the  defaulted  interest in any lawful manner plus, to the extent
not prohibited by applicable  statute or case law,  interest payable on the
defaulted interest at the rate provided in the Securities. The Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,   may  pay  the  defaulted  interest  to  the  persons  who  are
Securityholders  on a  subsequent  special  record  date.  The Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  shall fix such record date and payment  date.  At least 15 days
before the record date, the Company and,  following the earlier to occur of
a  Ribapharm  IPO  and  a  Ribapharm  Spin-Off,  Ribapharm  shall  mail  to
Securityholders  a notice that  states the record  date,  payment  date and
amount of interest to be paid.

2.13 CUSIP NUMBERS.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm  Spin-Off,  Ribapharm in issuing the  Securities may use one or
more "CUSIP" numbers, and if so, the Trustee shall use the CUSIP numbers in
notices of redemption or exchange as a  convenience  to Holders;  provided,
however,  that no representation is hereby deemed to be made by the Trustee
as to the  correctness  or  accuracy  of the CUSIP  numbers  printed in the
notice or on the  Securities,  and that  reliance may be placed only on the
other  identification  numbers printed on the Securities.  The Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  shall  promptly  notify the  Trustee of any change in the CUSIP
numbers.

2.14 DEPOSIT OF MONEYS.

     Prior to 11:00  A.M.,  New York City time,  on each  interest  payment
date,  maturity date,  redemption date and Repurchase Date, the Company or,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm  shall  have  deposited  with the  Paying  Agent  in  immediately
available funds money sufficient to make cash payments, if any, due on such
interest payment date, maturity date,  redemption date and Repurchase Date,
as the case may be, in a timely  manner  which  permits the Paying Agent to
remit payment to the Holders on such interest payment date,  maturity date,
redemption date and Repurchase Date, as the case may be.

<PAGE>   13

2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.

     (A) The Global  Securities  initially  shall (i) be  registered in the
name of the Depositary or the nominee of such Depositary, (ii) be delivered
to the Trustee as custodian for such  Depositary  and (iii) bear legends as
set forth in SECTION 2.17.

     Members of, or participants in, the Depositary  ("PARTICIPANTS") shall
have no rights under this  Indenture  with  respect to any Global  Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under  the  Global  Security,  and the  Depositary  may be  treated  by the
Company,  Ribapharm, the Trustee and any agent of the Company, Ribapharm or
the Trustee as the absolute  owner of the Global  Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company,  Ribapharm, the Trustee or any agent of the Company,  Ribapharm or
the Trustee from giving effect to any written certification, proxy or other
authorization  furnished  by the  Depositary  or  impair,  as  between  the
Depositary and Participants, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.

     (B)  Transfers of Global  Securities  shall be limited to transfers in
whole,  but  not in  part,  to the  Depositary,  its  successors  or  their
respective   nominees.   Interests  of  beneficial  owners  in  the  Global
Securities  may be  transferred  or exchanged  for Physical  Securities  in
accordance  with  the  rules  and  procedures  of the  Depositary  and  the
provisions  of SECTION  2.16.  In addition,  Physical  Securities  shall be
transferred  to all  beneficial  owners in  exchange  for their  beneficial
interests in Global  Securities if (i) the Depositary  notifies the Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off,  Ribapharm,  that  it is  unwilling  or  unable  to  continue  as
Depositary  for any Global  Security or such  Depositary has ceased to be a
"clearing  agency"  registered  under the  Exchange  Act,  and a  successor
Depositary  is not  appointed by the Company and,  following the earlier to
occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,  within 90
days of such  notice  or (ii) an  Event  of  Default  has  occurred  and is
continuing  and the  Registrar  has  received  a written  request  from the
Depositary to issue Physical Securities.

     (C) In  connection  with any  transfer or exchange of a portion of the
beneficial  interest in a Global Security to beneficial  owners pursuant to
SECTION  2.15(B),  the Registrar shall (if one or more Physical  Securities
are to be issued)  reflect on its books and records the date and a decrease
in the  aggregate  principal  amount of such  Global  Security in an amount
equal to the aggregate  principal amount of the beneficial  interest in the
Global  Security to be  transferred,  and the Company  and,  following  the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
shall execute and the Trustee shall  authenticate and deliver,  one or more
Physical  Securities of authorized  denominations in an aggregate principal
amount equal to the aggregate  principal amount of the beneficial  interest
in the Global Security so transferred.

     (D) In  connection  with  the  transfer  of a Global  Security  in its
entirety to  beneficial  owners  pursuant to SECTION  2.15(B),  such Global
Security shall be deemed to be surrendered to the Trustee for cancellation,
and the Company and  Ribapharm  shall  execute,  and the Trustee shall upon
written  instructions  from the Company  and  Ribapharm,  authenticate  and
deliver,  to each beneficial owner identified by the Depositary in exchange
for its beneficial  interest in such Global  Security,  an equal  aggregate
principal amount of Physical Securities of authorized denominations.

     (E) Any Physical Security constituting a Restricted Security delivered
in  exchange  for an  interest  in a Global  Security  pursuant  to SECTION
2.15(B) or (C) shall,  except as otherwise  provided by SECTION 2.16,  bear
the Private Placement Legend.

     (F) The Holder of any Global  Security may grant proxies and otherwise
authorize  any Person,  including  Participants  and Persons  that may hold
interests  through  Participants,  to take any  action  which a  Holder  is
entitled to take under this Indenture or the Securities.

2.16 SPECIAL TRANSFER PROVISIONS.

     (A)  TRANSFERS  TO  NON-QIB  INSTITUTIONAL  ACCREDITED  INVESTORS  AND
NON-U.S.  PERSONS. The following provisions shall apply with respect to the
registration  of any  proposed  transfer  of a  Restricted  Security to any
Institutional  Accredited  Investor  which is not a QIB or to any  Non-U.S.
Person:

<PAGE>   14

          (i)  the  Registrar  shall  register  the  transfer  of  any
     Restricted  Security,  whether  or not such  Security  bears  the
     Private Placement Legend, if (x) the requested  transfer is after
     the  second  anniversary  of the issue  date for the  Securities;
     provided, however, that none of the Company, Ribapharm nor any of
     their respective  Affiliates has held any beneficial  interest in
     such Security, or portion thereof, at any time on or prior to the
     second anniversary of the issue date for the Securities or (y)(1)
     in the case of a transfer to an Institutional Accredited Investor
     which is not a QIB  (excluding  Non-U.S.  Persons),  the proposed
     transferee   has   delivered  to  the   Registrar  a  certificate
     substantially  in the  form of  EXHIBIT  C hereto  and any  legal
     opinions and certifications  required thereby and (2) in the case
     of a  transfer  to a  Non-U.S.  Person  on or  before  the  first
     anniversary  of the issue date for the  Securities,  the proposed
     transferor   has   delivered   to  the   Registrar   certificates
     substantially  in the form of EXHIBIT D-1 and EXHIBIT D-2 hereto;
     provided,  that if the  transferor  is a Non-U.S.  Person who has
     previously  furnished a certificate  substantially in the form of
     EXHIBIT D-2, such  transferor  need not furnish a certificate  in
     the form of EXHIBIT D-1;

          (ii) if the proposed  transferee  is a  Participant  and the
     Notes to be  transferred  consist of  Physical  Securities  which
     after  transfer  are to be evidenced by an interest in the Global
     Security,   upon   receipt  by  the   Registrar  of  (x)  written
     instructions  given in accordance with the  Depositary's  and the
     Registrar's  procedures and (y) the appropriate  certificate,  if
     any, required by clause (y) of paragraph (i) above, the Registrar
     shall  register the transfer and reflect on its books and records
     the date and an increase in the aggregate principal amount of the
     Global  Security in an amount  equal to the  aggregate  principal
     amount of Physical Securities to be transferred,  and the Trustee
     shall cancel the Physical Securities so transferred; and

          (iii) if the proposed transferor is a Participant seeking to
     transfer an interest in one Global  Security to a transferee  who
     will hold such interest in another Global Security,  upon receipt
     by the Registrar of (x) written  instructions given in accordance
     with the Depositary's and the Registrar's  procedures and (y) the
     appropriate  certificate,  if  any,  required  by  clause  (y) of
     paragraph (i) above,  the Registrar  shall  register the transfer
     and  reflect on its books and records the date and (A) a decrease
     in the aggregate  principal amount of the Global Security through
     which the transferor held such interest in an amount equal to the
     aggregate  principal  amount of the  Securities to be transferred
     and (B) an  increase  in the  aggregate  principal  amount of the
     Global  Security  through which the  transferee  proposes to hold
     such  interest,  in an amount  equal to the  aggregate  principal
     amount of the Securities to be transferred.

     (B)  TRANSFERS  TO QIBS.  The  following  provisions  shall apply with
respect  to the  registration  of any  proposed  transfer  of a  Restricted
Security to a QIB:

          (i)  the  Registrar  shall  register  the  transfer  of  any
     Restricted  Security,  whether  or not such  Security  bears  the
     Private Placement Legend, if (x) the requested  transfer is after
     the  second  anniversary  of the issue  date for the  Securities;
     provided, however, that none of the Company, Ribapharm nor any of
     their respective  Affiliates has held any beneficial  interest in
     such Security, or portion thereof, at any time on or prior to the
     second  anniversary  of the issue date for the  Securities or (y)
     such  transfer  is being  made by a proposed  transferor  who has
     checked the box provided for on the form of Security stating,  or
     has otherwise  advised the Company and,  following the earlier to
     occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, and
     the  Registrar  in  writing,  that  the  sale  has  been  made in
     compliance  with the  provisions of Rule 144A to a transferee who
     has signed the certification provided for on the form of Security
     stating,  or has otherwise  advised the Company and the Registrar
     in  writing,  that  it is  purchasing  the  Security  for its own
     account or an account  with  respect to which it  exercises  sole
     investment  discretion  and that it and any such account is a QIB
     within the meaning of Rule 144A, and is aware that the sale to it
     is being made in reliance on Rule 144A and  acknowledges  that it
     has  received  such   information   regarding  the  Company  and,
     following the earlier to occur of a Ribapharm IPO and a Ribapharm
     Spin-Off, Ribapharm, as it has requested pursuant to Rule 144A or
     has  determined  not to request such  information  and that it is
     aware  that  the   transferor   is  relying  upon  its  foregoing
     representations in order to claim the exemption from registration
     provided by Rule 144A;

<PAGE>   15

          (ii) if the proposed  transferee  is a  Participant  and the
     Securities to be transferred consist of Physical Securities which
     after  transfer  are to be evidenced by an interest in the Global
     Security,  upon receipt by the Registrar of written  instructions
     given  in  accordance  with  the   Depositary's  and  Registrar's
     procedures, the Registrar shall register the transfer and reflect
     on  its  books  and  records  the  date  and an  increase  in the
     principal amount of the Global Security in an amount equal to the
     principal  amount of Physical  Securities to be transferred,  and
     the Trustee shall cancel the Physical  Securities so transferred;
     and

          (iii) if the proposed transferor is a Participant seeking to
     transfer an interest in the  Regulation S Global  Security or the
     IAI Global  Security,  upon  receipt by the  Registrar of written
     instructions  given in accordance with the  Depositary's  and the
     Registrar's procedures, the Registrar shall register the transfer
     and  reflect on its books and records the date and (A) a decrease
     in the  aggregate  principal  amount of the  Regulation  S Global
     Security  or the IAI Global  Security,  as the case may be, in an
     amount equal to the aggregate  principal amount of the Securities
     to be transferred and (B) an increase in the aggregate  principal
     amount of the Rule 144A Global Security in an amount equal to the
     aggregate principal amount of the Securities to be transferred.

     (C)  RESTRICTIONS  ON  TRANSFER  AND  EXCHANGE  OF GLOBAL  SECURITIES.
Notwithstanding  any other provisions of this Indenture,  a Global Security
may not be transferred  except as a whole by the Depositary to a nominee of
the  Depositary  or by a nominee of the  Depositary  to the  Depositary  or
another  nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.

     (D)  PRIVATE  PLACEMENT  LEGEND.   Upon  the  transfer,   exchange  or
replacement of Securities  not bearing the Private  Placement  Legend,  the
Registrar or  co-Registrar  shall deliver  Securities  that do not bear the
Private  Placement  Legend.  Upon the transfer,  exchange or replacement of
Securities   bearing  the  Private  Placement  Legend,   the  Registrar  or
co-Registrar  shall deliver only Securities that bear the Private Placement
Legend unless (i) the requested transfer is after the second anniversary of
the issue  date for the  Securities  (provided,  however,  that none of the
Company,  Ribapharm  nor any of their  respective  Affiliates  has held any
beneficial interest in such Security, or portion thereof, at any time prior
to or on the second anniversary of the issue date), (ii) there is delivered
to the Trustee an Opinion of Counsel reasonably satisfactory to the Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off, Ribapharm, to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain  compliance with
the  provisions of the  Securities Act or (iii) such Security has been sold
pursuant to an effective  registration  statement  under the Securities Act
and the Holder  selling such  Securities  has delivered to the Registrar or
co-Registrar  a  notice  in  the  form  of  EXHIBIT  E  hereto.   Upon  the
effectiveness  of any  Shelf  Registration  Statement  (as  defined  in the
Registration  Rights Agreement),  the Company and, following the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, shall deliver
to the  Trustee a notice of  effectiveness,  a Security or  Securities,  an
authentication  order in  accordance  with SECTION 2.02 and, if required by
the  Depositary,  the  Company  and,  following  the  earlier to occur of a
Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,  shall deliver to the
Depositary a letter of representations  in a form reasonably  acceptable to
the Depositary.

     (E) GENERAL.  By its  acceptance  of any Security  bearing the Private
Placement  Legend,  each  Holder  of  such  a  Security   acknowledges  the
restrictions  on transfer of such Security set forth in this  Indenture and
in the  Private  Placement  Legend and agrees  that it will  transfer  such
Security only as provided in this Indenture.

     The Registrar  shall retain  copies of all letters,  notices and other
written  communications  received  pursuant to SECTION 2.15 or this Section
2.16.  The Company and,  following  the earlier to occur of a Ribapharm IPO
and a Ribapharm  Spin-Off,  Ribapharm,  shall have the right to inspect and
make copies of all such letters, notices or other written communications at
any  reasonable  time upon the giving of reasonable  written  notice to the
Registrar.

<PAGE>   16

     (F) TRANSFERS OF SECURITIES  HELD BY AFFILIATES.  Any  certificate (i)
evidencing  a Security  that has been  transferred  to an  Affiliate of the
Company  or  Ribapharm  within  two  years  after  the  issue  date for the
Securities,  as  evidenced  by a notation on the  Assignment  Form for such
transfer or in the  representation  letter  delivered in respect thereof or
(ii) evidencing a Security that has been acquired from an Affiliate  (other
than by an Affiliate)  of ICN or Ribapharm in a  transaction  or a chain of
transactions  not involving  any public  offering;  shall,  until two years
after the last date on which the Company, Ribapharm or any Affiliate of the
Company or Ribapharm was an owner of such Security,  in each case, bear the
Private  Placement  Legend,  unless  otherwise  agreed by the Company  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm (with written notice thereof to the Trustee).

     (G) NO OBLIGATION OF THE TRUSTEE.

          (i) The Trustee shall have no  responsibility  or obligation
     to any beneficial owner of a Global  Security,  a member of, or a
     Participant in the Depositary or any other person with respect to
     the accuracy of the records of the  Depositary  or its nominee or
     of  any  Participant  or  member  thereof,  with  respect  to any
     ownership  interest  in the  Securities  or with  respect  to the
     delivery to any  Participant,  member,  beneficial owner or other
     person (other than the  Depositary) of any notice  (including any
     notice of redemption or repurchase) or the payment of any amount,
     under  or  with  respect  to such  Securities.  All  notices  and
     communications to be given to Holders and all payments to be made
     to Holders  under the  Securities  shall be given or made only to
     the  registered  Holders  (which shall be the  Depositary  or its
     nominee  in  the  case  of a  Global  Security).  The  rights  of
     beneficial  owners in any Global Security shall be exercised only
     through  the  Depositary  subject  to the  applicable  rules  and
     procedures of the  Depositary.  The Trustee may rely and shall be
     fully   protected  in  conclusively   relying  upon   information
     furnished  by  the  Depositary   with  respect  to  its  members,
     participants and any beneficial owners.

          (ii)  The  Trustee  shall  have  no  obligation  or  duty to
     monitor,   determine  or  inquire  as  to  compliance   with  any
     restrictions  on transfer  imposed under this  Indenture or under
     applicable  law with  respect to any  transfer of any interest in
     any  Security   (including   any   transfers   between  or  among
     Participants,   members  or  beneficial   owners  in  any  Global
     Security) other than to require delivery of such certificates and
     other documentation or evidence as are expressly required by, and
     to do so as and when  expressly  required  by,  the terms of this
     Indenture,  and to  examine  the  same to  determine  substantial
     compliance as to form with the express requirements hereof.

2.17 RESTRICTIVE LEGENDS.

     Each  Global  Security  and  Physical   Security  that  constitutes  a
Restricted  Security shall bear the legend (the "PRIVATE PLACEMENT LEGEND")
as set forth in  EXHIBIT  B-1 on the face  thereof  until  after the second
anniversary  of the later of (i) the issue date for the Securities and (ii)
the last date on which  the  Company,  Ribapharm  or any  Affiliate  of the
Company or Ribapharm  was the owner of such  Security  (or any  predecessor
security) (or such shorter period of time as permitted by Rule 144(k) under
the Securities Act or any successor  provision  thereunder) (or such longer
period of time as may be required  under the  Securities  Act or applicable
state  securities  laws  in the  opinion  of  counsel  for the  Company  or
Ribapharm,  unless  otherwise  agreed among the Company,  Ribapharm and the
Holder thereof).

     Each  Global  Security  shall  also  bear the  legend  as set forth in
EXHIBIT B-2.

                              III. REDEMPTION

3.01 RIGHT OF REDEMPTION.

     Redemption  of  Securities,  as  permitted  by any  provision  of this
Indenture,  shall be made in accordance  with Paragraph 6 of the Securities
and this  Article  III.  The Company  will not have the right to redeem any
Securities  prior to July 21, 2004. On or after July 21, 2004,  the Company
will  have the  right to redeem  all or any part of the  Securities  at the
Redemption  Prices  specified  in  Paragraph  6 therein  under the  caption
"Redemption Price," in each case including accrued and unpaid interest,  if
any, to, but excluding, the redemption date.

<PAGE>   17

3.02 NOTICES TO TRUSTEE.

     If the Company elects to redeem Securities  pursuant to PARAGRAPH 6 of
the  Securities,  it shall notify the Trustee at least 50 days prior to the
redemption  date (unless a shorter notice period shall be  satisfactory  to
the Trustee) of the redemption date and the aggregate  principal  amount of
Securities to be redeemed. The Securities may not be redeemed at the option
of Ribapharm.

3.03 SELECTION OF SECURITIES TO BE REDEEMED.

     If less than all the Securities are to be redeemed,  the Trustee shall
select the Securities to be redeemed in compliance with the requirements of
the  principal  exchange  or market,  if any, on which the  Securities  are
listed, or, if the Securities are not so listed, on either a pro rata basis
or by lot or  such  other  method  as  the  Trustee  shall  deem  fair  and
equitable. The Trustee shall make the selection from Securities outstanding
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000 principal  amount.  Securities and portions of them it selects shall
be in amounts of $1,000 principal  amount or positive integer  multiples of
$1,000 principal  amount.  The Trustee shall promptly notify the Company in
writing of the Securities  selected for redemption and the principal amount
thereof to be redeemed.

     The Registrar  need not transfer or exchange any  Securities  selected
for  redemption,  except the unredeemed  portion of Securities  redeemed in
part.  Also, the Registrar need not transfer or exchange any Securities for
a period of 15 days before selecting Securities to be redeemed.

3.04 NOTICE OF REDEMPTION.

     At least 30 days but not more than 60 days before a  redemption  date,
the Company shall mail by  first-class  mail a notice of redemption to each
Holder whose Securities are to be redeemed.

     The notice shall identify the  Securities and the aggregate  principal
amount thereof to be redeemed and shall state:

          (i) the redemption date;

          (ii) the  Redemption  Price,  plus the amount of accrued and
     unpaid  interest  to  be  paid  on  the  Securities   called  for
     redemption;

          (iii) the then current conversion rate and conversion price;

          (iv) the name and address of the Paying Agent and Conversion
     Agent;

          (v) the date on which the right to convert the  principal of
     the Securities called for redemption will terminate and the place
     or  places  where  such   Securities  may  be   surrendered   for
     conversion;

          (vi)  that  Holders  who  want to  convert  Securities  must
     satisfy the requirements in ARTICLE X;

          (vii) the paragraph of the Securities  pursuant to which the
     Securities are to be redeemed;

          (viii)  that  Securities   called  for  redemption  must  be
     surrendered to the Paying Agent to collect the Redemption Price;

          (ix) that unless the Company shall default in the payment of
     the  Redemption   Price,   interest  on  Securities   called  for
     redemption  ceases to accrue on and after the redemption date and
     that the Securities will cease to be convertible  after the close
     of  business  on  the  business  day  immediately  preceding  the
     redemption date; and

          (x) the CUSIP number or numbers,  as the case may be, of the
     Securities.

     The date on which the right to convert the principal of the Securities
called for redemption  will terminate  shall be at the close of business on
the business day immediately preceding the redemption date.

<PAGE>   18

     At the Company's  request,  upon reasonable prior notice,  the Trustee
shall  give the  notice  of  redemption  in the  Company's  name and at the
Company's expense;  provided that the form and content of such notice shall
be prepared by the Company.

3.05 EFFECT OF NOTICE OF REDEMPTION.

     Once notice of redemption is mailed,  Securities called for redemption
become due and payable on the redemption date at the Redemption  Price plus
accrued and unpaid  interest to the date of  redemption,  and, on and after
such  date  (unless  the  Company  shall  default  in  the  payment  of the
Redemption  Price),  such  Securities  shall cease to bear  interest.  Upon
surrender  to the  Paying  Agent,  such  Securities  shall  be  paid at the
Redemption Price plus accrued  interest to the redemption date,  unless the
redemption  date is an  interest  payment  date,  in which case the accrued
interest will be paid in the ordinary course.

3.06 DEPOSIT OF REDEMPTION PRICE.

     On or before the  redemption  date, the Company shall deposit with the
Paying Agent money in funds  immediately  available on the redemption  date
sufficient  to pay the  Redemption  Price of and  accrued  interest  on all
Securities  to be redeemed on that date.  The Paying  Agent shall return to
the  Company,  as soon as  practicable,  any  money not  required  for that
purpose.

3.07 SECURITIES REDEEMED IN PART.

     Upon surrender of a Security that is redeemed in part, the Company and
Ribapharm shall execute and the Trustee shall authenticate for the Holder a
new Security or  Securities in an aggregate  principal  amount equal to the
unredeemed portion of the Security surrendered.

     If any Security selected for partial  redemption is converted in part,
the converted  portion of such Security  shall be deemed (so far as may be)
to be the portion selected for redemption.

3.08 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.

     Upon any Change in Control  (as  defined  below)  with  respect to the
Company  or,  following  the  earlier  to  occur of a  Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  each Holder of Securities  shall have the
right (the  "REPURCHASE  RIGHT"),  at the Holder's  option,  to require the
Company  or,  following  the  earlier  to  occur of a  Ribapharm  IPO and a
Ribapharm  Spin-Off,   Ribapharm,   to  repurchase  all  of  such  Holder's
Securities,  or a portion thereof which is $1,000 or any positive  integral
multiple thereof, on the date (the "REPURCHASE DATE") that is 45 days after
the  date of the  Change  in  Control  Notice  (as  defined  below)  at the
Repurchase  Price set forth in paragraph 8 of the Securities,  plus accrued
and unpaid  interest,  if any, to the  Repurchase  Date.  The obligation to
repurchase  the  Securities  of a Holder upon a Change in Control of either
the  Company  or  Ribapharm  shall,  following  the  earlier  to occur of a
Ribapharm IPO and a Ribapharm  Spin-Off,  be a joint and several obligation
of both the Company and Ribapharm.

     Within 30 days  after the  occurrence  of a Change in  Control  of the
Company,  or  following  the  earlier  to  occur of a  Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  the Company or  Ribapharm is obligated to
mail to all Holders of record of the  Securities  a notice (the  "CHANGE IN
CONTROL  NOTICE")  of the  occurrence  of such  Change in  Control  and the
Repurchase Right arising as a result thereof. The Company or Ribapharm,  as
the case may be,  shall  deliver a copy of the Change in Control  Notice to
the Trustee and shall  cause a copy to be  published  at the expense of the
Company or Ribapharm,  as the case may be, in THE NEW YORK TIMES and in THE
WALL  STREET  JOURNAL or another  newspaper  of  national  circulation.  To
exercise the Repurchase  Right,  a Holder of Securities  must deliver on or
before the close of business on the business day immediately  preceding the
Repurchase Date written notice to the Company or Ribapharm, as the case may
be (or an agent designated by the Company or Ribapharm, as the case may be,
for such purpose),  and the Trustee of the Holder's  exercise of such right
together  with the  Securities  with  respect  to which  the right is being
exercised, duly endorsed for transfer.

<PAGE>   19

     Each Change in Control Notice shall state:

          (i) the Repurchase Date;

          (ii)  the  date  by  which  the  Repurchase  Right  must  be
     exercised;

          (iii) the  Repurchase  Price,  plus the  amount  of  accrued
     interest to be paid on the Securities to be repurchased;

          (iv) a  description  of the  procedure  which a Holder  must
     follow to exercise a Repurchase Right;

          (v) that the Securities are to be surrendered for payment of
     the Repurchase Price;

          (vi)  that  Holders  will  be  entitled  to  withdraw  their
     election  if the  Company  or  Ribapharm,  as the case may be (if
     either of them  acting  as Paying  Agent),  or the  Paying  Agent
     receives,  not later than the close of business  on the  business
     day  immediately  preceding the  Repurchase  Date, or such longer
     period as may be required by law, a letter or telegram,  telex or
     facsimile   transmission  (receipt  of  which  is  confirmed  and
     promptly  followed  by a  letter)  setting  forth the name of the
     Holder,  the principal  amount of Securities the Holder delivered
     for purchase and a statement that such Holder is withdrawing  his
     election to have such Securities repurchased;

          (vii) the then existing conversion rate and conversion price
     for  conversion of Securities  and the place or places where such
     Securities may be surrendered for conversion; and

          (viii) the CUSIP  number or numbers,  as the case may be, of
     the Securities.

     No failure of the  Company or  Ribapharm,  as the case may be, to give
the  foregoing  notice  shall  limit  any  Holder's  right  to  exercise  a
Repurchase Right.

     To exercise a Repurchase  Right, a Holder shall deliver to the Company
and Ribapharm (if either of them is acting as Paying Agent), or to a Paying
Agent designated by the Company and Ribapharm, as the case may be, for such
purpose in the Change of Control  Notice within the period set forth in the
second  paragraph of this SECTION  3.08,  (i) the Option of Holder To Elect
Purchase  Notice on the back of the  Securities  with  respect to which the
Repurchase  Right is being  exercised,  duly  completed  and  signed,  with
appropriate  signature guarantee,  and (ii) such Securities with respect to
which the Repurchase Right is being  exercised,  duly endorsed for transfer
to the  Company  or  Ribapharm,  as the case may be, and the Holder of such
Securities  shall be entitled to receive from the Company or Ribapharm,  as
the case may be (if  either of them is acting  as  Paying  Agent),  or such
Paying Agent, a nontransferable receipt of deposit evidencing such deposit.

     In the event a Repurchase  Right shall be exercised in accordance with
the terms  hereof,  the  Company,  or  following  the earlier to occur of a
Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, shall pay or cause to be
paid the  applicable  Repurchase  Price (plus accrued and unpaid  interest)
with respect to the Securities as to which the Repurchase  Right shall have
been exercised to the Holder on the Repurchase Date.

     On or prior to a  Repurchase  Date,  the  Company or  Ribapharm  shall
deposit  with the Trustee or with a Paying  Agent (or, if either of them is
acting as Paying  Agent,  segregate  and hold in trust in  accordance  with
SECTION 2.04) an amount of money (to be available on the  Repurchase  Date)
sufficient to pay the Repurchase  Price (plus accrued and unpaid  interest)
of all of the Securities which are to be repurchased on that date.

     Both the  Change in  Control  Notice  and the  notice of the Holder to
exercise a Repurchase  Right having been given as specified in this SECTION
3.08, the Securities so to be repurchased  shall,  on the Repurchase  Date,
become due and payable at the  Repurchase  Price  applicable  thereto (plus
accrued and unpaid  interest)  and from and after such date  (unless  there
shall be a default in the payment of the Repurchase  Price) such Securities
shall  cease to bear  interest  and  shall  cease to be  convertible.  Upon
surrender  of any such  Security for  repurchase  in  accordance  with said
notice,  such  Security  shall be paid by the Company or  Ribapharm  at the
Repurchase Price (plus accrued and unpaid interest).

<PAGE>   20

     If  any  Security  shall  not  be  paid  upon  surrender  thereof  for
repurchase,  the  principal  shall,  until  paid,  bear  interest  from the
Repurchase Date at the rate borne by such Security on the principal  amount
of such Security and shall continue to be convertible.

     Any Security  which is to be  submitted  for  repurchase  only in part
shall be delivered pursuant to this SECTION 3.08 (with, if the Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  or the Trustee so requires,  due  endorsement  by, or a written
instrument of transfer in form  satisfactory  to the Company and Ribapharm,
if  applicable,  and the Trustee duly executed by the Holder thereof or its
attorney duly  authorized in writing),  and the Company and Ribapharm shall
execute, and the Trustee shall authenticate and make available for delivery
to the Holder of such Security  without service  charge,  a new Security or
Securities,  of any authorized denomination as requested by such Holder, of
the same tenor and in  aggregate  principal  amount equal to the portion of
such Security not submitted for repurchase.

     Notwithstanding anything herein to the contrary, if the option granted
to  Securityholders  to require the redemption of the  Securities  upon the
occurrence  of a Change in Control is  determined  to  constitute  a tender
offer,  the Company or  Ribapharm  will comply with all  applicable  tender
offer rules,  including  Rules 13e-4 and 14e-1 under the Exchange Act, upon
the occurrence of a Change in Control.

     As used in this SECTION 3.08 of the Indenture and in the Securities:

          A "CHANGE IN CONTROL" of the Company or, following the earlier to
     occur of a Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm,  as the
     case may be, means:

          (ix) the acquisition by any person, entity or "group" within
     the meaning of Section  13(d)(3) or 14(d)(2) of the  Exchange Act
     of  beneficial  ownership  (within  the  meaning  of  Rule  13d-3
     promulgated  under the Exchange Act) of 50% or more of the voting
     power of the total outstanding  voting stock of ICN or Ribapharm,
     as the case may be;

          (x)  persons  who  constitute  the Board of  Directors  (the
     "INCUMBENT  BOARD")  (i) of the  Company  as of the  date  of the
     indenture (which shall be deemed to include any person determined
     to have been  elected at the  Company's  2001  annual  meeting of
     stockholders)  or (ii) of Ribapharm as of the  effective  date of
     the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
     cease for any reason to  constitute  at least a  majority  of the
     Board of Directors of the Company or  Ribapharm,  as the case may
     be,  provided  that any person  subsequently  becoming a director
     whose election,  or nomination for election by stockholders,  was
     approved by a vote of at least a majority of the  directors  then
     comprising  the Incumbent  Board of the Company or Ribapharm,  as
     the case may be, shall be considered as though such person were a
     member of the Incumbent Board;

          (xi)  approval  by  the  stockholders  of a  reorganization,
     merger or consolidation of the Company or Ribapharm,  as the case
     may be, in each  case,  with  respect to which  persons  who were
     stockholders  of the  Company or  Ribapharm,  as the case may be,
     immediately prior to such reorganization, merger or consolidation
     do  not,   immediately   thereafter,   beneficially   own  shares
     sufficient  to elect a majority of directors of the  reorganized,
     merged or consolidated  company (provided that the failure of the
     Company to beneficially own shares sufficient to elect a majority
     of  directors  of  Ribapharm  following  a  Ribapharm  IPO  or  a
     Ribapharm  Spin-Off shall not be deemed to constitute a change in
     control pursuant to this provision); or

          (xii)  a  liquidation  or  dissolution  of  the  Company  or
     Ribapharm,  as the case may be (other than pursuant to the United
     States Bankruptcy  Code), or the conveyance,  transfer or leasing
     of all or  substantially  all of the  assets  of the  Company  or
     Ribapharm,  as the case may be, to any  person  (provided  that a
     Ribapharm  IPO or a  Ribapharm  Spin-Off  shall  not be deemed to
     constitute a Change in Control pursuant to this provision).

<PAGE>   21

3.09 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.

     In  connection  with any  redemption of  Securities,  the Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-off,
Ribapharm,  may  arrange,  in lieu of  redemption,  for  the  purchase  and
conversion of any Securities called for redemption by an agreement with one
or more investment bankers or other purchasers to purchase all or a portion
of such  Securities by paying to the Trustee in trust for the Holders whose
Securities  are to be so  purchased,  on or before the close of business on
the redemption  date, an amount that,  together with any amounts  deposited
with the  Trustee  by the  Company  or  Ribapharm,  as the case may be, for
redemption  of such  Securities,  is not less  than the  Redemption  Price,
together with interest,  if any,  accrued to the  redemption  date, of such
Securities.  Notwithstanding  anything to the  contrary  contained  in this
Article III, the  obligation  of the Company and,  following the earlier to
occur of a Ribapharm IPO and a Ribapharm  Spin-off,  Ribapharm,  to pay the
Redemption Price of such  Securities,  including all accrued  interest,  if
any,  shall be deemed to be  satisfied  and  discharged  to the extent such
amount is so paid by such  purchasers,  but no such agreement shall relieve
the Company and,  following  the earlier to occur of a Ribapharm  IPO and a
Ribapharm  Spin-off,  Ribapharm,  of its obligation to pay such  Redemption
Price and such  accrued  interest,  if any. If such an agreement is entered
into,  any Securities  not duly  surrendered  for conversion by the Holders
thereof  may, at the option of the Company  and,  following  the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-off, Ribapharm, be deemed, to
the fullest extent permitted by law,  acquired by such purchasers from such
Holders and (notwithstanding  anything to the contrary contained in Article
X) surrendered by such  purchasers  for  conversion,  all as of immediately
prior to the close of business on the redemption  date,  subject to payment
of the above  amount as  aforesaid.  The Trustee  shall hold and pay to the
Holders whose  Securities  are selected for redemption any such amount paid
to it for  purchase  and  conversion  in the same manner as it would moneys
deposited  with  it by the  Company  or  Ribapharm  for the  redemption  of
Securities.  Without the Trustee's  prior written  consent,  no arrangement
between the Company or Ribapharm and such  purchasers  for the purchase and
conversion of any Securities  shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture, and the Company and, following the earlier to occur of a
Ribapharm IPO or a Ribapharm Spin-off,  Ribapharm,  agrees to indemnify the
Trustee from, and hold it harmless against,  any loss, liability or expense
arising out of or in connection with any such  arrangement for the purchase
and  conversion of any  Securities  between the Company and  Ribapharm,  if
applicable, and such purchasers,  including the costs and expenses incurred
by the Trustee in the defense of any claim or  liability  arising out of or
in  connection  with the  exercise  or  performance  of any of its  powers,
duties,  responsibilities or obligations under this Indenture except to the
extent arising from its willful misconduct or negligence.

                               IV. COVENANTS

4.01 PAYMENT OF SECURITIES.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off,  Ribapharm, shall pay all amounts due with respect to
the Securities on the dates and in the manner  provided in the  Securities.
All such  amounts  shall be  considered  paid on the date due if the Paying
Agent holds (or, if the Company or Ribapharm is acting as Paying Agent,  if
the Company or Ribapharm,  as the case may be, has  segregated and holds in
trust in accordance with SECTION 2.04) on that date money sufficient to pay
the amount then due with respect to the Securities.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off,  Ribapharm,  shall pay interest on any overdue amount
(including, to the extent permitted by applicable law, overdue interest) at
the rate borne by the Securities.

4.02 MAINTENANCE OF OFFICE OR AGENCY.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off, Ribapharm, will maintain in the Borough of Manhattan,
The City of New York,  an office or agency  (which  may be an office of the
Trustee or an affiliate of the Trustee,  Registrar or  co-Registrar)  where
Securities may be surrendered  for  registration of transfer or exchange or
conversion  and where  notices  and  demands  to or upon the  Company  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  in respect of the  Securities and this Indenture may be served.
The Company and,  following  the earlier to occur of a Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  will give  prompt  written  notice to the
Trustee of the location,  and any change in the location, of such office or
agency. If at any time the Company and, following the earlier to occur of a
Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm,  shall fail to maintain
any such  required  office or agency or shall fail to furnish  the  Trustee
with the  address  thereof,  such  presentations,  surrenders,  notices and
demands may be made or served at the Corporate Trust Office of the Trustee.

<PAGE>   22

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off,  Ribapharm,  may also from time to time designate one
or more other offices or agencies  where the Securities may be presented or
surrendered  for any or all such purposes and may from time to time rescind
such  designations;   provided,   however,  that  no  such  designation  or
rescission  shall in any manner  relieve the  Company  and,  following  the
earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, of
its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such  purposes.  The Company  and,  following  the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
will give prompt written  notice to the Trustee of any such  designation or
rescission  and of any change in the  location of any such other  office or
agency.

     The Company and Ribapharm  hereby designate the Corporate Trust Office
of the Trustee as an agency of the Company  and,  following  the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm in accordance
with SECTION 2.03.

4.03 REPORTS.

     (A) The Company and, following the earlier to occur of a Ribapharm IPO
and a Ribapharm Spin-Off, Ribapharm, (at their own expense) will deliver to
the  Trustee  within  15  days  after  the  filing  of the  same  with  the
Commission,  copies  of  the  quarterly  and  annual  reports  and  of  the
information,  documents and other  reports,  if any, which the Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  each may be  required to file with the  Commission  pursuant to
Section  13 or 15(d) of the  Exchange  Act or which  they  furnish to their
stockholders.

     (B)  Notwithstanding  that the Company or Ribapharm may not be subject
to the reporting  requirements  of Section 13 or 15(d) of the Exchange Act,
for so long as any Securities  remain  outstanding the Company or Ribapharm
will promptly  provide the  information  required by Rule 144A(d)(4) to any
Holder or beneficial owner of Securities that so requests.

     (C) If and when this Indenture becomes subject to the TIA, the Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off,  Ribapharm,  will  file a copy of all such  information  with the
Commission for public  availability  (unless the Commission will not accept
such a filing) and make such information available to investors who request
it in  writing.  The  Company  and,  following  the  earlier  to occur of a
Ribapharm IPO and a Ribapharm  Spin-Off,  Ribapharm,  will also comply with
the other provisions of TIA ss. 314(a).

4.04 COMPLIANCE CERTIFICATE.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm  Spin-Off,  Ribapharm,  shall deliver to the Trustee within 120
days  after  the  end of  each  fiscal  year of the  Company  an  Officers'
Certificate stating whether or not the signers know of any Default or Event
of Default by the Company or, following the earlier to occur of a Ribapharm
IPO and a Ribapharm Spin-Off,  Ribapharm, as the case may be, in performing
any of its obligations  under this Indenture or the Securities.  If they do
know of any such  Default  or  Event  of  Default,  the  certificate  shall
describe the Default or Event of Default and its status.

4.05 STAY, EXTENSION AND USURY LAWS.

     Each of the Company and, following the earlier to occur of a Ribapharm
IPO and a Ribapharm  Spin-Off,  Ribapharm,  covenants (in each case, to the
extent  that it may  lawfully  do so) that it will  not at any time  insist
upon,  plead,  or in any  manner  whatsoever  claim or take the  benefit or
advantage of, any stay,  extension or usury law wherever enacted, now or at
any time  hereafter  in  force,  which  may  affect  the  covenants  or the
performance  of this  Indenture;  and each of the Company and Ribapharm (in
each  case,  to the extent  that it may  lawfully  do so) hereby  expressly
waives all benefit or advantage of any such law, and covenants that it will
not, by resort to any such law,  hinder,  delay or impede the  execution of
any power  herein  granted to the  Trustee,  but will suffer and permit the
execution of every such power as though no such law has been enacted.

<PAGE>   23

4.06 CORPORATE EXISTENCE.

     Subject to ARTICLE V, each of the Company and,  following  the earlier
to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, will do or
cause to be done all things  necessary  to preserve  and keep in full force
and effect its corporate  existence and the corporate  existence of each of
its subsidiaries in accordance with the respective organizational documents
of each  subsidiary and the rights  (charter and  statutory),  licenses and
franchises of the Company or Ribapharm and their  respective  subsidiaries;
provided, however, that neither the Company nor Ribapharm shall be required
to  preserve  any  such  right,  license  or  franchise,  or the  corporate
existence of any  subsidiary,  if in the judgment of the Board of Directors
of ICN or Ribapharm, as the case may be, (i) such preservation or existence
is not material to the conduct of business of the Company or Ribapharm,  as
the case may be, and (ii) the loss of such right,  license or  franchise or
the dissolution of such subsidiary does not have a material  adverse impact
on the Holders.

4.07 NOTICE OF DEFAULT.

     In the event that any Default  under  SECTION 6.01 hereof shall occur,
the Company or  Ribapharm,  as the case may be,  shall give prompt  written
notice of such Default to the Trustee.

                               V. SUCCESSORS

5.01 WHEN COMPANY AND RIBAPHARM MAY MERGE, ETC.

     Neither the Company nor, following the earlier to occur of a Ribapharm
IPO and a Ribapharm  Spin-Off,  Ribapharm,  shall consolidate with or merge
into,  or  transfer  or lease all or  substantially  all of its  assets to,
another  person  unless  such  other  person  is a  corporation,  a limited
liability  company or other entity  organized  under the laws of the United
States,  any State  thereof or the  District  of  Columbia  and such person
assumes by  supplemental  indenture  or other  written  instrument  all the
obligations  of the  Company or  Ribapharm,  as the case may be,  under the
Securities and this Indenture,  and immediately  after giving effect to the
transaction, no Default or Event of Default shall exist.

     The Company or  Ribapharm,  as the case may be,  shall  deliver to the
Trustee prior to the consummation of the proposed  transaction an Officers'
Certificate  to the foregoing  effect and an Opinion of Counsel,  which may
rely upon such  Officers'  Certificate  as to the absence of  Defaults  and
Events  of  Default,   stating  that  the  proposed  transaction  and  such
supplemental indenture will, upon consummation of the proposed transaction,
comply with this Indenture.

     The foregoing notwithstanding, neither a Ribapharm IPO nor a Ribapharm
Spin-Off shall be deemed to constitute the transfer of all or substantially
all of the assets of the Company.

5.02 SUCCESSOR SUBSTITUTED.

     Upon  any  consolidation  or  merger  or  transfer  or lease of all or
substantially  all of the assets of the Company or Ribapharm in  accordance
with SECTION 5.01,  the successor  person formed by such  consolidation  or
into which the Company or Ribapharm is merged or to which such  transfer or
lease is made shall  succeed  to,  and,  except in the case of a lease,  be
substituted  for,  and may  exercise  every  right and power of,  and shall
assume every duty and obligation of, the Company or Ribapharm,  as the case
may be, under this  Indenture with the same effect as if such successor had
been named as the Company or Ribapharm,  as the case may be,  herein.  When
the successor  assumes all obligations of the Company or Ribapharm,  as the
case may be,  hereunder,  except in the case of a lease, all obligations of
the predecessor shall terminate.

                         VI. DEFAULTS AND REMEDIES

6.01 EVENTS OF DEFAULT.

     An "EVENT OF DEFAULT" occurs if:

          (i) the  Company  and,  following  the earlier to occur of a
     Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, default in the
     payment of interest or  liquidated  damages on any Security  when
     the same becomes due and payable and the default  continues for a
     period  of  30  days,  whether  or  not  such  payment  shall  be
     prohibited by the provisions of ARTICLE XI hereof;

<PAGE>   24

          (ii) the Company  and,  following  the earlier to occur of a
     Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, default in the
     payment of the principal or Repurchase  Price or Redemption Price
     of any  Security  when the same  becomes  due and  payable on the
     Maturity Date, upon redemption or otherwise,  whether or not such
     payment  shall be  prohibited  by the  provisions  of  ARTICLE XI
     hereof;

          (iii) the  Company or,  following  the earlier to occur of a
     Ribapharm  IPO and a  Ribapharm  Spin-Off,  Ribapharm,  fails  to
     comply with any of its other agreements in the Securities or this
     Indenture and the default  continues for the period and after the
     notice specified below;

          (iv) the Company or any of its Significant  Subsidiaries or,
     following the earlier to occur of a Ribapharm IPO and a Ribapharm
     Spin-Off,  Ribapharm,  or  any of  its  Significant  Subsidiaries
     pursuant to or within the meaning of any Bankruptcy Law:

               (A)  commences a voluntary case,

               (B)  consents  to the  entry  of an  order  for  relief
                    against it in an involuntary case,

               (C)  consents to the  appointment  of a Custodian of it
                    or for all or  substantially  all of its property,
                    or

               (D)  makes a general  assignment for the benefit of its
                    creditors; or

          (v) a court of  competent  jurisdiction  enters  an order or
     decree under any Bankruptcy Law that:

               (A)  is for relief  against  the  Company or any of its
                    Significant Subsidiaries or, following the earlier
                    to  occur  of  a  Ribapharm  IPO  or  a  Ribapharm
                    Spin-Off,  Ribapharm  or any  of  its  Significant
                    Subsidiaries in an involuntary case,

               (B)  appoints a Custodian  of the Company or any of its
                    Significant Subsidiaries or, following the earlier
                    to  occur  of a  Ribapharm  IPO  and  a  Ribapharm
                    Spin-Off,  Ribapharm  or any  of  its  Significant
                    Subsidiaries for all or  substantially  all of the
                    property of ICN, Ribapharm or any such Significant
                    Subsidiary, as the case may be, or

               (C)  orders the  liquidation  of the  Company or any of
                    its  Significant  Subsidiaries  or,  following the
                    earlier  to  occur  of  a  Ribapharm   IPO  and  a
                    Ribapharm  Spin-Off,   Ribapharm  or  any  of  its
                    Significant Subsidiaries,

     and the order or decree  remains  unstayed  and in effect  for 90
     consecutive days.

     The term  "BANKRUPTCY  LAW" means Title 11,  U.S.  Code or any similar
Federal or State law for the relief of debtors.  The term "CUSTODIAN" means
any receiver  trustee,  assignee,  liquidator or similar official under any
Bankruptcy Law.

     A default  under  CLAUSE  (III) is not an Event of  Default  until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities  then  outstanding  notify  the  Company  and the  Trustee  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm  of the default and the default is not cured within 60 days after
receipt of the notice. The notice must specify the default,  demand that it
be  remedied  and state that the notice is a "NOTICE  OF  DEFAULT".  If the
Holders of 25% in aggregate principal amount of the outstanding  Securities
request the Trustee to give such notice on their behalf,  the Trustee shall
do so. When a default is cured, it ceases.

<PAGE>   25

6.02 ACCELERATION.

     If an Event of Default  (other than an Event of Default  specified  in
SECTION  6.01(IV)  OR (V) with  respect to the Company  or,  following  the
earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm) as
to which the Trustee has  received  notice  pursuant to SECTION 4.07 occurs
and is continuing,  the Trustee by notice to the Company and, following the
earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, or
the  Holders of at least 25% in  principal  amount of the  Securities  then
outstanding  by notice to the Company and the Trustee  and,  following  the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
may declare the  Securities  to be due and payable.  Upon such  declaration
such  principal and interest  shall be due and payable  immediately.  If an
Event of Default  specified in SECTION  6.01(IV) OR (V) with respect to the
Company  or,  following  the  earlier  to  occur of a  Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  occurs,  the  principal  of  and  accrued
interest on all the  Securities  shall ipso facto become and be immediately
due and  payable  without any  declaration  or other act on the part of the
Trustee or any  Securityholder.  The  Holders of a  majority  in  aggregate
principal  amount of the Securities  then  outstanding by written notice to
the  Trustee  may  rescind  an  acceleration  and its  consequences  if the
rescission  would not conflict with any order or decree and if all existing
Events of Default have been cured or waived except  nonpayment of principal
or interest that has become due solely because of the  acceleration  and if
all amounts due to the Trustee under SECTION 7.07 have been paid.

6.03 OTHER REMEDIES.

     Notwithstanding any other provision of this Indenture,  if an Event of
Default  occurs and is  continuing,  the Trustee  may pursue any  available
remedy by  proceeding at law or in equity to collect the payment of amounts
due with respect to the  Securities  or to enforce the  performance  of any
provision of the Securities or this Indenture.

     The Trustee may maintain a proceeding  even if it does not possess any
of the  Securities  or does not  produce any of them in the  proceeding.  A
delay or omission by the Trustee or any  Securityholder  in exercising  any
right or remedy  accruing  upon an Event of  Default  shall not  impair the
right or remedy or constitute a waiver of or  acquiescence  in the Event of
Default. All remedies are cumulative.

6.04 WAIVER OF PAST DEFAULTS.

     Subject to  SECTIONS  6.07 and 9.02,  the  Holders  of a  majority  in
aggregate  principal amount of the Securities then outstanding by notice to
the  Trustee  may  waive  any past  Default  or Event  of  Default  and its
consequences.  When a Default or an Event of Default is waived, it is cured
and ceases for every purpose of this Indenture.

6.05 CONTROL BY MAJORITY.

     The  Holders  of a  majority  in  aggregate  principal  amount  of the
Securities  then  outstanding  may  direct  the time,  method  and place of
conducting  any  proceeding  for any  remedy  available  to the  Trustee or
exercising  any trust or power  conferred on it.  However,  the Trustee may
refuse to follow any direction that  conflicts with law or this  Indenture,
is  unduly  prejudicial  to the  rights of other  Securityholders  or would
involve the Trustee in personal  liability;  provided  that the Trustee may
take  any  other  action   deemed  proper  by  the  Trustee  which  is  not
inconsistent with such direction.

6.06 LIMITATION ON SUITS.

     Except as  provided in SECTION  6.07,  a  Securityholder  may pursue a
remedy with respect to this Indenture or the Securities only if:

          (i) the  Holder  gives to the  Trustee  written  notice of a
     continuing Event of Default;

          (ii) the  Holders  of at least  25% in  aggregate  principal
     amount of the Securities then  outstanding make a written request
     to the Trustee to pursue the remedy;

          (iii) such Holder or Holders offer and if requested  provide
     to the Trustee indemnity  satisfactory to the Trustee against any
     loss, liability or expense;

<PAGE>   26

          (iv) the Trustee does not comply with the request  within 60
     days after receipt of the request and the offer of indemnity; and

          (v) during such  60-day  period the Holders of a majority in
     aggregate  principal amount of the Securities then outstanding do
     not give the Trustee a direction inconsistent with the request.

     A Securityholder may not use this Indenture to prejudice the rights of
another  Securityholder  or to obtain a preference or priority over another
Securityholder.

6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

     Notwithstanding  any other provision of this  Indenture,  the right of
any  Holder to  receive  payment  of all  amounts  due with  respect to the
Securities,  on  or  after  the  respective  due  dates  expressed  in  the
Securities,  or to bring suit for the enforcement of any such payment on or
after such respective dates,  shall not be impaired or affected without the
consent of the Holder.

     Notwithstanding  any other provision of this  Indenture,  the right of
any Holder to bring suit for the  enforcement  of the right to convert  the
Security  shall not be  impaired  or  affected  without  the consent of the
Holder.

6.08 COLLECTION SUIT BY TRUSTEE.

     If an Event of Default specified in SECTION 6.01(I) or (II) occurs and
is  continuing,  the Trustee  may  recover  judgment in its own name and as
trustee of an express trust against the Company and,  following the earlier
to occur of a Ribapharm IPO and a Ribapharm  Spin-Off,  Ribapharm,  for the
whole amount due with respect to the  Securities  including  any unpaid and
accrued interest.

6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.

     The  Trustee  may file  such  proofs  of claim  and  other  papers  or
documents  as may be  necessary or advisable in order to have the claims of
the Trustee, any predecessor Trustee and the Securityholders allowed in any
judicial  proceedings  relative to the Company or, following the earlier to
occur of a Ribapharm  IPO and a  Ribapharm  Spin-Off,  Ribapharm,  or their
respective creditors or properties.

     The Trustee  may  collect  and  receive  any moneys or other  property
payable or  deliverable  on any such claims and to distribute the same, and
any custodian,  receiver,  assignee, trustee,  liquidator,  sequestrator or
similar  official in any such judicial  proceeding is hereby  authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee  shall  consent  to the  making of such  payments  directly  to the
Holders,  to  pay  the  Trustee  any  amount  due  it  for  the  reasonable
compensation,  expenses,  disbursements  and advances of the  Trustee,  its
agents and counsel,  and any other  amounts due the Trustee  under  SECTION
7.07.

     Nothing herein  contained  shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of  reorganization,  arrangement,  adjustment or composition  affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.

6.10 PRIORITIES.

     If the Trustee  collects  any money  pursuant  to this  ARTICLE VI, it
shall pay out the money in the following order:

     First:    to the Trustee for amounts due under SECTION 7.07;

     Second:   to  holders of Senior  Indebtedness  to the extent
               required by ARTICLE XI;

     Third:    to Securityholders  for all amounts due and unpaid
               on the Securities,  without preference or priority
               of any  kind,  according  to the  amounts  due and
               payable on the Securities; and

     Fourth:   to the Company and, following the earlier to occur
               of a  Ribapharm  IPO  and  a  Ribapharm  Spin-Off,
               Ribapharm.

<PAGE>   27

     The Trustee,  upon prior written notice to the Company and,  following
the  earlier  to  occur  of a  Ribapharm  IPO  and  a  Ribapharm  Spin-Off,
Ribapharm,  may fix a record date and payment date for any payment by it to
Securityholders pursuant to this SECTION 6.10.

6.11 UNDERTAKING FOR COSTS.

     In any suit for the  enforcement  of any  right or remedy  under  this
Indenture  or in any suit  against  the  Trustee  for any  action  taken or
omitted by it as Trustee,  a court in its discretion may require the filing
by any party  litigant in the suit other than the Trustee of an undertaking
to pay the costs of the suit,  and the court in its  discretion  may assess
reasonable costs,  including reasonable  attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party  litigant.  This SECTION 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to SECTION 6.07
or a suit by Holders of more than 10% in aggregate  principal amount of the
outstanding Securities.

                                VII. TRUSTEE

7.01 DUTIES OF TRUSTEE.

     (A) If an Event of Default has occurred and is continuing, the Trustee
shall  exercise  such  of  the  rights  and  powers  vested  in it by  this
Indenture,  and use the same degree of care and skill in their exercise, as
a prudent  person  would  exercise  or use under the  circumstances  in the
conduct of his or her own affairs.

     (B) Except during the continuance of an Event of Default:

          (i) the  Trustee  need  perform  only those  duties that are
     specifically set forth in this Indenture and no others; and

          (ii) in the  absence of bad faith on its part,  the  Trustee
     may conclusively  rely, as to the truth of the statements and the
     correctness of the opinions expressed therein,  upon certificates
     or  opinions  furnished  to the  Trustee  and  conforming  to the
     requirements  of this  Indenture;  but in the  case  of any  such
     certificates  or  opinions  which  by any  provision  hereof  are
     specifically required to be furnished to the Trustee, the Trustee
     shall examine the certificates and opinions to determine  whether
     or not they conform to the requirements of this Indenture.

     (C)  The  Trustee  may  not be  relieved  from  liability  for its own
negligent  action,  its own  negligent  failure  to act or its own  willful
misconduct, except that:

          (i) this  paragraph  does not  limit the  effect of  SECTION
     7.01(B);

          (ii)  the  Trustee  shall  not be  liable  for any  error of
     judgment  made in good  faith by a Trust  Officer,  unless  it is
     proved  that  the  Trustee  was  negligent  in  ascertaining  the
     pertinent facts; and

          (iii) the Trustee  shall not be liable  with  respect to any
     action it takes or omits to take in good faith in accordance with
     a direction received by it pursuant to SECTION 6.05.

     (D) The Trustee  may refuse to perform any duty or exercise  any right
or power unless it receives indemnity  satisfactory to it against any loss,
liability or expense.

     (E) Every  provision of this  Indenture that in any way relates to the
Trustee is subject to the provisions of this SECTION 7.01.

     (F) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing  with the Company AND, and
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm.  Money held in trust by the Trustee need not be segregated  from
other funds except to the extent required by law.

<PAGE>   28

7.02 RIGHTS OF TRUSTEE.

     (A) The Trustee may rely on any document  believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document; if, however, the
Trustee shall determine to make such further inquiry or  investigation,  it
shall be entitled  during  normal  business  hours to examine the  relevant
books,  records and premises of the Company and,  following  the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, personally or
by agent or attorney upon  reasonable  prior notice at the sole cost of the
Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.

     (B) Before the Trustee acts or refrains from acting, it may require an
Officers'  Certificate and/or an Opinion of Counsel.  The Trustee shall not
be  liable  for any  action  it takes  or  omits  to take in good  faith in
reliance on such Officers' Certificate or Opinion of Counsel.

     (C) Any request or  direction  of the Company or  Ribapharm  mentioned
herein  shall be  sufficiently  evidenced  by a Company  Request or Company
Order and any  resolution of the Board of Directors  shall be  sufficiently
evidenced by a Board Resolution.

     (D)  The  Trustee  may  consult  with  counsel  (such  counsel  to  be
reasonably  acceptable to the Company and Ribapharm) and the written advice
of such  counsel  or any  Opinion  of  Counsel  shall be full and  complete
authorization  and  protection in respect of any action taken,  suffered or
omitted by it hereunder in good faith and in reliance thereon.

     (E) The Trustee may act through  agents or attorneys  and shall not be
responsible  for the  misconduct  or  negligence  of any agent or  attorney
appointed with due care.

     (F) The  Trustee  shall not be liable for any action it takes or omits
to take in good faith  which it  believes  to be  authorized  or within its
discretion, rights or powers hereunder.

     (G) Except with  respect to SECTION  6.01,  the Trustee  shall have no
duty to inquire as to the  performance  of the  Company or  Ribapharm  with
respect to the covenants contained in ARTICLE IV. In addition,  the Trustee
shall not be deemed to have knowledge of an Event of Default except (i) any
Default or Event of Default  occurring  pursuant  to  SECTIONS  6.01(I) and
6.01(II) or (ii) any Default or Event of Default of which the Trustee shall
have received  written  notification  at the Corporate  Trust Office of the
Trustee and such notice references the Securities and this Indenture,  or a
Responsible  Officer of the Trustee obtained actual knowledge.  Delivery of
reports,  information  and documents to the Trustee under ARTICLE IV (other
than  SECTIONS  4.04 and 4.07) is for  informational  purposes only and the
Trustee's receipt of the foregoing shall not constitute constructive notice
of any  information  contained  therein or  determinable  from  information
contained therein,  including the Company's or Ribapharm's  compliance with
any of their  respective  covenants  hereunder  (as to which the Trustee is
entitled to rely conclusively on Officers' Certificates).

7.03 INDIVIDUAL RIGHTS OF TRUSTEE.

     The Trustee in its  individual  or any other  capacity  may become the
owner or pledgee of Securities  and may otherwise  deal with the Company or
Ribapharm  or any of their  respective  Affiliates  with the same rights it
would  have if it were not  Trustee.  Any  Agent  may do the same with like
rights. The Trustee, however, must comply with SECTIONS 7.10 and 7.11.

7.04 TRUSTEE'S DISCLAIMER.

     The Trustee makes no  representation as to the validity or adequacy of
this  Indenture  or the  Securities;  it shall not be  accountable  for the
Company's  use of the  proceeds  from the  Securities;  and it shall not be
responsible for any statement in the Securities  other than its certificate
of authentication.

7.05 NOTICE OF DEFAULTS.

     If a Default or Event of Default  occurs and is continuing as to which
the Trustee has received notice pursuant to SECTION 4.07, the Trustee shall
mail to each  Securityholder  a notice of the  Default  or Event of Default
within 30 days after it occurs  unless such Default or Event of Default has
been cured or  waived.  Except in the case of a Default or Event of Default
in payment of any amounts due with respect to any Security, the Trustee may
withhold  the  notice  if and so long  as a  committee  of its  Responsible
Officers in good faith  determines  that  withholding  the notice is in the
interests of Securityholders.

<PAGE>   29

7.06 REPORTS BY TRUSTEE TO HOLDERS.

     Within 60 days  after each May 15  beginning  with May 15,  2002,  the
Trustee shall mail to each  Securityholder  if required by TIA ss. 313(c) a
brief report dated as of such May 15 that complies with TIA ss. 313(a).  In
such event, the Trustee also shall comply with TIA ss. 313(b).

     A copy of each  report at the time of its  mailing to  Securityholders
shall be mailed to the Company and  Ribapharm and filed by the Trustee with
the SEC and each  stock  exchange,  if any,  on which  the  Securities  are
listed.  The Company and  following the earlier to occur of a Ribapharm IPO
and a Ribapharm Spin-Off, Ribapharm, shall promptly notify the Trustee when
the Securities are listed on any stock exchange.

7.07 COMPENSATION AND INDEMNITY.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off, Ribapharm, shall pay to the Trustee from time to time
such compensation for its services as shall be agreed upon in writing.  The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express  trust.  The Company  and,  following  the earlier to
occur  of a  Ribapharm  IPO  and a  Ribapharm  Spin-Off,  Ribapharm,  shall
reimburse  the  Trustee  upon  request  for  all  reasonable  out-of-pocket
expenses  incurred  by it.  Such  expenses  shall  include  the  reasonable
compensation  and  out-of-pocket  expenses  of  the  Trustee's  agents  and
counsel.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm  Spin-Off,  Ribapharm,  shall indemnify the Trustee against any
loss or liability or expense (including the reasonable fees and expenses of
counsel) incurred by it in connection with the acceptance or administration
of this trust and the  performance of its duties  hereunder,  including the
reasonable  costs and  expenses of  defending  itself  against any claim or
liability  in  connection  with the exercise or  performance  of any of its
powers and duties hereunder. Neither the Company nor Ribapharm need pay for
any  settlement  made  without its  consent.  The Trustee  shall notify the
Company  and  Ribapharm  promptly  of any  claim  for  which  it  may  seek
indemnification.  Neither the  Company nor  Ribapharm  need  reimburse  any
expense or indemnify against any loss or liability  incurred by the Trustee
through the Trustee's negligence or bad faith.

     To secure  the  Company's  and,  following  the  earlier to occur of a
Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm's, payment obligations in
this SECTION 7.07, the Trustee shall have a lien prior to the Securities on
all money or property held or collected by the Trustee, except that held in
trust to pay amounts due on particular Securities.

     The indemnity obligations of the Company and Ribapharm with respect to
the Trustee provided for in this SECTION 7.07 shall survive any resignation
or removal of the Trustee.

     When the Trustee incurs expenses or renders services after an Event of
Default  specified in SECTION 6.01(IV) or (V) occurs,  the expenses and the
compensation  for the  services  are  intended  to  constitute  expenses of
administration under any Bankruptcy Law.

7.08 REPLACEMENT OF TRUSTEE.

     A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this SECTION 7.08.

     The Trustee may resign by so notifying the Company and,  following the
earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, in
writing.  The Holders of a majority in  aggregate  principal  amount of the
Securities  then  outstanding  may remove the Trustee by so  notifying  the
Trustee and the Company and,  following the earlier to occur of a Ribapharm
IPO and a  Ribapharm  Spin-Off,  Ribapharm,  in writing  and may  appoint a
successor Trustee with the Company's and, following the earlier to occur of
a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm's, consent. The Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off, Ribapharm, may remove the Trustee if:

          (i) the Trustee fails to comply with SECTION 7.10;

          (ii) the Trustee is adjudged a bankrupt or an insolvent;

          (iii) a receiver or other public officer takes charge of the
     Trustee or its property; or

          (iv) the Trustee becomes incapable of acting.

<PAGE>   30

     If the  Trustee  resigns or is  removed or if a vacancy  exists in the
office of Trustee for any reason, the Company and, following the earlier to
occur  of a  Ribapharm  IPO  and a  Ribapharm  Spin-Off,  Ribapharm,  shall
promptly appoint a successor  Trustee.  Within one year after the successor
Trustee  takes  office,  the Holders of a majority in  aggregate  principal
amount of the Securities then  outstanding may appoint a successor  Trustee
to replace the successor  Trustee  appointed by the Company and,  following
the  earlier  to  occur  of a  Ribapharm  IPO  and  a  Ribapharm  Spin-Off,
Ribapharm.

     If a successor  Trustee does not take office  within 30 days after the
retiring Trustee resigns or is removed,  the retiring Trustee,  the Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off,  Ribapharm, or the Holders of at least 10% in aggregate principal
amount of the  outstanding  Securities  may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

     If the  Trustee  fails to comply  with  SECTION  7.10,  any Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

     A  successor  Trustee  shall  deliver  a  written  acceptance  of  its
appointment to the retiring  Trustee and to the Company and,  following the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm.
Thereupon the  resignation or removal of the retiring  Trustee shall become
effective,  and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this  Indenture.  The  successor  Trustee shall
mail a notice of its succession to  Securityholders.  The retiring  Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in SECTION 7.07.

7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.

     If  the  Trustee  consolidates  with,  merges  or  converts  into,  or
transfers  all or  substantially  all of its corporate  trust  business to,
another  corporation,  the  successor  corporation  without any further act
shall be the successor Trustee, if such successor  corporation is otherwise
eligible hereunder.

7.10 ELIGIBILITY; DISQUALIFICATION.

     This  Indenture  shall  always have a Trustee  (or its parent  holding
company) who satisfies the requirements of TIA ss.  310(a)(1).  The Trustee
shall  always  have or be a  member  of a Bank  Holding  Company  having  a
combined  capital and surplus of at least  $50,000,000  as set forth in its
most recent published annual report of condition.  The Trustee shall comply
with TIA ss. 310(b);  provided,  however, that there shall be excluded from
the operation of TIA ss.  310(b)(1) any indenture or indentures under which
other  securities or  certificates  of interest or  participation  in other
securities  of the Company are  outstanding  if the  requirements  for such
exclusion set forth in TIA ss.  310(b)(1) are met. Nothing herein contained
shall prevent the Trustee from filing with the SEC the application referred
to in the penultimate paragraph of TIA ss. 310(b).

7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

     The Trustee shall comply with TIA ss.  311(a),  excluding any creditor
relationship  listed in TIA ss. 311(b).  A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.

                        VIII. DISCHARGE OF INDENTURE

8.01 TERMINATION OF THE OBLIGATIONS OF THE COMPANY AND RIBAPHARM.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm  Spin-Off,  Ribapharm,  may terminate all of their  obligations
under  this  Indenture  if  all  Securities  previously  authenticated  and
delivered (other than mutilated, destroyed, lost or stolen Securities which
have been replaced or paid as provided in SECTION 2.07) have been delivered
to the Trustee for cancellation or if:

          (i) the Securities mature within one year or all of them are
     to be called for  redemption  within one year under  arrangements
     satisfactory to the Trustee for giving the notice of redemption;

<PAGE>   31

          (ii) the Company or Ribapharm  irrevocably deposits in trust
     with the Trustee money or U.S. Government  Obligations sufficient
     to pay the  principal or  Redemption  Price of and any unpaid and
     accrued interest on the Securities to maturity or redemption,  as
     the  case may be.  Immediately  after  making  the  deposit,  the
     Company and,  following  the earlier to occur of a Ribapharm  IPO
     and a Ribapharm  Spin-Off,  Ribapharm,  shall give notice of such
     event to the Securityholders;

          (iii) the  Company and  Ribapharm  have paid or caused to be
     paid all sums then  payable by the Company and  Ribapharm  to the
     Trustee hereunder as of the date of such deposit; and

          (iv) the Company  and,  following  the earlier to occur of a
     Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, have delivered
     to the Trustee an opinion of counsel and an Officers' Certificate
     stating  that  all  conditions   precedent  provided  for  herein
     relating to the satisfaction and discharge of this Indenture have
     been complied with.

     However,  the Company's and Ribapharm's  obligations in SECTIONS 2.02,
2.03,  2.04,  2.05,  2.06,  2.07, 2.08, 2.15, 2.16, 2.17, 4.02, 7.07, 7.08,
ARTICLE VIII and in ARTICLE X shall  survive  until the  Securities  are no
longer  outstanding.  Thereafter  only the  obligations  of the Company and
Ribapharm in SECTIONS 7.07 and 8.03 shall survive.

     After a deposit  pursuant  to this  SECTION  8.01,  the  Trustee  upon
request shall  acknowledge  in writing the discharge of the  obligations of
the Company and Ribapharm  under the Securities  and this Indenture  except
for those surviving obligations specified above.

     In  order  to  have  money  available  on a  payment  date  to pay the
principal or Redemption Price of and any unpaid and accrued interest on the
Securities,  the  U.S.  Government  Obligations  shall  be  payable  as  to
principal  and any unpaid and accrued  interest  on or before such  payment
date in such amounts as will provide the necessary money.

     "U.S.  GOVERNMENT  OBLIGATIONS" means direct non-callable  obligations
of, or non-callable obligations guaranteed by, the United States of America
for the payment of which the full faith and credit of the United  States of
America is pledged.

8.02 APPLICATION OF TRUST MONEY.

     The Trustee shall hold in trust money or U.S.  Government  Obligations
deposited  with it pursuant to SECTION  8.01.  It shall apply the deposited
money and the money from U.S.  Government  Obligations  through  the Paying
Agent and in accordance with this Indenture to the payment of the principal
or  Redemption  Price  of  and  any  unpaid  and  accrued  interest  on the
Securities.  Money and  securities  so held in trust are not subject to the
subordination provisions of ARTICLE XI.

8.03 REPAYMENT TO COMPANY.

     The Trustee and the Paying  Agent  shall  promptly  pay to the Company
and,  following  the  earlier to occur of a  Ribapharm  IPO and a Ribapharm
Spin-Off,  Ribapharm,  upon the request of the Company and,  following  the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
any excess money or  securities  held by them at any time.  The Trustee and
the Paying  Agent shall pay to the Company  and,  following  the earlier to
occur of a Ribapharm  IPO and a  Ribapharm  Spin-Off,  Ribapharm,  upon the
request of the Company and,  following  the earlier to occur of a Ribapharm
IPO and a  Ribapharm  Spin-Off,  Ribapharm,  any money held by them for the
payment of the principal or Redemption  Price of and any unpaid and accrued
interest that remains unclaimed for two years; provided,  however, that the
Trustee  or such  Paying  Agent,  before  being  required  to make any such
repayment,  may, at the expense and request of the Company  and,  following
the  earlier  to  occur  of a  Ribapharm  IPO  and  a  Ribapharm  Spin-Off,
Ribapharm, cause to be published once in a newspaper of general circulation
in The  City of New  York or  cause to be  mailed  to each  Holder,  notice
stating that such money remains and that,  after a date specified  therein,
which shall not be less than 30 days from the date of such  publication  or
mailing,  any unclaimed balance of such money then remaining will be repaid
to the Company and, following the earlier to occur of a Ribapharm IPO and a
Ribapharm Spin-Off, Ribapharm,. After payment to the Company and Ribapharm,
Securityholders  entitled  to  the  money  must  look  to the  Company  and
Ribapharm for payment as general  creditors unless an applicable  abandoned
property law designates another person.

<PAGE>   32

8.04 REINSTATEMENT.

     If the  Trustee  or Paying  Agent is unable to apply any money or U.S.
Government  Obligations in accordance with SECTIONS 8.01 and 8.02 by reason
of any legal  proceeding or by reason of any order or judgment of any court
or governmental  authority enjoining,  restraining or otherwise prohibiting
such application, the obligations of the Company and, following the earlier
to occur of a Ribapharm IPO or a Ribapharm  Spin-Off,  Ribapharm under this
Indenture and the  Securities  shall be revived and reinstated as though no
deposit had occurred  pursuant to SECTIONS 8.01 and 8.02 until such time as
the Trustee or Paying  Agent is  permitted  to apply all such money or U.S.
Government Obligations in accordance with SECTIONS 8.01 and 8.02; provided,
however,  that if the Company or Ribapharm  has made any payment of amounts
due with  respect to any  Securities  because of the  reinstatement  of its
obligations,  the  Company  or  Ribapharm,  as the  case  may be,  shall be
subrogated to the rights of the Holders of such  Securities to receive such
payment from the money or U.S.  Government  Obligations held by the Trustee
or Paying Agent.

                               IX. AMENDMENTS

9.01 WITHOUT CONSENT OF HOLDERS.

     The Company and Ribapharm,  with the consent of the Trustee, may amend
or supplement  this  Indenture or the  Securities  without notice to or the
consent of any Securityholder:

          (i)   to   cure   any   ambiguity,   omission,   defect   or
     inconsistency;

          (ii) to comply with SECTIONS 5.01 and 10.11;

          (iii) to provide for  uncertificated  Securities in addition
     to certificated Securities; or

          (iv) to make any change that does not  adversely  affect the
     rights of any Securityholder.

9.02 WITH CONSENT OF HOLDERS.

     The Company and Ribapharm,  with the consent of the Trustee, may amend
or  supplement  this  Indenture  or the  Securities  without  notice to any
Securityholder  but with the  written  consent of the Holders of at least a
majority  in  aggregate  principal  amount of the  outstanding  Securities.
Subject to SECTION 6.07,  the Holders of a majority in aggregate  principal
amount of the  outstanding  Securities may waive  compliance by the Company
and  Ribapharm  with any  provision  of this  Indenture  or the  Securities
without notice to any other Securityholder. However, without the consent of
each Securityholder affected, an amendment, supplement or waiver, including
a waiver pursuant to SECTION 6.04, may not:

          (i) reduce  the  amount of  Securities  whose  Holders  must
     consent to an amendment, supplement or waiver;

          (ii)  reduce the rate of or change  the time for  payment of
     interest on any Security;

          (iii) reduce the principal,  Redemption  Price or Repurchase
     Price of or change the fixed maturity of any Security (including,
     without limitation, the optional redemption provisions);

          (iv) make any  Security  payable  in money  other  than that
     stated in the Security;

          (v) make any change in SECTION 6.04, 6.07 or 9.02; or

          (vi) make any change  that  adversely  affects  the right to
     convert any  Security or to require the Company or  Ribapharm  to
     repurchase any of the Securities upon a Change in Control.

     An  amendment  under this  SECTION  9.02 may not make any change  that
adversely  affects  the  rights  under  ARTICLE  XI of any holder of Senior
Indebtedness unless the holders of such Senior Indebtedness pursuant to its
terms consent to the change.

     Promptly after an amendment under this SECTION 9.02 becomes effective,
the Company and,  following  the earlier to occur of a Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  shall  mail to  Securityholders  a notice
<PAGE>   33
briefly describing the amendment. Any failure of the Company and, following
the  earlier  to  occur  of a  Ribapharm  IPO  and  a  Ribapharm  Spin-Off,
Ribapharm,  to mail such  notice  shall not in any way impair or affect the
validity of such amendment, supplement or waiver.

     It shall not be  necessary  for the consent of the Holders  under this
SECTION 9.02 to approve the  particular  form of any proposed  amendment or
supplement,  but it  shall  be  sufficient  if such  consent  approves  the
substance thereof.

9.03 COMPLIANCE WITH TRUST INDENTURE ACT.

     Every  amendment,  waiver  or  supplement  to  this  Indenture  or the
Securities shall comply with the TIA as then in effect.

9.04 REVOCATION AND EFFECT OF CONSENTS.

     Until an amendment,  supplement or waiver becomes effective, a consent
to it  by a  Holder  is a  continuing  consent  by  the  Holder  and  every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the  consenting  Holder's  Security,  even if  notation of the
consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the  consent as to its  Security or portion of a Security
if the  Trustee  receives  the  notice of  revocation  before  the date the
amendment, supplement or waiver becomes effective. An amendment, supplement
or waiver  becomes  effective in accordance  with its terms and  thereafter
binds every Securityholder.

     After an  amendment,  supplement  or  waiver  becomes  effective  with
respect to the  Securities,  it shall bind every  Securityholder  unless it
makes a change  described in SECTION  9.02.  In that case,  the  amendment,
supplement or waiver shall bind each Holder of a Security who has consented
to it and, provided that notice of such amendment,  supplement or waiver is
reflected  on a Security  that  evidences  the same debt as the  consenting
Holder's  Security,  every subsequent  Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.

9.05 NOTATION ON OR EXCHANGE OF SECURITIES.

     If an amendment, supplement or waiver changes the terms of a Security,
the Trustee  may  require  the Holder of the  Security to deliver it to the
Trustee.  The Trustee may place an appropriate  notation on the Security as
directed and prepared by the Company and, following the earlier to occur of
a Ribapharm  IPO and a  Ribapharm  Spin-Off,  Ribapharm,  about the changed
terms and  return it to the  Holder.  Alternatively,  if the  Company  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm, so determine, the Company and, following the earlier to occur of
a Ribapharm IPO and a Ribapharm  Spin-Off,  Ribapharm,  in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.

9.06 TRUSTEE PROTECTED.

     The  Trustee  need  not  sign  any  amendment,  supplement  or  waiver
authorized pursuant to this ARTICLE IX that adversely affects the Trustee's
rights.  The Trustee  shall be entitled to receive and rely upon an Opinion
of Counsel and an Officers'  Certificate that any  supplemental  indenture,
amendment or waiver complies with the Indenture.

                               X. CONVERSION

10.01 CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS.

     A Holder of a Security  may convert  such  Security at any time during
the period stated in paragraph 9 of the Securities.  The initial conversion
rate is stated in paragraph 9 of the  Securities.  The  conversion  rate is
subject to adjustment in accordance with SECTIONS 10.06 through 10.12.

     Securities shall initially be convertible into ICN Common Stock.  Upon
completion of a Ribapharm Spin-Off,  holders of Securities will be entitled
to receive,  upon  conversion of  Securities,  that number of shares of ICN
Common Stock that would have been  issuable to such Holder upon  conversion
of such Securities  immediately  prior to the record date for the Ribapharm
Spin-Off,  plus that number of shares of  Ribapharm  Common Stock which the
Holder would have been  entitled to receive in the  Ribapharm  Spin-Off had
the Holder converted such Securities  immediately  prior to the record date
for the  Ribapharm  Spin-Off,  subject to  adjustment  in  accordance  with
Sections  10.06  through  10.12  hereof.  A Holder shall not be entitled to
receive any shares of Ribapharm Common Stock if the Ribapharm Spin-Off does
not occur,  unless a Holder  would  otherwise  be so  entitled  pursuant to
Section 10.11.

<PAGE>   34

     A Holder may convert a portion of the  principal  of such  Security if
the portion is $1,000  principal  amount or a positive  integer multiple of
$1,000  principal  amount.  Provisions  of this  Indenture  that  apply  to
conversion  of all of a Security  also apply to  conversion of a portion of
it.

     Any shares issued upon conversion of a Security shall bear the Private
Placement  Legend  until after the second  anniversary  of the later of the
issue  date for the  Securities  and the last  date on which  the  Company,
Ribapharm or any  Affiliate  of the Company or  Ribapharm  was the owner of
such shares or the Security (or any  predecessor  security) from which such
shares were  converted (or such shorter period of time as permitted by Rule
144(k) under the Securities Act or any successor provision  thereunder) (or
such longer period of time as may be required  under the  Securities Act or
applicable  state securities laws in the Opinion of Counsel for the Company
and Ribapharm,  unless otherwise  agreed by the Company,  Ribapharm and the
Holder thereof).

10.02 CONVERSION PROCEDURE.

     To convert a Security,  a Holder  must  satisfy  the  requirements  in
paragraph 9 of the Securities.  The date on which the Holder  satisfies all
those  requirements  is the  "CONVERSION  DATE".  As  soon  as  practicable
following the Conversion  Date, (i) the Company shall deliver to the Holder
through the Conversion Agent a certificate for the number of full shares of
ICN Common Stock  issuable upon the  conversion  and a check in lieu of any
fractional  share  thereof and (ii)  following a  Ribapharm  Spin-Off,  the
Company,  Ribrapharm,  or the  Company and  Ribapharm,  as the case may be,
shall deliver to the Holder through the Conversion  Agent a certificate for
the number of full  shares of  Ribapharm  Common  Stock  issuable  upon the
conversion and a check in lieu of any fractional share thereof.  The person
in  whose  name  the  certificate  is  registered  shall  be  treated  as a
stockholder of record on and after the Conversion Date.

     Except as described  below,  no payment or adjustment will be made for
accrued  interest  on, or  liquidated  damages with respect to, a converted
Security or for dividends on any ICN Common Stock or Ribapharm Common Stock
issued on or prior to conversion.  If any Holder  surrenders a Security for
conversion  after the close of  business on the record date for the payment
of an  installment  of interest and prior to the opening of business on the
next interest payment date,  then,  notwithstanding  such  conversion,  the
interest  payable  on such  interest  payment  date  shall  be paid on such
interest  payment date to the Holder of such  Security on such record date;
provided,  however,  that such Security,  when  surrendered for conversion,
must be accompanied by payment to the Trustee on behalf of the Company and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm  of an amount  equal to the  interest  payable  on such  interest
payment date on the portion so converted;  provided, further, however, that
such payment to the Trustee described in the immediately  preceding proviso
shall not be required in connection  with any conversion of a Security that
occurs  on or  after  the date  that the  Company  has  issued a notice  of
redemption  pursuant  to SECTION  3.03 hereof and prior to the date of such
redemption.

     If a Holder  converts  more than one  Security  at the same time,  the
number of full shares  issuable upon the  conversion  shall be based on the
total principal amount of the Securities converted.

     Upon  surrender  of a Security  that is  converted in part the Trustee
shall  authenticate for the Holder a new Security equal in principal amount
to the unconverted portion of the Security surrendered.

     If the  last  day on  which a  Security  may be  converted  is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not
a Legal Holiday.

<PAGE>   35

10.03 FRACTIONAL SHARES.

     The Company will not and, following a Ribapharm Spin-Off,  neither the
Company nor Ribapharm will,  issue or distribute  fractional  shares of ICN
Common Stock or Ribapharm Common Stock, as the case may be, upon conversion
of  Securities  and instead  will deliver a check in an amount equal to the
value of such fraction  computed on the basis of the last sale price of the
ICN Common Stock or Ribapharm  Common Stock as reported on the NYSE or NNM,
as the case  may be (or if not  listed  for  trading  thereon,  then on the
principal  securities  exchange  or on the  principal  automated  quotation
system on which the ICN Common Stock or Ribapharm Common Stock, as the case
may be, is listed or admitted to trading),  at the close of business on the
date of  conversion  or if no such sale takes  place on such day,  the last
sale price for such day shall be the  average of the  closing bid and asked
prices regular way on the NYSE or NNM, as the case may be (or if not listed
for  trading  thereon,  on  the  principal  securities  exchange  or on the
principal  automated  quotation  system  on which the ICN  Common  Stock or
Ribapharm  Common  Stock,  as the case may be,  is listed  or  admitted  to
trading), for such day. If on the date of conversion,  the ICN Common Stock
or Ribapharm  Common  Stock,  as the case may be, is not quoted by any such
organization,  the fair value of such ICN Common Stock or Ribapharm  Common
Stock,  as the case may be, on such day, as  reasonably  determined in good
faith by the Board of  Directors of the Company or  Ribapharm,  as the case
may be, shall be used.

10.04 TAXES ON CONVERSION.

     If a Holder  converts  its  Security,  the  Company  and,  following a
Ribapharm Spin-Off, the Company,  Ribapharm,  or the Company and Ribapharm,
as the case may be, shall pay any  documentary,  stamp or similar  issue or
transfer  tax  payable  to the United  States of  America or any  political
subdivision or taxing  authority  thereof due on the issue of shares of ICN
Common Stock and,  following a Ribapharm  Spin-Off,  Ribapharm Common Stock
upon the  conversion.  However,  the Holder shall pay any such tax which is
due because the shares are issued in a name other than the  Holder's  name.
The Conversion  Agent may refuse to deliver the  certificates  representing
the ICN Common Stock or Ribapharm Common Stock being issued in a name other
than the Holder's name until the Conversion Agent receives a sum sufficient
to pay any tax which will be due  because  the shares are to be issued in a
name other than the  Holder's  name.  Nothing  herein  shall  preclude  the
withholding of any tax required by law or regulations.

10.05 COMPANY AND RIBAPHARM TO PROVIDE STOCK.

     The Company  and,  following a Ribapharm  Spin-Off,  Ribapharm,  shall
reserve out of their authorized but unissued ICN Common Stock and Ribapharm
Common Stock,  respectively,  or ICN Common Stock or Ribapharm Common Stock
held in their respective treasuries,  enough shares of ICN Common Stock and
Ribapharm  Common Stock,  respectively,  to permit the conversion of all of
the Securities.

     ICN Common Stock  deliverable  upon  conversion of Securities may come
only from the Company. Subject to the following paragraph, Ribapharm Common
Stock  deliverable  upon  conversion  of  Securities  following a Ribapharm
Spin-Off may come only from Ribapharm.

     Notwithstanding  any  reference  herein  to the  contrary,  if (A) the
Company  receives a ruling from the Internal  Revenue Service or an opinion
of its counsel that (i)  retention  of shares of Ribapharm  Common Stock by
the Company for delivery by the Company upon  conversion of Securities will
not prevent the Ribapharm  Spin-Off from qualifying as a tax-free  spin-off
under  Section 355 of the Code and (ii) the delivery by the Company of such
retained  shares of Ribapharm  Common Stock upon  conversion  of Securities
will be considered to be a tax-free  distribution of Ribapharm Common Stock
under Section 355 of the Code made  pursuant to the Ribapharm  Spin-Off and
(B) upon  receipt  of such a ruling or  opinion  of  counsel,  the  Company
elects,  in its sole discretion,  to retain and reserve shares of Ribapharm
Common  Stock for  delivery  upon  conversion  of  Securities  following  a
Ribapharm  Spin-Off such that,  upon  conversion  of all of the  Securities
following a Ribapharm  Spin-Off,  the Company can deliver all of the shares
of Ribapharm  Common Stock required to be delivered,  then Ribapharm Common
Stock  deliverable  upon  conversion  of  Securities  following a Ribapharm
Spin-Off  may come  only  from the  Company  and not  from  Ribapharm,  and
Ribapharm  shall  neither be required  to reserve  Ribapharm  Common  Stock
pursuant  to the first  sentence of this  Section  10.05 nor be required to
deliver shares of Ribapharm Common Stock pursuant to the second sentence of
this  Section  10.05;  provided,  however,  that if the Company  receives a
ruling or  opinion  described  in (A),  and if, as  described  in (B),  the
Company elects to retain and reserve  shares of Ribapharm  Common Stock for
delivery upon conversion of Securities, but the Company does not retain and
reserve enough shares of Ribapharm Common Stock so as to be able to deliver
all of the shares of Ribapharm  Common Stock  required to be delivered upon
conversion of all of the Securities  following a Ribapharm  Spin-Off,  then
Ribapharm  Common Stock  deliverable upon conversion of Securities may come
only from the  Company  until the  Company no longer  retains any shares of
Ribapharm  Common Stock,  and Ribapharm shall be required to reserve shares
of Ribapharm  Common Stock  pursuant to the first  sentence of this Section
10.05 (for delivery  pursuant to the second sentence of this Section 10.05)
in an amount  equal to the excess of (x) the number of shares of  Ribapharm
Common Stock  deliverable  upon conversion of all of the Securities and (y)
the number of shares of Ribapharm Common Stock retained and reserved by the
Company for delivery upon conversion.

<PAGE>   36

     All shares of ICN Common Stock and Ribapharm Common Stock which may be
delivered upon conversion of the Securities shall be validly issued,  fully
paid and non-assessable.

     The Company and Ribapharm  will endeavor to comply with all securities
laws  regulating  the offer and delivery of shares of ICN Common Stock and,
following a Ribapharm  Spin-Off,  Ribapharm Common Stock upon conversion of
Securities  and  will  endeavor  to  list  such  shares  on  each  national
securities  exchange or automated  quotation system on which the ICN Common
Stock or Ribapharm Common Stock are listed, as the case may be.

10.06 ADJUSTMENT OF CONVERSION RATE.

     The  conversion  rate  applicable  to  the  ICN  Common  Stock  or the
Ribapharm Common Stock, as the case may be, shall be, each independently of
the other, subject to adjustment from time to time as follows:

          (a) In case the Company or, following a Ribapharm  Spin-Off,
     Ribapharm, shall (1) pay a dividend in shares of ICN Common Stock
     or  Ribapharm  Common Stock to all holders of ICN Common Stock or
     Ribapharm  Common Stock,  as the case may be, except any dividend
     of Ribapharm  Common Stock made in connection  with the Ribapharm
     Spin-Off,  (2) make a distribution  in shares of ICN Common Stock
     or  Ribapharm  Common Stock to all holders of ICN Common Stock or
     Ribapharm  Common Stock,  as the case may be, except any dividend
     of Ribapharm  Common Stock made in connection  with the Ribapharm
     Spin-Off,  (3)  subdivide  the  outstanding  shares of ICN Common
     Stock or  Ribapharm  Common  Stock,  as the  case may be,  into a
     greater number of shares of ICN Common Stock or Ribapharm  Common
     Stock, as the case may be, or (4) combine the outstanding  shares
     of ICN Common Stock or Ribapharm  Common  Stock,  as the case may
     be,  into a  smaller  number of  shares  of ICN  Common  Stock or
     Ribapharm  Common Stock,  as the case may be, the conversion rate
     in effect  immediately  prior to such action shall be adjusted so
     that  the  holder  of any  Security  thereafter  surrendered  for
     conversion  shall be  entitled to receive the number of shares of
     ICN Common Stock and, following a Ribapharm Spin-Off,  Ribapharm,
     Common Stock which he would have owned immediately following such
     action  had such  Securities  been  converted  immediately  prior
     thereto.  Any adjustment  made pursuant to this SECTION  10.06(A)
     shall become effective  immediately  after the record date in the
     case of a dividend or  distribution  and shall  become  effective
     immediately after the effective date in the case of a subdivision
     or combination.

          (b) In case the Company or, following a Ribapharm  Spin-Off,
     Ribapharm,  as the case may be, shall issue rights or warrants to
     substantially all holders of ICN Common Stock or Ribapharm Common
     Stock,  as  the  case  may  be,  entitling  them  (for  a  period
     commencing no earlier than the record date for the  determination
     of Holders of ICN Common Stock or Ribapharm  Common Stock, as the
     case may be,  entitled to receive  such  rights or  warrants  and
     expiring  not  more  than 60 days  after  such  record  date)  to
     subscribe for or purchase shares of ICN Common Stock or Ribapharm
     Common Stock, as the case may be (or securities  convertible into
     ICN Common Stock or Ribapharm  Common Stock, as the case may be),
     at a price per share less than the then current  market price (as
     determined  pursuant  to  SECTION  10.06(G)  below) of ICN Common
     Stock or  Ribapharm  Common  Stock,  as the case may be,  on such
     record date, the conversion rate shall be adjusted by multiplying
     the conversion  rate in effect  immediately  prior to such record
     date by a fraction of which the numerator  shall be the number of
     shares of ICN Common Stock or Ribapharm Common Stock, as the case
     may be,  outstanding  on such  record  date,  plus the  number of
     shares of ICN Common Stock or Ribapharm Common Stock, as the case
     may  be,  so  offered  for   subscription  or  purchase  and  the
     denominator  of which shall be the number of shares of ICN Common
     Stock or Ribapharm Common Stock, as the case may be,  outstanding
     at the close of  business  on such record date plus the number of
     shares of ICN Common Stock or Ribapharm Common Stock, as the case
     may be, which the  aggregate  of the offering  price of the total
     number of shares of ICN Common Stock or Ribapharm  Common  Stock,
     as the case may be, so offered for subscription or purchase would
     purchase at such current  market price.  Such  adjustments  shall
     become effective immediately after such record date.

<PAGE>   37

          (c) In case the Company or, following a Ribapharm  Spin-Off,
     Ribapharm, shall distribute to all holders of ICN Common Stock or
     Ribapharm  Common  Stock,  as the case may be,  shares of capital
     stock of the Company or Ribapharm, as the case may be, other than
     ICN Common Stock or Ribapharm  Common Stock,  as the case may be,
     evidences  of  indebtedness  or other  assets  (other  than  cash
     dividends  out  of  current  or  retained  earnings),   or  shall
     distribute  to  substantially  all holders of ICN Common Stock or
     Ribapharm Common Stock, as the case may be, rights or warrants to
     subscribe for securities (other than those referred to in SECTION
     10.06(B) above), then in each such case the conversion rate shall
     be  adjusted  by  multiplying   the  conversion  rate  in  effect
     immediately prior to the close of business on the record date for
     the  determination of stockholders  entitled to such distribution
     by a fraction of which the numerator  shall be the current market
     price of ICN Common Stock or Ribapharm  Common Stock, as the case
     may be (determined as provided in subsection (g) below),  on such
     date and the denominator  shall be such current market price less
     the fair market value (as determined by the Board of Directors of
     the  Company  or  Ribapharm)  on such date of the  portion of the
     evidences  of  indebtedness,  shares of capital  stock,  cash and
     other assets to be distributed or of such subscription  rights or
     warrants applicable to one share of ICN Common Stock or Ribapharm
     Common Stock,  as the case may be. Such  adjustment  shall become
     effective immediately prior to the opening of business on the day
     following  such record date.  The  determination  of the Board of
     Directors of the Company  made  pursuant to this  subsection  (c)
     shall be conclusive and described in a Board Resolution; provided
     that, in the event of a distribution  of assets (other than cash,
     but including, without limitation, securities) in excess of $10.0
     million,  the Board of  Directors  shall  obtain the opinion of a
     nationally  recognized  investment banking firm or appraisal firm
     as to the fair market value of the assets distributed.

          (d) In case the Company or, following a Ribapharm  Spin-Off,
     Ribapharm,   shall,  by  dividend  or  otherwise,   at  any  time
     distribute to all holders of ICN Common Stock or Ribapharm Common
     Stock, as the case may be, cash (including any  distributions  of
     cash out of  current  or  retained  earnings  of the  Company  or
     Ribapharm,  as the case may be,  but  excluding  any cash that is
     distributed as part of a distribution requiring a conversion rate
     adjustment  pursuant  to  paragraphs  (c) or (e) of this  Section
     10.06) in an aggregate amount that,  together with the sum of (x)
     the aggregate amount of any other distributions to all holders of
     ICN Common Stock or Ribapharm  Common Stock,  as the case may be,
     made in cash  plus (y) all  Excess  Payments,  in each  case made
     within the 12 months preceding the date fixed for determining the
     stockholders  entitled to such  distribution  (the  "DISTRIBUTION
     RECORD  DATE")  and in  respect  of  which  no  conversion  price
     adjustment  pursuant  to  PARAGRAPHS  (C) or (E) of this  SECTION
     10.06 or this  PARAGRAPH  (D) has been made,  exceeds  10% of the
     product of (i) the current market price per share  (determined as
     provided  in  PARAGRAPH  (G) of this  SECTION  10.06)  of the ICN
     Common Stock or Ribapharm  Common  Stock,  as the case may be, on
     the  Distribution  Record Date times (ii) the number of shares of
     ICN Common Stock or Ribapharm  Common Stock,  as the case may be,
     outstanding on the  Distribution  Record Date  (excluding  shares
     held in the treasury of the Company or Ribapharm, as the case may
     be), the  conversion  rate shall be adjusted by  multiplying  the
     conversion rate in effect  immediately prior to the effectiveness
     of the conversion rate adjustment  contemplated by this paragraph
     (d) by a fraction  of which the  numerator  shall be the  current
     market price per share  (determined  as provided in PARAGRAPH (G)
     of this  SECTION  10.06)  of the ICN  Common  Stock or  Ribapharm
     Common Stock, as the case may be, on the Distribution Record Date
     and the  denominator  of which shall be such current market price
     less the amount of such cash and other  consideration  (including
     any  Excess  Payments)  so  distributed  applicable  to one share
     (based on the pro rata  portion of the  aggregate  amount of such
     cash and other  consideration  (including  any Excess  Payments),
     divided  by the shares of ICN Common  Stock or  Ribapharm  Common
     Stock, as the case may be, outstanding on the Distribution Record
     Date) of ICN Common Stock or Ribapharm  Common Stock, as the case
     may be. Such adjustment shall become effective  immediately prior
     to the opening of business on the day following the  Distribution
     Record Date.

<PAGE>   38

          (e) In case a tender offer or other  negotiated  transaction
     made  by  the  Company  or,   following  a  Ribapharm   Spin-Off,
     Ribapharm,  or any subsidiary of the Company or Ribapharm, as the
     case may be, for all or any  portion  of the ICN Common  Stock or
     Ribapharm Common Stock, as the case may be, shall be consummated,
     if an Excess  Payment is made in respect of such tender  offer or
     other  negotiated  transaction  and the  amount  of  such  Excess
     Payment, together with the sum of (x) the aggregate amount of all
     Excess   Payments   plus  (y)  the   aggregate   amount   of  all
     distributions to all holders of the ICN Common Stock or Ribapharm
     Common  Stock,  as the  case may be,  made in cash  (specifically
     including  distributions  of cash out of retained  earnings),  in
     each case made within the 12 months preceding the date of payment
     of  such  current   negotiated   transaction   consideration   or
     expiration of such current tender offer,  as the case may be (the
     "TENDER PAYMENT DATE"), and as to which no adjustment pursuant to
     PARAGRAPH  (C) or  PARAGRAPH  (D) of this  SECTION  10.06 or this
     PARAGRAPH  (E) has been made,  exceeds  10% of the product of (i)
     the current  market  price per share  (determined  as provided in
     PARAGRAPH  (G) of this SECTION  10.06) of the ICN Common Stock or
     Ribapharm Common Stock, as the case may be, on the Tender Payment
     Date  times  (ii) the  number of shares  of ICN  Common  Stock or
     Ribapharm   Common  Stock,  as  the  case  may  be,   outstanding
     (including  any tendered  shares but excluding any shares held in
     the treasury of the Company or Ribapharm,  as the case may be) on
     the Tender Payment Date, the conversion rate shall be adjusted by
     multiplying  the conversion rate in effect  immediately  prior to
     the effectiveness of the conversion rate adjustment  contemplated
     by this PARAGRAPH (E) by a fraction of which the numerator  shall
     be the current market price per share  (determined as provided in
     PARAGRAPH  (H) of this SECTION  10.06) of the ICN Common Stock or
     Ribapharm Common Stock, as the case may be, on the Tender Payment
     Date and the  denominator  of which shall be such current  market
     price  less the  amount  of such  Excess  Payments  and such cash
     distributions,  if any, applicable to one share (based on the pro
     rata portion of the aggregate  amount of such Excess Payments and
     such cash  distributions,  divided  by the  shares of ICN  Common
     Stock or Ribapharm Common Stock, as the case may be,  outstanding
     on the  Tender  Payment  Date) of ICN Common  Stock or  Ribapharm
     Common Stock,  as the case may be. Such  adjustment  shall become
     effective immediately prior to the opening of business on the day
     following the Tender Payment Date.

          (f) In addition to the foregoing  adjustments in subsections
     (a),  (b), (c), (d) and (e) above,  the Company or Ribapharm,  as
     the case may be, from time to time and to the extent permitted by
     law, may increase the conversion  rate by any amount for at least
     20 business  days,  if the Board of  Directors  of the Company or
     Ribapharm,  as the case may be, has made a  determination,  which
     determination shall be conclusive, that such increase would be in
     the best  interests of the Company or Ribapharm,  as the case may
     be. The  Company  or  Ribapharm,  as the case may be,  shall give
     notice to the  Trustee  and cause  notice of such  increase to be
     mailed to each Holder of Securities  at such Holder's  address as
     the same appears on the registry books of the Registrar, at least
     15 days prior to the date on which such increase  commences.  The
     Company or  Ribapharm,  as the case may be,  may,  at its option,
     also make such  increases in the  conversion  rate in addition to
     those set forth  above,  as the Board of Directors of the Company
     or  Ribapharm,  as the case may be,  deems  advisable to avoid or
     diminish  any income tax to holders of shares of ICN Common Stock
     or  Ribapharm   Common  Stock  resulting  from  any  dividend  or
     distribution  of stock (or rights to  acquire  stock) or from any
     event  treated  as such for  United  States  federal  income  tax
     purposes.

<PAGE>   39

          (g) For the  purpose of any  computation  under  subsections
     (a),  (b),  (c), (d) and (e) above of this  Section,  the current
     market price per share of ICN Common  Stock or  Ribapharm  Common
     Stock on the date  fixed for  determination  of the  stockholders
     entitled to receive the issuance or  distribution  requiring such
     computation (the "DETERMINATION  DATE") shall be deemed to be the
     average  of the  Daily  Market  Prices  for the  ten  consecutive
     trading  days  immediately   preceding  the  Determination  Date;
     provided, however, that (i) if the "ex" date for any event (other
     than the issuance or  distribution  requiring  such  computation)
     that requires an adjustment  to the  conversion  rate pursuant to
     subsection (a), (b), (c), (d) or (e) above occurs on or after the
     tenth  trading day prior to the  Determination  Date and prior to
     the "ex" date for the  issuance or  distribution  requiring  such
     computation, the Daily Market Price for each trading day prior to
     the  "ex"  date  for  such  other  event  shall  be  adjusted  by
     multiplying  such Daily  Market  Price by the  reciprocal  of the
     fraction  by  which  the  conversion  rate is so  required  to be
     adjusted as a result of such other  event,  (ii) if the "ex" date
     for any event (other than the issuance or distribution  requiring
     such  computation)  that requires an adjustment to the conversion
     rate  pursuant to  subsection  (a),  (b),  (c),  (d) or (e) above
     occurs on or after the "ex" date for the issuance or distribution
     requiring such  computation and on or prior to the  Determination
     Date,  the Daily Market Price for each  business day on and after
     the  "ex"  date  for  such  other  event  shall  be  adjusted  by
     multiplying such Daily Market Price by the same fraction by which
     the conversion  rate is so required to be adjusted as a result of
     such other event,  and (iii) if the "ex" date for the issuance or
     distribution  requiring  such  computation  is on or prior to the
     Determination  Date,  after  taking into  account any  adjustment
     required  pursuant  to clause  (i) or (ii) of this  proviso,  the
     Daily  Market  Price for each  trading  day on and after the "ex"
     date shall be adjusted  by adding  thereto the amount of any cash
     and  the  fair  market  value  (as  determined  by the  Board  of
     Directors of the Company or  Ribapharm,  as the case may be, in a
     manner  consistent with any  determination  of such value for the
     purposes of this Section, whose determination shall be conclusive
     and  described in a  Resolution  of the Board of Directors of the
     Company or  Ribapharm,  as the case may be) of the  evidences  of
     indebtedness,  shares of  capital  stock or other  securities  or
     assets being  distributed  (in the  distribution  requiring  such
     computation)  applicable  to one  share  of ICN  Common  Stock or
     Ribapharm  Common  Stock,  as the case may be, as of the close of
     business on the day before such "ex" date. For the purpose of any
     computation  under  subsection  (e) of this Section,  the current
     market price per share of ICN Common  Stock or  Ribapharm  Common
     Stock,  as the case may be, at the expiration time for the tender
     offer  requiring  such  computation  shall  be  deemed  to be the
     average of the Daily Market Price for the ten consecutive trading
     days  commencing  on the business day  immediately  following the
     expiration time of such tender offer (the  "COMMENCEMENT  DATE");
     provided,  however,  that if the "ex" date for any  event  (other
     than the tender offer requiring such  computation)  that requires
     an adjustment to the conversion  rate pursuant to subsection (a),
     (b), (c), (d) or (e) above occurs on or after the expiration time
     for the tender offer requiring such  computation and prior to the
     day in  question,  the Daily Market Price for each trading day on
     or after to the "ex" date for such other  event shall be adjusted
     by  multiplying  such Daily Market Price by the same  fraction by
     which the  conversion  rate is so  required  to be  adjusted as a
     result of such other event. For purposes of this subsection,  the
     term "ex" date,  (i) when used with  respect to any  issuance  or
     distribution,  means the first date on which the ICN Common Stock
     or Ribapharm Common Stock, as the case may be, trades regular way
     on the relevant exchange or in the relevant market from which the
     Daily Market Price was obtained without the right to receive such
     issuance  or  distribution,  (ii) when used with  respect  to any
     subdivision  or  combination  of  shares of ICN  Common  Stock or
     Ribapharm  Common Stock, as the case may be, means the first date
     on which the Daily Market Price Common Stock, as the case may be,
     trades  regular way on such  exchange or in such market after the
     time at which such subdivision or combination  becomes effective,
     and (iii) when used with  respect to any tender  offer  means the
     first  date on which the ICN  Common  Stock or  Ribapharm  Common
     Stock, as the case may be, trades regular way on such exchange or
     in such market after the expiration time of such tender offer (as
     it may be amended or extended).

<PAGE>   40

10.07 LIMITATIONS ON ADJUSTMENT.

          (a)  Notwithstanding   anything  to  the  contrary  in  this
     Indenture or the Securities, no adjustment in the conversion rate
     shall be made as a result  of the  Ribapharm  Spin-Off  except as
     provided in SECTION 10.01.

          (b) No adjustment in the  conversion  rate shall be required
     unless such  adjustment  would require an increase or decrease of
     at  least  1.0%  of  the  conversion  rate;   provided  that  any
     adjustments  which  by  reason  of  this  subsection  (c) are not
     required  to be made  shall be  carried  forward  and taken  into
     account in any subsequent adjustment. No adjustment shall be made
     for rights to purchase ICN Common Stock or Ribapharm Common Stock
     pursuant  to a Company  or  Ribapharm  plan for  reinvestment  of
     dividends  or  interest.  All  calculations  under this Article X
     shall be made to the nearest cent or to the nearest one-hundredth
     of a share, as the case may be. In no event shall the denominator
     in any fraction  pursuant to Section  10.06 be less than or equal
     to zero. If any such  denominator  would be less than or equal to
     zero, such denominator  shall be one. No adjustment shall be made
     for a  change  in the  par  value  of the  ICN  Common  Stock  or
     Ribapharm Common Stock, as the case may be.

10.08 OTHER ADJUSTMENTS.

     In the event  that,  as a result of an  adjustment  made  pursuant  to
SECTION 10.06 hereof, the Holder of any Security thereafter surrendered for
conversion  shall become entitled to receive any shares of Capital Stock of
the Company or Ribapharm other than shares of ICN Common Stock or Ribapharm
Common Stock,  as the case may be,  thereafter the conversion  rate of such
other shares so receivable upon conversion of any Security shall be subject
to  adjustment  from  time to time  in a  manner  and on  terms  as  nearly
equivalent  as  practicable  to the  provisions  with respect to ICN Common
Stock and Ribapharm Common Stock contained in this ARTICLE X.

     If any rights,  options or warrants issued by the Company or Ribapharm
as described in Section 10.06 are only  exercisable  upon the occurrence of
certain triggering events, then the conversion rate will not be adjusted as
provided in Section  10.06  until the  earliest  of such  triggering  event
occurs.  Upon the  expiration  or  termination  of any  rights,  options or
warrants  without the  exercise of such rights,  options or  warrants,  the
conversion  rate  then in  effect  shall  be  adjusted  immediately  to the
conversion  rate  which  would  have  been in  effect  at the  time of such
expiration  or  termination  had such rights,  options or warrants,  to the
extent  outstanding  immediately  prior to such  expiration or termination,
never been issued.

10.09 NOTICE OF ADJUSTMENT.

     Whenever the conversion rate is adjusted, the Company and, following a
Ribapharm  Spin-Off,  Ribapharm,  shall  promptly  mail to  Holders  at the
addresses appearing on the Registrar's books a notice of the adjustment and
file with the Trustee an Officers'  Certificate  briefly  stating the facts
requiring the  adjustment  and the manner of computing it. The  certificate
shall be conclusive evidence of the correctness of such adjustment.

10.10 NOTICE OF CERTAIN TRANSACTIONS.

     In the event that:

          (1)  the  Company  or,   following  a  Ribapharm   Spin-Off,
     Ribapharm,  takes any action which would require an adjustment in
     the conversion rate;

          (2)  the  Company  or,   following  a  Ribapharm   Spin-Off,
     Ribapharm,  takes any action  that would  require a  supplemental
     indenture pursuant to SECTION 10.11; or

          (3) there is a dissolution or liquidation of the Company or,
     following a Ribapharm Spin-Off, Ribapharm,;

a Holder of a Security may convert such  Security into shares of ICN Common
Stock and/or  Ribapharm  Common Stock,  prior to the record date for or the
effective  date  of the  transaction  so that he may  receive  the  rights,
warrants, securities or assets which a holder of shares of ICN Common Stock
and/or  Ribapharm  Common  Stock on that date may receive.  Therefore,  the
Company  and,  following a  Ribapharm  Spin-Off,  Ribapharm,  shall mail to
Holders at the addresses appearing on the Registrar's books and the Trustee
a notice stating the proposed record or effective date, as the case may be,
of any  transaction  referred to in clause (1),  (2) or (3) of this SECTION
10.10. The Company and, following a Ribapharm  Spin-Off,  Ribapharm,  shall
mail such  notice at least 15 days before  such date;  however,  failure to
mail such notice or any defect therein shall not affect the validity of any
transaction referred to in CLAUSE (1), (2) or (3) of this SECTION 10.10.

<PAGE>   41

10.11 EFFECT  OF RECLASSIFICATIONS,  CONSOLIDATIONS,  MERGERS  OR  SALES ON
      CONVERSION PRIVILEGE.

     If any of the following shall occur,  namely: (i) any reclassification
or change in the ICN Common Stock or Ribapharm  Common Stock  issuable upon
conversion  of  Securities  (other than a change in par value,  or from par
value to no par value, or from no par value to par value, or as a result of
a subdivision or  combination),  (ii) any  consolidation or merger to which
the Company or, following a Ribapharm Spin-Off, Ribapharm, is a party other
than a merger in which the  Company or,  following  a  Ribapharm  Spin-Off,
Ribapharm, as the case may be, is the continuing corporation and which does
not result in any  reclassification  of, or change  (other than a change in
name, or par value, or from par value to no par value, or from no par value
to par value or as a result of a subdivision  or  combination)  in, the ICN
Common Stock or Ribapharm  Common  Stock,  as the case may be, or (iii) any
sale or conveyance of all or substantially  all of the property or business
of the  Company  or,  following  a  Ribapharm  Spin-Off,  Ribapharm,  as an
entirety,  then the  Company  or  Ribapharm,  as the  case may be,  or such
successor  or  purchasing  corporation,  as the  case may be,  shall,  as a
condition  precedent  to  such  reclassification,   change,  consolidation,
merger,  sale  or  conveyance,   execute  and  deliver  to  the  Trustee  a
supplemental  indenture  in form  reasonably  satisfactory  to the  Trustee
providing that the Holder of each Security then outstanding  shall have the
right to convert such  Security into the kind and amount of shares of stock
and other  securities and property  (including  cash)  receivable upon such
reclassification,  change,  consolidation,  merger, sale or conveyance by a
holder of the  number of shares of ICN  Common  Stock or  Ribapharm  Common
Stock,  as the case may be,  deliverable  upon  conversion of such Security
immediately prior to such reclassification,  change, consolidation, merger,
sale  or  conveyance.   Such  supplemental   indenture  shall  provide  for
adjustments of the conversion  rate which shall be as nearly  equivalent as
may be practicable to the  adjustments of the conversion  rate provided for
in this ARTICLE X. If, in the case of any such consolidation,  merger, sale
or conveyance,  the stock or other securities and property (including cash)
receivable  thereupon by a holder of ICN Common  Stock or Ribapharm  Common
Stock, as the case may be, includes shares of stock or other securities and
property  of  a   corporation   other  than  the  successor  or  purchasing
corporation,  as the case may be, in such  consolidation,  merger,  sale or
conveyance, then such supplemental indenture shall also be executed by such
other  corporation and shall contain such additional  provisions to protect
the interests of the Holders of the Securities as the Board of Directors of
the  Company  and,  following  a  Ribapharm  Spin-Off,   Ribapharm,   shall
reasonably consider necessary by reason of the foregoing.  The provision of
this SECTION  10.11 shall  similarly  apply to  successive  consolidations,
mergers, sales or conveyances.

     In  the  event  the  Company  and,  following  a  Ribapharm  Spin-Off,
Ribapharm,  shall execute a supplemental indenture pursuant to this SECTION
10.11, the Company and, following a Ribapharm  Spin-Off,  Ribapharm,  shall
promptly file with the Trustee an Officers' Certificate briefly stating the
reasons  therefor,  the kind or amount of shares of stock or  securities or
property  (including cash) receivable by Holders of the Securities upon the
conversion of their  Securities  after any such  reclassification,  change,
consolidation,  merger,  sale or conveyance  and any  adjustment to be made
with respect thereto.

10.12 TRUSTEE'S DISCLAIMER.

     The Trustee has no duty to  determine  when an  adjustment  under this
ARTICLE  X should be made,  how it  should be made or what such  adjustment
should be, but may accept as conclusive  evidence of the correctness of any
such  adjustment,  and shall be  protected  in relying  upon the  Officers'
Certificate  with  respect  thereto  which the  Company  and,  following  a
Ribapharm  Spin-Off,  Ribapharm,  is  obligated  to file  with the  Trustee
pursuant to SECTION 10.09 hereof. The Trustee makes no representation as to
the validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the failure by the
Company or Ribapharm to comply with any provisions of this ARTICLE X.

     The Trustee  shall not be under any  responsibility  to determine  the
correctness  of any  provisions  contained  in any  supplemental  indenture
executed  pursuant to SECTION 10.11, but may accept as conclusive  evidence
of the  correctness  thereof,  and shall be protected in relying upon,  the
Officers' Certificate with respect thereto which the Company and, following
a Ribapharm  Spin-Off,  Ribapharm,  is  obligated  to file with the Trustee
pursuant to SECTION 10.09 hereof.

<PAGE>   42

10.13 RETURN OF FUNDS DEPOSITED FOR REDEMPTION OF CONVERTED SECURITIES.

     Any funds which at any time shall have been  deposited  by the Company
or  Ribapharm or on their behalf with the Trustee or any other Paying Agent
for the  purpose  of paying the  principal  of and  interest  on any of the
Securities and which shall not be required for such purposes because of the
conversion  of such  Securities,  as  provided  in this  Article  X,  shall
promptly  after such  conversion be repaid to the Company or Ribapharm,  as
the case may be, by the Trustee or such other  Paying  Agent in  accordance
with  the  Company's  or   Ribapharm's,   as  the  case  may  be,   written
instructions.

                             XI. SUBORDINATION

11.01 AGREEMENT TO SUBORDINATE.

     The Company and  Ribapharm  each agrees,  and each  Securityholder  by
accepting  a Security  agrees,  that the  payment of all  amounts  due with
respect to the  Securities  is  subordinated  in right of  payment,  to the
extent and in the manner  provided in this ARTICLE XI, to the prior payment
in full of all Senior  Indebtedness  of the Company and  Ribapharm and that
the subordination is for the benefit of the holders of Senior Indebtedness.

     Money and  securities  held in trust  pursuant to ARTICLE VIII are not
subject to the subordination provisions of this ARTICLE XI.

11.02 CERTAIN DEFINITIONS.

     "INDEBTEDNESS"  means,  with respect to any person,  the principal of,
and premium,  if any, and interest on (a) all  indebtedness  of such person
for borrowed money (including all indebtedness  evidenced by notes,  bonds,
debentures or other securities sold by such person for money), (b) all debt
obligations  incurred by such person in the acquisition  (whether by way of
purchase, merger,  consolidation or otherwise and whether by such person or
another  person) of any  business,  real  property or other assets  (except
inventory and related items acquired in the ordinary  course of the conduct
of the  acquiror's  usual  business),  (c)  guarantees  by such  person  of
indebtedness  described  in clause  (a) or (b) of another  person,  (d) all
renewals, extensions, refundings, deferrals, restructurings, amendments and
modifications of any such  indebtedness,  obligation or guarantee,  (e) all
reimbursement obligations of such person with respect to letters of credit,
bankers'  acceptances or similar  facilities issued for the account of such
person,  (f) all capital lease  obligations  of such person and (g) all net
obligations of such person under interest rate swap,  currency  exchange or
similar agreements of such person.

     "REPRESENTATIVE"  means the indenture trustee or other trustee,  agent
or representative for an issue of Senior Indebtedness.

     "SENIOR  INDEBTEDNESS"  means  all  Indebtedness  of  the  Company  or
Ribapharm,  as the case may be, outstanding at any time except Indebtedness
that by its terms is  subordinate  in right of payment to the Securities or
Indebtedness  that is not  otherwise  senior  in  right of  payment  to the
Securities.  Senior  Indebtedness  does  not  include  Indebtedness  of the
Company  or  Ribapharm,  as the case  may be,  to any of the  Company's  or
Ribapharm's subsidiaries.

11.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.

     Upon any  distribution  of  assets  to  creditors  of the  Company  or
Ribapharm, as the case may be, in a liquidation,  winding up or dissolution
of the  Company  or  Ribapharm,  as the  case may be,  or in a  bankruptcy,
reorganization,  insolvency, receivership or similar proceeding relating to
the  Company  or  Ribapharm,  as the  case  may  be,  or  their  respective
properties:

          (i)  holders  of  Senior  Indebtedness  of  the  Company  or
     Ribapharm,  as the case  may be,  shall be  entitled  to  receive
     payment  in  full of the  principal  of and  interest  (including
     interest  accruing after the commencement of any such proceeding)
     to  the  date  of  payment  on  the  Senior  Indebtedness  before
     Securityholders shall be entitled to receive any payment from the
     Company or  Ribapharm,  as the case may be, of  amounts  due with
     respect to the Securities; and

<PAGE>   43

          (ii)  until  the  Senior  Indebtedness  of  the  Company  or
     Ribapharm,  as the case may be, is paid in full, any distribution
     to which  Securityholders  would be entitled  from the Company or
     Ribapharm,  as the case may be, but for this  ARTICLE XI shall be
     made  to  holders  of  Senior  Indebtedness  of  the  Company  or
     Ribapharm,  as the case may be, as their  interests  may  appear,
     except  the  Securityholders  may  receive  securities  that  are
     subordinated to Senior  Indebtedness of the Company or Ribapharm,
     as the case may be, to at least the same extent as the Securities
     and payments made pursuant to SECTIONS 8.01 and 8.02.

     The  consolidation  of the Company or Ribapharm with, or the merger of
the Company or Ribapharm with or into, another person or the liquidation or
dissolution  of the Company or Ribapharm  following  the sale,  assignment,
conveyance,   transfer,   lease  or  other  disposal  of  their  respective
properties and assets  substantially  as an entirety to another person upon
the  terms  and  conditions  set  forth in  Article V shall not be deemed a
dissolution, winding up or liquidation, of the Company or Ribapharm, as the
case may be, for the purposes of this SECTION 11.03 if the person formed by
such  consolidation  or the  surviving  entity of such merger or the person
which acquires by sale, assignment,  conveyance,  transfer,  lease or other
disposal of such properties and assets substantially as an entirety, as the
case  may  be,  shall,  as a part  of  such  consolidation,  merger,  sale,
assignment,  conveyance, transfer, lease or other disposal, comply with the
conditions set forth in Article V.

11.04 COMPANY AND RIBAPHARM NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES
      IN CERTAIN CIRCUMSTANCES.

     No payment of amounts due may be made by the Company or Ribapharm,  as
the case may be,  directly or  indirectly,  with respect to the  Securities
(including any repurchase pursuant to the exercise of the Repurchase Right)
or to acquire any of the  Securities at any time if a default in payment of
the principal of or premium,  if any, or interest on Senior Indebtedness of
the Company or Ribapharm, as the case may be, exists, unless and until such
default  shall  have been  cured or waived or shall  have  ceased to exist.
During the  continuance  of any event of default with respect to any Senior
Indebtedness of the Company or Ribapharm, as the case may be, as such event
of  default  is  defined  under  any  such  Senior  Indebtedness  or in any
agreement  pursuant  to which any  Senior  Indebtedness  of the  Company or
Ribapharm,  as the case may be,  has been  issued  (other  than  default in
payment of the  principal of or premium,  if any, or interest on any Senior
Indebtedness),  permitting  the holders  thereof to accelerate the maturity
thereof,  no payment may be made by the Company or  Ribapharm,  as the case
may be,  directly  or  indirectly,  of any amount  due with  respect to the
Securities  for 180 days  following  written  notice  to the  Company  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  from any holder or holders thereof or their  representative  or
representatives  or the trustee or trustees under any indenture under which
any  instrument  evidencing  any such  Senior  Indebtedness  may have  been
issued,  that such an event of  default  has  occurred  and is  continuing.
However,  if the maturity of such Senior  Indebtedness is  accelerated,  no
payment may be made by the Company or Ribapharm, as the case may be, on the
Securities until such Senior Indebtedness that has matured has been paid or
such acceleration has been cured or waived.

     Regardless of anything to the contrary  herein,  nothing shall prevent
(a) any payment by the Trustee to the  Securityholders of amounts deposited
with it pursuant  to ARTICLE  VIII or (b) any payment by the Trustee or the
Paying  Agent as  permitted  by SECTION  11.11.  Nothing  contained in this
ARTICLE XI will limit the right of the  Trustee or the  Securityholders  to
take any action to accelerate  the maturity of the  Securities  pursuant to
SECTION 6.02 or to pursue any rights or remedies hereunder.

11.05 WHEN DISTRIBUTION MUST BE PAID OVER.

     In the event that the Company or  Ribapharm  shall make any payment to
the Trustee with respect to the  Securities  at a time when such payment is
prohibited  by SECTION  11.03 or 11.04,  such payment  shall be held by the
Trustee,  in trust for the benefit of, and shall be paid forthwith over and
delivered  to,  the  holders  of  Senior  Indebtedness  of the  Company  or
Ribapharm,  as the case may be, (pro rata as to each of such holders on the
basis of the  respective  amounts of Senior  Indebtedness  held by them) or
their  Representative or the trustee under the indenture or other agreement
(if any)  pursuant to which Senior  Indebtedness  may have been issued,  as
their  respective  interests may appear,  for application to the payment of
all Senior  Indebtedness  of the Company or Ribapharm,  as the case may be,
remaining unpaid to the extent necessary to pay all Senior  Indebtedness of
the Company or Ribapharm,  as the case may be, in full in  accordance  with
its terms,  after giving effects to any concurrent  payment or distribution
to or for the holders of Senior Indebtedness.

<PAGE>   44

     If a  distribution  is made to  Securityholders,  that because of this
ARTICLE  XI  should  not have been made to them,  the  Securityholders  who
receive  the  distribution  shall  hold it in trust for  holders  of Senior
Indebtedness and pay it over to them as their interests may appear.

11.06 NOTICE BY COMPANY AND RIBAPHARM.

     The Company and, following the earlier to occur of a Ribapharm IPO and
a Ribapharm Spin-Off,  Ribapharm, shall promptly notify the Trustee and the
Paying Agent in writing of any facts known to the Company or, following the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
that would cause a payment of any amount due with respect to the Securities
to violate  this  ARTICLE  XI, but  failure to give such  notice  shall not
affect the  subordination  of the  Securities  to the  Senior  Indebtedness
provided in this ARTICLE XI.

11.07 SUBROGATION.

     After all Senior Indebtedness is paid in full and until the Securities
are paid in full,  Securityholders shall be subrogated (equally and ratably
with all other  Indebtedness  of the Company and,  following the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm, ranking pari
passu with the Securities) to the rights of holders of Senior  Indebtedness
to receive  distributions  applicable to Senior  Indebtedness to the extent
that  distributions  otherwise  payable  to the  Securityholders  have been
applied to the payment of Senior  Indebtedness.  A distribution  made under
this Article XI to holders of Senior  Indebtedness  which  otherwise  would
have been  made to  Securityholders  is not,  as  between  the  Company  or
Ribapharm and  Securityholders,  a payment by the Company or Ribapharm,  as
the case may be, on Senior Indebtedness.

11.08 RELATIVE RIGHTS.

     This ARTICLE XI defines the  relative  rights of  Securityholders  and
holders of Senior Indebtedness. Nothing in this Indenture shall:

          (i) impair, as between the Company and Ribapharm, on the one
     hand, and  Securityholders,  on the other hand, the obligation of
     the Company  and,  following  the earlier to occur of a Ribapharm
     IPO and a Ribapharm  Spin-Off,  Ribapharm,  which is absolute and
     unconditional,  to  pay  all  amounts  due  with  respect  to the
     Securities in accordance with their terms;

          (ii)  affect  the  relative  rights of  Securityholders  and
     creditors of the Company and, following the earlier to occur of a
     Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,  other than
     holders of Senior Indebtedness; or

          (iii)  prevent  the  Trustee  or  any  Securityholder   from
     exercising  its  available  remedies  upon a Default  or Event of
     Default,  subject to the rights of holders of Senior Indebtedness
     to receive distributions otherwise payable to Securityholders.

11.09 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY OR RIBAPHARM.

     No  right  of  any  holder  of  Senior  Indebtedness  to  enforce  the
subordination  of the  indebtedness  evidenced by the  Securities  shall be
impaired by any act or failure to act by the Company or Ribapharm or by the
failure of the Company or Ribapharm to comply with this Indenture.

11.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.

     Whenever a distribution  is to be made or a notice given to holders of
Senior  Indebtedness,  the distribution may be made and the notice given to
their Representatives.

11.11 RIGHTS OF TRUSTEE AND PAYING AGENT.

     The  Trustee or Paying  Agent may  continue  to make  payments  on the
Securities  until it  receives  written  notice of facts that would cause a
payment  of amounts  due with  respect to the  Securities  to violate  this
ARTICLE  XI.  Only the  Company  or,  following  the  earlier to occur of a
Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, or a Representative or a
holder of an issue of Senior  Indebtedness that has no  Representative  may
give the notice.

<PAGE>   45

     The  Trustee  shall be  entitled  to rely on the  delivery  to it of a
written  notice by a person  representing  himself to be a holder of Senior
Indebtedness  (or a  Representative  on behalf of such holder) to establish
that such  notice  has been given by a holder of Senior  Indebtedness  or a
Representative  on behalf of any such holder. In the event that the Trustee
determines in good faith that further  evidence is required with respect to
the  right  of any  person  who  is a  holder  of  Senior  Indebtedness  to
participate in any payment or distribution pursuant to this ARTICLE XI, the
Trustee may  request  such  person to furnish  evidence  to the  reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such person,  the extent to which such person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of
such person  under this ARTICLE XI, and if such  evidence is not  furnished
the  Trustee  may  defer  any  payment  to  such  person  pending  judicial
determination  as to the right of such  person to receive  such  payment or
until such time as the Trustee shall be otherwise satisfied as to the right
of such person to receive such payment.

     The Trustee in its  individual  or any other  capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.

     The  Trustee  shall  not be deemed  to owe any  fiduciary  duty to the
holders of Senior  Indebtedness  and shall not be liable to any such holder
if it shall  mistakenly  pay over or distribute to  Securityholders  or the
Company  or  Ribapharm  or any  other  person  money or assets to which any
holders of Senior  Indebtedness shall be entitled by virtue of this ARTICLE
XI or otherwise.

11.12 OFFICERS' CERTIFICATE.

     If there occurs an event  referred to in SECTION  11.03 or 11.04,  the
Company  or,  following  the  earlier  to  occur of a  Ribapharm  IPO and a
Ribapharm Spin-Off,  Ribapharm,  as the case may be, shall promptly give to
the Trustee an Officers' Certificate (on which the Trustee may conclusively
rely)   identifying   all   holders   of  Senior   Indebtedness   or  their
Representatives  and the  principal  amount  of  Senior  Indebtedness  then
outstanding  held by each such  holder and  stating  the  reasons  why such
Officers' Certificate is being delivered to the Trustee.

11.13 OBLIGATION OF COMPANY AND RIBAPHARM UNCONDITIONAL.

     Nothing contained in this ARTICLE XI or elsewhere in this Indenture or
in any Security is intended to or shall  impair,  as between the Company or
Ribapharm,  as the case  may be,  their  respective  creditors  other  than
holders  of Senior  Indebtedness  and the  Holders of the  Securities,  the
obligation  of the  Company  and,  following  the  earlier  to  occur  of a
Ribapharm IPO and a Ribapharm  Spin-Off,  Ribapharm,  which is absolute and
unconditional, to pay to the Holders of the Securities all amounts due with
respect to the Securities as and when the same shall become due and payable
in  accordance  with their  terms,  or is intended  to or shall  affect the
relative  rights of the  Holders of the  Securities  and  creditors  of the
Company or  Ribapharm,  as the case may be,  other than the  holders of the
Senior  Indebtedness,  nor shall  anything  herein or therein  prevent  the
Trustee  or the  Holder  of  any  Security  from  exercising  all  remedies
otherwise  permitted by applicable  law upon default under this  Indenture,
subject to the  rights,  if any,  under this  ARTICLE XI of the  holders of
Senior  Indebtedness  in respect of cash,  property  or  securities  of the
Company or Ribapharm  received  upon the exercise of any such remedy.  Upon
any distribution of assets of the Company or Ribapharm  referred to in this
ARTICLE XI, the Trustee,  subject to the  provisions  of SECTIONS  7.01 and
7.02, and the Holders of the Securities  shall be entitled to rely upon any
order or  decree  by any  court of  competent  jurisdiction  in which  such
dissolution,  winding up,  liquidation or  reorganization  proceedings  are
pending,  or a  certificate  of the  liquidating  trustee or agent or other
person  making  any  distribution  to the  Trustee  or the  Holders  of the
Securities,  for the  purpose  of  ascertaining  the  persons  entitled  to
participate in such  distribution,  the holders of the Senior  Indebtedness
and other indebtedness of the Company or Ribapharm, as the case may be, the
amount  thereof  or  payable  thereon,   the  amount  or  amounts  paid  or
distributed  thereon  and all  other  facts  pertinent  thereto  or to this
ARTICLE XI.  Nothing  contained  in this  ARTICLE XI or  elsewhere  in this
Indenture or in any Security is intended to or shall affect the  obligation
of the Company or  Ribapharm,  as the case may be, to make,  or prevent the
Company or Ribapharm,  as the case may be, from making,  at any time except
during  the  pendency  of  any  dissolution,  winding  up,  liquidation  or
reorganization proceeding, and except during the continuance of any default
specified in SECTION  11.04 (not cured or waived),  payments at any time of
all amounts due with respect to the Securities.

<PAGE>   46

11.14 NOT TO PREVENT EVENTS OF DEFAULT.

     The failure to make any payment due with respect to the  Securities by
reason  of any  provision  of this  ARTICLE  XI shall not be  construed  as
preventing the occurrence of an Event of Default under SECTION 6.01

                             XII. MISCELLANEOUS

12.01 TRUST INDENTURE ACT CONTROLS.

     If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the
TIA, the required provision of the TIA shall control.

12.02 NOTICES.

     Any notice or communication  by the Company,  Ribapharm or the Trustee
to one or both of the others is duly given if in writing and  delivered  in
person,  mailed by  first-class  mail or by express  delivery  to the other
parties' addresses stated in this SECTION 12.02. The Company,  Ribapharm or
the Trustee by notice to the others may  designate  additional or different
addresses for subsequent notices or communications.

     Any notice or communication to a Securityholder shall be mailed to its
address  shown on the  register  kept by the  Registrar.  Failure to mail a
notice or communication  to a Securityholder  or any defect in it shall not
affect its sufficiency with respect to other Securityholders.

     If a notice or  communication  is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it, provided that a
notice  or  communication  to the  Trustee  will  not be duly  given  until
actually received.

     If the  Company  or  Ribapharm  mails a  notice  or  communication  to
Securityholders,  it shall mail a copy to the other and to the  Trustee and
each Agent at the same time.

     All notices or communications shall be in writing.

     The Company's address is:

               ICN Pharmaceuticals, Inc.
               3300 Hyland Avenue
               Costa Mesa, CA  92626
               (714) 545-0100
               Attention:  David C. Watt

     Ribapharm's address is:

               Ribapharm Inc.
               3300 Hyland Avenue
               Costa Mesa, CA  92626
               (714) 545-0100
               Attention:  Harry A. Roosje

     The Trustee's address is:

               The Bank of New York
               101 Barclay Street, Floor 21 West
               New York, NY 10286
               (212) 495-1784
               Attention:  Corporate Trust Administration

12.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

     Securityholders may communicate  pursuant to TIA ss. 312(b) with other
Securityholders  with respect to their  rights under this  Indenture or the
Securities.  The Company,  Ribapharm, the Trustee, the Registrar and anyone
else shall have the protection of TIA ss. 312(c).

12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

     Upon any request or  application  by the Company or  Ribapharm  to the
Trustee to take any action under this Indenture,  the Company or Ribapharm,
as the case may be, shall furnish to the Trustee:

<PAGE>   47

          (i) an Officers' Certificate stating that, in the opinion of
     the signers,  all conditions  precedent,  if any, provided for in
     this Indenture relating to the proposed action have been complied
     with; and

          (ii) an Opinion of Counsel  stating  that, in the opinion of
     such counsel,  all such  conditions  precedent have been complied
     with.

     Each signer of an Officers'  Certificate  or an Opinion of Counsel may
(if so stated)  rely,  effectively,  upon an Opinion of Counsel as to legal
matters and an Officers'  Certificate as to factual  matters if such signer
reasonably  and in good faith  believes  in the  accuracy  of the  document
relied upon.

12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

     Each  Officers'  Certificate  or Opinion of  Counsel  with  respect to
compliance  with a condition  or covenant  provided  for in this  Indenture
shall include:

          (i) a statement  that the person making such  certificate or
     opinion has read such covenant or condition;

          (ii) a brief  statement  as to the  nature  and scope of the
     examination  or  investigation   upon  which  the  statements  or
     opinions contained in such certificate or opinion are based;

          (iii) a statement that, in the opinion of such person, he or
     she has made such examination or investigation as is necessary to
     enable him or her to express an informed opinion as to whether or
     not such covenant or condition has been complied with; and

          (iv) a  statement  as to whether or not,  in the  opinion of
     such person, such condition or covenant has been complied with.

12.06 RULES BY TRUSTEE AND AGENTS.

     The Trustee may make reasonable rules for action by or at a meeting of
Securityholders.  The Registrar,  Paying Agent or Conversion Agent may make
reasonable  rules and set  reasonable  requirements  for  their  respective
functions.

12.07 LEGAL HOLIDAYS.

     A "LEGAL  HOLIDAY" is a Saturday,  a Sunday or a day on which  banking
institutions  are not  required to be open in The City of New York,  in the
State  of New  York or in the city in which  the  Trustee  administers  its
corporate trust  business.  If a payment date is a Legal Holiday at a place
of payment,  payment may be made at that place on the next  succeeding  day
that is not a Legal  Holiday,  and no interest shall accrue on that payment
for the intervening period.

     A "BUSINESS DAY" is a day other than a Legal Holiday.

12.08 NO RECOURSE AGAINST OTHERS.

     No past, present or future director,  officer, employee,  incorporator
or  stockholder  of the  Company  or  Ribapharm,  as such,  shall  have any
liability  for any  obligations  of the  Company  or  Ribapharm  under  the
Securities,  this Indenture,  the Registration  Rights Agreement or for any
claim based on, in respect of, or by reason of, such  obligations  or their
creation.  Each Holder by accepting a Security waives and releases all such
liability.  The waiver and  release are part of the  consideration  for the
issuance of the Securities.

12.09 DUPLICATE ORIGINALS.

     The  parties  may sign any  number of copies of this  Indenture.  Each
signed copy shall be an original,  but all of them  together  represent the
same agreement.  DELIVERY OF AN EXECUTED  COUNTERPART BY FACSIMILE SHALL BE
EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART THEREOF.

12.10 GOVERNING LAW.

     The laws of the State of New York,  without  regard to  principles  of
conflicts of law, shall govern this Indenture and the Securities.

<PAGE>   48

12.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

     This Indenture may not be used to interpret another indenture, loan or
debt  agreement  of the  Company or  Ribapharm  or any of their  respective
subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

12.12 SUCCESSORS.

     All  agreements of the Company and Ribapharm in this Indenture and the
Securities  shall bind their respective  successors.  All agreements of the
Trustee in this Indenture shall bind its successors.

12.13 SEPARABILITY.

     In case any provision in this Indenture or in the Securities  shall be
invalid,   illegal   or   unenforceable,   the   validity,   legality   and
enforceability of the remaining provisions shall not in any way be affected
or impaired  thereby and a Holder shall have no claim therefor  against any
party hereto.

12.14 TABLE OF CONTENTS, HEADINGS, ETC.

     The  Table of  Contents,  Cross-Reference  Table and  headings  of the
Articles and Sections of this Indenture have been inserted for  convenience
of reference  only,  are not to be considered a part hereof and shall in no
way modify or restrict any of the terms or provisions hereof.

<PAGE>   49

     IN WITNESS  WHEREOF,  the parties hereto have caused this Indenture to
be duly executed as of the date first above written.

                                    ICN PHARMACEUTICALS, INC.

                                    By: /s/ David C.Watt
                                        -----------------------------------
                                    Name:   David C. Watt
                                    Title:  Executive Vice President,
                                            General Counsel and Corporate
                                            Secretary

                                    RIBAPHARM INC.

                                    By: /s/ Harry A. Roosje
                                        -----------------------------------
                                    Name:   Harry A. Roosje
                                    Title:  Vice President Associate
                                            General Counsel

                                    THE BANK OF NEW YORK

                                    By: /s/ John Guiliano
                                        -----------------------------------
                                    Name:   John Guiliano
                                    Title:  Authorized Signatory

<PAGE>   50

                                                                  EXHIBIT A
                                                                  ---------

                             [Face of Security]

                         ICN PHARMACEUTICALS, INC.

  [INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND AS REQUIRED]

               6 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2008
                           CUSIP NO. ____________

     ICN  PHARMACEUTICALS,  INC., a Delaware corporation (herein called the
"COMPANY")  and  the  corporate   parent  of  RIBAPHARM  INC.,  a  Delaware
corporation  (herein  called  "RIBAPHARM"),   for  value  received,  hereby
promises to pay to ___________ or registered assigns,  the principal sum of
_________________  Dollars  ($_______________)  [or such  greater or lesser
amount as indicated on Schedule A hereto](FN1) on July 15, 2008, and to pay
interest  thereon,  as provided on the reverse hereof,  until the principal
and any unpaid and accrued interest is paid or duly provided for. The right
to payment of the principal  and all other amounts due with respect  hereto
is  subordinated  to the rights of Senior  Indebtedness as set forth in the
Indenture referred to on the reverse side hereof.

--------------------------------------------------
(FN1)  This provision is included in Global Notes only.

     Upon the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
the  Securities  shall be joint and several  obligations of the Company and
Ribapharm.  Ribapharm will have no payment  obligations under the Indenture
or the Securities unless and until a Ribapharm IPO or a Ribapharm  Spin-Off
occurs.

     Interest Payment Dates: January 15 and July 15, with the first payment
to be made on January 15, 2002.

     Record Dates: January 1 and July 1.

     The provisions on the back of this  certificate are incorporated as if
set forth on the face hereof.

<PAGE>   51

     IN WITNESS WHEREOF, ICN PHARMACEUTICALS,  INC. AND RIBAPHARM INC. have
caused this instrument to be duly signed.

                                    ICN PHARMACEUTICALS, INC.

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

                                    RIBAPHARM INC.

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

Dated: _______________

<PAGE>   52

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to
in the within-mentioned Indenture.

THE BANK OF NEW YORK, as Trustee

By:
   ---------------------------------
         Authorized Signatory

Dated: ________________

<PAGE>   53

                           [REVERSE OF SECURITY]

                         ICN PHARMACEUTICALS, INC.

               6 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2008

     1. INTEREST.  ICN  PHARMACEUTICALS,  INC., a Delaware corporation (the
"COMPANY")  and  the  corporate   parent  of  RIBAPHARM  INC.,  a  Delaware
corporation  ("RIBAPHARM"),  and,  following  the  earlier  to  occur  of a
Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm, promise to pay interest
on the principal amount of this Security at the rate PER ANNUM shown above.
The Company  will pay interest  semi-annually  on January 15 and July 15 of
each year, with the first payment to be made on January 15, 2002.  Interest
on the Securities will accrue on the principal  amount from the most recent
date to which interest has been paid or, if no interest has been paid, from
July 18, 2001.  Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

     2. MATURITY. The Notes will mature on July 15, 2008.

     3. METHOD OF PAYMENT.  The Company and, following the earlier to occur
of a Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm,  will pay interest
on the  Securities  (except  defaulted  interest)  to the  persons  who are
registered  Holders of  Securities  at the close of  business on the record
date set forth on the face of this Security next  preceding the  applicable
interest payment date. Holders must surrender  Securities to a Paying Agent
to collect  the  principal,  Redemption  Price or  Repurchase  Price of the
Securities.  The Company and, following the earlier to occur of a Ribapharm
IPO and a  Ribapharm  Spin-Off,  Ribapharm,  will pay all  amounts due with
respect to the Securities in money of the United States that at the time of
payment is legal tender for payment of public and private  debts.  However,
the Company  or,  following  the earlier to occur of a Ribapharm  IPO and a
Ribapharm Spin-Off,  Ribapharm, may pay all amounts due with respect to the
Securities  held  other  than by the  Depositary  by check  payable in such
money. It may mail an interest check to a Holder's registered address.

     4. PAYING AGENT, REGISTRAR,  CONVERSION AGENT. Initially,  The Bank of
New York (the "TRUSTEE") will act as Paying Agent, Registrar and Conversion
Agent.  The Company and,  following the earlier to occur of a Ribapharm IPO
and a Ribapharm Spin-Off, Ribapharm, may change any Paying Agent, Registrar
or Conversion  Agent without notice.  The Company or, following the earlier
to occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, may act in
any such capacity.

     5.  INDENTURE.  The Company issued the  Securities  under an Indenture
dated as of July 18, 2001 (the  "INDENTURE")  among the Company,  Ribapharm
and the Trustee.  The terms of the  Securities  include those stated in the
Indenture  and those made part of the  Indenture  by reference to the Trust
Indenture Act of 1939 (15 U.S. Code ss.ss.  77aaa-77bbbb) (the "ACT") as in
effect on the date of the Indenture. The Securities are subject to all such
terms, and  Securityholders are referred to the Indenture and the Act for a
statement  of such  terms.  The  Securities  are general  unsecured  senior
subordinated  obligations of the Company limited to $400,000,000  aggregate
principal amount  ($525,000,000 if the Initial Purchaser (as defined in the
Indenture) has elected to exercise its over-allotment option to purchase up
to an  additional  $125,000,000  of the  Securities),  except as  otherwise
provided in the Indenture (except for Securities issued in substitution for
destroyed,  mutilated, lost or stolen Securities).  Terms used herein which
are  defined in the  Indenture  have the  meanings  assigned to them in the
Indenture.

     6. OPTIONAL  REDEMPTION.  The Securities  will be redeemable  prior to
maturity at the option of the Company,  in whole or in part, at any time on
or after July 21, 2004, at the following  redemption  prices  (expressed as
percentages  of the  principal  amount  thereof),  if  redeemed  during the
periods commencing on the dates set forth below, in each case together with
accrued and unpaid interest to the redemption date:

                                             Redemption
                          Date                 Price
                    ---------------------------------------
                       July 21, 2004         103.714%
                    ---------------------------------------
                       July 16, 2005         102.786%
                    ---------------------------------------
                       July 16, 2006         101.857%
                    ---------------------------------------
                       July 16, 2007         100.929%
                     through July 15,
                      2008 inclusive
                    ---------------------------------------

<PAGE>   54

     7. NOTICE OF REDEMPTION.  Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
of  Securities  to be redeemed at its  registered  address.  Securities  in
denominations  larger than $1,000  principal amount may be redeemed in part
but only in whole multiples of $1,000  principal  amount.  On and after the
redemption date interest ceases to accrue on Securities or portions of them
called for redemption.

     8. REPURCHASE AT OPTION OF HOLDER. In the event of a Change in Control
with  respect  to the  Company  or,  following  the  earlier  to occur of a
Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm, then each Holder of the
Securities  shall have the right,  at the Holder's  option,  subject to the
rights  of the  holders  of Senior  Indebtedness  under  ARTICLE  XI of the
Indenture,  to require the Company or Ribapharm to repurchase such Holder's
Securities  including  any  portion  thereof  which is $1,000 in  principal
amount or any  positive  integer  multiple  thereof on a business  day (the
"REPURCHASE  DATE") that is 45 days after the date of the Change in Control
Notice,  unless  otherwise  required by applicable law, at a price equal to
100% of the outstanding principal amount of such Security, plus accrued and
unpaid  interest to the  Repurchase  Date. The obligation to repurchase the
Securities  of a Holder  upon a Change in Control of either the  Company or
Ribapharm  shall be a joint and several  obligation of both the Company and
Ribapharm.

     Within 30 days  after the  occurrence  of the Change in  Control,  the
Company or  Ribapharm,  as the case may be, is  obligated to give notice of
the occurrence of such Change in Control to each Holder.  Such notice shall
include,  among other  things,  the date by which  Holders  must notify the
Company of their  intention  to exercise  the  Repurchase  Right and of the
procedure which Holders must follow to exercise such right. To exercise the
Repurchase  Right,  a Holder of  Securities  must  deliver on or before the
close of business on the business day immediately  preceding the Repurchase
Date written notice to the Company or Ribapharm, as the case may be, (or an
agent designated by the Company or Ribapharm,  as the case may be, for such
purpose),  and the Trustee of the Holder's  exercise of such right together
with the  Securities  with  respect to which the right is being  exercised,
duly endorsed for transfer.

     A "CHANGE IN  CONTROL" of the  Company  or,  following  the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off, Ribapharm, means:

          (i) the acquisition by any person,  entity or "group" within
     the meaning of Section  13(d)(3) or 14(d)(2) of the  Exchange Act
     of  beneficial  ownership  (within  the  meaning  of  Rule  13d-3
     promulgated  under the Exchange Act) of 50% or more of the voting
     power of the total outstanding  voting stock of ICN or Ribapharm,
     as the case may be;

          (ii)  persons who  constitute  the Board of  Directors  (the
     "INCUMBENT  BOARD")  (i) of the  Company  as of the  date  of the
     Indenture (which shall be deemed to include any person determined
     to have been  elected at the  Company's  2001  annual  meeting of
     stockholders)  or (ii) of Ribapharm as of the  effective  date of
     the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
     cease for any reason to  constitute  at least a  majority  of the
     Board of Directors of the Company or  Ribapharm,  as the case may
     be,  provided  that any person  subsequently  becoming a director
     whose election,  or nomination for election by stockholders,  was
     approved by a vote of at least a majority of the  directors  then
     comprising  the incumbent  board of the Company or Ribapharm,  as
     the case may be, shall be considered as though such person were a
     member of the Incumbent Board;

          (iii)  approval  by the  stockholders  of a  reorganization,
     merger or consolidation of the Company or Ribapharm,  as the case
     may be, in each  case,  with  respect to which  persons  who were
     stockholders  of the  Company or  Ribapharm,  as the case may be,
     immediately prior to such reorganization, merger or consolidation
     do  not,   immediately   thereafter,   beneficially   own  shares
     sufficient  to elect a majority of directors of the  reorganized,
     merged or consolidated  company (provided that the failure of the
     Company to beneficially own shares sufficient to elect a majority
     of  directors  of  Ribapharm  following  a  Ribapharm  IPO  or  a
     Ribapharm  Spin-Off shall not be deemed to constitute a change in
     control pursuant to this provision); or

<PAGE>   55

          (iv)  a  liquidation   or  dissolution  of  the  Company  or
     Ribapharm,  as the case may be (other than pursuant to the United
     States Bankruptcy  Code), or the conveyance,  transfer or leasing
     of all or  substantially  all of the  assets  of the  Company  or
     Ribapharm,  as the case may be, to any  person  (provided  that a
     Ribapharm  IPO or a  Ribapharm  Spin-Off  shall  not be deemed to
     constitute a change in control pursuant to this provision).

     9.  CONVERSION.  A Holder may convert his or her Security  into Common
Stock of the Company and, following a Ribapharm Spin-Off, Ribapharm, at any
time  prior to the  close of  business  on July 15,  2008,  or,  (x) if the
Security is called for  redemption  by the Company,  the Holder may convert
such  Security at any time before the close of business on the business day
immediately  preceding  the date fixed for such  redemption,  or (y) if the
Security  is to be  repurchased  by the  Company or  Ribapharm  pursuant to
PARAGRAPH 8 hereof,  the Holder may convert it at any time before the close
of business on the business day immediately preceding the Repurchase Date.

     The initial  conversion rate is 29.1924 shares of ICN Common Stock per
$1,000 principal amount of Securities,  or an effective initial  conversion
price of approximately  $34.25 per share,  subject to adjustment in certain
circumstances as specified in the Indenture. Upon completion of a Ribapharm
Spin-Off,   holders  of  Securities  will  be  entitled  to  receive,  upon
conversion  of  Securities,  that number of shares of ICN Common Stock that
would have been issuable to such Holder upon  conversion of such Securities
immediately prior to the record date for the Ribapharm Spin-Off,  plus that
number of shares of Ribapharm Common Stock which the Holder would have been
entitled to receive in the Ribapharm Spin-Off had the Holder converted such
Securities immediately prior to the record date for the Ribapharm Spin-Off,
subject to adjustment. Ribapharm and/or the Company will deliver a check in
lieu of any fractional  share. On conversion,  no payment or adjustment for
any unpaid and accrued interest, or liquidated damages with respect to, the
Securities  will be made. If a Holder  surrenders a Security for conversion
between the record date for the payment of interest  and the next  interest
payment date,  such Security,  when  surrendered  for  conversion,  must be
accompanied by payment of an amount equal to the interest thereon which the
registered Holder on such record date is to receive,  unless the Securities
have been called for redemption.

     To  convert  a  Security,  a  Holder  must (1)  complete  and sign the
Conversion Notice, with appropriate signature guarantee, on the back of the
Security,  (2)  surrender the Security to a Conversion  Agent,  (3) furnish
appropriate   endorsements  and  transfer  documents  if  required  by  the
Registrar or Conversion Agent, (4) pay the amount of interest,  if any, the
Holder may be paid as provided in the last sentence of the above  paragraph
and (5) pay any transfer or similar tax if required. A Holder may convert a
portion  of a  Security  if the  portion  is $1,000  principal  amount or a
positive integer multiple of $1,000 principal amount.

     Any shares issued upon conversion of a Security shall bear the Private
Placement  Legend  until after the second  anniversary  of the later of the
issue  date for the  Securities  and the last date on which the  Company or
Ribapharm or any  Affiliate  of the Company or  Ribapharm  was the owner of
such shares or the Security (or any  predecessor  security) from which such
shares were  converted (or such shorter period of time as permitted by Rule
144(k) under the Securities Act or any successor provision  thereunder) (or
such longer period of time as may be required  under the  Securities Act or
applicable  state securities laws in the Opinion of Counsel for the Company
and Ribapharm,  unless otherwise  agreed by the Company,  Ribapharm and the
Holder thereof).

     10.  SUBORDINATION.  The  Securities  are  subordinated  in  right  of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full of all Senior Indebtedness.  Each Holder by accepting
a Security agrees to such  subordination and authorizes the Trustee to give
it effect.

     11.  DENOMINATIONS,   TRANSFER,   EXCHANGE.   The  Securities  are  in
registered form without coupons in denominations of $1,000 principal amount
and positive integer multiples of $1,000 principal amount.  The transfer of
Securities may be registered and Securities may be exchanged as provided in
the Indenture.  The Registrar may require a Holder,  among other things, to
furnish appropriate  endorsements and transfer documents. No service charge
shall be made for any such  registration  of transfer or exchange,  but the
Company and Ribapharm may require  payment of a sum sufficient to cover any
tax or other  governmental  charge  payable in  connection  therewith.  The
Registrar  need not  exchange or  register  the  transfer  of any  Security
selected for redemption in whole or in part, except the unredeemed  portion
of  Securities  to be  redeemed  in part.  Also,  it need not  exchange  or
register the transfer of any  Securities for a period of 15 days before the
mailing  of a  notice  of  redemption  of  the  Securities  selected  to be
redeemed.

<PAGE>   56

     12. PERSONS DEEMED OWNERS.  The registered Holder of a Security may be
treated as the owner of such Security for all purposes.

     13. MERGER OR  CONSOLIDATION.  Neither the Company nor,  following the
earlier to occur of a Ribapharm  IPO and a Ribapharm  Spin-Off,  Ribapharm,
shall  consolidate  with,  or merge  into,  or  transfer  or  lease  all or
substantially  all of its  assets  to,  any  person  unless the person is a
corporation,  limited liability company or other entity organized under the
laws of the United  States,  any State  thereof or the District of Columbia
and such  person  assumes  by  supplemental  indenture,  or  other  written
instrument,  all the  obligations of the Company or Ribapharm,  as the case
may be, under the Securities and the Indenture and immediately after giving
effect to the  transaction  no  Default  or Event of  Default  exists.  The
foregoing notwithstanding, neither a Ribapharm IPO nor a Ribapharm Spin-Off
shall be deemed to constitute the transfer of all or  substantially  all of
the assets of the Company.

     14.   AMENDMENTS,   SUPPLEMENTS   AND  WAIVERS.   Subject  to  certain
exceptions,  the Indenture or the Securities may be amended or supplemented
with the  consent  of the  Holders  of at  least a  majority  in  aggregate
principal  amount of the  Securities  then  outstanding,  and any  existing
Default or Event of Default  may be waived  with the consent of the Holders
of a  majority  in  aggregate  principal  amount  of  the  Securities  then
outstanding.  Without notice to or the consent of any  Securityholder,  the
Indenture  or the  Securities  may be amended or  supplemented  to cure any
ambiguity, omission, defect or inconsistency, to provide for uncertificated
Securities in addition to certificated Securities,  to comply with SECTIONS
5.01  and  10.11  of the  Indenture  or to make any  change  that  does not
adversely affect the rights of any Securityholder.

     15. DEFAULTS AND REMEDIES.  An Event of Default includes,  in summary,
the occurrence of any of the following:  default in payment of principal at
maturity,  upon redemption or exercise of a Repurchase  Right or otherwise;
default for 30 days in payment of interest or other amounts due; failure by
the Company  or,  following  the earlier to occur of a Ribapharm  IPO and a
Ribapharm  Spin-Off,  Ribapharm,  for 60 days after  notice to it to comply
with any of its other  agreements in the Indenture or the  Securities;  and
certain events of bankruptcy or insolvency.  If any Event of Default occurs
and is continuing,  the Trustee or the Holders of at least 25% in aggregate
principal  amount of the Securities  then  outstanding  may declare all the
Securities  to be due and  payable  immediately,  except as provided in the
Indenture.  Securityholders may not enforce the Indenture or the Securities
except as provided  in the  Indenture.  The  Trustee may require  indemnity
satisfactory  to it before it enforces  the  Indenture  or the  Securities.
Subject to certain  limitations,  Holders of a majority in principal amount
of the Securities  then  outstanding may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Securityholders notice
of any continuing Default or Event of Default (except a Default or Event of
Default in  payment) if it  determines  that  withholding  notice is in the
interests of the Securityholders. The Company and, following the earlier to
occur of a Ribapharm IPO and a Ribapharm Spin-Off,  Ribapharm, must furnish
an annual compliance certificate to the Trustee.

     16.  REGISTRATION  RIGHTS.  The Holders are  entitled to  registration
rights as set forth in the Registration Rights Agreement (as defined in the
Indenture).  The Holders shall be entitled to receive liquidated damages in
certain  circumstances,  all  as  set  forth  in  the  Registration  Rights
Agreement.

     17. TRUSTEE DEALINGS WITH THE COMPANY AND RIBAPHARM. The Trustee under
the  Indenture,  or any banking  institution  serving as successor  Trustee
thereunder,  in its  individual or any other  capacity,  may make loans to,
accept  deposits from, and perform  services for the Company,  Ribapharm or
their  respective  Affiliates,  and may  otherwise  deal with the  Company,
Ribapharm or their respective Affiliates, as if it were not Trustee.

     18. NO RECOURSE AGAINST OTHERS.  No past,  present or future director,
officer, employee,  incorporator or stockholder,  as such of the Company or
Ribapharm  shall have any liability for any  obligations  of the Company or
Ribapharm  under the Securities,  the Indenture,  the  Registration  Rights
Agreement  or for any claim  based on, in  respect  of or by reason of such
obligations or their creation.  Each Securityholder by accepting a Security
waives and releases all such liability.  The waiver and release are part of
the consideration for the issue of the Securities.

<PAGE>   57

     19.   AUTHENTICATION.   This   Security   shall  not  be  valid  until
authenticated by the manual  signature of the Trustee or an  authenticating
agent.

     20. ABBREVIATIONS.  Customary abbreviations may be used in the name of
a  Securityholder  or an assignee,  such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entirety),  JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(Uniform Gifts to Minors Act).

     THE COMPANY AND, FOLLOWING THE EARLIER TO OCCUR OF A RIBAPHARM IPO AND
A RIBAPHARM  SPIN-OFF,  RIBAPHARM WILL FURNISH TO ANY  SECURITYHOLDER  UPON
WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE
MADE TO:

          ICN Pharmaceuticals, Inc.
          3300 Hyland Avenue
          Costa Mesa, CA  92626
          Attention:  Corporate Secretary

          Ribapharm Inc.
          3300 Hyland Avenue
          Costa Mesa, CA  92626
          Attention:  Corporate Secretary

<PAGE>   58

                            [FORM OF ASSIGNMENT]

I or we assign to

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER

---------------------------------------------------------------------------
(please print or type name and address)

---------------------------------------------------------------------------

---------------------------------------------------------------------------
the within  Security  and all  rights  thereunder,  and hereby  irrevocably
constitutes and appoints

---------------------------------------------------------------------------
attorney  to  transfer  the  Security  on the  books  of the  Company  and,
following the earlier to occur of a Ribapharm IPO and a Ribapharm Spin-Off,
Ribapharm,  with  full  power  of  substitution  in  the  premises.

Dated:
      ------------------------------    -----------------------------------

                                        NOTICE:   The   signature  on  this
                                        assignment must correspond with the
                                        name as it appears upon the face of
                                        the   within   Security   in  every
                                        particular  without  alteration  or
                                        enlargement     or    any    change
                                        whatsoever  and be  guaranteed by a
                                        guarantor institution participating
                                        in the Securities  Transfer  Agents
                                        Medallion  Program or in such other
                                        guarantee program acceptable to the
                                        Trustee.

Signature Guarantee:
                    -------------------------------------------------------

          In connection with any transfer of this Security  occurring prior
to the date which is the earlier of (i) the date of the  declaration by the
Commission  of the  effectiveness  of a  registration  statement  under the
Securities Act of 1933, as amended (the "Securities  Act") covering resales
of this  Security  (which  effectiveness  shall not have been  suspended or
terminated  at the date of the  transfer)  and (ii) the Resale  Restriction
Termination  Date,  the  undersigned  confirms that it has not utilized any
general solicitation or general advertising in connection with any transfer
of this Security and has transferred this Security only: [Check One]

(1)  ____   to the Company or Ribapharm or any subsidiary thereof; or

(2)  ____   pursuant  to  and  in  compliance  with  Rule  144A  under  the
            Securities Act of 1933, as amended; or

(3)  ____   to an institutional  "accredited  investor" (as defined in Rule
            501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
            amended)  that has  furnished  to the  Trustee a signed  letter
            containing certain  representations and agreements (the form of
            which letter can be obtained from the Trustee); or

(4)  ____   outside  the  United  States  to a  person  other  than a "U.S.
            person" in  compliance  with Rule 904 of Regulation S under the
            Securities Act of 1933, as amended; or

(5)  ____   pursuant to the exemption  from  registration  provided by Rule
            144 under the Securities Act of 1933, as amended; or

(6)  ____   pursuant  to an  effective  registration  statement  under  the
            Securities Act of 1933, as amended; or

(7)  ____   pursuant to another  available  exemption from the registration
            statement  requirements  of  the  Securities  Act of  1933,  as
            amended.

<PAGE>   59

and unless the box below is checked,  the  undersigned  confirms  that such
Security  is not being  transferred  to an  "affiliate"  of the  Company or
Ribapharm  as  defined  in Rule 144 under the  Securities  Act of 1933,  as
amended (an "Affiliate"):

     |_| The  transferee is an Affiliate of the Company or  Ribapharm.  (If
the Security is transferred to an Affiliate,  the  restrictive  legend must
remain on the Security for two years following the date of the transfer).

          Unless one of the items is checked,  the  Trustee  will refuse to
register any of the Securities evidenced by this certificate in the name of
any person other than the registered  Holder  thereof;  provided,  however,
that if item (3),  (4), (5) or (7) is checked,  the Company or Ribapharm or
the Trustee may  require,  prior to  registering  any such  transfer of the
Securities,  in  their  sole  discretion,   such  written  legal  opinions,
certifications  (including an investment letter in the case of box (3)) and
other  information  as  the  Trustee  or  the  Company  or  Ribapharm  have
reasonably  requested to confirm that such  transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the  registration
requirements of the Securities Act of 1933, as amended.

          If none of the  foregoing  items  are  checked,  the  Trustee  or
Registrar  shall not be obligated to register  this Security in the name of
any person other than the Holder hereof unless and until the  conditions to
any such transfer of  registration  set forth herein and in SECTION 2.16 of
the Indenture shall have been satisfied.

Dated:                              Signed:
       -------------------------            -------------------------------
                                            (Sign  exactly as  name appears
                                            on the other side of this
                                            Security)

Signature Guarantee:
                    -------------------------------------------------------

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

          The  undersigned  represents  and warrants  that it is purchasing
this  Security  for its own account or an account  with respect to which it
exercises sole investment  discretion and that it and any such account is a
"qualified  institutional  buyer" within the meaning of Rule 144A under the
Securities  Act of 1933,  as  amended,  and is aware that the sale to it is
being made in reliance on Rule 144A and  acknowledges  that it has received
such information regarding the Company and Ribapharm as the undersigned has
requested  pursuant to Rule 144A or has  determined  transferor  is relying
upon the  undersigned's  foregoing  representations  in order to claim  the
exemption from registration provided by Rule 144A.

Dated:
      -------------------------     ---------------------------------------
                                    NOTICE: To be executed by an executive
                                            officer

<PAGE>   60

                             CONVERSION NOTICE

To convert this Security into Common Stock of the Company and,  following a
Ribapharm Spin-Off, Ribapharm, check the box:

|_|

To convert only part of this  Security,  state the  principal  amount to be
converted (must be in multiples of $1,000):

                            $
                             ------------------

If you want the stock  certificate  made out in another person's name, fill
in the form below:

---------------------------------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)

---------------------------------------------------------------------------

---------------------------------------------------------------------------

---------------------------------------------------------------------------
(Print or type other person's name, address and zip code)

---------------------------------------------------------------------------

Date:                Signature(s):
     ---------------              -----------------------------------------

                                  -----------------------------------------
                                  (Sign  exactly as your  name(s) appear(s)
                                   on the other side of this Security)

Signature(s) guaranteed by: (All   signatures   must  be  guaranteed  by  a
                            guarantor  institution   participating  in  the
                            Securities Transfer Agents Medallion Program or
                            in such other guarantee  program  acceptable to
                            the Trustee.)

<PAGE>   61

                 OPTION OF HOLDER TO ELECT PURCHASE NOTICE

     If you want to elect to have this Security purchased by the Company or
Ribapharm,  as the case may be,  pursuant to SECTION 3.08 of the Indenture,
check the box: |_|

     If you want to elect to have only part of this  Security  purchased by
the Company or Ribapharm,  as the case may be,  pursuant to SECTION 3.08 of
the Indenture, state the principal amount:

                    $
                      ----------------------------------
                     (in an integral multiple of $1,000)

Date:                               Signature(s):
     -------------------------                   --------------------------

                                   ----------------------------------------
                                   (Sign exactly as your name(s)  appear(s)
                                   on the other side of this Security)

Signature(s) guaranteed by:
                                   ----------------------------------------
                                   (All  signatures must be guaranteed by a
                                   guarantor  institution  participating in
                                   the Securities Transfer Agents Medallion
                                   Program  or  in  such  other   guarantee
                                   program acceptable to the Trustee.)

<PAGE>   62

                                 SCHEDULE A
                                 ----------

      SCHEDULE OR EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY(FN2).
      ---------------------------------------------------------------

     The  following  exchanges  of a part of this  Global  Security  for an
interest in another Global Security or for Securities in certificated form,
have been made:

                                                  Principal       Signature
                                                amount of this        or
               Amount of         Amount of         Global        authorized
              decrease in       increase in       Security        signatory
   Date        Principal         Principal        following      of Trustee
    of       amount of this    amount of this   such decrease      or Note
Exhchange   Global Security   Global Security   (or increase)     Custodian

-------------------------------------------
(FN2)   This is included in Global Notes only.

<PAGE>   63

                                                                EXHIBIT B-1
                                                                -----------

                      FORM OF PRIVATE PLACEMENT LEGEND

     THIS  SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR THE  SECURITIES  LAWS OF ANY
STATE OR OTHER  JURISDICTION.  NEITHER  THIS  SECURITY  NOR ANY INTEREST OR
PARTICIPATION  HEREIN  MAY  BE  REOFFERED,  SOLD,  ASSIGNED,   TRANSFERRED,
PLEDGED,  ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE  ABSENCE  OF  SUCH
REGISTRATION OR UNLESS SUCH  TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION. THE HOLDER HEREOF MAY NOT ENGAGE IN HEDGING TRANSACTIONS
WITH RESPECT TO THIS SECURITY  UNLESS SUCH  TRANSACTIONS  ARE IN COMPLIANCE
WITH THE SECURITIES ACT.

     THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE  HEREOF AGREES TO OFFER,
SELL OR OTHERWISE  TRANSFER SUCH  SECURITY,  PRIOR TO THE DATE (THE "RESALE
RESTRICTION  TERMINATION  DATE")  WHICH IS THE LATER OF (X) TWO YEARS AFTER
THE LATER OF THE ORIGINAL  ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR RIBAPHARM OR ANY  AFFILIATE OF THE COMPANY OR RIBAPHARM  WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),  AND (Y) SUCH
LATER DATE,  IF ANY, AS MAY BE REQUIRED BY  APPLICABLE  LAW ONLY (A) TO THE
COMPANY OR RIBAPHARM OR ANY SUBSIDIARY OF EITHER OF THEM, (B) PURSUANT TO A
REGISTRATION   STATEMENT  THAT  HAS  BEEN  DECLARED   EFFECTIVE  UNDER  THE
SECURITIES  ACT, (C) FOR SO LONG AS THE  SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE  SECURITIES  ACT, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED  INSTITUTIONAL  BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING  MADE IN  RELIANCE  ON RULE 144A  UNDER THE  SECURITIES  ACT,  (D)
PURSUANT  TO OFFERS  AND SALES  THAT OCCUR  OUTSIDE  THE  UNITED  STATES IN
ACCORDANCE   WITH  REGULATION  S  UNDER  THE  SECURITIES  ACT,  (E)  TO  AN
INSTITUTIONAL  "ACCREDITED  INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN  ACCOUNT OR FOR THE  ACCOUNT OF  ANOTHER  INSTITUTIONAL  ACCREDITED
INVESTOR,  FOR  INVESTMENT  PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT
OR (F)  PURSUANT TO ANY OTHER  AVAILABLE  EXEMPTION  FROM THE  REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT,  SUBJECT TO THE COMPANY'S,  RIBAPHARM'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER PURSUANT
TO  CLAUSES  (D),  (E) OR (F) TO  REQUIRE  THE  DELIVERY  OF AN  OPINION OF
COUNSEL,  CERTIFICATION  AND/OR OTHER  INFORMATION  SATISFACTORY TO EACH OF
THEM,  AND IN THE  CASE OF THE  FOREGOING  CLAUSE  (E),  A  CERTIFICATE  OF
TRANSFER (A FORM OF WHICH MAY BE OBTAINED  FROM THE  COMPANY,  RIBAPHARM OR
THE TRUSTEE)  COMPLETED  AND  DELIVERED BY THE  TRANSFEROR  TO THE COMPANY,
RIBAPHARM AND THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

<PAGE>   64

                                                                EXHIBIT B-2
                                                                -----------

                     FORM OF LEGEND FOR GLOBAL SECURITY

     Any Global Security authenticated and delivered hereunder shall bear a
legend  (which  would be in addition to any other  legends  required in the
case of a Restricted Security) in substantially the following form:

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
     INDENTURE  HEREINAFTER  REFERRED TO AND IS REGISTERED IN THE NAME
     OF A  DEPOSITARY  OR A NOMINEE  OF A  DEPOSITARY  OR A  SUCCESSOR
     DEPOSITARY.  THIS  SECURITY IS NOT  EXCHANGEABLE  FOR  SECURITIES
     REGISTERED  IN THE NAME OF A PERSON OTHER THAN THE  DEPOSITARY OR
     ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES  DESCRIBED IN THE
     INDENTURE,  AND  NO  TRANSFER  OF  THIS  SECURITY  (OTHER  THAN A
     TRANSFER  OF THIS  SECURITY  AS A WHOLE  BY THE  DEPOSITARY  TO A
     NOMINEE OF THE  DEPOSITARY  OR BY A NOMINEE OF THE  DEPOSITARY TO
     THE  DEPOSITARY  OR  ANOTHER  NOMINEE OF THE  DEPOSITARY)  MAY BE
     REGISTERED EXCEPT IN THE LIMITED  CIRCUMSTANCES  DESCRIBED IN THE
     INDENTURE.

          UNLESS  THIS  CERTIFICATE  IS  PRESENTED  BY  AN  AUTHORIZED
     REPRESENTATIVE  OF  THE  DEPOSITORY  TRUST  COMPANY,  A NEW  YORK
     CORPORATION  ("DTC"), TO THE COMPANY OR, FOLLOWING THE EARLIER TO
     OCCUR OF A RIBAPHARM IPO AND A RIBAPHARM  SPIN-OFF,  RIBAPHARM OR
     THEIR AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE,  OR PAYMENT,
     AND ANY  CERTIFICATE  ISSUED IS  REGISTERED IN THE NAME OF CEDE &amp;
     CO.  OR IN SUCH  OTHER  NAME  AS IS  REQUESTED  BY AN  AUTHORIZED
     REPRESENTATIVE  OF DTC (AND ANY  PAYMENT IS MADE TO CEDE &amp; CO. OR
     TO  SUCH  OTHER  ENTITY  AS  IS   REQUESTED   BY  AN   AUTHORIZED
     REPRESENTATIVE OF DTC), ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF
     FOR VALUE OR OTHERWISE  BY OR TO ANY PERSON IS WRONGFUL  INASMUCH
     AS THE  REGISTERED  OWNER  HEREOF,  CEDE &amp; CO.,  HAS AN  INTEREST
     HEREIN.

          TRANSFERS  OF THIS  GLOBAL  SECURITY  SHALL  BE  LIMITED  TO
     TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &amp; CO. OR
     TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S  NOMINEE AND TRANSFERS
     OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
     MADE IN  ACCORDANCE  WITH THE  RESTRICTIONS  SET FORTH IN SECTION
     2.16 OF THE INDENTURE.

<PAGE>   65

                                                                  EXHIBIT C
                                                                  ---------

                         Form of Certificate To Be
                        Delivered in Connection with
                 Transfers to Non-QIB Accredited Investors
                 -----------------------------------------

The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention:  Corporate Trust Administration

Ladies and Gentlemen:

     In  connection  with  our  proposed  purchase  of 6  1/2%  Convertible
Subordinated Notes due 2008 (the "SECURITIES") of ICN PHARMACEUTICALS, INC.
(the "COMPANY"), we confirm that:

     1. We have received a copy of the Offering  Memorandum  (the "OFFERING
MEMORANDUM"),  dated July 13,  2001,  relating to the  Securities  and such
other  information  as we deem  necessary  in order to make our  investment
decision. We acknowledge that we have read and agreed to the matters stated
on the inside  front cover of the  Offering  Memorandum  and in the section
entitled  "Notice to Investors" of the Offering  Memorandum,  including the
restrictions on duplication and circulation of the Offering Memorandum.

     2. We understand  that any  subsequent  transfer of the  Securities is
subject to certain  restrictions  and conditions set forth in the Indenture
relating to the  Securities (as described in the Offering  Memorandum)  and
the  undersigned  agrees  to be bound  by,  and not to  resell,  pledge  or
otherwise   transfer  the  Securities   except  in  compliance  with,  such
restrictions and conditions and the Securities Act of 1933, as amended (the
"SECURITIES ACT") and all applicable state securities laws.

     3. We understand  that the offer and sale of the  Securities  have not
been  registered  under the Securities Act, and that the Securities may not
be offered or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any  accounts for which we are acting as
hereinafter stated, that if we should sell any Securities prior to the date
that is two years after the original issuance of the Securities, we will do
so only (i) to the Company,  Ribapharm or any of their  subsidiaries,  (ii)
inside the United States in accordance  with Rule 144A under the Securities
Act to a "QUALIFIED INSTITUTIONAL BUYER" (as defined in Rule 144A under the
Securities  Act),  (iii)  inside  the  United  States  to an  institutional
"ACCREDITED  INVESTOR"  (as defined  below) that,  prior to such  transfer,
furnishes (or has furnished on its behalf by a U.S.  broker-dealer)  to the
Trustee (as defined in the Indenture relating to the Securities),  a signed
letter containing certain  representations  and agreements  relating to the
restrictions on transfer of the Securities (the form of which letter can be
obtained  from the  Trustee),  (iv) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the
exemption from  registration  provided by Rule 144 under the Securities Act
(if  available),  or (vi) pursuant to an effective  registration  statement
under the  Securities  Act,  and we further  agree to provide to any person
purchasing any of the Securities  from us a notice  advising such purchaser
that resales of the Securities are restricted as stated herein.

     4. We are not acquiring the  Securities  for or on behalf of, and will
not transfer the  Securities to, any pension or welfare plan (as defined in
SECTION 3 of the Employee  Retirement Income Security Act of 1974),  except
as permitted by law.

     5. We understand  that, on any proposed resale of any  Securities,  we
will be required  to furnish to the  Trustee and the Company and  Ribapharm
such  certifications,  legal opinions and other  information as the Trustee
and the Company and  Ribapharm may  reasonably  require to confirm that the
proposed  sale  complies  with  the  foregoing  restrictions.   We  further
understand  that the  Securities  purchased by us will bear a legend to the
foregoing effect.

     6. We are an institutional  "ACCREDITED  INVESTOR" (as defined in Rule
501(a)(1),  (2), (3) or (7) of Regulation D under the  Securities  Act) and
have such knowledge and experience in financial and business  matters as to
be capable of  evaluating  the  merits and risks of our  investment  in the
Securities,  and we and any  accounts for which we are acting are each able
to bear the economic risk of our or their investment, as the case may be.

     7. We are acquiring the Securities purchased by us for our own account
or for one or more accounts (each of which is an institutional  "ACCREDITED
INVESTOR") as to each of which we exercise sole  investment  discretion and
not with a view toward resale of the Securities.

<PAGE>   66

     You,  the Company,  Ribapharm,  the Trustee and others are entitled to
rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any  interested  party in any  administrative  or legal
proceeding or official inquiry with respect to the matters covered hereby.

                                    Very truly yours,

                                    [Name of Transferee]

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

<PAGE>   67

                                                                EXHIBIT D-1
                                                                -----------

                    Form of Certificate To Be Delivered
                        in Connection with Transfers
                          Pursuant to Regulation S

The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention:  Corporate Trust Administration

     Re:  ICN PHARMACEUTICALS, INC. (the "COMPANY") 6 1/2% Convertible
          Subordinated Notes due 2008 (the "SECURITIES")

Ladies and Gentlemen:

     In connection with our proposed sale of $_________ aggregate principal
amount of the  Securities,  we  confirm  that  such sale has been  effected
pursuant to and in accordance with  Regulation S under the U.S.  Securities
Act of 1933,  as amended  (the  "SECURITIES  ACT"),  and,  accordingly,  we
represent that:

          (1) the  offer of the  Securities  was made in an  "offshore
     transaction"  to a person other than a "U.S.  person" (as defined
     in Regulation S);

          (2) either (a) at the time the buy offer was originated, the
     transferee  was  outside  the United  States or we and any person
     acting on our behalf reasonably  believed that the transferee was
     outside the United States,  or (b) the  transaction  was executed
     in,  on or  through  the  facilities  of a  designated  off-shore
     securities  market and  neither  we nor any person  acting on our
     behalf knows that the  transaction has been  pre-arranged  with a
     buyer in the United States;

          (3) no directed selling efforts have been made in the United
     States in  contravention  of the  requirements  of Rule 903(b) or
     Rule 904(b) of Regulation S, as applicable;

          (4) the transaction is not part of a plan or scheme to evade
     the registration requirements of the Securities Act;

          (5)  we  have  advised  the   transferee   of  the  transfer
     restrictions applicable to the Securities; and

          (6) if we are a dealer  in  securities  or have  received  a
     selling  concession,  fee or other remuneration in respect of the
     Securities,  and the transfer is to occur  during the  Restricted
     Period,  then  the  requirements  of  Rule  904(c)(1)  have  been
     satisfied.

     You, the Company,  Ribapharm and counsel for the Company and Ribapharm
are  entitled to rely upon this letter and are  irrevocably  authorized  to
produce  this  letter  or a copy  hereof  to any  interested  party  in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.  Terms used in this  certificate  have the meanings
set forth in Regulation S.

                                    Very truly yours,

                                    [Name of Transferor]

                                    By:
                                        ------------------------------------
                                        Authorized Signature

<PAGE>   68

                                                                EXHIBIT D-2
                                                                -----------

                    Form of Certificate To Be Delivered
                        in Connection with Transfers
                          Pursuant to Regulation S

The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention:  Corporate Trust Administration

     Re:  ICN PHARMACEUTICALS, INC. (the "COMPANY") 6 1/2% Convertible
          Subordinated Notes due 2008 (the "SECURITIES")

Ladies and Gentlemen:

     In  connection  with our  proposed  purchase of  $_________  aggregate
principal  amount of the  Securities,  we  confirm  that such sale has been
effected  pursuant to and in  accordance  with  Regulation S under the U.S.
Securities  Act  of  1933,  as  amended  (the   "SECURITIES   ACT"),   and,
accordingly, we represent that:

          (1) the  undersigned  is not a U.S.  person  (as  defined in
     Regulation S) and has not acquired the Securities for the account
     or benefit of any U.S. person;

          (2) the undersigned is not a distributor  within the meaning
     of Regulation S; and

          (3) the undersigned  agrees to resell the Securities only in
     accordance  with the  provisions  of  Regulation  S,  pursuant to
     registration   under  the  Securities  Act,  or  pursuant  to  an
     exemption from  registration  and agrees not to engage in hedging
     transactions  with regard to the Securities  unless in compliance
     with the Securities Act.

     You, the Company,  Ribapharm and counsel for the Company and Ribapharm
are  entitled to rely upon this letter and are  irrevocably  authorized  to
produce  this  letter  or a copy  hereof  to any  interested  party  in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.  Terms used in this  certificate  have the meanings
set forth in Regulation S.

                                    Very truly yours,

                                    [Name of Transferee]

                                    By:
                                        -----------------------------------
                                        Authorized Signature

<PAGE>   69

                                                                  EXHIBIT E
                                                                  ---------

       Form of Notice of Transfer Pursuant to Registration Statement

ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California  92626

RIBAPHARM INC.
3300 Hyland Avenue
Costa Mesa, California  92626

[Name and Address of Trustee]

     Re:  ICN PHARMACEUTICALS, INC. (the "COMPANY") 6 1/2% Convertible
          Subordinated Notes due 2008 (the "SECURITIES")

Ladies and Gentlemen:

     Please be advised  that  _____________  has  transferred  $___________
aggregate  principal  amount of the  Securities  or __ shares of the Common
Stock, $0.01 par value per share, of the Company or Ribapharm Inc. issuable
on conversion of the Securities  ("STOCK")  pursuant to an effective  Shelf
Registration Statement on Form S-3 (File No. 333-_____).

     We hereby certify that the prospectus delivery  requirements,  if any,
of the Securities Act of 1933 as amended,  have been satisfied with respect
to the transfer  described above and that the above-named  beneficial owner
of the Securities or Stock is named as a "SELLING  SECURITY  HOLDER" in the
Prospectus dated _________,  or in amendments or supplements  thereto,  and
that the aggregate principal amount of the Securities,  or number of shares
of Stock  transferred  are [a portion of] the Securities or Stock listed in
such Prospectus, as amended or supplemented, opposite such owner's name.

                                    Very truly yours,

                                    -----------------------------
                                              (Name)<PAGE>   1

                                                                EXHIBIT 4.2

                  $400,000,000 Aggregate Principal Amount

                         ICN PHARMACEUTICALS, INC.

               6 1/2% Convertible Subordinated Notes due 2008
                       REGISTRATION RIGHTS AGREEMENT

July 18, 2001

UBS WARBURG LLC
299 Park Avenue
New York, New York 10171

Dear Sirs:

          ICN Pharmaceuticals, Inc., a Delaware corporation ("ICN") and the
corporate parent of Ribapharm Inc., a Delaware corporation ("Ribapharm"),
proposes to issue and sell to UBS Warburg LLC, as initial purchaser (the
"Initial Purchaser"), upon the terms set forth in a purchase agreement,
dated July 13, 2001 (the "Purchase Agreement"), $250,000,000 aggregate
principal amount of ICN's 6 1/2% Convertible Subordinated Notes due 2008
(the "Firm Notes"), which will be convertible into shares of common stock
of ICN, par value $0.01 per share (the "ICN Conversion Shares"), or in the
event of a Ribapharm Spin-Off, as defined in the Purchase Agreement (a
"Ribapharm Spin-Off"), convertible into ICN Conversion Shares and shares of
common stock of Ribapharm, par value $0.01 per share (the "Ribapharm
Conversion Shares," and together with the ICN Conversion Shares, the
"Conversion Shares"). In addition, ICN has granted the Initial Purchaser an
option to purchase up to an additional $125,000,000 aggregate principal
amount of ICN's 6 1/2% Convertible Notes due 2008 which the Initial
Purchaser may subsequently elect to purchase pursuant to the terms of the
Purchase Agreement (the "Additional Notes," and together with the Firm
Notes, the "Notes"). The Notes will be issued pursuant to an indenture, of
even date herewith (the "Indenture") among ICN, Ribapharm and The Bank of
New York (the "Trustee"). As an inducement to the Initial Purchaser, ICN
and Ribapharm severally and not jointly agree, until such time as there
shall occur a Ribapharm Liquidity Event (as defined below), in which case
ICN and Ribapharm agree jointly and severally, with the Initial Purchaser,
for the benefit of the holders of the Notes (including, without limitation,
the Initial Purchaser) and Conversion Shares (collectively, the
"Securityholders"), as follows:

     1. Shelf Registration. (a) ICN and, in the sole discretion of ICN and
Ribapharm, Ribapharm shall file with the Securities and Exchange Commission
(the "Commission") within 90 days after the Closing Date, as defined in the
Purchase Agreement, a registration statement (the "First Shelf Registration
Statement") on Form S-1 or Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), if the use of such form is then available,
to cover resales of Transfer Restricted Securities (as defined below),
other than the Ribapharm Conversion Shares, by the Holders (as defined
below) and shall use its reasonable best efforts to cause the First Shelf
Registration Statement to be declared effective by the Commission on or
prior to 180 days from the Closing Date. Ribapharm shall file with the
Commission within 90 days after a Ribapharm Liquidity Event a registration
statement (the "Second Shelf Registration Statement" and together with the
First Shelf Registration Statement, the "Shelf Registration Statement") on
Form S-1 under the Securities Act to cover resales of Transfer Restricted
Securities, other than Transfer Restricted Securities registered on the
First Registration Statement, by the Holders. Ribapharm shall use its
reasonable best efforts to cause the Second Shelf Registration Statement to
be declared effective by the Commission on or prior to 180 days from the
effective date of the Ribapharm Liquidity Event. No Holder shall be
entitled to have Transfer Restricted Securities held by such Holder covered
by any Shelf Registration Statement unless such Holder shall have provided
a questionnaire and confirmation in accordance with Section 2(a) hereof and
is in compliance with Section 2(m) hereof. "Transfer Restricted Securities"
means each Note and any ICN Conversion Share and, following a Ribapharm
Spin-Off, any Ribapharm Conversion Share until the earlier of the (i) the
date on which such Note or Conversion Share has been effectively registered
under the Securities Act and disposed of, whether or not in accordance with
the Shelf Registration Statement, and (ii) the date which is two years (or
such shorter period of time as permitted by Rule 144(k) under the
Securities Act (or any similar provisions then in force)) after the later
of (A) the date of original issue of the Notes and (B) the last day that
ICN or, following a Ribapharm Liquidity Event, Ribapharm or any of their
respective "affiliates" (as defined under the Securities Act) was the owner
of such Notes (or any predecessor thereto). "Ribapharm Liquidity Event"
means the earlier to occur of (i) an initial public offering of common
stock of Ribapharm (a "Ribapharm Public Offering") or (ii) a Ribapharm
Spin-Off.

<PAGE>   2

     (b) ICN and, following a Ribapharm Liquidity Event, Ribapharm shall
use their reasonable best efforts to cause any Shelf Registration Statement
pursuant to which they are a registrant to remain effective until all of
the Notes and ICN Conversion Shares cease to be Transfer Restricted
Securities (the "Shelf Registration Period"). ICN and Ribapharm shall be
deemed not to have used their respective reasonable best efforts to keep a
Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that could result in Holders of Transfer
Restricted Securities covered thereby not being able to offer and sell such
Transfer Restricted Securities during that period, unless such action is
required by applicable law or otherwise permitted hereunder, including,
without limitation, by Section 2(i) hereof.

     (c) Notwithstanding any other provisions of this Agreement to the
contrary, ICN and Ribapharm shall cause any Shelf Registration Statement
pursuant to which they are a registrant and the related Prospectus (as
defined below) and any amendment or supplement thereto, as of the effective
date of such Shelf Registration Statement, amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the
Securities Act and the rules and regulations of the Commission and (ii) not
to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that the foregoing shall not apply to any
information relating to the Initial Purchaser or any Holder provided in
writing to ICN and Ribapharm by the Initial Purchaser or any Holder
specifically for inclusion in any Shelf Registration Statement.

     2. Registration Procedures. In connection with the proposed offer and
sale of the Transfer Restricted Securities in accordance with the methods
of distribution set forth in any Shelf Registration Statement (the "Shelf
Registration"), the following provisions apply:

          (a) ICN and Ribapharm shall prepare and mail to each
     Securityholder who has the right to register Transfer Restricted
     Securities on a Shelf Registration Statement pursuant to which ICN or
     Ribapharm is a registrant a questionnaire requesting such information
     regarding such Securityholder and the distribution of Transfer
     Restricted Securities as ICN or Ribapharm may reasonably require for
     inclusion in such Shelf Registration Statement pursuant to which they
     are a registrant and asking each such Securityholder to confirm that
     it will comply with applicable securities laws, including the
     Securities Act and the rules and regulations promulgated thereunder it
     being agreed that delivery of a questionnaire in the form of Annex B
     to the ICN Offering Memorandum dated July 13, 2001, shall satisfy such
     obligation with respect to registration of Notes and ICN Conversion
     Shares. Each Securityholder to whom such questionnaire is mailed shall
     deliver a completed questionnaire together with its written
     confirmation to ICN and Ribapharm within 15 days of receipt. ICN and
     Ribapharm will include in any Shelf Registration Statement pursuant to
     which they are a registrant as a selling Securityholder each
     Securityholder that returns its questionnaire and confirmation within
     15 days of receipt and will use their respective reasonable efforts to
     include in any Shelf Registration Statement pursuant to which they are
     a registrant any Securityholder which fails to provide ICN and
     Ribapharm with a completed questionnaire and confirmation within 15
     days of receipt but otherwise provides the completed questionnaire and
     confirmation prior to the commencement of the Shelf Registration
     Period. ICN and Ribapharm shall have no obligation to include in any
     Shelf Registration Statement pursuant to which they are a registrant
     (whether by post-effective amendment, by Prospectus supplement or
     otherwise) a Securityholder which fails to timely provide ICN and
     Ribapharm with a completed questionnaire and confirmation. "Holder"
     means each Securityholder who delivers a completed questionnaire and
     confirmation containing the required information within such 15-day
     period to ICN, in the case of a questionnaire and confirmation
     relating to the Notes, or the respective issuer, in the case of a
     questionnaire and confirmation relating to the Conversion Shares or is
     otherwise included as a selling Securityholder in any Shelf
     Registration Statement.

          (b) ICN and Ribapharm shall (i) furnish to the Initial Purchaser,
     prior to the filing thereof with the Commission, a copy of any Shelf
     Registration Statement pursuant to which they are a registrant and
     each amendment thereof and each supplement, if any, to the Prospectus
     included therein and, in the event that the Initial Purchaser (with
     respect to any portion of an unsold allotment from the original
     offering) is participating in the Shelf Registration, ICN and
     Ribapharm shall use their respective reasonable best efforts to
     reflect in each such document, when so filed with the Commission, such
     comments as the Initial Purchaser reasonably may propose; and (ii)
     include in such Shelf Registration Statement (or amendment or
     supplements) the names of the Holders who propose to sell Transfer
     Restricted Securities pursuant to such Shelf Registration Statement as
     selling Securityholders.

<PAGE>   3

          (c) ICN and Ribapharm shall give written notice to the Initial
     Purchaser and, with respect to clause (i) below only, Holders of any
     Transfer Restricted Securities required to be registered on any Shelf
     Registration Statement pursuant to which they are a registrant (which
     notice pursuant to clauses (ii)-(v) below shall be accompanied by an
     instruction to suspend the use of the prospectus contained in such
     Shelf Registration Statement (the "Prospectus") and any sales pursuant
     to such Prospectus until the requisite changes have been made):

               (i) when such Shelf Registration Statement or any amendment
          thereto has been filed with the Commission and when such Shelf
          Registration Statement or any post-effective amendment thereto
          has become effective;

               (ii) of any request by the Commission for amendments or
          supplements to such Shelf Registration Statement or the
          Prospectus or for additional information;

               (iii) of the issuance by the Commission of any stop order
          suspending the effectiveness of such Shelf Registration Statement
          or the initiation of any proceedings for that purpose;

               (iv) of the receipt by either ICN or Ribapharm or their
          respective legal counsel of any written notification with respect
          to the suspension of the qualification of such Transfer
          Restricted Securities for sale in any jurisdiction or the
          initiation or threatening of any proceeding for such purpose; and

               (v) of the happening of any event (but not the details
          thereof) that requires or would require ICN and Ribapharm to make
          changes in the Prospectus in order that the Prospectus does not
          contain an untrue statement of a material fact nor omits to state
          a material fact required to be stated therein or necessary to
          make the statements therein, in light of the circumstances under
          which they were made, not misleading.

     Any notice given hereunder shall be kept confidential by the Initial
     Purchaser and the Holders and the recipient of a notice agrees that
     neither the recipient nor its affiliates will engage in any unlawful
     transactions in the securities of ICN or Ribapharm based on the
     information contained in such notice.

          (d) ICN and Ribapharm shall make every reasonable effort to
     obtain the withdrawal at the earliest possible time, of any order
     suspending the effectiveness of any Shelf Registration Statement
     pursuant to which they are a registrant.

          (e) ICN and Ribapharm shall furnish to each Holder of Transfer
     Restricted Securities included within the coverage of any Shelf
     Registration Statement pursuant to which they are a registrant,
     without charge, at least one copy of such Shelf Registration Statement
     and any post-effective amendment thereto, including financial
     statements and schedules, and, if the Holder so requests in writing,
     all exhibits thereto (including those, if any, incorporated by
     reference), except that the foregoing provision shall not apply to
     regular periodic reports filed with the Commission on Forms 10-K or
     10-Q or current reports on Form 8-K or any similar successor Forms, or
     exhibits to such documents unless requested in writing.

          (f) ICN and Ribapharm, during the Shelf Registration Period,
     shall deliver to each Holder of Transfer Restricted Securities
     included within the coverage of any Shelf Registration pursuant to
     which they are a registrant, without charge, as many copies of the
     Prospectus (including each preliminary Prospectus) and any amendment
     or supplement thereto as such person may reasonably request. ICN and
     Ribapharm each consents, subject to the provisions of this Agreement,
     to the use of the Prospectus or any amendment or supplement thereto by
     each of the selling Holders of the Transfer Restricted Securities
     covered by the Prospectus in connection with the offering and sale of
     the Transfer Restricted Securities covered by the Prospectus, or any
     amendment or supplement thereto, included in any Shelf Registration
     Statement pursuant to which they are a registrant, except during a
     Suspension Period (as defined below).

<PAGE>   4

          (g) Prior to any public offering of the Transfer Restricted
     Securities pursuant to any Shelf Registration Statement, ICN and
     Ribapharm shall use their reasonable best efforts to register or
     qualify or cooperate with the Holders of the Transfer Restricted
     Securities included therein and their respective counsel in connection
     with the registration or qualification or exemption from registration
     or qualification of the Transfer Restricted Securities included in
     such Shelf Registration Statement pursuant to which they are a
     registrant for offer and sale under the securities or "blue sky" laws
     of such states of the United States as any Holder of the Transfer
     Restricted Securities included in such Shelf Registration Statement
     reasonably requests in writing and do any and all other acts or things
     reasonably necessary or advisable to enable the offer and sale in such
     states of the Transfer Restricted Securities covered by such Shelf
     Registration Statement; provided, however, that ICN and Ribapharm each
     shall not be required to (i) qualify as a foreign corporation to do
     business in any jurisdiction where ICN or Ribapharm is not then so
     qualified or (ii) take any action which would subject ICN or Ribapharm
     to general service of process or to taxation in any jurisdiction where
     it is not then so subject or (iii) subject ICN or Ribapharm to
     taxation in any jurisdiction in which it is not now so subject.

          (h) Unless any Transfer Restricted Security shall be in
     book-entry form only or it shall be prohibited under any applicable
     law, rule or regulation, ICN and Ribapharm shall cooperate with the
     Holders of the Transfer Restricted Securities to facilitate the timely
     preparation and delivery prior to settlement of any sales pursuant to
     any Shelf Registration Statement pursuant to which they are a
     registrant of certificates representing the Transfer Restricted
     Securities sold pursuant to such Shelf Registration Statement free of
     any restrictive legends and in such denominations and registered in
     such names as the Holders may request provided that such request is
     made a reasonable period of time prior to sales of the Transfer
     Restricted Securities pursuant to such Shelf Registration Statement.

          (i) Upon the occurrence of any event contemplated by paragraphs
     (ii) through (v) of Section 2(c) above during the Shelf Registration
     Period, ICN and Ribapharm shall promptly prepare and file a
     post-effective amendment to any Shelf Registration Statement pursuant
     to which they are a registrant or a supplement to the Prospectus and
     any other required document so that, as thereafter delivered to
     Holders of the Transfer Restricted Securities covered thereby or
     purchasers of Transfer Restricted Securities, the Prospectus will not
     contain an untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein, in light of the circumstances under which they
     were made, not misleading; provided, however, that ICN or Ribapharm
     may delay preparing, filing and distributing any such supplement or
     amendment (such period of delay, a "Suspension Period") if ICN or
     Ribapharm determine in good faith that the preparation or filing of
     such supplement or amendment would, in the reasonable judgment of ICN
     or Ribapharm, (i) interfere with or affect any pending or contemplated
     corporate development (whether or not a final decision has been made
     with respect to such development) or (ii) involve initial or
     continuing disclosure obligations that are not in the best interests
     of the stockholders of ICN or Ribapharm at such time; provided,
     further, that such delay shall not extend for a period of more than 60
     business days in any 3-month period or more than 90 business days in
     any 12-month period. If ICN and Ribapharm notify the Initial Purchaser
     and the Holders of the Transfer Restricted Securities in accordance
     with paragraphs (ii) through (v) of Section 2(c) above to suspend the
     use of the Prospectus until the requisite changes to the Prospectus
     have been made, then the Initial Purchaser and the Holders of the
     Transfer Restricted Securities shall suspend use of such Prospectus
     and the period of effectiveness of the Shelf Registration Statement
     provided for in Section 1(b) above shall be extended by the number of
     days from and including the date of the giving of such notice to and
     including the date when the Initial Purchaser and the Holders of the
     Transfer Restricted Security shall have received such amended or
     supplemented Prospectus pursuant to this Section 2(i).

          (j) Not later than the effective date of each Shelf Registration
     Statement, ICN or Ribapharm, as the case may be, will provide CUSIP
     numbers for the Transfer Restricted Securities registered under any
     Shelf Registration Statement pursuant to which they are a registrant
     and provide the Trustee with a certificate or certificates for the
     Notes, in a form eligible for deposit with The Depository Trust
     Company, it being understood that such securities will continue to
     bear any appropriate restrictive legends.

<PAGE>   5

          (k) ICN and Ribapharm will comply in all material respects with
     all rules and regulations of the Commission to the extent and so long
     as they are applicable to any Shelf Registration Statement pursuant to
     which they are a registrant and will make generally available to their
     respective securityholders (or otherwise provide in accordance with
     Section 11(a) of the Securities Act and Rule 158 thereunder) an
     earnings statement satisfying the provisions of Section 11(a) of the
     Securities Act and Rule 158 thereunder, no later than 45 days after
     the end of a 12-month period (or 90 days, if such period is a fiscal
     year) beginning with the first month of the first fiscal quarter of
     ICN, and following a Ribapharm Liquidity Event, Ribapharm commencing
     after the effective date of the Shelf Registration Statement, which
     statement shall cover such 12-month period.

          (l) ICN and Ribapharm shall cause the Indenture to be qualified
     under the Trust Indenture Act of 1939, as amended, in a timely manner
     and containing such changes, if any, as shall be necessary or
     desirable for such qualification. In the event that such qualification
     would require the appointment of a new trustee under the Indenture,
     ICN and Ribapharm shall appoint a new trustee thereunder pursuant to
     the applicable provisions of the Indenture.

          (m) In addition to the questionnaire and confirmation provided
     for by Section 2(a) above, ICN and Ribapharm may require each Holder
     of Transfer Restricted Securities to be sold pursuant to any Shelf
     Registration Statement pursuant to which they are a registrant to
     furnish to ICN and Ribapharm such information regarding the Holder and
     the distribution of the Transfer Restricted Securities as ICN and
     Ribapharm may from time to time reasonably require for inclusion in
     such Shelf Registration Statement. ICN and Ribapharm may exclude from
     such Shelf Registration Statement the Transfer Restricted Securities
     of any Holder that fails to furnish such information promptly after
     receiving such request and ICN and Ribapharm shall have no obligation
     to register under the Securities Act the Transfer Restricted
     Securities of any Holder who fails to provide such information as
     provided in this paragraph.

          (n) ICN and Ribapharm shall each enter into such customary
     agreements (including, if requested, an underwriting agreement in
     customary form) and take all such other action, if any, as any Holder
     which, together with its "affiliates" (as defined in the Securities
     Act), holds $50,000,000 or greater in fair market value of the
     Transfer Restricted Securities and which, together with its
     affiliates, intends to sell at least $50,000,000 in fair market value
     of Transfer Restricted Securities in an underwritten offering, shall
     reasonably request in order to facilitate the disposition of the
     Transfer Restricted Securities pursuant to the Shelf Registration
     Statement; provided, however, that if ICN and Ribapharm are requested
     to enter into such an agreement and, in response to such request,
     provide notice thereof to all Holders and afford such Holders a right
     to participate in such an underwritten offering (subject to customary
     cutback provisions), then neither ICN nor Ribapharm shall be obligated
     hereby to enter into a subsequent such agreement within six months of
     entering into such agreement.

          (o) ICN and Ribapharm shall, subject to the execution and
     delivery to ICN and Ribapharm of any confidentiality agreements that
     ICN and Ribapharm may reasonably request, make reasonably available
     for inspection by the Holders upon reasonable request, any underwriter
     participating in any disposition of Transfer Restricted Securities
     pursuant to any Shelf Registration Statement and any attorney,
     accountant or other agent retained by the Holders or any such
     underwriter all relevant financial and other records, corporate
     documents and properties of ICN or Ribapharm and cause the respective
     officers, directors, employees, accountants and auditors of ICN and
     Ribapharm to supply all relevant information reasonably requested by
     the Holders or any such underwriter, attorney, accountant or agent in
     connection with any Shelf Registration Statement pursuant to which
     they are a registrant, in each case, as shall be reasonably necessary
     to enable such persons, to conduct a reasonable investigation within
     the meaning of Section 11 of the Securities Act; provided, however,
     that the foregoing inspection and information gathering shall be
     coordinated on behalf of the Initial Purchaser and the other parties
     by one firm of counsel, which firm shall be Dewey Ballantine LLP
     unless another firm shall be designated as described in Section 3
     hereof.

<PAGE>   6

          (p) ICN and, following a Ribapharm Liquidity Event, Ribapharm, if
     requested by any Holder of the Transfer Restricted Securities referred
     to in paragraph (n) above, each shall cause (i) its respective counsel
     to deliver an opinion relating to the Transfer Restricted Securities
     in customary form addressed and reasonably satisfactory to such Holder
     and the managing underwriters, if any, thereof and dated, in the case
     of the initial opinion, the effective date of such Shelf Registration
     Statement covering the matters customarily covered in underwritten
     offerings, (ii) its respective counsel to deliver a statement in
     customary form reasonably satisfactory to such Holder and the managing
     underwriters, if any, thereof and dated, in the case of the initial
     opinion, the effective date of such Shelf Registration Statement
     relating to the compliance as to form of such Shelf Registration
     Statement (but not any documents incorporated by reference therein)
     and of the Indenture with the requirements of the Securities Act and
     the Trust Indenture Act, respectively; and, as of the date of the
     opinion and as of the effective date of the Shelf Registration
     Statement or most recent post-effective amendment thereto, as the case
     may be that no fact had come to such counsel's attention in connection
     with the preparation of the Shelf Registration Statement causing such
     counsel to believe that such Shelf Registration Statement and the
     Prospectus, as then amended or supplemented (but not any documents
     incorporated by reference therein), contained an untrue statement of a
     material fact or omitted to state therein a material fact required to
     be stated therein or necessary to make the statements therein, in
     light of the circumstances under which such statements were made, not
     misleading; (iii) its respective officers to execute and deliver all
     customary documents and certificates and updates thereof requested by
     any underwriters of the applicable Transfer Restricted Securities; and
     (iv) its respective independent public accountants and the independent
     public accountants, if any, with respect to any other entity for which
     financial information is provided in the Shelf Registration Statement
     to provide to the selling Holder(s) of the applicable Transfer
     Restricted Securities and any underwriter therefor a comfort letter in
     customary form reasonably satisfactory to such Holder and the managing
     underwriters, if any, thereof and covering matters of the type
     customarily covered in comfort letters in connection with primary
     underwritten offerings.

          (q) In the event that any broker-dealer registered under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act") shall
     underwrite any Transfer Restricted Securities or participate as a
     member of an underwriting syndicate or selling group or "assist in the
     distribution" (within the meaning of the Conduct Rules (the "Rules")
     of the National Association of Securities Dealers, Inc. ("NASD"))
     thereof, whether as a Holder of such Transfer Restricted Securities or
     as an underwriter, a placement or sales agent or a broker or dealer in
     respect thereof, or otherwise, ICN and, following a Ribapharm
     Liquidity Event, Ribapharm, if requested by such broker-dealer, will
     each assist such broker-dealer in complying with the requirements of
     such Rules, including, without limitation, by (i) if such Rules,
     including Rule 2720, shall so require, engaging a "qualified
     independent underwriter" (as defined in Rule 2720) to participate in
     the preparation of any Shelf Registration Statement relating to such
     Transfer Restricted Securities, to exercise usual standards of due
     diligence in respect thereto and, if any portion of the offering
     contemplated by such Shelf Registration Statement is an underwritten
     offering or is made through a placement or sales agent, to recommend
     the yield of such Transfer Restricted Securities, (ii) indemnify any
     such qualified independent underwriter to the extent of the
     indemnification of underwriters provided in Section 4 hereof and
     provide such information to such broker-dealer as may be required in
     order for such broker-dealer to comply with the requirements of the
     Rules.

          (r) ICN and Ribapharm shall use their reasonable best efforts to
     take all other steps necessary to effect the registration of the
     Transfer Restricted Securities covered by any Shelf Registration
     Statement pursuant to which they are a registrant contemplated hereby.

     3. Registration Expenses. ICN and Ribapharm severally and not jointly
agree, until such time as there shall occur a Ribapharm Liquidity Event, in
which case ICN and Ribapharm agree jointly and severally to bear all fees
and expenses incurred by them in connection with the performance of their
obligations under Sections 1 and 2 hereof whether or not a Shelf
Registration Statement is filed or becomes effective and shall bear, or
reimburse the Holders of the Transfer Restricted Securities covered thereby
for, the reasonable fees and disbursements of one firm of counsel, which
firm shall be Dewey Ballantine LLP unless another firm shall be designated
by the Holders of a majority in initial principal amount of the Notes
covered thereby to act as counsel for the Holders in connection therewith.
The Holders shall be responsible for all other fees and expenses, such as
brokerage fees, agency fees, transfer taxes, underwriting discounts and
commissions.

<PAGE>   7

     4. Indemnification and Contribution. (a) To the extent permitted by
law, ICN and Ribapharm severally and not jointly agree, until such time as
there shall occur a Ribapharm Liquidity Event, in which case ICN and
Ribapharm agree jointly and severally to indemnify and hold harmless each
Holder of Transfer Restricted Securities covered by any Shelf Registration
Statement pursuant to which they are a registrant and each person, if any,
who controls such Holder within the meaning of the Securities Act or the
Exchange Act (each Holder and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses,
claims, damages or liabilities, joint or several, or any actions in respect
thereof (including, but not limited to, any losses, claims, damages,
liabilities or actions relating to purchases and sales of the Transfer
Restricted Securities) to which each Indemnified Party may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages, liabilities or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary Prospectus included
in such Shelf Registration Statement, or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances under which such statements were
made, and shall reimburse, as incurred, the Indemnified Parties for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action in respect thereof; provided, however, that ICN or Ribapharm shall
not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in such Shelf
Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary Prospectus included in such Shelf
Registration Statement in reliance upon and in conformity with written
information pertaining to the Initial Purchaser or such Holder and
furnished to ICN or Ribapharm by or on behalf of the Initial Purchaser or
Holder specifically for inclusion therein and; provided, further, that this
indemnity agreement will be in addition to any liability which ICN or
Ribapharm may otherwise have to such Indemnified Party. ICN and Ribapharm
severally and not jointly agree, until such time as there shall occur a
Ribapharm Liquidity Event, in which case ICN and Ribapharm agree jointly
and severally to indemnify the underwriters, their officers and directors
and each person who controls such underwriters within the meaning of the
Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Transfer
Restricted Securities if requested by such Holders.

     (b) To the extent permitted by law, each Holder of the Transfer
Restricted Securities covered by a Shelf Registration Statement, severally
and not jointly, will indemnify and hold harmless ICN and Ribapharm and
each person, if any, who controls ICN or Ribapharm within the meaning of
the Securities Act or the Exchange Act from and against any losses, claims,
damages or liabilities or any actions in respect thereof, to which ICN or
Ribapharm or any such controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained
in such Shelf Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary Prospectus included in such Shelf
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or omission or alleged untrue statement or omission
was made in reliance upon and in conformity with written information
pertaining to such Holder and furnished to ICN or Ribapharm by or on behalf
of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, shall reimburse, as
incurred, ICN and Ribapharm for any legal or other expenses reasonably
incurred by ICN and Ribapharm or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or
action in respect thereof. This indemnity agreement will be in addition to
any liability which such Holder may otherwise have to ICN or Ribapharm or
any of their respective controlling persons.

<PAGE>   8

     (c) Promptly after receipt by an indemnified party under this Section
4 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 4, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (which may be counsel for the
indemnifying party) unless such indemnified party shall have been advised
by counsel that there may be one or more defenses reasonably available to
such indemnified party that are in conflict with the defenses available to
the indemnifying party or its affiliates or controlling persons, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof the indemnifying party will not
be liable to such indemnified party under this Section 4 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of or consent to
judgment in any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability on any claims that are the subject matter of such
action and does not include a statement as to or an admission of fault or
culpability or a failure to act by or on behalf of any indemnified party.
An indemnifying party will not be liable for any settlement of any action
or claim effected without its written consent; provided, however, that such
consent will not be reasonably withheld.

     (d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other
from the sale of the Transfer Restricted Securities, pursuant to any Shelf
Registration Statement, or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties
on the one hand and the indemnified party on the other in connection with
the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof). The relative fault of the
parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by ICN or Ribapharm on the one hand or such Holder or such other
indemnified party, as the case may be, on the other, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. ICN, Ribapharm and each
Holder agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection (d).
Notwithstanding any other provision of this subsection (d) the Holders of
the Transfer Restricted Securities shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Transfer Restricted Securities pursuant to any
Shelf Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
subsection (d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the
same rights to contribution as such indemnified party and each person, if
any, who controls ICN or Ribapharm within the meaning of the Securities Act
or the Exchange Act shall have the same rights to contribution as ICN and
Ribapharm.

<PAGE>   9

     (e) The agreements contained in this Section 4 shall survive the sale
of the Transfer Restricted Securities pursuant to the Shelf Registration
Statement and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by
or on behalf of any indemnified party.

     5. Liquidated Damages Under Certain Circumstances. If (i) ICN fails to
file the First Shelf Registration Statement with the Commission on or prior
to 90 days after the Closing Date, or (ii) the First Shelf Registration
Statement has not been declared effective by the Commission within 180 days
after the Closing Date, ICN will pay liquidated damages to each Holder of
Transfer Restricted Securities required to be registered thereunder that
timely complied with the requirements of Section 2(a). In addition, if (i)
Ribapharm fails to file the Second Shelf Registration Statement with the
Commission on or prior to 90 days after a Ribapharm Liquidity Event or (ii)
the Second Shelf Registration Statement has not been declared effective by
the Commission within 180 days after the Ribapharm Liquidity Event,
Ribapharm will pay liquidated damages to each Holder of Transfer Restricted
Securities that timely complied with the requirements of Section 2(a). If
either Shelf Registration Statement is filed and declared effective but
shall thereafter during the applicable Shelf Registration Period cease to
be effective (without being succeeded immediately by an additional
registration statement filed and declared effective) or usable for the
offer and sale of Transfer Restricted Securities required to be registered
thereunder for a period of time (including any Suspension Period) which
shall exceed 60 days in the aggregate in any 12-month period (each such
event referred to above in this Section 5, a "Registration Default"), ICN
and Ribapharm severally and not jointly agree, until such time as there
shall occur a Ribapharm Liquidity Event, in which case ICN and Ribapharm
agree jointly and severally to pay liquidated damages to each Holder of
Transfer Restricted Securities that timely complied with the requirements
of Section 2(a). The amount of liquidated damages payable during any period
during which a Registration Default shall have occurred and be continuing
is that amount which is equal to one-quarter of one percent (25 basis
points) per annum per $1,000 initial principal amount and, if applicable,
on an equivalent basis per Conversion Share (subject to adjustment in the
event of stock splits, stock recombinations, stock dividends and the like)
constituting Transfer Restricted Securities for each 90-day period until
the applicable registration statement is filed and the applicable
Registration Default has been cured, up to a maximum amount of liquidated
damages of three-quarters of one percent (75 basis points) per annum per
$1,000 initial principal amount of Notes and, if applicable, on an
equivalent basis per Conversion Share (subject to adjustment as set forth
above) constituting Transfer Restricted Securities. All accrued liquidated
damages shall be paid to Holders of record entitled to receive such
payments by wire transfer of immediately available funds or by federal
funds check by ICN or Ribapharm on the regular interest payment date.
Following the cure of all Registration Defaults or, if earlier, the
termination of the applicable Shelf Registration Period, liquidated damages
will cease to accrue with respect to such Registration Default.
Notwithstanding anything to the contrary set forth herein, following the
cure of any event that caused a Registration Default or once the Transfer
Restricted Securities are eligible for resale under Rule 144(k) of the
Securities Act, liquidated damages payable by ICN or Ribapharm shall cease
to accrue, at which time the interest rate shall be restored to its initial
rate.

     6. Rules 144 and 144A. ICN and, following a Ribapharm Liquidity Event,
Ribapharm each shall use its reasonable best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in
a timely manner and, if at any time ICN or Ribapharm is not required to
file such reports, it will, upon the request of any Holder of Notes, make
publicly available such information as is necessary to permit sales of
their securities pursuant to Rules 144 and 144A. ICN and Ribapharm
severally and not jointly agree, until such time as there shall occur a
Ribapharm Liquidity Event, in which case ICN and Ribapharm agree jointly
and severally to take such further action as any Holder of Notes may
reasonably request, all to the extent required from time to time to enable
such Holder to sell Notes without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including the requirements of Rule 144A(d)(4)). ICN and Ribapharm will
provide a copy of this Agreement to prospective purchasers of Notes
identified to ICN and Ribapharm by the Initial Purchaser upon request. Upon
the request of any Holder of Notes, ICN and Ribapharm each shall deliver to
such Holder a written statement as to whether it has complied with such
requirements. Notwithstanding the foregoing, nothing in this Section 6
shall be deemed to require ICN or Ribapharm to register any of its
respective securities pursuant to the Exchange Act.

<PAGE>   10

     7. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and
manager or managers that will administer the offering ("Managing
Underwriters") will be selected by ICN; provided, however, that such
selection is consented to by the Holders of a majority in aggregate initial
principal amount of Transfer Restricted Securities to be included in such
offering, which consent shall not be unreasonably withheld or delayed. No
person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities
on the basis provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents reasonably
required under the terms of such underwriting arrangements. The Holders
participating in any underwritten offering shall be responsible for any
expenses customarily borne by selling security holders, including
underwriting discounts and commissions and fees and expenses of counsel to
the selling security holders.

     8. Miscellaneous.
        -------------

          (a) Amendments and Waivers. The provisions of this Agreement may
     not be amended, modified or supplemented, and waivers or consents to
     departures from the provisions hereof may not be given, except by ICN
     and Ribapharm and the written consent of the Holders of a majority of
     the outstanding principal amount of the Transfer Restricted Securities
     affected by such amendment, modification, supplement, waiver or
     consents.

          (b) Notices. All notices and other communications provided for or
     permitted hereunder shall be made in writing by hand delivery,
     first-class mail, facsimile transmission or overnight air courier:

               (1)  if to a Holder of the Transfer Restricted Securities,
                    at the most current address given by such Holder to ICN
                    and Ribapharm in writing.

               (2)  if to the Initial Purchaser:

                    UBS Warburg LLC
                    299 Park Avenue
                    New York, NY 10171
                    Fax No.: (212) 821-2446
                    Attention: Syndicate Department
                    with a copy to:
                    Dewey Ballantine LLP
                    1301 Avenue of the Americas
                    New York, NY 10019
                    Fax No.: (212) 259-6333
                    Attention:  Frederick W. Kanner

               (3)  if to ICN, at its address as follows:

                    ICN Pharmaceuticals, Inc.
                    3300 Hyland Avenue
                    Costa Mesa, CA  92626
                    Fax No.: (714) 641-7206
                    Attention:  David C. Watt, General Counsel
                    with a copy to:
                    Fried, Frank, Harris, Shriver &amp; Jacobson
                    One New York Plaza
                    New York, NY  10004
                    Fax No.: (212) 859-4000
                    Attention: Jeffrey Bagner

               (4)  if to Ribapharm, at its address as follows:

                    Ribapharm Inc.
                    3300 Hyland Avenue
                    Costa Mesa, CA  92626
                    Fax No.: (714) 641-7274
                    Attention: Harry A. Roosje, General Counsel
                    with a copy to:
                    Fried, Frank, Harris, Shriver &amp; Jacobson
                    One New York Plaza
                    New York, NY  10004
                    Fax No.: (212) 859-4000
                    Attention: Jeffrey Bagner

<PAGE>   11

          All such notices and communications shall be deemed to have been
     duly given: at the time delivered by hand, if personally delivered;
     three business days after being deposited in the mail, postage
     prepaid, if mailed; when receipt is acknowledged by recipient's
     facsimile machine operator, if sent by facsimile transmission; and on
     the day delivered, if sent by overnight air courier.

          (c) No Conflicting Agreements. Neither ICN nor Ribapharm, as of
     the date hereof, entered into, nor shall either of them, on or after
     the date hereof, enter into, any agreement with respect to their
     respective securities that conflicts with the provisions hereof.

          (d) Successors and Assigns. This Agreement shall be binding upon
     ICN and Ribapharm and each Holder of Transfer Restricted Securities
     and their respective successors and assigns.

          (e) Counterparts. This Agreement may be executed in any number of
     counterparts and by the parties hereto in separate counterparts, each
     of which when so executed shall be deemed to be an original and all of
     which taken together shall constitute one and the same agreement.
     Delivery of an executed counterpart by facsimile shall be effective as
     delivery of a manually executed counterpart thereof.

          (f) Headings. The headings in this Agreement are for convenience
     of reference only and shall not limit or otherwise affect the meaning
     hereof.

          (g) Governing Law. This agreement shall be governed by, and the
     construed in accordance with, the laws of the State of New York,
     without regard to principles of conflicts of laws.

          (h) Submission to Jurisdiction. Except as set forth below, no
     claim may be commenced, prosecuted or continued in any court other
     than the courts of the State of New York located in the City and
     County of New York or in the United States District Court for the
     Southern District of New York, which courts shall have jurisdiction
     over the adjudication of such matters, and each party hereto consents
     to the jurisdiction of such courts and personal service with respect
     thereto. Each of ICN and Ribapharm hereby consents to personal
     jurisdiction, service and venue in any court in which any claim
     arising out of or in any way relating to this Agreement is brought by
     any third party against the Initial Purchaser or any indemnified
     party. Each of the Initial Purchaser, ICN and Ribapharm (on their
     respective behalf's and, to the extent permitted by applicable law, on
     behalf of their respective stockholders and affiliates) waives all
     right to trial by jury in any action, proceeding or counterclaim
     (whether based upon contract, tort or otherwise) in any way arising
     out of or relating to this Agreement. Each party hereto agrees that a
     final judgment in any such action, proceeding or counterclaim brought
     in any such court shall be conclusive and binding upon such party and
     may be enforced in any other courts in the jurisdiction of such party
     is or may be subject, by suit upon such judgment.

          (i) Severability. If any one or more of the provisions contained
     herein, or the application thereof in any circumstance, is held
     invalid, illegal or unenforceable, the validity, legality and
     enforceability of any such provision in every other respect and of the
     remaining provisions contained herein shall not be affected or
     impaired thereby.

          (j) Transfer Restricted Securities Held by ICN and Ribapharm.
     Whenever the consent or approval of Holders of a specified percentage
     of initial principal amount of Transfer Restricted Securities is
     required hereunder, Transfer Restricted Securities held by ICN or
     Ribapharm or their respective affiliates (other than subsequent
     Holders of Transfer Restricted Securities if such subsequent Holders
     are deemed to be affiliates solely by reason of their holdings of such
     Transfer Restricted Securities) shall not be counted in determining
     whether such consent or approval was given by the Holders of such
     required percentage.

          (k) Entire Agreement. This Agreement is intended by the parties
     as a final expression of their agreement and intended to be a complete
     and exclusive statement of the agreement and understanding of the
     parties hereto in respect of the subject matter contained herein.
     There are no restrictions, promises, warranties or undertakings, other
     than those set forth or referred to herein with respect to the
     registration rights granted with respect to the Transfer Restricted
     Securities. This Agreement supersedes all prior agreements and
     understandings between the parties with respect to such subject
     matter.
<PAGE>   12

     If the foregoing is in accordance with your understanding of our
agreement, please sign and return to ICN and Ribapharm a counterpart
hereof, whereupon this instrument, along with all counterparts, will become
a binding agreement on the Initial Purchaser, ICN and Ribapharm in
accordance with its terms.

                                    Very truly yours,

                                    ICN PHARMACEUTICALS, INC.

                                    By: /s/ David C. Watt
                                        -----------------------------------
                                        Name:  David C. Watt
                                        Title: Executive Vice President,
                                               General Counsel and
                                               Corporate Secretary

                                    RIBAPHARM INC.

                                    By: /s/ Harry A. Roosje
                                        -----------------------------------
                                        Name:  Harry A. Roosje
                                        Title: Vice President Associate
                                               General Counsel

Accepted and agreed to as
of the date first above written

UBS WARBURG LLC

By: /s/ Roderick O'Neill
    -----------------------------------
    Name:  Roderick O'Neill
    Title: Director

By: /s/ Robert Steininger
    -----------------------------------
    Name:  Robert Steininger
    Title: Director

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